<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1998
REGISTRATION NO. 33-49298
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
POST-EFFECTIVE AMENDMENT NO. 6
TO
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--10
B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SALOMON SMITH BARNEY INC.
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
PAINEWEBBER INCORPORATED
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, NJ 08543-9051 SALOMON SMITH BARNEY INC.
388 GREENWICH
STREET--23RD FLOOR
NEW YORK, NY 10013
PRUDENTIAL SECURITIES PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
INCORPORATED 1285 AVENUE OF THE TWO WORLD TRADE
ONE NEW YORK PLAZA AMERICAS CENTER--59TH FLOOR
NEW YORK, NY 10292 NEW YORK, NY 10019 NEW YORK, NY 10048
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
TERESA KONCICK, ESQ. ROBERT E. HOLLEY LAURIE A. HESSLEIN
P.O. BOX 9051 1200 HARBOR BLVD. 388 GREENWICH ST.
PRINCETON, NJ 08543-9051 WEEHAWKEN, NJ 07087 NEW YORK, NY 10013
LEE B. SPENCER, JR. COPIES TO: DOUGLAS LOWE, ESQ.
ONE NEW YORK PLAZA PIERRE DE SAINT PHALLE, DEAN WITTER REYNOLDS INC.
NEW YORK, NY 10292 ESQ. TWO WORLD TRADE
450 LEXINGTON AVENUE CENTER--59TH FLOOR
NEW YORK, NY 10017 NEW YORK, NY 10048
The issuer has registered an indefinite number of Units under the Securities Act
of 1933 pursuant to Rule 24f-2 and filed the Rule 24f-2 Notice for the most
recent fiscal year on March 10, 1998.
Check box if it is proposed that this filing will become effective on November
6, 1998 pursuant to paragraph (b) of Rule 485. / x /
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--10
(A UNIT INVESTMENT TRUST)
O CONNECTICUT, MICHIGAN, NEW JERSEY AND NEW YORK
PORTFOLIOS
O PORTFOLIOS OF LONG-TERM MUNICIPAL BONDS
O DESIGNED FOR FEDERALLY TAX-FREE INCOME
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated November 6, 1998.
<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
For more than 25 years, Defined Asset FundsSM has been a leader in unit
investment trust research and product innovation. Our family of 'DefinedSM'
Funds helps investors work toward their financial goals with a full range of
quality investments, including municipal, corporate and government bond
portfolios, as well as domestic and international equity portfolios.
Defined Asset Funds offer a number of advantages:
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Preselected 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, tolerance for risk 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.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF JULY 31, 1998, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
Connecticut Portfolio--
Risk/Return Summary.................................. 3
Michigan Insured Portfolio--
Risk/Return Summary.................................. 6
New Jersey Insured Portfolio-- Risk/Return Summary...... 9
New York Insured Portfolio--
Risk/Return Summary.................................. 12
What You Can Expect From Your Investment................ 17
Monthly Income....................................... 17
Return Figures....................................... 17
Records and Reports.................................. 17
The Risks You Face...................................... 18
Interest Rate Risk...................................
Call Risk............................................ 18
Reduced Diversification Risk......................... 18
Liquidity Risk....................................... 18
Concentration Risk................................... 18
State Concentration Risk............................. 18
Bond Quality Risk.................................... 21
Insurance Related Risk............................... 21
Litigation and Legislation Risks..................... 21
Selling or Exchanging Units............................. 21
Sponsors' Secondary Market........................... 21
Selling Units to the Trustee......................... 22
Exchange Option...................................... 22
How The Fund Works...................................... 22
Pricing.............................................. 22
Evaluations.......................................... 23
Income............................................... 23
Expenses............................................. 23
Portfolio Changes.................................... 24
Fund Termination..................................... 24
Certificates......................................... 24
Trust Indenture...................................... 24
Legal Opinion........................................ 25
Auditors............................................. 25
Sponsors............................................. 25
Trustee.............................................. 26
Underwriters' and Sponsors' Profits.................. 26
Public Distribution.................................. 26
Code of Ethics....................................... 26
Year 2000 Issues..................................... 26
Taxes................................................... 27
Supplemental Information................................ 29
Financial Statements.................................... D-1
2
<PAGE>
- --------------------------------------------------------------------------------
CONNECTICUT PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,910,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 58% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 11%
/ / Hospitals/Healthcare 17%
/ / Municipal Water/Sewer Utilities 17%
/ / Refunded Bonds 45%
/ / State/Local Municipal Electric
Utilities 10%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o The Fund is concentrated in refunded bonds.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF CONNECTICUT
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CONNECTICUT WHICH ARE
BRIEFLY DESCRIBED ON PAGE 18.
3
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.84
Annual Income per unit: $ 58.08
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.39
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.34
Evaluator's Fee
$ 0.44
Other Operating Expenses
-----------
$ 1.86
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Connecticut Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior Connecticut Series were
offered between March 9, 1988 and February 15, 1996 and were
outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High % % % % % %
Average
Low
- -------------------------------------------------------------------
Average
Sales fee % % %
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
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.
UNIT PRICE PER UNIT $1,094.17
(as of July 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. 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. You will not pay any other fee when you sell
your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Connecticut state and local personal income
taxes if you live in Connecticut.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
Program is an open-end mutual fund with a comparable
investment objective. Income from this Program will
generally be subject to state and local income taxes. For
more complete information about the Program, including
charges and fees, ask the Trustee for the Program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
5
<PAGE>
- --------------------------------------------------------------------------------
MICHIGAN INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,675,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 19%
/ / Hospitals/Healthcare 19%
/ / Industrial Development Revenue 16%
/ / Lease Rental Appropriation 18%
/ / Municipal Water/Sewer Utilities 19%
/ / Universities/Colleges 9%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF MICHIGAN SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO MICHIGAN WHICH ARE BRIEFLY DESCRIBED
ON PAGE 19.
6
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.73
Annual Income per unit: $ 56.87
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.69
Trustee's Fee
$ 0.39
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.37
Evaluator's Fee
$ 0.44
Other Operating Expenses
-----------
$ 1.89
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Michigan Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior Michigan Series were offered
between March 30, 1988 and August 1, 1996 and were
outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 5.85% 4.70% 7.28% 10.78% 5.88% 7.88%
Average 4.15 4.23 7.20 7.29 5.28 7.80
Low 3.11 3.79 7.12 4.52 4.74 7.72
- -------------------------------------------------------------------
Average
Sales fee 3.04% 5.19% 5.82%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
7
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
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.
UNIT PRICE PER UNIT $1,053.83
(as of July 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. 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. You will not pay any other fee when you sell
your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Michigan state and local personal income
taxes if you live in Michigan.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
Program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this Program will generally be subject
to state and local income taxes. For more complete
information about the Program, including charges and fees,
ask the Trustee for the Program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
8
<PAGE>
- --------------------------------------------------------------------------------
NEW JERSEY INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of long
term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 8 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,640,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 3
/ / Hospitals/Healthcare 16%
/ / Miscellaneous 25%
/ / Refunded Bonds 56%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o The Fund is concentrated in refunded bonds.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW JERSEY
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW JERSEY WHICH ARE BRIEFLY
DESCRIBED ON PAGE 20.
9
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in bonds of several different issuers.
