Rule 497(b)
Registration Number 33-60017
("QUILTS")
QUEST FOR VALUE'S
UNIT INVESTMENT LADDERED TRUST SERIES
A Unit Investment Trust
QUILTS Income-U.S. Treasury Series 12
QUILTS Income-U.S. Treasury Series 13
QUILTS Asset Builder-U.S. Treasury Series 14
QUILTS consists of three separate unit investment trusts designated
QUILTS Income-U.S. Treasury Series 12, QUILTS Income-U.S. Treasury Series 13
and QUILTS Asset Builder-U.S. Treasury Series 14 (collectively, the "Trusts").
The Sponsor of the Trusts is Quest for Value Distributors (the "Sponsor"). The
objectives of the Trusts are to provide safety of principal and, with respect
to QUILTS-Income U.S. Treasury Series 12 current quarterly distributions of
interest and, with respect to QUILTS Income-U.S. Treasury Series 13 current
monthly distributions of interest. With respect to QUILTS Asset Builder-U.S.
Treasury Series 14, the Trusts seek to accumulate principal value in the Units
over the life of the Trust. Units of the Trusts may be suited for purchase by
IRAs, self-employed retirement plans (formerly Keogh Plans), pension,
profit-sharing and other qualified retirement plans. Investors considering
participation in any such plan should review specific tax laws and pending
legislation related thereto and should consult their attorneys or tax advisers
with respect to the establishment and maintenance of any such plan. (See
"Retirement Plans" and "Tax Status" in Part B of this Prospectus.) The Trusts
also seek to provide investment flexibility by allowing investors to choose
among three portfolios, each with a differing weighted average maturity and
quality. Each Trust seeks to achieve these objectives by investment in a
portfolio of U.S. Treasury Obligations (the "Treasury Securities") that are
backed by the full faith and credit of the United States Government. (The
Treasury Securities are sometimes collectively referred to as the
"Securities".) Each Trust is designed to have regularly scheduled payments of
principal during its life from a portfolio of Securities with laddered
maturities. The value of the Units of the Trusts will fluctuate with
fluctuations in the value of the underlying Securities in the portfolios of
each Trust. Therefore, Unit Holders who sell their Units prior to termination
of the Trusts may receive more or less than their original purchase price upon
sale.
These Trusts may be particularly appropriate for foreign investors as
the income from the Trusts, provided certain conditions are met, will be
exempt from withholding for U.S. Federal income tax purposes. A foreign
investor must provide a completed W-8 Form to his financial representative or
the Trustee to avoid withholding on his account.
The Trusts may also be appropriate for investors who desire to
participate in a portfolio of taxable fixed income securities offering the
safety of principal provided by an investment backed by the full faith and
credit of the United States. In addition, many investors may benefit from the
exemption from state and local personal income taxes that will pass through
the Trusts to Unit Holders.
This Prospectus consists of two parts. Part A contains a Summary of
Essential Information for each Trust including descriptive material relating
to each Trust, the Statement of Condition of the Trusts and the Portfolios of
each Trust. Part B contains general information about the Trusts. Part A may
not be distributed unless accompanied by Part B.
QUILTS are not a deposit or other obligation of, or guaranteed by, a
depository institution. QUILTS are not insured by the FDIC and are subject to
investment risks, including possible loss of the principal amount invested.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
PROSPECTUS PART A DATED JUNE 29, 1995
Please read and retain both parts of this Prospectus for
future reference.
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QUILTS Income
U.S. Treasury Series 12
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 28, 1995 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<S> <C>
CUSIP#: 74834K227 Evaluation Time: 12:00 Noon New York Time on the initial
Sponsor: Quest for Value Distributors Date of Deposit and 4:00 P.M. thereafter.
Date of Deposit: June 28, 1995 Minimum Purchase: 1,000 Units
Aggregate Principal Amount Minimum Principal Distribution: $1.00 per 1,000 Units.
of Securities:..........$500,000 Weighted Average Maturity of Securities in the Portfolio:
Number of Units: (The number of Units will 1.06 years
be increased as the Sponsor deposits Minimum Value of Trust: The Trust may be terminated if
additional Securities into the Trust.)500,000 the value of the Securities in the Trust is less than
Fractional Undivided Interest in Trust 40% of the original aggregate principal amount of
per 1,000 Units:....................1/500 Securities in the Trust.
Public Offering Price: Mandatory Termination Date: The earlier of December 31,
Aggregate Offering Price of Securities 1997 or the disposition of the last Security in the Trust.
in Trust................$501,625 Trustee and Evaluator: United States Trust
Divided By 500,000 Units multiplied Company of
by 1,000...............$1,003.25 New York.
Plus Sales Charge of 1.70% of Public Trustee's Annual Fee and Estimated Expenses: $1.00 per
Offering Price............$17.35 1,000 Units.
Public Offering Price per Annual Supervisory Fee (Payable to an affiliate of the
1,000 Units(1).........$1,020.60 Sponsor): Maximum of $.10 per $1,000 principal
Redemption Price per 1,000 amount of Securities (see "Trust Expenses and
Units..................$1,002.63 Charges" in Part B).
Sponsor's Initial Repurchase Price
per 1,000 Units:.......$1,003.25
Excess of Public Offering Price Over
Redemption Price per 1,000 Units:...$17.97
Excess of Sponsor's Initial Repurchase Price
Over Redemption Price per 1,000 Units:.$.62
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INFORMATION PER 1,000 UNITS
BASED UPON QUARTERLY DISTRIBUTIONS
Gross annual interest income (cash)................................... $57.25
Less organizational expenses (4)....................................... .20
Less estimated annual fees and expenses(5)............................. 1.10
Estimated net annual interest income (cash)(2)........................ 55.95
Estimated daily interest accrual (Does not include income
accrual from original issue discount bonds.)............................ .155
Estimated current return based on Public Offering Price
(Does not include income accrual from original issue
discount bonds. The estimated current return is
increased for transactions entitled to a discount.)(5)................. 5.48%
Estimated long term return (Does not include income accrual
from original issue discount bonds. The estimated long term return
is increased for transactions entitled to a discount.)(3)(5)..............5.43%
First record date.............................................January 15, 1996
First interest payment date...................................January 31, 1996
Subsequent record dates..................15th day of last month of each quarter
Subsequent interest payment dates.....................Last day of each quarter
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(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 5, 1995 to the date of
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
5, 1995.
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(2) The first interest distribution of $29.53 per 1,000 Units for Treasury
Income Series 12 will be made on January 31, 1996 (the "First Payment
Date") to all Unit Holders of record on January 15, 1996 (the "First
Record Date"). The next quarterly payment per 1,000 Units of Treasury
Income Series 12, will be $12.35 on April 30, 1996 and thereafter (the
"Quarterly Payment Date").
(3) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the
Securities in the portfolio of the Trust in accordance with accepted
practices (taking into account the amortization of premiums, accretion of
discounts, market value, and estimated retirement of each Security) and
subtracting from the average yield so calculated the fees, expenses and
sales charge of each Trust. Estimated current return is calculated by
dividing the estimated net annual interest income by the Public Offering
Price per Unit. In contrast to the estimated long term return, the
estimated current return does not take into account the amortization of
premium or accretion of discount on the underlying Securities, if any.
These returns do not include the effects of any delay in payments to Unit
Holders and a calculation which includes those effects would be lower.
See "Estimated Long Term Return and Estimated Current Return" in Part B.
(4) Although historically the sponsors of unit investment trusts ("UITs")
have paid all of the costs of establishing UITs, this Trust (and
therefore the Unit Holders) will bear all or a portion of its
organizational costs up to a maximum of $.20 per $1,000 Units per annum
for Treasury Income Series 12. Such organizational costs include: the
cost of preparing and printing the registration statement, the trust
indenture and other closing documents; registering units with the
Securities and Exchange Commission and the states; and the initial audit
of the Trust. See "Trust Expenses and Changes" in Part B.
(5) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, the Estimated Current Return and the
Estimated Long Term Return will be adversely affected.
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QUILTS Income
U.S. Treasury Series 13
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 28, 1995 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<S> <C>
CUSIP#: 74834K235 Evaluation Time: 12:00 Noon New York Time on the initial
Sponsor: Quest for Value Distributors Date of Deposit and 4:00 P.M. thereafter.
Date of Deposit: June 28, 1995 Minimum Purchase: 1,000 Units
Aggregate Principal Amount Minimum Principal Distribution: $1.00 per 1,000 Units.
of Securities:..........$500,000 Weighted Average Maturity of Securities in the Portfolio:
Number of Units: (The number of Units will 1.89 years
be increased as the Sponsor deposits Minimum Value of Trust: The Trust may be terminated if
additional Securities into the Trust.)500,000 the value of the Securities in the Trust is less than
Fractional Undivided Interest in Trust 40% of the original aggregate principal amount of
per 1,000 Units:....................1/500 Securities in the Trust.
Public Offering Price: Mandatory Termination Date: The earlier of May 15, 1999
Aggregate Offering Price of Securities or the disposition of the last Security in the Trust.
in Trust................$502,172 Trustee and Evaluator: United States Trust Company of
Divided By 500,000 Units multiplied New York.
by 1,000...............$1,004.34 Trustee's Annual Fee and Estimated Expenses: $1.37 per
Plus Sales Charge of 1.95% of Public 1,000 Units.
Offering Price............$19.97 Annual Supervisory Fee (Payable to an affiliate of the
Public Offering Price per Sponsor): Maximum of $.10 per $1,000 principal
1,000 Units(1).........$1,024.31 amount of Securities (see "Trust Expenses and
Redemption Price per 1,000 Charges" in Part B).
Units..................$1,003.78
Sponsor's Initial Repurchase Price
per 1,000 Units:.......$1,004.34
Excess of Public Offering Price Over
Redemption Price per 1,000 Units:...$20.53
Excess of Sponsor's Initial Repurchase Price
Over Redemption Price per 1,000 Units:.$0.56
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INFORMATION PER 1,000 UNITS
BASED UPON MONTHLY DISTRIBUTIONS
Gross annual interest income (cash)................................... $58.00
Less organizational expenses(4)....................................... .20
Less estimated annual fees and expenses(5)............................. 1.47
Estimated net annual interest income (cash)(2)........................ 56.33
Estimated daily interest accrual (Does not include income
accrual from original issue discount bonds.).......................... .156
Estimated current return based on Public Offering Price
(Does not include income accrual from original issue discount
bonds. The estimated current return is increased for transactions
entitled to a discount.)(5)...................................... 5.50%
Estimated long term return (Does not include income accrual from original
issue discount bonds. The estimated long term return is increased for
transactions entitled to a discount.)(3)(4).........................5.45%
First record date................................................July 15, 1995
First interest payment date......................................July 31, 1995
Subsequent record dates.................................15th day of each month
Subsequent interest payment dates.......................Last day of each month
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(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 5, 1995 to the date of
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
5, 1995.
(2) The first interest distribution of $1.56 per 1,000 Units for Treasury
Income Series 13 will be made on July 31, 1995 (the "First Payment Date")
to all Unit Holders of record on July 15, 1995 (the "First Record Date").
The next monthly payment
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per 1,000 Units of Treasury Income Series 13, will be $4.69 on August 31,
1995 and thereafter (the "Monthly Payment Date").
(3) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the
Securities in the portfolio of the Trust in accordance with accepted
practices (taking into account the amortization of premiums, accretion of
discounts, market value, and estimated retirement of each Security) and
subtracting from the average yield so calculated the fees, expenses and
sales charge of each Trust. Estimated current return is calculated by
dividing the estimated net annual interest income by the Public Offering
Price per Unit. In contrast to the estimated long term return, the
estimated current return does not take into account the amortization of
premium or accretion of discount on the underlying Securities, if any.
These returns do not include the effects of any delay in payments to Unit
Holders and a calculation which includes those effects would be lower.
See "Estimated Long Term Return and Estimated Current Return" in Part B.
(4) Although historically the sponsors of unit investment trusts ("UITs")
have paid all of the costs of establishing UITs, this Trust (and
therefore the Unit Holders) will bear all or a portion of its
organizational costs up to a maximum of $.20 per $1,000 Units per annum
for Treasury Income Series 13. Such organizational costs include: the
cost of preparing and printing the registration statement, the trust
indenture and other closing documents; registering units with the
Securities and Exchange Commission and the states; and the initial audit
of the Trust. See "Trust Expenses and Changes" in Part B.
(5) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, the Estimated Current Return and the
Estimated Long Term Return will be adversely affected.
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QUILTS Asset Builder
U.S. Treasury Series 14
<CAPTION>
SUMMARY OF ESSENTIAL INFORMATION AS OF JUNE 28, 1995 (The initial Date of
Deposit which is the date on which the Trust Agreement was signed and the
deposit of Securities with the Trustee was made.)
<S> <C>
CUSIP#: 74834K243 Excess of Sponsor's Initial Repurchase
Sponsor: Quest for Value Distributors Price Over Redemption Price per 1,000
Date of Deposit: June 28, 1995 Units:...........................$.40
Aggregate Principal Amount of Evaluation Time: 12:00 Noon New York Time on the initial
Securities:..........................$500,000 Date of Deposit and 4:00 P.M. thereafter.
Number of Units: (The number of Units will be Minimum Purchase: 1,000 Units
increased as the Sponsor deposits Minimum Principal Distribution: $1.00 per 1,000 Units.
additional Securities into the Trust.)500,000 Weighted Average Maturity of Securities in the Portfolio:
Fractional Undivided Interest in Trust per 2.37 years
1,000 Units:............................1/500 Minimum Value of Trust: The Trust may be terminated if
Public Offering Price: the value of the Securities in the Trust is less than
Aggregate Offering Price of Securities 40% of the original aggregate principal amount of
in Trust ...................$438,739 Securities in the Trust.
Divided By 500,000 Units multiplied Mandatory Termination Date: The earlier of November 30,
by 1,000 ....................$877.48 1999 or the disposition of the last Security in the Trust.
Plus Sales Charge of 1.95% of Public Trustee and Evaluator: United States Trust Company of New
Offering Price ..............$17.45 York.
Public Offering Price per 1,000 Units(1)$894.93 Trustee's Annual Fee and Estimated Expenses: $.55 per
Redemption Price per 1,000 Units..........$877.08 1,000 Units.
Sponsor's Initial Repurchase Price per Annual Supervisory Fee (Payable to an affiliate of the
1,000 Units:..................$877.48 Sponsor): Maximum of $.10 per $1,000 principal
Excess of Public Offering Price Over amount of Securities (see "Trust Expenses and
Redemption Price per 1,000 Units:......$17.85 Charges" in Part B).
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INFORMATION PER 1,000 UNITS
Gross annual interest income (cash) (Does not include income
accrued from original issue discount bonds.).................. $1.03
Less organizational expenses (3)................................ .20
Less estimated annual fees and expenses (The Trustee will
retain excess interest income in
the Trust to pay future expenses.)(4).......................... .65
Estimated net annual interest income (cash) (Does not include income
accrual from original issue discount bonds.).................... .18
Estimated long term return (Does not include income accrual
from original issue discount bonds.
The estimated long term return is increased for transactions
entitled to a discount.)(2)(4).................................. 5.57%
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(1) No accrued interest will be added for any person contracting to purchase
Units on the date of this Prospectus. Anyone ordering Units after such
Date will pay accrued interest from July 5, 1995 to the date of
settlement (three business days after order) (the "First Settlement
Date"), less distributions from the Interest Account subsequent to July
5, 1995.
