<PAGE>
DEFINED ASSET FUNDSSM
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- --------------------------------------------------------------------------------
EQUITY INVESTOR FUND
CONCEPT SERIES
REAL ESTATE INCOME FUND 4
(A UNIT INVESTMENT TRUST)
O PROFESSIONAL SELECTION
O DIVERSIFICATION
O REINVESTMENT OPTION
O MONTHLY INCOME
SPONSORS: -------------------------------------------------
Merrill Lynch, The Securities and Exchange Commission has not
Pierce, Fenner & Smith approved or disapproved these Securities or
Incorporated passed upon the adequacy of this prospectus. Any
Salomon Smith Barney Inc. representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated May 12, 1999.
<PAGE>
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Defined Asset FundsSM
DEFINED ASSET FUNDSSM IS AMERICA'S OLDEST AND LARGEST FAMILY OF UNIT INVESTMENT
TRUSTS, WITH OVER $160 BILLION SPONSORED OVER THE LAST 28 YEARS. DEFINED ASSET
FUNDS HAS BEEN A LEADER IN UNIT INVESTMENT TRUST RESEARCH AND PRODUCT
INNOVATION. OUR FAMILY OF FUNDS HELPS INVESTORS WORK TOWARD THEIR FINANCIAL
GOALS WITH A FULL RANGE OF QUALITY INVESTMENTS, INCLUDING MUNICIPAL, CORPORATE
AND GOVERNMENT BOND PORTFOLIOS, EQUITY PORTFOLIOS AND INTERNATIONAL EQUITY
PORTFOLIOS.
DEFINED ASSET FUNDS OFFER A NUMBER OF ADVANTAGES:
O A DISCIPLINED STRATEGY OF BUYING AND HOLDING WITH A LONG-TERM VIEW IS THE
CORNERSTONE OF DEFINED ASSET FUNDS.
O FIXED PORTFOLIO: DEFINED FUNDS FOLLOW A BUY AND HOLD INVESTMENT STRATEGY;
FUNDS ARE NOT MANAGED AND PORTFOLIO CHANGES ARE LIMITED.
O DEFINED PORTFOLIOS: WE CHOOSE THE STOCKS AND BONDS IN ADVANCE, SO YOU KNOW
WHAT YOU'RE INVESTING IN.
O PROFESSIONAL RESEARCH: OUR DEDICATED RESEARCH TEAM SEEKS OUT STOCKS OR BONDS
APPROPRIATE FOR A PARTICULAR FUND'S OBJECTIVES.
O ONGOING SUPERVISION: WE MONITOR EACH PORTFOLIO ON AN ONGOING BASIS.
NO MATTER WHAT YOUR INVESTMENT GOALS, RISK TOLERANCE OR TIME HORIZON, THERE'S
PROBABLY A DEFINED ASSET FUND THAT SUITS YOUR INVESTMENT STYLE. YOUR FINANCIAL
PROFESSIONAL CAN HELP YOU SELECT A DEFINED ASSET FUND THAT WORKS BEST FOR YOUR
INVESTMENT PORTFOLIO.
