<PAGE>
File No. 33-62325
40 Act File No. 811-2271
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: NUVEEN TAX-EXEMPT UNIT TRUST, SERIES 823
B. Name of Depositor: JOHN NUVEEN & CO. INCORPORATED
C. Complete address of Depositor's principal executive offices:
333 West Wacker Drive
Chicago, Illinois 60606
D. Name and complete address of agents for service:
JOHN NUVEEN & CO. INCORPORATED
Attn: James J. Wesolowski
333 West Wacker Drive
Chicago, Illinois 60606
CHAPMAN AND CUTLER
Attn: Eric F. Fess
111 West Monroe Street
Chicago, Illinois 60603
It is proposed that this filing will become effective (check appropriate box)
- -----
- ----- immediately upon filing pursuant to paragraph (b)
- -----
- ----- on (date) pursuant to paragraph (b)
- -----
- ----- 60 days after filing pursuant to paragraph (a)
- -----
- ----- on (date) pursuant to paragraph (a) of rule 485 or 486
E. Title and amount of securities being registered: An indefinite number of
Units as permitted by Rule 24f-2.
F. Proposed maximum offering price to the public of the securities being
registered: Not presently determinable.
G. Amount of filing fee: $500 in accordance with Rule 24f-2.*
H. Approximate date of proposed sale to the public:
As soon as practicable after the effective date of the Registration
Statement.
*Previously Paid
______
Check box if it is proposed that this filing will become effective
on 9/07/95 at 1:30 p.m. pursuant to Rule 487.
______
<PAGE>
NUVEEN TAX-EXEMPT UNIT TRUST, SERIES 823
Cross-Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction 1 as
to Prospectus on Form S-6)
FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust ) Prospectus Part-A Cover Page
(b) Title of securities issued )
2. Name and address of Depositor ) Information About the Sponsor
3. Name and address of Trustee ) Information About the Trustee
4. Name and address of principal ) Information About the Sponsor
Underwriter )
5. Organization of trust ) What Is The Nuveen Tax-Exempt
) Unit Trust?
6. Execution and termination of ) What Is The Nuveen Tax-Exempt
Trust Agreement ) Unit Trust?
) Information About the Trustee
) Other Information
7. Changes of Name *
8. Fiscal Year
9. Litigation
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. General Information regarding ) Summary of Portfolios
trust's securities ) Why and How are the Bonds
Insured?
When Are Distributions
Made to Unitholders?
) Ownership and Transfer of Units
) How Units May Be Redeemed
Without Charge
) How Bonds May Be Removed From
) The Trusts
) Information About the Trustee
) Information About the Sponsor
) Other Information
) What Is The Tax Status of
) Unitholders?
11. Type of securities comprising ) What Is The Nuveen Tax-Exempt
units ) Unit Trust?
) Summary of Portfolios
) Composition of Trusts
) What Are The Objectives Of
) The Trusts?
Why and How are the Bonds
Insured?
12. Certain information regarding ) *
periodic payment certificates )
13. (a)Load, fees, expenses, etc. ) Part A - Essential Information
) How Is The Public Offering Price
) Determined?
) Market For Units
) What Is Accrued Interest?
) What Are Estimated Long Term
) Return And Estimated Current
) Return?
) How Was The Price Of The Bonds
) Determined At The Date of Deposit?
) What Are Normal Trust Operating
) Expenses?
) Summary of Portfolios
) When Are Distributions Made
) To Unitholders?
) How Detailed Are Reports To
Unitholders?
<PAGE>
(b)Certain information regarding ) *
periodic payment certificates )
(c)Certain percentages ) How Is the Public Offering Price
) Determined?
) Market For Units
) What Are Estimated Long Term
) Return And Estimated Current
) Return?
) How Was The Price of the Bonds
) Determined At The Date of Deposit?
) What is Accrued Interest?
(d)Certain other fees, etc. ) How Was The Price Of The Bonds
payable by holders ) Determined At The Date of Deposit?
) What Are Normal Trust Operating
) Expenses?
) Ownership and Transfer of Units
(e)Certain profits receivable ) Composition of Trusts
by depositor, principal under- )
writer, trustee or affiliated ) How Units May Be Purchased By
persons ) The Sponsor
(f)Ratio of annual charges
to income *
14. Issuance of trust's securities ) Summary of Portfolios
) When Are Distributions Made
) To Unitholders?
) Ownership and Transfer of Units
) How Units May Be Redeemed
) Without Charge
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and Disposition of ) What Is The Nuveen Tax-Exempt
Underlying Securities ) Unit Trust?
) Summary of Portfolios
) Composition of Trusts
) Why and How are the Bonds
Insured?
) How Units May Be Redeemed
Without Charge
) How Bonds May Be Removed From
) The Trusts
) Other Information
17. Withdrawal or redemption ) Market For Units
) How Units May Be Redeemed
) Without Charge
) How Units May Be Purchased By
) The Sponsor
18. (a)Receipt and disposition of income ) Summary of Portfolios
) When Are Distributions
Made To Unitholders?
) How Detailed Are Reports To
) Unitholders?
(b)Reinvestment of distributions ) Accumulation Plan
(c)Reserves or special funds ) Summary of Portfolios
) When Are Distributions
) Made To Unitholders?
(d)Schedule of distributions ) *
19. Records, accounts and reports ) When Are Distributions Made
) To Unitholders?
) How Detailed Are Reports To
) Unitholders?
20. Certain miscellaneous provisions of ) Information About the Trustee
Trust Agreement ) Information About the Sponsor
) Other Information
<PAGE>
21. Loans to security holders ) *
22. Limitations on liability ) Summary of Portfolios
) Composition of Trusts
) Information About The Trustee
23. Bond arrangements ) *
24. Other material provisions of Trust ) *
Agreement. )
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of Depositor ) Information About the Sponsor
26. Fees received by Depositor ) *
27. Business of Depositor ) Information About the Sponsor
28. Certain information as to officials ) *
and affiliated persons of Depositor )
29. Voting Securities of Depositor ) Information About the Sponsor
30. Persons controlling Depositor )
)
31. Payments by Depositor for certain )
services rendered to trust )
) *
32. Payments by Depositor for certain )
other services rendered to trust )
)
33. Remuneration of employees of Depositor)
for certain services rendered to trust)
)
34. Remuneration of other persons for )
certain services rendered to trust )
<PAGE>
IV. DISTRIBUTION AND REDEMPTION OF SECURITIES
35. Distribution of trust's securities by )
states )
) *
36. Suspension of sales of trust's )
securities )
)
37. Revocation of authority to distribute )
38. (a)Method of distribution )
)
(b)Underwriting agreements ) How Units of The Trusts Are
) Distributed To The Public
(c)Selling agreements )
39. (a)Organization of principal )
underwriter )
) Information About The Sponsor
(b)NASD membership of principal )
underwriter )
40. Certain fees received by principal ) *
underwriter
41. (a)Business of principal underwriter )
)
(b)Branch offices of principal under- ) *
writer )
)
(c)Salesmen of principal underwriter )
42. Ownership of trust's securities by ) *
certain persons )
)
43. Certain brokerage commissions received) *
by principal underwriter )
44. (a)Method of valuation ) Part A - Essential Information
) How Is The Public Offering Price
) Determined?
) How Was The Price Of The Bonds
) Determined At The Date of Deposit?
) What Are Normal Trust Operating
) Expenses?
(b)Schedule as to offering price ) *
(c)Variation in offering price to ) How Is the Public Offering Price
certain persons ) Determined?
) What Is Accrued Interest?
) How Was The Price Of The Bonds
) Determined At The Date of Deposit?
<PAGE>
45. Suspension of redemption rights ) *
46. (a)Redemption valuation ) Unit Value and Evaluation
) How Units May Be Redeemed
) Without Charge
) How Units May Be Purchased By
) The Sponsor
(b)Schedule as to redemption price ) *
47. Maintenance of position in underlying ) How Is the Public Offering Price
securities ) Determined?
) How Units May Be Purchased By
) The Sponsor
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Trustee) Information About The Trustee
49. Fees and expenses of Trustee ) Part A - Essential Information
) What Are Normal Trust Operating
) Expenses?
50. Trustee's lien ) What Are Normal Trust Operating
) Expenses?
) When Are Distributions Made
) To Unitholders?
VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES
51. Insurance of holders of trust's ) *
securities )
VII. POLICY OF REGISTRANT
52. (a)Provisions of trust agreement with ) What Are Normal Trust Operating
respect to selection or elimination) Expenses?
of underlying securities ) How Units May Be Redeemed With-
) out Charge
) How Bonds May Be Removed From
) The Trusts
(b)Transactions involving elimination ) *
of underlying securities )
(c)Policy regarding substitution or ) Summary of Portfolio
elimination of underlying ) Composition of Trusts
securities ) How Bonds May Be Removed From
) The Trusts
(d)Fundamental policy not otherwise ) *
covered )
53. Tax status of trust ) What Is The Tax Status Of
) Unitholders?
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during last ten years) *
55.) ) *
56.)Certain information regarding )
57.)periodic payment certificates )
58.) )
__________
*Inapplicable, omitted, answer negative or not required.
<PAGE>
A
NUVEEN NUVEEN MARYLAND TRADITIONAL TRUST 310
(NUVEEN TAX EXEMPT UNIT TRUSTS SERIES 823)
CUSIP NUMBERS:
Monthly: 67102E 220
Quarterly: 67102E 238
Semi-Annually: 67102E 246
PROSPECTUS--PART A (SPECIFIC TERMS) -- SEPTEMBER 7, 1995
THIS PART A OF THE PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY THE PART B OF THE PROSPECTUS.
BOTH PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
Maryland Traditional Trust, Series 310 (the "Maryland Traditional Trust")
consists of a portfolio of interest-bearing obligations issued by or on behalf
of the State of Maryland, certain United States Territories or authorities
and political subdivisions thereof which, in the
opinion of recognized bond counsel to the issuing authorities, provide income
which is exempt from Federal income tax, Maryland income tax and local tax, to
the extent indicated below.
The objectives of the Trust are income exempt from Federal income tax and
state income taxes, and conservation of capital. The objectives are, of
course, dependent upon the continuing ability of the issuers, obligors and/or
insurers to meet their respective obligations.
The Portfolio of Maryland Traditional Trust 310 consists of 6 obligations
issued by entities located in Maryland and two obligations issued by entities
located in the District of Columbia and the Territory of Puerto Rico,
respectively. The Bonds in the Trust are either general obligations of the
governmental entity issuing
them and are backed by the taxing power thereof or are payable as to principal
and interest from the income of a specific project or authority and are not
supported by the issuer's power to levy taxes. The sources of payment for the
Bonds, other than general obligation Bonds and Bonds escrowed to maturity or
optional redemption date, are divided as follows:
<TABLE>
<CAPTION>
NUMBER OF PORTFOLIO
ISSUES PURPOSE OF ISSUE PERCENTAGE
- ----------- ----------------------------------------------------------------------------- -------------
<C> <S> <C>
1 Electrical System Revenue 14%
1 Health Care Facility Revenue 14
1 Water and/or Sewer Revenue 14
1 Dedicated-Tax Supported Revenue 7
1 Transportation Facility Revenue 7
</TABLE>
Approximately 43.0% of the aggregate principal amount of the Bonds in the
Trust (accounting for approximately 42.1% of the aggregate offering price of the
Bonds) are original issue discount bonds. See "RISK FACTORS" for a discussion of
the characteristics of such obligations and of the risks associated therewith.
For a discussion of the risks associated with investments in the bonds of
various issuers, see "RISK FACTORS" in Part B of this Prospectus. Certain of the
Bonds may be insured by a commercial insurer, see "Schedule of Investments" and
"WHY AND HOW ARE THE BONDS INSURED?" in Part B of this Prospectus.
ESSENTIAL INFORMATION
REGARDING THE NUVEEN MARYLAND TRADITIONAL TRUST 310
ON THE BUSINESS DAY PRIOR TO THE DATE OF DEPOSIT, SEPTEMBER 6, 1995
Sponsor and Evaluator........ John Nuveen & Co. Incorporated
Trustee...................... The Chase Manhattan Bank, N.A.
------------------------------------------------
The income, expense and distribution data set forth below have been calculated
for Unitholders receiving monthly, quarterly or semi-annual distribution
options.
<TABLE>
<S> <C>
Principal Amount of Bonds in Trust.................. $ 3,500,000
Number of Units..................................... 35,000
Fractional Undivided Interest in Trust Per Unit..... 1/35,000
Public Offering Price--Less than 500 Units
Aggregate Offering Price of Bonds in Trust...... $ 3,357,003
Divided by Number of Units...................... $ 95.91
Plus Sales Charge 4.9% (5.152% of the Aggregate
Offering Price of the Bonds per Unit).......... $ 4.94
Public Offering Price Per Unit(1)............... $ 100.85
Redemption Price Per Unit (exclusive of accrued
interest)......................................... $ 95.45
Sponsor's Initial Repurchase Price Per Unit
(exclusive of accrued interest)................... $ 95.91
Excess of Public Offering Price Per Unit over
Redemption Price Per Unit......................... $ 5.40
Excess of Public Offering Price Per Unit over
Sponsor's Repurchase Price Per Unit............... $ 4.94
Average Maturity of Bonds in the Trust(2)........... 23.7 years
</TABLE>
- ----------
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.
1 of 6
<PAGE>
ESSENTIAL INFORMATION (CONT.)
<TABLE>
<CAPTION>
MONTHLY QUARTERLY SEMI-ANNUAL
----------- ----------- -----------
<S> <C> <C> <C>
Calculation of Estimated Net Annual
Interest Income Per Unit
Annual Interest Income(3)............ $ 5.4145 $ 5.4145 $ 5.4145
Less Estimated Annual Expense........ $ .2402 $ .2082 $ .1892
----------- ----------- -----------
Estimated Net Annual Interest
Income(4).......................... $ 5.1743 $ 5.2063 $ 5.2253
Daily Rate of Accrual Per Unit........... $ .01437 $ .01446 $ .01451
ESTIMATED CURRENT RETURN(5).............. 5.13% 5.16% 5.18 %
ESTIMATED LONG TERM RETURN(5)............ 5.15% 5.19% 5.21 %
Trustee's Annual Fees(6)................. $ 1.5193 $ 1.1993 $ 1.0093
Date of Deposit..................................................................................September 7, 1995
Settlement Date.................................................................................September 12, 1995
Mandatory Termination Date....................................See "OTHER INFORMATION" in Part B of this Prospectus
Minimum Value of Each Trust...................................See "OTHER INFORMATION" in Part B of this Prospectus
Sponsor's Annual Evaluation Fee.........................................$0.17 per $1,000 principal amount of Bonds
Estimated Annual Organizational Expenses(7).......................................................$.03086 per Unit
- ----------
<FN>
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4 p.m. Eastern time on the business day next
following receipt of an order by the Sponsor or Trustee. (See "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?" in Part B of this
Prospectus.)
(1) Units are offered at the Public Offering Price plus accrued interest from the preceding Record Date to, but not including,
the date of settlement (normally three business days after purchase). The Date of Deposit of the Fund has been designated as
the First Record Date for all plans of distribution of the Trust and, accordingly, for Units purchased on the Date of
Deposit, $.07 of accrued interest to the Settlement Date will be added to the Public Offering Price. (See "WHAT IS ACCRUED
INTEREST?" in Part B of this Prospectus.)
(2) The Average Maturity of Bonds in the Trust is calculated based upon the stated maturities of the Bonds in the 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 Maturity of Bonds in the Trust may increase or decrease from time to time as Bonds mature
or are called or sold.
(3) Assumes delivery of all Bonds. (See "COMPOSITION OF TRUSTS" appearing in Part B of this Prospectus.) Interest income does not
include accretion of original issue discount on "zero coupon" Bonds, Stripped Obligations or other original issue discount
Bonds. (See "RISK FACTORS" in Part B of this Prospectus.)
(4) The amount and timing of interest distributions from the Trust under the various plans of distribution are set forth below.
It is anticipated that the amount of interest to be distributed per Unit in each year under each plan of distribution will
initially be substantially equal to the Estimated Net Annual Interest Income per Unit for that plan. The amount of interest
to be distributed annually per Unit, will generally change as Bonds are redeemed, mature or are sold or as fees and expenses
increase or decrease.
(5) Estimated Long Term Return for the Trust represents the average of the yields to maturity (or call) of the Bonds in the
Trust's portfolio calculated in accordance with accepted bond practices and adjusted to reflect a compounding factor,
expenses and sales charges. Estimated Current Return is computed by dividing the Net Annual Interest Income per Unit by the
Public Offering Price, and in contrast to Estimated Long Term Return does not reflect the amortization of premium or
accretion of discount, if any. For more information see "WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN?"
in Part B of this Prospectus.
(6) Each Trustee annual fee is per $1,000 principal amount of the underlying Bonds in the Trust for that portion of the Trust
that represents a particular plan of distribution.
(7) The Trust (and therefore Unit holders) will bear all or a portion of its organizational costs (including costs of preparing
the registration statements, the trust indenture and other closing documents, registering Units with the Securities and
Exchange Commission and states, the initial audit of the Trust portfolio, legal fees and the initial fees and expenses of the
Trustee but not including the expenses incurred in the printing of preliminary and final prospectuses, and expenses
incurred in the
preparation and printing of brochures and other advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year period. See "WHAT ARE NORMAL TRUST OPERATING
EXPENSES?" in Part B and "Statement of Condition." Historically, the sponsors of unit investment trusts have paid all the
costs of establishing such trusts.
</TABLE>
INTEREST DISTRIBUTION
Details of interest distributions per Unit of the Maryland Traditional Trust
under the various plans appear in the following table based upon estimated Net
Annual Interest Income at the Date of Deposit:
<TABLE>
<CAPTION>
NORMAL
DISTRIBUTIONS
1995 1996 PER YEAR
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------- --------------
Record Date*.......................... 10/1 11/1 2/1 5/1
Distribution Date..................... 10/15 11/15 2/15 5/15
- --------------------------------------------------------------------------------------------------------------------
Monthly Distribution Plan............. $ .3448(1) $ 5.1743
-------- $.4311 every month --------
Quarterly Distribution Plan........... $ .3448(1) $ .4338(2) $ 1.3014 $ 1.3014 $ 5.2063
Semi-Annual Distribution Plan......... $ .3448(1) $ .4353(3) $ 2.6118 $ 5.2253
- --------------------------------------------------------------------------------------------------------------------
<FN>
* Record Dates for semi-annual distributions are May 1 and November 1; for quarterly distributions, they are February 1, May 1,
August 1 and November 1. Record Dates for monthly distributions are the first day of each month. Distribution Dates under each
distribution plan are the fifteenth day of the month in which the respective Record Date occurred. For additional information
see "WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?" in Part B of this Prospectus.
(1) The first distribution will be paid to all Unitholders, regardless of the distribution plan selected. Such distribution may
be more or less than a regular monthly distribution.
(2) The second distribution under the quarterly distribution plan represents a 1-month distribution; subsequent quarterly
distributions will be regular 3-month distributions.
(3) The second distribution under the semi-annual distribution plan represents a 1-month distribution; subsequent semi-annual
distributions will be regular 6-month distributions.
</TABLE>
2 of 6
<PAGE>
MARYLAND RISK FACTORS
The financial condition of the State of Maryland is affected by various
national, economic, social and environmental policies and conditions.
Additionally, Constitutional and statutory limitations imposed on the State and
its local governments concerning taxes, bond indebtedness and other matters may
constrain the revenue-generating capacity of the State and its local governments
and, therefore, the ability of the issuers of the Bonds to satisfy their
obligations.
The economic vitality of the State and its various regions and, therefore,
the ability of the State and its local governments to satisfy the Bonds, are
affected by numerous factors. The State's economic base is diversified,
consisting of manufacturing, construction and service industries, supplemented
by rural areas with selective commercial agriculture. The State has a relatively
high wage labor market which has resulted in the State's business sector
becoming more vulnerable to competitive pressures.
The State is a party to numerous lawsuits in which an adverse final decision
could materially affect the State's governmental operations and consequently its
ability to pay debt service on its obligations.
The State of Maryland currently maintains a "triple A" bond rating from
Standard & Poor's, Moody's and Fitch Investors Service on its general obligation
indebtedness.
Further information concerning Maryland risk factors may be obtained upon
written or telephonic request to the Trustee as described in "OTHER
INFORMATION--Supplemental Information" appearing in Part B of this Prospectus.
TAX STATUS--MARYLAND TRADITIONAL TRUST
For a discussion of the Federal tax status of income earned on Maryland
Traditional Trust Units, see "WHAT IS THE TAX STATUS OF UNITHOLDERS?" in Part B
of this Prospectus.
The assets of the Maryland Traditional Trust will consist of
interest-bearing obligations issued by or on behalf of the State of Maryland,
its political subdivisions and authorities and, provided the interest thereon is
exempt from State income taxes by the laws or treaties of the United States,
obligations issued by or on behalf of the United States' territories or
possessions, including Puerto Rico, Guam and the Virgin Islands, their political
subdivisions and authorities (the "Maryland Bonds").
In the opinion of Venable, Baetjer and Howard, special counsel for the
Series for Maryland tax matters, under existing law:
For Maryland state and local income tax purposes, the Maryland
Traditional Trust will not be taxable as an association, and the income of
the Maryland Traditional Trust will be treated as the income of the
Unitholders.
For Maryland state and local tax purposes, interest on the Maryland
Bonds which is exempt from Maryland state and local income tax when received
by the Maryland Traditional Trust, and which would be exempt from Maryland
state and local income tax if received directly by a Unitholder, will retain
its status as tax-exempt interest when received by the Maryland Traditional
Trust and distributed to the Unitholders.
Interest derived from the Maryland Traditional Trust by a Unitholder
with respect to the Maryland Bonds will not be subject to Maryland state or
local income taxes; provided that interest or profit derived from the
Maryland Traditional Trust by a financial institution, as defined in Section
8-101(c) of the Tax-General Article of the Annotated Code of Maryland, will
be subject to the Maryland state franchise tax on financial institutions,
except to the extent such interest is expressly exempt from the Maryland
state franchise tax by the statutes which authorize the issuance of such
Maryland Bonds (See Section 8-204 of the Tax General Article of the
Annotated Code of Maryland).
A Unitholder will not be subject to Maryland state or local income tax
with respect to gain realized when Maryland Bonds held in the Maryland
Traditional Trust are sold, redeemed, or paid at maturity, except with
respect to gain realized upon a sale, redemption or payment at maturity of
such Maryland Bonds as are issued by or on behalf of United States
territories or possessions, their political subdivisions and authorities;
such gain will equal the proceeds of sale, redemption or payment, less the
tax basis of the Maryland Bonds (adjusted to reflect (a) the amortization of
Bond premium or discount, and (b) the deposit in the Maryland Traditional
Trust after the Unitholder's settlement date of Maryland Bonds with accrued
interest).
Although the matter is not free from doubt, gain realized by a
Unitholder from the redemption, sale or other disposition of a Maryland
Traditional Trust Unit (i) will be subject to Maryland state income tax
except in the case of individual Unitholders who are not Maryland residents,
and (ii) will be subject to Maryland local income tax in the case of
individual Unitholders who are Maryland residents.
If interest on indebtedness incurred or continued by a Unitholder to
purchase Units in the Maryland Traditional Trust is not deductible for
Federal income tax purposes, it will also be nondeductible for Maryland
state income tax purposes and, if applicable, local income tax purposes.
Maryland Traditional Trust Units will be subject to Maryland inheritance
and estate tax only if held by Maryland residents. Neither the Maryland
Bonds nor the Maryland Traditional Trust Units will be subject to Maryland
personal property tax, sales tax or use tax.
3 of 6
<PAGE>
NUVEEN MARYLAND TRADITIONAL TRUST 310
(NUVEEN TAX-EXEMPT UNIT TRUST SERIES 823)
SCHEDULE OF INVESTMENTS AT THE DATE OF DEPOSIT, SEPTEMBER 7, 1995
<TABLE>
<CAPTION>
Ratings(3) Trustee's
Optional --------------------- Determination
Aggregate Name of Issuer and Title of Issue Represented Redemption Standard of Offering
Principal by Sponsor's Contracts to Purchase Bonds(1) Provisions(2) & Poor's Moody's Price
<C> <C> <S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ 245,000 Washington Metropolitan Area Transit Authority 2004 at 102 AAA Aaa $ 233,713
(District of Columbia), Gross Revenue Transit
Refunding Bonds, Series 1993, 5.25% Due
7/1/14. (FGIC Insured.)
500,000 Anne Arundel County, Maryland, Pollution 2004 at 102 A A2 507,790
Control Revenue Refunding Bonds (Baltimore
Gas and Electric Company Project), Series
1994, 6.00% Due 4/1/24.
250,000 City of Baltimore, Maryland (Mayor and City 2004 at 100 AAA Aaa 255,000
Council of Baltimore), Convention Center
Revenue Bonds, Series 1994, 6.00% Due 9/1/17.
(FGIC Insured.)
500,000 City of Baltimore, Maryland (Mayor and City No Optional Call AAA Aaa 452,155
Council of Baltimore), Refunding Revenue
Bonds (Wastewater Projects), Series 1994-A,
5.00% Due 7/1/22. (Original issue discount
bonds delivered on or about February 24, 1994
at a price of 94.22% of principal
amount.)(FGIC Insured.)
500,000 Harford County, Maryland, Consolidated Public 2003 at 102 AA- Aa 460,450
Improvement and Refunding Bonds, Series 1993,
4.90% Due 12/1/11. (General Obligation
Bonds.)
500,000 Howard County, Maryland, Metropolitan District 2003 at 102 AA+ Aa1 486,295
Project and Refunding Bonds, 1993 Series A,
5.50% Due 8/15/22. (General Obligation
Bonds.)
500,000 City of Takoma Park, Maryland, Hospital 2005 at 102 AAA Aaa 482,380
Facilities Refunding and Improvement Revenue
Bonds (Washington Adventist Hospital), Series
1995, 5.50% Due 9/1/15. (Original issue
discount bonds delivered on or about June 27,
1995 at a price of 93.63% of principal
amount.)(FSA Insured.)
505,000 Commonwealth of Puerto Rico, Public Improvement 2005 at 101 1/2 AAA Aaa 479,220
Bonds of 1995 (General Obligation Bonds.),
5.375% Due 7/1/22. (Original issue discount
bonds delivered on or about May 4, 1995 at a
price of 93.916% of principal amount.)(MBIA
Insured.)
- ----------- ---------------
$ 3,500,000 $ 3,357,003
- ----------- ---------------
- ----------- ---------------
</TABLE>
- ------------
(1) The Sponsor's contracts to purchase Bonds were entered into during the
period from September 5, 1995 to September 6, 1995. Other information regarding
the Bonds in the Trust on the initial Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST
COST TO (OR LOSS) INCOME TO BID PRICE
TRUST SPONSOR TO SPONSOR TRUST OF BONDS
--------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
MARYLAND
TRADITIONAL
TRUST 310...... $3,346,963 $ 10,040 $ 189,506 $3,341,059
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is .46%. Neither cost
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. The Sponsor did not participate as either the sole
underwriter or as a manager or member of a syndicate that acted as the original
underwriter of any of the Bonds.
(2) The Bonds are first subject to optional redemption in the years, and at
the prices, shown. Unless otherwise indicated, the Bonds, except for Bonds
issued at a substantial original issue discount, are redeemable at declining
prices (but not below par value) in subsequent years. Original issue discount
bonds, including zero coupon bonds, are generally redeemable at prices based on
the issue price plus the amount of original issue discount accreted to
redemption plus, if applicable, some premium, the amount of which will decline
in subsequent years. The Bonds may also be subject to sinking fund redemption
without premium prior to the dates shown. Certain Bonds may be subject to
redemption without premium prior to the date shown pursuant to special or
mandatory call provisions specified in the instruments setting forth the terms
and provisions of such Bonds. See "COMPOSITION OF TRUSTS", "WHAT IS THE TAX
STATUS OF UNITHOLDERS?" and "RISK FACTORS" in Part B of this Prospectus.
(3) Certain of the Bonds in a Traditional Trust, as insured by an Insurer,
may be rated AAA by Standard & Poor's and/or Aaa by Moody's. The insurance on
such Bonds guarantees the payment of interest and
principal on such Bonds when due but does not cover certain market risks
associated with fixed income securities such as accelerated payments, mandatory
redemptions or interest rate risks. (See "WHY AND HOW ARE THE BONDS INSURED?" in
Part B of this Prospectus and "Description of Ratings" in the Information
Supplement.)
4 of 6
<PAGE>
Statement of Condition
NUVEEN MARYLAND TRADITIONAL TRUST 310
(Nuveen Tax-Exempt Unit Trust, Series 823)
AS OF SEPTEMBER 7, 1995
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Tax-Exempt Bonds,
backed by an irrevocable letter of
credit(1)(2).................................... $ 3,357,003
Accrued interest to September 7, 1995 on
underlying Bonds(1)............................. 39,570
Organizational costs(3)........................... 5,400
--------------
Total................................. $ 3,401,973
--------------
--------------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to September 7, 1995 on
underlying Bonds(4).......................... $ 39,570
Accrued organizational costs(3)............... 5,400
--------------
Total................................. $ 44,970
--------------
--------------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest
outstanding (35,000)
Cost to investors(5)........................ $ 3,529,956
Less: Gross underwriting commission(6).... (172,953)
--------------
Net amount applicable to investors............ $ 3,357,003
--------------
Total................................. $ 3,401,973
--------------
--------------
- ------------
(1) Represented by contracts to purchase Tax-Exempt Bonds which
include "when issued" or "regular way" or "delayed delivery"
contracts for which an irrevocable letter of credit issued by
a major commercial bank has been deposited with the Trustee on
the Date of Deposit. The amount of such letter of credit and
any cash deposited exceeds the amount necessary for the
purchase of the Bonds plus accrued interest to the Date of
Deposit. At the Date of Deposit, Bonds may have been delivered
to the Sponsor pursuant to certain of these contracts; the
Sponsor has assigned to the Trustee all of its rights, title
and interest in and to such Bonds.
(2) Aggregate value (at offering prices) as of the Date of Deposit
of the Bonds listed under "Schedule of Investments" herein,
and their aggregate cost to the Trust are the same. Such
offering prices were determined by Kenny S&P Evaluation
Services, a division of J.J. Kenny Co., Inc., as of the close
of business on the business day prior to the Date of Deposit.
(See "HOW WAS THE PRICE OF THE BONDS DETERMINED AT THE DATE OF
DEPOSIT?" in Part B of this Prospectus.) Insurance coverage
providing for the timely payment, when due, of all principal
of and interest on certain of the Bonds in a Traditional Trust
may have been obtained by the issuers of such Bonds. Such
insurance, if any, does not guarantee the market value of the
Bonds or the value of the Units. Both the bid and the offering
prices of the underlying Bonds and of the Units may include
value attributable to such policies of insurance, if any.
(3) The Trust (and therefore Unitholders) will bear all or a
portion of its estimated organizational costs which will be
deferred and amortized over five years from the Date of
Deposit.
(4) Representing, as set forth in "WHAT IS ACCRUED INTEREST?" in
Part B of this Prospectus, advancement by the Trustee of an
amount equal to the accrued Bond interest as of the Date of
Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued
interest) computed as set forth under "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.
(6) The gross underwriting commission of 4.90% of the Public
Offering Price has been calculated on the assumption that the
Units sold are not subject to a reduction of sales charge for
quantity purchases. In single transactions involving 500 Units
or more, the sales charge is reduced. (See "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.)
</TABLE>
5 of 6
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
MARYLAND TRADITIONAL TRUST 310:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of
Maryland Traditional Trust 310 (contained in Nuveen Tax-Exempt Unit Trust,
Series 823), as of September 7, 1995. These financial statements are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
these 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 the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, 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 that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the related schedule of
investments at date of deposit referred to above present fairly, in all material
respects, the financial position of Maryland Traditional Trust 310 as of
September 7, 1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
September 7, 1995.
6 of 6
<PAGE>
A
NUVEEN NUVEEN COLORADO INSURED TRUST 60
(NUVEEN TAX EXEMPT UNIT TRUSTS SERIES 823)
CUSIP NUMBERS:
Monthly: 6706E9 317
Quarterly: 6706E9 325
Semi-Annually: 6706E9 333
PROSPECTUS--PART A (SPECIFIC TERMS) -- SEPTEMBER 7, 1995
THIS PART A OF THE PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY THE PART B OF THE PROSPECTUS.
BOTH PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
Colorado Insured Trust, Series 60 (the "Colorado Insured Trust") consists of
a portfolio of interest-bearing obligations issued by or on behalf of the State
of Colorado, certain United States Territories or authorities and political
subdivisions thereof which, in the opinion of
recognized bond counsel to the issuing authorities, provide income which is
exempt from Federal income tax and Colorado income tax, to the extent indicated
below.
The objectives of the Trust are income exempt from Federal income tax and
state income taxes, and conservation of capital. The objectives are, of
course, dependent upon the continuing ability of the issuers, obligors and/or
insurers to meet their respective obligations.
The Portfolio of Colorado Insured Trust 60 consists of 8 obligations issued
by entities located in Colorado and one obligation issued by an entity located
in the Territory of Puerto Rico. The Bonds in the Trust are either general
obligations of the governmental entity issuing them and are backed by the taxing
power thereof or are payable as to principal and interest from the income of a
specific project or authority and are not supported by the issuer's power to
levy taxes. The sources of payment for the Bonds, other than general obligation
Bonds and Bonds escrowed to maturity or optional redemption date, are divided as
follows:
<TABLE>
<CAPTION>
NUMBER OF PORTFOLIO
ISSUES PURPOSE OF ISSUE PERCENTAGE
- ----------- ----------------------------------------------------------------------------- -------------
<C> <S> <C>
2 Health Care Facility Revenue 29%
1 Dedicated-Tax Supported Revenue 15
1 Transportation Facility Revenue 14
1 Combination Utility Revenue 14
1 Water and/or Sewer Revenue 8
1 College and University Revenue 6
</TABLE>
Approximately 33.0% of the aggregate principal amount of the Bonds in the
Trust (accounting for approximately 31.3% of the aggregate offering price of the
Bonds) are original issue discount bonds. See "RISK FACTORS" for a discussion of
the characteristics of such obligations and of the risks associated therewith.
All of the Bonds in the Colorado Insured Trust are covered by policies of
insurance obtained from the MBIA Insurance Corporation guaranteeing payment of
principal and interest when due. As a result of such insurance, the Bonds in the
Trust have received a rating of "Aaa" by Moody's and
both the Bonds in the Trust and the Units of the Trust have received a rating of
"AAA" by Standard & Poor's.
For a discussion of the risks associated with investments in the bonds of
various issuers, see "RISK FACTORS" in Part B of this Prospectus.
ESSENTIAL INFORMATION
REGARDING THE NUVEEN COLORADO INSURED TRUST 60
ON THE BUSINESS DAY PRIOR TO THE DATE OF DEPOSIT, SEPTEMBER 6, 1995
Sponsor and Evaluator........ John Nuveen & Co. Incorporated
Trustee...................... The Chase Manhattan Bank, N.A.
------------------------------------------------
The income, expense and distribution data set forth below have been calculated
for Unitholders receiving monthly, quarterly or semi-annual distribution
options.
<TABLE>
<S> <C>
Principal Amount of Bonds in Trust.................. $ 3,500,000
Number of Units..................................... 35,000
Fractional Undivided Interest in Trust Per Unit..... 1/35,000
Public Offering Price--Less than 500 Units
Aggregate Offering Price of Bonds in Trust...... $ 3,337,208
Divided by Number of Units...................... $ 95.35
Plus Sales Charge 4.9% (5.152% of the Aggregate
Offering Price of the Bonds per Unit).......... $ 4.91
Public Offering Price Per Unit(1)............... $ 100.26
Redemption Price Per Unit (exclusive of accrued
interest)......................................... $ 94.88
Sponsor's Initial Repurchase Price Per Unit
(exclusive of accrued interest)................... $ 95.35
Excess of Public Offering Price Per Unit over
Redemption Price Per Unit......................... $ 5.38
Excess of Public Offering Price Per Unit over
Sponsor's Repurchase Price Per Unit............... $ 4.91
Average Maturity of Bonds in the Trust(2)........... 25.1 years
</TABLE>
- ----------
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.
1 of 7
<PAGE>
ESSENTIAL INFORMATION (CONT.)
<TABLE>
<CAPTION>
MONTHLY QUARTERLY SEMI-ANNUAL
----------- ----------- -----------
<S> <C> <C> <C>
Calculation of Estimated Net Annual
Interest Income Per Unit
Annual Interest Income(3)............ $ 5.5121 $ 5.5121 $ 5.5121
Less Estimated Annual Expense........ $ .2435 $ .2115 $ .1925
----------- ----------- -----------
Estimated Net Annual Interest
Income(4).......................... $ 5.2686 $ 5.3006 $ 5.3196
Daily Rate of Accrual Per Unit........... $ .01463 $ .01472 $ .01477
ESTIMATED CURRENT RETURN(5).............. 5.25% 5.29% 5.31 %
ESTIMATED LONG TERM RETURN(5)............ 5.29% 5.32% 5.34 %
Trustee's Annual Fees(6)................. $ 1.5467 $ 1.2267 $ 1.0367
Date of Deposit..................................................................................September 7, 1995
Settlement Date.................................................................................September 12, 1995
Mandatory Termination Date....................................See "OTHER INFORMATION" in Part B of this Prospectus
Minimum Value of Each Trust...................................See "OTHER INFORMATION" in Part B of this Prospectus
Sponsor's Annual Evaluation Fee.........................................$0.17 per $1,000 principal amount of Bonds
Estimated Annual Organizational Expenses(7).......................................................$.03143 per Unit
- ----------
<FN>
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4 p.m. Eastern time on the business day next
following receipt of an order by the Sponsor or Trustee. (See "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?" in Part B of this
Prospectus.)
(1) Units are offered at the Public Offering Price plus accrued interest from the preceding Record Date to, but not including,
the date of settlement (normally three business days after purchase). The Date of Deposit of the Fund has been designated as
the First Record Date for all plans of distribution of the Trust and, accordingly, for Units purchased on the Date of
Deposit, $.07 of accrued interest to the Settlement Date will be added to the Public Offering Price. (See "WHAT IS ACCRUED
INTEREST?" in Part B of this Prospectus.)
(2) The Average Maturity of Bonds in the Trust is calculated based upon the stated maturities of the Bonds in the 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 Maturity of Bonds in the Trust may increase or decrease from time to time as Bonds mature
or are called or sold.
(3) Assumes delivery of all Bonds. (See "COMPOSITION OF TRUSTS" appearing in Part B of this Prospectus.) Interest income does not
include accretion of original issue discount on "zero coupon" Bonds, Stripped Obligations or other original issue discount
Bonds. (See "RISK FACTORS" in Part B of this Prospectus.)
(4) The amount and timing of interest distributions from the Trust under the various plans of distribution are set forth below.
It is anticipated that the amount of interest to be distributed per Unit in each year under each plan of distribution will
initially be substantially equal to the Estimated Net Annual Interest Income per Unit for that plan. The amount of interest
to be distributed annually per Unit, will generally change as Bonds are redeemed, mature or are sold or as fees and expenses
increase or decrease.
(5) Estimated Long Term Return for the Trust represents the average of the yields to maturity (or call) of the Bonds in the
Trust's portfolio calculated in accordance with accepted bond practices and adjusted to reflect a compounding factor,
expenses and sales charges. Estimated Current Return is computed by dividing the Net Annual Interest Income per Unit by the
Public Offering Price, and in contrast to Estimated Long Term Return does not reflect the amortization of premium or
accretion of discount, if any. For more information see "WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN?"
in Part B of this Prospectus.
(6) Each Trustee annual fee is per $1,000 principal amount of the underlying Bonds in the Trust for that portion of the Trust
that represents a particular plan of distribution.
(7) The Trust (and therefore Unit holders) will bear all or a portion of its organizational costs (including costs of preparing
the registration statements, the trust indenture and other closing documents, registering Units with the Securities and
Exchange Commission and states, the initial audit of the Trust portfolio, legal fees and the initial fees and expenses of the
Trustee but not including the expenses incurred in the printing of preliminary and final prospectuses, and expenses
incurred in the
preparation and printing of brochures and other advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year period. See "WHAT ARE NORMAL TRUST OPERATING
EXPENSES?" in Part B and "Statement of Condition." Historically, the sponsors of unit investment trusts have paid all the
costs of establishing such trusts.
</TABLE>
2 of 7
<PAGE>
INTEREST DISTRIBUTION
Details of interest distributions per Unit of the Colorado Insured Trust
under the various plans appear in the following table based upon estimated Net
Annual Interest Income at the Date of Deposit:
<TABLE>
<CAPTION>
NORMAL
DISTRIBUTIONS
1995 1996 PER YEAR
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------- --------------
Record Date*.......................... 10/1 11/1 2/1 5/1
Distribution Date..................... 10/15 11/15 2/15 5/15
- --------------------------------------------------------------------------------------------------------------------
Monthly Distribution Plan............. $ .3511(1) $ 5.2686
-------- $.4389 every month --------
Quarterly Distribution Plan........... $ .3511(1) $ .4416(2) $ 1.3248 $ 1.3248 $ 5.3006
Semi-Annual Distribution Plan......... $ .3511(1) $ .4431(3) $ 2.6586 $ 5.3196
- --------------------------------------------------------------------------------------------------------------------
<FN>
* Record Dates for semi-annual distributions are May 1 and November 1; for quarterly distributions, they are February 1, May 1,
August 1 and November 1. Record Dates for monthly distributions are the first day of each month. Distribution Dates under each
distribution plan are the fifteenth day of the month in which the respective Record Date occurred. For additional information
see "WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?" in Part B of this Prospectus.
(1) The first distribution will be paid to all Unitholders, regardless of the distribution plan selected. Such distribution may
be more or less than a regular monthly distribution.
(2) The second distribution under the quarterly distribution plan represents a 1-month distribution; subsequent quarterly
distributions will be regular 3-month distributions.
(3) The second distribution under the semi-annual distribution plan represents a 1-month distribution; subsequent semi-annual
distributions will be regular 6-month distributions.
</TABLE>
COLORADO RISK FACTORS
The financial condition of the State of Colorado is affected by various
national, economic, social and environmental policies and conditions.
Additionally, Constitutional and statutory limitations imposed on the State and
its local governments concerning taxes, bond indebtedness and other matters may
constrain the revenue-generating capacity of the State and its local governments
and, therefore, the ability of the issuers of the Bonds to satisfy their
obligations. Historically, the State has experienced significant revenue
shortfalls. A recently passed, but somewhat ambiguous Constitutional Amendment
requires voter approval prior to tax increases, creation of debt, or until levy
or valuation for assessment ratio increases. The Amendment also limits increases
in government spending and property tax revenues to specified percentages.
The economic vitality of the State and its various regions and, therefore,
the ability of the State and its local governments to satisfy the Bonds, are
affected by numerous factors. The economy of the State continues to be dependent
on tourism and its position as a transportation hub. These sectors tend to be
cyclical.
The State is a party to numerous lawsuits in which an adverse final decision
could materially affect the State's governmental operations and consequently its
ability to pay debt service on its obligations.
Further information concerning Colorado risk factors may be obtained upon
written or telephonic request to the Trustee as described in "OTHER INFORMATION
- -- Supplemental Information" appearing in Part B of this Prospectus.
TAX STATUS--COLORADO INSURED TRUST
For a discussion of the Federal tax status of income earned on Colorado
Insured Trust Units, see "WHAT IS THE TAX STATUS OF UNITHOLDERS?" in Part B of
this Prospectus.
In the opinion of Sherman & Howard L.L.C., special Colorado counsel to the
Series, under existing law:
A Colorado Insured Trust will consist of obligations which were issued
by the State of Colorado or its political subdivisions or by the United
States or possessions of the United States including Puerto Rico, the Virgin
Islands and Guam ("Colorado Bonds").
Because Colorado income tax law is based upon the Federal law and in
light of the opinion of Chapman and Cutler, the Colorado Insured Trust is
not an association taxable as a corporation for purposes of Colorado income
taxation.
With respect to Colorado Unitholders, in view of the relationship
between Federal and Colorado tax computations described above and the
opinion of Chapman and Cutler referred to above:
Each Colorado Unitholder will be treated as owning a share of each asset
of the Colorado Insured Trust for Colorado income tax purposes, in the
proportion that the number of Units of such Trust held by him bears to the
total number of outstanding Units of the Colorado Insured Trust, and the
income of the Colorado Insured Trust will therefore be treated as the income
of each Colorado Unitholder under Colorado law in the proportion described.
3 of 7
<PAGE>
Interest on Colorado Bonds that would not be subject to Colorado income
tax or Colorado alternative minimum tax when paid directly to a Colorado
Unitholder will not be subject to Colorado income tax or alternative minimum
tax when received by the Colorado Insured Trust and attributed to such
Colorado Unitholder and when distributed to such Colorado Unitholder.
Any proceeds paid under an insurance policy issued to the issuer of the
Colorado Bonds involved, to the Depositor prior to deposit of the Colorado
Bonds in the Colorado Insured Trust, or to the Colorado Insured Trust, which
proceeds represent maturing interest on defaulted Colorado Bonds and which
proceeds would not be subject to Colorado income tax or alternative minimum
tax when paid directly to a Colorado Unitholder will not be subject to
Colorado income and alternative minimum tax when received by the Colorado
Insured Trust and attributed to such Colorado Unitholder and when
distributed to such Colorado Unitholder.
Each Colorado Unitholder will realize gain or loss taxable in Colorado
when the Colorado Insured Trust disposes of a Colorado Bond (whether by
sale, exchange, redemption or payment at maturity) or when the Colorado
Unitholder redeems or sells Units at a price that differs from original cost
as adjusted for amortization of bond discount or premium and other basis
adjustments (including any basis reduction that may be required to reflect a
Colorado Unitholder's share of interest, if any, accruing on Colorado Bonds
during the interval between the Colorado Unitholder's settlement date and
the date such Colorado Bonds are delivered to the Colorado Insured Trust, if
later).
Tax cost reduction requirements relating to amortization of bond premium
may, under some circumstances, result in Colorado Unitholders realizing gain
taxable in Colorado when their Units are sold or redeemed for an amount
equal to or less than their original cost.
If interest on indebtedness incurred or continued by a Colorado
Unitholder to purchase Units in the Colorado Insured Trust is not deductible
for Federal income tax purposes, it will not be deductible for Colorado
income tax purposes.
4 of 7
<PAGE>
NUVEEN COLORADO INSURED TRUST 60
(NUVEEN TAX-EXEMPT UNIT TRUST SERIES 823)
SCHEDULE OF INVESTMENTS AT THE DATE OF DEPOSIT, SEPTEMBER 7, 1995
<TABLE>
<CAPTION>
Ratings(3) Trustee's
Optional --------------------- Determination
Aggregate Name of Issuer and Title of Issue Represented Redemption Standard of Offering
Principal by Sponsor's Contracts to Purchase Bonds(1) Provisions(2) & Poor's Moody's Price
<C> <C> <S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ 200,000 Colorado Postsecondary Educational Facilities 2005 at 100 AAA Aaa $ 202,240
Authority, Revenue Bonds (The Auraria
Foundation Project), Series 1995, 6.00% Due
9/1/15. (When issued.)
120,000 Adams County School District No. 1 (Mapleton 2003 at 100 AAA Aaa 111,196
Public Schools), Adams County, Colorado,
General Obligation Refunding Bonds, Series
1993, 5.25% Due 6/1/17.
525,000 E-470 Public Highway Authority, Arapahoe 2005 at 103 AAA Aaa
County, Colorado, Capital Improvement Trust
Fund Highway Revenue Bonds (E-470 Project),
Vehicle Registration Fee Bonds,
275M-6.05% Due 8/31/15, 279,947
250M-6.15% Due 8/31/26. 255,608
500,000 City of Colorado Springs, Colorado, Utilities 2004 at 100 AAA Aaa 450,185
System Improvement and Refunding Revenue
Bonds, Series 1994A, 5.125% Due 11/15/23.
500,000 City and County of Denver, Colorado, Airport 2005 at 102 AAA Aaa 487,500
System Revenue Bonds, Series 1995A, 5.70% Due
11/15/25.
500,000 City and County of Denver, Colorado, Hospital 2003 at 102 AAA Aaa 505,620
Revenue Bonds (The Children's Hospital
Association Project), Series 1993, 6.00% Due
10/1/15.
500,000 City and County of Denver, Colorado, Revenue 2003 at 102 AAA Aaa 438,450
Bonds, Series 1994 (Sisters of Charity of
Leavenworth Health Services Corporation),
5.00% Due 12/1/23. (Original issue discount
bonds delivered on or about February 2, 1994
at a price of 94.00% of principal amount.)
275,000 Metro Wastewater Reclamation District, 2003 at 100 AAA Aaa 245,861
Colorado, Sewer Refunding Bonds, Series
1993B, 4.75% Due 4/1/12. (Original issue
discount bonds delivered on or about December
29, 1993 at a price of 94.39% of principal
amount.)
380,000 Commonwealth of Puerto Rico, Public Improvement 2005 at 101 1/2 AAA Aaa 360,601
Bonds of 1995 (General Obligation Bonds.),
5.375% Due 7/1/22. (Original issue discount
bonds delivered on or about May 4, 1995 at a
price of 93.916% of principal amount.)
- ----------- ---------------
$ 3,500,000 $ 3,337,208
- ----------- ---------------
- ----------- ---------------
</TABLE>
- ------------
(1) The Sponsor's contracts to purchase Bonds were entered into during the
period from September 5, 1995 to September 6, 1995. Other information regarding
the Bonds in the Trust on the initial Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST
COST TO (OR LOSS) INCOME TO BID PRICE
TRUST SPONSOR TO SPONSOR TRUST OF BONDS
--------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
COLORADO
INSURED TRUST
60............. $3,317,098 $ 20,110 $ 192,925 $3,320,645
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is .47%. Neither cost
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. The Sponsor did not participate as either the sole
underwriter or as a manager or member of a syndicate that acted as the original
underwriter of any of the Bonds.