(2) Estimated long term return is calculated by each Trust by computing the
average of the yields to maturity (or earlier call date) of the
Securities in the portfolio of the Trust in accordance with accepted
practices (taking into account the amortization of premiums, accretion of
discounts, market value, and estimated retirement of each Security) and
subtracting from the average yield so calculated the fees, expenses and
sales charge of each Trust. This return does not include the effects of
any delay in payments to Unit Holders and a calculation which includes
those effects would be lower. See "Estimated Long Term Return and
Estimated Current Return" in Part B.
(3) Although historically the sponsors of unit investment trusts ("UITs")
have paid all of the costs of establishing UITs, this Trust (and
therefore the Unit Holders) will bear all or a portion of its
organizational costs up to a maximum of $.20 per 1,000 Units per annum
for Asset Builder Series 14. Such organizational costs include: the cost
of preparing and printing the registration statement, the trust indenture
and other closing documents; registering units with the Securities and
Exchange Commission and the states; and the initial audit of the Trust.
See "Trust Expenses and Changes" in Part B.
(4) Assumes the Trust will reach a size of 10,000,000 Units as estimated by
the Sponsor; expenses per Unit will vary with the actual size of the
Trust. If the Trust does not reach this Unit level, the Estimated Annual
Fees and Expenses per Unit, and the Estimated Long Term Return will be
adversely affected.
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QUEST FOR VALUE'S
UNIT INVESTMENT LADDERED TRUST SERIES
("QUILTS")
The Trusts. QUILTS consists of three separate unit investment trusts
designated QUILTS Income-U.S. Treasury Series 12 ("Treasury Income Series
12"), QUILTS Income-U.S. Treasury Series 13 ("Treasury Income Series 13") and
QUILTS Asset Builder-U.S. Treasury Series 14 ("Asset Builder Series 14")
(collectively, the "Trusts"). The Trusts were created under the laws of the
State of New York by a Trust Indenture and Agreement (the "Trust Agreement"),
dated the initial Date of Deposit, between Quest for Value Distributors, as
sponsor (the "Sponsor") and United States Trust Company of New York, as
trustee (the "Trustee"). The Trustee will also act as the Evaluator for the
Trusts. On the initial Date of Deposit, the Sponsor deposited with the Trustee
United States Treasury Obligations that are backed by the full faith and
credit of the United States Government including delivery statements relating
to contracts for the purchase of certain such Securities (the "Securities") in
the aggregate amount set forth in the "Summary of Essential Information" for
each Trust and cash or an irrevocable letter of credit issued by a major
commercial bank in the amount required for such purchases. Thereafter, the
Trustee, in exchange for the Securities so deposited, delivered to the Sponsor
a certificate evidencing the ownership of all of the Units of the Trusts,
which Units are being offered by this Prospectus. On the initial Date of
Deposit, each Unit in the Trusts represents an undivided interest in the
principal and net income of that Trust in the ratio of one Unit for each $1.00
principal amount of Securities initially deposited in that Trust. (See "The
Trust Organization" in Part B.)
Objectives. The objectives of the Trusts are to obtain safety of
principal and, with respect to Treasury Income Series 12 and Treasury Income
Series 13 current distributions of interest. With respect to Asset Builder
Series 14, the Trusts seek to accumulate principal value in the Units over the
life of the Trust. The Trusts also seek to provide investment flexibility by
allowing investors to choose among three portfolios of Securities, each with a
differing weighted average maturity and quality. The Trusts seek to achieve
these objectives through investment in a fixed, laddered portfolio of United
States Treasury Securities. The Trusts are also structured to provide
protection against changes in interest rates and to pass through to Unit
Holders the exemption from state personal income taxes afforded to direct
owners of United States obligations.
99% of the aggregate principal amount of the Securities in Asset
Builder Series 14 are Zero Coupon Bonds. 1% of the aggregate principal amount
of the Securities in Asset Builder Series 14 are interest-bearing securities
which are used to pay the expenses of this Trust. Any excess amounts remaining
after expenses are paid will be paid to Unit Holders of this Trust in cash.
Zero Coupon Bonds provide for payment at maturity at par value, but do not
provide for the payment of current interest. (For the amount of Zero Coupon
Bonds in Asset Builder Series 14, and the cost of such Securities to that
Trust, see "Portfolio" for Asset Builder Series 14 in this Part A). Investors
generally will be required to recognize interest currently, even though they
will not receive a corresponding amount of cash until later years. Long-term
capital gains based upon the difference, if any, between the value of the
Securities at maturity, redemption or sale and their original purchase price
at discount (plus the earned portion of acquisition discount) are generally
taxed, in the case of individuals, at a rate less than the rate applicable to
ordinary income. (See "Tax Status" in Part B.) Investment in Asset Builder
Series 14 should be made with the understanding that the value of Zero Coupon
Bonds may be subject to greater fluctuation in response to changes in interest
rates than interest-bearing Securities. In addition, for certain investors,
the accrual of the market discount from the Zero Coupon Bonds is not taxable
until the Securities in Asset Builder Series 14 are disposed of or mature.
(See "Tax Status" in Part B.) Any gain realized on the disposition or
maturities of these securities is treated as ordinary interest income to the
extent it represents accrued market discount. Any excess over that amount
would generally be treated as long-term capital gain if held for more than 1
year.
The Treasury Securities are direct obligations of the United States
and are backed by its full faith and credit. The value of the Units, the
estimated current return (not applicable to Asset Builder Series 14) and
estimated long-term return to new purchasers will fluctuate with
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the value of the Securities included in the portfolio of each Trust which will
generally decrease or increase inversely with changes in prevailing interest
rates. See "Tax Status" in Part B of this Prospectus.
With the deposit of the Securities in the Trusts on the initial Date
of Deposit, the Sponsor established a proportionate relationship among the
face amounts of each Security in the portfolio of each Trust. During the
90-day period following the initial Date of Deposit, the Sponsor may deposit
additional Securities ("Additional Securities"), contracts to purchase
Additional Securities or cash (or a bank letter of credit in lieu of cash)
with instructions to purchase Additional Securities, in order to create new
Units, maintaining to the extent practicable the original proportionate
relationship among the face amounts of each Security in the portfolio of each
Trust. It may not be possible to maintain the exact original proportionate
relationship among the Securities deposited on the initial Date of Deposit
because of, among other reasons, purchase requirements, changes in prices, or
unavailability of Securities. Replacement Securities may be acquired under
specified conditions (see "The Trust" and "Trust Administration" in Part B of
this Prospectus). Units may be continuously offered to the public by means of
this Prospectus (see "Public Offering" in Part B) resulting in a potential
increase in the number of Units outstanding. Deposits of Additional Securities
in the portfolio of each Trust subsequent to the 90-day period following the
initial Date of Deposit must replicate exactly the proportionate relationship
among the face amounts of Securities comprising the portfolio of each Trust at
the end of the initial 90- day period. No assurance can be given that the
Trusts' objectives will be achieved. In addition, an investment in a Trust can
be affected by fluctuations in interest rates.
Portfolio Summaries. General. The Trusts are comprised of those
Securities listed in each "Portfolio" in this Part A. The portfolio of each
Trust initially consists of contracts to purchase U.S. Treasury Obligations
fully secured by the full faith and credit of the United States, certain of
which have been purchased at a market discount or premium. Certain Securities
may have been purchased on a "when, as, and if" issued basis. Interest on
these Securities begins accruing to the benefit of holders on their respective
dates of delivery. Unit Holders will be "at risk" with respect to these
Securities (i.e. may derive either gain or loss from fluctuations in the
offering side evaluation of the securities) from the date they commit for
Units. The Trusts consist of the Securities (or contracts to purchase the
Securities) listed in each Portfolio as may continue to be held from time to
time in each Trust and any Additional Securities deposited in the Trusts in
connection with the sale of additional Units to the public as described above,
together with the accrued and undistributed interest thereon and undistributed
cash realized from the sale or redemption of Securities (see "Trust
Administration" in Part B of this Prospectus). Neither the Sponsor nor the
Trustee shall be liable in any way for any default, failure or defect in any
of the Securities. However, should any deposited contract fail, the Sponsor
shall, within 90 days from the initial Date of Deposit, acquire replacement
Securities and substitute them in the portfolios of the Trust. If the failed
Securities are not substituted or if the purchase price of the substituted
Securities does not exceed the cost of the original contracts, the Sponsor
shall make a pro rata distribution of the amount, if any, by which the cost of
the failed contract exceeded the cost of the substituted security on the next
scheduled distribution date.
On the Date of Deposit each Unit represented the fractional undivided
interest in each Trust set forth under "Essential Information" for each Trust.
Thereafter, if any Units are redeemed by the Trustee the face amount of
Securities in each Trust will be reduced by amounts allocable to redeemed
Units, and the fractional undivided interest represented by each Unit in the
balance will be increased. However, if additional Units are issued by each
Trust (through deposit of Securities by the Sponsor in connection with the
sale of additional Units), the aggregate value of Securities in each Trust
will be increased by amounts allocable to additional Units and the fractional
undivided interest represented by each Unit in the balance will be decreased.
Units will remain outstanding until redeemed upon tender to the Trustee by any
Unit Holder (which may include the Sponsor) or until the termination of the
Indenture.
The Sponsor has a limited right to substitute other Securities in the Trust
portfolio in the event of a failed contract. (See "The Trusts - Substitution of
Securities" in Part B.) Each Unit in each Trust represents an undivided interest
in the principal and net income of that Trust in the ratio of one Unit for each
$1.00 principal amount of Securities initially deposited in that Trust. (See
"The Trusts - Organization" in Part B.) (For the specific number of Units in
each Trust, see the "Summary of
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Essential Information" for each Trust in this Part A). The Sponsor has not
participated as a sole underwriter or manager, co-manager or member of
underwriting syndicates from which any of the Securities were acquired for the
Trusts.
Treasury Income Series 12. Treasury Income Series 12 consists of a
fixed portfolio of interest-bearing U.S. Treasury Obligations with consecutive
maturities from January 31, 1996 to December 31, 1996 (referred to as
"laddered maturities"). As Securities mature, Treasury Income Series 12 will
return to Unit Holders every 3 months beginning in January, 1996,
approximately 20% of the face amount of the amount invested.
On the initial Date of Deposit 40% of the Securities in Treasury
Income Series 12 were purchased at a "market" discount from par value at
maturity. Based on the offering side evaluation on the initial Date of Deposit
40% of the aggregate principal amount of Securities in the portfolio were
acquired at a discount from par, 60% were at a premium over par and none were
at par. A Unit Holder may receive more or less than his original purchase
price upon disposition of his Units because the value of Units fluctuates with
the value of the underlying Securities, which vary inversely with interest
rates. On the initial Date of Deposit, the bid side evaluation was lower than
the offering side evaluation by .06% of the aggregate offering price of the
Treasury Income Series 12. (See "Public Offering" in Part B.)
All of the issues of Treasury Income Series 12 are represented by the
Sponsor's contracts to purchase, which are expected to be settled on or about
July 5, 1995 and none of the issues has been deposited in the Trust.
Treasury Income Series 13. Treasury Income Series 13 consists of a
fixed portfolio of interest-bearing U.S. Treasury Obligations with consecutive
maturities from May 15, 1996 to May 15, 1998 (referred to as "laddered
maturities"). As Securities mature, Treasury Income Series 13 will return to
Unit Holders every 6 months beginning in May, 1996, approximately 20% of the
face amount of the amount invested.
On the initial Date of Deposit 20% of the Securities in Treasury
Income Series 13 were purchased at a "market" discount from par value at
maturity. Based on the offering side evaluation on the initial Date of Deposit
20% of the aggregate principal amount of Securities in the portfolio were
acquired at a discount from par, 80% were at a premium over par and none were
at par. A Unit Holder may receive more or less than his original purchase
price upon disposition of his Units because the value of Units fluctuates with
the value of the underlying Securities, which vary inversely with interest
rates. On the initial Date of Deposit, the bid side evaluation was lower than
the offering side evaluation by .06% of the aggregate offering price of the
Treasury Income Series 13. (See "Public Offering" in Part B.)
All of the issues of Treasury Income Series 13 are represented by the
Sponsor's contracts to purchase, which are expected to be settled on or about
July 5, 1995 and none of the issues has been deposited in the Trust.
Asset Builder Series 14 . Asset Builder Series 14 consists principally
of a fixed portfolio of stripped U.S. Treasury notes or bonds with maturities
longer than 1 year, which are referred to as Zero Coupon Bonds. Zero Coupon
Bonds provide for payment at maturity at par value, unless sooner sold or
redeemed, but do not provide for the payment of current interest. The market
value of Zero Coupon Bonds may be subject to greater fluctuations than coupon
bonds in response to changes in interest rates. See "The Trusts--Discount and
Zero Coupon Bonds" in Part B. The Securities in Asset Builder Series 14 have
consecutive maturities from November 15, 1996 to November 30, 1998 (referred
to as "laddered maturities"). As Securities mature, Asset Builder Series 14
will return to Unit Holders every 6 months beginning in November, 1996,
approximately 20% of the face amount of the amount invested.
On the initial Date of Deposit 100% of the Securities in Asset Builder
Series 14 were purchased at a "market" discount from par value at maturity.
Based on the offering side evaluation on the initial Date of Deposit 100% of
the aggregate principal amount of Securities in the portfolio were acquired at
a discount from par, none were at a premium over par and none were at par. A
Unit Holder may receive more or less than his original purchase price upon
disposition of his Units because the value of Units fluctuates with the value
of the underlying Securities, which vary inversely with interest rates.
A-9
<PAGE>
On the initial Date of Deposit, the bid side evaluation was lower than the
offering side evaluation by .04% of the aggregate offering price of the Asset
Builder Series 14. (See "Public Offering" in Part B.)
All of the issues of Asset Builder Series 14 are represented by the
Sponsor's contracts to purchase, which are expected to be settled on or about
July 5, 1995 and none of the issues has been deposited in the Trust.
RISK FACTORS
An investment in Units of the Trusts should be made with an
understanding of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the portfolio of each Trust
and hence of the Units of each Trust will decline with increases in interest
rates. The value of the underlying Securities will fluctuate inversely with
changes in interest rates. The high inflation of prior years, together with
the fiscal measures adopted to attempt to deal with it, have resulted in wide
fluctuations in interest rates and, thus, in the value of fixed rate long term
debt obligations generally. The Sponsor cannot predict whether such
fluctuations will continue in the future.
In selecting Securities for deposit in the Trusts, the following
factors, among others, were considered by the Sponsor: (i) the prices of the
Securities relative to other comparable Securities; (ii) the maturities of
these Securities; and (iii) whether the Securities were issued after July 18,
1984.
Investment in Asset Builder Series 14 should be made with the
understanding that the value of Zero Coupon Bonds is subject to greater
fluctuation in response to changes in interest rates. In addition, the accrued
market discount of such Securities is not taxable to certain categories of
Unit Holders of such Trust until the Securities in such Trust are disposed of
or mature.
