<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------
EQUITY INVESTOR FUND The objective of this Defined Fund is total return
1998 ML SELECT TEN V.I. TRUST through a combination of capital appreciation and
(A UNIT INVESTMENT current dividend income. The common stocks in the
TRUST) Trust were selected by following a strategy that
- ------------------------------invests for a period of about one year in
/ / DESIGNED FOR TOTAL RETURN approximately equal values of the ten common
/ / DEFINED PORTFOLIO OF 10 stocks in the Dow Jones Industrial Average (DJIA)
HIGHEST DIVIDEND YIELDING having the highest dividend yields three business
DOW STOCKS days prior to the date of this Prospectus.
/ / DIVIDEND INCOME The value of units will fluctuate with the value
of the common stocks in the Trust and no assurance
can be given that dividends will be paid or that
the units will appreciate in value.
Units of interest ('Units') are sold only to
separate accounts (the 'Accounts') to fund
benefits under variable annuity contracts or
variable life insurance policies (the 'Contracts')
issued by Merrill Lynch Life Insurance Company or
ML Life Insurance Company of New York (each an
'Insurer'). The Accounts invest in Units in
accordance with allocation instructions received
from Contractowners. Accordingly, the interest of
a Contractowner in the Units is subject to the
terms of the Contract and is described in the
accompanying Prospectus for the Contracts, which
should be reviewed carefully by a person
considering the purchase of a Contract. That
Prospectus describes the relationship between
increases or decreases in the net asset value of,
and any distributions on, Units, and the benefits
provided under the Contract. The rights of the
Accounts as Holders of Units should be
distinguished from the rights of a Contractowner
which are described in the Contracts. References
to Holder in this Prospectus shall refer to the
Accounts.
-------------------------------------------------
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 DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Inquiries should be directed to the Trustee at
SPONSOR: 1-800-221-7771.
Merrill Lynch, Prospectus dated May 1, 1998.
Pierce, Fenner & Smith INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Incorporated AND RETAIN IT FOR FUTURE REFERENCE.
<PAGE>
- --------------------------------------------------------------------------------
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. Each unit
receives an equal share of income and principal distributions.
- ---------------------------------------------------
Defining the Strategy
- ---------------------------------------------------
The Select Ten Trust follows a simple, time-tested Strategy: buy approximately
equal amounts of the ten highest dividend-yielding common stocks (Strategy
Stocks) of the 30 stocks in the DJIA* (determined three business days prior to
the date of this Prospectus) and hold them for about one year. It is intended
that Securities selected for inclusion in the Trust will comply with any
investment limitations required to assure favorable Federal income tax treatment
for the Contracts. At the end of the year, the Trust will be liquidated and the
Strategy reapplied to the DJIA to select a new portfolio. As of three business
days prior to the initial date of deposit, Select Ten Portfolios (unit trusts
following the same strategy which are sold directly to the public) hold
approximately $16 billion of the DJIA Strategy Stocks. Each Select Ten Trust is
designed to be part of a longer term strategy and investors are advised to
follow the Strategy for at least three to five years. So long as the Sponsor
continues to offer new Trusts and if applicable regulatory approval is obtained,
the Accounts intend to reinvest into a new Trust each year. The Sponsor reserves
the right not to offer new Trusts.
The Strategy provides a disciplined approach to investing, based on a buy and
hold philosophy, which ignores market timing and investment research and rejects
active management. The Sponsor anticipates that the Trust portfolio will remain
unchanged over its one-year life despite any adverse developments concerning an
issuer, an industry or the economy or stock market generally. While the Strategy
does not work perfectly each and every year, the Strategy had a higher total
return than the DJIA in 16 of the last 25 years. Of course, past performance of
the Strategy is no guarantee of future results and there can be no guarantee
that the Trust will meet its objectives or will not lose money over its one-year
life or in subsequent rollovers.
- ---------
* The name 'Dow Jones Industrial Average' is the property of Dow Jones &
Company, Inc., which is not affiliated with the Sponsor, has not participated in
any way in the creation of the Trust or in the selection of stocks included in
the Trust and has not reviewed or approved any information included in this
Prospectus.
- ---------------------------------------------------
Defining the Portfolio
- ---------------------------------------------------
Based upon the principal business of each issuer and current market values, the
following industries are represented in the Trust:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / Oil/Gas-International 20%
/ / Auto Manufacturing 10
/ / Chemical Products 10
/ / Financial Services/Banking 10
/ / Forest Products and Paper 10
/ / Manufacturing 10
/ / Photo Equipment/Supplies 10
/ / Tobacco/Food Processing 10
/ / Utilities/Telecommunications 10
- ---------------------------------------------------
Defining the Risks
- ---------------------------------------------------
The Strategy Stocks, as the 10 highest dividend-yielding stocks in the DJIA,
generally share attributes that have caused them to have lower prices or higher
yields relative to the other stocks in the DJIA. The Strategy Stocks 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. The Strategy is therefore
contrarian in nature. The Trust does not reflect any investment recommendations
of the Sponsor and one or more of the stocks in the Trust may, from time to
time, be subject to sell recommendations by the Sponsor.