(2) The Bonds are first subject to optional redemption in the years, and at
the prices, shown. Unless otherwise indicated, the Bonds, except for Bonds
issued at a substantial original issue discount, are redeemable at declining
prices (but not below par value) in subsequent years. Original issue discount
bonds, including zero coupon bonds, are generally redeemable at prices based on
the issue price plus the amount of original issue discount accreted to
redemption plus, if applicable, some premium, the amount of which will decline
in subsequent years. The Bonds may also be subject to sinking fund redemption
without premium prior to the dates shown. Certain Bonds may be subject to
redemption without premium prior to the date shown pursuant to special or
mandatory call provisions specified in the instruments setting forth the terms
and provisions of such Bonds. See "COMPOSITION OF TRUSTS", "WHAT IS THE TAX
STATUS OF UNITHOLDERS?" and "RISK FACTORS" in Part B of this Prospectus.
(3) All the Bonds in the Insured Trusts, as insured by the Insurer, are
rated AAA by Standard & Poor's and Aaa by Moody's. The insurance obtained by
the Trust guarantees the payment of interest and
principal on the Bonds when due but does not cover certain market risks
associated with fixed income securities such as accelerated payments, premiums
payable on mandatory redemptions or interest rate risks. (See "WHY AND HOW ARE
THE BONDS INSURED?" in Part B of this Prospectus and "Description of Ratings" in
the Information Supplement.)
5 of 7
<PAGE>
Statement of Condition
NUVEEN COLORADO INSURED TRUST 60
(Nuveen Tax-Exempt Unit Trust, Series 823)
AS OF SEPTEMBER 7, 1995
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Tax-Exempt Bonds,
backed by an irrevocable letter of
credit(1)(2).................................... $ 3,337,208
Accrued interest to September 7, 1995 on
underlying Bonds(1)............................. 51,458
Organizational costs(3)........................... 5,500
--------------
Total................................. $ 3,394,166
--------------
--------------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to September 7, 1995 on
underlying Bonds(4).......................... $ 51,458
Accrued organizational costs(3)............... 5,500
--------------
Total................................. $ 56,958
--------------
--------------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest
outstanding (35,000)
Cost to investors(5)........................ $ 3,509,141
Less: Gross underwriting commission(6).... (171,933)
--------------
Net amount applicable to investors............ $ 3,337,208
--------------
Total................................. $ 3,394,166
--------------
--------------
- ------------
(1) Represented by contracts to purchase Tax-Exempt Bonds which
include "when issued" or "regular way" or "delayed delivery"
contracts for which an irrevocable letter of credit issued by
a major commercial bank has been deposited with the Trustee on
the Date of Deposit. The amount of such letter of credit and
any cash deposited exceeds the amount necessary for the
purchase of the Bonds plus accrued interest to the Date of
Deposit. At the Date of Deposit, Bonds may have been delivered
to the Sponsor pursuant to certain of these contracts; the
Sponsor has assigned to the Trustee all of its rights, title
and interest in and to such Bonds.
(2) Aggregate value (at offering prices) as of the Date of Deposit
of the Bonds listed under "Schedule of Investments" herein,
and their aggregate cost to the Trust are the same. Such
offering prices were determined by Kenny S&P Evaluation
Services, a division of J.J. Kenny Co., Inc., as of the close
of business on the business day prior to the Date of Deposit.
(See "HOW WAS THE PRICE OF THE BONDS DETERMINED AT THE DATE OF
DEPOSIT?" in Part B of this Prospectus.) Insurance coverage
providing for the timely payment, when due, of all principal
of and interest on the Bonds in an Insured Trust has been
obtained by the Sponsor or by the issuers of such Bonds. Such
insurance does not guarantee the market value of the Bonds or
the value of the Units. Both the bid and the offering prices
of the underlying Bonds and of the Units may include value
attributable to such policies of insurance.
(3) The Trust (and therefore Unitholders) will bear all or a
portion of its estimated organizational costs which will be
deferred and amortized over five years from the Date of
Deposit.
(4) Representing, as set forth in "WHAT IS ACCRUED INTEREST?" in
Part B of this Prospectus, advancement by the Trustee of an
amount equal to the accrued Bond interest as of the Date of
Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued
interest) computed as set forth under "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.
(6) The gross underwriting commission of 4.90% of the Public
Offering Price has been calculated on the assumption that the
Units sold are not subject to a reduction of sales charge for
quantity purchases. In single transactions involving 500 Units
or more, the sales charge is reduced. (See "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.)
</TABLE>
6 of 7
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
COLORADO INSURED TRUST 60:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of
Colorado Insured Trust 60 (contained in Nuveen Tax-Exempt Unit Trust, Series
823), as of September 7, 1995. These financial statements are the responsibility
of the Sponsor. Our responsibility is to express an opinion on these 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 the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, 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 that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the related schedule of
investments at date of deposit referred to above present fairly, in all material
respects, the financial position of Colorado Insured Trust 60 as of September 7,
1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
September 7, 1995.
7 of 7
<PAGE>
A
NUVEEN NUVEEN MICHIGAN INSURED TRUST 62
(NUVEEN TAX EXEMPT UNIT TRUSTS SERIES 823)
CUSIP NUMBERS:
Monthly: 67095E 377
Quarterly: 67095E 385
Semi-Annually: 67095E 393
PROSPECTUS--PART A (SPECIFIC TERMS) -- SEPTEMBER 7, 1995
THIS PART A OF THE PROSPECTUS MAY NOT BE DISTRIBUTED
UNLESS ACCOMPANIED BY THE PART B OF THE PROSPECTUS.
BOTH PARTS OF THE PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
Michigan Insured Trust, Series 62 (the "Michigan Insured Trust") consists of
a portfolio of interest-bearing obligations issued by or on behalf of the State
of Michigan, certain United States Territories or authorities and political
subdivisions thereof which, in the opinion of
recognized bond counsel to the issuing authorities, provide income which is
exempt from Federal income tax and Michigan income, intangible and local taxes,
to the extent indicated below.
The objectives of the Trust are income exempt from Federal income tax,
state income taxes and state intangible taxes, and conservation of capital.
The objectives are, of
course, dependent upon the continuing ability of the issuers, obligors and/or
insurers to meet their respective obligations.
The Portfolio of Michigan Insured Trust 62 consists of 8 obligations issued
by entities located in Michigan and one obligation issued by an entity located
in the Territory of Puerto Rico. The Bonds in the Trust are either general
obligations of the governmental entity issuing them and are backed by the taxing
power thereof or are payable as to principal and interest from the income of a
specific project or authority and are not supported by the issuer's power to
levy taxes. The sources of payment for the Bonds, other than general obligation
Bonds and Bonds escrowed to maturity or optional redemption date, are divided as
follows:
<TABLE>
<CAPTION>
NUMBER OF PORTFOLIO
ISSUES PURPOSE OF ISSUE PERCENTAGE
- ----------- ----------------------------------------------------------------------------- -------------
<C> <S> <C>
2 Health Care Facility Revenue 25%
1 College and University Revenue 14
1 Miscellaneous Revenue 6
</TABLE>
Approximately 30.6% of the aggregate principal amount of the Bonds in the
Trust (accounting for approximately 27.2% of the aggregate offering price of the
Bonds) are original issue discount obligations. Certain of these original issue
discount obligations, amounting to 5.7% of the aggregate principal amount and
1.8% of the aggregate offering price of the Bonds in the Trust, are "zero
coupon" bonds. See "RISK FACTORS" for a discussion of the characteristics of
such obligations and of the risks associated therewith.
All of the Bonds in the Michigan Insured Trust are covered by policies of
insurance obtained from the MBIA Insurance Corporation guaranteeing payment of
principal and interest when due. As a result of such insurance, the Bonds in the
Trust have received a rating of "Aaa" by Moody's and
both the Bonds in the Trust and the Units of the Trust have received a rating of
"AAA" by Standard & Poor's.
For a discussion of the risks associated with investments in the bonds of
various issuers, see "RISK FACTORS" in Part B of this Prospectus.
ESSENTIAL INFORMATION
REGARDING THE NUVEEN MICHIGAN INSURED TRUST 62
ON THE BUSINESS DAY PRIOR TO THE DATE OF DEPOSIT, SEPTEMBER 6, 1995
Sponsor and Evaluator........ John Nuveen & Co. Incorporated
Trustee...................... The Chase Manhattan Bank, N.A.
------------------------------------------------
The income, expense and distribution data set forth below have been calculated
for Unitholders receiving monthly, quarterly or semi-annual distribution
options.
<TABLE>
<S> <C>
Principal Amount of Bonds in Trust.................. $ 3,500,000
Number of Units..................................... 35,000
Fractional Undivided Interest in Trust Per Unit..... 1/35,000
Public Offering Price--Less than 500 Units
Aggregate Offering Price of Bonds in Trust...... $ 3,293,641
Divided by Number of Units...................... $ 94.10
Plus Sales Charge 4.9% (5.152% of the Aggregate
Offering Price of the Bonds per Unit).......... $ 4.85
Public Offering Price Per Unit(1)............... $ 98.95
Redemption Price Per Unit (exclusive of accrued
interest)......................................... $ 93.67
Sponsor's Initial Repurchase Price Per Unit
(exclusive of accrued interest)................... $ 94.10
Excess of Public Offering Price Per Unit over
Redemption Price Per Unit......................... $ 5.28
Excess of Public Offering Price Per Unit over
Sponsor's Repurchase Price Per Unit............... $ 4.85
Average Maturity of Bonds in the Trust(2)........... 23.5 years
</TABLE>
- ----------
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.
1 of 7
<PAGE>
ESSENTIAL INFORMATION (CONT.)
<TABLE>
<CAPTION>
MONTHLY QUARTERLY SEMI-ANNUAL
----------- ----------- -----------
<S> <C> <C> <C>
Calculation of Estimated Net Annual
Interest Income Per Unit
Annual Interest Income(3)............ $ 5.3706 $ 5.3706 $ 5.3706
Less Estimated Annual Expense........ $ .2407 $ .2087 $ .1897
----------- ----------- -----------
Estimated Net Annual Interest
Income(4).......................... $ 5.1299 $ 5.1619 $ 5.1809
Daily Rate of Accrual Per Unit........... $ .01424 $ .01433 $ .01439
ESTIMATED CURRENT RETURN(5).............. 5.19% 5.22% 5.24 %
ESTIMATED LONG TERM RETURN(5)............ 5.30% 5.33% 5.35 %
Trustee's Annual Fees(6)................. $ 1.5413 $ 1.2213 $ 1.0313
Date of Deposit..................................................................................September 7, 1995
Settlement Date.................................................................................September 12, 1995
Mandatory Termination Date....................................See "OTHER INFORMATION" in Part B of this Prospectus
Minimum Value of Each Trust...................................See "OTHER INFORMATION" in Part B of this Prospectus
Sponsor's Annual Evaluation Fee.........................................$0.17 per $1,000 principal amount of Bonds
Estimated Annual Organizational Expenses(7).......................................................$.02914 per Unit
- ----------
BECAUSE CERTAIN OF THE BONDS IN THE TRUST WILL NOT BE DELIVERED TO THE TRUSTEE UNTIL AFTER THE SETTLEMENT DATE FOR
A PURCHASE OF UNITS MADE ON THE DATE OF DEPOSIT, INTEREST THAT ACCRUES ON THOSE BONDS BETWEEN THE DATE OF DEPOSIT
AND SUCH DELIVERY DATE WILL BE TREATED AS A RETURN OF PRINCIPAL RATHER THAN AS TAX-EXEMPT INCOME. THE AMOUNT OF
ANY SUCH RETURN OF PRINCIPAL IS NOT INCLUDED IN THE ANNUAL INTEREST INCOME SHOWN ABOVE. FOR THE TRUST, THE
FOLLOWING SETS FORTH THE LATEST SCHEDULED BOND DELIVERY DATE, THE AMOUNT PER UNIT THAT WILL BE TREATED AS A RETURN
OF PRINCIPAL TO UNITHOLDERS WHO PURCHASE ON THE DATE OF DEPOSIT, AND THE ESTIMATED CURRENT RETURN UNDER THE
MONTHLY DISTRIBUTION PLAN AFTER THE FIRST YEAR, ASSUMING THE PORTFOLIO AND ESTIMATED ANNUAL EXPENSES DO NOT VARY
FROM THAT SET FORTH ABOVE (SEE "WHAT ARE NORMAL TRUST OPERATING EXPENSES?" IN PART B OF THIS PROSPECTUS AND THE
"SCHEDULE OF INVESTMENTS"). THE ESTIMATED CURRENT RETURN AFTER THE FIRST YEAR WILL ALSO BE HIGHER UNDER THE
QUARTERLY AND SEMI-ANNUAL DISTRIBUTION PLANS:
LATEST SCHEDULED PER UNIT ESTIMATED CURRENT RETURN
DELIVERY DATE RETURN OF PRINCIPAL AFTER THE FIRST YEAR
------------------ -------------------- -------------------------
MICHIGAN INSURED TRUST........ SEPTEMBER 21, 1995 $ .02 5.21 %
<FN>
Evaluations for purpose of sale, purchase or redemption of Units are made as of 4 p.m. Eastern time on the business day next
following receipt of an order by the Sponsor or Trustee. (See "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?" in Part B of this
Prospectus.)
(1) Units are offered at the Public Offering Price plus accrued interest from the preceding Record Date to, but not including,
the date of settlement (normally three business days after purchase). The Date of Deposit of the Fund has been designated as
the First Record Date for all plans of distribution of the Trust and, accordingly, for Units purchased on the Date of
Deposit, $.07 of accrued interest to the Settlement Date will be added to the Public Offering Price. (See "WHAT IS ACCRUED
INTEREST?" in Part B of this Prospectus.)
(2) The Average Maturity of Bonds in the Trust is calculated based upon the stated maturities of the Bonds in the 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 Maturity of Bonds in the Trust may increase or decrease from time to time as Bonds mature
or are called or sold.
(3) Assumes delivery of all Bonds. (See "COMPOSITION OF TRUSTS" appearing in Part B of this Prospectus.) Interest income does not
include accretion of original issue discount on "zero coupon" Bonds, Stripped Obligations or other original issue discount
Bonds. (See "RISK FACTORS" in Part B of this Prospectus.)
(4) The amount and timing of interest distributions from the Trust under the various plans of distribution are set forth below.
It is anticipated that the amount of interest to be distributed per Unit in each year under each plan of distribution will
initially be substantially equal to the Estimated Net Annual Interest Income per Unit for that plan. The amount of interest
to be distributed annually per Unit, will generally change as Bonds are redeemed, mature or are sold or as fees and expenses
increase or decrease.
(5) Estimated Long Term Return for the Trust represents the average of the yields to maturity (or call) of the Bonds in the
Trust's portfolio calculated in accordance with accepted bond practices and adjusted to reflect a compounding factor,
expenses and sales charges. Estimated Current Return is computed by dividing the Net Annual Interest Income per Unit by the
Public Offering Price, and in contrast to Estimated Long Term Return does not reflect the amortization of premium or
accretion of discount, if any. For more information see "WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN?"
in Part B of this Prospectus.
(6) Each Trustee annual fee is per $1,000 principal amount of the underlying Bonds in the Trust for that portion of the Trust
that represents a particular plan of distribution.
(7) The Trust (and therefore Unit holders) will bear all or a portion of its organizational costs (including costs of preparing
the registration statements, the trust indenture and other closing documents, registering Units with the Securities and
Exchange Commission and states, the initial audit of the Trust portfolio, legal fees and the initial fees and expenses of the
Trustee but not including the expenses incurred in the printing of preliminary and final prospectuses, and expenses
incurred in the
preparation and printing of brochures and other advertising materials and any other selling expenses) as is common for mutual
funds. Total organizational expenses will be amortized over a five year period. See "WHAT ARE NORMAL TRUST OPERATING
EXPENSES?" in Part B and "Statement of Condition." Historically, the sponsors of unit investment trusts have paid all the
costs of establishing such trusts.
</TABLE>
2 of 7
<PAGE>
INTEREST DISTRIBUTION
Details of interest distributions per Unit of the Michigan Insured Trust
under the various plans appear in the following table based upon estimated Net
Annual Interest Income at the Date of Deposit:
<TABLE>
<CAPTION>
NORMAL
DISTRIBUTIONS
1995 1996 PER YEAR
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------- --------------
Record Date*.......................... 10/1 11/1 2/1 5/1
Distribution Date..................... 10/15 11/15 2/15 5/15
- --------------------------------------------------------------------------------------------------------------------
Monthly Distribution Plan............. $ .3434(1) $ 5.1523
-------- $.4293 every month --------
Quarterly Distribution Plan........... $ .3434(1) $ .4320(2) $ 1.2960 $ 1.2960 $ 5.1843
Semi-Annual Distribution Plan......... $ .3434(1) $ .4335(3) $ 2.6010 $ 5.2033
- --------------------------------------------------------------------------------------------------------------------
<FN>
* Record Dates for semi-annual distributions are May 1 and November 1; for quarterly distributions, they are February 1, May 1,
August 1 and November 1. Record Dates for monthly distributions are the first day of each month. Distribution Dates under each
distribution plan are the fifteenth day of the month in which the respective Record Date occurred. For additional information
see "WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?" in Part B of this Prospectus.
(1) The first distribution will be paid to all Unitholders, regardless of the distribution plan selected. Such distribution may
be more or less than a regular monthly distribution.
(2) The second distribution under the quarterly distribution plan represents a 1-month distribution; subsequent quarterly
distributions will be regular 3-month distributions.
(3) The second distribution under the semi-annual distribution plan represents a 1-month distribution; subsequent semi-annual
distributions will be regular 6-month distributions.
</TABLE>
MICHIGAN RISK FACTORS
The financial condition of the State of Michigan is affected by various
national, economic, social and environmental policies and conditions.
Additionally, Constitutional and statutory limitations imposed on the State and
its local governments concerning taxes, bond indebtedness and other matters may
constrain the revenue-generating capacity of the State and its local governments
and, therefore, the ability of the issuers of the Bonds to satisfy their
obligations. Historically, the State has experienced significant revenue
shortfalls. The State's Constitution limits the amount of total State revenues
that may be raised from taxes and other sources. State revenues (excluding
federal aid and revenues used for payment of principal and interest on general
obligation bonds) in any fiscal year are limited to a specified percentage of
State personal income in the prior calendar year or average of the prior three
calendar years, whichever is greater. The State may raise taxes in excess of the
limit in emergency situations.
The economic vitality of the State and its various regions and, therefore,
the ability of the State and its local governments to satisfy the Bonds, are
affected by numerous factors. The economy of the State continues to be dependent
on manufacturing, tourism, and agriculture. These sectors tend to be cyclical
and are facing increasing competition from foreign producers.
The State is a party to numerous lawsuits in which an adverse final decision
could materially affect the State's governmental operations and consequently its
ability to pay debt service on its obligations.
All outstanding general obligation bonds of the State are rated "AA" by
Standard and Poor's and "A1" by Moody's.
Further information concerning Michigan risk factors may be obtained upon
written or telephonic request to the Trustee as described in "OTHER INFORMATION
- -- Supplemental Information" appearing in Part B of this Prospectus.
TAX STATUS--MICHIGAN INSURED TRUST
For a discussion of the Federal tax status of income earned on Michigan
Insured Trust Units, see "WHAT IS THE TAX STATUS OF UNITHOLDERS?" in Part B of
this Prospectus.
In the opinion of Dickinson, Wright, Moon, Van Dusen & Freeman, special
Michigan counsel to the Series, under existing law:
The assets of a Michigan Trust will consist of interest-bearing
obligations issued by or on behalf of the State of Michigan, and counties,
municipalities, authorities and political subdivisions thereof, and, in
limited instances, bonds issued by Puerto Rico, the Virgin Islands, Guam,
the Northern Mariana Islands or possessions of the United States (the
"Michigan Bonds").
Under the Michigan income tax act, the Michigan single business tax act,
the Michigan intangibles tax act, the Michigan city income tax act (which
authorizes the only income tax ordinance that may be adopted by cities in
Michigan), and under the law which authorizes a "first class" school
district to levy an excise tax upon income, the Michigan Insured Trust is
not subject to tax. The income of the Michigan Insured Trust will be
3 of 7
<PAGE>
treated as the income of the Unitholders and be deemed to have been received
by them when received by the Michigan Insured Trust.
Interest on the Michigan Bonds in the Michigan Insured Trust which is
exempt from Federal income tax is exempt from Michigan state and local
income taxes and from the Michigan single business tax. Further, any amounts
paid under the insurance representing maturing interest on defaulted
obligations held by the Trustee will be excludable from Michigan state and
local income taxes and from the Michigan single business tax if, and to the
same extent as, such interest would have been excludable if paid by the
respective issuer.
For purposes of the foregoing Michigan tax laws (corporations and
financial institutions are not subject to the Michigan income tax), each
Unitholder will be considered to have received his pro rata share of
Michigan Bond interest when it is received by the Michigan Insured Trust,
and each Unitholder will have a taxable event when the Michigan Insured
Trust disposes of a Michigan Bond (whether by sale, exchange, redemption or
payment at maturity) or when the Unitholder redeems or sells Units. Due to
the requirement that tax cost be reduced to reflect amortization of bond
premium, under some circumstances a Unitholder may realize taxable gain when
Units are sold or redeemed for an amount equal to, or less than, their
original cost. The tax cost of each Unit to a Unitholder will be allocated
for purposes of these Michigan tax laws in the same manner as the cost is
allocated for Federal income tax purposes.
Pursuant to the position of the Michigan Department of Treasury in a
bulletin dated December 19, 1986, reaffirmed in a bulletin dated March 31,
1989, the portion of the Michigan Insured Trust represented by the Michigan
Bonds will be exempt from the Michigan Intangibles Tax. The Department of
Treasury has not indicated a position with respect to treatment of amounts
paid under a policy of insurance with respect to maturing interest on
defaulted obligations (which amounts would have been excludable if paid by
the respective issuer) for purposes of determining the income base for the
Michigan Intangibles Tax.
If a Unitholder is subject to the Michigan single business tax (i.e., is
engaged in a "business activity" as defined in the Michigan single business
tax act), and has a taxable event for Federal income tax purposes when the
Michigan Insured Trust sells or exchanges Michigan Bonds or the Unitholder
sells or exchanges Units, such event may impact on the adjusted tax base
upon which the single business tax is computed. Any capital gain or loss
realized from such taxable event which was included in the computation of
the Unitholder's Federal taxable income, plus the portion, if any, of such
capital gain excluded in such computation and minus the portion, if any, of
such capital loss not deducted in such computation for the year the loss
occurred, will be included in the adjusted tax base. The adjusted tax base
of any person other than a corporation is affected by any gain or loss
realized from the taxable event only to the extent that the resulting
Federal taxable income is derived from "business activity."
4 of 7
<PAGE>
NUVEEN MICHIGAN INSURED TRUST 62
(NUVEEN TAX-EXEMPT UNIT TRUST SERIES 823)
SCHEDULE OF INVESTMENTS AT THE DATE OF DEPOSIT, SEPTEMBER 7, 1995
<TABLE>
<CAPTION>
Ratings(3) Trustee's
Optional --------------------- Determination
Aggregate Name of Issuer and Title of Issue Represented Redemption Standard of Offering
Principal by Sponsor's Contracts to Purchase Bonds(1) Provisions(2) & Poor's Moody's Price
<C> <C> <S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ 500,000 Michigan State Hospital Finance Authority, 2003 at 102 AAA Aaa $ 480,000
Hospital Revenue Refunding Bonds (Oakwood
Hospital Obligated Group), Series 1993A,
5.50% Due 11/1/13.
370,000 Michigan State Hospital Finance Authority 2003 at 102 AAA Aaa 362,600
(Michigan), Hospital Revenue Refunding Bonds
(St. John Hospital), Series 1993A, 5.75% Due
5/15/16. (Original issue discount bonds
delivered on or about January 14, 1993 at a
price of 93.313% of principal amount.)
200,000 Michigan Municipal Bond Authority, Local No Optional Call AAA Aaa 59,000
Government Loan Program, Revenue Bonds,
Series 1994G, 0.00% Due 5/1/16. (Original
issue discount bonds delivered on or about
December 21, 1994 at a price of 22.999% of
principal amount.)
240,000 Leslie Public Schools, Counties of Ingham and 2005 at 101 AAA Aaa 241,978
Jackson, State of Michigan, 1995 School
Building and Site and Refunding Bonds, 6.00%
Due 5/1/15. (General Obligation Bonds.)
500,000 Board of Trustees of Oakland University, 2005 at 102 AAA Aaa 489,370
Michigan, General Revenue Bonds, Series 1995,
5.75% Due 5/15/26.
535,000 * County of Ottawa, State of Michigan, Ottawa 2005 at 100 AAA Aaa 535,000
County Refunding Bonds (Northwest Ottawa
Water-1976-Second Refunding), 5.875% Due
1/1/15. (General Obligation Bonds.) (When
issued.)
500,000 Reeths-Puffer Schools, County of Muskegon, 2005 at 101 AAA Aaa 502,030
State of Michigan, 1995 School Building and
Site and Refunding Bonds, 6.00% Due 5/1/25.
(General Obligation Bonds.)
155,000 Warren Consolidated Schools, Counties of Macomb 2003 at 102 AAA Aaa 149,188
and Oakland, State of Michigan, 1993
Refunding Bonds, 5.50% Due 5/1/14. (General
Obligation Bonds.)
500,000 Commonwealth of Puerto Rico, Public Improvement 2005 at 101 1/2 AAA Aaa 474,475
Bonds of 1995 (General Obligation Bonds.),
5.375% Due 7/1/22. (Original issue discount
bonds delivered on or about May 4, 1995 at a
price of 93.916% of principal amount.)
- ----------- ---------------
$ 3,500,000 $ 3,293,641
- ----------- ---------------
- ----------- ---------------
</TABLE>
* These Bonds, or a portion thereof, have delivery dates beyond the normal
settlement date. Their expected delivery date is September 21, 1995. Contracts
relating to Bonds with delivery dates after the date of settlement for
purchase made on the Date of Deposit constitute approximately 15% of the
aggregate principal amount of the Trust. (See "COMPOSITION OF TRUSTS" in Part
B of this Prospectus.)
- ------------
(1) The Sponsor's contracts to purchase Bonds were entered into during the
period from September 5, 1995 to September 6, 1995. Other information regarding
the Bonds in the Trust on the initial Date of Deposit is as follows:
<TABLE>
<CAPTION>
ANNUAL
PROFIT INTEREST
COST TO (OR LOSS) INCOME TO BID PRICE
TRUST SPONSOR TO SPONSOR TRUST OF BONDS
--------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
MICHIGAN
INSURED TRUST
62............. $3,282,267 $ 11,374 $ 188,756 $3,278,428
</TABLE>
In addition, the difference between the Trustee's determination of Offering
Price and Bid Price (as a percentage of principal amount) is .43%. Neither cost
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. The Sponsor did not participate as either the sole
underwriter or as a manager or member of a syndicate that acted as the original
underwriter of any of the Bonds.
(2) The Bonds are first subject to optional redemption in the years, and at
the prices, shown. Unless otherwise indicated, the Bonds, except for Bonds
issued at a substantial original issue discount, are redeemable at declining
prices (but not below par value) in subsequent years. Original issue discount
bonds, including zero coupon bonds, are generally redeemable at prices based on
the issue price plus the amount of original issue discount accreted to
redemption plus, if applicable, some premium, the amount of which will decline
in subsequent years. The Bonds may also be subject to sinking fund redemption
without premium prior to the dates shown. Certain Bonds may be subject to
redemption without premium prior to the date shown pursuant to special or
mandatory call provisions specified in the instruments setting forth the terms
and provisions of such Bonds. See "COMPOSITION OF TRUSTS", "WHAT IS THE TAX
STATUS OF UNITHOLDERS?" and "RISK FACTORS" in Part B of this Prospectus.
(3) All the Bonds in the Insured Trusts, as insured by the Insurer, are
rated AAA by Standard & Poor's and Aaa by Moody's. The insurance obtained by the
Trust guarantees the payment of interest and
principal on the Bonds when due but does not cover certain market risks
associated with fixed income securities such as accelerated payments, premiums
payable on mandatory redemptions or interest rate risks. (See "WHY AND HOW ARE
THE BONDS INSURED?" in Part B of this Prospectus and "Description of Ratings" in
the Information Supplement.)
5 of 7
<PAGE>
Statement of Condition
NUVEEN MICHIGAN INSURED TRUST 62
(Nuveen Tax-Exempt Unit Trust, Series 823)
AS OF SEPTEMBER 7, 1995
<TABLE>
<S> <C>
TRUST PROPERTY
Sponsor's contracts to purchase Tax-Exempt Bonds,
backed by an irrevocable letter of
credit(1)(2).................................... $ 3,293,641
Accrued interest to September 7, 1995 on
underlying Bonds(1)............................. 51,059
Organizational costs(3)........................... 5,100
--------------
Total................................. $ 3,349,800
--------------
--------------
LIABILITIES AND INTEREST OF UNITHOLDERS
LIABILITIES:
Accrued interest to September 7, 1995 on
underlying Bonds(4).......................... $ 51,059
Accrued organizational costs(3)............... 5,100
--------------
Total................................. $ 56,159
--------------
--------------
INTEREST OF UNITHOLDERS:
Units of fractional undivided interest
outstanding (35,000)
Cost to investors(5)........................ $ 3,463,329
Less: Gross underwriting commission(6).... (169,688)
--------------
Net amount applicable to investors............ $ 3,293,641
--------------
Total................................. $ 3,349,800
--------------
--------------
- ------------
(1) Represented by contracts to purchase Tax-Exempt Bonds which
include "when issued" or "regular way" or "delayed delivery"
contracts for which an irrevocable letter of credit issued by
a major commercial bank has been deposited with the Trustee on
the Date of Deposit. The amount of such letter of credit and
any cash deposited exceeds the amount necessary for the
purchase of the Bonds plus accrued interest to the Date of
Deposit. At the Date of Deposit, Bonds may have been delivered
to the Sponsor pursuant to certain of these contracts; the
Sponsor has assigned to the Trustee all of its rights, title
and interest in and to such Bonds.
(2) Aggregate value (at offering prices) as of the Date of Deposit
of the Bonds listed under "Schedule of Investments" herein,
and their aggregate cost to the Trust are the same. Such
offering prices were determined by Kenny S&P Evaluation
Services, a division of J.J. Kenny Co., Inc., as of the close
of business on the business day prior to the Date of Deposit.
(See "HOW WAS THE PRICE OF THE BONDS DETERMINED AT THE DATE OF
DEPOSIT?" in Part B of this Prospectus.) Insurance coverage
providing for the timely payment, when due, of all principal
of and interest on the Bonds in an Insured Trust has been
obtained by the Sponsor or by the issuers of such Bonds. Such
insurance does not guarantee the market value of the Bonds or
the value of the Units. Both the bid and the offering prices
of the underlying Bonds and of the Units may include value
attributable to such policies of insurance.
(3) The Trust (and therefore Unitholders) will bear all or a
portion of its estimated organizational costs which will be
deferred and amortized over five years from the Date of
Deposit.
(4) Representing, as set forth in "WHAT IS ACCRUED INTEREST?" in
Part B of this Prospectus, advancement by the Trustee of an
amount equal to the accrued Bond interest as of the Date of
Deposit.
(5) Aggregate Public Offering Price (exclusive of accrued
interest) computed as set forth under "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.
(6) The gross underwriting commission of 4.90% of the Public
Offering Price has been calculated on the assumption that the
Units sold are not subject to a reduction of sales charge for
quantity purchases. In single transactions involving 500 Units
or more, the sales charge is reduced. (See "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?" in Part B of this Prospectus.)
</TABLE>
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<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS OF JOHN NUVEEN & CO. INCORPORATED AND UNITHOLDERS OF
MICHIGAN INSURED TRUST 62:
We have audited the accompanying statement of condition and the schedule of
investments at date of deposit (included in Part A of this Prospectus) of
Michigan Insured Trust 62 (contained in Nuveen Tax-Exempt Unit Trust, Series
823), as of September 7, 1995. These financial statements are the responsibility
of the Sponsor. Our responsibility is to express an opinion on these 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 the irrevocable letter of credit arrangement for the purchase of
securities, described in Note (1) to the statement of condition, 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 that our
audit provides a reasonable basis for our opinion.
In our opinion, the statement of condition and the related schedule of
investments at date of deposit referred to above present fairly, in all material
respects, the financial position of Michigan Insured Trust 62 as of September 7,
1995, in conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Chicago, Illinois,
September 7, 1995.
7 of 7
<PAGE>
B
SEPTEMBER 1, 1995
SUBJECT TO COMPLETION
NUVEEN Tax-Exempt Unit Trusts
PROSPECTUS -- PART B
(GENERAL TERMS)
SEPTEMBER 1, 1995
THIS PART B OF THE PROSPECTUS MAY NOT BE DISTRIBUTED UNLESS ACCOMPANIED BY PART
A. BOTH PARTS OF THIS PROSPECTUS SHOULD BE RETAINED FOR FUTURE REFERENCE.
FURTHER DETAIL REGARDING CERTAIN OF THE INFORMATION PROVIDED IN THE PROSPECTUS
MAY BE OBTAINED WITHIN FIVE BUSINESS DAYS OF WRITTEN OR TELEPHONIC REQUEST TO
THE TRUSTEE AT 770 BROADWAY, NEW YORK, NY 10003 OR (800) 257-8787.
INTEREST INCOME TO A TRUST AND TO UNITHOLDERS, IN THE OPINION OF COUNSEL, UNDER
EXISTING LAW IS EXEMPT FROM FEDERAL INCOME TAX. CAPITAL GAINS, IF ANY, ARE
SUBJECT TO TAX. IN ADDITION, INTEREST INCOME OF STATE TRUSTS IS, IN THE OPINION
OF COUNSEL, EXEMPT, TO THE EXTENT INDICATED, FROM STATE AND LOCAL TAXES.
INTEREST INCOME OF ANY TRUST OTHER THAN A STATE TRUST MAY BE SUBJECT TO STATE
AND LOCAL TAXES.
CURRENTLY OFFERED AT PUBLIC OFFERING PRICE PLUS INTEREST ACCRUED TO THE DATE OF
SETTLEMENT. MINIMUM PURCHASE-- EITHER $5,000 OR 50 UNITS, WHICHEVER IS LESS.
THIS NUVEEN TAX-EXEMPT UNIT TRUST SERIES consists of the underlying separate
unit investment trust set forth in Part A to this Prospectus. Each Trust
initially consists of delivery statements relating to contracts to purchase
Bonds and, thereafter, will consist of a diversified portfolio of obligations
issued by or on behalf of states and territories of the United States and
authorities and political subdivisions thereof (see "Schedule of Investments"
appearing in Part A of this Prospectus). Except in specific instances as noted
in Part A of this Prospectus, the information contained in this Part B shall
apply to each Trust in its entirety. All obligations in each Traditional Trust
are rated in the category "A" or better by Standard & Poor's, a division of the
McGraw Hill Companies ("Standard & Poor's") or Moody's Investors Service, Inc.
("Moody's") on the Date of Deposit. All obligations in each Insured Trust are
covered by policies of insurance obtained from the MBIA Insurance Corporation
guaranteeing payment of principal and interest when due. All such policies of
insurance remain effective so long as the obligations are outstanding. As a
result of such insurance, the Bonds in each portfolio of the Insured Trusts have
received a rating of "Aaa" by Moody's and the Bonds in the Insured Trusts and
the Units of each such Trust have received a rating of "AAA" by Standard &
Poor's. INSURANCE RELATES ONLY TO THE BONDS IN THE INSURED TRUSTS AND NOT TO THE
UNITS OFFERED HEREBY OR TO THEIR MARKET VALUE. (See "WHY AND HOW ARE THE BONDS
INSURED?".)
THE OBJECTIVES of a Trust are tax-exempt income and conservation of capital
through a diversified investment in tax-exempt Bonds. The payment of interest
and the preservation of principal are, of course, dependent upon the continuing
ability of the issuers of Bonds and of any insurer thereof to meet their
obligations thereunder. There is no guarantee that a Trust's objectives will be
achieved. (See "RISK FACTORS".)
DISTRIBUTIONS of interest received by a Trust will be made semi-annually unless
the Unitholder elects to receive them monthly or quarterly. (See "WHEN ARE
DISTRIBUTIONS MADE TO UNITHOLDERS?".) Distribution of funds in the Principal
Account, if any, will ordinarily be made semi-annually.
FOR ESTIMATED LONG TERM RETURNS AND ESTIMATED CURRENT RETURNS to Unitholders in
each Trust on the business day prior to the Date of Deposit. (See Part A of this
Prospectus and "WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT
RETURN?".)
THE PUBLIC OFFERING PRICE per Unit of each Trust during the initial offering
period is equal to a pro rata share of the OFFERING prices of the Bonds in such
Trust's portfolio plus a sales charge of up to 4.90% of the Public Offering
Price (equivalent to 5.152% of the net amount invested); the sales charge is
somewhat lower on Trusts with lesser average maturities. (See "HOW IS THE PUBLIC
OFFERING PRICE DETERMINED?".) The Secondary Market Public Offering Price per
Unit for each Trust will be equal to a pro rata share of the sum of BID prices
of the Bonds in such Trust plus the sales charges determined based on the number
of years remaining to the maturity of each Bond. Accrued interest from the
preceding Record Date to, but not including, the settlement date (normally three
business days after purchase) is added to the Public Offering Price. The sales
charge is reduced on a graduated scale for sales involving at least $50,000 or
500 Units and will be applied on whichever basis is more favorable to the
purchaser. (See "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?".)
A UNITHOLDER MAY REDEEM UNITS at the office of the Trustee at prices based upon
the BID prices of the Bonds. The price received upon redemption may be more or
less than the amount paid by Unitholders, depending upon the value of the Bonds
on the date of tender for redemption. (See "HOW UNITS MAY BE REDEEMED WITHOUT
CHARGE?".) The Sponsor, although not required to do so, intends to make a
secondary market for the Units of the Trusts at prices based upon the BID prices
of the Bonds in the respective Trusts. (See "MARKET FOR UNITS".) RETAIN BOTH
PART A AND PART B OF THIS PROSPECTUS FOR FUTURE REFERENCE.
RISK FACTORS. An investment in a Trust should be made with an understanding of
the risks associated therewith, including, among other factors, the inability of
the issuer or an insurer to pay the principal of or interest on a bond when due,
volatile interest rates, early call provisions, and changes to the tax status of
the Bonds. See Part A of this Prospectus and "RISK FACTORS."
UNITS OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY AND
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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.
<PAGE>
NUVEEN Tax-Exempt Unit Trusts
<TABLE>
<CAPTION>
INDEX PAGE
<C> <S> <C> <C>
WHAT IS THE NUVEEN TAX-EXEMPT UNIT TRUST? 3
WHAT ARE THE OBJECTIVES OF THE TRUSTS? 3
SUMMARY OF PORTFOLIOS 3
RISK FACTORS 4
COMPOSITION OF TRUSTS 6
WHY AND HOW ARE THE BONDS INSURED? 7
HOW IS THE PUBLIC OFFERING PRICE DETERMINED? 8
MARKET FOR UNITS 11
WHAT IS ACCRUED INTEREST? 11
WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED
CURRENT RETURN? 12
HOW WAS THE PRICE OF THE BONDS DETERMINED AT THE
DATE
OF DEPOSIT? 12
WHAT IS THE TAX STATUS OF UNITHOLDERS? 13
WHAT ARE NORMAL TRUST OPERATING EXPENSES? 14
WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS? 15
ACCUMULATION PLAN 16
HOW DETAILED ARE REPORTS TO UNITHOLDERS? 17
UNIT VALUE AND EVALUATION 17
HOW UNITS OF THE TRUSTS ARE DISTRIBUTED TO THE
PUBLIC 17
OWNERSHIP AND TRANSFER OF UNITS 19
HOW UNITS MAY BE REDEEMED WITHOUT CHARGE 19
HOW UNITS MAY BE PURCHASED BY THE SPONSOR 20
HOW BONDS MAY BE REMOVED FROM THE TRUSTS 20
INFORMATION ABOUT THE TRUSTEE 21
INFORMATION ABOUT THE SPONSOR 22
OTHER INFORMATION 22
</TABLE>
2
<PAGE>
WHAT IS THE NUVEEN TAX-EXEMPT UNIT TRUST?
This Nuveen Tax-Exempt Unit Trust is one of a series of separate but similar
investment companies created by the Sponsor, each of which is designated by a
different Series number. The underlying unit investment trusts contained in this
Series are combined under one Trust Indenture and Agreement. Specific
information regarding this Trust is set forth in Part A of this Prospectus. The
various Nuveen Tax-Exempt Unit Trusts are collectively referred to herein as the
"Trusts"; the trusts in which few or none of the Bonds are insured are sometimes
referred to as the "Traditional Trusts", the trusts in which all of the Bonds
are insured as described herein are sometimes referred to as the "Insured
Trusts", and the state trusts (both Traditional and Insured) are sometimes
referred to as the "State Trusts." This Series was created under the laws of the
State of New York pursuant to a Trust Indenture and Agreement dated the Date of
Deposit (the "Indenture") between John Nuveen & Co. Incorporated (the "Sponsor")
and The Chase Manhattan Bank, N.A. (the "Trustee").
The Sponsor has deposited with the Trustee delivery statements relating to
contracts for the purchase of municipal debt obligations together with funds
represented by an irrevocable letter of credit issued by a major commercial bank
in the amount, including accrued interest, required for their purchase (or the
obligations themselves) (the "Bonds"). See "Schedule of Investments" in Part A
of this Prospectus, for a description of the Securities deposited in a Trust.
See "SUMMARY OF PORTFOLIOS" and "RISK FACTORS" for a discussion of zero coupon
bonds and stripped obligations included in the Trusts, if any. Some of the
delivery statements may relate to contracts for the purchase of "when issued" or
other Bonds with delivery dates after the date of settlement for a purchase made
on the Date of Deposit. See the "Schedule of Investments" in Part A of this
Prospectus and "COMPOSITION OF TRUSTS". For a discussion of the Sponsor's
obligations in the event of a failure of any contract for the purchase of any of
the Bonds and its limited right to substitute other bonds to replace any failed
contract, see "COMPOSITION OF TRUSTS."
Payment of interest on the Bonds in each Insured Trust, and of principal at
maturity, is guaranteed under policies of insurance obtained by the Sponsor or
by the issuers of the Bonds. (See "WHY AND HOW ARE THE BONDS INSURED?".) AS A
GENERAL MATTER, NEITHER THE ISSUER NOR THE SPONSOR HAS OBTAINED INSURANCE WITH
RESPECT TO THE BONDS IN ANY TRADITIONAL TRUST.
The Trustee has delivered to the Sponsor registered Units which represent
ownership of the entire Trust, and which are offered for sale by this
Prospectus. Each Unit of a Trust represents a fractional undivided interest in
the principal and net income of such Trust in the ratio set forth in "Essential
Information" in Part A of this Prospectus. Units may only be sold in states in
which they are registered. To the extent that any Units of any Trust are
redeemed by the Trustee, the aggregate value of the Trust's assets will decrease
by the amount paid to the redeeming Unitholder, but the fractional undivided
interest of each unredeemed Unit in such Trust will increase proportionately.
The Sponsor will initially, and from time to time thereafter, hold Units in
connection with their offering.
WHAT ARE THE OBJECTIVES OF THE TRUSTS?
The objectives of the Trusts are income exempt from Federal income tax and, in
the case of State Trusts, where applicable, state income and intangibles taxes,
and conservation of capital, through an investment in obligations issued by or
on behalf of states and territories of the United States and authorities and
political subdivisions thereof, the interest on which is, in the opinion of
recognized bond counsel to the issuing governmental authorities, exempt from
Federal income tax under existing law and certain state income tax and
intangibles taxes, if any, for purchasers who qualify as residents of that State
in which Bonds are issued. Insurance guaranteeing the timely payment, when due,
of all principal and interest on the Bonds in each Insured Trust has been
obtained by the Sponsor or by the issuers of such Bonds from MBIA Insurance
Corporation, and as a result of such insurance the obligations in the Insured
Trusts are rated "Aaa" by Moody's and "AAA" by Standard & Poor's. (See "WHY AND
HOW ARE THE BONDS INSURED?".) All obligations in each Traditional Trust are
rated in the category "A" or better (SP-1 or MIG 2 or better in the case of
short term obligations included in a Short Term Traditional Trust) by Standard &
Poor's or Moody's (including provisional or conditional ratings). In addition,
certain Bonds in certain Traditional Trusts may be covered by insurance
guaranteeing the timely payment, when due, of all principal and interest. There
is, of course, no guarantee that the Trusts' objectives will be achieved. For a
comparison of net after-tax return for various tax brackets see the "TAXABLE
EQUIVALENT ESTIMATED CURRENT RETURN TABLES" included in the Appendices to the
Information Supplement of this Prospectus.
SUMMARY OF PORTFOLIOS
In selecting Bonds for the respective Trusts, the following factors, among
others, were considered: (i) the Standard & Poor's Corporation rating of the
Bonds or the Moody's Investors Service, Inc. rating of the Bonds (see "WHAT ARE
THE OBJECTIVES OF THE TRUSTS?" for a description of minimum rating standards),
(ii) the prices of the Bonds relative to other bonds of comparable quality and
maturity, (iii) the diversification of Bonds as to purpose of issue and location
of issuer, (iv) the maturity dates of the Bonds, and (v) in the case of the
Insured Trusts only, the availability of MBIA Insurance Corporation insurance on
such Bonds. (See "WHY AND HOW ARE THE BONDS INSURED?".)
3
<PAGE>
RISK FACTORS
An investment in Units of any Trust should be made with an understanding of
the risks that such an investment may entail. Each Trust consists of fixed-rate
municipal debt obligations. As such, the value of the debt obligations and
therefore of the Units will decline with increases in interest rates. In
general, the longer the period until the maturity of a Bond, the more sensitive
its value will be to fluctuations in interest rates. The Sponsor cannot predict
the extent or timing of such fluctuations and, accordingly, their effect upon
the value of the debt obligations. Additional risk factors include the ability
of the issuer, or, if applicable, an insurer, to make payments of interest and
principal when due, "mandatory put" features, early call provisions and the
potential for changes in the tax status of the Bonds. As set forth in Part A of
this Prospectus, the Trusts may contain or be concentrated in one or more of the
types of bonds discussed below. The following paragraphs briefly discuss certain
circumstances which may adversely affect the ability of issuers of Bonds held in
the portfolio of a Trust to make payment of principal and interest thereon, and
which also therefore may adversely affect the ratings of such Bonds. With
respect to Insured Trusts, however, because of the insurance obtained by the
Sponsor or by the issuers of the Bonds, such changes should not adversely affect
an Insured Trust's receipt of principal and interest, the Standard & Poor's AAA
or Moody's Aaa ratings of the Bonds in the Insured Trust portfolio, or the
Standard & Poor's AAA rating of the Units of each such Insured Trust. The Bonds
described below may be subject to special or extraordinary redemption
provisions. For economic risks specific to the individual Trusts, see Part A of
this Prospectus and the Appendices to the Information Supplement of this
Prospectus.
HEALTH FACILITY OBLIGATIONS are obligations of issuers whose revenues are
derived from services provided by hospitals or other health care facilities,
including nursing homes. The ability of such issuers to make debt service
payments on these obligations is dependent on various factors, including
occupancy levels of the facility, demand for services, wages of employees,
overhead expenses, competition from other similar providers, government
regulation, the cost of malpractice insurance, and the degree of governmental
financial assistance, including Medicare and Medicaid.
HOUSING OBLIGATIONS are obligations of issuers whose revenues are primarily
derived from mortgage loans on single family residences or housing projects for
low to moderate income families. Housing obligations are generally prepayable at
any time and therefore their average life will ordinarily be less than their
stated maturities. The ability of such issuers to make debt service payments on
these obligations is dependent on various factors, including occupancy levels,
rental income, mortgage default rates, taxes, operating expenses, governmental
regulations and the appropriation of subsidies.
INDUSTRIAL REVENUE OBLIGATIONS are 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. Debt service payment on IRBs is dependent upon various factors,
including the creditworthiness of the corporate operator of the project and, if
applicable, corporate guarantor, revenues generated from the project, expenses
associated with the project and regulatory and environmental restrictions.
ELECTRIC UTILITY OBLIGATIONS are obligations of issuers whose revenues are
primarily derived from the sale of electric energy. The ability of such issuers
to make debt service payments on these obligations is dependent on various
factors, including the rates for electricity, the demand for electricity, the
degree of competition, governmental regulation, overhead expenses and variable
costs, such as fuel.
TRANSPORTATION FACILITY REVENUE OBLIGATIONS are obligations of issuers which
are payable from and secured by revenues derived from the ownership and
operation of airports, public transit systems and ports. The ability of issuers
to make debt service payments on airport obligations is dependent on the
capability of airlines to meet their obligations under use agreements. Due to
increased competition, deregulation, increased fuel costs and other factors,
many airlines may have difficulty meeting their obligations under these use
agreements. Bonds that are secured primarily by the revenue collected by a
public transit system typically are additionally secured by a pledge of sales
tax receipts collected at the state or local level, or of other governmental
financial assistance. The revenue of issuers of transit system obligations will
be affected by variations in utilization, which in turn may be affected by the
degree of local governmental subsidization, competition from other forms of
transportation, and increased costs. Port authorities derive their revenues
primarily from fees imposed on ships using the facilities which may fluctuate
depending on the local economy and on competition from competing forms of
transportation such as air, rail and trucks. The revenues of issuers which
derive their payments from bridge, road or tunnel toll revenues could be
adversely affected by increases in fuel costs, competition from toll-free
vehicular bridges and roads and alternative modes of transportation.
WATER AND/OR SEWERAGE OBLIGATIONS are obligations of issuers whose revenues
are payable from user fees from the sale of water and/or sewerage services. The
problems of such issuers include the ability to obtain rate
4
<PAGE>
increases, population declines, the limitations on operations and increased
costs and delays attributable to environmental considerations, the difficulties
obtaining new supplies of fresh water, the effect of conservation programs and
in "no-growth" zoning ordinances.
