Registration No. 333-13049
1940 Act No. 811-05903
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3 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 170
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: $0.00
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 December 9, 1996 at 2:00 p.m. pursuant to Rule
487.
________________________________
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 170
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 securities *
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
periodic 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.
Peroni Top Ten Growth Trust, 1997 Series
The Trust. The First Trust (registered trademark) Special Situations
Trust, Series 170 (Peroni Top Ten Growth Trust, 1997 Series) is a unit
investment trust consisting of a portfolio containing common stocks
issued by companies which comprise the Top Ten Picks of Eugene E.
Peroni, Jr., Director of Technical Research for Janney Montgomery Scott
Inc., for the year 1997. The phone number for Janney Montgomery Scott
Inc. is (800) 526-6397. Such Top Ten Picks are considered to have the
potential for capital appreciation (the "Equity Securities").
The objective of the Trust is to provide potential capital appreciation
by investing the Trust's portfolio in common stocks. See "Schedule of
Investments." The Trust has a mandatory termination date (the "Mandatory
Termination Date" or "Trust Ending Date") of approximately one year from
the date of this Prospectus 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 Equity Securities deposited in the Trust. The Equity Securities
deposited in the Trust's portfolio have no fixed maturity date and the
value of these underlying Equity Securities will fluctuate with changes
in the values of stocks in general but may decline more than or not
increase as much as stocks in general. See "Portfolio."
The Sponsor may, from time to time after the Initial Date of Deposit,
deposit additional Equity Securities or cash (including a letter of
credit) with instructions to purchase additional Equity Securities in
the Trust. Such deposits of additional Equity Securities or cash will be
done in such a manner that the original proportionate relationship among
the number of shares of the individual issues of the Equity Securities
shall be maintained. Any deposit by the Sponsor of additional Equity
Securities or cash will duplicate, as nearly as is practicable, the
original proportionate share relationship (subject to appropriate
adjustment in the event of stock splits, stock dividends and the like)
and not the actual proportionate share relationship on the subsequent
Date of Deposit, because the two may differ. Any such difference may be
due to the sale, redemption or liquidation of any of the Equity
Securities deposited in the Trust on the Initial, or any subsequent,
Date of Deposit. Moreover, because of fluctuations in the price of the
Equity Securities, the proportionate value relationship among the Equity
Securities on any subsequent Date of Deposit will probably be different
from that established on the Initial Date of Deposit. See "What is the
First Trust Special Situations Trust?" and "How May Equity Securities be
Removed from the Trust?"
Public Offering Price. The Public Offering Price per Unit of the Peroni
Top Ten Growth Trust, 1997 Series is equal to the aggregate underlying
value of the Equity Securities in the Trust (generally determined by the
closing sale prices of the listed Equity Securities and the ask prices
of over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash and receivables (including declared but unpaid dividends),
if any, in the Capital and Income Accounts of the Trust, plus an initial
sales charge for the Trust equal to the difference between the maximum
sales charge for the Trust (2.95% of the Public Offering Price) and the
maximum deferred sales charge ($0.195 per Unit) divided by the number of
Units of the Trust outstanding. Commencing February 28, 1997, and on the
last business day of each month thereafter, through November 28, 1997, a
deferred sales charge of $0.0195 will be assessed per Unit. Units
purchased subsequent to the initial deferred sales charge payment will
be subject to the initial sales charge
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.
Janney Montgomery Scott Inc.
The date of this Prospectus is December 9, 1996
Page 1
and the remaining deferred sales charge payments. The deferred sales
charge will be paid from funds in the Capital Account, if sufficient, or
from the periodic sale of Equity Securities. The total maximum sales
charge assessed to Unit holders on a per Unit basis will be 2.95% of the
Public Offering Price (equivalent to 2.980% of the net amount invested,
exclusive of the deferred sales charge). A pro rata share of accumulated
dividends, if any, in the Income Account is included in the Public
Offering Price. The minimum amount which an investor may purchase in the
Trust is $2,500. The sales charge for the Trust is reduced on a
graduated scale for sales involving at least 5,000 Units. See "How is
the Public Offering Price Determined?"
