AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 26, 1997
REGISTRATION NO. 333-05685
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
AMENDMENT NO. 4
TO
FORM S-6
---------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
---------------------------------
A. EXACT NAME OF TRUST:
EQUITY INVESTOR FUND
EQUITY PARTICIPATION SERIES--LOW FIVE PORTFOLIO
DEFINED ASSET FUNDS
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE, PAINEWEBBER INCORPORATED
FENNER & SMITH 1285 AVENUE OF THE
INCORPORATED AMERICAS
DEFINED ASSET FUNDS NEW YORK, NY 10019
P.O. BOX 9051
PRINCETON, NJ 08543-9051
PRUDENTIAL SECURITIES
INCORPORATED
ONE NEW YORK PLAZA
NEW YORK, NY 10292 DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE
CENTER--59TH FLOOR
NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ.
P.O. BOX 9051
PRINCETON, NJ 08543-9051 ROBERT E. HOLLEY
1285 AVENUE OF THE
AMERICAS
NEW YORK, NY 10019
COPIES TO:
LEE B. SPENCER, JR. PIERRE DE SAINT PHALLE, DOUGLAS LOWE, ESQ.
ONE NEW YORK PLAZA ESQ. 130 LIBERTY STREET--29TH
NEW YORK, NY 10292 450 LEXINGTON AVENUE FLOOR
NEW YORK, NY 10017 NEW YORK, NY 10006
E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.
F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite
G. AMOUNT OF FILING FEE: not applicable
THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
DEFINED ASSET FUNDSSM
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The objectives of this Defined Fund are to provide
EQUITY PARTICIPATION SERIES capital appreciation together with protection
LOW FIVE PORTFOLIO against a loss of capital for investors who hold
(A UNIT INVESTMENT their investment until the termination of the
TRUST) Trust. The Trust will invest in a portfolio
- ------------------------------consisting of call options on a basket of the five
lowest dollar price per share common stocks of the
ten highest dividend yielding common stocks in the
Dow Jones Industrial Average (DJIA) and U.S.
Treasury zero coupon bonds. The Trust will not
receive any dividend income on stocks underlying
the call options and is designed for those
investors who are willing to commit to an
approximately 5 1/2 year investment.
The value of units will fluctuate with the value
of the securities in the Trust's portfolio and no
assurance can be given that the units will
appreciate in value.
Minimum purchase: One Unit.
-------------------------------------------------
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
SPONSORS: COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Merrill Lynch, OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Pierce, Fenner & Smith CONTRARY IS A CRIMINAL OFFENSE.
Incorporated Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities Prospectus dated August 26, 1997.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
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Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored over the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International bond and equity portfolios
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Defining the Equity Participation Low Five Strategy
- ---------------------------------------------------
This Trust combines options on a basket of the common stocks comprising the Low
Five Strategy (as contrasted with separate options on each common stock) with
principal protection provided by U.S. Treasury zero coupon bonds. The Low Five
Strategy invests in the five lowest dollar price per share common stocks (Low
Five Stocks) of the 10 highest dividend-yielding stocks of the 30 stocks in the
DJIA* as of three business days prior to the date of this prospectus. The call
options initially relate to the Low Five Stocks identified under Defined
Portfolio. The Low Five Stocks underlying the call options will adjust annually
each August, 1998-2002 to continue to reflect the Low Five Strategy.
The call options held by the Trust will provide each unit 100% of the price
appreciation (exclusive of dividends) on an investment of $1,000 in the Low Five
Stocks for a period of approximately 5 1/2 years from the initial date of
deposit. The U.S. Treasury zero coupon bonds will return to investors who hold
their units until the termination of the Trust not less than $1,000 per unit.
The Equity Participation Low Five Strategy provides a disciplined approach to
investing without active management. For investors who hold their units until
termination of the Trust, the Trust can provide safety of capital if a market
correction were to occur yet still allow investors to profit if market levels
continue to rise.
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Defining Your Portfolio
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Approximately 27.68% of the initial value of the Trust's portfolio consists of
call options. The call options will expire on February 20, 2003, and it is
anticipated that the Sponsors will direct the Trustee to sell the call options
approximately five business days prior to their expiration. Each of the call
options is an obligation of, or guaranteed by, a financial institution whose
long-term debt or financial strength and claims-paying ability are rated in the
category AA or better by Standard & Poor's Ratings Group and in the category Aa
or better by Moody's Investors Service Inc.
On the initial date of deposit, the Low Five Stocks underlying the call options
represented the following industries:
APPROXIMATE
BASKET PERCENTAGE
/ / Oil/Gas-International 20%
/ / Chemicals 20%
/ / Tobacco/Food Processing 20%
/ / Utility/Telecommunications 20%
/ / Auto Manufacturing 20%
Approximately 72.32% of the initial value of the Trust's portfolio consists of
U.S. Treasury zero coupon bonds maturing on or shortly before the expiration of
the call options plus cash in an amount sufficient to pay estimated annual
expenses of the Trust. A zero coupon bond is purchased at a discount from its
face amount while the Trust will receive the bond's face value at maturity. The
Sponsors anticipate that these bonds will appreciate by the expiration of the
call options to an amount equal in value to not less than $1,000 per unit.
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Defining Your Risks
- ---------------------------------------------------
The Trust is designed for those investors who desire protection from a market
correction with upside participation (exclusive of any dividends) if the
domestic equity markets continue to increase in price. Because the Trust is
designed to return to investors at least $1,000 per Unit at its termination, it
may not be an appropriate investment for investors who are unwilling to commit
to an approximately 5 1/2 year investment. If you redeem or sell your units
prior to termination of the Trust, the amount you will receive will be affected
by the values at that time of the U.S. Treasury zero coupon bonds and of the
options, and you may receive less than $1,000 per unit. Furthermore, the Trust
is not an appropriate investment for those who are not comfortable with the
Equity Participation Low Five Strategy.
- ----------------------------
* The name 'Dow Jones Industrial Average' is the property of Dow Jones &
Company, Inc., which is not affiliated with the Sponsors, has not participated
in any way in the creation of the Portfolio or in the selection of stocks
included in the Portfolio and has not reviewed or approved any information
included in this Prospectus.
A-2
<PAGE>
While the call options relate to five of the highest-yielding stocks in the
DJIA, the call options do not pass through any dividends payable on the Stocks
and the Trust will not receive any dividend income. The Trust is therefore not
appropriate for investors seeking current income.
The value of your units will fluctuate with the value of the call options and
U.S. Treasury zero coupon bonds held in the Trust's portfolio. The value of the
call options could be adversely affected by changes in the financial condition
of the issuers of the options and of the issuers of the Low Five Stocks
themselves.
The value of the call options will also be adversely affected by decreases in
the value and dividend rates of the Low Five Stocks, an increase in interest
rates, a reduction in the perceived volatility of the stock market and the
remaining time to expiration. Additionally, the value of a call option does not
increase or decrease at the same rate as the underlying Stocks (although they
move in the same direction). However, as an option approaches its expiration,
its value increasingly moves with the price of the Low Five Stocks.
The Low Five Stocks generally have lower prices and therefore higher yields
relative to the other stocks in the DJIA because they may, for example, be
experiencing financial difficulty, or be out of favor in the market because of
weak performance, poor earnings forecasts or negative publicity, or they may be
reacting to general market cycles. Investing in these stocks is considered
contrarian in nature. There can be no assurance that the market factors that
caused the relatively low prices and high yields of the Low Five Stocks will
change, that any negative conditions adversely affecting the stock price will
not deteriorate, that share prices will not decline further during the life of
the Trust or that the Low Five Stocks will continue to be included in the DJIA.
The Low Five Stocks do not reflect any investment recommendations of the
Sponsors and one or more of the Low Five Stocks may, from time to time, be
subject to sell recommendations from one or more of the Sponsors.