UNIVERSITY AND COLLEGE REVENUE OBLIGATIONS are obligations of issuers whose
revenues are derived mainly from tuition, dormitory revenues, grants and
endowments. General problems faced by such issuers include declines in the
number of "college" age individuals, possible inability to raise tuitions and
fees, the uncertainty of continued receipt of Federal grants and state funding,
and government legislation or regulations which may adversely affect the
revenues or costs of such issuers.
DEDICATED-TAX SUPPORTED OBLIGATIONS are obligations of issuers which are
payable from and secured by tax revenues from a designated source, which
revenues are pledged to secure the bonds. The various types of Bonds described
below differ in structure and with respect to the rights of the bondholders to
the underlying property. Each type of dedicated-tax supported Bond has distinct
risks, only some of which are set forth below. One type of dedicated-tax
supported Bond is secured by the incremental tax received on either real
property or on sales within a specifically defined geographical area; such tax
generally will not provide bondholders with a lien on the underlying property or
revenues. Another type of dedicated-tax supported Bond is secured by a special
tax levied on real property within a defined geographical area in such a manner
that the tax is levied on those who benefit from the project; such bonds
typically provide for a statutory lien on the underlying property for unpaid
taxes. A third type of dedicated-tax supported Bond may be secured by a tax
levied upon the manufacture, sale or consumption of commodities or upon the
license to pursue certain occupations or upon corporate privileges within a
taxing jurisdiction. As to any of these types of Bonds, the ability of the
designated revenues to satisfy the interest and principal payments on such bonds
may be affected by changes in the local economy, the financial success of the
enterprise responsible for the payment of the taxes, the value of any property
on which taxes may be assessed and the ability to collect such taxes in a timely
fashion. Each of these factors will have a different affect on each distinct
type of dedicated-tax supported bonds.
MUNICIPAL LEASE OBLIGATIONS are obligations that are secured by lease
payments of a governmental entity and are normally subject to annual budget
appropriations of the leasing governmental entity. A governmental entity that
enters into such a lease agreement cannot obligate future governments to
appropriate for and make lease payments but covenants to take such action as is
necessary to include any lease payments due in its budgets and to make the
appropriations therefor. A governmental entity's failure to appropriate for and
to make payments under its lease obligation could result in insufficient funds
available for payment of the obligations secured thereby.
ORIGINAL ISSUE DISCOUNT OBLIGATIONS AND STRIPPED OBLIGATIONS are bonds which
were issued with nominal interest rates less than the rates then offered by
comparable securities and as a consequence were originally sold at a discount
from their face, or par, values. In a stable interest rate environment, the
market value of an original issue discount bond would tend to increase more
slowly in early years and in greater increments as the bond approached maturity.
Certain of the original issue discount obligations in a Trust may be zero
coupon bonds. Zero coupon bonds do not provide for the payment of any current
interest; the buyer receives only the right to receive a final payment of the
face amount of the bond at its maturity. Zero coupon bonds are subject to
substantially greater price fluctuations during periods of changing market
interest rates than are securities of comparable quality that pay interest
currently.
Original issue discount obligations, including zero coupon bonds, may be
subject to redemption at prices based on the issue price plus the amount of
original issue discount accreted to redemption (the "accreted value") plus, if
applicable, some premium. Pursuant to such call provisions, an original issue
discount bond may be called prior to its maturity date at a price less than its
face value. See the "Schedule of Investments" appearing in Part A of this
Prospectus for more information about the call provisions of portfolio Bonds.
Certain of the Bonds in a Trust may be stripped obligations, which represent
evidences of ownership with respect to either the principal amount of or a
payment of interest on a tax-exempt obligation ("Stripped Obligations"). Each
Stripped Obligation has been purchased at a discount from the amount payable at
maturity. A Stripped Obligation therefore has economic characteristics similar
to zero coupon bonds, as described above.
Unitholders should consult their own tax advisers with respect to the state
and local tax consequences of owning original issue discount bonds or Stripped
Obligations. Under applicable provisions governing determination of state and
local taxes, interest on original issue discount obligations or Stripped
Obligations may be deemed to be received in the year of accrual even though
there is no corresponding cash payment.
5
<PAGE>
Certain bonds may carry a "mandatory put" (also referred to as a "mandatory
tender" or "mandatory repurchase") feature pursuant to which the holder of such
bonds will receive payment of the full principal amount thereof on a stated date
prior to the maturity date unless such holder affirmatively acts to retain the
bond. The Trustee does not have the authority to act to retain Bonds with such
features; accordingly, it will receive payment of the full principal amount of
any such Bonds on the stated put date and such date is therefore treated as the
maturity date of such Bonds in selecting Bonds for the respective Trusts and for
purposes of calculating the average maturity of the Bonds in any Trust.
COMPOSITION OF TRUSTS
Each Trust initially consists of delivery statements relating to contracts to
purchase Bonds (or of such Bonds) as are listed under "Schedule of Investments"
in Part A of this Prospectus and, thereafter, of such Bonds as may continue to
be held from time to time (including certain securities deposited in the Trust
in substitution for Bonds not delivered to a Trust or in exchange or
substitution for Bonds upon certain refundings), together with accrued and
undistributed interest thereon and undistributed cash realized from the
disposition of Bonds.
"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS. The contracts to
purchase Bonds delivered to the Trustee represent an obligation by issuers or
dealers to deliver Bonds to the Sponsor for deposit in the Trusts. Certain of
the contracts relate to Bonds which have not been issued as of the Date of
Deposit and which are commonly referred to as "when issued" or "when, as and if
issued" Bonds. Although the Sponsor believes it unlikely, if such Bonds, or
replacement bonds described below, are not acquired by a Trust or if their
delivery is delayed, the Estimated Current Returns and Estimated Long Term
Returns shown in Part A of this Prospectus may be reduced. Certain of the
contracts for the purchase of Bonds provide for delivery dates after the date of
settlement for purchases made on the Date of Deposit. Interest on such "when
issued" and "delayed delivery" Bonds accrues to the benefit of Unitholders
commencing with the first settlement date for the Units. However, in the opinion
of counsel, Unitholders who purchase their Units prior to the date such Bonds
are actually delivered to the Trustee must reduce the tax basis of their Units
for interest accruing on such Bonds during the interval between their purchase
of Units and the delivery of the Bonds because such amounts constitute a return
of principal. As a result of such adjustment, the Estimated Current Returns set
forth in Part A of this Prospectus (which are based on the Public Offering Price
as of the business day prior to the Date of Deposit) may be slightly lower than
Unitholders will receive after the first year, assuming the Portfolio does not
change and estimated annual expense does not vary from that set forth under
"Essential Information" in Part A of this Prospectus. Those Bonds in each Trust
purchased with delivery dates after the date of settlement for purchases made on
the Date of Deposit are so noted in the "Schedule of Investments" in Part A of
this Prospectus.
LIMITED REPLACEMENT OF CERTAIN BONDS. Neither the Sponsor nor the Trustee
shall be liable in any way for any default, failure or defect in any Bond. In
the event of a failure to deliver any Bond that has been purchased for a Trust
under a contract, including those Bonds purchased on a when, as and if issued
basis ("Failed Bonds"), the Sponsor is authorized under the Indenture to direct
the Trustee to acquire other specified Bonds ("Replacement Bonds") to make up
the original corpus of the Trust within 20 days after delivery of notice of the
failed contract and the cost to the Trust (exclusive of accrued interest) may
not exceed the amount of funds reserved for the purchase of the Failed Bonds.
The Replacement Bonds must satisfy the criteria previously described for the
Trusts and shall be substantially identical to the Failed Bonds they replace in
terms of (i) the exemption from federal and state taxation; (ii) maturity and;
(iii) cost to the Trust. In addition, Replacement Bonds shall not be "when, as
and if issued" Bonds. Whenever a Replacement Bond has been acquired for a Trust,
the Trustee shall, within five days after the delivery thereof, mail or deliver
a notice of such acquisition to all Unitholders of the Trust involved. Once the
original corpus of the Trust is acquired, the Trustee will have no power to vary
the investment of the Trust.
To the extent Replacement Bonds are not acquired, the Sponsor shall refund
to all Unitholders of the Trust involved the sales charge attributable to such
Failed Bonds not replaced, and the principal and accrued interest attributable
to such Bonds shall be distributed not more than 30 days after the determination
of such failure or at such earlier time as the Trustee in its sole discretion
deems to be in the interest of the Unitholders. Any such accrued interest paid
to Unitholders will be paid by the Sponsor and, accordingly, will not be treated
as tax-exempt income. In the event Failed Bonds in a Trust could not be
replaced, the Net Annual Interest Income per Unit for such Trust would be
reduced and the Estimated Current Return thereon might be lowered.
SALE, MATURITY AND REDEMPTION OF BONDS. Certain of the Bonds may from time
to time under certain circumstances be sold or redeemed or will mature in
accordance with their terms. The proceeds from such events will be used to pay
for Units redeemed or distributed to Unitholders and not reinvested;
accordingly, no assurance can be given that a Trust will retain for any length
of time its present size and composition.
All of the Bonds in each Trust are subject to being called or redeemed in
whole or in part prior to their stated maturities pursuant to the optional
redemption provisions described in the "Schedule of Investments" in Part A of
6
<PAGE>
this Prospectus and in most cases pursuant to sinking fund, special or
extraordinary redemption provisions. See the discussion of the various types of
bond issues, above, for information on the call provisions of such bonds,
particularly single family mortgage revenue bonds.
The exercise of redemption or call provisions will (except to the extent the
proceeds of the called Bonds are used to pay for Unit redemptions) result in the
distribution of principal and may result in a reduction in the amount of
subsequent interest distributions; it may also affect the current return on
Units of the Trust involved. The exercise of redemption or call provisions is
more likely to occur in situations where when the Bonds have an offering side
evaluation which represents a premium over par (as opposed to a discount from
par). (In the case of original issue discount bonds, such redemption is
generally to be made at the issue price plus the amount of original issue
discount accreted to the date of redemption; such price is referred to herein as
"accreted value"). Because Bonds may have been valued at prices above or below
par value or the then current accreted value at the time Units were purchased,
Unitholders may realize gain or loss upon the redemption of portfolio Bonds.
(See "WHAT IS THE TAX STATUS OF UNITHOLDERS?" and "WHEN ARE DISTRIBUTIONS MADE
TO UNITHOLDERS?" in Part B and the "Schedule of Investments" in Part A of this
Prospectus.)
CERTAIN TAX MATTERS; LITIGATION. Certain of the Bonds in a Trust's
portfolio may be subject to continuing requirements such as the actual use of
bond proceeds, manner of operation of the project financed from bond proceeds or
rebate of excess earnings on 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 each Trust an opinion of bond counsel was
rendered as to the exemption of interest on such obligations from Federal income
taxation, and the issuers covenanted to comply with all requirements necessary
to retain the tax-exempt status of the Bonds, 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.
To the best knowledge of the Sponsor, there is no litigation pending as of
the Date of Deposit in respect of any Bonds which might reasonably be expected
to have a material adverse effect on any of the Trusts. It is possible that
after the Date of Deposit, litigation may be initiated with respect to Bonds in
any Trust. Any such litigation may affect the validity of such Bonds or the
tax-exempt nature of the interest thereon, but while the outcome of litigation
of such nature can never be entirely predicted, the opinions of bond counsel to
the issuer of each Bond on the date of issuance state that such Bonds were
validly issued and that the interest thereon is, to the extent indicated, exempt
from Federal income tax.
WHY AND HOW ARE THE BONDS INSURED?
Insurance guaranteeing the timely payment, when due, of all principal and
interest on the Bonds in each Insured Trust has been obtained by the Sponsor or
by the issuers or underwriters of the Bonds from the MBIA Insurance Corporation
(the "Insurer"). Certain of the Bonds in an Insured Trust may be covered by a
policy or policies of insurance obtained by the issuers or underwriters of the
Bonds from Municipal Bond Insurance Association (the "Association") or Bond
Investors Guaranty Insurance Company ("BIG"). The claims-paying ability of both
the Insurer and the Association was rated "AAA Prime Grade" by Standard &
Poor's. Moody's rates all bond issuers insured by either the Insurer or the
Association "Aaa" and short-term loans "MIG 1," both designated to be of the
highest quality. The Insurer has issued a policy or policies of insurance
covering each of the Bonds in the Insured Trusts, each policy to remain in force
until the payment in full of such Bonds and whether or not the Bonds continue to
be held by an Insured Trust. By the terms of each policy the Insurer will
unconditionally guarantee to the holders or owners of the Bonds the payment,
when due, required of the issuer of the Bonds of an amount equal to the
principal of and interest on the Bonds as such payments shall become due but not
be paid (except that in the event of any acceleration of the due date of
principal by reason of mandatory or optional redemption, default or otherwise,
the payments guaranteed will be made in such amounts and at such times as would
have been due had there not been an acceleration).
Insurance guaranteeing the timely payment, when due, of all principal and
interest on certain Bonds in a Traditional Trust may have been obtained by the
Sponsor, issuer or underwriter of the particular Bonds involved or by another
party. Such insurance, which provides coverage substantially the same as that
obtained with respect to Bonds in Insured Trusts as described above, is
effective so long as the insured Bond is outstanding and the insurer remains in
business. Insurance relates only to the particular Bond and not to the Units
offered hereby or to their market value. Insured Bonds have received a rating of
"Aaa" by Moody's and/or "AAA" by Standard & Poor's in recognition of such
insurance.
7
<PAGE>
If a Bond in a Traditional Trust is insured, the "Schedule of Investments"
appearing in Part A of this Prospectus will identify the insurer. The Sponsor to
date has purchased and presently intends to purchase insurance for Bonds in
Traditional Trusts exclusively from the Insurer. There can be no assurance that
any insurer listed therein will be able to satisfy its commitments in the event
claims are made in the future. However, Standard & Poor's and/or Moody's have
rated the claims-paying ability of each insurer "AAA" or "Aaa," respectively.
The Insurer 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 the Insurer. The Insurer is a limited liability corporation
rather than a several liability association. The Insurer is domiciled in the
State of New York and licensed to do business in all 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, the Virgin Islands of the United States and the Territory of
Guam. The Insurer has one European branch in the Republic of France.
As of June 30, 1995 the Insurer had admitted assets of $3.6 billion
(unaudited), total liabilities of $2.4 billion (unaudited), and total capital
and surplus of $1.2 billion (unaudited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. As of December 31, 1994, the Insurer had admitted assets of $3.4
billion (audited), total liabilities of $2.3 billion (audited), and total
capital and surplus of $1.1 billion (audited) determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities.
The Association is comprised of the five insurance companies set forth in
the following table, which provides certain unaudited financial information with
respect to each of the five insurance companies comprising the Association.
MUNICIPAL BOND INSURANCE ASSOCIATION
FIVE MEMBER COMPANIES ASSETS AND POLICYHOLDERS' SURPLUS (UNAUDITED)
AS OF SEPTEMBER 30, 1994.
(000'S OMITTED)
<TABLE>
<CAPTION>
NEW YORK NEW YORK NEW YORK
STATUTORY STATUTORY POLICYHOLDERS
ASSETS LIABILITIES SURPLUS
--------------- --------------- --------------
<S> <C> <C> <C>
The AEtna Casualty & Surety Company........................................... $ 10,030,200 $ 8,275,300 $ 1,754,900
Fireman's Fund Insurance Company.............................................. 6,815,775 4,904,534 1,911,241
The Travelers Indemnity Company............................................... 10,295,359 8,515,392 1,779,967
CIGNA Property and Casualty Company (formerly AEtna Insurance Company)........ 5,112,251 4,842,235 270,016
The Continental Insurance Company............................................. 2,794,536 2,449,805 344,731
--------------- --------------- --------------
Total................................................................. $ 35,048,121 $ 28,987,266 $ 6,060,855
--------------- --------------- --------------
--------------- --------------- --------------
</TABLE>
Insurance companies are subject to extensive regulation and supervision
where they do business by state insurance commissioners who regulate the
standards of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding reserves
for unearned premiums, losses and other matters. A significant portion of the
assets of insurance companies are required by law to be held in reserve against
potential claims on policies and is not available to general creditors. Although
the federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.
The above ratings are not recommendations to buy, sell or hold the Bonds,
and such ratings may be subject to revision or withdrawal at any time by the
rating agencies. Any downward revision or withdrawal of either or both ratings
may have an adverse effect on the market price of the Bonds. See the Information
Supplement--for further information concerning insurance.
Because the insurance on the Bonds, if any, will be effective so long as the
Bonds are outstanding, such insurance will be taken into account in determining
the market value of the Bonds and therefore some value attributable to such
insurance will be included in the value of the Units of the Insured Trusts. The
insurance does not, however, guarantee the market value of the Bonds or of the
Units.
HOW IS THE PUBLIC OFFERING PRICE DETERMINED?
The Public Offering Price of the Units of each Trust is equal to the Trustee's
determination of the aggregate OFFERING prices of the Bonds deposited therein
(minus any advancement to the principal account of the Trust made by the
8
<PAGE>
Trustee) plus a sales charge set forth in "Essential Information" in Part A of
this Prospectus, in each case adding to the total thereof cash held by the
Trust, if any, and dividing the sum so obtained by the number of Units
outstanding in the Trust. See "UNIT VALUE AND EVALUATION."
The sales charge applicable to quantity purchases is reduced on a graduated
scale for sales to any purchaser of at least $50,000 or 500 Units and will be
applied on whichever basis is more favorable to the purchaser. For purposes of
calculating the applicable sales charge, purchasers who have indicated their
intent to purchase a specified amount of Units of any Trust in the primary or
secondary offering period by executing and delivering a letter of intent to the
Sponsor, which letter of intent must be in a form acceptable to the Sponsor and
shall have a maximum duration of thirteen months, will be eligible to receive a
reduced sales charge according to the following tables based on the amount of
intended aggregate purchases as expressed in the letter of intent. Due to
administrative limitations and in order to permit adequate tracking, the only
secondary market purchases that will be permitted to be applied toward the
intended specified amount and that will receive the corresponding reduced sales
charge are those Units that are acquired through or from the Sponsor. By
establishing a letter of intent, a Unitholder agrees that the first purchase of
Units following the execution of such letter of intent will be at least 5% of
the total amount of the intended aggregate purchases expressed in such
Unitholder's letter of intent. Further, through the establishment of the letter
of intent, such Unitholder agrees that Units representing 5% of the total amount
of the intended purchases will be held in escrow by the Trustee pending
completion of these purchases. All distributions on Units held in escrow will be
credited to such Unitholder's account. If total purchases prior to the
expiration of the letter of intent period equal or exceed the amount specified
in a Unitholder's letter of intent, the Units held in escrow will be transferred
to such Unitholder's account. If the total purchases are less than the amount
specified, the Unitholder involved must pay the Sponsor an amount equal to the
difference between the amounts paid for these purchases and the amounts which
would have been paid if the higher sales charge had been applied. If such
Unitholder does not pay the additional amount within 20 days after written
request by the Sponsor or the Unitholder's securities representative, the
Sponsor will instruct the Trustee to redeem an appropriate number of the
escrowed Units to meet the required payment. By establishing a letter of intent,
a Unitholder irrevocably appoints the Sponsor as attorney to give instructions
to redeem any or all of such Unitholder's escrowed Units, with full power of
substitution in the premises. A Unitholder or his securities representative must
notify the Sponsor whenever such Unitholder makes a purchase of Units that he
wishes to be counted towards the intended amount. Sales charges during the
primary offering period are as follows:
<TABLE>
<CAPTION>
NATIONAL AND STATE LONG INTERMEDIATE
TRUSTS TRUSTS
---------------------- ----------------------
<S> <C> <C> <C> <C>
PERCENT PERCENT PERCENT PERCENT
OF OF NET OF OF NET
OFFERING AMOUNT OFFERING AMOUNT
NUMBER OF UNITS* PRICE INVESTED PRICE INVESTED
- --------------------------------------------------------------------------------- ----------- --------- ----------- ---------
Less than 500.................................................................... 4.90% 5.152% 4.25% 4.439%
500 but less than 1,000.......................................................... 4.75 4.987 4.15 4.330
1,000 but less than 2,500........................................................ 4.50 4.712 3.85 4.004
2,500 but less than 5,000........................................................ 4.25 4.439 3.60 3.734
5,000 but less than 10,000....................................................... 3.50 3.627 3.35 3.466
10,000 but less than 25,000...................................................... 3.00 3.093 3.00 3.093
25,000 but less than 50,000...................................................... 2.50 2.564 2.50 2.564
50,000 or more................................................................... 2.00 2.041 2.00 2.041
<CAPTION>
INTERMEDIATE TRUSTS
----------------------
<S> <C> <C>
PERCENT PERCENT
OF OF NET
OFFERING AMOUNT
NUMBER OF UNITS* PRICE INVESTED
- --------------------------------------------------------------------------------- ----------- ---------
Less than 500.................................................................... 3.90% 4.058%
500 but less than 1,000.......................................................... 3.70 3.842
1,000 but less than 2,500........................................................ 3.50 3.627
2,500 but less than 5,000........................................................ 3.25 3.359
5,000 but less than 10,000....................................................... 3.00 3.093
10,000 but less than 25,000...................................................... 2.75 2.828
25,000 but less than 50,000...................................................... 2.50 2.564
50,000 or more................................................................... 2.00 2.041
</TABLE>
<TABLE>
<CAPTION>
SHORT INTERMEDIATE
TRUSTS SHORT TERM TRUSTS
---------------------- ----------------------
<S> <C> <C> <C> <C>
PERCENT PERCENT PERCENT PERCENT
OF OF NET OF OF NET
OFFERING AMOUNT OFFERING AMOUNT
NUMBER OF UNITS* PRICE INVESTED PRICE INVESTED
- --------------------------------------------------------------------------------- ----------- --------- ----------- ---------
Less than 500.................................................................... 3.00% 3.093% 2.50% 2.564%
500 but less than 1,000.......................................................... 2.80 2.881 2.30 2.354
1,000 but less than 2,500........................................................ 2.60 2.670 2.10 2.145
2,500 but less than 5,000........................................................ 2.35 2.407 1.85 1.885
5,000 but less than 10,000....................................................... 2.10 2.145 1.60 1.626
10,000 but less than 25,000...................................................... 1.85 1.885 1.35 1.368
25,000 but less than 50,000...................................................... 1.80 1.833 1.25 1.266
50,000 or more................................................................... 1.50 1.523 1.15 1.163
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 500 Units to $50,000,
2,500 Units to $250,000 etc., and will be applied on that basis which is more
favorable to the purchaser.
For "secondary market" sales the Public Offering Price per Unit of each
Trust is determined by adding to the Trustee's determination of the BID price of
each Bond in the Trust a sales charge determined in accordance with the table
set forth below based upon the number of years remaining to the maturity of each
such Bond. See "UNIT VALUE AND EVALUATION." The effect of this method of sales
charge calculation will be that different sales charge
9
<PAGE>
rates will be applied to the various Bonds in a Trust portfolio based upon the
maturities of such Bonds. As shown, the sales charge on Bonds in each maturity
range (and therefore the aggregate sales charge on the purchase) is reduced with
respect to purchases of at least $50,000 or 500 Units:
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000
UNDER TO TO TO TO TO
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999
- --------------------------------------------------- ----------- ----------- ----------- ----------- ----------- -------------
Less than 1........................................ 0 0 0 0 0 0
1 but less than 2.................................. 1.523% 1.446% 1.369% 1.317% 1.215% 1.061%
2 but less than 3.................................. 2.041 1.937 1.833 1.729 1.626 1.420
3 but less than 4.................................. 2.564 2.433 2.302 2.175 2.041 1.781
4 but less than 5.................................. 3.093 2.961 2.828 2.617 2.459 2.175
5 but less than 7.................................. 3.627 3.433 3.239 3.093 2.881 2.460
7 but less than 10................................. 4.167 3.951 3.734 3.520 3.239 2.828
10 but less than 13................................ 4.712 4.467 4.221 4.004 3.788 3.253
13 but less than 16................................ 5.263 4.988 4.712 4.439 4.167 3.627
16 or more......................................... 5.820 5.542 5.263 4.987 4.603 4.004
<CAPTION>
<S> <C> <C>
$2,500,000
TO $5,000,000
YEARS TO MATURITY $4,999,999 OR MORE
- --------------------------------------------------- ------------- -------------
Less than 1........................................ 0 0
1 but less than 2.................................. .900% .750%
2 but less than 3.................................. 1.225 1.030
3 but less than 4.................................. 1.546 1.310
4 but less than 5.................................. 1.883 1.590
5 but less than 7.................................. 2.165 1.870
7 but less than 10................................. 2.489 2.150
10 but less than 13................................ 2.842 2.430
13 but less than 16................................ 3.169 2.710
16 or more......................................... 3.500 3.000
</TABLE>
*Breakpoint sales charges are computed both on a dollar basis and on the basis
of the number of Units purchased, using the equivalent of 500 Units to
$50,000, 2,500 Units to $250,000, etc., and will be applied on that basis
which is more favorable to the purchaser.
The secondary market sales charges above are expressed as a percent of the
net amount invested; expressed as a percent of the Public Offering Price, the
maximum sales charge on any Trust, including one consisting entirely of Bonds
with 16 years or more to maturity, would be 5.50% (5.820% of the net amount
invested). The actual secondary market sales charge included in the Public
Offering Price of any particular Trust will depend on the maturities of the
Bonds in the portfolio of such Trust.
Pursuant to the terms of the Indenture, the Trustee may terminate a Trust if
the net asset value of such Trust, as shown by any evaluation, is less than 20%
of the original principal amount of the Trust.
At all times while Units are being offered for sale, the Sponsor will
appraise or cause to be appraised daily the value of the underlying Bonds in
each Trust as of 4:00 p.m. eastern time on each day on which the New York Stock
Exchange (the "Exchange") is normally open and will adjust the Public Offering
Price of the Units commensurate with such appraisal. Such Public Offering Price
will be effective for all orders received by a dealer or the Sponsor at or prior
to 4:00 p.m. eastern time on each such day. Orders received after that time, or
on a day when the Exchange is closed for a scheduled holiday or weekend, will be
held until the next determination of price.
Accrued interest from the preceding Record Date to, but not including, the
settlement date of the transaction (three business days after purchase) will be
added to the Public Offering Price to determine the purchase price of Units. See
"WHAT IS ACCRUED INTEREST?".
The graduated sales charges set forth above will apply on all applicable
purchases of Nuveen investment company securities on any one day by the same
purchaser in the amounts stated, and for this purpose purchases of this Series
will be aggregated with concurrent purchases of any other Series or of shares of
any open-end management investment company of which the Sponsor is principal
underwriter and with respect to the purchase of which a sales charge is imposed.
Purchases by or for the account of an individual and his or her spouse and
children under 21 years of age ("immediate family members") will be aggregated
to determine the applicable sales charge. The graduated sales charges are also
applicable to a trustee or other fiduciary purchasing securities for a single
trust estate or single fiduciary account. Units may be purchased at the Public
Offering Price without a sales charge by officers or directors and by bona fide,
full-time employees of Nuveen, Nuveen Advisory Corp., Nuveen Institutional
Advisory Corp. and The John Nuveen Company, including in each case these
individuals and their immediate family members (as defined above).
Units may be purchased in the primary or secondary market at the Public
Offering Price for non-breakpoint purchases minus the concession the Sponsor
typically allows to brokers and dealers for non-breakpoint purchases (see "HOW
UNITS OF THE TRUSTS ARE DISTRIBUTED TO THE PUBLIC?") by (1) investors who
purchase Units through registered investment advisers, certified financial
planners and registered broker-dealers who in each case either charge periodic
fees for financial planning, investment advisory or asset management services,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as defined above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive sales charge reductions for quantity
purchases.
10
<PAGE>
The initial or primary Public Offering Price of the Units in each Trust is
based upon a pro rata share of the OFFERING prices per Unit of the Bonds in such
Trust plus the applicable sales charge. The secondary market Public Offering
Price of each Trust is based upon a pro rata share of the BID prices per Unit of
the Bonds in such Trust plus the applicable sales charge. The OFFERING prices of
Bonds in a Trust may be expected to average between 1/2% to 2% more than the BID
prices of such Bonds. The difference between the bid side evaluation and the
offering side evaluation of the Bonds in each Trust on the business day prior to
the Date of Deposit is shown in the discussion of each Trust portfolio.
Whether or not Units are being offered for sale, the Sponsor will determine
the aggregate value of each Trust as of 4:00 p.m. eastern time: (i) on each June
30 or December 31 (or, if such date is not a business day, the last business day
prior thereto), (ii) on any day on which a Unit is tendered for redemption (or
the next succeeding business day if the date of tender is a non-business day)
and (iii) at such other times as may be necessary. For this purpose, a "business
day" shall be any day on which the Exchange is normally open. (See "UNIT VALUE
AND EVALUATION.")
MARKET FOR UNITS
During the initial public offering period, the Sponsor intends to offer to
purchase Units of each Trust at a price equivalent to the pro rata share per
Unit of the OFFERING prices of the Bonds in such Trust (plus accrued interest).
Afterward, although it is not obligated to do so, the Sponsor intends to
maintain a secondary market for Units of each Trust at its own expense and
continuously to offer to purchase Units of each Trust at prices, subject to
change at any time, which are based upon the BID prices of Bonds in the
respective portfolios of the Trusts. UNITHOLDERS WHO WISH TO DISPOSE OF THEIR
UNITS SHOULD INQUIRE OF THE TRUSTEE OR THEIR BROKER AS TO THE CURRENT REDEMPTION
PRICE. (See "HOW UNITS MAY BE REDEEMED WITHOUT CHARGE?".) In connection with its
secondary marketmaking activities, the Sponsor may from time to time enter into
secondary market joint account agreements with other brokers and dealers.
Pursuant to such an agreement the Sponsor will purchase Units from the broker or
dealer at the bid price and will place the Units into a joint account managed by
the Sponsor; sales from the account will be made in accordance with the then
current prospectus and the Sponsor and the broker or dealer will share profits
and losses in the joint account in accordance with the terms of their joint
account agreement.
Certificates, if any, for Units are delivered to the purchaser as promptly
after the date of settlement (three business days after purchase) as the Trustee
can complete the mechanics of registration, normally within 48 hours after
registration instructions are received. Purchasers of Units to whom Certificates
are issued will be unable to exercise any right of redemption until they have
received their Certificates as tender of the Certificate, properly endorsed for
transfer. (See "HOW UNITS MAY BE REDEEMED WITHOUT CHARGE?".)
WHAT IS ACCRUED INTEREST?
Accrued interest is the accumulation of unpaid interest on a bond from the last
day on which interest thereon was paid. Interest on Bonds in each Trust is
accounted for daily on an accrual basis. For this reason, the purchase price of
Units of a Trust will include not only the Public Offering Price but also the
proportionate share of accrued interest to the date of settlement. Accrued
interest does not include accrual of original issue discount on zero coupon
bonds, Stripped Obligations or other original issue discount bonds. Interest
accrues to the benefit of Unitholders commencing with the settlement date of
their purchase transaction.
In an effort to reduce the amount of accrued interest that investors would
have to pay in addition to the Public Offering Price, the Trustee has agreed to
advance to each Trust the amount of accrued interest due on the Bonds as of the
Date of Deposit (which has been designated the first Record Date for all plans
of distribution). This accrued interest will be paid to the Sponsor as the
holder of record of all Units on the Date of Deposit. Consequently, the amount
of accrued interest to be added to the Public Offering Price of Units will
include only accrued interest from the Date of Deposit to, but not including,
the date of settlement of the investor's purchase (three business days after
purchase), less any distributions from the related Interest Account. The Trustee
will recover its advancements (without interest or other cost to the Trusts)
from interest received on the Bonds deposited in each Trust.
The Trustee has no cash for distribution to Unitholders until it receives
interest payments on the Bonds in the Trusts. Since municipal bond interest is
accrued daily but paid only semi-annually, during the initial months of the
Trusts, the Interest Accounts, consisting of accrued but uncollected interest
and collected interest (cash), will be predominantly the uncollected accrued
interest that is not available for distribution. However, due to advances by the
Trustee, the Trustee will provide a first distribution between approximately 30
and 60 days after the Date of Deposit. Assuming each Trust retains its original
size and composition and expenses and fees remain the same, annual interest
collected and distributed will approximate the estimated Net Annual Interest
Income stated herein. However, the amount of accrued interest at any point in
time will be greater than the amount that the Trustee will have actually
received and distributed to the Unitholders. Therefore, there will always remain
an item of accrued interest that is included in the Purchase Price and the
redemption price of the Units.
Interest is accounted for daily and a proportionate share of accrued and
undistributed interest computed from the preceding Record Date is added to the
daily valuation of each Unit of each Trust. (See Part A of this Prospectus and
"WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?".) As Bonds mature, or are redeemed
or sold, the accrued interest applicable to such bonds is collected and
subsequently distributed to Unitholders. Unitholders who
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sell or redeem all or a portion of their Units will be paid their proportionate
share of the remaining accrued interest to, but not including, the third
business day following the date of sale or tender.
WHAT ARE ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN?
The Estimated Long Term Return for each Trust is a measure of the return to the
investor expected to be earned over the estimated life of the Trust. The
Estimated Long Term Return represents an average of the yields to maturity (or
call) of the Bonds in the Trust's portfolio calculated in accordance with
accepted bond practice and adjusted to reflect expenses and sales charges. Under
accepted bond practice, tax-exempt bonds are customarily offered to investors on
a "yield price" basis, which involves computation of yield to maturity or to an
earlier call date (whichever produces the lower yield), and which takes into
account not only the interest payable on the bonds but also the amortization or
accretion of any premium over, or discount from, the par (maturity) value
inherent in the bond's purchase price. In the calculation of Estimated Long Term
Return, the average yield for the Trust's portfolio is derived by weighting each
Bond's yield by the market value of the Bond and by the amount of time remaining
to the date to which the Bond is priced. This weighted average yield is then
adjusted to reflect estimated expenses, is compounded, and is reduced by a
factor which represents the amortization of the sales charge over the expected
average life of the Trust. The Estimated Long Term Return calculation does not
take into account the effect of a first distribution which may be less than a
regular distribution or may be paid at some point after 30 days (or a second
distribution which may be less than a normal distribution for Unitholders who
choose quarterly or semi-annual plans of distribution), and it also does not
take into account the difference in timing of payments to Unitholders who choose
quarterly or semi-annual plans of distribution, each of which will reduce the
return.
Estimated Current Return is computed by dividing the Net Annual Interest
Income per Unit by the Public Offering Price. In contrast to Estimated Long Term
Return, Estimated Current Return does not reflect the amortization of premium or
accretion of discount, if any, on the Bonds in the Trust's portfolio. Net Annual
Interest Income per Unit is calculated by dividing the annual interest income to
the Trust, less estimated expenses, by the number of Units outstanding.
Net Annual Interest Income per Unit, used to calculate Estimated Current
Return, will vary with changes in fees and expenses of the Trustee and the
Evaluator and with the redemption, maturity, exchange or sale of Bonds. A
Unitholder's actual return may vary significantly from the Estimated Long-Term
Return, based on their holding period, market interest rate changes, other
factors affecting the prices of individual bonds in the portfolio, and
differences between the expected remaining life of portfolio bonds and the
actual length of time that they remain in the Trust; such actual holding periods
may be reduced by termination of the Trust, as described in "OTHER INFORMATION."
Since both the Estimated Current Return and the Estimated Long Term Return
quoted herein are based on the market value of the underlying Bonds on the
business day prior to the Date of Deposit, subsequent calculations of these
performance measures will reflect the then current market value of the
underlying Bonds and may be higher or lower. The Sponsor will provide estimated
cash flow information relating to a Trust without charge to each potential
investor in a Trust who receives this prospectus and makes an oral or written
request to the Sponsor for such information.
A portion of the monies received by a Trust may be treated, in the first
year only, as a return of principal due to the inclusion in the Trust portfolio
of "when-issued" or other Bonds having delivery dates after the date of
settlement for purchases made on the Date of Deposit. A consequence of this
treatment is that in the computation of Estimated Current Return for the first
year, such monies are excluded from Net Annual Interest Income and treated as an
adjustment to the Public Offering Price. (See "Essential Information" appearing
in Part A of this Prospectus, "COMPOSITION OF TRUSTS" and "WHAT IS THE TAX
STATUS OF UNITHOLDERS?")
A comparison of tax-free and equivalent taxable estimated current returns
with the returns on various taxable investments is one element to consider in
making an investment decision. The Sponsor may from time to time in its
advertising and sales materials compare the then current estimated returns on a
Trust and returns over specified periods on other similar Nuveen Trusts with
returns on taxable investments such as corporate or U.S. Government bonds, bank
CD's and money market accounts or money market funds, each of which has
investment characteristics that may differ from those of the Trust. U.S.
Government bonds, for example, are backed by the full faith and credit of the
U.S. Government and bank CD's and money market accounts are insured by an agency
of the federal government. Money market accounts and money market funds provide
stability of principal, but pay interest at rates that vary with the condition
of the short-term debt market. The investment characteristics of the Trusts are
described more fully elsewhere in the Prospectus.
HOW WAS THE PRICE OF THE BONDS DETERMINED AT THE DATE OF DEPOSIT?
The prices at which the Bonds deposited in the Trusts would have been offered to
the public on the business day prior to the Date of Deposit were determined by
the Trustee on the basis of an evaluation of such Bonds prepared by Kenny S&P
Evaluation Services, a division of J. J. Kenny Co., Inc., a firm regularly
engaged in the business of evaluating, quoting or appraising comparable bonds.
With respect to Bonds in Insured Trusts and insured Bonds in Traditional Trusts,
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc., evaluated
the Bonds as so insured. (See "WHY AND HOW ARE THE BONDS INSURED?".)
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The amount by which the Trustee's determination of the OFFERING PRICES of
the Bonds deposited in the Trusts was greater or less than the cost of such
Bonds to the Sponsor was PROFIT OR LOSS to the Sponsor exclusive of any
underwriting profit. (See Part A of this Prospectus.) The Sponsor also may
realize FURTHER PROFIT OR SUSTAIN FURTHER LOSS as a result of fluctuations in
the Public Offering Price of the Units. Cash, if any, made available to the
Sponsor prior to the settlement date for a purchase of Units, or prior to the
acquisition of all Portfolio securities by a Trust, may be available for use in
the Sponsor's business, and may be of benefit to the Sponsor.
WHAT IS THE TAX STATUS OF UNITHOLDERS?
At the respective times of issuance of the Bonds, opinions relating to the
validity thereof and to the exemption of interest thereon from Federal income
tax were rendered by bond counsel to the respective issuing authorities. In
addition, with respect to State Trusts, where applicable, bond counsel to the
issuing authorities rendered opinions as to the exemption of interest on such
Bonds, when held by residents of the state in which the issuers of such Bonds
are located, from state income taxes and certain state or local intangibles and
local income taxes. For a discussion of the tax status of State Trusts see Part
A of this Prospectus. Neither the Sponsor nor its counsel have made any special
review for the Trusts of the proceedings relating to the issuance of the Bonds
or of the basis for the opinions rendered in connection therewith. If the
interest on a Bond should be determined to be taxable, the Bond would generally
have to be sold at a substantial discount. In addition, investors could be
required to pay income tax on interest received prior to the date of which
interest is determined to be taxable.
Federally tax-exempt income, including income on Units of the Trusts, will
be taken into consideration in computing the portion, if any, of social security
benefits received that will be included in a taxpayer's gross income subject to
the Federal income tax.
Gain realized on the sale or redemption of the Bonds by the Trustee or of a
Unit by a Unitholder is includable in gross income for Federal income tax
purposes, and may be includable in gross income for state tax purposes. (Such
gain does not include any amounts received in respect of tax-exempt accrued
interest or accrued original issue discount, if any.) A portion of a
Unitholder's gain, to the extent of accreted market discount, may be treated as
ordinary income rather than capital gain if the Bonds were purchased by a Trust
at a market discount or if the Unitholder purchased his or her Units at a market
discount on or after April 30, 1993. Market discount can arise based on the
price the Trust pays for the Bonds or the price a Unitholder pays for his or her
Units. Market discount that accretes while the Trust holds a Bond would be
recognized as ordinary income by the Unitholders when principal payments are
received on the Bond, upon sale or at redemption (including early redemption),
or upon the sale or redemption of his or her Units, unless a Unitholder elects
to include market discount in taxable income as it accrues. The market discount
rules are complex and Unitholders should consult their tax advisors regarding
these rules and their application.
In the opinion of Chapman and Cutler, Counsel to the Sponsor, under existing
law:
(1) the Trusts are not associations taxable as corporations for Federal
income tax purposes. Tax-exempt interest received by each of the Trusts
on Bonds deposited therein will retain its status as tax-exempt
interest, for Federal income tax purposes, when received by the Trusts
and when distributed to the Unitholders, except that the alternative
minimum tax and environmental tax (the "Superfund Tax") applicable to
corporate Unitholders may, in certain circumstances, include in the
amount on which such taxes are calculated a portion of the interest
income received by the Trust. See "CERTAIN TAX MATTERS APPLICABLE TO
CORPORATE UNITHOLDERS", below;
(2) each Unitholder of a Trust is considered to be the owner of a pro rata
portion of such Trust under Subpart E, subchapter J of Chapter 1 of the
Internal Revenue Code of 1986 (the "Code") and will have a taxable event
when the Trust disposes of a Bond or when the Unitholder redeems or
sells Units. Unitholders must reduce the tax basis of their Units for
their share of accrued interest received by the Trust, if any, on Bonds
delivered after the date the Unitholders pay for their Units 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 at
maturity, redemption or otherwise), gain or loss is recognized to the
Unitholder. The amount of any such gain or loss is measured by comparing
the Unitholder's pro rata share of the total proceeds from such
disposition with the Unitholder's basis for his or her fractional
interest in the asset disposed of. In the case of a Unitholder who
purchases Units, such basis (before adjustment for earned original issue
discount and amortized bond premium, if any) is determined by
apportioning the cost of the Units among each of the Trust assets
ratably according to value as of the date of acquisition of the Units.
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 or her Units are sold
or redeemed for an amount equal to their original cost; and
(3) any amounts paid on defaulted Bonds held by the Trustee under policies
of insurance issued with respect to such Bonds will be excludable from
Federal gross income if, and to the same extent as, such interest would
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have been so excludable if paid by the respective 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 (2) of this opinion is
accordingly applicable to policy proceeds representing maturing
interest.
In the opinion of Carter, Ledyard & Milburn, counsel to the Trustee, and, in the
absence of a New York Trust from the Series, special counsel for the Series for
New York tax matters, under existing law:
Under the income tax laws of the State and City of New York, each Trust
is not an association taxable as a corporation and the income of each Trust
will be treated as the income of the Unitholders.
For a summary of each opinion of special counsel to the respective State
Trusts for state tax matters, see Part A of this Prospectus.
ALL STATEMENTS IN THE PROSPECTUS CONCERNING EXEMPTION FROM FEDERAL, STATE OR
OTHER TAXES ARE THE OPINION OF COUNSEL AND ARE TO BE SO CONSTRUED.
The Internal Revenue Code provides that interest on indebtedness incurred or
continued to purchase or carry obligations, the interest on which is wholly
exempt from Federal income taxes, is not deductible. Because each Unitholder is
treated for Federal income tax purposes as the owner of a pro rata share of the
Bonds owned by the applicable Trust, interest on borrowed funds used to purchase
or carry Units of such Trust will not be 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 to purchase or improve a personal residence).
Similar rules are generally applicable for state tax purposes. Special rules
apply in the case of certain financial institutions that acquire Units.
Investors with questions regarding these issues should consult with their tax
advisers.
For purposes of computing the alternative minimum tax for individuals and
corporations, interest on certain specified tax-exempt private activity bonds is
included as a preference item. The Trusts do not include any such bonds.
CERTAIN TAX MATTERS APPLICABLE TO CORPORATE UNITHOLDERS. In the case of
certain corporations, 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. 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) 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 operation loss deduction). Although tax-exempt
interest received by each of the Trusts on Bonds deposited therein will not be
included in the gross income of corporations for Federal income tax purposes,
"adjusted current earnings" includes all tax-exempt interest, including interest
on all Bonds in the Trust and tax-exempt original issue discount.
Corporate Unitholders are urged to consult their own tax advisers with
respect to the particular tax consequences to them resulting under the Federal
tax law, including the corporate alternative minimum tax, the Superfund Tax and
the branch profits tax imposed by Section 884 of the Code.
EXCEPT AS NOTED ABOVE AND IN PART A OF THIS PROSPECTUS, THE EXEMPTION OF
INTEREST ON STATE AND LOCAL OBLIGATIONS FOR FEDERAL INCOME TAX PURPOSES 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.
WHAT ARE NORMAL TRUST OPERATING EXPENSES?
No annual advisory fee is charged to the Trusts by the Sponsor. The Sponsor
does, however, receive a fee as set forth in "Essential Information" in Part A
of this Prospectus for regularly evaluating the Bonds and for maintaining
surveillance over the portfolio. (See "UNIT VALUE AND EVALUATION.")
The Trustee receives for ordinary recurring services an annual fee for each
plan of distribution for each Trust as set forth in "Essential Information"
appearing in Part A of this Prospectus. Each annual fee is per $1,000 principal
amount of the underlying Bonds in a Trust for that portion of the Trust that
represents a particular plan of distribution. 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) and may be further adjusted in accordance with the
cumulative percentage increase of the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent of Shelter" since the
establishment of the Trusts. The Trustee has the use of funds, if any, being
held in the Interest and Principal Accounts of each Trust for future
distributions, payment of expenses and redemptions. These Accounts are
non-interest bearing to Unitholders. Pursuant to normal banking procedures, the
Trustee benefits from the use of funds held therein. Part of the Trustee's
compensation for its services to the Fund is expected to result from such use of
these funds.
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Premiums for the policies of insurance obtained by the Sponsor or by the
Bond issuers with respect to the Bonds in the Insured Trusts and with respect to
insured Bonds in Traditional Trusts have been paid in full prior to the deposit
of the Bonds in the Trusts, and the value of such insurance has been included in
the evaluation of the Bonds in each Trust and accordingly in the Public Offering
Price of Units of each Trust. There are no annual continuing premiums for such
insurance.
All or a portion of the expenses incurred in establishing the Trusts,
including costs of preparing the registration statement, the trust indenture and
other closing documents, registering Units with the Securities and Exchange
Commission and states, the initial audit of each Trust portfolio, legal fees,
the initial fees and expenses of the Trustee and any other non-material
out-of-pocket expenses, will be paid by the Trusts and amortized over the first
five years of such Trusts. The following are additional expenses of the Trusts
and, when paid by or are owed to the Trustee, are secured by a lien on the
assets of the Trust or Trusts to which such expenses are allocable: (1) the
expenses and costs of any action undertaken by the Trustee to protect the Trusts
and the rights and interests of the Unitholders; (2) all taxes and other
governmental charges upon the Bonds or any part of the Trusts (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated); (3) amounts payable to the Trustee as fees for ordinary recurring
services and for extraordinary non-recurring services rendered pursuant to the
Indenture, all disbursements and expenses including counsel fees (including fees
of bond counsel which the Trustee may retain) sustained or incurred by the
Trustee in connection therewith; and (4) any losses or liabilities accruing to
the Trustee without negligence, bad faith or willful misconduct on its part. The
Trustee is empowered to sell Bonds in order to pay these amounts if funds are
not otherwise available in the applicable Interest and Principal Accounts.
The Indenture requires each Trust to be audited on an annual basis at the
expense of the Trust by independent public accountants selected by the Sponsor.
The Trustee shall not be required, however, to cause such an audit to be
performed if its cost to a Trust shall exceed $.05 per Unit on an annual basis.
Unitholders of a Trust covered by an audit may obtain a copy of the audited
financial statements upon request.
WHEN ARE DISTRIBUTIONS MADE TO UNITHOLDERS?
Interest received by the Trustee on the Bonds in each Trust, including that part
of the proceeds of any disposition of Bonds which represents accrued interest
and including any insurance proceeds representing interest due on defaulted
Bonds, shall be credited to the "Interest Account" of such Trust and all other
moneys received by the Trustee shall be credited to the "Principal Account" of
such Trust.
The pro rata share of cash in the Principal Account in each Trust will be
computed as of each semi-annual Record Date and distributions to the Unitholders
as of such Record Date will be made on or shortly after the fifteenth day of the
month. Proceeds received from the disposition, including sale, call or maturity,
of any of the Bonds and all amounts paid with respect to zero coupon bonds and
Stripped Obligations will be held in the Principal Account and either used to
pay for Units redeemed or distributed on the Distribution Date following the
next semi-annual Record Date. The Trustee is not required to make a distribution
from the Principal Account of any Trust unless the amount available for
distribution in such account equals at least ten cents per Unit.
The pro rata share of the Interest Account in each Trust will be computed by
the Trustee each month as of each Record Date and distributions will be made on
or shortly after the fifteenth day of the month to Unitholders of such Trust as
of the Record Date who are entitled to distributions at that time under the plan
of distribution chosen. Persons who purchase Units between a Record Date and a
Distribution Date will receive their first distribution on the Distribution Date
following the next Record Date under the applicable plan of distribution.
Purchasers of Units who desire to receive interest distributions on a
monthly or quarterly basis may elect to do so at the time of purchase during the
initial public offering period. Those indicating no choice will be deemed to
have chosen the semi-annual distribution plan. All Unitholders, however, who
purchase Units during the initial public offering period and who hold them of
record on the first Record Date will receive the first distribution of interest.
Thereafter, Record Dates for monthly distributions will be the first day of each
month; Record Dates for quarterly distributions will be the first day of
February, May, August and November; and Record Dates for semi-annual
distributions will be the first day of May and November. See Part A of this
Prospectus for details of distributions per Unit of each Trust under the various
plans based upon estimated Net Annual Interest Income at the Date of Deposit.
The amount of the regular distributions will generally change when Bonds are
redeemed, mature or are sold or when fees and expenses increase or decrease. For
the purpose of minimizing fluctuations in the distributions from the Interest
Account of a Trust, the Trustee is authorized to advance such amounts as may be
necessary to provide for interest distributions of approximately equal amounts.
The Trustee shall be reimbursed, without interest, for any such advances from
funds in the Interest Account of such Trust. The Trustee's fee takes into
account the costs attributable to the outlay of capital needed to make such
advances.