Dividend and Capital Distributions. Distributions of dividends received
by the Trust, if any, will be made as part of the final liquidation
distribution. Distributions of funds in the Capital Account, if any,
will be made as part of the final liquidation distribution, and in
certain circumstances, earlier. 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 remaining Unit holder his or her 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?" The Sponsor
intends to create a separate 1998 series of the Peroni Top Ten Growth
Trust (the "1998 Trust") in conjunction with the termination of this
series of the Trust. Unit holders who elect to become Rollover Unit
holders will not receive the final liquidation distribution, but instead
will receive units in the 1998 Trust. See "Special Redemption,
Liquidation and Investment in a New Trust." However, there is no
assurance that the 1998 Trust will be offered.
Secondary Market for Units. Although 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 Equity Securities in the Trust
(generally determined by the closing sale prices of listed Equity
Securities and the bid prices of over-the-counter traded Equity
Securities) plus or minus cash and receivables (including declared but
unpaid dividends), 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 Equity Securities in the Trust (generally determined by the
closing sale prices of listed Equity Securities and the bid prices of
over-the-counter traded Equity Securities) plus or minus a pro rata
share of cash and receivables (including declared but unpaid dividends),
if any, in the Capital and Income Accounts of the Trust. Units sold or
tendered for redemption prior to such time as the entire deferred sales
charge on such Units has been collected will be assessed the amount of
the remaining deferred sales charge at the time of sale or redemption. A
Unit holder tendering 2,500 or more Units of the Trust for redemption
may request a distribution of shares of Equity Securities (reduced by
customary transfer and registration charges) in lieu of payment in cash.
See "How May Units be Redeemed?"
Special Redemption, Liquidation and Investment in a New Trust. Unit
holders who hold their Units in book entry form may be given the option
of specifying by December 1, 1997 (the "Rollover Notification Date") to
have all of their Units redeemed in-kind and the distributed Equity
Securities sold by the Trustee, in its capacity as Distribution Agent,
during the Special Redemption and Liquidation Period. (Unit holders so
electing are referred to herein as "Rollover Unit holders.") The
Distribution Agent will appoint the Sponsor as its agent to determine
the manner, timing and execution of sales of underlying Equity
Securities. The proceeds of the redemption will then be invested in
Units of the 1998 Trust, if such Trust is offered. The Sponsor may,
however, stop creating new Units of the 1998 Trust at any time in its
sole discretion without regard to whether all the proceeds from the sale
of Equity Securities on behalf of the Rollover Unit holders have
actually been invested. (Any cash which has not been invested on behalf
of the Rollover Unit holders in the 1998 Trust will be distributed at
the end of the Special Redemption and Liquidation Period.) However, the
Sponsor anticipates that sufficient Units can be created, although
moneys in the Trust may not be fully invested immediately. If the 1998
Trust is offered, each Rollover Unit holder's redemption proceeds will
be used to purchase Units of the 1998 Trust at a reduced sales charge.
Units purchased other than with redemption proceeds will be subject to
the full sales charge. The portfolio for the 1998 Trust, if offered,
will contain common stock issued by companies which will comprise the
Top Ten Picks of Eugene E. Peroni, Jr. for the year 1998. Such Top Ten
Picks will be considered to have the potential for capital appreciation.
Page 2
Rollover Unit holders will receive credit for the amount of dividends in
the Income Account of the Trust which will be included in the
reinvestment in Units of the 1998 Trust. The exchange option described
above is subject to modification, termination or suspension.
Termination. The Trust will terminate approximately one year after the
Initial Date of Deposit, regardless of market conditions at that time.
Commencing on the Mandatory Termination Date, Equity 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 Equity 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 or her address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 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 Equity
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 Equity
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 not
electing the "Rollover Option" or a distribution of shares of the Equity
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?"
