Registration No. 333-04931
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 150
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agents for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as
amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on June 20, 1996 at 2:00 p.m. pursuant to Rule
487.
________________________________
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
Form N-8B-2 Item Number Form S-6 Heading in Prospectus
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors; Statement of
Net Assets
* Inapplicable, answer negative or not required.
Real Estate Trust, Series 1
The Trust. The First Trust (registered trademark) Special Situations
Trust, Series 150 (the "Trust") is a unit investment trust consisting of
a diversified portfolio of common stocks issued by publicly traded
equity real estate investment trusts, known as REITs.
The objective of the Trust is to provide for potential capital
appreciation and potential dividend income by investing the Trust's
portfolio in common stocks issued by publicly traded equity real estate
investment trusts, which the Sponsor believes have the potential for
outstanding financial performance and capital appreciation (the
"Securities"). See "Schedule of Investments." The Trust has a mandatory
termination date ("Mandatory Termination Date" or "Trust Ending Date"),
as set forth under "Summary of Essential Information." There is, of
course, no guarantee that the objective of the Trust will be achieved.
Each Unit of the Trust represents an undivided fractional interest in
all the Securities deposited in the Trust.
The Securities deposited in the Trust's portfolio have no fixed maturity
date, and the value of these underlying Securities will fluctuate with
changes in the values of stocks in general, and the real estate market
in particular. See "Portfolio."
The Sponsor may, from time to time during a period of up to
approximately 360 days after the Initial Date of Deposit, deposit
additional Securities or cash (including a letter of credit) with
instructions to purchase additional Securities in the Trust. Such
deposits of additional Securities or cash will be done in such a manner
that the original proportionate relationship amongst the individual
issues of the Securities shall be maintained. Any deposit by the Sponsor
of additional Securities, or the purchase of additional Securities
pursuant to a cash deposit, will duplicate, as nearly as is practicable,
the original proportionate relationship established on the Initial Date
of Deposit, not the actual proportionate relationship on the subsequent
date of deposit, since the two may differ. Any such difference may be
due to the sale, redemption or liquidation of any Securities deposited
in the Trust on the Initial, or any subsequent, Date of Deposit. See
"What is the First Trust Special Situations Trust?" and "How May
Securities be Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Trust
during the initial offering period is equal to the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the ask prices of over-the-
counter traded Securities) plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of the Trust, plus a maximum
sales charge of 4.90% (equivalent to 5.152% of the net amount invested).
A pro rata share of accumulated dividends, if any, in the Income Account
is included in the Public Offering Price. The secondary market Public
Offering Price per Unit will be based upon the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the bid prices of over-the-
counter traded Securities) plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of the Trust plus a maximum
sales charge of 4.90% (equivalent to 5.152% of the net amount invested)
subject to reduction beginning July 1, 1997. The minimum amount which an
investor may purchase of the Trust is $2,000 ($1,000 for Individual
Retirement Accounts or other retirement plans). The sales charge is
reduced on a graduated scale for sales involving at least 10,000 Units.
See "How is the Public Offering Price Determined?"
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.
J. C. BRADFORD & CO.
The date of this Prospectus is June 20, 1996
Page 1
Dividend and Capital Distributions. Distributions of dividends and
capital, if any, received by the Trust, net of expenses of the Trust,
will be paid on the Distribution Date to Unit holders of record on the
Record Date, as set forth in the "Summary of Essential Information." On
July 31, 1996, the Initial Distribution Date, Unit holders of record as
of July 15, 1996 will receive $.0740 per Unit. Beginning in August, the
regular estimated monthly distribution will be $.0670 per Unit.
Distributions of funds in the Capital Account, if any, will be made at
least annually in December of each year. Any distribution of income
and/or capital will be net of the expenses of the Trust. See "What is
the Federal Tax Status of Unit Holders?" Additionally, upon termination
of the Trust, the Trustee will distribute, upon surrender of Units for
redemption, to each Unit holder his pro rata share of the Trust's
assets, less expenses, in the manner set forth under "Rights of Unit
Holders-How are Income and Capital Distributed?"
Secondary Market for Units. After the initial offering period, while
under no obligation to do so, the Sponsor and the Underwriter intend to
maintain a market for Units of the Trust and offer to repurchase such
Units at prices which are based on the aggregate underlying value of
Securities in the Trust (generally determined by the closing sale prices
of listed Securities and the bid prices of over-the-counter traded
Securities) plus or minus cash, if any, in the Capital and Income
Accounts of the Trust. If a secondary market is maintained during the
initial offering period, the prices at which Units will be repurchased
will also be based upon the aggregate underlying value of the Securities
in the Trust (generally determined by the closing sale prices of listed
Securities and the ask prices of over-the-counter traded Securities)
plus or minus cash, if any, in the Capital and Income Accounts of the
Trust. If a secondary market is not maintained, a Unit holder may redeem
Units through redemption at prices based upon the aggregate underlying
value of the Securities in the Trust (generally determined by the
closing sale prices of listed Securities and the bid prices of over-the-
counter traded Securities) plus or minus a pro rata share of cash, if
any, in the Capital and Income Accounts of the Trust. A Unit holder
tendering 2,500 Units or more for redemption may request a distribution
of shares of Securities (reduced by customary transfer and registration
charges) in lieu of payment in cash. See "How May Units be Redeemed?"
Unit holders electing a distribution of shares of Securities should be
aware that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. See "What is the Federal Tax Status of Unit Holders?"
Termination. Commencing on the Mandatory Termination Date, Securities
will begin to be sold as prescribed by the Sponsor. The Sponsor will
determine the manner, timing and execution of the sale of the
Securities. Written notice of any termination of the Trust specifying
the time or times at which Unit holders may surrender their certificates
for cancellation shall be given by the Trustee to each Unit holder at
his address appearing on the registration books of the Trust maintained
by the Trustee. At least 60 days prior to the Mandatory Termination Date
of the Trust, the Trustee will provide written notice thereof to all
Unit holders and will include with such notice a form to enable Unit
holders to elect a distribution of shares of Securities (reduced by
customer transfer and registration charges) if such Unit holder owns at
least 2,500 Units of the Trust, rather than to receive payment in cash
for such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Securities. To be effective, the election
form, together with surrendered certificates and other documentation
required by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date of the Trust. Unit
holders electing a distribution of shares of Securities should be aware
that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. Unit holders not electing a distribution of shares of
Securities will receive a cash distribution within a reasonable time
after the Trust is terminated. See "Rights of Unit Holders-How are
Income and Capital Distributed?" and "Other Information-How May the
Indenture be Amended or Terminated?"
Risk Factors. An investment in the Trust should be made with an
understanding of the risks associated therewith, including, among other
factors, the possible deterioration of either the financial condition of
the issuers of the Securities or the general condition of the stock
market, changes in the real estate market, vacancy rates and
competition, volatile interest rates or economic recession. In addition,
because certain REITs may be subject to a management fee, an investment
by the Trust in such Securities may result in duplicative expenses. The
Trust's portfolio is not managed and Securities will not be sold by the
Trust regardless of market fluctuations, although some Securities may be
sold under certain limited circumstances. See "What are Securities?-Risk
Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-June 20, 1996
Underwriter: J. C. Bradford & Co.
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank (National
Association)
Evaluator: First Trust Advisors L.P.
<TABLE>
<CAPTION>
General Information
<S> <C>
Initial Number of Units (1) 15,000
Fractional Undivided Interest in the Trust per Unit (1) 1/15,000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in Portfolio (2) $142,932
Aggregate Offering Price Evaluation of Securities per Unit $ 9.5288
Sales Charge of 4.90% of the Public Offering Price per Unit
(5.152% of the net amount invested) $ .4910
Public Offering Price per Unit (3) $10.0198
Sponsor's Initial Repurchase Price per Unit $ 9.5288
Redemption Price per Unit (based on aggregate
underlying value of Securities) (4) $ 9.5288
Calculation of Estimated Net Annual Dividends per Unit:
Estimated Gross Annual Dividends per Unit (5) $ .8282
Less: Estimated Annual Expense per Unit $ (.0246)
_________
Estimated Net Annual Dividends per Unit $ .8036
=========
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number 33718R 526
First Settlement Date June 25, 1996
Mandatory Termination Date September 1, 2002
Discretionary Liquidation Amount The Trust may be terminated if the value thereof is less than 40% of the total
value of Securities deposited in the Trust during the primary offering period.
Trustee's Annual Fee $.0074 per Unit outstanding.
Evaluator's Annual Fee (6) $.0017 per Unit outstanding, payable to an affiliate of the Sponsor. Evaluations
for purposes of sale, purchase or redemption of Units are made as of the close
of trading (generally 4:00 p.m. Eastern time) on the New York Stock Exchange on
each day on which it is open.
Supervisory Fee (7) Maximum of $.0035 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Estimated Annual Organizational
and Offering Expenses (8) $.0028 per Unit outstanding.
Income Distribution Record Date Fifteenth day of each month commencing July 15, 1996.
Income Distribution Date (9) Last day of each month commencing July 31, 1996.
</TABLE>
[FN]
______________
(1) As of the close of business on the Initial Date of Deposit, the
number of Units of the Trust may be adjusted so that the Public Offering
Price per Unit will equal approximately $10.00. Therefore, to the extent
of any such adjustment, the fractional undivided interest per Unit will
increase or decrease accordingly, from the amounts indicated above.
(2) Each Security listed on a national securities exchange or the NASDAQ
National Market System is valued at the last closing sale price, or if
no such price exists or if the Security is not so listed, at the closing
ask price thereof.
(3) On the Initial Date of Deposit there will be no accumulated dividends
in the Income Account. Anyone ordering Units after such date will pay a
pro rata share of any accumulated dividends in such Income Account. The
Public Offering Price as shown reflects the value of the Securities at
the opening of business on the Initial Date of Deposit and establishes
the original proportionate relationship amongst the individual
securities. No sales to investors will be executed at this price.
Additional Securities will be deposited during the day of the Initial
Date of Deposit which will be valued as of 4:00 p.m. Eastern time and
sold to investors at a Public Offering Price per Unit based on this
valuation.
(4) See "How May Units be Redeemed?"
(5) Estimated gross annual dividends are based on the most recent
quarterly dividend. Dividends will consist of ordinary income, capital
gains and/or return of capital.
(6) The minimum and maximum evaluation fee for any one calendar year will
be $1,000 and $2,500, respectively.
(7) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0023 per
Unit.
(8) The Trust (and therefore Unit holders) 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 portfolio and the initial fees
and expenses of the Trustee but not including the expenses incurred in
the printing of preliminary prospectuses, and 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 a period
not to exceed five years from the Initial Date of Deposit. See "What are
the Expenses and Charges?" and "Statement of Net Assets." Historically,
the sponsors of unit investment trusts have paid all the costs of
establishing such trusts.
(9) Distributions from the Capital Account will be made monthly payable
on the last day of the month to Unit holders of record on the fifteenth
day of such month if the amount available for distribution equals at
least $1.00 per 100 Units. Notwithstanding, distributions of funds in
the Capital Account, if any, will be made in December of each year.
Page 3
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 150 is one of a series
of investment companies created by the Sponsor under the name of The
First Trust Special Situations Trust, all of which are generally
similar, but each of which is separate and is designated by a different
series number (the "Trust"). This Series consists of an underlying
separate unit investment trust designated as: Real Estate Trust, Series
1. The Trust was created under the laws of the State of New York,
pursuant to a Trust Agreement (the "Indenture") dated the Initial Date
of Deposit, with Nike Securities L.P. as Sponsor, The Chase Manhattan
Bank (National Association) as Trustee and First Trust Advisors L.P. as
Portfolio Supervisor and Evaluator.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee
confirmations of contracts for the purchase of common stocks issued by
publicly traded equity real estate investment trusts, known as REITs
(the "REIT" or "REITs"). The Trust includes a diversified portfolio of
REITs, together with an irrevocable letter or letters of credit of a
financial institution in an amount at least equal to the purchase price
of such securities. In exchange for the deposit of securities or
contracts to purchase securities in the Trust, the Trustee delivered to
the Sponsor documents evidencing the entire ownership of the Trust.
The objective of the Trust is to provide for potential capital
appreciation and potential for increasing dividend income through an
investment in securities issued by REITs. Additionally, the Trust allows
individual investors the opportunity to invest in the real estate market
in a more affordable, practical and liquid alternative to purchasing
individual properties.
The Trust was designed to provide a unique, simple way to invest in one
of the greatest wealth-producing assets in history-real estate. This
opportunity is made possible because of an exciting transformation in
the way American real estate is financed, owned and managed. Through
REITs, ownership of commercial real estate is affordable and liquid. A
REIT is a corporation or business trust which combines the capital of
many investors to acquire real estate. REITs act much like a mutual fund
for real estate. REITs make investments in a diverse array of real
estate, from shopping centers and office buildings to apartment
complexes, hotels, hospitals and healthcare facilities. Investors
receive income from the rents or mortgage payments received from the
properties and enjoy capital gains if properties are sold at a profit.
REITs do not pay federal corporate income tax and often are excluded
from state taxation. This advantaged tax treatment means there is no
double taxation of income to the shareholders. REITs are legally
required to distribute 95% of net income and dividends to investors, in
this case, the Trust. Distributions from the Trust will consist of
ordinary income, capital gains and/or return of principal. The amount of
these distributions will vary, according to the type of distribution
that is made.
All REITs selected for this Trust are listed NYSE or NASDAQ securities
and have an average capitalization of $400 million. This assures daily
liquidity of Trust Units which is a key benefit not generally available
with direct ownership of real estate. The Trust's portfolio includes 23
REITs which own over 1,900 properties.
This evolution in the real estate market, which is still largely
undiscovered by the investing public, provides superior opportunities
for above-average total returns from relatively high monthly dividend
income, capital gains, and some tax advantaged treatment. REIT share
values are likely to be propelled higher throughout the `90s, in the
opinion of the Sponsor, by improving real estate values, good operating
results, and increased demand for REIT shares as this improved vehicle
for ownership is discovered by individuals and corporations.
The Sponsor believes that the Trust offers a vehicle for investors to
participate financially in the real estate market through a diversified
portfolio. The diversification of assets in the Trust, however, does not
eliminate the risk of loss always inherent in the ownership of securities.
Other than owning a primary residence, individual investors often have
few practical opportunities to invest in the real estate market. The
Trust seeks to offer a more affordable, practical and liquid alternative
to owning individual properties. The Trust's portfolio seeks to provide
greater diversification in several respects: each REIT in the portfolio
Page 4
is operated by a different management team; various regions of the
country, each with its own economic conditions and cycles, are
represented in the Trust's portfolio; and different REITs specialize in
different sectors, such as apartment complexes, office buildings,
shopping malls, industrial parks and hotels. The Sponsor believes that
income-oriented investors should consider a diversified portfolio of
REITs, such as the Trust, for a variety of reasons: potential for high
current yields are available providing dividend income and a degree of
protection in declining markets; solid dividend growth is possible due
to recent strength in industry earnings (funds from operations); and
REIT stock valuations are currently low relative to the yield on U.S.
Treasury securities, providing the potential for capital appreciation.
In addition, in the Sponsor's opinion, the following factors should also
be considered: REITs should rise in value as general investor skepticism
about real estate shifts to optimism; well-capitalized REITs are often
buying properties or mortgages at discounts to their book value
providing upside potential; during inflationary periods, both real
estate values and rents typically rise, benefiting the REIT investor;
and long-term capital earmarked for REITs is expected to grow separately
in coming years due to relaxed barriers for pension plan investing.