The Fund is not appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.69
Annual Income per unit: $ 56.35
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.68
Trustee's Fee
$ 0.38
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.37
Evaluator's Fee
$ 0.45
Other Operating Expenses
-----------
$ 1.88
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior New
Jersey Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to this
Fund. These prior Series differed in that they charged a
higher sales fee. These prior New Jersey Series were offered
between January 14, 1988 and September 11, 1996 and were
outstanding on September 30, 1998. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 5.85% 4.70% 7.28% 10.78% 5.88% 7.88%
Average 4.15 4.23 7.20 7.29 5.28 7.80
Low 3.11 3.79 7.12 4.52 4.74 7.72
- -------------------------------------------------------------------
Average
Sales fee 3.04% 5.19% 5.82%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
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.
UNIT PRICE PER UNIT $1,031.73
(as of July 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. 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. You will not pay any other fee when you sell
your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New Jersey state and local personal income
taxes if you live in New Jersey.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
Program is an open-end mutual fund with a comparable
investment objective. Income from this Program will
generally be subject to state and local income taxes. For
more complete information about the Program, including
charges and fees, ask the Trustee for the Program's
prospectus. Read it carefully before you invest. The Trustee
must receive your written election to reinvest at least 10
days before the record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
11
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 9 long-term tax-exempt
municipal bonds with an aggregate face amount of
$7,155,000. The Fund is a unit investment trust which means
that, unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 19%
/ / General Obligation 11%
/ / Hospitals/Healthcare 3%
/ / Miscellaneous 18%
/ / Municipal Water/Sewer Utilities 6%
/ / Refunded Bonds 25%
/ / Transit 18%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o The Fund is concentrated in refunded bonds.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW YORK SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO NEW YORK WHICH ARE BRIEFLY DESCRIBED
ON PAGE 20.
12
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in bonds of
several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.78
Annual Income per unit: $ 57.38
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
2.90%
Maximum Sales Fee (Load) on new purchases
(as a percentage of $1,000 invested)
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.39
Portfolio Supervision,
Bookkeeping and
Administrative Fees
$ 0.14
Evaluator's Fee
$ 0.23
Other Operating Expenses
-----------
$ 1.46
TOTAL
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior New
York Portfolios, which had investment objectives, strategies
and types of bonds substantially similar to this Fund. These
prior Series differed in that they charged a higher sales
fee. These prior New York Series were offered between
January 14, 1988 and September 11, 1997 and were outstanding
on September 30, 1998. OF COURSE, PAST PERFORMANCE OF PRIOR
SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 9/30/98.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 6.94% 5.26% 7.87% 11.62% 6.02% 8.47%
Average 4.47 4.41 7.51 7.72 5.44 8.10
Low 2.18 3.81 7.37 4.79 4.76 7.59
- -------------------------------------------------------------------
Average
Sales fee 3.17% 5.11% 5.73%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
13
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is $250.
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.
UNIT PRICE PER UNIT $1,084.71
(as of July 31, 1998)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
UNIT PAR VALUE $1,000.00
Unit par value means the total amount of money you should
generally receive on each unit by the termination of the
Fund (other than interest and premium on the bonds). This
total amount assumes that all bonds in the Fund are either
paid at maturity or called by the issuer at par or are sold
by the Fund at par. If you sell your units before the Fund
terminates, you may receive more or less than the unit par
value.
10. 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. You will not pay any other fee when you sell
your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New York state and local personal income
taxes if you live in New York.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
Program is an open-end mutual fund with a comparable
investment objective, but the bonds generally will not be
insured. Income from this Program will generally be subject
to state and local income taxes. For more complete
information about the Program, including charges and fees,
ask the Trustee for the Program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
14
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CONNECTICUT RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 18.83 3.70 4.31 4.93 5.54 6.18 6.78 7.39 8.01
$ 25,350- 81,400 $ 42,350-102,300 31.24 4.36 5.09 5.82 6.54 7.27 8.00 8.73 9.45
$ 81,400-128,100 $102,300-155,950 34.11 4.55 5.31 6.07 6.83 7.59 8.35 9.11 9.86
$128,100-278,450 $155,950-278,450 38.88 4.91 5.73 6.54 7.38 8.18 9.00 9.82 10.63
OVER $278,450 OVER $278,450 42.32 5.20 6.07 6.93 7.80 8.87 9.54 10.40 11.27
</TABLE>
FOR MICHIGAN RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 18.74 3.89 4.31 4.92 5.64 6.15 6.77 7.38 8.00
$ 25,350- 61,400 $ 42,350-102,300 31.17 4.38 5.08 5.81 6.54 7.28 7.99 8.72 9.44
$ 61,400-128,100 $102,300-165,950 34.04 4.55 5.31 6.08 6.82 7.68 8.34 9.10 9.85
$128,100-278,450 $155,950-278,450 38.82 4.90 5.72 6.54 7.35 8.17 8.89 9.81 10.62
OVER $278,450 OVER $278,450 42.26 5.20 6.08 6.93 7.79 8.86 9.63 10.39 11.26
</TABLE>
FOR NEW JERSEY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 42,350 17.08 3.62 4.22 4.82 5.43 6.03 6.63 7.24 7.84
$ 0- 25,350 17.98 3.66 4.27 4.88 5.49 6.10 6.71 7.31 7.92
$ 25,351- 61,400 $ 42,351-102,300 31.98 4.41 5.15 5.88 6.62 7.35 8.09 8.82 9.56
$ 61,401-128,100 $102,301-155,950 35.40 4.64 5.42 6.19 6.97 7.74 8.51 9.29 10.06
$128,101-278,450 $155,951-278,450 40.08 5.01 5.84 6.68 7.51 8.34 9.18 10.01 10.85
OVER $278,450 OVER $278,450 43.45 5.30 6.19 7.07 7.96 8.84 9.73 10.61 11.49
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1998
federal income tax rates and assumes that all income would otherwise be taxed at
the investor's highest tax rate. Yield figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, you should consult your own tax advisers in this
regard.
15
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 24.55 3.38 4.64 5.30 5.96 6.63 7.29 7.95 8.62
$ 25,351- 61,400 $ 42,351-102,300 36.14 4.70 5.48 6.28 7.05 7.83 8.61 9.40 10.18
$ 61,401-128,100 $102,301-155,950 38.80 4.90 5.72 6.54 7.35 8.17 8.99 9.80 10.62
$128,101-278,450 $155,951-278,450 43.24 5.29 6.17 7.05 7.83 8.81 9.69 10.57 11.45
OVER $278,450 OVER $278,450 46.43 5.60 6.53 7.47 8.40 9.33 10.27 11.20 12.13
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1998* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,350 $ 0- 42,350 20.82 3.79 4.42 5.05 5.68 6.31 6.95 7.58 8.21
$ 25,351- 61,400 $ 42,351-102,300 32.93 4.47 5.22 5.96 6.71 7.46 8.20 8.95 9.69
$ 61,401-128,100 $102,301-155,950 35.73 4.67 5.45 6.22 7.00 7.78 8.56 9.34 10.11
$128,101-278,450 $155,951-278,450 40.38 5.03 5.87 6.71 7.55 8.39 9.23 10.06 10.90
OVER $278,450 OVER $278,450 43.74 5.33 6.22 7.11 8.00 8.89 9.78 10.66 11.55
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1998
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions, the possible partial disallowance of deductions
or state and local taxation. Consequently, investors are urged to consult their
own tax advisers in this regard.
16
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
17
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or 'called' by the issuer before their stated
maturity.