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 Equity Securities or the general condition of the
stock market, changes in interest rates or an economic recession. The
Trust's portfolio is not managed and Equity Securities will not be sold
by the Trust regardless of market fluctuations, although some Equity
Securities may be sold under certain limited circumstances. On certain
days, Equity Securities with limited trading volume may not be available
for purchase and deposit in the Trust in amounts necessary to fill all
purchase orders for Units. Accordingly, on such days, the number of
Units which will be made available for purchase by investors may be
limited, and purchase orders for Units will be deferred until such time
as such Equity Securities are available for purchase and deposited in
the Trust in amounts sufficient to fill orders for Units. In such
circumstances, the price paid with respect to any such deferred
purchases may be more or less than the price paid for Units purchased on
the day the purchase order was submitted. Finally, the results of
ownership of Units will differ from the results of ownership of the
underlying Equity Securities of the Trust for various reasons, including
the timing of the purchase and sale (or redemption) of Units of the
Trust, sales charges and expenses of the Trust, and taxes. See "What are
Equity Securities?-Risk Factors."
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Equity Securities-December 9, 1996
Underwriter: Janney Montgomery Scott Inc.
Sponsor: Nike Securities L.P.
Trustee: The Chase Manhattan Bank
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 Equity Securities in Portfolio (2) $148,503
Aggregate Offering Price Evaluation of Equity Securities per Unit $ 9.900
Maximum Sales Charge 2.95% of the Public Offering Price
per Unit (2.980% of the net amount invested, exclusive of the deferred sales charge) (3) $ .295
Less Deferred Sales Charge per Unit $ (.195)
Public Offering Price per Unit (3) $ 10.000
Sponsor's Initial Repurchase Price per Unit $ 9.705
Redemption Price per Unit (based on aggregate underlying
value of Equity Securities less the deferred sales charge) (4) $ 9.705
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CUSIP Number 33718R 831
First Settlement Date December 12, 1996
Rollover Notification Date December 1, 1997
Special Redemption and Liquidation
Period During the period from December 5, 1997 to January 12, 1998.
Mandatory Termination Date January 12, 1998
Discretionary Liquidation Amount A Trust may be terminated if the value of the Equity Securities is less than
the lower of $2,000,000 or 20% of the total value of Equity Securities
deposited in a Trust during the primary offering period.
Trustee's Annual Fee $.0116 per Unit outstanding.
Evaluator's Annual Fee $.0030 per Unit outstanding. 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 (5) Maximum of $.0035 per Unit outstanding annually payable to an affiliate of the
Sponsor.
Estimated Annual Amortization of
Organizational and Offering Costs (6) $.0175 per Unit.
Income Distribution (7) Distributions of dividends received by the Trust will be made as part of the
final liquidation distribution.
</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 Equity 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 the Equity Security is not so listed at
the closing ask price thereof.
(3) The maximum sales charge consists of an initial sales charge and a
deferred sales charge. The initial sales charge applies to all Units and
represents an amount equal to the difference between the maximum sales
charge for the Trust of 2.95% of the Public Offering Price and the
amount of the maximum deferred sales charge ($0.195 per Unit).
Subsequent to the Initial Date of Deposit, the amount of the initial
sales charge will vary with changes in the aggregate underlying value of
the Equity Securities underlying the Trust. In addition to the initial
sales charge, Unit holders of the Trust will pay a deferred sales charge
of $0.0195 per Unit per month commencing February 28, 1997 and on the
last business day of each month thereafter through November 28, 1997.
Units purchased subsequent to the initial deferred sales charge payment
will be subject to the initial sales charge and the remaining deferred
sales charge payments. These deferred sales charge payments will be paid
from funds in the Capital Account, if sufficient, or from the periodic
sale of Equity Securities. See "Fee Table" and "Public Offering" for
additional information. 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 Equity Securities at the opening of business on the Initial Date of
Deposit and establishes the original proportionate share relationship
among the individual Equity Securities. No sales to investors will be
executed at this price. Additional Equity 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) In addition, the Sponsor will be reimbursed for bookkeeping and other
administrative expenses currently at a maximum annual rate of $.0010 per Unit.
(6) 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, legal fees and the
initial fees and expenses of the Trustee but not including the expenses
incurred in the printing of preliminary and final 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 approximately one year. 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.