With the deposit of the Securities on the Initial Date of Deposit, the
Sponsor established a percentage relationship between the amounts of
individual Securities in the Trust's portfolio. From time to time
following the Initial Date of Deposit, the Sponsor, pursuant to the
Indenture, may deposit additional Securities in the Trust, or cash with
instructions to purchase additional Securities in the 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 the Trust. Any deposit by the Sponsor of additional
Securities, or the purchase of additional Securities pursuant to a cash
deposit, will duplicate, as nearly as is practicable, the original
proportionate relationship and not the actual proportionate relationship
on the subsequent date of deposit, since the two may differ. Any such
difference may be due to the sale, redemption or liquidation of any of
the Securities deposited in the Trust on the Initial, or any subsequent,
Date of Deposit. See "How May Securities be Removed from the Trust?" The
original percentage relationship of each Security to the Trust is set
forth herein under "Schedule of Investments." Since the prices of the
underlying Securities will fluctuate daily, the ratio, on a market value
basis, will also change daily. The portion of Securities represented by
each Unit will not change as a result of the deposit of additional
Securities in the Trust. If the Sponsor deposits cash, however, existing
and new investors may experience a dilution of their investment and a
reduction in their anticipated income because of fluctuations in the
prices of the Securities between the time of the cash deposit and the
purchase of the Securities and because the Trust will pay the associated
brokerage fees. To minimize this effect, the Trust will try to purchase
the Securities as close to the evaluation time or as close to the
evaluation price as possible.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Securities as set forth under
"Summary of Essential Information." To the extent that Units of the
Trust are redeemed, the aggregate value of the Securities in the Trust
will be reduced and the undivided fractional interest represented by
each outstanding Unit of the Trust will increase. However, if additional
Units are issued by the Trust in connection with the deposit of
additional Securities or cash by the Sponsor, the aggregate value of the
Securities in the Trust will be increased by amounts allocable to
additional Units, and the fractional undivided interest represented by
each Unit of the Trust will be decreased proportionately. See "How May
Units be Redeemed?"
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to each Trust for which the Sponsor will be reimbursed in
amounts as set forth under "Summary of Essential Information," the
Sponsor will not receive any fees in connection with its activities
relating to the Trust. Such bookkeeping and administrative charges may
be increased without approval of the Unit holders 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. The fees payable to the Sponsor for such
services may exceed the actual costs of providing such services for this
Trust, but at no time will the total amount received for such services
rendered to all unit investment trusts of which Nike Securities L.P. is
Page 5
the Sponsor in any calendar year exceed the actual cost to the Sponsor
of supplying such services in such year. First Trust Advisors L.P., an
affiliate of the Sponsor, will receive an annual supervisory fee, which
is not to exceed the amount set forth under "Summary of Essential
Information," for providing portfolio supervisory services for the
Trust. Such fee is based on the number of Units outstanding in the Trust
on January 1 of each year, except for the year or years in which an
initial offering period occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such month. The
fee may exceed the actual costs of providing such supervisory services
for this Trust, but at no time will the total amount received for
portfolio supervisory services rendered to all unit investment trusts of
which Nike Securities L.P. is the Sponsor in any calendar year exceed
the aggregate cost to First Trust Advisors L.P. of supplying such
services in such year. In providing such supervisory services, the
Portfolio Supervisor may purchase research services from a variety of
sources which may include underwriters or dealers of the Trust.
Subsequent to the initial offering period, the Evaluator, an affiliate
of the Sponsor, will receive a fee as indicated in the "Summary of
Essential Information." The fee may exceed the actual costs of providing
such evaluation services for the Trust, but at no time will the total
amount received for evaluation services rendered to all unit investment
trusts of which Nike Securities L.P. is the Sponsor in any calendar year
exceed the aggregate cost to First Trust Advisors L.P. of supplying such
services in such year. The Trustee pays certain expenses of the Trust
for which it is reimbursed by the Trust. The Trustee will receive for
its ordinary recurring services to the Trust an annual fee as set forth
in "Summary of Essential Information." Such fee will be based upon the
largest aggregate number of Units of the Trust outstanding at any time
during the year. For a discussion of the services performed by the
Trustee pursuant to its obligations under the Indenture, reference is
made to the material set forth under "Rights of Unit Holders."
The Trustee's and Evaluator's fees are payable from the Income Account
of the Trust to the extent funds are available, and then from the
Capital Account of the Trust. Since the Trustee has the use of the funds
being held in the Capital and Income Accounts for payment of expenses
and redemptions and since such Accounts are noninterest-bearing to Unit
holders, the Trustee benefits thereby. Part of the Trustee's
compensation for its services to the Trust is expected to result from
the use of these funds. However, the Trustee may bear from its own
resources certain expenses relating to the Trust, including organization
costs and brokerage commissions. The Trustee's and Evaluator's fees may
be increased without approval of the Unit holders 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.
Expenses incurred in establishing the Trust, 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 portfolio and the
initial fees and expenses of the Trustee and any other out-of-pocket
expenses, will be paid by the Trust and charged off over a period not to
exceed five years from the Initial Date of Deposit. The following
additional charges are or may be incurred by the Trust: all legal and
annual auditing expenses of the Trustee incurred by or in connection
with its responsibilities under the Indenture; the expenses and costs of
any action undertaken by the Trustee to protect the Trust and the rights
and interests of the Unit holders; fees of the Trustee for any
extraordinary services performed under the Indenture; indemnification of
the Trustee for any loss, liability or expense incurred by it without
negligence, bad faith or willful misconduct on its part, arising out of
or in connection with its acceptance or administration of the Trust;
indemnification of the Sponsor for any loss, liability or expense
incurred without gross negligence, bad faith or willful misconduct in
acting as Depositor of the Trust; all taxes and other government charges
imposed upon the Securities or any part of the Trust (no such taxes or
charges are being levied or made or, to the knowledge of the Sponsor,
contemplated). The above expenses and the Trustee's annual fee, when
paid or owing to the Trustee, are secured by a lien on the Trust. In
addition, the Trustee is empowered to sell Securities in the Trust in
order to make funds available to pay all these amounts if funds are not
otherwise available in the Income and Capital Accounts of the Trust.
Since the Securities are all common stocks and the income stream
produced by dividend payments is unpredictable, the Sponsor cannot
provide any assurance that dividends will be sufficient to meet any or
all expenses of the Trust. As described above, if dividends are
insufficient to cover expenses, it is likely that Securities will have
to be sold to meet Trust expenses. These sales may result in capital
gains or losses to Unit holders. See "What is the Federal Tax Status of
Unit Holders?"
Page 6
The Indenture requires the Trust to be audited on an annual basis at the
expense of the Trust by independent auditors selected by the Sponsor. So
long as the Sponsor is making a secondary market for the Units, the
Sponsor is required to bear the cost of such annual audits to the extent
such cost exceeds $0.0050 per Unit. Unit holders of the Trust covered by
an audit may obtain a copy of the audited financial statements upon request.
What is the Federal Tax Status of Unit Holders?
The Trust, which is an association taxable as a corporation under the
Internal Revenue Code, intends to qualify on a continuing basis for
special federal income tax treatment as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code"). If the
Trust so qualifies and timely distributes to Unit holders 90% or more of
its taxable income (without regard to its net capital gain, i.e., the
excess of its long-term capital gain over its net short-term capital
loss), it will not be subject to Federal income tax on the portion of
its taxable income (including any net capital gain) that it distributes
to Unit holders. In addition, to the extent the Trust distributes to
Unit holders at least 98% of its taxable income (including any net
capital gain), it will not be subject to the 4% excise tax on certain
undistributed income of "regulated investment companies." The Trust
intends to timely distribute its taxable income (including any net
capital gains) to avoid the imposition of Federal income tax or the
excise tax.
In any taxable year of the Trust, the distributions of the Trust's
income, other than distributions which are designated as capital gain
dividends, will be taxable as ordinary income to the Unit holders. To
the extent that distributions to a Unit holder in any year exceed the
Trust's current and accumulated earnings and profits, they will be
treated as a return of capital and will reduce the Unit holder's basis
in his Units, and to the extent that they exceed his basis, will be
treated as a gain from the sale of his Units as discussed below.
Distributions from the Trust will not be eligible for the dividends
received deduction for corporations. Although distributions generally
will be treated as distributed when paid, distributions declared in
October, November or December, payable to Unit holders of record on a
specified date in one of those months and paid during January of the
following year will be treated as having been distributed by the Trust
(and received by the Unit holders) on December 31 of the year such
distributions are declared.
Distributions of the Trust's net capital gain which are properly
designated as capital gain dividends by the Trust will be taxable to
Unit holders as long-term capital gain, regardless of the length of time
the Units have been held by a Unit holder. A Unit holder may recognize a
taxable gain or loss if the Unit holder sells or redeems his Units. Any
gain or loss arising from (or treated as arising from) the sale or
redemption of Units will generally be a capital gain or loss, except in
the case of a dealer or financial institution. For taxpayers other than
corporations, net capital gains are presently subject to a maximum
stated marginal 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. A capital loss is long-term if the asset is
held for more than one year and short-term if held for one year or less.
If a Unit holder holds Units for six months or less and subsequently
sells such Units at a loss, the loss will be treated as a long-term
capital loss to the extent that any long-term capital gain distribution
is made with respect to such Units during the six-month period or less
that the Unit holder owns the Units. Distributions in partial
liquidation reflecting the proceeds of prepayments, redemptions,
maturities (including monthly mortgage payments of principal) or sales
of Securities (exclusive of net capital gain) will not be taxable to
Unit holders of such Trust to the extent that they represent a return of
capital for tax purposes. The portion of distributions which represents
a return of capital will, however, reduce a Unit holder's basis in his
Units, and to the extent they exceed the basis of his Units will be
taxable as a capital gain.
The "Revenue Reconciliation Act of 1993" (the "Tax Act") raised tax
rates on ordinary income while capital gains remain subject to a 28%
maximum stated rate for taxpayers other than corporations. Because some
or all capital gains are taxed at a comparatively lower rate under the
Tax Act, the Tax Act includes a provision that recharacterizes capital
gains as ordinary income in the case of certain financial transactions
that are "conversion transactions" effective for transactions entered
into after April 30, 1993. Unit holders and prospective investors should
consult with their tax advisors regarding the potential effect of this
provision on their investment in Units.
Page 7
Under the Code, certain miscellaneous itemized deductions, such as
investment expenses, tax return preparation fees and employee business
expenses, will be deductible by individuals only to the extent they
exceed 2% of adjusted gross income. Miscellaneous itemized deductions
subject to this limitation under present law do not include expenses
incurred by the Trust as long as the Units of the Trust are held by or
for 500 or more persons at all times during the taxable year or another
exception is met. In the event the Units of the Trust are held by fewer
than 500 persons, additional taxable income may be realized by the
individual and Unit holders in excess of the distributions received from
the Trust.
Each Unit holder of the Trust shall receive an annual statement
describing the tax status of the distributions paid by the Trust.
Each Unit holder will be requested to provide the Unit holder's taxpayer
identification number to the Trustee and to certify that the Unit holder
has not been notified that payments to the Unit holder are subject to
back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions
by the Trust to such Unit holder (including amounts received upon the
redemption of Units) will be subject to back-up withholding.
Distributions by the Trust will generally be subject to United States
income taxation and withholding in the case of Units held by non-
resident alien individuals, foreign corporations or other non-United
States persons. Such persons should consult their tax advisors.
As discussed in "Rights of Unit holders-How May Units be Redeemed?",
under certain circumstances a Unit holder who owns at least 2,500 Units
may request an In Kind Distribution upon the redemption of Units or the
termination of the Trust. Unit holders electing an In Kind Distribution
of shares of the Securities should be aware that the exchange is subject
to taxation and Unit holders will recognize gain or loss based on the
value of the Securities received.
A Unit holder who is a foreign investor (i.e., an investor other than a
United States citizen or resident or a United States corporation,
partnership, estate or trust) should be aware that, generally, subject
to applicable tax treaties, distributions from the Trust which
constitute dividends for Federal income tax purposes (other than
dividends which the Trust designates as capital gain dividends) will be
subject to United States income taxes, including withholding taxes.
However, distributions received by a foreign investor from the Trust
that are designated by the Trust as capital gain dividends should not be
subject to United States Federal income taxes, including withholding
taxes, if all of the following conditions are met: (i) the capital gain
dividend is not effectively connected with the conduct by the foreign
investor of a trade or business within the United States, (ii) the
foreign investor (if an individual) is not present in the United States
for 183 days or more during his or her taxable year, and (iii) the
foreign investor provides all certification which may be required of his
status (foreign investors may contact the Sponsor to obtain a Form W-8
which must be filed with the Trustee and refiled every three calendar
years thereafter). Foreign investors should consult their tax advisors
with respect to United States tax consequences of ownership of Units.
Units in the Trust and Trust distributions may also be subject to state
and local taxation and Unit holders should consult their tax advisors in
this regard.
Distributions reinvested into additional Units of the Trust will be
taxed to a Unit holder in the manner described above (i.e., as ordinary
income, long-term capital gain or as a return of capital).
The federal tax status of each year's distributions will be reported to
Unit holders and to the Internal Revenue Service. The foregoing
discussion relates only to the federal income tax status of the Trust
and to the tax treatment of distributions by the Trust to United States
Unit holders. Distributions by the Trust will generally be subject to
United States income taxation and withholding in the case of Units held
by non-resident alien individuals, foreign corporations or other non-
United States persons. Such persons should consult their tax advisors.
Units in the Trust and Trust distributions may also be subject to state
and local taxation and Unit holders should consult their tax advisor in
this regard.
Investment in the Trust may be particularly well suited for purchase by
funds and accounts of individual investors that are exempt from Federal
income taxes such as Individual Retirement Accounts, Keogh Plans,
pension funds and other tax-deferred retirement plans. (See "Why are
Investments in the Trust Suitable for Retirement Plans?")
Page 8
Why are Investments in the Trust Suitable for Retirement Plans?
Units of the Trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other tax-deferred
retirement plans. Generally, the Federal income tax relating to capital
gains and income received in each of the foregoing plans is deferred
until distributions are received. Distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible
for special averaging or tax-deferred rollover treatment. Investors
considering participation in any such plan should review specific tax
laws related thereto and should consult their attorneys or tax advisors
with respect to the establishment and maintenance of any such plan. Such
plans are offered by brokerage firms and other financial institutions.
Fees and charges with respect to such plans may vary.
PORTFOLIO
What are the Securities?
The Trust consists of different issues of Securities issued by publicly
traded equity real estate investment trusts, known as REITs, and which
are listed on a national securities exchange or the NASDAQ National
Market System or traded in the over-the-counter market. See "What are
the Securities Selected for Real Estate Trust, Series 1?" for a general
description of the companies.
Risk Factors. The Trust consists of such of the Securities listed under
"Schedule of Investments" as may continue to be held from time to time
in the Trust and any additional Securities acquired and held by the
Trust pursuant to the provisions of the Trust Agreement, together with
cash held in the Income and Capital Accounts. Neither the Sponsor nor
the Trustee shall be liable in any way for any failure in any of the
Securities. However, should any contract for the purchase of any of the
Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in the Trust to cover such purchase
are reinvested in substitute Securities in accordance with the Trust
Agreement, refund the cash and sales charge attributable to such failed
contract to all Unit holders on the next distribution date.
Because certain of the Securities from time to time may be sold under
certain circumstances described herein, and because the proceeds from
such events will be distributed to Unit holders and will not be
reinvested, no assurance can be given that the Trust will retain for any
length of time its present size and composition. Although the Portfolio
is not managed, the Sponsor may instruct the Trustee to sell Securities
under certain limited circumstances. Pursuant to the Indenture and with
limited exceptions, the Trustee may sell any securities or other
property acquired in exchange for Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer.
However, in the event such securities or property are nonetheless
acquired by the Trust, they may be accepted for deposit in the Trust and
either sold by the Trustee or held in the Trust pursuant to the
direction of the Sponsor (who may rely on the advice of the Portfolio
Supervisor). See "How May Securities be Removed from the Trust?"
Securities, however, will not be sold by the Trust to take advantage of
market fluctuations or changes in anticipated rates of appreciation or
depreciation.
Whether or not the Securities are listed on a national securities
exchange, the principal trading market for the Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading
market for the Securities may depend on whether dealers will make a
market in the Securities. There can be no assurance that a market will
be made for any of the Securities, that any market for the Securities
will be maintained or of the liquidity of the Securities in any markets
made. In addition, the Trust may be restricted under the Investment
Company Act of 1940 from selling Securities to the Sponsor. The price at
which the Securities may be sold to meet redemptions and the value of
the Trust will be adversely affected if trading markets for the
Securities are limited or absent.