The Trust is not an appropriate investment for those who are not comfortable
with the Strategy or for those who are unable or unwilling to assume the risk
involved generally with an equity investment. It may not be appropriate for
investors seeking either preservation of capital or high current income.
There can be no assurance that the market factors that caused the relatively low
prices and high yields of the Strategy Stocks will change, that any negative
conditions adversely affecting the stock price will not deteriorate, that the
dividend rates on the Strategy Stocks will be maintained or that share prices
will not decline further during the life of the Trust, or that the Strategy
Stocks will continue to be included in the DJIA.
Unit price fluctuates with the value of the Trust portfolio, and the value of
the portfolio could be affected by changes in the financial condition of the
issuers, changes in the various industries represented
A-2
<PAGE>
in the portfolio, movements in stock prices generally, the impact of the
purchase and sale of securities for the Trust (especially during the first few
days of a Trust and during the rollover period) and other factors. Additionally,
equity markets have been at historically high levels and no assurance can be
given that these levels will continue. Therefore, there is no guarantee that the
objective of the Trust will be achieved. Also, the return on an investment in
the Trust will be lower than the hypothetical returns on Strategy Stocks because
the Trust has transaction fees, brokerage commissions and expenses, purchases
Strategy Stocks at different prices, is not fully invested at all times and
because of other factors described under Hypothetical Strategy Stock Performance
Information (including charges and fees assessed under the Contracts). Trust
performance may also vary from that of Select Ten Portfolios because of
differences in timing and procedures for effecting purchases and redemptions.
Unlike a mutual fund, the Trust is not actively managed and the Sponsor receives
no management fee. Therefore, any adverse financial condition of an issuer or
any market movement in the price of a security will not require the sale of
securities from the Trust. Although the Trust may sell
securities under certain limited circumstances, given the investment philosophy
of the Trust, it is not likely to do so. The Trust may continue to
purchase or hold securities originally selected even though the market value and
yields on the securities may have changed or the securities may no longer be
included in the DJIA.
The portfolio is not considered to be 'concentrated' in stocks of any particular
industry.
- ---------------------------------------------------
Defining the Investment
- ---------------------------------------------------
OFFERING OF UNITS
Full and fractional Units may be purchased by the Accounts to fund benefits
under Contracts. There is no minimum purchase amount. The Accounts may buy Units
only directly from the Trustee and may realize the value of Units only by
tendering them for redemption. Units of this Trust may not be held outside of an
Account.
INITIAL OFFER PRICE PER 1,000 UNITS $1,000.00
The Offer Price to the Accounts as of April 29, 1998, the business day prior to
the initial date of deposit is based on the aggregate value of the underlying
securities ($99,461.75) and any cash held to purchase securities ($10,538.25),
divided by the number of units outstanding (110,000) times 1,000. The Offer
Price on any subsequent date will vary. The underlying securities are valued by
the Trustee on the basis of their closing sale prices at 4:00 p.m. Eastern time
on every business day.
ROLLOVER
If the Account is invested in a Select Ten Trust at its termination, the Insurer
intends to redeem the Units and, subject to obtaining an exemptive order from
the SEC, to reinvest the proceeds in units of a successor trust (a 'rollover').
That trust will hold the current Strategy Stocks determined shortly before the
rollover. Brokerage commissions in selling securities during a rollover will be
borne by the Accounts and thus indirectly by Contractowners. If a Contractowner
no longer wishes to have Contract benefits determined by reference to the Trust,
the owner may change allocation instructions as permitted by the provisions of
the Contract.
DISTRIBUTIONS
Dividend income, net of expenses and transaction fees, will be distributed on
the 10th of June 1998, September 1998, December 1998 and March 1999 for Units
owned as of the 9th of those months. The Accounts intend to reinvest the
quarterly distributions of income and any principal on Units in additional Units
of the Trust. Reinvesting helps to compound your income for a greater total
return.
TERMINATION
The Trust will terminate on April 30, 1999.
- ---------------------------------------------------
Defining Trust Costs
- ---------------------------------------------------
The following charges are paid out of the Trust and are therefore borne
indirectly by Contractowners. They are in addition to charges paid by the
Accounts or by Contractowners directly under the Contracts.
TRANSACTION FEE
The Sponsor receives a deferred transaction fee, accrued daily at the annual
rate of $4.70 per 1,000 Units (about 0.47%), for creating and maintaining the
Trust. No contingent fee will be owed if Units are redeemed before the Trust
terminates. Half of this fee is paid by the Sponsor to the Merrill Lynch
Insurance Group, Inc. to compensate it for its administrative services
relating to making Units available to fund the Accounts.