CONTENTS
PAGE
-----------
RISK/RETURN SUMMARY..................................... 3
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT................ 6
INCOME............................................... 6
RECORDS AND REPORTS.................................. 6
THE RISKS YOU FACE...................................... 6
CONCENTRATION RISK................................... 6
LITIGATION AND LEGISLATION RISKS..................... 7
SELLING OR EXCHANGING UNITS............................. 7
SPONSORS' SECONDARY MARKET........................... 7
SELLING UNITS TO THE TRUSTEE......................... 8
ROLLOVER/EXCHANGE OPTION............................. 8
HOW THE FUND WORKS...................................... 9
PRICING.............................................. 9
EVALUATIONS.......................................... 9
INCOME............................................... 10
EXPENSES............................................. 10
PORTFOLIO CHANGES.................................... 11
PORTFOLIO TERMINATION................................ 11
NO CERTIFICATES...................................... 11
TRUST INDENTURE...................................... 11
LEGAL OPINION........................................ 12
AUDITORS............................................. 12
SPONSORS............................................. 12
TRUSTEE.............................................. 12
UNDERWRITERS' AND SPONSORS' PROFITS.................. 12
PUBLIC DISTRIBUTION.................................. 13
CODE OF ETHICS....................................... 13
YEAR 2000 ISSUES..................................... 13
ADVERTISING AND SALES LITERATURE..................... 14
TAXES................................................... 14
SUPPLEMENTAL INFORMATION................................ 15
FINANCIAL STATEMENTS.................................... 16
REPORT OF INDEPENDENT ACCOUNTANTS.................... 16
STATEMENT OF CONDITION............................... 16
2
<PAGE>
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RISK/RETURN SUMMARY
1. WHAT IS THE PORTFOLIO'S OBJECTIVE?
The Portfolio seeks total return through capital
appreciation and high current income by investing for
approximately two years in a fixed portfolio of publicly
traded equity real estate investment trusts.
You can participate in the Portfolio by purchasing units.
Each unit represents an equal share of the stocks in the
Portfolio and receives an equal share of income
distributions.
2. WHAT IS THE PORTFOLIO'S INVESTMENT STRATEGY?
o The Portfolio contains 25 equity REITs selected by the
Sponsors with research provided by a professional REIT
consultant, Cohen & Steers Capital Management, Inc.
o In the opinion of the Sponsors, these REITs have attractive
dividend yields and the potential for capital appreciation
and increasing dividends.
o Investing in the Portfolio rather than in only one or two
of the underlying REITs is a way to diversify your
investment, even though 100% of the Portfolio is invested
in a single industry.
The Portfolio plans to hold the stocks in the Portfolio for
about two years. At the end of approximately two years, we
will liquidate the Portfolio and select a new portfolio, if
available.
3. WHAT REAL ESTATE SECTORS ARE REPRESENTED IN THE PORTFOLIO?
The Portfolio contains REITs in the following real estate
sectors:
APPROXIMATE
PORTFOLIO
PERCENTAGE
o Office/Industrial 28%
o Apartment 20
o Regional Mall 20
o Healthcare 12
o Shopping Center 12
o Industrial 8
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o The Portfolio is considered to be 'concentrated' in the
real estate industry and is subject to certain risks
associated with ownership of real estate generally and the
value of REITs in particular.
-- The REIT market has undergone considerable growth and
change in recent years with the transformation from
private to public ownership of real estate. Significant
developments affecting REITs, which are generally
disclosed in periodic reports filed by the REITs under
the federal securities laws, are expected to continue.
-- Certain REITs may be relatively illiquid and some of the
issuers may be thinly capitalized or have a limited
operating history and as a result may be especially
susceptible to stock market and real estate
fluctuations.
o There can be no assurance that the issuers of the
underlying securities will pay dividends.
o Stock prices can be volatile.
o Share prices and dividend yields may decline during the
life of the Portfolio.
o The Portfolio may continue to purchase or hold the REITs
originally selected even though their market value or yield
may have changed.
3
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Defined Portfolio
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Equity Investor Fund
Concept Series
Real Estate Income Fund 4
Defined Asset Funds
<TABLE>
<CAPTION>
PRICE
TICKER PERCENTAGE PER SHARE CURRENT DIVIDEND COST
NAME OF ISSUER SYMBOL OF PORTFOLIO (1) TO PORTFOLIO YIELD (2) TO PORTFOLIO (3)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. AMB Property Corporation AMB 3.97% $ 22.5625 6.20% $ 9,927.50
