VOYAGEUR TAX EXEMPT TRUST SERIES 10, S-6EL24, 1997-05-14

VOYAGEUR TAX EXEMPT TRUST SERIES 10
S-6EL24, 1997-05-14

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FILE NO: 333-

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
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: DELAWARE VOYAGEUR TAX-EXEMPT TRUST,
Series 10

B. Name of Depositor: VOYAGEUR FUND MANAGERS, INC.

C. Complete address of Depositor's principal executive offices:

One Commerce Square
Philadelphia, Pennsylvania 19103

D. Name and complete address of agents for service:

VOYAGEUR FUND MANAGERS, INC. CHAPMAN AND CUTLER
Attention: George M. Chamberlain, Jr. Attention: Mark J. Kneedy
One Commerce Square 111 West Monroe Street
Philadelphia, Pennsylvania 19103 Chicago, Illinois 60603

E. Title and amount of securities being registered: An indefinite number of
Units of proportionate interest pursuant to Rule 24f-2 under the
Investment Company Act of 1940

F. Proposed maximum offering price to the public of the securities being
registered: Indefinite

G. Amount of registration fee: $0.00

H. Approximate date of proposed sale to the public:

AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT

/ / Check box if it is proposed that this filing will become effective
pursuant to Rule 487

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The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.

DELAWARE-VOYAGEUR TAX-EXEMPT TRUST
SERIES 10

CROSS REFERENCE SHEET

Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933

(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)

FORM N-8B-2 FORM S-6
ITEM NUMBER HEADING IN PROSPECTUS

I. ORGANIZATION AND GENERAL INFORMATION

1. (a) Name of trust )
(b) Title of securities issued ) Prospectus Front Cover Page

2. Name and address of Depositor ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration

3. Name and address of Trustee ) Introduction
) Summary of Essential Financial
) Information
) Trust Administration

4. Name and address of principal ) Underwriting
underwriter )

5. Organization of trust ) Introduction

6. Execution and termination of ) Introduction
Trust Indenture and Agreement ) Trust Administration

7. Changes of Name ) *

8. Fiscal year ) *

9. Material Litigation ) *

II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST

10. General information regarding ) Introduction
trust's securities and rights ) Rights of Unitholders
of security holders ) The Fund
) Trust Administration

11. Type of securities comprising ) Introduction
units ) The Fund
) The Trusts

12. Certain information regarding ) *
periodic payment certificates )

13. (a) Load, fees, charges and ) Introduction
expenses ) Summary of Essential Financial
) Information
) Public Offering
) Trust Information
) Trust Administration

(b) Certain information regard- ) *
ing periodic payment plan )
certificates )

(d) Certain other fees, ) Public Offering
expenses or charges ) Trust Administration
payable by holders ) Trust Operating Expenses

(e) Certain profits to be ) Public Offering
received by depositor, ) Underwriting
principal underwriter, ) The Trusts
trustee or affiliated persons ) Trust Operating Expenses

(f) Ratio of annual charges ) *
to income )

14. Issuance of trust's securities ) The Fund

15. Receipt and handling of payments ) *
from purchasers )

16. Acquisition and disposition of ) Introduction
underlying securities ) Rights of Unitholders
) Trust Administration

17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration

18. (a) Receipt and disposition ) Introduction
of income ) Rights of Unitholders

(b) Reinvestment of distribu- ) Rights of Unitholders
tions )

(d) Schedule of distributions ) Summary of Essential Financial
) Information

19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration

20. Certain miscellaneous provisions ) Trust Administration
of trust agreement )

21. Loans to security holders ) *

22. Limitations on liability )
) Trust Administration

23. Bonding arrangements ) *

24. Other material provisions of ) *
trust indenture or agreement )

III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR

25. Organization of Depositor ) Trust Administration

26. Fees received by Depositor ) Trust Administration

27. Business of Depositor ) Trust Administration

28. Certain information as to )
officials and affiliated ) *
persons of Depositor )

29. Companies owning securities of ) *
Depositor )

30. Controlling persons of Depositor ) *

31. Compensation of Directors ) *

32. Compensation of Directors ) *

33. Compensation of Employees ) *

34. Compensation to other persons ) Public Offering

IV. DISTRIBUTION AND REDEMPTION OF SECURITIES

35. Distribution of trust's ) Rights of Unitholders
securities )

36. Suspension of sales of trust's ) *
securities )

37. Revocation of authority to ) *
distribute )

38. (a) Method of distribution )

(b) Underwriting agreements ) Underwriting

39. (a) Organization of principal )
underwriter )
) Trust Administration
(b) N.A.S.D. membership by )
principal underwriter )

40. Certain fees received by ) *
principal underwriter )

41. (a) Business of principal ) Trust Administration
underwriter )

(b) Branch offices of principal ) *
underwriter )

42. Ownership of securities of the ) *
trust )

43. Certain brokerage commissions )
received by principal ) *
underwriter )

44. (a) Method of valuation ) Introduction
) Summary of Essential Financial
) Information
) Public Offering
) Trust Administration
) Rights of Unitholders

(b) Schedule as to offering ) *
price )

45. Suspension of redemption rights ) Rights of Unitholders

46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration

(b) Schedule as to redemption ) *
price )

47. Purchase and sale of interests )
in underlying securities ) Trust Administration

V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN

48. Organization and regulation of ) Trust Administration
trustee )
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Trust Administration

50. Trustee's lien ) Trust Administration

VI. INFORMATION CONCERNING INSURANCE OF HOLDERS OF SECURITIES

51. Insurance of holders of trust's )
securities ) *

VII. POLICY OF REGISTRANT

52. (a) Provisions of trust agree- )
ment with respect to )
replacement or elimi- ) The Fund
nation of portfolio )
securities )

(b) Transactions involving )
elimination of underlying ) *
securities )

(d) Fundamental policy not ) *
otherwise covered )

53. Tax status of trust ) Tax Status
) The Trusts

VIII. Financial and Statistical Information

54. Trust's securities during ) *
last ten years )

55. )
)

56. Certain information regarding ) *
)

57. Periodic payment certificates )

58. )

59. Financial statements (Instruc- ) Other Matters
tions 1(c) to Form S-6) )

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

* Inapplicable, omitted, answer negative or not required

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

PRELIMINARY PROSPECTUS DATED
MAY 14, 1997, SUBJECT TO COMPLETION

DELAWARE-VOYAGEUR TAX-EXEMPT TRUST, SERIES 10
NEW MEXICO SERIES 2 PENNSYLVANIA INSURED SERIES 1
TERRITORIAL INSURED SERIES 6

THE FUND. Delaware-Voyageur Tax-Exempt Trust, Series 10 (the "Fund")
consists of the underlying separate unit investment trusts set forth above. The
various trusts are collectively referred to herein as the "Trusts." Pennsylvania
Insured Series 1 is referred to herein as the "Insured State Trust." Territorial
Insured Series 6 is referred to herein as the "Insured National Trust."
Collectively, the Insured State Trust and the Insured National Trusts may be
referred to herein as the "Insured Trusts." Because not all of the Bonds in New
Mexico Series 2 are insured, New Mexico Series 2 is not an Insured State Trust.
New Mexico Series 2 and the Insured State Trust may, collectively, be referred
to herein as the "State Trusts." Each Trust initially consists of
interest-bearing obligations (including delivery statements relating to
contracts for the purchase of certain such obligations and an irrevocable letter
of credit) issued by or on behalf of states and territories of the United States
and political subdivisions and authorities thereof, the interest on which is,
with certain exceptions, in the opinion of recognized bond counsel to the
issuing governmental authorities, exempt from all Federal income taxes under
existing law (the "Bonds"). In addition, the interest income of each State Trust
is, in the opinion of counsel, exempt to the extent indicated from state and
local taxes when held by residents of the state where the issuers of Bonds in
such State Trust are located. Investors should consult their tax advisers to
determine the extent to which such interest income is exempt from taxation in
their state of residence. Capital gains, if any, are subject to Federal and
state tax. All Bonds in the Insured Trusts have insurance guaranteeing the
payments of principal and interest, when due, or are escrowed to maturity. All
such insurance remains effective so long as the Bonds are outstanding. IT SHOULD
BE NOTED THAT THE INSURANCE RELATES ONLY TO THE BONDS IN AN INSURED TRUST AND
NOT TO THE UNITS OFFERED HEREBY OR TO THE MARKET VALUE THEREOF. As a result of
such insurance or escrow, the Bonds of each Insured Trust are rated "AAA" by
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. ("Standard & Poor's") and/or "Aaa" by Moody's Investors Service, Inc.
("Moody's"). Both Standard & Poor's and Moody's have indicated that their
respective rating is not a recommendation to buy, hold or sell Units nor does it
take into account the extent to which expenses of an Insured Trust or sales by
an Insured Trust of Bonds for less than the purchase price paid by such Trust
will reduce payment to Unitholders of the interest and principal required to be
paid on such Bonds. See "Insurance on the Bonds in the Insured Trusts." No
representation is made as to any insurer's ability to meet its commitments. NO
INSURANCE POLICY HAS BEEN OBTAINED FOR ANY OF THE BONDS IN THE TRUST WITH THE
NAME DESIGNATION OF NEW MEXICO SERIES 2; HOWEVER, CERTAIN OF THE BONDS CONTAINED
THEREIN MAY BE INSURED. Certain of the Bonds in certain of the Trusts may have
been acquired at prices which resulted in such Bonds being purchased at a
discount from the aggregate par value of such Bonds. Gains based upon the
difference, if any, between the value of such Bonds at maturity, redemption or
sale and their purchase price at a discount (plus earned original issue
discount) may constitute taxable ordinary income with respect to a Unitholder
who is not a dealer with respect to his Units.

INVESTMENT OBJECTIVES OF THE FUND. The objectives of the Fund are
income exempt from Federal income tax and, in the case of the State Trusts,
Federal and state income tax (if any) and conservation of capital through an
investment in diversified portfolios of Federal and state tax-exempt
obligations. The Trusts may be an appropriate investment vehicle for investors
who desire to participate in a portfolio of tax-exempt fixed income securities
with greater diversification than they might be able to acquire individually. In
addition, securities of the type deposited in the Trusts are often not available
in small amounts. There is, of course, no guarantee that the Trusts will achieve
their objectives. The payment of interest and the preservation of principal are
dependent upon the continuing ability of the issuers and/or obligors of the
Bonds and of the insurers thereof to meet their respective obligations.

UNITS OF THE TRUSTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK AND ARE NOT FEDERALLY INSURED OR OTHERWISE PROTECTED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY AND INVOLVE INVESTMENT RISK, INCLUDING LOSS OF PRINCIPAL.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

The investor is advised to read and retain this Prospectus for future reference.
THE DATE OF THIS PROSPECTUS IS _________, 1997

PUBLIC OFFERING PRICE. The Public Offering Price of the Units of each
Trust during the initial offering period is equal to the aggregate offering
price of the Bonds in such Trust's portfolio and cash, if any, in the Principal
Account held or owned by such Trust divided by the number of Units outstanding,
plus the applicable sales charge and accrued interest, if any. For sales charges
in the secondary market, see "Public Offering--General." If the Bonds in each
Trust were available for direct purchase by investors, the purchase price of the
Bonds would not include the sales charge included in the Public Offering Price
of the Units. During the initial offering period, the sales charge is reduced on
a graduated scale for sales involving $100,000 or more. If Units were available
for purchase at the opening of business on the Initial Date of Deposit, the
Public Offering Price per Unit would have been that amount set forth in the
"Summary of Essential Financial Information." See "Public Offering."

ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN. The Estimated
Current Return and Estimated Long-Term Return to Unitholders are as set forth
under "Summary of Essential Financial Information." The methods of calculating
Estimated Current Return and Estimated Long-Term Return are set forth in the
footnotes to the "Summary of Essential Financial Information" and under
"Estimated Current Return and Estimated Long-Term Return."

DISTRIBUTIONS. Unitholders will receive distributions on a monthly
basis. See "Rights of Unitholders-- Distributions of Interest and Principal."
Record dates will be the first day of each month. Distributions will be made on
the fifteenth day of the month subsequent to the respective record dates.

MARKET FOR UNITS. Although not obligated to do so, an affiliate of the
Sponsor, Voyageur Investments, Inc., intends to, and certain of the other
Underwriters may, maintain a secondary market for the Units at prices based upon
the aggregate bid price of the Bonds in the portfolio of a Trust; however,
during the initial offering period such prices will be based upon the aggregate
offering prices of the Bonds. If such a market is not maintained and no other
over-the-counter market is available, a Unitholder will be able to dispose of
his Units through redemption at prices based upon the bid prices of the
underlying Bonds (see "Rights of Unitholders--Redemption of Units").

REINVESTMENT OPTION. Unitholders have the opportunity to have their
distributions reinvested into an open-end management investment company as
described herein. See "Rights of Unitholders--Reinvestment Option."

RISK FACTORS. An investment in the Trusts should be made with an
understanding of the risks associated therewith, including, among other factors,
the inability of the issuer or an insurer to pay the principal of or interest on
a Bond when due, volatile interest rates, early call provisions, and changes to
the tax status of the Bonds. See "The Trusts--Risk Factors" for the applicable
Trust and "Risk Factors."

DELAWARE-VOYAGEUR TAX-EXEMPT TRUST, SERIES 10
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
AS OF THE OPENING OF BUSINESS ON THE INITIAL DATE OF DEPOSIT: ________, 1997
SPONSOR: VOYAGEUR FUND MANAGERS, INC.
DISTRIBUTOR: VOYAGEUR INVESTMENTS, INC.
EVALUATOR: MULLER DATA CORPORATION
TRUSTEE: THE CHASE MANHATTAN BANK

<TABLE>
<CAPTION>
New Pennsylvania Territorial
Mexico Insured Insured
Series 2 Series 1 Series 6
------------ -------- --------
<S> <C> <C> <C>
Principal Amount (Par Value) of Bonds................
Number of Units......................................
Fractional Undivided Interest in the Trust per Unit..
Principal Amount (Par Value) of Bonds per Unit (1)...
Public Offering Price: Aggregate Offering Price of
Bonds in Portfolio...............................
Aggregate Offering Price of Bonds per Unit...........
Sales Charge 4.9% (5.152% of the Aggregate
Offering Price of the Bonds) per Unit(2)..........
Public Offering Price per Unit(2)(3).................
Redemption Price per Unit(3)(4)......................
Sponsor's Initial Repurchase Price per Unit..........
Excess of Public Offering Price per Unit Over
Redemption Price per Unit.........................
Excess of Sponsor's Initial Repurchase Price per Unit
Over Redemption Price per Unit....................
Minimum Value of the Trust under which Trust
Agreement may be terminated.......................
Minimum Principal Distribution.........$0.10 per Unit
First Settlement Date................ _________, 1997
Mandatory Termination Date............_________, 2045
Calculation of Estimated Net Annual Unit Income(5):
Estimated Annual Interest Income per Unit.........
Less: Estimated Annual Expense per Unit...........
Estimated Net Annual Interest Income per Unit.....
Estimated Normal Monthly Distribution per Unit(6)....
Estimated Daily Rate of Net Interest Accrual per Unit
Estimated Current Return Based on Public Offering
Price(2)(6)(7)....................................
Estimated Long-Term Return(2)(6)(7)..................
Initial Distribution (________, 1997)................
Trustee's Initial Annual Fee per $1,000 Principal
Amount of Bonds(5)................................
Evaluator's Annual Fee per Unit......................
Sponsor's Annual Fee per Unit........................
Estimated Organizational and Offering Expenses
per Unit (8)......................................
Record Dates..................First day of each month
Distribution Dates........Fifteenth day of each month

</TABLE>

Evaluations for purpose of sale, purchase or redemption of Units are made as of
4:00 P.M. Eastern time on days of trading on the New York Stock Exchange next
following receipt of an order for a sale or purchase of Units or receipt by the
Trustee of Units tendered for redemption.

(1) Because certain of the Securities in certain Trusts may from time to
time under certain circumstances be sold or redeemed or will be called
or mature in accordance with their terms, there is no guarantee that the
value of each Unit at the respective Trusts' termination will be equal
to the Principal Amount (Par Value) of Securities per Unit stated above.

(2) The sales charge is decreased and the Estimated Current Return and
Estimated Long-Term Return are increased for transactions entitled to a
reduced sales charge. See "Public Offering--General."

(3) Anyone ordering Units for settlement after the First Settlement Date
will pay accrued interest from such date to the date of settlement
(normally three business days after order) less distributions from the
Interest Account subsequent to the First Settlement Date. For purchases
settling on the First Settlement Date, no accrued interest will be
added to the Public Offering Price. After the initial offering period,
the Sponsor's Repurchase Price per Unit will be determined as described
under the caption "Public Offering--Public Market."

(4) See "Rights of Unitholders--Redemption of Units."

(5) During the first year the Trustee will reduce its fee in the _________
Trust by approximately __________ per Unit (which amount is the
estimated interest to be earned per Unit prior to the expected delivery
date for the "when, as and if issued" Bonds included in such Trust).
Should such estimated interest exceed such amount, the Trustee will
reduce its fee up to its annual fee. After the first year, the Trustee's
fee will be that amount indicated above; Estimated Annual Interest
Income per Unit will be increased to $______, Estimated Annual Expense
per Unit will be increased to $______; and Estimated Net Annual Interest
Income per Unit will remain the same as shown. However, in no event will
the Trustee's Annual Fee for each Trust be less than $2,000. See
"Estimated Current Return and Estimated Long-Term Return."

(6) These figures are based on estimated per Unit cash flows. Estimated cash
flows will vary with changes in fees and expenses, with changes in
current interest rates and with the principal prepayment, redemption,
maturity, call, exchange or sale of the underlying Bonds. The estimated
cash flows for each Trust are available upon request at no charge from
the Sponsor.

(7) The Estimated Current Return is calculated by dividing the estimated net
annual interest income per Unit by the Public Offering Price. The
estimated net annual interest income per Unit will vary with changes in
fees and expenses of the Trustee, the Sponsor and the Evaluator and with
the principal prepayment, redemption, maturity, exchange or sale of
Bonds while the Public Offering Price will vary with changes in the
offering price of the underlying Bonds; therefore, there is no assurance
that the present Estimated Current Return indicated above will be
realized in the future. The Estimated Long-Term Return is calculated
using a formula which (1) takes into consideration, and determines and
factors in the relative weightings of, the market values, yields (which
takes into account the amortization of premiums and the accretion of
discounts) and estimated retirements of all of the Bonds in a Trust and
(2) takes into account a compounding factor and the expenses and sales
charge associated with each Trust Unit. Since the market values and
estimated retirements of the Bonds and the expenses of a Trust will
change, there is no assurance that the present Estimated Long-Term
Return as indicated above will be realized in the future. The Estimated
Current Return and Estimated Long-Term Return are expected to differ
because the calculation of the Estimated Long-Term Return reflects the
estimated date and amount of principal returned while the Estimated
Current Return calculation includes only net annual interest income and
Public Offering Price.

(8) Each Trust (and therefore the Unitholders of the respective Trust) will
bear all or a portion of its organizational and offering costs
(including costs of preparing the registration statement, the trust
indenture and other closing documents, registering Units with the
Securities and Exchange Commission and states, the initial audit of the
Trust portfolios and the initial fees and expenses of the Trustee but
not including the expenses incurred in the preparation and printing of
brochures and other advertising materials and any other selling
expenses) as is common for mutual funds. Total organizational and
offering expenses will be charged off over the initial offering period
which is currently expected to be approximately 2-3 months from the
Initial Date of Deposit. In so doing, the Sponsor may have to sell
Securities from the Trusts. The sale of Securities will serve to reduce
the Principal Amount (Par Value) of Securities per Unit stated above.
See 'Trust Operating Expenses" and "Statements of Net Assets."
Historically, the sponsors of unit investment trusts have paid all of
the costs of establishing such trusts.

(9) The Sponsor has agreed to waive the Sponsor's Annual Fee per Unit during
the first year of each Trusts' life. Thereafter, the Sponsor's Annual
Fee per Unit will be assessed in the amounts set forth above. As a
result of the inclusion of these fees after the first year, the
Estimated Current Return and in parenthesis, the Estimated Long-Term
Return, for the New Mexico Trust, Pennsylvania Trust and Territorial
Trust are expected to be____%, ____%, ___% ___%, ___% and ___%,
respectively, in subsequent years.

THE FUND

GENERAL. The Fund was created under the laws of the State of New York
pursuant to a Trust Agreement (the "Trust Agreement"), dated the Initial Date of
Deposit, as defined in "Summary of Essential Financial Information," with
Voyageur Fund Managers, Inc., as Sponsor, Muller Data Corporation, as Evaluator,
and The Chase Manhattan Bank, as Trustee.

The Fund consists of three separate unit investment trusts, each having
a portfolio of interest-bearing obligations (including delivery statements
relating to contracts for the purchase of certain such obligations) issued by or
on behalf of states and territories of the United States, and political
subdivisions and authorities thereof, the interest on which is, in the opinion
of recognized bond counsel to the issuing governmental authorities, exempt from
all Federal income taxes under existing law. All issuers of Bonds in a State
Trust are located in the State for which such Trust is named or in United States
territories or possessions and their public authorities; consequently, in the
opinion of counsel, the related interest earned on such Bonds is exempt to the
extent indicated from state and local taxes of such State or territory. In
addition, in the case of the Insured National Trust, interest income may also be
exempt from certain state and local taxes for residents of various states.
Illinois, Indiana, Virginia and Washington residents may only purchase units of
an Insured National Trust by this Prospectus. On the Initial Date of Deposit,
the Sponsor deposited with the Trustee the Bonds indicated under the "Schedule
of Investments" for each Trust herein, including delivery statements relating to
contracts for the purchase of certain such obligations and an irrevocable letter
of credit issued by a financial institution in the aggregate amount required for
such purchases (the "Bonds"). Thereafter, the Trustee, in exchange for the Bonds
so deposited, delivered to the Sponsor evidences of ownership of the number of
Units of each Trust as indicated under "Summary of Essential Financial
Information."