PUBLIC OFFERING PRICE
The Public Offering Price of each Unit of the Trusts is equal to the
aggregate offering price of the Securities in each Trust divided by the number
of Units of each Trust outstanding, plus a sales charge of (a) 1.70% of the
Public Offering Price or 1.729% of the net amount invested in Securities per
Unit of Treasury Income Series 12, (b) 1.95% of the Public Offering Price or
1.989% of the net amount invested in Securities per Unit of Treasury Income
Series 13, and (c) 1.95% of the Public Offering Price or 1.989% of the net
amount invested in Securities per Unit of Asset Builder Series 14. In
addition, for Units ordered after the date hereof, accrued interest will be
payable from the First Settlement Date for Units of the Trust (three business
days from the date hereof) to the expected date of settlement (three business
days after order). For additional information regarding the Public Offering
Price, the descriptions of interest and principal distributions, repurchase
and redemption of Units and other essential information regarding the Trusts,
see the "Summary of Essential Information" for each Trust in this Part A.
During the initial offering period orders involving the lesser of at least
500,000 Units or $500,000 for Treasury Income Series 12, 500,000 Units or
$500,000 for Treasury Income Series 13 and 500,000 Units or $500,000 for Asset
Builder Series 14 will be entitled to a volume discount from the Public
Offering Price. In addition, to the extent Units of each QUILTS Trust are
currently available from the Sponsor, Unit Holders may elect to rollover
principal distributions paid to them as Securities in their respective Trust
mature into additional units of such available QUILTS Trusts (upon receipt by
the Trusts of an appropriate exemptive order from the Securities and Exchange
Commission) at a reduced sales charge. (See "Public Offering-Volume and Other
Discounts" in Part B.) The Public Offering Price per Unit may vary on a daily
basis in accordance with fluctuations in the aggregate offering price of the
Securities. (See "Public Offering-Offering Price" in Part B.)
DISTRIBUTIONS
Distributions of interest income, less expenses, will be made by
Treasury Income Series 12 on a quarterly basis and Treasury Income Series 13
on a monthly basis. The first interest distributions will be made on the First
Payment Date to all Unit Holders of record on the First Record Date of the
Trust and thereafter distributions will be made on a quarterly basis for
Treasury Income Series 12 and on a monthly basis for Treasury Income Series
13. Distributions of principal, if any, will be made quarterly for Treasury
Income Series 12, semi-annually for Treasury Income Series 13 and
semi-annually for
A-10
<PAGE>
Asset Builder Series 14 beginning in 1996. (See "Rights of Unit
Holders-interest and Principal Distributions" in Part B. For estimated
quarterly and monthly interest distributions, the amount of the first interest
distributions and the specific dates representing the First Payment Date and
the First Record Date see "Summary of Essential Information" for each Trust in
Part A.)
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
Units of the Trusts are offered to investors on a "dollar price" basis
(using the computation method previously described under "Public Offering
Price") as distinguished from a "yield price" basis often used in offerings of
tax exempt bonds (involving the lesser of the yield as computed to maturity of
bonds or to an earlier redemption date). Since they are offered on a dollar
price basis, the rate of return on an investment in Units of Treasury Income
Series 12 and Treasury Income Series 13 is measured in terms of "Estimated
Current Return" and "Estimated Long Term Return". The rate of return for Asset
Builder Series 14 is only measured in terms of "Estimated Long Term Return."
This calculation of performance is mandated by the rules of the Securities and
Exchange Commission.
Estimated Long Term Return is calculated by: (1) computing the yield
to maturity or to an earlier call date (whichever results in a lower yield)
for each Security in each Trust portfolio in accordance with accepted
practices, which practices take into account not only the interest payable on
the Securities but also the amortization of premiums or accretion of
discounts, if any; (2) calculating the average of the yields for the
Securities in each Trust portfolio by weighing each Security's yield by the
market value of the Security and by the amount of time remaining to the date
to which the Security is priced (thus creating an average yield for the
portfolio of each Trust); and (3) reducing the average yield for the portfolio
of each Trust in order to reflect estimated fees and expenses of each Trust
and the maximum sales charge paid by Unit Holders. The resulting Estimated
Long Term Return represents a measure of the return to Unit Holders earned
over the estimated life of each Trust. The Estimated Long Term Return as of
the initial Date of Deposit is stated for the Trusts under "Summary of
Essential Information" for each Trust in Part A.
Estimated Current Return is computed by dividing the Estimated Net
Annual Interest Income per Unit by the Public Offering Price per Unit. In
contrast to the Estimated Long Term Return, the Estimated Current Return does
not take into account the amortization of premium or accretion of discount, if
any, on the Securities in the portfolio of each Trust. Moreover, because
interest rates on Securities purchased at a premium are generally higher than
current interest rates on newly issued bonds of a similar type with comparable
rating, the Estimated Current Return per Unit may be affected adversely if
such Securities are redeemed prior to their maturity. On the initial Date of
Deposit, the Estimated Net Annual Interest Income per Unit divided by the
Public Offering Price resulted in the Estimated Current Return stated for each
applicable Trust under "Summary of Essential Information" for each Trust in
Part A.
The Estimated Net Annual Interest Income per Unit of each Trust will
vary with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Securities in the Trusts. The Public Offering Price will
vary with changes in the offering prices (bid prices in the case of the
secondary market) of the Securities. Therefore, there is no assurance that the
present Estimate Current Return or Estimated Long Term Return will be realized
in the future.
MARKET FOR UNITS
The Sponsor, although not obligated to do so, currently intends to
maintain a secondary market for the Units of the Trusts after the initial
public offering has been completed. The secondary market repurchase price will
be based on the aggregate bid price of the Securities in a Trust portfolio;
and the reoffer price will be based on the aggregate offering price of the
Securities plus a sales charge of (a) 1.70% (1.729% of the net amount
invested) plus net accrued interest for Treasury Income Series 12, (b) 1.95%
(1.989% of the net amount invested) plus net accrued interest for Treasury
Income Series 13, and (c) 1.95% (1.989% of the net amount invested) plus net
accrued interest for Asset Builder Series 14. If a market is not maintained a
Unit Holder will be able to redeem his Units with the Trustee at a price based
on the aggregate bid price of the Unit. (See "Liquidity-Sponsor "Repurchase"
in Part B.)
A-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Sponsor, Trustee, and Unit Holders of
Quest for Value's Unit Investment Laddered Trust Series ("QUILTS")
QUILTS Income-U.S. Treasury Series 12
QUILTS Income-U.S. Treasury Series 13
QUILTS Asset Builder-U.S. Treasury Series 14
We have audited the accompanying Statements of Condition and Portfolios of
Quest for Value's Unit Investment Laddered Trust Series ("QUILTS"), QUILTS
Income-U.S. Treasury Series 12 ("Treasury Income Series 12"), QUILTS
Income-U.S. Treasury Series 13 ("Treasury Income Series 13") and QUILTS Asset
Builder-U.S. Treasury Series 14 ("Asset Builder Series 14") as of June 28,
1995. These statements are the responsibility of the Sponsor. Our
responsibility is to express an opinion on the Statements of Condition and
Portfolios 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 Statements of Condition and
Portfolios are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
Statements of Condition and Portfolios. 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. The irrevocable
letter of credit deposited in connection with the securities owned as of June
28, 1995, pursuant to contracts to purchase, as shown in the Statements of
Condition and Portfolios, was confirmed to us by United States Trust Company
of New York, the Trustee.
In our opinion, the accompanying Statements of Condition and Portfolios
present fairly, in all material respects, the financial position of Treasury
Income Series 12, Treasury Income Series 13 and Asset Builder Series 14 as of
June 28, 1995 in conformity with generally accepted accounting principles.
BDO SEIDMAN
New York, New York
June 28, 1995
A-12
<PAGE>
<TABLE>
QUILTS
STATEMENTS OF CONDITION
AS OF DATE OF DEPOSIT, JUNE 28, 1995
TRUST PROPERTY
<CAPTION>
Treasury Treasury Asset
Income Income Builder
Series 12 Series 13 Series 14
<S> <C> <C> <C>
Investment in Securities:
Sponsor's Contracts to Purchase Underlying
Securities Backed by Irrevocable Letters of Credit(1) $501,625 $502,172 $438,739
Accrued Interest to Date of Deposit on Securities(1) 6,638 3,219 49
Organizational Costs (2)........................... 20,000 20,000 20,000
Total.............................................. $528,263 $525,391 $458,788
LIABILITY AND INTEREST OF UNIT HOLDERS
Liability for Accrued Interest on Securities(1)(5). $6,638 $3,219 $ 49
Accrued Liability(2)............................... 20,000 20,000 20,000
26,638 23,219 20,049
Interest of Unit Holders
Units of Fractional Undivided Interest Outstanding:
Cost to Unit Holders(3)........................ 510,300 512,157 447,464
Less-Gross Underwriting Commissions(4)......... 8,675 9,985 8,725
Net Amount Applicable to Unit Holders.............. 501,625 502,172 438,739
Total.............................................. $528,263 $525,391 $458,788
</TABLE>
(1) Aggregate cost to the Trusts of the Securities listed in the portfolio
of each Trust is based on offering prices determined by the Evaluator
on the basis set forth under "Public Offering-Offering Price" as of
12:00 Noon on June 28, 1995. An irrevocable letter of credit issued by
Credit Lyonnais in an amount of $3,000,000 has been deposited with the
Trustee to cover the purchase of $1,500,000 principal amount of
Securities pursuant to contracts to purchase such Securities and
$9,906 accrued interest on such Securities to the expected dates of
settlement.
(2) Organizational costs incurred by the Trusts have been deferred and
will be amortized over the life of each of the Trusts. The Trust will
reimburse the Sponsor for actual organizational costs incurred up to a
maximum of $.20 per 1,000 Units per annum. To the extent the Trust is
larger or smaller, the actual dollar amount reimbursed may vary.
(3) Aggregate public offering price (exclusive of interest) is computed on
500,000, 500,000 and 500,000 Units for Treasury Income Series 12,
Treasury Income Series 13, and Asset Builder Series 14, respectively,
on the basis set forth under "Public Offering-Offering Price" in Part
B.
(4) Sales charge of 1.70% computed on 500,000 Units of Treasury Income
Series 12, 1.95% computed on 500,000 Units of Treasury Income Series
13, and 1.95% computed on 500,000 Units of Asset Builder Series 14 on
the basis set forth under "Public Offering Price" in Part B.
(5) On the basis set forth under "Public Offering-Accrued Interest" in
Part B, the Trustee will advance the amount of accrued interest as of
July 5, 1995 (the "First Settlement Date"), and all accrued interest
to the First Settlement Date will be distributed to the Sponsor as the
Unit Holder of record as of the First Settlement Date. Consequently,
the amount of accrued interest to be added to the public offering
price of Units will include only accrued interest from the First
Settlement Date to date of settlement, less any distributions from the
Interest Account subsequent to the First Settlement Date.
A-13
<PAGE>
<TABLE>
QUILTS
Treasury Income Series 12
AS OF DATE OF DEPOSIT, JUNE 28, 1995
<CAPTION>
Aggregate Coupon/ Cost of
Portfolio Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
<S> <C> <C> <C> <C> <C>
1 $100,000 U.S. Treasury Note 4.000% $99,062
1/31/96
2 100,000 U.S. Treasury Note 5.500% 99,859
4/30/96
3 100,000 U.S. Treasury Note 6.125% 100,469
7/31/96
4 100,000 U.S. Treasury Note 6.875% 101,516
10/31/96
5 100,000 U.S. Treasury Note 6.125% 100,719
12/31/96
--------- ---------
$500,000 $501,625
</TABLE>
ESTIMATED CASH FLOWS TO UNIT HOLDERS
The Table below sets forth the per 1,000 Units estimated distributions
of interest and principal to Unit Holders. The table assumes no changes in
Trust expenses, no redemptions or sales of the underlying U.S. Treasury
Obligations prior to maturity and the receipt of all principal due upon
maturity. To the extent the foregoing assumptions change actual distributions
will vary.
<TABLE>
<CAPTION>
Estimated Interest Estimated Principal Estimated Total
Quilts Treasury Income Series 12 Distribution Distribution Distribution
<S> <C> <C> <C>
January 1996 29.53 200.00 229.53
April 1996 12.35 200.00 212.35
July 1996 9.77 200.00 209.77
October 1996 6.80 200.00 206.80
December 1996 2.98 200.00 202.98
</TABLE>
A-14
<PAGE>
<TABLE>
QUILTS
Treasury Income Series 13
AS OF DATE OF DEPOSIT, JUNE 28, 1995
<CAPTION>
Aggregate Coupon/ Cost of
Portfolio Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
<S> <C> <C> <C> <C> <C>
1 $100,000 U.S. Treasury Note 4.250% $ 98,781
5/15/96
2 100,000 U.S. Treasury Note 6.500% 101,156
11/30/96
3 100,000 U.S. Treasury Note 6.125% 100,766
5/31/97
4 100,000 U.S. Treasury Note 6.000% 100,531
11/30/97
5 100,000 U.S. Treasury Note 6.125% 100,938
5/15/98
--------- ---------
$500,000 $502,172
</TABLE>
ESTIMATED CASH FLOWS TO UNIT HOLDERS
The Table below sets forth the per 1,000 Units estimated distributions
of interest and principal to Unit Holders. The table assumes no changes in
Trust expenses, no redemptions or sales of the underlying U.S. Treasury
Obligations prior to maturity and the receipt of all principal due upon
maturity. To the extent the foregoing assumptions change actual distributions
will vary.
<TABLE>
<CAPTION>
Estimated Interest Estimated Principal Estimated Total
Quilts Treasury Income Series 13 Distribution Distribution Distribution
<S> <C> <C> <C>
July 1995 1.56 1.56
August 1995-April 1996 4.69 4.69
May 1996 4.69 200.00 204.69
June 1996-October 1996 4.01 4.01
November 1996 4.01 200.00 204.01
December 1996 3.47 3.47
January 1997-April 1997 2.94 2.94
May 1997 2.94 200.00 202.94
June 1997 2.44 2.44
July 1997-October 1997 1.94 1.94
November 1997 1.94 200.00 201.94
December 1997 1.45 1.45
January 1998-April 1998 0.96 0.96
May 1998 0.96 200.00 200.96
</TABLE>
A-15
<PAGE>
<TABLE>
QUILTS
Asset Builder Series 14
AS OF DATE OF DEPOSIT, JUNE 28, 1995
<CAPTION>
Aggregate Coupon/ Cost of
Portfolio Principal Title of Securities Maturity Securities
No. Amount Contracted for (1) Date(s) to Trust (2)
<S> <C> <C> <C> <C> <C>
1 $100,000 U.S. Treasury Strip 0.000% $92,593
11/15/96
2 100,000 U.S. Treasury Strip 0.000% 89,999
5/15/97
3 100,000 U.S. Treasury Strip 0.000% 87,381
11/15/97
4 100,000 U.S. Treasury Strip 0.000% 84,884
5/15/98
5 90,000 U.S. Treasury Strip 0.000% 74,101
11/15/98
6 10,000 U.S. Treasury Note 5.125% 9,781
11/30/98
--------- ---------
$500,000 $438,739
</TABLE>
A-16
<PAGE>
FOOTNOTES TO PORTFOLIOS
(1) Contracts to purchase the Securities were entered into on June 28, 1995,
for Treasury Income Series 12, Treasury Income Series 13, and Asset
Builder Series 14. All contracts are expected to be settled on or about
the First Settlement Date of each Trust which is expected to be July 5,
1995 for Treasury Income Series 12, Treasury Income Series 13, and Asset
Builder Series 14.