2. Apartment Investment &
Management Company AIV 3.94 41.1250 6.08 9,870.00
3. Archstone Communities Trust ASN 3.96 23.0625 6.42 9,916.88
4. Arden Realty, Inc. ARI 3.97 26.1250 6.81 9,927.50
5. Brandywine Realty Trust BDN 4.01 19.6875 7.92 10,040.63
6. Charles E. Smith Residential
Realty, Inc. SRW 4.05 34.9375 6.13 10,131.88
7. Cornerstone Properties, Inc. CPP 4.02 16.7500 7.16 10,050.00
8. Developers Diversified Realty
Corporation DDR 3.99 16.6250 8.42 9,975.00
9. Essex Property Trust, Inc. ESS 4.02 33.5000 6.57 10,050.00
10. First Industrial Realty Trust,
Inc. FR 4.01 27.1250 8.85 10,036.25
11. Health Care Property Investors,
Inc. HCP 4.07 30.8750 8.94 10,188.75
12. Healthcare Realty Trust, Inc. HR 3.95 20.5625 10.41 9,870.00
13. Highwoods Properties, Inc. HIW 3.97 26.8125 8.06 9,920.63
14. JDN Realty Corporation JDN 4.00 23.2500 6.19 9,997.50
15. JP Realty, Inc. JPR 4.01 20.0625 9.27 10,031.25
16. Liberty Property Trust LRY 4.04 24.6250 7.31 10,096.25
17. Mack-Cali Realty Corporation CLI 3.95 32.9375 6.68 9,881.25
18. Nationwide Health Properties,
Inc. NHP 3.98 20.7500 8.67 9,960.00
19. Post Properties, Inc. PPS 4.04 40.4375 6.92 10,109.38
20. Regency Realty Corporation REG 4.04 22.4375 8.20 10,096.88
21. Simon Property Group, Inc. SPG 4.01 29.5000 6.85 10,030.00
22. SL Green Realty Corporation SLG 4.11 21.4375 6.53 10,290.00
23. Taubman Centers, Inc. TCO 3.97 13.4375 7.14 9,943.75
24. The Macerich Company MAC 3.96 26.7500 7.25 9,897.50
25. Urban Shopping Centers, Inc. URB 3.96 31.9375 7.01 9,900.63
----------------- -----------------
100.00% $ 250,139.41
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----------------- -----------------
</TABLE>
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(1) Based on Cost to Portfolio.
(2) Calculated by annualizing the latest quarterly or semi-annual ordinary
dividend declared.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on May 11, 1999, 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 May 11, 1999 and are represented entirely by
contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or co-managers of a public offering of the securities in
this Portfolio during the last three years. Affiliates of the Sponsors 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
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 securities in the Portfolio. 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.
------------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
PROSPECTUS
FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT
STOCKS FROM THOSE DESCRIBED ABOVE.
<PAGE>
5. IS THIS PORTFOLIO APPROPRIATE FOR YOU?
Yes, if you want total return through capital appreciation
and high dividend income. You will benefit from a
professionally selected and supervised portfolio whose risk
is reduced by investing in equity securities of different
issuers.
The Portfolio is not appropriate for you if you are
unwilling to take the risk involved with an equity REIT
investment. It may not be appropriate for you if you are
seeking preservation of capital.
6. WHAT ARE THE PORTFOLIO'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Portfolio.
ESTIMATED ANNUAL OPERATING
EXPENSES
AS A % OF AMOUNT
NET PER 1,000
ASSETS UNITS
---------- -----------
.091% $ 0.90
Trustee's Fee
.045% $ 0.45
Portfolio Supervision,
Bookkeeping and
Administrative Fees (including
updating
expenses)
.041% $ 0.41
REIT Consultant's Fee
.152% $ 1.50
Other Operation Expenses
---------- -----------
.329% $ 3.26
TOTAL
AMOUNT
PER 1,000
UNITS
---------------------
ORGANIZATION COSTS per 1,000 units
(deducted from Portfolio assets at
the close of the initial offering
period) $ 2.14
The Sponsors historically paid organization costs and
updating expenses.
INVESTOR FEES
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested) 4.50%
You will pay an up-front sales fee of approximately 1.00%.
In addition, seven monthly deferred sales charges of $2.50
per 1,000 units ($17.50 annually) will be deducted from
the Portfolio's net asset value each year of the
Portfolio's two-year life (December, 1999 through June,
2000 and July, 2000 through January, 2001).
The maximum sales fees are as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $50,000 4.50%
$ 50,000 to $99,999 4.25%
$100,000 to $249,999 3.75%
$250,000 to $999,999 3.50%
$1,000,000 or more 2.75%
EXAMPLE
This example may help you compare the cost of investing in
the Portfolio to the cost of investing in other funds.
The example assumes that you invest $10,000 in the
Portfolio for the periods indicated and sell all your units
at the end of those periods. The example also assumes a 5%
return on your investment each year and that the
Portfolio's operating expenses stay the same. Although your
actual costs may be higher or lower, based on these
assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
$332 $794 $1,282 $2,613
7. IS THE PORTFOLIO MANAGED?
Unlike a mutual fund, the Portfolio is not managed and
securities are not sold because of market changes. The
Sponsors monitor the portfolio and may instruct the Trustee
to sell securities under certain limited circumstances.