The plan of distribution selected by a Unitholder will remain in effect
until changed. Unitholders purchasing Units in the secondary market will
initially receive distributions in accordance with the election of the prior
owner. Unitholders desiring to change their plan of distribution may do so by
sending a written notice requesting the change, together with any
Certificate(s), to the Trustee. The notice and any Certificate(s) must be
received by the
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Trustee not later than the semi-annual Record Date to be effective as of the
semi-annual distribution following the subsequent semi-annual Record Date.
Unitholders are requested to make any such changes within 45 days prior to the
applicable Record Date. Certificates should only be sent by registered or
certified mail to minimize the possibility of their being lost or stolen. (See
"OWNERSHIP AND TRANSFER OF UNITS.")
As of the first day of each month the Trustee will deduct from the Interest
Account of a Trust or, to the extent funds are not sufficient therein, from the
Principal Account of a Trust, amounts needed for payment of expenses of such
Trust. The Trustee also may withdraw from said accounts such amount, if any, as
it deems necessary to establish a reserve for any governmental charges payable
out of such Trust. Amounts so withdrawn shall not be considered a part of the
Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate account. In addition, the Trustee shall withdraw
from the Interest Account and the Principal Account of a Trust such amounts as
may be necessary to cover redemptions of Units of such Trust by the Trustee.
Funds which 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 banking procedures.
ACCUMULATION PLAN
The Sponsor is also the principal underwriter of the Accumulation Funds
described in the following table. Each of these funds is an open-end,
diversified management investment company into which Unitholders may choose to
reinvest Trust distributions automatically, without any sales charge.
(Reinvestment generally is available only to Unitholders who are residents of
the states for which such portfolios are named.) Unitholders may reinvest both
interest and principal distributions or principal distributions only. Each
Accumulation Fund has investment objectives which differ in certain respects
from those of the Trusts and may invest in securities which would not be
eligible for deposit in the Trusts. The investment adviser to each Accumulation
Fund is Nuveen Advisory Corp., a wholly-owned subsidiary of the Sponsor. For a
more detailed description, Unitholders of each Accumulation Fund should read
carefully the prospectus of the Accumulation Fund in which they are interested.
For additional information concerning the Accumulation Plan see the Information
Supplement of this Prospectus.
<TABLE>
<CAPTION>
ACCUMULATION FUND GENERAL FUND DESCRIPTION
- -------------------------------------------------------------- --------------------------------------------------------------
<S> <C>
Nuveen Municipal Bond Fund Tax-exempt income by investing in long-term municipal
securities.
Nuveen Tax-Free Reserves, Inc. and Nuveen Tax-Free Money
Market Fund, Inc.:
Nuveen Massachusetts Tax-Free Money Market Fund Nuveen New Tax-exempt and in certain cases double and triple tax- exempt
York Tax-Free Money Market Fund "money market" funds with checkwriting privileges.
Nuveen California Tax-Free Fund:
Nuveen California Tax-Free Value Fund Double tax-exempt income by investing in long-term investment
grade California tax-exempt securities.
Nuveen California Insured Tax-Free Value Fund Double tax-exempt income by investing in insured California
tax-exempt securities.
Nuveen California Tax-Free Money Market Fund California tax-exempt "money market" fund with checkwriting
privileges.
Nuveen Tax-Free Bond Fund, Inc. and the Nuveen Multistate
Tax-Free Trust:
Nuveen Massachusetts Tax-Free Value Fund, Nuveen New York Double and in certain cases triple tax-exempt income by
Tax-Free Value Fund, Nuveen Ohio Tax-Free Value Fund, Nuveen investing in tax-exempt securities in the state for which the
New Jersey Tax-Free Value Fund, Nuveen Arizona Tax-Free Value portfolio is named.
Fund, Nuveen Florida Tax-Free Value Fund, Nuveen Maryland
Tax-Free Value Fund, Nuveen Michigan Tax-Free Value Fund,
Nuveen Pennsylvania Tax-Free Value Fund and Nuveen Virginia
Tax-Free Value Fund
Nuveen Insured Tax-Free Bond Fund, Inc.:
Nuveen Insured Municipal Bond Fund, Nuveen Massachusetts Tax-exempt and in certain cases double and triple tax- exempt
Insured Tax-Free Value Fund and the Nuveen New York Insured funds investing in insured tax-exempt securities in the state
Tax-Free Value Fund. for which the portfolio is named.
</TABLE>
Shareholder Services, Inc. will mail to each participant in the Accumulation
Plan a quarterly statement containing a record of all transactions involving
purchases of Accumulation Fund shares (or fractions thereof) with Trust interest
distributions or as a result of reinvestment of Accumulation Fund dividends. Any
distribution of principal used
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to purchase shares of an Accumulation Fund will be separately confirmed by
Shareholder Services, Inc. Unitholders will also receive distribution statements
from the Trustee detailing the amounts transferred to their Accumulation Fund
accounts.
Participants may at any time, by so notifying the Trustee in writing, elect to
change the Accumulation Fund into which their distributions are being
reinvested, to change from principal only reinvestment to reinvestment of both
principal and interest or vice versa, or to terminate their participation in the
Accumulation Plan altogether and receive future distributions on their Units in
cash. There will be no charge or other penalty for such change of election or
termination. The character of Trust distributions for income tax purposes will
remain unchanged even if they are reinvested in an Accumulation Fund.
HOW DETAILED ARE REPORTS TO UNITHOLDERS?
The Trustee shall furnish Unitholders of a Trust in connection with each
distribution, a statement of the amount of interest, if any, and the amount of
other receipts (received since the preceding distribution) being distributed,
expressed in each case as a dollar amount representing the pro rata share of
each Unit of a Trust outstanding and a year to date summary of all distributions
paid on said Units. Within a reasonable period of time after the end of each
calendar year, the Trustee shall furnish to each person who at any time during
the calendar year was a registered Unitholder of a Trust a statement with
respect to such Trust (i) as to the Interest Account: interest received
(including amounts representing interest received upon any disposition of
Bonds), and, except for any State Trust, the percentage of such interest by
states in which the issuers of the Bonds are located, deductions for fees and
expenses of such Trust, redemption of Units and the balance remaining after such
distributions and deductions, expressed in each case both as a total dollar
amount and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (ii) as to the
Principal Account: the dates of disposition of any Bonds and the net proceeds
received therefrom (excluding any portion representing accrued interest), the
amount paid for purchase of Replacement Bonds, the amount paid upon redemption
of Units, deductions for payment of applicable taxes and fees and expenses of
the Trustee, and the balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount representing the
pro rata share of each Unit outstanding on the last business day of such
calendar year; (iii) a list of the Bonds held and the number of Units
outstanding on the last business day of such calendar year; (iv) the Unit Value
based upon the last computation thereof made during such calendar year; and (v)
amounts actually distributed during such calendar year from the Interest Account
and from the Principal Account, separately stated, expressed both as total
dollar amounts and as dollar amounts representing the pro rata share of each
Unit outstanding. Each annual statement will reflect pertinent information in
respect of all plans of distribution so that Unitholders may be informed
regarding the results of other plans of distribution.
UNIT VALUE AND EVALUATION
The value of each Trust is determined by the Sponsor on the basis of (1) the
cash on hand in the Trust or moneys in the process of being collected, (2) the
value of the Bonds in the Trust based on the BID prices of the Bonds and (3)
interest accrued thereon not subject to collection, LESS (1) amounts
representing taxes or governmental charges payable out of the Trust and (2) the
accrued expenses of the Trust. The result of such computation is divided by the
number of Units of such Trust outstanding as of the date thereof to determine
the per Unit value ("Unit Value") of such Trust. The Sponsor may determine the
value of the Bonds in each Trust (1) on the basis of current BID prices of the
Bonds obtained from dealers or brokers who customarily deal in bonds comparable
to those held by the Trust, (2) if bid prices are not available for any of the
Bonds, on the basis of bid prices for comparable bonds, (3) by causing the value
of the Bonds to be determined by others engaged in the practice of evaluating,
quoting or appraising comparable bonds or (4) by any combination of the above.
Although the Unit Value of each Trust is based on the BID prices of the Bonds,
the Units are sold initially to the public at the Public Offering Price based on
the OFFERING prices of the Bonds.
Because the insurance obtained by the Sponsor or by the issuers of Bonds
with respect to the Bonds in the Insured Trusts and with respect to insured
Bonds in Traditional Trusts is effective so long as such Bonds are outstanding,
such insurance will be taken into account in determining the bid and offering
prices of such Bonds and therefore some value attributable to such insurance
will be included in the value of Units of Trusts that include such Bonds.
HOW UNITS OF THE TRUSTS ARE DISTRIBUTED TO THE PUBLIC
John Nuveen & Co. Incorporated is the Sponsor and sole Underwriter of the Units.
It is the intention of the Sponsor to qualify Units of National, Long
Intermediate, Intermediate, Short Intermediate and Short Term Trusts for sale
under the laws of substantially all of the states of the United States of
America, and Units of State Trusts only in the state for which the Trust is
named and selected other states.
17
<PAGE>
Promptly following the deposit of Bonds in exchange for Units of the Trusts,
it is the practice of the Sponsor to place all of the Units as collateral for a
letter or letters of credit from one or more commercial banks under an agreement
to release such Units from time to time as needed for distribution. Under such
an arrangement the Sponsor pays such banks compensation based on the then
current interest rate. This is a normal warehousing arrangement during the
period of distribution of the Units to public investors. To facilitate the
handling of transactions, sales of Units shall be limited to transactions
involving a minimum of either $5,000 or 50 Units, whichever is less. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units.
The Sponsor plans to allow a discount to brokers and dealers in connection
with the primary distribution of Units and also in secondary market
transactions. The primary market discounts are as follows:
<TABLE>
<CAPTION>
DISCOUNT PER UNIT
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NATIONAL LONG INTER- SHORT INTER-
AND STATE MEDIATE INTERMEDIATE MEDIATE SHORT TERM
NUMBER OF UNITS* TRUSTS TRUSTS TRUSTS TRUSTS TRUSTS
- ------------------------------ ---------- ------------- ------------- ------------- -----------
Less than 500................. $3.20 $2.90 $2.70 $2.00 $1.50
500 but less than 1,000....... 3.20 2.90 2.70 2.00 1.50
1,000 but less than 2,500..... 3.20 2.70 2.50 1.80 1.30
2,500 but less than 5,000..... 3.20 2.45 2.25 1.55 1.05
5,000 but less than 10,000.... 2.50 2.45 2.25 1.55 1.05
10,000 but less than 25,000... 2.00 2.00 2.00 1.30 .80
25,000 but less than 50,000... 1.75 1.75 1.75 1.30 .60
50,000 or more................ 1.75 1.50 1.50 1.00 .60
</TABLE>
*Breakpoint sales charges and related dealer concessions are computed both on a
dollar basis and on the basis of the number of Units purchased, using the
equivalent of 500 Units to $50,000, 2,500 Units to $250,000 etc. and will be
applied on that basis which is more favorable to the purchaser.
The Sponsor currently intends to maintain a secondary market for Units of
each Trust. See "MARKET FOR UNITS." The amount of the dealer concession on
secondary market purchases of Trust Units through the Sponsor will be computed
based upon the value of the Bonds in the Trust portfolio, including the sales
charge computed as described in "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?",
and adjusted to reflect the cash position of the Trust principal account, and
will vary with the size of the purchase as shown in the following table:
<TABLE>
<CAPTION>
AMOUNT OF PURCHASE*
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$50,000 $100,000 $250,000 $500,000 $1,000,000 $2,500,000
UNDER TO TO TO TO TO TO $5,000,000
YEARS TO MATURITY $50,000 $99,999 $249,999 $499,999 $999,999 $2,499,999 $4,999,999 OR MORE
- -------------------------- --------- --------- --------- --------- --------- ---------- ---------- ----------
Less than 1............... 0 0 0 0 0 0 0 0
1 but less than 2......... 1.00% .90% .85% .80% .70% .55% .467% .389%
2 but less than 3......... 1.30% 1.20% 1.10% 1.00% .90% .73% .634% .538%
3 but less than 4......... 1.60% 1.45% 1.35% 1.25% 1.10% .90% .781% .662%
4 but less than 5......... 2.00% 1.85% 1.75% 1.55% 1.40% 1.25% 1.082% .914%
5 but less than 7......... 2.30% 2.15% 1.95% 1.80% 1.65% 1.50% 1.320% 1.140%
7 but less than 10........ 2.60% 2.45% 2.25% 2.10% 1.95% 1.70% 1.496% 1.292%
10 but less than 13....... 3.00% 2.80% 2.60% 2.45% 2.30% 2.00% 1.747% 1.494%
13 but less than 16....... 3.25% 3.15% 3.00% 2.75% 2.50% 2.15% 1.878% 1.606%
16 or more................ 3.50% 3.50% 3.40% 3.35% 3.00% 2.50% 2.185% 1.873%
</TABLE>
*Breakpoint sales charges and related dealer concessions are computed both on a
dollar basis and on the basis of the number of Units purchased, using the
equivalent of 500 Units to $50,000, 2,500 Units to $250,000, etc., and will be
applied on that basis which is more favorable to the purchaser.
The Sponsor reserves the right to change the foregoing dealer concessions
from time to time.
Registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for financial
planning, investment advisory or asset management services, or provide such
services in connection with the establishment of an investment account for which
a comprehensive "wrap fee" charge is imposed, and bank trust departments
investing funds over which they exercise exclusive discretionary investment
authority and that are held in a fiduciary, agency, custodial or similar
capacity, are not entitled to receive any dealer concession for primary or
secondary market purchases in which an investor purchases any number of Units at
the Public Offering Price for non-breakpoint purchases minus the concession the
sponsor typically allows to brokers and dealers for non-breakpoint purchases
(see "HOW IS THE PUBLIC OFFERING PRICE DETERMINED?").
Certain commercial banks are making Units of the Trusts available to their
customers on an agency basis. A portion of the sales charge paid by these
customers is retained by or remitted to the banks in the amounts shown in the
above table. The Glass-Steagall Act prohibits banks from underwriting Trust
Units; the Act does, however, permit certain agency transactions and banking
regulators have not indicated that these particular agency transactions
18
<PAGE>
are not permitted under the Act. In Texas and in certain other states, any bank
making Units available must be registered as a broker-dealer under state law.
OWNERSHIP AND TRANSFER OF UNITS
The ownership of Units is evidenced by book entry positions recorded on the
books and records of the Trustee unless the Unitholder expressly requests that
the purchased Units be evidenced in Certificate form. The Trustee is authorized
to treat as the owner of Units that person who at the time is registered as such
on the books of the Trustee. Any Unitholder who holds a Certificate may change
to book entry ownership by submitting to the Trustee the Certificate along with
a written request that the Units represented by such Certificate be held in book
entry form. Likewise, a Unitholder who holds Units in book entry form may obtain
a Certificate for such Units by written request to the Trustee. Units may be
held in denominations of one Unit or any multiple or fraction thereof. Fractions
of Units are computed to three decimal places. Any Certificates issued will be
numbered serially for identification, and are issued in fully registered form,
transferable only on the books of the Trustee. Book entry Unitholders will
receive a Book Entry Position Confirmation reflecting their ownership.
For Trusts allowing optional plans of distribution, Certificates for Units
will bear an appropriate notation on their face indicating which plan of
distribution has been selected. When a change is made, the existing Certificates
must be surrendered to the Trustee and new Certificates issued to reflect the
currently effective plan of distribution. There will be no charge for this
service. Holders of book entry Units can change their plan of distribution by
making a written request to the Trustee, which will issue a new Book Entry
Position Confirmation to reflect such change.
Units are transferable by making a written request to the Trustee and, in
the case of Units evidenced by Certificate(s), by presenting and surrendering
such Certificate(s) to the Trustee, at its address listed on the back cover of
this Part B of the Prospectus, properly endorsed or accompanied by a written
instrument or instruments of transfer. The Certificate(s) should be sent
registered or certified mail for the protection of the Unitholder. Each
Unitholder must sign such written request, and such Certificate(s) or transfer
instrument, exactly as his name appears on (a) the face of the Certificate(s)
representing the Units to be transferred, or (b) the Book Entry Position
Confirmation(s) relating to the Units to be transferred. Such signature(s) must
be guaranteed by a guarantor acceptable to the Trustee. In certain instances the
Trustee may require additional documents such as, but not limited to, trust
instruments, certificates of death, appointments as executor or administrator or
certificates of corporate authority. Mutilated Certificates must be surrendered
to the Trustee in order for a replacement Certificate to be issued. Although at
the date hereof no charge is made and none is contemplated, a Unitholder may be
required to pay $2.00 to the Trustee for each Certificate reissued or transfer
of Units requested and to pay any governmental charge which may be imposed in
connection therewith.
REPLACEMENT OF LOST, STOLEN OR DESTROYED CERTIFICATES.
To obtain a new Certificate replacing one that has been lost, stolen, or
destroyed, the Unitholder must furnish the Trustee with sufficient
indemnification and pay such expenses as the Trustee may incur. This
indemnification must be in the form of an Open Penalty Bond of Indemnification.
The premium for such an indemnity bond may vary, but currently amounts to 1% of
the market value of the Units represented by the Certificate. In the case
however, of a Trust as to which notice of termination has been given, the
premium currently amounts to 0.5% of the market value of the Units represented
by such Certificate.
HOW UNITS MAY BE REDEEMED WITHOUT CHARGE
Unitholders may redeem all or a portion of their Units by (1) making a written
request for such redemption (book entry Unitholders may use the redemption form
on the reverse side of their Book Entry Position Confirmation) to the Trustee at
its address listed on the back cover of this Part B of the Prospectus
(redemptions of 1,000 Units or more will require a signature guarantee), (2) in
the case of Units evidenced by a Certificate, by also tendering such Certificate
to the Trustee, duly endorsed or accompanied by proper instruments of transfer
with signatures guaranteed as explained above, or provide satisfactory indemnity
required in connection with lost, stolen or destroyed Certificates and (3)
payment of applicable governmental charges, if any. Certificates should be sent
only by registered or certified mail to minimize the possibility of their being
lost or stolen. (See "OWNERSHIP AND TRANSFER OF UNITS".) No redemption fee will
be charged. A Unitholder may authorize the Trustee to honor telephone
instructions for the redemption of Units held in book entry form. Units
represented by Certificates may not be redeemed by telephone. The proceeds of
Units redeemed by telephone will be sent by check either to the Unitholder at
the address specified on his account or to a financial institution specified by
the Unitholder for credit to the account of the Unitholder. A Unitholder wishing
to use this method of redemption must complete a Telephone Redemption
Authorization Form and furnish the Form to the Trustee. Telephone Redemption
Authorization Forms can be obtained from a Unitholder's registered
representative or by calling the Trustee. Once the completed Form is on file,
the Trustee will honor telephone redemption requests by any person. The time a
telephone redemption request is received
19
<PAGE>
determines the "date of tender" as discussed below. The redemption proceeds will
be mailed within three business days following the telephone redemption request.
Only Units held in the name of individuals may be redeemed by telephone;
accounts registered in broker name, or accounts of corporations or fiduciaries
(including among others, trustees, guardians, executors and administrators) may
not use the telephone redemption privilege.
On the third business day following the date of tender, the Unitholder will
be entitled to receive in cash for each Unit tendered an amount equal to the
Unit Value of such Trust determined by the Trustee, as of 4:00 p.m. eastern time
on the date of tender as defined hereafter, plus accrued interest to, but not
including, the third business day after the date of tender ("Redemption Price").
The price received upon redemption may be more or less than the amount paid by
the Unitholder depending on the value of the Bonds on the date of tender.
Unitholders should check with the Trustee or their broker to determine the
Redemption Price before tendering Units.
The "date of tender" is deemed to be the date on which the request for
redemption of Units is received in proper form by the Trustee, except that as
regards a redemption request received after 4:00 p.m. eastern time or on any day
on which the New York Stock Exchange (the "Exchange") is normally closed, the
date of tender is the next day on which such Exchange is normally open for
trading and such request will be deemed to have been made on such day and the
redemption will be effected at the Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account of the appropriate Trust or, if the balance therein is insufficient,
from the Principal Account of such Trust. All other amounts paid on redemption
shall be withdrawn from the Principal Account. The Trustee is empowered to sell
underlying Bonds of a Trust in order to make funds available for redemption.
(See "HOW BONDS MAY BE REMOVED FROM THE TRUSTS.") Units so redeemed shall be
cancelled. To the extent that Bonds are sold from a Trust, the size and
diversity of such Trust will be reduced. Such sales may be required at a time
when Bonds would not otherwise be sold and might result in lower prices than
might otherwise be realized.
The Redemption Price is determined on the basis of the BID prices of the
Bonds in each Trust, while the initial Public Offering Price of Units will be
determined on the basis of the OFFERING prices of the Bonds as of 4:00 p.m.
eastern time on any day on which the Exchange is normally open for trading and
such determination is made. As of any given time, the difference between the bid
and offering prices of such Bonds may be expected to average 1/2% to 2% of
principal amount. In the case of actively traded Bonds, the difference may be as
little as 1/4 to 1/2 of 1%, and in the case of inactively traded Bonds such
difference usually will not exceed 3%.
The right of redemption may be suspended and payment postponed for any
period during which the Securities and Exchange Commission determines that
trading in the municipal bond market is restricted or an emergency exists, as a
result of which disposal or evaluation of the Bonds is not reasonably
practicable, or for such other periods as the Securities and Exchange Commission
may by order permit.
Under regulations issued by the Internal Revenue Service, the Trustee will
be required to withhold a specified percentage of the principal amount of a Unit
redemption if the Trustee has not been furnished the redeeming Unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the Unitholder only when filing his or her tax return. Under normal
circumstances the Trustee obtains the Unitholder's tax identification number
from the selling broker at the time the Certificate or Book Entry Return
Confirmation is issued, and this number is printed on the Certificate or Book
Entry Return Confirmation and on distribution statements. If a Unitholder's tax
identification number does not appear as described above, or if it is incorrect,
the Unitholder should contact the Trustee before redeeming Units to determine
what action, if any, is required to avoid this "back-up withholding."
HOW UNITS MAY BE PURCHASED BY THE SPONSOR
The Trustee will notify the Sponsor of any tender of Units for redemption. If
the Sponsor's bid in the secondary market at that time equals or exceeds the
Redemption Price it may purchase such Units by notifying the Trustee before the
close of business on the second succeeding business day and by making payment
therefor to the Unitholder not later than the day on which payment would
otherwise have been made by the Trustee. (See "HOW UNITS MAY BE REDEEMED WITHOUT
CHARGE.") The Sponsor's current practice is to bid at the Redemption Price in
the secondary market. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units.
HOW BONDS MAY BE REMOVED FROM THE TRUSTS
Bonds will be removed from a Trust as they mature or are redeemed by the issuers
thereof. See Part A of this Prospectus and "RISK FACTORS" for a discussion of
call provisions of portfolio Bonds.
20
<PAGE>
The Indenture also empowers the Trustee to sell Bonds for the purpose of
redeeming Units tendered by any Unitholder, and for the payment of expenses for
which income may not be available. Under the Indenture the Sponsor is obligated
to provide the Trustee with a current list of Bonds in each Trust to be sold in
such circumstances. In deciding which Bonds should be sold the Sponsor intends
to consider, among other things, such factors as: (1) market conditions; (2)
market prices of the Bonds; (3) the effect on income distributions to
Unitholders of the sale of various Bonds; (4) the effect on principal amount of
underlying Bonds per Unit of the sale of various Bonds; (5) the financial
condition of the issuers; and (6) the effect of the sale of various Bonds on the
investment character of the Trust. Such sales, if required, could result in the
sale of Bonds by the Trustee at prices less than original cost to the Trust. To
the extent Bonds are sold, the size and diversity of such Trust will be reduced.
In addition, the Sponsor is empowered to direct the Trustee to liquidate
Bonds upon the happening of certain other events, such as default in the payment
of principal and/or interest, an action of the issuer that will adversely affect
its ability to continue payment of the principal of and interest on its Bonds,
or an adverse change in market, revenue or credit factors affecting the
investment character of the Bonds. If a default in the payment of the principal
of and/or interest on any of the Bonds occurs, and if the Sponsor fails to
instruct the Trustee whether to sell or continue to hold such Bonds within 30
days after notification by the Trustee to the Sponsor of such default, the
Indenture provides that the Trustee shall liquidate said Bonds forthwith and
shall not be liable for any loss so incurred. The Sponsor may also direct the
Trustee to liquidate Bonds in a Trust if the Bonds in the Trust are the subject
of an advanced refunding, generally considered to be when refunding bonds are
issued and the proceeds thereof are deposited in irrevocable trust to retire the
refunded Bonds on their redemption date.
Except as stated in "COMPOSITION OF TRUSTS" regarding the limited right of
substitution of Replacement Bonds for Failed Bonds, and except for refunding
securities that may be exchanged for Bonds under certain conditions specified in
the Indenture, the Indenture does not permit either the Sponsor or the Trustee
to acquire or deposit bonds either in addition to, or in substitution for, any
of the Bonds initially deposited in a Trust.
INFORMATION ABOUT THE TRUSTEE
The Trustee and its address are stated on the back cover of this Part B of the
Prospectus. The Trustee is subject to supervision and examination by the Federal
Deposit Insurance Corporation, the Board of Governors of the Federal Reserve
System and either the Comptroller of the Currency or state banking authorities.
LIMITATIONS ON LIABILITIES OF SPONSOR AND TRUSTEE
The Sponsor and the Trustee shall be under no liability to Unitholders for
taking any action or for refraining from any action in good faith pursuant to
the Indenture, or for errors in judgment, but shall be liable only for their own
negligence, lack of good faith or willful misconduct. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the Trustee of
any of the Bonds. In the event of the failure of the Sponsor to act under the
Indenture, the Trustee may act thereunder and shall not be liable for any action
taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental charges
imposed upon or in respect of the Bonds or upon the interest thereon or upon it
as Trustee under the Indenture or upon or in respect of any Trust which the
Trustee may be required to pay under any present or future law of the United
States of America or of any other taxing authority having jurisdiction. In
addition, the Indenture contains other customary provisions limiting the
liability of the Trustee.
SUCCESSOR TRUSTEES AND SPONSORS
The Trustee or any successor trustee may resign by executing an instrument
of resignation in writing and filing same with the Sponsor and mailing a copy of
a notice of resignation to all Unitholders then of record. Upon receiving such
notice, the Sponsor is required to promptly appoint a successor trustee. If the
Trustee becomes incapable of acting or is adjudged a bankrupt or insolvent, or a
receiver or other public officer shall take charge of its property or affairs,
the Sponsor may remove the Trustee and appoint a successor by written
instrument. The resignation or removal of a trustee and the appointment of a
successor trustee shall become effective only when the successor trustee accepts
its appointment as such. Any successor trustee shall be a corporation authorized
to exercise corporate trust powers, having capital, surplus and undivided
profits of not less than $5,000,000. Any corporation into which a trustee may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which a trustee shall be a party, shall be the
successor trustee.
If upon resignation of a trustee no successor 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.
21
<PAGE>
If the Sponsor fails to undertake any of its duties under the Indenture, and
no express provision is made for action by the Trustee in such event, the
Trustee may, in addition to its other powers under the Indenture (1) appoint a
successor sponsor or (2) terminate the Indenture and liquidate the Trusts.
INFORMATION ABOUT THE SPONSOR
John Nuveen & Co. Incorporated, the Sponsor and Underwriter, was founded in 1898
and is the oldest and largest investment banking firm specializing in the
underwriting and distribution of tax-exempt securities and maintains the largest
research department in the investment banking community devoted exclusively to
the analysis of municipal securities. In 1961 the Sponsor began sponsoring the
Nuveen Tax-Exempt Unit Trust and, since this time, it has issued more than $30
billion in tax-exempt unit trusts, including over $8 billion in insured trusts.
The Sponsor is also principal underwriter of 16 mutual funds and 60 closed-end
funds. These registered open-end and closed-end investment companies currently
have approximately $32.8 billion in tax-exempt securities under management.
Nationwide, more than 1,000,000 individual investors have purchased Nuveen's tax
exempt trusts and funds. The present corporation was organized in 1967 as a
wholly-owned subsidiary of Nuveen Corporation, successor to the original John
Nuveen & Co. founded in 1898 as a sole proprietorship and incorporated in 1953.
In 1974, John Nuveen & Co. Incorporated became a wholly-owned subsidiary of The
St. Paul Companies, Inc., a financial services management company located in St.
Paul, Minnesota. On May 19, 1992, common shares comprising a minority interest
in The John Nuveen Company ("JNC"), a newly organized corporation which holds
all of the shares of Nuveen, were sold to the general public in an initial
public offering. St. Paul retains a controlling interest in JNC with over 70% of
JNC's shares. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and the Securities Industry Association and has its principal
offices located in Chicago (333 W. Wacker Drive) and New York (Swiss Bank Tower,
10 East 50th Street). It maintains 14 regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Sponsor may
advertise and create specific investment programs and systems. For example, such
activities may include presenting information on how to use an investment in the
Trust, alone or in combination with an investment in other mutual funds or unit
investment trusts sponsored by Nuveen, to accumulate assets for future education
needs or periodic payments such as insurance premiums. The Trust's sponsor may
produce software or additional sales literature to promote the advantages of
using the Trust to meet these and other specific investor needs.
OTHER INFORMATION
AMENDMENT OF INDENTURE
The Indenture 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 thereof which may be defective or inconsistent, or (2)
to make such other provisions as shall not adversely affect the Unitholders,
provided, however, that the Indenture may not be amended to increase the number
of Units in any Trust or to permit the deposit or acquisition of bonds either in
addition to, or in substitution for any of the Bonds initially deposited in any
Trust except as stated in "COMPOSITION OF TRUSTS" regarding the limited right of
substitution of Replacement Bonds and except for the substitution of refunding
bonds under certain circumstances. The Trustee shall advise the Unitholders of
any amendment promptly after execution thereof.
TERMINATION OF INDENTURE
Each Trust may be liquidated at any time by written consent of 100% of the
Unitholders or by the Trustee when the value of such Trust, as shown by any
evaluation, is less than 20% of the original principal amount of such Trust and
will be liquidated by the Trustee in the event that Units not yet sold
aggregating more than 60% of the Units originally created are tendered for
redemption by the Sponsor thereby reducing the net worth of such Trust to less
than 40% of the principal amount of the Bonds originally deposited in the
portfolio. (See "Essential Information" appearing in Part A of this Prospectus.)
The sale of Bonds from the Trusts upon termination may result in realization of
a lesser amount than might otherwise be realized if such sale were not required
at such time. For this reason, among others, the amount realized by a Unitholder
upon termination may be less than the principal amount of Bonds originally
represented by the Units held by such Unitholder. The Indenture will terminate
upon the redemption, sale or other disposition of the last Bond held thereunder,
but in no event shall it continue beyond the end of the calendar year preceding
the fiftieth anniversary of its execution for National and State Trusts, beyond
the end of the calendar year preceding the twentieth anniversary of its
execution for Long Intermediate, and Intermediate Trusts or beyond the end of
the calendar year preceding the tenth anniversary of its execution for Short
Intermediate and Short Term Trusts.
Written notice of any termination specifying the time or times at which
Unitholders may surrender their Certificates, if any, for cancellation shall be
given by the Trustee to each Unitholder at the address appearing on the
22
<PAGE>
registration books of the Trust maintained by the Trustee. Within a reasonable
time thereafter the Trustee shall liquidate any Bonds in the Trust then held and
shall deduct from the assets of the Trust any accrued costs, expenses or
indemnities provided by the Indenture which are allocable to such Trust,
including estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. The Trustee shall then distribute to Unitholders of
such Trust their pro rata share of the balance of the Interest and Principal
Accounts. With such distribution the Unitholders shall be furnished a final
distribution statement, in substantially the same form as the annual
distribution statement, of the amount distributable. At such time as the Trustee
in its sole discretion shall determine that any amounts held in reserve are no
longer necessary, it shall make distribution thereof to Unitholders in the same
manner.
LEGAL OPINION
The legality of the Units offered hereby has been passed upon by Chapman and
Cutler, 111 West Monroe Street, Chicago, Illinois 60603. Special counsel for the
Trusts for respective state tax matters are named in "Tax Status" for each Trust
appearing in Part A of this Prospectus. Carter, Ledyard & Milburn, 2 Wall
Street, New York, New York 10005, has acted as counsel for the Trustee with
respect to the Series, and, in the absence of a New York Trust from the Series,
as special New York tax counsel for the Series.
AUDITORS
The "Statement of Condition" and "Schedule of Investments" at Date of
Deposit included in Part A of this Prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report in
Part A of this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
SUPPLEMENTAL INFORMATION
Upon written or telephonic request to the Trustee, investors will receive at
no cost to the investor supplemental information about this Trust, which has
been filed with the Securities and Exchange Commission and is intended to
supplement information contained in Part A and Part B of this Prospectus. The
supplemental information includes
more detailed information concerning certain of the Bonds included in the Trusts
contained in the applicable Series and more specific risk information concerning
the individual state Trusts. This supplement also includes additional general
information about the Sponsor and the Trusts.
23
<PAGE>
NUVEEN Tax-Exempt Unit Trusts
PROSPECTUS -- PART B
SEPTEMBER 1, 1995
<TABLE>
<C> <S> <C>
SPONSOR John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
Telephone: 312.917.7700
Swiss Bank Tower
10 East 50th Street
New York, NY 10022
212.207.2000
TRUSTEE The Chase Manhattan Bank, N.A.
770 Broadway
New York, NY 10003
800.257.8787
LEGAL COUNSEL Chapman and Cutler
TO SPONSOR 111 West Monroe Street
Chicago, IL 60603
INDEPENDENT Arthur Andersen LLP
PUBLIC 33 West Monroe Street
ACCOUNTANTS Chicago, IL 60603
FOR THE TRUSTS
</TABLE>
--------------
Except as to statements made herein furnished by the Trustee, the
Trustee has assumed no responsibility for the accuracy, adequacy and
completeness of the information contained in this Prospectus.
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 to which reference is made.
No person is authorized to give any information or to make
representations not contained in this Prospectus or in supplemental information
or sales literature prepared by the Sponsor, and any information or
representation not contained therein must not be relied upon as having been
authorized by either the Trusts, the Trustee or the Sponsor. 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. The Trusts are registered as a Unit Investment Trust under
the Investment Company Act of 1940. Such registration does not imply that the
Trusts or any of their Units has been guaranteed, sponsored, recommended or
approved by the United States or any State or agency or officer thereof.
<PAGE>
NUVEEN TAX-EXEMPT UNIT TRUSTS
---------------------------------------------
INFORMATION SUPPLEMENT
NUVEEN SERIES 823
This Information Supplement provides additional
information concerning the structure, operations and
risks of a Nuveen Tax-Exempt Unit Trust not found in the
prospectuses for the Trusts. This Information Supplement
is not a prospectus and does not include all of the
information that a prospective investor should consider
before investing in a Trust. This Information Supplement
should be read in conjunction with the prospectus for
the Trust in which an investor is considering investing
("Prospectus"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone
number and address indicated in Part B of the
Prospectus. This Information Supplement has been created
to supplement information contained in the Prospectus.
This Information Supplement is dated September 7,
1995. Capitalized terms have been defined in the
Prospectus.
TABLE OF CONTENTS
--------------------------------------------------
<TABLE>
<S> <C>
GENERAL RISK DISCLOSURE..................................................... 2
Health Facility Obligations............................................... 2
Housing Obligations....................................................... 2
Single Family Mortgage Revenue Bonds...................................... 2
Federally Enhanced Obligations............................................ 3
Industrial Revenue Obligations............................................ 3
Electric Utility Obligations.............................................. 3
Transportation Facility Revenue Bonds..................................... 4
Water and/or Sewerage Obligations......................................... 4
University and College Revenue Obligations................................ 4
Bridge Authority and Tollroad Obligations................................. 4
Dedicated-Tax Supported Bonds............................................. 4
Municipal Lease Bonds..................................................... 5
Original Issue Discount Bonds and Stripped Obligations.................... 5
WHY AND HOW ARE THE BONDS INSURED?.......................................... 6
ACCUMULATION PLAN........................................................... 8
INFORMATION ABOUT THE SPONSOR............................................... 10
DESCRIPTION OF RATINGS...................................................... 11
Appendix A -- Maryland Disclosure........................................... A-1
Appendix B -- Colorado Disclosure........................................... B-1
Appendix C -- Michigan Disclosure........................................... C-1
</TABLE>
<PAGE>
GENERAL RISK DISCLOSURE
An investment in Units of any Trust should be made with an understanding of
the risks that such an investment may entail. These include the ability of the
issuer, or, if applicable, an insurer, to make payments of interest and
principal when due, the effects of changes in interest rates generally, early
call provisions and the potential for changes in the tax status of the Bonds. As
set forth in the portfolio summaries in Part A of this Prospectus, the Trusts
may contain or be concentrated in one or more of the types of bonds discussed
below. The following paragraphs discuss certain circumstances which may
adversely affect the ability of issuers of Bonds held in the portfolio of a
Trust to make payment of principal and interest thereon or which may adversely
affect the ratings of such Bonds; with respect to Insured Trusts, however,
because of the insurance obtained by the Sponsor or by the issuers of the Bonds,
such changes should not adversely affect an Insured Trust's receipt of principal
and interest, the Standard & Poor's AAA or Moody's Aaa ratings of the Bonds in
the Insured Trust portfolio, or the Standard & Poor's AAA rating of the Units of
each such Insured Trust. For economic risks specific to the individual Trusts,
see "Risk Factors" for each Trust.
HEALTH FACILITY OBLIGATIONS. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are derived from services provided by
hospitals or other health care facilities, including nursing homes. Ratings of
bonds issued for health care facilities are sometimes based on feasibility
studies that contain projections of occupancy levels, revenues and expenses. A
facility's gross receipts and net income available for debt service may be
affected by future events and conditions including, among other things, demand
for services, the ability of the facility to provide the services required, an
increasing shortage of qualified nurses or a dramatic rise in nursing salaries,
physicians' confidence in the facility, management capabilities, economic
developments in the service area, competition from other similar providers,
efforts by insurers and governmental agencies to limit rates, legislation
establishing state rate-setting agencies, expenses, government regulation, the
cost and possible unavailability of malpractice insurance, and the termination
or restriction of governmental financial assistance, including that associated
with Medicare, Medicaid and other similar third party payor programs. Medicare
reimbursements are currently calculated on a prospective basis and are not based
on a provider's actual costs. Such method of reimbursement may adversely affect
reimbursements to hospitals and other facilities for services provided under the
Medicare program and thereby may have an adverse effect on the ability of such
institutions to satisfy debt service requirements. In the event of a default
upon a bond secured by hospital facilities, the limited alternative uses for
such facilities may result in the recovery upon such collateral not providing
sufficient funds to fully repay the bonds.
Certain hospital bonds provide for redemption at par upon the damage,
destruction or condemnation of the hospital facilities or in other special
circumstances.
HOUSING OBLIGATIONS. Some of the Bonds in a Trust may be obligations of
issuers whose revenues are primarily derived from mortgage loans to housing
projects for low to moderate income families. Such issues are generally
characterized by mandatory redemption at par or, in the case of original issue
discount bonds, accreted value in the event of economic defaults and in the
event of a failure of the operator of a project to comply with certain covenants
as to the operation of the project. The failure of such operator to comply with
certain covenants related to the tax-exempt status of interest on the Bonds,
such as provisions requiring that a specified percentage of units be rented or
available for rental to low or moderate income families, potentially could cause
interest on such Bonds to be subject to Federal income taxation from the date of
issuance of the Bonds. 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, employment and income conditions
prevailing in local labor markets, increases in taxes, 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.
Occupancy of such housing projects may be adversely affected by high rent levels
and income limitations imposed under Federal and state programs.
SINGLE FAMILY MORTGAGE REVENUE BONDS. Some of the Bonds in a Trust may be
single family mortgage revenue bonds, which are issued for the purpose of
acquiring from originating financial institutions notes secured by mortgages on
residences located within the issuer's boundaries and owned by persons of low or
moderate income. Mortgage loans are generally partially or completely prepaid
prior to their final maturities as a result of events such as sale of the
mortgaged premises, default, condemnation or casualty loss. Because these bonds
are subject to extraordinary mandatory redemption in whole or in part from such
prepayments of mortgage loans, a substantial portion of such bonds will probably
be redeemed prior to their scheduled maturities or even prior to their ordinary
call dates. Extraordinary mandatory redemption without premium could also result
from the failure of the originating financial institutions to make mortgage
loans in sufficient amounts within a specified time period. The
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<PAGE>
redemption price of such issues may be more or less than the offering price of
such 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, as amended, or Section 143 of the Internal Revenue Code of
1986, which Sections contain certain requirements relating to the use of the
proceeds of such bonds in order for the interest on such bonds to retain its
tax-exempt status. In each case, the issuer of the bonds has covenanted to
comply with applicable requirements and bond counsel to such issuer has issued
an opinion that the interest on the bonds is exempt from Federal income tax
under existing laws and regulations. There can be no assurance that such
continuing requirements will be satisfied; the failure to meet such requirements
could cause interest on the Bonds to be subject to Federal income taxation,
possibly from the date of issuance of the Bonds.
FEDERALLY ENHANCED OBLIGATIONS. Some of the mortgages which secure the
various health care or housing projects which underlie the previously discussed
Health Facility, Housing, and Single Family Mortgage Revenue Obligations (the
"Obligations") in a Trust may be insured by the Federal Housing Administration
("FHA"). Under FHA regulations, the maximum insurable mortgage amount cannot
exceed 90% of the FHA's estimated value of the project. The FHA mortgage
insurance does not constitute a guarantee of timely payment of the principal of
and interest on the Obligations. Payment of mortgage insurance benefits may be
(1) less than the principal amount of Obligations outstanding or (2) delayed if
disputes arise as to the amount of the payment or if certain notices are not
given to the FHA within the prescribed time periods. In addition, some of the
previously discussed Obligations may be secured by mortgage-backed certificates
guaranteed by the Government National Mortgage Association ("GNMA"), a wholly
owned corporate instrumentality of the United States, and/or the Federal
National Mortgage Association ("Fannie Mae") a federally chartered and
stockholder-owed corporation. GNMA and Fannie Mae guarantee timely payment of
principal and interest on the mortgage-backed certificates, even where the
underlying mortgage payments are not made. While such mortgage-backed
certificates are often pledged to secure payment of principal and interest on
the Obligations, timely payment of interest and principal on the Obligations is
not insured or guaranteed by the United States, GNMA, Fannie Mae or any other
governmental agency or instrumentality. The GNMA mortgage-backed certificates
constitute a general obligation of the United States backed by its full faith
and credit. The obligations of Fannie Mae, including its obligations under the
Fannie Mae mortgage-backed securities, are obligations solely of Fannie Mae and
are not backed by, or entitled to, the full faith and credit of the United
States.
INDUSTRIAL REVENUE OBLIGATIONS. Certain of the Bonds in a Trust may be
industrial revenue bonds ("IRBs"), including pollution control revenue bonds,
which are tax-exempt securities issued by states, municipalities, public
authorities or similar entities to finance the cost of acquiring, constructing
or improving various industrial projects. These projects are usually operated by
corporate entities. Issuers are obligated only to pay amounts due on the IRBs to
the extent that funds are available from the unexpended proceeds of the IRBs or
receipts or revenues of the issuer under an arrangement between the issuer and
the corporate operator of a project. The arrangement may be in the form of a
lease, installment sale agreement, conditional sale agreement or loan agreement,
but in each case the payments to the issuer are designed to be sufficient to
meet the payments of amounts due on the IRBs. Regardless of the structure,
payment of IRBs is solely dependent upon the creditworthiness of the corporate
operator of the project and, if applicable, corporate guarantor. Corporate
operators or guarantors may be affected by many factors which may have an
adverse impact on the credit quality of the particular company or industry.
These include cyclicality of revenues and earnings, regulatory and environmental
restrictions, litigation resulting from accidents or environmentally-caused
illnesses, extensive competition and financial deterioration resulting from a
corporate restructuring pursuant to a leveraged buy-out, takeover or otherwise.
Such a restructuring may result in the operator of a project becoming highly
leveraged which may have an impact on such operator's creditworthiness which in
turn would have an adverse impact on the rating and/or market value of such
Bonds. Further, the possibility of such a restructuring may have an adverse
impact on the market for and consequently the value of such Bonds, even though
no actual takeover or other action is ever contemplated or effected. The IRBs in
a Trust may be subject to special or extraordinary redemption provisions which
may provide for redemption at par or, in the case of original issue discount
bonds, accreted value. The Sponsor cannot predict the causes or likelihood of
the redemption of IRBs in a Trust prior to the stated maturity of such Bonds.
ELECTRIC UTILITY OBLIGATIONS. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are primarily derived from the sale of
electric energy. The problems faced by such issuers include the difficulty in
obtaining approval for timely and adequate rate increases from the applicable
public utility commissions, the difficulty of financing large construction
programs, increased competition, reductions in estimates of future demand for
electricity in certain areas of the country, the limitations on operations and
increased costs and delays
3
<PAGE>
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 a Trust to make payments
of principal and/or interest on such Bonds.
TRANSPORTATION FACILITY REVENUE BONDS. Some of the Bonds in a Trust may be
obligations of issuers which are payable from and secured by revenues derived
from the ownership and operation of airports, public transit systems and ports.
The major portion of an airport's gross operating income is generally derived
from fees received from airlines pursuant to use agreements which consist of
annual payments for airport use, occupancy of certain terminal space, service
fees and leases. 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. In particular, facilities with use
agreements involving airlines experiencing financial difficulty may experience a
reduction in revenue due to the possible inability of these airlines to meet
their use agreement obligations because of such financial difficulties and
possible bankruptcy. 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. Bonds that are secured primarily by the revenue collected by a public
transit system typically are additionally secured by a pledge of sales tax
receipts collected at the state or local level, or of other governmental
financial assistance. Transit system net revenues will be affected by variations
in utilization, which in turn may be affected by the degree of local
governmental subsidization, demographic and population shifts, and competition
from other forms of transportation; and by increased costs, including costs
resulting from previous deferrals of maintenance. Port authorities derive their
revenues primarily from fees imposed on ships using the facilities. The rate of
utilization of such facilities may fluctuate depending on the local economy and
on competition from competing forms of transportation such as air, rail and
trucks.
WATER AND/OR SEWERAGE OBLIGATIONS. Some of the Bonds in a Trust may be
obligations of issuers whose revenues are derived from the sale of water and/or
sewerage services. Such Bonds are generally payable from user fees. The problems
of such issuers include the ability to obtain timely and adequate rate
increases, population decline resulting in decreased user fees, the difficulty
of financing large construction programs, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
increasing difficulty of obtaining or discovering new supplies of fresh water,
the effect of conservation programs and the impact of "no-growth" zoning
ordinances. All of such issuers have been experiencing certain of these problems
in varying degrees.
UNIVERSITY AND COLLEGE REVENUE OBLIGATIONS. Some of the Bonds in a Trust
may be obligations of issuers which are, or which govern the operation of,
colleges and universities and whose revenues are derived mainly from tuition,
dormitory revenues, grants and endowments. General problems of such issuers
include the prospect of a declining percentage of the population consisting of
"college" age individuals, possible inability to raise tuitions and fees
sufficiently to cover increased operating costs, the uncertainty of continued
receipt of Federal grants and state funding, and government legislation or
regulations which may adversely affect the revenues or costs of such issuers.
All of such issuers have been experiencing certain of these problems in varying
degrees.
BRIDGE AUTHORITY AND TOLLROAD OBLIGATIONS. Some of the Bonds in a Trust may
be obligations of issuers which derive their payments from bridge, road or
tunnel toll revenues. The revenues of such an issuer could be adversely affected
by competition from toll-free vehicular bridges and roads and alternative modes
of transportation. Such revenues could also be adversely affected by a reduction
in the availability of fuel to motorists or significant increases in the costs
thereof. Specifically, governmental regulations restricting the use of vehicles
in the New York City metropolitan area may adversely affect revenues of the
Triborough Bridge and Tunnel Authority.
DEDICATED-TAX SUPPORTED BONDS. Some of the Bonds in a Trust may be
obligations of issuers which are payable from and secured by tax revenues from a
designated source, which revenues are pledged to secure the bonds. The various
types of Bonds described below differ in structure and with respect to the
rights of the bondholders to the underlying property. Each type of dedicated-tax
supported Bond has distinct risks, only some of which are set forth below. One
type of dedicated-tax supported Bond is secured by the incremental tax received
on either real property or on sales within a specifically defined geographical
area; such tax generally will not provide bondholders with a lien on the
underlying property or revenues. Another type of dedicated-tax supported Bond is
secured by a special tax levied on real property within a defined geographical
area in such a manner that the tax is levied on those who benefit from the
project; such bonds typically provide for a statutory lien on the
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<PAGE>
underlying property for unpaid taxes. A third type of dedicated-tax supported
Bond may be secured by a tax levied upon the manufacture, sale or consumption of
commodities or upon the license to pursue certain occupations or upon corporate
privileges within a taxing jurisdiction. As to any of these types of Bonds, the
ability of the designated revenues to satisfy the interest and principal
payments on such bonds may be affected by changes in the local economy, the
financial success of the enterprise responsible for the payment of the taxes,
the value of any property on which taxes may be assessed and the ability to
collect such taxes in a timely fashion. Each of these factors will have a
different affect on each distinct type of dedicated-tax supported bonds.
MUNICIPAL LEASE BONDS. Some of the Bonds in a Trust may be obligations that
are secured by lease payments of a governmental entity. Such payments are
normally subject to annual budget appropriations of the leasing governmental
entity. A governmental entity that enters into such a lease agreement cannot
obligate future governments to appropriate for and make lease payments but
covenants to take such action as is necessary to include any lease payments due
in its budgets and to make the appropriations therefor. A governmental entity's
failure to appropriate for and to make payments under its lease obligation could
result in insufficient funds available for payment of the obligations secured
thereby.