With the deposit of the Bonds on the Initial Date of Deposit, the
Sponsor established a percentage relationship between the amounts of Bonds in
each Trust's portfolio. From time to time following the Initial Date of Deposit,
the Sponsor, pursuant to the Trust Agreement, may deposit additional Bonds in a
Trust and Units may be continuously offered for sale to the public by means of
this Prospectus, resulting in a potential increase in the outstanding number of
Units of a Trust. Any additional Bonds deposited in a Trust will maintain, as
nearly as is practicable, the original proportionate relationship of the Bonds
in a Trust's portfolio. Since the prices of the underlying Bonds will fluctuate
daily, the ratio, on a market value basis, will also change daily. The portion
of Bonds represented by each Unit will not change as a result of the deposit of
additional Bonds in a Trust.

Certain of the Bonds in certain of the Trusts may have been purchased
on a "when, as and if issued" or "delayed delivery" basis. See footnote (1) in
"The Trusts--Notes to Schedules of Investments." The delivery of any such Bonds
may be delayed or may not occur. Interest on these Bonds begins accruing to the
benefit of Unitholders on their respective dates of delivery. To the extent any
Bonds are actually delivered to the Fund after their respective expected dates
of delivery, Unitholders who purchase their Units prior to the date such Bonds
are actually delivered to the Trustee would be required to adjust their tax
basis in their Units for a portion of the interest accruing on such Bonds during
the interval between their purchase of Units and the actual delivery of such
Bonds. As a result of any such adjustment, the Estimated Current Returns during
the first year would be slightly lower than those stated herein which would be
the returns after the first year, assuming the portfolio of a Trust and
estimated annual expenses other than those of the Trustee (which may be reduced
in the first year only) do not vary from that set forth under "Summary of
Essential Financial Information". Unitholders will be "at risk" with respect to
all Bonds in the portfolios including "when, as and if issued" and "delayed
delivery" Bonds (i.e., may derive either gain or loss from fluctuations in the
evaluation of such Bonds) from the date they commit for Units. For a discussion
of the Sponsor's obligations in the event of the failure of any contract for the
purchase of any of the Bonds and limited right to substitute other tax-exempt
bonds to replace any failed contract, see "Replacement Bonds" below.

Each Unit initially offered represents the fractional undivided
interest in each Trust as indicated under "Summary of Essential Financial
Information." To the extent that any Units are redeemed by the Trustee, the
fractional undivided interest in a Trust represented by each unredeemed Unit
will increase, although the actual interest in such Trust represented by such
fraction will remain unchanged. Units will remain outstanding until redeemed
upon tender to the Trustee by Unitholders, which may include the Sponsor or the
Underwriters, or until the termination of the Trust Agreement.

REPLACEMENT BONDS. Because certain of the Bonds in a Trust may from
time to time under certain circumstances be sold or redeemed or will mature in
accordance with their terms and because the proceeds from such events will be
distributed to Unitholders and will not be reinvested, no assurance can be given
that a Trust will retain for any length of time its present size and
composition. Neither the Sponsor nor the Trustee shall be liable in any way for
any default, failure or defect in any Bond. In the event of a failure to deliver
any Bond that has been purchased for a Trust under a contract, including those
securities purchased on a "when, as and if issued" basis ("Failed Bonds"), the
Sponsor is authorized under the Trust Agreement to direct the Trustee to acquire
other securities ("Replacement Bonds") to make up the original corpus of the
affected Trust.

The Replacement Bonds must be purchased within 20 days after delivery of
the notice of the failed contract and the purchase price (exclusive of accrued
interest) may not exceed the amount of funds reserved for the purchase of the
Failed Bonds. The Replacement Bonds shall (i) be tax-exempt bonds, issued by
states or territories of the United States or political subdivisions thereof and
shall have the benefit of an exemption from state taxation of interest to an
extent equal to or greater than that of the bonds they replace, with fixed
maturity dates substantially the same as those of the Failed Bonds; (ii) be
purchased at a price that results in a yield to maturity and in a current
return, in each case as of the Initial Date of Deposit, at least equal to that
of the Failed Bonds; (iii) be payable in U.S. currency; (iv) not be when, as and
if issued bonds; (v) be rated at least "AAA" by Standard & Poor's and/or "Aaa"
by Moody's in the case of an Insured Trust and at least BBB by Standard & Poor's
and/or Baa by Moody's in the case of any uninsured Trust; and (vi) be insured by
one of the Insurers if such Bonds are purchased for an Insured Trust. Whenever a
Replacement Bond has been acquired for a Trust, the Trustee shall, within five
days thereafter, notify all Unitholders of such Trust of the acquisition of the
Replacement Bond and shall, on the next monthly distribution date which is more
than 30 days thereafter, make a pro rata distribution of the amount, if any, by
which the cost to the affected Trust of the Failed Bond exceeded the cost of the
Replacement Bond plus accrued interest. Once the original corpus of a Trust is
acquired, the Trustee will have no power to vary the investment of the Trust;
i.e., the Trust will have no managerial power to take advantage of market
variations to improve a Unitholder's investment.

If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Bonds in the event of a
failed contract, the Sponsor will refund the sales charge attributable to such
Failed Bonds to all Unitholders of the affected Trust and distribute the
principal and accrued interest (at the coupon rate of such Failed Bonds to the
date the Failed Bonds are removed from the Trust) attributable to such Failed
Bonds not later than the next Distribution Date following such removal or such
earlier time as the Trustee in its sole discretion deems to be in the interest
of the Unitholders. In the event a Replacement Bond should not be acquired by a
Trust, the estimated net annual interest income per Unit for the Trust would be
reduced and the Estimated Current Return and the Estimated Long-Term Return
thereon might be lowered. In addition, Unitholders should be aware that they may
not be able at the time of receipt of such principal to reinvest such proceeds
in other securities at a yield equal to or in excess of the yield which such
proceeds were earning to Unitholders in the affected Trust.

INVESTMENT OBJECTIVES AND PORTFOLIO SELECTION

The objectives of the Fund are to gain interest income exempt from
Federal income tax and, in the case of a State Trust, Federal and state income
taxation and to conserve capital through an investment in diversified portfolios
of Federal and state tax-exempt obligations. There is, of course, no guarantee
that the Trusts will achieve their objectives. The Fund may be an appropriate
investment vehicle for investors who desire to participate in a portfolio of
tax-exempt fixed income securities with greater diversification than they might
be able to acquire individually. In addition, securities of the type deposited
in the Fund are often not available in small amounts.

Insurance guaranteeing the timely payment, when due, of all principal
and interest on the Bonds in each Insured Trust has been obtained by the issuer
of such Bonds, by a prior owner of such Bonds or by the Sponsor prior to the
deposit of such Bonds in such Insured Trust from one of several insurance
companies (the "Insurers"). Certain Bonds may be escrowed to maturity. No
representation is made as to any Insurer's ability to meet its commitments. All
Bonds insured by an Insurer receive a "AAA" rating by Standard & Poor's and a
"Aaa" rating by Moody's. All Bonds selected for an uninsured Trust were rated in
no case less than BBB by Standard & Poor's or Baa by Moody's. See "Description
of Bond Ratings." NO PORTFOLIO INSURANCE HAS BEEN OBTAINED BY THE SPONSOR FOR
BONDS CONTAINED IN NEW MEXICO SERIES 2.

In selecting Bonds for the Trusts the following factors, among others,
were considered by the Sponsor: (i) either the Standard & Poor's rating of the
securities was in no case less than AAA in the case of the Insured Trusts and
BBB in the case of the uninsured Trusts, or the Moody's rating of the Securities
was in no case less than Aaa in the case of the Insured Trusts and Baa in the
case of the uninsured Trusts, including provisional or conditional ratings,
respectively, or, if not rated, the Securities had, in the opinion of the
Sponsor, credit characteristics sufficiently similar to the credit
characteristics of interest-bearing tax-exempt obligations that were so rated as
to be acceptable for acquisition by the Fund, (ii) whether the Bonds are insured
by an Insurer in the case of an Insured Trust, (iii) the prices of the Bonds
relative to other bonds of comparable quality and maturity and (iv) the
diversification of Bonds as to purpose of issue and location of issuer, (v) with
respect to the Insured Trusts, the availability and cost of insurance for the
prompt payment of principal and interest, when due, on the Bonds. Subsequent to
the Initial Date of Deposit, a Bond may cease to be rated or its rating may be
reduced below either the applicable Standard & Poor's or Moody's ratings set
forth above or both. Neither event requires elimination of such Bonds from the
portfolio of a Trust but may be considered in the Sponsor's determination as to
whether or not to direct the Trustee to dispose of the Bonds, see "Trust
Administration-- Portfolio Administration."

To the best knowledge of the Sponsor, there is no litigation pending as
of the Initial Date of Deposit in respect of any Bonds which might reasonably be
expected to have a material adverse effect upon the Fund or any of the Trusts.
At any time after the Initial Date of Deposit, litigation may be initiated on a
variety of grounds with respect to Bonds in the Fund. Such litigation, as, for
example, suits challenging the issuance of pollution control revenue bonds under
environmental protection statutes, may affect the validity of such Bonds or the
tax-free nature of the interest thereon. While the outcome of litigation of such
nature can never be entirely predicted, the Fund has received or will receive
opinions of bond counsel to the issuing authorities of each Bond on the date of
issuance to the effect that such Bonds have been validly issued and that the
interest thereon is exempt from Federal and applicable state income taxation. In
addition, other factors may arise from time to time which potentially may impair
the ability of issuers to meet obligations undertaken with respect to the Bonds.

THE TRUSTS

NEW MEXICO SERIES 2

GENERAL. New Mexico Series 2 (the "New Mexico Trust") consists of ___
issues of Bonds. The issues are payable from the income of a specific project or
authority and are not supported by the issuer's power to levy taxes. These
issues are divided by purpose of issues (and percentage of principal amount to
total New Mexico Trust) as follows: ____% Education Revenue Bonds, ____%
Industrial Revenue Bonds, ___% Water and Sewer Revenue Bonds and ____% Other
Revenue Bonds. No Bond has received a provisional rating. For a general
description of certain of the risks associated with the Bonds, see "Risk
Factors" below. None of the Bonds in the New Mexico Trust are insured.

RISK FACTORS SPECIFIC TO NEW MEXICO. The following brief summary
regarding the economy of New Mexico is based upon information drawn from
publicly available sources and is included for the purpose of providing the
information about general economic conditions that may or may not affect issuers
of the New Mexico Bonds. The Sponsor has not independently verified any of the
information contained in such publicly available documents.

Major industries in the State are energy resources, services,
construction, trade, tourism, agriculture-agribusiness, manufacturing, mining,
and government. From 1994-95, the value of construction contracts increased 6.9%
to $2.1 billion. In 1995, the total of gas and oil sales was $3.12 billion,
however, this was a 9.7% decrease from 1994. In 1994, the value of mineral
production (i.e., crude petroleum, natural gas, uranium, and coal) was
approximately $5.05 billion. Major federally funded scientific research
facilities at Los Alamos, Albuquerque and White Sands are also a notable part of
the State's economy.

The State has a thriving tourist industry. In 1994, there were
approximately 2.29 million visits to national parks and about 4.9 million visits
to State parks. According to a 1991 estimate by the U.S. Travel Data Center, the
State's tourist industry generated about $2.3 billion in revenue and more than
38,370 jobs. However, 1995 was a slower year for tourism and travel in New
Mexico. Total gross receipts for hotels and other lodging places dropped 1.4%,
compared with a 5.6% gain in 1994. Air travel was also down 0.4%. In addition,
visits to New Mexico's national parks and monuments, affected partly by federal
government shutdowns in the fall and winter, dropped 1.7%.

Agriculture is a major part of the State's economy, producing $1.521
billion in 1995. This was a 0.4% decrease from 1994. As a high, relatively dry
region with extensive grasslands, the State is ideal for raising cattle, sheep,
and other livestock. Livestock receipts dropped 3.0% from 1994-95, to $1.066
billion due to significant declines in prices for beef cattle and calves.
Because of irrigation and a variety of climatic conditions, the State's farmers
are able to produce a diverse assortment of quality products. The State's
farmers are major producers of alfalfa hay, wheat, chile peppers, cotton,
fruits, and pecans. Crop revenues in 1995 rose 6.4% to $455 million.
Agricultural businesses include chile canneries, wineries, alfalfa pellets,
chemical and fertilizer plants, farm machinery, feed lots, and commercial
slaughter plants.

Job growth in New Mexico in 1993 was the highest since 1984. However,
in 1995, the total employment growth rate was 1.7%, less than half the 1994
growth rate of 4.2%, while the unemployment rate stabilized, remaining level at
6.3% in 1994 and 1995 after reaching a seven year high of 7.7% in 1993. The fact
that the State's 1995 unemployment rate is higher than the national rate of 5.6%
can be partially explained by population growth in New Mexico that is well in
excess of the national average. New Mexico's population growth is 1.8%, about
twice the national rate. Job growth in New Mexico has increased migration which
has kept the unemployment rate higher than it otherwise would have been. New
Mexico ranks 5th in the nation in unemployment as of April 1996, up from 10th
highest in April 1995.

The New Mexico economy recorded solid gains in 1995, but the rate of
expansion had slowed by the end of the year. Nonagricultural wage and salary
employment rose 4.9%, or 32,500 jobs, for all of 1995, reaching 689,700 jobs.
This was about the same as the 1994 increase (5.0%) and marked the third year in
a row that job growth surpassed 4%. Total personal income was up 8.1% to $30.4
billion, exceeding the 6.9% gain in 1994, and the U.S. gain of 6.0%. State job
growth and personal income gain have exceeded the national rate since 1988.

However, the rapid growth of New Mexico's population has had a negative
impact on per capita income. The 1995 per capita income of $18,055 was
approximately 79% of the national figure of $22,788 and ranked 48th out of the
50 states and the District of Columbia, although New Mexico's per capita income
growth rate of 6.0% was 1.0% above the national rate and ranked ninth
nationally.

Construction, services and trade were the job growth leaders in 1995.
Construction employment rose by 4,200 jobs, or 10.1%. Although this was a
sizable jump, it was down from the previous annual increase, 16.5%. The advance
in services increased by 15,200 jobs, or 8.6%, while growth in trade employment
rose 5.5%, or 8,600 jobs. Transportation and public utilities placed fourth,
with an increase of 3.7%. Finance, insurance and real estate recorded gains of
only 1.7%. Government and manufacturing were the weakest industries at 1.3%
each. Mining employment remained unchanged at 15,700 for both 1994 and 1995.

The state's economy will still expand at a healthy pace in 1996, but
not as fast as last year. The slowing trend is expected to continue into 1997.

From fiscal year 1989 through fiscal year 1992, the annual base revenue
growth in New Mexico (recurring revenues adjusted to exclude legislative changes
or extraordinary receipts) was in the range of 3.0% to 4.5%. In fiscal year
1993, base revenue growth was about 5.5%, exclusive of gains in the volatile
energy-related areas. For fiscal year 1994, base revenues were forecast to
increase by 6.5%, reflecting the State's economic strength. The outlook was for
stronger economic and revenue growth to continue for several years.

Because of this strong revenue growth, cash balances and recurring
revenues were substantially higher in 1994 than expected from 1993. Prior to
1994 appropriations, New Mexico's Department of Finance and Administration
projected the fiscal year 1994 ending General Fund balances to be about $300
million, which was almost 13% of total appropriations. Since the State typically
tries to maintain a 5% reserve ratio, this anticipated total was two and
one-half times the usual reserve objective. Thus, substantial funds were
available for nonrecurring appropriations or tax cuts. Total recurring
expenditures for fiscal year 1994 were $2,368.8 million. Total general fund
revenue for 1994 was $2.559 billion.

Reflecting strength in the economy and sufficient revenues, the 1994
Legislature cut General Fund revenues for fiscal year 1995 by almost $60 million
by restoring low income/personal income tax rebates, lowering personal income
tax rates, especially for married filers, suspending 2 cents of the gasoline tax
for a 3-year period and diverting the governmental gross receipts tax to an
infrastructure fund. Scheduled personal income tax rate cuts in 1995 and 1996
were to reduce personal income tax revenues an additional $25 million by fiscal
year 1997.

The fiscal plan adopted by the 1994 legislature overstated fiscal year
1995 and 1996 general fund revenue by more than $100 million. While state
revenue was growing, it was not growing as fast as estimated. In September of
1995, the Governor ordered a reduction of general fund allotments to all state
agencies.

Total general fund revenue for fiscal year 1995 was $2.630 billion, a
2.7% increase from fiscal year 1994. Recurring revenue for fiscal year 1995
totaled $2.643 billion, an increase of 3.3% from fiscal year 1994. Recurring
appropriations for fiscal year 1995 totaled $2.623 billion, up 9.3% from fiscal
year 1994. Total expenditures for fiscal year 1995 were $2.715 billion, 5.0%
higher than 1994, with a total ending balance of $58.822 million.

For the fiscal year ending June 30, 1996, recurring revenue totaled
$2.747 billion, an increase of 3.9% over the previous fiscal year. Total General
Fund Revenue was $2.752 billion, up 4.6% from fiscal year 1995. The fiscal year
1996 revenue was below a December 1995 estimate by $2 million, or 0.1%. In
general, weakness in broad-based taxes was offset by strength in revenue related
to the production of natural gas and crude oil. Strength relative to the
estimate was also evident for interest earnings, miscellaneous receipts and
reversions.

Preliminary results for fiscal year 1996 show general fund total
receipts and recurring appropriations at $2.75 billion. Fiscal year 1996
receipts are up 4.6% from fiscal year 1995 while recurring appropriations are up
4.9%. Nonrecurring appropriations for fiscal year 1996 were $22 million, down
76% from fiscal year 1995. The net transfer necessary from the operating reserve
is $24.3 million and is within the $30 million transfer authority authorized by
the 1996 legislature.

The 1996 legislature also established the risk reserve fund within the
general fund. General fund balances including the risk reserve fund are
projected to total over $137 million. Without the risk reserve, balances would
be $21.5 million. The fiscal year 1996 balance in the operating reserve is $16.8
million, or only 0.6% of fiscal year 1996 total revenue.

The state support reserve received a $3.37 million transfer from public
school support and the ending balance is $4.7 million for fiscal year 1996.

Disaster allotments from the appropriation contingency fund totaled
over $5.4 million, primarily due to the drought and the severe wildfires
experienced during 1996 and the ending balance in the appropriation contingency
fund is a nominal $35,000 due to a reversion.

For fiscal year 1997, the Governor proposed a budget which took into
consideration spending requirements in Medicaid (an 18.2% increase, or $30.9
million) and in the criminal justice system (a 5.7% increase, or $6.9 million),
and placed a high priority on public school funding (a 2.0% increase, or $26.2
million).

Estimated results for fiscal year 1997 show general fund total receipts
of $2.955 billion and recurring appropriations of $2.862 billion with
expenditures totaling $2.883 billion. The estimated fiscal year 1997 total
ending balance is $210 million, an increase of 53% over the preliminary fiscal
year 1996 results of $137 million.

The foregoing information constitutes only a brief summary of some of
the financial difficulties which may impact certain issuers of Bonds and does
not purport to be a complete or exhaustive description of all adverse conditions
to which the issuers in the New Mexico Trust are subject. Additionally, many
factors including national economic, social and environmental policies and
conditions, which are not within the control of the issuers of Bonds, could
affect or could have an adverse impact on the financial condition of the State
and various agencies and political subdivisions located in the State. The
Sponsor is unable to predict whether or to what extent such factors or other
factors may affect the issuers of Bonds, the market value or marketability of
the Bonds or the ability of the respective issuers of the Bonds acquired by the
New Mexico Trust to pay interest on or principal of the Bonds.

STATE TAXATION. For a discussion of the Federal tax status of income
earned on New Mexico Trust Units, see "Tax Status."

The assets of the New Mexico Trust will consist of interest-bearing
obligations issued by or on behalf of the State of New Mexico ("New Mexico") or
counties, municipalities, authorities or political subdivisions thereof (the
"New Mexico Bonds"), and by or on behalf of the government of Puerto Rico, the
government of the Guam, or the government of the Virgin Islands (collectively
the "Possession Bonds")(collectively the New Mexico Bonds and the Possession
Bonds shall be referred to herein as the "Bonds") the interest on which is
expected to qualify as exempt from New Mexico income taxes.

Neither the Sponsor nor its counsel have independently examined the
Bonds to be deposited in and held in the New Mexico Trust. However, although no
opinion is expressed herein regarding such matter, it is assumed that: (i) the
Bonds were validly issued, (ii) the interest thereon is excludable from gross
income for federal income tax purposes and (iii) interest on the Bonds, if
received directly by a Unit holder, would be exempt from the New Mexico income
taxes applicable to individuals and corporation (collectively, the "New Mexico
State Income Tax"). At the respective times of issuance of the Bonds, opinions
relating to the validity thereof and to the exemption of interest thereon from
federal income tax were rendered by bond counsel to the respective issuing
authorities. In addition, with respect to the Bonds, bond counsel to the issuing
authorities rendered opinions as to the exemption of interest from the New
Mexico State Income Tax. Neither the Sponsor nor its counsel has made any review
for the New Mexico Trust of the proceedings relating to the issuance of the
Bonds or of the bases for the opinions rendered in connection therewith. The
opinion set forth below does not address the taxation of persons other than full
time residents of New Mexico.

In the opinion of Chapman and Cutler, counsel to the Sponsor, under
existing law and based upon the assumptions set forth above:

(1) The New Mexico Trust will not be subject to tax under the New
Mexico State Income Tax.

(2) Interest on the Bonds which is exempt from the New Mexico State
Income Tax when received by the New Mexico Trust, and which would be exempt from
the New Mexico State Income Tax if received directly by a Unitholder, will
retain its status as exempt from such tax when received by the New Mexico Trust
and distributed to such Unitholder provided that the New Mexico Trust complies
with the reporting requirements contained in the New Mexico State Income Tax
Regulations.

(3) To the extent that interest income derived from the New Mexico
Trust by a Unitholder with respect to Possession Bonds is exempt fromstate taxes
pursuant to 48 U.S.C. Section 745, 48 U.S.C. Section 1423a or 48 U.S.C. Section
1403, such interest income will not be subject to New Mexico State Income Tax.