ESTIMATED ANNUAL TRUST OPERATING EXPENSES
As a % Amount per
of Net 1,000
Assets Units
---------- ----------
Trustee's Fee .082% $ 0.82
Portfolio Supervision,
Bookkeeping and
Administrative Fees .045% $ 0.45
Organizational Expenses .046% $ 0.46
Other Operating Expenses .006% $ 0.06
---------- ----------
TOTAL .179% $ 1.79
These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.
This Trust (and therefore the Accounts and, indirectly, Contractowners) 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.
SELLING UNITS
The Account as Holder may redeem Units to reflect changed investment allocations
and to the extent necessary to provide benefits under the Contracts. The price
will be based on the then current net asset value, which may be more or less
than the cost. The redemption price as of April 29, 1998 was $1,000 per 1,000
Units.
A-3
<PAGE>
- --------------------------------------------------------------------------------
Defined Portfolio
- --------------------------------------------------------------------------------
Equity Investor Fund
1998 ML Select Ten V.I. Trust April 30, 1998
Defined Asset Funds
<TABLE><CAPTION>
PERCENTAGE CURRENT PRICE
TICKER OF PORTFOLIO DIVIDEND YIELD PER SHARE COST
NAME OF ISSUER SYMBOL (1) (2) TO TRUST TO TRUST (3)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Philip Morris Companies, Inc. MO 9.94% 4.27% $ 37.4375 $ 9,883.50
2. General Motors Corporation GM 10.10 2.95 67.8750 10,045.50
3. Chevron Corporation CHV 10.04 2.93 83.2500 9,990.00
4. J.P. Morgan & Company, Inc. JPM 10.06 2.89 131.6875 10,008.25
5. Eastman Kodak Company EK 10.08 2.46 71.5625 10,018.75
6. Minnesota Mining & Manufacturing
Company MMM 10.09 2.37 92.9375 10,037.25
7. Exxon Corporation XON 9.97 2.25 72.9375 9,919.50
8. American Telephone & Telegraph
Company T 9.77 2.23 59.2500 9,717.00
9. International Paper Company IP 10.00 1.93 51.8125 9,948.00
10. Union Carbide Corporation UK 9.95 1.86 48.5000 9,894.00
-------------- --------------
100.00% $ 99,461.75
-------------- --------------
-------------- --------------
</TABLE>
- ----------------------------
(1) Based on Cost to Trust.
(2) Current Dividend Yield for each security was calculated by annualizing the
last quarterly or semi-annual ordinary dividend declared on the security and
dividing the result by its market value as of the close of trading on April
29, 1998.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on April 29, 1998, the business day prior to the initial
date of deposit. The value of the Securities on any subsequent business day
will vary.
----------------------------
The securities were acquired on April 29, 1998 and are represented entirely by
contracts to purchase the securities. The Sponsor may have acted as an
underwriter, manager or co-manager of a public offering of the securities in
this portfolio during the last three years. Affiliates of the Sponsor may serve
as specialists in the securities in this portfolio 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 the Sponsor may be an officer or director of
one or more of the issuers of the securities in the portfolio. The 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. The 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.
A-4
<PAGE>
- --------------------------------------------------------------------------------
Hypothetical Strategy Stock Performance Information
- --------------------------------------------------------------------------------
Select Ten Trusts are based on a strategy of investing equal amounts in the 10
highest dividend-yielding stocks ('Strategy Stocks') in the DJIA each year.
Although the Strategy Stocks underperformed the DJIA in eight of the last 25
years, their total return over several years generally outperformed the DJIA.