(2) Evaluation of Securities by the Evaluator was made on the basis of current
offering prices for the Securities. The offering prices are greater than
the current bid prices of the Securities which are the basis on which Unit
Value is determined for purposes of redemption of Units.(See "Public
Offering-Comparison of Public Offering Price, Sponsor's Repurchase Price
and Redemption Price" in Part B.)
<TABLE>
<CAPTION>
The aggregate value of Securities in the
Trust, based on the bid prices on the Date Additional information regarding the Trust
of Deposit, are as follows: is as follows:
Value of Securities Based Upon
Bid Side Evaluation Sponsor's Purchase Price
<S> <C> <C>
Treasury Income Series 12 $501,313 $501,594
Treasury Income Series 13 $501,891 $502,094
Asset Builder Series 14 $438,539 $438,901
Cost of Securities Based Upon Sponsor's Profit
Offering Side Evaluation (Date of Deposit)
Treasury Income Series 12 $501,625 $31
Treasury Income Series 13 $502,172 $78
Asset Builder Series 14 $438,739 $(162)
Difference in Dollars Annual Interest Income
Treasury Income Series 12 $312 $28,625
Treasury Income Series 13 $281 $29,000
Asset Builder Series 14 $200 $ 513
% Difference Between Bid Side Evaluation
and Offering Side Evaluation
Treasury Income Series 12 .06%
Treasury Income Series 13 .06%
Asset Builder Series 14 .04%
</TABLE>
A-17
<PAGE>
UNDERWRITING SYNDICATES
The names and addresses of the Underwriters of the Units and their
participation in the offering of QUILTS are as follows:
<TABLE>
<CAPTION>
Units of Units of Units of
Treasury Income Treasury Income Asset Builder
Name and Address Series 12 Series 13 Series 14
Sponsor
<S> <C> <C> <C>
Quest For Value 100,000 100,000 200,000
World Financial Center
200 Liberty Street
New York, NY 10281
Underwriters
Oppenheimer & Co., Inc. 100,000 100,000 100,000
World Financial Center
200 Liberty Street
New York, NY 10281
Pershing Division of 100,000 100,000 100,000
Donaldson, Lufkin &
Jenrette Securities Corp.
One Pershing Plaza
Jersey City, NJ 07399
Fidelity Capital Markets 100,000 100,000 100,000
Division of National
Financial Services
World Trade Center
164 Northern Ave. ZT3
Boston, MA 02210
Stephens Inc. 100,000 100,000 -----
111 Center Street
Stephens Building
Little Rock, AR 72203
-------- -------- --------
500,000 500,000 500,000
</TABLE>
A-18
<PAGE>
PROSPECTUS PART B
Part B of this Prospectus may not be Distributed unless Accompanied by Part A
QUEST FOR VALUE'S UNIT INVESTMENT LADDERED TRUST SERIES ("QUILTS")
QUILTS Income-U.S. Treasury Series 12 ("Treasury Income Series 12")
QUILTS Income-U.S. Treasury Series 13 ("Treasury Income Series 13")
QUILTS Asset Builder-U.S. Treasury Series 14 ("Asset Builder Series 14")
THE TRUST
Organization. "QUILTS" is comprised of three separate "unit investment
trusts" designated as set forth above and in Part A. The Trusts were created
under the laws of the State of New York pursuant to a Trust Indenture and
Agreement (the "Trust Agreement"), dated the Date of Deposit, between Quest
for Value Distributors, as Sponsor and United States Trust Company of New
York, as Trustee.
The Trustee also acts as the Evaluator for the Trusts.
On the Date of Deposit the Sponsor deposited with the Trustee the
underlying securities and contracts and funds (represented by the irrevocable
letter(s) of credit issued by major commercial bank(s)) for the purchase of
such securities (the "Securities"). (See "Portfolio" for each Trust in Part A
of this Prospectus.) The Trusts are created simultaneously with the execution
of the Trust Agreement and the deposit of the Securities with the Trustee. The
Trustee then immediately delivered to the Sponsor certificates of beneficial
interest (the "Certificates") representing the units (the "Units") comprising
the entire ownership of the Trusts. Through this Prospectus, the Sponsor is
offering the Units, including Additional Units, as defined below, for sale to
the public. The holders of Units (the "Unit Holders") will have the right to
have their Units redeemed at a price based on the aggregate bid side
evaluation of the Securities (the "Redemption Price") if they cannot be sold
in the secondary market which the Sponsor, although not obligated to, proposes
to maintain. In addition, the Sponsor may offer for sale through this
Prospectus Units which the Sponsor may have repurchased in the secondary
market or upon the tender of such Units for redemption.
With the deposit of the Securities in the Trusts on the initial Date of
Deposit, the Sponsor established a proportionate relationship among the
principal amounts of interest bearing and non-interest bearing U.S. Treasury
Obligations of specified ranges of maturities in the portfolios of each Trust.
During the 90-day period following the Date of Deposit, the Sponsor is
permitted under the Trust Agreement to deposit additional Securities (the
"Additional Securities") and any cash in the Trusts not held for distribution
to Unit Holders prior to the deposit, resulting in a corresponding increase in
the number of Units outstanding (the "Additional Units"). Such Additional
Units may be continuously offered for sale to the public by means of this
Prospectus. The Sponsor anticipates that any Additional Securities deposited
in the Trusts during the 90-day period subsequent to the Date of Deposit will
maintain, as far as practicable, the original proportionate relationship among
the principal amounts of U.S. Treasury Obligations in the portfolios
established on the Date of Deposit. Precise duplication of this original
proportionate relationship may not be possible because fractions of U.S.
Treasury Obligations may not be purchased or for other reasons, but
duplication will continue to be the goal in connection with any such deposit
of Additional Securities. (These original proportionate relationships on the
Date of Deposit are set forth in "Summary of Essential Information," for each
Trust in Part A.) Deposits of Additional Securities in the portfolios of each
Trust subsequent to the 90-day period following the Date of Deposit must
replicate exactly the proportionate relationship among the principal amounts
of Securities comprising the portfolios of each Trust at the time of
replication.
A "Unit" represents an undivided interest or pro rata share in the
principal and interest of each Trust in the ratio of one Unit for each $1.00
principal amount of Securities initially deposited in each Trust. Because
regular payments of principal are to be received and certain of the Securities
will mature in accordance with their terms or may be sold under certain
circumstances described herein and because Additional Securities may be
deposited into the Trusts from time to time, the Trusts are not expected to
retain their present size and composition. To the extent that any Units are
redeemed by
1
<PAGE>
the Trustee, the fractional undivided interest or pro rata share in such Trust
represented by each unredeemed Unit will increase, although the actual
interest in such Trust represented by such fraction will remain unchanged.
Units will remain outstanding until redeemed upon tender to the Trustee by
Unit Holders, which may include the Sponsor, or until the termination of the
Trust Agreement.
Objectives. The Trusts offer investors the opportunity to participate in
a portfolio of U.S. Treasury Obligations with a greater diversification than
they might be able to acquire themselves. The objectives of the Trusts are to
provide safety of principal and, with respect to Treasury Income Series 12,
quarterly distributions of interest and, with respect to Treasury Income
Series 13, monthly distributions of interest. With respect to Asset Builder
Series 14 the Trusts seek to accumulate principal value in the Units over the
life of the Trust. The Trusts seek to provide investment flexibility by
allowing investors to choose among three portfolios of Securities that have
differing maturities and a choice of frequent income distribution or to
accumulate principal value. Investors should be aware that there is no
assurance the Trusts' objectives will be achieved. Even though the portfolios
of Treasury Income Series 12 and Treasury Income Series 13 consist primarily
of U.S. Treasury Obligations which pay interest no more often than
semi-annually, Treasury Income Series 12 will pay interest quarterly and
Treasury Income Series 13 will pay interest monthly, through advances made by
the Trustee, which will then be reimbursed when interest is received. (See
"Interest and Principal Distributions" in this Part B.)
Since disposition of Units prior to final liquidation of the Trusts may
result in an investor receiving less than the amount paid for such Units (see
"Public Offering-Comparison of Public Offering Price, Sponsor's Repurchase
Price and Redemption Price" in this Part B), the purchase of a Unit should be
looked upon as a long-term investment. The Trusts are not designed to be a
complete investment program.
Portfolios. The Trusts consist of the Securities (or contracts to
purchase such Securities together with an irrevocable letter or letters of
credit for the purchase of such contracts) listed under "Portfolio" for each
Trust in Part A of this Prospectus, as long as such Securities may continue to
be held from time to time in the Trusts (including certain securities
deposited in the Trusts in exchange or substitution for any Securities
pursuant to the Trust Agreement) together with accrued and undistributed
interest thereon and undistributed and uninvested cash realized from the
disposition of Securities. Because certain of the Securities from time to time
may be redeemed or will mature in accordance with their terms or may be sold
under certain circumstances described herein, a Trust is not expected to
retain for any length of time its present size and composition.
The Sponsor although not obligated to do so, intends to maintain a
secondary market for the Units on the bid side of the market for the Units.
(See "Liquidity-Sponsor Repurchase", herein.) Unit Holders of the Trusts, in
the absence of a secondary market for Units will have the right to have one or
more of their Units redeemed with the Trustee at a price equal to the
Redemption Price thereof (see "Liquidity-Sponsor Repurchase" in this Part B)
based on the then aggregate bid price for the Securities in the portfolios of
each Trust. Due to fluctuations in the market price of the Securities in the
portfolios and the fact that the Initial Public Offering Price is based on the
offering side of the market and includes a sales charge among other factors,
the amount realized by a Unit Holder upon the redemption or sale of Units may
be less than the price paid for such units by the Unit Holder.
The portfolio of each Trust consists of Securities issued by the United
States of America ("U.S. Treasury Obligations"), which are direct obligations
of the United States and therefore are backed by the full faith and credit of
the United States Government. The U.S. Treasury Obligations are different
issues of bonds, bills, notes, debentures and other debt obligations with
fixed final maturity dates. None of the U.S. Treasury Obligations have any
equity or conversion features. All of the U.S. Treasury Obligations in
Treasury Income Series 12 and Treasury Income Series 13 are current
interest-bearing obligations of the United States of America, or in the case
of U.S. Treasury Obligations not delivered on the initial Date of Deposit,
contracts to purchase such obligations assigned to the Trustee. Most of the
U.S. Treasury Obligations in Asset Builder Series 14 consist of stripped U.S.
Treasury notes and
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bonds with maturities of 1 year or more (hereinafter referred to as "Zero
Coupon Bonds"). The balance of the portfolio of this Trust consists of
interest-bearing obligations used to pay expenses of the Trust. Any excess
amounts after expenses are paid will be paid to Unit Holders in cash. A Zero
Coupon Bond makes no present interest payments. Rather, it makes one payment
of its face amount at maturity.
U.S. Treasury Obligations represent 100% of the aggregate market value of
the portfolios of each Trust. These U.S. Treasury Obligations are sold by the
United States Department of Treasury (the "Treasury") to finance shortfalls
between the Treasury's income and expenditures. Such gaps may have been
planned and accounted for in the budget, or they may arise from unexpected
changes in economic, political, fiscal and other circumstances. U.S. Treasury
Obligations constitute public debt of the United States and are, therefore,
direct obligations of the United States.
When selecting U.S. Treasury Obligations for the Trusts, the following
factors, among others, were considered by the Sponsor: (i) the prices and yields
of such U.S. Treasury Obligations relative to other comparable securities; (ii)
the maturities of such U.S. Treasury Obligations; and (iii) whether the U.S.
Treasury Obligations were issued after July 18, 1984.
The yields on U.S. Treasury Obligations of the type deposited in the
Trusts are dependent on a variety of factors, including general money market
conditions, fluctuations in prevailing interest rates, general conditions of
the government securities markets, size of a particular offering and the
maturity of the obligations.
RISK FACTORS
Risk Factors. An investment in Units of the Trusts should be made with an
understanding of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the portfolios of each Trust,
and hence of the Units, will decline with increases in prevailing interest
rates. The value of the underlying Securities will fluctuate inversely with
changes in prevailing interest rates. In recent years, the national economy
has experienced significant variations in rates of inflation and economic
growth, substantial increases in the national debt, substantial increase in
reliance upon foreign investors to finance the national debt, and material
reformulation of federal tax, monetary and regulatory policies. These
conditions have been associated with wide fluctuations in prevailing interest
rates and thus in the value of fixed rate debt obligations. The Sponsor cannot
predict whether such fluctuations will continue in the future.
The Securities in the portfolios of each Trust were chosen in part on the
basis of their respective stated maturity dates. The ranges of maturity dates
of each of the Securities contained in the portfolios of each Trust are shown
on the "Portfolio" for each Trust in Part A of this Prospectus.
The Trusts may be appropriate for investors who desire to invest in a
portfolio of taxable fixed income federal securities offering the safety of
principal provided by an investment in U.S. Treasury Obligations backed by the
full faith and credit of the United States Government. The Trusts generally
pass through to Unit Holders the exemptions from state and local personal
income taxes afforded to direct owners of U.S. Obligations. The Trusts are
appropriate for qualified retirement plans. (See "Retirement Plans" in this
Part B.) These Trusts may also be particularly appropriate for foreign
investors as the income from the Trusts, provided certain conditions are met,
will be exempt from withholding for U.S. Federal income tax purposes. (See
"Tax Status".)
Certain of the Securities in the Trusts may have been acquired at a
market premium. Securities trade at a premium because the prevailing interest
rates on the Securities are higher than interest on comparable debt securities
being issued at currently prevailing interest rates. The current returns of
securities trading at a market premium are higher than the current returns of
comparably rated debt securities of a similar type issued at currently
prevailing interest rates because premium securities tend to decrease in
market value as they approach maturity, when the face amount becomes payable.
Because part of the purchase price is thus returned not at maturity but
through current income
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payments, an early redemption at par of a security purchased at a premium or a
maturity at par of a security purchased at a premium will result in a
reduction in yield and a loss of principal to the Unit Holders. If currently
prevailing interest rates for newly issued and otherwise comparable securities
increase, the market premium of previously issued securities will decline and
if currently prevailing interest rates for newly issued comparable securities
decline, the market premium of previously issued securities will increase, all
other things being equal. Furthermore, the value of the Units will fluctuate
with fluctuations in the value of the underlying Securities in the portfolios
of each Trust. Therefore, Unit Holders who sell their Units prior to
termination may receive more or less than their original purchase price upon
sale. Market premium attributable to interest rate changes does not indicate
market confidence in the issue.
Substitution of Securities. Neither the Sponsor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Securities.
In the event of a failure to deliver any Security that has been purchased for
the Trusts under a contract, including those Securities purchased on a "when,
as, and if" issued basis ("Failed Securities"), the Sponsor is authorized
under the Trust Agreement to direct the Trustee to acquire other securities
("Replacement Securities") and to substitute them in the portfolios of the
Trusts within 90 days of the initial Date of Deposit.
Replacement Securities must be deposited with the Trustee within 20 days
after delivery of notice of a Failed Security (but in no event later than the
90th day following the initial Date of Deposit) and the purchase price thereof
(exclusive of accrued interest) may not exceed the amount of funds reserved by
the Trustee pursuant to a letter of credit supplied by the Sponsor for the
purchase of the Failed Security. The Replacement Securities must (i) be U.S.
