MUNICIPAL INVESTMENT TR FD INV GRADE PORT INTERM TERM SE DAF, S-6EL24/A, 1995-08-25

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S-6EL24/A, 1995-08-25

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 25, 1995

REGISTRATION NO. 33-57547

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549
------------------------------------------

AMENDMENT NO. 2
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:

MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO
(BBB QUALITY OR BETTER)
INTERMEDIATE TERM SERIES
DEFINED ASSET FUNDS

B. NAMES OF DEPOSITORS:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.

C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:

MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
POST OFFICE BOX 9051
PRINCETON, N.J. 08543-9051 SMITH BARNEY INC.
388 GREENWICH STREET--23RD
FLOOR
NEW YORK, N.Y. 10013

PRUDENTIAL SECURITIES DEAN WITTER REYNOLDS INC. PAINEWEBBER INCORPORATED
INCORPORATED TWO WORLD TRADE 1285 AVENUE OF THE
ONE SEAPORT PLAZA CENTER--59TH FLOOR AMERICAS
199 WATER STREET NEW YORK, N.Y. 10048 NEW YORK, N.Y. 10019
NEW YORK, N.Y. 10292

D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:

TERESA KONCICK, ESQ. LAURIE A. HESSLEIN LEE B. SPENCER, JR.
P.O. BOX 9051 388 GREENWICH ST. ONE SEAPORT PLAZA
PRINCETON, N.J. 08543-9051 NEW YORK, N.Y. 10013 199 WATER STREET
NEW YORK, N.Y. 10292

COPIES TO:
DOUGLAS LOWE, ESQ. ROBERT E. HOLLEY PIERRE DE SAINT PHALLE,
130 LIBERTY STREET--29TH 1200 HARBOR BLVD. ESQ.
FLOOR WEEHAWKEN, N.J. 07087 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10006 NEW YORK, N.Y. 10017

E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:

An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.

F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite

G. AMOUNT OF FILING FEE: $500 (as required by Rule 24f-2)

H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:

As soon as practicable after the effective date of the registration
statement.

THIS REGISTRATION STATEMENT SHALL HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

DEFINED ASSET FUNDSSM
--------------------------------------------------------------------------------
MUNICIPAL INVESTMENT 5.78% ESTIMATED CURRENT RETURN shows the estimated
TRUST FUND annual cash to be received from interest-bearing
INVESTMENT GRADE PORTFOLIO bonds in the Portfolio (net of estimated annual
(BBB QUALITY OR BETTER) expenses) divided by the Public Offering Price
INTERMEDIATE TERM (including the maximum sales charge).
SERIES 5.93% ESTIMATED LONG TERM RETURN is a measure of
A UNIT INVESTMENT TRUST the estimated return over the estimated life of
------------------------------the Fund (which has a dollar weighted average
/ / INTERMEDIATE MATURITIES portfolio maturity of about 12 years). This
/ / EXEMPT FROM REGULAR represents an average of the yields to maturity
FEDERAL INCOME TAX (or in certain cases, to an earlier call date) of
/ / DEFINED PORTFOLIO OF the individual bonds in the Portfolio, adjusted to
MUNICIPAL BONDS reflect the maximum sales charge and estimated
/ / MONTHLY INCOME expenses. The average yield for the Portfolio is
/ / PROFESSIONAL SELECTION derived by weighting each bond's yield by its
5.78% market value and the time remaining to the call or
ESTIMATED CURRENT RETURN maturity date, depending on how the bond is
5.93% priced. Unlike Estimated Current Return, Estimated
ESTIMATED LONG TERM RETURN Long Term Return takes into account maturities,
AS OF AUGUST 24, 1995 discounts and premiums of the underlying bonds.
No return estimate can be predictive of your
actual return because returns will vary with
purchase price (including sales charges), how long
units are held, changes in Portfolio composition,
changes in interest income and changes in fees and
expenses. Therefore, Estimated Current Return and
Estimated Long Term Return are designed to be
comparative rather than predictive. A yield
calculation which is more comparable to an
individual bond may be higher or lower than
Estimated Current Return or Estimated Long Term
Return which are more comparable to return
calculations used by other investment products.

-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities Prospectus dated August 25, 1995.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>

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Defined Asset FundsSM

Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.

Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.

Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:

o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios

The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.

----------------------------------------------------------------
Defined Intermediate Term Series
----------------------------------------------------------------

Our defined portfolio of municipal bonds offers you a simple and convenient way
to earn tax-free monthly income. And by purchasing Defined Asset Funds, you not
only receive professional selection but also gain the advantage of reduced risk
by investing in bonds of several different issuers.

INVESTMENT OBJECTIVE

To provide interest income exempt from regular federal income taxes through
investment in a fixed portfolio consisting of intermediate term municipal bonds
issued by or on behalf of states and their local governments and authorities.

DIVERSIFICATION

The Portfolio is diversified among 14 bond issues. Spreading your investment
among different issuers reduces your risk, but does not eliminate it. Because of
maturities, sales or other dispositions of bonds, the size, composition and
return of the Portfolio will change over time.

----------------------------------------------------------------
Defining Your Portfolio
----------------------------------------------------------------

INVESTMENT QUALITY -- BBB OR BETTER

The bonds are rated investment grade by Fitch Investors Service, Inc. or, in the
opinion of Fitch, as Credit Consultant, have comparable credit characteristics.
If Fitch has not rated a bond at least BBB, it has delivered an opinion that the
bond has the credit characteristics of rated bonds in the BBB category. Some of
the bonds may also be rated investment grade by Standard & Poor's Ratings Group
or Moody's Investors Service, Inc.

PROFESSIONAL SELECTION AND SUPERVISION

The Portfolio contains a variety of bonds selected by experienced buyers for
Defined Asset Funds. Fitch will review bonds proposed by the Agent for the
Sponsors for deposit in the Portfolio. If a bond is not rated by Fitch, Fitch
will either issue a rating or provide an opinion as to whether the proposed bond
has investment grade credit characteristics. For a bond to be deposited in the
Portfolio, Fitch must rate it at least BBB or deliver an opinion that the bond
has comparable credit characteristics to investment grade bonds. Fitch's
opinions regarding investment grade characteristics are based exclusively on
publicly available information provided to it by the Agent for the Sponsors and
other information already in Fitch's possession. Fitch will use its professional
expertise to evaluate the information and prepare its opinions. Certain bonds
may also be rated by Standard & Poor's or Moody's. If so, a bond will only be
deposited if that rating is investment grade or above. For example, a bond that
has received an investment grade rating from Fitch but a lower than investment
grade rating from either Standard & Poor's or Moody's will not be deposited in
the Portfolio. However, there is no requirement that a bond deposited in the
Portfolio receive any rating from either Standard & Poor's or Moody's.

The Fund is not actively managed; however, following deposit, Fitch will monitor
the bonds and inform the Agent for the Sponsors of any significant unfavorable
changes in its opinion of any bond not rated by Fitch. Information relating to
opinions of bonds not rated by Fitch will be available only to the Sponsors; it
will not be available to the general public. The Agent for the Sponsors will
receive information from Fitch about changes in the credit quality of bonds
rated by Fitch at essentially the same time as the general public. A bond can be
sold if retaining it is considered detrimental to investors' interests.

A-2
<PAGE>
TYPES OF BONDS

The Portfolio consists of $15,780,000 face amount of municipal bonds of the
following types:

APPROXIMATE
PORTFOLIO PERCENTAGE

/ / General Obligations 13%
/ / Hospitals/Health Care Facilities 17%
/ / Lease Rental Appropriation 15%
/ / Ecological Services/Equipment 8%
/ / Special Tax Issues 25%
/ / State/Local Municipal Utilities 8%
/ / Industrial Development Revenue 11%
/ / Housing 3%

BOND CALL FEATURES

It is possible that during periods of falling interest rates, a bond with a
coupon higher than current market rates will be prepaid or 'called', at the
option of the bond issuer, before its expected maturity. When bonds are
initially callable, the price is usually at a premium to par which then declines
to par over time. Bonds may also be subject to a mandatory sinking fund or have
extraordinary redemption provisions. For example, if the bond's proceeds are not
able to be used as intended the bond may be redeemed. This redemption and the
sinking fund are often at par.

CALL PROTECTION

Although some of the bonds may be subject to optional refunding or call
provisions, we have selected bonds with call protection. This call protection
means that any bond in the Portfolio generally cannot be called for a number of
years and thereafter at a declining premium over par.

TAX INFORMATION

Based on the opinion of bond counsel, income from the bonds held by this Fund is
generally 100% exempt under existing laws from regular federal income tax.
Interest on approximately 19% of the bonds will be a preference item for
purposes of the Alternative Minimum Tax (AMT). Any gain on a disposition of the
underlying bonds or units will be subject to tax.

----------------------------------------------------------------
Defining Your Risks
----------------------------------------------------------------

RISK FACTORS

The Portfolio contains bonds rated in the BBB category by Fitch, which is the
lowest 'investment grade' rating assigned by the rating agency. The Portfolio
may also contain bonds which are not rated but which have, in the opinion of the
Credit Consultant, comparable credit characteristics to securities rated
investment grade. While none of the bonds is rated below investment grade by
Fitch, Standard & Poor's or Moody's, investors should be aware that these bonds
may have speculative characteristics and that changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments on these bonds than is the case with higher
rated securities. Because ratings may be lowered or the credit assessment of the
Credit Consultant may change, an investment in Units should be made with an
understanding of the risks of investing in 'junk bonds' (bonds rated below
investment grade or unrated bonds having similar credit characteristics),
including increased risk of loss of principal and interest on the underlying
bonds. (see Risk Factors in Part B).

Unit price fluctuates and could be adversely affected by increasing interest
rates as well as the financial condition of the issuers of the bonds and any
banks or insurance companies backing the bonds. Because of the possible
maturity, sale or other disposition of securities, the size, composition and
return of the portfolio may change at any time. Because of the sales charges,
returns of principal and fluctuations in unit price, among other reasons, the
sale price will generally be less than the cost of your units. Unit prices could
also be adversely affected if a limited trading market exists in any bond to be
sold. There is no guarantee that the Fund will achieve its investment objective.

The opinions provided to the Agent for the Sponsors by the Credit Consultant on
unrated bonds will not be traditional ratings because they will generally not be
based on the level of information or access to officials generally utilized in
connection with a traditional credit rating because they are likely to be given
on an expedited basis and because the opinion will generally not be based on
formal procedures normally associated with traditional credit ratings, such as
the use of a rating committee. Therefore, the Credit Consultant's opinions on
credit quality are likely to have less certainty than traditional credit
ratings. The opinions, however, will be the opinions of experienced professional
research analysts for Fitch and will take into account factors typically
considered in debt credit analysis. The Credit Consultant will render an opinion
only when in the judgement of its analysts it has sufficient information to
determine whether a bond has investment grade credit characteristics (see Risk
Factors in Part B).

The Fund is concentrated in Special Tax Allocation bonds and is therefore
dependent to a significant degree on revenues generated from those particular
activities. (See Risk Factors in Part B). Also, since interest on some of the
bonds will be a preference item for purposes of AMT, the Fund may not be
appropriate for investors who are subject to AMT.

A-3
<PAGE>
----------------------------------------------------------------
Defining Your Investment
----------------------------------------------------------------

PUBLIC OFFERING PRICE PER UNIT $1,025.75

The Public Offering Price as of August 24, 1995, the business day prior to the
Initial Date of Deposit, is based on the aggregate offer side value of the
underlying bonds in the Fund ($15,542,992.00), plus cash ($167,000), divided by
the number of units outstanding (15,947) plus a maximum sales charge of 4.00% on
the value of the underlying bonds. The Public Offering Price on any subsequent
date will vary. An amount equal to net accrued but undistributed interest on the
unit is added to the Public Offering Price. The underlying bonds are evaluated
by an independent evaluator at 3:30 p.m. Eastern time on every business day.

LOW MINIMUM INVESTMENT

You can get started with a minimum purchase of about $1,000.

UNIT PAR VALUE

The par value of your unit -- the amount of money you will receive by
termination of the Fund, assuming all the bonds are paid at maturity or are
redeemed by the issuer at par or sold by the Fund at par to meet redemptions --
is $1,000.

REINVESTMENT OPTION

You can elect to automatically reinvest your distributions into a separate
portfolio of federally tax-exempt bonds. Reinvesting helps to compound your
income tax-free.

PRINCIPAL DISTRIBUTIONS

Principal from sales, redemptions and maturities of bonds in the Fund will be
distributed to investors periodically when the amount to be distributed is more
than $5.00 per unit.

TERMINATION DATE

The Fund will generally terminate no later than the maturity date of the last
maturing bond listed in the Portfolio. The Fund may be terminated earlier if the
value is less than 40% of the face amount of bonds deposited.

SPONSORS' PROFIT OR LOSS

The Sponsors' profit or loss associated with the Fund will include the receipt
of applicable sales charges, any fees for underwriting or placing bonds,
fluctuations in the Public Offering Price or secondary market price of units and
a gain of $108,947.65 on the deposit of the bonds.

UNDERWRITING ACCOUNT

None of the Sponsors has participated as sole underwriter, managing underwriter
or member of an underwriting syndicate from which any of the bonds in the
Portfolio were acquired.

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
P.O. Box 9051,
Princeton, NJ 08543-9051 75.85%

SMITH BARNEY INC.
388 Greenwich Street--23rd Floor,
New York, NY 10013 9.41%

PAINEWEBBER INCORPORATED
1285 Avenue of the Americas,
New York, NY 10019 6.27%

PRUDENTIAL SECURITIES INCORPORATED
One Seaport Plaza--199 Water Street,
New York, NY 10292 3.14%

DEAN WITTER REYNOLDS INC.
Two World Trade Center--59th Floor,
New York, NY 10048 3.14%

OPPENHEIMER & CO. INC.
One World Financial Center--8th Floor
New York, NY 10281 1.57%

GRUNTAL & CO. INC.
14 Wall Street,
New York, NY 10005 0.62%
-------
100.00%
-------

A-4
<PAGE>

FITCH STANDARD & OPTIONAL SINKING
CREDIT POOR'S MOODY'S REFUNDING FUND
PORTFOLIO TITLE QUALITY (1) RATING (2) RATING (3) REDEMPTIONS (4) REDEMPTIONS (4)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. $1,125,000 California St. Pub.
Wks. Bd., Lease Rev. Rfdg. Bonds
(Var. Univ. of California Proj.),
Ser. A, 5.50%, 6/1/10 A A-(p) A1(con.) -- 6/1/09
2. Lemore, CA, Redev. Agy., Lemore
Redev. Proj., Tax Alloc. Rfdg.
Bonds, Issue of 1995 O NR Baa
$170,000, 6.00%, 8/1/05 8/1/03 @ 102 --
$180,000, 6.10%, 8/1/06 8/1/03 @ 102 --
$190,000, 6.20%, 8/1/07 8/1/03 @ 102 --
$205,000, 6.30%, 8/1/08 8/1/03 @ 102 --
$220,000, 6.40%, 8/1/09 8/1/03 @ 102 --
$230,000, 6.50%, 8/1/10 8/1/03 @ 102 --
3. $1,250,000 Pamona, CA, Pub. Fin.
Auth., 1993 Rfdg. Rev. Bonds, Ser.
L (Southwest Pamona Redev. Proj.),
5.50%, 2/1/08 O BBB+ Baa 2/1/04 @ 102 2/1/04
4. $1,500,000 City of Fort Wayne,
IN, Redev. Dist. Tax Increment Rev.
Bonds of 1995 (Civic Ctr. Urban
Renewal Area Proj.), 6.75%, 2/1/10 O NR NR 2/1/05 @ 101 2/1/09
5. $1,250,000 Massachusetts St.
Hlth. and Educl. Fac. Auth., Rev.
Bonds (Addison-Gilbert Hosp.), Ser.
C, 5.90%, 7/1/08 O NR Baa1 7/1/03 @ 102 7/1/04
6. $210,000 Mississippi Bus. Fin.
Corp., Ind. Dev. Rev. Bonds (The
Taylor Grp., Inc., Proj.), Ser.
1995 (Shawmut Bank Connecticut -
Letter of Credit), 6.30%, 5/1/10
(6) BBB++ BBB++ A2+ 5/1/02 @ 103 5/1/08