This is why the Sponsor recommends following the Strategy for at least three to
five years. Only the average annualized total return figures at the bottom of
each column reflect reinvestment of dividends (at the end of each year). The
results below are hypothetical for the following reasons: None of these figures
reflects any transaction fees, expenses or brokerage commissions which investors
in the Trust bear. Nor do they reflect any charges or fees deducted under the
Contracts. Trust performance will also differ from the hypothetical performance
of Strategy Stocks because Select Ten Trusts are established at various times
during a year, may not be fully invested at all times or equally weighted in all
10 stocks, and their stocks are normally purchased or sold at prices different
from the closing prices used in buying and selling Trust units. Past performance
is no guaranty of future results of the Strategy or any Select Ten Trust.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
(FIGURES DO NOT REFLECT TRANSACTION FEES, COMMISSIONS, FUND EXPENSES OR TAXES)
<TABLE><CAPTION>
STRATEGY STOCKS(1) DOW JONES INDUSTRIAL AVERAGE (DJIA)
---------------------------------------------------------- ----------------------------------------------------------
ACTUAL DIVIDEND TOTAL ACTUAL DIVIDEND TOTAL
YEAR APPRECIATION(2) YIELD(3) RETURN(4) APPRECIATION(2) YIELD(3) RETURN(4)
- ---- -------------- ---------------------- -------------- -------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
1973 -6.22% 5.20% -1.02% -16.58% 3.46% -13.12%
1974 -7.73 7.42 -0.31 -27.57 4.43 -23.14
1975 49.06 7.96 57.02 38.32 6.08 44.40
1976 27.69 7.12 34.81 17.86 4.86 22.72
1977 -6.75 5.92 -0.83 -17.27 4.56 -12.71
1978 -6.94 7.10 0.16 -3.15 5.84 2.69
1979 3.94 8.41 12.35 4.19 6.33 10.52
1980 17.83 8.54 26.37 14.93 6.48 21.41
1981 -0.94 8.41 7.47 -9.23 5.83 -3.40
1982 17.24 8.22 25.46 19.60 6.19 25.79
1983 30.22 8.24 38.46 20.30 5.38 25.68
1984 0.69 6.65 7.34 -3.76 4.82 1.06
1985 21.66 6.97 28.63 27.66 5.12 32.78
1986 23.76 10.81 34.57 22.58 4.33 26.91
1987 1.87 5.10 6.97 2.26 3.76 6.02
1988 15.70 8.44 24.14 11.85 4.10 15.95
1989 20.35 6.95 27.30 26.96 4.75 31.71
1990 -13.00 5.06 -7.94 -4.34 3.77 -0.57
1991 28.16 5.21 33.37 20.32 3.61 23.93
1992 3.62 4.70 8.32 4.17 3.17 7.34
1993 22.71 4.21 26.92 13.72 3.00 16.72
1994 -0.19 4.08 3.89 2.14 2.81 4.95
1995 32.45 4.03 36.48 33.45 3.03 36.48
1996 24.46 3.48 27.94 26.01 2.56 28.57
1997 18.34 3.25 21.59 22.64 2.14 24.78
1998
(through
3/31/98) 8.40 0.70 9.10 11.27 0.85 11.72
Average Annualized Total Return 18.33 13.37
</TABLE>
- ----------------------------
(1) The Strategy Stocks for any given year were selected by ranking the dividend
yields for each of the stocks in the DJIA as of the beginning of the year,
based upon an annualization of the last quarterly or semi-annual regular
dividend distribution (which would have been declared in the preceding year)
divided by that stock's market value on the first trading day that year on
the New York Stock Exchange.
(2) Appreciation for the Strategy 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 a given year from the market value of those
stocks at the closing value on the last trading day in the year, and
dividing the result by the market value of the stocks at the opening value
on the first trading day in that year. Appreciation for the DJIA is
calculated by subtracting the opening value of the DJIA on the first trading
day in each year from the closing value of the DJIA on the last trading day
in the year, and dividing the result by the opening value of the DJIA on the
first trading day in that year.
(3) Actual Dividend Yield for the Strategy Stocks is calculated by adding the
total dividends on the stocks in the year and dividing the result by the
market value of the stocks on the first trading day in that year. Actual
Dividend Yield for the DJIA is calculated by taking the total dividends
credited to the DJIA and dividing the result by the opening value of the
DJIA on the first trading day of the year.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Individual year Total Returns do not take into consideration any
reinvestment of dividend income.
A-5
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders of Equity Investor Fund, 1998 ML Select Ten
V.I. Trust, 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 April 30, 1998. 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 cash and 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 April 30, 1998
in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
April 30, 1998
STATEMENT OF CONDITION AS OF APRIL 30, 1998
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 99,461.75
Cash..................................................... 10,538.25
Organizational Costs(2).................................. 92,000.00
--------------------
Total............................................$ 202,000.00
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2).................................$ 92,000.00
--------------------
Interest of Holders of 110,000 Units of fractional
undivided interest outstanding:
Cost to investors(3)...................................$ 110,000.00
--------------------
Total............................................$ 202,000.00
--------------------
--------------------
- ------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio determined by the Trustee at 4:00 p.m., Eastern time on April 29,
1998. The contracts to purchase securities are collateralized by an irrevocable
letter of credit which has been issued by DBS Bank, New York Branch, in the
amount of $99,539.35 and deposited with the Trustee. The amount of the letter of
credit includes $99,461.75 for the purchase of securities.
(2) This represents a portion of the Trust's organizational costs which
will be deferred and amortized over the life of the Trust. Organizational costs
have been estimated based on projected total assets of $200 million. To the
extent the Trust is larger or smaller, the amount may vary.
(3) Aggregate offer price computed on the basis of the value of the
underlying securities at 4:00 p.m., Eastern time on April 29, 1998.