(7) If the 1998 Trust is offered, at the Rollover Notification Date for
Rollover Unit holders or upon termination of the Trust for other Unit
holders, amounts in the Income Account (which consist of dividends on
the Equity Securities) will be included in amounts distributed to or on
behalf of Unit holders. 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 $0.01 per Unit. Notwithstanding,
distributions of funds in the Capital Account, if any, will be made as
part of the final liquidation distribution.
Page 4
FEE TABLE
This Fee Table is intended to help a prospective investor to understand
the costs and expenses that he or she will bear directly or indirectly.
See "Public Offering" and "What are the Expenses and Charges?" Although
the Trust has a term of only approximately one year and is a unit
investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
<TABLE>
<CAPTION>
Amount
per Unit
________
<S> <C> <C>
Unit holder Transaction Expenses
Initial sales charge imposed on purchase
(as a percentage of the public offering price) 1.00%(a) $ 0.100
Deferred sales charge
(as a percentage of public offering price) 1.95%(b) 0.195
________ ________
2.95% $ 0.295
======== ========
Estimated Annual Fund Operating Expenses
(as a percentage of average net assets)
Trustee's fee .117% $ .0116
Portfolio supervision, bookkeeping, administrative, evaluation fees
and amortization of organizational and offering expenses .251% .0250
Other operating expenses .022% .0022
________ ________
Total .390% $ .0388
======== ========
</TABLE>
<TABLE>
<CAPTION>
Example
_______
Cumulative Expenses Paid for Period:
1 Year 3 Years(c) 5 Years(c) 10 Years(c)
______ _________ _________ __________
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000
investment, assuming the Peroni Top Ten Growth Trust, 1997 Series,
estimated operating expense ratio of .390% and a 5% annual return
on the investment throughout the periods $ 33 $ 82 $132 $272
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and
Exchange Commission regulations applicable to mutual funds. For purposes
of the example, the deferred sales charge imposed on reinvestment of
dividends is not reflected until the year following payment of the
dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment. The
example should not be considered a representation of past or future
expenses or annual rate of return; the actual expenses and annual rate
of return may be more or less than those assumed for purposes of the
example.
[FN]
_________________
(a) The Initial Sales Charge is actually the difference between the
maximum total sales charge of 2.95% and the maximum deferred sales
charge ($0.195 per Unit for the Peroni Top Ten Growth Trust, 1997
Series) and would exceed 1.00% if the Public Offering Price exceeds
$10.00 per Unit.
(b) The actual fee is $0.0195 per month per Unit, irrespective of
purchase or redemption price deducted on the last business day of each
month over a ten-month period, commencing on February 28, 1997 through
November 28, 1997. If the Unit price exceeds $10.00 per Unit, the
deferred sales charge will be less than 1.95%. If the Unit price is less
than $10.00 per Unit, the deferred sales charge will exceed 1.95%. Units
purchased subsequent to the initial deferred sales charge payment will
be subject to only the Initial Sales Charge and the remaining deferred
sales charge payments.
(c) Although the Trust has a term of only approximately one year and is a
unit investment trust rather than a mutual fund, this information is
presented to permit a comparison of fees, assuming the principal amount
and distributions are rolled over each year into a new Trust subject
only to the deferred sales charge.
Page 5
PERONI TOP TEN GROWTH TRUST, 1997 SERIES
The First Trust Special Situations Trust, Series 170
What is The First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 170 (Peroni Top Ten
Growth Trust, 1997 Series) 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 to one another, but
each of which is separate and is designated by a different series number
(the "Trust" or the "1997 Trust"). The Trust is a unit investment trust
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, 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
companies which comprise the Top Ten Picks of Eugene E. Peroni, Jr. for
the year 1997 (the "Equity Securities"), 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 Equity Securities. Such Top
Ten Picks are considered to have the potential for capital appreciation.
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 Peroni Top Ten Growth Trust, 1997 Series is to
provide potential capital appreciation by investing in common stocks of
companies which, in the opinion of Eugene E. Peroni, Jr., are considered
to have the potential for capital appreciation. There is, of course, no
guarantee that the objective of the Trust will be achieved.