(4) Each Unitholder will recognize gain or loss for New Mexico State
Income Tax purposes if the Trustee disposes of a bond (whether by redemption,
sale or otherwise) or if the Unitholder redeems or sells Units of the New Mexico
Trust to the extent that such a transaction results in a recognized gain or loss
to such Unitholder for federal income tax purposes.

(5) The New Mexico State Income Tax does not permit a deduction of
interest paid on indebtedness or other expenses incurred (or continued) in
connection with the purchase or carrying of Units in the New Mexico Trust to the
extent that interest income related to the ownership of Units is exempt from the
New Mexico State Income Tax.

Chapman and Cutler has expressed no opinion with respect to taxation
under any other provisions of New Mexico law. Prospective investors should
consult their tax advisors regarding collateral tax consequences under New
Mexico law relating to the ownership of the Units, including, but not limited
to, the inclusion of income attributable to ownership of the Units in "modified
gross income" for the purposes of determining eligibility for and the amount of
the low income comprehensive tax rebate, the child day care credit, and the
elderly taxpayers' property tax rebate and the applicability of other New Mexico
taxes, such as the New Mexico estate tax.

<TABLE>
<CAPTION>
NEW MEXICO SERIES 2
SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: _______, 1997

Name of Issuer, Title, Interest Rate and Offering Price
Aggregate Maturity Date of either Bonds Deposited Redemption to New Mexico
Principal (1) or Bonds Contracted for (1)(5) Rating (2) Feature (3) Trust (4)
------------- -------------------------------- ---------- ----------- ----------
<S> <C> <C> <C> <C>

</TABLE>

For an explanation of the footnotes used on this page, see "Notes to Schedules
of Investments" on page ___.

PENNSYLVANIA INSURED SERIES 1

GENERAL. Pennsylvania Insured Series 1 (the "Pennsylvania Trust")
consists of ___ issues of Bonds. The issues are payable from the income of a
specific project or authority and are not supported by the issuer's power to
levy taxes. These issues are divided by purpose of issues (and percentage of
principal amount to total Pennsylvania Trust) as follows: ____% Education
Revenue Bonds, ____% Certificates of Participation, and ___% Water and Sewer
Revenue Bonds. No Bond has received a provisional rating. For a general
description of certain of the risks associated with the Bonds, see "Risk
Factors" below.

RISK FACTORS SPECIFIC TO PENNSYLVANIA. Prospective investors should
consider the financial difficulties and pressures which the Commonwealth of
Pennsylvania and certain of its municipal subdivisions have undergone. Both the
Commonwealth and the City of Philadelphia have historically experienced
significant revenue shortfalls. There can be no assurance that the Commonwealth
will not experience further declines in economic conditions or that portions of
the municipal obligations purchased by the Fund will not be affected by such
declines. Without intending to be complete, the following briefly summarizes
some of these difficulties and the current financial situation, as well as some
of the complex factors affecting the financial situation in the Commonwealth. It
is derived from sources that are generally available to investors and is based
in part on information obtained from various agencies in the Commonwealth. No
independent verification has been made of the following information.

STATE ECONOMY. Pennsylvania has been historically identified as a
heavy-industry state although that reputation has changed recently as the
industrial composition of the Commonwealth diversified when the coal, steel and
railroad industries began to decline. The major new sources of growth in the
Commonwealth are in the service sector, including trade, medical and the health
services, education and financial institutions. The Commonwealth's agricultural
industries are also an important component of its economic structure, accounting
for more than $3.6 billion in crop and livestock products annually while
agribusiness and food related industries support $39 billion in economic
activity annually.

Non-manufacturing employment in the Commonwealth has increased steadily
since 1980 to its 1995 level of 82.1 percent of total Commonwealth employment.
The growth in employment experienced in the Commonwealth during such periods is
comparable to the growth in employment in Middle Atlantic region of the United
States. Manufacturing, which contributed 17.9 percent of 1995 non-agricultural
employment, has fallen behind both the services sector and the trade sector as
the largest single source of employment within the Commonwealth. In 1995, the
services sector accounted for 30.4 percent of all non-agricultural employment in
the Commonwealth while the trade sector accounted for 22.8 percent.

The Commonwealth recently experienced a slowdown in its economy.
Moreover, economic strengths and weaknesses vary in different parts of the
Commonwealth. In general, heavy industry and manufacturing have been facing
increasing competition from foreign producers. During 1995, the annual average
unemployment rate in the Commonwealth was 5.9 percent compared to 5.6 percent
for the United States. For March 1996 the unadjusted unemployment rate was 5.9
percent in the Commonwealth and 5.8 percent in the United States, while the
seasonally adjusted unemployment rate for the Commonwealth was 5.6 percent and
for the United States was 5.6 percent.

STATE BUDGET. The Commonwealth operates under an annual budget that is
formulated and submitted for legislative approval by the Governor each February.
The Pennsylvania Constitution requires that the Governor's budget proposal
consist of three parts: (i) a balanced operating budget setting forth proposed
expenditures and estimated revenues from all sources and, if estimated revenues
and available surplus are less than proposed expenditures, a recommendation for
specific additional sources of revenue sufficient to pay the deficiency, (ii) a
capital budget setting forth proposed expenditures to be financed from the
proceeds of obligations of the Commonwealth or its agencies or from operating
funds; and (iii) a financial plan for not less than the succeeding five fiscal
years, that includes for each year projected operating expenditures and
estimated revenues and projected expenditures for capital projects. The General
Assembly may add, change or delete any items in the budget prepared by the
Governor, but the Governor retains veto power over the individual appropriations
passed by the legislature. The Commonwealth's fiscal year begins on July 1 and
ends on June 30.

All funds received by the Commonwealth are subject to appropriation in
specific amounts by the General Assembly or by executive authorization by the
Governor. Total appropriations enacted by the General Assembly may not exceed
the ensuing year's estimated revenues, plus (less) the unappropriated fund
balance (deficit) of the preceding year, except for constitutionally authorized
debt service payments. Appropriations from the principal operating funds of the
Commonwealth (the General Fund, the Motor License Fund and the State Lottery
Fund) are generally made for one fiscal year and are returned to the
unappropriated surplus of the fund if not spent or encumbered by the end of the
fiscal year. The Constitution specifies that a surplus of operating funds at the
end of a fiscal year must be appropriated for the ensuing year.

Pennsylvania uses the "fund" method of accounting. For purposes of
government accounting, a "fund" is an independent fiscal and accounting entity
with a self-balancing set of accounts, recording cash and/or other resources
together with all related liabilities and equities that are segregated for the
purpose of carrying on specific activities or attaining certain objectives in
accordance with the fund's special regulations, restrictions or limitations. In
the Commonwealth, funds are established by legislative enactment or in certain
cases by administrative action. Over 150 funds have been established for the
purpose of recording the receipt and disbursement of moneys received by the
Commonwealth. Annual budgets are adopted each fiscal year for the principal
operating funds of the Commonwealth and several other special revenue funds.
Expenditures and encumbrances against these funds may only be made pursuant to
appropriation measures enacted by the General Assembly and approved by the
Governor. The General Fund, the Commonwealth's largest fund, receives all tax
revenues, non-tax revenues and federal grants and entitlements that are not
specified by law to be deposited elsewhere. The majority of the Commonwealth's
operating and administrative expenses are payable from the General Fund. Debt
service on all bond indebtedness of the Commonwealth, except that issued for
highway purposes or for the benefit of other special revenue funds, is payable
from the General Fund.

Financial information for the principal operating funds of the
Commonwealth is maintained on a budgetary basis of accounting, which is used for
the purpose of ensuring compliance with the enacted operating budget. Since
1984, the Commonwealth has also prepared annual financial statements in
accordance with generally accepted accounting principles ("GAAP"). Budgetary
basis financial reports are based on a modified cash basis of accounting, as
opposed to a modified accrual basis of accounting prescribed by GAAP. The
budgetary basis financial information is adjusted at fiscal year-end to reflect
appropriate accruals for financial reporting in conformity with GAAP.

RECENT FINANCIAL CONDITIONS. From fiscal 1984, when the Commonwealth
first prepared its financial statements on a GAAP basis, through fiscal 1989,
the Commonwealth reported a positive unreserved-undesignated fund balance for
its governmental fund types at each fiscal year end. Slowing economic growth
during 1990, leading to a national economic recession beginning in fiscal 1991,
reduced revenue growth and increased costs of certain governmental programs and
contributed to negative unreserved-undesignated fund balances at the end of the
1990 and 1991 fiscal years. The negative unreserved-undesignated fund balance
was due largely to operating deficits in the General Fund and the State Lottery
Fund during those fiscal years. Actions taken during fiscal 1992 to bring the
General Fund budget back into balance, including tax increases and expenditure
restraints, resulted in a $1.1 billion reduction to the unreserved-undesignated
fund deficit for combined governmental fund types and a return to a positive
fund balance. Financial performance continued to improve during the 1993 and
1994 fiscal years. The fund balance for the governmental fund types increased
from $1,692.8 million on June 30, 1993, as restated, to $1,982.0 million on June
30, 1994, an increase of $289.2 million. An unreserved-undesignated fund balance
of $334.7 million was recorded for fiscal 1994 year end. At June 30, 1995, the
fund balance totaled $1,927.6 million, including an unreserved-undesignated fund
balance of $104.8 million.

FINANCIAL RESULTS FOR RECENT FISCAL YEARS. For the five-year period
from fiscal 1991 through fiscal 1995, total revenues and other sources rose at a
9.1 percent average annual rate while total expenditures and other uses grew by
7.4 percent annually. Over two-thirds of the increase in total revenues and
other sources during this period occurred during fiscal 1992 when a $2.7 billion
tax increase was enacted to address a fiscal 1991 budget deficit and to fund
increased expenditures for fiscal 1992. For the four-year period from fiscal
1992 through fiscal 1995, total revenues and other sources increased at an
annual average of 3.3 percent, less than one-half the rate of increase for the
five-year period beginning with fiscal 1991. This slower rate of growth was due,
in part, to tax rate reductions and other tax law revisions that restrained the
growth of tax receipts for fiscal years 1993, 1994 and 1995.

Expenditures and other uses followed a pattern similar to that for
revenues, although with smaller growth rates, during the fiscal 1991 through
fiscal 1995 period. Program areas having the largest increase in costs for the
fiscal 1991 to fiscal 1995 period related to protection of persons and property,
an expansion of state prisons, and public health and welfare. Recently, efforts
to restrain the rapid expansion of public health and welfare program costs have
resulted in expenditure increases at or below the total rate of increase for
total expenditures in each fiscal year.

FISCAL 1994 FINANCIAL RESULTS. Commonwealth revenues during the 1994
fiscal year totaled $15,210.7 million, $38.6 million above the fiscal year
estimate, and 3.9 percent over Commonwealth revenues during the 1993 fiscal
year. The sales tax was an important contributor to the higher than estimated
revenues. The strength of collections from the sales tax offset the lower than
budgeted performance of the personal income tax that ended the 1994 fiscal year
$74.4 million below estimate. The shortfall in the personal income tax was
largely due to shortfalls in income not subject to withholding such as interest,
dividends and other income. Expenditures, excluding pooled financing
expenditures and net of all fiscal 1994 appropriation lapses, totaled $14,934.4
million representing a 7.2 percent increase over fiscal 1993 expenditures.
Medical assistance and prisons spending contributed to the rate of spending
growth for the 1994 fiscal year. The Commonwealth maintained an operating
balance on a budgetary basis for fiscal 1994 producing a fiscal year ending
unappropriated surplus of $335.8 million.

FISCAL 1995 FINANCIAL RESULTS. Commonwealth revenues for the 1995
fiscal year were above estimate and exceeded fiscal year expenditures and
encumbrances. Fiscal 1995 was the fourth consecutive fiscal year the
Commonwealth reported an increase in the fiscal year-end unappropriated balance.
Prior to reserves for transfer to the Tax Stabilization Reserve Fund, the fiscal
1995 closing unappropriated surplus was $540.0 million, an increase of $204.2
million over the fiscal 1994 closing unappropriated surplus prior to transfers.

Commonwealth revenues during the 1995 fiscal year were $4159.4 million,
2.9 percent, above the estimate of revenues used at the time the 1995 fiscal
year budget was enacted. Corporation taxes contributed $329.4 million of the
additional receipts, largely due to higher receipts from the corporate net
income tax. Fiscal 1995 revenues from the corporate net income tax were 22.6
percent over collections in fiscal 1994 and include the effects of the reduction
of the tax rate from 12.25 percent to 11.99 percent that became effective with
tax years beginning on and after January 1, 1994. The sales and use tax and
miscellaneous revenues also showed strong year-over-year growth that produced
above-estimate revenue collections. Sales and use tax revenues were $5,526.9
million, $128.8 million above the enacted budget estimate and 7.9 percent over
fiscal 1994 collections. Tax receipts from both motor vehicle and non-motor
vehicle sales contributed to the higher collections. Miscellaneous revenue
collections for fiscal 1995 were $183.5 million, $44.9 million above estimate
and were largely due to additional investment earnings, escheat revenues and
other miscellaneous revenues.

FISCAL 1996 BUDGET. On June 30, 1995, the Governor signed a $16.2
billion general fund budget, an increase of approximately 2.7 percent over the
total appropriations from Commonwealth revenues in the fiscal 1995 budget. The
appropriations increase for fiscal 1996 is one of the lowest rates in recent
years. Areas receiving the largest budgetary increases are medical assistance
and basic education. In addition, the budget accelerated corporate net income
tax rate reductions, eliminated the inheritance tax paid by a surviving spouse
on jointly-owned property, and made other business tax reductions.

FISCAL 1997 BUDGET. In February 1996, the Governor presented his
proposed fiscal 1997 budget to the General Assembly. Proposed appropriations
from General Fund Commonwealth revenues totals $16,189.9 million, a reduction
from the estimated $16,219.9 million (including proposed supplemental
appropriations) for fiscal 1996. The proposed reduction represents a decline of
approximately 0.2 percent in appropriations from the prior fiscal year. Revenue
receipts are estimated to increase by $403.9 million, or 2.5 percent, over
anticipated receipts for fiscal 1996. The anticipated increased revenues,
together with the projected $140 million of appropriation lapses during fiscal
1996 and the proposed draw-down of approximately $95 million of surplus provide
the funding sources for the proposed budget. The proposed draw-down of the
fiscal 1996 unappropriated surplus produces a projected 1997 fiscal year end
surplus of under $5 million, without any consideration of possible appropriation
lapses for fiscal 1997. The decline in appropriation authority over the prior
fiscal year in the proposed budget relies on several program changes, including
$329 million of cost containment efforts in public health and welfare programs.
Other significant cost restraints include reductions to appropriations for the
state-aided colleges and universities and no increases for the state-related
colleges and universities.

DEBT LIMITS AND OUTSTANDING DEBT. The Pennsylvania Constitution permits
the issuance of the following types of debt: (i) debt to suppress insurrection
or rehabilitate areas affected by disaster; (ii) electorate approved debt; (iii)
debt for capital projects subject to an aggregate outstanding debt limit of 1.75
times the annual average tax revenues of the preceding five fiscal years; and
(iv) tax anticipation notes payable in the fiscal year of issuance.

Under the Pennsylvania Fiscal Code, the Auditor General is required to
certify to the Governor and the General Assembly certain information regarding
the Commonwealth's indebtedness. According to the February 29, 1996 Auditor
General certificate, the average annual tax revenues deposited in all funds in
the five fiscal years ended June 30, 1995 was approximately $17.7 billion, and,
therefore, the net debt limitation for the 1996 fiscal year is $30.9 billion.
Outstanding net debt totaled $3.9 billion at June 30, 1995, approximately equal
to the net debt at June 30, 1994. At February 29, 1996, the amount of debt
authorized by law to be issued, but not yet incurred, was $16.5 billion.

Outstanding general obligation debt totaled $5,045.4 million at June
30, 1995, a decrease of $30.4 million from June 30, 1994. Over the ten-year
period ending June 30, 1995, total outstanding general obligation debt increased
at an annual rate of 1.1 percent. Within the most recent five-year period,
outstanding general obligation debt has grown at an annual rate of 1.7 percent.

DEBT RATINGS. All outstanding general obligation bonds of the
Commonwealth are rated AA - by S&P and Al by Moody's.

CITY OF PHILADELPHIA. The City of Philadelphia (the "CITY" or
"PHILADELPHIA") is the largest city in the Commonwealth, with an estimated
population of 1,585,577 according to the 1990 Census. Philadelphia experienced a
series of general fund deficits for fiscal years 1988 through 1992 which have
culminated in serious financial difficulties for the City. In its 1992
Comprehensive Annual Financial Report, Philadelphia reported a cumulative
general fund deficit of $71.4 million for fiscal year 1992.

In June 1991, the Pennsylvania legislature established the Pennsylvania
Intergovernmental Cooperation Authority ("PICA"), a five-member board to assist
Philadelphia in remedying fiscal emergencies. PICA is designed to provide
assistance through the issuance of funding debt and to make factual findings and
recommendations to Philadelphia concerning its budgetary and fiscal affairs. The
legislation empowered PICA to issue notes and bonds on behalf of Philadelphia,
and also authorized Philadelphia to levy a one-percent sales tax, the proceeds
of which would be used to pay off the bonds. In return for Pica's fiscal
assistance, Philadelphia is required, among other things, to establish five-year
financial plans that include balanced annual budgets. Under the legislation, if
Philadelphia does not comply with such requirements, PICA may withhold bond
revenues and certain state funding. At this time, the City is operating under a
five-year fiscal plan approved by PICA on April 17, 1995. Technical
modifications were made to that plan as of July 12, 1995 and the revised plan,
incorporating such technical modifications, was approved by PICA on July 18,
1995. As of November 15, 1995, PICA has issued approximately $1,418.7 million of
its Special Tax Revenue Bonds.

No further PICA bonds are to be issued by PICA for the purpose of
financing a capital project or deficit, as the authority for such bond sales
expired on December 31, 1994. PICA's authority to issue debt for the purpose of
financing a cash flow deficit expires on December 31, 1996. Its ability to
refund existing outstanding debt is unrestricted.

In January 1993, Philadelphia anticipated a cumulative general fund
budget deficit of $57 million for the 1993 fiscal year. In response to the
anticipated deficit, the Mayor unveiled a financial plan eliminating the budget
deficit for the 1993 budget year through significant service cuts that included
a plan to privatize certain city-provided services. Due to an upsurge in tax
receipts, cost-cutting and additional PICA borrowings, Philadelphia completed
the 1993 fiscal year with a balanced general fund budget. The audit findings for
fiscal year 1993 show a cumulative general fund surplus of approximately $3
million for the fiscal year ended June 30, 1993.

In January 1994, the Mayor proposed a $2.3 billion city general fund
budget that included no tax increases, no significant service cuts and a series
of modest health and welfare program increases. At that time, the Mayor also
unveiled a $2.2 billion program (the "PHILADELPHIA ECONOMIC STIMULUS PROGRAM")
designed to stimulate Philadelphia's economy and stop the loss of 1,000 jobs a
month. In its 1994 Comprehensive Annual Financial Report, Philadelphia reported
a cumulative general fund surplus of approximately $15.4 million for the fiscal
year ended June 30, 1994, up from approximately $3 million as of June 30, 1.993.
Philadelphia's preliminary unaudited General Fund financial statements at June
30, 1995 project a surplus approximating $59.6 million.

S&P's rating on Philadelphia's general obligation bonds is "BBB-."
Moody's rating is currently "Baa."

LITIGATION. The Commonwealth is a party to numerous lawsuits in which
an adverse final decision could materially affect the Commonwealth's
governmental operations and consequently its ability to pay debt service on its
obligations. The Commonwealth also faces tort claims made possible by the
limited waiver of sovereign immunity effected by Act 152, approved September 28,
1978, as amended. Under the Act, damages for any loss are limited to $250,000
per person and $1 million for each accident.

STATE TAXATION. For a discussion of the Federal tax status of income
earned on Pennsylvania Trust Units, see "Tax Status."

In the opinion of Chapman and Cutler, special counsel for the
Pennsylvania Trust for Pennsylvania tax matters, under existing law:

We have examined certain laws of the State of Pennsylvania (the
"STATE") to determine their applicability to the Pennsylvania Trust (the
"PENNSYLVANIA TRUST") and to the holders of Units in the Pennsylvania Trust who
are residents of the State of Pennsylvania (the "UNITHOLDERS"). The assets of
the Pennsylvania Trust will consist of interest-bearing obligations issued by or
on behalf of the State, any public authority, commission, board or other agency
created by the State or a political subdivision of the State, or political
subdivisions thereof (the "BONDS"). Distributions of income with respect to the
Bonds received by the Pennsylvania Trust will be made monthly.

Although we express no opinion with respect thereto, in rendering the
opinion expressed herein, we have assumed that: (i) the Bonds were validly
issued by the State or its municipalities, as the case may be, (ii) the interest
therein is excludable from gross income for federal income tax purposes, (iii)
the interest thereon is exempt from Pennsylvania State and local taxes and (iv)
the Bonds are exempt from county personal property taxes. This opinion does not
address the taxation of persons other than full-time residents of Pennsylvania.

Based on the foregoing, and review and consideration of existing State
laws as of this date, it is our opinion, and we herewith advise you, as follows:

1. The Pennsylvania Trust will have no tax liability for purposes
of the personal income tax (the "PERSONAL INCOME TAX"), the corporate
income tax (the "CORPORATE INCOME TAX") and the capital stock-franchise
tax (the "FRANCHISE TAX"), all of which are imposed under the
Pennsylvania Tax Reform Code of 1971, or the Philadelphia School
District Investment Net Income Tax (the "PHILADELPHIA SCHOOL TAX")
imposed under Section 19-1804 of the Philadelphia Code of Ordinances.

2. Interest on the Bonds, net of Pennsylvania Trust expenses,
which is exempt from the Personal Income Tax when received by the
Pennsylvania Trust and which would be exempt from such tax if received
directly by a Unitholder, will retain its status as exempt from such
tax when received by the Pennsylvania Trust and distributed to such
Unitholder. Interest on the Bonds which is exempt from the Corporate
Income Tax and the Philadelphia School Tax when received by the
Pennsylvania Trust and which would be exempt from such taxes if
received directly by a Unitholder, will retain its status as exempt
from such taxes when received by the Pennsylvania Trust and distributed
to such Unitholder.