The value of the U.S. Treasury zero coupon bonds will be adversely affected by
decreases in bond prices and increases in interest rates.
Unlike a mutual fund, the Trust is not actively managed and the Sponsors receive
no management fee. Therefore, any adverse financial condition of an issuer of a
Low Five Stock or any market movement in the price of a call option or a Low
Five Stock will not require the sale of a call option or any other change in the
Trust's portfolio.
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Defining Your Investment
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PUBLIC OFFERING PRICE PER UNIT $1,035.87
The Public Offering Price as of August 25, 1997, the initial date of deposit, is
based on the aggregate value of the underlying call options and zero coupon
bonds ($247,250.00) plus cash, divided by the number of units outstanding (250),
plus the sales charge. The Public Offering Price on any subsequent date will
vary. The call options and zero coupon bonds are valued by the Evaluator at 4:00
p.m. Eastern time on every business day.
DISTRIBUTIONS
The Trust will pay no distributions until a reasonable time after the maturity
of the U.S. Treasury bonds and the settlement date of the call options.
TAXES
Investors will be required to include original issue discount relating to the
zero coupon bonds in income every year as it accrues, prior to the Trust's
receipt of cash payments on the zero coupon bonds. Gain or loss recognized by an
investor on a sale of Units, or on the Trust's sale of zero coupon bonds or an
interest in the call option, will be capital gain or loss. Counsel is of the
opinion that gain or loss recognized by an investor on the cash settlement of
the call option will be capital gain or loss.
TERMINATION DATE
The Trust will terminate on or about February 28, 2003. The Trust may be
terminated earlier if its value is less than 40% of the value of the securities
when deposited regardless of whether the 40% level is reached through the
operation of market movement or through sale of securities to meet redemption of
units.
SPONSORS' PROFIT OR LOSS
The Sponsors' profit or loss from the Trust will include the receipt of
applicable sales charges, fluctuations in the Public Offering Price or secondary
market price of units and a gain of $925.00 on the initial deposit of the
securities (see Sponsors' and Underwriters' Profits in Part B).
A-3
<PAGE>
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Defining Your Costs
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SALES CHARGES
This table shows the maximum costs and expenses you would pay, directly or
indirectly, if you invested in this Trust.
As a %
of Net Amount
Amount per
Invested Unit
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Maximum Sales Charge 3.50% $ 35.87
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
As a %
of Net Amount per
Assets Unit
----------- -----------
Trustee's Fee .070% $ 0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees .045% $ 0.45
Evaluator's Fee .035% $ 0.35
Other Operating
Expenses .042% $ 0.42
----------- -----------
TOTAL .192% $ 1.92
These estimates do not include the costs of purchasing and selling the call
options or the bonds.
This Trust (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Trust--as is common for mutual
funds. The organizational costs are estimated at $0.46 per Unit (.046% of net
assets).
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:
1 Year 3 Years 5 Years
$38 $42 $47
This information is presented to permit a comparison of fees. The example uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds.
Reductions to the repurchase and cash redemption prices in the secondary market
to recoup the costs of liquidating securities to meet redemption have not been
reflected. The example should not be considered a representation of past or
future expenses or annual rates of return; the actual expenses and annual rates
of return may be more or less than the example.
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem your units or sell your units at any time prior to the
termination of the Trust. Your price will be based on the then current net asset
value (generally based on the lower, bid side evaluation of the call options and
zero coupon bonds, as determined by an independent evaluator) plus principal
cash. The bid side redemption and secondary market repurchase price as of August
25, 1997 was $983.49 per unit ($52.38 per unit less than the Public Offering
Price).
A-4
<PAGE>
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Defined Portfolio
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Equity Investor Fund
Equity Participation Series--Low Five Portfolio August 25, 1997
Defined Asset Funds
The Portfolio consists of the following:
<TABLE>
<CAPTION>
RATINGS OF ISSUER(2)
---------------------- PERCENTAGE
CALL OPTIONS:(1) STANDARD EXERCISE OF COST TO
NAME OF ISSUER & POOR'S MOODY'S DATE(3) TRUST(4) TRUST(5)
- ---------------------------------------- --------- ------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
1. Swiss Bank Corp., London Branch AA+ Aa1 2/20/2003 4.429% $ 11,072.40
2. Swiss Re Financial Products Corp. AAA+ Aaa+ 2/20/2003 23.252 58,130.10
---------- --------------
Subtotal 27.681% $ 69,202.50
---------- --------------
<CAPTION>
ZERO COUPON BONDS:
MATURITY
FACE AMOUNT DATE
----------- -----------
<S> <C> <C>
United States Treasury Notes $ 250,000 2/15/2003 71.219% 178,047.50
CASH 1.100 2,750.00
---------- --------------
Subtotal 72.319% $ 180,797.50
---------- --------------
Total 100% $ 250,000.00
---------- --------------
---------- --------------
</TABLE>
- ----------------------------
(1) The call options initially cover the following Stocks: AT&T Corporation,
Philip Morris Companies, Inc., General Motors Corporation, Exxon Corporation
and Dupont (E.I.) De Nemours & Company. Any of the Sponsors may have acted
as underwriters, managers or co-managers of a public offering of Low Five
Stocks during the last three years. Affiliates of the Sponsors may serve as
specialists in Low Five Stocks on one or more stock exchanges and may have a
long or short position in any of these securities or in options on any of
them, and may be on the opposite side of public orders executed on the floor
of an exchange where the securities are listed. An officer, director or
employee of any of the Sponsors may be an officer or director of one or more
of the issuers of the Low Five Stocks. A Sponsor may trade for its own
account as an odd-lot dealer, market maker, block positioner and/or
arbitrageur in any of the securities or in options on them. Any Sponsor, its
affiliates, directors, elected officers and employee benefits programs may
have either a long or short position in any securities or in options on
them.
(2) Ratings are ratings of the long-term debt of the issuers or their
guarantors, unless followed by '+', which indicates a rating of the
financial strength and claims-paying ability of the issuer or guarantor.
(3) The Trustee will seek to sell the call options at least five business days
before their respective exercise dates.
(4) Based on Cost to Trust.
(5) Valuation by the Evaluator at the evaluation time on August 25, 1997.
A-5
<PAGE>
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Hypothetical Strategy Performance Information
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The following table compares the actual price appreciation (excluding dividends)
of the Dow Jones Industrial Average for five-year periods with the hypothetical
price appreciation for the same periods of investing approximately equal amounts
in each of the Low Five Stocks (but not the Trust) at the beginning of the
period and reinvesting the proceeds in the same manner on the first trading day
of each following year in the period. The Low Five Stocks would have
underperformed the DJIA in three of these 16 periods (in four periods if
Portfolio sales charges and expenses were deducted from Low Five Stock
performance). The results below are hypothetical for the following reasons: (1)
an investment in the Trust will not realize as high a total return as a direct
investment in the Low Five Stocks, since the Trust has sales charges and
expenses; (2) the quoted performance figures are based on closing sales prices
on December 31, while the call options provide for annual readjustment in August
of each year and (3) the periods shown are 5 years, while the Trust will last
for approximately 5 1/2 years. The table does not reflect any fees and expenses
associated with the option issuers. Past performance is no guaranty of future
results of the Low Five Stocks or the Trust.