A-6
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INVESTOR FUND SELECT TEN V.I. TRUST
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
----
Portfolio Description...................... 1
Risk Factors............................... 3
Sale of Units.............................. 4
Redemption of Units........................ 5
Rollover................................... 5
Income, Distributions and Reinvestment..... 6
PAGE
----
Expenses................................... 6
Taxes...................................... 7
Records and Reports........................ 7
Trust Indenture............................ 7
Miscellaneous.............................. 7
Supplemental Information................... 8
PORTFOLIO DESCRIPTION
THE STRATEGY
Simple strategies can sometimes be the most effective. The Trust seeks total
return by acquiring the ten highest dividend yielding stocks in the Dow Jones
Industrial Average* as of the date indicated in Part A, and holding them for
about one year. This investment strategy is based on three time-tested
investment principles: time in the market is more important than timing the
market; the stocks to buy are the ones everyone else is selling; and dividends
can be an important part of total return. Because issuers of DJIA stocks are
highly capitalized, established companies, they are generally able to survive
adverse developments. An investment in the Trust can be cost-efficient, avoiding
the odd-lot costs of buying small quantities of securities directly. Purchasing
a portfolio of these stocks as opposed to one or two provides a more diversified
holding. There is only one investment decision instead of ten, four quarterly
dividends instead of 40. Investments in a number of companies with high
dividends relative to their stock prices is designed to increase the Trust's
potential for higher returns. Investing in these stocks of the DJIA may be
effective as well as conservative because regular dividends are common for
established companies and dividends have accounted for a substantial portion of
the total return on stocks of the DJIA as a group. The Trust's return will
consist of a combination of capital appreciation and current dividend income.
The Trust will terminate in about one year. There can be no assurance that the
dividend rates on the selected stocks will be maintained. Reduction or
elimination of a dividend could adversely affect the stock price as well.
The first DJIA, consisting of 12 stocks, was 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.
- --------------
* 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 Trust or in the selection of stocks included
in the Trust portfolio and has not reviewed or approved any information included
in this Prospectus.
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
PORTFOLIO SELECTION
The Trust holds ten common stocks in the DJIA having the highest dividend
yields as of the date indicated in Part A. 'Highest dividend yield' is
calculated for each Security by annualizing the last quarterly or semi-annual
ordinary dividend distributed on the Security and dividing the result by its
closing sales price. This yield is historical and there is no assurance that any
dividends will be declared or paid in the future on the Securities.
The Strategy selection 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 application of the Strategy may
cause the Trust to own a stock that the Sponsor does not recommend for purchase
and, in fact, the Sponsor may have sell recommendations on a number of the
stocks in the Trust at the time the stocks are selected for inclusion in the
Trust. 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 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 Securities on the initial date of deposit established a
proportionate relationship among the number of shares of each Security. New
Units may be created thereafter, maintaining to the extent practicable that
original proportionate relationship. Acquisition of additional Securities
subsequent to the initial 90-day period must
2
<PAGE>
generally replicate exactly the proportionate relationship among the number of
shares of each Security at the end of the initial 90-day period. The ability to
acquire each Security at the same time will generally depend upon the Security's
availability and any restrictions on the purchase of that Security under the
federal securities laws or otherwise.
Additional Units may 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 Contractowners to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage fees will be an expense of the Trust. To minimize the risk of price
fluctuations when purchasing Securities, the Trust will try to purchase
Securities as close to the Evaluation Time or at prices as close to the
evaluated prices as possible. The Trust may also enter into program trades with
unaffiliated broker/dealers, which will have the effect of increasing brokerage
commissions while reducing market risk. The Trust may benefit from reduced
commissions and institutional prices available to the Trust.
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 portfolio is regularly reviewed, because of
the Strategy, the Trust is unlikely to sell any of the Securities, other than to
satisfy redemptions of units, or to cease buying additional shares in connection
with the issuance of Additional Units. More specifically, adverse developments
concerning a Security including the adverse financial condition of the issuer, 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 Security detrimental to the interest of investors, will
generally not cause the Trust to dispose of a Security or cease buying it.
Furthermore, the Trust will likely continue to hold a Security and purchase
additional shares notwithstanding its ceasing to be included among the ten
highest dividend yielding stocks in the DJIA or even its deletion from the DJIA.
RISK FACTORS
An investment in the Trust entails certain risks, including the risk that
the value of an investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens. The rights of holders of common stocks to receive payments
from the issuer are generally inferior to the rights of creditors of, or holders
of debt obligations or preferred stocks issued by, the issuer. Moreover, because
common stocks do not represent an obligation of the issuer they do not offer any
assurance of income or provide the degree of protection of capital provided by
debt securities. 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 Sponsor cannot predict the direction or scope of
any of these factors. Additionally, equity markets have been at historically
high levels and no assurance can be given that these levels will continue. There
can be no assurance that the Trust will be effective in achieving its objective
over its one-year life or that future portfolios selected through this process
during consecutive one-year periods will meet their objectives. The Trust is not
designed to be a complete investment program.