ORIGINAL ISSUE DISCOUNT BONDS AND STRIPPED OBLIGATIONS. Certain of the
Bonds in a Trust may be original issue discount bonds. These Bonds were issued
with nominal interest rates less than the rates then offered by comparable
securities and as a consequence were originally sold at a discount from their
face, or par, values. This original issue discount, the difference between the
initial purchase price and face value, is deemed under current law to accrue on
a daily basis and the accrued portion is treated as tax-exempt interest income
for federal income tax purposes. On sale or redemption, gain, if any, realized
in excess of the earned portion of original issue discount will be taxable as
capital gain. See "What is the Tax Status of Unitholders". The current value of
an original issue discount bond reflects the present value of its face amount at
maturity. In a stable interest rate environment, the market value of an original
issue discount bond would tend to increase more slowly in early years and in
greater increments as the bond approached maturity.
Certain of the original issue discount bonds in a Trust may be zero coupon
bonds. Zero coupon bonds do not provide for the payment of any current interest;
the buyer receives only the right to receive a final payment of the face amount
of the bond at its maturity. The effect of owning a zero coupon bond is that a
fixed yield is earned not only on the original investment but also, in effect,
on all discount earned during the life of the 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,
but at the same time also 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 that pay interest
currently.
Original issue discount bonds, including zero coupon bonds, may be subject
to redemption at prices based on the issue price plus the amount of original
issue discount accreted to redemption (the "accreted value") plus, if
applicable, some premium. Pursuant to such call provisions an original issue
discount bond may be called prior to its maturity date at a price less than its
face value. See the "Schedules of Investments" for more information about the
call provisions of portfolio Bonds.
Certain of the Bonds in a Trust may be Stripped Obligations, which represent
evidences of ownership with respect to either the principal amount of or a
payment of interest on a tax-exempt obligation. An obligation is "stripped" by
depositing it with a custodian, which then effects a separation in ownership
between the bond and any interest payment which has not yet become payable, and
issues evidences of ownership with respect to such constituent parts. A Stripped
Obligation therefore has economic characteristics similar to zero coupon bonds,
as described above.
Each Stripped Obligation has been purchased at a discount from the amount
payable at maturity. With respect to each Unitholder, the Internal Revenue Code
treats as "original issue discount" that portion of the discount which produces
a yield to maturity (as of the date of purchase of the Unitholder's Units) equal
to the lower of the coupon rate of interest on the underlying obligation or the
yield to maturity on the basis of the purchase price of the Unitholder's Units
which is allocable to each Stripped Obligation. Original issue discount which
accrues with respect to a Stripped Obligation will be exempt from Federal income
taxation to the same extent as interest on the underlying obligations. (See
"WHAT IS THE TAX STATUS OF UNITHOLDERS?" in Part B of this Prospectus.)
Unitholders should consult their own tax advisers with respect to the state
and local tax consequences of owning original issue discount bonds or Stripped
Obligations. Under applicable provisions governing determination of state and
local taxes, interest on original issue discount bonds or Stripped Obligations
may be deemed to be received in the year of accrual even though there is no
corresponding cash payment.
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<PAGE>
WHY AND HOW ARE THE BONDS INSURED?
INSURANCE ON BONDS
INSURED TRUSTS--Insurance guaranteeing the timely payment, when due, of all
principal and interest on the Bonds in each Insured Trust has been obtained by
the Sponsor or by the issuers or underwriters of Bonds from the MBIA Insurance
Corporation (the "Insurer"). Some of the Bonds in each Insured Trust may be
covered by a policy or policies of insurance obtained by the issuers or
underwriters of the Bonds from Municipal Bond Insurance Association (the
"Association") or Bond Investors Guaranty Insurance Company ("BIG"). The Insurer
has issued a policy or policies of insurance covering each of the Bonds in the
Insured Trusts, each policy to remain in force until the payment in full of such
Bonds and whether or not the Bonds continue to be held by an Insured Trust. By
the terms of each policy the Insurer will unconditionally guarantee to the
holders or owners of the Bonds the payment, when due, required of the issuer of
the Bonds of an amount equal to the principal of and interest on the Bonds as
such payments shall become due but not be paid (except that in the event of any
acceleration of the due date of principal by reason of mandatory or optional
redemption, default or otherwise, the payments guaranteed will be made in such
amounts and at such times as would have been due had there not been an
acceleration). The Insurer will be responsible for such payments, less any
amounts received by the holders or owners of the Bonds from any trustee for the
bond issuers or from any other sources other than the Insurer. The Insurer's
policies relating to small industrial development bonds and pollution control
revenue bonds also guarantee the full and complete payments required to be made
by or on behalf of an issuer of Bonds pursuant to the terms of the Bonds if
there occurs an event which results in the loss of the tax-exempt status of the
interest on such Bonds, including principal, interest or premium payments, if
any, as and when thereby required. The Insurer has indicated that its insurance
policies do not insure the payment of principal or interest on bonds which are
not required to be paid by the issuer thereof because the bonds were not validly
issued; as indicated under "What is the Tax Status of Unitholders?" the
respective issuing authorities have received opinions of bond counsel relating
to the valid issuance of each of the Bonds in the Insured Trusts. The Insurer's
policy also does not insure against non-payment of principal of or interest on
the Bonds resulting from the insolvency, negligence or any other act or omission
of the trustee or other paying agent for the Bonds. The policy is not covered by
the Property/Casualty Insurance Security Fund specified in Article 76 of the New
York Insurance Law. The policies are non-cancellable and the insurance premiums
have been fully paid on or prior to the Date of Deposit, either by the Sponsor
or, if a policy has been obtained by a Bond issuer, by such issuer.
Upon notification from the trustee for any bond issuer or any holder or
owner of the Bonds or coupons that such trustee or paying agent has insufficient
funds to pay any principal or interest in full when due, the Insurer will be
obligated to deposit funds promptly with State Street Bank and Trust Company,
N.A., New York, New York, as fiscal agent for the Insurer, sufficient to fully
cover the deficit. If notice of nonpayment is received on or after the due date,
the Insurer will provide for payment within one business day following receipt
of the notice. Upon payment by the Insurer of any Bonds, coupons, or interest
payments, the Insurer shall succeed to the rights of the owner of such Bonds,
coupons or interest payments with respect thereto.
The Insurer 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 the Insurer. The Insurer is a limited liability corporation
rather than a several liability association. The Insurer is domiciled in the
State of New York and licensed to do business in all 50 states, the District of
Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern
Mariana Islands, the Virgin Islands of the United States and the Territory of
Guam. The Insurer has one European branch in the Republic of France.
As of June 30, 1995 the Insurer had admitted assets of $3.6 billion
(unaudited), total liabilities of $2.4 billion (unaudited), and total capital
and surplus of $1.2 billion (unaudited) determined in accordance with statutory
accounting practices prescribed or permitted by insurance regulatory
authorities. As of December 31, 1994, the Insurer had admitted assets of $3.4
billion (audited), total liabilities of $2.3 billion (audited), and total
capital and surplus of $1.1 billion (audited) determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory
authorities. Copies of the Insurer's year end financial statements prepared in
accordance with statutory accounting practices are available from the Insurer.
The address of the Insurer is 113 King Street, Armonk, New York 10504.
Each insurance company comprising the Association will be severally and not
jointly obligated under the Association policy in the following respective
percentages: The AEtna Casualty and Surety Company, 33%; Fireman's Fund
Insurance Company, 30%; The Travelers Indemnity Company, 15%; AEtna Insurance
Company (now known as CIGNA Property and Casualty Company), 12%; and The
Continental Insurance Company, 10%. As a several obligor, each such insurance
company will be obligated only to the extent of its percentage of any claim
under the Association policy and will not be obligated to pay any unpaid
obligation of any other member of the
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<PAGE>
Association. Each insurance company's participation is backed by all of its
assets. However, each insurance company is a multiline insurer involved in
several lines of insurance other than municipal bond insurance, and the assets
of each insurance company also secure all of its other insurance policy and
surety bond obligations.
The following table sets forth certain unaudited financial information with
respect to the five insurance companies comprising the Association. The
statistics, which have been furnished by the Association, are as reported by the
insurance companies to the New York State Insurance Department and are
determined in accordance with statutory accounting principles. 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. In addition, these numbers are subject to revision by the New York
State Insurance Department which, if revised, could either increase or decrease
the amounts.
MUNICIPAL BOND INSURANCE ASSOCIATION
FIVE MEMBER COMPANIES ASSETS AND POLICYHOLDERS' SURPLUS (UNAUDITED)
AS OF SEPTEMBER 30, 1994.
(000'S OMITTED)
<TABLE>
<CAPTION>
NEW YORK NEW YORK NEW YORK
STATUTORY STATUTORY POLICYHOLDERS
ASSETS LIABILITIES SURPLUS
--------------- --------------- --------------
<S> <C> <C> <C>
The AEtna Casualty & Surety Company........................................... $ 10,030,200 $ 8,275,300 $ 1,754,900
Fireman's Fund Insurance Company.............................................. 6,815,775 4,904,534 1,911,241
The Travelers Indemnity Company............................................... 10,295,359 8,515,392 1,779,967
CIGNA Property and Casualty Company (formerly AEtna Insurance Company)........ 5,112,251 4,842,235 270,016
The Continental Insurance Company............................................. 2,794,536 2,449,805 344,731
--------------- --------------- --------------
Total................................................................. $ 35,048,121 $ 28,987,266 $ 6,060,855
--------------- --------------- --------------
--------------- --------------- --------------
</TABLE>
Standard & Poor's Corporation rates all new issues insured by the Association
"AAA" Prime Grade.
Moody's Investors Service rates all bond issues insured by the Association
"Aaa" and short term loans "MIG 1", both designated to be of the highest
quality.
Each such rating should be evaluated independently of any other rating. No
application has been made to any other rating agency in order to obtain
additional ratings on the Bonds. The ratings reflect the respective rating
agency's current assessment of the creditworthiness of the Association and its
ability to pay claims on its policies of insurance. Any further explanation as
to the significance of the above ratings may be obtained only from the
applicable rating agency.
Moody's Investors Service rates all bond issues insured by the Insurer "Aaa"
and short-term loans "MIG 1," both designated to be of the highest quality.
Standard & Poor's Ratings Group, a division of McGraw Hill ("Standard &
Poor's") rates all new issues insured by the Insurer "AAA" Prime Grade."
The Moody's Investors Service rating of the Insurer should be evaluated
independently of the Standard & Poor's Corporation rating of the Insurer. No
application has been made to any other rating agency in order to obtain
additional ratings on the Bonds. The ratings reflect the respective rating
agency's current assessment of the creditworthiness of the Insurer and its
ability to pay claims on its policies of insurance (See "Description of
Ratings.") Any further explanation as to the significance of the above ratings
may be obtained only from the applicable rating agency.
The above ratings are not recommendations to buy, sell or hold the Bonds, and
such ratings may be subject to revision or withdrawal at any time by the rating
agencies. Any downward revision or withdrawal of either or both ratings may have
an adverse effect on the market price of the Bonds.
Because the insurance on the Bonds will be effective so long as the Bonds are
outstanding, such insurance will be taken into account in determining the market
value of the Bonds and therefore some value attributable to such insurance will
be included in the value of the Units of the Insured Trusts. The insurance does
not, however, guarantee the market value of the Bonds or of the Units.
TRADITIONAL TRUSTS--Insurance guaranteeing the timely payment, when due, of all
principal and interest on certain Bonds in a Traditional Trust may have been
obtained by the Sponsor, issuer or underwriter of the particular Bonds involved
or by another party. Such insurance, which provides coverage substantially the
same as that obtained with respect to Bonds in Insured Trusts as described
above, is effective so long as the insured Bond is
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outstanding and the insurer remains in business. Insurance relates only to the
particular Bond and not to the Units offered hereby or to their market value.
Insured Bonds have received a rating of "Aaa" by Moody's Investors Service, Inc.
and/or "AAA" by Standard & Poor's Corporation in recognition of such insurance.
If a Bond in a Traditional Trust is insured, the Schedule of Investments in
Part A of this Prospectus will identify the insurer. Such insurance will be
provided by Financial Guaranty Insurance Company ("FGIC"), AMBAC Indemnity
Corporation ("AMBAC"), Bond Investors Guaranty Insurance Company, now known as
MBIA Corp. of Illinois ("BIG"), Capital Guaranty Insurance Company ("CGIC"),
Financial Security Assurance, Inc. ("FSA"), Municipal Bond Insurance Association
(the "Association"), MBIA Insurance Corporation ("MBIA") or Connie Lee Insurance
Company ("ConnieLee"). The Sponsor to date has purchased and presently intends
to purchase insurance for Bonds in Traditional Trusts exclusively from MBIA (see
the preceding disclosure regarding MBIA). There can be no assurance that any
insurer listed therein will be able to satisfy its commitments in the event
claims are made in the future. However, Standard & Poor's Corporation has rated
the claims-paying ability of each insurer "AAA," and Moody's Investors Service
has rated all bonds insured by each such insurer, except ConnieLee, "Aaa."
Moody's Investor's Service gives no ratings for bonds insured by ConnieLee.
Because any such insurance will be effective so long as the insured Bonds
are outstanding, such insurance will be taken into account in determining the
market value of such Bonds and therefore some value attributable to such
insurance will be included in the value of the Units of the Trust that includes
such Bonds. The insurance does not, however, guarantee the market value of the
Bonds or of the Units.
ACCUMULATION PLAN
The Sponsor, John Nuveen & Co. Incorporated, is also the principal underwriter
of the Nuveen Municipal Bond Fund, Inc. (the "Bond Fund"), Nuveen Tax-Free
Reserves, Inc. ("Tax-Free Reserves"), Nuveen California Tax-Free Fund, Inc. (the
"California Fund"), Nuveen Tax-Free Bond Fund, Inc. ("Tax-Free Bond Fund"),
Nuveen Insured Tax-Free Bond Fund, Inc. (the "Insured Bond Fund") and Nuveen
Tax-Free Money Market Fund, Inc. (the "Money Market Fund") and the Nuveen
Multistate Tax-Free Trust (the "Multistate Trust"). Each of these funds
(together, the "Accumulation Funds") is an open-end, diversified management
investment company into which Unitholders may choose to reinvest Trust
distributions automatically, without any sales charge. (Reinvestment in the
California Fund is available only to Unitholders who are California residents.
Reinvestment in the State Portfolios of the Tax-Free Bond Fund, the Insured Bond
Fund, the Money Market Fund and the Multistate Trust is available only to
Unitholders who are residents of the states for which such portfolios are
named.) Unitholders may reinvest both interest and principal distributions or
principal distributions only. Each Accumulation Fund has investment objectives
which differ in certain respects from those of the Trusts and may invest in
securities which would not be eligible for deposit in the Trusts. The investment
adviser to each Accumulation Fund is Nuveen Advisory Corp., a wholly-owned
subsidiary of the Sponsor. The following is a general description of the
investment objectives and policies of each Accumulation Fund. For a more
detailed description, Unitholders should read the prospectus of the Accumulation
Fund in which they are interested.
THE BOND FUND
The Bond Fund has the objective of providing, through investment in a
professionally managed portfolio of long-term municipal bonds, as high a level
of current interest income exempt from Federal income tax as is consistent with
preservation of capital. The Bond Fund may include in its portfolio tax-exempt
bonds rated Baa or BBB or better by Moody's or Standard & Poor's, unrated bonds
which, in the opinion of the investment adviser, have credit characteristics
equivalent to bonds rated Baa or BBB or better, and certain temporary
investments, including securities the interest income from which may be subject
to Federal income tax.
TAX-FREE RESERVES
Tax-Free Reserves is a "money market" fund that includes in its portfolio
only obligations maturing within one year from the date of acquisition,
maintains an average maturity of all investments of 120 days or less, values its
portfolio at amortized cost and seeks to maintain a net asset value of $1.00 per
share. It provides checkwriting and expedited wire redemption privileges for its
shareholders. Tax-Free Reserves has the objective of providing, through
investment in a professionally managed portfolio of high quality short-term
municipal obligations, as high a level of current interest income exempt from
Federal income tax as is consistent with preservation of capital and the
maintenance of liquidity. Tax- Free Reserves may include in its portfolio
municipal obligations rated Aaa, Aa, MIG-1, VMIG-1 or Prime-1 by Moody's or AAA,
AA, SP-1 or A-1 by Standard & Poor's, unrated municipal obligations that, in the
opinion of the investment adviser, have credit characteristics equivalent to
obligations rated as above, tax-exempt obligations backed by the U.S.
Government, and temporary investments that may be subject to Federal income tax.
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THE CALIFORNIA FUND
The California Fund has the objective of providing, through investment in
professionally managed portfolios of California municipal obligations, as high a
level of current interest income exempt from both Federal and California income
taxes as is consistent with the investment policies of each of the portfolios of
the California Fund and with preservation of capital. Each portfolio of the
California Fund may include temporary investments that may be subject to tax.
California Unitholders may reinvest in one of three portfolios of the California
Fund: The Nuveen California Tax-Free Value Fund, the Nuveen California Insured
Tax-Free Value Fund and the Nuveen California Tax-Free Money Market Fund.
The Nuveen California Tax-Free Value Fund invests primarily in long-term
investment grade California tax-exempt bonds (I.E., bonds rated in the four
highest categories by Moody's or Standard & Poor's or, if unrated, that have
equivalent credit characteristics). The Nuveen California Insured Tax-Free Value
Fund invests primarily in the same type of investments as the Special Bond
Portfolio, each of which is covered by insurance guaranteeing the timely payment
of principal and interest or is backed by a deposit of U.S. Government
securities.
The Nuveen California Tax-Free Money Market Fund invests primarily in
high-quality short term California tax- exempt money market instruments (I.E.,
obligations rated in the two highest categories by Moody's or Standard & Poor's
or, if unrated, that have equivalent credit characteristics). This portfolio
will include only obligations maturing within one year from the date of
acquisition, will maintain an average maturity of all investments of 120 days or
less, will value its portfolio at amortized cost and will seek to maintain a net
asset value of $1.00 per share. The Nuveen California Tax-Free Money Market Fund
provides for an expedited wire redemption privilege.
THE TAX-FREE BOND FUND
The Tax-Free Bond Fund consists of the Nuveen Massachusetts Tax-Free Value
Fund, the Nuveen New York Tax-Free Value Fund, the Nuveen Ohio Tax-Free Value
Fund, and the Nuveen New Jersey Tax-Free Value Fund, which are each available
for reinvestment to Unitholders who are residents of the state for which such
portfolio is named. The Tax-Free Bond Fund has the objective of providing,
through investment in a professionally managed portfolio of municipal bonds, as
high a level of current interest income exempt both from Federal income tax and
from the income tax imposed by each portfolio's designated state as is
consistent with preservation of capital. The Tax-Free Bond Fund may include in
each of its portfolios tax-exempt bonds rated Baa or BBB or better; unrated
bonds which, in the opinion of the investment adviser, have credit
characteristics equivalent to bonds rated Baa or BBB or better; and certain
temporary investments, including securities the interest income from which may
be subject to Federal and state income tax.
THE INSURED BOND FUND
The Insured Bond Fund consists of the Nuveen Insured Municipal Bond Fund,
the Nuveen Massachusetts Insured Tax-Free Value Fund and the Nuveen New York
Insured Tax-Free Value Fund, which are each available for reinvestment to
Unitholders. (The Massachusetts and New York Portfolios are available only to
those Unitholders who are residents of the state for which the portfolio is
named.) The Insured Bond Fund has the objective of providing, through investment
in professionally managed portfolios of municipal bonds, as high a level of
current interest income exempt from both Federal income tax and, in the case of
designated state portfolios, from the income tax imposed by each portfolio's
designated state, as is consistent with preservation of capital. The Insured
Bond Fund may include in each of its portfolios the same type of investments as
the Tax-Free Bond Fund, each of which is covered by insurance guaranteeing the
timely payment of principal and interest or is backed by a deposit of U.S.
Government securities.
THE MONEY MARKET FUND
The Money Market Fund consists of the Nuveen Massachusetts Tax-Free Money
Market Fund and the Nuveen New York Tax-Free Money Market Fund, which are each
available for reinvestment to Unitholders who are residents of the state for
which such portfolio is named. The Money Market Fund includes in its portfolios
only obligations maturing within one year from the date of acquisition,
maintains an average maturity of 120 days or less, values its portfolios at
amortized cost and seeks to maintain a net asset value of $1.00 per share. The
Money Market Fund has the objective of providing, through investment in
professionally managed portfolios of high quality short-term municipal
obligations, as high a level of current interest income exempt both from Federal
income tax and from the income tax imposed by each portfolio's designated state
as is consistent with stability of principal and the maintenance of liquidity.
The Money Market Fund may include in each of its portfolios municipal
obligations rated Aaa, Aa, MIG-1, MIG- 2, VMIG-1, VMIG-2, Prime 1 or Prime 2 by
Moody's or AAA, AA, SP-1, SP-2, A-1 or A-2 by Standard & Poor's; unrated
municipal obligations that, in the opinion of the investment adviser,
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have credit characteristics equivalent to obligations rated as above; and
temporary investments that may be subject to Federal and state income tax.
THE MULTISTATE TRUST
The Multistate Trust consists of the Nuveen Arizona Tax-Free Value Fund, the
Nuveen Florida Tax-Free Value Fund, the Nuveen Maryland Tax-Free Value Fund, the
Nuveen Michigan Tax-Free Value Fund, the Nuveen New Jersey Tax-Free Value Fund,
the Nuveen Pennsylvania Tax-Free Value Fund and the Nuveen Virginia Tax Free
Value Fund, which are each available for reinvestment to Unitholders who are
residents of the state for which such portfolio is named. The Multistate Trust
has the objective of providing, through investment in a professionally managed
portfolio of municipal bonds, as high a level of current interest income exempt
from both regular Federal income tax and the applicable state personal income
tax as is consistent with preservation of capital. The Multistate Trust may
include in each of its portfolios tax-exempt bonds rated "Baa" or "BBB" or
better, unrated bonds which, in the opinion of the investment advisor, have
credit characteristics equivalent to bonds rated "baa" or "BBB" or better,
limited to no more than 20% of the Multistate Trust's assets, and certain
temporary investments that may be subject to Federal and state income tax.
Each person who purchases Units of a Trust may become a participant in the
Accumulation Plan and elect to have his or her distributions on Units of the
Trust invested directly in shares of one of the Accumulation Funds. Reinvesting
Unitholders may select any interest distribution plan. Thereafter, each
distribution of interest income or principal on the participant's Units
(principal only in the case of a Unitholder who has chosen to reinvest only
principal distributions) will, on the applicable distribution date, or the next
day on which the New York Stock Exchange is normally open ("business day") if
the distribution date is not a business day, automatically be received by
Shareholder Services, Inc., transfer agent for each of the Accumulation Funds,
on behalf of such participant and applied on that date to purchase shares (or
fractions thereof) of the Accumulation Fund chosen at net asset value as
computed as of 4:00 p.m. eastern time on each such date. All distributions will
be reinvested in the Accumulation Fund chosen and no part thereof will be
retained in a separate account. These purchases will be made without a sales
charge.
INFORMATION ABOUT THE SPONSOR
John Nuveen & Co. Incorporated, the Sponsor and Underwriter, was founded in 1898
and is the oldest and largest investment banking firm specializing in the
underwriting and distribution of tax-exempt securities and maintains the largest
research department in the investment banking community devoted exclusively to
the analysis of municipal securities. In 1961 the Sponsor began sponsoring the
Nuveen Tax-Exempt Unit Trust and, since this time, it has issued more than $30
billion in tax-exempt unit trusts, including over $8 billion in insured trusts.
The Sponsor is also principal underwriter of the Nuveen Municipal Bond Fund,
Inc., the Nuveen Tax-Exempt Money Market Fund, Inc., Nuveen Tax-Free Reserves,
Inc., Nuveen California Tax-Free Fund, Inc., Nuveen Tax-Free Bond Fund, Inc.,
Nuveen Insured Tax-Free Bond Fund, Inc. and Nuveen Tax-Free Money Market Fund,
Inc., all registered open-end management investment companies, and acted as
co-managing underwriter of Nuveen Municipal Value Fund, Inc., Nuveen California
Municipal Value Fund, Inc., Nuveen New York Municipal Value Fund, Inc., Nuveen
Municipal Income Fund, Inc., Nuveen California Municipal Income Fund, Inc.,
Nuveen New York Municipal Income Fund, Inc., Nuveen Premium Income Municipal
Fund, Inc., Nuveen Performance Plus Municipal Fund, Inc., Nuveen California
Performance Plus Municipal Fund, Inc., Nuveen New York Performance Plus
Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal
Market Opportunity Fund, Inc., Nuveen California Municipal Market Opportunity
Fund, Inc., Nuveen New York Municipal Market Opportunity Fund, Inc., Nuveen
Investment Quality Municipal Fund, Inc., Nuveen California Investment Quality
Municipal Fund, Inc., Nuveen New York Investment Quality Municipal Fund, Inc.,
Nuveen Insured Quality Municipal Fund, Inc., Nuveen Florida Investment Quality
Municipal Fund, Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen
New Jersey Investment Quality Municipal Fund, Inc., and the Nuveen Select
Quality Municipal Fund, Inc., Nuveen California Quality Municipal Fund, Inc.,
Nuveen New York Select Quality Municipal Fund, Inc., Nuveen Quality Income
Municipal Fund, Inc., Nuveen Insured Municipal Opportunity Fund, Inc., Nuveen
Florida Quality Income Municipal Fund, Nuveen Michigan Quality Income Municipal
Fund, Inc., Nuveen New Jersey Quality Income Municipal Fund, Inc., Nuveen Ohio
Quality Income Municipal Fund, Inc., Nuveen Pennsylvania Quality Income
Municipal Fund, Nuveen Texas Quality Income Municipal Fund, Nuveen California
Quality Income Municipal Fund, Inc., Nuveen New York Quality Income Municipal
Fund, Inc., Nuveen Premier Insured Municipal Income Fund, Inc., Nuveen Select
Tax Free Income Portfolio, Nuveen Select Tax Free Income Portfolio 2, Nuveen
Insured California Select Tax-Free Income Portfolio, Nuveen Insured New York
Select Tax-Free Income Portfolio, Nuveen Premium Income Municipal Fund 2, Inc.,
Nuveen Select Tax Free Income Portfolio 3, Nuveen Select Maturities Municipal
Fund, Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen
Arizona Premium Income Municipal Fund, Inc., Nuveen Insured Premium Income
Municipal Fund, Inc., Nuveen Insured Florida Premium Income
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Municipal Fund, Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen New
Jersey Premium Income Municipal Fund, Inc., Nuveen Insured New York Premium
Income Municipal Fund, Inc., Nuveen Ohio Premium Income Municipal Fund, Inc.,
Nuveen Pennsylvania Premium Income Municipal Fund, Nuveen Texas Premium Income
Municipal Fund, Nuveen Premium Income Municipal Fund 4, Inc., Nuveen
Pennsylvania Premium Income Municipal Fund 2, Nuveen Insured Florida Premium
Income Municipal Fund 2, Nuveen Maryland Premium Income Municipal Fund, Nuveen
Virginia Premium Income Municipal Fund, Nuveen Massachusetts Premium Income
Municipal Fund, Nuveen Insured California Premium Income Municipal Fund 2, Inc.,
Nuveen Insured New York Premium Income Municipal Fund 2, Nuveen New Jersey
Premium Income Municipal Fund 2, Nuveen Washington Premium Income Municipal
Fund, Nuveen Michigan Premium Income Municipal Fund 2, Nuveen Georgia Premium
Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund, Nuveen
Connecticut Premium Income Municipal Fund, Nuveen North Carolina Premium Income
Municipal Fund, Nuveen New Jersey Premium Income Municipal Fund 3, Nuveen
Florida Premium Income Municipal Fund, Nuveen New York Premium Income Municipal
Fund, Nuveen California Premium Income Municipal Fund, Nuveen Pennsylvania
Premium Income Municipal Fund 3, Nuveen Maryland Income Municipal Fund 2, Nuveen
Virginia Premium Income Municipal Fund 2, Nuveen Ohio Premium Income Municipal
Fund 2, Nuveen Insured Premium Income Municipal Fund 2, Nuveen California
Premium Income Municipal Fund 2, all registered closed-end management investment
companies. These registered open-end and closed-end investment companies
currently have approximately $32.8 billion in tax-exempt securities under
management. Nationwide, more than 1,000,000 individual investors have purchased
Nuveen's tax exempt trusts and funds. The present corporation was organized in
1967 as a wholly-owned subsidiary of Nuveen Corporation, successor to the
original John Nuveen & Co. founded in 1898 as a sole proprietorship and
incorporated in 1953. In 1974, John Nuveen & Co. Incorporated became a
wholly-owned subsidiary of The St. Paul Companies, Inc., a financial services
management company located in St. Paul, Minnesota. On May 19, 1992, common
shares comprising a minority interest in The John Nuveen Company ("JNC"), a
newly organized corporation which holds all of the shares of Nuveen, were sold
to the general public in an initial public offering. St. Paul retains a
controlling interest in JNC with over 70% of JNC's shares. The Sponsor is a
member of the National Association of Securities Dealers, Inc. and the
Securities Industry Association and has its principal offices located in Chicago
(333 W. Wacker Drive) and New York (Swiss Bank Tower, 10 East 50th Street). It
maintains 14 regional offices.
To help advisers and investors better understand and more efficiently use an
investment in the Trust to reach their investment goals, the Trust's sponsor,
John Nuveen & Co. Incorporated, may advertise and create specific investment
programs and systems. For example, such activities may include presenting
information on how to use an investment in the Trust, alone or in combination
with an investment in other mutual funds or unit investment trusts sponsored by
Nuveen, to accumulate assets for future education needs or periodic payments
such as insurance premiums. The Trust's sponsor may produce software or
additional sales literature to promote the advantages of using the Trust to meet
these and other specific investor needs.
DESCRIPTION OF RATINGS*
STANDARD & POOR'S CORPORATION. A description of the applicable Standard &
Poor's Corporation rating symbols and their meanings follows:
A Standard & Poor's rating is a current assessment of the creditworthiness
of an obligor with respect to a specific debt obligation. This assessment may
take into consideration obligors such as guarantors, insurers or lessees.
The rating is not a recommendation to purchase, sell or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.
The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.
The ratings are based, in varying degrees, on the following considerations:
I. Likelihood of default--capacity and willingness of the obligor as to
the timely payment of interest and repayment of principal in accordance
with the terms of the obligation;
II. Nature of and provisions of the obligation;
- ----------
*As published by the rating companies.
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III. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization or other arrangements under
the laws of bankruptcy and other laws affecting creditors' rights.
AAA--This is the highest rating assigned by Standard & Poor's to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.
AA--Bonds rated AA have a very strong capacity to pay interest and repay
principal, and differ from the highest rated issues only in small degree.
A--Bonds rated A have a strong capacity to pay interest and repay principal,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB--Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in the higher rated categories.
PLUS (+) OR MINUS (-): The ratings from "AA" to "BB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
PROVISIONAL RATINGS: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the issuance of the bonds being rated and indicates
that payment of debt service requirements is largely or entirely dependent upon
the successful and timely completion of the project. This rating, however, while
addressing credit quality subsequent to completion of the project, makes no
comment on the likelihood of, or the risk of default upon failure of, such
completion. Accordingly, the investor should exercise his own judgment with
respect to such likelihood and risk.
NOTE RATINGS: A Standard & Poor's note rating reflects the liquidity
concerns and market access risks unique to notes. Notes due in 3 years or less
will likely receive a note rating. Notes maturing beyond 3 years will most
likely receive a long-term debt rating.
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety
characteristics will be given a plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
RATINGS OF INSURED TRUST UNITS.
A Standard & Poor's rating on the units of an insured investment trust
(hereinafter referred to collectively as "units" and "trusts") is a current
assessment of creditworthiness with respect to the investment 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
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.
Units rated "AAA" are composed exclusively of assets that are rated "AAA" by
Standard & Poor's and/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. However, unit ratings may be subject to revision or
withdrawal at any time by Standard & Poor's and each rating should be evaluated
independently of any other rating.
MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:
Aaa--Bonds which are rated Aaa are judged to be the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues. Their safety is so absolute that,
with the occasional exception of oversupply in a few specific instances,
characteristically, their market value is affected solely by money market
fluctuations.
Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of
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greater amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities. Their market
value is virtually immune to all but money market influences, with the
occasional exception of oversupply in a few specific instances.
A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. The market
value of A-rated bonds may be influenced to some degree by economic performance
during a sustained period of depressed business conditions, but, during periods
of normalcy, A-rated bonds frequently move in parallel with Aaa and Aa
obligations, with the occasional exception of oversupply in a few specific
instances.
Moody's bond rating symbols may contain numerical modifiers of a generic
rating classification. The modifier 1 indicates that the bond ranks at the high
end of its category; the modifier 2 indicates a mid-range ranking; and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.
Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well. The market value of Baa-rated
bonds is more sensitive to changes in economic circumstances, and aside from
occasional speculative factors applying to some bonds of this class, Baa market
valuations move in parallel with Aaa, Aa and A obligations during periods of
economic normalcy, except in instances of oversupply.
Con. (--)--Bonds for which the security depends upon the completion of some
act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.
NOTE RATINGS:
MIG 1-- This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2-- This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
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APPENDIX A
MARYLAND DISCLOSURE
ECONOMIC FACTORS--MARYLAND
Some of the significant financial considerations relating to the investments
of the Maryland Traditional Trust are summarized below. This information is
derived principally from official statements and preliminary official statements
released on or before May 13, 1992, relating to issues of Maryland obligations
and does not purport to be a complete description.
The State's total expenditures for the fiscal years ending June 30, 1990,
June 30, 1991 and June 30, 1992 were $11.019, $11.304 and $11.657 billion,
respectively. As of January 13, 1993, it was estimated that total expenditures
for fiscal 1993 would be $11.897 billion. The State's General Fund, representing
approximately 55%-60% of each year's total budget, had a surplus on a budgetary
basis of $57 million in fiscal year 1990, $55 thousand in fiscal year 1991, and
a deficit of $56 million in fiscal 1992. The Governor of Maryland reduced fiscal
1993 appropriations by $56 million to offset the fiscal 1992 deficit. The State
Constitution mandates a balanced budget.
The 1993 fiscal year budget was enacted in April 1992 which, together with
legislation enacted in 1992, involved the transfer of certain funds, new fees
and taxes, and alteration of certain statutory State expenditure programs. When
the 1993 budget was enacted, it was estimated that the General Fund surplus at
June 30, 1993 would be approximately $10 million on a budgetary basis. During
the final months of fiscal year 1992 and the initial months of fiscal year 1993,
collections of State revenues were below the levels estimated at the time of the
adoption of the 1993 budget. The Governor proposed a cost containment plan to
address this revenue shortfall and to provide reserves to finance potential
deficiency appropriations. On September 30, 1992, the Board of Public Works
approved the Governor's proposal to reduce General Fund appropriations by $168
million. The Board of Public Works also approved the Governor's proposal to
reduce the special fund appropriations for the Department of Transportation by
$30 million. Legislation was introduced at the 1993 session of the General
Assembly to transfer this $30 million to the General Fund, as well as $10
million from various other special funds. In a special session held in November,
1992, the General Assembly enacted legislation reducing State aid to local
governments by $147 million. In addition, other elements of the governor's
original cost containment plan are in the process of being implemented or
revised.
The public indebtedness of Maryland and its instrumentalities is divided
into three basic types. The State issues general obligation bonds, to the
payment of which the State ad valorem property tax is exclusively pledged, for
capital improvements and for various State-sponsored projects. The Department of
Transportation of Maryland issues limited, special obligation bonds for
transportation purposes payable primarily from specific, fixed-rate excise taxes
and other revenues related mainly to highway use. Certain authorities issue
obligations payable solely from specific non-tax enterprise fund revenues and
for which the State has no liability and has given no moral obligation
assurance.
According to the most recent available ratings, general obligation bonds of
the State of Maryland are rated "Aaa" by Moody's and "AAA" by Standard & Poor's
Corporation, as are those of Baltimore County, a separate political entity
surrounding Baltimore City. General obligation bonds of Montgomery County,
located in the suburbs of Washington, D.C., are rated "Aaa" by Moody's and "AAA"
by Standard & Poor's Corporation. General obligation bonds of Prince George's
County, the second largest metropolitan county, which is also in the suburbs of
Washington, D.C., are rated "A1" by Moody's and "AA-" by Standard & Poor's
Corporation. The general obligation bonds of those other counties of the State
that are rated by Moody's carry an "A" rating or better except for those of
Allegany County, which are rated "Baa". The most populous municipality in
Maryland is Baltimore City, the general obligaton bonds of which are rated "A1"
by Moody's and "A" by Standard & Poor's Corporation. The majority of Maryland
Health and Higher Education Authority and State Department of Transportation
revenue bond issues have received an "A" rating or better from Moody's.
While the ratings and other factors mentioned above indicate that Maryland
and its principal subdivisions and agencies are addressing the effects of the
economic recession and, overall, are in satisfactory economic health, there can,
of course, be no assurance that this will continue or that particular bond
issues may not be adversely affected by changes in state or local economic or
political conditions.
MARYLAND TAXABLE ESTIMATED CURRENT RETURN TABLE
The following tables show the approximate taxable estimated current returns
for individuals that are equivalent to tax-exempt estimated current returns
under combined Federal, state and local taxes, using published 1995 marginal
Federal tax rates and marginal state and local tax rates currently available and
scheduled to be in effect*. The tables incorporate increased tax rates for
higher-income taxpayers that were included in the Revenue
A-1
<PAGE>
Reconciliation Act of 1993. Except as indicated below, for cases in which more
than one state bracket falls within a Federal bracket, the highest state bracket
is combined with the Federal bracket. The combined state, local and Federal tax
brackets shown reflect the fact that state tax payments are currently deductible
for Federal tax purposes. The tables illustrate what you would have to earn on
taxable investments to equal the tax-exempt estimated current return for your
income tax bracket. A taxpayer's marginal tax rate is affected by both his
taxable income and his adjusted gross income. Locate your adjusted gross and
your taxable income (which is your adjusted gross income reduced by any
deductions and exemptions), then locate your tax bracket based on joint or
single tax filing. Read across to the equivalent taxable estimated current
return you would need to match the tax-free income.
COMBINED MARGINAL TAX RATES FOR JOINT TAXPAYERS WITH FOUR PERSONAL EXEMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERAL COMBINED
FEDERAL ADJUSTED STATE*,
TAXABLE GROSS LOCAL AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 39.0 $ 0-114.7 21.5 % 5.73 6.05 6.37 6.69 7.01 7.32 7.64 7.96
39.0- 94.3 0-114.7 33.5 6.77 7.14 7.52 7.89 8.27 8.65 9.02 9.40
114.7-172.1 34.0 6.82 7.20 7.58 7.95 8.33 8.71 9.09 9.47
94.3-143.6 0-114.7 36.0 7.03 7.42 7.81 8.20 8.59 8.98 9.38 9.77
114.7-172.1 37.0 7.14 7.54 7.94 8.33 8.73 9.13 9.52 9.92
172.1-294.6 39.5 7.44 7.85 8.26 8.68 9.09 9.50 9.92 10.33
143.6-150.0 114.7-172.1 42.0 7.76 8.19 8.62 9.05 9.48 9.91 10.34 10.78
172.1-294.6 44.5 8.11 8.56 9.01 9.46 9.91 10.36 10.81 11.26
150.0-256.5 114.7-172.1 42.5 7.83 8.26 8.70 9.13 9.57 10.00 10.43 10.87
172.1-294.6 45.5 8.26 8.72 9.17 9.63 10.09 10.55 11.01 11.47
Over 294.6 42.5 2 7.83 8.26 8.70 9.13 9.57 10.00 10.43 10.87
Over 256.5 172.1-294.6 49.0 8.82 9.31 9.80 10.29 10.78 11.27 11.76 12.25
Over 294.6 46.0 3 8.33 8.80 9.26 9.72 10.19 10.65 11.11 11.57
COMBINED MARGINAL TAX RATES FOR SINGLE TAXPAYERS WITH ONE PERSONAL EXEMPTION
-----------------------------------------------------------------------------------------------------------
<CAPTION>
FEDERAL COMBINED
FEDERAL ADJUSTED STATE*,
TAXABLE GROSS LOCAL AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.50% 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 23.4 $ 0-114.7 21.5 5.73 6.05 6.37 6.69 7.01 7.32 7.64 7.96
23.4- 56.6 0-114.7 33.5 6.77 7.14 7.52 7.89 8.27 8.65 9.02 9.40
56.6-100.0 0-114.7 36.0 7.03 7.42 7.81 8.20 8.59 8.98 9.38 9.77
114.7-237.2 37.5 7.20 7.60 8.00 8.40 8.80 9.20 9.60 10.00
100.0-118.0 114.7-237.2 38.5 7.32 7.72 8.13 8.54 8.94 9.35 9.76 10.16
118.0-256.5 114.7-237.2 43.5 7.96 8.41 8.85 9.29 9.73 10.18 10.62 11.06
Over 237.2 42.5 2 7.83 8.26 8.70 9.13 9.57 10.00 10.43 10.87
Over 256.5 Over 237.2 46.0 3 8.33 8.80 9.26 9.72 10.19 10.65 11.11 11.57
</TABLE>
- ------------------
* These tables approximate the effect of the exemption of distributions of
tax-exempt income from the Maryland Trust from county taxes, assuming a rate
equal to 50% of the applicable Maryland state income tax rate. In general,
Maryland local income taxes imposed by various counties are equal to
approximately 50% of the state income tax liability, although Worcester County
currently imposes an income tax equal to 30% of the state income tax liability.
1 The table reflects the effect of the limitations on itemized deductions
and the deduction for personal exemptions. They were designed to phase out
certain benefits of these deductions for higher income taxpayers. These
limitations, in effect, raise the current maximum marginal Federal tax rate to
approximately 44.0 percent for taxpayers filing a joint return and entitled to
four personal exemptions and to approximately 41.0 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.
2 Federal tax rate reverts to 36.0% after the 80% cap on the limitation on
itemized deductions has been met.
3 Federal tax rate reverts to 39.6% after the 80% cap on the limitation on
itemized deductions has been met.
A-2
<PAGE>
APPENDIX B
COLORADO DISCLOSURE
ECONOMIC FACTORS--COLORADO
RESTRICTIONS ON APPROPRIATIONS AND REVENUES. The State Constitution
requires that expenditures for any fiscal year not exceed revenues for such
fiscal year. By statute, the amount of General Fund revenues available for
appropriation is based upon revenue estimates which, together with other
available resources, must exceed annual appropriations by the amount of the
unappropriated reserve (the "Unappropriated Reserve"). The Unappropriated
Reserve requirement for fiscal years 1991, 1992 and 1993 was set at 3% of total
appropriations from the General Fund. For fiscal years 1994 and thereafter, the
Unappropriated Reserve retirement is set at 4%. In addition to the
Unappropriated Reserve, a constitutional amendment approved by Colorado voters
in 1992 requires the State and each local government to reserve a certain
percentage of its fiscal year spending (excluding bonded debt service) for
emergency use (the "Emergency Reserve"). The minimum Emergency Reserve was set
at 1% for 1993 and 2% for 1994 and is set at 3% for 1995 and later years. For
fiscal year 1992 and thereafter, General Fund appropriations are also limited by
statute to an amount equal to the cost of performing certain required
reappraisals of taxable property plus an amount equal to the lesser of (i) five
percent of Colorado personal income or (ii) 106% of the total General Fund
appropriations for the previous fiscal year. This restriction does not apply to
any General Fund appropriations which are required as a result of a new federal
law, a final state or federal court order or moneys derived from the increase in
the rate or amount of any tax or fee approved by a majority of the registered
electors of the State voting at any general election. In addition, the statutory
limit on the level of General Fund appropriations may be exceeded for a given
fiscal year upon the declaration of a State fiscal emergency by the State
General Assembly.
The 1993 fiscal year ending General Fund balance was $326.8 million, which
was $196.9 million over the combined Unappropriated Reserve and Emergency
Reserve requirement. The 1994 fiscal year ending General Fund balance was $405.1
million, or $234.0 million over the required Unappropriated Reserve and
Emergency Reserve. Based on June 20, 1995 estimates, the 1995 fiscal year ending
General Fund balance is expected to be $427.0 million, or $204.8 million over
the required Unappropriated Reserve and Emergency Reserve.
On November 3, 1992, voters in Colorado approved a constitutional amendment
(the "Amendment") which, in general, became effective December 31, 1992, and
could restrict the ability of the State and local governments to increase
revenues and impose taxes. The Amendment applies to the State and all local
governments, including home rule entities ("Districts"). Enterprises, defined as
government-owned businesses authorized to issue revenue bonds and receiving
under 10% of annual revenue in grants from all Colorado state and local
governments combined, are excluded from the provisions of the Amendment.
The provisions of the Amendment are unclear and have required judicial
interpretation. Among other provisions, beginning November 4, 1992, the
Amendment requires voter approval prior to tax increases, creation of debt, or
mill levy or valuation for assessment ratio increases. The Amendment also limits
increases in government spending and property tax revenues to specified
percentages. The Amendment requires that District property tax revenues yield no
more than the prior year's revenues adjusted for inflation, voter approved
changes and (except with regard to school districts) local growth in property
values according to a formula set forth in the Amendment. School districts are
allowed to adjust tax levies for changes in student enrollment. Pursuant to the
Amendment, local government spending is to be limited by the same formula as the
limitation for property tax revenues. The Amendment limits increases in
expenditures from the State General Fund and program revenues (cash funds) to
the growth in inflation plus the percentage change in State population in the
prior calendar year. The bases for initial spending and revenue limits are
fiscal year 1992 spending and 1991 property taxes collected in 1992. The bases
for spending and revenue limits for fiscal year 1994 and later years will be the
prior fiscal year's spending and property taxes collected in the prior calendar
year. Debt service changes, reductions and voter-approved revenue changes are
excluded from the calculation bases. The Amendment also prohibits new or
increased real property transfer tax rates, new State real property taxes and
local District income taxes.
Litigation concerning several issues relating to the Amendment has been
brought in the Colorado courts. The litigation deals with three principal
issues: (i) whether Districts can increase mill levies to pay debt service on
general obligation bonds without obtaining voter approval; (ii) whether a
multi-year lease-purchase agreement subject to annual appropriations is an
obligation which requires voter approval prior to execution of the agreement;
and (iii) what constitutes an "enterprise" which is excluded from the provisions
of the Amendment. In September, 1994, the Colorado Supreme Court held that
Districts can increase mill levies to pay debt service on general obligation
bonds issued after the effective date of the Amendment; in June, 1995 the
Colorado Supreme Court validated mill levy increases to pay general obligation
bonds issued prior to the Amendment. In late 1994,
B-1
<PAGE>
the Colorado Court of Appeals held that multi-year lease-purchase agreements
subject to annual appropriation do not require voter approval. The time to file
an appeal in that case has expired. Finally, in May, 1995, the Colorado Supreme
Court ruled that entities with the power to levy taxes may not themselves be
"enterprises" for purposes of the Amendment; however, the Court did not address
the issue of how valid enterprises may be created. Future litigation in the
"enterprise" arena may be filed in the future to clarify these issues.
According to the COLORADO ECONOMIC PERSPECTIVE, FOURTH QUARTER, FY 1994-95,
JUNE 20, 1995 (the "Economic Report"), inflation for 1993 was 4.2% and
population grew at the rate of 2.9% in Colorado. Accordingly, under the
Amendment, increases in State expenditures during the 1995 fiscal year will be
limited to 7.1% over expenditures during the 1994 fiscal year. The limitation
for the 1996 fiscal year is projected to be 7.0%, based on projected inflation
of 4.4% for 1994 and projected population growth of 2.6% during 1994. The 1994
fiscal year is the base year for calculating the limitation for the 1995 fiscal
year. For the 1994 fiscal year, General Fund revenues totalled $3,725.2 million
and program revenues (cash funds) totalled $1,659.9 million, resulting in total
estimated base revenues of $5,385.1 million. Expenditures for the 1995 fiscal
year, therefore, cannot exceed $5,767.4 million. However, the 1995 fiscal year
General Fund and program revenues (cash funds) are projected to be only $5,664.7
million, or $102.7 million less than expenditures allowed under the spending
limitation.
There is also a statutory restriction on the amount of annual increases in
taxes that the various taxing jurisdictions in Colorado can levy without
electoral approval. This restriction does not apply to taxes levied to pay
general obligation debt.
STATE FINANCES. As the State experienced revenue shortfalls in the
mid-1980s, it adopted various measures, including impoundment of funds by the
Governor, reduction of appropriations by the General Assembly, a temporary
increase in the sales tax, deferral of certain tax reductions and inter-fund
borrowings. On a GAAP basis, the State had unrestricted General Fund balances at
June 30 of approximately $16.3 million in fiscal year 1991, $133.3 million in
fiscal year 1992, $326.8 million in fiscal year 1993, and $405.1 million in
fiscal year 1994. The fiscal year 1995 unrestricted General Fund ending balance
is currently projected to be $427.0 million.
For fiscal year 1994, the following tax categories generated the following
percentages of the State's $3,725.2 million total gross receipts: individual
income taxes represented 51.5% of gross fiscal year 1994 receipts; sales, use,
and other excise taxes represented 32.4% of gross fiscal year 1994 receipts; and
corporate income taxes represented 3.9% of gross fiscal year 1994 receipts. The
final budget for fiscal year 1995 projects General Fund revenues of
approximately $3,929.6 million and appropriations of approximately $3,905.9
million. The percentages of General Fund revenue generated by type of tax for
fiscal year 1995 are not expected to be significantly different from fiscal year
1994 percentages.
STATE DEBT. Under its constitution, the State of Colorado is not permitted
to issue general obligation bonds secured by the full faith and credit of the
State. However, certain agencies and instrumentalities of the State are
authorized to issue bonds secured by revenues from specific projects and
activities. The State enters into certain lease transactions which are subject
to annual renewal at the option of the State. In addition, the State is
authorized to issue short-term revenue anticipation notes. Local governmental
units in the State are also authorized to incur indebtedness. The major source
of financing for such local government indebtedness is an ad valorem property
tax. In addition, in order to finance public projects, local governments in the
State can issue revenue bonds payable from the revenues of a utility or
enterprise or from the proceeds of an excise tax, or assessment bonds payable
from special assessments. Colorado local governments can also finance public
projects through leases which are subject to annual appropriation at the option
of the local government. Local governments in Colorado also issue tax
anticipation notes. The Amendment requires prior voter approval for the creation
of any multiple fiscal year debt or other financial obligation whatsoever,
except for refundings at a lower rate or obligations of an enterprise.