For example, an issuer might call its bonds if it no longer needs the money for
the original purpose or, during periods of falling interest rates, if the
issuer's bonds have a coupon higher than current market rates. If the bonds are
called, your income will decline and you may not be able to reinvest the money
you receive at as high a yield or as long a maturity. An early call at par of a
premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be 'concentrated' in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the Connecticut, New Jersey and New York
Portfolios' concentrations in refunded bonds. Refunded bonds are typically:
o backed by direct obligations of the U.S. government; or
o in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
o noncallable prior to maturity; but
o sometimes called for redemption prior to maturity.
STATE CONCENTRATION RISK
CONNECTICUT RISKS
Generally
Connecticut has experienced a variety of economic problems in the last several
years including:
o manufacturing, historically the state's most important activity, has
employed fewer and fewer poeple over the last 10 years;
o large cuts in defense spending threaten defense-related business, which has
traditionally represented a big part of the state's manufacturing
activity; and
18
<PAGE>
o unemployment and poverty are high in certain parts of the state, even
though unemployment state-wide is below the national average.
State and Local Government
Connecticut's state and local governments have also experienced financial
difficulties for several years. For example:
o the state's General Fund had operating deficits for several years in the
late 1980s and early 1990s. Since 1991, however, the General Fund has had
operating surpluses;
o the state issued notes in 1991 to fund its accumulated deficit. The notes
were originally supposed to be paid by 1996, but they were rescheduled, so
that they will be repaid by 1999; and
o Connecticut has several of the nation's poorest and most financially
troubled cities, including its capital city of Hartford and Bridgeport,
which filed for bankruptcy in 1991.
Local governments in Connecticut receive tax revenue only from taxes on real
estate and personal property, which makes it hard for them to raise additional
tax revenue. Both Connecticut and its cities depend heavily on federal aid, and
the cities also depend on a significant amount of state aid. Both the state and
its cities could be hurt by any future reduction in the amount of such aid.
Connecticut's general obligation bonds are rated AA by Standard & Poor's, Aa3 by
Moody's, and AA by Fitch.
MICHIGAN RISKS
Generally
Because Michigan's leading sectors are closely integrated with the manufacturing
of durable goods, its economy is more cyclical than non-industrial states and
the nation as a whole. As a result:
o any substantial national economic downturn will likely hurt Michigan's
economy and its state and local governments;
o because the state is highly reliant on the auto industry, its economy could
be hurt by changes in that industry, expecially consolidation, plant
closings and labor disputes;
o while in the past the state's unemployment rate was higher than the
national average, for several years it has been near or below the national
average.
Certain tax changes have reduced or changed the mix of tax revenues of the state
and local governments. In recent years:
o the state sales tax rate was raised;
o the income tax rate was lowered;
o an annual cap was imposed on property tax assessment increases; and
o property taxes used for school funding were cut, and now schools are paid
for by a combination of property taxes and general state revenues.
In addition, certain state laws limit the overall amount of state revenues that
can be raised from taxes, which could affect State operations and restrict the
sharing of revenue with local
19
<PAGE>
governments. This, combined with the above tax changes, could hurt the value of
Michigan bonds in the portfolio or make it more difficult for Michigan's local
governments to pay their debt service.
The state's general obligation bonds are rated Aa by Moody's, AA+ by Standard &
Poor's and AA by Fitch.
NEW JERSEY RISKS
State and Local Government
Certain features of New Jersey law could affect the repayment of debt:
o the State of New Jersey and its agencies and public authorities issue
general obligation bonds, which are secured by the full faith and credit of
the state, backed by its taxing authority, without recourse to specific
sources of revenue, therefore, any liability to increase taxes could impair
the state's ability to repay debt; and
o the state is required by law to maintain a balanced budget, and state
spending for any given municipality or county cannot increase by more than
5% per year. This limit could make it harder for any particular county or
municipality to repay its debts.
In recent years the state budget's main expenditures have been
o elementary and secondary education, and
o state agencies and programs, including police and corrections facilities,
higher education, and environmental protection.
The state's general obligations are rated Aa1 by Moody's and AA+ by Standard &
Poor's.
NEW YORK RISKS
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
o the high combined state and local tax burden;
o a decline in manufacturing jobs, leading to above-average unemployment;
o sensitivity to the financial services industry; and
o dependence on federal aid.
State Government
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
New York City Government
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
o aging public facilities that need repair or replacement;
20
<PAGE>
o welfare and medical costs;
o expiring labor contracts; and
o a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A-by Standard
& Poor's and A3 by Moody's.
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Defined
Portfolios). Insurance policies generally make payments only according to a
bond's original payment schedule and do not make early payments when a bond
defaults or becomes taxable. Although the federal government does not regulate
the insurance business, various state laws and federal initiatives and tax law
changes could significantly affect the insurance business. The claims-paying
ability of the insurance companies is generally rated A or better by Standard &
Poor's or another nationally recognized rating organization. The insurance
company ratings are subject to change at any time at the discretion of the
rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund 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.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
21
<PAGE>
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 sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). 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 may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
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
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
22
<PAGE>
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
A bond will be considered to mature on its stated maturity date unless:
o it has been called for redemption;
o (although not called) its yield to maturity is more than 40 basis points
higher than its yield to any call date;
o funds or securities have been placed in escrow to redeem it on an earlier
date; or
o the bond is subject to a mandatory tender.
In each of these cases the earlier date will be considered the maturity date.
INCOME
The Trustee credits interest 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 monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. While this
fee may exceed the amount of these costs and expenses attributable to this Fund,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund
23
<PAGE>
expenses and may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
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. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, 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:
24
<PAGE>
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 51% requirement. No amendment may
reduce your interest in the Fund 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 and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either 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 or Evaluator 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 Fund; 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, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements 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 The
Travelers Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
25
<PAGE>
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
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 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 Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, 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. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. 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 bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
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
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
preclearance and 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 Fund and to provide
reasonable standards of conduct.
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
Fund.
26
<PAGE>
TAXES
The following summary describes some of the important 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.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and federal
alternative minimum tax. Neither we nor our counsel have reviewed the issuance
of the bonds, related proceedings or the basis for the opinions of counsel for
the issuers. We cannot assure you that the issuer (or other users) have complied
or will comply with any requirements necessary for a bond to be tax-exempt. If
any of the bonds were determined not to be tax-exempt, you could be required to
pay income tax for current and prior years, and if the Fund were to sell the
bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
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 from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. If you are an individual and sell your units after
holding them for more than 12 months, you may be entitled to a 20% maximum
federal tax rate on any resulting gains. Consult your tax adviser in this
regard. Because the deductibility of capital losses is subject to limitations,
you may not be able to deduct all of your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition
27
<PAGE>
premium' and 'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
CONNECTICUT TAXES
In the opinion of Day, Berry & Howard LLP, Hartford, Connecticut, special
counsel on Connecticut tax matters:
Under the income tax laws of the State of Connecticut, the Fund will not be
taxed. If you are an individual, trust or estate that is subject to the
Connecticut income tax, you will not be taxed on your share of the interest
derived by the Fund from those bonds that are tax-exempt for Connecticut income
tax purposes. In addition, if you hold your units of the Fund as a capital
asset, you will not recognize either gain or loss if the Fund enters into a
transaction in which it is treated for federal income tax purposes as having
sold a bond that is issued by an issuer in Connecticut and is tax-exempt for
Connecticut income tax purposes, and you may not have to recognize gain or loss
to the extent attributable to a unit's share of any such bonds if you sell,
exchange or redeem the unit. You should consult your tax adviser in this regard.
In all other instances, you will recognize gain or loss, in the event either the
Fund enters into a transaction involving a bond held by it or you sell, exchange
or redeem a unit of the Fund, to the same extent that you recognize gain or loss
therefrom for Federal income tax purposes.