8. HOW DO I BUY UNITS?
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply. Employees of certain Sponsors
and Sponsor affiliates and non-employee directors of
certain of the Sponsors may purchase Units at a reduced
sales charge.
The minimum investment is $250.
4
<PAGE>
UNIT PRICE PER 1,000 UNITS $999.94
(as of May 11, 1999)
Unit price is based on the net asset value of the Portfolio
plus the up-front sales fee. Unit price also includes the
estimated organization costs shown on page 4, to which no
sales fee has been applied.
The Portfolio stocks are valued by the Trustee on the basis
of their closing prices at 4:00 p.m. Eastern time every
business day. Unit price changes every day with changes in
the prices of the stocks.
9. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale, less any remaining deferred
sales fee and the costs of liquidating securities to meet
the redemption.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays distributions of any dividend income, net of
expenses, on the 25th of each month beginning July, 1999 if
you own units on the 10th of those months. Distributions of
ordinary income will be dividends for federal income tax
purposes and will not be eligible for the
dividends-received deduction for corporations. Certain
distributions may be designated as capital gain dividends,
which may be eligible for the 20% maximum federal tax rate
in the hands of noncorporate investors. Distributions to
foreign investors will generally be subject to withholding
taxes.
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You may choose to reinvest your distributions into
additional units of the Portfolio. You will pay only the
deferred sales fee remaining at the time of reinvestment.
Unless you choose reinvestment, you will receive your
distributions in cash.
EXCHANGE PRIVILEGES
You may exchange units of this Portfolio for units of
certain other Defined Asset Funds. You may also exchange
into this Portfolio from certain other funds. We charge a
reduced sales fee on designated exchanges.
5
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME
The Portfolio will pay to you any income it has received monthly during its
life. Because the Portfolio generally pays dividends as they are received,
individual income payments will fluctuate based upon the amount of dividends
declared and paid by each issuer. Other reasons your income may vary are:
o changes in the Portfolio because of additional securities purchases or
sales;
o a change in the Portfolio's expenses; and
o the amount of dividends declared and paid.
There can be no assurance that any dividends will be declared or paid.
RECORDS AND REPORTS
You will receive:
o a notice from the Trustee if new equity securities are deposited in exchange
or substitution for equity securities originally deposited;
o annual reports on Portfolio activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of income received during the year. Please contact your tax advisor in
this regard.
You may request audited financial statements of the Portfolio from the Trustee.
You may inspect records of Portfolio transactions at the Trustee's office during
regular business hours.
THE RISKS YOU FACE
CONCENTRATION RISK
When stocks in a particular industry make up 25% or more of the Portfolio, the
Portfolio is said to be 'concentrated' in that industry, which makes the
Portfolio less diversified.
Many factors can have an adverse impact on the performance of a particular REIT,
its cash available for distribution, the credit quality of a particular REIT or
the real estate industry generally. Risks associated with the direct ownership
of real estate include, among other factors:
o general and local economic conditions;
o decline in real estate values;
o the financial health of tenants;
o overbuilding and increased competition for tenants;
o oversupply of properties for sale, changing demographics, changes in
interest rates, changes in government regulations, faulty construction;
o changes in neighborhood values;
o the unavailability of construction financing or mortgage loans at rates
acceptable to developers.
o Variations in rental income and space availability and vacancy rates in
terms of supply and demand are additional factors affecting real estate
generally and REITs in particular.
o E-commerce though the internet may have an adverse impact on retail sales
of tenants of retail shopping centers.
o The financial condition of some tenants of healthcare REITs have been
adversely affected by the balanced budget
6
<PAGE>
amendment of 1997 which reduced medicare reimbursement levels.
o REITs may not be diversified and are subject to;
-- the risks of financing projects;
-- defaults by borrowers;
-- self-liquidation; and
-- the market's perception of the REIT industry generally.
o Certain REITs in the Portfolio may be structured as UPREITs. This form of
REIT owns an interst in a partnership that owns real estate, which can
result in a potential conflict of interest between shareholders who may
want to sell an asset and partnership interest holders who would be subject
to tax liability if the REIT sells the property.
o In some cases, REITs have entered into 'no sell' agreements, which are
designed to avoid a taxable event to the holders of partnership units by
preventing the REIT from selling the property. This kind of arrangement
could mean that the REIT would refuse a lucrative offer for an asset or be
forced to hold on to a poor asset. Because 'no sell' agreements are often
undisclosed, the Sponsors are unable to state whether any of the REITs in
the Portfolio have entered into this kind of arrangement.