COST
PORTFOLIO TITLE TO FUND (5)
---------------------------------------------------------
<S> <C>
1. $1,125,000 California St. Pub.
Wks. Bd., Lease Rev. Rfdg. Bonds
(Var. Univ. of California Proj.),
Ser. A, 5.50%, 6/1/10 $ 1,049,411.25
2. Lemore, CA, Redev. Agy., Lemore
Redev. Proj., Tax Alloc. Rfdg.
Bonds, Issue of 1995
$170,000, 6.00%, 8/1/05 169,362.50
$180,000, 6.10%, 8/1/06 179,281.80
$190,000, 6.20%, 8/1/07 189,198.20
$205,000, 6.30%, 8/1/08 204,091.85
$220,000, 6.40%, 8/1/09 218,985.80
$230,000, 6.50%, 8/1/10 228,900.60
3. $1,250,000 Pamona, CA, Pub. Fin.
Auth., 1993 Rfdg. Rev. Bonds, Ser.
L (Southwest Pamona Redev. Proj.),
5.50%, 2/1/08 1,159,512.50
4. $1,500,000 City of Fort Wayne,
IN, Redev. Dist. Tax Increment Rev.
Bonds of 1995 (Civic Ctr. Urban
Renewal Area Proj.), 6.75%, 2/1/10 1,516,680.00
5. $1,250,000 Massachusetts St.
Hlth. and Educl. Fac. Auth., Rev.
Bonds (Addison-Gilbert Hosp.), Ser.
C, 5.90%, 7/1/08 1,211,612.50
6. $210,000 Mississippi Bus. Fin.
Corp., Ind. Dev. Rev. Bonds (The
Taylor Grp., Inc., Proj.), Ser.
1995 (Shawmut Bank Connecticut -
Letter of Credit), 6.30%, 5/1/10
(6) 210,000.00

</TABLE>
------------------------------------
(1) These ratings are ratings of the issues themselves by Fitch. Where an 'O'
appears, Fitch has not rated the issue, but has delivered an opinion that the
issue has investment grade credit characteristics. (See Appendix A.)
(2) These ratings are ratings of the bonds themselves by Standard & Poor's. The
symbol 'NR' indicates that Standard & Poor's did not rate the issue. (See
Appendix A.)
(3) These ratings are ratings of the issues themselves by Moody's. The symbol
'NR' indicates that Moody's did not rate the issue. (See Appendix A.)
(4) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(5) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, 27% of the bonds were deposited at a
premium, 1% at par and 72% at a discount from par.
(6) These bonds are subject to AMT.
+ Rating of the Letter of Credit Bank backing the issue.

A-5
<PAGE>

--------------------------------------------------------------------------------
Defined Portfolio
--------------------------------------------------------------------------------
Municipal Investment Trust Fund
Investment Grade Portfolio (BBB Quality or Better)
Intermediate Term Series (Continued) August 25, 1995
<TABLE><CAPTION>
FITCH STANDARD & OPTIONAL SINKING
CREDIT POOR'S MOODY'S REFUNDING FUND
PORTFOLIO TITLE QUALITY (1) RATING (2) RATING (3) REDEMPTIONS (4) REDEMPTIONS (4)
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7. $1,500,000 Mississippi Bus. Fin.
Corp., Ind. Dev. Rev. Bonds (T,T&W
Farm Products, Inc., Proj.), Ser.
1995 (Deposit Guaranty National
Bank - Letter of Credit), 6.90%,
7/1/10 (6)(7) O NR NR 7/1/03 @ 103 7/1/06
8. The Ind. Dev. Auth. of City of
Lee's Summit, MO, Hlth. Fac. Rev.
Bonds (John Knox Vil. Proj.), Ser.
1995 (7) A- NR NR
$700,000, 6.15%, 8/15/07 8/15/05 @ 102 --
$800,000, 6.55%, 8/15/10 8/15/05 @ 102 8/15/08
9. $1,250,000 New York State Urban
Dev. Corp., Corr. Fac. Rev. Bonds,
Rfdg. Ser. A, 5.40%, 1/1/06 A BBB Baa1 -- --
10. $1,000,000 The City of New
York, NY, G.O. Bonds,
Ser. 1994 A, 6.00%, 8/1/05 A- BBB+ Baa1 8/1/04 @ 101.5 --
11. $1,250,000 North Carolina
Eastern Mun. Pwr. Agy., Rfdg. Ser.
B, 6.00%, 1/1/05 BBB+ BBB+ A 1/1/03 @ 102 --
12. $1,000,000 City of Leander,
Williamson Cnty., TX,
G.O. Bonds, Ser. 1995, 6.50%,
8/15/10 (7) O NR NR 8/15/05 @ 101 --
13. $500,000 South Plains Regl.
Hsg. Auth., TX, Multi-Family Mtge.
Rev. Bonds, Ser. 1995 A (Sec. 8
Asstd. Proj.), 6.90%, 8/1/09 BBB NR NR 8/1/05 @ 102 8/1/06
14. $1,250,000 Tooele Cnty., UT,
Hazardous Waste Disp. Rev. Bonds
(Laidlaw Inc./U.S.P.C. Clive
Proj.), Ser. 1995 (Guarantee-
Laidlaw Inc.), 6.75%, 8/1/10 (6) O BBB+ NR 2/1/05 @ 102 --

COST
PORTFOLIO TITLE TO FUND (5)
---------------------------------------------------------
<S> <C>
7. $1,500,000 Mississippi Bus. Fin.
Corp., Ind. Dev. Rev. Bonds (T,T&W
Farm Products, Inc., Proj.), Ser.
1995 (Deposit Guaranty National
Bank - Letter of Credit), 6.90%,
7/1/10 (6)(7) $ 1,528,485.00
8. The Ind. Dev. Auth. of City of
Lee's Summit, MO, Hlth. Fac. Rev.
Bonds (John Knox Vil. Proj.), Ser.
1995 (7)
$700,000, 6.15%, 8/15/07 697,053.00
$800,000, 6.55%, 8/15/10 803,272.00
9. $1,250,000 New York State Urban
Dev. Corp., Corr. Fac. Rev. Bonds,
Rfdg. Ser. A, 5.40%, 1/1/06 1,192,675.00
10. $1,000,000 The City of New
York, NY, G.O. Bonds,
Ser. 1994 A, 6.00%, 8/1/05 996,250.00
11. $1,250,000 North Carolina
Eastern Mun. Pwr. Agy., Rfdg. Ser.
B, 6.00%, 1/1/05 1,245,462.50
12. $1,000,000 City of Leander,
Williamson Cnty., TX,
G.O. Bonds, Ser. 1995, 6.50%,
8/15/10 (7) 990,550.00
13. $500,000 South Plains Regl.
Hsg. Auth., TX, Multi-Family Mtge.
Rev. Bonds, Ser. 1995 A (Sec. 8
Asstd. Proj.), 6.90%, 8/1/09 508,095.00
14. $1,250,000 Tooele Cnty., UT,
Hazardous Waste Disp. Rev. Bonds
(Laidlaw Inc./U.S.P.C. Clive
Proj.), Ser. 1995 (Guarantee-
Laidlaw Inc.), 6.75%, 8/1/10 (6) 1,244,112.50
--------------------
$ 15,542,992.00
--------------------
--------------------
</TABLE>

------------------------------------
(1) These ratings are ratings of the issues themselves by Fitch. Where an 'O'
appears, Fitch has not rated the issue, but has delivered an opinion that the
issue has investment grade credit characteristics. (See Appendix A.)
(2) These ratings are ratings of the bonds themselves by Standard & Poor's. The
symbol 'NR' indicates that Standard & Poor's did not rate the issue. (See
Appendix A.)
(3) These ratings are ratings of the issues themselves by Moody's. The symbol
'NR' indicates that Moody's did not rate the issue. (See Appendix A.)
(4) Bonds are first subject to optional redemptions (which may be exercised in
whole or in part) on the dates and at the prices indicated under the Optional
Refunding Redemptions column. In subsequent years, bonds are redeemable at
declining prices, but typically not below par value. Some issues may be subject
to sinking fund redemption or extraordinary redemption without premium prior to
the dates shown.
(5) Evaluation of the bonds by the Evaluator is made on the basis of current
offer side evaluation. On this basis, 27% of the bonds were deposited at a
premium, 1% at par and 72% at a discount from par.
(6) These bonds are subject to AMT.
(7) These bonds are when issued bonds that are expected to settle 1 to 7 days
after the settlement date for units. The Trustee's fee and expenses will be
reduced during the first year by $0.14 per unit to compensate for interest that
would have been accrued on bonds between the settlement date for units and the
actual date of delivery of the bonds. (See Income, Distributions and
Reinvestment -- Income in Part B.)

A-6
<PAGE>
----------------------------------------------------------------
Defining Your Costs
----------------------------------------------------------------
SALES CHARGE

Although the Fund is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.

As a % of Initial As a % of
Offering Period Secondary Market
Public Offering Public Offering
Price Price
----------------- -----------------
Maximum Sales Charges 4.00% 4.50%

The Fund (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds. Historically, the Sponsors of unit investment trusts have paid all the
costs of establishing those trusts.

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a %
of Average Net
Assets* Per Unit
----------------- -------------
Trustee's Fee .070% $ 0.69
Bookkeeping Fees .005% $ '0.05
Organizational Expenses .020% $ 0.20
Credit Consultant's Fee .081% $ 0.79
Evaluator's Fee .008% $ 0.08
Other Operating Expenses .028% $ 0.27
----------------- -------------
TOTAL .212% $ 2.08

------------------
* Based on the mean of the bid or offer evaluations.

Investors should realize that the total annual fees are greater for this Fund
than for other Intermediate Term Series of the Sponsors, because the other funds
do not generally pay consultants for ongoing monitoring of the Portfolio (see
Fund Expenses in Part B). The Sponsors believe that the monitoring arrangement
with Fitch (which is not affiliated with any of the Sponsors) is desirable in
the present circumstances due to the increased risk of bonds rated lower than A.
Some of the bonds may have speculative characteristics (see Risk Factors in Part
B).

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods.

1 Year 3 Years 5 Years 10 Years
$42 $47 $51 $66

The example assumes reinvestment of all distributions into additional units of
the Fund (a reinvestment option different from that offered by this Fund) and
uses a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. The Costs Over Time above
reflect both sales charges and operating expenses on an increasing investment
(because the net annual return is reinvested). The example should not be
considered a representation of past or future expenses or annual rate of return;
the actual expenses and annual rate of return may be more or less than the
example.

SELLING YOUR INVESTMENT

You may sell your units at any time. Your price is based on the Fund's then
current net asset value (based on the offer side evaluation of the bonds during
the initial public offering period and the lower, bid side evaluation
thereafter, as determined by an independent evaluator, plus accrued interest).
The bid side redemption and secondary market repurchase price as of August 24,
1995 was $973.26 ($52.49 less than the Public Offering Price). There is no fee
for selling your units.

----------------------------------------------------------------
Defining Your Income
----------------------------------------------------------------

MONTHLY FEDERALLY TAX-FREE INTEREST INCOME

The Fund pays monthly income, even though the bonds generally pay interest
semi-annually.

WHAT YOU MAY EXPECT
(PAYABLE ON THE 25TH DAY OF THE MONTH TO HOLDERS OF RECORD ON THE 10TH DAY OF
THE MONTH):

First Distribution per unit
(September 25, 1995): $ 2.47

Regular Monthly Income per unit
(Beginning on October 25, 1995): $ 4.94

Annual Income per unit: $ 59.31

Estimated cash flows are available upon request from the Sponsors.

A-7
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

The Sponsors, Trustee and Holders of Municipal Investment Trust Fund, Investment
Grade Portfolio (BBB Quality or Better), Intermediate Term Series, Defined Asset
Funds (the 'Fund'):

We have audited the accompanying statement of condition and the related
portfolio included in the prospectus of the Fund as of August 25, 1995. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of cash, securities and an irrevocable letter of credit deposited
for the purchase of securities, as described in the statement of condition, with
the Trustee. An audit also includes assessing the accounting principles used and
significant estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of August 25, 1995
in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
New York, N.Y.
August 25, 1995
STATEMENT OF CONDITION AS OF AUGUST 25, 1995

TRUST PROPERTY

Investments--Bonds and Contracts to purchase Bonds(1) $ 15,542,992.00
Cash 167,000.00
Accrued interest to Initial Date of Deposit on underlying
Bonds 112,782.07
Organizational Costs(2) 15,947.00
--------------------
Total $ 15,838,721.07
--------------------
--------------------
LIABILITIES AND INTEREST OF HOLDERS
Liabilities: Advance by the Trustee for accrued
interest(3) $ 112,782.07
Accrued Liability(2) 15,947.00
--------------------
Subtotal 128,729.07
--------------------
Interest of Holders of 15,947 Units of fractional
undivided interest outstanding:
Cost to investors(4) 16,357,559.67
Gross underwriting commissions(5) (647,607.67)
Subtotal $ 15,709,992.00
--------------------
Total $ 15,838,721.07
--------------------
--------------------

---------------

(1) Aggregate cost to the Fund of the bonds listed under Defined
Portfolio is based upon the offer side evaluation determined by the Evaluator at
the evaluation time on the business day prior to the Initial Date of Deposit.
The contracts to purchase the bonds are collateralized by an irrevocable letter
of credit which has been issued by San Paolo Bank, New York Branch, in the
amount of $11,263,490.11 and deposited with the Trustee. The amount of the
letter of credit includes $11,192,909.35 for the purchase of $11,445,000 face
amount of the bonds, plus $70,580.76 for accrued interest.
(2) This represents a portion of the Fund's organizational costs,
which will be deferred and amortized over five years.
(3) Representing a special distribution by the Trustee of an amount
equal to the accrued interest on the bonds as of the Initial Date of Deposit.
(4) Aggregate public offering price (exclusive of interest) computed
on the basis of the offer side evaluation of the underlying bonds as of the
evaluation time on the business day prior to the Initial Date of Deposit.
(5) Assumes the maximum sales charge of 4.00%.

A-8
<PAGE>

<TABLE><CAPTION>
--------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS

TAXABLE INCOME 1995* EFFECTIVE % TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN TAX BRACKET 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>
0- 23,350 $ 0- 39,000 15.00 4.71 5.29 5.88 6.47 7.06 7.65
---------------------------------------------------------------------------------------------------------------------------
$ 23,350- 56,550 $ 39,000- 94,250 28.00 5.56 6.25 6.94 7.64 8.33 9.03
---------------------------------------------------------------------------------------------------------------------------
$ 56,550-117,950 $ 94,250-143,600 31.00 5.80 6.52 7.25 7.97 8.70 9.42
---------------------------------------------------------------------------------------------------------------------------
$117,950-256,500 $143,600-256,500 36.00 6.25 7.03 7.81 8.59 9.38 10.16
---------------------------------------------------------------------------------------------------------------------------
OVER $256,500 OVER $256,500 39.60 6.62 7.45 8.28 9.11 9.93 10.76
---------------------------------------------------------------------------------------------------------------------------

TAXABLE INCOME 1995*
SINGLE RETURN 7% 7.5% 8%

------------------
<S> <C> <C> <C>
0- 23,350 8.24 8.82 9.41
------------------
$ 23,350- 56,550 9.72 10.42 11.11
------------------
$ 56,550-117,950 10.14 10.87 11.59
------------------
$117,950-256,500 10.94 11.72 12.50
------------------
OVER $256,500 11.59 12.42 13.25
------------------
</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
projected 1995 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, holders are urged to consult their own tax advisers in
this regard.

MUNICIPAL BONDS AND THE ALTERNATIVE MINIMUM TAX

INCOME+ MUNICIPAL BOND 'PREFERENCE'
INTEREST INCOME*
(STATE INCOME TAX RATES)
SINGLE ++ JOINT ++ 0% 7% 11%
--------------------------------------------------
$50,000 $23,000 $18,000 $16,000
--------------------------------------------------
$30,000 $21,000 $18,000 $16,000
--------------------------------------------------
$100,000 $27,000 $18,000 $14,000
--------------------------------------------------
$55,000 $23,000 $18,000 $15,000
--------------------------------------------------
$225,000 $33,000 $16,000 $7,000
--------------------------------------------------
$205,000 $32,000 $16,000 $8,000
--------------------------------------------------

NOTES:
* Assuming no 'preference' or similar items except for municipal bond
'preference' interest income and state income taxes.
+ Regular taxable income plus state income
taxes and personal exemptions.
++Assuming no dependents.