In the case of an entity subject to the Connecticut corporation business tax,
all amounts treated for federal tax purposes as income that are derived from the
units of the Fund or their ownership will be subject to that Connecticut tax.
MICHIGAN TAXES
In the opinion of Miller, Canfield, Paddock and Stone, P.L.C., Bloomfield Hills,
special counsel on Michigan tax matters:
Under the income tax laws of the State of Michigan, the Fund will not be taxed
as a corporation. If you are a Michigan taxpayer, your interest income from the
Fund will not be tax-exempt in Michigan except to the extent that the interest
is earned on bonds that are tax-exempt for Michigan purposes. Capital gain
distributions and capital gain or loss on your Fund units themselves will be
subject to Michigan income tax. Depending on where you live, your income from
the Fund may be subject to state and local taxation. You should consult your tax
adviser in this regard.
28
<PAGE>
NEW JERSEY TAXES
In the opinion of Drinker Biddle & Reath, Philadelphia, Pennsylvania, special
counsel on New Jersey tax matters:
The Fund will not be taxed as a corporation under the current income tax laws of
the State of New Jersey. Your income from the Fund may be subject to taxation
depending on where you live. If you are a New Jersey taxpayer your income from
the Fund (including gains on sales of bonds by the Fund) and gains on sales of
units by you will be tax-exempt to the extent that income and gains are earned
on bonds that are tax-exempt for New Jersey purposes. You should consult your
tax adviser as to the consequences to you with respect to any investment you
make in the Fund.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
29
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 10 (CONNECTICUT, MICHIGAN,
NEW JERSEY AND NEW YORK TRUSTS)
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 10 (Connecticut, Michigan, New Jersey
and New York Trusts):
We have audited the accompanying statements of condition of
Defined Asset Funds - Municipal Investment Trust Fund,
Multistate Series - 10 (Connecticut, Michigan, New Jersey
and New York Trusts), including the portfolios, as of July
31, 1998 and the related statements of operations and of
changes in net assets for the years ended July 31, 1998,
1997 and 1996. These financial statements are the
responsibility of the Trustee. Our responsibility is to
express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at July 31,
1998, as shown in such portfolios, were confirmed to us by
The Chase Manhattan Bank, 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 audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the
financial position of Defined Asset Funds - Municipal
Investment Trust Fund, Multistate Series - 10 (Connecticut,
Michigan, New Jersey and New York Trusts) at July 31, 1998
and the results of their operations and changes in their
net assets for the above-stated years in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
September 28, 1998
D - 1.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (CONNECTICUT TRUST)
STATEMENT OF CONDITION
As of July 31, 1998
<TABLE><CAPTION>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,923,891 )(Note 1)......... $ 3,131,483
Accrued interest ............................... 41,469
Cash - principal ............................... 4
-----------
Total trust property ......................... 3,172,956
LESS LIABILITIES:
Income advance from Trustee.....................$ 3,124
Accrued Sponsors' fees ......................... 702 3,826
----------- -----------
NET ASSETS, REPRESENTED BY:
2,940 units of fractional undivided
interest outstanding (Note 3)................ 3,131,487
Undistributed net investment income ............ 37,643 $ 3,169,130
----------- ===========
UNIT VALUE ($ 3,169,130 / 2,940 units )........... $ 1,077.94
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (CONNECTICUT TRUST)
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 187,612 $ 193,446 $ 196,001
Trustee's fees and expenses ............ (4,991) (5,032) (5,297)
Sponsors' fees ......................... (1,216) (1,220) (1,189)
------------------------------------------------
Net investment income .................. 181,405 187,194 189,515
------------------------------------------------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 14,255 1,748
Unrealized appreciation
of investments ....................... 11,637 153,103 51,731
------------------------------------------------
Net realized and unrealized
gain on investments ................. 25,892 154,851 51,731
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 207,297 $ 342,045 $ 241,246
================================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (CONNECTICUT TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 181,405 $ 187,194 $ 189,515
Realized gain on
securities sold or redeemed .......... 14,255 1,748
Unrealized appreciation
of investments ....................... 11,637 153,103 51,731
------------------------------------------------
Net increase in net assets
resulting from operations ............ 207,297 342,045 241,246
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (181,618) (187,251) (189,443)
Principal .............................. (18,317) (3,378)
------------------------------------------------
Total distributions .................... (199,935) (190,629) (189,443)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,903) (753)
Redemption amounts - principal ......... (263,151) (65,517)
------------------------------------------------
Total share transactions ............... (266,054) (66,270)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (258,692) 85,146 51,803
NET ASSETS AT BEGINNING OF YEAR .......... 3,427,822 3,342,676 3,290,873
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 3,169,130 $ 3,427,822 $ 3,342,676
================================================
PER UNIT:
Income distributions during
year .................................$ 59.02 $ 58.37 $ 58.29
================================================
Principal distributions during
year .................................$ 6.18 $ 1.06
=====================================
Net asset value at end of
year .................................$ 1,077.94 $ 1,075.56 $ 1,028.52
================================================
TRUST UNITS:
Redeemed during year ................... 247 63
Outstanding at end of year ............. 2,940 3,187 3,250
================================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (CONNECTICUT TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee's Redemption of Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 2,940 units at Date of Deposit .....................$ 3,086,353
Less sales charge .......................................... 138,886
-----------
Net amount applicable to Holders ........................... 2,947,467
Redemptions of units - net cost of 310 units redeemed
less redemption amounts (principal)....................... (17,880)
Realized gain on securities sold or redeemed ............... 16,003
Principal distributions .................................... (21,695)
Unrealized appreciation of investments...................... 207,592
-----------
Net capital applicable to Holders ..........................$ 3,131,487
===========
4. INCOME TAXES
As of July 31, 1998, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $207,592, all of
which related to appreciated securities. The cost of investment
securities for Federal income tax purposes was $2,923,891 at July 31,
1998.
D - 5.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (CONNECTICUT TRUST)
PORTFOLIO
As of July 31, 1998
<TABLE><CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 State of Connecticut Hlth. and Educl. AAA $ 500,000 6.200 % 2022 07/01/02 $ 508,385 $ 539,150
Facs. Auth. Rev. Bonds, Saint Francis @ 102.000
Hosp. and Medical Center Issue Ser. B
(MBIA Ins.) (4)
2 State of Connecticut, Hlth. and Educl. AAA 445,000 6.250 2022(6) 07/01/02 454,336 486,870
Facs. Auth. Rev. Bonds, Middlesex Hosp. @ 102.000
Issue Ser. G (MBIA Ins.) (4)
3 State of Connecticut, Hlth. and Educl. AAA 500,000 6.000 2022(6) 07/01/02 500,000 543,135
Fac. Auth. Rev. Bonds, Trinity College @ 102.000
Issue, Ser. C (MBIA Ins.) (4)
4 State of Connecticut Spec. Tax Oblig Aaa(m) 375,000 6.250 2009(6) 10/01/01 384,038 406,924
Bonds, Trans. Infrastructure @ 102.000
Purposes, 1991 Ser. B
5 State of Connecticut, Clean Wtr. Fund AAA 500,000 6.125 2012 08/01/02 507,415 540,680
Rev. Bonds, 1992 Ser. @ 102.000
6 Town of East Lyme, CT, G.O. A1(m) 65,000 5.625 2017 08/01/02 63,508 67,764
Bonds, Ser. 1992 @ 102.000
7 Town of Plainfield, CT, G.O. AAA 250,000 6.375 2011 08/01/02 259,990 272,518
Bonds, (MBIA Ins.) (4) @ 102.000
8 Puerto Rico Elec. Pwr. Auth., Pwr. Rev. BBB+ 275,000 5.000 2012 07/01/99 246,219 274,442
Rfdg. Bonds, Ser. N @ 100.000
--------- --------- ---------
TOTAL $ 2,910,000 $ 2,923,891 $ 3,131,483
========= ========= =========
See Notes to Portfolios on page D - 23.