COMPARISON OF PRICE APPRECIATION(1)
(FIGURES DO NOT REFLECT DIVIDENDS, SALES CHARGES, COMMISSIONS, TRUST EXPENSES OR
TAXES)
<TABLE>
<CAPTION>
DOW JONES INDUSTRIAL AVERAGE LOW FIVE STOCKS(2)
--------------------------------
AVERAGE -------------------------------- AVERAGE
PERIOD TOTAL ANNUALIZED TOTAL ANNUALIZED
- ------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1977-81 -12.91% -2.73% 20.23% 3.75%
1978-82 25.91 4.72 62.46 10.19
1979-83 56.36 9.35 119.94 17.07
1980-84 44.46 7.63 124.18 17.52
1981-85 60.46 9.92 121.39 17.23
1982-86 116.69 16.73 187.40 23.51
1983-87 85.26 13.12 126.84 17.80
1984-88 72.29 11.49 96.50 14.47
1985-89 127.24 17.84 99.82 14.85
1986-90 70.28 11.23 21.83 4.03
1987-91 67.14 10.82 53.51 8.95
1988-92 70.26 11.23 71.18 11.35
1989-93 73.11 11.60 101.48 15.04
1990-94 39.27 6.85 100.58 14.94
1991-95 94.28 14.21 221.51 26.31
1992-96 103.47 15.27 152.79 20.38
</TABLE>
- ----------------------------
(1) Appreciation for the Low Five Stocks is calculated by subtracting the market
value of these stocks at the opening value on the first trading day on the
New York Stock Exchange in the period from the market value of those stocks
at the closing value on the last trading day in that period, and dividing
the result by the market value of the stocks at the opening value on the
first trading day in that period. Appreciation for the DJIA is calculated by
subtracting the opening value of the DJIA on the first trading day in the
period from the closing value of the DJIA on the last trading day in that
period, and dividing the result by the opening value of the DJIA on the
first trading day in that period.
(2) Each year new Low Five Stocks were selected by ranking the dividend yields
for each of the stocks in the DJIA as of the beginning of the year, based
upon annualization of the last quarterly or semi-annual regular dividend
distributions (which would have been declared in the preceding year) divided
by that stock's market value on the first trading day in that year on the
New York Stock Exchange, eliminating the 20 stocks with the lowest dividend
yields and selecting from among those remaining stocks, the five stocks with
the lowest prices per share.
A-6
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Equity Participation
Series--Low Five Portfolio, Defined Asset Funds (the 'Trust'):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Trust as of August 25, 1997. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Trust as of August 25, 1997
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 26, 1997
STATEMENT OF CONDITION AS OF AUGUST 25, 1997
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 247,250.00
Cash..................................................... 2,750.00
Organizational costs (2)................................. 8,280.00
--------------------
Total............................................$ 258,280.00
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2).................................$ 8,280.00
--------------------
Subtotal 8,280.00
--------------------
Interest of Holders of 250 Units of fractional undivided
interest outstanding:
Cost to investors(3)................................... 258,967.49
Gross underwriting commissions(4)...................... (8,967.49)
--------------------
Subtotal 250,000.00
--------------------
Total............................................$ 258,280.00
--------------------
--------------------
- ------------
(1) Aggregate cost to the Trust of the securities listed under Defined
Portfolio determined by the Evaluator at 4:00 p.m. Eastern time on August 25,
1997. The contracts to purchase securities are collateralized by an irrevocable
letter of credit which has been issued by Fuji Bank Ltd., New York Branch, in
the amount of $247,250.00 and deposited with the Trustee. The amount of the
letter of credit includes $246,325.00 for the purchase of securities.
(2) This represents a portion of the Trust's organizational costs which
will be deferred and amortized over a one-year period. Organizational costs have
been estimated based on projected total assets of $18 million. To the extent the
Trust is larger or smaller, the estimate may vary.
(3) Aggregate public offering price computed on the basis of the value
of the underlying securities at 4:00 p.m., Eastern time on August 25, 1997.
(4) Assumes the maximum sales charge per unit of 3.50% of the net amount
invested.
A-7
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY PARTICIPATION SERIES -- LOW FIVE PORTFOLIO
FURTHER INFORMATION REGARDING THE TRUST MAY BE OBTAINED
WITHIN FIVE DAYS OF WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
Index
PAGE
----
Trust Description.......................... 1
Risk Factors............................... 3
How to Buy Units........................... 4
How to Redeem or Sell Units................ 5
Income and Distributions................... 6
Trust Expenses............................. 6
PAGE
----
Taxes...................................... 7
Records and Reports........................ 8
Trust Indenture............................ 8
Miscellaneous.............................. 9
Supplemental Information................... 11
TRUST DESCRIPTION
The Trust seeks to provide both capital appreciation and protection against
a loss of capital over a 5 1/2 year period through an investment in call options
on a basket of common stocks and in zero coupon bonds.
THE CALL OPTIONS. The Trust seeks capital appreciation through the
acquisition of call options on a basket of the Low Five Stocks. The call options
have been issued or guaranteed by financial institutions whose long-term debt
obligations or financial strength and claims-paying ability are rated in the
category AA or better by Standard & Poor's Ratings Group and in the category Aa
or better by Moody's Investors Service Inc. The call options will expire
approximately eight days prior to the Trust's termination. The Sponsors
anticipate that they will direct the Trustee to sell the call options
approximately five business days prior to their expiration. The call options do
not pass through any dividends payable on the Low Five Stocks. As a result, the
options are priced lower than comparable investments that account for dividends.
THE ZERO COUPON BONDS. The zero coupon bonds are designed to ensure that
unit holders will receive not less than $1,000 per unit at the termination of
the Trust. The bonds were purchased at a discount and do not make any payments
of interest before their maturity. The Trust only has the right to receive a
fixed payment at the bonds' maturity.
THE EQUITY PARTICIPATION LOW FIVE STRATEGY. The Trust seeks capital
appreciation by following a simple strategy: investing in the five lowest dollar
price per share common stocks of the ten highest dividend yielding stocks in the
Dow Jones Industrial Average. The Trust applies this strategy over a 5 1/2 year
period by investing in 5 1/2 year call options on an annually adjusted basket of
the Low Five Stocks.
THE DOW JONES INDUSTRIAL AVERAGE. First published in The Wall Street Journal
in 1896, the Dow Jones Industrial Average includes some of the most well-known,
widely followed and highly capitalized companies in America. These companies are
major factors in their industries. These companies file information with the SEC
which is available free of charge upon request from the Trustee.
1
<PAGE>
LIST AS OF OCTOBER 1, 1928 CURRENT LIST
- ----------------------------------------------------------------------
Allied Chemical Allied Signal
American Can Aluminum Co. of America
American Smelting American Express
American Sugar AT&T
American Tobbaco Boeing
Atlantic Refining Caterpillar
Bethlehem Steel Chevron
Chrysler Coca-Cola
General Electric Du Pont
General Motors Eastman Kodak
General Railway Signal Exxon
Goodrich General Electric
International Harvester General Motors
International Nickel Goodyear
Mack Trucks Hewlett-Packard
Nash Motors IBM
North American International Paper
Paramount Publix Johnson & Johnson
Postum, Inc. J.P. Morgan & Co.
Radio Corporation of America (RCA) McDonald's
Sears Roebuck Merck
Standard Oil of New Jersey Minnesota Mining & Manufacturing
Texas Corporation Philip Morris
Texas Gulf Sulphur Procter & Gamble
Union Carbide Sears Roebuck
United States Steel Travelers Group
Victor Talking Machine Union Carbide
Westinghouse Electric United Technologies
Woolworth Wal-Mart Stores
Wright Aeronautical Walt Disney
THE LOW FIVE STOCKS
The call options provide capital appreciation on the five lowest dollar
price per share common stocks of the ten common stocks in the DJIA having the
highest dividend yields as of the dates indicated in Part A. 'Highest dividend
yield' is calculated by annualizing the last quarterly or semi-annual ordinary
dividend distributed on the DJIA Stocks and dividing the result by its closing
sales price. Since the Trust does not hold the actual stocks, it will not
receive, nor will the value of the call options reflect, any dividends paid by
the underlying stocks.