Treasury Obligations, (ii) have a fixed maturity approximately the same as the
fixed maturity of the Security replaced, and (iii) be purchased at a price
that results in a yield to maturity and in a current return, in each case as
of the date on which such Replacement are deposited with the Trustee, which is
equivalent (taking into consideration then current market conditions and the
relative creditworthiness of the underlying obligation) to the yield to
maturity and current return of the related Failed Security. Whenever a
Replacement Security has been acquired for a Trust, the Trustee shall, within
five days thereafter, notify all Unit Holders of the acquisition of the
Replacement Security and shall, no later than the next Quarterly or Monthly
Payment Date, make a pro rata distribution of the amount, if any, by which the
cost to the Trust of the Failed Security exceeded the cost of the Replacement
Security.
If the right of limited substitution described in the preceding paragraph
shall not be utilized to acquire Replacement Securities in the event of a
failed contract, the Sponsor will refund to each Unit Holder the portion of
the sales charge and the pro rata portion of the cost of such Failed
Securities, and distribute the principal and accrued interest attributable to
such Failed Securities on the next Quarterly or Monthly Payment Date. In all
cases, accrued interest attributable to Failed Securities will be paid to Unit
Holders until such time as Replacement Securities are acquired. All such
interest paid to a Unit Holder which accrued after the expected date of
settlement for purchase of his Units will be paid by the Sponsor.
Because certain of the Securities from time to time may be redeemed or
will mature in accordance with their terms or may be sold under certain
circumstances, no assurance can be given that the Trusts will retain their
present size and composition for any length of time. The proceeds from the
sale of a Security or the exercise of any redemption or call provision will be
distributed to Unit Holders except to the extent such proceeds are applied to
meet redemptions of Units. (See "Liquidity-Trustee Redemption" in this Part
B.)
Discount and Zero Coupon Bonds. Most of the aggregate principal amount of
the Securities in Asset Builder Series 14 are stripped U.S. Treasury notes or
bonds with maturities of 1 year or more, which are referred to as Zero Coupon
Bonds. The balance of the portfolio of this Trust consists of interest-bearing
obligations used to pay expenses of the Trust. Any excess amounts remaining
after expenses are paid will be paid to Unit Holders in cash. Zero Coupon
Bonds do not provide for the payment of any current interest and provide for
payment at maturity at face value unless sooner sold
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or redeemed. The market value of Zero Coupon Bonds is subject to greater
fluctuation in response to changes in prevailing interest rates. Zero Coupon
Bonds generally are subject to redemption at compound accreted value based on
par value at maturity. Because the issuer is not obligated to make current
interest payments, Zero Coupon Bonds may be less likely to be redeemed than
coupon bonds issued at a similar prevailing interest rates. In the case of
certain categories of Unit Holders, the accrued market discount from Zero
Coupon Bonds is not taxable until such Securities are disposed of or have
matured. The accrued portion of such discount will generally be treated as
taxable interest income for regular federal income tax purposes. Upon sale or
redemption, any gain realized that is in excess of the earned portion of
acquisition discount will be taxable as long-term capital gain if the Zero
Coupon Bonds have been held for more than one year. (See "Tax Status" in this
Part B.) The current value of a Zero Coupon Bond reflects the present value of
its face amount at maturity. (See "Portfolio Summary" in Part A.)
Some of the aggregate principal amount of Securities in the Trusts may
have been purchased at a "market" discount from par value at maturity. The
coupon interest rates on the discount bonds at the time they were purchased
and deposited in the Trusts were lower than the current market interest rates
for newly issued bonds of comparable rating and type. At the time of issuance
the discount bonds were for the most part issued at then current coupon
interest rates. The current yields (coupon interest income as a percentage of
market price) of discount bonds will be lower than the current yields of
comparably rated bonds of similar type newly issued at current interest rates
because discount bonds tend to increase in market value as they approach
maturity and the full principal amount becomes payable. A market discount bond
held to maturity will have a larger portion of its total return in the form of
capital gain and less in the form of interest income than a comparable bond
newly issued at current yield and a lower current market value than otherwise
comparable bonds with a shorter term of maturity. If prevailing interest rates
rise, the value of discount bonds will decrease; and if prevailing interest
rates decline, the value of discount bonds will increase. The discount does
not necessarily indicate a lack of market confidence in the issuer.
PUBLIC OFFERING
Offering Price. The Public Offering Price per Unit of each Trust is
computed by adding to the aggregate offering price of the Securities in each
Trust divided by the number of Units outstanding for that Trust, an amount
equal to (a) 1.70% of the aggregate offering price of the Securities per Unit
which is equal to 1.729% of the Public Offering Price for Treasury Income
Series 12, (b) 1.95% of the aggregate offering price of the Securities per
Unit which is equal to 1.989% of the Public Offering Price for Treasury Income
Series 13, and (c) 1.95% of the aggregate offering price of the Securities per
Unit which is equal to 1.989% of the Public Offering Price for Asset Builder
Series 14. A proportionate share of accrued interest on the Securities from
the First Settlement Date to the expected date of settlement for the Units is
added to the Public Offering Price. Accrued interest is the accumulated and
unpaid interest on a Security from the last day on which interest was paid and
is accounted for daily by the applicable Trusts at the initial daily rate set
forth under "Summary of Essential Information" for each Trust in Part A. The
Public Offering Price for each Trust can vary on a daily basis from the amount
stated in this Prospectus in accordance with fluctuations in the prices of the
Securities and the price to be paid by each investor will be computed as of
the date the Units are purchased.
The aggregate offering side evaluation of the Securities is determined by
the Evaluator (a) on the basis of current offering prices of the Securities,
(b) if an offering price is not available for any particular Security, on the
basis of current offering prices for comparable securities, (c) by determining
the value of the Securities on the offer side of the market by appraisal, or
(d) by any combination of the above. This evaluation is made on the initial
Date of Deposit as of 12:00 Noon New York Time and as of 4:00 P.M. each
business day thereafter during the initial public offering, effective for all
orders received during the preceding 24-hour period. With respect to the
initial evaluation of the offering prices of certain Securities which at the
initial Date of Deposit were subject to syndicate offering period pricing
restrictions, it is the practice of the Evaluator to determine such evaluation
on the basis of the syndicate
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offering price, unless other factors cause the Evaluator to conclude that such
syndicate offering price does not then accurately reflect the free market
value of such Securities, in which case the Evaluator will also take into
account the other criteria described above for the purpose of making its
determination.
The Evaluator may obtain current bid or offering prices for the
Securities from investment dealers or brokers (including the Sponsor) that
customarily deal in U.S. Treasury Obligations, or from any other reporting
service or source of information which the Evaluator deems appropriate.
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
Securities in the Trusts is actually paid semi-annually to the Trusts.
However, interest on the Securities in the applicable Trusts is accounted for
daily on an accrual basis. Because of this, the Trusts always have an amount
of interest earned but not yet collected by the Trustee because of
non-collected coupons. For this reason, the Public Offering Price of Units of
the Trusts will have added to it the proportionate share of accrued and
undistributed interest to date of settlement.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price on the sale
of Units to the public, the Trustee will advance the amount of accrued
interest as of the First Settlement Date as set forth in the "Summary of
Essential Information" for each Trust in Part A and the same will be
distributed to the Sponsor as the Unit Holder of record as of the First
Settlement Date. Consequently, the amount of accrued interest to be added to
the Public Offering Price of Units will include only accrued interest from the
First Settlement Date to date of settlement, less any distributions from the
Interest Account subsequent to the First Settlement Date. Thus, since the
First Settlement Date is the date of settlement for anyone ordering Units on
the date of this Prospectus, no accrued interest will be added to the Public
Offering Price of Units ordered on the initial Date of Deposit. Except through
an advancement of its own funds, the Trustee will have no cash for
distribution to Unit Holders until it receives interest payments on the
Securities in the Trust. The Trustee has agreed to make advancements of its
own funds in order to reduce the amount of time before monthly or quarterly
distributions of interest in Unit Holders commence (see "Interest and
Principal Distributions"). The Trustee will recover its advancements without
interest or other costs to such Trust from interest received on the Securities
in the Trust. When these advancements have been recovered, regular
distributions of interest to Unit Holders will be commenced. The Interest
Account during the initial months of the Trusts will include some cash
representing interest which has been collected but will predominantly consist
of uncollected accrued interest which is not available for distribution. Since
the Trusts normally receive the interest on Securities twice a year and the
interest on the Securities in the Trusts is accrued on a daily basis, the
Trusts usually will have an amount of interest accrued but not actually
received and distributed to Unit Holders. A Unit Holder will not recover his
proportionate share of accrued interest until the Units are sold or redeemed,
or such Trust is terminated. At that time, the Unit Holder will receive his
proportionate share of the accrued interest computed to the settlement date in
the case of sale or termination and to the date of tender in the case of
redemption.
Volume and Other Discounts. Units of the Trusts are available to Unit
Holders at a volume discount ("Volume Discount") from the Public Offering
Price during the initial public offering. Volume Discount will result in a
reduction of the sales charge applicable to such purchases. Furthermore,
Volume Discount applies to the cumulative Units purchased by a Unit Holder
during a period of 60 days from the initial date of sale of the Units to such
Unit Holder. Units purchased by the same purchasers in separate transactions
during this 60-day period will be aggregated for purposes of determining if
such purchaser is entitled to a Volume Discount provided that such purchaser
must own at least the lesser of either (i) the required number of Units or
(ii) the required dollar amount at the Public Offering Price, at the time such
determination is made. Units held in the name of the spouse of the purchaser
or in the name of a child of the purchaser under 21 years of age are deemed
for the purposes hereof to be registered in the name of the purchaser. Volume
Discount is also applicable to a trustee or other
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fiduciary purchasing securities for a single trust estate or single fiduciary
account. As a result of such discounts, Units are sold to dealers/agents at
prices which represent a concession as reflected below. The Sponsor reserves
the right to change these discounts from time to time. The amount of Volume
Discount, the approximate sales charge and the dealer concession applicable to
such purchases are as follows:
<TABLE>
<CAPTION>
Volume Discount Approximate Approximate
Lesser of Number of from Public Reduced Dealer/Agent
Units or Dollar Amount Sales Charge Offering per Unit Sales Charge Concession
Treasury Income Series 12
<S> <C> <C> <C> <C>
Less than 500,000 1.70% 0% 1.70% 1.05%
500,000 to 999,999 1.70% .20% 1.50% .95%
1,000,000 and above* 1.70% .45% 1.25% .75%
Treasury Income Series 13
Less than 500,000 1.95% 0% 1.95% 1.20%
500,000 to 999,999 1.95% .25% 1.70% 1.10%
1,000,000 and above* 1.95% .55% 1.40% .85%
Asset Builder Series 14
Less than 500,000 1.95% 0% 1.95% 1.20%
500,000 to 999,999 1.95% .25% 1.70% 1.10%
1,000,000 and above* 1.95% .55% 1.40% .85%
</TABLE>
- -----------
* For any transactions of 1,000,000 Units or more or over $1,000,000, the
Sponsor intends to negotiate the applicable sales charge and such charge
will be disclosed to any such purchaser.
Rollover Privilege. In addition, to the extent Units of each QUILTS trust
are currently available from the Sponsor, Unit Holders of the Trusts may elect
to rollover principal distributions paid to them as Securities in their
respective Trusts mature into additional units of such available QUILTS trusts
at a reduced sales charge equal to the first breakpoint of the Trust
purchased, as described above on the day the rollover is executed. Reduced
sales charges are available only on proceeds received from principal
distributions from maturing Securities of the Trust. Furthermore, for rollover
transactions of any amount, dealers/agents will receive concessions equal to
the first breakpoint of the Trust purchased described above on the day the
rollover is executed. For more complete information concerning the rollover
privilege, including charges and expenses, the Unit Holders should contact
their broker.
Net Asset Value Purchases. No sales charge will be applied to the
following transactions: purchases by persons who for at least 90 days have
been directors, trustees, officers or full-time employees of any of (i) the
funds distributed by Quest for Value Distributors, (ii) Quest for Value
Advisors and (iii) Quest for Value Distributors, or their affiliates, their
immediate relatives or any trust, pension, profit sharing or other benefit
plan for any of them; purchases by any account advised by Oppenheimer Capital,
the parent of Quest for Value Advisors; and purchases by an employee of a
broker-dealer having a dealer or servicing agreement with Quest for Value
Distributors and/or a participating member of the Oppenheimer Capital brokered
CD selling group or of a bank or financial intermediary currently offering
QUILTS to its customers.
Distribution of Units. During the initial offering period (i) Units
issued on the initial Date of Deposit and (ii) Additional Units issued after
such date in respect of additional deposits of Securities, will be distributed
by the Sponsor and dealers at the Public Offering Price plus accrued interest.
The initial offering period in each case is thirty days unless extended by the
Sponsor for Units specified in (i) and (ii) in the preceding sentence. In
addition, Units may be distributed through dealers who are members of the
National Association of Securities Dealers, Inc. or other financial
intermediaries as permitted by law. Certain banks and thrifts will make Units
of each Trust available to their customers on an agency basis. A portion of
the sale charge paid by their customers is retained by or remitted
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to the banks. Under the Glass-Steagall Act, banks are prohibited from
underwriting Units; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have indicated that these particular
agency transactions are permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of federal
law expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
The Sponsor intends to qualify the Units of the Trusts for sale in
Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia,
Illinois, Indiana, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri,
Nebraska, Nevada, New Jersey, New York, Ohio, Oklahoma, Oregon, Texas,
Virginia, Washington and the District of Columbia. Additional states may be
added from time to time.
The Sponsor may provide additional concessions to its affiliates in
connection with the distribution of the Units. The Sponsor reserves the right
to change the dealers concession at any time. Such Units may then be
distributed to the public by the dealers at the Public Offering Price then in
effect. The Sponsor reserves the right to reject, in whole or in part, any
order for the purchase of Units. Also, the Sponsor in its discretion may from
time to time pursuant to objective criteria established by the Sponsor pay
fees to qualifying Underwriters, brokers, dealers, banks and/or others for
certain services or activities which are primarily intended to result in sales
of Units of the Trusts. Such payments are made by the Sponsor out of its own
assets and out of the assets of the Trusts. These programs will not change the
price Unit Holders pay for their Units or the amount that each Trust will
receive from the Units sold.
Sponsor's Profits. The Sponsor will receive a gross underwriting
commission (although the net commission retained will be lower because of the
concession paid to dealers) equal to 1.70% of the Public Offering Price per
Unit (equivalent to 1.729% of the net amount invested in the Securities) for
Treasury Income Series 12, 1.95% of the Public Offering Price per Unit
(equivalent to 1.989% of the net amount invested in the Securities) for
Treasury Income Series 13, and 1.95% of the Public Offering Price per Unit
(equivalent to 1.989% of the net amount invested in the Securities) for Asset
Builder Series 14. Additionally, the Sponsor may realize a profit on the
deposit of the Securities in the Trust representing the difference between the
cost of the Securities to the Sponsor and the cost of the Securities to the
Trusts (see "Portfolios" in Part A). The Sponsor may realize profits or
sustain losses with respect to Securities deposited in the Trust which were
acquired from underwriting syndicates of which it was a member.
The Sponsor may have participated as a sole underwriter or manager,
co-manager or member of underwriting syndicates from which some of the
aggregate principal amount of the Securities were acquired for the Trusts in
the amounts set forth in Part A.