With the deposit of the Equity Securities on the Initial Date of
Deposit, the Sponsor established a percentage relationship between the
number of shares of Equity Securities in the Trust's portfolio. See
"What are the Equity Securities Selected for Peroni Top Ten Growth
Trust, 1997 Series?" From time to time following the Initial Date of
Deposit, the Sponsor, pursuant to the Indenture, may deposit additional
Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Equity 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
Equity Securities, or the purchase of additional Equity Securities
pursuant to a cash deposit, will duplicate, as nearly as is practicable,
the original proportionate share relationship (subject to appropriate
adjustment in the event of stock splits, stock dividends and the like)
and not the actual proportionate share relationship on the subsequent
Date of Deposit, because the two may differ. Any such difference may be
due to the sale, redemption or liquidation of any of the Equity
Securities deposited in the Trust on the Initial, or any subsequent,
Date of Deposit. Moreover, because of fluctuations in the price of the
Equity Securities, the proportionate value relationship among the Equity
Securities on any subsequent Date of Deposit will probably be different
from that established on the Initial Date of Deposit. See "How May
Equity Securities be Removed from the Trust?" The original percentage
relationship of each Equity Security to the Trust is set forth herein
under "Schedule of Investments" for the Trust. Because the prices of the
underlying Equity Securities will fluctuate daily, the ratio, on a
market value basis, will also change daily. The portion of Equity
Securities represented by each Unit will not change as a result of the
deposit of additional Equity 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 Equity Securities between
the time of the cash deposit and the purchase of the Equity Securities
and because the Trust will pay the associated brokerage fees. To
minimize this effect, the Trust will try to purchase the Equity
Securities as close to the evaluation time or as close to the evaluation
price as possible. The Trustee may, from time to time, retain and pay
compensation to the Sponsor (or an affiliate of the Sponsor) to act as
agent for the Trust with respect to acquiring Equity Securities for the
Trust. In acting in such capacity, the Sponsor or its affiliate will be
held subject to the restrictions under the Investment Company Act of
1940, as amended.
On the Initial Date of Deposit, each Unit of the Trust represented the
undivided fractional interest in the Equity Securities deposited in the
Page 6
Trust set forth under "Summary of Essential Information." To the extent
that Units of the Trust are redeemed, the aggregate value of the Equity
Securities in the Trust will be reduced and the undivided fractional
interest represented by each outstanding Unit of the Trust will be
increased proportionately. However, if additional Units are issued by
the Trust in connection with the deposit of additional Equity Securities
by the Sponsor, the aggregate value of the Equity Securities in the
Trust will be increased by amounts allocable to additional Units, and
the undivided fractional interest represented by each outstanding Unit
of the Trust will be decreased proportionately. See "How May Units be
Redeemed?" The Trust has a Mandatory Termination Date as set forth
herein under "Summary of Essential Information."
What are the Expenses and Charges?
With the exception of bookkeeping and other administrative services
provided to the 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 the
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
the Sponsor in any calendar year exceed the aggregate cost to the
Sponsor of supplying such services in such year. First Trust Advisors
L.P., the "Portfolio Supervisor" and an affiliate of the Sponsor, will
receive an annual supervisory fee, payable in monthly installments,
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 will
be based on the number of Units outstanding at the end of such month.
This fee may exceed the actual costs of providing such supervisory
services for the 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. Pursuant to a contractual arrangement with the
Portfolio Supervisor, Janney Montgomery Scott Inc. will provide
supervisory services to the Portfolio Supervisor in return for the
entire supervisory fee.
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 the Evaluator 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 the
"Summary of Essential Information" based upon the largest aggregate
number of Units of the Trust outstanding at any time during the calendar
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 to the extent such
funds are not available, from the Capital Account of the Trust. Because
the Trustee has the use of the funds being held in the Capital and
Income Accounts for payment of expenses and redemptions and because 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. Both 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 registering or qualifying the Units with the states, the
initial audit of the Trust's portfolio, legal fees, the initial fees and
expenses of the Trustee and any other out-of-pocket expenses, will be
Page 7
paid by the Trust and charged off over a period not to exceed one year.