</TABLE>
D - 6.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (MICHIGAN TRUST)
STATEMENT OF CONDITION
As of July 31, 1998
<TABLE><CAPTION>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,661,603 )(Note 1)......... $ 2,795,441
Accrued interest ............................... 36,016
Cash - principal ............................... 13
-----------
Total trust property ......................... 2,831,470
LESS LIABILITIES:
Income advance from Trustee.....................$ 1,219
Accrued Sponsors' fees ......................... 676 1,895
----------- -----------
NET ASSETS, REPRESENTED BY:
2,706 units of fractional undivided
interest outstanding (Note 3)................ 2,795,454
Undistributed net investment income ............ 34,121 $ 2,829,575
----------- ===========
UNIT VALUE ($ 2,829,575 / 2,706 units )........... $ 1,045.67
===========
</TABLE>
See Notes to Financial Statements.
D - 7.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (MICHIGAN TRUST)
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 172,474 $ 179,681 $ 179,682
Trustee's fees and expenses ............ (4,730) (4,817) (5,018)
Sponsors' fees ......................... (1,167) (1,152) (1,130)
------------------------------------------------
Net investment income .................. 166,577 173,712 173,534
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 17,059
Unrealized appreciation (depreciation)
of investments ....................... (6,857) 114,589 54,643
------------------------------------------------
Net realized and unrealized
gain on investments ................. 10,202 114,589 54,643
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 176,779 $ 288,301 $ 228,177
================================================
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (MICHIGAN TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 166,577 $ 173,712 $ 173,534
Realized gain on
securities sold or redeemed .......... 17,059
Unrealized appreciation (depreciation)
of investments ....................... (6,857) 114,589 54,643
------------------------------------------------
Net increase in net assets
resulting from operations ............ 176,779 288,301 228,177
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (166,493) (173,697) (173,484)
Principal .............................. (19,997) (11,863)
------------------------------------------------
Total distributions .................... (186,490) (173,697) (185,347)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (4,300)
Redemption amounts - principal ......... (342,865)
------------------------------------------------
Total share transactions ............... (347,165)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (356,876) 114,604 42,830
NET ASSETS AT BEGINNING OF YEAR .......... 3,186,451 3,071,847 3,029,017
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 2,829,575 $ 3,186,451 $ 3,071,847
================================================
PER UNIT:
Income distributions during
year .................................$ 57.09 $ 57.25 $ 57.18
================================================
Principal distributions during
year .................................$ 7.39 $ 3.91
=================== ============
Net asset value at end of
year .................................$ 1,045.67 $ 1,050.25 $ 1,012.47
================================================
TRUST UNITS:
Redeemed during year ................... 328
Outstanding at end of year ............. 2,706 3,034 3,034
================================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (MICHIGAN TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee's Redemption of Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 2,706 units at Date of Deposit .....................$ 2,822,710
Less sales charge .......................................... 127,021
-----------
Net amount applicable to Holders ........................... 2,695,689
Redemptions of units - net cost of 544 units redeemed
less redemption amounts (principal)....................... (4,675)
Realized gain on securities sold or redeemed ............... 8,040
Principal distributions .................................... (37,438)
Unrealized appreciation of investments...................... 133,838
-----------
Net capital applicable to Holders ..........................$ 2,795,454
===========
4. INCOME TAXES
As of July 31, 1998, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $133,838, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,661,603 at July 31, 1998.
D - 10.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (MICHIGAN TRUST) (INSURED)
PORTFOLIO
As of July 31, 1998
<TABLE><CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (5) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 The Central Michigan Univ. Bd. of AAA $ 245,000 6.000 % 2013 10/01/02 $ 246,024 $ 262,682
Trustees, MI, Gen. Rev. and Rfdg. @ 102.000
Bonds, Ser. 1992 (MBIA Ins.)
2 Clinton Township Bldg. Auth., Cnty. AAA 375,000 5.875 2016 11/01/01 371,374 391,778
of Macomb, MI< Bldg. Auth., Bonds, @ 102.000
Ser. 1991 A (AMBAC Ins.)
3 City of Grand Rapids, MI, Wtr. Supply AAA 500,000 5.750 2018 01/01/01 486,950 508,300
Sys. Rfdg. Rev. Bonds, Ser. 1991 @ 100.000
(Financial Guaranty Ins.)
4 State Bldg. Auth., MI, 1990 Rev. Bonds, AAA 105,000 6.000 2009 10/01/01 105,356 110,543
Ser. II (AMBAC Ins.) @ 100.000
5 City of Saginaw, MI, Hosp. Fin. Auth. AAA 500,000 6.000 2021 07/01/01 500,000 520,125
(St. Luke's Hosp.), Hosp. Rev. Rfdg. @ 100.000
Bonds, Ser. 1991 C (MBIA Ins.)
6 The Econ. Dev. Corp. of the Cnty. of AAA 450,000 6.050 2024 08/01/02 451,899 483,323
St. Clair, MI, Poll. Ctl. Rfdg. Rev. @ 102.000
Bonds (The Detroit Edison Company
Proj.) Collateralized Ser. DD (AMBAC
Ins.)
7 Charter Cnty. of Wayne, MI, Arpt. Rev. AAA 500,000 6.000 2020 12/01/00 500,000 518,690
Bonds (Detroit Metro. Wayne Cnty. @ 100.000
Airport) Subordinate Lien, Ser. 1990 B
(AMBAC Ins.)
--------- --------- ---------
TOTAL $ 2,675,000 $ 2,661,603 $ 2,795,441
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 23.
D - 11.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW JERSEY TRUST)
STATEMENT OF CONDITION
As of July 31, 1998
<TABLE><CAPTION>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 2,652,672 )(Note 1)......... $ 2,763,374
Accrued interest ............................... 32,874
Cash - income .................................. 3,028
Cash - principal ............................... 27
-----------
Total trust property ......................... 2,799,303
LESS LIABILITY - Accrued Sponsors' fees .......... 670
-----------
NET ASSETS, REPRESENTED BY:
2,721 units of fractional undivided
interest outstanding (Note 3)................$ 2,763,401
Undistributed net investment income ............ 35,232 $ 2,798,633
----------- ===========
UNIT VALUE ($ 2,798,633 / 2,721 units )........... $ 1,028.53
===========
</TABLE>
See Notes to Financial Statements.
D - 12.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW JERSEY TRUST)
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 173,952 $ 203,766 $ 229,033
Trustee's fees and expenses ............ (4,846) (5,217) (5,741)
Sponsors' fees ......................... (1,184) (1,389) (1,446)
------------------------------------------------
Net investment income .................. 167,922 197,160 221,846
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 36,680 10,603 26,424
Unrealized appreciation (depreciation)
of investments ....................... (54,332) 59,034 15,724
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (17,652) 69,637 42,148
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 150,270 $ 266,797 $ 263,994
================================================
</TABLE>
See Notes to Financial Statements.