During the initial offering period and thereafter to the extent
Additional Units continue to be issued and offered for sale to the public the
Sponsor may also realize profits or sustain losses as a result of fluctuations
after the initial Date of Deposit in the offering prices of the Securities and
hence in the Public Offering Price received by the Sponsor for the Units.
Cash, if any, made available to the Sponsor prior to settlement date for the
purchase of Units may be used in the Sponsor's business subject to the
limitations of 17 CFR 240.15c3-3 under the Securities Exchange Act of 1934,
and may be of benefit to the Sponsor.
In maintaining a market for the Units (see "Liquidity-Sponsor
Repurchase") the Sponsor will realize profits or sustain losses in the amount
of any difference between the price at which they buy Units and the price at
which they resell such Units.
Comparison of Public Offering Price, Sponsor's Repurchase Price and
Redemption Price. Although the Public Offering Price of Units of the Trusts
will be determined on the basis of the current offering prices of the
Securities in the Trusts, the value at which Units may be redeemed or sold in
the secondary market will be determined on the basis of the current bid prices
of such Securities. On the initial Date of Deposit, the Public Offering Price
and the Sponsor's Initial Repurchase Price per Unit
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of each Trust (each based on the offering side evaluation of the Securities in
the Trusts) each exceeded the Redemption Price and the Sponsor's secondary
market Repurchase Price per Unit (based upon the current bid side evaluation
of the Securities in the Trusts) by the amounts shown under "Summary of
Essential Information" for each Trust in Part A of this Prospectus. On the
initial Date of Deposit, the bid side evaluation for each Trust was lower than
the offering side evaluation for such Trust by the amount set forth in Part A.
For this reason, among others (including fluctuations in the market prices of
such Securities and the fact that the Public Offering Price includes the
applicable sales charge), the amount realized by a Unit Holder upon any
redemption or Sponsor repurchase of Units may be less than the price paid for
such Units. See "Liquidity-Sponsor Repurchase."
ESTIMATED LONG TERM RETURN AND ESTIMATED CURRENT RETURN
Units of the Trusts are offered to investors on a "dollar price" basis
(using the computation method previously described under "Public Offering
Price") as distinguished from a "yield price" basis (involving the lesser of
the yield as computed to maturity of bonds or to an earlier redemption date).
Since they are offered on a dollar price basis, the rate of return on an
investment in Units of Treasury Income Series 12 and Treasury Income Series 13
is measured in terms of "Estimated Current Return" and "Estimated Long Term
Return." The rate of return for Asset Builder Series 14 is only measured in
terms of "Estimated Long Term Return." This calculation of performance is
mandated by the rules of the Securities and Exchange Commission.
Estimated Long Term Return is calculated by: (1) computing the yield to
maturity or to an earlier call date (whichever results in a lower yield) for
each Security in each Trust's portfolio in accordance with accepted practices,
which practices take into account not only the interest payable on the
Security but also the amortization of premiums or accretion of discounts, if
any; (2) calculating the average of the yields for the Securities in each
Trust's portfolio by weighing each Security's yield by the market value of the
Security and by the amount of time remaining to the date to which the Security
is priced (thus creating an average yield for the portfolio of each Trust);
and (3) reducing the average yield for the portfolio of each Trust in order to
reflect estimated fees and expenses of such Trust and the maximum sales charge
paid by Unit Holders. The resulting Estimated Long Term Return represents a
measure of the return to Unit Holders earned over the estimated life of the
Trusts. The Estimated Long Term Return as of the initial Date of Deposit is
stated for each Trust under "Summary of Essential Information" in Part A.
Estimated Current Return is computed by dividing the Estimated Net Annual
Interest Income per Unit by the Public Offering Price per Unit. In contrast to
the Estimated Long Term Return, the Estimated Current Return does not take
into account the amortization of premium or accretion of discount, if any, on
the Securities in the portfolio of each Trust. Moreover, because prevailing
interest rates on Securities purchased at a premium are generally higher than
current interest rates on newly issued bonds of a similar type with comparable
rating, the Estimated Current Return per Unit may be affected adversely if
such Securities are redeemed prior to their maturity. On the initial Date of
Deposit, the Estimated Net Annual Interest Income per Unit divided by the
Public Offering Price resulted in the Estimated Current Return stated for the
applicable Trust under "Summary of Essential Information" in Part A.
The Estimated Net Annual Interest Income per Unit of each Trust will vary
with changes in the fees and expenses of the Trustee and the Evaluator
applicable to the Trust and with the redemption, maturity, sale or other
disposition of the Securities in such Trust. The Public Offering Price will
vary with changes in the offering prices (bid prices in the case of the
secondary market) of the Securities. Therefore, there is no assurance that the
present Estimated Current Return or Estimated Long Term Return will be
realized in the future.
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RIGHTS OF UNIT HOLDERS
Book-Entry Units. Ownership of Units of the Trusts will not be evidenced
by certificates. All evidence of ownership of the Units will be recorded in
book-entry form either at Depository Trust Company ("DTC") through an
investor's broker's account or through registration of the Units on the books
of the Trustee. Units held through DTC will be deposited by the Sponsor with
DTC in the Sponsor's DTC account and registered in the nominee name CEDE & CO.
Individual purchases of beneficial ownership interest in the Trust will be
made in book-entry form through DTC or the Trustee. Ownership and transfer of
Units will be evidenced and accomplished directly and indirectly by
book-entries made by DTC and its participants if the Units are evidenced at
DTC, or otherwise will be evidenced and accomplished by book-entries made by
the Trustee. DTC will record ownership and transfer of the Units among DTC
participants and forward all notices and credit all payments received in
respect of the Units held by the DTC participants. Beneficial owners of Units
will receive written confirmation of their purchase and sale from the
broker-dealer or bank from whom their purchase was made. Units are
transferable by making a written request properly accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unit Holder. Unit Holders must sign
such written request exactly as their names appear on the records of the
Trusts. Such signatures must be guaranteed by a commercial bank or trust
company, savings and loan association or by a member firm of a national
securities exchange.
Interest and Principal Distributions. Interest received by the Trusts is
credited by the Trustee to an Interest Account for the Trusts and a deduction
is made to reimburse the Trustee without interest for any amounts previously
advanced. Proceeds representing principal received from the maturity,
redemption, sale or other disposition of the Securities are credited to a
Principal Account of the Trust. Cash credited to the Interest Account and
Principal Account will not be reinvested by the Trusts prior to distribution.
Such cash balances are maintained by the Trustee and any income generated
thereon inures to the benefit of the Trustee and not the Trusts.
Distributions to each Unit Holder from the Interest Account are computed
as of the close of business on each Record Date for the following Payment Date
and consist of an amount substantially equal to one-twelfth of such Unit
Holder's pro rata share of the Estimated Net Annual Interest Income in the
Interest Account. Distributions from the Principal Account of the Trusts
(other than amounts representing failed contracts, as previously discussed)
will be computed as of each quarterly Record Date for Treasury Income Series
12 and as of each monthly Record Date for Treasury Income Series 13, and will
be made to the Unit Holders of the Trusts on or shortly after the next
Quarterly or Monthly Payment Date. Proceeds representing principal received
from the disposition of any of the Securities between a Record Date and a
Payment Date which are not used for redemptions of Units will be held in the
Principal Account and not distributed until the second succeeding Payment
Date. Persons who purchase Units between a Record Date and a Payment Date will
receive their first distribution on the second Payment Date after such
purchase.
Normally, interest payments on the Securities in the portfolios of the
Trusts which pay interest are made on a semi-annual basis. Therefore, it
usually takes several months after the Date of Deposit for the Trustee to
receive sufficient interest payments on the Securities to begin quarterly or
monthly distributions of interest to Unit Holders. However, the Trustee has
agreed to advance sufficient funds to the Trusts in order to reduce the amount
of time before quarterly or monthly distributions of interest to Unit Holders
commence. Further, because interest payments are not received by the Trusts at
a constant rate throughout the year, interest distributions may be more or
less than the amount credited to the Interest Account as of a given Record
Date. For the purpose of minimizing fluctuations in the distributions from the
Interest Account, the Trustee will advance sufficient funds, without interest,
as may be necessary to provide interest distributions of approximately equal
amounts. All funds in respect of the Securities received and held by the
Trustee prior to distribution to Unit Holders may be of benefit to the Trustee
and do not bear interest to Unit Holders.
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In order to acquire the "when, as, and if issued" Securities contracted
for by the Trusts, if any, it may be necessary to pay on the settlement dates
for delivery of such Securities amounts covering accrued interest on such
Securities which exceed (1) the amounts paid by Unit Holders and (2) the
amount which will be made available under the letter of credit furnished by
the Sponsor on the initial Date of Deposit for the purchase of such
Securities. The Trustee has agreed to pay for any amounts necessary to cover
any such excess and will be reimbursed therefor, without interest, when funds
become available from interest payments on the particular Securities with
respect to which such payments may have been made. Also, since interest on the
Securities in the portfolios of the Trusts does not accrue to the benefit of
Unit Holders until their respective dates of delivery, the Trustee will, in
order to provide income to the Unit Holders for this period of non-accrual,
reduce its fee applicable to the Trust in an amount equal to the amount of
interest that would have so accrued on such Securities in the Trust between
the date of settlement for the Units and such dates of delivery. To the extent
such non-accrual is in excess of the reduction in the Trustee's fee, the
amount of such excess will be distributed to Unit Holders as a return of
capital.
As of the first day of each month, the Trustee will deduct from the
Interest Account of the Trusts, and, to the extent funds are not sufficient
therein, from the Principal Account of the Trusts, amounts necessary to pay
the expenses of the Trusts (see "Trust Expenses and Charges" in this Part B).
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any applicable taxes or other
governmental charges that may be payable out of the Trusts. Amounts so
withdrawn shall not be considered a part of the Trusts' assets until such time
as the Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Interest and
Principal Accounts such amounts as may be necessary to cover purchases of
Replacement Securities and redemptions of Units by the Trustee.
The estimated quarterly interest distribution per Unit for Treasury
Income Series 12 and the estimated monthly interest distribution per unit for
Treasury Income Series 13 will initially be in the amount shown under "Summary
of Essential Information" for each Trust in Part A and will change and may be
reduced as Securities mature or are redeemed, exchanged or sold, or as
expenses of the Trusts fluctuate. No distribution need be made from the
Principal Account until the balance therein is an amount sufficient to
distribute $1.00 per 1,000 Units.
Records. For each of the Trusts, the Trustee shall furnish Unit Holders
in connection with each distribution a statement of the amount of interest, if
any, and the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per Unit. Within a reasonable time
after the end of each calendar year the Trustee will furnish to each person
who at any time during the calendar year was a Unit Holder of record, a
statement showing (a) as to the Interest Account: interest received (including
any earned original issue discount and amounts representing interest received
upon any disposition of Securities), amounts paid for purchases of Replacement
Securities and redemptions of Units, if any, deductions for applicable taxes
and fees and expenses of the Trusts, 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; (b) as to the Principal Account: the
dates of disposition of any Securities and the net proceeds received therefrom
(including any unearned original issue discount but excluding any portion
representing accrued interest), deductions for payments of applicable taxes
and fees and expenses of the Trusts, amounts paid for purchases of Replacement
Securities and redemptions of Units, if any, 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; (c) a list of the Securities held
and the number of Units outstanding on the last business day of such calendar
year; (d) the Redemption Price per Unit based upon the last computation
thereof made during such calendar year; and (e) amounts actually distributed
to Unit Holders during such calendar year from the Interest and Principal
Accounts, separately stated, of each Trust, expressed both as total dollar
amounts and as dollar amounts representing the pro rata share of each Unit
outstanding on the last business day of such calendar year.
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The Trustee shall keep available for inspection by Unit Holders at all
reasonable times during usual business hours, books of record and account of
its transactions as Trustee, including records of the names and addresses of
Unit Holders, certificates issued or held, a current list of Securities in the
portfolio of each Trust and a copy of the Trust Agreement.
TAX STATUS
In the opinion of Battle Fowler LLP, counsel for the Sponsor, under
existing law:
Each Trust is not an association taxable as a corporation for United
States federal income tax purposes and income of the Trusts will be
treated as income of the Unit Holders in the manner set forth below. Each
Unit Holder will be considered the owner of a pro rata portion of each
asset of a Trust under the grantor trust rules of Sections 671-678 of the
Internal Revenue Code of 1986, as amended (the "Code").
Each Unit Holder will be considered to have received his pro rata
share of interest derived from each Trust asset when such interest is
received by the Trust. Each Unit Holder will be required to include in
his gross income, as determined for Federal income tax purposes, original
issue discount with respect to his interest in a Security held by the
Trust at the same time and in the same manner as though the Unit Holder
were the direct owner of such interest. Each Unit Holder's pro rata share
of each expense paid by the Trust is deductible by the Unit Holder to the
same extent as though the expense had been paid directly by him.
Each Unit Holder will have a taxable event when a Security is
disposed of (whether by sale, exchange, redemption, or payment at
maturity) or when the Unit Holder redeems or sells his Units. The total
tax cost of each Unit to a Unit Holder must be allocated among the cash
and Securities held in the Trust in accordance with their relative fair
market value on the date the Unit Holder purchases his Units in order to
determine his per Unit tax basis for the Securities represented thereby.
If a Unit Holder's tax cost of his pro rata interest in a Security
exceeds the amount payable in respect of such pro rata interest upon the
maturity of the Security, such excess is a "bond premium" which may be
amortized by the Unit Holder at the Unit Holder's election as provided in
Section 171 of the Code.
The tax basis of a Unit Holder with respect to his interest in a Security
will be increased by the amount of original issue discount thereon properly
included in the Unit Holder's gross income as determined for Federal income
tax purposes.
The amount of gain recognized by a Unit Holder on a disposition of a
Security by a Trust will be equal to the difference between such Unit Holder's
pro rata portion of the gross proceeds realized by the Trust on the
disposition and the Unit Holder's tax cost basis in his pro rata portion of
the Security disposed of. Any gain recognized on a sale or exchange of a Unit
Holder's pro rata interest in a Security, and not constituting a realization
of accrued "market discount" in the case of a Security issued after July 18,
1984, and any loss will be a capital gain or loss, except in the case of a
dealer or financial institution. Gain realized on the disposition of the
interest of a Unit Holder in a market discount Security is treated as ordinary
income to the extent the gain does not exceed the accrued market discount. A
Unit Holder has an interest in a market discount Security in a case in which
the Unit Holder's tax cost for his pro rata interest in the Security is less
than the stated redemption price thereof at maturity (or the issue price plus
original issue discount accrued up to the acquisition date, in the case of an
original issue discount Security). If a Unit Holder has an interest in a
market discount Security and has incurred debt to acquire Units, the
deductibility of a portion of the interest incurred on such debt may be
deferred. Any capital gain or loss arising from the disposition of a Unit
Holder's pro rata interest in a Security will be a long-term capital gain or
loss if the Unit Holder has held his Units and the Trust has held the Security
for more than one year. Net capital gains (i.e., the excess of net long-term
capital gain over net short-term capital loss) of individuals, estates and
trusts are subject to a maximum nominal tax rate of 28%. Such net capital
gains may, however, result in a
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disallowance of itemized deductions and/or affect a personal exemption
phase-out. For taxable year beginning after December 31, 1992, net capital
gain from the disposition of property held for investment is excluded from
investment income for purposes of computing the limitation on the deduction
for investment interest applicable to individuals. A taxpayer may, however,
elect to include such net capital gain in investment income if the taxpayer
reduces the amount of net capital gain that is otherwise eligible for the
maximum 28% rate by such amount.