The following additional charges are or may be incurred by the Trust:
all legal 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 (other
than trading losses from purchasing the Equity Securities on the Initial
Date of Deposit) incurred without gross negligence, bad faith or willful
misconduct in acting as Depositor of the Trust; all taxes and other
government charges imposed on the Equity Securities or any part of the
Trust (no such taxes or charges are currently 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
Equity 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. Because the Equity Securities are all
common stocks and the income stream produced by dividend payments, if
any, 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 Equity Securities will have to be sold to meet Trust
expenses. These sales may result in capital gains or losses to Unit
holders and may tend to reduce gains or increase the losses which are
ultimately received by the Unit holders from investing in the Trust. See
"What is the Federal Tax Status of Unit Holders?" and "What are Equity
Securities?-Risk Factors."
What is the Federal Tax Status of Unit Holders?
The following is a general discussion of certain of the Federal income
tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as
"capital assets" (generally, property held for investment) within the
meaning of Section 1221 of the Internal Revenue Code of 1986 (the
"Code"). Unit holders should consult their tax advisers in determining
the Federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor,
under existing law:
1. 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
Code; and the income of the Trust will be treated as income of the Unit
holders thereof under the Code. Each Unit holder will be considered to
have received his or her pro rata share of the income derived from each
Equity Security when such income is received by the Trust.
2. Each Unit holder will have a taxable event when the Trust disposes
of an Equity Security (whether by sale, taxable exchange, liquidation,
redemption, or otherwise) or upon the sale or redemption of Units by the
Unit holder. The price a Unit holder pays for his or her Units is
allocated among his or her 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 or her Units) in order to determine
his or her tax basis for his or her 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 generally be treated as capital gain. In general,
any such capital gain will be short-term unless a Unit holder has held
his or her Units for more than one year.
3. 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
Page 8
a dealer or a financial institution and will be long-term if the Unit
holder has held his or her Units for more than one year (the date on
which the Units are acquired (i.e., the "trade date") is excluded for
purposes of determining whether the Units have been held 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 Equity Securities held by the
Trust will generally be considered a capital loss (except in the case of
a dealer or a financial institution) and, in general, will be long-term
if the Unit holder has held his or her Units for more than one year.
Unit holders should consult their tax advisers regarding the recognition
of gains and losses for Federal income tax purposes. In particular, a
Rollover Unit holder should be aware that a Rollover Unit holder's loss,
if any, incurred in connection with the exchange of Units for units in
the next new series of the Peroni Top Ten Growth Trust (the "1998
Trust") will generally be disallowed with respect to the disposition of
any Equity Securities pursuant to such exchange to the extent that such
Unit holder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into
account such Unit holder's deemed ownership of the securities underlying
the Units in the 1997 Trust in the manner described above, if such
substantially identical securities are acquired within a period
beginning 30 days before and ending 30 days after such disposition.
However, any gains incurred in connection with such an exchange by a
Rollover Unit holder would be recognized.
4. Generally, the tax basis of a Unit holder includes sales charges,
and such charges are not deductible. A portion of the sales charge for
the Trust is deferred. It is possible that for federal income tax
purposes a portion of the deferred sales charge may be treated as
interest which would be deductible by a Unit holder subject to
limitations on the deduction of investment interest. In such case, the
non-interest portion of the Deferred Sales Charge would be added to the
Unit holder's tax basis in his or her Units. The deferred sales charge
could cause the Unit holder's Units to be considered to be debt-financed
under Section 246A of the Code which would result in a small reduction
of the dividends-received deduction. In any case, the income (or
proceeds from redemption) a Unit holder must take into account for
federal income tax purposes is not reduced by amounts deducted to pay
the Deferred Sales Charge. Unit holders should consult their own tax
advisers as to the income tax consequences of the deferred sales charge.
Dividends Received Deduction. A Unit holder will be considered to have
received all of the dividends paid on his or her pro rata portion of
each Equity Security when such dividends are received by the Trust
regardless of whether such dividends are used to pay a portion of the
Deferred Sales Charge. Unit holders will be taxed in this manner
regardless of whether such distributions from the Trust are actually
received by the Unit holder.