D - 13.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW JERSEY TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 167,922 $ 197,160 $ 221,846
Realized gain on
securities sold or redeemed .......... 36,680 10,603 26,424
Unrealized appreciation (depreciation)
of investments ....................... (54,332) 59,034 15,724
------------------------------------------------
Net increase in net assets
resulting from operations ............ 150,270 266,797 263,994
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (168,738) (197,372) (222,322)
Principal .............................. (38,896) (19,110) (27,997)
------------------------------------------------
Total distributions .................... (207,634) (216,482) (250,319)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (7,648) (2,711) (5,432)
Redemption amounts - principal ......... (672,351) (224,680) (474,895)
------------------------------------------------
Total share transactions ............... (679,999) (227,391) (480,327)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (737,363) (177,076) (466,652)
NET ASSETS AT BEGINNING OF YEAR .......... 3,535,996 3,713,072 4,179,724
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 2,798,633 $ 3,535,996 $ 3,713,072
================================================
PER UNIT:
Income distributions during
year .................................$ 56.48 $ 56.83 $ 57.08
================================================
Principal distributions during
year .................................$ 13.56 $ 5.46 $ 7.38
================================================
Net asset value at end of
year .................................$ 1,028.53 $ 1,047.70 $ 1,032.84
================================================
TRUST UNITS:
Redeemed during year ................... 654 220 463
Outstanding at end of year ............. 2,721 3,375 3,595
================================================
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW JERSEY TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee's Redemption of Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 2,721 units at Date of Deposit .....................$ 2,842,873
Less sales charge .......................................... 127,930
-----------
Net amount applicable to Holders ........................... 2,714,943
Redemptions of units - net cost of 1,779 units redeemed
less redemption amounts (principal)....................... (57,666)
Realized gain on securities sold or redeemed ............... 93,515
Principal distributions .................................... (98,093)
Unrealized appreciation of investments...................... 110,702
-----------
Net capital applicable to Holders ..........................$ 2,763,401
===========
4. INCOME TAXES
As of July 31, 1998, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $110,702, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,652,672 at July 31, 1998.
D - 15.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW JERSEY TRUST) (INSURED)
PORTFOLIO
As of July 31, 1998
<TABLE><CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (5) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Lacey Mun. Utilities Auth., Ocean AAA $ 605,000 6.000 % 1999(6) 12/01/99 $ 609,229 $ 634,560
Cnty., NJ, Swr. Rfdg. Rev. Bonds, Ser. @ 102.000
1989 (MBIA Ins.)
2 The Mercer Cnty. Imp. Auth. Mercer AAA 385,000 6.000 2015(6) 12/15/99 386,097 396,769
Cnty., NJ, Rev. Bonds, (Regl. Sludge @ 100.000
Proj.), Ser. 1990 (Financial
Guaranty Ins.)
3 New Jersey Hlth. Care Fac. Fin. Auth. AAA 200,000 6.000 2021(6) 07/01/01 200,670 210,788
Rev. Bonds, (St. Peter's Med. Ctr. @ 100.000
Issue), Ser. E (MBIA Ins.)
4 New Jersey Hlth. Care Fac. Fin. Auth., AAA 415,000 6.000 2021 07/01/01 416,390 432,857
Rev. Bonds, Centrastate Med. Ctr. @ 100.000
Issue Ser. A (AMBAC Ins.)
5 New Jersey Hlth. Care Fac. Fin. Auth., AAA 210,000 6.250 2021(6) 07/01/01 213,566 222,760
Rev. Bonds, Hackensack Med. Ctr., @ 100.000
Ser. 1991 (Financial Guaranty Ins.)
6 New Jersey Sports and Exposition Auth., AAA 675,000 6.000 2021 03/01/02 679,847 707,906
State Contract Bonds, 1992 A (FSAM @ 100.000
Ins.)
7 The Port Auth. of NY and NJ Consol. AAA 75,000 5.625 2014 08/01/02 72,926 78,657
Bonds, Eighty-First Ser. (MBIA Ins.) @ 101.000
8 Univ. of Medicine and Dentistry of NJ, AAA 75,000 5.750 2021(6) 12/01/01 73,947 79,077
Bonds, Ser. E (MBIA Ins.) @ 100.000
--------- --------- ---------
TOTAL $ 2,640,000 $ 2,652,672 $ 2,763,374
========= ========= =========
See Notes to Portfolios on D - 23.
</TABLE>
D - 16.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
STATEMENT OF CONDITION
As of July 31, 1998
<TABLE><CAPTION>
<S> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
at value (cost $ 7,075,144 )(Note 1)......... $ 7,481,991
Accrued interest ............................... 92,066
Cash - income .................................. 2,511
Cash - principal ............................... 17,651
-----------
Total trust property ......................... 7,594,219
LESS LIABILITY - Accrued Sponsors' fees .......... 1,693
-----------
NET ASSETS, REPRESENTED BY:
7,153 units of fractional undivided
interest outstanding (Note 3)................$ 7,499,642
Undistributed net investment income ............ 92,884 $ 7,592,526
----------- ===========
UNIT VALUE ($ 7,592,526 / 7,153 units )........... $ 1,061.45
===========
</TABLE>
See Notes to Financial Statements.
D - 17.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................$ 436,723 $ 458,728 $ 486,823
Trustee's fees and expenses ............ (8,459) (8,775) (9,289)
Sponsors' fees ......................... (2,951) (3,018) (3,026)
------------------------------------------------
Net investment income .................. 425,313 446,935 474,508
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 28,083 8,014 45,797
Unrealized appreciation (depreciation)
of investments ....................... (31,613) 333,294 (19,443)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (3,530) 341,308 26,354
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..............$ 421,783 $ 788,243 $ 500,862
================================================
</TABLE>
See Notes to Financial Statements.
D - 18.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE><CAPTION>
Years Ended July 31,
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income ..................$ 425,313 $ 446,935 $ 474,508
Realized gain on
securities sold or redeemed .......... 28,083 8,014 45,797
Unrealized appreciation (depreciation)
of investments ....................... (31,613) 333,294 (19,443)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 421,783 788,243 500,862
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (425,821) (447,056) (475,565)
Principal .............................. (11,516) (20,358) (19,345)
------------------------------------------------
Total distributions .................... (437,337) (467,414) (494,910)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (6,295) (1,579) (8,136)
Redemption amounts - principal ......... (544,694) (129,843) (718,300)
------------------------------------------------
Total share transactions ............... (550,989) (131,422) (726,436)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (566,543) 189,407 (720,484)
NET ASSETS AT BEGINNING OF YEAR .......... 8,159,069 7,969,662 8,690,146
------------------------------------------------
NET ASSETS AT END OF YEAR ................$ 7,592,526 $ 8,159,069 $ 7,969,662
================================================
PER UNIT:
Income distributions during
year .................................$ 57.45 $ 57.63 $ 57.69
================================================
Principal distributions during
year .................................$ 1.53 $ 2.61 $ 2.34
================================================
Net asset value at end of
year .................................$ 1,061.45 $ 1,063.35 $ 1,021.75
================================================
TRUST UNITS:
Redeemed during year ................... 520 127 708
Outstanding at end of year ............. 7,153 7,673 7,800
================================================
</TABLE>
See Notes to Financial Statements.
D - 19.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
See "How to Sell Units - Trustee's Redemption Units"
in this Prospectus, Part B.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are distributed as explained in "Income, Distributions
and Reinvestment - Distributions" in this Prospectus, Part B.