Under the tax law, interest income on certain municipal bonds, although
exempt from regular federal income tax, is treated as a 'preference' item for
purposes of AMT. The table above shows amounts of such municipal bond
'preference' interest income that individual taxpayers could receive in 1995
without becoming subject to the AMT. The table gives information for single and
joint returns of individuals having no dependents. The table provides three
income levels and three hypothetical state income tax rates.

A-9
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND
INTERMEDIATE TERM SERIES
DEFINED ASSET FUNDS
I want to learn more about automatic reinvestment in the Investment Accumulation
Program. Please send me information about participation in the Municipal Fund
Accumulation Program, Inc. and a current Prospectus.
My name (please
print) ________________________________________________________________________
My address (please print):
Street and Apt.
No. ___________________________________________________________________________
City, State, Zip
Code __________________________________________________________________________
This page is a self-mailer. Please complete the information above, cut along the
dotted line, fold along the lines on the reverse side, tape, and mail with the
Trustee's address displayed on the outside.

<PAGE>

BUSINESS REPLY MAIL NO POSTAGE
FIRST CLASS PERMIT NO. 644 NEW YORK, NY NECESSARY
IF MAILED
POSTAGE WILL BE PAID BY ADDRESSEE IN THE
THE CHASE MANHATTAN BANK, N.A. UNITED STATES
DEFINED ASSET FUNDS
BOX 2051
NEW YORK, NY 10081

--------------------------------------------------------------------------------
(Fold along this line.)

<PAGE>

DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO
(BBB QUALITY OR BETTER)
INTERMEDIATE SERIES

FURTHER DETAIL REGARDING ANY OF THE INFORMATION PROVIDED IN THE PROSPECTUS MAY
BE OBTAINED
WITHIN FIVE DAYS OF WRITTEN OR TELEPHONIC REQUEST TO THE TRUSTEE, THE ADDRESS
AND
TELEPHONE NUMBER OF WHICH ARE SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.

Index

PAGE
---------
Fund Description...................................... 1
Risk Factors.......................................... 3
How to Buy Units...................................... 9
How to Sell Units..................................... 10
Income, Distributions and Reinvestment................ 11
Fund Expenses......................................... 12
Taxes................................................. 12
PAGE
---------
Records and Reports................................... 13
Trust Indenture....................................... 14
Miscellaneous......................................... 14
Exchange Option....................................... 16
Supplemental Information.............................. 16
Appendix A--Description of Ratings.................... a-1
Appendix B--Sales Charge Schedules.................... b-1

FUND DESCRIPTION

BOND PORTFOLIO SELECTION

Professional buyers for Defined Asset Funds selected the Bonds for the
Portfolio after considering the Fund's investment objective as well as the
credit quality of the Bonds as determined by Fitch, the yield and price of the
Bonds compared to similar securities, the maturities of the Bonds and the
diversification of the Portfolio. Yields on 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. No leverage
or borrowing is used nor does the Portfolio contain other kinds of securities to
enhance yield. A summary of the Bonds in the Portfolio appears in Part A of the
Prospectus.

The Credit Consultant is obligated to review, on a timely basis, bonds
proposed by the Agent for the Sponsors for deposit in the Portfolio, whether or
not the Credit Consultant has an existing rating on the bonds. After reviewing
each proposed bond, the Credit Consultant is obligated to either issue a rating
or provide the Agent for the Sponsors with an opinion as to whether the proposed
bond has investment grade credit characteristics. For a bond to be deposited in
the Portfolio, the Credit Consultant must rate the bond in the BBB category or
better or deliver an opinion that the bond has comparable credit characteristics
to investment grade bonds.

Certain bonds may also be rated by Standard & Poor's or Moody's. If so, a
bond will only be deposited in the Portfolio if that rating as well as Fitch's
rating or opinion is investment grade or above. For example, a bond that has
received an investment grade rating from the Credit Consultant but a lower than
investment grade rating from either Standard & Poor's or Moody's will not be
deposited in the Portfolio. However, there is no requirement that a bond
deposited in the Portfolio receive any rating from either Standard & Poor's or
Moody's.

Ratings represent opinions of the rating organizations as to the quality of
bonds rated, but these are general (not absolute) standards of quality. And in
some instances, the opinions provided to the Agent for the Sponsors by the
Credit Consultant on unrated bonds will not be traditional ratings because they
will generally not be based on the level of information or access to officials
generally utilized in connection with a traditional credit rating because they
are likely to be given on an expedited basis and because they will generally not
be based on formal procedures normally associated with traditional credit
ratings, such as the use of a rating committee. Therefore,

1
<PAGE>
the Credit Consultant's opinions on credit quality are likely to have less
certainty than traditional credit ratings. The opinions, however, will be the
opinions of experienced professional research analysts for Fitch and will take
into account factors typically considered in debt credit analysis. The Credit
Consultant will render an opinion only when in the judgement of its analysts it
has sufficient information to determine whether a bond has investment grade
credit characteristics. Information relating to opinions of bonds not rated by
Fitch will be available only to the Sponsors; it will not be available to the
general public.

Opinions are to be based exclusively on publicly available information
provided to the Credit Consultant by the Agent for the Sponsors and on other
public information in the possession of the Credit Consultant. The Credit
Consultant has no obligation to collect information from any other source. The
Credit Consultant will use its professional expertise to evaluate the
information and prepare the opinion. Once the Bonds have been deposited in the
Portfolio, the Agent for the Sponsors will provide the Credit Consultant with
sufficient information to enable the Credit Consultant to monitor the Bonds. The
Credit Consultant will advise the Agent for the Sponsors in the event of any
significant unfavorable changes in its opinion of the credit quality of any Bond
not rated by Fitch, and if, in the opinion of the Credit Consultant, any Bond
not rated by Fitch ceases to have investment grade credit characteristics. The
Agent for the Sponsors will receive information from the Credit Consultant about
changes in the credit quality of Bonds rated by the Credit Consultant at
essentially the same time as the general public. In the event that the Credit
Consultant does not, in its judgement, have sufficient information to monitor
the Bonds, the Credit Consultant will notify the Agent for the Sponsors of the
insufficiency and if the necessary information is not received, will withdraw
its opinion regarding investment grade characteristics of the Bonds.

The Credit Consultant. The Credit Consultant, Fitch Investors Service,
Inc., is a Nationally Recognized Statistical Rating Organization, whose primary
business is to provide credit ratings on bonds issued by states and
municipalities and their instrumentalities and political subdivisions,
industrial companies, utilities, financial institutions, and issuers of
mortgage-and asset-backed securities.

The Credit Consultant is based in New York City and was originally
organized in 1913. The Credit Consultant is registered as an investment adviser
with the Securities and Exchange Commission ('SEC') and various states. The
Credit Consultant did not recommend the Bonds for purchase by the Fund. Fitch
reviewed bonds proposed by the Agent for the Sponsors for inclusion in the
Portfolio and indicated whether, in their judgment, the bonds have
characteristics similar to bonds that are of investment grade credit quality. In
addition, the Credit Consultant will monitor the Bonds in the Portfolio and
notify the Agent for the Sponsors if, in the opinion of the Credit Consultant,
any of the Bonds cease to have investment grade characteristics. The Agent for
the Sponsors shall receive notice of a downgrade in the rating of any rated Bond
in the same way the information is received by the general public. In the event
any of the Bonds cease to have investment grade credit characteristics the Agent
for the Sponsors shall determine, in its sole discretion, whether to dispose of
any of the Bonds (see Bond Portfolio Supervision below).

Fitch ratings and credit opinions are not recommendations to buy, sell, or
hold any bond. They do not comment on the adequacy of market price, the
suitability of any bond for a particular investor, or the tax-exempt nature or
taxability of payments made in respect of any bond.

Fitch ratings are based on information obtained from issuers, other
obligors, underwriters, their experts, and other sources Fitch believes to be
reliable. Fitch does not audit or verify the truth or accuracy of the
information. Ratings may be changed, suspended, or withdrawn as a result of
changes in, or the unavailability of, information or for other reasons.

BOND PORTFOLIO SUPERVISION

The deposit of the Bonds in the Fund on the initial date of deposit
established a proportionate relationship among the face amounts of the Bonds.
During the 90-day period following the initial date of deposit the Sponsors may
deposit additional Bonds in order to create new Units, maintaining to the extent
possible that original proportionate relationship. Deposits of additional Bonds
subsequent to the 90-day period must generally replicate exactly the
proportionate relationship among the face amounts of the Bonds at the end of the
initial 90-day period.

2
<PAGE>
The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. The Fund may retain an issuer's bonds despite adverse financial
developments. However, the Credit Consultant will monitor the Bonds on an
ongoing basis and advise the Agent for the Sponsors in the event of any
significant unfavorable changes in its opinion of the credit quality of any Bond
not rated by Fitch, and if, in the opinion of the Credit Consultant, any Bond
not rated by Fitch ceases to have investment grade credit characteristics.
Information relating to opinions of bonds not rated by Fitch will be available
only to the Sponsors; it will not be available to the general public. The Agent
for the Sponsors will receive information from Fitch about changes in the credit
quality of Bonds rated by Fitch at essentially the same time as the general
public. The Sponsors will consider information provided by the Credit Consultant
in conducting the Portfolio supervision.

A Bond may be sold in certain circumstances including the occurrence of a
default in payment or other default on the Bond, a decline in the projected
income pledged for debt service on a revenue bond, institution of certain legal
proceedings, if the Bond becomes taxable or is otherwise inconsistent with the
Fund's investment objectives, a decline in the price of the Bond or the
occurrence of other market or credit factors (including advance refunding) that,
in the opinion of Defined Asset Funds research analysts, makes retention of the
Bond detrimental to the interests of investors. The Trustee must generally
reject any offer by an issuer of a Bond to exchange another security pursuant to
a refunding or refinancing plan.

Neither the Sponsors, the Trustee nor the Credit Consultant are liable for
any default or defect in a Bond. If a contract to purchase any Bond fails, the
Sponsors may generally deposit a replacement bond so long as it is a tax-exempt
bond, has a fixed maturity or disposition date substantially similar to the
failed Bond and is rated BBB or better by Fitch or has comparable credit
characteristics in the opinion of the Credit Consultant. A replacement bond must
be deposited within 110 days after deposit of the failed contract, at a cost
that does not exceed the funds reserved for purchasing the failed Bond and at a
yield to maturity and current return substantially equivalent (considering then
current market conditions and relative creditworthiness) to those of the failed
Bond, as of the date the failed contract was deposited.

RISK FACTORS

An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline with increases in interest rates.
Generally speaking, bonds with longer maturities will fluctuate in value more
than bonds with shorter maturities. In recent years there have been wide
fluctuations in interest rates and in the value of fixed-rate bonds generally.
The Sponsors cannot predict the direction or scope of any future fluctuations.

The Portfolio contains Bonds rated in the BBB category by Fitch, which is
the lowest 'investment grade' rating assigned by the rating agency. The
Portfolio may also contain Bonds which are not rated but which have in the
opinion of the Credit Consultant, comparable credit characteristics to bonds
rated investment grade. Investors should therefore be aware that these Bonds may
have speculative characteristics and that changes in economic conditions or
other circumstances are more likely to lead to a weakened capacity to make
principal and interest payments on these Bonds than is the case with higher
rated bonds. Moreover, conditions may develop with respect to any of the issuers
of the Bonds that may cause the rating agencies to lower their ratings below
investment grade on a given Bond or cause the Credit Consultant to determine
that the credit characteristics of a given Bond are not comparable to those of
obligations rated investment grade. There can be no assurance that the rating
currently assigned to a given Bond by a rating agency or the credit assessment
of the Credit Consultant actually reflects all current information about the
issuer of that Bond. Subsequent to the initial date of deposit, a Bond or other
obligations of the issuer or guarantor or bank or other entity issuing a letter
of credit related thereto may cease to be rated, its rating may be reduced or
the credit assessment of the Credit Consultant may change. Because of the fixed
nature of the Portfolio, none of these events requires an elimination of that
Bond from the Portfolio, but the lowered rating or changed credit assessment may
be considered in the Sponsors' determination to direct the disposal of the Bond
(see Bond Portfolio Supervision above).

Because ratings may be lowered or the credit assessment of the Credit
Consultant may change, an investment in Units should be made with an
understanding of the risks of investing in 'junk bonds' (bonds rated below
investment grade or unrated bonds having similar credit characteristics),
including increased risk of loss of principal and interest on the underlying
bonds. Bonds that are rated below investment grade or unrated debt

3
<PAGE>
obligations having similar credit characteristics are often subject to greater
market fluctuations and risk of loss of income and principal than bonds rated
investment grade, and their value may decline more precipitously in response to
rising interest rates. This effect is so not only because increased interest
rates generally lead to decreased values for fixed-rate instruments, but also
because increased interest rates may indicate a slowdown in the economy
generally, which could result in defaults by less creditworthy issuers. Because
investors generally perceive that there are greater risks associated with
lower-rated bonds, the yields and prices of these bonds tend to fluctuate more
than higher-rated bonds with changes in the perceived credit quality of their
issuers, whether these changes are short-term or structural, and during periods
of economic uncertainty. Moreover, issuers whose obligations have been recently
downgraded may be subject to claims by debtholders and suppliers which, if
sustained, would make it more difficult for these issuers to meet payment
obligations.

Debt rated below investment grade or having similar credit characteristics
also tends to be more thinly traded than investment-grade debt and held
primarily by institutions, and this lack of liquidity can negatively affect the
value of the debt. Debt which is not rated investment grade or having similar
credit characteristics may be subordinated to other obligations of the issuer.
Senior debtholders would be entitled to receive payment in full before
subordinated debtholders receive any payment at all in the event of a bankruptcy
or reorganization. Lower rated debt obligations and debt obligations having
similar credit characteristics may also present payment-expectation risks. For
example, these bonds may contain call or redemption provisions that would make
it attractive for the issuers to redeem them in periods of declining interest
rates, and investors would therefore not be able to take advantage of the higher
yield offered.

The opinions provided to the Agent for the Sponsors by the Credit
Consultant on unrated bonds will not be traditional ratings because they will
generally not be based on the level of information or access to public officials
generally utilized in connection with a traditional credit rating because they
are likely to be given on an expedited basis and because they will generally not
be based on formal procedures normally associated with traditional credit
ratings, such as the use of a rating committee. Therefore, the Credit
Consultant's opinions on credit quality are likely to have less certainty than
traditional credit ratings. The opinions, however, will be the opinions of
experienced professional research analysts for Fitch and will take into account
factors typically considered in debt credit analysis. The Credit Consultant will
render an opinion only when in the judgement of its analysts it has sufficient
information to determine whether a bond has investment grade credit
characteristics.

Certain of the Bonds may have been deposited at a market discount or
premium principally because their interest rates are lower or higher than
prevailing rates on comparable debt securities. The current returns of market
discount bonds are lower than comparably rated bonds selling at par because
discount bonds tend to increase in market value as they approach maturity. The
current returns of market premium bonds are higher than comparably rated bonds
selling at par because premium bonds tend to decrease in market value as they
approach maturity. Because part of the purchase price is returned through
current income payments and not at maturity, an early redemption at par of a
premium bond will result in a reduction in yield to the Fund. Market premium or
discount attributable to interest rate changes does not indicate market
confidence or lack of confidence in the issue.

Certain Bonds deposited into the Fund may have been acquired on a
when-issued or delayed delivery basis. The purchase price for these Bonds is
determined prior to their delivery to the Fund and a gain or loss may result
from fluctuations in the value of the Bonds.

The Fund may be concentrated in one or more of types of bonds.
Concentration in a State may involve additional risk because of the decreased
diversification of economic, political, financial and market risks. Set forth
below is a brief description of certain risks associated with bonds which may be
held by the Fund. Additional information is contained in the Information
Supplement which is available from the Trustee at no charge to the investor.