LITIGATION AND LEGISLATION
Philip Morris Companies common stock represents approximately 10% of the
value of the Portfolio. Pending legal proceedings against Philip Morris cover a
wide range of matters including product liability and consumer protection.
Damages claimed in many of the smoking and heatlh cases alleging personal injury
(both individual and class actions), and in health cost recovery cases brought
by governments, unions and similar entities seeking reimbursement for health
care expenditures, aggregate many billions of dollars.
In June 1997, Philip Morris and other companies in the U.S. tobacco industry
entered into a settlement of significant litigation and regulatory issues
affecting the industry generally. While the costs of that settlement to the
tobacco
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industry would have been great, industry leaders considered that it at least
would reduce uncertainties facing the industry and increase stability in
business and capital markets. Now, however, legislation pending in Congress (the
McCain bill) threatens the negotiated settlement, substantially changing many
aspects of it and increasing the uncertainty surrounding the proposed resolution
of issues that could adversely affect the volume, operating revenues and
financial position of tobacco companies such as Philip Morris.
The Sponsor cannot predict the outcome of the litigation pending against
Philip Morris or how the current uncertainty concerning regulatory and
legislative measures will ultimately be resolved. The Sponsor cannot predict
whether these and other possible developments will have a material effect on the
price of Philip Morris stock over the term of the Portfolio, which could in turn
adversely affect Unit prices.
Except as set forth above, the Sponsor does 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 Trust, although pending litigation and
legislation, particularly with respect to the tobacco industry, may have a
material adverse effect on the value of certain of the Securities in the Trust.
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
Securities in the Trust or the issuers of the Securities. 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 Trust. 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 Securities to
achieve their business goals.
LIFE OF THE TRUST
The size and composition of the Trust will be affected by the level of
purchases or redemptions of Units that may occur from time to time. Principally,
this will depend upon the number of Contractowners whose premium payments or
cash value are allocated to be invested in Units. The Trust will be terminated
no later than the mandatory 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 Holders of 51% of the Units. See Trust Termination.
SALE OF UNITS
OFFER PRICE
Units may be purchased by an Account from the Trustee as an investment
medium for the Contracts. Units are continuously offered at prices equal to the
net asset value per Unit, determined daily as described under Evaluations. For a
Unit to be purchased or sold at same day net asset value, allocation
instructions must be received by the Account no later than 4 p.m. Eastern time.
Units are subject to a transaction charge accrued daily at the annual rate of
$4.70 per 1,000 Units (about 0.47%). Units purchased after the Initial Date of
Deposit are subject only to future transaction charge accruals. The Sponsor is
also the principal underwriter of the Trust.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. If the Securities are listed on a national securities exchange or the
Nasdaq National Market, evaluations are generally based on closing sales prices
on that exchange or that system (unless the Trustee deems these prices
inappropriate) or, if closing sales prices are not available, at the mean
between the closing bid and offer prices. If the Securities are not listed or if
listed but the principal market is elsewhere, the evaluation is generally
determined based on sales prices of the Securities on the over-the-counter
market or, if sales prices in that market are not available, on the basis of the
mean between current bid and offer prices for the Securities or for comparable
securities or by appraisal or by any combination of these methods. Neither the
Sponsor nor the Trustee guarantee the enforceability, marketability or price of
any Securities.
NO CERTIFICATES
Units are issued only in uncertificated form.
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REDEMPTION OF UNITS
Units may be redeemed at any time by the Account by sending the Trustee a
redemption request.
No later than the seventh calendar day after tender (normally on the next
Business Day), the Account will be wired an amount equal to the net asset value
per Unit next computed after receipt of Contractowner instructions. Because of
market movements, changes in the Portfolio and accrued transaction fees, this
price may be more or less than the cost of the Units.
If cash is not available in the Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Sponsor in a manner
designed to maintain, to the extent practicable, the proportionate relationship
among the number of shares of each Security. Provision is made under the
Indenture for the Sponsor to specify the minimum dollar amount in which blocks
of Securities are to be sold in order to obtain the best price for the Trust.
While these minimum amounts may vary from time to time in accordance with market
conditions, the Sponsor believes that the minimum dollar amount of sales which
would be specified would be approximately $25,000. 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 of the
Trust.
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.
ROLLOVER
Upon termination of the Trust the Accounts will redeem Units held and,
subject to obtaining an exemptive order from the SEC, invest the proceeds in the
next Select Ten V.I. Trust. Proceeds will generally be reinvested in the next
Trust on the termination date of the terminating Trust. An Insurer may, however,
stop offering the Select Ten Trust as an allocation alternative at any time. The
Sponsor may, in its sole discretion and without penalty or liability to Holders
or Contractowners, decide not to sponsor any successor Trust or decide to modify
the terms of the rollover. Prior notice of any decision would be provided to the
Accounts.