An investment in Units should be made with an understanding of the risks
which an investment in common stocks entails, including the risk that
the financial condition of the issuers of the Securities or the general
condition of the common stock market may worsen, and the value of the
Securities and therefore the value of the Units may decline. Common
stocks are especially susceptible to general stock market movements and
to volatile increases and decreases of value as market confidence in and
Page 9
perceptions of the issuers change. These perceptions are based on
unpredictable factors, including expectations regarding government,
economic, monetary and fiscal policies, inflation and interest rates,
economic expansion or contraction, and global or regional political,
economic or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that are
generally subordinate to those of creditors of, or holders of debt
obligations or preferred stocks of, such issuers. Shareholders of common
stocks of the type held by the Trust have a right to receive dividends
only when and if and in the amounts declared by the issuer's board of
directors, and they have a right to participate in amounts available for
distribution by the issuer only after all other claims on the issuer
have been paid or provided for. Common stocks do not represent an
obligation of the issuer and, therefore, do not offer any assurance of
income or provide the same degree of protection of capital as do debt
securities. The issuance of additional debt securities or preferred
stock will create prior claims for payment of principal, interest and
dividends which could adversely affect the ability and inclination of
the issuer to declare or pay dividends on its common stock or the rights
of holders of common stock with respect to assets of the issuer upon
liquidation or bankruptcy. The value of common stocks is subject to
market fluctuations for as long as the common stocks remain outstanding,
and thus the value of the Securities in the Portfolio may be expected to
fluctuate over the life of the Trust to values higher or lower than
those prevailing on the Initial Date of Deposit.
Holders of common stocks incur more risk than holders of preferred
stocks and debt obligations because common stockholders, as owners of
the entity, have generally inferior rights to receive payments from the
issuer in comparison with the rights of creditors of, or holders of debt
obligations or preferred stocks issued by, the issuer. Cumulative
preferred stock dividends must be paid before common stock dividends,
and any cumulative preferred stock dividend omitted is added to future
dividends payable to the holders of cumulative preferred stock.
Preferred stockholders are also generally entitled to rights on
liquidation which are senior to those of common stockholders.
Real Estate Investment Trusts. An investment in the Trust should be made
with an understanding of the risks inherent in an investment in REITs
specifically and in real estate generally (in addition to securities
market risks). REITs are financial vehicles that have as their objective
the pooling of capital from a number of investors in order to
participate directly in real estate ownership or financing. REITs are
generally fully integrated operating companies that have interests in
income-producing real estate. REITs are differentiated by the types of
real estate properties held and the actual geographic location of
properties and fall into two major categories: equity REITs emphasize
direct property investment, holding their invested assets primarily in
the ownership of real estate or other equity interests, while mortgage
REITs concentrate on real estate financing, holding their assets
primarily in mortgages secured by real estate. As of the Initial Date of
Deposit, the Trust contains only equity REITs. REITs obtain capital
funds for investment in underlying real estate assets by selling debt or
equity securities in the public or institutional capital markets or by
bank borrowing. Thus, the returns on common equities of the REITs in
which the Trust invests will be significantly affected by changes in
costs of capital and, particularly in the case of highly "leveraged"
REITs (i.e., those with large amounts of borrowings outstanding), by
changes in the level of interest rates. The objective of an equity REIT
is to purchase income-producing real estate properties in order to
generate high levels of cash flow from rental income and a gradual asset
appreciation, and they typically invest in properties such as office,
retail, industrial, hotel and apartment buildings and healthcare
facilities.
REITs are a creation of the tax law. REITs essentially operate as a
corporation or business trust with the advantage of exemption from
corporate income taxes provided the REIT satisfies the requirements of
Sections 856 through 860 of the Internal Revenue Code. The major tests
for tax-qualified status are that the REIT (i) be managed by one or more
trustees or directors, (ii) issue shares of transferable interest to its
owners, (iii) have at least 100 shareholders, (iv) have no more than 50%
of the shares held by five or fewer individuals, (v) invest
substantially all of its capital in real estate related assets and
derive substantially all of its gross income from real estate related
assets and (vi) distributed at least 95% of its taxable income to its
shareholders each year. If any REIT in the Trust's portfolio should fail
to qualify for such tax status, the related shareholders (including the
Trust) could be adversely affected by the resulting tax consequences.
Page 10
The underlying value of the Securities and the Trust's ability to make
distributions to Unit holders may be adversely affected by changes in
national economic conditions, changes in local market conditions due to
changes in general or local economic conditions and neighborhood
characteristics, increased competition from other properties,
obsolescence of property, changes in the availability, cost and terms of
mortgage funds, the impact of present or future environmental
legislation and compliance with environmental laws, the ongoing need for
capital improvements, particularly in older properties, changes in real
estate tax rates and other operating expenses, regulatory and economic
impediments to raising rents, adverse changes in governmental rules and
fiscal policies, dependency on management skill, civil unrest, acts of
God, including earthquakes and other natural disasters (which may result
in uninsured losses), acts of war, adverse changes in zoning laws, and
other factors which are beyond the control of the issuers of the REITs
in the Trust.
The value of the REITs may at times be particularly sensitive to
devaluation in the event of rising interest rates. Equity REITs are less
likely to be affected by interest rate fluctuations than mortgage REITs
and the nature of the underlying assets of an equity REIT may be
considered more tangible than that of a mortgage REIT. Equity REITs are
more likely to be adversely affected by changes in the value of the
underlying property it owns than mortgage REITs.
REITs may concentrate investments in specific geographic areas or in
specific property types, i.e., hotels, shopping malls, residential
complexes and office buildings. The impact of economic conditions on
REITs can also be expected to vary with geographic location and property
type. Investors should be aware the REITs may not be diversified and are
subject to the risks of financing projects. REITs are also subject to
defaults by borrowers, self-liquidation, the market's perception of the
REIT industry generally, and the possibility of failing to qualify for
pass-through of income under the Internal Revenue Code, and to maintain
exemption from the Investment Company Act of 1940. A default by a
borrower or lessee may cause the REIT to experience delays in enforcing
its right as mortgagee or lessor and to incur significant costs related
to protecting its investments. In addition, because real estate
generally is subject to real property taxes, the REITs in the Trust may
be adversely affected by increases or decreases in property tax rates
and assessments or reassessments of the properties underlying the REITs
by taxing authorities. Furthermore, because real estate is relatively
illiquid, the ability of REITs to vary their portfolios in response to
changes in economic and other conditions may be limited and may
adversely affect the value of the Units. There can be no assurance that
any REIT will be able to dispose of its underlying real estate assets
when advantageous or necessary. In an effort to reduce the impact of the
risks discussed above, the Underwriter has selected REITs that are
diversified among various real estate sectors and geographic locations.
The issuer of REITs generally maintains comprehensive insurance on
presently owned and subsequently acquired real property assets,
including liability, fire and extended coverage. However, certain types
of losses may be uninsurable or not be economically insurable as to
which the underlying properties are at risk in their particular locales.
There can be no assurance that insurance coverage will be sufficient to
pay the full current market value or current replacement cost of any
lost investment. Various factors might make it impracticable to use
insurance proceeds to replace a facility after it has been damaged or
destroyed. Under such circumstances, the insurance proceeds received by
a REIT might not be adequate to restore its economic position with
respect to such property.
Under various environmental laws, a current or previous owner or
operator of real property may be liable for the costs of removal or
remediation of hazardous or toxic substances on, under or in such
property. Such laws often impose liability whether or not the owner or
operator caused or knew of the presence of such hazardous or toxic
substances and whether or not the storage of such substances was in
violation of a tenant's lease. In addition, the presence of hazardous or
toxic substances, or the failure to remediate such property properly,
may adversely affect the owner's ability to borrow using such real
property as collateral. No assurance can be given that one or more of
the REITs in the Trust may not be presently liable or potentially liable
for any such costs in connection with real estate assets they presently
own or subsequently acquire while such REITs are held in the Trust.
Unit holders will be unable to dispose of any of the Securities in the
Portfolio, as such, and will not be able to vote the Securities. As the
holder of the Securities, the Trustee will have the right to vote all of
the voting stocks in the Trust and will vote such stocks in accordance
with the instructions of the Sponsor.
Page 11
The Underwriter has acquired or will acquire the Securities for the
Sponsor and thereby may benefit. The Underwriter in its general
securities business acts as agent or principal in connection with the
purchase and sale of securities, including the Securities in the Trust,
and may act as a market maker in certain of the Securities. The
Underwriter also from time to time may issue reports on and make
recommendations relating to securities, which may include the
Securities. The Underwriter has performed investment banking services
for certain of the issuers of the Securities.
What are the Securities Selected for Real Estate Trust, Series 1?
RETAIL
CBL & Associates Properties, Inc., headquartered in Chattanooga,
Tennessee, is a real estate investment trust which owns regional malls
and community shopping centers, primarily in the Southeast and select
markets in the Northeastern United States. The company owns more than
100 properties totaling almost 20 million square feet, manages an
additional 2.8 million square feet of non-owned shopping centers, and
currently has under construction eight new shopping centers and one mall
redevelopment and expansion project totaling 1.6 million square feet.
Glimcher Realty Trust, a business operated as the Glimcher Realty Trust
since 1994 and as The Glimcher Company since 1959, is a fully
integrated, self-administered and self-managed real estate investment
trust headquartered in Columbus, Ohio. The company owns and manages a
total of 92 properties, in excess of 14.7 million square feet of gross
leasable area, located in 22 states. The company's focus is to own,
lease, manage, acquire and develop enclosed regional malls, community
shopping centers and single tenant retail properties.
Horizon Group, Inc., of Norton Shores, Michigan, is one of the largest
developers, owners and operators of outlet centers in the United States.
The company is a self-administered real estate investment trust which
operates as a fully integrated real estate company that owns 35 outlet
centers with 8.5 million square feet of gross leasable area, in 19 states.
JDN Realty Corporation, headquartered in Atlanta, Georgia, is a real
estate development company specializing in the development and asset
management of retail shopping centers anchored by value-oriented
retailers. The company owns and operates 41 properties containing
approximately 4.9 million square feet of gross leasable area, located in
9 states, primarily in the Southeastern United States.
Simon Property Group, of Indianapolis, Indiana, owns, develops, manages,
leases, expands and acquires regional malls, community shopping centers
and specialty and mixed-use properties throughout the United States. It
currently owns or has an interest in 122 properties which consist of
existing properties in 28 states containing a total of 62 million square
feet, of which approximately 37 million square feet is owned by the
company. Simon Property Group, together with its affiliated management
company, currently manages more than 75 million square feet of gross
leasable area in retail and mixed-use properties.
MULTI-FAMILY
Associated Estates Realty Corporation, headquartered in Richmond
Heights, Ohio, is a self-administered and self-managed real estate
investment trust specializing in the development, acquisition, ownership
and management of multifamily properties in the Midwest. The company
currently owns or is a joint venture partner in more than 15,000 suites
in 81 multifamily properties in Ohio, Michigan and Western Pennsylvania.
Camden Property Trust, headquartered in Houston, Texas, owns and
operates 49 apartment properties containing more than 16,000 units in
Houston, Dallas, Austin, Corpus Christi and El Paso, Texas and Tucson,
Arizona. The company currently has four properties containing 1,552
units under construction and three properties containing more than 1,000
units in its development schedule. Upon completion of those properties,
the company's portfolio will increase to almost 20,000 units in 56
properties.
Essex Property Trust, Inc., of Palo Alto, California, is a fully
integrated real estate operating company. Self-administered and self-
managed, the company focuses on multifamily residential properties in
the San Francisco, Seattle and Portland metropolitan areas and in
selected Southern California markets. Essex currently has ownership
interests in 23 multifamily properties, totaling 4,924 units, accounting
for approximately 89% of its revenue.
Page 12
Gables Residential Trust, headquartered in Atlanta, Georgia, is a
vertically integrated real estate operating company known for its
experienced capabilities in the management, development, acquisition and
construction of Class A multifamily apartment communities in the
Southeastern and Southwestern United States. Focusing its interests on
the principal cities of Georgia, Texas and Tennessee, the company
currently owns more than 11,000 completed and stabilized apartment
buildings and has an additional dozen communities with more than 3,000
apartment homes under development and/or lease-up.
Walden Residential Properties, Inc., of Dallas, Texas, is a self-
administered and self-managed real estate investment trust which owns
garden apartment communities serving middle-income apartment residents.
With regional offices in Texas, Arizona, Oklahoma, and Georgia, Walden
currently owns and operates 54 properties with 16,821 apartment units
located principally in Texas, Oklahoma, Florida, Arizona and Utah.
Wellsford Residential Property Trust, headquartered in New York, New
York, is a fully integrated, self-administered equity REIT that owns and
operates 75 multifamily communities containing more than 18,000
apartment units located in the Southwest and Pacific Northwest regions
of the United States.
OFFICE/INDUSTRIAL
First Industrial Realty Trust, headquartered in Chicago, Illinois, has
acquired, expanded and developed an aggregate of 95 in-service
properties comprising 10.5 million square feet of industrial space since
becoming a public company in June, 1994. The company has a significant
presence in the Midwest where it owns, manages, acquires and develops
bulk warehouse and light industrial properties. It currently owns 316 in-
service properties totaling more than 27.6 million square feet and is
landlord to more than 800 tenants.
Liberty Property Trust, headquartered in Malvern, Pennsylvania, is a
self-administered real estate investment trust which owns and manages
one of the largest portfolios of quality suburban industrial and office
properties in the United States. A fully-integrated real estate firm,
the company currently owns and operates 216 properties with more than
700 tenants in over 17 million square feet of space and develops,
acquires, leases and manages a growing portfolio of properties in the
Southeastern and MidAtlantic states.
HEALTHCARE
Capstone Capital Corp., headquartered in Birmingham, Alabama, is a self-
administered real estate investment trust which currently owns, leases
and provides mortgage financing for 48 healthcare related properties
located in 13 states that are diversified as to operator, facility type
and healthcare segment.
Health and Retirement Properties Trust, headquartered in Newton,
Massachusetts, is a real estate investment trust which has more than $1
billion in real estate investments, principally in nursing homes,
retirement centers and medical office buildings.
Healthcare Realty Trust, headquartered in Nashville, Tennessee, provides
real estate solutions to the healthcare industry through property
management, leasing and development services, construction capital and
the acquisition of existing healthcare properties. The current portfolio
of this equity real estate investment trust consists of 65 properties,
comprised of seven facility types, leased to 14 healthcare providers in
35 markets throughout the United States. The company currently manages
or is developing 42 properties nationwide.
National Health Investors, Inc., of Murfreesboro, Tennessee, specializes
in the purchase and leaseback of healthcare real estate and in making
mortgage loans to healthcare operators. The company currently has
approximately $629.0 million in investments in 233 healthcare facilities
located in 24 states.
Omega Healthcare Investors, Inc., headquartered in Ann Arbor, Michigan,
is a real estate investment trust investing in and providing financing
to the long-term care industry. Its portfolio includes almost 200
healthcare facilities, located in 20 states and operated by 25
independent healthcare operating companies. Omega is also an owner of
and provides advisory services to Principal Healthcare Finance Limited,
a company which owns and leases 23 nursing home facilities located in
the United Kingdom.
HOTEL
Equity Inns, Inc., headquartered in Memphis, Tennessee, is a real estate
investment trust which focuses on acquiring leading brands in the
Page 13
premium limited-service and extended-stay hotel sectors as well as
selected full-service hotels. In addition to 30 Hampton Inns, the
company owns or has under contract 3 Residence Inns, 3 Holiday Inns, 3
Comfort Inns, 5 Homewood Suites, and 1 Holiday Inn Express.
Hospitality Properties Trust, of Newton, Massachusetts, is a real estate
investment trust which provides sale-leaseback financing to unaffiliated
hotel operating companies. The company has investments totaling
approximately $814 million in 82 hotels located in 26 states.
DIVERSIFIED
Eastgroup Properties, headquartered in Jackson, Mississippi, is an
equity real estate investment trust which owns industrial facilities and
apartment complexes as well as selected office buildings. The trust
concentrates on the major markets in the Southeastern and Southwestern
states, with special emphasis on Florida and Texas.
TRIPLE NET LEASE
Commercial Net Lease Realty, of Orlando, Florida, is an equity real
estate investment trust that invests in high-quality, freestanding
retail properties subject to long-term, net leases with major retail
tenants such as Barnes & Noble, Eckerd and OfficeMax. The company
currently owns 167 properties in 27 states.