If the Unit Holder sells or redeems a Unit for cash, he is deemed thereby
to have disposed of his entire pro rata interest in all Trust assets
represented by the Unit and will have a taxable income or loss measured by the
difference between his per Unit tax basis for such assets, as described above,
and the amount realized.
Under the personal income tax laws of the State and City of New York, the
income of Trust will be treated as the income of the Unit Holders.
Each Trust may contain one or more Securities which were originally
issued at a discount ("original issue discount"). In general, original issue
discount can be defined as the difference between the price at which a
Security was issued and its stated redemption price at maturity. In the case
of a Security issued before July 2, 1982, original issue discount is deemed to
accrue (be "earned") ratably over the period from the date of issuance of the
Security to the date of maturity and is apportioned among the original holder
of the obligation and subsequent purchasers in accordance with a ratio, the
numerator of which is the number of calendar days the obligation was owned by
the holder and the denominator of which is the total number of calendar days
from the date of issuance of the obligation to its date of maturity. Gain or
loss upon the disposition of an original issue discount Security is measured
by the difference between the amount realized upon disposition and the amount
paid for such obligation. A holder may, however, exclude from gross income
that portion of such gain attributable to accrued interest and the "earned"
portion of original issue discount.
In the case of a Security issued after July 1, 1982, original issue
discount is deemed to accrue on a constant interest method, which corresponds
in general to the economic accrual of interest (adjusted to eliminate
proportionately on an elapsed-time basis any excess of the amount paid for the
Security over the sum of the issue price and the accrued original issue
discount on the acquisition date). Unit Holders generally will be required to
recognize the accrual of original issue discount as interest income currently
even though they will not receive a corresponding amount of cash until later
years. The tax basis in the Security is increased by the amount of original
issue discount that is deemed to accrue while the Security is held. The
difference between the amount realized on a disposition of the Security
(excluding accrued interest) and the adjusted tax basis of the Security will
give rise to taxable gain or loss upon a disposition of the Security by the
Trust (or a sale or redemption of Units by a Unit Holder).
The general rule that requires the holder of a debt instrument issued at
a discount to include in gross income on a current basis the sum of the daily
portions of original issue discount does not apply to a debt instrument that
has a fixed maturity not more than one year from the date of issue. For
short-term Government obligations held by a cash method taxpayer, if no
special election is made by the holder, income is not realized until the sale,
maturity, or other disposition of the obligation, and is ordinary income to
the extent the gain realized does not exceed an amount equal to the ratable
share of acquisition discount. Gain, if any, in excess of such amount should
be a short-term capital gain. Acquisition discount is the excess of the stated
redemption price at maturity of the obligation over the basis of the taxpayer
in the obligation. For accrual basis taxpayers and taxpayers treated for this
purpose as if they use the accrual method (dealers, banks, regulated
investment companies, common trust funds, and taxpayers engaged in hedging
transactions), acquisition discount on short-term Governmental obligations is
includible in income as it accrues, on a straight line basis, unless a special
election is made. Limitations apply to the deductibility of interest on loans
incurred to acquire short-term obligations and special rules apply to
short-term obligations that are a stripped bond or stripped coupon.
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A Unit Holder who is neither a citizen nor a resident of the United
States and is not a United States domestic corporation (a "foreign Unit
Holder") will not generally be subject to United States Federal income tax on
his, her or its pro rata share of interest and original issue discount on a
Security held in the Trust or any gain from the sale or other disposition of
his, her or its pro rata interest in a Security held in the Trust, which
interest or original issue discount is not effectively connected with the
conduct by the foreign Unit Holder of a trade or business within the United
States and which gain is either (i) not from sources within the United States
or (ii) not so effectively connected, provided that:
(a) with respect to interest and original issue discount the Security
was issued after July 18, 1984;
(b) with respect to any U.S. source capital gain, the foreign Unit
Holder (if an individual) is not present in the United States
for 183 days or more during his or her taxable year in which
the gain was realized and so certifies; and
(c) the foreign Unit Holder provides the required certifications
regarding (i) his, her or its status and, (ii) in the case of U.S.
source income, the fact that the interest, original issue discount or
gain is not effectively connected with the conduct by the foreign
Unit Holder of a trade or business within the United States.
The interest and/or dividend income received by a foreign Unit Holder
from an entity of which it owns 10% or more of the voting stock in the case of
a corporation or 10% or more of the profits or capital interest in the case of
a partnership, will, however, be subject to federal income taxation. Foreign
Unit Holders should consult their own tax counsel with respect to United
States tax consequences of ownership of Units.
Each Unit Holder (other than a foreign Unit Holder who has properly
provided the certifications described above) will be requested to provide the
Unit Holder's taxpayer identification number to the Trustee and to certify
that the Unit Holder has not been notified that payments to the Unit Holder
are subject to back-up withholding. If the taxpayer identification number and
an appropriate certification are not provided when requested, 31% back-up
withholding will apply.
The foregoing discussion relates only to United States Federal and, to
the extent stated, New York State and City income taxes.
Investors should consult their tax counsel for advice with respect to
their own particular tax situations.
After the end of each calendar year, the Trustee will furnish to each
Unit Holder an annual statement containing information relating to the
interest received by the Trust on the Securities, the gross proceeds received
by the Trust from the disposition of any Security (resulting from redemption
or payment at maturity of any Security or the sale by the Trust of any
Security), and the fees and expenses paid by the Trust. The Trustee will also
furnish required annual information returns to each Unit Holder and to the
Internal Revenue Service.
The Sponsor believes that Unit Holders who are individuals should not
generally be subject to state personal income taxes on the interest (including
original issue discount) received through each Trust. However, Unit Holders
(including individuals) may be subject to state and local taxes on any capital
gains (or market discount treated as ordinary income) derived from each Trust
and to other state and local taxes with respect to the interest derived from
each Trust. Moreover, Unit Holders will probably not be entitled to a
deduction for state tax purposes for their share of the fees and expenses paid
by the Trusts or for any interest on indebtedness incurred to purchase or
carry their Units. Even though the Sponsor believes that interest income
(including original issue discount) received through each Trust is exempt from
state personal income taxes on individuals in most states, Unit Holders should
consult their own tax advisers with respect to state and local taxation
matters.
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LIQUIDITY
Sponsor Repurchase. The Sponsor, although not obligated to do so,
currently intends to maintain a secondary market for the Units and
continuously to offer to repurchase the Units. The Sponsor's secondary market
repurchase price after the initial public offering is completed, will be based
on the aggregate bid price of the Securities in each Trust portfolio and will
be the same as the redemption price. The aggregate bid price will be
determined by the Evaluator on a daily basis after the initial public offering
is completed and computed on the basis set forth under "Liquidity-Trustee
Redemption." During the initial offering period, the Sponsor's repurchase
price will be based on the aggregate offering price of the Securities in the
Trusts. Unit Holders who wish to dispose of their Units should inquire of the
Sponsor as to current market prices prior to making a tender for redemption.
The Sponsor may discontinue repurchase of Units if the supply of Units exceeds
demand, or for other business reasons. The date of repurchase is deemed to be
the date on which Units are received in proper form by Quest of Value
Distributors, Two World Financial Center, 225 Liberty Street, New York, NY
10080-6116. Units received after 4 P.M., New York Time, will be deemed to have
been repurchased on the next business day. In the event a market is not
maintained for the Units, a Unit Holder may be able to dispose of Units only
by tendering them to the Trustee for redemption.
Units purchased by the Sponsor in the secondary market may be reoffered
for sale by the Sponsor at a price based on the aggregate offering price of
the Securities in the Trusts plus (a) a 1.70% sales charge (1.729% of the net
amount invested) plus net accrued interest for Treasury Income Series 12, (b)
a 1.95% sales charge (1.989% of the net amount invested) plus net accrued
interest for Treasury Income Series 13 and (c) a 1.95% sales charge (1.989% of
the net amount invested) plus net accrued interest for Asset Builder Series
14. Any Units that are purchased by the Sponsor in the secondary market also
may be redeemed by the Sponsor if it determines such redemption to be in its
best interest.
The Sponsor may, under certain circumstances, as a service to Unit
Holders, elect to purchase any Units tendered to the Trustee for redemption
(see "Liquidity-Trustee Redemption" in this Part B). Factors which the Sponsor
will consider in making a determination will include the number of Units of
all Trusts which it has in inventory, its estimate of the salability and the
time required to sell such Units and general market conditions. For example,
if in order to meet redemptions of Units the Trustee must dispose of
Securities, and if such disposition cannot be made by the redemption date
(seven calendar days after tender), the Sponsor may elect to purchase such
Units. Such purchase shall be made by payment to the Unit Holder not later
than the close of business on the redemption date of an amount equal to the
Redemption Price on the date of tender.
Trustee Redemption. Units may also be tendered to the Trustee for
redemption at its corporate trust office at 770 Broadway, New York, New York
10003, upon proper delivery of such Units and payment of any relevant tax. At
the present time there are no specific taxes related to the redemption of
Units. No redemption fee will be charged by the Sponsor or the Trustee. Units
redeemed by the Trustee will be canceled.
Within seven calendar days following a tender for redemption, or, if such
seventh day is not a business day, on the first business day prior thereto,
the Unit Holder will be entitled to receive in cash an amount for each Unit
tendered equal to the Redemption Price per Unit computed as of the Evaluation
Time set forth under "Summary of Essential Information" for each Trust in Part
A on the date of tender. The "date of tender" is deemed to be the date on
which Units are received by the Trustee, except that with respect to Units
received after the close of trading on the New York Stock Exchange, the date
of tender is the next day on which such Exchange is open for trading, and such
Units will be deemed to have been tendered to the Trustee on such day for
redemption at the Redemption Price computed on that day.
Accrued interest paid on redemption shall be withdrawn from the Interest
Account, or, if the balance therein is insufficient, from the Principal
Account. All other amounts paid on redemption shall be withdrawn from the
Principal Account. The Trustee is empowered to sell Securities in order to
make funds available for redemptions. Such sales, if required, could result in
a sale of Securities by
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the Trustee at a loss. To the extent Securities are sold, the size and
diversity of such Trust will be reduced.
The Redemption Price per Unit is the pro rata share of each Unit in each
Trust determined by the Trustee on the basis of (i) the cash on hand in the
Trust or moneys in the process of being collected, (ii) the value of the
Securities in the Trust based on the bid prices of such Securities and (iii)
interest accrued thereon, less (a) amounts representing taxes or other
governmental charges payable out of each Trust, (b) the accrued expenses of
such Trust and (c) cash allocated for the distribution to Unit Holders of
record as of the business day prior to the evaluation being made. The
Evaluator may determine the value of the Securities in each Trust (1) on the
basis of current bid prices of the Securities obtained from dealers or brokers
who customarily deal in bonds comparable to those held by the Trusts, (2) on
the basis of bid prices for bonds comparable to any Securities for which bid
prices are not available, (3) by determining the value of the Securities by
appraisal, or (4) by any combination of the above. The Evaluator will
determine the aggregate current bid price evaluation of the Securities in each
Trust, taking into account the market value of the Securities in the manner
described as set forth under "Public Offering-Offering Price."
The Trustee is irrevocably authorized in its discretion, if the Sponsor
does not elect to purchase a Unit tendered for redemption or if the Sponsor
tenders a Unit or Units for redemption, in lieu of redeeming such Unit, to
sell such Unit in the over-the-counter market for the account of the tendering
Unit Holder at prices which will return to the Unit Holder an amount in cash,
net after deducting brokerage commissions, transfer taxes and other charges,
equal to or in excess of the Redemption Price for such Unit. The Trustee will
pay the net proceeds of any such sale to the Unit Holder on the day he would
otherwise be entitled to receive payment of the Redemption Price.
The Trustee reserves the right to suspend the right of redemption and to
postpone the date of payment of the Redemption Price per Unit for any period
during which the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on that Exchange is restricted or
during which (as determined by the Securities and Exchange Commission) an
emergency exists as a result of which disposal or evaluation of the Securities
is not reasonably practicable, or for such other periods as the Securities and
Exchange Commission may by order permit. The Trustee and the Sponsor are not
liable to any person or in any way for any loss or damage which may result
from any such suspension or postponement.
A Unit Holder who wishes to dispose of his Units should inquire of his
bank or broker in order to determine if there is a current secondary market
price in excess of the Redemption Price.
RETIREMENT PLANS
The Trusts may be an appropriate investment for retirement plans such as
IRAs, self-employed retirement plans (formerly Keogh Plans), pension,
profit-sharing plans and other qualified retirement plans.
Generally, capital gains and income received under each of the foregoing
plans are deferred from Federal taxation. All distributions from such plans
are generally treated as ordinary income but may, in some cases, be eligible
for special income averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with
respect to the establishment and maintenance of any such plan. Such plans are
offered by brokerage firms and other financial institutions. Fees and charges
with respect to such plans may vary.
Individual Retirement Account-IRA. Any individual under age 701/2 may
contribute the lesser of $2,000 or 100% of compensation to any IRA annually.
Such contributions are fully deductible if the individual (and spouse if
filing jointly) is not covered by a retirement plan at work.
A participant's interest in an IRA must be, or commence to be,
distributed to the participant not later than April 1 of the calendar year
following the year during which the participant attains age 701/2.
Distributions made before attainment of age 591/2, except in the case of the
participant's death or disability, or where the amount distributed is to be
rolled over to another IRA, or where the distributions are taken as a series
of substantially equal periodic payments over the participant's life or life
expectancy (or the joint lives or life expectancies of the participant and the
designated
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beneficiary) are generally subject to a surtax in an amount equal to 10% of
the distribution. The amount of such periodic payments may not be modified
before the later of five years or attainment of age 591/2. Excess
contributions are subject to an annual 6% excise tax.
IRA applications, disclosure statements and trust agreements are
available from the Sponsor upon request.
Qualified Retirement Plans. Units of each Trust may be purchased by
qualified pension or profit sharing plans maintained by corporations,
partnerships or sole proprietors. The maximum annual contribution for a
participant in a money purchase pension plan or to paired profit sharing and
pension plans is the lesser of 25% of compensation or $30,000. Prototype plan
documents for establishing qualified retirement plans are available from the
Sponsor upon request. The latest date by which a participant must commence
receiving benefits from a plan is generally the same as for an IRA. The 10%
early distribution surtax also applies, except that distributions received
after age 55 or as a result of a separation of service, and distributions
received to pay deductible medical expenses or pursuant to qualified domestic
relations order are not subject to the tax.
Excess Distributions Tax. In addition to the other taxes due by reason of
a plan distribution, a tax of 15% may apply to certain aggregate distributions
from IRAs, Keogh Plans, and corporate retirement plans to the extent such
aggregate taxable distributions exceed specified amounts (generally $150,000,
as adjusted during a tax year). This 15% tax will not apply to distributions
on account of death, qualified domestic relations order or to eligible
distributions that are rolled over to an IRA or other qualified plan. In
general, for lump sum distributions the excess distribution over $750,000 (as
adjusted) will be subject to the 15% tax.