The Low Five Strategy determination process is a straightforward, objective,
mathematical application that ignores any subjective factors concerning an
issuer in the DJIA, an industry or the economy generally. The options may relate
to a stock that the Sponsors do not recommend for purchase and, in fact, any
Sponsor may have sell recommendations on a number of the Low Five Stocks subject
to the options from time to time. Various theories attempt to explain why a
common stock is among the ten highest yielding stocks in the DJIA at any given
time: the issuer may be in financial difficulty or out of favor in the market
because of weak earnings or performance or forecasts or negative publicity;
uncertainties relating to pending or threatened litigation or pending or
proposed legislation or government regulation; the stock may be a cyclical stock
reacting to national and international economic developments; or the market may
be anticipating a reduction in or the elimination of the issuer's dividend. Some
of the foregoing factors may
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be relevant to only a segment of an issuer's overall business yet the publicity
may be strong enough to outweigh otherwise solid business performance. In
addition, companies in certain industries have historically paid relatively high
dividends.
The deposit of the call options and the zero coupon bonds (together, the
'Securities') in the Fund on the initial date of deposit established a
proportionate relationship based on the face amount of the bonds and the number
of shares of each Strategy Stock underlying the call options. During the 90-day
period following the initial date of deposit the Sponsors may deposit additional
Securities in order to create new Units, maintaining to the extent possible that
original proportionate relationship. Deposits of additional Securities
subsequent to the 90-day period must generally replicate exactly their
proportionate relationship at the end of the initial 90-day period. The ability
to acquire each Security at the same time will generally depend upon its
availability and any restrictions on the purchase of that Security under the
federal securities laws or otherwise.
Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investment because of price fluctuations in the Securities between the
time of the cash deposit and the actual purchase of the additional Securities
and because any associated brokerage fees will be an expense of the Portfolio.
To minimize the risk of price fluctuations purchasing Securities, the Portfolio
will try to purchase Securities as close to the Evaluation Time or at prices as
close to the evaluated prices as possible.
Because each Defined Asset Fund is a preselected portfolio, you know the
securities before you invest. Of course, the Trust's portfolio will change
somewhat over time as Securities are purchased upon creation of additional
Units, as Securities are sold to meet Unit redemptions or in other limited
circumstances.
PORTFOLIO SUPERVISION
The Trust follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. Although the Trust's portfolio is regularly reviewed, because
of the Low Five Strategy, the Trust is unlikely to sell any of the call options
or zero coupon bonds other than to satisfy redemptions of Units. More
specifically, except for an adverse development affecting the issuer of a call
option, adverse developments concerning a decline in the value of the option,
adverse developments concerning a bond, or adverse developments concerning a Low
Five Stock including the adverse financial condition of the issuer of a Low Five
Stock, a failure to maintain a current dividend rate, the institution of legal
proceedings against the issuer, a default under certain documents materially and
adversely affecting the future declaration of dividends, or a decline in the
price, or the occurrence of other market or credit factors (including a public
tender offer or a merger or acquisition transaction) that might otherwise make
retention of the call options or zero coupon bonds detrimental to the interest
of investors, will generally not cause the Trust to dispose of a call option or
bond. Furthermore, other than the annual adjustment, the Low Five Stocks
underlying the options do not change even if a Low Five Stock ceases to be
ranked among the five lowest dollar price per share stocks of the ten
highest-dividend yielding stocks in the DJIA or is deleted from the DJIA.
RISK FACTORS
An investment in the Trust entails certain risks, including the risk that
the value of your investment will decline if the value of the call options
decrease due to the impaired financial condition of the issuers of the call
options or the Low Five Stocks or a decline in the general condition of the
stock market. The obligations of the issuers of the call options are not
collateralized or otherwise secured. However, if any rating of an issuer's (or
guarantor's) long-term debt or financial strength and claims-paying ability is
reduced to below investment grade, collateral will be required for that issuer's
(or guarantor's) obligation to the Trust. Common stocks in general may be
especially susceptible to general stock market movements and to volatile
increases and decreases in value as market confidence in and perceptions of the
issuers change. Equity markets can be affected by unpredictable factors
including expectations regarding government, economic, monetary and fiscal
policies, inflation and interest rates, economic expansion or contraction, and
global or regional political, economic or banking crises. The Sponsors cannot
predict the direction or scope of any of these factors. Equity markets have been
at historically high levels and no assurance can be given that these levels will
continue.
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The trading prices of the call options will be directly affected by the
trading prices of and dividends on the Low Five Stocks as well as by the time to
maturity of the call options, the market volatility and the level of interest
rates generally. The market for the call options is likely to influence and be
influenced by the market for Low Five Stocks. For example, the prices of Low
Five Stocks could be depressed by investors' anticipation of the potential
distribution into the market of substantial amounts of Low Five Stocks on the
termination date and by hedging or arbitrage activity that may develop involving
the call options and the Low Five Stocks. The Sponsors believe that there should
be a readily available market among institutional investors for the call options
in the event it is necessary to sell the options to meet redemptions of units.
The Trust seeks to provide protection against a loss of capital by investing
in the zero coupon bonds. The zero coupon bonds pay no income until maturity.
The sale of units before the zero coupon bonds' maturity at a time when interest
rates have increased would involve greater market risk than investment in a fund
holding comparable debt obligations which pay interest currently. While the
Trust is designed to return to investors $1,000 per Unit at its termination, if
you redeem or sell your Units prior to termination of the Trust, you may receive
less.
The Low Five Stocks may be concentrated in one or more of types of issuers.
Concentration may involve additional risk because of the decreased
diversification of economic, financial and market risks. Set forth below is a
brief description of certain risks associated with the Low Five Stocks.
Additional information is contained in the Information Supplement which is
available from the Trustee at no charge to the investor.
LITIGATION AND LEGISLATION
The Sponsors do not know of any pending litigation as of the initial date of
deposit that might reasonably be expected to have a material adverse effect on
the Fund, although pending litigation may have a material adverse effect on the
value of the Low Five Stocks and, consequently, the call options. In addition,
at any time after the initial date of deposit, litigation may be initiated on a
variety of grounds, or legislation may be enacted, affecting the call options or
zero coupon bonds in the Trust's portfolio, the issuers of the call options or
the issuers of the Low Five Stocks. Changing approaches to regulation,
particularly with respect to the environment or with respect to the petroleum or
tobacco industry, may have a negative impact on certain companies represented in
the Low Five Stocks. There can be no assurance that future litigation,
legislation, regulation or deregulation will not have a material adverse effect
on the Trust or will not impair the ability of the issuers of the Low Five
Stocks or the call options to achieve their business goals.
LIFE OF THE TRUST; TERMINATION
The Trust will be terminated no later than the termination date specified in
Part A of the Prospectus. It will terminate earlier upon the disposition of the
last Security or upon the consent of investors holding 51% of the Units. The
Trust may also be terminated earlier by the Sponsors once its total assets have
fallen below the minimum value specified in Part A of the Prospectus. A decision
by the Sponsors to terminate the Trust early will be based on factors such as
the size of the Trust's portfolio relative to its original size, the ratio of
Trust expenses to income, and the cost of maintaining a current prospectus.
Notice of impending termination will be provided to investors and thereafter
units will no longer be redeemable. On or shortly before termination, the
Trustee will dispose of any Securities remaining in the Trust's portfolio. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from any of the Sponsors at the Public Offering Price.
The Public Offering Price varies each Business Day with changes in the value of
the Trust's portfolio and other assets and liabilities of the Trust.
PUBLIC OFFERING PRICE
During the initial offering period and for at least the first three months
of the Fund, the Public Offering Price (and the Initial Repurchase Price) is
based on the higher, offer side evaluation of the Securities at the next
Evaluation Time after the order is received. After this period, the Public
Offering Price (and the Sponsors' Repurchase Price and the Redemption Price) is
based on the lower, bid side evaluation of the Securities. The maximum sales
charge is equal to 3.50% of the net amount invested or, for quantity purchases
of units by an investor and the investor's spouse and minor children, or by a
single trust estate or fiduciary account, made on a single day, the following
percentages of the net amount invested:
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APPLICABLE SALES
CHARGE
(GROSS UNDERWRITING
PROFIT)
AS % OF NET AMOUNT
NUMBER OF UNITS INVESTED
- ------------------------------------------ ----------------------
Less than 250............................. 3.50%
250 to 749................................ 3.00
750 to 999................................ 2.75
1,000 or more............................. 2.50
The dealer concession is 70% of the effective sales charge.