3. NET CAPITAL
Cost of 7,153 units at Date of Deposit .....................$ 7,442,338
Less sales charge .......................................... 334,905
-----------
Net amount applicable to Holders ........................... 7,107,433
Redemptions of units - net cost of 1,847 units redeemed
less redemption amounts (principal)....................... (77,823)
Realized gain on securities sold or redeemed ............... 131,689
Principal distributions .................................... (68,504)
Unrealized appreciation of investments...................... 406,847
Net capital applicable to Holders ..........................$ 7,499,642
===========
4. INCOME TAXES
As of July 31, 1998, unrealized appreciation of investments, based on cost
for Federal income tax purposes, aggregated $406,847, all of which related
to appreciated securities. The cost of investment securities for Federal
income tax purposes was $7,075,144 at July 31, 1998.
D - 20.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
PORTFOLIO
As of July 31, 1998
<TABLE><CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (5) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Buffalo, NY, Rfdg. Ser. Bonds, AAA $ 775,000 6.250 % 2014 02/01/01 $ 797,630 $ 818,183
Ser. 1991 (Financial Guaranty Ins.) @ 101.000
2 Metropolitan Trans. Auth., NY, Commuter AAA 1,295,000 5.500 2017 07/01/02 1,235,870 1,312,664
Fac. Rev. Bonds, Ser. 1992 A (MBIA @ 100.000
Ins.)
3 The City of NY, G.O. Bonds, Fiscal AAA 1,060,000 6.250 2010(6) 08/01/02 1,082,408 1,158,866
1992 Ser., Fixed Rate Bonds Subseries @ 101.500
C-1 (FSA Ins.)
30,000 6.250 2010 08/01/02 30,634 32,474
@ 101.500
4 New York City, Mun. Wtr. Fin. AAA 450,000 6.250 2021(6) 06/15/01 456,062 477,945
Auth., NY, Wtr. and Swr. Sys. Rev. @ 100.000
Bonds Fiscal 1991 Ser. A (FSA Ins.)
460,000 6.250 2021 06/15/01 466,196 482,572
@ 100.000
5 New York City Mun. Wtr. Fin. AAA 160,000 6.200 2021(6) 06/15/02 162,824 174,272
Auth., NY, Wtr. and Swr. Sys. Rev. @ 101.500
Bonds, Fiscal 1992 Ser. C (AMBAC
Ins.)
6 Dorm. Auth. State of NY (The AAA 1,285,000 5.875 2022 07/01/02 1,280,425 1,354,005
New York Pub. Library), Ins. Rev. Bonds, @ 102.000
Ser. 1992 A (MBIA Ins.)
7 Niagara Falls Bridge Comm., NY, Toll AAA 105,000 6.125 2019(6) 10/01/02 106,563 115,046
Bridge Sys. Rev. Bonds, Ser. 1992 @ 102.000
(Financial Guaranty Ins.)
8 Triborough Bridge and Tunnel Auth., AAA 1,350,000 5.500 2017 01/01/02 1,280,529 1,368,779
Spec. Oblig. Bonds, Ser. 1992 (AMBAC @ 100.000
Ins.)
</TABLE>
D - 21.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES 10 (NEW YORK TRUST)
PORTFOLIO
As of July 31, 1998
<TABLE><CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
9 New York State Med. Care Fac. Fin. AAA $ 185,000 5.500 % 2021 02/15/02 $ 176,003 $ 187,185
Agency, NY, Mental Hlth. Services. @ 100.000
Fac. Imp. Rev. Bonds, 1992 Ser. A
(Financial Guranty Ins.)
--------- --------- ---------
TOTAL $ 7,155,000 $ 7,075,144 $ 7,481,991
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 23.
D - 22.
<PAGE>
DEFINED ASSET FUNDS - MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 10 (CONNECTICUT, MICHIGAN,
NEW JERSEY AND NEW YORK TRUSTS)
NOTES TO PORTFOLIOS
As of July 31, 1998
<TABLE><CAPTION>
<S> <C>
(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc. if followed by "(m)", or by Fitch Investors
Service, Inc. if followed by "(f)"; "NR" indicates that this bond is not
currently rated by any of the above-mentioned rating services. These ratings
have been furnished by the Evaluator but not confirmed with the rating
agencies. See "Description of Ratings" in Part B of this Prospectus.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in part,
are initially at prices of par plus a premium, then subsequently at prices
declining to par. Certain securities may provide for redemption at par prior
or in addition to any optional or mandatory redemption dates or maturity, for
example, through the operation of a maintenance and replacement fund, if
proceeds are not able to be used as contemplated, the project is condemned or
sold or the project is destroyed and insurance proceeds are used to redeem
the securities. Many of the securities are also subject to mandatory sinking
fund redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at par
and redeem only part of the issue. Some of the securities have mandatory
sinking funds which contain optional provisions permitting the issuer to
increase the principal amount of securities called on a mandatory redemption
date. The sinking fund redemptions with optional provisions may, and optional
refunding redemptions generally will, occur at times when the redeemed
securities have an offering side evaluation which represents a premium over
par. To the extent that the securities were acquired at a price higher than
the redemption price, this will represent a loss of capital when compared
with the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption after
satisfying any redemption requests for Units received by the Fund. The
estimated current return may be affected by redemptions. The tax effect on
Holders of redemptions and related distributions is described under "Taxes"
in this Prospectus, Part B.
(4) Insured by the indicated municipal bond insurance company. See "Risk
Factors - Bonds Backed by Letters of Credit or Insurance" in this
Prospectus, Part B.
(5) All securities are insured, either on an individual basis or by Portfolio
insurance, by a municipal bond insurance company which has been assigned
"AAA" claims paying ability by Standard & Poor's. Accordingly, Standard
& Poor's has assigned a "AAA" rating to the securities. Securities covered
by portfolio insurance are rated "AAA" only as long as they remain in the
Trust. See "Risk Factors - Bonds Backed by Letters of Credit or Insurance"
in this Prospectus, Part B.
(6) Bonds with an aggregate face amount of $ 1,320,000 of the Connecticut Trust,
$ 1,475,000 of the New Jersey Trust and $ 1,775,000 of the New York Trust
have been pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.
</TABLE>
D - 23.
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--10
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
33-49298) and
o Investment Company Act of 1940 (file
no. 811-1777).
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.
14281--10/98
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES
CONTENTS OF REGISTRATION STATEMENT
This Post-Effective Amendment to the Registration Statement on Form S-6
comprises the following papers and documents:
The facing sheet of Form S-6.
The cross-reference sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:
1.1.1--Form of Standard Terms and Conditions of Trust Effective as of
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
9.1 --Information Supplement (incorporated by reference to Exhibit 9.1 to
the Registration Statement of Municipal Investment Trust Fund,
Insured Series--207, 1933 Act File No. 33-54037).
R-1
<PAGE>
DEFINED ASSET FUNDS--
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--10
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES--10,
CERTIFIES THAT IT MEETS ALL OF THE REQUIREMENTS FOR EFFECTIVENESS OF THIS
REGISTRATION STATEMENT PURSUANT TO RULE 485(B) UNDER THE SECURITIES ACT OF 1933
AND HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 30TH DAY OF
OCTOBER, 1998.
SIGNATURES APPEAR ON PAGES R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Numbers: 33-43466 and 33-51607
HERBERT M. ALLISON, JR.
STEPHEN L. HAMMERMAN
DAVID H. KOMANSKY
JOHN L. STEFFENS
By ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>
SALOMON SMITH BARNEY INC.