GENERAL OBLIGATION BONDS

Certain of the Bonds may be general obligations of a governmental entity.
General obligation bonds are backed by the issuer's pledge of its full faith,
credit and taxing power for the payment of principal and interest. However, the
taxing power of any governmental entity may be limited by provisions of state
constitutions or laws and its credit will depend on many factors, including an
erosion of the tax base resulting from population declines, natural disasters,
declines in the state's industrial base or an inability to attract new
industries, economic

4
<PAGE>
limits on the ability to tax without eroding the tax base and the extent to
which the entity relies on federal or state aid, access to capital markets or
other factors beyond the entity's control. In addition, political restrictions
on the ability to tax and budgetary constraints affecting state governmental aid
may have an adverse impact on the creditworthiness of cities, counties, school
districts and other local governmental units.

As a result of the recent recession's adverse impact upon both revenues and
expenditures, as well as other factors, many state and local governments have
confronted deficits which were the most severe in recent years. Many issuers are
facing highly difficult choices about significant tax increases and spending
reductions in order to restore budgetary balance. The failure to implement these
actions on a timely basis could force these issuers to issue additional debt to
finance deficits or cash flow needs and could lead to a reduction of their bond
ratings and the value of their outstanding bonds.

MORAL OBLIGATION BONDS

The Portfolio may include 'moral obligation' bonds. If an issuer of moral
obligation bonds is unable to meet its obligations, the repayment of the bonds
becomes a moral commitment but not a legal obligation of the state or local
government in question. Even though the state or local government may be called
on to restore any deficits in capital reserve funds of the agencies or
authorities which issued the bonds, any restoration generally requires
appropriation by the state or local legislature and does not constitute a
legally enforceable obligation or debt of the state or local government. The
agencies or authorities generally have no taxing power.

REFUNDED BONDS

Refunded bonds are typically secured by direct obligations of the U.S.
Government or in some cases obligations guaranteed by the U.S. Government placed
in an escrow account maintained by an independent trustee until maturity or a
predetermined redemption date. These obligations are generally noncallable prior
to maturity or the predetermined redemption date. In a few isolated instances,
however, bonds which were thought to be escrowed to maturity have been called
for redemption prior to maturity.

MUNICIPAL REVENUE BONDS

Municipal revenue bonds are tax-exempt securities issued by states,
municipalities, public authorities or similar entities to finance the cost of
acquiring, constructing or improving various projects. Municipal revenue bonds
are not general obligations of governmental entities backed by their taxing
power and payment is generally solely dependent upon the creditworthiness of the
public issuer or the financed project or state appropriations. Examples of
municipal revenue bonds are:

Municipal utility bonds, including electrical, water and sewer revenue
bonds, whose payments are dependent on various factors, including the rates
the utilities may charge, the demand for their services and their operating
costs, including expenses to comply with environmental legislation and
other energy and licensing laws and regulations. Utilities are particularly
sensitive to, among other things, the effects of inflation on operating and
construction costs, the unpredictability of future usage requirements, the
costs and availability of fuel and, with certain electric utilities, the
risks associated with the nuclear industry;

Lease rental bonds which are generally issued by governmental financing
authorities with no direct taxing power for the purchase of equipment or
construction of buildings that will be used by a state or local government.
Lease rental bonds are generally subject to an annual risk that the lessee
government might not appropriate funds for the leasing rental payments to
service the bonds and may also be subject to the risk that rental
obligations may terminate in the event of damage to or destruction or
condemnation of the equipment or building;

Multi-family housing revenue bonds and single family mortgage revenue
bonds which are issued to provide financing for various housing projects
and which are payable primarily from the revenues derived from mortgage
loans to housing projects for low to moderate income families or notes
secured by mortgages on residences; repayment of this type of bonds is
therefore dependent upon, among other things, occupancy levels, rental
income, the rate of default on underlying mortgage loans, the ability of
mortgage insurers to pay claims, the continued availability of federal,
state or local housing subsidy programs, economic conditions in local
markets, construction costs, taxes, utility costs and other operating
expenses and the managerial ability of project managers. Housing bonds are
generally prepayable at any time and therefore their average life will
ordinarily be less than their stated maturities;

5
<PAGE>
Hospital and health care facility bonds whose payments are dependent
upon revenues of hospitals and other health care facilities. These revenues
come from private third-party payors and government programs, including the
Medicare and Medicaid programs, which have generally undertaken cost
containment measures to limit payments to health care facilities. Hospitals
and health care facilities are subject to various legal claims by patients
and others and are adversely affected by increasing costs of insurance;

Airport, port, highway and transit authority revenue bonds which are
dependent for payment on revenues from the financed projects, including
user fees from ports and airports, tolls on turnpikes and bridges, rents
from buildings, transit fare revenues and additional financial resources
including federal and state subsidies, lease rentals paid by state or local
governments or a pledge of a special tax such as a sales tax or a property
tax. In the case of the air travel industry, airport income is largely
affected by the airlines' ability to meet their obligations under use
agreements which in turn is affected by increased competition among
airlines, excess capacity and increased fuel costs, among other factors;

Solid waste disposal bonds which are generally payable from dumping and
user fees and from revenues that may be earned by the facility on the sale
of electrical energy generated in the combustion of waste products and
which are therefore dependent upon the ability of municipalities to fully
utilize the facilities, sufficient supply of waste for disposal, economic
or population growth, the level of construction and maintenance costs, the
existence of lower-cost alternative modes of waste processing and
increasing environmental regulation. A recent decision of the U.S. Supreme
Court limiting a municipality's ability to require use of its facilities
may have an adverse affect on the credit quality of various issues of
these bonds;

Special tax bonds which are not secured by general tax revenues but are
only payable from and secured by the revenues derived by a municipality
from a particular tax--for example, a tax on the rental of a hotel room, on
the purchase of food and beverages, on the rental of automobiles or on the
consumption of liquor and may therefore be adversely affected by a
reduction in revenues resulting from a decline in the local economy or
population or a decline in the consumption, use or cost of the goods and
services that are subject to taxation;

Student loan revenue bonds which are typically secured by pledges of new
or existing student loans. The loans, in turn, are generally either
guaranteed by eligible guarantors and reinsured by the Secretary of the
U.S. Department of Education, directly insured by the federal government,
or financed as part of supplemental or alternative loan programs within a
state (e.g., loan repayments are not guaranteed). These bonds often permit
the issuer to enter into interest rate swap agreements with eligible
counterparties in which event the bonds are subject to the additional risk
of the counterparty's ability to fulfill its swap obligation;

University and college bonds, the payments on which are dependent upon
various factors, including the size and diversity of their sources of
revenues, enrollment, reputation, the availability of endowments and other
funds and, in the case of public institutions, the financial condition of
the relevant state or other governmental entity and its policies with
respect to education; and

Tax increment and tax allocation bonds, which are secured by ad valorem
taxes imposed on the incremental increase of taxable assessed valuation of
property within a jurisdiction above an established base of assessed value.
The issuers of these bonds do not have general taxing authority and the tax
assessments on which the taxes used to service the bonds are based may be
subject to devaluation due to market price declines or governmental action.

Puerto Rico. Certain Bonds may be affected by general economic conditions
in the Commonwealth of Puerto Rico. Puerto Rico's economy is largely dependent
for its development on federal programs and current federal budgetary policies
suggest that an expansion of its programs is unlikely. Reductions in federal tax
benefits or incentives or curtailment of spending programs could adversely
affect the Puerto Rican economy.

Industrial Development Revenue Bonds. Industrial development revenue bonds
are municipal obligations issued to finance various privately operated projects
including pollution control and manufacturing facilities. Payment is generally
solely dependent upon the creditworthiness of the corporate operator of the
project and, in certain cases, an affiliated or third party guarantor and may be
affected by economic factors relating to the particular industry as well as
varying degrees of governmental regulation. In many cases industrial revenue
bonds do not have the benefit of covenants which would prevent the corporations
from engaging in capital restructurings

6
<PAGE>
or borrowing transactions which could reduce their ability to meet their
obligations and result in a reduction in the value of the Portfolio.

BONDS BACKED BY LETTERS OF CREDIT OR INSURANCE

Certain Bonds may be secured by letters of credit issued by commercial
banks or savings banks, savings and loan associations and similar thrift
institutions or are direct obligations of banks or thrifts. The letter of credit
may be drawn upon, and the Bonds redeemed, if an issuer fails to pay amounts due
on the Bonds or, in certain cases, if the interest on the Bond becomes taxable.
Letters of credit are irrevocable obligations of the issuing institutions. The
profitability of a financial institution is largely dependent upon the credit
quality of its loan portfolio which, in turn, is affected by the institution's
underwriting criteria, concentrations within the portfolio and specific industry
and general economic conditions. The operating performance of financial
institutions is also impacted by changes in interest rates, the availability and
cost of funds, the intensity of competition and the degree of governmental
regulation.

Certain Bonds may be insured or guaranteed by insurance companies listed
below. The claims-paying ability of each of these companies, unless otherwise
indicated, was rated AAA by Standard & Poor's or another nationally recognized
rating organization at the time the insured Bonds were purchased by the Fund.
The ratings are subject to change at any time at the discretion of the rating
agencies. In the event that the rating of an Insured Fund is reduced, the
Sponsors are authorized to direct the Trustee to obtain other insurance on
behalf of the Fund. The insurance policies guarantee the timely payment of
principal and interest on the Bonds but do not guarantee their market value or
the value of the Units. The insurance policies generally do not provide for
accelerated payments of principal or cover redemptions resulting from events of
taxability.

The following summary information relating to the listed insurance
companies has been obtained from publicly available information:

<TABLE><CAPTION>
FINANCIAL INFORMATION
AS OF MARCH 31, 1995
(IN MILLIONS OF DOLLARS)
-------------------------------------
POLICYHOLDERS'
NAME DATE ESTABLISHED ADMITTED ASSETS SURPLUS
----------------------------------------------------- ----------------- --------------- --------------------
<S> <C> <C> <C>
AMBAC Indemnity Corporation.......................... 1970 $ 2,204 $ 792
Asset Guaranty Insurance Co. (AA by S&P)............. 1988 166 77
Capital Guaranty Insurance Company................... 1986 309 171
Capital Markets Assurance Corp....................... 1987 210 138
Connie Lee Insurance Company......................... 1987 195 108
Continental Casualty Company......................... 1948 19,816 3,502
Financial Guaranty Insurance Company................. 1984 2,172 963
Financial Security Assurance Inc..................... 1984 806 341
Firemen's Insurance Company of Newark, NJ 1855 2,038 390
Industrial Indemnity Co. (HIBI)...................... 1920 1,719 309
MBIA Insurance Corporation........................... 1986 3,504 1,132
</TABLE>

Insurance companies are subject to extensive regulation and supervision
where they do business by state insurance commissioners who regulate the
standards of solvency which must be maintained, the nature of and limitations on
investments, reports of financial condition, and requirements regarding reserves
for unearned premiums, losses and other matters. A significant portion of the
assets of insurance companies are required by law to be held in reserve against
potential claims on policies and is not available to general creditors. Although
the federal government does not regulate the business of insurance, federal
initiatives including pension regulation, controls on medical care costs,
minimum standards for no-fault automobile insurance, national health insurance,
tax law changes affecting life insurance companies and repeal of the antitrust
exemption for the insurance business can significantly impact the insurance
business.

STATE RISK FACTORS

Investment in a single State Trust, as opposed to a Fund which invests in
the obligations of several states, may involve some additional risk due to the
decreased diversification of economic, political, financial and market

7
<PAGE>
risks. A brief description of the factors which may affect the financial
of tax considerations relating to that State, appear in Part A (or for certain
State Trusts, Part C), of the Prospectus; further information is contained in
the Information Supplement.

LITIGATION AND LEGISLATION

The Sponsors do not know of any pending litigation as of the initial date
of deposit which might reasonably be expected to have a material adverse effect
upon the Fund. At any time after the initial date of deposit, litigation may be
initiated on a variety of grounds, or legislation may be enacted, affecting the
Bonds in the Fund. Litigation, for example, challenging the issuance of
pollution control revenue bonds under environmental protection statutes may
affect the validity of certain Bonds or the tax-free nature of their interest.
While the outcome of litigation of this nature can never be entirely predicted,
opinions of bond counsel are delivered on the date of issuance of each Bond to
the effect that it has been validly issued and that the interest thereon is
exempt from federal income tax. From time to time, proposals are introduced in
Congress to, among other things, reduce federal income tax rates, impose a flat
tax, exempt investment income from tax or abolish the federal income tax and
replace it with another form of tax. Enactment of any such legislation could
adversely affect the value of the Units. The Fund, however, cannot predict what
legislation, if any, in respect of tax rates may be proposed, nor can it predict
which proposals, if any, might be enacted.

Also, certain proposals, in the form of state legislative proposals or
voter initiatives, seeking to limit real property taxes have been introduced in
various states, and an amendment to the constitution of the State of California,
providing for strict limitations on real property taxes, has had a significant
impact on the taxing powers of local governments and on the financial condition
of school districts and local governments in California. In addition, other
factors may arise from time to time which potentially may impair the ability of
issuers to make payments due on the Bonds. Under the Federal Bankruptcy Code,
for example, municipal bond issuers, as well as any underlying corporate
obligors or guarantors, may proceed to restructure or otherwise alter the terms
of their obligations.

From time to time Congress considers proposals to prospectively and
retroactively tax the interest on state and local obligations, such as the
Bonds. The Supreme Court clarified in South Carolina v. Baker (decided on April
20, 1988) that the U.S. Constitution does not prohibit Congress from passing a
nondiscriminatory tax on interest on state and local obligations. This type of
legislation, if enacted into law, could require investors to pay income tax on
interest from the Bonds and could adversely affect an investment in Units. See
Taxes.

PAYMENT OF THE BONDS AND LIFE OF THE FUND

The size and composition of the Portfolio will change over time. Most of
the Bonds are subject to redemption prior to their stated maturity dates
pursuant to optional refunding or sinking fund redemption provisions or
otherwise. In general, optional refunding redemption provisions are more likely
to be exercised when the value of a Bond is at a premium over par than when it
is at a discount from par. Some Bonds may be subject to sinking fund and
extraordinary redemption provisions which may commence early in the life of the
Fund. Additionally, the size and composition of the Fund will be affected by the
level of redemptions of Units that may occur from time to time. Principally,
this will depend upon the number of investors seeking to sell or redeem their
Units and whether or not the Sponsors are able to sell the Units acquired by
them in the secondary market. As a result, Units offered in the secondary market
may not represent the same face amount of Bonds as on the initial date of
deposit. Factors that the Sponsors will consider in determining whether or not
to sell Units acquired in the secondary market include the diversity of the
Portfolio, the size of the Fund relative to its original size, the ratio of Fund
expenses to income, the Fund's current and long-term returns, the degree to
which Units may be selling at a premium over par and the cost of maintaining a
current prospectus for the Fund. These factors may also lead the Sponsors to
seek to terminate the Fund earlier than its mandatory termination date.

FUND TERMINATION

The Fund will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Bond or upon the consent of investors holding 51% of the
Units. The Fund may also be terminated earlier by the Sponsors once the total
assets of the Fund have fallen below the minimum value specified in Part A of
the Prospectus. A decision by the Sponsors to terminate

8
<PAGE>
the Fund early will be based on factors similar to those considered by the
Sponsors in determining whether to continue the sale of Units in the secondary
market.

Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Fund will seek to dispose of any Bonds remaining in the Portfolio although
any Bond unable to be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final disposition. A proportional
share of the expenses associated with termination, including brokerage costs in
disposing of Bonds, will be borne by investors remaining at that time. This may
have the effect of reducing the amount of proceeds those investors are to
receive in any final distribution.

LIQUIDITY

Up to 40% of the value of the Portfolio may be attributable to guarantees
or similar security provided by corporate entities. These guarantees or other
security may constitute restricted securities that cannot be sold publicly by
the Trustee without registration under the Securities Act of 1933, as amended.
The Sponsors nevertheless believe that, should a sale of the Bonds guaranteed or
secured be necessary in order to meet redemption of Units, the Trustee should be
able to consummate a sale with institutional investors.