STATE ECONOMY. Based on estimates published by the State of Colorado,
Office of State Planning and Budgeting as presented in the Economic Report, over
50% of non-agricultural employment in Colorado in 1994 was concentrated in the
retail and wholesale trade and service sectors, reflecting the importance of
tourism to the State's economy and of Denver as a regional economic and
transportation hub. The government and manufacturing sectors followed as the
next largest employment sectors in the State, representing approximately 17.1%
and 10.9%, respectively, of non-agricultural employment in the State in 1994.
The Office of Planning and Budgeting projects similar concentrations for 1995
and 1996.
According to the Economic Report, the unemployment rate improved slightly
from an average of 5.2% during 1993 to 4.2% during 1994. Total retail sales
increased by 12.2% during 1994. Colorado continued to surpass the job growth
rate of the U.S., with a 2.8% rate of growth projected for Colorado in 1995, as
compared with 2.7% for the nation as a whole. However, the rate of job growth in
Colorado is projected to be lower in 1995 than the 1994 rate as a result of
layoffs at Lowry Air Force Base, Public Service Company, Continental Airlines
and US West.
B-2
<PAGE>
Personal income rose 7.5% in Colorado during 1993 and 7.6% in 1992. During
1994, personal income rose 6.6% in Colorado, as compared with 6.1% for the
nation as a whole.
Economic conditions in the State may have continuing effects on other
governmental units within the State (including issuers of the Colorado Bonds in
the Colorado Traditional Trust), which, to varying degrees, have also
experienced reduced revenues as a result of recessionary conditions and other
factors.
COLORADO TAXABLE ESTIMATED CURRENT RETURN TABLE
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, using published 1994 marginal Federal
tax rates and marginal state tax rates currently available and scheduled to be
in effect. The tables incorporate increased tax rates for higher-income
taxpayers that were included in the Revenue Reconciliation Act of 1993. For
cases in which more than one state bracket falls within a Federal bracket, the
highest state bracket is combined with the Federal bracket. The combined state
and Federal tax brackets shown reflect the fact that state tax payments are
currently deductible for Federal tax purposes. The tables illustrate what you
would have to earn on taxable investments to equal the tax-exempt estimated
current return for your income tax bracket. A taxpayer's marginal tax rate is
affected by both his taxable income and his adjusted gross income. Locate your
adjusted gross and your taxable income (which is your adjusted gross income
reduced by any deductions and exemptions), then locate your tax bracket based on
joint or single tax filing. Read across to the equivalent taxable estimated
current return you would need to match the tax-free income.
COMBINED MARGINAL TAX RATES FOR JOINT TAXPAYERS WITH FOUR PERSONAL EXEMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERAL
FEDERAL ADJUSTED COMBINED
TAXABLE GROSS STATE AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% 6.50%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 38.0 $ 0-111.8 19.5 % 5.90 6.21 6.52 6.83 7.14 7.45 7.76 8.07
38.0- 91.9 0-111.8 31.5 6.93 7.30 7.66 8.03 8.39 8.76 9.12 9.49
111.8-167.7 32.5 7.04 7.41 7.78 8.15 8.52 8.89 9.26 9.63
91.9-140.0 0-111.8 34.5 7.25 7.63 8.02 8.40 8.78 9.16 9.54 9.92
111.8-167.7 35.5 7.36 7.75 8.14 8.53 8.91 9.30 9.69 10.08
167.7-290.2 37.5 7.60 8.00 8.40 8.80 9.20 9.60 10.00 10.40
140.0-250.0 111.8-167.7 40.0 7.92 8.33 8.75 9.17 9.58 10.00 10.42 10.83
167.7-290.2 43.0 8.33 8.77 9.21 9.65 10.09 10.53 10.96 11.40
Over 290.2 40.0 2 7.92 8.33 8.75 9.17 9.58 10.00 10.42 10.83
Over 250.0 167.7-290.2 47.0 8.96 9.43 9.91 10.38 10.85 11.32 11.79 12.26
Over 290.2 44.0 3 8.48 8.93 9.38 9.82 10.27 10.71 11.16 11.61
</TABLE>
COMBINED MARGINAL TAX RATES FOR SINGLE TAXPAYERS WITH ONE PERSONAL EXEMPTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERAL
FEDERAL ADJUSTED COMBINED
TAXABLE GROSS STATE AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% 6.50%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 22.8 $ 0-111.8 19.5 % 5.90 6.21 6.52 6.83 7.14 7.45 7.76 8.07
22.8- 55.1 0-111.8 31.5 6.93 7.30 7.66 8.03 8.39 8.76 9.12 9.49
55.1-115.0 0-111.8 34.5 7.25 7.63 8.02 8.40 8.78 9.16 9.54 9.92
111.8-234.3 36.0 7.42 7.81 8.20 8.59 8.98 9.38 9.77 10.16
115.0-250.0 111.8-234.3 41.0 8.05 8.47 8.90 9.32 9.75 10.17 10.59 11.02
Over 234.3 40.0 2 7.92 8.33 8.75 9.17 9.58 10.00 10.42 10.83
Over 250.0 Over 234.3 44.0 3 8.48 8.93 9.38 9.82 10.27 10.71 11.16 11.61
<FN>
- ------------------
1 The table reflects the effect of the limitations on itemized deductions and the deduction for personal exemptions. They
were designed to phase out certain benefits of these deductions for higher income taxpayers. These limitations, in effect, raise
the current maximum marginal Federal tax rate to approximately 44.0 percent for taxpayers filing a joint return and entitled to
four personal exemptions and to approximately 41.0 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.
2 Federal tax rate reverts to 36.0% after the 80% cap on the limitation on itemized deductions has been met.
3 Federal tax rate reverts to 39.6% after the 80% cap on the limitation on itemized deductions has been met.
</TABLE>
B-3
<PAGE>
APPENDIX C
MICHIGAN DISCLOSURE
ECONOMIC FACTORS--MICHIGAN
As described above, except to the extent the Michigan Traditional Trust
invests in temporary investments, the Michigan Traditional Trust will invest
substantially all of its net assets in Michigan Bonds. The Michigan Traditional
Trust is therefore susceptible to political, economic or regulatory factors
affecting issuers of Michigan Bonds. The information set forth below is derived
from official statements prepared in connection with the issuance of Michigan
Bonds and other sources that are generally available to investors. The
information is provided as general information intended to give a recent
historical description and is not intended to indicate future or continuing
trends in the financial or other positions of the State of Michigan (the
"State"). This information has not been independently verified.
There can be no assurance that current or future statewide or regional
economic difficulties, and the resulting impact on issuers and other obligors
with respect to the Michigan Insured Trust generally, will not adversely affect
the market value of Michigan Bonds held in the portfolio of the Michigan
Traditional Trust or the ability of particular obligors to make timely payments
of debt service on (or relating to) those obligations.
The principal sectors of the State's economy are manufacturing of durable
goods (including automobile and office equipment manufacturing), tourism and
agriculture. As reflected in historical employment figures, the State's economy
has lessened its dependence upon durable goods manufacturing. In 1960,
employment in such industry accounted for 33% of the State's workforce. This
figure fell to 17% by 1994. However, manufacturing (including auto-related
manufacturing) continues to be an important part of the State's economy. These
industries are highly cyclical. This factor could adversely affect the revenue
streams of the State and its political subdivisions because of its impact on tax
sources, particularly sales taxes, income taxes and single business taxes.
Recently, as well as historically, the average monthly unemployment rate in
the State has been higher than the average figures for the United States. For
example, for 1993 the average monthly unemployment rate in the State was 7% as
compared to a national average of 6.8%. However, for 1994, the average monthly
unemployment rate in the State was 5.9% as compared to a national average of
6.1%.
BUDGET. The budget of the State is a complete financial plan and
encompasses the revenues and expenditures, both operating and capital outlay, of
the General Fund and special revenue funds. The budget is prepared on a basis
consistent with generally accepted accounting principles (GAAP). The State's
Fiscal Year begins on October 1 and ends September 30 of the following year.
Under State law, the executive budget recommendations for any fund may not
exceed the estimated revenue thereof, and an itemized statement of estimated
revenues in each operating fund must be contained in an appropriation bill as
passed by the Legislature, the total of which may not be less than the total of
all appropriations made from the fund for that fiscal year. The State
Constitution provides that proposed expenditures from and revenues of any fund
must be in balance and that any prior year's surplus or deficit in any fund must
be included in the succeeding year's budget for that fund.
The State's Constitution limits the amount of total State revenues that may
be raised from taxes and other sources. State revenues (excluding federal aid
and revenues used for payment of principal and interest on general obligation
bonds) in any fiscal year are limited to a specified percentage of State
personal income in the prior calendar year or average of the prior three
calendar years, whichever is greater. The State may raise taxes in excess of the
limit in emergency situations.
The State finances its operations through the State's General Fund and
special revenue funds. The General Fund receives revenues of the State that are
not specifically required to be included in the special revenue funds. General
Fund revenues are obtained approximately 59 percent from the payment of State
taxes and 41 percent from federal and non-tax revenue sources. Tax revenues
credited to the General Fund include the State's personal income tax, single
business tax, use tax, and approximately 15% of sales tax collections. In
addition the State levies various other taxes. Approximately one-half of total
General Fund expenditures are made by the State's Department of Education and
Department of Social Services. Other significant expenditures from the General
Fund provide funds for law enforcement, general State government, debt service
and capital outlays.
Despite modest surplus in the three preceding fiscal years, the State ended
fiscal years 1989-90 and 1990-91 with negative balances of $310.3 million and
$169.4 million, respectively. This negative balance had been eliminated as of
the end of fiscal year 1991-92, which ended September 30, 1992. The State ended
fiscal year 1992-93 with a projected balance of $26 million after the transfer
of $282.6 million to the BSF described below. The state ended fiscal year
1993-94 with a General Fund balance of $460.2 million which was transferred to
the Counter-Cyclical Budget and Economic Stabilization Fund ("BSF".)
C-1
<PAGE>
The State budget for the 1994-95 fiscal year, which began on October 1,
1994, was passed by the Legislature in July 1994. This budget passed by the
Legislature totaled $8,030.8 million from General Fund/general purpose revenues.
The Governor vetoed $6.5 million of these appropriations.
The Governor's Executive Budget for fiscal year 1995-96 was submitted to the
Legislature on February 9, 1995. The fiscal year 1995-96 General Fund/general
purpose Executive Budget recommendation totaled $8,507.6 million.
The State also maintains the BSF which accumulates balances during the years
of significant economic growth and which may be utilized during periods of
budgetary shortfalls. The unreserved balance for the BSF for the 1990-91 fiscal
year end was $182.2 million, for the 1991-92 fiscal year end was $20.1 million
and for the 1992-93 fiscal year was $303.4 million. The ending unreserved fiscal
year 1993-94 General Fund balance of $460.2 million was transfered to the BSF.
DEBT. The State Constitution limits State general obligation debt to (i)
short-term debt for State operating purposes which must be repaid in the same
fiscal year in which it is issued and which cannot exceed 15% of the undedicated
revenues received by the State during the preceding fiscal year, (ii) short and
long term debt unlimited in amount for the purpose of making loans to school
districts and (iii) long term debt for voter-approved purposes.
The State has issued and has outstanding general obligation full faith and
credit bonds for water resources, environmental protection program and
recreation program purposes totalling, as of September 30, 1994, approximately
$382 million. The State anticipates issuing additional general obligation
environmental bonds in 1995. In November 1988 the State's voters approved the
issuance of $800 million of general obligation bonds for environmental
protection and recreational purposes; of this amount approximately $423 million
remains to be issued. The State issued $500 million in general obligation notes
on March 16, 1995 which will mature September 29, 1995. The State issued $85
million in general obligation school loan notes in April 1995 which will mature
on August 15, 1995.
OTHER ISSUERS OF MICHIGAN MUNICIPAL OBLIGATIONS. There are a number of
state agencies, instrumentalities and political subdivisions of the State that
issue bonds, some of which may be conduit revenue obligations payable from
payments from private borrowers. These entities are subject to various economic
risks and uncertainties, and the credit quality of the securities issued by them
may vary considerably from obligations backed by the full faith and credit of
the State.
RATINGS. Currently the State's general obligation bonds are rated A1 by
Moody's, "AA" by S&P and "AA" by Fitch Investors Service, Inc.
LITIGATION. The State is a party to various legal proceedings seeking
damages or injunctive or other relief. In addition to routine litigation,
certain of these proceedings could, if unfavorably resolved from the point of
view of the State, substantially affect State programs or finances. These
lawsuits involve programs generally in the areas of corrections, highway
maintenance, social services, tax collection, commerce and budgetary reductions
to school districts and governmental units and court funding. The ultimate
disposition of these proceedings is not determinable.
PROPERTY TAX AND SCHOOL FINANCE REFORM. The State Constitution limits the
extent to which municipalities or political subdivisions may levy taxes upon
real and personal property through a process that regulates assessments.
On August 19, 1993, the Governor signed into law Act 145, Public Acts of
Michigan, 1993 ("Act 145"), a measure which would have significantly impacted
financing of primary and secondary school operations and which has resulted in
additional property tax and school finance reform legislation. Act 145 would
have exempted all property in the State of Michigan from millage levied for
local and intermediate school districts operating purposes, other than millage
levied for community colleges, effective July 1, 1994. In order to replace local
property tax revenues lost as a result of Act 145, the Michigan Legislature, in
December 1993, enacted several statutes which address property tax and school
finance reform.
The property tax and school finance reform measures included a ballot
proposal which was approved by the voters on March 15, 1994. Effective May 1,
1994, the State sales and use tax was increased from 4% to 6%, the State income
tax was decreased from 4.6% to 4.4%, the cigarette tax was increased from $.25
to $.75 per pack and an additional tax of 16% of the wholesale price was imposed
on certain other tobacco products. A .75% real estate transfer tax become
effective January 1, 1995. Beginning in 1994, state property tax of 6 mills
began to be imposed on all real and personal property currently subject to the
general property tax. The ability of school districts to levy property taxes for
school operating purposes will be partially restored. A school board will, with
voter approval, be able to levy up to the lesser of 18 mills or the number of
mills levied in 1993 for school operating purposes, on non-homestead property.
The adopted ballot proposal contained additional provisions regarding the
C-2
<PAGE>
ability of local school districts to levy taxes as well as a limit on assessment
increases for each parcel of property, beginning in 1995 to the lesser of 5% or
the rate of inflation. When property is subsequently sold, its assessed value
will revert to the current assessment level of 50% of true cash value. Under the
adopted ballot proposal, much of the additional revenue generated by the new
taxes will be dedicated to the State School Aid Fund.
The adopted ballot proposal contained a system of financing local school
operating costs relying upon a foundation allowance amount which may vary by
district based upon historical spending levels. State funding will provide each
school district an amount equal to the difference between their foundation
allowance and the revenues generated by their local property tax levy. Local
school districts would also be entitled to levy supplemental property taxes to
generate additional revenue if their foundation allowance is less than their
historical per pupil expenditures. The adopted ballot proposal also contained
provisions which allow for the levy of a limited number of enhancement mills on
regional and local school district bases.
The adopted ballot proposal shifted significant portions of the cost of
local school operations from local school districts to the State and raised
additional State revenues to fund these additional State expenses. These
additional revenues will be included within the State's constitutional revenue
limitations and may impact the State's ability to raise additional revenues in
the future.
MICHIGAN TAXABLE ESTIMATED CURRENT RETURN TABLE
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, using published 1994 marginal Federal
tax rates and marginal state tax rates currently available and scheduled to be
in effect. The tables incorporate increased tax rates for higher-income
taxpayers that were included in the Revenue Reconciliation Act of 1993. For
cases in which more than one state bracket falls within a Federal bracket, the
highest state bracket is combined with the Federal bracket. The combined state
and Federal tax brackets shown reflect the fact that state tax payments are
currently deductible for Federal tax purposes. The tables illustrate what you
would have to earn on taxable investments to equal the tax-exempt estimated
current return for your income tax bracket. A taxpayer's marginal tax rate is
affected by both his taxable income and his adjusted gross income. Locate your
adjusted gross and your taxable income (which is your adjusted gross income
reduced by any deductions and exemptions), then locate your tax bracket based on
joint or single tax filing. Read across to the equivalent taxable estimated
current return you would need to match the tax-free income.
C-3
<PAGE>
COMBINED MARGINAL TAX RATES FOR JOINT TAXPAYERS WITH FOUR PERSONAL EXEMPTIONS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERAL
FEDERAL ADJUSTED COMBINED
TAXABLE GROSS STATE* AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% 6.50%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 39.0 $ 0-114.7 21.0 % 6.01 6.33 6.65 6.96 7.28 7.59 7.91 8.23
39.0- 94.3 0-114.7 33.0 7.09 7.46 7.84 8.21 8.58 8.96 9.33 9.70
114.7-172.1 34.0 7.20 7.58 7.95 8.33 8.71 9.09 9.47 9.85
94.3-143.6 0-114.7 36.0 7.42 7.81 8.20 8.59 8.98 9.38 9.77 10.16
114.7-172.1 36.5 7.48 7.87 8.27 8.66 9.06 9.45 9.84 10.24
172.1-294.6 39.0 7.79 8.20 8.61 9.02 9.43 9.84 10.25 10.66
143.6-256.5 114.7-172.1 41.5 8.12 8.55 8.97 9.40 9.83 10.26 10.68 11.11
172.1-294.6 44.0 8.48 8.93 9.38 9.82 10.27 10.71 11.16 11.61
Over 294.6 41.5 2 8.12 8.55 8.97 9.40 9.83 10.26 10.68 11.11
Over 256.5 172.1-294.6 48.0 9.13 9.62 10.10 10.58 11.06 11.54 12.02 12.50
Over 294.6 45.0 3 8.64 9.09 9.55 10.00 10.45 10.91 11.36 11.82
</TABLE>
COMBINED MARGINAL TAX RATES FOR SINGLE TAXPAYERS WITH ONE PERSONAL EXEMPTION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERAL
FEDERAL ADJUSTED COMBINED
TAXABLE GROSS STATE* AND TAX-EXEMPT ESTIMATED CURRENT RETURN
INCOME INCOME FEDERAL --------------------------------------------------------------
(1,000'S) (1,000'S) TAX RATE1 4.75% 5.00% 5.25% 5.50% 5.75% 6.00% 6.25% 6.50%
------------- ------------- ----------- ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 23.4 $ 0-114.7 21.0 % 6.01 6.33 6.65 6.96 7.28 7.59 7.91 8.23
23.4- 56.6 0-114.7 33.0 7.09 7.46 7.84 8.21 8.58 8.96 9.33 9.70
56.6-118.0 0-114.7 36.0 7.42 7.81 8.20 8.59 8.98 9.38 9.77 10.16
114.7-237.2 37.5 7.60 8.00 8.40 8.80 9.20 9.60 10.00 10.40
118.0-256.5 114.7-237.2 42.0 8.19 8.62 9.05 9.48 9.91 10.34 10.78 11.21
Over 237.2 41.5 2 8.12 8.55 8.97 9.40 9.83 10.26 10.68 11.11
Over 256.5 Over 237.2 45.0 3 8.64 9.09 9.55 10.00 10.45 10.91 11.36 11.82
<FN>
- ------------------
* The state tax rate which is used in the table is based on a 4.4% state personal income tax rate and a 3.5% tax on intangible
income. The combined tax brackets reflect Federal and state income and state intangibles taxes but do not reflect the effect of
the exemption from local income taxes; accordingly, Michigan residents subject to such local income taxes would need a somewhat
higher taxable return than those shown to equal the tax-exempt yield of the Michigan Trust.
1 The table reflects the effect of the limitations on itemized deductions and the deduction for personal exemptions. They
were designed to phase out certain benefits of these deductions for higher income taxpayers. These limitations, in effect, raise
the current maximum marginal Federal tax rate to approximately 44.0 percent for taxpayers filing a joint return and entitled to
four personal exemptions and to approximately 41.0 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.
2 Federal tax rate reverts to 36.0% after the 80% cap on the limitation on itemized deductions has been met.
3 Federal tax rate reverts to 39.6% after the 80% cap on the limitation on itemized deductions has been met.
</TABLE>
C-4
<PAGE>
Statement of differences between electronic filing and printed document.
Pursuant to Rule 499(c) (7) under the Securities Act of 1933 and Rule
20-11 under the Investment Company Act of 1940, Registrant hereby identifies
those differences in the foregoing document between the electronic format in
which it is filed and the printed form in which it will be circulated:
(1) The printed and distributed prospectus may be paged differently
because the printed document may contain a different amount of information on
each page from that contained in the electronic transmission.
(2) On the cover page, in the index and on the last page of the printed
document, solid vertical bars will appear.
(3) In the printed document, footnote symbols may include a "dagger" or
multiple "dagger". The "dagger" symbol is represented as # in the electronic
document.
(4) The printed and distributed prospectus will not contain the
preliminary prospectus legend included at the beginning of the first
prospectus page.
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
The Depositor has obtained the following Stockbrokers Blanket Bonds
for its officers, directors and employees:
INSURER/POLICY NO. AMOUNT
United Pacific Insurance Co. $10,000,000
Reliance Insurance Company
B 74 92 20
Aetna Casualty and Surety $10,000,000
08 F10618BCA
St. Paul Insurance Co. $ 6,000,000
400 HC 1051
B. This amendment of Registration Statement comprises the following papers
and documents:
The facing sheet
The cross-reference sheet
The Prospectus
The signatures
Consents of Independent Public
Accountants and Counsel as indicated
Exhibits as listed on page S-5
C. Explanatory Note:
This Amendment No. 1 to the Registration Statement contains
multiple separate prospectuses. Each prospectus will relate to an
individual unit investment trust and will consist of a Part A, a
Part B and an Information Supplement. Each prospectus will be
identical with the exception of the respective Part A which will
contain the financial information specific to such underlying unit
investment trust.
D. Undertakings:
1. With the exception of the information included in the state
specific appendices to the Information Supplement, which will vary
depending upon the make-up of a Fund or updated to reflect current
events, any amendment to a Fund's Information Supplement will be
subject to the review of the staff of the Securities and Exchange
Commission prior to distribution; and
2. The Information Supplement to the Trust will not include third
party financial information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Nuveen Tax-Exempt Unit Trust, Series 823 has duly caused this
Amendment of Registration Statement to be signed on its behalf by the
undersigned thereunto duly authorized in the City of Chicago and State of
Illinois on 9/07/95.
NUVEEN TAX-EXEMPT UNIT TRUST, SERIES 823
(Registrant)
By JOHN NUVEEN & CO. INCORPORATED
(Depositor)
By: Larry Woods Martin
_________________________________
Vice President
Attest: Morrison C. Warren
__________________________________
Assistant Secretary
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
of Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
SIGNATURE TITLE* DATE
Richard J. Franke Chairman, Board of Directors )
Chief Executive Officer and )
Director )
)
Donald E. Sveen President, Chief Operating )
Officer and Director )
)
Anthony T. Dean Executive Vice President ) Larry Woods Martin
and Director ) Attorney-In-Fact**
)
Timothy T. Schwertfeger Executive Vice President )
and Director )
John P. Amboian Chief Financial Officer and )
Executive Vice President )
O. Walter Renfftlen Vice President and Controller )
(Principal Accounting Officer))
)
)9/07/95
___________________
*The titles of the persons named herein represent their capacity in and
relationship to John Nuveen & Co. Incorporated, the Depositor.
**The powers of attorney were filed on Form SE for Messrs. Franke,
Sveen, Renfftlen, Dean and Schwertfeger with the Amendment to the
Registration Statement on Form S-6 of Nuveen Tax-Exempt Unit Trust,
Series 671 (File No. 33-49175). The Power of Attorney for Messr. Amboian
is included herein as Exhibit 7.1.
<PAGE>
823
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The consent of Arthur Anderson LLP to the use of its name in the Prospectus
included in the Registration Statement is filed by this amendment as Exhibit
4.4 to the Registratin Statement.
CONSENT OF CHAPMAN AND CUTLER
The consent of Chapman and Cutler to the use of its name in the Prospectus
included in the Registration Statement is contained in its opinions filed by
this amendment as Exhibits 3.1 and 3.2 to the Registration Statement.
CONSENT OF STATE COUNSEL
The consents of special counsel to the Fund for state tax matters to the
use of their names in the Prospectus included in the Registration Statement
are contained in their opinions filed by this amendment as Exhibit 3.3 to the
Registration Statement.
CONSENT OF STANDARD & POOR'S,
A DIVISION OF THE MCGRAW-HILL COMPANIES
The consent of Standard & Poor's, a Division of The McGraw-Hill
Companies, to the use of its name in the Prospectus included in the Registration
Statement is filed by this amendment as Exhibit 4.1 to the Registration
Statement.
CONSENT OF KENNY S&P EVALUATION SERVICES
The consent of Kenny S&P Evaluation Services to the use of its name in the
Prospectus included in the Registration Statement is filed by this amendment
as Exhibit 4.2 to the Registration Statement.
CONSENT OF CARTER, LEDYARD & MILBURN
The consent of Carter, Ledyard & Milburn to the use of its name in the
Prospectus included in the Registration Statement is filed by this amendment
as Exhibit 4.3 to the Registration Statement.
<PAGE>
LIST OF EXHIBITS
1.1 (a) Copy of Standard Terms and Conditions of Trust Between John Nuveen &
Co. Incorporated, Depositor, and The Chase Manhattan Bank (National
Association), Trustee.
1.1 (b) Trust Indenture and Agreement.
2.1 Copy of Certificate of Ownership (Included in Exhibit 1.1(a) on
pages 2 to 8, inclusive, and incorporated herein by reference).
3.1 Opinion of counsel as to legality of securities being registered.
3.2 Opinion of counsel as to Federal income tax status of securities
being registered.
3.3 Opinions of special state counsel to the Fund for state tax matters
as to income tax status to residents of the respective states of the
units of the respective trusts and consents to the use of their names
in the Prospectus.
4.1 Consent of Standard & Poor's, a Division of The McGraw-Hill Companies.
4.2 Consent of Kenny S&P Evaluation Services.
4.3 Consent of Carter, Ledyard & Milburn.
4.4 Consent of Arthur Anderson LLP
6.1 List of Directors and Officers of Depositor and other related
information.
7.1 Power of Attorney
<PAGE>
Standard Terms and Conditions of Trust
for
Nuveen Tax-Exempt Unit Trust Series 823
and subsequent Series
Effective: September 7, 1995
Between
John Nuveen & Co. Incorporated
As Depositor
and
The Chase Manhattan Bank (National Association)
As Trustee
______________________________
- --
Trust Indenture And Agreement
Nuveen Tax-Exempt Unit Trust
Table of Contents
Section Heading Page
Form of Certificates 2
Form of Assignment 7
Statement Regarding Distributions 7
Article I Definitions 8
Article II Deposit of Bonds; Acceptance of Trust; Form
and Issuance of Certificates; Insured Trust Bond Insurance
12
Section 2.01. Deposit of Bonds 12
Section 2.02. Acceptance of Trust 12
Section 2.03. Issue of Certificates and Establishment of
Book Entry Positions 12
Section 2.04. Separate Trusts 13
Section 2.05. Form of Certificates 13
Section 2.06. Insured Trust Bond Insurance 13
Article III Administration of Fund 14
Section 3.01. Initial Cost 14
Section 3.02. Interest Account 14
Section 3.03. Principal Account 15
Section 3.04. Reserve Account 15
Section 3.05. Distributions 15
Section 3.06. Distribution Statements 19
Section 3.07. Sale of Bonds 21
Section 3.08. Refunding Bonds 22
Section 3.09. Bond Counsel 22
Section 3.10. Notice and Sale by Trustee 23
Section 3.11. Trustee Not to Amortize 23
Section 3.12. Liability of Depositor 23
Section 3.13. Notice to Depositor 23
Section 3.14. Limited Replacement of Special Bonds 23
Article IV Evaluation, Redemption, Purchase, Transfer or
Interchange of Units and Replacement of Certificates 25
Section 4.01. Evaluation 25
Section 4.02. Redemptions by Trustee; Purchases by
Depositor 27
Section 4.03. Transfer or Interchange of Units 28
Section 4.04. Certificates Mutilated, Destroyed, Stolen or
Lost 29
Section 4.05. Compensation of Depositor 30
Article V Trustee 31
Section 5.01. General Definition of Trustee's Liabilities,
Rights and Duties 31
Section 5.02. Books, Records and Reports 33
Section 5.03. Indenture and List of Bonds on File 34
Section 5.04. Compensation 34
Section 5.05. Removal and Resignation of Trustee; Successor
35
Section 5.06. Qualifications of Trustee 36
Article VI Rights of Unitholders 36
Section 6.01. Beneficiaries of Trust 36
Section 6.02. Rights, Terms and Conditions 36
Article VII Additional Covenants; Miscellaneous
Provisions 37
Section 7.01. Amendments 37
Section 7.02. Termination 37
Section 7.03. Construction 39
Section 7.04. Registration of Units 39
Section 7.05. Written Notice 39
Section 7.06. Severability 40
Section 7.07. Dissolution of Depositor Not to Terminate
40
__________________________
This Contents does not constitute part of the Indenture.
Standard Terms and Conditions of Trust
for
Nuveen Tax-Exempt Unit Trust Series 823
and subsequent Series
Effective September 7, 1995
These Standard Terms and Conditions of Trust effective
September 7, 1995 are executed by and between John Nuveen &
Co. Incorporated, as Depositor and The Chase
Manhattan Bank (National Association), as Trustee.
Witnesseth That:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor and the Trustee
agree as follows:
Introduction
These Standard Terms and Conditions of Trust, effective
September 7, 1995, shall be applicable to Nuveen Tax-Exempt
Unit Trust Series 823 and all subsequent Series
established after the date of effectiveness hereof, as
provided in this paragraph. For Nuveen Tax-Exempt Unit
Trust Series 823 and all subsequent Series
established after the date of effectiveness hereof to which
these Standard Terms and Conditions of Trust, effective
September 7, 1995, are to be applicable, the
Depositor and the Trustee shall execute a Trust Indenture
and Agreement, incorporating by reference these Standard
Terms and Conditions of Trust, effective September
7, 1995, 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 and
for each Trust in such Series (i) the Bonds deposited in
trust, (ii) the fractional undivided interest
represented by each Unit and (iii) the number of Units of
the Trust.
Whereas, it is desired to expand the market for certain
obligations the interest income on which is not includible
in gross income pursuant to the applicable
provisions of the United States Internal Revenue Code of
1986, as amended, or pursuant to other provisions of law,
some of which obligations, as individual issues or
parts thereof, might be unavailable or impracticable as
investments to certain individual investors, and to provide
proper diversification to such investors,
particularly those with limited investment capital; and
Whereas, the Depositor desires to provide for the collection
and distribution of the principal of and interest on such
obligations by the Trustee to such persons as
shall purchase an interest therein, as hereinafter provided;
and
Whereas, the Depositor has acquired and, concurrently with
the execution and delivery hereof, has deposited in trust
with the Trustee the Tax-exempt bonds and/or
evidences of ownership interests in principal and/or
interest payments on such Tax-exempt bonds (the "Bonds") (or
delivery statements relating to contracts for the
purchase thereof), listed in the Schedules set forth for the
respective portfolios of each Series of the Nuveen
Tax-Exempt Unit Trust indicated in the Trust
Agreement hereinafter referred to as the National
Traditional Trust, the Long Intermediate Traditional Trust,
the Intermediate Traditional Trust, the Short
Intermediate Traditional Trust, the Short Term Traditional
Trust, the National Insured Trust, the Long Intermediate
Insured Trust, the Intermediate Insured Trust,
the Short Intermediate Insured Trust, the Short Term Insured
Trust and individual trusts consisting of Bonds the interest
on which is exempt from certain taxation in
specific states ("[State] Traditional Trust" or "[State]
Intermediate Traditional Trust" or "[State] Insured Trust"
or "[State] Intermediate Insured Trust" or
"[State] Short Intermediate Insured Trust"), or any one or
two of such Trusts, included in the Fund, such Trusts being
created hereunder and to be held by the
Trustee in separate Trusts upon the terms and conditions
hereinafter set forth for the use and benefit of all owners
of Units of the respective Trusts of the Nuveen
Tax-Exempt Unit Trust of that Series indicated in the Trust
Agreement (hereinafter called the "Units"); and
Whereas, concurrently with the delivery to the Trustee of
the Bonds listed in the Schedules attached to the Trust
Agreement, the Insurer has delivered to and
deposited with the Trustee, a Municipal Bond Fund Insurance
Policy or Policies to protect each Insured Trust and the
Unitholders thereof against nonpayment of
principal and interest when due on any Bond or Bonds; and
Whereas, concurrently with the receipt of the aforesaid
deposit the Trustee has registered on the registration books
of the respective Trust the ownership by The
Depository Trust Company of a number of Units constituting
the ownership of all Units of fractional undivided interest
in such Bonds and in the respective Interest
Accounts and Principal Accounts maintained under this
Indenture in the manner hereinafter provided, and has caused
such Units to be credited at The Depository Trust
Company to the account of the Depositor, and will, upon
receipt of confirmation of the effectiveness of the
registration of the aforementioned Units with the
Securities and Exchange Commission, cause such Units to be
transferred on the registration books of the respective
Trusts to such other names, and in such
denominations, as the Depositor may direct, and will deliver
certificates evidencing the same, upon request, as
hereinafter provided; and
Whereas, for those Units which at any time or from time to
time may be held in certificated form, the form of the
certificates of ownership in the respective Trusts
("Certificates") shall be substantially as follows:.c2.Form
of Certificates
Number Units
Certificate of Ownership Plan of
Distribution:
--Evidencing-- Monthly
Quarterly
An Undivided Interest Semi-Annual
Not Applicable
--in the-- CUSIP ____
Nuveen Tax-Exempt Unit Trust,Series [the Series as indicated
inthe Trust Indenture and
Agreement]_________________________ Trust ___
This is to certify that
_______________________________________ is the owner and
registered holder of this Certificate evidencing the
ownership of ______ unit(s) of
undivided interest ("Units") in the above Trust (herein
called the "Trust") of the related Series of the Nuveen
Tax-Exempt Unit Trust created by the Trust Indenture
and Agreement pertaining to such Series (hereinafter called
the "Indenture"), between John Nuveen & Co. Incorporated
(hereinafter called the "Depositor") and The
Chase Manhattan Bank N.A. (hereinafter called the
"Trustee"). The Trust consists of: (1) such of the Bonds
deposited in Trust and listed in the appropriate
Schedule attached to the Indenture and any other obligations
that may be deposited in the Trust in exchange or
substitution therefor by reason of replacement of
failed contracts or refunding of the obligations initially
deposited, in accordance with the Indenture, as may from
time to time continue to be held as part of the
Trust and (2) such cash amounts as from time to time may be
held in the Interest Account and the Principal Account
maintained under the Indenture in the manner
described below.
At any given time this Certificate shall represent a
fractional undivided interest in the Trust, the numerator of
which fraction shall be the number of full and
fractional Units set forth on the face hereof and the
denominator of which shall be the total number of Units of
undivided fractional interest of the Trust which are
outstanding at such time.
The Depositor hereby grants and conveys all of its rights,
title and interest in and to the Trust to the extent of the
fractional undivided interest represented
hereby to the registered holder of this Certificate subject
to and in pursuance of the Indenture, all the terms,
conditions and covenants of which are incorporated
herein as if fully set forth at length.
The registered holder of the Units represented by this
Certificate is entitled at any time upon tender of this
Certificate to the Trustee at the Trustee's Office in
the City of New York, and upon payment of any tax or other
governmental charges, to receive on the third business day
following the day on which such tender is made,
an amount in cash equal to the evaluation of the
fractional undivided interest in the Trust evidenced by this
Certificate, upon the basis provided for in the
Indenture. The right of redemption may be suspended and the
date of payment may be postponed for any period during which
the New York Stock Exchange is closed or
trading on that Exchange is restricted, for any period
during which an emergency exists so that disposal of the
obligations held in the Trust is not reasonably
practicable or it is not reasonably practicable fairly to
determine the value of such obligations, or for such other
periods as the Securities and Exchange
Commission may by order permit.
Interest received by the Trustee as part of the Trust
(including interest accrued and unpaid prior to the day of
deposit of any obligation in the Trust and that part
of the proceeds of the sale, liquidation, redemption or
maturity of any such obligation or from any insurance
thereon which represents accrued interest but not
accrued original issue discount, if any) shall be credited
by the Trustee to the Interest Account. The fractional
undivided interest represented by this Certificate
in the balance in the Interest Account (after the deductions
referred to below) shall be computed as of the date of the
Indenture and paid on such date. The next
computation shall be made as of the "First General Record
Date" as defined in the Indenture and thereafter in
accordance with the plan of distribution shown above.
An amount in cash equal to said fractional
undivided interest in the Interest Account shall be
distributed on the fifteenth day of the month in which
each such computation is made, or within a reasonable period
of time thereafter, to or upon the order of the registered
holder of the Units represented by this
Certificate at the close of business on the first day of the
month in which such distribution is made.
All moneys (other than interest) received by the Trustee as
part of the Trust (including original issue discount and
amounts received from the sale, liquidation,
redemption or maturity of any obligations held in the Trust
or from any insurance thereon) shall be credited by the
Trustee to a separate Principal Account. The
fractional undivided interest represented by this
Certificate in the cash balance in the Principal Account
(after the deductions referred to below) shall be computed
as of the semi-annual Record Dates as defined in the
Indenture in each year, commencing with the first such date
occurring subsequent to the date of the Indenture.
An amount in cash equal to said undivided fractional
interest in the Principal Account shall be distributed on
the fifteenth day of the months in which the Record
Dates occur, or within a reasonable period of time
thereafter, to or upon the order of the registered holder of
this Certificate at the close of business on the first day
of the month in which such distribution is made. The
Trustee shall not be required to make a distribution from
the Principal Account unless the cash balance on deposit
therein available for such distribution shall be sufficient
to distribute at least 10 cents per Unit.
Distributions from the Interest and Principal Accounts shall
be made by mail at the post office address of the holder
hereof appearing in the registration books of
the Trustee or otherwise as directed by the holder.
From time to time deductions shall be made from the Interest
Account and Principal Account, as more fully set forth in
the Indenture, for redemptions, compensation
of the Trustee, reimbursement of certain expenses incurred
by or on behalf of the Trustee, certain legal expenses and
payment of or the establishment of a reserve
for, applicable taxes, if any.
Within a reasonable period of time after the end of each
calendar year the Trustee shall furnish to the registered
holder of this
Certificate a statement setting forth, among other things,
the amounts received and deductions therefrom and the
amounts distributed during the preceding year in
respect of interest on, and sales, redemptions or maturities
of, and proceeds from insurance on, obligations held in the
Trust.
This Certificate shall be
transferable by the registered holder hereof by presentation
and surrender of this Certificate at the corporate
trust office of the Trustee properly endorsed on the reverse
hereof or accompanied by a written instrument or instruments
of transfer in form satisfactory to the
Trustee and executed by the registered holder hereof or his
authorized attorney. Certificates are interchangeable for
(i) one or more Certificates or (ii) a Book
Entry Position, in each case in an equal aggregate number of
Units of undivided interest in denominations of a single
Unit of undivided interest or any multiple and
fraction thereof, all in the manner provided in the
Indenture.
The holder hereof may be required to pay a charge of $2.00
per Certificate issued in connection with the transfer or
interchange of this
Certificate and any tax or other governmental charge that
may be imposed in connection with the transfer, interchange
or other surrender of this Certificate.
The holder of the Units represented by this Certificate, by
virtue of the acceptance of this Certificate, assents to and
shall be bound by the terms of the
Indenture, a copy of which is on file and available for
inspection at the corporate trust office of the Trustee, to
which reference is made for all the terms,
conditions and covenants thereof.
The Trustee may deem and treat the person in whose name this
Certificate is registered upon the books of the Trustee as
the owner of the Units represented by this
Certificate for all purposes and the Trustee shall not be
affected by any notice to the contrary.
The Trust shall terminate upon the maturity, redemption,
sale or other disposition of the last bond held therein,
provided, however, that in no event shall the Trust
continue beyond the date specified in the Indenture. The
Indenture also provides that the Trust may be terminated at
any time by the written consent of One hundred
per cent (100%) of the Unitholders of the Trust and under
certain circumstances which include a decrease in the value
of the Trust to less than Twenty per cent (20%)
of the aggregate principal amount of bonds initially
deposited in the Trust or a redemption by the Depositor of
Units not theretofore sold in an amount aggregating
more than Sixty per cent (60%) of the initial number of
Units thereby reducing the net worth of the Trust to less
than Forty per cent (40%) of the aggregate
principal amount of bonds initially deposited in the Trust.
Upon any termination the Trustee shall fully liquidate the
bonds then held, if any, and distribute pro
rata the funds then held in the Trust upon surrender of the
Units, all in the manner provided in the Indenture.
Upon termination, the Trustee shall be under
no further obligation with respect to the
Trust, except to hold the funds in trust without interest
until distribution as aforesaid and shall have no duty upon
any such termination to communicate with the
holder hereof other than by mail at the address of such
holder appearing on the registration books of the Trustee.
This Certificate shall not become valid or binding for any
purpose until properly executed by the Trustee under the
Indenture.
In Witness Whereof, John Nuveen & Co. Incorporated has
caused this Certificate to be executed in facsimile by its
Chairman of the Board and The Chase Manhattan Bank, N.A.,
as Trustee, has caused this
Certificate to be executed manually or in facsimile in its
corporate name by an authorized officer.
Date: John Nuveen & Co. Incorporated, Depositor
By
Chairman of the Board
The Chase Manhattan Bank, N.A., Trustee
By
Authorized Officer
Form of Assignment
For Value Received _________________________________ hereby
sells, assigns and transfers unto _________________________
the Units represented by the within
Certificate and does hereby irrevocably constitute and
appoint _________________________ attorney, to transfer the
Units represented by the within Certificate on the
books of the Trustee, with full power of substitution in the
premises.
Date:
Statement Regarding Distributions
On the face of this Certificate it is indicated whether the
registered holder hereof has elected to receive
distributions from the Interest Account monthly,
quarterly or semi-annually.
This Certificate by its terms provides that (after the
initial computation and payment on the date of the
Indenture) distributions from the Interest Account shall be
computed as of the First General Record Date, and thereafter
in accordance with the plan of distribution chosen, and an
amount in cash equal to the share of the
Interest Account represented by this Certificate distributed
on the fifteenth day of each month in which such computation
is made, or within a reasonable period of
time thereafter, to or upon the order of the registered
holder of this Certificate at the close of business on the
first day of the month in which the distribution
is made.
All Unitholders of record on the First General Record Date,
regardless of the plan of distribution selected, will
receive the first distribution to be made and
thereafter distributions will be made monthly, quarterly or
semi-annually, depending upon the plan of distribution
chosen by the holder hereof.
If monthly distributions have been selected, the fractional
undivided interest represented by this Certificate in the
balance in the Interest Account, after the
first distribution and after the deductions referred to in
the Certificate, will be computed as of the first day of
each month of each year, commencing with the
first such day after the First General Record Date, and
subsequent to the date of this Certificate, and an amount in
cash as thus computed distributed to or upon the
order of the holder hereof at such date of computation
(which also is the Record Date) on or shortly after the
fifteenth day of each month.
If quarterly distributions have been selected, the
fractional undivided interest represented by this
Certificate in the balance in the Interest Account, after
the
first distribution and after the deductions referred to in
the Certificate, will be computed quarterly as of the
quarterly Record Dates in each year, commencing with
the first such day after the First General Record Date and
subsequent to the date of this Certificate, and an amount in
cash as thus computed distributed to or upon
the order of the holder hereof at such date of computation
(which also is the Record Date) on or shortly after the
fifteenth day of each month in which such
computation is made.
If semi-annual distributions have been selected, the
fractional undivided interest represented by this
Certificate in the balance in the Interest Account, after
the
first distribution and after the deductions referred to in
the Certificate will be computed semi-annually as of the
semi-annual Record Dates in each year, commencing
with the first such day after the First General Record Date
and subsequent to the date of this Certificate, and an
amount in cash as thus computed distributed to or
upon the order of the holder hereof at such date of
computation (which also is the Record Date) on or shortly
after the fifteenth day of each month in which such
computation is made.
The plan of distribution chosen by the registered holder
hereof may be changed by written notice to the Trustee
requesting the change, accompanied by
this Certificate. A
plan of distribution shall continue in effect until changed
as herein provided. A change in a plan of distribution will
be effective as of the day following the
semi-annual Record Date if made by such Record Date.
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 participating
in a distribution, 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 distribution to be made and shall be
entitled to be reimbursed, without interest, out of interest
received by the 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 to
Unitholders who are participating in one of the
optional plans for distribution of interest shall not be
affected because of advancements by the Trustee for the
purpose of equalizing distributions to Unitholders
participating in a different plan.
Now, Therefore, in consideration of the premises and of the
mutual agreements herein contained, the Depositor and the
Trustee agree as follows:
Article I
Definitions
Section 1.01. Whenever used in this Indenture the
following words and phrases, unless the context clearly
indicates otherwise, shall have the following
meanings:
(1) "Bonds" shall mean such of the Tax-exempt
Obligations, including, the delivery statements relating to
contracts (which may include "when-issued"
contracts"), if any, for the purchase of certain bonds and
certified or bank check or checks or letter of credit or
letters of credit sufficient in amount and
availability required for such purchase, deposited in
irrevocable trust and listed in the Schedules attached to
the Trust Agreement, and any obligation received in
exchange for an obligation originally so deposited pursuant
to the terms thereof such that without exception every
holder of the originally deposited obligation must
exchange such obligation at a date not determined by the
holder for a new obligation of the same maturity and bearing
the same interest rate as the originally
deposited obligation, and any obligation received in
exchange or substitution for such obligations pursuant to
Sections 3.08 or 3.14 hereof, as may from time to time
continue to be held as a part of the Trust Fund.
(2) "Book Entry Dealer" shall mean those dealers
including banks, trust companies and other investment
advisers for whose customers the Depositor executes and
confirms trades, and broker/dealers that clear trades in
Units through the Depositor, through whom purchasers of
Units will automatically be book entry Unitholders.
(3) "Book Entry Position" shall mean any position in
Units of a Trust which ownership is recorded on the books of
the Trustee which notation evidences
ownership of an undivided fractional Interest in a Trust in
book entry form.
(4) "Book Entry Position Confirmation" shall mean the
notice sent out by the Depositor to a purchaser of Units
through a Book Entry Dealer, or a Unitholder who
converts certificated Units to a Book Entry Position which
confirms such purchase or conversion.
(5) "Book Entry Unitholder" shall mean the registered
holder of any Book Entry Position 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 Book
Entry Position and as such shall be deemed a
beneficiary of the related Trust created by this Indenture
to the extent of his pro rata share thereof.
(6) "Business Day" shall mean any day other than a
Saturday, Sunday or, in the City of New York, a legal
holiday or a day on which banking institutions are
authorized by law to close.
(7) "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.
(8) "Certificated Unitholder" shall mean the
registered holder of any Certificate, his legal
representatives and heirs and the successors of any
corporation,
partnership or other legal entity which is a registered
holder of any Certificate and as such shall be deemed a
beneficiary of the related Trust created by this
Indenture to the extent of his pro rata share thereof.
(9) "Depositor" shall mean John Nuveen & Co.
Incorporated and its successors in interest, or any
successor depositor as hereinafter provided for.
(10) "Eligible Book Entry Unitholder" shall have the
meaning ascribed to such term in Section 4.02 of this
Indenture.
(11) "Indenture" shall mean this Standard Terms and
Conditions of Trust as originally executed or, if amended as
hereinafter provided, as so amended, together
with the Trust Indenture and Agreement creating a particular
series of the Fund.
(12) "Insurance" shall mean the contract or contracts
or policy or policies of insurance guaranteeing the payment
when due of the principal of and interest on
the Bonds (except Bonds held pursuant and subject to this
Indenture which are insured by individual policies of
insurance issued by the Municipal Bond Insurance
Association ("MBIA") or the MBIA Insurance Corporation (the
"Corporation") which have been obtained by the issuers or
underwriters of such Bonds (the "Pre-Insured
Bonds")) held pursuant and subject to this Indenture,
together with the proceeds, if any, thereof payable to or
received by the Trustee for the benefit of each
Insured Trust in the Fund and the respective Unitholders
thereof.
(13) "Insured Trust" shall mean any separate trust
created by this Indenture, each Bond contained in the
portfolio of which is either a Pre-Insured Bond or
guaranteed by insurance obtained by the Depositor from the
Insurer.
(14) "Insurer" shall mean the MBIA Insurance
Corporation (the "Corporation"), its successors and assigns,
having its headquarters in Armonk, New York, and
issuing the contracts or policies of insurance protecting
the owners of the Bonds against nonpayment when due of the
principal thereof and interest thereon (except
for Pre-Insured Bonds).
(15) "New Bonds" shall have the meaning ascribed to
such term in Section 3.14 of this Indenture.
(16) "Prospectus" shall mean the prospectus relating to
the Trust Fund filed with the Securities and Exchange
Commission pursuant to Rule 497(b) under the
Securities Act of 1933, as amended, and dated the date of
the Trust Agreement.
(17) "Special Bonds" shall have the meaning ascribed to
such term in Section 3.14 of this Standard Terms and
Conditions of Trust.
(18) "Stripped Obligation" shall mean a certificate,
receipt or other evidence of ownership with respect to
either the principal amount of or an installment of
interest payable on a Tax-exempt Obligation.
(19) "Tax-exempt Obligation" shall include
interest-bearing obligations, Zero Coupon Obligations and
Stripped Obligations, the interest income and/or accrued
original issue discount on which is not includible in the
determination of gross income under federal income tax law.