TriNet Corporate Realty Trust, Inc., headquartered in San Francisco,
California, is a real estate investment trust specializing in the
acquisition and management of predominantly office and industrial
properties net leased to corporations nationwide, including
strategically important distribution and headquarters locations. All of
TriNet's 101 properties, totaling approximately 12 million square feet
in 25 states, are leased by a diverse group of U.S. corporations. The
company's triple net leases typically provide that its tenants pay for
most or all property operating expenses while the contractual rental
income escalates.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
The value of the Securities will fluctuate over the life of the Trust
and may be more or less than the price at which they were deposited in
the Trust. The Securities may appreciate or depreciate in value (or pay
dividends), depending on the full range of economic and market
influences affecting these securities.
The Sponsor and the Trustee shall not be liable in any way for any
default, failure or defect in any Security. In the event of a notice
that any Security will not be delivered ("Failed Contract Obligations")
to the Trust, the Sponsor is authorized under the Indenture to direct
the Trustee to acquire other Securities ("Replacement Securities"). Any
Replacement Security will be identical to those which were the subject
of the failed contract. The Replacement Securities must be purchased
within 20 days after delivery of the notice of a failed contract, and
the purchase price may not exceed the amount of funds reserved for the
purchase of the Failed Contract Obligations.
If the right of limited substitution described in the preceding
paragraphs is not utilized to acquire Replacement Securities in the
event of a failed contract, the Sponsor will refund the sales charge
attributable to such Failed Contract Obligations to all Unit holders of
the Trust, and the Trustee will distribute the principal attributable to
such Failed Contract Obligations not more than 120 days after the date
on which the Trustee received a notice from the Sponsor that a
Replacement Security would not be deposited in the Trust. In addition,
Unit holders should be aware that at the time of receipt of such
principal, they may not be able to reinvest such proceeds in other
securities at a yield equal to or in excess of the yield which such
proceeds would have earned for Unit holders of the Trust.
The Indenture also authorizes the Sponsor to increase the size of the
Trust and the number of Units thereof by the deposit of additional
Securities, or cash (including a letter of credit) with instructions to
purchase additional Securities, in the Trust and the issuance of a
corresponding number of additional Units. If the Sponsor deposits cash,
existing and new investors could experience a dilution of their
investments and a reduction in anticipated income because of
fluctuations in the prices of the Securities between the time of the
cash deposit and the actual purchase of the Securities and because the
Trust will pay the brokerage fees associated therewith.
Page 14
The Trust consists of the Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) that may
continue to be held from time to time in the Trust and any additional
Securities acquired and held by the Trust, pursuant to the provisions of
the Indenture (including provisions with respect to deposits into the
Trust of Securities, in connection with the issuance of additional Units).
Once all of the Securities in the Trust are acquired, the Trustee will
have no power to vary the investments of the Trust, i.e., the Trustee
will have no managerial power to take advantage of market variations to
improve a Unit holder's investment and may dispose of Securities only
under limited circumstances. See "How May Securities be Removed from the
Trust?"
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit with respect to any Security which
might reasonably be expected to have a material adverse effect on the
Trust. At any time after the Initial Date of Deposit, litigation may be
instituted on a variety of grounds with respect to the Securities. The
Sponsor is unable to predict whether any such litigation will be
instituted, or if instituted, whether such litigation might have a
material adverse effect on the Trust.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is based on the aggregate
underlying value of the Securities in the Trust (generally determined by
the closing sale prices of listed Securities and the ask prices of over-
the-counter traded Securities), plus or minus cash, if any, in the
Income and Capital Accounts of the Trust, plus a sales charge of 4.90%
(equivalent to 5.152% of the net amount invested) subject to reduction
beginning July 1, 1997, divided by the amount of Units of the Trust
outstanding.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Securities in the Trust,
plus or minus cash, if any, in the Income and Capital Accounts of the
Trust divided by the number of Units of the Trust outstanding. For
secondary market sales after the completion of the initial offering
period, the Public Offering Price is also based on the aggregate
underlying value of the Securities in the Trust (generally determined by
the closing sale prices of listed Securities and the bid price of over-
the-counter traded Securities), plus or minus cash, if any, in the
Income and Capital Accounts of the Trust, plus a maximum sales charge of
4.90% of the Public Offering Price (equivalent to 5.152% of the net
amount invested) divided by the number of outstanding Units of the Trust.
The minimum amount which an investor may purchase of the Trust is $2,000
($1,000 for Individual Retirement Accounts and other retirement plans).
The applicable sales charge for both primary and secondary market sales
is reduced by a discount as indicated below for volume purchases (except
for sales made pursuant to a "wrap fee account" or similar arrangements
as set forth below):
<TABLE>
<CAPTION>
Underwriter
Number of Units Discount Sales Charge Concession
_______________ ________ ___________ ___________
<S> <C> <C> <C>
10,000 to 24,999 0.90% 4.00% 2.85%
25,000 to 49,999 1.90% 3.00% 1.85%
50,000 to 99,999 2.90% 2.00% .85%
100,000 or more 3.65% 1.25% .50%
</TABLE>
Any such reduced sales charge shall be the responsibility of the selling
Underwriter, broker/dealer, bank or other selling agent. The reduced
sales charge structure will apply on all purchases of Units in the Trust
by the same person on any one day from the Underwriter or any one
broker/dealer, bank or other selling agent. Additionally, 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. The reduced sales charges will also be
applicable to a trustee or other fiduciary purchasing securities for a
single trust estate or single fiduciary account. The purchaser must
Page 15
inform the Underwriter, broker/dealer, bank or other selling agent of
any such combined purchase prior to the sale, in order to obtain the
indicated discount. In addition, with respect to the employees, officers
and directors (including their immediate family members, defined as
spouses, children, grandchildren, parents, grandparents, siblings,
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, Underwriter and broker/dealers, banks or other selling
agents and their subsidiaries, the sales charge is reduced by 3.75% of
the Public Offering Price for purchases of Units during the primary and
secondary public offering periods. In addition, unit holders of any
utility trusts or any other trusts with similar objectives to such
trusts can exchange any units they hold of such trusts for Units of the
Trust subject only to a sales charge of 3.9% of the Public Offering
Price. Investors should contact their broker to see if they are eligible
for this discount.
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 primary market,
or during the secondary market at the Public Offering Price less the
concession the Sponsor typically would allow such broker/dealer. See
"Public Offering-How are Units Distributed?"
Had the Units of the Trust been available for sale on the business day
prior to the Initial Date of Deposit, the Public Offering Price would
have been as indicated in "Summary of Essential Information." The Public
Offering Price of Units on the date of the Prospectus or during the
initial offering period may vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Securities. During the initial offering period, the
aggregate value of the Units of the Trust shall be determined on the
basis of the aggregate underlying value of the Securities therein plus
or minus cash, if any, in the Income and Capital Accounts of the Trust.
The aggregate underlying value of the Securities will be determined in
the following manner: if the Securities are listed on a national
securities exchange or the NASDAQ National Market System, this
evaluation is generally based on the closing sale prices on that
exchange or that system (unless it is determined that these prices are
inappropriate as a basis for valuation) or, if there is no closing sale
price on that exchange or system, at the closing ask prices. If the
Securities are not so listed or, if so listed and the principal market
therefor is other than on the exchange, the evaluation shall generally
be based on the current ask prices on the over-the-counter market
(unless it is determined that these prices are inappropriate as a basis
for evaluation). If current ask prices are unavailable, the evaluation
is generally determined (a) on the basis of current ask prices for
comparable securities, (b) by appraising the value of the Securities on
the ask side of the market or (c) by any combination of the above.
After the completion of the initial offering period, the secondary
market Public Offering Price will be equal to the aggregate underlying
value of the Securities therein, plus or minus cash, if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. The aggregate underlying value of the Securities for secondary
market sales is calculated in the same manner as described above for
sales made during the initial offering period with the exception that
bid prices are used instead of ask prices.
Although payment is normally made three business days following the
order for purchase (the "date of settlement"), payment may be made prior
thereto. 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. Delivery of
Certificates representing Units so ordered will be made three business
days following such order or shortly thereafter. See "Rights of Unit
Holders-How May Units be Redeemed?" for information regarding the
ability to redeem Units ordered for purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the Initial
Date of Deposit and (ii) for additional Units issued after such date as
additional Securities or cash are deposited by the Sponsor, Units will
be distributed to the public at the then current Public Offering Price.
The initial offering period may be up to approximately 360 days. During
such period, the Sponsor may deposit additional Securities or cash in
the Trust and create additional Units. Units reacquired by the Sponsor
during the initial offering period (at prices based upon the aggregate
underlying value of the Securities in the Trust plus or minus a pro rata
Page 16
share of cash, if any in the Income and Capital Accounts of the Trust)
may be resold at the then current Public Offering Price. Upon the
termination of the initial offering period, unsold Units created or
reacquired during the initial offering period will be sold or resold at
the then current Public Offering Price.
Upon completion of the initial offering, Units repurchased in the
secondary market (see "Will There be a Secondary Market?") may be
offered by this Prospectus at the secondary market public offering price
determined in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for
sale in a number of states. Sales initially will be made to dealers and
other selling agents at prices which represent a concession or agency
commission of 3.2% of the Public Offering Price for primary and
secondary market sales (or 65% of the then current maximum sales charge
after July 1, 1997). Effective on each July 1, commencing July 1, 1997,
such sales charge will be reduced by 1/2 of 1% to a minimum sales charge
of 3.0%. However, resales of Units of the Trust by such dealers and
other selling agents to the public will be made at the Public Offering
Price described in the Prospectus. The Sponsor reserves the right to
change the amount of the concession or agency commission from time to
time. Certain commercial banks may be making Units of the Trust
available to their customers on an agency basis. A portion of the sales
charge paid by these customers is retained by or remitted to the banks
in the amounts indicated above. Under the Glass-Steagall Act, banks are
prohibited from underwriting Trust Units; 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 Texas and in certain other states, any
banks making Units available must be registered as broker/dealers under
state law.
What are the Sponsor's and Underwriter's Profits?
The Underwriter of the Trust will receive a gross sales commission equal
to 4.90% of the Public Offering Price of the Units (equivalent to 5.152%
of the net amount invested), less any reduced sales charge for quantity
purchases as described under "Public Offering-How is the Public Offering
Price Determined?" See "Underwriting" for information regarding the
receipt of the excess gross sales commissions by the Sponsor from the
Underwriter and additional concessions available to the Underwriter,
dealers and others. In addition, the Sponsor may be considered to have
realized a profit or to have sustained a loss, as the case may be, in
the amount of any difference between the cost of the Securities to the
Trust (which is based on the Evaluator's determination of the aggregate
offering price of the underlying Securities of such Trust on the Initial
Date of Deposit as well as subsequent deposits) and the cost of such
Securities to the Sponsor. See "Underwriting" and Note (2) of "Schedule
of Investments." During the initial offering period, the Underwriter
also may realize profits or sustain losses as a result of fluctuations
after the Initial Date of Deposit in the Public Offering Price received
by the Underwriter upon the sale of Units.
In maintaining a market for the Units, the Sponsor and Underwriter 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 includes a sales charge of 4.90% subject
to reduction beginning July 1, 1997) or redeemed. The secondary market
public offering price of Units may be greater or less than the cost of
such Units to the Sponsor or the Underwriter.
Will There be a Secondary Market?
After the initial offering period, although not obligated to do so, both
the Sponsor and the Underwriter intend to maintain a market for the
Units and continuously offer to purchase Units at prices, subject to
change at any time, based upon the aggregate underlying value of the
Securities in the Trust plus or minus cash, if any, in the Income and
Capital Accounts of the Trust. All expenses incurred in maintaining a
secondary market, other than the fees of the Evaluator and the costs of
the Trustee in transferring and recording the ownership of Units, will
be borne by the Sponsor. If the supply of Units exceeds demand, or for
some other business reason, the Sponsor or Underwriter may discontinue
purchases of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE
OF HIS UNITS, HE SHOULD INQUIRE OF THE UNDERWRITER OR SPONSOR AS TO
CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE
TRUSTEE.
Page 17
RIGHTS OF UNIT HOLDERS
How is Evidence of Ownership Issued and Transferred?
The Trustee is authorized to treat as the record owner of Units that
person who is registered as such owner on the books of the Trustee.
Ownership of Units may be evidenced by registered certificates executed
by the Trustee and the Sponsor. Delivery of certificates representing
Units ordered for purchase is normally made three business days
following such order or shortly thereafter. Certificates are
transferable by presentation and surrender to the Trustee properly
endorsed or accompanied by a written instrument or instruments of
transfer. Certificates to be redeemed must be properly endorsed or
accompanied by a written instrument or instruments of transfer. A Unit
holder must sign exactly as his name appears on the face of the
certificate with the signature guaranteed by a participant in the
Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for,
STAMP, as may be accepted by the Trustee. In certain instances, the
Trustee may require additional documents such as, but not limited to,
trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority.
Certificates will be issued in fully registered form, transferable only
on the books of the Trustee in denominations of one Unit or any multiple
thereof, numbered serially for purposes of identification.
Unit holders may elect to hold their Units in uncertificated form. The
Trustee will maintain an account for each such Unit holder and will
credit each such account with the number of Units purchased by that Unit
holder. Within two business days of the issuance or transfer of Units
held in uncertificated form, the Trustee will send to the registered
owner of Units a written initial transaction statement containing a
description of the Trust; the number of Units issued or transferred; the
name, address and taxpayer identification number, if any, of the new
registered owner; a notation of any liens and restrictions of the issuer
and any adverse claims to which such Units are or may be subject or a
statement that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units are
transferable through the same procedures applicable to Units evidenced
by certificates (described above), except that no certificate need be
presented to the Trustee and no certificate will be issued upon the
transfer unless requested by the Unit holder. A Unit holder may at any
time request the Trustee to issue certificates for Units.
Although no such charge is now made or contemplated, a Unit holder may
be required to pay $2.00 to the Trustee per certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or exchange. For new certificates
issued to replace destroyed, stolen or lost certificates, the Unit
holder may be required to furnish indemnity satisfactory to the Trustee
and pay such expenses as the Trustee may incur. Mutilated certificates
must be surrendered to the Trustee for replacement.
How are Income and Capital Distributed?
The Trustee will distribute any net income received with respect to any
of the securities in the Trust on or about the Income Distribution Dates
to Unit holders of record on the preceding Income Record Date. See
"Summary of Essential Information." 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. The pro rata share
of cash in the Capital Account of the Trust will be computed as of the
fifteenth day of each month. Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of
Units or pay expenses, will, however, be distributed on the last day of
each month to Unit holders of record on the fifteenth day of such month
if the amount available for distribution equals at least $1.00 per 100
Units. The Trustee is not required to pay interest on funds held in the
Capital Account of the Trust (but may itself earn interest thereon and
therefore benefit from the use of such funds). Notwithstanding,
distributions of funds in the Capital Account, if any, will be made on
the last day of each December to Unit holders of record as of December
15. See "What is the Federal Tax Status of Unit Holders?"
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
Page 18
the Trust if the Trustee has not been furnished the Unit holder'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 Unit holder only when filing a tax return. Under
normal circumstances the Trustee obtains the Unit holder's tax
identification number from the selling broker. However, a Unit holder
should examine his or her statements from the Trustee to make sure that
the Trustee has been provided a certified tax identification number in
order to avoid this possible "back-up withholding." In the event the
Trustee has not been previously provided such number, one should be
provided as soon as possible.