The principal trading market for the Bonds will generally be in the
over-the-counter market and the existence of a liquid trading market for the
Bonds may depend on whether dealers will make a market in them. There can be no
assurance that a liquid trading market will exist for any of the Bonds,
especially since the Fund may be restricted under the Investment Company Act of
1940 from selling Bonds to any Sponsor. The value of the Portfolio will be
adversely affected if trading markets for the Bonds are limited or absent.

HOW TO BUY UNITS

Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price plus accrued interest on the Units.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund.

PUBLIC OFFERING PRICE

In the initial offering period, the Public Offering Price is based on the
next offer side evaluation of the Bonds, and includes a sales charge based on
the number of Units of a single Fund or Trust purchased on the same or any
preceding day by a single purchaser. See Initial Offering sales charge schedule
in Appendix B. The purchaser or his dealer must notify the Sponsors at the time
of purchase of any previous purchase to be aggregated and supply sufficient
information to permit confirmation of eligibility; acceptance of the purchase
order is subject to confirmation. Purchases of Fund Units may not be aggregated
with purchases of any other unit trust. This procedure may be amended or
terminated at any time without notice.

In the secondary market (after the initial offering period), the Public
Offering Price is based on the bid side evaluation of the Bonds, and includes a
sales charge based (a) on the number of Units of the Fund and any other Series
of Municipal Investment Trust Fund purchased in the secondary market on the same
day by a single purchaser (see Secondary Market sales charge schedule in
Appendix B) and (b) the maturities of the underlying Bonds (see Effective Sales
Charge Schedule in Appendix B). To qualify for a reduced sales charge, the
dealer must confirm that the sale is to a single purchaser or is purchased for
its own account and not for distribution. For these purposes, Units held in the
name of the purchaser's spouse or child under 21 years of age are deemed to be
purchased by a single purchaser. A trustee or other fiduciary purchasing
securities for a single trust estate or single fiduciary account is also
considered a single purchaser.

In the secondary market, the Public Offering Price is further reduced
depending on the maturities of the various Bonds in the Portfolio, by
determining a sales charge percentage for each Bond, as stated in Effective
Sales Charge in Appendix B. The sales charges so determined, multiplied by the
bid side evaluation of the Bonds, are aggregated and the total divided by the
number of Units outstanding to determine the Effective Sales Charge. On any
purchase, the Effective Sales Charge is multiplied by the applicable secondary
market sales charge percentage (depending on the number of Units purchased) in
order to determine the sales charge component of the Public Offering Price.

9
<PAGE>
Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at any time at prices
including a sales charge of not less than $5 per Unit.

Net accrued interest is added to the Public Offering Price, the Sponsors'
Repurchase Price and the Redemption Price per Unit. This represents the interest
accrued on the Bonds, net of Fund expenses, from the initial date of deposit to,
but not including, the settlement date for Units (less any prior distributions
of interest income to investors). Bonds deposited also carry accrued but unpaid
interest up to the initial date of deposit. To avoid having investors pay this
additional accrued interest (which earns no return) when they purchase Units,
the Trustee advances and distributes this amount to the Sponsors; it recovers
this advance from interest received on the Bonds. Because of varying interest
payment dates on the Bonds, accrued interest at any time will exceed the
interest actually received by the Fund.

EVALUATIONS

Evaluations are determined by the independent Evaluator on each Business
Day. This excludes Saturdays, Sundays and the following holidays as observed by
the New York Stock Exchange: New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. Bond
evaluations are based on closing sales prices (unless the Evaluator deems these
prices inappropriate). If closing sales prices are not available, the evaluation
is generally determined on the basis of current bid or offer prices for the
Bonds or comparable securities or by appraisal or by any combination of these
methods. In the past, the bid prices of publicly offered tax-exempt issues have
been lower than the offer prices by as much as 3 1/2% or more of face amount in
the case of inactively traded issues and as little as 1/2 of 1% in the case of
actively traded issues, but the difference between the offer and bid prices has
averaged between 1 and 2% of face amount. Neither the Sponsors, the Trustee or
the Evaluator will be liable for errors in the Evaluator's judgment. The fees of
the Evaluator will be borne by the Fund.

CERTIFICATES

Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.

HOW TO SELL UNITS

SPONSORS' MARKET FOR UNITS

You can sell your Units at any time without a fee. The Sponsors (although
not obligated to do so) will normally buy any Units offered for sale at the
repurchase price next computed after receipt of the order. The Sponsors have
maintained secondary markets in Defined Asset Funds for over 20 years. Primarily
because of the sales charge and fluctuations in the market value of the Bonds,
the sale price may be less than the cost of your Units. You should consult your
financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices for Units.

The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons; in that event, the
Sponsors may still purchase Units at the redemption price as a service to
investors. The Sponsors may reoffer or redeem Units repurchased.

TRUSTEE'S REDEMPTION OF UNITS

You may redeem your Units by sending the Trustee a redemption request
together with any certificates you hold. Certificates must be properly endorsed
or accompanied by a written transfer instrument with signatures guaranteed by an
eligible institution. In certain instances, additional documents may be required
such as a certificate of death, trust instrument, certificate of corporate
authority or appointment as executor, administrator or guardian. If the Sponsors
are maintaining a market for Units, they will purchase any Units tendered at the
repurchase price described above. Municipal Investment Trust Fund has no
back-end load or 12b-1 fees, so there is never a fee for cashing in your
investment (see Appendix B). If they do not purchase Units tendered, the

10
<PAGE>
Trustee is authorized in its discretion to sell Units in the over-the-counter
market if it believes it will obtain a higher net price for the redeeming
investor.

By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Bonds, net accrued interest, cash and the value of any other Fund assets;
deducting unpaid taxes or other governmental charges, accrued but unpaid Fund
expenses, unreimbursed Trustee advances, cash held to redeem Units or for
distribution to investors and the value of any other Fund liabilities; and
dividing the result by the number of outstanding Units. Bonds are evaluated on
the offer side during the initial offering period and on the bid side
thereafter.

If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Bonds selected by the Agent for the Sponsors
based on market and credit factors determined to be in the best interest of the
Fund. These sales are often made at times when the Bonds would not otherwise be
sold and may result in lower prices than might be realized otherwise and will
also reduce the size and diversity of the Fund.

Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Bonds not reasonably practicable, or
for any other period permitted by the SEC.

INCOME, DISTRIBUTIONS AND REINVESTMENT

INCOME

Some of the Bonds may have been purchased on a when-issued basis or may
have a delayed delivery. Since interest on these Bonds does not begin to accrue
until the date of their delivery to the Fund, the Trustee's annual fee and
expenses may be reduced to provide tax-exempt income to investors for this
non-accrual period. If a when-issued Bond is not delivered until later than
expected and the amount of the Trustee's annual fee and expenses is insufficient
to cover the additional accrued interest, the Sponsors will treat the contracts
as failed Bonds. The Trustee is compensated for its fee reduction by drawing on
the letter of credit deposited by the Sponsors before the settlement date for
these Bonds and depositing the proceeds in a non-interest bearing account for
the Fund.

Interest received is credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund.

DISTRIBUTIONS

Each Unit receives an equal share of monthly distributions of interest
income net of estimated expenses. Interest on the Bonds is generally received by
the Fund on a semi-annual or annual basis. Because interest on the Bonds is not
received at a constant rate throughout the year, any Monthly Income Distribution
may be more or less than the interest actually received. To eliminate
fluctuations in the Monthly Income Distribution, the Trustee will advance
amounts necessary to provide approximately equal interest distributions; it will
be reimbursed, without interest, from interest received on the Bonds, but the
Trustee is compensated, in part, by holding the Fund's cash balances in
non-interest bearing accounts. Along with the Monthly Income Distributions, the
Trustee will distribute the investor's pro rata share of principal received from
any disposition of a Bond to the extent available for distribution. In addition,
for Defined Asset Funds Municipal Series, distributions of amounts necessary to
pay the deferred portion of the sales charge will be made from the Capital and
Income Accounts to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations.

The initial estimated annual income per Unit, after deducting estimated
annual Fund expenses (and, for Defined Asset Funds Municipal Series, the portion
of the deferred sales charge payable from interest income) as stated in Part A
of the Prospectus, will change as Bonds mature, are called or sold or otherwise
disposed of, as replacement bonds are deposited and as Fund expenses change.
Because the Portfolio is not actively managed, income distributions will
generally not be affected by changes in interest rates. Depending on the
financial conditions of the issuers of the Bonds, the amount of income should be
substantially maintained as long as the

11
<PAGE>
Portfolio remains unchanged; however, optional bond redemptions or other
Portfolio changes may occur more frequently when interest rates decline, which
would result in early returns of principal and possibly earlier termination of
the Fund.

REINVESTMENT

Distributions will be paid in cash unless the investor elects to have
distributions reinvested without sales charge in the Municipal Fund Accumulation
Program, Inc. The Program is an open-end management investment company whose
investment objective is to obtain income exempt from regular federal income
taxes by investing in a diversified portfolio of state, municipal and public
authority bonds rated A or better or with comparable credit characteristics.
Reinvesting compounds earnings free from federal tax. Investors participating in
the Program will be subject to state and local income taxes to the same extent
as if the distributions had been received in cash, and most of the income on the
Program is subject to state and local income taxes. For more complete
information about the Program, including charges and expenses, request the
Program's prospectus from the Trustee. Read it carefully before you decide to
participate. Written notice of election to participate must be received by the
Trustee at least ten days before the Record Day for the first distribution to
which the election is to apply.

FUND EXPENSES

Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund.
Fitch, as Credit Consultant, will be compensated by the Fund for providing
ongoing monitoring of the Portfolio. The fee to be paid by the Fund to the
Credit Consultant for providing ongoing monitoring of the Portfolio generally
shall be the amount set forth under Estimated Annual Fund Operating Expenses in
Part A, based on the face amount of Bonds in the Portfolio, computed annually,
payable quarterly. In addition, the Credit Consultant receives fees from the
issuers of the securities that it rates. The Trustee's annual fee is payable in
monthly installments. The Trustee also benefits when it holds cash for the Fund
in non-interest bearing accounts. Possible additional charges include Trustee
fees and expenses for extraordinary services, costs of indemnifying the Trustee
and the Sponsors, costs of action taken to protect the Fund and other legal fees
and expenses, Fund termination expenses and any governmental charges. The
Trustee has a lien on Fund assets to secure reimbursement of these amounts and
may sell Bonds for this purpose if cash is not available. The Sponsors may be
reimbursed for their costs of providing bookkeeping and administrative services
to the Fund, currently estimated at $0.10 per Unit. The Trustee's, Credit
Consultant's and Evaluator's fees may be adjusted for inflation without
investors' approval.

All or a portion of expenses in establishing the Fund, including the cost
of the initial preparation of documents relating to the Fund, Federal and State
registration fees, the initial fees and expenses of the Trustee, legal expenses
and any other out-of-pocket expenses will be paid by the Fund and amortized over
five years. Advertising and selling expenses will be paid from the Underwriting
Account at no charge to the Fund. Sales charges on Defined Asset Funds range
from under 1.0% to 5.5%. This may be less than you might pay to buy and hold a
comparable managed fund. Defined Asset Funds can be a cost-effective way to
purchase and hold investments. Annual operating expenses are generally lower
than for managed funds. Because Defined Asset Funds have no management fees,
limited transaction costs and no ongoing marketing expenses, operating expenses
are generally less than 0.25% a year. When compounded annually, small
differences in expense ratios can make a big difference in your investment
results.

TAXES

The following discussion addresses only the U.S. federal and certain New
York State and City income tax consequences under current law of Units held as
capital assets and does not address the tax consequences of Units held by
dealers, financial institutions or insurance companies or other investors with
special circumstances.

In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:

The Fund is not an association taxable as a corporation for federal
income tax purposes. Each investor will be considered the owner of a pro
rata portion of each Bond in the Fund under the grantor trust rules of
Sections 671-679 of the Internal Revenue Code of 1986, as amended (the
'Internal Revenue Code'). Each investor will be considered to have received
the interest and accrued the original issue discount, if any, on his pro
rata portion of each Bond when interest on the Bond is received or original
issue discount is accrued by

12
<PAGE>
the Fund. The investor's basis in his Units will be equal to the cost of
his Units, including any up-front sales charge.

When an investor pays for accrued interest, the investor's confirmation
of purchase will report to him the amount of accrued interest for which he
paid. These investors will receive the accrued interest amount as part of
their first monthly distribution. Accordingly, these investors should
reduce their tax basis by the accrued interest amount after the first
monthly distribution.

An investor will recognize taxable gain or loss when all or part of his
pro rata portion of a Bond is disposed of by the Fund. An investor will
also be considered to have disposed of all or a portion of his pro rata
portion of each Bond when he sells or redeems all or some of his Units. An
investor who is treated as having acquired his pro rata portion of a Bond
at a premium will be required to amortize the premium over the term of the
Bond. The amortization is only a reduction of basis for the investor's pro
rata portion of the Bond and does not result in any deduction against the
investor's income. Therefore, under some circumstances, an investor may
recognize taxable gain when his pro rata portion of a Bond is disposed of
for an amount equal to or less than his original tax basis therefor.

Under Section 265 of the Internal Revenue Code, a non-corporate investor
is not entitled to a deduction for his pro rata share of fees and expenses
of the Fund, because the fees and expenses are incurred in connection with
the production of tax-exempt income. Further, if borrowed funds are used by
an investor to purchase or carry Units of the Fund, interest on this
indebtedness will not be deductible for federal income tax purposes. In
addition, under rules used by the Internal Revenue Service, the purchase of
Units may be considered to have been made with borrowed funds even though
the borrowed funds are not directly traceable to the purchase of Units.

Under the income tax laws of the State and City of New York, the Fund is
not an association taxable as a corporation and income received by the Fund
will be treated as the income of the investors in the same manner as for
federal income tax purposes, but will not necessarily be tax-exempt.

The foregoing discussion relates only to U.S. federal and certain
aspects of New York State and City income taxes. Depending on their state
of residence, investors may be subject to state and local taxation and
should consult their own tax advisers in this regard.

* * *

In the opinion of bond counsel rendered on the date of issuance of each
Bond, the interest on each Bond is excludable from gross income under existing
law for regular federal income tax purposes (except in certain circumstances
depending on the investor) but may be subject to state and local taxes, and
interest on some or all of the Bonds may become subject to regular federal
income tax, perhaps retroactively to their date of issuance, as a result of
changes in federal law or as a result of the failure of issuers (or other users
of the proceeds of the Bonds) to comply with certain ongoing requirements. If
the interest on a Bond should be determined to be taxable, the Bond would
generally have to be sold at a substantial discount. In addition, investors
could be required to pay income tax on interest received prior to the date on
which the interest is determined to be taxable.

Neither the Sponsors nor Davis Polk & Wardwell have made or will make any
review of the proceedings relating to the issuance of the Bonds or the basis for
these opinions and there can be no assurance that the issuer (and other users)
will comply with any ongoing requirements necessary for a Bond to maintain its
tax-exempt character.

RECORDS AND REPORTS

The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Bonds and a copy of the Indenture, and
supplemental information on the operations of the Fund and the risks
associated with the Bonds held by the Fund, which may be inspected by investors
at reasonable times during business hours.

With each distribution, the Trustee includes a statement of the interest
and any other receipts being distributed. Within five days after deposit of
Bonds in exchange or substitution for Bonds (or contracts) previously deposited,
the Trustee will send a notice to each investor, identifying both the Bonds
removed and the replacement bonds deposited. The Trustee sends each investor of
record an annual report summarizing transactions in the Fund's accounts and
amounts distributed during the year and Bonds held, the number of Units

13
<PAGE>
outstanding and the Redemption Price at year end, the interest received by the
Fund on the Bonds, the gross proceeds received by the Fund from the disposition
of any Bond (resulting from redemption or payment at maturity or sale of any
Bond), and the fees and expenses paid by the Fund, among other matters. The
Trustee will also furnish annual information returns to each investor and to the
Internal Revenue Service. Investors are required to report to the Internal
Revenue Service the amount of tax-exempt interest received during the year.
Investors may obtain copies of Bond evaluations from the Trustee to enable them
to comply with federal and state tax reporting requirements. Fund accounts are
audited annually by independent accountants selected by the Sponsors. Audited
financial statements are available from the Trustee on request.