Employees of certain of the Sponsors and their affiliates may purchase Units
at a reduced price equal to 50% of the otherwise applicable sales charge.
EVALUATIONS
Evaluations are determined by an independent Evaluator on each Business Day.
This excludes Saturdays, Sundays and the following holidays as observed by the
New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial
Day, Independence Day, Labor Day, Thanksgiving and Christmas and the following
federal holidays: Martin Luther King's birthday, Columbus Day and Veterans Day.
Neither the Sponsors, the Trustee nor the Evaluator guarantee the
enforceability, marketability or price of any Securities or will be liable for
errors in the Evaluator's judgment. The value of the call options, which have no
readily ascertainable market value, will be determined in good faith. The fees
of the Evaluator will be borne by the Trust.
NO CERTIFICATES
All investors are required to hold their Units in uncertifcated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company ('DTC').
HOW TO REDEEM OR SELL UNITS
You can redeem your Units at any time for net asset value. In addition,
while not obligated to do so, the Sponsors have maintained an uninterrupted
secondary market for Units for over 20 years and will ordinarily buy back Units
at net asset value. The following describes these two methods to redeem or sell
Units in greater detail.
REDEEMING UNITS
You can always redeem your Units for net asset value. This can be done by
contacting your broker, dealer or financial institution that holds your Units in
street name. In certain instances, additional documents may be required such as
a trust instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.
Within seven days after the receipt of your request (any any necessary
documents), a check will be mailed to you in an amount equal to the net asset
value of your Units. Because of any sales charges, market movements or changes
in the Trust's portfolio, net asset value at the time you redeem your Units may
be greater or less than the original cost of your Units. Net asset value is
calculated each Business Day by adding the value of the Securities, cash and the
value of any other Trust assets; deducting any unpaid taxes or other
governmental charges, accrued but unpaid Trust expenses, unreimbursed Trustee
advances, cash held to redeem Units or for distribution to investors and the
value of any other Trust liabilities; and dividing the result by the number of
outstanding Units. Net asset value will be reduced after the initial offering
period to reflect the cost to the Trust of liquidating Securities to pay the
redemption price.
As long as the Sponsors are maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsors for net asset value. If the Sponsors are not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.
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The Trustee may sell Securities selected by the Agent for the Sponsors based
on market and credit factors determined to be in the best interest of the Trust.
These sales are often made at times when the Securities would not otherwise be
sold and may result in lower prices than might be realized otherwise and may
also reduce the size and diversity of the Trust. If Securities are being sold
during a time when additional Units are being created by the purchase of
additional Securities (as described above), Securities will be sold in a manner
designed to maintain, to the extent practicable, the proportionate relationship
among the Securities in the Portfolio.
Any investor owning Units representing Securities with a value of at least
$250,000 who redeems those Units may, in lieu of cash redemption, request
distribution in kind of an amount and value of Securities per Unit equal to the
otherwise applicable Redemption Price per Unit. Generally, subject to applicable
federal and state laws governing the transfer of restricted securities and all
other applicable legal restrictions, a portion of each Security will be paid
over to a distribution agent and either held for the account of the investor or
disposed of in accordance instructions of the investor. Any brokerage
commissions on sales of Securities in connection with in-kind redemptions will
be borne by the redeeming investors. The in-kind redemption option may be
terminated by the Sponsors at any time upon prior notice to investors.
Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Securities not
reasonably practicable or (iii) for any other period permitted by SEC order.
SPONSORS' SECONDARY MARKET FOR UNITS
As long as the Sponsors are maintaining a secondary market for Units they
will buy back Units at net asset value (generally based on the lower, bid side
evaluation of the call options and zero coupon bonds, as determined by an
independent evaluator) less the estimated costs of liquidating Securities to
meet redemptions. Because of the sales charge, market movements or changes in
the Trust's portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. The Sponsors may resell
the Units to other buyers or redeem the Units by tendering them to the Trustee.
You should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.
The Sponsors may discontinue the secondary market for Units without prior
notice if the supply of Units exceeds demand or for other business reasons.
Regardless of whether the Sponsors maintain a secondary market, you have the
right to redeem your Units for net asset value with the Trustee at any time, as
described above.
INCOME AND DISTRIBUTIONS
INCOME AND DISTRIBUTIONS
The Trust has no current income, thus it pays no distributions until a
reasonable time following the maturity of the zero coupon bonds and the
settlement date of the call options.
TRUST EXPENSES
Estimated annual Trust expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Trust. The
estimated expenses do not include the brokerage commissions, if any, payable by
the Trust in purchasing and selling Securities. The Trustee's annual fee is
payable on a monthly basis. The Trustee also benefits when it holds cash for the
Trust in non-interest bearing accounts. Possible additional charges include
Trustee fees and expenses for extraordinary services, costs of indemnifying the
Trustee and the Sponsors, costs of action taken to protect the Trust and other
legal fees and expenses, Trust termination expenses and any governmental
charges. The Trustee has a lien on Trust assets to secure reimbursement of these
amounts and may sell Securities for this purpose if cash is not available. The
Sponsors receive an annual fee currently estimated at $0.35 per Unit to
reimburse them for the cost of providing portfolio supervisory services to the
Trust. While the fee may exceed their costs of providing these services to the
Trust, the total supervision fees from all Series of Equity Investor Fund will
not exceed their costs for these services to all of those Series during any
calendar year. The Sponsors may also be reimbursed for their costs of providing
bookkeeping and administrative services to Defined Asset Funds, currently
estimated at
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$0.10 per Unit. The Trustee's, Sponsors' and Evaluator's fees may be adjusted
for inflation without investors' approval.
Expenses incurred in establishing the Trust, including the cost of the
initial preparation of documents relating to the Trust, federal and state
registration fees, the initial fees and expenses of the Trustee, legal expenses
and any other out-of-pocket expenses will be paid by the Trust and amortized
over a one-year period. Advertising and selling expenses will be paid from the
Underwriting Account at no charge to the Trust. Defined Asset Funds can be a
cost-effective way to purchase and hold investments. Annual operating expenses
are generally lower than for managed funds. Because Defined Asset Funds have no
management fees, limited transaction costs and no ongoing marketing expenses,
operating expenses are generally less than 0.25% a year. When compounded
annually, small differences in expense ratios can make a big difference in your
investment results.
TAXES
The following discussion addresses certain tax consequences of an investment
in Units that are held as capital assets and does not address the tax
consequences of an investment in Units by dealers, financial institutions,
insurance companies or other persons subject to special tax rules.
In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:
The Trust is not an association taxable as a corporation for federal
income tax purposes. Each investor will be considered to be the owner of a
pro rata portion of each asset in the Trust under the grantor trust rules of
Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
'Code').
The zero coupon bonds will be considered to have been issued at an
original issue discount for federal income tax purposes. As a result,
investors will be required to include original issue discount in respect of
the zero coupon bonds in income as it accrues, in accordance with a constant
yield method based on a compounding of interest, before the Trust's receipt
of cash payments attributable to the income. Under the constant yield
method, investors generally will be required to include in income
increasingly greater amounts of original issue discount in successive
accrual periods. The tax basis of an investor's pro rata share of zero
coupon bonds will be increased by the amount of original issue discount that
the investor includes in income.