3. Distributions from the Pennsylvania Trust attributable to
capital gains recognized by the Pennsylvania Trust upon its disposition
of a Bond issued on or after February 1, 1994, will be taxable for
purposes of the Personal Income Tax and the Corporate Income Tax. No
opinion is expressed with respect to the taxation of distributions from
the Pennsylvania Trust attributable to capital gains recognized by the
Pennsylvania Trust upon its disposition of a Bond issued before
February 1, 1994.

4. Distributions from the Pennsylvania Trust attributable to
capital gains recognized by the Pennsylvania Trust upon its disposition
of a Bond will be exempt from the Philadelphia School Tax if the Bond
was held by the Pennsylvania Trust for a period of more than six months
and the Unitholder held his Unit for more than six months before the
disposition of the Bond. If, however, the Bond was held by the
Pennsylvania Trust or the Unit was held by the Unitholder for a period
of less than six months, then distributions from the Pennsylvania Trust
attributable to capital gains recognized by the Pennsylvania Trust upon
its disposition of a Bond issued on or after February 1, 1994 will be
taxable for purposes of the Philadelphia School Tax; no opinion is
expressed with respect to the taxation of any such gains attributable
to Bonds issued before February 1, 1994.

5. Insurance proceeds paid under policies which represent maturing
interest on defaulted obligations will be exempt from the Corporate
Income Tax to the same extent as such amounts are excluded from gross
income for federal income tax purposes. No opinion is expressed with
respect to whether such insurance proceeds are exempt from the Personal
Income Tax or the Philadelphia School Tax.

6. Each Unitholder will recognize gain for purposes of the
Corporate Income Tax if the Unitholder redeems or sells Units of the
Pennsylvania Trust to the extent that such a transaction results in a
recognized gain to such Unitholder for federal income tax purposes and
such gain is attributable to Bonds issued on or after February 1, 1994.
No opinion is expressed with respect to the taxation of gains realized
by a Unitholder on the sale or redemption of a Unit to the extent such
gain is attributable to Bonds issued prior to February 1, 1994.

7. A Unitholder's gain on the sale or redemption of a Unit will be
subject to the Personal Income Tax, except that no opinion is expressed
with respect to the taxation of any such gain to the extent it is
attributable to Bonds issued prior to February 1, 1994.

8. A Unitholder's gain upon a redemption or sale of Units will be
exempt from the Philadelphia School Tax if the Unitholder held his Unit
for more than six months and the gain is attributable to Bonds held by
the Pennsylvania Trust for a period of more than six months. If,
however, the Unit was held by the Unitholder for less than six months
or the gain is attributable to Bonds held by the Pennsylvania Trust for
a period of less than six months, then the gains will be subject to the
Philadelphia School Tax; except that no opinion is expressed with
respect to the taxation of any such gains attributable to Bonds issued
before February 1, 1994.

9. The Bonds will not be subject to taxation under the County
Personal Property Tax Act of June 17, 1913 (the "PERSONAL PROPERTY
TAX"). Personal property taxes in Pennsylvania are imposed and
administered locally, and thus no assurance can be given as to whether
Units will be subject to the Personal Property Tax in a particular
jurisdiction However, in our opinion, Units should not be subject to
the Personal Property Tax.

Unitholders should be aware that, generally, interest on indebtedness
incurred or continued to purchase or carry Units is not deductible for purposes
of the Personal Income Tax, the Corporate Income Tax or the Philadelphia School
Tax.

We have not examined any of the Bonds to be deposited and held in the
Pennsylvania Trust or the proceedings for the issuance thereof or the opinions
of bond counsel with respect thereto, and therefore express no opinion as to the
exemption from federal or state income taxation of interest on the Bonds if
interest thereon had been received directly by a Unitholder.

Chapman and Cutler has expressed no opinion with respect to taxation
under any other provision of Pennsylvania law. Ownership of the Units may result
in collateral Pennsylvania tax consequences to certain taxpayers. Prospective
investors should consult their tax advisors as to the applicability of any such
collateral consequences.

<TABLE>
<CAPTION>
PENNSYLVANIA INSURED SERIES 1
SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: _______, 1997

Name of Issuer, Title, Interest Rate and Offering Price
Aggregate Maturity Date of either Bonds Deposited Redemption to National
Principal (1) or Bonds Contracted for (1)(5) Rating (2) Feature (3) Trust (4)
- ------------- --------------------------------------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>

- ---------------- --------------------------------------------- ------------- ----------------------- -----------------
</TABLE>

For an explanation of the footnotes used on this page, see "Notes to Schedules
of Investments" on page ___.

TERRITORIAL INSURED SERIES 6

GENERAL. Territorial Insured Series 6 (the "Territorial
Trust") consists entirely of obligations of issuers located in Territories of
the United States, such as Puerto Rico, Guam and the Northern Marianna Islands.
Specifically, the Territorial Trust consists of __ issues of Bonds all issued by
entities located in the Commonwealth of Puerto Rico. One of the Bonds in the
Territorial Trust is a general obligation (___%) of the governmental entity
issuing it and is backed by the taxing power thereof. The remaining issues are
payable from the income of a specific project or authority and are not supported
by the issuer's power to levy taxes. These issues are divided by purpose of
issues (and percentage of principal amount to total Territorial Trust) as
follows: ____% Education Revenue Bonds; ____% Transportation Revenue Bonds and
____% Water and Sewer Revenue Bonds. No Bond has received a provisional rating.
For a general description of certain of the risks associated with the Bonds, see
"Risk Factors" below.

RISK FACTORS SPECIFIC TO PUERTO RICO. The economy of Puerto
Rico is closely integrated with that of the mainland United States. During
fiscal 1996 approximately 88% of Puerto Rico's exports were to the U.S.
mainland, which was also the source of approximately 62% of Puerto Rico's
imports. The economy of Puerto Rico is dominated by the manufacturing and
service sectors. The manufacturing sector has experienced a basic change over
the years as a result of increased emphasis on higher wage, high technology
industries such as pharmaceuticals, electronics, computers, microprocessors,
professional and scientific instruments, and certain high technology machinery
and equipment. The service sector, including finance, insurance and real estate,
also plays a major role in the economy. It ranks second only to manufacturing in
contribution to the gross domestic product and leads all sectors in providing
employment. In recent years, the service sector has experienced significant
growth in response to the expansion of the manufacturing sector.

Puerto Rico's more than decade-long economic expansion
continued throughout the five-year period from fiscal 1992 through fiscal 1996.
Almost every sector of the economy participated and record levels of employment
were achieved. Factors behind this expansion included government-sponsored
economic development programs, periodic declines in the exchange value of the
U.S. dollar, increases in the level of federal transfers and the relatively low
cost of borrowing. Unemployment, although at relatively low historical levels,
remains above the average for the United States. Average employment increased
from 977,000 in fiscal 1992 to 1,092,300 in fiscal 1996. Average unemployment
decreased from 16.5% in fiscal 1992, to 13.8% in fiscal 1996.

Gross product in fiscal 1992 was $23.7 billion and gross
product in fiscal 1996 was $30.2 billion ($26.7 billion in 1992 prices). This
represents an increase in gross product of 27.7% from fiscal 1992 to 1996 (12.9%
in 1992 prices). Since fiscal 1985, personal income, both aggregate and per
capita, has increased consistently each fiscal year. In fiscal 1996, aggregate
personal income was $29.4 billion ($27.8 billion in 1992 prices) and personal
income per capita was $7,882 ($7,459 in 1992 prices).

The gross product forecast for fiscal 1997, made in February
1997, projects an increase of 2.8% over fiscal 1996. Further growth in the
Puerto Rico economy in fiscal 1997 depends on several factors, including the
strength of the U.S. economy, the relative stability in the price of oil
imports, increases in the number of visitors to the island, the level of
exports, the exchange value of the U.S. dollar, the level of federal transfers
and the cost of borrowing. During the first seven months of fiscal 1997, total
employment (seasonally adjusted) averaged 1,129,100, compared to 1,089,000 in
the same period in fiscal 1996, an increase of 3.7%.

The Puerto Rican economy is affected by a number of
Commonwealth and federal investment incentive programs. Aid for Puerto Rico's
economy has traditionally depended heavily on federal programs, and current
federal budgetary policies suggest that an expansion of aid to Puerto Rico is
unlikely. An adverse effect on the Puerto Rican economy could result from other
U.S. policies, including further reduction in transfer payment programs such as
food stamps, curtailment of military spending and policies which could lead to a
stronger dollar. One of the factors assisting the development of the Puerto
Rican economy has been the tax incentives offered by the federal and Puerto Rico
governments. Recently enacted federal legislation amending Internal Revenue Code
Section 936, however, phases out the federal tax incentives during a ten-year
period.

On February 26, 1997, legislation was introduced in the U.S.
House of Representatives proposing a mechanism to settle permanently the
political relationship between Puerto Rico and the United States, either through
full self government (e.g., statehood or independence, including, as an
alternative, free association via a bilateral treaty) or continued commonwealth.
Under the legislation, failure to settle on full self government after
completion of the referendum process provided therein would result in retention
of commonwealth status. Any change in the current status of Puerto Rico could
have a material adverse impact on such matters as the basic characteristics of
future Puerto Rico debt obligations, the markets for these obligations, and the
types, levels and quality of revenue sources pledged for the payment of existing
and future debt obligations. However, no assessment can be made at this time of
the economic and other effects of a change in federal laws affecting Puerto
Rico.

FEDERAL TAXATION. For a discussion of the Federal tax status
of income earned on Territorial Trust Units, see "Tax Status."

<TABLE>
<CAPTION>
TERRITORIAL INSURED SERIES 6
SCHEDULE OF INVESTMENTS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: _____, 1997

Name of Issuer, Title, Interest Rate and Offering Price
Aggregate Maturity Date of either Bonds Deposited Redemption to Territorial
Principal (1) or Bonds Contracted for (1)(5) Rating (2) Feature (3) Trust (4)
------------- ----------------------------------------------- ---------- --------------- -------------
<S> <C> <C> <C> <C>

</TABLE>

For an explanation of the footnotes used on this page, see "Notes to Schedules
of Investments" on page ___.

Notes to Schedules of Investments
As of the Opening of Business on the
Initial Date of Deposit: _______, 1997

1. All Bonds are represented by "regular way" or "when issued"
contracts for the performance of which an irrevocable letter of credit, obtained
from an unaffiliated financial institution, has been deposited with the Trustee.
The Sponsor has assigned to the Trustee all of its right, title and interest in
and to such Bonds. Contracts to acquire Bonds were entered into during the
period from __________, 1997 to ___________, 1997. These Bonds have expected
settlement dates from __________, 1997 to ________, 1997 (see "The Fund").

2. All ratings are by Standard & Poor's and/or Moody's. As a result of
the insurance related to each Bond in an Insured Trust, each Bond is rated "AAA"
by Standard & Poor's and/or "Aaa" by Moody's. See "Insurance on Bonds in the
Insured Trusts" and "Description of Bond Ratings."

3. There is shown under this heading the year in which each issue of
the Bonds is initially or currently callable and the call price for that year.
Each issue of the Bonds continues to be callable at declining prices thereafter
(but not below par value) except for original issue discount bonds which are
redeemable at prices based on the issue price plus the amount of original issue
discount accreted to redemption date plus, if applicable, some premium, the
amount of which will decline in subsequent years. "S.F." indicates a sinking
fund is established with respect to an issue of the Bonds. Redemption pursuant
to call provisions generally will, and redemption pursuant to sinking fund
provisions may, occur at times when the redeemed obligations have an offering
side valuation which represents a premium over par. Certain Bonds may be subject
to redemption without premium prior to the date shown pursuant to extraordinary
optional or mandatory redemptions if certain events occur. Notwithstanding any
provisions to the contrary, certain bond issuers have in the past, and others
may in the future, attempt to redeem bonds prior to their initially scheduled
call dates and at prices which do not include any premiums. For a general
discussion of certain of these events, see "Risk Factors--Redemptions of Bonds."
To the extent that the Bonds were deposited in a Trust at a price higher than
the price at which they are redeemed, this will represent a loss of capital when
compared with the original Public Offering Price of the Units. Conversely, to
the extent that the Bonds were acquired at a price lower than the redemption
price, this will represent an increase in capital when compared with the
original Public Offering Price of the Units. Distributions will generally be
reduced by the amount of the income which would otherwise have been paid with
respect to redeemed Bonds and there will be distributed to Unitholders the
principal amount and any premium received on such redemption. The Estimated
Current Return and Estimated Long-Term Return in this event may be affected by
such redemptions. For the Federal tax effect on Unitholders of such redemptions
and resultant distributions, see "Tax Status" and "Estimated Current Return and
Estimated Long-Term Return."

4. Evaluation of Bonds is made on the basis of current offering prices
for the Bonds. The offering prices are greater than the current bid prices of
the Bonds which is the basis on which Unit value is determined for purposes of
redemption of Units (see "Public Offering--Offering Price").

5. Other information regarding the Bonds in each Trust, as of the
opening of business on the Initial Date of Deposit, is as follows:

<TABLE>
<CAPTION>
Annual Bid Side
Cost to Profit (Loss) Interest Income Evaluation
Trust Sponsor to Sponsor to Trust of Bonds
----- ------- ---------- -------- --------
<S> <C> <C> <C> <C>
New Mexico Series 2
Pennsylvania Insured Series 1
Territorial Insured Series 6

</TABLE>

The Sponsor may have entered into contracts which hedge interest rate
fluctuations on certain Bonds in the portfolios. On the opening of business on
the Initial Date of Deposit, the offering side evaluation of the Bonds in each
Trust was higher than the bid side evaluation of such Bonds by____%, _____% and
_____% for the New Mexico, Pennsylvania and Territorial Trusts, respectively.
Two Bonds in the Series, representing ___% of the principal amount of the Bonds,
(marked by a double asterisk (**)) were purchased on a "when, as and if issued"
basis. Interest on these Bonds begin accruing to the benefit of Unitholders on
their respective dates of delivery. Delivery is expected to take place nine and
twenty one days, respectively, after the First Settlement Date.

"#" indicates that such Bond was issued at either an original issue discount or
purchased at a market discount. The tax effect of Bonds issued at an original
issue discount or purchased at a market discount is described in "Tax Status."

6. This Bond has been purchased at a deep discount from the par value
because there is little or no stated interest income thereon. Bonds which pay no
interest are normally described as "zero coupon" bonds. Over the life of bonds
purchased at a deep discount the value of such bonds will increase such that
upon maturity the holders of such bonds will receive 100% of the principal
amount thereof. To the extent that zero coupon bonds are sold or called prior to
maturity, there is no guarantee that the value of the proceeds received
therefrom by the Trust will equal or exceed the par value that would have been
obtained at maturity of such zero coupon bonds.

EQUIVALENT TAXABLE ESTIMATED CURRENT RETURNS

As of the date of this Prospectus, the following table shows the
approximate taxable estimated current returns for individuals that are
equivalent to tax-exempt estimated current returns under combined Federal and
State (if applicable) taxes using the published Federal and State (if
applicable) tax rates scheduled to be in effect in 1997. This table illustrates
approximately what you would have to earn on taxable investments to equal the
tax-exempt estimated current return in your income tax bracket. For cases in
which more than one State bracket falls within a Federal bracket, the highest
State bracket is combined with the Federal bracket. The combined State and
Federal tax rates shown reflect the fact that State tax payments are currently
deductible for Federal tax purposes. The table does not show the approximate
taxable estimated current returns for individuals who are subject to the
alternative minimum tax. The taxable equivalent estimated current returns may be
somewhat higher than the equivalent returns indicated in the following table for
those individuals who have adjusted gross incomes in excess of $121,200. The
table does not reflect the effect of limitations on itemized deductions and the
deduction for personal exemptions which were designed to phase out certain
benefits of these deductions for higher income taxpayers. These limitations, in
effect, raise the marginal maximum Federal tax rate to approximately 44 percent
for taxpayers filing a joint return and entitled to four personal exemptions and
to approximately 41 percent for taxpayers filing a single return entitled to
only one personal exemption. These limitations are subject to certain maximums,
which depend on the number of exemptions claimed and the total amount of the
taxpayer's itemized deductions. For example, the limitation on itemized
deductions will not cause a taxpayer to lose more than 80 percent of his
allowable itemized deductions, with certain exceptions. See "Tax Status" for a
more detailed discussion of recent Federal tax legislation, including a
discussion of provisions affecting corporations.

<TABLE>
<CAPTION>
New Mexico Tax Equivalent Table

Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
------------------------------ -----------------------------------------------------------
Single Joint Tax 4-1/2% 5% 5-1/2% 6% 6-1/2% 7% 7-1/2%
Return Return Bracket Equivalent Taxable Estimated Current Return
------------- ------ ------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 24.65 20.1% 5.63% 6.26% 6.88% 7.51% 8.14% 8.76% 9.39%
$ 0 - 41.20 21.0 5.70 6.33 6.96 7.59 8.23 8.86 9.49
24.65 - 59.75 41.20 - 99.60 33.7 6.79 7.54 8.30 9.05 9.80 10.56 11.31
59.75 - 124.65 99.60 - 151.75 36.9 7.13 7.92 8.72 9.51 10.30 11.09 11.89
124.65 - 271.05 151.75 - 271.05 41.4 7.68 8.53 9.39 10.24 11.09 11.95 12.80
Over 271.05 Over 271.05 44.7 8.14 9.04 9.95 10.85 11.75 12.66 13.56

Pennsylvania Tax Equivalent Table

Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
------------------------------ -----------------------------------------------------------
Single Joint Tax 4-1/2% 5% 5-1/2% 6% 6-1/2% 7% 7-1/2%
Return Return Bracket Equivalent Taxable Estimated Current Return
------------- ------ ------- -----------------------------------------------------------
$ 0- 24.65 $ 0- 41.20 17.4% 5.45% 6.05% 6.66% 7.26% 7.87% 8.47% 9.08%
24.65 - 59.75 41.20 - 99.60 30.0 6.43 7.14 7.86 8.57 9.29 10.00 10.71
59.75 - 124.65 99.60 - 151.75 32.9 6.71 7.45 8.20 8.94 9.69 10.43 11.18
124.65 - 271.05 151.75 - 271.05 37.8 7.23 8.04 8.84 9.65 10.45 11.25 12.06
Over 271.05 Over 271.05 41.3 7.67 8.52 9.37 10.22 11.07 11.93 12.78

Territorial Tax Equivalent Table

Taxable Income ($1,000's) Tax-Exempt Estimated Current Return
------------------------------ -----------------------------------------------------------
Single Joint Tax 4-1/2% 5% 5-1/2% 6% 6-1/2% 7% 7-1/2%
Return Return Bracket* Equivalent Taxable Estimated Current Return
------------- ------ ------- -----------------------------------------------------------
$ 0 - 24.65 $ 0 - 41.20 15.0% 5.29% 5.88% 6.47% 7.06% 7.65% 8.24% 8.82%
24.65 - 59.75 41.20 - 99.60 28.0 6.25 6.94 7.64 8.33 9.03 9.72 10.42
59.75 - 124.65 96.60 - 151.75 31.0 6.52 7.25 7.97 8.70 9.42 10.14 10.87
124.65- 271.05 151.75- 271.05 36.0 7.03 7.81 8.59 9.38 10.16 10.94 11.72
Over 271.05 Over 271.05 39.6 7.45 8.28 9.11 9.93 10.76 11.59 12.42

</TABLE>

INDEPENDENT AUDITORS' REPORT

TO THE SPONSOR, TRUSTEE AND THE UNITHOLDERS OF DELAWARE-VOYAGEUR
TAX-EXEMPT TRUST, SERIES 10:

We have audited the accompanying statements of net assets, including
the schedules of investments, of Delaware-Voyageur Tax-Exempt Trust, Series 10
(New Mexico Series 2, Pennsylvania Insured Series 1 and Territorial Insured
Series 6), as of ______, 1997. The statements of net assets are the
responsibility of the Sponsor. Our responsibility is to express an opinion on
such financial statements based on our audits.

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

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Delaware-Voyageur
Tax-Exempt Trust, Series 10 (New Mexico Series 2, Pennsylvania Insured Series 1
and Territorial Insured Series 6), as of ___________, 1997, in conformity with
generally accepted accounting principles.

KPMG Peat Marwick LLP

Minneapolis, Minnesota
___________, 1997

DELAWARE-VOYAGEUR TAX-EXEMPT TRUST, SERIES 10
STATEMENTS OF NET ASSETS
AS OF THE OPENING OF BUSINESS ON THE INITIAL
DATE OF DEPOSIT: __________, 1997

<TABLE>
<CAPTION>
New Pennsylvania Territorial
Mexico Insured Insured
Series 2 Series 1 Series 6
------------ ------------ ----------
<S> <C> <C> <C>
Contracts to purchase securities(1)(2)
Accrued interest on underlying securities(1)(3)
Organizational and offering Costs (4)
Total Assets
Less: distributions payable(3)
Less: accrued organizational and offering costs (4)
Net Assets

Net Assets Represented By:
Interest of Unitholders--
Units of fractional undivided interest
outstanding: ( ______,______, _______
_______ and ______ Units, respectively)
Cost to investors(5)
Less: Gross underwriting commission(5)
Net Assets(5)

</TABLE>

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

(1) The aggregate value of the Bonds listed under "Schedule of Investments"
for each Trust herein and their cost to such Trust are the same. The value
of the Bonds is determined by Muller Data Corporation on the bases set
forth under "Public Offering--Offering Price." The contracts to purchase
Bonds are collateralized by an irrevocable letter of credit which has been
deposited with the Trustee in and for the following amounts:

<TABLE>
<CAPTION>
Principal Offering
Amount of Price of Accrued Interest
Amount of Bonds Under Bonds Under to Expected
Letter of Credit Contracts Contracts Delivery Dates
<S> <C> <C> <C> <C>
New Mexico Series 2
Territorial Insured Series 6
Pennsylvania Insured Series 1

</TABLE>

(2) Insurance coverage providing for the timely payment of principal and
interest on the Bonds in the portfolio of each Insured Trust has been
obtained by the issuer of the Bond, the underwriter of such Bond, the
Sponsor or others.
See "Schedule of Investments."