REIT TAXATION RISK
Each REIT in which the Portfolio invests will have stated its intention to be
treated as a 'real estate investment trust.' However, we cannot assure you that
the REITs have complied or will comply with the numerous requirements necessary
for a REIT to qualify as a 'real estate investment trust.' If a REIT fails to so
qualify, its taxable income will be subject to a regular corporate tax, and it
will not be eligible for a treatment as a REIT for the next four taxable years.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Portfolio.
Future tax legislation could affect the value of the Portfolio by:
o reducing the dividends-received deduction or
o increasing the corporate tax rate resulting in less money available for
dividend payments.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on their net asset value.
Your net asset value is calculated each business day by:
o adding the value of the Portfolio Securities, cash and any other Portfolio
assets;
o subtracting accrued but unpaid Portfolio expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors,
and any other Portfolio liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the Portfolio.
As of the close of the initial offering period, the price you receive will be
reduced to pay the Portfolio's estimated organization costs.
7
<PAGE>
If you sell your units before the final deferred sales fee installment, the
amount of any remaining payments will be deducted from your proceeds.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
less any remaining deferred sales fee and the cost of liquidating Securities to
meet the redemption. We may resell the units to other buyers or to the Trustee.
We have maintained a secondary market continuously for more than 28 years, but
we could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by contacting your broker, dealer or financial
institution that holds your units in street name. Sometimes, additional
documents are needed such as a trust document, certificate of corporate
authority, certificate of death or appointment as executor, administrator or
guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee will sell your units in the over-the-counter market if it
believes it can obtain a higher price. In that case, you will receive the net
proceeds of the sale.
If the Portfolio does not have cash available to pay you for the units you are
selling, the agent for the Sponsors will select securities to be sold. These
sales could be made at times when the securities would not otherwise be sold and
may result in your receiving less than you paid for your unit and also reduce
the size and diversity of the Portfolio.
If you sell units with a value of at least $250,000, you may choose to receive
your distribution 'in kind.' If you so choose, you will receive securities and
cash with a total value equal to the price of your units. The Trustee will try
to distribute securities in the portfolio pro rata, but it reserves the right to
distribute only one or a few securities. The Trustee will act as your agent in
an in-kind distribution and will either hold the securities for your account or
transfer them as you instruct. You must pay any transaction costs as well as
transfer and ongoing custodial fees on sales of securities distributed in kind.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
securities not reasonably practicable; and
o for any other period permitted by SEC order.
8
<PAGE>
ROLLOVER/EXCHANGE OPTION
When this Portfolio is about to terminate, you may have the option to roll your
proceeds into the next Real Estate Income Portfolio if one is available.
If you hold your units with one of the Sponsors and notify your financial
adviser by May 16, 2001, your units will be redeemed and the proceeds from the
sale of the securities will be reinvested in units of the new Real Estate Income
Portfolio. If you decide not to roll over your proceeds, you will receive a cash
distribution (or, if you so choose, an in-kind distribution) after the Portfolio
terminates. The Portfolio will terminate by June 15, 2001.
You may exchange units of this Portfolio for units of another Select or Focus
Series or certain other Defined Asset Funds at a reduced sales fee any time
before this Portfolio terminates. To exchange units, you should talk to your
financial professional about what Portfolios are exchangeable, suitable and
currently available.
We may amend or terminate the options to exchange your units or roll your
proceeds at any time without notice.
HOW THE FUND WORKS
PRICING
Units are charged a combination of initial and deferred sales fees.
In addition, during the initial offering period, a portion of the price of a
unit also consists of securities to pay all or some of the costs of organizing
the Portfolio including:
o cost of initial preparation of legal documents;
o federal and state registration fees;
o initial fees and expenses of the Trustee;
o initial audit; and
o legal expenses and other out-of-pocket expenses.