Within a reasonable time after the Trust is terminated, each Unit holder
will, upon surrender of his Units for redemption, receive: (i) the pro
rata share of the amounts realized upon the disposition of Securities,
unless he elects an In-Kind Distribution as described below and (ii) a
pro rata share of any other assets of the Trust, less expenses of the
Trust. Not less than 60 days prior to the Mandatory Termination Date of
the Trust, the Trustee will provide written notice thereof to all Unit
holders and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Securities (i.e., an "In-Kind
Distribution"), if such Unit holder owns at least 2,500 Units of the
Trust, rather than to receive payment in cash for such Unit holder's pro
rata share of the amounts realized upon the disposition by the Trustee
of Securities. An In-Kind Distribution will be reduced by customary
transfer and registration charges. To be effective, the election form,
together with surrendered certificates and other documentation required
by the Trustee, must be returned to the Trustee at least five business
days prior to the Mandatory Termination Date of the Trust. Unit holders
electing a distribution of shares of Securities should be aware that the
transaction is subject to taxation and Unit holders will recognize gain
based on the appreciation in value of the Securities received. See "What
is the Federal Tax Status of Unit Holders?" A Unit holder may, of
course, at any time after the Securities are distributed, sell all or a
portion of the shares.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Securities therein. All other receipts (e.g. return of
capital, etc.) are credited to the Capital Account of the Trust.
The Trustee may establish reserves (the "Reserve Account") within the
Trust for state and local taxes, if any, and any governmental charges
payable out of the Trust.
What Reports will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of income, if any, and the amount
of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per Unit. 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 Unit holder
of the Trust the following information in reasonable detail: (1) a
summary of transactions in the Trust for such year; (2) any Securities
sold during the year and the Securities held at the end of such year by
the Trust; (3) the redemption price per Unit based upon a computation
thereof on the 31st day of December of such year (or the last business
day prior thereto); and (4) amounts of income and capital distributed
during such year.
In order to comply with Federal and state tax reporting requirements,
Unit holders will be furnished, upon request to the Trustee, evaluations
of the Securities in the Trust furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his Units by tendering to
the Trustee, at its corporate trust office in the City of New York, the
certificates representing the Units to be redeemed, or in the case of
uncertificated Units, delivery of a request for redemption, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as explained above (or by providing satisfactory indemnity,
as in connection with lost, stolen or destroyed certificates), and
payment of applicable governmental charges, if any. No redemption fee
will be charged. On the third business day following such tender, the
Unit holder will be entitled to receive in cash an amount for each Unit
equal to the Redemption Price per Unit next computed after receipt by
the Trustee of such tender of Units. The "date of tender" is deemed to
be the date on which Units are received by the Trustee, except that as
regards Units received after 4:00 p.m. Eastern time, the date of tender
is the next day on which the New York Stock Exchange is open for trading
Page 19
and such Units will be deemed to have been tendered to the Trustee on
such day for redemption at the redemption price computed on that day.
Units so redeemed shall be cancelled.
Any Unit holder tendering 2,500 Units or more for redemption may request
by written notice submitted at the time of tender from the Trustee, in
lieu of a cash redemption, a distribution of shares of Securities in an
amount and value of Securities per Unit equal to the Redemption Price
Per Unit as determined as of the evaluation next following tender. To
the extent possible, In-Kind Distributions shall be made by the Trustee
through the distribution of each of the Securities in book-entry form to
the account of the Unit holder's bank or broker/dealer at the Depository
Trust Company. An In-Kind Distribution will be reduced by customary
transfer and registration charges. The tendering Unit holder will
receive his pro rata number of whole shares of each of the Securities
comprising the portfolio and cash from the Capital Account equal to the
fractional shares to which the tendering Unit holder is entitled. Unit
holders electing a distribution of shares of Securities should be aware
that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. See "What is the Federal Tax Status of Unit Holders?" The
Trustee may adjust the number of shares of any issue of Securities
included in a Unit holder's In-Kind Distribution to facilitate the
distribution of whole shares, such adjustment to be made on the basis of
the value of Securities on the date of tender. If funds in the Capital
Account are insufficient to cover the required cash distribution to the
tendering Unit holder, the Trustee may sell Securities in the manner
described above.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of the principal amount of a
Unit redemption if the Trustee has not been furnished the redeeming Unit
holder'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 Unit holder only when filing
a tax return. Under normal circumstances the Trustee obtains the Unit
holder's tax identification number from the selling broker. However, any
time a Unit holder elects to tender Units for redemption, such Unit
holder should make sure that the Trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the Trustee has not been previously provided
such number, one must be provided at the time redemption is requested.
Any amounts paid on redemption representing income shall be withdrawn
from the Income Account of the Trust to the extent that funds are
available for such purpose, or from the Capital Account. All other
amounts paid on redemption shall be withdrawn from the Capital Account
of the Trust.
The Trustee is empowered to sell Securities of the Trust in order to
make funds available for redemption. To the extent that Securities are
sold, the size and diversity of the Trust will be reduced. Such sales
may be required at a time when Securities would not otherwise be sold
and might result in lower prices than might otherwise be realized.
The Redemption Price per Unit (as well as the secondary market Public
Offering Price) will be determined on the basis of the aggregate
underlying value of the Securities in the Trust plus or minus cash, if
any, in the Income and Capital Accounts of the Trust. The Redemption
Price per Unit is the pro rata share of each Unit determined by the
Trustee by adding: (1) the cash on hand in the Trust other than cash
deposited in the Trust to purchase Securities not applied to the
purchase of such Securities; (2) the aggregate value of the Securities
held in the Trust, as determined by the Evaluator on the basis of the
aggregate underlying value of the Securities in the Trust next computed;
and (3) dividends receivable on the Securities trading ex-dividend as of
the date of computation; and deducting therefrom: (1) amounts
representing any applicable taxes or governmental charges payable out of
the Trust; (2) any amounts owing to the Trustee for its advances; (3) an
amount representing estimated accrued expenses of the Trust, including
but not limited to fees and expenses of the Trustee (including legal and
auditing fees), the Evaluator and supervisory fees, if any; (4) cash
held for distribution to Unit holders of record of the Trust as of the
business day prior to the evaluation being made; and (5) other
liabilities incurred by the Trust; and finally dividing the results of
such computation by the number of Units of the Trust outstanding as of
the date thereof.
The aggregate value of the Securities will be determined in the
following manner: if the Securities are listed on a national securities
exchange or the NASDAQ National Market System, this evaluation is
generally based on the closing sale prices on that exchange or that
system (unless it is determined that these prices are inappropriate as a
Page 20
basis for valuation) or, if there is no closing sale price on that
exchange or system, at the closing bid prices. If the Securities are not
so listed or, if so listed and the principal market therefor is other
than on the exchange, the evaluation shall generally be based on the
current bid prices on the over-the-counter market (unless these prices
are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the
value of the Securities on the bid side of the market or (c) by any
combination of the above.
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 the New
York Stock Exchange is restricted or any emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit. Under certain extreme circumstances, the
Sponsor may apply to the Securities and Exchange Commission for an order
permitting a full or partial suspension of the right of Unit holders to
redeem their Units. 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.
How May Units be Purchased by the Sponsor or Underwriter?
The Trustee shall notify the Sponsor of any tender of Units for
redemption. If the Sponsor'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 1:00 p.m. Eastern time on the same
business day and by making payment therefor to the Unit holder not later
than the day on which the Units would otherwise have been redeemed by
the Trustee. Units held by the Sponsor may be tendered to the Trustee
for redemption as any other Units. In the event the Sponsor does not
purchase Units, the Trustee may sell Units tendered for redemption in
the over-the-counter market, if any, as long as the amount to be
received by the Unit holder is equal to the amount he would have
received on redemption of the Units.
The offering price of any Units acquired by the Sponsor will be in
accord with the Public Offering Price described in the then effective
Prospectus describing such Units. Any profit or loss resulting from the
resale or redemption of such Units will belong to the Sponsor.
How May Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor or the
Trustee; their activities described herein are governed solely by the
provisions of the Indenture. The Indenture provides that the Sponsor may
(but need not) direct the Trustee to dispose of a Security in the event
that an issuer defaults in the payment of a dividend that has been
declared, that any action or proceeding has been instituted restraining
the payment of dividends or there exists any legal question or
impediment affecting such Security, that the issuer of the Security has
breached a covenant which would affect the payments of dividends, the
credit standing of the issuer or otherwise impair the sound investment
character of the Security, that the issuer has defaulted on the payment
on any other of its outstanding obligations, or that the price of the
Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor, the retention of such
Securities would be detrimental to the Trust. In addition, the Sponsor
will instruct the Trustee to dispose of certain Securities and to take
such further action as may be needed from time to time to ensure that
the Trust continues to satisfy the qualifications of a regulated
investment company, including the requirements with respect to
diversification under Section 851 of the Internal Revenue Code. Except
as stated under "Portfolio-What are Some Additional Considerations for
Investors?" for Failed Obligations, the acquisition by the Trust of any
securities or other property other than the Securities is prohibited.
Pursuant to the Indenture and with limited exceptions, the Trustee may
sell any securities or other property acquired in exchange for
Securities such as those acquired in connection with a merger or other
transaction. If offered such new or exchanged securities or property,
the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the Trust, they may
be accepted for deposit in the Trust and either sold by the Trustee or
Page 21
held in the Trust pursuant to the direction of the Sponsor (who may rely
on the advice of the Portfolio Supervisor). Proceeds from the sale of
Securities (or any securities or other property received by the Trust in
exchange for Securities) by the Trustee are credited to the Capital
Account of the Trust for distribution to Unit holders or to meet
redemptions.
The Trustee may also sell Securities designated by the Sponsor, or if
not so directed, in its own discretion, for the purpose of redeeming
Units of the Trust tendered for redemption and the payment of expenses.
The Sponsor, in designating Securities to be sold by the Trustee, will
generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares
of individual issues of Securities. To the extent this is not
practicable, the composition and diversity of the Securities may be
altered. In order to obtain the best price for the Trust, it may be
necessary for the Sponsor to specify minimum amounts (generally 100
shares) in which blocks of Securities are to be sold.
INFORMATION AS TO UNDERWRITER, SPONSOR,
TRUSTEE AND EVALUATOR
Who is the Underwriter?
J.C. Bradford & Co., the Underwriter, is one of America's top ten
investment firms located outside New York City. Founded in 1927, J.C.
Bradford & Co. is headquartered in Nashville, Tennessee and currently
has over 80 offices, primarily across the Southeast. A major strength of
the firm is its primary research and national correspondence network
which provides coverage of REITs.
J.C. Bradford & Co. is a member of the New York Stock Exchange and the
National Association of Securities Dealers Automated Quotation System,
Inc. (NASDAQ).
Who is the Sponsor?
Nike Securities L.P., the Sponsor, specializes in the underwriting,
trading and distribution of unit investment trusts and other securities.
Nike Securities L.P., an Illinois limited partnership formed in 1991,
acts as Sponsor for successive series of The First Trust Combined
Series, The First Trust Special Situations Trust, The First Trust
Insured Corporate Trust, The First Trust of Insured Municipal Bonds and
The First Trust GNMA. First Trust introduced the first insured unit
investment trust in 1974 and to date more than $9 billion in First Trust
unit investment trusts have been deposited. The Sponsor's employees
include a team of professionals with many years of experience in the
unit investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141. As of
December 31, 1995, the total partners' capital of Nike Securities L.P.
was $9,033,760 (audited). (This paragraph relates only to the Sponsor
and not to the Trust or to any series thereof or to any other
underwriter. 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
financial information will be made available by the Sponsor upon request.)
Who is the Trustee?
The Trustee is The Chase Manhattan Bank (National Association), a
national banking association with its principal executive office located
at 1 Chase Manhattan Plaza, New York, New York 10081 and its unit
investment trust office at 770 Broadway, New York, New York 10003. Unit
holders who have questions regarding the Trusts may call the Customer
Service Help Line at 1-800-682-7520. The Trustee is subject to
supervision by the Comptroller of the Currency, the Federal Deposit
Insurance Corporation and the Board of Governors of the Federal Reserve
System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Securities. For information
relating to the responsibilities of the Trustee under the Indenture,
reference is made to the material set forth under "Rights of Unit
Holders."
The Trustee and any successor trustee may resign by executing an
instrument in writing and filing the same with the Sponsor and mailing a
copy of a notice of resignation to all Unit holders. Upon receipt of
such notice, the Sponsor is obligated to appoint a successor trustee
promptly. If the Trustee becomes incapable of acting or becomes bankrupt
Page 22
or its affairs are taken over by public authorities, the Sponsor may
remove the Trustee and appoint a successor as provided in the Indenture.
If upon resignation of a trustee no successor 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 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 banking corporation organized
under the laws of the United States or any State and having at all times
an aggregate capital, surplus and undivided profits of not less than
$5,000,000.
Limitations on Liabilities of Sponsor and Trustee
The Sponsor and the Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action in good
faith pursuant to the Indenture, or for errors in judgment, but shall be
liable only for their own willful misfeasance, bad faith, gross
negligence (ordinary negligence in the case of the Trustee) or reckless
disregard of their obligations and duties. The Trustee shall not be
liable for depreciation or loss incurred by reason of the sale by the
Trustee of any of the Securities. In the event of the failure of the
Sponsor to act under the Indenture, the Trustee may act thereunder and
shall not be liable for any action taken by it in good faith under the
Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of the Trust 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 Indenture
contains other customary provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or becomes incapable of acting or becomes bankrupt or its
affairs are taken over by public authorities, then the Trustee may (a)
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, or (b) terminate the Indenture and
liquidate the Trust as provided herein, or (c) continue to act as
Trustee without terminating the Indenture.
Who is the Evaluator?
The Evaluator is First Trust Advisors L.P., an Illinois limited
partnership formed in 1991 and an affiliate of the Sponsor. The
Evaluator's address is 1001 Warrenville Road, Lisle, Illinois 60532. The
Evaluator may resign or may be removed by the Sponsor or the Trustee, in
which event the Sponsor and the Trustee are to use their best efforts to
appoint a satisfactory successor. Such resignation or removal shall
become effective upon the acceptance of appointment by the successor
Evaluator. 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.
The Trustee, Sponsor and Unit holders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the
accuracy thereof. Determinations by the Evaluator under the Indenture
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 or Unit holders 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.
OTHER INFORMATION
How May the Indenture be Amended or Terminated?
The Sponsor and the Trustee have the power to amend the Indenture
without the consent of any of the Unit holders when such an amendment is
(1) to cure any ambiguity or to correct or supplement any provision of
the Indenture which may be defective or inconsistent with any other
provision contained therein, or (2) to make such other provisions as
Page 23
shall not adversely affect the interest of the Unit holders (as
determined in good faith by the Sponsor and the Trustee).
The Indenture provides that the Trust shall terminate upon the Mandatory
Termination Date indicated herein under "Summary of Essential
Information." The Trust may be liquidated at any time by consent of 100%
of the Unit holders of the Trust or by the Trustee when the value of the
Securities owned by the Trust as shown by any evaluation, is less than
40% of the total value of Securities deposited in such Trust during the
primary offering period, or in the event that Units of the Trust not yet
sold aggregating more than 60% of the Units of the Trust are tendered
for redemption by the Underwriter, including the Sponsor. If the Trust
is liquidated because of the redemption of unsold Units of the Trust by
the Underwriter, the Sponsor will refund to each purchaser of Units of
the Trust the entire sales charge and the transaction fees paid by such
purchaser. In the event of termination, written notice thereof will be
sent by the Trustee to all Unit holders of the Trust. Within a
reasonable period after termination, the Trustee will follow the
procedures set forth under "How are Income and Capital Distributed?"
Commencing on the Mandatory Termination Date, Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the
Securities. Written notice of any termination of the Trust specifying
the time or times at which Unit holders may surrender their certificates
for cancellation shall be given by the Trustee to each Unit holder at
his address appearing on the registration books of the Trust maintained
by the Trustee. At least 60 days prior to the Maturity Date of the
Trust, the Trustee will provide written notice thereof to all Unit
holders and will include with such notice a form to enable Unit holders
to elect a distribution of shares of Securities (reduced by customary
transfer and registration charges), if such Unit holder owns at least
2,500 Units of the Trust, rather than to receive payment in cash for
such Unit holder's pro rata share of the amounts realized upon the
disposition by the Trustee of Securities. To be effective, the election
form, together with surrendered certificates and other documentation
required by the Trustee, must be returned to the Trustee at least five
business days prior to the Mandatory Termination Date of the Trust. Unit
holders electing a distribution of shares of Securities should be aware
that the transaction is subject to taxation and Unit holders will
recognize gain based on the appreciation in value of the Securities
received. See "What is the Federal Tax Status of Unit Holders?" Unit
holders not electing a distribution of shares of Securities will receive
a cash distribution from the sale of the remaining Securities within a
reasonable time after the Trust is terminated. Regardless of the
distribution involved, the Trustee will deduct from the funds of the
Trust any accrued costs, expenses, advances 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. Any
sale of Securities in the Trust upon termination may result in a lower
amount than might otherwise be realized if such sale were not required
at such time. The Trustee will then distribute to each Unit holder his
pro rata share of the balance of the Income and Capital Accounts.