An investor will recognize gain or loss (if any) when he sells or redeems
all or some of his Units for cash and when the Trust sells zero coupon bonds
or an interest in the call options. The gain or loss will generally be
capital gain or loss. However, gain attributable to the sale or maturity of
a zero coupon bond will generally be ordinary income to the extent of any
accrued market discount. An investor will generally have market discount to
the extent that his basis in a zero coupon bond when he purchases a Unit is
less than its issue price increased by original issue discount that has
accrued to previous holders. Investors should consult their tax advisers in
regard to these matters. An investor will also recognize gain or loss (if
any) upon exercise of the call options by the Trust. Counsel is of the
opinion that gain or loss arising from the Trust's exercise of the call
options will be capital gain or loss.
Net capital gain (the excess of net long-term capital gains over net
short-term capital losses) may be taxed at a lower rate than ordinary income
for certain noncorporate taxpayers. A capital gain or loss is long-term if
the asset is held for more than one year and short-term if the asset is held
for one year or less. The lower net capital gain tax rate will be
unavailable to those noncorporate investors who have held their Units for
less than a year and a day at the time they sell or redeem their Units for
cash or on the mandatory termination date. Under the recently enacted
Taxpayer Relief Act of 1997, investors who are individuals and have held
their Units for more than 18 months may be entitled to a 20% maximum federal
tax rate for gains from the sale of these Units. Investors should consult
their tax advisers in this regard. The deduction of capital losses is
subject to limitations.
An investor's basis in his Units will equal the cost of his Units,
including the sales charge, plus the amount of original issue discount and
acquisition discount in respect of the zero coupon bonds that the investor
includes in income. The proceeds received by an investor upon the
termination of the Trust or the redemption of Units will reflect a charge
for organizational and ongoing Trust expenses. The annual statement and the
relevant tax reporting forms received by investors will be based upon the
amounts they accrue, net of the charge for organizational expenses.
Accordingly, investors should not increase their basis in their Units by any
amount used to pay organizational and ongoing Trust expenses.
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An individual investor who itemizes deductions will be entitled to deduct
his pro rata share of ongoing expenses paid by the Trust only to the extent
that this amount, together with the investor's other miscellaneous
deductions, exceeds 2% of his adjusted gross income. The Code further
restricts the ability of an individual investor with an adjusted gross
income in excess of a specified amount (for 1997, $121,200 or $60,600 for a
married person filing a separate return) to deduct his pro rata share of
Trust expenses.
Under the income tax laws of the State and City of New York, the Trust is
not an association taxable as a corporation and the income of the Trust will
be treated as the income of the investors in the same manner as for federal
income tax purposes.
The foregoing discussion summarizes only certain U.S. federal and New
York State and City income tax consequences of an investment in Units by
investors who are U.S. persons, as defined in the Code. Foreign investors
(including non-resident alien individuals and foreign corporations) not
engaged in U.S. trade or business will generally not be subject to U.S.
federal income taxes, including withholding taxes, with respect to an
investment in the Trust if certain requirements are met, including the
certification of foreign status and other matters. Under certain
circumstances, withholding agents will file with the Internal Revenue
Service foreign person information returns. Investors may be subject to
taxation in New York or in other U.S. or foreign jurisdictions and should
consult their own tax advisers in this regard.
* * * *
The Trustee will furnish information returns to each investor and to the
Internal Revenue Service.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Trust,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
The Trustee sends each investor of record an annual report summarizing
transactions in the Trust's accounts, including amounts distributed from them,
any portfolio securities purchased or sold, listing securities held and the
number of Units outstanding and the Redemption Price per Unit at year end, and
the fees and expenses paid by the Trust, among other matters. Trust accounts are
audited by independent accountants selected by the Sponsors and any report of
the accountants will be available from the Trustee on request.
TRUST INDENTURE
The Trust is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.
The Indenture may be amended by the Sponsors and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or other
governmental agency or to make any other change not materially adverse to the
interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Trust
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsor and Trustee
without the investors' consent. The resignation or removal of either becomes
effective upon acceptance of appointment by a successor; in this case, the
Sponsors will use their best efforts to appoint a successor promptly; however,
if upon resignation no successor has accepted appointment within 30 days after
notification, the resigning Trustee or Evaluator may apply to a court of
competent jurisdiction to appoint a successor.
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Any Sponsor may resign so long as one Sponsor with a net worth of $2,000,000
remains. A new Sponsor may be appointed by the remaining Sponsors and the
Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Trust or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.
The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limiting the liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, as special counsel for the Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and the New
York State banking authorities.
SPONSORS
The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; PaineWebber Incorporated, a wholly-owned
subsidiary of PaineWebber Group Inc.; Prudential Securities Incorporated, an
indirect wholly-owned subsidiary of the Prudential Insurance Company of America,
and Dean Witter Reynolds, Inc., a principal operating subsidiary of Morgan
Stanley, Dean Witter, Discover & Co. Each Sponsor, or one of its predecessor
corporations, has acted as Sponsor of a number of series of unit investment
trusts. Each Sponsor has acted as principal underwriter and managing underwriter
of other investment companies. The Sponsors, in addition to participating as
members of various selling groups or as agents of other investment companies,
execute orders on behalf of investment companies for the purchase and sale of
securities of these companies and sell securities to these companies in their
capacities as brokers or dealers in securities.
CODE OF ETHICS
The Agent for the Sponsors has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its personnel
who have access to information on Defined Asset Funds portfolio transactions.
The code is intended to prevent any act, practice or course of conduct which
would operate as a fraud or deceit on any Trust and to provide guidance to these
persons regarding standards of conduct consistent with the Agent's
responsibilities to Defined Asset Funds.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. The Sponsors intend
to qualify Units for sale in all states in which qualification is deemed
necessary through the Underwriting Account and
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by dealers who are members of the National Association of Securities Dealers,
Inc. The Sponsors do not intend to qualify Units for sale in any foreign
countries and this Prospectus does not constitute an offer to sell Units in any
country where Units cannot lawfully be sold.
UNDERWRITERS' AND SPONSORS' PROFITS
Upon sale of the Units, the Underwriters will be entitled to receive sales
charges; each Underwriters' interest in the Underwriting Account will depend on
the number of Units acquired through the issuance of additional Units. The
Sponsors also realize a profit or loss on deposit of the Securities equal to the
difference between the cost of the Securities to the Trust (based on the
aggregate value of the Securities on their date of deposit) and the purchase
price of the Securities to the Sponsors plus commissions payable by the
Sponsors. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Securities it deposits in the Fund which were acquired from
underwriting syndicates of which it was a member. During the initial offering
period, the Underwriting Account also may realize profits or sustain losses as a
result of fluctuations after the initial date of deposit in the Public Offering
Price of the Units. In maintaining a secondary market for Units, the Sponsors
will also realize profits or sustain losses in the amount of any difference
between the prices at which they buy Units and the prices at which they resell
these Units (which include any sales charge) or the prices at which they redeem
the Units. Cash, if any, made available by buyers of Units to the Sponsors prior
to a settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.
PERFORMANCE INFORMATION
The following chart shows the average annual compounded rate of return of
selected asset classes over the 10-year and 20-year periods ending December 31,
1996, compared to the rate of inflation over the same periods. Of course, this
chart represents past performance of these investments and is no guarantee of
future results, either of these categories or of any Defined Fund. Defined Funds
also have sales charges and expenses which are not reflected in the chart.
Stocks (S&P 500)
20 yr 14.55%
10 yr 15.28%
Small-company stocks
20 yr 17.84%
10 yr 12.98%
Long-term corporate bonds
20 yr 9.71%
10 yr 9.48%
U.S. Treasury bills (short-term)
20 yr 7.28%
10 yr 5.46%
Consumer Price Index
20 yr 5.15%
10 yr 3.70%
0 2 4 6 8 10 12 14 16 18 20
Source: Ibbotson Associates. Used with permission. All rights reserved.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
10
<PAGE>
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement or regular current income consistent with the preservation of
principal. Unit investment trusts are particularly suited for investors who
prefer to seek long-term profits by purchasing and holding investments, rather
than through active trading. Few individuals have the knowledge, resources or
capital to buy and hold a diversified portfolio on their own; it would generally
take a considerable sum of money to obtain the breadth and diversity that
Defined Asset Funds offer. Your investment objectives may call for a combination
of Defined Asset Funds.