The estimated organization costs will be deducted from the assets of the
Portfolio as of the close of the initial offering period.
The deferred sales fee is generally a monthly charge of $2.50 per 1,000 units
and is accrued in seven monthly installments each year of the Portfolio's life.
Units redeemed or repurchased prior to the accrual of the final deferred sales
fee installment will have the amount of any remaining installments deducted from
the redemption or repurchase proceeds or deducted in calculating an in-kind
distribution, however, this deduction will be waived in the event of the death
or disability (as defined in the Internal Revenue Code of 1986) of an investor.
If you redeem or sell your units before July, 2000, you will pay only the
balance of any deferred sales fee remaining for the first year. If you redeem or
sell your units on or after July, 2000 you will pay the remaining balance of the
deferred sales fee for the second year. The initial sales fee is equal to the
aggregate sales fee less the aggregate amount of any remaining installments of
the deferred sales fee.
It is anticipated that securities will not be sold to pay the deferred sales fee
until after the date of the last annual installment. Investors will be at risk
for market price fluctuations in the securities from the several installment
accrual
9
<PAGE>
dates to the dates of actual sale of securities to satisfy this liability.
EVALUATIONS
The Trustee values the securities on each business day (i.e., any day other than
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 or, if closing sales prices are not available, at the
mean between the closing bid and offer prices.
INCOME
o The annual income per unit, after deducting estimated annual Portfolio
expenses per unit, will depend primarily upon the amount of dividends declared
and paid by the issuers of the securities and changes in the expenses of the
Portfolio 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.
o Each unit receives an equal share of distributions of dividend income net of
estimated expenses. Each investor's monthly income distribution will equal
approximately one-twelfth of the investor's pro rata share of the estimated
annual income to the Income Account, after deducting estimated expenses.
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. The Trustee credits dividends received to an
Income Account and other receipts to a Capital Account. The Trustee may
establish a reserve account by withdrawing from these accounts amounts it
considers appropriate to pay any material liability. These accounts do not
bear interest.
EXPENSES
The Trustee is paid a fee monthly. It also benefits when it holds cash for the
Portfolio in non-interest bearing accounts. The Trustee may also receive
additional amounts:
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Portfolio and other legal fees and
expenses;
o expenses for keeping the Portfolio's registration statement current; and
o Portfolio termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per 1,000 units annually
for providing portfolio supervisory, bookkeeping and administrative services and
for any other expenses properly chargeable to the Portfolio. Legal, typesetting,
electronic filing and regulatory filing fees and expenses associated with
updating the Portfolio's registration statement yearly are also now chargeable
to the Portfolio. While this fee may exceed the amount of these costs and
expenses attributable to this Portfolio, the total of these fees for all Series
of Defined Asset Funds will not exceed the aggregate amount attributable
10
<PAGE>
to all of these Series for any calendar year. Certain of these expenses were
previously paid for by the Sponsors.
The Trustee's and Sponsors'fees may be adjusted for inflation without investors'
approval.
The deferred sales fees you owe are paid from the Capital Account. Although we
may collect the deferred sales charge monthly, to keep Units more fully invested
we do not currently plan to pay the deferred sales charge until after the
rollover notification date.
The Sponsors will pay advertising and selling expenses at no charge to the
Portfolio. If Portfolio expenses exceed initial estimates, the Portfolio will
owe the excess. The Trustee has a lien on Portfolio assets to secure
reimbursement of Portfolio expenses and may sell securities if cash is not
available.
PORTFOLIO CHANGES
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio.
We decide whether to offer units for sale that we acquire in the secondary
market after reviewing:
o diversity of the Portfolio;
o size of the Portfolio relative to its original size;
o ratio of Portfolio expenses to income; and
o cost of maintaining a current prospectus.
PORTFOLIO TERMINATION
When the Portfolio is about to terminate you will receive a notice, and you will
be unable to sell your units after that time. Unless you choose to receive an
in-kind distribution of securities, we will sell any remaining securities, and
you will receive your final distribution in cash.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling securities. This may reduce the amount you receive as
your final distribution.
NO CERTIFICATES
All investors are required to hold their Units in uncertificated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company.