Legal Opinions
The legality of the Units offered hereby and certain matters relating to
Federal 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 Trust.
Experts
The statement of net assets, including the schedule of investments, of
the Trust at the opening of business on the Initial Date of Deposit
appearing in this Prospectus and Registration Statement has been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon appearing elsewhere herein and in the Registration Statement,
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
Page 24
UNDERWRITING
The Underwriter named below has purchased Units in the following amount:
<TABLE>
<CAPTION>
Number
Name Address of Units
______ __________ ________
<S> <C> <C>
UNDERWRITER
J. C. Bradford & Co. 330 Commerce Street, Nashville, Tennessee 37201 15,000
======
</TABLE>
On the Initial Date of Deposit, the Underwriter of the Trust became the
owner of the Units of the Trust and entitled to the benefits thereof, as
well as the risks inherent therein.
The Underwriter Agreement provides that a public offering of the Units
of the Trust will be made at the Public Offering Price described in the
Prospectus. Units may also be sold to or through dealers and other
selling agents during the initial offering period and in the secondary
market at prices representing a concession or agency commission as
described in "Public Offering-How are Units Distributed?"
The Underwriter has agreed to underwrite additional Units of the Trust
as they become available. The Sponsor will receive from the Underwriter
the difference between the gross sales commission and the Underwriter
concession of 3.75% of the Public Offering Price. Volume concessions or
agency commissions of an additional 0.05%, 0.15% and 0.25% of the Public
Offering Price will be given to the Underwriter for purchases from the
Sponsor of at least $10,000,000, $15,000,000 and $20,000,000 of the
Trust, respectively.
From time to time the Sponsor may implement programs under which
underwriters and dealers of the Trust may receive nominal awards from
the Sponsor for each of their registered representatives who have sold a
minimum number of UIT Units during a specified time period. In addition,
at various times the Sponsor may implement other programs under which
the sales force of an underwriter or dealer may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor
will reallow to any such underwriter or dealer that sponsors sales
contests or recognition programs conforming to criteria established by
the Sponsor, or participates 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 or dealers for certain services or activities
which are primarily intended to result in sales of Units of the Trust.
Such payments are made by the Sponsor out of its own assets, and not out
of the assets of the Trust. These programs will not change the price
Unit holders pay for their Units or the amount that the Trust will
receive from the Units sold.
The Sponsor may from time to time in its advertising and sales materials
compare the then current estimated returns on the Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as corporate or U.S.
Government bonds, bank CDs and money market accounts or money market
funds, each of which has investment characteristics that may differ from
those of the Trust. U.S. Government bonds, for example, are backed by
the full faith and credit of the U.S. Government and bank CDs and money
market accounts are insured by an agency of the federal government.
Money market accounts and money market funds provide stability of
principal, but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of the Trust are
described more fully elsewhere in this Prospectus.
Trust performance may be compared to performance on a total return basis
with the Dow Jones Industrial Average, the S&P 500 Composite Stock Price
Index, or performance data from Lipper Analytical Services, Inc. and
Morningstar Publications, Inc. or from publications such as Money, The
New York Times, U.S. News and World Report, Business Week, Forbes or
Fortune. As with other performance data, performance comparisons should
not be considered representative of the Trust's relative performance for
any future period.
Page 25
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 150, comprised of Real Estate Trust, Series 1, at the opening of
business on June 20, 1996. This statement of net assets is the
responsibility of the Trust's Sponsor. Our responsibility is to express
an opinion on this statement of net assets based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the statement of net assets is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the statement
of net assets. Our procedures included confirmation of the letter of
credit held by the Trustee and deposited in the Trust on June 20, 1996.
An audit also includes assessing the accounting principles used and
significant estimates made by the Sponsor, as well as evaluating the
overall presentation of the statement of net assets. We believe that our
audit of the statement of net assets provides a reasonable basis for our
opinion.
In our opinion, the statement of net assets referred to above presents
fairly, in all material respects, the financial position of The First
Trust Special Situations Trust, Series 150, comprised of Real Estate
Trust, Series 1, at the opening of business on June 20, 1996 in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
June 20, 1996
Page 26
Statement of Net Assets
REAL ESTATE TRUST, SERIES 1
The First Trust Special Situations Trust, Series 150
At the Opening of Business on the Initial Date of Deposit
June 20, 1996
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Investment in Securities represented by purchase contracts (1) (2) $142,932
Organizational and offering costs (3) 35,000
_________
177,932
Less accrued organizational and offering costs (3) (35,000)
_________
Net assets $142,932
=========
Units outstanding 15,000
ANALYSIS OF NET ASSETS
Cost to investors (4) $150,297
Less sales charge (4) (7,365)
_________
Net assets $142,932
=========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $200,000 issued by Bankers
Trust Company has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Securities
pursuant to purchase contracts for such Securities.
(3) The Trust will bear all or a portion of its estimated organizational
and offering costs which will be deferred and charged off over a period
not to exceed five years from the Initial Date of Deposit. The estimated
organizational and offering costs are based on 2,500,000 Units of the
Trust expected to be issued. To the extent the number of Units issued is
larger or smaller, the estimate will vary.
(4) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 4.90% of the Public Offering Price (equivalent
to 5.152% of the net amount invested), assuming no reduction of sales
charge for quantity purchases.
Page 27
Schedule of Investments
REAL ESTATE TRUST, SERIES 1
The First Trust Special Situations Trust, Series 150
At the Opening of Business on the Initial Date of Deposit
June 20, 1996
<TABLE>
<CAPTION>
Percentage Market
of Aggregate Value Cost of
Number Ticker Symbol and Offering per Securities
of Shares Name of Issuer of Securities (1) Price Share to Trust (2)
_________ ______________________________________ ___________ __________ __________
<S> <C> <C> <C> <C>
RETAIL
232 CBL CBL & Associates Properties, Inc. 3.57% $22.000 $ 5,104
409 GRT Glimcher Realty Trust 4.94% 17.250 7,055
325 HGI Horizon Group, Inc. 4.92% 21.625 7,028
327 JDN JDN Realty Corporation 4.98% 21.750 7,112
231 SPG Simon Property Group 3.94% 24.375 5,631
MULTIFAMILY
347 AEC Associated Estates Realty Corporation 4.98% 20.500 7,113
235 CPT Camden Property Trust 3.92% 23.875 5,610
161 ESS Essex Property Trust, Inc. 2.46% 21.875 3,522
235 GBP Gables Residential Trust 3.92% 23.875 5,610
338 WDN Walden Residential Properties, Inc. 4.97% 21.000 7,098
319 WRP Wellsford Residential Property Trust 4.99% 22.375 7,138
OFFICE/INDUSTRIAL
230 FR First Industrial Realty Trust 3.86% 24.000 5,520
249 LRY Liberty Property Trust 3.61% 20.750 5,167
HEALTHCARE
353 CCT Capstone Capital Corp. 4.94% 20.000 7,060
320 HRP Health and Retirement Properties Trust 3.92% 17.500 5,600
323 HR Healthcare Realty Trust 4.97% 22.000 7,106
212 NHI National Health Investors, Inc. 4.93% 33.250 7,049
254 OHI Omega Healthcare Investors, Inc. 4.91% 27.625 7,017
HOTEL
588 ENNS Equity Inns, Inc. 4.94% 12.000 7,056
273 HPT Hospitality Properties Trust 4.97% 26.000 7,098
DIVERSIFIED
161 EGP Eastgroup Properties 2.46% 21.875 3,522
TRIPLE NET LEASE
533 NNN Commercial Net Lease Realty 4.99% 13.375 7,129
187 TRI TriNet Corporate Realty Trust, Inc. 3.91% 29.875 5,587
_____ ________
Total Investments 100% $142,932
===== ========
</TABLE>
[FN]
______________
(1) All Securities are represented by regular way contracts to purchase
such Securities for the performance of which an irrevocable letter of
credit has been deposited with the Trustee. The contracts to purchase
Securities were entered into by the Sponsor on June 19, 1996.
(2) The cost of the Securities to the Trust represents the aggregate
underlying value with respect to the Securities acquired (generally
determined by the closing sale prices of the listed Securities and the
ask prices of the over-the-counter traded Securities on the business day
preceding the Initial Date of Deposit). The valuation of the Securities
has been determined by the Evaluator, an affiliate of the Sponsor. The
aggregate underlying value of the Securities on the Initial Date of
Deposit was $142,932. Cost and loss to Sponsor relating to the
Securities sold to the Trust were $143,112 and $180, respectively.
Page 28
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Page 31
CONTENTS:
Summary of Essential Information 3
Real Estate Trust, Series 1
The First Trust Special Situations Trust, Series 150:
What is The First Trust Special Situations Trust? 4
What are the Expenses and Charges? 5
What is the Federal Tax Status of Unit Holders? 7
Why are Investments in the Trust Suitable for Retirement Plans? 9
Portfolio:
What are the Securities? 9
Risk Factors 9
Real Estate Investment Trusts 10
What are the Securities Selected for Real Estate Trust, Series 1? 12
What are Some Additional Considerations for Investors? 14
Public Offering:
How is the Public Offering Price Determined? 15
How are Units Distributed? 16
What are the Sponsor's and Underwriter's Profits? 17
Will There be a Secondary Market? 17
Rights of Unit Holders:
How is Evidence of Ownership Issued and Transferred? 18
How are Income and Capital Distributed? 18
What Reports will Unit Holders Receive? 19
How May Units be Redeemed? 19
How May Units be Purchased by the Sponsor or Underwriter? 21
How May Securities be Removed from the Trust? 21
Information as to Underwriter, Sponsor, Trustee and Evaluator:
Who is the Underwriter? 22
Who is the Sponsor? 22
Who is the Trustee? 22
Limitations on Liabilities of Sponsor and Trustee 23
Who is the Evaluator? 23
Other Information:
How May the Indenture be Amended or Terminated? 23
Legal Opinions 24
Experts 24
Underwriting 25
Report of Independent Auditors 26
Statement of Net Assets 27
Notes to Statement of Net Assets 27
Schedule of Investments 28
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM
IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
THIS PROSPECTUS DOES NOT CONTAIN ALL 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.
J. C. Bradford & Co.
REAL ESTATE TRUST
SERIES 1
Underwriter:
J. C. Bradford & Co.
330 Commerce Street
Nashville, Tennessee 37201
Trustee:
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
1-800-682-7520
June 20, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 32
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. This Registration Statement on Form S-6 comprises the
following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 150, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1,
The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1 and The First
Trust Combined Series 248, for purposes of the representations
required by Rule 487 and represents the following:
(1) that the portfolio securities deposited in the series
as to the securities of which this Registration Statement is
being filed do not differ materially in type or quality from
those deposited in such previous series;
(2) that, except to the extent necessary to identify the
specific portfolio securities deposited in, and to provide
essential financial information for, the series with respect to
the securities of which this Registration Statement is being
filed, this Registration Statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
(3) that it has complied with Rule 460 under the Securities
Act of 1933.
Pursuant to the requirements of the Securities Act of 1933,
the Registrant, The First Trust Special Situations Trust, Series
145, has duly caused this Amendment to Registration Statement to
be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle and State of Illinois on
June 20, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 150
By NIKE SECURITIES L.P.
Depositor
By Robert M. Porcellino
Vice President
S-2
Pursuant to the requirements of the Securities Act of 1933,
this Amendment to the Registration Statement has been signed
below by the following person in the capacity and on the date
indicated:
NAME TITLE* DATE
Robert D. Van Kampen Sole Director )
of Nike Securities )
Corporation, the ) June 20, 1996
General Partner of )
Nike Securities L.P. )
)
)
)Robert M. Porcellino
) Attorney-in-Fact**
)
)
* The title of the person named herein represents his
capacity in and relationship to Nike Securities L.P.,
Depositor.
** An executed copy of the related power of attorney was
filed with the Securities and Exchange Commission in
connection with the Amendment No. 1 to Form S-6 of The
First Trust Combined Series 258 (File No. 33-63483) and
the same is hereby incorporated herein by this reference.
S-3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Experts" and to the use of our report dated June 20, 1996, in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 333-04931) and related Prospectus of The First Trust Special
Situations Trust, Series 150.
ERNST & YOUNG LLP
Chicago, Illinois
June 20, 1996
CONSENTS OF COUNSEL
The consents of counsel to the use of their names in the
Prospectus included in this Registration Statement will be
contained in their respective opinions to be filed as Exhibits
3.1, 3.2, 3.3 and 3.4 of the Registration Statement.
CONSENT OF FIRST TRUST ADVISORS L.P.
The consent of First Trust Advisors L.P. to the use of its
name in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
S-4
EXHIBIT INDEX
1.1 Form of Standard Terms and Conditions of Trust for The
First Trust Special Situations Trust, Series 22 and
certain subsequent Series, effective November 20, 1991
among Nike Securities L.P., as Depositor, United States
Trust Company of New York as Trustee, Securities
Evaluation Service, Inc., as Evaluator, and First Trust
Advisors L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
43693] filed on behalf of The First Trust Special
Situations Trust, Series 22).
1.1.1 Form of Trust Agreement for Series 150 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank
(National Association), as Trustee and First Trust
Advisors L.P., as Evaluator and Portfolio Supervisor.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities
L.P., Depositor (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-
6 [File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust,
Series 19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of First Trust Advisors L.P.
6.1 List of Directors and Officers of Depositor and other
related information (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42683] filed on
behalf of The First Trust Special Situations Trust,
Series 18).
7.1 Power of Attorney executed by the Director listed on
page S-3 of this Registration Statement (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
63483] filed on behalf of The First Trust Combined
Series 258).
S-6
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
TRUST AGREEMENT
Dated: June 20, 1996
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank (National Association), as
Trustee and First Trust Advisors L.P., as Evaluator and Portfolio
Supervisor, sets forth certain provisions in full and
incorporates other provisions by reference to the document
entitled "Standard Terms and Conditions of Trust for The First
Trust Special Situations Trust, Series 22 and certain subsequent
Series, Effective November 20, 1991" (herein called the "Standard
Terms and Conditions of Trust"), and such provisions as are
incorporated by reference constitute a single instrument. All
references herein to Articles and Sections are to Articles and
Sections of the Standard Terms and Conditions of Trust.
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, the
Evaluator and the Portfolio Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II and Part III hereof,
all the provisions contained in the Standard Terms and Conditions
of Trust are herein incorporated by reference in their entirety
and shall be deemed to be a part of this instrument as fully and
to the same extent as though said provisions had been set forth
in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed
to:
A. The Securities initially deposited in the Trust
pursuant to Section 2.01 of the Standard Terms and Conditions of
Trust are set forth in the Schedules hereto.
B. (1) The aggregate number of Units outstanding for the
Trust on the Initial Date of Deposit is 15,000 Units.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
Documents representing this number of Units for the Trust
are being delivered by the Trustee to the Depositor pursuant to
Section 2.03 of the Standard Terms and Conditions of Trust.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
3.57% CBL & Associates Properties, Inc.,
4.94% Glimcher Realty Trust, 4.92% Horizon
Group, Inc., 4.98% JDN Realty Corporation,
3.94% Simon Property Group, 4.98% Associated
Estates Realty Corporation, 3.92% Camden
Property Trust, 2.46% Essex Property Trust,
Inc., 3.92% Gables Residential Trust, 4.97%
Walden Residential Properties, Inc., 4.99%
Wellsford Residential Property Trust, 3.86%
First Industrial Realty Trust, 3.61% Liberty
Property Trust, 4.94% Capstone Capital Corp.,
3.92% Health and Retirement Properties Trust,
4.97% Healthcare Realty Trust, 4.93% National
Health Investors, Inc., 4.91% Omega
Healthcare Investors, Inc., 4.94% Equity
Inns, Inc., 4.97% Hospitality Properties
Trust, 2.46% Eastgroup Properties, 4.99%
Commercial Net Lease Realty, 3.91% TriNet
Corporate Realty Trust, Inc.