Defined Asset Funds reflect a buy and hold strategy that the Sponsors
believe can be more effective and less expensive than active management. This
strategy is premised on selection criteria and procedures, diversification and
regular monitoring by investment professionals. Various advertisements and sales
literature may summarize the results of economic studies concerning how stock
movement has tended to be concentrated and how longer-term investments can tend
to reduce risk.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Defined equity
funds offer growth potential and some protection against inflation.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
the Trust, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Trust.
11
<PAGE>
Defined
Asset FundsSM
SPONSORS:
Merrill Lynch, EQUITY PARTICIPATION SERIES--
Pierce, Fenner & Smith IncorporatedLOW FIVE PORTFOLIO
Defined Asset Funds
P.O. Box 9051 This Prospectus does not contain all of the
Princeton, NJ 08543-9051 information with respect to the investment
(609) 282-8500 company set forth in its registration
PaineWebber Incorporated statement and exhibits relating thereto which
1200 Harbor Boulevard have been filed with the Securities and
Weehawken, NJ 07087 Exchange Commission, Washington, D.C. under
(201) 902-3000 the Securities Act of 1933 and the Investment
Prudential Securities Incorporated Company Act of 1940, and to which reference
One New York Plaza is hereby made. Copies of filed material can
New York, NY 10292 be obtained from the Public Reference Section
(212) 778-6164 of the Commission, 450 Fifth Street, N.W.,
Dean Witter Reynolds Inc. Washington, D.C. 20549 at prescribed rates.
Two World Trade Center--59th Floor The Commission also maintains a Web site that
New York, NY 10048 contains information statements and other
(212) 392-2222 information regarding registrants such as
EVALUATOR: Defined Asset Funds that file electronically
Interactive Data Services, Inc. with the Commission at http://www.sec.gov.
14 Wall Street--11th Floor ------------------------
New York, NY 10005 No person is authorized to give any
(212) 306-6551 information or to make any representations
TRUSTEE: with respect to this investment company not
The Chase Manhattan Bank contained in its registration statement and
Customer Service Retail Department related exhibits; and any information or
Bowling Green Station representation not contained therein must not
P.O. Box 5187 be relied upon as having been authorized.
New York, NY 10274-5187 ------------------------
1-800-323-1508 When Units of this Trust are no longer
available, this Prospectus may be used as a
preliminary prospectus for a future series;
in which case investors should note the
following:
Information contained herein is subject to
amendment. A registration statement relating
to securities of a future series has been
filed with the Securities and Exchange
Commission. These securities may not be sold
nor may offers to buy be accepted prior to
the time the registration statement becomes
effective.
This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any State in which such offer
solicitation or sale would be unlawful prior
to registration or qualification under the
securities laws of any such State.
11300--8/97
<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.
I. Bonding arrangements of each of the Depositors are incorporated by reference
to Item A of Part II to the Registration Statement on Form S-6 under the
Securities Act of 1933 for Municipal Investment Trust Fund, Monthly Payment
Series--573 Defined Asset Funds (Reg. No. 333-08241).
II. The date of organization of each of the Depositors is set forth in Item B
of Part II to the Registration Statement on Form S-6 under the Securities Act of
1933 for Municipal Investment Trust Fund, Monthly Payment Series--573 Defined
Asset Funds (Reg. No. 333-08241) and is herein incorporated by reference
thereto.
III. The Charter and By-Laws of each of the Depositors are incorporated herein
by reference to Exhibits 1.3 through 1.12 to the Registration Statement on Form
S-6 under the Securities Act of 1933 for Municipal Investment Trust Fund,
Monthly Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
IV. Information as to Officers and Directors of the Depositors has been filed
pursuant to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934 and is incorporated by reference to the SEC
filings indicated and made a part of this Registration Statement:
Merrill Lynch, Pierce, Fenner & Smith Incorporated 8-7221
PaineWebber Incorporated.......................... 8-16267
Prudential Securities Incorporated................ 8-27154
Dean Witter Reynolds Inc. ........................ 8-14172
----------------------------
B. The Internal Revenue Service Employer Identification Numbers of the Sponsors
and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith Incorporated 13-5674085
Prudential Securities Incorporated................ 22-2347336
Dean Witter Reynolds Inc. ........................ 94-0899825
PaineWebber Incorporated ......................... 13-2638166
The Chase Manhattan Bank, Trustee................. 13-4994650
UNDERTAKING
The Sponsors undertake that they will not make any amendment to the Supplement
to this Registration Statement which includes material changes without
submitting the amendment for Staff review prior to distribution.
II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference from the
Cross-Reference Sheet of the Registration Statement of Defined Asset Funds
Municipal Insured Series, 1933 Act File No. 33-54565).
The Prospectus.
Additional Information not included in the Prospectus (Part II).
The following exhibits:
1.1 --Form of Trust Indenture.
1.1.1 --Form of Standard Terms and Conditions of Trust Effective as of October
21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series-48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement under the Securities Act
of 1933 of The Corporate Income Fund, One Hundred Ninety-Fourth
Monthly Payment Series, 1933 Act File No. 2-90925).
3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their name under the headings
'Taxes' and 'Miscellaneous--Legal Opinion' in the Prospectus.
4.1 --Consent of evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Equity Income Fund, Select Ten
Portfolio, 1996 International Series B (United Kingdom and Japan
Portfolios), 1933 Act File No. 333-00593).
R-1
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 26TH DAY OF
AUGUST, 1997.
SIGNATURES APPEAR ON PAGE R-3, R-4, R-5 AND R-6.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466
HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By DANIEL C. TYLER
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors Number: 33-55073
of PaineWebber Incorporated:
DONALD B. MARRON
JOSEPH J. GRANO, JR.
By
ROBERT E. HOLLEY
(As authorized signatory for PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Numbers:
33-41631 and
333-15919
ROBERT C. GOLDEN
ALAN D. HOGAN
A. LAURENCE NORTON, JR.
LELAND B. PATON
VINCENT T. PICA II
MARTIN PFINSGRAFF
HARDWICK SIMMONS
LEE B. SPENCER, JR.
BRIAN M. STORMS
By RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
Exhibit 1.1
EQUITY INVESTOR FUND
EQUITY PARTICIPATION SERIES - LOW FIVE PORTFOLIO
DEFINED ASSET FUNDS
REFERENCE TRUST INDENTURE
Dated as of July 23, 1997
This Trust Indenture (the "Indenture") sets forth certain provisions in
full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust Effective October 21, 1993" (the
"Standard Terms and Conditions of Trust") and such provisions as are set
forth in full herein and such provisions as are incorporated by reference
constitute a single instrument. All references herein to Articles and
Sections are to Articles and Sections of the Standard Terms and Conditions of
Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements herein
contained, the Sponsors, the Trustee and the Evaluator agree as follows:
Part I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a part
of this instrument as fully and to the same extent as though said provisions
had been set forth in full in this instrument.
<PAGE>
Part II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Sponsors are Merrill Lynch, Pierce, Fenner & Smith
Incorporated, PaineWebber Incorporated, Prudential Securities Incorporated
and Dean Witter Reynolds Inc.
(b) The Trustee is The Chase Manhattan Bank. The Evaluator
is Interactive Data Services, Inc.
(c) The Trust is organized as a Grantor Trust for Federal tax
purposes.
(d) Units must not be held in certificated form.
(e) A new term "Initial Deposit Certificate" is added to read
as follows:
The certificate described in Section 2.02(a) relating to the
initial deposit of Securities into the Trust on the Date of Deposit.