A corporation that owns Units will generally be entitled to a 70%
dividends received deduction with respect to such Unit holder's pro rata
portion of dividends received by the Trust (to the extent such dividends
are taxable as ordinary income, as discussed above) in the same manner
as if such corporation directly owned the Equity Securities paying such
dividends (other than corporate Unit holders, such as "S" corporations
which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax).
However, a corporation owning Units should be aware that Sections 246
and 246A of the Code impose additional limitations on the eligibility of
dividends for the 70% dividends received deduction. These limitations
include a requirement that stock (and therefore Units) must generally be
held at least 46 days (as determined under Section 246(c) of the Code).
Final regulations have recently been issued which address special rules
that must be considered in determining whether the 46-day holding period
requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unit holder owns certain stock
(or Units) the financing of which is directly attributable to
indebtedness incurred by such corporation.
It should be noted that various legislative proposals that would affect
the dividends received deduction have been introduced. Unit holders
should consult with their tax advisers with respect to the limitations
on and possible modifications to the dividends received deduction.
Limitations on Deductibility of Trust Expenses by Unit Holders. 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 such Unit holder. It should be noted that as a
Page 9
result of the Tax Reform Act of 1986, certain miscellaneous itemized
deductions, such as investment expenses, tax return preparation fees and
employee business expenses will be deductible by an individual only to
the extent they exceed 2% of such individual's adjusted gross income
(similar limitations also apply to estates and trusts). Unit holders who
are individuals, trusts or estates may be required to treat some or all
of the expenses of the Trust as miscellaneous itemized deductions
subject to this limitation. It should also be noted that as a result of
the Revenue Reconciliation Act of 1993, in the case of an individual
whose adjusted gross income exceeded an applicable amount (which for
1996 is $117,950; or $58,975 for a married individual filing a separate
return), itemized deductions otherwise allowable will be reduced by the
lessor of (1) 3% of the excess of adjusted gross income over the
applicable amount or (2) 80% of certain of the itemized deductions
otherwise allowable. As a result, individual Unit holders may be subject
to a further reduction in the amount of the expenses of the Trust which
they may deduct.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by
the Trust or Disposition of Units. As discussed above, a Unit holder may
recognize taxable gain (or loss) when an Equity Security is disposed of
by the Trust or if the Unit holder disposes of a Unit (although losses
incurred by Rollover Unit holders may be subject to disallowance, as
discussed above). For taxpayers other than corporations, net capital
gains (which is defined as net long-term capital gain over net short-
term capital loss for a taxable year) are 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.
"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 advisers regarding the potential effect of this
provision on their investment in Units.
If the Unit holder disposes of a Unit, he or she is deemed thereby to
have disposed of his or her entire pro rata interest in all assets of
the Trust involved including his or her pro rata portion of all the
Equity Securities represented by the Unit.
Special Tax Consequences of In-Kind Distributions Upon Redemption of
Units, Termination of the Trust and Investment in a New Trust. As
discussed in "Rights of Unit Holders-How are Income and Capital
Distributed?", under certain circumstances a Unit holder who owns at
least 2,500 Units of the Trust may request an In-Kind Distribution upon
the redemption of Units or the termination of the Trust. The Unit holder
requesting an In-Kind Distribution will be liable for expenses related
thereto (the "Distribution Expenses") and the amount of such In-Kind
Distribution will be reduced by the amount of the Distribution Expenses.
See "Rights of Unit Holders-How are Income and Capital Distributed?" As
previously discussed, prior to the redemption of Units or the
termination of the Trust, a Unit holder is considered as owning a pro
rata portion of each of the Trust's assets for Federal income tax
purposes. The receipt of an In-Kind Distribution will result in a Unit
holder receiving an undivided interest in whole shares of stock plus,
possibly, cash.
The potential tax consequences that may occur under an In-Kind
Distribution will depend on whether or not a Unit holder receives cash
in addition to Equity Securities. An "Equity Security" for this purpose
is a particular class of stock issued by a particular corporation. A
Unit holder will not recognize gain or loss if a Unit holder only
receives Equity Securities in exchange for his or her pro rata portion
in the Equity Securities held by the Trust. However, if a Unit holder
also receives cash in exchange for a fractional share of an Equity
Security held by the Trust, such Unit holder will generally recognize
gain or loss based upon the difference between the amount of cash
received by the Unit holder and his or her tax basis in such fractional
share of an Equity Security held by the Trust.