TRUST INDENTURE
The Portfolio is a 'unit investment trust' governed by a Trust Indenture, a
contract among the Sponsors and the Trustee, which sets forth their duties and
obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the
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51% requirement. No amendment may reduce your interest in the Portfolio without
your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties;
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities; or
o the Sponsors determine that its replacement is in your best interest.
Investors holding 51% of the units may remove the Trustee. The Trustee may
resign or be removed by the Sponsors without the consent of investors. The
resignation or removal of the Trustee becomes effective when a successor accepts
appointment. The Sponsors will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee may petition a court to appoint a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Portfolio; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee and the Sponsors.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered
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broker-dealer each Sponsor buys and sells securities (including investment
company shares) for others (including investment companies) and participates as
an underwriter in various selling groups.
TRUSTEE
The Bank of New York, Unit Investment Trust Department, Box 974-Wall Street
Station, New York, New York 10268-0974, is the Trustee. It is supervised by the
Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. Any cash made available
by you to the Sponsors before the settlement date for those units may be used in
the Sponsors' businesses to the extent permitted by federal law and may benefit
the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on stocks in the
Portfolio which were acquired from underwriting syndicates of which it was a
member.
During the initial offering period, the Sponsor may realize profits or sustain
losses on units they hold due to fluctuations in the price per unit. The
Sponsors experienced a loss of $520.00 on the initial deposit of the Securities.
Any profit or loss to the Portfolio will be effected by the receipt of
applicable sales charges and a gain or loss on subsequent deposits of
securities. In maintaining a secondary market, 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 or redeem them.
PUBLIC DISTRIBUTION
During the initial offering period, units will be distributed to the public by
the Sponsors and dealers who are members of the National Association of
Securities Dealers, Inc.
Dealers will be entitled to the concession stated below on Units sold or
redeemed during the first year. On Units held in the second year, the dealer
will be entitled to an additional concession of $11 per 1,000 Units ($5 per
1,000 Units for purchases of $1 million or more).
DEALER CONCESSION AS
A % OF PUBLIC
AMOUNT PURCHASED OFFERING PRICE
---------------------------- ---------------------
Less than $50,000 2.00%
$50,000 to $99,999 1.80%
$100,000 to $249,999 1.45%
$250,000 to $999,999 1.25%
$1,000,000 and over 0.50%
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
reporting of personal securities transactions by its employees with access to
information on portfolio transactions. The goal of the code is to prevent fraud,
deception or misconduct against the Portfolio and to provide reasonable
standards of conduct.
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YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Portfolio. The Year 2000 Problem may adversely affect the issuers of the
securities contained in the Portfolio, but we cannot predict whether any impact
will be material to the Portfolio as a whole.
ADVERTISING AND SALES LITERATURE
Advertising and sales literature may include brief descriptions of the principal
businesses of the companies represented in the Portfolio and the research
analysis of why they were selected.
TAXES
The following summarizes the material income tax consequences of holding Units.
It assumes that you are not a dealer, financial institution, insurance company
or other investor with special circumstances. You should consult your own tax
adviser about your particular circumstances.
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Portfolio intends to qualify for special tax treatment as a regulated
investment company so that it will not be subject to federal income tax on the
portion of its taxable income that it distributes to investors in a timely
manner.
DISTRIBUTIONS
Distributions to you of the Portfolio's dividend income and of the Portfolio's
gains from Securities it has held for one year or less will generally be taxed
to you as ordinary income, to the extent of the Portfolio's taxable income not
attributable to the Portfolio's net capital gain. Distributions to you in excess
of the Portfolio's taxable income will be treated as a return of capital and
will reduce your basis in your Units. To the extent such distributions exceed
your basis, they will be treated as gain from the sale of your Units.
Distributions to you that are treated as ordinary income will constitute
dividends for federal income tax purposes. Corporate investors will not be
eligible for the 70% dividends-received deduction with respect to these
distributions.
Distributions to you of the Portfolio's net capital gain will generally be
taxable to you as long-term capital gain, regardless of how long you have held
your Units.