(f) A new term "Call Option" is added to read as follows:
A call option held in the Trust's portfolio and evidenced by a
Master Agreement and supplemental schedule and Confirmation in the forms of
Exhibits A through D hereto.
(g) The term "Date of Deposit" is amended to read as follows:
The date on which the Sponsors first deposit Securities in the Trust.
(h) Section 2.02(a) is amended to read as follows:
(a) Creation of the Trust; Initial Deposit. (1) The Trustee
acknowledges that cash in the amount of $10 has been deposited with it by the
Sponsors on the date hereof.
(2) The Trustee is authorized and directed by the Sponsors to
execute and deliver on the date hereof a Master Agreement and supplemental
schedule with Swiss Bank Corporation and Swiss Re Financial Products
substantially in the form of Exhibits A and B hereto, respectively.
(3) In connection with the initial deposit of Securities into
the Trust on the Date of Deposit, the Sponsors and the Trustee shall execute
an Initial Deposit Certificate specifying, by reference to the Trust's
Prospectus, the description and quantity of Securities, letters of credit and
cash being deposited and the number of Units to be issued. Execution of the
Initial Deposit Certificate shall be deemed an acknowledgment by the Trustee
that the Securities and cash identified therein have been deposited with the
Trustee and that any contracts to purchase the Securities have been assigned
to the Trustee. The Trustee shall, on the Date of Deposit, deliver to, or
assign in the name of or on the order of, the Sponsors the number of Units so
specified in the Initial Deposit Certificate.
(4) The Trustee is authorized and directed by the Sponsors to
execute and deliver on the Date of Deposit, and on the date of any subsequent
deposit hereunder pursuant to Section 2.02(b), Confirmations under the
-2-
<PAGE>
aforesaid Master Agreements with the Swiss Bank Corporation and Swiss Re
Financial Products in substantially the forms of Exhibits C and D hereto,
respectively, but with such changes thereto as the Sponsors shall authorize
and approve, and such other documentation as the Sponsors shall instruct as
necessary to effect the deposit of Securities into the Trust.
(i) The first sentence of Section 3.08(a) is amended to read
as follows:
(a) The Sponsors by written notice may (and shall, if
requested by the Trustee, provide direction as to price, time and manner of
any sale) direct the Trustee to sell any Security at a price and time and in
a manner (including, without limitation, the execution and delivery of
documentation necessary to effect such sale) deemed appropriate by the
Sponsors to meet redemtions pursuant to Section 5.02 or 5.03 or if the
Sponsors shall have determined with respect to such Security that any one or
more of the following conditions exist:
(j) The "Trustee Expense Limit" shall mean the amount set
forth as such in the Initial Deposit Certificate.
(k) Section 8.01 shall be amended to add the following para-
graphs:
(o) With respect to any calculations required to be made by
the Trustee as Calculation Agent, or otherwise, under the Master Agreements,
supplemental schedules or Confirmations attached as Exhibits A through D, the
Trustee is authorized to rely conclusively upon calculations which shall be
prepared by the Agent for the Sponsors and the Trustee shall have no
liability for such calculations.
(p) The Trustee shall rely upon the direction of the Agent
for the Sponsors as to (i) any action to be taken by the Trustee in
connection with the obligation of Swiss Bank Corporation or Swiss Re
Financial Products to provide collateral security in accordance with the
Confirmations (including, without limitation, the monitoring of the Debt
Rating of such parties) or (ii) any action to be taken in connection with a
default or Early Termination of the Transactions entered into or assumed by
the Trustee pursuant to the Confirmations.
(l) Section 3.08 is amended to add the following paragraph
(d):
(d) Prior to, but not more than 20 Business Days before the
expiration of any Call Option held by the Trust, the Agent for the Sponsors
shall instruct the Trustee to sell such Call Option in the open market and
shall furnish the Trustee with any documents necessary to effect such sale.
-3-
<PAGE>
EQUITY INVESTOR FUND
EQUITY PARTICIPATION SERIES - LOW FIVE PORTFOLIO
DEFINED ASSET FUNDS
SUPPLEMENTAL TRUST INDENTURE
and
INITIAL DEPOSIT CERTIFICATE
Dated as of August 25, 1997
This Supplemental Trust Indenture and Initial Deposit
Certificate supplement the Standard Terms and Conditions and the
Reference Trust Indenture for this Trust dated July 23, 1997.
WITNESSETH THAT:
In consideration of the premises and of the mutual agreements
herein contained, the Sponsors, the Trustee and the Evaluator agree
as follows:
Part II
The following additional special terms and conditions are hereby
agreed to:
(a) On the date of this Supplement, the Securities (or con-
tracts for the purchase of such Securities) listed under "Defined
Portfolio" in proposed Amendment No. 4 to the Registration Statement
of the Trust have been deposited with (or assigned to) the Trustee
under this Indenture and the number of Units specified under "State-
ment of Condition" in said Amendment have been delivered to, or
assigned in the name of or on the order of, the Sponsors by the
Trustee in exchange thereof.
(b) The Trustee Expense Limit shall initially mean $1.23 per
Unit.
(c) In connection with the deposit evidenced hereby, the
Sponsors authorize and direct the Trustee to execute and deliver (i)
the Assignment Agreements among the agent for the Sponsors, the
Trustee and, respectively, Swiss Re Financial Products Corporation
and Swiss Bank Corporation and (ii) Confirmations containing the same
terms as the Confirmations assigned by such Assignment Agreements.
-4-
EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
AUGUST 26, 1997
EQUITY INVESTOR FUND,
EQUITY PARTICIPATION SERIES--LOW FIVE PORTFOLIO, DEFINED ASSET FUNDS
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, N.J. 08543-9051
(609) 282-8500
Dear Sirs:
We have acted as special counsel for you, as sponsors (the 'Sponsors') of
Equity Investor Fund, Equity Participation Series--Low Five Portfolio, Defined
Asset Funds (the 'Fund'), in connection with the issuance of units of fractional
undivided interest in the Fund (the 'Units') in accordance with the Trust
Indenture relating to the Fund (the 'Indenture').
We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsors and (ii) the Units, when duly issued and delivered by
the Sponsors and the Trustee in accordance with the Indenture, will be legally
issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as Exhibit 3.1 to the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the headings 'Taxes' and 'Miscellaneous--Legal
Opinion.'
Very truly yours,
DAVIS POLK & WARDWELL
EXHIBIT 4.1
AUGUST 26, 1997
Interactive Data
14 Wall Street
New York, N.Y. 10005
(212) 285-0700
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, N.J. 08543-9051
The Chase Manhattan Bank
Unit Investment Trust Division
4 New York Plaza--6th Floor
New York, New York 10004
RE: EQUITY INVESTOR FUND, EQUITY PARTICIPATION SERIES--LOW FIVE PORTFOLIO,
DEFINED ASSET FUNDS (A UNIT INVESTMENT TRUST) UNITS OF FRACTIONAL UNDIVIDED
INTEREST--REGISTERED UNDER THE SECURITIES ACT OF 1933, FILE NO. 333-05685
Gentlemen:
We have examined the Registration Statement for the above-captioned Fund.
We hereby consent to the reference to Interactive Data Services, Inc. in
the Prospectus and Registration Statement for the above-captioned Fund and to
the evaluations of the Securities prepared by us which are referred to in such
Prospectus and Registration Statement.
You are authorized to file copies of this letter with the Securities and
Exchange Commission.
Very truly yours,
James Perry
Vice President
EXHIBIT 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of Equity Investor Fund, Equity Participation
Series--Low Five Portfolio, Defined Asset Funds:
We consent to the use in this Registration Statement No. 333-05685 of our report
dated August 26, 1997, relating to the Statement of Condition of Equity Investor
Fund, Equity Participation Series--Low Five Portfolio, Defined Asset Funds and
to the reference to us under the heading 'Miscellaneous--Auditors' in the
Prospectus which is a part of this Registration Statement.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 26, 1997