D. The Record Date shall be as set forth in the prospectus
for the sale of Units dated the date hereof (the "Prospectus")
under "Summary of Essential Information."
E. The Distribution Date shall be as set forth in the
Prospectus under "Summary of Essential Information."
F. The Mandatory Termination Date for the Trust shall be
as set forth in the Prospectus under "Summary of Essential
Information."
G. The Evaluator's compensation as referred to in
Section 4.03 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0017 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05.
H. The Trustee's Compensation Rate pursuant to
Section 6.04 of the Standard Terms and Conditions of Trust shall
be an annual fee of $.0074 per Unit, calculated based on the
largest number of Units outstanding during each period in respect
of which a payment is made pursuant to Section 3.05. However, in
no event, except as may otherwise be provided in the Standard
Terms and Conditions of Trust, shall the Trustee receive
compensation in any one year from any Trust of less than $2,000
for such annual compensation.
I. The Initial Date of Deposit for the Trust is June 20,
1996.
J. The minimum amount of Equity Securities to be sold by
the Trustee pursuant to Section 5.02 of the Indenture for the
redemption of Units shall be 100 shares.
PART III
A. Section 1.01(2) shall be amended to read as follows:
"(2) "Trustee" shall mean The Chase Manhattan Bank
(National Association), or any successor trustee appointed as
hereinafter provided."
All references to United States Trust Company of New York in
the Standard Terms and Conditions of Trust shall be amended to
refer to The Chase Manhattan Bank (National Association).
B. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
C. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows and, in connection therewith, the third
paragraph of Section 3.02 shall be deleted:
(b)(1)From time to time following the Initial Date of
Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee (i) additional Securities, duly endorsed in blank or
accompanied by all necessary instruments of assignment and
transfer in proper form, (ii) Contract Obligations relating
to such additional Securities, accompanied by cash and/or
Letter(s) of Credit as specified in paragraph (c) of this
Section 2.01, or (iii) cash (or a Letter of Credit in lieu
of cash) with instructions to purchase additional
Securities, in an amount equal to the portion of the Unit
Value of the Units created by such deposit attributable to
the Securities to be purchased pursuant to such
instructions. Except as provided in the following
subparagraphs (2), (3) and (4) the Depositor, in each case,
shall ensure that each deposit of additional Securities
pursuant to this Section shall maintain, as nearly as
practicable, the Percentage Ratio. Each such deposit of
additional Securities shall be made pursuant to a Notice of
Deposit of Additional Securities delivered by the Depositor
to the Trustee. Instructions to purchase additional
Securities shall be in writing, and shall specify the name
of the Security, CUSIP number, if any, aggregate amount,
price or price range and date to be purchased. When
requested by the Trustee, the Depositor shall act as broker
to execute purchases in accordance with such instructions;
the Depositor shall be entitled to compensation therefor in
accordance with applicable law and regulations. The Trustee
shall have no liability for any loss or depreciation
resulting from any purchase made pursuant to the Depositor's
instructions or made by the Depositor as broker.
(2) Additional Securities (or Contract Obligations
therefor) may, at the Depositor's discretion, be deposited
or purchase in round lots. If the amount of the deposit is
insufficient to acquire round lots of each Security to be
acquired, the additional Securities shall be deposited or
purchased in the order of the Security in the Trust most
under-represented immediately before the deposit with
respect to the Percentage Ratio.
(3) If at the time of a deposit of additional
Securities, Securities of an issue deposited on the Initial
Date of Deposit (or of an issue of Replacement Securities
acquired to replace an issue deposited on the Initial Date
of Deposit) are unavailable, cannot be purchased at
reasonable prices or their purchase is prohibited or
restricted by applicable law, regulation or policies, the
Depositor may (i) deposit, or instruct the Trustee to
purchase, in lieu thereof, another issue of Securities or
Replacement Securities or (ii) deposit cash or a letter of
credit in an amount equal to the valuation of the issue of
Securities whose acquisition is not feasible with
instructions to acquire such Securities of such issue when
they become available.
(4) Any contrary authorization in the preceding
subparagraphs (1) through (3) notwithstanding, deposits of
additional Securities made after the 90-day period
immediately following the Initial Date of Deposit (except
for deposits made to replace Failed Contract Obligations if
such deposits occur with 20 days from the date of a failure
occurring within such initial 90-day period) shall maintain
exactly the Percentage Ratio existing immediately prior to
such deposit.
(5) In connection with and at the time of any deposit
of additional Securities pursuant to this Section 2.01(b),
the Depositor shall exactly replicate Cash (as defined
below) received or receivable by the Trust as of the date of
such deposit. For purposes of this paragraph, "Cash" means,
as to the Capital Account, cash or other property (other
than Securities) on hand in the Capital Account or
receivable and to be credited to the Capital Account as of
the date of the deposit (other than amounts to be
distributed solely to persons other than holders of Units
created by the deposit) and, as to the Income Account, cash
or other property (other than Securities) received by the
Trust as of the date of the deposit or receivable by the
Trust in respect of a record date for a payment on a
Security which has occurred or will occur before the Trust
will be the holder of record of a Security, reduced by the
amount of any cash or other property received or receivable
on any Security allocable (in accordance with the Trustee's
calculations of distributions from the Income Account
pursuant to Section 3.05) to a distribution made or to be
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of a
fraction, the numerator of which is the number of Units
created by the deposit and the denominator of which is the
number of Units which are outstanding immediately prior to
the deposit.
D. The second paragraph of Section 3.02 of the Standard
Terms and Conditions is hereby deleted and replaced with the
following sentence:
"Any non-cash distributions (other than a non-taxable
distribution of the shares of the distributing corporation
which shall be retained by a Trust) received by a Trust
shall be dealt with in the manner described at Section 3.11,
herein, and shall be retained or disposed of by such Trust
according to those provisions. The proceeds of any
disposition shall be credited to the Income Account of a
Trust. Neither the Trustee nor the Depositor shall be
liable or responsible in any way for depreciation or loss
incurred by reason of any such sale."
E. Paragraph (c) of Subsection II of Section 3.05 of the
Standard Terms and Conditions of Trust is hereby amended to read
as follows:
"On each Distribution Date the Trustee shall distribute
to each Unit holder of record at the close of business on
the Record Date immediately preceding such Distribution Date
an amount per Unit equal to such Unit holder's pro rata
share of the balance of the Principal Account (except for
monies on deposit therein required to purchase Contract
Obligations) computed as of the close of business on such
Record Date after deduction of any amounts provided in
Subsection I."
F. Section 3.05.II(a) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (a) On each Distribution Date, the Trustee shall
distribute to each Unit holder of record at the close of
business on the Record Date immediately preceding such
Distribution Date an amount per Unit equal to such Unit
holder's Income Distribution (as defined below), plus such
Unit holder's pro rata share of the balance of the Principal
Account (except for monies on deposit therein required to
purchase Contract Obligations) computed as of the close of
business on such Record Date after deduction of any amounts
provided in Subsection I, provided, however, that the
Trustee shall not be required to make a distribution from
the Principal Account unless the amount available for
distribution shall equal $1.00 per 100 Units.
Each Trust shall provide the following distribution
elections: (1) distributions to be made by check mailed to
the post office address of the Unit holder as it appears on
the registration books of the Trustee, or (2) the following
reinvestment option:
The Trustee will, for any Unit holder who provides
the Trustee written instruction, properly executed and
in form satisfactory to the Trustee, received by the
Trustee no later than its close of business 10 business
days prior to a Record Date (the "Reinvestment Notice
Date"), reinvest such Unit holder's distribution from
the Income and Capital Accounts in Units of the Trust,
purchased from the Depositor, to the extent the
Depositor shall make Units available for such purchase,
at the Depositor's offering price as of the fifth
business day prior to the following Distribution Date,
and at such reduced sales charge as may be described in
the prospectus for the Trusts. If, for any reason, the
Depositor does not have Units of the Trust available
for purchase, the Trustee shall distribute such Unit
holder's distribution from the Income and Capital
Accounts in the manner provided in clause (1) of the
preceding paragraph. The Trustee shall be entitled to
rely on a written instruction received as of the
Reinvestment Notice Date and shall not be affected by
any subsequent notice to the contrary. The Trustee
shall have no responsibility for any loss or
depreciation resulting from any reinvestment made in
accordance with this paragraph, or for any failure to
make such reinvestment in the event the Depositor does
not make Units available for purchase.
Any Unit holder who does not effectively elect
reinvestment in Units of their respective Trust pursuant to
the preceding paragraph shall receive a cash distribution in
the manner provided in clause (1) of the second preceding
paragraph."
G. Section 3.05.II(b) of the Standard Terms and Conditions
of Trust is hereby amended to read in its entirety as follows:
"II. (b) For purposes of this Section 3.05, the Unit
holder's Income Distribution shall be equal to such Unit
holder's pro rata share of the cash balance in the Income
Account computed as of the close of business on the Record
Date immediately preceding such Income Distribution after
deduction of (i) the fees and expenses then deductible
pursuant to Section 3.05.I. and (ii) the Trustee's estimate
of other expenses properly chargeable to the Income Account
pursuant to the Indenture which have accrued, as of such
Record Date, or are otherwise properly attributable to the
period to which such Income Distribution relates."
H. Section 3.11 of the Standard Terms and Conditions of
Trust is hereby deleted in its entirety and replaced with the
following language:
"Section 3.11. Notice to Depositor.
In the event that the Trustee shall have been notified
at any time of any action to be taken or proposed to be
taken by at least a legally required number of holders of
any Securities deposited in a Trust, the Trustee shall take
such action or omit from taking any action, as appropriate,
so as to insure that the Securities are voted as closely as
possible in the same manner and the same general proportion
as are the Securities held by owners other than such Trust.
In the event that an offer by the issuer of any of the
Securities or any other party shall be made to issue new
securities, or to exchange securities, for Trust Securities,
the Trustee shall reject such offer. However, should any
issuance, exchange or substitution be effected
notwithstanding such rejection or without an initial offer,
any securities, cash and/or property received shall be
deposited hereunder and shall be promptly sold, if
securities or property, by the Trustee pursuant to the
Depositor's direction, unless the Depositor advises the
Trustee to keep such securities or property. The Depositor
may rely on the Portfolio Supervisor in so advising the
Trustee. The cash received in such exchange and cash
proceeds of any such sales shall be distributed to Unit
holders on the next distribution date in the manner set
forth in Section 3.05 regarding distributions from the
Principal Account. The Trustee shall not be liable or
responsible in any way for depreciation or loss incurred by
reason of any such sale.
Neither the Depositor nor the Trustee shall be liable
to any person for any action or failure to take action
pursuant to the terms of this Section 3.11.
Whenever new securities or property is received and
retained by a Trust pursuant to this Section 3.11, the
Trustee shall, within five days thereafter, mail to all Unit
holders of such Trust notices of such acquisition unless
legal counsel for such Trust determines that such notice is
not required by The Investment Company Act of 1940, as
amended."
I. Section 3.05 of Article III of the Standard Terms and
Conditions of Trust is hereby amended to include the following
subsection:
"Section 3.05.I.(e) deduct from the Interest Account
or, to the extent funds are not available in such Account,
from the Principal Account and pay to the Depositor the
amount that it is entitled to receive pursuant to Section
3.14.
J. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraphs
which shall be entitled Section 3.14.:
"Section 3.14. Bookkeeping and Administrative Expenses.
As compensation for providing bookkeeping and other
administrative services of a character described in Section
26(a)(2)(C) of the Investment Company Act of 1940 to the
extent such services are in addition to, and do not
duplicate, the services to be provided hereunder by the
Trustee or the Portfolio Supervisor, the Depositor shall
receive against a statement or statements therefor submitted
to the Trustee monthly or annually an aggregate annual fee
in an amount as set forth in the Prospectus times the number
of Units outstanding as of January 1 of such year except for
a year or years in which an initial offering period as
determined by Section 4.01 of this Indenture occurs, in
which case the fee for a month is based on the number of
Units outstanding at the end of such month (such annual fee
to be pro rated for any calendar year in which the Depositor
provides service during less than the whole of such year),
but in no event shall such compensation when combined with
all compensation received from other unit investment trusts
for which the Depositor hereunder is acting as Depositor for
providing such bookkeeping and administrative services in
any calendar year exceed the aggregate cost to the Depositor
providing services to such unit investment trusts. Such
compensation may, from time to time, be adjusted provided
that the total adjustment upward does not, at the time of
such adjustment, exceed the percentage of the total
increase, after the date hereof, in consumer prices for
services as measured by the United States Department of
Labor Consumer Price Index entitled "All Services Less Rent
of Shelter" or similar index, if such index should no longer
be published. The consent or concurrence of any Unit holder
hereunder shall not be required for any such adjustment or
increase. Such compensation shall be paid by the Trustee,
upon receipt of invoice therefor from the Depositor, upon
which, as to the cost incurred by the Depositor of providing
services hereunder the Trustee may rely, and shall be
charged against the Interest and Principal Accounts on or
before the Distribution Date following the Monthly Record
Date on which such period terminates. The Trustee shall
have no liability to any Certificateholder or other person
for any payment made in good faith pursuant to this Section.
If the cash balance in the Interest and Principal
Accounts shall be insufficient to provide for amounts
payable pursuant to this Section 3.14, the Trustee shall
have the power to sell (i) Bonds from the current list of
Bonds designated to be sold pursuant to Section 5.02 hereof,
or (ii) if no such Bonds have been so designated, such Bonds
as the Trustee may see fit to sell in its own discretion,
and to apply the proceeds of any such sale in payment of the
amounts payable pursuant to this Section 3.14.
Any moneys payable to the Depositor pursuant to this
Section 3.14 shall be secured by a prior lien on the Trust
Fund except that no such lien shall be prior to any lien in
favor of the Trustee under the provisions of Section 6.04
herein.
K. Section 5.02 of the Standard Terms and Conditions of
Trust is amended by adding the following after the second
paragraph of such section:
"Notwithstanding anything herein to the contrary, in
the event that any tender of Units pursuant to this Section
5.02 would result in the disposition by the Trustee of less
than a whole Security, the Trustee shall distribute cash in
lieu thereof and sell such Securities as directed by the
Sponsors as required to make such cash available.
Unit holders may redeem 2,500 Units or more of a Trust
and request a distribution in kind of (i) such Unit holder's
pro rata portion of each of the Securities in such Trust, in
whole shares, and (ii) cash equal to such Unit holder's
pro rata portion of the Income and Principal Accounts as
follows: (x) a pro rata portion of the net proceeds of sale
of the Securities representing any fractional shares
included in such Unit holder's pro rata share of the
Securities and (y) such other cash as may properly be
included in such Unit holder's pro rata share of the sum of
the cash balances of the Income and Principal Accounts in an
amount equal to the Unit Value determined on the basis of a
Trust Fund Evaluation made in accordance with Section 5.01
determined by the Trustee on the date of tender less amounts
determined in clauses (i) and (ii)(x) of this Section.
Subject to Section 5.05 with respect to Rollover Unit
holders, to the extent possible, distributions of Securities
pursuant to an in kind redemption of Units shall be made by
the Trustee through the distribution of each of the
Securities in book-entry form to the account of the Unit
holder's bank or broker-dealer at the Depository Trust
Company. Any distribution in kind will be reduced by
customary transfer and registration charges."
L. Paragraph (g) of Section 6.01 of the Standard Terms and
Conditions of Trust is hereby amended by inserting the following
after the first word thereof:
"(i) the value of any Trust as shown by an evaluation
by the Trustee pursuant to Section 5.01 hereof shall be less
than the lower of $2,000,000 or 20% of the total principal
amount of Securities deposited in such Trust, or (ii)"
M. Section 1.01(4) shall be amended to read as follows:
"(4) "Portfolio Supervisor" shall mean First Trust
Advisors L.P. and its successors in interest, or any
successor portfolio supervisor appointed as hereinafter
provided."
N. Section 1.01(3) shall be amended to read as follows:
"(3) "Evaluator" shall mean First Trust Advisors L.P.
and its successors in interest, or any successor evaluator
appointed as hereinafter provided."