(3) The Trustee will advance the amount of accrued interest as of _________,
1997 (the "First Settlement Date"), and all accrued interest to the First
Settlement Date will be distributed to the Sponsor as the Unitholder of
record as of the First Settlement Date.

(4) The Trusts (and therefore Unitholders) will bear all or a portion of their
organizational and offering costs, which will be deferred and charged off
against principal at the end of the initial offering period.

(5) The aggregate public offering price (exclusive of interest) and the
aggregate sales charge are computed on the bases set forth under "Public
Offering--Offering Price" and "Public Offering--Sponsor and Underwriter
Compensation" and assume all single transactions involve less than
$100,000. For single transactions involving $100,000 or more, the sales
charge is reduced (see "Public Offering--General") resulting in an equal
reduction in both the Cost to investors and the Gross underwriting
commission while the Net Assets remains unchanged.

RISK FACTORS

GENERAL. Certain of the Bonds in the Trusts may have been acquired at a
market discount from par value. The coupon interest rates on the discount bonds
at the time they were purchased and deposited in the Trusts were lower than the
current market interest rates for newly issued bonds of comparable rating and
type. If such interest rates for newly issued comparable bonds increase, the
market discount of previously issued bonds will become greater, and if such
interest rates for newly issued comparable bonds decline, the market discount of
previously issued bonds will be reduced, other things being equal. Investors
should also note that the value of bonds purchased at a market discount will
increase in value faster than Bonds purchased at a market premium if interest
rates decrease. Conversely, if interest rates increase, the value of bonds
purchased at a market discount will decrease faster than Bonds purchased at a
market premium. In addition, if interest rates rise, the prepayment risk of
higher yielding, premium bonds and the prepayment benefit for lower yielding,
discount bonds will be reduced. A discount bond held to maturity will have a
larger portion of its total return in the form of taxable income and capital
gain and less in the form of tax-exempt interest income than a comparable bond
newly issued at current market rates. See "Tax Status." Market discount
attributable to interest changes does not indicate a lack of market confidence
in the issue. Neither the Sponsor, the Distributor nor the Trustee shall be
liable in any way for any default, failure or defect in any of the Bonds.

Certain of the Bonds in the Trusts may be original issue discount
bonds. Under current law, the original issue discount, which is the difference
between the stated redemption price at maturity and the issue price of the
Bonds, is deemed to accrue on a daily basis and the accrued portion is treated
as tax-exempt interest income for Federal income tax purposes. On sale or
redemption, any gain realized that is in excess of the earned portion of
original issue discount will be taxable as capital gain unless the gain is
attributable to market discount in which case the accretion of market discount
is taxable as ordinary income. See "Tax Status." The current value of an
original issue discount bond reflects the present value of its stated redemption
price at maturity. The market value tends to increase in greater increments as
the Bonds approach maturity.

Certain of the original issue discount bonds may be zero coupon bonds
(including bonds known as multiplier bonds, money multiplier bonds, capital
appreciation bonds, capital accumulator bonds, compound interest bonds and money
discount maturity payment bonds). Zero coupon bonds do not provide for the
payment of any current interest and generally provide for payment at maturity at
face value unless sooner sold or redeemed. Zero coupon bonds may be subject to
more price volatility than conventional bonds. While some types of zero coupon
bonds, such as multipliers and capital appreciation bonds, define par as the
initial offering price rather than the maturity value, they share the basic zero
coupon bond features of (i) not paying interest on a semi-annual basis and (ii)
providing for the reinvestment of the bond's semi-annual earnings at the bond's
stated yield to maturity. While zero coupon bonds are frequently marketed on the
basis that their fixed rate of return minimizes reinvestment risk, this benefit
can be negated in large part by weak call protection, i.e., a bond's provision
for redemption at only a modest premium over the accreted value of the bond. See
footnote (6) in "The Trusts--Notes to Schedules of Investments."

Certain of the Bonds in the Trusts may have been acquired at a market
premium from par value at maturity. The coupon interest rates on the premium
bonds at the time they were purchased and deposited in the Trusts were higher
than the current market interest rates for newly issued bonds of comparable
rating and type. If such interest rates for newly issued and otherwise
comparable bonds decrease, the market premium of previously issued bonds will be
increased, and if such interest rates for newly issued comparable bonds
increase, the market premium of previously issued bonds will be reduced, other
things being equal. The current returns of bonds trading at a market premium are
initially higher than the current returns of comparable bonds of a similar type
issued at currently prevailing interest rates because premium bonds tend to
decrease in market value as they approach maturity when the face amount becomes
payable. Because part of the purchase price is thus returned not at maturity but
through current income payments, early redemption of a premium bond at par or
early prepayments of principal will result in a reduction in yield. Redemption
pursuant to call provisions generally will, and redemption pursuant to sinking
fund provisions may, occur at times when the redeemed Bonds have an offering
side valuation which represents a premium over par or for original issue
discount Bonds a premium over the accreted value. To the extent that the Bonds
were deposited in the Fund at a price higher than the price at which they are
redeemed, this will represent a loss of capital when compared to the original
Public Offering Price of the Units. Because premium bonds generally pay a higher
rate of interest than Bonds priced at or below par, the effect of the redemption
of premium bonds would be to reduce estimated net annual unit income by a
greater percentage than the par amount of such bonds bears to the total par
amount of Bonds in the affected Trust. Although the actual impact of any such
redemptions that may occur will depend upon the specific Bonds that are
redeemed, it can be anticipated that the estimated net annual unit income will
be significantly reduced after the dates on which such Bonds are eligible for
redemption. A Trust may be required to sell zero coupon bonds prior to maturity
(at their current market price which is likely to be less than their par value)
in the event that all the Bonds in the portfolio other than the zero coupon
bonds are called or redeemed in order to pay expenses of a Trust or in case a
Trust is terminated. See "Trust Administration--Portfolio Administration" and
"Trust Administration--Amendment or Termination." See "The Trusts-- Schedule of
Investments" for each Trust for the earliest scheduled call date and the initial
redemption price for each Bond.

Certain of the Bonds in certain of the Trusts may be general
obligations of a governmental entity that are backed by the taxing power of such
entity. In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such an
investment may entail. All other Bonds in the Trusts are revenue bonds payable
from the income of a specific project or authority and are not supported by the
issuer's power to levy taxes. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds, on the other hand, are payable only from
the revenues derived from a particular facility or class of facilities or, in
some cases, from the proceeds of a special excise tax or other specific revenue
source. There are, of course, variations in the security of the different Bonds
in the Fund, both within a particular classification and between
classifications, depending on numerous factors. See "The Trusts--General" for
each Trust.

Certain of the Bonds in certain of the Trusts may be obligations which
derive their payments from mortgage loans. Certain of such housing bonds may be
FHA insured or may be single family mortgage revenue bonds issued for the
purpose of acquiring from originating financial institutions notes secured by
mortgages on residences located within the issuer's boundaries and owned by
persons of low or moderate income. In view of this an investment in such a Trust
should be made with an understanding of the characteristics of such issuers and
the risks which such an investment may entail. Mortgage loans are generally
partially or completely prepaid prior to their final maturities as a result of
events such as sale of the mortgaged premises, default, condemnation or casualty
loss. Because these bonds are subject to extraordinary mandatory redemption in
whole or in part from such prepayments of mortgage loans, a substantial portion
of such bonds will probably be redeemed prior to their scheduled maturities or
even prior to their ordinary call dates. Extraordinary mandatory redemption
without premium could also result from the failure of the originating financial
institutions to make mortgage loans in sufficient amounts within a specified
time period. Additionally, unusually high rates of default on the underlying
mortgage loans may reduce revenues available for the payment of principal of or
interest on such mortgage revenue bonds. These bonds were issued under Section
103A of the Internal Revenue Code, which Section contains certain requirements
relating to the use of the proceeds of such bonds in order for the interest on
such bonds to retain its tax-exempt status. In each case the issuer of the bonds
has covenanted to comply with applicable requirements and bond counsel to such
issuer has issued an opinion that the interest on the bonds is exempt from
Federal income tax under existing laws and regulations. Certain issuers of
housing bonds have considered various ways to redeem bonds they have issued
prior to the stated first redemption dates for such bonds. In connection with
any housing bonds held by the Fund, the Sponsor at the Initial Date of Deposit
is not aware that any of the respective issuers of such Bonds are actively
considering the redemption of such Bonds prior to their respective stated
initial call dates. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be health care
revenue bonds. In view of this an investment in such a Trust should be made with
an understanding of the characteristics of such issuers and the risks which such
an investment may entail. Ratings of bonds issued for health care facilities are
often based on feasibility studies that contain projections of occupancy levels,
revenues and expenses. A facility's gross receipts and net income available for
debt service may be affected by future events and conditions including, among
other things, demand for services and the ability of the facility to provide the
services required, physicians' confidence in the facility, management
capabilities, competition with other health care facilities, efforts by insurers
and governmental agencies to limit rates, legislation establishing state
rate-setting agencies, expenses, the cost and possible unavailability of
malpractice insurance, the funding of Medicare, Medicaid and other similar third
party payor programs, government regulation and the termination or restriction
of governmental financial assistance, including that associated with Medicare,
Medicaid and other similar third party payor programs. Medicare reimbursements
are currently calculated on a prospective basis utilizing a single nationwide
schedule of rates. Prior to such legislation Medicare reimbursements were based
on the actual costs incurred by the health facility. The current legislation may
adversely affect reimbursements to hospitals and other facilities for services
provided under the Medicare program. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations of
public utility issuers, including those selling wholesale and retail electric
power and gas. In view of this an investment in such a Trust should be made with
an understanding of the characteristics of such issuers and the risks which such
an investment may entail. General problems of such issuers would include the
difficulty in financing large construction programs in an inflationary period,
the limitations on operations and increased costs and delays attributable to
environmental considerations, the difficulty of the capital market in absorbing
utility debt, the difficulty in obtaining fuel at reasonable prices and the
effect of energy conservation. All of such issuers have been experiencing
certain of these problems in varying degrees. In addition, Federal, state and
municipal governmental authorities may from time to time review existing, and
impose additional, regulations governing the licensing, construction and
operation of nuclear power plants, which may adversely affect the ability of the
issuers of certain of the Bonds in the portfolio to make payments of principal
and/or interest on such Bonds. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations of
issuers whose revenues are derived from the sale of water and/or sewerage
services. In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such an
investment may entail. Such Bonds are generally payable from user fees. The
problems of such issuers include the ability to obtain timely and adequate rate
increases, population decline resulting in decreased user fees, the difficulty
of financing large construction programs, the limitations on operations and
increased costs and delays attributable to environmental considerations, the
increasing difficulty of obtaining or discovering new supplies of fresh water,
the effect of conservation programs and the impact of "no growth" zoning
ordinances. All of such issuers have been experiencing certain of these problems
in varying degrees. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be industrial revenue
bonds ("IRBs"). In view of this an investment in such a Trust should be made
with an understanding of the characteristics of such issuers and the risks which
such an investment may entail. IRBs have generally been issued under bond
resolutions pursuant to which the revenues and receipts payable under the
arrangements with the operator of a particular project have been assigned and
pledged to purchasers. In some cases, a mortgage on the underlying project may
have been granted as security for the IRBs. Regardless of the structure, payment
of IRBs is solely dependent upon the creditworthiness of the corporate operator
of the project or corporate guarantor. Corporate operators or guarantors may be
affected by many factors which may have an adverse impact on the credit quality
of the particular company or industry. These include cyclicality of revenues and
earnings, regulatory and environmental restrictions, litigation resulting from
accidents or environ- mentally-caused illnesses, extensive competition and
financial deterioration resulting from a corporate restructuring pursuant to a
leveraged buy-out, takeover or otherwise. Such a restructuring may result in the
operator of a project becoming highly leveraged which may impact on such
operator's creditworthiness which in turn would have an adverse impact on the
rating and/or market value of such Bonds. Further, the possibility of such a
restructuring may have an adverse impact on the market for and consequently the
value of such Bonds, even though no actual takeover or other action is ever
contemplated or effected. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations that
are secured by lease payments of a governmental entity (hereinafter called
"lease obligations"). Lease obligations are often in the form of certificates of
participation. In view of this an investment in such a Trust should be made with
an understanding of the characteristics of such issuers and the risks which such
an investment may entail. Although the lease obligations do not constitute
general obligations of the municipality for which the municipality's taxing
power is pledged, a lease obligation is ordinarily backed by the municipality's
covenant to appropriate for and make the payments due under the lease
obligation. However, certain lease obligations contain "non-appropriation"
clauses which provide that the municipality has no obligation to make lease
payments in future years unless money is appropriated for such purpose on a
yearly basis. A governmental entity that enters into such a lease agreement
cannot obligate future governments to appropriate for and make lease payments
but covenants to take such action as is necessary to include any lease payments
due in its budgets and to make the appropriations therefor. A governmental
entity's failure to appropriate for and to make payments under its lease
obligation could result in insufficient funds available for payment of the
obligations secured thereby. Although "non-appropriation" lease obligations are
secured by the leased property, disposition of the property in the event of
foreclosure might prove difficult. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations of
issuers which are, or which govern the operation of, schools, colleges and
universities and whose revenues are derived mainly from ad valorem taxes or, for
higher education systems, from tuition, dormitory revenues, grants and
endowments. In view of this an investment in such a Trust should be made with an
understanding of the characteristics of such issuers and the risks which such an
investment may entail. General problems relating to school bonds include
litigation contesting the state constitutionality of financing public education
in part from ad valorem taxes, thereby creating a disparity in educational funds
available to schools in wealthy areas and schools in poor areas. Litigation or
legislation on this issue may affect the sources of funds available for the
payment of school bonds in the Trusts. General problems relating to college and
university obligations include the prospect of a declining percentage of the
population consisting of "college" age individuals, possible inability to raise
tuitions and fees sufficiently to cover increased operating costs, the
uncertainty of continued receipt of Federal grants and state funding, and
government legislation or regulations which may adversely affect the revenues or
costs of such issuers. All of such issuers have been experiencing certain of
these problems in varying degrees. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations which
are payable from and secured by revenues derived from the ownership and
operation of facilities such as airports, bridges, turnpikes, port authorities,
convention centers and arenas. In view of this an investment in such a Trust
should be made with an understanding of the characteristics of such issuers and
the risks which such an investment may entail. The major portion of an airport's
gross operating income is generally derived from fees received from signatory
airlines pursuant to use agreements which consist of annual payments for leases,
occupancy of certain terminal space and service fees. Airport operating income
may therefore be affected by the ability of the airlines to meet their
obligations under the use agreements. The air transport industry is experiencing
significant variations in earnings and traffic, due to increased competition,
excess capacity, increased costs, deregulation, traffic constraints and other
factors, and several airlines are experiencing severe financial difficulties.
The Sponsor cannot predict what effect these industry conditions may have on
airport revenues which are dependent for payment on the financial condition of
the airlines and their usage of the particular airport facility. Similarly,
payment on Bonds related to other facilities is dependent on revenues from the
projects, such as user fees from ports, tolls on turnpikes and bridges and rents
from buildings. Therefore, payment may be adversely affected by reduction in
revenues due to such factors as increased cost of maintenance, decreased use of
facility, lower cost of alternative modes of transportation, scarcity of fuel
and reduction or loss of rents. See "The Trusts--General" for each Trust.

Certain of the Bonds in certain of the Trusts may be obligations which
are payable from and secured by revenues derived from the operation of resource
recovery facilities. In view of this an investment in such a Trust should be
made with an understanding of the characteristics of such issuers and the risks
which such an investment may entail. Resource recovery facilities are designed
to process solid waste, generate steam and convert steam to electricity.
Resource recovery bonds may be subject to extraordinary optional redemption at
par upon the occurrence of certain circumstances, including but not limited to:
destruction or condemnation of a project; contracts relating to a project
becoming void, unenforceable or impossible to perform; changes in the economic
availability of raw materials, operating supplies or facilities necessary for
the operation of a project or technological or other unavoidable changes
adversely affecting the operation of a project; administrative or judicial
actions which render contracts relating to the projects void, unenforceable or
impossible to perform; or impose unreasonable burdens or excessive liabilities.
The Sponsor cannot predict the causes or likelihood of the redemption of
resource recovery bonds in a Trust prior to the stated maturity of the Bonds.
See "The Trusts--General" for each Trust.

An investment in Units of the Trusts should be made with an
understanding of the interest rate risk associated with such an investment.
Generally, bond prices (and therefore Unit prices) will move inversely with
interest rates, and bonds (Trusts) with longer maturities are likely to exhibit
greater fluctuations in market value, all other things being equal, than bonds
(Trusts) with shorter maturities.

REDEMPTIONS OF BONDS. Certain of the Bonds in certain of the Trusts are
subject to redemption prior to their stated maturity date pursuant to sinking
fund provisions, call provisions or extraordinary optional or mandatory
redemption provisions or otherwise. A sinking fund is a reserve fund accumulated
over a period of time for retirement of debt. A callable debt obligation is one
which is subject to redemption or refunding prior to maturity at the option of
the issuer. A refunding is a method by which a debt obligation is redeemed, at
or before maturity, by the proceeds of a new debt obligation. In general, call
provisions are more likely to be exercised when the offering side valuation is
at a premium over par than when it is at a discount from par. The exercise of
redemption or call provisions will (except to the extent the proceeds of the
called Bonds are used to pay for Unit redemptions) result in the distribution of
principal and may result in a reduction in the amount of subsequent interest
distributions and it may also affect the current return on Units of the Trust
involved. Each Trust portfolio contains a listing of the sinking fund and call
provisions, if any, with respect to each of the Bonds. Extraordinary optional
redemptions and mandatory redemptions result from the happening of certain
events. Generally, events that may permit the extraordinary optional redemption
of Bonds or may require the mandatory redemption of Bonds include, among others:
the substantial damage or destruction by fire or other casualty of the project
for which the proceeds of the Bonds were used; an exercise by a local, state or
Federal governmental unit of its power of eminent domain to take all or
substantially all of the project for which the proceeds of the Bonds were used;
changes in the economic availability of raw materials, operating supplies or
facilities or technological or other changes which render the operation of the
project for which the proceeds of the Bonds were used uneconomic; changes in law
or an administrative or judicial decree which renders the performance of the
agreement under which the proceeds of the Bonds were made available to finance
the project impossible or which creates unreasonable burdens or which imposes
excessive liabilities, such as taxes, not imposed on the date the Bonds are
issued on the issuer of the Bonds or the user of the proceeds of the Bonds; an
administrative or judicial decree which requires the cessation of a substantial
part of the operations of the project financed with the proceeds of the Bonds,
an overestimate of the costs of the project to be financed with the proceeds of
the Bonds resulting in excess proceeds of the Bonds which may be applied to
redeem Bonds; or an underestimate of a source of funds securing the Bonds
resulting in excess funds which may be applied to redeem Bonds. The Sponsor is
unable to predict all of the circumstances which may result in such redemption
of an issue of Bonds. See "The Trusts--Schedule of Investments" for each Trust
and footnote (3) in "The Trusts--Notes to Schedules of Investments."

ESTIMATED CURRENT RETURN AND ESTIMATED LONG-TERM RETURN

As of the opening of business on the Initial Date of Deposit, the
Estimated Current Returns and the Estimated Long-Term Returns were those
indicated in the "Summary of Essential Financial Information." The Estimated
Current Returns are calculated by dividing the estimated net annual interest
income per Unit by the Public Offering Price. The estimated net annual interest
income per Unit will vary with changes in fees and expenses of the Trustee,
Sponsor and Evaluator and with the principal prepayment, redemption, maturity,
exchange or sale of Bonds while the Public Offering Price will vary with changes
in the offering price of the underlying Bonds; therefore, there is no assurance
that the present Estimated Current Returns will be realized in the future.
Estimated Long-Term Returns are calculated using a formula which (i) takes into
consideration, and determines and factors in the relative weightings of, the
market values, yields (which takes into account the amortization of premiums and
the accretion of discounts) and estimated retirements of all the Bonds in a
Trust and (ii) takes into account a compounding factor and the expenses and
sales charge associated with each Trust Unit. Since the market values and
estimated retirements of the Bonds and the expenses of a Trust will change,
there is no assurance that the present Estimated Long-Term Returns will be
realized in the future. Estimated Current Returns and Estimated Long-Term
Returns are expected to differ because the calculation of Estimated Long-Term
Returns reflects the estimated date and amount of principal returned while
Estimated Current Returns calculations include only net annual interest income
and Public Offering Price.

In order to acquire certain of the Bonds contracted for by the Sponsor
for deposit in each Trust, it may be necessary for the Sponsor or Trustee to pay
on the settlement dates for delivery of such Bonds amounts covering accrued
interest on such Bonds which exceed (i) the amounts paid by Unitholders and (ii)
the amounts which will be made available through cash furnished by the Sponsor
on the Initial Date of Deposit, which amount of cash may exceed the interest
which would accrue to the First Settlement Date. The Trustee has agreed to pay
for any amounts necessary to cover any such excess and will be reimbursed
therefor, without interest, when funds become available from interest payments
on the particular Bonds with respect to which such payments may have been made.
Also, since interest on any "when, as and if issued" Bonds does not begin
accruing as tax-exempt interest income to the benefit of Unitholders until their
respective dates of delivery, the Trustee may, in order to maintain (or in some
cases approach) for the Unitholders the same estimated net annual interest
incomes during the first year of the Trusts' operations as is indicated under
"Summary of Essential Financial Information," reduce its fee (and to the extent
necessary pay Trust expenses) in an amount equal to that indicated under
"Summary of Essential Financial Information."