TRUST INDENTURE

The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors, the Trustee and the Evaluator. This Prospectus
summarizes various provisions of the Indenture, but each statement is qualified
in its entirety by reference to the Indenture.

The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified on the substance of any amendment.

The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The Evaluator may resign or be removed by the Sponsors and the
Trustee without the investors' consent. The resignation or removal of either
becomes effective upon acceptance of appointment by a successor; in this case,
the Sponsors will use their best efforts to appoint a successor promptly;
however, if upon resignation no successor has accepted appointment within 30
days after notification, the resigning Trustee or Evaluator may apply to a court
of competent jurisdiction to appoint a successor.

Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains and is agreeable to the resignation. A new Sponsor may be
appointed by the remaining Sponsors and the Trustee to assume the duties of the
resigning Sponsor. If there is only one Sponsor and it fails to perform its
duties or becomes incapable of acting or bankrupt or its affairs are taken over
by public authorities, the Trustee may appoint a successor Sponsor at reasonable
rates of compensation, terminate the Indenture and liquidate the Fund or
continue to act as Trustee without a Sponsor. Merrill Lynch, Pierce, Fenner &
Smith Incorporated has been appointed as Agent for the Sponsors by the other
Sponsors.

The Sponsors, the Trustee and the Evaluator are not liable to investors or
any other party for any act or omission in the conduct of their responsibilities
absent bad faith, willful misfeasance, negligence (gross negligence in the case
of a Sponsor or the Evaluator) or reckless disregard of duty. The Indenture
contains customary provisions limiting the liability of the Trustee.

MISCELLANEOUS

LEGAL OPINION

The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.

AUDITORS

The Statement of Condition on the back cover of the Prospectus was audited
by Deloitte & Touche LLP, independent accountants, as stated in their opinion.
It is included in reliance upon that opinion given on the authority of that firm
as experts in accounting and auditing.

14
<PAGE>
TRUSTEE

The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.

SPONSORS

The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-
owned subsidiary of The Travelers Inc.; Prudential Securities Incorporated, an
indirect wholly-owned subsidiary of the Prudential Insurance Company of America;
Dean Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter
Discover & Co. and PaineWebber Incorporated, a wholly-owned subsidiary of
PaineWebber Group Inc. Each Sponsor, or one of its predecessor corporations, has
acted as Sponsor of a number of series of unit investment trusts. Each Sponsor
has acted as principal underwriter and managing underwriter of other investment
companies. The Sponsors, in addition to participating as members of various
selling groups or as agents of other investment companies, execute orders on
behalf of investment companies for the purchase and sale of securities of these
companies and sell securities to these companies in their capacities as brokers
or dealers in securities.

PUBLIC DISTRIBUTION

In the initial offering period Units will be distributed to the public
through the Underwriting Account and dealers who are members of the National
Association of Securities Dealers, Inc. The initial offering period is 30 days
or less if all Units are sold. If some Units initially offered have not been
sold, the Sponsors may extend the initial offering period for up to four
additional successive 30-day periods.

The Sponsors intend to qualify Units for sale in all states in which
qualification is deemed necessary through the Underwriting Account and by
dealers who are members of the National Association of Securities Dealers, Inc.;
however, Units of a State trust will be offered for sale only in the State for
which the trust is named, except that Units of a New Jersey trust will also be
offered in Connecticut, Units of a Florida trust will also be offered in New
York and Units of a New York trust will also be offered in Connecticut, Florida
and Puerto Rico. The Sponsors do not intend to qualify Units for sale in any
foreign countries and this Prospectus does not constitute an offer to sell Units
in any country where Units cannot lawfully be sold. Sales to dealers and to
introducing dealers, if any, will initially be made at prices which represent a
concession from the Public Offering Price, but the Agent for the Sponsors
reserves the right to change the rate of any concession from time to time. Any
dealer or introducing dealer may reallow a concession up to the concession to
dealers.

UNDERWRITERS' AND SPONSORS' PROFITS

Upon sale of the Units, the Underwriters will be entitled to receive sales
charges. The Sponsors also realize a profit or loss on deposit of the Bonds
equal to the difference between the cost of the Bonds to the Fund (based on the
offer side evaluation on the initial date of deposit) and the Sponsors' cost of
the Bonds. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Bonds it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Underwriting Account also may realize profits or sustain losses as a result of
fluctuations after the initial date of deposit in the Public Offering Price of
the Units. In maintaining a secondary market for Units, the Sponsors will also
realize profits or sustain losses in the amount of any difference between the
prices at which they buy Units and the prices at which they resell these Units
(which include the sales charge) or the prices at which they redeem the Units.
Cash, if any, made available by buyers of Units to the Sponsors prior to a
settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.

FUND PERFORMANCE

Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of income and principal
distributions reinvested, may be included from time to time in advertisements,
sales literature, reports and other information furnished to current or
prospective investors. Total return figures are not averaged, and may not
reflect deduction of the sales charge, which would decrease the return. Average
annualized return figures reflect deduction of the maximum sales charge. No
provision is made for any income taxes payable.

<PAGE>
Past performance may not be indicative of future results. The Fund is not
actively managed. Unit price and return fluctuate with the value of the Bonds in
the Portfolio, so there may be a gain or loss when Units are sold.

Fund performance may be compared to performance on the same basis (with
distributions reinvested) of Moody's Municipal Bond Averages or performance data
from publications such as Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Money Magazine, The New York Times, U.S. News and World
Report, Barron's Business Week, CDA Investment Technology, Inc., Forbes Magazine
or Fortune Magazine. As with other performance data, performance comparisons
should not be considered representative of the Fund's relative performance for
any future period.

DEFINED ASSET FUNDS

Because each Defined Asset Fund is a preselected portfolio of bonds, you
know the securities, maturities, call dates and ratings before you invest. Of
course, the Portfolio will change somewhat over time, as Bonds mature, are
redeemed or are sold to meet Unit redemptions or in other limited circumstances.
Because the Portfolio is not actively managed and principal is returned as the
Bonds are disposed of, this principal should be relatively unaffected by changes
in interest rates.

Municipal Investment Trust Funds have provided investors with tax-free
income for more than 30 years. For decades informed investors have purchased
unit investment trusts for dependability and professional selection of
investments. Defined Asset Funds' philosophy is to allow investors to 'buy with
knowledge' (because, unlike managed funds, the portfolio of municipal bonds and
the return are relatively fixed) and 'hold with confidence' (because the
portfolio is professionally selected and regularly reviewed). Defined Asset
Funds offers an array of simple and convenient investment choices, suited to fit
a wide variety of personal financial goals--a buy and hold strategy for capital
accumulation, such as for children's education or retirement, or attractive,
regular current income consistent with the preservation of principal. Tax-exempt
income can help investors keep more today for a more secure financial future. It
can also be important in planning because tax brackets may increase with higher
earnings or changes in tax laws. Unit investment trusts are particularly suited
for the many investors who prefer to seek long-term income by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
One's investment objectives may call for a combination of Defined Asset Funds.

One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.

EXCHANGE OPTION

You may exchange Fund Units for units of certain other Defined Asset Funds
subject only to a reduced sales charge. You may exchange your units of any
Municipal Investment Trust Fund Intermediate Term Series with a regular maximum
sales charge of at least 3.25%, of any other Defined Asset Fund with a regular
maximum sales charge of at least 3.50%, or of any unaffiliated unit trust with a
regular maximum sales charge of at least 3.0%, for Units of this Fund at their
relative net asset values, subject only to a reduced sales charge, or to any
remaining Deferred Sales Charge, as applicable.

To make an exchange, you should contact your financial professional to find
out what suitable Exchange Funds are available and to obtain a prospectus. You
may acquire units of only those Exchange Funds in which the Sponsors are
maintaining a secondary market and which are lawfully for sale in the state
where you reside. Except for the reduced sales charge, an exchange is a taxable
event normally requiring recognition of any gain or loss on the units exchanged.
However, the Internal Revenue Service may seek to disallow a loss if the
portfolio of the units acquired is not materially different from the portfolio
of the units exchanged; you should consult your own tax advisor. If the proceeds
of units exchanged are insufficient to acquire a whole number of Exchange Fund
units, you may pay the difference in cash (not exceeding the price of a single
unit acquired).

16
<PAGE>
As the Sponsors are not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.

SUPPLEMENTAL INFORMATION

Upon written or telephonic request to the Trustee shown on the back cover
of this Prospectus, investors will receive at no cost to the investor
supplemental information about the Fund, which has been filed with the SEC. The
supplemental information includes more detailed risk factor disclosure about the
types of Bonds that may be part of the Fund's Portfolio, general risk disclosure
concerning any letters of credit or insurance securing certain Bonds, and
general information about the structure and operation of the Fund.

<PAGE>

APPENDIX A

DESCRIPTION OF RATINGS (AS DESCRIBED BY THE RATING COMPANIES THEMSELVES)

FITCH INVESTORS SERVICE, INC.

AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events.

AA--Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA.

A--Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB--Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however are more likely to have adverse impact on these bonds, and therefore
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings.

BB--Bonds considered speculative. The obligor's ability to pay interest and
repay principal may be affected over time by adverse economic changes. However,
business and financial alternatives can be identified which could assist the
obligor in satisfying its debt service requirements.

B--Bonds considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probabilty of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issue.

CCC--Bonds have certain identifiable characteristics which, if not
remedied, may lead to default. The ability to meet obligations requires an
advantageous business and economic environment.

CC--Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C--Bonds are in imminent default in payment of interest or principal.

Plus (+) Minus (-) Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the 'AAA' category.

NR Indicates that Fitch does not rate the specific issue.

o indicates that Fitch does not rate the specific issue but has issued an
opinion that the issue has investment grade credit characteristics.

Conditional. A conditional rating is premised on the successful completion
of a project or the occurrence of a specific event.

STANDARD & POOR'S RATINGS GROUP, A DIVISION OF MCGRAW-HILL, INC.

AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.

AA--Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.

A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB--Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

BB, B, CCC, CC--Debt rated BB, B, CCC and CC is regarded, on balance, as
predominately speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

a-1
<PAGE>
The ratings may be modified by the addition of a plus or minus sign to show
relative standing within the major rating categories.

A provisional rating, indicated by 'p' following a rating, assumes the
successful completion of the project being financed by the issuance of the debt
being rated and indicates that payment of debt service requirements is largely
or entirely dependent upon the successful and timely completion of the project.
This rating, however, while addressing credit quality subsequent to completion
of the project, makes no comment on the likelihood of, or the risk of default
upon failure of, such completion.

* Continuance of the rating is contingent upon S&P's receipt of an executed
copy of the escrow agreement or closing documentation confirming investments and
cash flows.

NR--Indicates that no rating has been requested, that there is insufficient
information on which to base a rating or that Standard & Poor's does not rate a
particular type of obligation as a matter of policy.

MOODY'S INVESTORS SERVICE, INC.

Aaa--Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
'gilt edge'. Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

Aa--Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.

A--Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa--Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba--Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Rating symbols may include numerical modifiers 1, 2 or 3. The numerical
modifier 1 indicates that the security ranks at the high end, 2 in the
mid-range, and 3 nearer the low end, of the generic category. These modifiers of
rating symbols give investors a more precise indication of relative debt quality
in each of the historically defined categories.

Conditional ratings, indicated by 'Con.', are sometimes given when the
security for the bond depends upon the completion of some act or the fulfillment
of some condition. Such bonds are given a conditional rating that denotes their
probable credit stature upon completion of that act or fulfillment of that
condition.

NR--Should no rating be assigned, the reason may be one of the following:
(a) an application for rating was not received or accepted; (b) the issue or
issuer belongs to a group of securities that are not rated as a matter of
policy; (c) there is a lack of essential data pertaining to the issue or issuer
or (d) the issue was privately placed, in which case the rating is not published
in Moody's publications.

a-2
<PAGE>
APPENDIX B
SALES CHARGE SCHEDULES FOR MUNICIPAL INVESTMENT TRUST FUND
INITIAL OFFERING

<TABLE><CAPTION>
SALES CHARGE
(GROSS UNDERWRITING PROFIT)
---------------------------------- PRIMARY MARKET
AS PERCENT OF AS PERCENT OF DEALER CONCESSION AS CONCESSION TO
OFFER SIDE PUBLIC NET AMOUNT PERCENT OF PUBLIC INTRODUCING
NUMBER OF UNITS OFFERING PRICE INVESTED OFFERING PRICE DEALERS
----------------------------------- ------------------- ------------- --------------------- ------------------
MONTHLY PAYMENT SERIES, MULTISTATE SERIES, INSURED SERIES
<S> <C> <C> <C> <C>
Less than 250...................... 4.50% 4.712% 2.925% $ 32.40
250 - 499.......................... 3.50 3.627 2.275 25.20
500 - 749.......................... 3.00 3.093 1.950 21.60
750 - 999.......................... 2.50 2.564 1.625 18.00
1,000 or more...................... 2.00 2.041 1.300 14.40

<CAPTION>
INTERMEDIATE SERIES (TEN YEAR MATURITIES)

<S> <C> <C> <C> <C>
Less than 250...................... 4.00% 4.167% 2.600% $ 28.80
250 - 499.......................... 3.00 3.093 1.950 21.60
500 - 749.......................... 2.50 2.564 1.625 18.00
750 - 999.......................... 2.00 2.041 1.300 14.40
1,000 or more...................... 1.50 1.523 0.975 10.00

<CAPTION>
INTERMEDIATE SERIES (SHORT INTERMEDIATE MATURITIES)

SECONDARY MARKET

ACTUAL SALES CHARGE AS DEALER CONCESSION AS
PERCENT OF EFFECTIVE PERCENT OF EFFECTIVE
NUMBER OF UNITS SALES CHARGE SALES CHARGE
---------------- ----------------------- -----------------------
1-249 100% 65%
250-499 80 52
500-749 60 39
750-999 45 29.25
1,000 or more 35 22.75

EFFECTIVE SALES CHARGE

AS PERCENT AS PERCENT
TIME TO OF BID SIDE OF PUBLIC
MATURITY EVALUATION OFFERING PRICE
--------------------------- ----------- -----------------
Less than six months 0% 0%
Six months to 1 year 0.756 0.75
Over 1 year to 2 years 1.523 1.50
Over 2 years to 4 years 2.564 2.50
Over 4 years to 8 years 3.627 3.50
Over 8 years to 15 years 4.712 4.50
Over 15 years 5.820 5.50

For this purpose, a Bond will be considered to mature on its stated
maturity date unless it has been called for redemption or funds or securities
have been placed in escrow to redeem it on an earlier date, or is subject to a
mandatory tender, in which case the earlier date will be considered the maturity
date.

b-1
<PAGE>

Defined
Asset FundsSM

SPONSORS: MUNICIPAL INVESTMENT
Merrill Lynch, Pierce, Fenner & TRUST FUND
Smith Incorporated Investment Grade Portfolio
Defined Asset Funds (BBB Quality or Better)
P.O. Box 9051, Intermediate Term Series
Princeton, NJ A Unit Investment Trust
08543-9051
(609) 282-8500 This Prospectus does not contain all of the
Smith Barney Inc. information with respect to the investment
388 Greenwich Street--23rd Floor, company set forth in its registration
New York, NY statement and exhibits relating thereto which
10013 have been filed with the Securities and
(800) 223-2532 Exchange Commission, Washington, D.C. under
PaineWebber Incorporated the Securities Act of 1933 and the Investment
1285 Avenue of the Americas, Company Act of 1940, and to which reference
New York, NY is hereby made.
10019 ------------------------------
(201) 902-3000 No person is authorized to give any
Prudential Securities Incorporated information or to make any representations
One Seaport Plaza--199 Water with respect to this investment company not
Street, contained in its registration statement and
New York, NY exhibits relating thereto; and any
10292 information or representation not contained
(212) 776-1000 therein must not be relied upon as having
Dean Witter Reynolds Inc. been authorized.
Two World Trade Center--59th Floor,------------------------------
New York, NY When Units of this Fund are no longer
10048 available this Prospectus may be used as a
(212) 392-2222 preliminary prospectus for a future series,
EVALUATOR: in which event investors should note the
Kenny S&P Evaluation Services, following:
a division of J. J. Kenny Co., Inc.Information contained herein is subject to
65 Broadway, New York, NY 10019 amendment. A registration statement relating
TRUSTEE: to securities of a future series has been
The Chase Manhattan Bank, N.A. filed with the Securities and Exchange
(A National Banking Association) Commission. These securities may not be sold
Defined Asset Funds nor may offers to buy be accepted prior to
Box 2051 the time the registration statement becomes
New York, NY 10081 effective.
This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any State in which such offer
solicitation or sale would be unlawful prior
to registration or qualification under the
securities laws of any such State.