(20) "Telephone Redemption Authorization Form" shall
mean any form approved by the Trustee for use by Book Entry
Unitholders redeeming 1,000 Units or less.
(21) "Traditional Trust" shall mean any Trust which is
not an Insured Trust.
(22) "Trust" or "Trusts" shall mean the separate trust
or trusts created by this Indenture, the Bonds constituting
the portfolios of which are listed in the
various separate Schedules attached to the Trust Agreement.
(23) "Trust Agreement" shall mean the Trust Indenture
and Agreement for the particular series of the Fund into
which this Standard Terms and Conditions is
incorporated.
(24) "Trustee" shall mean The Chase Manhattan Bank
(National Association), or any successor trustee as
hereinafter provided for.
(25) "Trustee's Office" shall mean the office of the
Trustee specified in the Prospectus or any other office that
the Trustee may from time to time designate as
the principal office where its unit trust business shall be
conducted.
(26) "Trust Fund" or "Fund" shall mean the collective
Trusts created by this Indenture, which shall consist of all
the Bonds held pursuant and subject to this
Indenture together with all undistributed interest received
or accrued thereon, and any undistributed cash realized from
the sale, redemption, liquidation, or
maturity thereof or the proceeds of insurance received in
respect thereof. Such amounts as may be on deposit in the
Reserve Account hereinafter established shall be
excluded from the Trust Fund.
(27) "Unit" in respect of any Trust shall mean the
fractional undivided interest in and ownership of the Trust
equal to that fraction of the respective Trust
such that 1 shall be the numerator and the number of Units
as set forth under the caption "Essential Information _
Number of Units" in the Prospectus for each Trust
shall be the denominator, said denominator of which shall be
decreased by the number of any such Units redeemed as
provided in Section 4.02.
(28) "Unitholder" shall mean any Book Entry Unitholder
or any Certificated Unitholder.
(29) "Zero Coupon Obligation" shall mean a bond which
does not provide for the payment of any current interest.
(30) Words importing singular number shall include the
plural number in each case and vice versa, and words
importing person shall include corporations and
associations, as well as natural persons.
(31) 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 IIDeposit of Bonds; Acceptance of
Trust; Form and Issuanceof Certificates; Insured Trust Bond
Insurance
Section 2.01. Deposit of Bonds;: The Depositor,
concurrently with the execution and delivery hereof, has
deposited with the Trustee in trust the Bonds
listed in the Schedules attached to the Trust Agreement (or
delivery statements relating to contracts for the purchase
thereof) 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. If
the seller in any contract to buy any such Bonds fails to
perform for any reason beyond the control of the Depositor
and the Depositor does not obtain these Bonds
from any other source, the Depositor shall forthwith give
the Trustee the Failed Contract Notice as defined in Section
3.14 and may take the remedial action
specified in said Section 3.14.
Section 2.02. Acceptance of Trust;: The Trustee
hereby accepts the trust herein created for the use and
benefit of the Unitholders in the Trusts, subject
to the terms and conditions of this Indenture.
Section 2.03. Issue of Certificates and
Establishment of Book Entry Positions;: The Trustee hereby
acknowledges receipt of the deposit referred to in
Section 2.01, and simultaneously with the receipt of said
deposit, will register on the registration books of the
Trust, for each of the monthly, quarterly, and
semi-annual plans of distribution, the ownership by The
Depository Trust Company of all Units of each Trust, and
will cause such Units to be credited at The
Depository Trust Company to the account of the Depositor.
The Trustee shall not cause such Units to be transferred on
the registration books of the Trust to a
holder other than the Depositor, and the Depositor shall not
sell, pledge, hypothecate or otherwise transfer such Units,
prior to the effectiveness of the
registration statement covering the Units filed with the
Securities and Exchange Commission under the Securities Act
of 1933, except that the Depositor may place the
Units as security for any letter of credit provided in
connection with the deposit of contracts described in
Section 2.01.
Upon the sale of Units to a purchaser, the Units will be
evidenced by a Book Entry Position unless such purchaser
expressly requests that the purchased Units be
evidenced in Certificate form. Upon sale of the Units to a
purchaser who requests Units in certificated form, the
Trustee shall issue a Certificate or Certificates
in the name of the purchaser and note that such Unitholder
is a Certificated Unitholder on the books of the Trustee.
Section 2.04. Separate Trusts;: The Trusts
created by this Indenture are separate and distinct trusts
for all purposes and the assets of one trust may
not be commingled with the assets of any other nor shall the
expenses of any trust be charged against the other. The
Certificates and/or Book Entry Positions
representing the ownership of Units of undivided fractional
interest in one Trust shall not be exchangeable for
certificates or book entry positions representing
ownership of Units of undivided fractional interest in any
other Trust.
Section 2.05. 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 either manually or in facsimile by an authorized
officer of the Trustee and in facsimile by the Chairman of
the Board, President or one of the Vice
Presidents of the Depositor and dated the date of execution
and delivery by the Trustee. In case any authorized officer
of the Trustee or the Depositor who has
signed or whose facsimile signature has been placed upon any
Certificate shall have ceased to be such officer before any
such Certificate is issued, it may be issued
with the same effect as if he were such officer at the date
of issue.
Section 2.06. Insured Trust Bond Insurance;:
Concurrently with the delivery to the Trustee of the Bonds
listed in the Schedules for Insured Trusts
attached to the Trust Agreement, the Insurer has delivered
to and deposited with the Trustee, a Municipal Bond
Insurance Policy or Policies (the "Insurance") to
protect each Bond and the Unitholders of the respective
Insured Trust in which such Bond is held against nonpayment
of principal and interest when due on any such
Bond or Bonds (except for Pre-Insured Bonds).
The Trustee shall take all action deemed necessary or
advisable in connection with the Insurance to continue the
Insurance in full force and effect, all in such
manner as in its sole discretion shall appear to result in
the most protection and least expense to each Insured Trust.
At all times during the existence of the Insured Trust, the
Insurance policies shall provide for payment by the Insurer
to the Trustee of any amounts of principal
and interest due, but not paid, by the issuer of an insured
Bond. The Trustee shall promptly notify the Insurer of any
nonpayment or threatened nonpayment of
principal or interest and the Insurer shall in accordance
with the terms of the policies make payment to the Trustee
of all amounts of principal and interest at that
time due, but not paid.
Upon the making of any payment referred to in the preceding
paragraphs, the Insurer shall succeed to the rights of the
Trustee under the Bond or Bonds involved to
the extent of the payments made. Concurrently with the
payment of any amounts by the Insurer occasioned by the
nonpayment of principal and/or interest by the
issuer, the Trustee shall execute and deliver to the Insurer
any receipt, instrument or document required to evidence the
right of the Insurer to payment of
principal and/or interest under the Bond or Bonds involved
to the extent of the payments made by the Insurer to the
Trustee.
The Trustee shall promptly notify the Corporation of any
nonpayment of principal of or interest on any Bonds and if
the Corporation should fail to make payment to
the Trustee within 30 days after receipt of such notice, the
Trustee shall take all action against the Corporation and/or
the issuer deemed necessary to collect all
amounts of principal and interest at that time due, but not
collected.
Article III Administration of Fund
Section 3.01. Initial Cost;: The expenses
incurred in establishing a 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 preliminary
prospectuses and final prospectuses, expenses incurred in
preparation and printing of brochures and other advertising
materials and any other selling expenses shall
be borne by the Trust, provided, however, the Trust shall
not bear such expenses in excess of the amount shown in the
Statements of Condition included in the
Prospectus for the Trust dated the date specified in the
Trust Agreement, and any such excess shall be borne by the
Depositor. To the extent the funds in the
Interest and 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 Account 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 Section 3.05, and the provisions of Section 5.04 with
respect to the reimbursement of disbursements
for Trust expenses, including, without limitation, the lien
in favor of the Trustee therefor, shall apply to the payment
of expenses made pursuant to this Section.
For purposes of calculation of distributions under Section
3.05 and the addition provided in clause (d) of Section
4.01, the expenses borne by the Trust pursuant to
this Section shall be deemed to have been paid on the date
specified in the Trust Agreement and to accrue at a daily
rate over the time period specified for their
amortization in the 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 no later than the
termination of the Trust.
Section 3.02. Interest Account;: The Trustee
shall collect the interest on the Bonds in each Trust as
such becomes payable (including all interest
accrued but unpaid prior to the date of deposit of the Bonds
in trust and including that part of the proceeds of the
sale, liquidation, redemption or maturity of any
Bonds or insurance thereon which represents accrued interest
thereon but not accrued original issue discount, if any) and
credit such interest to a separate account
for each Trust to be known as the "Interest Account". For
purposes of this Indenture, interest to be credited to the
Interest Account shall not be deemed to include
original issue discount accrued or paid or any amounts
accrued or paid in respect of Stripped Obligations.
Section 3.03. Principal Account;: The Bonds in
each Trust and all moneys (including moneys delivered to the
Trustee for the purchase of bonds pursuant to
contracts, which moneys are no longer required for such
purchase and all amounts received with respect to Zero
Coupon Obligations and Stripped Obligations) other
than amounts credited to the Interest Account, received by
the Trustee in respect of the Bonds in each Trust, including
insurance thereon, shall be credited to a
separate account for each Trust to be known as the
"Principal Account." Moneys which are required to cover
contracts to purchase bonds are hereby declared to be
held in trust by the Trustee for such purchase until the
Depositor shall have notified the Trustee that such
contracts, and if applicable, any contracts for New
Bonds as permitted by Section 3.14, have failed and shall
have directed the Trustee to distribute such moneys as
provided in Section 3.05. For this purpose if the
Depositor shall deposit New Bonds in a principal amount less
than the principal amount of Special Bonds, such event shall
be treated as a failure as to the principal
amount of Special Bonds not replaced by an equal principal
amount of New Bonds.
Section 3.04. Reserve Account;: From time to
time the Trustee shall withdraw from the cash on deposit in
the Interest Account or the Principal Account of
the appropriate Trust 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 such Trust. Such amounts so
withdrawn shall be credited to a separate account for each
Trust 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 appropriate account.
Section 3.05. Distributions;: The Trustee, as of
the Settlement Date set forth in the Prospectus, shall
advance from its own funds and shall pay to the
Depositor, as the sole Unitholder of record on the date of
the Trust Agreement, the amount of interest accrued on the
Bonds as of the date of the Trust Agreement.
The Trustee shall be entitled to reimbursement, without
interest, for such advancement from interest received by the
respective Trusts before any further
distributions shall be made from the Interest Account to
Unitholders of the respective Trusts. The second
distribution of funds from the Interest Account of the
respective Trusts shall be in the amount as set forth for
each Trust in the Prospectus and shall be
made on the date as indicated in the Prospectus (sometimes
referred to herein as the First General Record Date) to or upon
the order of all Unitholders of record of the respective
Trusts as of the dates as indicated in the
Prospectus. For all subsequent semi-annual distributions to
Unitholders of any Trust, the "Record Date" is hereby fixed
to be those dates set forth in the
Prospectus for each Trust.
As of the first day of each month of each year commencing
with the first Record Date for each Trust indicated in the
Prospectus, the Trustee shall with respect to
each Trust:
(a) 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 5.04;
(b) 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 at the time entitled to receive pursuant to
Section 4.05; and
(c) deduct from the Interest Account, or, to the
extent funds are not available in such Account, from the
Principal Account and pay to bond counsel, as
hereinafter provided for, an amount equal to unpaid fees and
expenses, if any, of such bond counsel as certified to by
the Depositor.
On or shortly after the 15th day of the months in which a
semi-annual distribution is to be made as set forth in the
Prospectus (the "Semi-Annual Distribution Date")
commencing on the date for each Trust indicated in the
Prospectus, the Trustee shall, with respect to any Trust,
distribute by mail to or upon the order of each
Unitholder of record of such trust 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 of such Trust calculated as of the
Record Date for such semi-annual payment on the
basis of one-half of the estimated annual interest income to
such Trust for the ensuing twelve months, after deduction of
the estimated costs and expenses of such
Trust to be incurred during the twelve month period for
which the interest income has been estimated provided,
however, that the first such semi-annual distribution
may be a partial distribution reflecting the number of
months since the preceding distribution.
In the event the amount on deposit in the Interest Account
of any Trust on a Semi-Annual Distribution Date is not
sufficient for the payment of the amount of
interest to be distributed on the basis of the aforesaid
computation, the Trustee shall advance out of its own funds
and cause to be deposited in and credited to
such Interest Account such amount as may be required to
permit payment of the semi-annual interest distribution to
be made on such Semi-Annual Distribution Date and
shall be entitled to be reimbursed, without interest, out of
interest received by such 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. The
Trustee's fee takes into account the costs attributable to
the outlay of capital needed to make such advances.
In lieu of the semi-annual distributions of interest
provided above, a Unitholder of any Trust may elect to
receive payments from the Interest Account of such Trust
monthly or quarterly. The second distribution hereinbefore
provided, however, shall be made to or upon the order of all
holders of Units of such Trust who have
chosen to receive subsequent distributions on a different
basis.
Unitholders of any Trust desiring to receive monthly or
quarterly distributions and who purchase their Units prior
to the Record Date for the second distribution may
elect at the time of purchase to receive distributions on a
monthly or quarterly basis by notice to the Trustee.
Unitholders must furnish written notice to the
Trustee indicating their desire to receive monthly or
quarterly distributions. The Trustee, within five business
days of receiving such notice, shall issue to the
Book Entry Unitholder a new Book Entry Position Confirmation
indicating such Unitholder's preferred distribution plan.
Such notice shall be effective with respect
to subsequent distributions until changed by further notice
to the Trustee. Those wishing to change their plan of
distribution must do so by sending written notice
at any time to the Trustee; Certificated Unitholders must
also send to the Trustee the Certificate to which the
requested change relates. Changes may be made only
as herein provided and will become effective as of the
following May 2 if received by May 1 of such year, or as of
November 2 if received by November 1 of such year
and such distributions will continue until further notice.
For monthly distributions the share of the balance in the
Interest Account to be distributed to or upon the order of a
Unitholder of any Trust who has elected to
receive monthly distributions, after the second
distribution, shall be computed as of the first day of each
month commencing with the first such day subsequent to
the date of the Certificate or to the date of the recording
of the Book Entry Position on the books of the Trustee and
distribution made as provided herein on or
shortly after the 15th day of the month of computation to
the Unitholder of record on such date of computation. Such
computation shall be made on the basis of
one-twelfth of the estimated annual interest income to the
related Trust for the ensuing twelve months for the account
of Unitholders of any Trust who have elected
to receive monthly distributions, after deduction of the
estimated costs and expenses to be incurred on behalf of
such Unitholders during the twelve month period for
which such interest income has been estimated.
For quarterly distributions the share of the balance in the
Interest Account to be distributed to or upon the order of a
Unitholder of any Trust who has elected to
receive quarterly distributions, after the second
distribution, shall be computed as of the first day of each
month as set forth in the Prospectus, commencing with
the first such day subsequent to the date of the Certificate
or to the date of the recording of the Book Entry Position
on the books of the Trustee and distribution
made as provided herein on or shortly after the 15th day of
the month of computation to the Unitholder of record on such
date of computation. Such computation shall
be made on the basis of one-fourth of the estimated annual
interest income to the related Trust for the ensuing twelve
months for the account of Unitholders of any
Trust who have elected to receive quarterly distributions,
after deduction of the estimated costs and expenses to be
incurred on behalf of such Unitholders during
the twelve month period for which such interest income has
been estimated provided, however, that the first such
quarterly distribution may be a partial distribution
reflecting the number of months since the preceding
distribution.
To the extent practicable, the Trustee shall allocate the
expenses of each Trust among Units of such Trust, giving
effect within any Trust to differences in
administrative and operational cost among those who have
chosen to receive distributions monthly, quarterly or
semi-annually.
If the Trustee determines that an event has occurred as a
result of which there has resulted an excessive distribution
from the Interest Account, it shall reduce
subsequent distributions so as to reconcile, as promptly as
practicable, the aggregate net income and distributions from
such Account.
In the event the amount on deposit in the Interest Account
of a Trust for a monthly or quarterly distribution is not
sufficient for the payment of the amount of
interest to be distributed to Unitholders participating in
such distributions on the basis of the aforesaid
computations, the Trustee shall advance its own funds and
cause to be deposited in and credited to such Interest
Account such amounts as may be required to permit payment of
the monthly or quarterly interest distribution to
be made as aforesaid and shall be entitled to be reimbursed,
without interest, out of interest received by such 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 such Interest Account to
an amount less than required for the next ensuing
distribution of interest. The Trustee's fee takes into
account the costs attributable to the outlay of capital
needed to make such advances. Distributions to Unitholders
of any Trust who are participating in one of the optional
plans for distribution of interest shall not be
affected because of advancements by the Trustee for the
purpose of equalizing distributions to Unitholders of any
Trust participating in a different plan.
Distributions of amounts represented by the cash balance in
the Principal Account for each Trust shall be computed as of
the dates as indicated in the Prospectus.
On the fifteenth day of each month, in which such
computation is made, or within a reasonable period of time
thereafter, the Trustee shall distribute by mail to or
upon the order of each Unitholder of record at the close of
business on the date of computation (the Record Date) at his
post office address such holder's pro rata
share of the cash balance of such Principal Account as thus
computed. The Trustee shall not be required to make a
distribution from such Principal Account unless
the cash balance on deposit therein available for
distribution shall be sufficient to distribute at least 10
cents per Unit.
Notwithstanding the foregoing, if the Depositor fails to
replace any Special Bond (as defined in Section 3.14) in a
Trust by delivering an equal principal amount of
New Bonds to the Trustee prior to the expiration of the
Purchase Period as defined in Section 3.14, the Trustee
shall distribute to all Unitholders of Units in the
respective Trust the entire amount of cash held by the
Trustee in respect of such Special Bonds which have not been
so replaced at the next monthly distribution date
which is more than thirty days after the expiration of the
Purchase Period or at such earlier time as the Trustee in
its sole discretion deems to be in the best
interest of the Unitholders.
The Trustee may, in its discretion, adjust the amount of
subsequent distributions from the Trust to take account of
any difference in interest accrued on the New
Bond at the time of its deposit and the interest which would
have accrued on the Special Bond as of such date.
The amounts to be so distributed to each Unitholder of a
Trust shall be that pro rata share of the cash balance of
the Interest and Principal Accounts of such Trust,
computed as set forth above, as shall be represented by the
Units evidenced by the outstanding Certificate or
Certificates registered in the name of such Unitholders
and/or Book Entry Positions recorded in the names of such
Unitholders on the books of the Trustee.
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 the Interest Account or the Principal Account of a Trust
shall be held in the same manner as other amounts
subsequently deposited in each of such Accounts,
respectively.
For the purpose of distribution as herein provided, the
holders 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 or upon the order of 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 of a Trust 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 (unless waived
as set forth in said Section 3.06).
Section 3.06. Distribution Statements;: With
each distribution from the Interest or Principal Accounts of
a Trust 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 expressed
as a dollar amount per Unit of such Trust except that such
information need not be furnished to a Unitholder who has
waived receipt thereof in writing.; In the
event that the issuer or insurer of any of the Bonds in a
Trust shall fail to make payment when due of any interest or
principal and such failure results in a change
in the amount which would otherwise be distributed as a
monthly distribution, the Trustee shall, with the first
distribution relating to such Trust following such
failure, set forth in an accompanying statement (a) the name
of the issuer and the Bond, (b) the amount of the reduction
in the distribution per unit resulting from
such failure, (c) the percentage of the aggregate principal
amount of Bonds which such Bond represents and (d) to the
extent then determined, information regarding
any disposition or legal action with respect to such Bond.
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 of a Trust a statement setting forth,
with respect to such calendar year and with respect to such
Trust:
(A) as to the Interest Account:
(1) the amount of interest received on the Bonds,
(2) the amounts paid for purchases of New Bonds
pursuant to Section 3.14 and for redemptions pursuant to
Section 4.02,
(3) the deductions for applicable taxes and fees and
expenses of the Trustee and bond counsel, 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 or
redemption of any of the Bonds and the net proceeds received
therefrom excluding any portion thereof
credited to the Interest Account,
(2) the amounts received with respect to Zero Coupon
Obligations and Stripped Obligations which, based on the
evaluation thereof on the Date of Deposit,
constitute tax-exempt original issue discount to a
Unitholder who purchased his Units on the Day of Deposit,
(3) the amount paid for purchases of New Bonds
pursuant to Section 3.14 and for redemptions pursuant to
Section 4.02,
(4) the deductions for payment of applicable taxes and
fees and expenses of the Trustee and bond counsel, and
(5) 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 Bonds 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 evaluation of
such Trust made during such calendar year,
(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 such distributions, and
(5) the amount of original issue discount earned on
portfolio Bonds, based on the valuation of such Bonds on the
Date of Deposit.
Section 3.07. Sale of Bonds;: If necessary, in
order to maintain the sound investment character of a Trust,
the Depositor may direct the Trustee to sell
or liquidate Bonds in such Trust at such price and time and
in such manner as shall be determined by the 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 Bonds 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 Bonds,
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
Bonds, 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
Bonds or otherwise; or that there exists any other legal
question or impediment affecting such Bonds 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 Bonds, or their general credit standing, or
otherwise impair the sound investment character of
such Bonds;
(d) that there has been a default in the payment of
principal of or interest on any other outstanding
obligations of an issuer of such Bonds;
(e) that in the case of revenue Bonds, the revenues
and income of the facility or project or other special funds
expressly charged and pledged for debt service
on any such Bonds shall fall substantially below the
estimated revenues or income calculated by the engineers or
other proper officials charged with the acquisition,
construction or operation of such facility or project, so
that, in the opinion of the Depositor, the retention of such
Bonds would be detrimental to the sound
investment character of such Trust and to the interest of
the Unitholders thereof;
(f) that the price of any such Bonds has 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 Bonds would be detrimental to such Trust
and to the interest of the Unitholders thereof;
(g) that such Bonds are the subject of an advanced
refunding. For the purposes of this Section 3.07(g), "an
advanced refunding" shall mean when refunding
bonds are issued and the proceeds thereof are deposited in
irrevocable trust to retire the Bonds on or before their
redemption date; or
(h) that as of any Record Date any of the Bonds 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 distribution from the
Principal Account on such next succeeding Monthly
Distribution Date at least $.50 per Unit.
Upon receipt of such direction from the Depositor, upon
which the Trustee shall rely, the Trustee shall proceed to
sell or liquidate the specified Bonds in
accordance with such direction; provided, however, that the
Trustee shall not sell or liquidate any Bonds upon receipt
of a direction from the Depositor that it has
determined that the conditions in subdivision (h) above
exist, unless the Trustee shall receive on account of such
sale or liquidation the full principal amount of
such Bonds, plus the premium, if any, and the interest
accrued and to accrue thereon to the date of the redemption
of such Bonds. 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 Bonds under this Section 3.07 except to the
extent otherwise required by Section 3.10 of this Indenture.
Section 3.08. Refunding Bonds;: In the event
that an offer shall be made by an obligor of any of the
Bonds in a Trust to issue new obligations in
exchange and substitution for any issue of Bonds pursuant to
a plan for the refunding or refinancing of such Bonds, the
Depositor shall instruct the Trustee in
writing to reject such offer and either to hold or sell such
Bonds, except that if (1) the issuer is in default with
respect to such Bonds or (2) in the opinion of
the Depositor, given in writing to the Trustee, the issuer
will probably default with respect to such Bonds 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 either be sold as provided in
Section 3.07 or deposited hereunder and shall be subject to
the terms and conditions of this Indenture to
the same extent as the Bonds originally deposited hereunder.
Within five days after such deposit, notice of such exchange
and deposit shall be given by the Trustee
to each Unitholder of such Trust, including an
identification of the Bonds eliminated and the bonds
substituted therefor.
Section 3.09. Bond Counsel;: The Depositor may
employ from time to time as it may deem necessary a firm of
municipal bond attorneys for any legal
services that may be required in connection with the
disposition of underlying bonds pursuant to Section 3.07 or
the substitution of any securities for underlying
bonds as the result of any refunding permitted under Section
3.08. The fees and expenses of such bond counsel shall be
paid by the Trustee from the Interest and
Principal Accounts of the applicable Trust as provided for
in Section 3.05(c) hereof.
Section 3.10. Notice and Sale by Trustee;: If at
any time the principal of or interest on any of the Bonds
shall be in default and not paid or provision
for payment thereof shall not have been duly made, either
pursuant to any Insurance thereon or otherwise, 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 Bonds,
the Trustee shall sell such Bonds 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 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 of any Trust by
reason of any premium or discount in respect of any of the
Bonds.
Section 3.12. Liability of Depositor;: 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 negligence, lack of good faith or
willful misconduct. 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, bond counsel, or any other
persons pursuant to this Indenture and in
furtherance of its duties.
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 Bonds (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 Bonds 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
Bonds;: If any contract in respect of Bonds in a Trust
other than a contract to purchase New Bonds (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 Bonds being herein
called the "Special Bonds"), the Depositor shall notify the
Trustee (such notice being herein called the
"Failed Contract Notice") of its inability to deliver the
Special Bonds to the Trustee promptly after it is notified
that the Special Bonds will not be delivered to
it by the seller thereof. The Depositor shall have until
the earlier of twenty days after giving the Failed Contract
Notice or ninety days after the date of the
Trust Agreement (such twenty-day or ninety-day period being
herein called the "Purchase Period") to deliver to the
Trustee an obligation to be held as Bonds
hereunder (herein called the "New Bonds") as part of such
Trust in replacement of an equal principal amount of the
Special Bonds, subject to the satisfaction of all
of the following conditions in the case of any such new
Bonds:
(a) The New Bonds (i) shall be tax-exempt obligations
issued by states, territories or their political
subdivisions, (ii) shall have a fixed maturity date
(whether or not entitled to the benefits of any sinking
redemption, purchase or similar fund) not exceeding the date
of maturity of the Special Bonds they replace
and not less than approximately 1 year in the case of a
Short Term Trust, approximately 3 years in the case of a
Short Intermediate Trust, approximately 5 years in
the case of an Intermediate Trust or State Intermediate
Trust approximately 11 years in the case of a Long
Intermediate Trust and approximately 15 years in the case
of any other Trust, in each case after the date of purchase,
(iii) shall be acquired by the Trust at a cost ("Acquisition
Cost") equal to the "Trustee's
Determination of Offering Price" of the respective Trust
indicated in the "Schedule of Investments" set forth in the
Prospectus dated the Date of Deposit and
relating to the Series of the Nuveen Tax-Exempt Unit Trust
as indicated in the Trust Agreement, attributable to the
principal amount of Special Bonds they replace,
(iv) must have a current return based on their Acquisition
Cost at least equal to the current return as of the Date of
Deposit of the Special Bonds they replace, (v)
must have a yield to maturity based on their Acquisition
Cost at least equal to the yield to maturity as of the Date
of Deposit of the Special Bonds they replace,
(vi) shall be payable as to principal and interest, if any,
in United States currency, (vii) shall not be when, as and
if issued Bonds, and (viii) with respect to a
State Trust, shall have benefit of exemption from state
taxation to an equal or greater extent than the Special
Bonds they replace.
(b) Each New Bond shall be rated at least "A" or
better by Standard & Poor's Ratings Group ("Standard &
Poor's") or "A" or better by Moody's Investors Service,
Inc. ("Moody's").
(c) The principal amount of the New Bonds (exclusive
of accrued interest) shall not exceed the principal amount
of the Special Bonds.
(d) In the case of Insured Trusts, each New Bond shall
be a Pre-Insured Bond or shall be acceptable to the Insurer
to be insured under policies of insurance
identical in form and substance to the Insurance included
and will be so included upon acquisition by the Trust.
(e) The Depositor shall furnish a notice to the
Trustee (which may be part of the Failed Contract Notice) in
respect of the New Bond purchased or to be
purchased that shall (i) identify the New Bonds, (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) through (d) have been satisfied with respect to
the New Bonds.
Upon satisfaction of the foregoing conditions with respect
to any New Bonds, the Depositor shall pay the purchase price
for the New Bonds from its own resources or
if and to the extent that the Trustee has credited any
moneys and/or letters of credit attributable to the Special
Bonds to the Principal Account of such Trust, the
Trustee shall pay the purchase price of the New Bonds upon
directions from the Depositor from the moneys and/or letters
of credit so credited. If the Depositor has
paid the purchase price and, in addition, the Trustee has
credited moneys of the Depositor to the Principal Account of
such Trust, 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 any New Bond is acquired by the Depositor pursuant
to the provisions of this Section 3.14, the Trustee shall,
within five days after the delivery thereof to
the Trustee mail to all Unitholders of the respective Trust
notices of such acquisition, including an identification of
the Special Bonds and the New Bonds acquired.
The Trustee shall not be liable or responsible in any way
for depreciation or loss incurred by reason of any purchase
of Special Bonds or New Bonds made by the
Depositor and in the absence of a purchase by the Depositor
the Trustee shall have no duty to purchase any New Bonds
under this Indenture. The Depositor shall not
be liable for any failure to purchase any New Bonds or for
errors of judgment in respect of this Section 3.14;
provided, however, that these provisions 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.
Notwithstanding anything to the contrary in this Section
3.14, no deposit of New Bonds will be made without an
opinion of counsel that such substitution will not
adversely affect the federal income tax status of the Trust,
if such New Bonds when added to all previously purchased New
Bonds in the Trust exceeds 15% of the
principal amount of Bonds initially deposited in the Trust.
Article IV Evaluation, Redemption, Purchase,
Transfer orInterchange of Units and Replacement of
Certificates
Section 4.01. Evaluation;: The Trustee shall
make an evaluation of each Trust as of that time set forth
in the Prospectus (the "Evaluation Time"), (i) on
the last business day of each of the months of June and
December, (ii) on the day on which any Unit of a respective
Trust is tendered for redemption, and (iii) 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
respective Trust (other than cash declared held in trust to
cover contracts to purchase bonds) or moneys in the process
of being collected from matured interest
coupons or bonds matured or called for redemption prior to
maturity, (2) the value of each issue of the Bonds in the
Trust, (3) interest accrued thereon not subject
to collection and distribution and (4) amounts representing
organizational expenses paid less accrued organizational
expenses of a Trust. In making the evaluations
the Trustee may determine the value of each issue of the
Bonds in the Trust by the following methods or any
combination thereof which it deems appropriate: (i) on
the basis of current bid prices of such Bonds as obtained
from investment dealers or brokers (including the Depositor)
who customarily deal in bonds comparable to
those held by the Trust, or (ii) if bid prices are not
available for any of such Bonds, on the basis of bid prices
for comparable bonds, or (iii) by causing the
value of the Bonds in the Trust to be determined by others
engaged in the practice of evaluating, quoting or appraising
bonds. 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 of such Trust, (ii) amounts
representing accrued expenses of the Trust including
but not limited to unpaid fees and expenses of the Trustee,
the Depositor and bond 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 such Trust of record, and required for
redemption of Units tendered, as of a date
prior to the evaluation then being made. The value of the
pro rata share of each Unit of such Trust determined on the
basis of any such evaluation shall be referred
to herein as the "Unit Value."
The Depositor shall make an evaluation of each Trust as of
the Evaluation Time (i) on the last business day of each of
the months of June and December, (ii) on the
day in which any Unit of such Trust is tendered for
redemption, and (iii) on any other day such an evaluation is
desired by the Trustee or is deemed necessary by the
Depositor. Such evaluation shall be made on the same basis
as set forth in the preceding paragraph. The Trustee, in
lieu of making the evaluation provided in the
preceding paragraph, may use the evaluation made by the
Depositor for all purposes of this Indenture, except as
provided in the following paragraph, and shall not be
liable or responsible, under any circumstances whatever, for
its election to use the Depositor's evaluation or for the
accuracy or correctness thereof or for any
error or omission therein.
The Trustee shall also cause an evaluation of the Bonds
deposited in each Trust to be made as of the Evaluation Time
on the day preceding the day on which said Bonds
are deposited under this Indenture by J.J. Kenny Co., Inc.,
or such other evaluator as shall be specified by the
Depositor. Such evaluation shall be made on the
same basis as set forth in the second preceding paragraph
except that it shall be based upon offering prices of said
Bonds. The determination of the offering price
of the Bonds so made shall be included in the Schedule
attached to the Trust Agreement. The Trustee shall not be
liable or responsible, under any circumstances
whatever, for the accuracy or correctness of such evaluation
or for the selection of the evaluator making the same.
Section 4.02. Redemptions by Trustee; Purchases
by Depositor';: A Certificated Unitholder may redeem his
Units by sending a written redemption request
and tendering his Certificate to the Trustee at the
Trustee's Office. Any individual Book Entry Unitholder
redeeming 1,000 Units or less may do so by telephone upon
completion and submission to the Trustee of a Telephone
Redemption Authorization Form prior to the date of
redemption (the "Eligible Book Entry Unitholders"). All
other Book Entry Unitholders must make their redemption
request in writing to the Trustee at the Trustee's Office,
and may do so by (i) completing the form on the
reverse side of their Book Entry Position Confirmation or
(ii) sending a written redemption request which includes (a)
the tax identification number for the account,
(b) the name and address of the redeeming Unitholder, (c) a
complete description of the Units to be redeemed with the
Trust number and payment option, (d) the number
of Units to be redeemed, (e) a notation that the Units are
in Book Entry form and (f) the number of Units remaining, if
the redemption is a partial redemption. Any
proper request for redemption made in one of the manners
provided for above shall be effected by the Trustee on the
third business day following the day on which
such request for redemption is made (being herein called the
"Redemption Date"). Subject to payment by any redeeming
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 set forth in the Prospectus, on
the date of tender, multiplied by the number of Units owned
by the Unitholder plus a sum equivalent to the
amount of accrued interest which would have been payable on
such Units to, but not including, the third business day
following the date of tender (herein called the
"Redemption Price"). Unit redemption requests received by
telephone or in writing by the Trustee on any day after the
Evaluation Time set forth in the Prospectus
will be treated by the Trustee as received on the next day
on which the New York Stock Exchange is open for trading and
will be deemed to have been received on such
day for redemption at the Redemption Price computed on that
day.
The Trustee may in its discretion, and shall when so
directed by the Depositor, suspend the right of redemption
for Units of a Trust or postpone the date of payment
of the Redemption Price therefor for more than three
business days following the day on which a proper request
for redemption is made in the manner provided for in
this Section 4.02 (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 such Trust of the Bonds is not
reasonably practicable or it is not reasonably practicable
fairly to determine in accordance herewith the value of the
Bonds; 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 a proper
request for redemption in the manner provided for in this
Section 4.02 by a Unitholder other than the
Depositor is received, the Trustee shall notify the
Depositor of such request. The Depositor shall have the
right to purchase such 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 day on which the request for
redemption of such Units was received. Such purchase shall
be made by payment for such Units by the Depositor to the
Unitholder not later than the close of business
on the Redemption Date of an amount equal to the Redemption
Price which would otherwise be payable by the Trustee to
such Unitholder.
Any Unit so purchased by the Depositor may at the option of
the Depositor be tendered to the Trustee for redemption at
the Trustee's Office in the manner provided in
the first paragraph of this Section 4.02.
If the Depositor does not elect to purchase any Unit of a
Trust tendered to the Trustee for redemption, or if a Unit
is being tendered by the Depositor for
redemption, that portion of the Redemption Price which
represents interest shall be withdrawn from the Interest
Account of such Trust to the extent available. The
balance paid on any redemption, including accrued interest,
if any, shall be withdrawn from the Principal Account of
such Trust to the extent that funds are
available for such purpose. If such available balance shall
be insufficient the Trustee shall sell such of the Bonds
held in such Trust currently designated for
such purposes by the Depositor as the Trustee in its sole
discretion shall deem necessary. In the event that funds
are withdrawn from such Principal Account for
payment of accrued interest, such Principal Account shall be
reimbursed for such funds so withdrawn when sufficient funds
are next available in such Interest
Account.
The Depositor shall maintain with the Trustee a current list
of Bonds held in each Trust designated to be sold for the
purpose of redemption of Units of each Trust
tendered for redemption and not purchased by the Depositor,
and for payment of expenses hereunder, provided that if the
Depositor shall for any reason fail to
maintain such a list, the Trustee, in its sole discretion,
may designate a current list of Bonds for such purposes.
The net proceeds of any sales of Bonds from such
list representing principal shall be credited to the
Principal Account of such Trust and the proceeds of such
sales representing accrued interest, if any, but not
accrued original issue discount, if any, shall be credited
to the Interest Account of such Trust.
The Trustee shall not be liable or responsible in any way
for depreciation or loss incurred by reason of any sale of
Bonds made pursuant to this Section 4.02.
Certificates evidencing Units redeemed pursuant to this
Section 4.02 shall be canceled by the Trustee and the Unit
or Units evidenced by such Certificates or Book
Entry Positions recorded on the books of the Trustee shall
be terminated by such redemptions.
Section 4.03. Transfer or Interchange of Units;:
Units represented by a Certificate may be transferred to
another person by the registered holder thereof
by written request to the Trustee accompanied by
presentation and surrender of the Certificate at the
Trustee's Office properly endorsed or accompanied by a
written
instrument or instruments of transfer in form satisfactory
to the Trustee and executed by the Certificated Unitholder.
Units represented by a Book Entry Position
may be transferred by delivery of written transfer
instructions to the Trustee's Office in such form and
accompanied by such documents as the Trustee may require.
Units transferred, whether represented prior to the transfer
in certificated form or book entry form, shall after the
transfer be represented in the same form,
unless otherwise requested by the transferor. Upon such
transfer, either (i) new Book Entry Position
Confirmation(s), (ii) new registered Certificate(s) or (iii)
any combination thereof, representing the same number of
Units as were transferred, will be issued in exchange and
substitution therefor.; Any Certificated
Unitholder may change to book entry ownership upon
submitting to the Trustee such Unitholder's Certificate or
Certificates along with a written request in form
satisfactory to the Trustee that the Units represented by
such Certificate or Certificates thereafter be held in book
entry form. Upon such surrender, an
appropriate notation will be made in the registration books
of the Trust to indicate that the Units formerly evidenced
by Certificates are held in a Book Entry
Position. Any Book Entry Unitholder may change to
Certificate ownership of the same Trust by submitting a
written request to the Trustee in form satisfactory to the
Trustee.
Certificates issued pursuant to this Indenture are
interchangeable for one or more other Certificates
representing an equal aggregate number of Units of the same
Trust. All Units shall be issued in denominations of one
Unit or any multiple and fraction thereof as may be
requested by the Unitholder. Fractions of Units shall
be computed to three decimal places.
The Trustee may deem and treat the person in whose name any
Certificate or Book Entry Position shall be registered upon
the books of the Trustee as the owner of the
related Units for all purposes hereunder and the Trustee
shall not be affected by any notice to the contrary, nor be
liable to any person or in any way for so
deeming and treating the person in whose name any
Certificate or Book Entry Position shall be so registered.
A sum sufficient to pay any tax or other governmental 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
$2.00 for each new Certificate issued on any such transfer
or interchange.
All Units canceled pursuant to this Indenture shall be
disposed of by the Trustee without liability on its part.
Section 4.04. 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 or, at
the Certificated Unitholder's written request in a form
satisfactory to the Trustee to thereafter hold the
Units in a Book Entry Position, enter an equivalent Book
Entry Position on the records of the Trustee pursuant to
Section 4.03 in exchange and substitution therefor
upon the Unitholder'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 cancelled before any new
Certificate or Book Entry Position shall be issued or
recorded in exchange and substitution therefor. Upon the
issuance of any new Certificate or recording of any
Book Entry Position on the books of the Trustee 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 or Book Entry Position
recorded on the books of the Trustee pursuant to this
Section shall constitute complete and indefeasible
evidence of ownership of Units in the related Trust, as if
originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.;
In the event the related Trust has terminated or is in the
process of termination, the Trustee may, instead of issuing
a new Certificate or recording of a Book Entry
Position 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
7.02 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.
Section 4.05. Compensation of Depositor;: For
services performed under this Indenture in evaluating and
for maintaining surveillance over the Bonds in
each Trust, the Depositor shall be paid that amount per
$1,000 principal amount of Bonds in each Trust as set forth
under the caption "Essential Information _
Sponsor's Annual Evaluation Fee" in the Prospectus. Such
compensation shall be computed on the basis of the greatest
amount of such principal amount of Bonds in
each Trust at any time during the period with respect to
which such compensation is being computed and 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 if such
index no longer exists, a comparable index. The
consent or concurrence of any Unitholder hereunder shall not
be required for any such adjustment or increase. The
Depositor shall in addition be compensated for its
costs incurred in providing such other services to the Trust
as the Trustee shall request. Such compensation shall be
charged by the Trustee, upon receipt of
invoice therefor from the Depositor, against the Interest
and Principal Accounts of the respective Trusts on or before
the Distribution Date on which such period
terminates. If the cash balances in the Interest and
Principal Accounts of any Trust shall be insufficient to
provide for amounts payable pursuant to this Section
4.05, the Trustee shall have the power to sell (i) Bonds of
such Trust from the current list of Bonds designated to be
sold pursuant to Section 4.02 hereof, or (ii)
if no such Bonds have been so designated such Bonds of such
Trust 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 4.05. Any moneys payable to the Depositor pursuant
to this Section 4.05 shall be secured by a prior
lien on such Trust except that no such lien shall be prior
to any lien in favor of the Trustee under the provisions of
Section 5.04.
Article V Trustee
Section 5.01. 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 each 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 of such Trust and
the payment of such costs and expenses shall be secured by a
prior lien on such Trust.; In addition to and
notwithstanding the other duties, rights, privileges and
liabilities of the Trustee as otherwise set forth herein,
the liabilities of the Trustee are further defined as
follows:
(a) All moneys deposited with or received by the
Trustee hereunder related to a Trust shall be held by it
without interest in trust as part of such Trust or
the Reserve Account of such Trust 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 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, Bonds, Certificates or
Book Entry Positions 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
Depositor. 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 Bonds
(except that the Trustee shall be responsible for the
exercise of due care in determining the genuineness of Bonds
delivered to it pursuant to contracts for the purchase of
such Bonds) or for or in respect of the
validity or sufficiency of any Certificates or of the due
execution thereof by the Depositor, or for the payment by
the Insurer of amounts due under or the
performance by the Insurer of its obligations in accordance
with the Insurance, 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 of the
affected Trust or Trusts.
(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 Agreement 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 reimbursable from
the Interest and Principal Accounts of the
affected Trust as set forth in Section 5.04 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 ratably from the Interest Accounts of the
affected Trusts or, to the extent funds are not available in
such Account, from the Principal Accounts of the
affected Trusts 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 and liquidate the affected Trust in the
manner provided in Section 7.02.
(g) If (i) the value of any Trust as shown by any
evaluation by the Trustee pursuant to Section 4.01 hereof
shall be less than twenty per cent (20%) of the
aggregate principal amount of Bonds initially deposited in
such Trust, or (ii) by reason of the Depositor's redemption
of Units of a Trust not theretofore sold, the
net worth of the Trust is reduced to less than forty per
cent (40%) of the aggregate principal amount of Bonds
initially deposited therein, the Trustee may in its
discretion, and shall when so directed by the Depositor,
terminate this Indenture and the trust created hereby
insofar as they related to such Trust and liquidate
such Trust, all in the manner provided in Section 7.02.
(h) In no event shall the Trustee be liable for any
taxes or other governmental charges imposed upon or in
respect of the Bonds or upon the interest thereon or
upon it as Trustee hereunder or upon or in respect of any
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 affected
Trust, and the payment of such amounts so paid by the
Trustee shall be secured by a prior lien on such Trust.
(i) 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.
(j) The Trustee in its individual or any other
capacity may become owner or pledgee of, or be an
underwriter or dealer in respect of, stocks, bonds or other
obligations issued by the same issuer (or an affiliate of
such issuer) or any obligor of any Bonds at any time held as
part of the Trust and may deal in any manner
with the same or with the issuer (or an affiliate of the
issuer) with the same rights and powers as if it were not
the Trustee hereunder.
(k) The Trust may include a letter or letters of
credit securing the purchase of Bonds pursuant to contracts
deposited by the Depositor which are issued by the
Trustee in its individual capacity for the account of the
Depositor, and the Trustee may otherwise deal with the
Depositor and the Trustee with the same rights and
powers as if it were not the Trustee hereunder.
Section 5.02. Books, Records and Reports;: The
Trustee shall keep proper books of record and account of all
the transactions of each Trust and Book Entry
Positions recorded on the books of the Trustee under this
Indenture at the Trustee's 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 Trustee's usual business hours.;
The Trustee shall cause 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, (i) if the Sponsor
shall provide to the Trustee a written
representation concluding that in the best judgment of the
Sponsor ceasing to prepare such annual audited statement
would not have a material adverse impact on the
marketability of the Units in the secondary market or (ii)
if the cost to a Trust for preparation of such statements
shall exceed an amount equivalent to $.05 per
Unit on an annual basis then the Trustee shall not be
required to have such statements prepared.
To the extent permitted under the Investment Company Act of
1940 as evidenced by an opinion of 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 each Trust
required by law or regulation in connection with the
maintenance of a secondary market in units of each 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 laws.
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 5.03. Indenture and List of Bonds on
File;: The Trustee shall keep a certified copy or duplicate
original of this Indenture on file at its
corporate trust office available for inspection at all
reasonable times during the Trustee's usual business hours
by any Unitholder, together with a current list of
the Bonds in each Trust.
Section 5.04. Compensation;: With respect to
Insured Trusts and Traditional Trusts, for services
performed under this Indenture, the Trustee shall be
paid at the rate specified under the caption "Essential
Information _ Trustee's Annual Fees," in the Prospectus,
provided, however, that for services performed prior
to the record date for the second distribution from the
Interest Account indicated under "Interest Distribution" for
each Trust in the Prospectus, the Trustee's
compensation shall be computed in respect of all Units
outstanding at the rate specified for the monthly plan of
distribution. Such compensation with respect to
each Trust shall be computed on the basis of the largest
principal amount of Bonds in such trust at any time during
the period with respect to which such
compensation is being computed. The Trustee may
periodically adjust the compensation provided for pursuant
to this paragraph in response to fluctuations in
short-term interest rates and average cash balances of the
Trust accounts (reflecting the cost to the Trustee of
advancing funds to a Trust to meet scheduled
distributions and changes in anticipated earnings on cash
balances) and may, in addition, adjust such portion of its
fee as is not computed by reference to the cash
balances in the Trust accounts in accordance with 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, if such index no
longer exists, a comparable index. 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 of each Trust 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 relating to such Trust for any and all
expenses, including the fees of counsel which may be
retained by the Trustee in connection with its
activities hereunder and disbursements incurred hereunder
and any extraordinary services performed by the Trustee
hereunder relating to such Trust. The Trustee
shall be indemnified ratably by the affected Trust 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 this 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 of the affected Trust shall be
insufficient to provide for amounts payable pursuant to this
Section 5.04 the Trustee shall have the power to sell (i)
Bonds of the affected Trust from the current
list of Bonds designated to be sold pursuant to Section 4.02
hereof, or (ii) if no such Bonds have been so designated
such Bonds of the affected Trust 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 5.04. The Trustee
shall not be liable or responsible in any way for
depreciation or loss incurred by reason of any sale of Bonds
made pursuant to this Section 5.04. Any moneys
payable to the Trustee pursuant to this Section shall be
secured by a prior lien on the affected Trust.
Section 5.05. 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 trusts created
by this Indenture, by executing an instrument
in writing resigning as Trustee of such trusts and filing
the 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 5.05(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. In case at any time the Trustee
shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the
Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the
Trustee or of its property or affairs for the purposes of
rehabilitation, conservation or liquidation, then in any
such case the Depositor may remove the Trustee 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; provided that a notice of such removal and
appointment of a successor trustee shall be mailed by the
Depositor to each Unitholder then of record.
(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 Bonds 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 retiring 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. The
retiring Trustee shall, nevertheless, retain a lien upon all
Bonds and moneys at the time held by it
hereunder to secure any amounts then due the retiring
Trustee.
(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 corporation into which any trustee hereunder
may be merged or with which it may be consolidated, or any
corporation 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.
(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 5.06. 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.
Article VI Rights of Unitholders
Section 6.01. Beneficiaries of Trust;: By the
purchase and acceptance or other lawful delivery and
acceptance of a Certificate of a Trust or the purchase
and acceptance of any Book Entry Position or other lawful
delivery and acceptance of such Book Entry Position
including receipt of a Book Entry Confirmation, the
Unitholder (i) shall be deemed to be a beneficiary of such
Trust and vested with all right, title and interest in such
Trust to the extent of the Unit or Units or
fraction thereof set forth and evidenced by such Certificate
or Book Entry Position and (ii) shall assent to and be bound
by the terms and conditions of this
Indenture.
Section 6.02. 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 prior to the
termination of the Trust tender his Units to the Trustee for
redemption in accordance with Section 4.02.
(b) The death or incapacity of any Unitholder shall
not operate to terminate this Indenture or the related
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 Fund or the
related 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 Bonds or
moneys from time to time received, held and applied by the
Trustee hereunder.
(c) No Unitholder shall have any right to vote or in
any manner otherwise control the operation and management of
the Trust Fund, the related Trust or the
obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the 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 VII Additional Covenants; Miscellaneous Provisions
Section 7.01. Amendments;: 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 (a) to cure any ambiguity or to
correct or supplement any provision contained herein which
may be defective or inconsistent with any other
provision contained herein; or (b) 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 hereunder above the
number of Units as set forth in the Prospectus under the
caption "Essential Information _ Number of Units" except as
provided in Section 4.04 hereof or such lesser
amount as may be outstanding at any time during the term of
this Indenture or (2) subject to Sections 3.08 and 3.14,
permit the deposit or acquisition hereunder of
obligations or other securities either in addition to or in
substitution for any of the Bonds.
Promptly after the execution of any such amendment the
Trustee shall furnish written notification to all the
outstanding Unitholders of the substance of such
amendment.