TRUST OPERATING EXPENSES

COMPENSATION OF SPONSOR. Voyageur Fund Managers, Inc., which acts as
Sponsor, reserves the right to charge fees for providing portfolio supervision
services in amounts set forth under "Summary of Essential Financial Information"
per 100 Units on an annual basis. Any such charges would be payable in monthly
installments and would be based on the number of Units outstanding on the first
day of each month of each year. Any such fees may exceed the actual costs of
providing such supervisory services for this Fund, but at no time will the total
amount paid to the Sponsor for portfolio supervisory services rendered to all
unit investment trusts sponsored by Voyageur Fund Managers, Inc. in any calendar
year exceed the aggregate cost to the Sponsor of supplying such services in such
year. The foregoing fee may be increased without approval of the Unitholders by
amounts not exceeding proportionate increases under the category "All Services
Less Rent of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category. An affiliate of the Sponsor will receive sales commissions and may
realize other profits (or losses) in connection with the sale of Units and the
Sponsor and the Underwriters may realize profits (or the Sponsor may realize
losses) in connection with the deposit of the Bonds as described under "Public
Offering--Sponsor and Underwriter Compensation."

EVALUATOR'S FEE. For its services, the Evaluator will receive an annual
fee as set forth under "Summary of Essential Financial Information." The
Evaluator's fees are payable in monthly installments and would be based on the
number of Units outstanding on the first day of each month of each year. The
Evaluator's fees may be increased without approval of the Unitholders by amounts
not exceeding proportionate increases under the category "All Services Less Rent
of Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a comparable
category.

TRUSTEE'S FEE. For its services, the Trustee will receive an annual fee
as set forth under "Summary of Essential Financial Information." The Trustee's
fees are payable in monthly installments (based on the outstanding principal
amount of Bonds in a Trust as of the first day of each month of each year) on or
before the fifteenth day of each month from the Interest Account to the extent
funds are available and then from the Principal Account. The Trustee's fee may
be periodically adjusted in response to fluctuations in short-term interest
rates (reflecting the cost to the Trustee of advancing funds to a Trust to meet
scheduled distributions) and may be further increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index published by the
United States Department of Labor or, if such category is no longer published,
in a comparable category. Since the Trustee has the use of the funds being held
in the Principal and Interest Accounts for future distributions, payment of
expenses and redemptions and since such Accounts are non-interest bearing to
Unitholders, the Trustee benefits thereby. Part of the Trustee's compensation
for its services to the Fund is expected to result from the use of these funds.
For a discussion of the services rendered by the Trustee pursuant to its
obligations under the Trust Agreement, see "Rights of Unitholders--Reports
Provided" and "Trust Administration."

MISCELLANEOUS EXPENSES. Expenses incurred in establishing the Trusts,
including the cost of the initial preparation of documents relating to the Trust
(including the Prospectus, Trust Agreement and certificates), federal and state
registration fees, the initial fees and expenses of the Trustee, legal and
accounting expenses, payment of closing fees and any other out-of-pocket
expenses, will be paid by each Trust and charged off against principal over the
initial offering period. The following additional charges are or may be incurred
by the Trusts: (i) fees of the Trustee for extraordinary services, (ii) expenses
of the Trustee (including legal and auditing expenses) and of counsel designated
by the Sponsor, (iii) various governmental charges, (iv) expenses and costs of
any action taken by the Trustee to protect a Trust and the rights and interests
of Unitholders, (v) indemnification of the Trustee for any loss, liability or
expenses incurred by it in the administration of a Trust without gross
negligence, bad faith or willful misconduct on its part, (vi) any special
custodial fees payable in connection with the sale of any of the Bonds in a
Trust and (vii) expenditures incurred in contacting Unitholders upon termination
of a Trust.

The fees and expenses set forth herein are payable out of the Trusts.
When such fees and expenses are paid by or owing to the Trustee, they are
secured by a lien on the portfolio or portfolios of the applicable Trust or
Trusts. If the balances in the Interest and Principal Accounts are insufficient
to provide for amounts payable by the Fund, the Trustee has the power to sell
Bonds to pay such amounts.

INSURANCE ON THE BONDS IN THE INSURED TRUSTS

Insurance guaranteeing prompt payment of interest and principal, when
due, on the Bonds in the Insured Trusts in the Fund has been obtained by the
Sponsor or by the issuers or underwriters of such Bonds. No insurance has been
obtained on the Bonds in the uninsured Trusts, however, certain of the Bonds in
the uninsured Trusts may be insured.

An Insurer has issued a policy or policies of insurance covering each
of the Bonds in the Insured Trusts, each policy to remain in force until the
payment in full of such Bonds and whether or not the Bonds continue to be held
by an Insured Trust. By the terms of each policy, the Insurer will
unconditionally guarantee to the holders or owners of the Insured Bonds the
payment, when due, required of the issuer of the Bonds of an amount equal to the
principal of and interest on the Bonds as such payments shall become due, but
not be paid (except that in the event of any acceleration of the due date of
principal by reason of mandatory or optional redemption, default or otherwise,
the payments guaranteed will be made in such amounts and at such times as would
have been due had there not been an acceleration). The Insurer will be
responsible for such payments, less any amounts received by the holders or
owners of the Bonds from any trustee for the bond issuers or from any other
sources other than the Insurer. The Insurers' policies relating to small
industrial development bonds and pollution control revenue bonds also guarantee
the full and complete payments required to be made by or on behalf of an issuer
of Bonds pursuant to the terms of the Bonds if there occurs an event which
results in the loss of the tax-exempt status of the interest on such Bonds,
including principal, interest or premium payments, if any, as and when thereby
required. Each Insurer has indicated that its insurance policies do not insure
the payment of principal or interest on bonds which are not required to be paid
by the issuer thereof because the bonds were not validly issued. However, as
indicated under "Tax Status," the respective issuing authorities have received
opinions of bond counsel relating to the valid issuance of each of the Bonds in
the Trusts. Each Insurer's policy also does not insure against non-payment of
principal of or interest on the Bonds resulting from the insolvency, negligence
or any other act or omission of the trustee or other paying agent for the Bonds.
Such policies are not covered by the Property/Casualty Insurance Security Fund
specified in Article 76 of the New York Insurance Law. The policies are
non-cancelable and the insurance premiums have been fully paid on or prior to
the date of deposit, either by the Sponsor or, if a policy has been obtained by
a Bond issuer, by such issuer.

Standard & Poor's rates all new issues insured by an Insurer "AAA Prime
Grade." Moody's rates all bond issues insured by an Insurer "Aaa." These ratings
independently reflect each company's current assessment of the creditworthiness
of each Insurer and its ability to pay claims on its policies of insurance. See
"Investment Objectives and Portfolio Selection." Any further explanation as to
the significance of either rating may be obtained only from the company which
issued the respective rating. Neither rating is a recommendation to buy, sell or
hold the Bonds, and such rating may be subject to revision or withdrawal at any
time by the respective issuer. Any downward revision or withdrawal of the rating
may have an adverse effect on the market price of the Bonds.

Because the insurance on the Bonds will be effective so long as the
Bonds are outstanding, such insurance will be taken into account in determining
the market value of the Bonds and therefore some value attributable to such
insurance will be included in the value of the Units of the Insured Trusts. The
insurance does not, however, guarantee the market value of the Bonds or of the
Units.

TAX STATUS

At the respective times of issuance of the Bonds, opinions relating to
the validity thereof and to the exclusion of interest thereon from Federal gross
income were rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler have made any special review for the
Fund of the proceedings relating to the issuance of the Bonds or of the bases
for such opinions. 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 interest is determined to be taxable. Gain realized on the sale or
redemption of the Bonds by the Trustee or of a Unit by a Unitholder is, however,
includible in gross income for Federal income tax purposes and may be includible
in gross income for state tax purposes. (It should be noted in this connection
that such gain does not include any amounts received in respect of accrued
interest or accrued original issue discount, if any).

In the opinion of Chapman and Cutler, counsel for the Sponsor, under
existing law:

1. Each Trust is not an association taxable as a corporation for
Federal income tax purposes and interest and accrued original issue
discount on Bonds which is excludable from gross income under the
Internal Revenue Code of 1986 (the "Code") will retain its status when
distributed to Unitholders; however such interest may be taken into
account in computing the alternative minimum tax, an additional tax on
branches of foreign corporations and the environmental tax (the
"Superfund Tax"), as noted below;

2. Each Unitholder is considered to be the owner of a pro rata
portion of each asset of the respective Trust under subpart E,
subchapter J of chapter 1 of the Code and will have a taxable event
when such Trust disposes of a Bond, or when the Unitholder redeems or
sells his Unit. If the Unitholder disposes of a Unit, he is deemed
thereby to have disposed of his entire pro rata interest in all assets
of the Trust involved including his pro rata portion of all the Bonds
represented by the Unit. Legislative proposals have been made that
would treat certain transactions designed to reduce or eliminate risk
of loss and opportunities for gain as constructive sales for purposes
of recognition of gain (but not loss). Unitholders should consult their
own tax advisors with regard to any such constructive sale
rules.Unitholders must reduce the tax basis of their Units for their
share of accrued interest received by the respective Trust, if any, on
Bonds delivered after the Unitholders pay for their Units to the extent
that such interest accrued on such Bonds before the date the Trust
acquired ownership of the Bonds (and the amount of this reduction may
exceed the amount of accrued interest paid to the seller),
consequently, such Unitholders may have an increase in taxable gain or
reduction in capital loss upon the disposition of such Units. Gain or
loss upon the sale or redemption of Units is measured by comparing the
proceeds of such sale or redemption with the adjusted basis of the
Units. If the Trustee disposes of Bonds (whether by sale, payment on
maturity, redemption or otherwise), gain or loss is recognized to the
Unitholder (subject to various non-recognition provisions of the Code).
The amount of any such gain or loss is measured by comparing the
Unitholder's pro rata share of the total proceeds from such disposition
with the Unitholder's basis for his or her fractional interest in the
asset disposed of. In the case of a Unitholder who purchases Units,
such basis (before adjustment for accrual of original issue discount
and amortized bond premium, if any) is determined by apportioning the
cost of the Units among each of the Trust assets ratably according to
value as of the valuation date nearest the date of acquisition of the
Units. It should be noted that certain legislative proposals have been
made which could affect the calculation of basis for Unitholders
holding securities that are substantially identical to the Bonds.
Unitholders should consult their own tax advisors with regard to the
calculation of basis. The tax basis reduction requirements of the Code
relating to amortization of bond premium may, under some circumstances,
result in the Unitholder realizing a taxable gain when his Units are
sold or redeemed for an amount less than or equal to his original cost;
and

3. Any proceeds paid under individual policies obtained by issuers
of Bonds which represent maturing interest on defaulted Bonds held by
the Trustee will be excludable from Federal gross income if, and to the
same extent as, such interest would have been excludable if paid in the
normal course by the issuer of the defaulted Bonds provided that, at
the time such policies are purchased, the amounts paid for such
policies are reasonable, customary and consistent with the reasonable
expectation that the issuer of the Bonds, rather than the Insurer, will
pay debt service on the Bonds.

Sections 1288 and 1272 of the Code provide a complex set of rules
governing the accrual of original issue discount. These rules provide that
original issue discount accrues either on the basis of a constant compound
interest rate or ratably over the term of the Bond, depending on the date the
Bond was issued. In addition, special rules apply if the purchase price of a
Bond exceeds the original issue price plus the amount of original issue discount
which would have previously accrued based upon its issue price (its "adjusted
issue price") to prior owners. If a Bond is acquired with accrued interest, that
portion of the price paid for the accrued interest is added to the tax basis of
the Bond. When this accrued interest is received, it is treated as a return of
capital and reduces the tax basis of the Bond. If a Bond is purchased for a
premium, the amount of the premium is added to the tax basis of the Bond. Bond
premium is amortized over the remaining term of the Bond, and the tax basis of
the Bond is reduced each tax year by the amount of the premium amortized in that
tax year. The application of these rules will also vary depending on the value
of the Bonds on the date a Unitholder acquires his Units and the price the
Unitholder pays for his Units. Unitholders should consult with their tax
advisers regarding these rules and their application.

"The Revenue Reconciliation Act of 1993" (the "Tax Act") subjects
tax-exempt bonds to the market discount rules of the Code effective for bonds
purchased after April 30, 1993. In general, market discount is the amount (if
any) by which the stated redemption price at maturity exceeds an investor's
purchase price (except to the extent that such difference, if any, is
attributable to original issue discount not yet accrued) subject to a statutory
DE MINIMIS rule. Market discount can arise based on the price a Trust pays for
Bonds or the price a Unitholder pays for his or her Units. Under the Tax Act,
accretion of market discount is taxable as ordinary income; under prior law the
accretion had been treated as capital gain. Market discount that accretes while
a Trust holds a Bond would be recognized as ordinary income by the Unitholders
when principal payments are received on the Bond, upon sale or at redemption
(including early redemption), or upon the sale or redemption of his or her
Units, unless a Unitholder elects to include market discount in taxable income
as it accrues. The market discount rules are complex and Unitholders should
consult their tax advisers regarding these rules and their application.

In the case of certain corporations, the alternative minimum tax and
the Superfund Tax for taxable years beginning after December 31, 1986 depend
upon the corporation's alternative minimum taxable income, which is the
corporation's taxable income with certain adjustments. One of the adjustment
items used in computing the alternative minimum taxable income and the Superfund
Tax of a corporation (other than an S Corporation, Regulated Investment Company,
Real Estate Investment Trust, or REMIC) is an amount equal to 75% of the excess
of such corporation's "adjusted current earnings" over an amount equal to its
alternative minimum taxable income (before such adjustment item and the
alternative tax net operating loss deduction). "Adjusted current earnings"
includes all tax exempt interest, including interest on all of the Bonds in the
Fund. Under current Code provisions, the Superfund Tax does not apply to tax
years beginning on or after January 1, 1996. Legislative proposals have been
introduced that would extend the Superfund Tax. Under the provisions of Section
884 of the Code, a branch profits tax is levied on the "effectively connected
earnings and profits" of certain foreign corporations which include tax-exempt
interest such as interest on the Bonds in the Trusts. Unitholders should consult
their tax advisers with respect to the particular tax consequences to them
including the corporate alternative minimum tax, the Superfund Tax and the
branch profits tax imposed by Section 884 of the Code.

Counsel for the Sponsor has also advised that under Section 265 of the
Code interest on indebtedness incurred or continued to purchase or carry Units
of a Trust is not deductible for Federal income tax purposes. The Internal
Revenue Service has taken the position that such indebtedness need not be
directly traceable to the purchase or carrying of Units (however, these rules
generally do not apply to interest paid on indebtedness incurred to purchase or
improve a personal residence). Also, under Section 265 of the Code, certain
financial institutions that acquire Units would generally not be able to deduct
any of the interest expense attributable to ownership of such Units. Legislative
proposals have been made that would extend the financial institution rules to
all corporations. Investors with questions regarding these issues should consult
with their tax advisers.

In the case of certain of the Bonds in the Fund, the opinions of bond
counsel indicate that interest on such Bonds received by a "substantial user" of
the facilities being financed with the proceeds of these Bonds, or persons
related thereto, for periods while such Bonds are held by such a user or related
person, will not be excludible from Federal gross income, although interest on
such Bonds received by others would be excludible from Federal gross income.
"Substantial user" and "related person" are defined under the Code and U.S.
Treasury Regulations. Any person who believes that he or she may be a
"substantial user" or a "related person" as so defined should contact his or her
tax adviser.

ALL STATEMENTS OF LAW IN THE PROSPECTUS CONCERNING EXCLUSION FROM
GROSS INCOME FOR FEDERAL, STATE OR OTHER TAX PURPOSES ARE THE OPINIONS OF
COUNSEL AND ARE TO BE SO CONSTRUED.

At the respective times of issuance of the Bonds, opinions relating to
the validity thereof and to the exclusion of interest thereon from Federal gross
income are rendered by bond counsel to the respective issuing authorities.
Neither the Sponsor nor Chapman and Cutler has made any special review for the
Fund of the proceedings relating to the issuance of the Bonds or of the basis
for such opinions.

In the case of corporations, the alternative tax rate applicable to
long-term capital gains is 35% effective for long-term capital gains realized in
taxable years beginning on or after January 1, 1993. For taxpayers other than
corporations, net capital gains are subject to a maximum marginal stated tax
rate of 28%. However, it should be noted that legislative proposals are
introduced from time to time that affect tax rates and could affect relative
differences at which ordinary income and capital gains are taxed. Under the
Code, taxpayers must disclose to the Internal Revenue Service the amount of
tax-exempt interest earned during the year. For purposes of computing the
alternative minimum tax for individuals and corporations and the Superfund Tax
for corporations, interest on certain private activity bonds (which includes
most industrial and housing revenue bonds) issued on or after August 8, 1996 is
included as an item of tax preference.

In general, Section 86 of the Code, in general, provides that 50% of
Social Security benefits are includible in gross income to the extent that the
sum of "modified adjusted gross income" plus 50% of the Social Security benefits
received exceeds a "base amount." The base amount is $25,000 for unmarried
taxpayers, $32,000 for married taxpayers filing a joint return and zero for
married taxpayers who do not live apart at all times during the taxable year and
who file separate returns. Modified adjusted gross income is adjusted gross
income determined without regard to certain otherwise allowable deductions and
exclusions from gross income and by including tax-exempt interest. To the extent
that Social Security benefits are includible in gross income, they will be
treated as any other item of gross income.

In addition, under the Tax Act, for taxable years beginning after
December 31, 1993, up to 85% of Social Security benefits are includible in gross
income to the extent that the sum of "modified adjusted gross income" plus 50%
of Social Security benefits received exceeds an "adjusted base amount." The
adjusted base amount is $34,000 for unmarried taxpayers, $44,000 for married
taxpayers filing a joint return, and zero for married taxpayers who do not live
apart at all times during the taxable year and who file separate returns.

Although tax-exempt interest is included in modified adjusted gross
income solely for the purpose of determining what portion, if any, of Social
Security benefits will be included in gross income, no tax-exempt interest,
including that received from a Trust, will be subject to tax. A taxpayer whose
adjusted gross income already exceeds the base amount or the adjusted base
amount must include 50% or 85%, respectively, of his Social Security benefits in
gross income whether or not he receives any tax-exempt interest. A taxpayer
whose modified adjusted gross income (after inclusion of tax-exempt interest)
does not exceed the base amount need not include any Social Security benefits in
gross income.

FOR A DISCUSSION OF THE STATE TAX STATUS OF INCOME EARNED ON UNITS OF A
TRUST, SEE "THE TRUSTS--STATE TAXATION" FOR THE APPLICABLE TRUST. EXCEPT AS
NOTED THEREIN, THE EXEMPTION OF INTEREST ON STATE AND LOCAL OBLIGATIONS FOR
FEDERAL INCOME TAX PURPOSES DISCUSSED ABOVE DOES NOT NECESSARILY RESULT IN
EXEMPTION UNDER THE INCOME OR OTHER TAX LAWS OF ANY STATE OR CITY. THE LAWS OF
THE SEVERAL STATES VARY WITH RESPECT TO THE TAXATION OF SUCH OBLIGATIONS.

Ownership of the Units may result in collateral federal income tax
consequences to certain taxpayers, including, without limitation, corporations
subject to either the environmental tax or the branch profits tax, financial
institutions, certain insurance companies, certain S corporations, individual
recipients of Social Security or Railroad Retirement benefits and taxpayers who
may be deemed to have incurred (or continued) indebtedness to purchase or carry
tax-exempt obligations. Prospective investors should consult their tax advisors
as to the applicability of any collateral consequences.

PUBLIC OFFERING

GENERAL. Units are offered at the Public Offering Price. During the
initial offering period the Public Offering Price is based on the offering
prices of the Bonds in each Trust and includes a sales charge of 4.9% of the
Public Offering Price (5.152% of the aggregate offering price of the Bonds) plus
any accrued interest. In the secondary market the Public Offering Price is based
on the bid prices of the Bonds in each Trust and includes a sales charge of 5.5%
of the Public Offering Price (5.820% of the aggregate bid price of the Bonds)
plus any accrued interest. However, the sales charge applicable to quantity
purchases is, during the initial offering period, reduced by a discount on a
graduated basis to any person acquiring $100,000 or more as follows (except for
sales made pursuant to a "wrap fee account" or similar arrangements as set forth
below):

Aggregate Dollar Value Reduction as a
of Units Purchased Percent of Offering Price
$100,000 - 249,999 .................... 0.30%
$250,000 - 499,999 .................... 0.50%
$500,000 - 999,999 .................... 0.90%
$1,000,000 or more .................... 1.40%

Any such reduced sales charge shall be the responsibility of the
selling Underwriter, broker, dealer or agent. The reduced sales charge structure
will apply on all purchases of Units in a Trust by the same person on any one
day from any one Underwriter or dealer. In addition, Unitholders who, during the
offering period, cumulatively purchase a sufficient number of Units of a Trust
to qualify for a reduced sales charge will receive such reduction retroactively
upon reaching the appropriate level. Units purchased in the name of the spouse
of a purchaser or in the name of a child of such purchaser under 21 years of age
will be deemed for the purposes of calculating the applicable sales charge to be
additional purchases by the purchaser. Investors may use the redemption proceeds
they have received from other unit investment trusts sponsored by the Sponsor to
purchase Units of a Trust without a sales charge. The reduced sales charges will
also be applicable to a trustee or other fiduciary purchasing securities for one
or more trust estate or fiduciary accounts. Employees, officers and directors
(including their immediate family members, defined as spouses, children,
grandchildren, parents, grandparents, mothers-in-law, fathers-in-law,
sons-in-law and daughters-in- law, and trustees, custodians or fiduciaries for
the benefit of such persons) of the Sponsor and its subsidiaries and affiliates
of the Sponsor may purchase Units of the Trusts without a sales charge in both
the initial and secondary offering periods.

Investors who purchase Units through registered broker/dealers who
charge periodic fees for financial planning, investment advisory or asset
management services, or provide such services in connection with the
establishment of an investment account for which a comprehensive "wrap fee"
charge is imposed may purchase Units in the initial and secondary offering
periods at the Public Offering Price less the concession the Sponsor typically
would allow such broker/dealer. See "Public Offering--Unit Distribution."

ACCRUED INTEREST. Accrued interest is the accumulation of unpaid
interest on a bond from the last day on which interest thereon was paid.
Interest on Bonds generally is paid semi-annually, although a Trust accrues such
interest daily. Because of this, each Trust always has an amount of interest
earned but not yet collected by the Trustee. For this reason, with respect to
sales settling subsequent to the First Settlement Date, the Public Offering
Price of Units will have added to it the proportionate share of accrued interest
to the date of settlement. Unitholders will receive on the next distribution
date of the respective Trust the amount, if any, of accrued interest paid on
their Units.