The rollover is accomplished by the in-kind redemption of Units to the
distribution agent acting on behalf of the Accounts.
The distribution agent will then adjust the Securities held for the Accounts
so that its composition matches the investment profile of the next Trust. This
adjustment will involve the sale of non-duplicated Securities and, possibly, of
a portion of certain duplicated Securities in order to rebalance the portfolio,
and the purchase of replacement Securities. After this adjustment the
distribution agent will make an in-kind contribution of the adjusted Securities
to the next Trust. Upon receipt of the in-kind contribution, the trustee of the
next Trust will issue the appropriate number of units in the Trust to the
Accounts.
The Sponsor intends to cause the distribution agent to sell those Securities
that will not be contributed to the next Trust, and then to create units of the
next Trust, in each case as quickly as possible subject to the Sponsor's
sensitivity that the concentrated sale and purchase of large volumes of
securities may affect market prices in a manner adverse to the interest of the
Accounts. Accordingly, the Sponsor may, in its sole discretion, undertake a more
gradual sale of Securities and a more gradual creation of units of the next
Trust to help mitigate any negative market price consequences caused by this
large volume of securities trades. In order to minimize potential losses caused
by market movement during the rollover period, the Sponsor may enter into
program trades, which may increase brokerage commissions incurred by the
Accounts. There can be no assurance, however, that any trading procedures will
be successful or might not result in less advantageous prices. Pending the
investment of rollover proceeds in securities to comprise the next Trust, those
moneys may be uninvested for several days.
The Division of Investment Management of the SEC is of the view that the
rollover option (to the Account) constitutes an 'exchange offer', for the
purposes of Section 11(c) of the Investment Company Act of 1940, and would
therefore be prohibited absent an exemptive order. The Sponsor has received
exemptive orders under Section 11(c) which it believes permit it to offer the
rollover, but no assurance can be given that the SEC will concur with the
Sponsor's position and additional regulatory approvals may be required.
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INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
The annual income per Unit, after deducting estimated annual Trust expenses
per Unit, will depend primarily upon the amount of dividends declared and paid
by the issuers of the Securities and changes in Trust expenses and, to a lesser
degree, upon the level of purchases of additional Securities and sales of
Securities. There is no assurance that dividends on the Securities will continue
at their current levels or be declared at all.
Each Unit receives an equal share of distributions of dividend income net of
estimated expenses and the transaction charge. Because dividends on the
Securities are not received at a constant rate throughout the year, any
distribution may be more or less than the amount then credited to the Income
Account. Dividends received are credited to an Income Account and other receipts
to a Capital Account. A Reserve Account may be created by withdrawing from the
Income and Capital Accounts amounts considered appropriate by the Trustee to
reserve for any material amount that may be payable out of the Trust. Funds held
by the Trustee in the various accounts do not bear interest. In addition,
distributions of amounts necessary to pay the transaction fee will be made
quarterly from the Income Account to an account maintained by the Trustee for
purposes of satisfying this obligation. Proceeds of the disposition of any
Securities not used to redeem Units will be held in the Capital Account and
distributed on the final Distribution Day or following liquidation of the Trust.
REINVESTMENT
Income and principal distributions on Units will be reinvested by
participating in the Trust's reinvestment plan. Under the plan, new Units will
be created with cash to purchase additional Securities. Purchases of additional
Securities will generally be made so as to maintain the then existing
proportionate relationship among the number of shares of each Security in the
Trust portfolio. Units acquired by reinvestment will be subject to unaccrued
transaction fees. Although the Sponsor has no intention of doing so, it reserves
the right to amend, modify or terminate the reinvestment plan at any time
without prior notice to Contractowners.
EXPENSES
TRANSACTION FEE
A transaction fee, to reimburse the Sponsor for certain expenses at the rate
set forth under Defining Trust Costs, calculated on a daily basis, will be
deducted from the Income Account and distributed to the Sponsor on the quarterly
distribution days. Accrued transaction fees will be deducted from the Income
Account at the time of any interim redemption.
OTHER EXPENSES
Estimated 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 payable by the Trust
in purchasing and selling Securities. The Trustee's Fee shown in Part A of this
Prospectus assumes that the Trust will reach a size estimated by the Sponsor and
is based on a sliding fee scale that reduces the per 1,000 Units Trustee's fee
as the size of the Trust increases. The Trustee's annual fee is payable in
monthly installments. 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 Sponsor, costs of action taken to protect the Trust and other legal fees
and expenses, 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 Sponsor receives an
annual fee currently estimated at $0.35 per 1,000 Units to reimburse it for the
cost of providing Portfolio supervisory services. While the fee may exceed its
costs of providing these services, the total supervision fees from all trusts of
Equity Investor Fund will not exceed its costs for providing these services to
all of those trusts during any calendar year. The Sponsor may also be reimbursed
for its costs of providing bookkeeping and administrative services to Defined
Asset Funds, currently estimated at $0.10 per 1,000 Units. The Trustee's and
Sponsor's fees may be adjusted for inflation without Holders' approval.