Section 7.02. Termination;: Each Trust shall
terminate upon the maturity, redemption, sale or other
disposition as the case may be of the last Bond held
in such Trust unless sooner terminated as hereinbefore
specified and may be terminated at any time by the written
consent of one hundred per cent of the Unitholders
of the respective Trust; provided, that in no event shall
any Trust continue beyond the end of the calendar year
preceding the fiftieth anniversary of the execution
of this Indenture for National and State Trusts, beyond the
end of the calendar year preceding the twentieth anniversary
of its execution for Long Intermediate and
Intermediate Trusts and beyond the end of the calendar year
preceding the tenth anniversary of its execution for Short
Intermediate and Short Term Trusts. Written
notice of any termination, specifying for Certificated
Unitholders the time or times at which the Certificated
Unitholders of such Trust may surrender their
Certificates for cancellation shall be given by the Trustee
to each such Certificated Unitholder at his address
appearing on the registration books of the Trustee.
Written notice of any termination shall be given by the
Trustee to each Book Entry Unitholder at his address
appearing on the registration books of the Trustee.
Within a reasonable period of time after the termination of
a Trust the Trustee shall fully liquidate the Bonds of such
Trust then held, if any, and shall:
(a) deduct from the Interest Account of such Trust or,
to the extent that funds are not available in such Account,
from the Principal Account of such Trust and
pay to itself individually an amount equal to the sum of (1)
its accrued compensation for its ordinary recurring services
in connection with such Trust, (2) any
compensation due it for its extraordinary services in
connection with such Trust and (3) any costs, expenses or
indemnities in connection with such Trust as provided
herein;
(b) deduct from the Interest Account of such Trust or,
to the extent that funds are not available in such Account,
from the Principal Account of such Trust and
pay accrued and unpaid fees of bond counsel in connection
with such Trust, if any, as directed and certified to by the
Depositor;
(c) deduct from the Interest Account of such Trust or
the Principal Account of such Trust any amounts which may be
required to be deposited in the Reserve
Account of such Trust 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 in connection with such Trust;
(d) distribute to each Unitholder of such Trust, upon
surrender for cancellation of his Certificate or
Certificates, if any, such holder's pro rata share of
the balance of the Interest Account of such Trust;
(e) distribute to each Unitholder of such Trust, upon
surrender, for cancellation by the Unitholder of his
Certificate or Certificates, if any, such
Unitholder's pro rata share of the balance of the Principal
Account of such Trust; 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 of such Trust as shall
be represented by the Units therein evidenced by the
outstanding Certificate or Certificates held of record by
such Unitholder and/or as evidenced on the records of
the Trustees as Book Entry Positions.
The Trustee shall be under no liability with respect to
moneys held by it in the Interest, Reserve and Principal
Accounts of a Trust 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 Certificated Unitholders of
such Trust 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 such remaining
Certificated Unitholders to surrender their written
Certificates for cancellation and receive the liquidation
distribution with respect thereto. If within one year after
the second notice all the Certificates of such
Trust shall not have been surrendered for cancellation, the
Trustee may take steps, or may appoint an agent to take
appropriate steps, to contact such remaining
Certificated Unitholders concerning surrender of their
Certificates and the cost thereof shall be paid out of the
moneys and other assets which remain in such Trust
hereunder.
Section 7.03. 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 7.04. Registration of Units;: The
Depositor agrees and undertakes to register the Units with
the Securities and Exchange Commission or other
applicable governmental agency pursuant to applicable
Federal or State statutes, if such 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 Fund created hereunder, and the Trustee shall
incur no liability or be under any obligation or
expense in connection therewith, except as provided in
Section 3.01.
Section 7.05. Written Notice;: Any notice,
demand, direction or instruction to be given to the
Depositor hereunder shall be in writing and shall be duly
given if mailed or delivered to the Depositor at 333 West
Wacker Drive, Chicago, Illinois 60606, or at such other
address as shall be specified by the Depositor to
the Trustee in writing. Any notice, demand, direction or
instruction to be given to the Trustee shall be in writing
and shall be duly given if mailed or delivered
to the Trustee's Office or such other address as shall be
specified to the Depositor by the Trustee 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 7.06. 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.
.c2.Section 7.07. Dissolution of Depositor Not to
Terminate;: The dissolution of the Depositor from or for
any cause whatsoever shall not operate to
terminate this Indenture insofar as the duties and
obligations of the Trustee are concerned.
In Witness Whereof, John Nuveen & Co. Incorporated, has
caused this Standard Terms and Conditions of Trust to be
executed by its President, one of its Vice
Presidents or one of its Assistant Vice Presidents and its
corporate seal to be hereto affixed and attested by its
Secretary or its Assistant Secretary and The Chase
Manhattan Bank (National Association) has caused this Trust
Indenture and Agreement to be executed by one of its Vice
Presidents or Second Vice Presidents and its
corporate seal to be hereto affixed and attested to by one
of its Assistant Treasurers; all as of the day, month and
year first above written.
John Nuveen & Co. Incorporated,
Depositor
By
Authorized Officer
(Seal)
Attest:
By_______________________________
Assistant Secretary
The Chase Manhattan Bank (National Assocation), Trustee
By
Second Vice President
(Seal)
Attest:
By_______________________________
Assistant Treasurer
<PAGE>
Exhibit 1.1.1
Nuveen Tax-Exempt Unit Trust Series 823
Trust Indenture and Agreement
Dated September 7, 1995
This Trust Indenture and Agreement by and between John
Nuveen & Co. Incorporated, as Depositor and The Chase
Manhattan Bank (National Association), 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 Nuveen
Tax-Exempt Unit Trust Series 823 and subsequent Series,
effective September 7, 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,
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(1) listed in
Schedule A hereto have been deposited in trust under this
Trust Indenture and Agreement.
(b) The fractional undivided interest in and ownership
of the Trust Fund represented by each Unit for a Trust on
the Initial Date of Deposit is the amount set
forth under the captions "Essential Information _ Fractional
Undivided Interest in the Trust per Unit" in the Prospectus.
(c) The number of Units created of a Trust are as set
forth under the caption "Essential Information - Number of
Units" in the Prospectus for each Trust.
In Witness Whereof, John Nuveen & Co. Incorporated, has
caused this Trust Indenture and Agreement for Nuveen
Tax-Exempt Unit Trust Series 823 to be executed by its
President, one of its Vice Presidents or one of its
Assistant Vice Presidents and its corporate seal to be
hereto affixed and attested by its Secretary or its
Assistant Secretary and The Chase Manhattan Bank (National
Association) has caused this Trust Indenture and Agreement
to be executed by one of its Vice Presidents or
Second Vice Presidents and its corporate seal to be hereto
affixed and attested to by one of its Assistant Treasurers;
all as of the day, month and year first above
written.
John Nuveen & Co. Incorporated,
Depositor
By Larry Woods Martin
Authorized Officer
(Seal)
Attest:
By Morrison C. Warren
Assistant Secretary
The Chase Manhattan Bank (National Association), Trustee
By Timothy Kelley
Second Vice President
(Seal)
Attest:
By Joseph Lyons
Assistant Treasurer
Schedule A to the Trust Indenture and AgreementSecurities
Initially DepositedinNuveen Tax-Exempt Unit Trust Series 823
(Note: Incorporated herein and made a part hereof is the
"Schedule of Investments" as set forth for each Trust in the
Prospectus.)
<PAGE>
EXHIBIT 3.1
(ON CHAPMAN AND CUTLER LETTERHEAD)
9/07/95
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, Illinois 60606
RE: Nuveen Tax-Exempt Unit Trust, Series 823
Gentlemen:
We have served as counsel for you, as depositor of Nuveen Tax-Exempt Unit
Trust, Series 823 (hereinafter referred to as the "Fund"), in connection
with the issuance under the Trust Indenture and Agreement dated the date
hereof between John Nuveen & Co. Incorporated, as Depositor, and The Chase
Manhattan Bank (National Association), as Trustee, of Units of fractional
undivided interest in the one or more Trusts of said Fund (hereinafter
referred to as the "Units").
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 Indenture and Agreement and
the establishment of book entry positions and the execution and issuance of
certificates evidencing the Units in the Trusts of the Fund have been duly
authorized; and
2. The book entry positions and certificates positions evidencing the
Units in the Trusts of the Fund when duly executed and delivered or duly
established by the Depositor and the Trustee in accordance with the
aforementioned Trust Indenture and Agreement, will constitute valid and
binding obligations of such Trusts and the Depositor in accordance with the
terms thereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62325) 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>
EXHIBIT 4.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of
our report and to all references to our Firm included in or made a
part of this Registration Statement.
ARTHUR ANDERSON LLP
Chicago, Illinois
9/07/95
<PAGE>
EXHIBIT 4.2
(On J. J. Kenny Co., Inc. Letterhead)
9/07/95
John Nuveen & Company
333 West Wacker Drive
Chicago, IL 60606
Re: Nuveen Tax Exempt Unit Trust, Series 823
Gentlemen:
We have examined the registration statement File No. 33-62325
for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc.
is currently acting as the evaluator for the trust. We hereby
consent to the use in the Registration Statement of the reference
to Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc.
as evaluator.
In addition, we hereby confirm that the ratings indicated in the
Registration Statement for the respective bonds comprising the trust
portfolio are the ratings currently indicated in our KENNYBASE database.
You are hereby authorized to file a copy of this letter with the
Securities and Exchange Commission.
Sincerely,
Frank A. Ciccotto
<PAGE>
EXHIBIT 4.1
(ON STANDARD & POOR'S, A DIVISION OF THE MCGRAW-HILL COMPANIES LETTERHEAD)
9/07/95
John Nuveen & Company
333 West Wacker Drive
Chicago, Illinois 60606
Re: NUVEEN TAX EXEMPT UNIT TRUST, SERIES 823
This is in response to your requests regarding the above-captioned
fund which consists of separate underlying insured and traditional unit
investment trusts, SEC file # 33-62325.
INSURED TRUSTS.
With respect to the insured trusts we have reviewed the information
presented to us and have assigned a 'AAA' rating to the units of each insured
trust and a 'AAA' rating to the securities contained in each insured trust.
The ratings are direct reflections of the portfolio of each insured trust,
which will be composed soley of securities covered by bond insurance policies
that insure against default in the payment of principal and interest on the
securities contained in each insured trust for as long as they remain
outstanding. We understand that the bonds described in the prospectus are the
same as those in the attatched list. Since such policies have been issued by
MBIA which has been assigned a 'AAA' claims paying ability rating by S&P, S&P
has assigned a 'AAA' to the units of each insured trust and a 'AAA' rating to
the securities contained in each trust.
You have permission to use the name of Standard & Poor's, a Division of
The McGraw-Hill Companies and the above-assigned rating in connection with your
dissemination of information relating to the insured trusts provided that it is
understood that the ratings are not 'market' ratings nor recommendations to buy,
hold or sell the units of the insured trusts or the securities contained in the
insured trusts. Further, it should be understood the rating on the units of
each insured trust does not take into account the extent to which the trust's
expenses or portfolio asset sales for less than the 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, a Division of The McGraw-Hill Companies in connection with the rating
assigned to the units of each insured trust in the registration statement or
prospectus relating to the units and 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 Standard and Poor's, a Division of The
McGraw-Hill Companies in connection with the ratings assigned to the securities
contained in the insured 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 certification received by
us, we reserve the right to nullify the ratings.
<PAGE>
TRADITIONAL TRUSTS.
With respect to the traditional unit investment trusts within the
above-captioned fund, we have reviewed the information presented to us and we
hereby confirm that the ratings indicated in the prospectus as being assigned
by Standard & Poor's, a Division of The McGraw-Hill Companies to the securities
contained in each traditional trust of such fund are, according to our records,
the ratings currently assigned by Standard & Poor's, a Division of The
McGraw-Hill Companies to such securities. You understand that Standard
& Poor's, a Division of The McGraw-Hill Companies has not consented to, and will
not consent to, being named as "expert" under the federal securities laws,
including and without limitation, Section 7 of the Securities Act of 1933, with
respect to the ratings on any securities contained in any of the traditional
trusts.
Please note that the 'AAA' rating assigned to the units of each
insured trust does not apply to the units of any of the traditional trusts.
STANDARD & POOR'S, A DIVISION
OF THE MCGRAW-HILL COMPANIES
Sanford Bragg
<PAGE>
EXHIBIT 3.2
(ON CHAPMAN AND CUTLER LETTERHEAD)
9/07/95
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, Illinois 60606
RE: Nuveen Tax-Exempt Unit Trust, Series 823
Gentlemen:
We have served as counsel for you, as Depositor of Nuveen Tax-Exempt Unit
Trust, Series 823 (the "Fund") in connection with the issuance under the
Trust Indenture and Agreement, dated the date hereof between John Nuveen & Co.
Incorporated, as Depositor, and The Chase Manhattan Bank (National Association),
as Trustee, of Units of fractional undivided interest (the "Units"), as
evidenced by a book entry position or certificate, if requested by the purchaser
of Units, in the one or more Trusts of said Fund.
We have also served as counsel for you in connection with all previous
Series of the Nuveen Tax-Exempt Unit Trust and as such have previously
examined such pertinent records and documents and matters of law as we have
deemed necessary, including (but not limited to) the Trust Indenture and
Agreements with respect to those series. We have also examined such
pertinent records and documents and matters of law as we have deemed
necessary including (but not limited to) the Trust Indenture and Agreement
relating to Nuveen Tax-Exempt Unit Trust, Series 823.
We have concluded that the Trust Indenture and Agreement for the Fund and
its counterpart in each of the prior issues of Nuveen Tax-Exempt Unit Trust
are in all material respects substantially identical.
Based upon the foregoing, and upon such matters of law as we consider
to be applicable we are of the opinion that, under existing federal income
law:
(i) For Federal income tax purposes, each of the Trusts will not be
taxable as an association 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 of the Fund in the proportion
that the number of Units of such Trust held by him bears to the total number
of outstanding Units of such Trust. Under Subpart E, Subchapter J of Chapter
1 of the Code, income of each Trust will be treated as income of each
Unitholder thereof in the proportion described and an item of 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 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 Unitholder, except in the case of a Unitholder
who is a substantial user (or a person related to such user) of a facility
financed through issuance of any industrial development bonds or certain
private activity bonds held by the Trust. In the case of such Unitholder who
is a substantial user (and no other) interest received and original issue
discount 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 Sections 56(f) and 56(g)
of the Code, the enviromental tax (the "Superfund Tax") imposed by Sections
59A of the Code, and the branch profits tax imposed by Section 884 of the Code
with repect 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 such Units.
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 the Trust 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 Trust, but only to the extent that such advances are to be
repaid to the Trustee out of interest received by the Fund with respect to
such Bonds. In addition, such basis will be increased by both the
Unitholder's aliquot share of the accrued original issued discount with
respect to each Bond held by the Trust with respect to which there was an
original issue discount and reduced by the annual amortization of bond
premium, if any, on Bonds held by the Trust.
<PAGE>
(iv) If the Trustee disposes of a Trust asset (whether by sale, payment on
maturity, redemption or otherwise), gain or loss is recognized to the
Unitholder and the amount thereof is measured by comparing the
Unitholder's aliquot share of the total proceeds from the transaction
with his basis for his fractional interest in the asset disposed of. Such
basis is ascertained by apportioning the tax basis for his Units among each
of the Trust assets (as of the date on which his Units were acquired) ratably
according to their values as of the valuation date nearest the date on which
he purchased such Units. A Unitholder's basis in his Units and of his
fractional interest in each Trust asset must be reduced by the amount of his
aliquot share of interest received by the 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, must be
reduced by the annual amortization of bond premium, if any, on Bonds held by
the Trust and must be increased by the Unitholder's share of accrued
original issue discount with respect to each Bond which, at the time
the Bond was issued, had original issue discount.
(v) In the case of any Bond held by the Trust where the "stated
redemption price at maturity" exceeds the "issue price," such excess shall
be original issue discount. With respect to each Unitholder, upon the
purchase of his Units subsequent to the original issuance of Bonds held by the
Trust Section 1272(a)(7) of the Code provides for a reduction in the accrued
"daily portion" of such original issue discount upon the purchase of a Bond
subsequent to the Bond's original issue, under certain circumstances. In the
case of any Bond held by the Trust the interest on which is excludable from
gross income under Section 103 of the Code, any original issue discount which
accrues with respect thereto will be treated as interest which is excludable
from gross income under Section 103 of the Code.
(vi) In the case of any Bond which matures within one year of the date
issued, the accrual of tax-exempt original issue discount will generally be
computed daily on a ratable basis unless the Unitholder elects to accrue such
discount under a constant yield method, compounded daily.
(vii) In the case of any Bond which does not mature within one year
after the date issued, tax-exempt original issue discount will accrue
daily, computed generally under a constant yield method, compounded
semiannually (with straight line interpolation between compounding dates).
(viii) In the case of Trusts for which MBIA Insurance Corporation ("MBIA")
insurance with respect to each of the Bonds deposited therein has been obtained
by the Depositor or the issuer or underwriter of the Bonds, we have examined
the form of MBIA's policy or several policies of insurance (the "Policies")
which have been delivered to the Trustee. Assuming issuance of Policies in such
form, in our opinion, any amounts paid under said Policies representing 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 by the respective 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 Policy proceeds representing
maturing interest.
<PAGE>
Because the Trusts do not include any "specified private activity bonds"
within the meaning of Section 57(a)(5) of the Code issued on or after August
8, 1986, none of the Trust Fund's 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 alter-
native 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) is an amount equal to 50% of the excess of such
corporation's "adjusted net book income" over an amount equal to its AMTI
(before such adjustment item and the alternative tax net operating
loss deduction). For taxable years beginning after 1989, such adjustment item
will be 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 net operating loss deduction) pursuant to
Section 56(g) of the Code. Both "adjusted net book income" and "adjusted
current earnings" include all tax-exempt interest, including interest on all
Bonds in the Trust, and tax-exempt original issue discount.
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 generally provides for a reduction
in each taxable year of 100% of the otherwise deductible interest on
indebtedness incurred or continued by financial institutions, to which either
Section 585 or Section 593 of the Code applies, to purchase or carry
obligations acquired after August 7, 1986, the interest on which is exempt
from federal income taxes for such taxable year. Under rules prescribed by
Section 265, the amount of interest otherwise deductible by such financial
institutions in any taxable year which is deemed to be attributable to
tax-exempt obligations acquired after August 7, 1986 will 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.
<PAGE>
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 by taxpayers other than certain financial institutions, as referred to
above, is not deductible for Federal income tax purposes. Under rules used by
the Internal Revenue Service for determining when borrowed funds are con-
sidered 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 pays for Bonds or the price
a Unitholder pays for his or her Units. Under the Tax Act, accretion of market
discount is taxable as ordinary income; under prior law, the accretion had been
treated as capital gain. Market discount that accretes while a Trust holds a
Bond would be recognized as ordinary income by the Unitholders when principal
payments are received on the Bond, upon sale or at redemption (including early
redemption), or upon the sale or redemption of his or her Units, unless a
Unitholder elects to include market discount in taxable income as it accrues.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62325) 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>
EXHIBIT 3.3
(ON VENABLE, BAETJER AND HOWARD LETTERHEAD)
9/07/95
Nuveen Tax-Exempt Unit Trust --
Series 823, Maryland Traditional Trust 310
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606
Attn: James J. Wesolowski, Esquire
Vice President, General Counsel
and Secretary
Chase Manhattan Bank, N.A.,
as Trustee of Nuveen Tax-Exempt Unit Trust --
Series 823, Maryland Traditional Trust 310
770 Broadway
New York, New York 10003
Gentlemen:
We have acted as special Maryland counsel to the Nuveen Tax-Exempt Unit
Trust-- Series 823 (the "Fund") with respect to the issuance by the Fund
of units of fractional undivided interest in the Fund (the "Units") as
described in a certain Registration Statement (No. 33-62325) on Form S-6
under the Securities Act of 1933, as amended (the "Registration Statement").
The Fund has been organized under a Trust Indenture and Agreement dated
as of the date hereof between John Nuveen & Co. Incorporated (the "Depositor")
and Chase Manhattan Bank, N.A. (the "Trustee"). The Fund will
issue the Units in several Trusts, one of which is the Maryland Traditional
Trust 310 (the "Trust"). The Units will be purchased by various
investors (the "Unitholders"). Each Unit of the Trust represents a fractional
undivided interest in the principal and net income of the Trust in the ratio
of ten Units for each $1,000 principal amount of the obligations initially
acquired by the Trust. Each trust will be administered as a distinct entity
with seperate certificates, investments, expenses, books and records.
The assets of the Trust will consist of interest-bearing obligations
issued by or on behalf of the State of Maryland, its political subdivisions
and authorities and, provided the interest thereon is exempt from State
income tax under the laws or treaties of the United States, obligations
issued by or on behalf of the territories or possessions of the United
States, including Puerto Rico, the Virgin Islands and Guam, and their
political subdivisions and authorities (the "Bonds").(N.1) Distributions
of the interest received by the Trust will be made semi-annually unless the
Unitholder elects otherwise.
You have requested our opinion as to the application of Maryland state and
local taxes to the Trust and the Unitholders. In rendering our
opinion, we have assumed (i) that the interest on all Bonds in the Trust will
be exempt from Federal income tax (N.2) and (ii) that the Bonds have been
issued in strict compliance with all requirements of Maryland law and, where
applicable, Federal or territorial law. Furthermore, in rendering our
opinion, we have relied on the opinion of Messrs. Chapman and Cutler, of even
date herewith, that:
(i) The Trust will not be taxable as an association but will be governed
by the provisions of Subchapter J (relating to trusts) of Chapter 1 of the
Internal Revenue Code of 1986 (the "Code");
(ii) Each Unitholder will be considered the owner of a pro rata
portion of the Trust and will be subject to Federal income tax on the income
therefrom under the provisions of Subpart E of Subchapter J of Chapter 1 of
the Code;
(iii) The Trust, itself, will not be subject to Federal income taxes;
(iv) For Federal income tax purposes, each item of Trust 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 the
Trust consists of interest excludable from Federal gross income, such income
will be excludable from Federal gross income of the Unitholder;
<PAGE>
(v) For Federal income tax purposes, each Unitholder will have a
taxable event upon the redemption or sale of his Unit. Gain or loss will
be determined by comparing the proceeds of such a redemption or sale with
the Unitholder's adjusted basis for the Unit. Before adjustment, this basis
would be cost, if the Unitholder had purchased his Units. For Federal
income tax purposes, if the Trustee disposes of a Trust asset (whether
by sale, payment on maturity, retirement or otherwise), gain or loss will
result to each Unitholder; such gain or loss is to be computed by measuring
the Unitholder's aliquot share of the total proceeds from the transaction
against his basis for his fractional interest in the asset disposed of (such
basis being determined by apportioning the basis for his Units among all of
the Trust's assets ratably according to their values as of the valuation
date nearest the date on which he purchased his Units). A
Unitholder's basis in his Units and the basis for his fractional
interest in each Trust asset must be reduced by the amount of his aliquot
share of interest received, 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 and must be reduced
annually for amortization of premiums, if any, on obligations held by the
Trust.
Based upon the foregoing, we are of the opinion, for Maryland State
and local tax purposes, that:
(1) The Trust will not be recognized as an association taxable as a
corporation, and the income of the Trust will be treated as the income of
the Unitholders.
(2) Interest received by the Trust on obligations of the State of
Maryland or its political subdivisions and authorities, or of territories
and possessions of the United States (to the extent federal law exempts
interest on obligations of territories or possessions of the United States
from state taxation) will be exempt from Maryland state and local income
taxes when allocated to an individual Unitholder of the Trust.
(3) Interest or profit realized from a sale or exchange of bonds
issued by the State of Maryland or one of its political subdivisions
derived from the Trust by a financial institution, as defined in Section
8-101(c) of the Tax-General Article of the Annotated Code of Maryland,
will be subject to the Maryland state franchise tax on financial institutions,
except to the extent such interest is expressly exempt from the Maryland state
franchise tax by the statutes which authorize the isuance of such Bonds
(See Section 8-204 of the Tax-General Article of the Annotated Code of
Maryland).
(4) A Unitholder will not be subject to Maryland state or local
income tax with respect to gain realized when Bonds held in the Trust are
sold, redeemed or paid at maturity, except with respect to gain realized upon
a sale, redemption, or payment at maturity of such Bonds as are issued by or
on behalf of the United States' territories or possessions, their political
subdivisions and authorities; such gain will equal the proceeds of sale,
redemption or payment, less the tax basis of the Bond (adjusted to reflect
(a) the amortization of Bond premium or discount, and (b) the deposit in the
Trust after the Unitholder's settlement date of Bonds with accrued
interest).
(5) Gain realized by a Unitholder from the redemption, sale or
other disposition of a Unit will be subject to Maryland state income tax
and Maryland local income tax except in the case of individual Unitholders
who are not Maryland residents.
(6) Maryland presently imposes an income tax on items of tax preference
with reference to such items as defined in the Code. For taxable years
beginning after December 31, 1986, interest paid on certain private activity
bonds constitutes a tax preference pursuant to Section 57 (a) (5) of the
Code. Accordingly, if the Maryland Series holds such bonds, 50% of the
interest would be taxable by Maryland under the provisions of Section
10-205(f) of the Tax-General Article of the Annotated Code of Maryland,
subject to a threshold amount.
(7) Interest on indebtedness incurred or continued (directly or
indirectly) by a Unitholder to purchase or carry Units in the Trust
will not be deductible for Maryland State or local income tax purposes.
(8) Trust Units will be subject to Maryland inheritance and estate tax
only if held by Maryland residents.
(9) Neither the Bonds nor the Units will be subject to the Maryland
personal property tax, sales tax or use tax.
This letter is not to be construed as a prediction of a favorable outcome
with respect to any issue for which no favorable prediction is made herein, or
as a guaranty of any tax result, or as offering an assurance or guaranty that
a Maryland state or local taxing authority might not differ with our
conclusions, or raise other questions or issues upon audit, or that such
action may not be judicially sustained.
We have not examined any of the Bonds to be deposited in the Fund and held
by the Trust, and express no opinion as to whether the interest on any such
Bonds would in fact be tax-exempt if directly received by a Unitholder;
nor have we made any review of the proceedings relating to the issuance of the
Bonds or the basis for the bond counsel opinions or the opinions of Messrs.
Chapman and Cutler referred to herein.
<PAGE>
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm in such Registration
Statement and the Preliminary Prospectus included therein. In giving
such consent, we do not thereby admit that we are within the category of
persons whose consent is required by Section 7 of the Securities Act of 1933,
as amended, and the rules and regulations thereunder.
_______________________
(N.1)It is understood that, from time to time, some uninvested cash may be
held in the Trust.
(N.2)Section 2.01 of the Indenture provides that the Depositor may deposit
delivery statements relating to contracts for the purchase of Bonds (rather
than actual Bonds) into the Trust. We understand that, should any such
contract to purchase Bonds fail, the Depositor intends to pay to all
Unitholders an amount equivalent to the interest that would have been
paid to such Unitholders had the contract not failed. Such amount
will constitute taxable income for Federal income tax purposes.
Very truly yours,
VENABLE, BAETJER AND HOWARD
<PAGE>
EXHIBIT 3.3
(ON SHERMAN & HOWARD L.L.C. LETTERHEAD)
9/07/95
Nuveen Tax-Exempt Unit Trust,
Series 823
c/o Chase Manhattan Bank, N.A.
770 Broadway
New York, New York 10003
RE:
Colorado Insured Trust 60
Ladies and Gentlemen:
We have acted as special counsel to the Nuveen Tax-Exempt Unit Trust,
Series 823 (the "Fund") with respect to certain applications of the
income tax law of the State of Colorado to the above captioned Trust(s)
created as part of the Fund (the "Colorado Trust(s)") and to the holders of
certificates or registered holders of book entry positions evidencing
ownership of fractional undivided interest ("Units") in the Colorado Trust(s)
who are residents of the State of Colorado ("Colorado Unitholders").
In this connection, we have examined the form of an opinion of Chapman and
Cutler, counsel for John Nuveen & Co. Incorporated, the Depositor, to be dated
today, as to the federal tax status of the several constituent trusts of the
Fund and the holders of Units, including the Colorado Trust(s) and the
Colorado Unitholders. Chapman and Cutler has advised us that its opinion, as
executed and delivered, will be in all material respects identical to such
form. We have also examined such pertinent materials and matters of law as
we deemed necessary in order to enable us to express the opinions hereinafter
set forth.
It is our understanding that a Colorado Trust will consist of
obligations which were issued by the State of Colorado or its political
subdivisions or by the United States or possessions of the United States,
including Puerto Rico, the Virgin Islands and Guam ("Bonds"). The following
opinion assumes that the Colorado Trust(s) will have no income other than
(i) interest income on the Bonds, (ii) insurance proceeds, if any, referred
to in paragraph (3) below, and (iii) gain on the disposition of such Bonds.
Based on the foregoing and, with your permission, in reliance upon the
opinion of Chapman and Cutler referred to above, it is our opinion that
application of existing Colorado income tax law would be as follows:
The Chapman and Cutler opinion concludes that each trust, including the
Colorado Trust(s), will be governed by the provisions of subchapter J of
chapter 1, Internal Revenue Code of 1986 (the "Code"). Although there are no
Colorado income tax statutes similar to subchapter J of chapter 1 of the Code,
the Colorado statutory provisions generally operate to reach the same result
that is reached under the federal system. The income, deduction, and credit
items directly reportable by the "owner" of a trust under the federal rules
are also directly reportable by that same person under Colorado rules.
Conversely, items of income, deduction, and credit not reportable for federal
purposes typically are not reported for Colorado purposes. For resident
individuals, estates, and trusts, Colorado law imposes a tax on federal
taxable income, as defined in the Code, with specific modifications. For
corporations, a tax is imposed on net income derived from sources within
Colorado. A corporation's net income is defined as federal taxable income,
again with certain modifications. There are two modifications relevent to
this opinion. First, interest income less amortization of premium on
obligations of any state or any politcal subdivision thereof must be added
to federal taxable income; however, interest income on obligations of the
State of Colorado or a political subdivision thereof which are issued on or
after May 1, 1980 is specifically excluded from this modification. Interest
income on obligations of the State of Colorado or a political subdivision
thereof which were issued before May 1, 1980 is also excluded from this
modification to the extent that such interest is specifically exempt from
income taxation under the laws of the State of Colorado authorizing the
issuance of such obligations. The second relevent modification is that
interest income on obligations of the United States and its possessions is
subtracted from federal taxable income to the extent it was included in
federal taxable income.
Colorado also imposes on individuals, estates, and trusts an alternative
minimum tax based on the federal alternative minimum taxable income determined
pursuant to Section 55 of the Code. As with the modifications to federal
taxable income pertaining to interest income on Colorado exempt obligations,
interest income on obligations of the State of Colorado and political
sudivisions thereof which are issued on or after May 1, 1980, or which were
issued prior to May 1, 1980 but have interest specifically exempt from income
taxation under the Colorado laws authorizing the issuance of such obligations,
is not included in the modification that otherwise requires that interest
income from obligations of states or political subdivisions thereof be added
to federal alternative minimum taxable income. Furthermore, interest income
on obligations of the United States and its possessions is subtracted from
federal alternative minimum taxable income.
Because Colorado income tax law is based upon the federal law and in light
of the opinion of Chapman and Cutler, the Colorado Trust(s) will not be
association(s) taxable as corporation(s) for purposes of Colorado income
taxation.
<PAGE>
With respect to Colorado Unitholders, in view of the relationship
between federal and Colorado tax computations described above and the opinion
of Chapman and Cutler referred to above:
1. Each Colorado Unitholder will be treated as owning a share of
each asset of the Colorado Unitholder's respective Colorado Trust for
Colorado income tax purposes, in the proportion that the number of
Units of such Colorado Trust held by the Unitholder bears to the
total number of outstanding Units of the Colorado Trust, and the
income of the Colorado Trust will therefore be treated as the income
of each Colorado Unitholder under Colorado law in the proportion
described;
2. Interest on Bonds that would not be included in the base subject to
Colorado income tax or Colorado alternative minimum tax when paid
directly to a Colorado Unitholder will not be included in the base
subject to Colorado income tax or alternative minimum tax when
received by a Colorado Trust and attributed to such Colorado
Unitholder and when distributed to such Colorado Unitholder;
3. Proceeds paid under an insurance policy, if any, issued to the issuer
of the Bonds involved, to the Depositor prior to deposit of the Bonds
in a Colorado Trust, or to a Colorado Trust, which proceeds
represent maturing interest on defaulted Bonds and which proceeds
would not be included in the base subject to Colorado income tax or
Colorado alternative minimum tax when paid directly to a Colorado
Unitholder will not be included in the base subject to Colorado
income and alternative minimum tax when received by a Colorado
Trust and attributed to such Colorado Unitholder and when
distributed to such Colorado Unitholder;
4. Each Colorado Unitholder will realize gain or loss taxable
in Colorado when the Colorado Unitholder's respective Colorado
Trust disposes of a Bond (whether by sale, exchange, redemption,
or payment at maturity) or when the Colorado Unitholder redeems or
sells Units at a price that differs from original cost as adjusted
for amortization of bond discount or premium and other basis
adjustments (including any basis reduction that may be required to
reflect a Colorado Unitholder's share of interest, if any, accruing
on Bonds during the interval between the Colorado Unitholder's
settlement date and the date such Bonds are delivered to the Colorado
Trust, if later);
5. Tax cost reduction requirements relating to amortization of bond
premium may, under some circumstances, result in Colorado
Unitholders realizing gain taxable in Colorado when their
Units are sold or redeemed for an amount equal to or less than their
original cost; and
6. If interest on indebtedness incurred or continued by a Colorado
Unitholder to purchase Units in the Colorado Trust is not
deductible for federal income tax purposes, it will not be
deductible for Colorado income tax purposes.
We have not examined any of the Bonds to be deposited in the Colorado
Trusts(s) and express no opinion as to whether the interest (or, if appli-
cable, insurance proceeds representing interest) on any such Bonds would in
fact be included in the base subject to Colorado income tax or Colorado
alternative minimum tax if directly received by a Colorado Unitholder.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62325) relating to the Units referred
to above and to the use of our name and the reference to our firm in such
Registration Statement, and in the related Prospectus, under the "Tax Status"
heading for each Colorado Trust in the Fund. In addition, we authorize
Chase Manhattan Bank, N.A. to rely upon this opinion in its capacity
as Trustee of the Fund.
Very truly yours,
SHERMAN & HOWARD L.L.C.
<PAGE>
EXHIBIT 3.3
(ON DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN LETTERHEAD)
9/07/95
John Nuveen & Co. Incorporated
333 W. Wacker Drive
Chicago, Illinois 60606
Chase Manhattan Bank, N.A.
770 Broadway
New York, New York 10003
Re: Nuveen Tax-Exempt Unit Trust, Series 823
Michigan Insured Trust 62
Gentlemen:
We have acted as special Michigan counsel to the captioned Trust(s)(the
"Michigan Trust(s)") of Nuveen Tax-Exempt Unit Trust - Series 823
(the "Fund") concerning a Registration Statement (No. 33-62325) on Form S-6
under the Securities Act of 1933, as amended, covering the issuance by the
Michigan Trust(s) of Units of fractional undivided interest in the Michigan
Trust(s) (the "Units").
The Michigan Trust(s) has (have) been organized under a Trust Indenture
and Agreement dated as of 9/07/95 between John Nuveen & Co. Incorporated, as
Depositor ("Nuveen"), and Chase Manhattan Bank, N.A., as Trustee
("Trustee"). The Fund will contain several trusts, including the Michigan
Trust(s), which will issue the Units. The Units of the Michigan Trust(s)
will be purchased by various investors (the "Unitholders"). Each Unit of
a Michigan Trust represents a fractional undivided interest in a Michigan
Trust. The Michigan Trust(s) and the other trusts each will be administered
as a distinct entity with separate certificates, investments, expenses, books
and records. Further, Nuveen, the Trustee and Municipal Bond Investors
Assurance Corporation will enter into an agreement for any Michigan Insured
Trust providing for the provision of insurance (the "Insurance") against the
nonpayment of principal and interest when due.
The assets of a Michigan Trust will consist of interest-bearing
obligations issued by or on behalf of the State of Michigan, and counties,
municipalities, authorities and political subdivisions thereof, and, in
limited instances, bonds issued by Puerto Rico, the Virgin Islands, Guam, the
Northern Mariana Islands or possessions of the United States (the "Bonds").
Distributions of the interest received by a Michigan Trust will generally
be made semi-annually unless the Unitholder elects otherwise.
We have been advised by Nuveen that in the opinion of bond counsel to each
issuer, the interest on all Bonds in a Michigan Trust is exempt from
Federal income tax under existing law.
Chapman and Cutler, counsel for Nuveen, has advised us that for federal
income tax purposes a Michigan Trust will not be taxable as an association
but will be governed by the provisions of Subchapter J (relating to Trusts)
of Chapter 1 of the Internal Revenue Code of 1986, as amended. Each
Unitholder will be considered the owner of a pro rata portion of the
Unitholder's repective Michigan Trust and will be subject to tax on the income
therefrom under the provisions of Subpart E of Subchapter J of Chapter 1 of
the Internal Revenue Code of 1986, as amended. A Michigan Trust itself will
not be subject to federal income taxes. For federal income tax purposes, each
item of income from a Michigan Trust 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 Michigan Trust consists of interest excludable
from gross income under Section 103 of the Internal Revenue Code of 1986, as
amended, such income will be excludable from federal gross income of the
Unitholder. In addition, if Insurance has been obtained, Chapman and Cutler
has examined the form of the policy of Insurance being issued with respect to
the Bonds and based thereon has advised us that any amounts paid under the
Insurance representing 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 by the
respective issuer.
Based upon the above information which, with Nuveen's consent, we have
relied upon, it is our opinion that for Michigan state and local tax pur-
poses, a Michigan Trust will be recognized as a trust not taxable as a
corporation.
We are further of the opinion that under existing law:
Under the Michigan income tax act, the Michigan single business tax act,
the Michigan intangibles tax act, the Michigan city income tax act (which
authorizes the only income tax ordinance which may be adopted by cities in
Michigan), and under the law which authorizes a "first class" school district
to levy an excise tax upon income, the Michigan Trust(s) will not be subject
to tax. The income of a Michigan Trust will be treated as the income of the
Unitholders and be deemed to have been received by them when received
by their respective Michigan Trust.
Interest on the Bonds in a Michigan Trust which is exempt from Federal
income tax is exempt from Michigan state and local income taxes and from the
Michigan single business tax. Further, any amounts paid under any Insurance
representing maturing interest on defaulted obligations held by the Trustee
will be excludable from Michigan state and local income taxes and from the
Michigan single business tax if, and to the same extent as, such interest
would have been so excludable if paid by the respective issuer.
For purposes of the foregoing Michigan tax laws (corporations and
financial institutions are not subject to the Michigan income tax), each
Unitholder will be considered to have received his pro rata share of
Bond interest when it is received by the Unitholder's respective Michigan
Trust, and each Unitholder will have a taxable event when the Unitholder's
respective Michigan Trust disposes of a Bond (whether by sale, exchange,
redemption or payment at maturity) or when the Unitholder redeems or sells
Units. Due to the requirement that tax cost be reduced to reflect
amortization of bond premium, under some circumstances a Unitholder may
realize taxable gain when Units are sold or redeemed for an amount equal to,
or less than, their original cost. The tax cost of each Unit to a Unitholder
will be allocated for purposes of these Michigan tax laws in the same manner
as the cost is allocated for Federal income tax purposes.
<PAGE>
Pursuant to the position of the Michigan Department of Treasury in a
bulletin dated December 19, 1986, the portion of the tax exempt bond fund
represented by the Bonds will be exempt from the Michigan Intangibles
Tax. The Department of Treasury has not indicated a position with respect
to treatment of amounts paid under a policy of insurance with respect to
maturing interest on defaulted obligations (which amounts would have been
exludable if paid by the respective issuer) for purposes of determining
the income base for the Michigan Intangibles Tax.
If a Unitholder is subject to the Michigan single business tax (i.e.
is engaged in a "business activity" as defined in the Michigan single
business tax act) and has a taxable event for Federal income tax purposes
when a Michigan Trust sells or exchanges Bonds or the Unitholder
sells or exchanges Units, such event may impact on the adjusted tax base upon
which the single business tax is computed. Any capital gain or loss realized
from such taxable event which was included in the computation of the
Unitholder's Federal taxable income, plus the portion, if any, of such
capital gain excluded in such computation and minus the portion, if any, of
such capital loss not deducted in such computation for the year the loss
occurred, will be included in the adjusted tax base. The adjusted tax base
of any person other than a corporation is affected by any gain or loss
realized from the taxable event only to the extent that the resulting Federal
taxable income is derived from "business activity".
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement (File No. 33-62325) relating to the Units and to
the reference to our Firm as special Michigan counsel in the Registration
Statement and in the related Prospectus.
Very truly yours,
DICKINSON, WRIGHT, MOON, VAN DUSEN & FREEMAN
<PAGE>
EXHIBIT 4.3
(ON CARTER LEDYARD & MILBURN LETTERHEAD)
9/07/95
Nuveen Tax-Exempt Unit Trust, Series 823
c/o John Nuveen & Co. Incorporated,
as Depositor of Nuveen Tax-Exempt Unit
Trust, Series 823
333 W. Wacker Drive
Chicago, Illinois 60606
RE: Nuveen Tax-Exempt Unit Trust, Series 823
Dear Sirs:
We hereby consent to the reference to our firm under the caption "What is
the Tax Status of Unitholders?" in the Registration Statement and
related Prospectus of Nuveen Tax-Exempt Unit Trust, Series 823 for the
registration of units of fractional undivided interest in the Fund in the
aggregate principal amount as set forth in the Closing Memorandum dated
today's date.
Very truly yours,
CARTER, LEDYARD & MILBURN
Exhibit 6.1
John Nuveen & Co. Incorporated
Officers and Directors
A.
Officers:
Richard J. Franke Chairman, Board of Directors, Chief Executive
Officer and Director
Donald E. Sveen President, Chief Operating Officer and
Director
Anthony T. Dean Executive Vice President and Director
Timothy R. Schwertfeger Executive Vice President and Director
John P. Amboian Executive Vice President and Chief Financial
Officer
O. Walter Renfftlen Vice President and Controller
Anna R. Kucinskis Vice President
George P. Thermos Vice President
H. William Stabenow Vice President and Treasurer
Thomas C. Muntz Vice President
Robert B. Kuppenheimer Vice President
Paul C. Williams Vice President
Michael G. Gaffney Vice President
Robert D. Freeland Vice President
Bradford W. Shaw, Jr. Vice President
Stuart W. Rogers Vice President
James J. Wesolowski Vice President, General Counsel and Secretary
Stephen D. Foy Vice President, Assistant Controller and
Assistant Secretary
Larry W. Martin Assistant Vice President, Assistant General
Counsel and Assistant Secretary
Gifford R. Zimmerman Assistant Vice President, Assistant General
Counsel and Assistant Secretary
Kenneth C. Dunn Vice President and Assistant General Counsel
Directors:
Richard J. Franke Chairman, Board of Directors, Chief Executive
Officer and Director
Donald E. Sveen President, Chief Operating Officer and
Director
Anthony T. Dean Executive Vice President and Director
Timothy R. Schwertfeger Executive Vice President and Director
The Principal business address of Messrs. Franke, Sveen, Dean and
Schwertfeger is 333 West Wacker Drive, Chicago, Illinois.
B.
Each officer and director of John Nuveen & Co. Incorporated has been an
officer, director or employee of the firm, or its corporate predecessor, for
more than five years last past, except as follows:
Mr. John P. Amboian became Executive Vice President and Chief Financial
Officer in June 1995. From June 1993 until such time he served as Senior
Vice President, Finance, Strategy & Systems for the Miller Brewing Company.
From August 1984 until such time he served as Vice President, Finance Planning
& Analysis for Kraft Foods, Inc.
Mr. Kenneth C. Dunn became Vice President, Assistant General Counsel and
Assistant Secretary in May 1995. From January 1990 until such time he served
as a Partner with the law firm of Gardner, Carton & Douglas.
September 1, 1995
Chicago, Illinois
<PAGE>
Exhibit 7.1
This Power of Attorney is applicable only to registration statements,
amendments of registration statements, applications for registration and
similar or related documents pertaining to any series of the Nuveen
Tax-Exempt Unit Trust, Nuveen Tax-Exempt Unit Trust - State Series,
Nuveen Tax-Exempt Unit Trust - Intermediate Series, Nuveen Tax-Exempt
Unit Trust - Discount Series and Nuveen Tax-Exempt Unit Trust - Insured
Series whether or not in existence at the date hereof.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned the Chief Financial
Officer and an Executive Vice President of John Nuveen & Co. Incorporated,
a Delaware corporation, hereby constitutes and appoints Larry W. Martin,
Morrison C. Warren, James J. Wesolowski and Gifford R. Zimmerman, and each
of them (with full power to act alone) his true and lawful attorney-in-fact
and agent, for him and on his behalf and in his name, place and stead, in
any and all capacitites, to sign, execute and affix his seal thereto and file
one or more Registration Statements on Form S-6 under the Securities Act of
1933 or any successor form required to be filed by unit investment trusts
under the Securities Act of 1933, including any amendment or amendments
thereto, with all exhibits, Form N-8B-2 under the Investment Company Act of
1940 or any successor form including any amendment or amendments thereto,
with all exhibits, and any and all other documents required to be filed
with respect to any series of the Nuveen Tax-Exempt Unit Trust, Nuveen
Tax-Exempt Unit Trust - State Series, Nuveen Tax-Exempt Unit Trust
Intermediate Series, Nuveen Tax-Exempt Unit Trust - Discount Series and
the Nuveen Tax Exempt Unit Trust - Insured Series whether or not in
existence at the date hereof with any regulatory authority, federal or state,
relating to the registration thereof, granting unto said attorneys, and each
of them, full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the premises
in order to effectuate the same as fully to all intents and purposes as he
might or could do if personally present, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them may lawfully do or
cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned, Chief Financial Officer and Executive
Vice President of John Nuveen & Co. Incorporated, has hereunto set his hand
this 31 day of July, 1995.
___________________
Signature
John P. Amboian
- --------------------
Print Name
State of Illinois)
)
County of Cook )
On this 31 of July, 1995, John P. Amboian personally appeared before me,
a Notary Public in and for said County and State, who is known to me to be the
person whose name and signature is affixed to the foregoing Power of Attorney
and who acknowledged the same to be his voluntary act and deed for the intent
and purposes therein set forth.
Olivia Rubio
____________________
Notary Public
My commission Expires 2/25/97
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Maryland
Traditional Trust 310 which is incorporated in the Prospectus dated September 7,
1995 and is qualified in its entirety by reference to such prospectus.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> Aug-31-1996
<PERIOD-END> Aug-31-1996
<INVESTMENTS-AT-COST> 3,346,963
<INVESTMENTS-AT-VALUE> 3,357,003
<RECEIVABLES> 39,570
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,401,973
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 39,570
<TOTAL-LIABILITIES> 39,570
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 35,000
<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> 3,357,003
<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> 95.91
<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>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Colorado
Insured Trust 60 which is incorporated in the Prospectus dated September 7, 1995
and is qualified in its entirety by reference to such prospectus.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> Aug-31-1996
<PERIOD-END> Aug-31-1996
<INVESTMENTS-AT-COST> 3,317,098
<INVESTMENTS-AT-VALUE> 3,337,208
<RECEIVABLES> 51,458
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,394,166
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,458
<TOTAL-LIABILITIES> 51,458
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 35,000
<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> 3,337,208
<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> 95.35
<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 the Michigan
Insured Trust 62 which is incorporated in the Prospectus dated September 7, 1995
and is qualified in its entirety by reference to such prospectus.
</LEGEND>
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> Aug-31-1996
<PERIOD-END> Aug-31-1996
<INVESTMENTS-AT-COST> 3,282,267
<INVESTMENTS-AT-VALUE> 3,293,641
<RECEIVABLES> 51,059
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,349,800
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51,059
<TOTAL-LIABILITIES> 51,059
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 35,000
<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> 3,293,641
<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> 94.10
<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>
MEMORANDUM
Nuveen Tax-Exempt Unit Trust, Series 823
File No. 33-62325
The Prospectus and the Indenture filed with Amendment No. 1 of the
Registration Statement on Form S-6 have been revised to reflect information
regarding the execution of the Indenture and the deposit of bonds on 9/07/95,
and to set forth certain statistical data based thereon. In addition, there
are a number of other changes from the Prospectus as originally filed to which
reference is made, including the increase in the size of the Fund, a
corresponding increase in the number of Units and a change in the individual
trusts constituting the Fund. All references to the Units, prices and related
statistical data will apply to each trust of the Fund and the Units thereof
individually.
Except for such updating, an effort has been made to set forth below each
of the changes and also to reflect the same by marking the Prospectus
transmitted with the Amendment. Also, differences between the Final
Prospectus relating to the previous series of the Nuveen Tax-Exempt Unit
Trust and the subject Prospectus have been indicated.
FORM S-6
FACING SHEET. The file number is now shown.
THE PROSPECTUS
PART A-PAGE 2. The "Estimated Long-Term Return" and "Estimated
Current Return" to Unitholders under each Trust under each of the distribution
plans are stated.
PART A-PAGES 1 - 2. Essential information for each of the Trusts,
including applicable footnotes, has been completed for this Series.
PART A-PAGES 1 - 2. The date of the Indenture has been inserted in Section
1 along with the size and number of Units of each of the Trusts.
PART A-PAGES 1 - 6 et seq. The following information for each Trust appears
on the pages relating to such trust:
The estimated daily accrual of interest under the plans of
distribution for each of the Trusts
Data regarding the composition of the portfolio of each
Trust
Disclosure regarding the states' economic and legislative
matters relevant to investors of state trusts
Concentrations of issues by purpose in each Trust
The approximate percentage of the bonds in the
portfolio of each Trust acquired in distributions where
the Sponsor was either the sole underwriter or manager
or member of the underwriting syndicate
The percentage of "when issued" bonds in the portfolio
of each Trust
The schedule of investments for each Trust, including
the notes thereto
Descriptions of the opinions of the special tax
counsel for state trusts
The Record Dates and Distribution Dates for
interest distributions for each Trust
The statements of condition for each Trust
and the accountant's report with regard thereto.
The amount of the Trustee's Fee
CHAPMAN AND CUTLER
Chicago, Illinois
9/07/95