In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price in the sale
of Units to the public, the Trustee will advance the amount of accrued interest
as of the First Settlement Date and the same will be distributed to the Sponsor
as the Unitholder of record as of the First Settlement Date. Consequently, the
amount of accrued interest to be added to the Public Offering Price of Units
will include only accrued interest from the First Settlement Date to the date of
settlement, less any distributions from the Interest Account subsequent to the
First Settlement Date. See "Rights of Unitholders--Distributions of Interest and
Principal."

Because of the varying interest payment dates of the Bonds, accrued
interest at any point in time will be greater than the amount of interest
actually received by a Trust and distributed to Unitholders. Therefore, there
will always remain an item of accrued interest that is added to the value of the
Units. If a Unitholder sells or redeems all or a portion of his Units, he will
be entitled to receive his proportionate share of the accrued interest from the
purchaser of his Units. Since the Trustee has the use of the funds held in the
Interest Account for distributions to Unitholders and since such Account is
noninterest-bearing to Unitholders, the Trustee benefits thereby.

OFFERING PRICE. The Public Offering Price of the Units will vary from
the amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Bonds in each
Trust.

As indicated above, the price of the Units as of the opening of
business on the Initial Date of Deposit was determined by adding to the
determination of the aggregate offering price of the Bonds an amount equal to
5.152% of such value and dividing the sum so obtained by the number of Units
outstanding. This computation produced a gross underwriting profit equal to 4.9%
of the Public Offering Price. Such price determination as of the opening of
business on the Initial Date of Deposit was made on the basis of an evaluation
of the Bonds in each Trust prepared by Muller Data Corporation, a firm regularly
engaged in the business of evaluating, quoting or appraising comparable
securities. Except on the Initial Date of Deposit, during the initial offering
period, the Evaluator will appraise or cause to be appraised daily the value of
the underlying Bonds as of 4:00 P.M. Eastern time on days the New York Stock
Exchange is open and will adjust the Public Offering Price of the Units
commensurate with such appraisal. Such Public Offering Price will be effective
for all orders received at or prior to 4:00 P.M. Eastern time on each such day.
Orders received by the Trustee, Sponsor, Distributor or any Underwriter or
dealer for purchases, sales or redemptions after that time, or on a day when the
New York Stock Exchange is closed, will be held until the next determination of
price. For secondary market sales the Public Offering Price per Unit will be
equal to the aggregate bid price of the Bonds in a Trust plus the secondary
market sales charge. For secondary market purposes such appraisal and adjustment
will be made by the Evaluator as of 4:00 P.M. Eastern time on days on which the
New York Stock Exchange is open for each day on which any Unit of a Trust is
tendered for redemption, and it shall determine the aggregate value of such
Trust as of 4:00 P.M. Eastern time on such other days as may be necessary.

The aggregate price of the Bonds in each Trust has been and will be
determined on the basis of bid prices or offering prices, as appropriate, (i) on
the basis of current market prices for the Bonds obtained from dealers or
brokers who customarily deal in bonds comparable to those held by the Trust;
(ii) if such prices are not available for any particular Bonds, on the basis of
current market prices for comparable bonds; (iii) by causing the value of the
Bonds to be determined by others engaged in the practice of evaluation, quoting
or appraising comparable bonds; or (iv) by any combination of the above.

The initial or primary Public Offering Price of the Units and the
Sponsor's initial repurchase price per Unit are based on the offering price per
Unit of the underlying Bonds plus the applicable sales charge plus interest
accrued but unpaid from the First Settlement Date to the date of settlement. The
secondary market Public Offering Price and the Redemption Price per Unit are
based on the bid price per Unit of the Bonds in each Trust plus the applicable
sales charge plus accrued interest. The offering price of Bonds in each Trust
may be expected to range from .35%-1% more than the bid price of such Bonds. On
the Initial Date of Deposit, the offering side evaluation of the Bonds in each
Trust were higher than the bid side evaluation of such Bonds by the amount
indicated under footnote (5) in "The Trusts--Notes to Schedules of Investments."

Although payment is normally made three business days following the
order for purchase, payment may be made prior thereto. However, delivery of
certificates, if any are requested in writing, representing Units so ordered
will be made as soon as possible following such order or shortly thereafter. A
person will become the owner of Units on the date of settlement provided payment
has been received. Cash, if any, made available to the Sponsor prior to the date
of settlement for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the limitations of
the Securities Exchange Act of 1934.

UNIT DISTRIBUTION. During the initial offering period, Units will be
distributed to the public by Underwriters, broker-dealers and others (see
"Underwriting") at the Public Offering Price, plus accrued interest computed as
described above. Upon the completion of the initial offering, Units repurchased
in the secondary market, if any, may be offered by this prospectus at the
secondary Public Offering Price in the manner described.

The Sponsor intends to qualify the Units for sale in the state for
which such Trust is named, except that in the case of the National Trusts, the
Sponsor intends to qualify Units for sale in a number of states and Puerto Rico.
Broker-dealers or others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period
equal to $.33 per Unit ($.34 per Unit for the portion of aggregate sales of each
Series which exceed $250,000 by broker-dealers or others in the primary offering
who did not act as Underwriters and who purchase such Units from the Sponsor)
and in the secondary market equal to 4.0% of the Public Offering Price per Unit.
In addition, broker-dealers or others who sell, within five business days of a
Trust's Initial Date of Deposit, that amount necessary to qualify for the
Underwriter Concession set forth under "Sponsor and Underwriter Compensation"
below will be allowed the concession set forth in such section on all sales
during such period. Certain commercial banks are making Units of the Fund
available to their customers on an agency basis. A portion of the sales charge
(equal to the agency commission referred to above) is retained by or remitted to
the banks. Under the Glass-Steagall Act, banks are prohibited from underwriting
Units of the Fund; however, the Glass-Steagall Act does permit certain agency
transactions and the banking regulators have not indicated that these particular
agency transactions are not permitted under such Act. In addition, state
securities laws on this issue may differ from the interpretations of Federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law. Notwithstanding the concessions
referred to above, in connection with any quantity purchases, a broker/dealer or
bank will receive the following concessions for purchases made from the Sponsor,
pursuant to the sales charge reduction schedule for quantity purchases set forth
above, resulting in total concessions as contained in the following table:

Aggregate Dollar Value Total Concession
of Units Purchased per Unit
$100,000 - $249,999 .................... $.32
$250,000 - $499,999 .................... .31
$500,000 - $999,999 .................... .29
$1,000,000 or more...................... .25

The Sponsor and the Distributor each reserves the right to reject, in
whole or in part, any order for the purchase of Units and to change the amount
of the concession or agency commission to dealers and others from time to time.
See "Underwriting." To facilitate the handling of transactions, sales of Units
shall normally be limited to transactions involving a minimum of $1,000.

SPONSOR AND UNDERWRITER COMPENSATION. The gross sales commission
through the initial or primary distribution of Units will equal 4.9% of the
Public Offering Price of the Units (5.152% of the net amount invested), less any
reduced sales charge for quantity purchases as described under "General" above.
Underwriters will acquire Units from the Sponsor based on the amount of Units
underwritten. The concessions from the Public Offering Price will be as set
forth in the following table:

Aggregate Dollar Value Total Underwriter
of Units Underwritten Concession per Unit
$100,000 - $249,999 ......................... $.35
$250,000 - $499,999 ......................... .36
$500,000 - $999,999 ......................... .37
$1,000,000 or more........................... .40

Broker-dealers and other financial institutions purchasing Units from
the Distributor during the first week after the Initial Date of Deposit may also
receive the concession described above according to the schedule above
describing Underwriters compensation. In addition, the Sponsor will realize a
profit or will sustain a loss, as the case may be, as a result of the difference
between the price paid for the Bonds by the Sponsor and the cost of such Bonds
to a Trust (which is based on the determination of the aggregate offering price
of the Bonds in such Trust on the Initial Date of Deposit as prepared by Muller
Data Corporation. See "Underwriting" and "The Trusts--Schedules of Investments."
Affiliates of the Sponsor and the Underwriters may also realize profits or
sustain losses with respect to Bonds deposited in a Trust which were acquired by
the Sponsor from underwriting syndicates of which such parties were members. An
affiliate of the Sponsor participated as sole underwriter or as a manager or as
a member of an underwriting syndicate from which 2.9% of the Bonds in the
portfolios of the Trusts were acquired. The Underwriters may further realize
additional profit or loss during the initial offering period as a result of the
possible fluctuations in the market value of the Bonds in a Trust after the
Initial Date of Deposit, since all proceeds received from purchasers of Units
(excluding dealer concessions or agency commissions allowed, if any) will be
retained by the Underwriters.

As stated under "Public Market" below, an affiliate of the Sponsor,
Voyageur Fund Distributors, Inc. (the "Distributor"), intends to, and certain of
the other Underwriters may, maintain a secondary market for the Units of the
Fund. In so maintaining a market, the Distributor or any such Underwriters will
also realize profits or sustain losses in the amount of any difference between
the price at which Units are purchased and the price at which Units are resold
(which price is based on the bid prices of the Bonds in a Trust and includes a
sales charge). In addition, the Sponsor, the Distributor or any such
Underwriters will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.

PUBLIC MARKET. During the initial public offering period, the
Distributor and/or certain of the other Underwriters intend to offer to purchase
Units at a price based on the aggregate offering price per Unit of the Bonds in
each Trust plus accrued interest to the date of settlement. Afterward, although
they are not obligated to do so, the Distributor intends to, and certain of the
other Underwriters may, maintain a market for the Units offered hereby and to
offer continuously to purchase such Units at the bid price of the Bonds in the
portfolio plus interest accrued to the date of settlement plus any principal
cash on hand, less any amounts representing taxes or other governmental charges
payable out of the Trust and less any accrued Trust expenses. If the supply of
Units exceeds demand or if some other business reason warrants it, the
Distributor and/or the other Underwriters may either discontinue all purchases
of Units or discontinue purchases of Units at such prices. In the event that a
market is not maintained for the Units and the Unitholder cannot find another
purchaser, a Unitholder desiring to dispose of his Units may dispose of such
Units by tendering them to the Trustee for redemption at the Redemption Price,
which is based upon the aggregate bid price of the Bonds in the portfolio and
any accrued interest. The aggregate bid prices of the underlying Bonds in a
Trust are expected to be less than the related aggregate offering prices. See
"Rights of Unitholders--Redemption of Units." A UNITHOLDER WHO WISHES TO DISPOSE
OF HIS UNITS SHOULD INQUIRE OF HIS BROKER AS TO CURRENT MARKET PRICES IN ORDER
TO DETERMINE WHETHER THERE IS IN EXISTENCE ANY PRICE IN EXCESS OF THE REDEMPTION
PRICE AND, IF SO, THE AMOUNT THEREOF.

RIGHTS OF UNITHOLDERS

OWNERSHIP OF UNITS. Ownership of Units of any Trust will not be
evidenced by certificates unless a Unitholder, the Unitholder's registered
broker/dealer or the clearing agent for such broker/dealer makes a written
request to the Trustee. Certificates, if issued, will be so noted on the
confirmation statement sent to the Underwriter and broker. Non-receipt of such
certificate(s) must be reported to the Trustee within one year; otherwise, a 2%
surety bond fee will be required for replacement.

Units are transferable by making a written request to the Trustee and,
in the case of Units evidenced by a certificate, by presenting and surrendering
such certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer which should be sent registered or
certified mail for the protection of the Unitholder. Unitholders must sign such
written request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be transferred. Such signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guarantee program in addition to, or in substitution for, STAMP, as
may be accepted by the Trustee.

Although no such charge is now made or contemplated, the Trustee may
require a Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in connection
with each such transfer or interchange. Destroyed, stolen, mutilated or lost
certificates will be replaced upon delivery to the Trustee of satisfactory
indemnity, evidence of ownership and payment of expenses incurred. Mutilated
certificates must be surrendered to the Trustee for replacement.

DISTRIBUTIONS OF INTEREST AND PRINCIPAL. Interest received by the
Trusts, including that part of the proceeds of any disposition of Bonds which
represents accrued interest and including any insurance proceeds representing
interest due on defaulted Bonds, is credited by the Trustee to the Interest
Account of the appropriate Trust. Other receipts are credited to the Principal
Account of the appropriate Trust. Interest received by a Trust after deduction
of amounts sufficient to reimburse the Trustee for any amounts advanced and paid
to the Sponsor as the Unitholder of record as of the First Settlement Date (see
"Public Offering--Offering Price") will be distributed on or shortly after the
fifteenth day of each month on a pro rata basis to Unitholders of record as of
the preceding record date (which will be the first day of the month). All
distributions will be net of applicable expenses. The pro rata share of cash in
the Principal Account will be computed as of the applicable record date, and
distributions to the Unitholders as of such record date will be made on or
shortly after the fifteenth day of such month. Proceeds received from the
disposition of any of the Bonds after such record date and prior to the
following distribution date will be held in the Principal Account and not
distributed until the next distribution date. The Trustee is not required to pay
interest on funds held in the Principal or Interest Accounts (but may itself
earn interest thereon and therefore benefits from the use of such funds) nor to
make a distribution from the Principal Account unless the amount available for
distribution shall equal at least $0.10 per Unit.

The distribution to the Unitholders as of each record date after the
First Settlement Date will be made on the following distribution date or shortly
thereafter and shall consist of an amount substantially equal to such portion of
the Unitholders' pro rata share of the estimated net annual unit income in the
Interest Account after deducting estimated expenses. Because interest payments
are not received by the Trusts at a constant rate throughout the year, such
interest distribution may be more or less that the amount credited to the
Interest Account as of the record date. For the purpose of minimizing
fluctuation in the distributions from the Interest Account, the Trustee is
authorized to advance such amounts as may be necessary to provide interest
distributions of approximately equal amounts. The Trustee shall be reimbursed
for any such advances from funds in the Interest Account on the ensuing record
date. Persons who purchase Units will commence receiving distributions only
after such person becomes a record owner. Notification to the Trustee of the
transfer of Units is the responsibility of the purchaser, but in the normal
course of business such notice is provided by the selling broker-dealer.

As of the first day of each month, the Trustee will deduct from the
Interest Account and, to the extent funds are not sufficient therein, from the
Principal Account, amounts necessary to pay the expenses of Trusts (as
determined on the basis set forth under "Trust Operating Expenses"). The Trustee
also may withdraw from said accounts such amounts, if any, as it deems necessary
to establish a reserve for any governmental charges or extraordinary charges
payable out of the Trusts. Amounts so withdrawn shall not be considered a part
of a Trust's assets until such time as the Trustee shall return all for any part
of such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Interest and Principal Accounts such amounts as may be
necessary to cover purchases of Replacement Bonds and redemption of Units by the
Trustee.

REINVESTMENT OPTION. Unitholders of the Trusts may elect to have each
distribution of interest income, capital gains and/or principal on their Units
automatically reinvested in shares of any mutual fund advised by the Sponsor or
its affiliates, Delaware Management Company or Delaware International Advisors,
Ltd., which are registered in the Unitholder's state of residence. Such mutual
funds are hereinafter collectively referred to as the "Reinvestment Funds."

Each Reinvestment Fund has investment objectives which differ in
certain respects from those of the Trusts. The prospectus relating to each
Reinvestment Fund describes the investment policies of such fund and sets forth
the procedures to follow to commence reinvestment. A Unitholder may obtain a
prospectus for the respective Reinvestment Fund from Voyageur Investments, Inc.
at 1818 Market Street, Philadelphia, Pennsylvania 19103.

After becoming a participant in a reinvestment plan, each distribution
of interest income, capital gains and/or principal on the participant's Units
will, on the applicable distribution date, automatically be applied, as directed
by such person, as of such distribution date by the Trustee to purchase shares
(or fractions thereof) of the applicable Reinvestment Fund at a net asset value
as computed as of the closing of trading on the New York Stock Exchange on such
date.

Confirmations of all reinvestments by a Unitholder into a Reinvestment
Fund will be mailed to the Unitholder by such Reinvestment Fund.

A participant may at any time prior to five days preceding the next
succeeding distribution date, by so notifying the Trustee in writing, elect to
terminate his or her reinvestment plan and receive future distributions on his
or her Units in cash. There will be no charge or other penalty for such
termination. Each Reinvestment Fund, its sponsor and its investment adviser
shall have the right to terminate at any time the reinvestment plan relating to
such fund.

REPORTS PROVIDED. The Trustee shall furnish Unitholders of a Trust in
connection with each distribution a statement of the amount of interest and, if
any, the amount of other receipts (received since the preceding distribution)
being distributed expressed in each case as a dollar amount representing the pro
rata share of each Unit of a Trust outstanding. For as long as the Sponsor deems
it to be in the best interests of the Unitholders, the accounts of each Trust
shall be audited, not less frequently than annually, by independent certified
public accountants and the report of such accountants shall be furnished by the
Trustee to Unitholders of such Trusts upon request. Within a reasonable period
of time after the end of each calendar year, the Trustee shall furnish to each
person who at any time during the calendar year was a registered Unitholder of a
Trust a statement (i) as to the Interest Account: interest received (including
amounts representing interest received upon any disposition of the Bonds) and
the percentage of such amount by states and territories in which the issuers of
such Bonds are located, deductions for applicable taxes and for fees and
expenses of such Trust, for purchases of Replacement Bonds and for redemptions
of Units, if any, reservations made by the Trustee, if any, and the balance
remaining after such distributions and deductions, express in each case both as
a total dollar amount and as a dollar amount representing the pro rata share of
each Unit outstanding on the last business day of such calendar year; (ii) as to
the Principal Account: the dates of disposition of any Bonds and the net
proceeds received therefrom (excluding any portion representing accrued
interest), the amount paid for purchases of Replacement Bonds and for
redemptions of Units, if any, reservations made by the Trustee, if any,
deductions for payment of applicable taxes, fees and expenses of such Trust and
the balance remaining after such distributions and deductions expressed both as
a total dollar amount and as a dollar amount representing the pro rata share of
each Unit outstanding on the last business day of such calendar year; (iii) a
list of the Bonds held and the number of Units outstanding on the last business
day of such calendar year; (iv) the Redemption Price per Unit based upon the
last computation thereof made during such calendar year; and (v) amounts
actually distributed during such calendar year from the Interest and Principal
Accounts, separately stated, expressed both as total dollar amounts and as
dollar amounts representing the pro rata share of each Unit outstanding.

In order to comply with Federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Bonds in a Trust furnished to it by the Evaluator.

REDEMPTION OF UNITS. A Unitholder who does not dispose of Units in the
secondary market described above may cause Units to be redeemed by the Trustee
by making a written request to the Trustee, at its unit investment trust office,
The Chase Manhattan Bank, 4 New York Plaza, New York, New York 10004-2413 and,
in the case of Units evidenced by a certificate, by tendering such certificate
to the Trustee, properly endorsed or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee. Unitholders must
sign the request, and such certificate or transfer instrument, exactly as their
names appear on the records of the Trustee and on any certificate representing
the Units to be redeemed. If the amount of the redemption is $25,000 or less and
the proceeds are payable to the Unitholder(s) of record at the address of
record, no signature guarantee is necessary for redemptions by individual
account owners (including joint owners). Additional documentation may be
requested, and a signature guarantee is always required, from corporations,
executors, administrators, trustees, guardians or associations. The signatures
must be guaranteed by a participant in the STAMP or such other guarantee program
in addition to, or in substitution for, STAMP, as may be accepted by the
Trustee. A certificate should only be sent by registered or certified mail for
the protection of the Unitholder. Since tender of the certificate is required
for redemption when one has been issued, Units represented by a certificate
cannot be redeemed until the certificate representing such Units has been
received by the purchasers.

Redemption shall be made by the Trustee on the third business day
following the day on which a tender for redemption is received (the "Redemption
Date"). Such redemption shall be made by payment of cash, equivalent to the
Redemption Price for such Trust, determined as set forth below as of the
evaluation time stated under "Summary of Essential Financial Information," next
following such tender, multiplied by the number of Units being redeemed. Any
Units redeemed shall be cancelled and any undivided fractional interest in the
Fund extinguished. The price received upon redemption might be more or less than
the amount paid by the Unitholder depending on the value of the Bonds in the
Trust involved at the time of redemption.

Under regulations issued by the Internal Revenue Service, the Trustee
will be required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unitholder's
tax identification number in the manner required by such regulations. Any amount
so withheld is transmitted to the Internal Revenue Service and may be recovered
by the Unitholder only when filing a return. Under normal circumstances the
Trustee obtains the Unitholder's tax identification number from the selling
broker. However, at any time a Unitholder elects to tender Units for redemption,
such Unitholder should provide a tax identification number to the Trustee in
order to avoid this possible "back-up withholding" in the event the Trustee has
not been previously provided such number.

Accrued interest paid on redemption shall be withdrawn from the
Interest Account or, if the balance therein is insufficient, from the Principal
Account. All other amounts will be withdrawn from the Principal Account. The
Trustee is empowered to sell underlying Bonds in order to make funds available
for redemption. Units so redeemed shall be cancelled.

The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the bid price of the Bonds in
each Trust, while the initial and primary Public Offering Price of Units will be
determined on the basis of the offering price of the Bonds, as of 4:00 P.M.
Eastern time on days of trading on the New York Stock Exchange on the date any
such determination is made. On the Initial Date of Deposit, the Public Offering
Price per Unit (which is based on the offering prices of the Bonds and includes
the sales charge) exceeded the value at which Units could have been redeemed
(based upon the current bid prices of the Bonds in such Trust) by the amount
shown under "Summary of Essential Financial Information." While the Trustee has
the power to determine the Redemption Price per Unit when Units are tendered for
redemption, such authority has been delegated to the Evaluator which determines
the price per Unit on a daily basis. The Redemption Price per Unit is the pro
rata share of each Unit in a Trust determined on the basis of (i) the cash on
hand in such Trust or monies in the process of being collected, (ii) the value
of the Bonds in such Trust based on the bid prices of the Bonds (including "when
issued" contracts, if any) and (iii) interest accrued thereon, less (a) amounts
representing taxes or other governmental charges payable out of such Trust and
(b) the accrued expenses of such Trust. The Evaluator may determine the value of
the Bonds in a Trust by employing any of the methods set forth in "Public
Offering-- Offering Price."