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Expenses incurred in establishing the Trust, including the cost of the
initial preparation of documents relating to the Trust, 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 the life of the Trust. Advertising
and selling expenses will be paid by the Sponsor at no charge to the Trust.
TAXES
The Trust is not an association taxable as a corporation for federal income
taxes. Taxable income received by an Account will in effect be offset by a
deduction for an increase in reserves. For information on tax consequences to
Contractowners, see the attached Prospectus for the Contracts.
RECORDS AND REPORTS
The Trustee 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 Holders at reasonable times during business hours.
With each distribution to the Accounts, the Trustee includes a statement of
the amounts of income and any other receipts being distributed. Following the
termination of the Trust, the Trustee sends each Account a statement summarizing
transactions in the Trust's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price per
1,000 Units at termination, and the fees and expenses paid by the Trust, among
other matters. Trust accounts may be audited by independent accountants selected
by the Sponsor 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 Sponsor and the Trustee. 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 Sponsor and the Trustee without consent
by Holders 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 Holders (as determined in good faith by the Sponsor). The Indenture
may also generally be amended upon consent of Holders of 51% of the Units. No
amendment may reduce the interest of any Holder of the Trust without the
Holder's consent or reduce the percentage of Units required to consent to any
amendment without unanimous consent of Holders. Holders will be notified of the
substance of any amendment.
The Trustee may resign upon notice to the Sponsor. It may be removed by
Holders of 51% of the Units at any time or by the Sponsor without the consent of
Holders if it becomes incapable of acting or bankrupt, its affairs are taken
over by public authorities, or if under certain conditions the Sponsor
determines in good faith that its replacement is in the best interest of the
investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsor will use its best efforts
to appoint a successor promptly; however, if upon resignation no successor has
accepted appointment within 30 days after notification, the resigning Trustee
may apply to a court of competent jurisdiction to appoint a successor.
The Sponsor and the Trustee are not liable to the Accounts 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 the
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 Sponsor.
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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 New York
State banking authorities.
SPONSOR
Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch & Co., Inc. has acted as Sponsor of a number of
series of unit investment trusts and as principal underwriter and managing
underwriter of other investment companies. The Sponsor, in addition to
participating as members of various selling groups or as agents of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of these companies and sells securities to these
companies in its capacities as broker or dealer in securities.
CODE OF ETHICS
The Sponsor 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 Sponsor's responsibilities to
the Trust.
PERFORMANCE INFORMATION
Total returns, average annualized returns or cumulative returns for various
periods of the Strategy Stocks, the related index, the current or one or more
prior Select Ten Trusts may be included from time to time in advertisements,
sales literature and reports to current or prospective investors. Total return
shows changes in Unit price during the period plus reinvestment of dividends and
capital gains, divided by the offer price. Average annualized returns show the
average return for stated periods of longer than a year. Sales material may also
include an illustration of the cumulative results of like annual investments in
Strategy Stocks during an accumulation period and like annual withdrawals during
a distribution period. Figures for actual Trusts (but not Strategy Stocks or the
related index) reflect deduction of all Trust expenses, but do not reflect any
charges or deductions assessed under the Contracts. No provision is made for any
income taxes payable. Similar figures may be given for Strategy Stocks. The
performance of Strategy Stocks may also be shown in comparison to other indexes.
Investors should bear in mind that this represents past performance and is no
assurance of future results of the current or any future Trust.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, Holders will receive without charge supplemental information about
the Portfolio, 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 Portfolio.
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Defined
Asset FundsSM
SPONSOR: EQUITY INVESTOR FUND
Merrill Lynch, 1998 ML SELECT TEN
Pierce, Fenner & Smith IncorporatedV.I. TRUST
Defined Asset Funds This Prospectus does not contain all of the
P.O. Box 9051 information with respect to the investment
Princeton, NJ 08543-9051 company set forth in its registration
(609) 282-8500 statement and exhibits relating thereto which
- ------------------------ have been filed with the Securities and
TRUSTEE: Exchange Commission, Washington, D.C. under
The Bank of New York the Securities Act of 1933 and the Investment
Unit Investment Trust Department Company Act of 1940, and to which reference
Box 974--Wall Street Division is hereby made. Copies of filed material can
New York, NY 10268-0974 be obtained from the Public Reference Section
1-800-221-7771 of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Commission also maintains a Web site that
contains information statements and other
information regarding registrants such as
Defined Asset Funds that file electronically
with the Commission at http://www.sec.gov.
------------------------
No person is authorized to give any
information or to make any representations
with respect to this investment company not
contained in its registration statement and
related exhibits; and any information or
representation not contained therein must not
be relied upon as having been authorized.
------------------------
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.
70078--5/98