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Salomon Smith Barney Inc.: have been filed
under the 1933 Act
File Numbers:
33-49753, 33-55073
and 333-10441
JAMES DIMON
DERYCK C. MAUGHAN
By GINA LEMON
(As authorized signatory for
Salomon Smith Barney Inc. and
Attorney-in-fact for the persons listed above)
R-4
<PAGE>
PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR
By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Numbers:
33-41631 and
333-15919
ROBERT C. GOLDEN
ALAN D. HOGAN
A. LAURENCE NORTON, JR.
LELAND B. PATON
VINCENT T. PICA II
MARTIN PFINSGRAFF
HARDWICK SIMMONS
LEE B. SPENCER, JR.
BRIAN M. STORMS
By RICHARD R. HOFFMANN
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)
R-5
<PAGE>
DEAN WITTER REYNOLDS INC.
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form SE and the following 1933
the Board of Directors of Dean Witter Act File Numbers: 33-17085 and
Reynolds Inc.: 333-13039
RICHARD M. DeMARTINI
ROBERT J. DWYER
CHRISTINE A. EDWARDS
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
MITCHELL M. MERIN
STEPHEN R. MILLER
RICHARD F. POWERS III
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for
Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)
R-6
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR
By the following persons, who constitute Powers of Attorney have been filed
the Board of Directors of PaineWebber under
Incorporated: the following 1933 Act File
Number: 33-55073
MARGO N. ALEXANDER
TERRY L. ATKINSON
BRIAN M. BAREFOOT
STEVEN P. BAUM
MICHAEL CULP
REGINA A. DOLAN
JOSEPH J. GRANO, JR.
EDWARD M. KERSCHNER
JAMES P. MacGILVRAY
DONALD B. MARRON
ROBERT H. SILVER
MARK B. SUTTON
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)
R-7
<PAGE>
EXHIBIT 4.1
STANDARD & POOR'S
A DIVISION OF THE McGRAW-HILL COMPANIES
J. J. KENNY
65 BROADWAY
NEW YORK, N.Y. 10006-2551
TELEPHONE (212) 770-4422
FAX 212/797-8681
October 30, 1998
Frank A. Ciccotto, Jr.
Vice President
Tax-Exempt Evaluations
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Defined Asset Funds
P.O. Box 9051
Princeton, New Jersey 08543-9051
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004
RE: DEFINED ASSET FUNDS--MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES--10
Gentlemen:
We have examined the post-effective Amendment to the Registration Statement
File No. 33-49298 for the above-captioned trust. We hereby acknowledge that
Kenny S&P Evaluation Services, a division of J. J. Kenny Co., Inc. is currently
acting as the evaluator for the trust. We hereby consent to the use in the
Amendment of the reference to Kenny S&P Evaluation Services, a division of J. J.
Kenny Co., Inc. as evaluator.
In addition, we hereby confirm that the ratings indicated in the
above-referenced Amendment to the Registration Statement for the respective
bonds comprising the trust portfolio are the ratings currently indicated in our
KENNYBASE database.
You are hereby authorized to file copies of this letter with the Securities
and Exchange Commission.
Sincerely,
FRANK A. CICCOTTO
Vice President
<PAGE>
Exhibit 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Defined Asset Funds--Municipal Investment Trust Fund--Multistate Series--10
(Connecticut, Michigan, New Jersey and New York Trusts):
We consent to the use in this Post-Effective Amendment No. 6 to Registration
Statement No. 33-49298 of our opinion dated September 28, 1998 appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the heading 'Miscellaneous--Auditors' in such Prospectus.
DELOITTE & TOUCHE LLP
New York, N.Y.
October 30, 1998
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>1
<NAME> CONNECTICUT TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,923,891
<INVESTMENTS-AT-VALUE> 3,131,483
<RECEIVABLES> 41,469
<ASSETS-OTHER> 4
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 3,172,956
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (3,826)
<TOTAL-LIABILITIES> (3,826)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,923,895
<SHARES-COMMON-STOCK> 2,940
<SHARES-COMMON-PRIOR> 3,187
<ACCUMULATED-NII-CURRENT> 37,643
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 207,592
<NET-ASSETS> 3,169,130
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 187,612
<OTHER-INCOME> 0
<EXPENSES-NET> (6,207)
<NET-INVESTMENT-INCOME> 181,405
<REALIZED-GAINS-CURRENT> 14,255
<APPREC-INCREASE-CURRENT> 11,637
<NET-CHANGE-FROM-OPS> 207,297
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (181,618)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (18,317)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 247
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (258,692)
<ACCUMULATED-NII-PRIOR> 40,759
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>2
<NAME> MICHIGAN TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,661,603
<INVESTMENTS-AT-VALUE> 2,795,441
<RECEIVABLES> 36,016
<ASSETS-OTHER> 13
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,831,470
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (1,895)
<TOTAL-LIABILITIES> (1,895)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,661,616
<SHARES-COMMON-STOCK> 2,706
<SHARES-COMMON-PRIOR> 3,034
<ACCUMULATED-NII-CURRENT> 34,121
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 133,838
<NET-ASSETS> 2,829,575
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 172,474
<OTHER-INCOME> 0
<EXPENSES-NET> (5,897)
<NET-INVESTMENT-INCOME> 166,577
<REALIZED-GAINS-CURRENT> 17,059
<APPREC-INCREASE-CURRENT> (6,857)
<NET-CHANGE-FROM-OPS> 176,779
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (166,493)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (19,997)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 328
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (356,876)
<ACCUMULATED-NII-PRIOR> 38,337
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>3
<NAME> NEW JERSEY TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 2,652,672
<INVESTMENTS-AT-VALUE> 2,763,374
<RECEIVABLES> 32,874
<ASSETS-OTHER> 3,055
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 2,799,303
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (670)
<TOTAL-LIABILITIES> (670)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2,652,699
<SHARES-COMMON-STOCK> 2,721
<SHARES-COMMON-PRIOR> 3,375
<ACCUMULATED-NII-CURRENT> 35,232
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 110,702
<NET-ASSETS> 2,798,633
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 173,952
<OTHER-INCOME> 0
<EXPENSES-NET> (6,030)
<NET-INVESTMENT-INCOME> 167,922
<REALIZED-GAINS-CURRENT> 36,680
<APPREC-INCREASE-CURRENT> (54,332)
<NET-CHANGE-FROM-OPS> 150,270
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (168,738)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (38,896)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 654
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (737,363)
<ACCUMULATED-NII-PRIOR> 43,696
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER>4
<NAME> NEW YORK TRUST
<MULTIPLIER> 1
<S>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUL-31-1998
<PERIOD-END> JUL-31-1998
<INVESTMENTS-AT-COST> 7,075,144
<INVESTMENTS-AT-VALUE> 7,481,991
<RECEIVABLES> 92,066
<ASSETS-OTHER> 20,162
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 7,594,219
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (1,693)
<TOTAL-LIABILITIES> (1,693)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,092,795
<SHARES-COMMON-STOCK> 7,153
<SHARES-COMMON-PRIOR> 7,673
<ACCUMULATED-NII-CURRENT> 92,884
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 406,847
<NET-ASSETS> 7,592,526
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 436,723
<OTHER-INCOME> 0
<EXPENSES-NET> (11,410)
<NET-INVESTMENT-INCOME> 425,313
<REALIZED-GAINS-CURRENT> 28,083
<APPREC-INCREASE-CURRENT> (31,613)
<NET-CHANGE-FROM-OPS> 421,783
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (425,821)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> (11,516)
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 520
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (566,543)
<ACCUMULATED-NII-PRIOR> 99,687
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