The price at which Units may be redeemed could be less than the price
paid by the Unitholder and may be less than the par value of the Bonds
represented by the Units so redeemed. As stated above, the Trustee may sell
Bonds to cover redemptions. When Bonds are sold, the size of the affected Trust
will be, and the diversity may be, reduced. Such sales may be required at a time
when Bonds would not otherwise be sold and might result in lower prices than
might otherwise be realized.

The right of redemption may be suspended and payment postponed for any
period during which the New York Stock Exchange is closed, other than for
customary weekend and holiday closings, or during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or an
emergency exists, as a result of which disposal or evaluation of the Bonds in a
Trust is not reasonably practicable, or for such other periods as the Securities
and Exchange Commission may by order permit. The Trustee is not liable to any
person in any way for any loss or damage which may result from any such
suspension or postponement.

TRUST ADMINISTRATION

DISTRIBUTOR PURCHASES OF UNITS. The Trustee shall notify the
Distributor of any tender of Units for redemption. If the Distributor's bid in
the secondary market at that time equals or exceeds the Redemption Price per
Unit, it may purchase such Units by notifying the Trustee before the close of
business on the date of such notification and by making payment therefor to the
Unitholder not later than the day on which the Units would otherwise have been
redeemed by the Trustee. Units held by the Sponsor or Distributor may be
tendered to the Trustee for redemption as any other Units.

The offering price of any Units acquired by the Distributor will be in
accord with the Public Offering Price described in the then currently effective
prospectus describing such Units. Any profit resulting from the resale of such
Units will belong to the Distributor which likewise will bear any loss resulting
from a lower offering or redemption price subsequent to its acquisition of such
Units.

PORTFOLIO ADMINISTRATION. The Trustee is empowered to sell, for the
purpose of redeeming Units tendered by any Unitholder, and for the payment of
expenses for which funds may not be available, such of the Bonds designated by
the Sponsor as the Trustee in its sole discretion may deem necessary. The
Sponsor, in designating such Bonds, will consider a variety of factors,
including (i) interest rates, (ii) market value and (iii) marketability. The
Sponsor may direct the Trustee to dispose of Bonds in the event there is a
decline in price or the occurrence of other market or credit factors, including
advance refunding (i.e., the issuance of refunding securities and the deposit of
the proceeds thereof in trust or escrow to retire the refunded securities on
their respective redemption dates), so that in the opinion of the Sponsor the
retention of such Securities would be detrimental to the interest of the
Unitholders.

The Sponsor is required to instruct the Trustee to reject any offer
made by an issuer of any of the Bonds to issue new obligations in exchange or
substitution for any Bond pursuant to a refunding or refinancing plan, except
that the Sponsor may instruct the Trustee to accept or reject such an offer or
to take any other action with respect thereto as the Sponsor may deem proper if
(i) the issuer is in default with respect to such Bond or (ii) in the written
opinion of the Sponsor the issuer will probably default with respect to such
Bond in the reasonably foreseeable future. Any obligation so received in
exchange or substitution will be held by the Trustee subject to the terms and
conditions of the Trust Agreement to the same extent as Bonds originally
deposited thereunder. Within five days after the deposit of obligations in
exchange or substitution for underlying Bonds, the Trustee is required to give
notice thereof to each Unitholder, identifying the Bonds eliminated and the
Bonds substituted therefor. Except as stated herein and under "The
Fund--Replacement Bonds" regarding the substitution of Replacement Bonds for
Failed Bonds, the acquisition by the Trust of any obligations other than the
Bonds initially deposited is not permitted.

If any default in the payment of principal or interest on any Bond
occurs and no provision for payment is made therefor within 30 days, the Trustee
is required to notify the Sponsor thereof. If the Sponsor fails to instruct the
Trustee to sell or to hold such Bond within 30 days after notification by the
Trustee to the Sponsor of such default, the Trustee may in its discretion sell
the defaulted Bond and not be liable for any depreciation or loss thereby
incurred.

AMENDMENT OR TERMINATION. The Sponsor and the Trustee have the power to
amend the Trust Agreement without the consent of any of the Unitholders when
such an amendment is (i) to cure an ambiguity or to correct or supplement any
provision of the Trust Agreement which may be defective or inconsistent with any
other provision contained therein or (ii) to make such other provisions as shall
not adversely affect the interest of the Unitholders (as determined in good
faith by the Sponsor and the Trustee), provided that the Trust Agreement may not
be amended to increase the number of Units issuable thereunder or to permit the
deposit or acquisition of obligations either in addition to or in substitution
for any of the Bonds initially deposited in a Trust, except for the substitution
of certain refunding obligations for such Bonds, for Replacement Bonds and for
subsequent deposits (see "The Fund"). In the event of any amendment, the Trustee
is obligated to notify promptly all Unitholders of the substance of such
amendment.

A Trust may be terminated at any time by consent of Unitholders
representing 66-2/3% of the Units of such Trust then outstanding or by the
Trustee when the value of such Trust, as shown by any semi-annual evaluation, is
less than the minimum value indicated under "Summary of Essential Financial
Information." A Trust will be liquidated by the Trustee in the event that a
sufficient number of Units not yet sold are tendered for redemption by the
Underwriters, including the Sponsor, so that the net worth of such Trust would
be reduced to less than 40% of the initial principal amount of such Trust. If a
Trust is liquidated because of the redemption of unsold Units by the
Underwriters, the Sponsor will refund to each purchaser of Units the entire
sales charge paid by such purchaser.

The Trust Agreement provides that a Trust shall terminate upon the
redemption, sale or other disposition of the last Bond held in such Trust, but
in no event shall it continue beyond the end of the year preceding the fiftieth
anniversary of the Trust Agreement. In the event of termination of a Trust,
written notice thereof will be sent by the Trustee to each Unitholder of such
Trust at his address appearing on the registration books of the Trust maintained
by the Trustee, such notice specifying the time or times at which the Unitholder
may surrender his certificate or certificates, if any were issued, for
cancellation. Within a reasonable time thereafter the Trustee shall liquidate
any Bonds then held in such Trust and shall deduct from the funds of such Trust
any accrued costs, expenses or indemnities provided by the Trust Agreement,
including estimated compensation of the Trustee and costs of liquidation and any
amounts required as a reserve to provide for payment of any applicable taxes or
other governmental charges. The sale of Bonds in a Trust upon termination may
result in a lower amount than might otherwise be realized if such sale were not
required at such time. For this reason, among others, the amount realized by a
Unitholder upon termination may be less than the principal amount or par amount
of Bonds represented by the Units held by such Unitholder. The Trustee shall
then distribute to each Unitholder his or her share of the balance of the
Interest and Principal Accounts. With such distribution the Unitholders shall be
furnished a final distribution statement of the amount distributable. At such
time as the Trustee in its sole discretion shall determine that any amounts held
in reserve are no longer necessary, it shall make distribution thereof to
Unitholders in the same manner.

LIMITATION ON LIABILITIES. The Sponsor, the Evaluator, the Distributor
and the Trustee shall be under no liability to Unitholders for taking any action
or for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
thereunder. The Trustee shall not be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Bonds. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement.

The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Bonds or upon the interest thereon or
upon it as Trustee under the Trust Agreement or upon or in respect of the Fund
which the Trustee may be required to pay under any present or future law of the
United States of America or of any other taxing authority having jurisdiction.
In addition, the Trust Agreement contains other customary provisions limiting
the liability of the Trustee.

The Trustee, Sponsor, Distributor and Unitholders may rely on any
evaluation furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Trust Agreement
shall be made in good faith upon the basis of the best information available to
it, provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor, Distributor or Unitholders for errors in judgment. This
provision shall not protect the Evaluator in any case of willful misfeasance,
bad faith, gross negligence or reckless disregard of its obligations and duties.

SPONSOR. Voyageur Fund Managers, Inc. is the Sponsor of the Fund and
Voyageur Investments, Inc. is the primary Distributor of Fund Units. After the
close of business on April 30, 1997, Voyageur Fund Managers, Inc. and Voyageur
Investments, Inc. became indirect, wholly owned subsidiaries of Lincoln National
Corporation ("LNC") as a result of LNC's acquisition of Dougherty Financial
Group, Inc., the parent company of the Sponsor and the Distributor. LNC,
headquartered in Fort Wayne, Indiana, owns and operates insurance and investment
management businesses, including Delaware Management Holdings, Inc. ("DMH").
Affiliates of DMH serve as adviser, distributor and transfer agent for the
Delaware Group of Mutual Funds, including the Delaware-Voyageur Funds.

As of May 1, 1997, affiliates of DMH, including Voyageur Fund Managers,
Inc., had assets under management of over $34 billion in mutual fund and
institutional accounts, and served as investment adviser to more than 60 mutual
fund portfolios. The principal business address for Voyageur Fund Managers, Inc.
is One Commerce Square, Philadelphia, Pennsylvania 19103; the principal business
address for Voyageur Investments, Inc. is 1818 Market Street, Philadelphia,
Pennsylvania 19103. (This paragraph relates only to the Sponsor and not to the
Fund or to any Series thereof. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
information will be made available by the Sponsor upon request.)

If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or become bankrupt or its affairs are
taken over by public authorities, then the Trustee may (i) appoint a successor
Sponsor at rates of compensation deemed by the Trustee to be reasonable and not
exceeding amounts prescribed by the Securities and Exchange Commission, (ii)
terminate the Trust Agreement and liquidate the Fund as provided therein or
(iii) continue to act as Trustee without terminating the Trust Agreement.

EVALUATOR. Muller Data Corporation serves as Evaluator. The Evaluator
may resign or be removed by the Sponsor in which event the Sponsor is to use its
best efforts to appoint a satisfactory successor. Such resignation or removal
shall become effective upon acceptance of appointment by the successor
evaluation. If upon resignation of the Evaluator no successor has accepted
appointment within 30 days after notice of resignation, the Evaluator may apply
to a court of competent jurisdiction for the appointment of a successor. Notice
of such resignation or removal and appointment shall be mailed by the Trustee to
each Unitholder.

TRUSTEE. The Trustee is The Chase Manhattan Bank, with its principal
executive office located at 270 Park Avenue, New York, New York 10017 and its
unit investment trust office at 4 New York Plaza, 6th Floor, New York, New York
10004-2413. The Trustee is subject to supervision by the Superintendent of Banks
of the State of New York, the Federal Deposit Insurance Corporation and the
Board of Governors of the Federal Reserve System.

The duties of the Trustee are primarily ministerial in nature. It did
not participate in the selection of Bonds for the portfolio of any Trust.

In accordance with the Trust Agreement, the Trustee shall keep proper
books of record and account of all transactions at its office for the Fund. Such
records shall include the name and address of, and the certificates issued by
each Trust to, every Unitholder of each Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or Federal statute, rule or
regulation (see "Rights of Unitholders--Reports Provided"). The Trustee is
required to keep a certified copy or duplicate original of the Trust Agreement
on file in its office available for inspection at all reasonable times during
the usual business hours by any Unitholder, together with a current list of the
Bonds held in the Trusts.

Under the Trust Agreement, the Trustee or any successor trustee may
resign and be discharged of the Trusts created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.

Any corporation into which a Trustee may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a corporation organized under the laws of the United States or any
State, be authorized to exercise trust powers and have at all times an aggregate
capital, surplus and undivided profits of not less than $5,000,000.

UNDERWRITING

The Underwriters named below have severally purchased Units in the
following respective amounts from the Sponsor.

<TABLE>
<CAPTION>
New Pennsylvania Territorial
Mexico Insured Insured
Name/Address Series 2 Series 1 Series 6
- -------------------------------- ---------- -------------- ---------
<S> <C> <C> <C>

Total

</TABLE>

Units may also be sold to broker-dealers and others at prices
representing the per Unit concession or agency commission stated under "Public
Offering--Unit Distribution." However, resales of Units by such broker-dealers
and others to the public will be made at the Public Offering Price described in
the Prospectus. The Sponsor and the Distributor each reserves the right to
reject, in whole or in part, any order for the purchase of Units and the right
to change the amount of the concession or agency commission from time to time.

At various times the Sponsor may implement programs under which the
sales forces of Underwriters, brokers, dealers, banks and/or others may be
eligible to win nominal awards for certain sales efforts, or under which the
Sponsor will reallow to any such Underwriters, brokers, dealers, banks and/or
others that sponsor sales contests or recognition programs conforming to
criteria established by the Sponsor, or participate in sales programs sponsored
by the Sponsor, an amount not exceeding the total applicable sales charges on
the sales generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to time pursuant to
objective criteria established by the Sponsor pay fees to qualifying
Underwriters, brokers, dealers, banks or others for certain services or
activities which are primarily intended to result in sales of Units of the
Trusts. Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trusts. These programs will not change the price
Unitholders pay for their Units or the amount that the Trusts will receive from
the Units sold.

OTHER MATTERS

LEGAL OPINIONS. The legality of the Units offered hereby and certain
matters relating to Federal and state tax law have been passed upon by Chapman
and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as counsel for the
Sponsor. Carter, Ledyard & Milburn will act as counsel for the Trustee and as
special New York tax counsel for the Trusts.

INDEPENDENT AUDITORS. The statements of net assets and the related
schedules of investments as of the opening of business on the Initial Date of
Deposit included in this Prospectus have been included herein in reliance upon
the report of KPMG Peat Marwick LLP, independent auditors, appearing elsewhere
herein and upon the authority of said firm as experts in accounting and
auditing.

DESCRIPTION OF BOND RATINGS*

STANDARD & POOR'S. A brief description of the applicable Standard &
Poor's ratings symbols and their meanings follows:

A Standard & Poor's corporate or municipal bond rating is a current
assessment of the creditworthiness of an obligor with respect to a specific debt
obligation. This assessment may take into consideration obligors such as
guarantors, insurers, or lessees.

The bond rating is not a recommendation to purchase, sell or hold a
security, inasmuch as it does not comment as to market price or suitability for
a particular investor.

The ratings are based on current information furnished by the issuer or
obtained by Standard & Poor's from other sources it considers reliable. Standard
& Poor's does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended or withdrawn as a result of changes in, or unavailability of, such
information, or for other circumstances.

The ratings are based, in varying degrees, on the following
considerations:

1. Likelihood of default--capacity and willingness of the obligor
as to the timely payment of interest and repayment of
principal in accordance with the terms of the obligation;

II. Nature of and provisions of the obligation;

------------------
* As published by the ratings companies.

III. Protection afforded by, and relative position of, the
obligation in the event of bankruptcy, reorganization or other
arrangements under the laws of bankruptcy and other laws
affecting creditors' rights.

AAA - Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal is
extremely strong.**

AA - Bonds rated AA have a very strong capacity to pay interest and
repay principal and differ from the highest rated issues only in small degree.

A - Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.

BBB - Bonds rated BBB are regarded as having an adequate capacity to
pay interest and repay principal. Whereas they normally exhibit 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 bonds in this category than for bonds in higher rated categories.

Plus (+) or Minus (-): The ratings from "AA" to "BBB" may be modified
by the addition of a plus or minus sign to show relative standing within the
major rating categories.

Provisional Ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the bonds 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. The
investor should exercise his/her own judgment with respect to such likelihood
and risk.

Credit Watch: Credit Watch highlights potential changes in ratings of
bonds and other fixed income securities. It focuses on events and trends which
place companies and government units under special surveillance by S&P's
180-member analytical staff. These may include merges, voter referendums,
actions by regulatory authorities, or developments gleaned from analytical
reviews. Unless otherwise noted, a rating decision will be made within 90 days.
Issues appear on Credit Watch where an event, situation, or deviation from
trends occurred and needs to be evaluated as to its impact on credit ratings. A
listing, however, does not mean a rating change is inevitable. Since S&P
continuously monitors all of its ratings, Credit Watch is not intended to
include all issues under review. Thus, rating changes will occur without issues
appearing on Credit Watch.

- --------
** Bonds insured by Financial Guaranty Insurance Company, AMBAC
Indemnity Corporation, Municipal Bond Investors Assurance Corporation, Connie
Lee Insurance Company, Financial Security Assurance and Capital Guaranty
Insurance Company are automatically rated "AAA" by Standard & Poor's.

MOODY'S INVESTORS SERVICE, INC. A brief description of the applicable
Moody's Investors Service, Inc. rating symbols and their meanings follows:

Aaa - Bonds which are rated Aaa are judged to be of 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. Their
safety is so absolute that with the occasional exception of oversupply in a few
specific instances, characteristically, their market value is affected solely by
money market fluctuations.

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.
Their market value is virtually immune to all but money market influences, with
the occasional exception of oversupply in a few specific instances.

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. The market value of A-rated bonds may be influenced to some degree by
economic performance during a sustained period of depressed business conditions,
but, during periods of normalcy, A-rated bonds frequently move in parallel with
Aaa and Aa obligations, with the occasional exception of oversupply in a few
specific instances.

A 1 and Baa 1 - Bonds which are rated A 1 and Baa 1 offer the maximum
in security within their quality group, can be bought for possible upgrading in
quality, and additionally, afford the investor an opportunity to gauge more
precisely the relative attractiveness of offerings in the market place.

Baa - Bonds which are rated Baa are considered as medium grade
obligation; 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. The market value of
Baa-rated bonds is more sensitive to changes in economic circumstances, and
aside form occasional speculative factors applying to some bonds of this class,
Baa market valuations will move in parallel with Aaa, Aa, and A obligations
during periods of economic normalcy, except in instances of oversupply.

Moody's bond rating symbols may contain numerical modifiers of a
generic rating classification. The modifier 1 indicates that the bond ranks at
the high end of its category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its generic
rating category.

Con.(--) - Bonds for which the security depends upon the completion of
some act or the fulfillment of some condition are rated conditionally. These are
bonds secured by (a) earnings of projects under construction, (b) earnings of
projects unseasoned in operation experience, (c) rentals which begin when
facilities are completed, or (d) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.

No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the Fund,
the Sponsor or the Underwriters. This Prospectus does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in any state to any
person to whom it is not lawful to make such offer in such state.

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

TABLE OF CONTENTS
TITLE PAGE

SUMMARY OF ESSENTIAL
FINANCIAL INFORMATION.................. 3
THE FUND.................................... 5
INVESTMENT OBJECTIVES AND
PORTFOLIO SELECTION.................... 7
THE TRUSTS.................................. 8
EQUIVALENT TAXABLE ESTIMATED
CURRENT RETURNS........................ 27
INDEPENDENT AUDITORS' REPORT................ 29
STATEMENTS OF NET ASSETS.................... 30
RISK FACTORS................................ 31
ESTIMATED CURRENT RETURN AND
ESTIMATED LONG-TERM RETURN............. 37
TRUST OPERATING EXPENSES.................... 38
INSURANCE ON THE BONDS IN THE
INSURED TRUSTS......................... 40
TAX STATUS.................................. 41
PUBLIC OFFERING............................. 45
RIGHTS OF UNITHOLDERS....................... 50
TRUST ADMINISTRATION........................ 55
UNDERWRITING................................ 59
OTHER MATTERS............................... 60
DESCRIPTION OF BOND RATINGS................. 60

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

This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration statements
and exhibits relating thereto, which the Fund has filed with the Securities and
Exchange Commission, Washington, D.C., under the Securities Act of 1933 and the
Investment Company Act of 1940, and to which reference is hereby made.

P R O S P E C T U S

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

__________, 1997

DELAWARE-VOYAGEUR
TAX-EXEMPT TRUST,
SERIES 10
NEW MEXICO SERIES 2
PENNSYLVANIA INSURED SERIES 1
TERRITORIAL INSURED SERIES 6

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement comprises the following papers and documents:

The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants, rating services and
legal counsel

The following exhibits:

1.1 Standard Terms and Conditions of Trust - Voyageur Tax-Exempt Trust
Series 1 and Subsequent Series dated January 19, 1995 (incorporated by
reference to Amendment No. 1 to Form S-6 filed on behalf Voyageur
Tax-Exempt Trust Series 5).

1.2 Form of Trust Indenture and Agreement for Delaware-Voyageur Tax-Exempt
Trust, Series 10 (to be filed by Amendment).

2. Opinion of counsel to the Sponsor as to legality of the Securities
being registered including a consent to the use of its name under the
headings "Tax Status" and "Legal Opinions" in the Prospectus and
opinion of counsel as to Federal income tax status of the securities
being registered and certain state tax matters (to be filed by
Amendment).

3. None.

4. Not Applicable.

5. Financial Data Schedules filed electronically as Exhibit(s) 27 pursuant
to Rule 401 of Regulation S-T (to be filed by Amendment).

6. Written Consents

(a) Consent of The Chase Manhattan Bank (to be filed by Amendment)

(b) Consent of KPMG Peat Marwick LLP (to be filed by Amendment)

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Delaware-Voyageur Tax-Exempt Trust, Series 10, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Philadelphia and State of Pennsylvania on the
14th day of May, 1997.

DELAWARE-VOYAGEUR TAX-EXEMPT TRUST,
SERIES 10 (Registrant)

By: Voyageur Fund Managers, Inc.
(Depositor)

By George M. Chamberlain, Jr.
----------------------------------
Senior Vice President and Secretary

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on May 14, 1997.

SIGNATURE TITLE

Wayne A. Stork
- ------------------------------
Wayne A. Stork President, Chief Executive Officer
and Chief Investment Officer

David K. Downes
- ------------------------------
David K. Downes Executive Vice President, Chief Operating
Officer, Chief Financial Officer and
Director

George M. Chamberlain, Jr.
- ------------------------------
George M. Chamberlain, Jr. Senior Vice President, Secretary
and Director

Richard J. Flannery
- ------------------------------
Richard J. Flannery Managing Director/Corporate & Tax Affairs

George M. Chamberlain, Jr.
----------------------------------
George M. Chamberlain, Jr.*

*George M. Chamberlain, Jr. signs this document pursuant to a Power of
Attorney filed with the Securities and Exchange Commission with Amendment No. 1
to the Registration Statement on Form S-6 for Delaware-Voyageur Unit Investment
Trust, Series 9 (Registration No. 333-25219).