O. The first sentence of Section 3.13. shall be amended to
read as follows:
"As compensation for providing supervisory portfolio
services under this Indenture, the Portfolio Supervisor
shall receive, in arrears, against a statement or statements
therefor submitted to the Trustee monthly or annually an
aggregate annual fee in an amount which shall not exceed
$0.0035 per Unit outstanding as of January 1 of such year
except for a Trust during the year or years in which an
initial offering period as determined in Section 4.01 of
this Indenture occurs, in which case the fee for a month is
based on the number of Units outstanding at the end of such
month (such annual fee to be pro rated for any calendar year
in which the Portfolio Supervisor provides services during
less than the whole of such year), but in no event shall
such compensation when combined with all compensation
received from other series of the Trust for providing such
supervisory services in any calendar year exceed the
aggregate cost to the Portfolio Supervisor for the cost of
providing such services."
P. Section 3.01 of the Standard Terms and Conditions of
Trust shall be replaced in its entirety with the following:
"Section 3.01. Initial Cost. The expenses incurred in
establishing a Trust, including the cost of the preparation
and typesetting of the registration statement, prospectuses
(including preliminary prospectuses), the indenture and
other documents relating to the Trust, printing of
Certificates, Securities and Exchange Commission and state
blue sky registration fees, the costs of the initial
valuation of the portfolio and audit of the Trust, the
initial fees and expenses of the Trustee, and legal and
other out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses, to the
extent not borne by the Depositor, shall be borne by the
Trust. To the extent the funds in the Income and Principal
Accounts of the Trust shall be insufficient to pay the
expenses borne by the Trust specified in this Section 3.01,
the Trustee shall advance out of its own funds and cause to
be deposited and credited to the Income Account such amount
as may be required to permit payment of such expenses. The
Trustee shall be reimbursed for such advance on each Record
Date from funds on hand in the Income Account or, to the
extent funds are not available in such Account, from the
Principal Account, in the amount deemed to have accrued as
of such Record Date as provided in the following sentence
(less prior payments on account of such advances, if any),
and the provisions of Section 6.04 with respect to the
reimbursement of disbursements for Trust expenses,
including, without limitation, the lien in favor of the
Trustee therefor and the authority to sell Securities as
needed to fund such reimbursement, shall apply to the
payment of expenses and the amounts advanced pursuant to
this Section. For the purposes of the preceding sentence
and the addition provided in clause (4) of the first
sentence of Section 5.01, the expenses borne by the Trust
pursuant to this Section shall be deemed to have been paid
on the date of the Trust Agreement and to accrue at a daily
rate over the time period specified for their amortization
provided in the Prospectus; provided, however, that nothing
herein shall be deemed to prevent, and the Trustee shall be
entitled to, full reimbursement for any advances made
pursuant to this Section no later than the termination of
the Trust. For purposes of calculating the accrual of
organizational expenses under this Section 3.01, the Trustee
shall rely on the written estimates of such expenses
provided by the Depositor pursuant to Section 5.01."
Q. Section 5.01 of the Standard Terms and Conditions of
Trust shall be amended as follows:
(i) The second sentence of the first paragraph of
Section 5.01 shall be amended by adding the following at the
conclusion thereof: ", plus (4) amounts representing
organizational expenses paid from the Trust less amounts
representing accrued organizational expenses of the Trust,
plus (5) all other assets of the Trust"
(ii) The following shall be added at the end of the
first paragraph of Section 5.01:
Until the Depositor has informed the Trustee that
there will be no further deposits of Additional
Securities pursuant to section 2.01(b), the Depositor
shall provide the Trustee with written estimates of (i)
the total organizational expenses to be borne by the
Trust pursuant to Section 3.01 and (ii) the total
number of Units to be issued in connection with the
initial deposit and all anticipated deposits of
additional Securities. For purposes of calculating the
Trust Fund Evaluation and Unit Value, the Trustee shall
treat all such anticipated expenses as having been paid
and all liabilities therefor as having been incurred,
and all Units as having been issued, in each case on
the date of the Trust Agreement, and, in connection
with each such calculation, shall take into account a
pro rata portion of such expense and liability based on
the actual number of Units issued as of the date of
such calculation. In the event the Trustee is informed
by the Depositor of a revision in its estimate of total
expenses or total Units and upon the conclusion of the
deposit of additional Securities, the Trustee shall
base calculations made thereafter on such revised
estimates or actual expenses, respectively, but such
adjustment shall not affect calculations made prior
thereto and no adjustment shall be made in respect
thereof.
R. Section 2.03(a) of the Standard Terms and Conditions of
Trust shall be amended by adding the following sentence after the
first sentence of such section:
"The number of Units may be increased through a split
of the Units or decreased through a reverse split thereof,
as directed in writing by the Depositor, at any time when
the Depositor is the only beneficial holder of Units, which
revised number of Units shall be recorded by the Trustee on
its books. The Trustee shall be entitled to rely on the
Depositor's direction as certification that no person other
than the Depositor has a beneficial interest in the Units
and the Trustee shall have no liability to any person for
action taken pursuant to such direction."
S. Section 3.07(h) is hereby added as follows:
"(h) the sale of a Security is necessary to ensure that
the Trust Fund continues to satisfy the qualifications of a
regulated investment company, including the requirements
with respect to diversification under Section 851 of the
Internal Revenue Code."
T. Section 8.01(b) shall be revised as follows: "(b) to
make such other provision regarding matters or questions arising
hereunder as shall not materially adversely affect the interests
of the Unitholders or (c) to make such amendments as may be
necessary for the Trust Fund to continue to qualify as a
regulated investment company for federal income tax purposes."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank (National Association) and First Trust Advisors
L.P. have each caused this Trust Agreement to be executed and the
respective corporate seal to be hereto affixed and attested (if
applicable) by authorized officers; all as of the day, month and
year first above written.
NIKE SECURITIES L.P.,
Depositor
By Robert M. Porcellino
Vice President
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION),
Trustee
By Thomas Porrazzo
Vice President
[SEAL]
ATTEST:
Rosalia A. Raviele
Second Vice President
FIRST TRUST ADVISORS L.P.,
Evaluator
By Robert M. Porcellino
Vice President
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Robert M. Porcellino
Vice President
SCHEDULE A TO TRUST AGREEMENT
Securities Initially Deposited
The First Trust Special Situations Trust, Series 150
(Note: Incorporated herein and made a part hereof for the
Trust is the "Schedule of Investments" for the Trust as set forth
in the Prospectus.)
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 20, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 150
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 150 in connection with the preparation, execution
and delivery of a Trust Agreement dated June 20, 1996 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank (National
Association), as Trustee and First Trust Advisors L.P., as
Evaluator and Portfolio Supervisor, pursuant to which the
Depositor has delivered to and deposited the Securities listed in
Schedule A to the Trust Agreement with the Trustee and pursuant
to which the Trustee has issued to or on the order of the
Depositor a certificate or certificates representing units of
fractional undivided interest in and ownership of the Fund
created under said Trust Agreement.
In connection therewith, we have examined such pertinent
records and documents and matters of law as we have deemed
necessary in order to enable us to express the opinions
hereinafter set forth.
Based upon the foregoing, we are of the opinion that:
1. the execution and delivery of the Trust Agreement and
the execution and issuance of certificates evidencing the Units
in the Fund have been duly authorized; and
2. the certificates evidencing the Units in the Fund when
duly executed and delivered by the Depositor and the Trustee in
accordance with the aforementioned Trust Agreement, will
constitute valid and binding obligations of the Fund and the
Depositor in accordance with the terms thereof.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-04931)
relating to the Units referred to above, to the use of our name
and to the reference to our firm in said Registration Statement
and in the related Prospectus.
Respectfully submitted,
CHAPMAN AND CUTLER
EFF:jln
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
June 20, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
(National Association)
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 150
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 150 (the
"Fund"), in connection with the issuance of units of fractional
undivided interests in the Trust of said Fund (the "Trust"),
under a Trust Agreement, dated June 20, 1996 (the "Indenture"),
among Nike Securities L.P., as Depositor, The Chase Manhattan
Bank (National Association), as Trustee and First Trust Advisors
L.P., as Evaluator and Portfolio Supervisor.
In this connection, we have examined the Registration
Statement, the form of Prospectus proposed to be filed with the
Securities and Exchange Commission, the Indenture and such other
instruments and documents we have deemed pertinent. The opinions
expressed herein assume that the Trust will be administered, and
investments by the Trust from proceeds of subsequent deposits, if
any, will be made, in accordance with the terms of the Indenture.
The Trust holds Equity Securities as such term is defined in the
Prospectus.
Based upon the foregoing and upon an investigation of such
matters of law as we consider to be applicable, we are of the
opinion that, under existing federal income tax law:
I. The Trust is not an association taxable as a
corporation for Federal income tax purposes; each Unit holder
will be treated as the owner of a pro rata portion of each of the
assets of the Trust under the Internal Revenue Code of 1986 (the
"Code"); the income of the Trust will be treated as income of the
Unit holders thereof under the Code; and an item of Trust income
will have the same character in the hands of a Unit holder as it
would have in the hands of the Trustee. Each Unit holder will be
considered to have received his pro rata share of income derived
from each Trust asset when such income is considered to be
received by the Trust.
II. Each Unit holder will have a taxable event when the
Trust disposes of an Equity Security (whether by sale, exchange,
liquidation, redemption, or otherwise) or upon the sale or
redemption of Units by such Unit holder. The price a Unit holder
pays for his Units is allocated among his pro rata portion of
each Equity Security held by the Trust (in proportion to the fair
market values thereof on the date the Unit holder purchases his
Units) in order to determine his tax basis for his pro rata
portion of each Equity Security held by the Trust. For Federal
income tax purposes, a Unit holder's pro rata portion of
dividends as defined by Section 316 of the Code paid by a
corporation with respect to an Equity Security held by the Trust
is taxable as ordinary income to the extent of such corporation's
current and accumulated "earnings and profits." A Unit holder's
pro rata portion of dividends paid on such Equity Security which
exceeds such current and accumulated earnings and profits will
first reduce a Unit holder's tax basis in such Equity Security,
and to the extent that such dividends exceed a Unit holder's tax
basis in such Equity Security shall be treated as gain. In
general, any such capital gain will be short term unless a Unit
holder has held his Units for more than one year.
III. A Unit holder's portion of gain, if any, upon the sale
or redemption of Units or the disposition of Equity Securities
held by the Trust will generally be considered a capital gain
except in the case of a dealer or a financial institution and
will be generally long-term if the Unit holder has held his Units
for more than one year. A Unit holder's portion of loss, if any,
upon the sale or redemption of Units or the disposition of
Securities held by the Trust will generally be considered a
capital loss (except in the case of a dealer or a financial
institution) and will be generally long-term if the Unit holder
has held his Units for more than one year.
Each Unit holder's pro rata share of each expense paid by
the Trust is deductible by the Unit holder to the same extent as
though the expense had been paid directly by him. It should be
noted that as a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses,
tax return preparation fees an employee business expenses will be
deductible by an individual only to the extent they exceed 2% of
such individuals' adjusted gross income. Unit holders may be
required to treat some or all of the expenses of the Trust as
miscellaneous itemized deductions subject to this limitation.
The scope of this opinion is expressly limited to the
matters set forth herein, and, except as expressly set forth
above, we express no opinion with respect to any other taxes,
including state or local taxes, United States tax consequences to
non-U.S. Unit holders or collateral tax consequences with respect
to the purchase, ownership and disposition of Units.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 333-04931)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours,
CHAPMAN AND CUTLER
EFF/jln
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
June 20, 1996
The Chase Manhattan Bank
(National Association), as Trustee of
The First Trust Special Situations
Trust, Series 150
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 150
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
150 (the "Trust"), which will be established under a Standard
Terms and Conditions of Trust dated November 20, 1991, and a
related Trust Agreement dated as of today (collectively, the
"Indenture"), among Nike Securities L.P., as Depositor (the
"Depositor"); First Trust Advisors L.P., as Evaluator and
Portfolio Supervisor and The Chase Manhattan Bank (National
Association), as Trustee (the "Trustee"). Pursuant to the terms
of the Indenture, units of fractional undivided interest in the
Trust (the "Units") will be issued in the aggregate number set
forth in the Indenture.
We have examined and are familiar with originals or
certified copies, or copies otherwise identified to our
satisfaction, of such documents as we have deemed necessary or
appropriate for the purpose of this opinion. In giving this
opinion, we have relied upon the two opinions, each dated today
and addressed to the Trustee, of Chapman and Cutler, counsel for
the Depositor, with respect to the matters of law set forth
therein.
Based upon the foregoing, we are of the opinion that:
1. The Trust will not constitute an association taxable as
a corporation under New York law, and accordingly will not be
subject to the New York State franchise tax or the New York City
general corporation tax.
2. Under the income tax laws of the State and City of New
York, the income of the Trust will be considered the income of
the holders of the Units.
We consent to the filing of this opinion as an exhibit to
the Registration Statement (No. 333-04931) filed with the
Securities and Exchange Commission with respect to the
registration of the sale of the Units and to the references to
our name under the captions "What is the Federal Tax Status of
Unit Holders?" and "Legal Opinions" in such Registration
Statement and the preliminary prospectus included therein.
Very truly yours,
CARTER, LEDYARD & MILBURN
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
June 20, 1996
The Chase Manhattan Bank
(National Association), as Trustee of
The First Trust Special Situations
Trust, Series 150
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 150
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
(National Association) ("Chase") in connection with the execution
and delivery of a Trust Agreement ("the Trust Agreement") dated
today's date (which Trust Agreement incorporateds by reference
certain Standard Terms and Conditions of Trust dated November 20,
1991, and the same are collectively referred to herein as the
"Indenture") among Nike Securities L.P., as Depositor (the
"Depositor"); First Trust Advisors L.P., as Evaluator and
Portfolio Supervisor; and Chase, as Trustee (the "Trustee"),
establishing The First Trust Special Situations Trust, Series 150
(the "Trusts"), and the execution by Chase, as Trustee under the
Indenture, of a certificate or certificates evidencing ownership
of units (such certificate or certificates and such aggregate
units being herein called "Certificates" and "Units"), each of
which represents an undivided interest in the respective Trust,
which consists of common stocks (including confirmations of
contracts for the purchase of certain stocks and bonds not
delivered and cash, cash equivalents or an irrevocable letter of
credit or a combination thereof, in the amount required for such
purchase upon the receipt of such stocks and bonds), such stocks
and bonds being defined in the Indenture as Securities and listed
in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. Chase is a duly organized and existing national banking
association authorized to exercise trust powers.
2. The Trust Agreement has been duly executed and
delivered by Chase and, assuming due execution and delivery by
the other parties thereto, constitutes the valid and legally
binding obligation of Chase.
3. The Certificates are in proper form for execution and
delivery by Chase, as Trustee.
4. Chase, as Trustee, has duly executed and delivered to
or upon the order of the Depositor a Certificate or Certificates
evidencing ownership of the Units, registered in the name of the
Depositor. Upon receipt of confirmation of the effectiveness of
the registration statement for the sale of the Units filed with
the Securities and Exchange Commission under the Securities Act
of 1933, the Trustee may deliver such other Certificates, in such
names and denominations as the Depositor may request, to or upon
the order of the Depositor as provided in the Closing Memorandum.
5. Chase, as Trustee, may lawfully advance to the Trust
amounts as may be necessary to provide periodic interest
distributions of approximately equal amounts, and be reimbursed,
without interest, for any such advances from funds in the
interest account, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Securities have been duly
authorized and delivered.
Very truly yours,
CARTER, LEDYARD & MILBURN
First Trust Advisors L.P.
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
June 20, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 150
Gentlemen:
We have examined the Registration Statement File No.
333-04931 for the above captioned fund. We hereby consent to the
use in the Registration Statement of the references to First
Trust Advisors L.P. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
First Trust Advisors L.P.
Robert M. Porcellino
Vice President
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<LEGEND> This schedule contains summary financial information extracted
from Amendment number 1 to form S-6 and is qualified in its entirety by
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<SERIES>
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<NAME> Real Estate Trust
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<PERIOD-START> JUN-20-1996
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