15138--8/95

<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS

A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.

SEC FILE OR
IDENTIFICATION DATE
NUMBER FILED
----------------------------------------
<S> <C> <C>
I. Bonding Arrangements and Date of Organization of the
Depositors filed pursuant to Items A and B of
Part II of the Registration Statement on Form
S-6 under the Securities Act of 1933:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-52691 1/17/95
Smith Barney Inc. .............................. 33-29106 6/29/89
PaineWebber Incorporated........................ 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-61418 4/26/78
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
II. Information as to Officers and Directors of the
Depositors filed pursuant to Schedules A and D
of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 8-7221 5/26/94, 6/29/92
Smith Barney Inc. .............................. 8-8177 8/29/94, 8/2/93
PaineWebber Incorporated........................ 8-16267 4/20/94, 7/31/86
Prudential Securities Incorporated.............. 8-27154 6/30/94, 6/20/88
Dean Witter Reynolds Inc. ...................... 8-14172 2/23/94, 4/9/91
III. Charter documents of the Depositors filed as
Exhibits to the Registration Statement on Form
S-6 under the Securities Act of 1933 (Charter,
By-Laws):
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-73866, 2-77549 9/22/81, 6/15/82
Smith Barney Inc. .............................. 33-20499 3/30/88
PaineWebber Incorporated........................ 2-87965, 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-52947 3/4/75
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsors and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 13-5674085
Smith Barney Inc. .............................. 13-1912900
PaineWebber Incorporated........................ 13-2638166
Prudential Securities Incorporated.............. 22-2347336
Dean Witter Reynolds Inc. ...................... 94-0899825
The Chase Manhattan Bank, N.A., Trustee......... 13-2633612
</TABLE>

UNDERTAKING
The Sponsors undertake that they will not instruct the Trustee to accept from
(i) Asset Guaranty Reinsurance Company, Municipal Bond Investors Assurance
Corporation or any other insurance company affiliated with any of the Sponsors,
in settlement of any claim, less than an amount sufficient to pay any principal
or interest (and, in the case of a taxability redemption, premium) then due on
any Security in accordance with the municipal bond guaranty insurance policy
attached to such Security or (ii) any affiliate of the Sponsors who has any
obligation with respect to any Security, less than the full amount due pursuant
to the obligation, unless such instructions have been approved by the Securities
and Exchange Commission pursuant to Rule 17d-1 under the Investment Company Act
of 1940.

II-1
<PAGE>
CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:

The facing sheet of Form S-6.

The Cross-Reference Sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).

The Prospectus.

Additional Information not included in the Prospectus (Part II).

The following exhibits:

1.1 --Form of Trust Indenture.
1.1.1 --Form of Standard Terms and Conditions of Trust Effective
October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to
the Registration Statement of Municipal Investment Trust Fund,
Multistate Series--48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by
reference to Exhibit 1.2 to the Registration Statement of The
Corporate Income Fund, One Hundred Ninety-Fourth Monthly
Payment Series, 1933 Act File No. 2-90925).
2.1 --Form of Certificate of Beneficial Interest (included in Exhibit
1.1.1).
3.1 --Opinion of counsel as to the legality of the securities being
issued including their consent to the use of their names under
the headings 'Taxes' and 'Miscellaneous--Legal Opinion' in the
Prospectus.
4.1 --Consent of the Evaluator.
5.1 --Consent of independent accountants.
5.21 --Form of Purchase Agreement for purchases in secondary market
with letter of credit backing (incorporated by reference to
Exhibit 5.21 to the Registration Statement of Municipal
Investment Trust Fund, Fifty-Fifth Intermediate Term Series,
1933 Act File No. 2-94809).
5.22 --Form of Purchase Agreement for purchases in secondary market
with guarantees (incorporated by reference to Exhibit 5.22 to
the Registration Statement of Municipal Investment Trust Fund,
Fifty-Fifth Intermediate Term Series, 1933 Act File No.
2-94809).
5.23 --Form of Purchase Agreement for purchases in secondary market
with collateralized backing (incorporated by reference to
Exhibit 5.23 to the Registration Statement of Municipal
Investment Trust Fund, Fifty-Fifth Intermediate Term Series,
1933 Act File No. 2-94809).
6.1 --Form of Collateral Agreement (incorporated by reference to
Exhibit 6.1 to the Registration Statement of Municipal
Investment Trust Fund, Fifty-Fifth Intermediate Term Series,
1933 Act File No. 2-94809).
9.1 --Form of Consultant's Agreement
9.2 --Information Supplement (incorporated by reference to Exhibit
9.1 to Post-Effective Amendment No. 4 to the Registration
Statement of Municipal Investment Trust Fund, Monthly Payment
Series--506, 1933 Act File No. 33-37730).

R-1
<PAGE>

MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO
(BBB QUALITY OR BETTER)
INTERMEDIATE TERM SERIES
DEFINED ASSET FUNDS

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 25TH DAY OF
AUGUST 1995.

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 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 Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.

A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.

A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.

R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR

By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466 and 33-51607

HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
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>
SMITH BARNEY INC.
DEPOSITOR

By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-56722 and
33-51999

STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
ROBERT H. LESSIN
JACK L. RIVKIN

By GINA LEMON
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)

R-4
<PAGE>
PAINEWEBBER INCORPORATED
DEPOSITOR

By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:

LEE FENSTERSTOCK
JOSEPH J. GRANO, JR.

By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)

R-5
<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 Number:
33-41631

ALAN D. HOGAN
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS

By
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)

R-6
<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
the Board of Directors of Dean Witter 1933 Act File Number: 33-17085
Reynolds Inc.:

NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
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-7

Exhibit 1.1

MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO (BBB Quality of Better)
INTERMEDIATE TERM SERIES
DEFINED ASSET FUNDS

REFERENCE TRUST INDENTURE

Dated as of August 25, 1995

This Trust Indenture (the "Indenture") sets forth certain provisions in
full and incorporates other provisions by reference to the document entitled
"Standard Terms and Conditions of Trust Effective October 21, 1993" (the
"Standard Terms and Conditions of Trust") and such provisions as are set forth
in full herein and such provisions as are incorporated by reference constitute a
single instrument. All references herein to Articles and Sections are to
Articles and Sections of the Standard Terms and Conditions of Trust.

WITNESSETH THAT:

In consideration of the premises and of the mutual
agreements herein contained, the Sponsors, the Trustee and the Evaluator agree
as follows:

Part I

STANDARD TERMS AND CONDITIONS OF TRUST

Subject to the provisions of Part II hereof, all the provisions contained
in the Standard Terms and Conditions of Trust are herein incorporated by
reference in their entirety and shall be deemed to be a part of this instrument
as fully and to the same extent as though said provisions had been set forth in
full in this instrument.

<PAGE>

Part II

SPECIAL TERMS AND CONDITIONS OF TRUST

The following special terms and conditions are hereby
agreed to:

(a) The Securities (or contracts for the purchase of such Securities)
listed under "Portfolio" in the Prospectus have been deposited with (or assigned
to) the Trustee under this Indenture, and the number of Units specified under
"Investment Summary" in the Prospectus have been delivered to, or assigned in
the name of or on the order of, the Sponsors by the Trustee in exchange
therefor.

(b) The Sponsors are Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Smith Barney Inc., PaineWebber Incorporated, Prudential Securities Incorporated
and Dean Witter Reynolds Inc.

(d) The Evaluator is Kenny S&P Evaluation Services, a Division of J.J.
Kenny Co., Inc.

(e) The Trust is organized as a Grantor Trust for Federal tax purposes.

(f) Units may be held in certificated form.

(g) Section 3.18 is amended to read as follows:

Section 3.18. Expenses Borne by the Trustee. The following organization
-----------------------------
and regular and recurring expenses of the Trust shall be borne by the
Trustee: (a) to the extent not borne by the Sponsors, expenses incurred
in establishing the Trust, including the cost of the initial preparation
and typesetting of the registration statement, prospectuses (including
preliminary prospectuses), the indenture, and other documents relating to
the Trust, SEC and state blue sky registration fees, the cost of the
initial valuation of the portfolio and audit of the Trust, the initial
fees and expenses of the Trustee, and legal and other out-of-pocket
expenses related thereto, but not including the expenses incurred in the
printing of preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other advertising
materials and any other selling expenses, (b) the compensation of the
Evaluator provided for in Section 4.03, (c) auditing fees and, to the
extent not borne by the Sponsors, expenses incurred in connection with
maintaining the Trust's registration statement current with Federal and
state authorities, (d) postage, stationery, printing and reproduction
charges incurred in preparing and mailing the statements and reports
furnished pursuant to Sections 3.07 and 8.03, and the distributions made
pursuant to Section 3.05 and the Certificates

<PAGE>

issued after the Date of Deposit pursuant to Section 6.01; and (e)
expenses of any Distribution Agent; provided that the Trustee shall not
--------
be obligated to bear expenses pursuant to clauses (a) through (e) of this
Section for any calendar year of the Trust in excess of the Trustee
Expense Limit (or in excess of a prorated portion of such amount for any
period of less than one year). Expenses of the Trust for any calendar
year in excess of the Trustee Expense Limit shall be deemed to be non-
routine expenses of the Trust payable by the Trustee in accordance with
Section 8.05(b).

The "Trustee Expense Limit" shall initially mean $_____ per Unit,
provided that the amount of the Trustee Expense Limit shall be reviewed
--------
at least annually by the Trustee and the Sponsors and adjusted by the
mutual written agreement of the Trustee and the Sponsors to reflect
estimated expenses of the Trust for the succeeding year (and the "Trustee
Expense Limit" shall mean thereafter such amount as so adjusted). In
connection with any such review, the Trustee shall furnish to the
Sponsors records in reasonable detail indicating for calendar years ended
prior to such review actual expenses incurred by the Trustee and the
Trust and the amounts paid to the Trustee pursuant to Section 3.04(a)(1)
in such calendar years.

(h) Paragraph (b) of Section 7.06 is amended to read as follows:

(b) The Sponsors shall receive, on or promptly after the Date of
Deposit upon written certification to the Trustee, reimbursement for any
organization expenses of the Trust included in Section 3.18(a) as payable by the
Trustee but which were paid by the Sponsors, without profit. The Sponsors shall
also recieve as reimbursement for any loss, liability or expense referred to in
Section 7.05(b) such amounts as they shall from time to time certify to the
Trustee in writing to be their losses, liabilities and expenses, without profit,
directly attributable to providing services to the Trust, increased by the cost
of such services provided directly by the Sponsors, as determined in accordance
with generally accepted accounting principles consistently applied.

-3-

EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000
AUGUST 25, 1995

MUNICIPAL INVESTMENT TRUST FUND
INVESTMENT GRADE PORTFOLIO
(BBB Quality or Better)
INTERMEDIATE TERM SERIES
DEFINED ASSET FUNDS

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NJ 08543-9051

Dear Sirs:

We have acted as special counsel for you, as sponsors (the 'Sponsors') of
Investment Grade Portfolio (BBB Quality or Better), Intermediate Term Series of
Municipal Investment Trust Fund, Defined Asset Funds (the 'Fund'), in connection
with the issuance of units of fractional undivided interest in the Fund (the
'Units') in accordance with the Trust Indenture relating to the Fund (the
'Indenture').

We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.

Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsors and (ii) the Units, when duly issued and delivered by
the Sponsors and the Trustee in accordance with the Indenture, will be legally
issued, fully paid and non-assessable.

We hereby consent to the use of this opinion as Exhibit 3.1 of the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the headings 'Taxes' and 'Miscellaneous--Legal
Opinion.'

Very truly yours,

DAVIS POLK & WARDWELL

EXHIBIT 4.1
KENNY S&P INFORMATION SYSTEMS
A DIVISION OF J. J. KENNY CO., INC.

AUGUST 25, 1995

MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, NEW JERSEY 08543-9051

THE CHASE MANHATTAN BANK, N.A.
1 CHASE MANHATTAN PLAZA--3B
NEW YORK, NEW YORK 10081

Re: Municipal Investment Trust Fund, Investment Grade Portfolio (BBB Quality or
Better), Intermediate Term Series, Defined Asset Funds

Gentlemen:

We have examined the Registration Statement File No. 33-57547, for the
above-captioned fund. We hereby acknowledge that Kenny S&P Information Systems,
a Division of J. J. Kenny Co., Inc. is currently acting as the evaluator for the
fund. We hereby consent to the use in the Registration Statement of the
reference to Kenny S&P Information Systems, a Division of J. J. Kenny Co., Inc.,
as evaluator.

In addition, we hereby confirm that the ratings indicated in the
Registration Statement for the respective bonds comprising the fund portfolio
are the ratings indicated in our KENNYBASE database as of the date of the
Evaluation Report.

You are hereby authorized to file a copy of this letter with the Securities
and Exchange Commission.

Sincerely,

F. A. SHINAL
Vice President
Chief Financial Officer

EXHIBIT 5.1
CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of
Municipal Investment Trust Fund,
Investment Grade Portfolio
(BBB Quality or Better)
Intermediate Term Series
Defined Asset Funds

We hereby consent to the use in this Registration Statement No. 33-57547 of our
opinion dated August 25, 1995, relating to the Statement of Condition of
Municipal Investment Trust Fund, Investment Grade Portfolio (BBB Quality or
Better), Intermediate Term Series, Defined Asset Funds and to the reference to
us under the heading 'Auditors' in the Prospectus which is a part of this
Registration Statement.

DELOITTE & TOUCHE LLP
New York, N.Y.
August 25, 1995

Exhibit 9.1

August 21, 1995

Fitch Investors Service, Inc.
One State Street Plaza
New York, New York 10004

CONSULTANT'S AGREEMENT
----------------------

Dear Sirs:

The undersigned, Unit Investment Trust Division of
Merrill Lynch, Pierce, Fenner & Smith Incorporated (together
with its affiliates, "Merrill Lynch"), as agent for the
sponsors of Defined Asset FundsSM - Municipal Investment
Trust Fund - Investment Grade Portfolio - Intermediate Term
Series (the "Fund"), hereby engages your research services
as described below, in connection with Merrill Lynch's
sponsorship and supervision of the Fund. The Fund is a
series of unit investment trusts which will invest in
various fixed rate securities which you have rated BBB- or
better ("Investment Grade") or have, in your opinion, credit
characteristics comparable to the characteristics of bonds
rated Investment Grade ("Investment Grade Credit
Characteristics"), as more fully described in the attached
draft registration statement on Form S-6 (the "Registration
Statement") as filed with the Securities and Exchange
Commission.

Merrill Lynch hereby agrees with you as follows:

1. Review of Securities. You will review on a timely
--------------------
basis, in connection with the filing of each Registration
Statement relating to a series, certain securities
identified to you by Merrill Lynch (the "Identified
Securities"). Whether or not an Identified Security is
publicly rated by another nationally recognized statistical
rating organization, you shall either issue a public rating
of that Identified Security or you shall provide Merrill
Lynch with an opinion on whether that Identified Security
has, in your view, Investment Grade Credit Characteristics.
Merrill Lynch shall receive all information regarding
Identified Securities publicly rated by Fitch by press
release faxed by you to Merrill Lynch within 15 minutes of
the time such information is released to the general public.
In the event that you provide Merrill Lynch with an opinion,

<PAGE>

Fitch Investors 2 August 21, 1995
Service, Inc.

the opinion shall be based exclusively on publicly available
information. If you do not have adequate information on any
Identified Security to enable you to render an opinion you
will promptly notify Merrill Lynch. With respect to unrated
Identified Securities, your opinion regarding Investment
Grade Credit Characteristics shall be based exclusively on
information provided to you by Merrill Lynch and other
publicly available information in your possession, and you
shall have no obligation to collect information from any
other source, including from any issuer or investment
banker.