TRUST ADMINISTRATION
Portfolio Supervision. Except for the purchase of Replacement Securities,
Additional Securities or as discussed herein, the acquisition of any
Securities for the Trust other than Securities initially deposited by the
Sponsor is prohibited. The Sponsor may direct the Trustee to dispose of
Securities upon (i) default in payment of principal or interest on such
Securities, (ii) default under other documents adversely affecting debt
service on such Securities, or (iii) decline in price or the occurrence of
other market or credit factors that in the opinion of the Sponsor would make
the retention of such Securities in the Trusts detrimental to the interests of
the Unit Holders. If a default in the payment of principal or interest on any
of the Securities occurs and if the Sponsor fails to instruct the Trustee to
sell or hold such Securities, the Trust Agreement provides that the Trustee
may sell such Securities. The Trustee shall not be liable for any depreciation
or loss by reason of any sale of Securities or by reason of the failure of the
Sponsor to give directions to the Trustee. An affiliate of the Sponsor, Quest
For Value Advisors, will perform the portfolio supervisory functions noted
herein on behalf of the Sponsor and receive the Annual Supervisory Fee noted
in Part A.
The Sponsor is authorized by the Trust Agreement to direct the Trustee to
accept or reject certain plans for the refunding or refinancing of any of the
Securities. Any bonds received in exchange or substitution will be held by the
Trustee subject to the terms and conditions of the Agreement to the same
extent as the Securities originally deposited. Within five days after such
deposit, notice of such exchange and deposit shall be given by the Trustee to
each Unit Holder registered on the books of the Trustee, including an
identification of the Securities eliminated and the Securities substituted
therefor.
Trust Agreement, Amendment and Termination. The Trust Agreement may be
amended by the Trustee, the Sponsor and the Evaluator without the consent of
any of the Unit Holders: (1) to cure any ambiguity or to correct or supplement
any provision which may be defective or inconsistent; (2) to change any
provision thereof as may be required by the Securities and Exchange Commission
or any successor governmental agency; or (3) to make such other provisions in
regard to matters arising thereunder as shall not adversely affect the
interests of the Unit Holders.
The Trust Agreement may also be amended in any respect, or performance of
any of the provisions thereof may be waived, with the consent of the Unit
Holders owning 662/3% of the Units then outstanding for the purpose of
modifying the rights of Unit Holders; provided that no such
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amendment or waiver shall reduce any Unit Holder's interest in a Trust without
his consent or reduce the percentage of Units required to consent to any such
amendment or waiver without the consent of Unit Holders. The Trust Agreement
may not be amended, without the consent of all Unit Holders then outstanding,
to increase the number of Units issuable or to permit the acquisition of any
securities in addition to or in substitution for those initially deposited in
the Trusts, or to provide the Trustee with the power to engage in business or
investment activities not specifically authorized in the indenture as
originally adopted or so as to adversely affect the characterization of a
Trust as a grantor trust for federal income tax purposes, except in accordance
with the provisions of the Trust Agreement. The Trustee shall promptly notify
Unit Holders, in writing, of the substance of any such amendment.
The Trust Agreement provides that the Trust shall terminate upon the
maturity, redemption or other disposition, as the case may be, of the last of
the Securities held in the Trust but in no event is it to continue beyond the
end of the calendar year preceding the fiftieth anniversary of the execution
of the Trust Agreement. If the value of a Trust shall be less than the minimum
amount set forth under "Summary of Essential Information" in Part A, the
Trustee may, in its discretion, and shall when so directed by the Sponsor,
terminate the Trusts. The Trust may also be terminated at any time with the
consent of the Unit Holders representing 100% of the Units then outstanding.
In the event of termination, written notice thereof will be sent by the
Trustee to all Unit Holders. Within a reasonable period after termination, the
Trustee must sell any Securities remaining in the terminated Trust, and, after
paying all expenses and charges incurred by the Trust, distribute to each Unit
Holder, upon surrender for cancellation of his Units, his pro rata share of
the Interest and Principal Accounts.
Alternatively, upon the termination of the Trust and further upon receipt
by the Trust, and subject to the conditions of an appropriate exemptive order
from the Securities and Exchange Commission, each Unit Holder's pro rata share
of the net asset value of the Trust will automatically be invested on behalf
of each Unit Holder in a mutual fund which invests in U.S. government
securities (the "Reinvestment Fund"). A copy of the current Prospectus of the
Reinvestment Fund will be delivered to Unit Holders at least 30 days prior to
the time reinvestment is made. At any time prior to the time of reinvestment,
Unit Holders may elect not to invest in the Reinvestment Fund, in which case,
their pro rata share of liquidation proceeds will be sent to them. This
investment in the Reinvestment Fund will not prevent Unit Holders from
recognizing taxable gain or loss as a result of the liquidation of the Trust,
even though no cash will be distributed to Unit Holders to pay any taxes.
However, Unit Holders may redeem any shares in the Reinvestment Fund in order
to generate cash to pay these taxes. Unit Holders should consult their own tax
advisers regarding this matter.
The Sponsor. Quest for Value Distributors is the Sponsor of Quest for
Value's Unit Investment Laddered Trust Series and all subsequent series. The
Sponsor is a majority-owned subsidiary of Oppenheimer Capital. Since 1969,
Oppenheimer Capital has managed assets for many of the nation's largest
pension plan clients. Today, the firm has over $28 billion under management,
including $5 billion in the Quest for Value funds. The Quest for Value
organization was created in 1988 to introduce mutual funds designed to help
individual investors achieve their financial goals. Quest for Value is
committed to retirement planning and services geared to the long term
investment goals of the individual investor. The Sponsor, a Delaware general
partnership, is engaged in the mutual fund distribution business. It is a
member of the National Association of Securities Dealers, Inc.
The information included herein is only for the purpose of informing
investors as to the financial responsibility of the Sponsor and its ability to
carry out its contractual obligations.
The Sponsor is liable for the performance of its obligations arising from
its responsibilities under the Trust Agreement, but will be under no liability
to Unit Holders for taking any action, or refraining from taking any action,
in good faith pursuant to the Trust Agreement, or for errors in judgment
except in cases of its own willful misfeasance, bad faith, negligence or
reckless disregard of its obligations and duties.
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The Sponsor may resign at any time by delivering to the Trustee an
instrument of resignation executed by the Sponsor. If at any time the Sponsor
shall resign or fail to perform any of its duties under the Trust Agreement or
becomes incapable of acting or becomes bankrupt or its affairs are taken over
by public authorities, then the Trustee may either (a) appoint a successor
Sponsor; (b) terminate the Trust Agreement and liquidate the Trusts; or (c)
continue to act as Trustee without terminating the Trust Agreement. Any
successor sponsor appointed by the Trustee shall be satisfactory to the
Trustee and, at the time of appointment, shall have a net worth of at least
$1,000,000.
The Trustee. The Trustee is United States Trust Company of New York,
with its offices at 770 Broadway, New York, New York 10003 (800) 428-8890.
The Trustee shall not be liable or responsible in any way for taking any
action, or for refraining from taking any action, in good faith pursuant to
the Trust Agreement, or for errors in judgment; or for any disposition of any
moneys, Securities or Certificates in accordance with the Trust Agreement,
except in cases of its own willful misfeasance, bad faith, negligence or
reckless disregard of its obligations and duties. In addition, the Trustee
shall not be liable for any taxes or other governmental charges imposed upon
or in respect of the Securities or the Trusts which it may be required to pay
under current or future law of the United States or any other taxing authority
having jurisdiction. The Trustee shall not be liable for depreciation or loss
incurred by reason of the sale by the Trustee of any of the Securities
pursuant to the Trust Agreement.
For further information relating to the responsibilities of the Trustee
under the Trust Agreement, reference is made to the material set forth under
"Rights of Unit Holders."
The Trustee may resign by executing an instrument in writing and filing
the same with the Sponsor, and mailing a copy of a notice of resignation to
all Unit Holders. In such an event the Sponsor is obligated to appoint a
successor Trustee as soon as possible. In addition, if the Trustee becomes
incapable of acting or becomes bankrupt or its affairs are taken over by
public authorities, the Sponsor may remove the Trustee and appoint a successor
as provided in the Trust Agreement. Notice of such removal and appointment
shall be mailed to each Unit Holder by the Sponsor. If upon resignation of the
Trustee no successor has been appointed and has accepted the appointment
within thirty days after notification, the retiring Trustee may apply to a
court of competent jurisdiction for the appointment of a successor. The
resignation or removal of the Trustee becomes effective only when the
successor Trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor Trustee. Upon execution of a written
acceptance of such appointment by such successor Trustee, all the rights,
powers, duties and obligations of the original Trustee shall vest in the
successor.
Any corporation into which the Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Trustee shall be a party, shall be the successor Trustee. The
Trustee must always be a banking corporation organized under the laws of the
United States or any State and have at all times an aggregate capital, surplus
and undivided profits of not less than $2,500,000.
The Evaluator. The Evaluator is United States Trust Company of New York,
with its offices at 770 Broadway, New York, New York 10003 (800) 428-8890.
The Trustee, the Sponsor and the Unit Holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Sponsor or Unit Holders for errors in judgment, except in cases of its own
willful misfeasance, bad faith, negligence or reckless disregard of its
obligations and duties. The Evaluator shall not be liable or responsible for
depreciation or losses incurred by reason of the purchase, sale or retention
of any Securities.
The Evaluator may resign or may be removed by the Sponsor and Trustee,
and the Sponsor and the Trustee are to use their best efforts to appoint a
satisfactory successor. Such resignation or removal shall become effective
upon the acceptance of appointment by the successor Evaluator. If
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upon resignation of the Evaluator no successor has accepted appointment within
thirty days after notice of resignation, the Evaluator may apply to a court of
competent jurisdiction for the appointment of a successor.
TRUST EXPENSES AND CHARGES
All or a portion of the expenses incurred in creating and establishing
the Trusts, including the cost of the initial preparation and execution of the
Trust Agreement, registration of the Trusts and the Units under the Investment
Company Act of 1940 and the Securities Act of 1933, blue sky registration
fees, the initial fees and expenses of the Trustee, legal expenses and other
actual out-of-pocket expenses, will be paid by the Trusts and amortized over
the life of the Trusts. All advertising and selling expenses, as well as any
organizational expenses not paid by the Trusts, will be borne by the Sponsor
at no cost to the Trusts.
The Sponsor will not charge the Trusts a fee for its services as such.
The Sponsor's affiliate will receive for portfolio supervisory services
to the Trusts an annual fee in the amount set forth under "Summary of
Essential Information" for each Trust in Part A. The Sponsor's fee may exceed
the actual cost of providing portfolio supervisory services for the Trusts,
but at no time will the total amount received for portfolio supervisory
services rendered to all series of the Quest for Value's Unit Investment
Laddered Trust Series in any calendar year exceed the aggregate cost to the
Sponsor of supplying such services in such year. (See "Trust Administration-
Portfolio Supervision.")
The Trustee's annual fee and estimated expenses are set forth under
"Summary of Essential Information" for each Trust in Part A. For a discussion
of the services performed by the Trustee pursuant to its obligations under the
Trust Agreement, see "Trust Administration" and "Rights of Unit Holders."
The Trustee's fees applicable to the Trusts are calculated based upon the
principal amount of Securities in the Trusts on the Record Date of such month,
payable monthly as of the Record Date from the Interest Account of the Trusts
to the extent funds are available and then from the Principal Account. Both
the supervisory fee and the Trustee's fee may be increased without approval of
the Unit Holders by amounts not exceeding proportionate increases in consumer
prices for services as measured by the United States Department of Labor's
Consumer Price Index entitled "All Services Less Rent."
The following additional charges are or may be incurred by the Trusts:
all expenses (including counsel fees) of the Trustee incurred and advances
made in connection with its activities under the Trust Agreement, including
the expenses and costs of any action undertaken by the Trustee to protect the
Trusts and the rights and interests of the Unit Holders; fees of the Trustee
for any extraordinary services performed under the Trust Agreement;
indemnification of the Trustee for any loss or liability accruing to it
without negligence, bad faith or willful misconduct on its part, arising out
of or in connection with its acceptance or administration of the Trusts;
indemnification of the Sponsor for any losses, liabilities and expenses
incurred in acting as sponsors of the Trusts without negligence, bad faith or
willful misconduct on its part; and all taxes and other governmental charges
imposed upon the Securities or any part of the Trusts (no such taxes or
charges are being levied, made or, to the knowledge of the Sponsor,
contemplated). The above expenses, including the Trustee's fees, when paid by
or owing to the Trustee are secured by a first lien on the Trusts to which
such expenses are charged. In addition, the Trustee is empowered to sell
Securities in order to make funds available to pay all expenses.
The accounts of the Trusts shall be audited not less than annually by
independent public accountants selected by the Sponsor. The expenses of the
audit shall be an expense of the Trust. So long as the Sponsor maintains a
secondary market, the Sponsor will bear any audit expense which exceeds 50
Cents per 1,000 Units. Unit Holders covered by the audit during the year may
receive a copy of the audited financial statements upon request.
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OTHER MATTERS
Legal Opinions. The legality of the Units offered hereby and certain
matters relating to federal tax law have been passed upon by Messrs.
Battle Fowler LLP, 75 East 55th Street, New York, New York 10022 as counsel
for the Sponsor. Messrs. Carter, Ledyard & Milburn, Two Wall Street, New
York, New York 10005 have acted as counsel for the Trustee.
Independent Auditors. The Statements of Condition and Portfolios are
included herein in reliance upon the report of BDO Seidman, independent
auditors, and upon the authority of said firm as experts in accounting and
auditing.
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Quest for Value's Unit Investment Laddered Trust Series ("QUILTS")
(A Unit Investment Trust)
QUILTS Income-U.S. Treasury Series 12
QUILTS Income-U.S. Treasury Series 13
QUILTS Asset Builder-U.S. Treasury Series 14
Prospectus Dated: June 29, 1995
Sponsor: Trustee and Evaluator:
Quest for Value Distributors United States Trust Company
Two World Financial Center of New York
225 Liberty Street 770 Broadway
New York, New York 10080-6116 New York, New York 10003
(800) 628-6664 (800) 428-8890
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Table of Contents
Title Page
PART A
Summary of Essential Information...........................................A-2
Independent Auditors' Report..............................................A-12
Statements of Condition...................................................A-13
Portfolio and Cash Flow Information.......................................A-14
Underwriting Syndicates...................................................A-18
PART B
The Trust....................................................................1
Risk Factors.................................................................3
Public Offering..............................................................5
Estimated Long Term Return and
Estimated Current Return....................................................9
Rights of Unit Holders......................................................10
Tax Status..................................................................12
Liquidity...................................................................15
Retirement Plans............................................................16
Trust Administration........................................................17
Trust Expenses and Charges..................................................20
Other Matters...............................................................21
No person is authorized to give any information or to make any
representations not contained in Parts A and B of this Prospectus; and any
information or representation not contained herein must not be relied upon as
having been authorized by the Trust, the Trustee, the Evaluator, or the
Sponsor. The Trust is a registered as unit investment trust under the
Investment Company Act of 1940. Such registration does not imply that the
Trust or any of its Units have been guaranteed, sponsored, recommended or
approved by the United States or any state or any agency or officer thereof.
This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in any state to any person to whom
it is not lawful to make such offer in such state.
Parts A and B of this Prospectus do not contain all of the information
set forth in the registration statement and exhibits relating thereto, filed
with the Securities and Exchange Commission, Washington, D.C., under the
Securities Act of 1933, and the Investment Company Act of 1940, and to which
reference is made.