GAIN OR LOSS UPON DISPOSITION
You will generally recognize capital gain or loss when you dispose of your
Units. If you receive Securities upon redemption of your Units, you will
generally recognize capital gain or loss equal to the difference between your
basis in your Units and the fair market value of the Securities received in
redemption.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain or loss will generally be long-term if you have held your
investment which produces the gain or loss for more than
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one year and short-term if you have held it for one year or less. Because the
deductibility of capital losses is subject to limitations, you may not be able
to deduct all of your capital losses. You should consult your tax adviser in
this regard.
YOUR BASIS IN THE SECURITIES
Your aggregate basis in the Units will generally be equal to the cost of your
Units, including the initial sales charge. You should not increase your basis in
your Units by deferred sales charges or organizational expenses, because the tax
reporting form and annual statements you receive will be based on the net
amounts paid to you, from which these expenses will already be deducted.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Portfolio will
not be taxed as a corporation, and the income of the Portfolio will be treated
as the income of the investors in the same manner as for federal income tax
purposes.
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will be subject to 30% withholding tax (or a lower
applicable treaty rate) on distributions. Based on the advice of our special
counsel as to existing law, the Trustee does not intend to withhold from
distributions to you of a Portfolio's net capital gain. Gain from sale or
redemption of your units should not be subject to withholding tax. You should
consult your tax adviser about the possible application of federal, state and
local, and foreign taxes.
RETIREMENT PLANS
You may wish to purchase units for an Individual Retirement Account ('IRAs') or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from these types
of plans are generally treated as ordinary income but may, in some cases, be
eligible for tax-deferred rollover treatment. You should consult your attorney
or tax adviser about the specific tax rules relating to these plans. These plans
are offered by brokerage firms, including the Sponsors of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Portfolio by
calling the Trustee. The supplemental information includes more detailed risk
disclosure and general information about the structure and operation of the
Portfolio. The supplemental information is also available from the SEC.
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders of Equity Investor Fund, Concept Series, Real
Estate Income Fund 4, Defined Asset Funds (the 'Portfolio'):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Portfolio as of May 12, 1999. 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 Portfolio as of May 12,
1999 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
May 12, 1999
STATEMENT OF CONDITION AS OF MAY 12, 1999
TRUST PROPERTY
Investments--Contracts to purchase Securities(1).........$ 250,139.41
--------------------
Total.........................................$ 250,139.41
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsors for organization
expenses(2).......................................$ 540.71
--------------------
Subtotal 540.71
--------------------
Interest of Holders of 252,666 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)...................................$ 252,650.84
Gross underwriting commissions and organization
expenses(5)(2)....................................... (3,052.14)
--------------------
Subtotal 249,598.70
--------------------
Total.........................................$ 250,139.41
--------------------
--------------------
- ---------------
(1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio determined by the Trustee at 4:00 p.m., Eastern time on May
11, 1999. 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 $250,659.41 and deposited with the Trustee. The amount of the
letter of credit includes $250,139.41 for the purchase of securities.
(2) A portion of the Unit Price consists of securities in an amount
sufficient to pay all or a portion of the costs incurred in establishing the
Portfolio. These costs have been estimated at $2.14 per 1,000 Units. A
distribution will be made as of the close of the initial offering period to an
account maintained by the Trustee from which the organization expenses
obligation of the investors will be satisfied. If actual organization costs
exceed the amount estimated above, the Sponsors will pay this excess amount.
(3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on the Initial Date of Deposit will be
adjusted to maintain the $999.94 per 1,000 Units offering price only for that
day. The Unit Price on any subsequent business day will vary.
(4) Aggregate public offering price computed on the basis of the value
of the underlying securities at 4:00 p.m., Eastern time on May 11, 1999.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00%
of the Unit Price. A deferred sales charge of $2.50 per 1,000 Units is payable
on December 1, 1999 and thereafter on the 1st day of each month through June
2000, and July 2000 through January 1, 2001. Distributions will be
made to an account maintained by the Trustee from which the deferred sales
charge obligation of the investors to the Sponsors will be satisfied.
16
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? EQUITY INVESTOR FUND
Request the most CONCEPT SERIES
recent free Information REAL ESTATE INCOME FUND 4
Supplement that gives more (A Unit Investment Trust)
details about the Fund, ---------------------------------------
by calling: This Prospectus does not contain
The Bank of New York complete information about the
1-800-221-7771 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
333-50587) and
o Investment Company Act of 1940 (file
no. 811-3044).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
100166RR--5/99