Merrill Lynch shall determine, in its sole discretion
and based upon all information available to it, whether, in
the interest of the Fund, to deposit any particular
Identified Security in the portfolio.

2. Provision of Information. You will provide
------------------------
Merrill Lynch with adequate information about your business
and operations and the performance of your services under
this Agreement for use by Merrill Lynch in preparing updated
prospectus disclosure and marketing materials for the Fund.

3. Provision of Securities Research. In addition to
--------------------------------
your review of the Identified Securities, you will
continuously monitor information pertaining to the
Identified Securities actually deposited in the portfolio
("Portfolio Securities") on an ongoing basis and advise
Merrill Lynch in the event of any significant unfavorable
changes in your opinion of the credit quality of any
Portfolio Security not rated by Fitch, and if, in your
opinion, Portfolio Security not rated by Fitch ceases to
have Investment Grade Credit Characteristics. Such
reporting shall be based exclusively on publicly available
information provided to you by Merrill Lynch or in your
possession. You will notify promptly Merrill Lynch if at
any time you have insufficient information to enable you to
monitor any Portfolio Security.

Merrill Lynch shall determine, in its sole discretion
and based upon all information available to it, whether, in
the interest of the Fund, to retain, sell, redeem, liquidate
or dispose of particular Portfolio Securities. A change in
credit quality will not necessarily result in the sale of a
Portfolio Security from the Portfolio unless, in the opinion
of Merrill Lynch, retention of the Portfolio Security would
be detrimental to the Fund's investors.

4. Exclusive Service. You hereby agree, for a period
-----------------
of one year from the date of deposit of securities in the

<PAGE>

Fitch Investors 3 August 21, 1995
Service, Inc.

first series of the Fund (the "Exclusive Period"), not to
provide the services in Sections 1, 2 and 3 of this
Agreement to any sponsor of unit investment trusts (as
defined in Section 4(2) of the Investment Company Act of
1940) other than Merrill Lynch; provided, that nothing
--------
herein shall prohibit or limit your issuance of credit
ratings in the ordinary course of business or your
discussions with unit investment trusts or their sponsors in
the ordinary course of business intended to create investor
demand for your credit ratings.

Merrill Lynch hereby agrees, for the Exclusive Period,
to employ you to provide the services in Sections 1, 2 and 3
of this Agreement on the same terms (including fees as
described in Section 5 of this Agreement) as provided herein
with respect to any series of the Fund initially sponsored
by Merrill Lynch during the Exclusive Period.

5. Consultant's Fees. Merrill Lynch hereby agrees to
-----------------
pay you or cause each series of the Fund to pay you for the
ongoing monitoring of the Identified Securities described in
this Agreement an annual fee of $0.80 per $1,000 Face Amount
of Portfolio Securities (as defined below), payable
quarterly.

"Face Amount of Portfolio Securities" shall be computed
on the basis of the average face amount of Portfolio
Securities in the Fund during a calendar quarter.

6. Expenses. You shall be responsible for all of
--------
your own expenses incurred in connection with this
Agreement.

7. Independent Contractor. For all purposes hereof,
----------------------
you shall be deemed to be an independent contractor and
shall be fully responsible for any personnel performing work
for Merrill Lynch on your behalf, including insurance,
benefits and tax liability. Except as otherwise expressly
provided herein or authorized by Merrill Lynch, you shall
have no authority to act for or represent Merrill Lynch or
the Fund or the Fund's sponsors or underwriters in any way
or otherwise be deemed the agent of either. Neither the
sponsors of the Fund nor the Fund are partners or joint
venturers with you and nothing herein shall be construed so
as to make them partners or joint venturers or impose any
liability as such on any one of them or you.

8. Publicity and Confidentiality. You shall not use
-----------------------------
the name Merrill Lynch or the names of any of the sponsors
or underwriters of the Fund identified in the Registration

<PAGE>

Fitch Investors 4 August 21, 1995
Service, Inc.

Statement, or any affiliate of Merrill Lynch or any of the
sponsors or underwriters, in any publicity release or
advertising without the prior written consent of Merrill
Lynch, which consent may be withheld in its sole discretion.

You agree to receive and maintain as confidential all
Non-Public Information (as defined below) received in
connection with this Agreement and the Fund and you shall
not use or disclose such information for your benefit or the
benefit of any of your other clients. It is expressly
understood that all Non-Public Information furnished by
Merrill Lynch pursuant to this Agreement remains the
property of Merrill Lynch and that all such information and
copies thereof will be returned to Merrill Lynch upon
request. You shall restrict circulation and communications
of such Non-Public Information within your organization to
only those persons and only to the extent necessary to
provide the services under this Agreement.

The preceding paragraph shall be inoperative as to any
Non-Public Information that (i) becomes generally available
to the public other than as a result of a disclosure by you,
(ii) was available to you on a non-confidential basis prior
to the disclosure of such Non-Public Information to you
pursuant to this Agreement, or (iii) becomes available to
you on a non-confidential basis from a source other than
Merrill Lynch or its agents or advisors provided that the
source of such Non-Public Information was not known by you
to have a fiduciary or contractual relationship with Merrill
Lynch or to be prohibited from making such disclosure to
you.

In the event that you are requested or required (by
deposition, interrogatories, requests for information or
documents in legal proceedings, subpoenas, civil
investigative demand or similar process), in connection with
any proceeding or investigation, to disclose any Non-Public
Information received in connection with this Agreement, you
will give Merrill Lynch prompt notice of such request or
requirement, to the extent practicable, so that Merrill
Lynch may seek an appropriate protective order or other
remedy and/or waive compliance with the provisions of this
Agreement, and you will cooperate with Merrill Lynch, to the
extent practicable, to obtain such protective order. In the
event that such protective order or other remedy is not
obtained or Merrill Lynch waives compliance with the
relevant provisions of this Agreement, you will furnish only
that portion of the information which, in the opinion of
your counsel, is legally required to be disclosed. It is

<PAGE>

Fitch Investors 5 August 21, 1995
Service, Inc.

further agreed that, if in the absence of a protective order
you are nonetheless legally compelled to disclose such
information, you may make such disclosure without liability
hereunder, provided, that you give Merrill Lynch notice of
--------
the information to be disclosed as far in advance of its
disclosure as is practicable and, upon Merrill Lynch's
request, use your best efforts to obtain assurances that
confidential treatment will be accorded to such information
and, provided further, that such disclosure was not caused
--------
by and did not result from a previous disclosure by you not
permitted hereunder.

For the purposes of this Agreement, "Non-Public
Information" means this Agreement and all other information
concerning Merrill Lynch, its affiliates and subsidiaries
including, without limitation, information regarding the
Fund, the Identified Securities and the Portfolio
Securities, which is not available to the general public.

9. Limited Liability. Except where you have been
-----------------
grossly negligent, have engaged in willful misconduct or
have acted in bad faith or in reckless disregard of your
duties hereunder and except as otherwise provided in Section
13 below, you shall not be liable to Merrill Lynch or the
Fund or any unitholders of the Fund for any loss or damage
hereunder resulting from your actions or omissions to act or
otherwise.

10. Assignment. Neither party to this Agreement shall
----------
assign this Agreement without the other party's consent.

11. Amendment. No provision of this Agreement may be
---------
amended or waived except by an instrument in writing
executed by the parties hereto.

12. Termination. This Agreement shall continue in
-----------
full force and effect with respect to any new series of the
Fund until the earliest of (i) termination by one of the
parties hereto, to take effect at any time subsequent to the
date that is six months from the date of deposit of
securities in the first series of the Fund, by giving 30
days prior written notice to the other party, (ii)
termination by one of the parties hereto, to take effect at
any time subsequent to the closing date of the fourth series
of the Fund, by giving 30 days prior written notice to the
other party, or (iii) termination of the last series of the
Fund offered pursuant to this Agreement; provided that
--------
Merrill Lynch may terminate this Agreement effective at any
time on 30 days' notice in the event of your willful
misconduct, bad faith or negligence in the performance of

<PAGE>

Fitch Investors 6 August 21, 1995
Service, Inc.

your duties, or by reason of your disregard of your
obligations and duties hereunder, or if, in Merrill Lynch's
sole opinion, your professional reputation is materially
damaged as a result of wrongdoing or alleged wrongdoing by
your directors, officers or employees in any matter
unrelated to this Agreement. The effective date of the
termination of this Agreement shall be the "Termination
Date". Upon termination of this Agreement, any fees due to
you under Section 5 shall be prorated.

You further agree to perform the duties provided for in
Sections 2 and 3 of this Agreement for the life of any
series of the Fund that is initially sponsored by Merrill
Lynch during the period beginning on the date of this
Agreement and ending on the Termination Date. Such
performance shall be governed by this Agreement on the same
terms (including fees) as provided for herein.

13. Indemnification. Merrill Lynch shall indemnify
---------------
you and hold you and each of your officers, employees and
agents harmless from and against any and all liability
arising out of (i) any actual or alleged inaccuracy or
omission in any prospectus or supplement thereto,
registration statement of the Fund or annual post-effective
amendment updating the information in such registration
statement or any advertising or promotional material
generated by the Fund or Merrill Lynch, and (ii) any breach
by Merrill Lynch of any representation, warranty, covenant
or agreement contained in this Agreement, and (iii) any
violation or alleged violation by Merrill Lynch or its
employees of any law or regulation applicable to Merrill
Lynch, its employees or the Fund or to this Agreement,
except (i) as stated in the following paragraphs and (ii) to
the extent such liability results from your breach of this
Agreement, your willful misconduct, bad faith, reckless
disregard of your duties or your gross negligence.

You shall indemnify and hold harmless Merrill
Lynch, and any sponsor or underwriter, their affiliates and
each of their officers, directors, employees and agents from
and against any and all liability arising out of (i) any
actual or alleged inaccuracy or omission in any prospectus
or supplement thereto, registration statement of the Fund or
annual post-effective amendment updating the information in
such registration statement or any advertising or
promotional material generated by the Fund or Merrill Lynch
but in each case only to the extent that the inaccuracy or
omission or alleged inaccuracy or omission was made in
reliance upon and in conformity with written information you
have furnished to Merrill Lynch specifically for inclusion

<PAGE>

Fitch Investors 7 August 21, 1995
Service, Inc.

in the Registration Statement or any of the other above -
referenced documents, (ii) any breach by you of any
representation, warranty, covenant or agreement contained in
this Agreement and (iii) any violation or alleged violation
by you or your employees of any law or regulation applicable
to you, your employees or the Fund or to this Agreement,
except to the extent such liability results from Merrill
Lynch's breach of this Agreement, willful misconduct, bad
faith, reckless disregard of its duties or gross negligence.

You confirm that the statements relating to you in the
second, third and fifth sentences of the first paragraph and
the first, second and third sentences of the second
paragraph under the caption "Defining Your Portfolio --
Professional Selection and Supervision;" the third paragraph
under "Defining Your Risks -- Risk Factors"; the second,
fourth and fifth paragraphs, and all four paragraphs of "--
The Credit Consultant", under the caption "Fund Description
-- Bond Portfolio Selection;" the third, fourth and fifth
sentences of the second paragraph under the caption "Fund
Description -- Bond Portfolio Supervision;" the fifth
paragraph under the caption "Risk Factors;" and all
statements in Appendix A under the caption "Description of
Ratings -- Fitch Investors Service, Inc." in the
Registration Statement are correct and were furnished by you
to Merrill Lynch in writing specifically for inclusion in
the Registration Statement and that, to date, no other
information has been furnished by you to Merrill Lynch for
such purposes.

Notwithstanding the previous paragraphs, you shall
indemnify and hold harmless Merrill Lynch and each of its
officers, directors, employees and agents from and against
(i) any out-of-pocket loss incurred by Merrill Lynch or any
sponsor, underwriter or dealer to a holder of units of any
series of the Fund resulting directly from one or more
Negligent Acts (as defined below); (ii) the reasonable fees
and expenses of outside counsel and accountants retained by
Merrill Lynch in connection with the investigation,
mitigation and resolution of any Negligent Act; and (iii)
any penalties and interest required to be paid by the
Securities and Exchange Commission or any state securities
commission or otherwise under the Federal or any State
securities laws in connection with any Negligent Act. A
"Negligent Act" shall mean any act of ordinary negligence or
negligent failure to act by you in the performance of your
duties with respect to credit opinions (as opposed to credit
ratings) under this Agreement; provided, that you shall not
--------
be deemed to have committed a Negligent Act if you followed
the procedures described in the fifth paragraph under the

<PAGE>

Fitch Investors 8 August 21, 1995
Service, Inc.

caption "Risk Factors" in the Prospectus and exercised
reasonable judgment in issuing a credit opinion.

In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to this
Section 13, such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may
be sought (the "indemnifying party") in writing and the
indemnifying party shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such
proceeding. For purposes of assuring that such fees are
reasonable the parties will consult with each other
regarding the conduct of the litigation. In any such
proceeding, any indemnified party shall have the right to
retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel
or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties
by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is
understood that the indemnifying party shall not, in respect
of the legal expenses of any indemnified party in connection
with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel)
for all such indemnified parties. Such firm shall be
designated in writing by the indemnified party. The
indemnifying party shall not be liable for any settlement of
any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall
be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified

<PAGE>

Fitch Investors 9 August 21, 1995
Service, Inc.

party in accordance with such request prior to the date of
such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
proceeding.

14. Authorization. You hereby represent that all
-------------
corporate action on your part and on the part of your
officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement has
been taken, that all corporate action necessary for the
performance of all of your obligations hereunder has been
taken, and that this Agreement constitutes a valid and
legally binding obligation of yours, enforceable in
accordance with its terms.

You further represent that no consent, approval,
order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state,
local or foreign governmental authority is required on your
part in connection with the consummation of the transactions
contemplated by this Agreement.

You further represent that you will maintain
certain insurance, including all insurance required under
applicable federal, state and local statutes including, but
not limited to, workers compensation, disability insurance
and general liability insurance in the minimum amount of $2
million.

15. Entire Agreement and Governing Law. This
----------------------------------
Agreement incorporates the entire understanding of the
parties and (except as otherwise provided herein) supersedes
all previous agreements, and shall be governed by and
construed in accordance with the laws of the State of New
York.

16. Notices. All notices and other written
-------
communications specified herein shall be in writing (which
term shall at the option of the notifying party include fax)
and shall be (i) personally delivered, (ii) transmitted by
first class mail, postage prepaid (airmail if
international), or (iii) transmitted by fax to the parties
as follows:

<PAGE>

Fitch Investors 10 August 21, 1995
Service, Inc.

If to you: Fitch Investors Service, Inc.
One State Street Plaza
33rd Floor
New York, NY 10004

Fax: (212) 480-4438
Attention: Neil D. Baron, Esq.

If to Merrill Merrill Lynch, Pierce, Fenner &
Lynch: Smith Incorporated
Unit Investment Trusts
P.O. Box 9051
Princeton, NJ 08543-9051

Fax: (609) 282-8972
Attention: James J. King, Jr.

17. Severability. The illegality, invalidity or
------------
unenforceability of any provision of this Agreement under
the law of any jurisdiction shall not affect its legality,
validity or enforceability under the law of any other
jurisdiction nor the legality, validity or enforceability of
any other provision hereof.

This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the
same effect as if the signatures were upon the same
instrument.

If the foregoing is in accordance with your
understanding, kindly sign and return the enclosed copy of
this letter whereupon it shall become a binding agreement
between us.

<PAGE>

Fitch Investors 11 August 21, 1995
Service, Inc.

Very truly yours,

MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED,
UNIT INVESTMENT TRUST
DIVISION,
as agent for the sponsors of
the Fund

By:
----------------------

Agreed and accepted:

FITCH INVESTORS SERVICE, INC.

By:
---------------------

Date: , 1995
--------------------

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