Because the Trust will own many Equity Securities, a Unit holder who
requests an In-Kind Distribution will have to analyze the tax
consequences with respect to each Equity Security owned by the Trust.
The amount of taxable gain (or loss) recognized upon such exchange will
generally equal the sum of the gain (or loss) recognized under the rules
described above by such Unit holder with respect to each Equity Security
Page 10
owned by the Trust. Unit holders who request an In-Kind Distribution are
advised to consult their tax advisers in this regard.
As discussed in "Rights of Unit Holders-Special Redemption, Liquidation
and Investment in a New Trust," a Unit holder may elect to become a
Rollover Unit holder. To the extent a Rollover Unit holder exchanges his
or her Units for Units of the 1998 Trust in a taxable transaction, such
Unit holder will recognize gains, if any, but generally will not be
entitled to a deduction for any losses recognized upon the disposition
of any Equity Securities pursuant to such exchange to the extent that
such Unit holder is considered the owner of substantially identical
securities under the wash sale provisions of the Code taking into
account such Unit holder's deemed ownership of the securities underlying
the Units in such 1998 Trust in the manner described above, if such
substantially identical securities were acquired within a period
beginning 30 days before and ending 30 days after such disposition under
the wash sale provisions contained in Section 1091 of the Code. In the
event a loss is disallowed under the wash sale provisions, special rules
contained in Section 1091(d) of the Code apply to determine the Unit
holder's tax basis in the securities acquired. Rollover Unit holders are
advised to consult their tax advisers.
Computation of the Unit holder's Tax Basis. Initially, a Unit holder's
tax basis in his or her Units will generally equal the price paid by
such Unit holder for his or her Units. The cost of the Units is
allocated among the Equity Securities held in the Trust in accordance
with the proportion of the fair market values of such Equity Securities
as of the valuation date nearest the date the Units are purchased in
order to determine such Unit holder's tax basis for his or her pro rata
portion of each Equity Security.
A Unit holder's tax basis in his or her Units and his or her pro rata
portion of an Equity Security held by the Trust will be reduced to the
extent dividends paid with respect to such Equity Security are received
by the Trust which are not taxable as ordinary income as described above.
General. 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 by the Internal Revenue Service 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 advisers.
Unit holders will be notified annually of the amounts of dividends
includable in the Unit holder's gross income and amounts of Trust
expenses which may be claimed as itemized deductions.
Unit holders desiring to purchase Units for tax-deferred plans and IRAs
should consult their broker for details on establishing such accounts.
Units may also be purchased by persons who already have self-directed
plans established. See "Why are Investments in the Trusts Suitable for
Retirement Plans?"
The foregoing discussion relates only to United States Federal income
taxation of Unit holders; Unit holders may be subject to state and local
taxation in other jurisdictions. Unit holders should consult their tax
advisers regarding potential state or local taxation with respect to the
Units, and foreign investors should consult their tax advisers with
respect to United States tax consequences of ownership of Units.
In the opinion of Carter, Ledyard & Milburn, Special Counsel to the
Trust for New York tax matters, under the existing income tax laws of
the State of New York, the Trust is not an association taxable as a
corporation and the income of the Trust will be treated as the income of
the Unit holders thereof.
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 advisers
Page 11
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. Potential
investors should consider the fact that the minimum purchase ($2,500)
may, and in the case of an Individual Retirement Account will, exceed
the amount contributable and deductible for federal income tax purposes,
for a particular year to a retirement plan. Accordingly, investors
considering investing through a retirement plan should consider doing so
with funds already in such plan.
PORTFOLIO
What are Equity Securities?
On the Initial Date of Deposit, the Trust consisted of ten Equity
Securities which are listed on the New York Stock Exchange or other
national securities exchanges, the NASDAQ National Market System or
traded in the over-the-counter market. See "What are the Equity
Securities Selected for Peroni Top Ten Growth Trust, 1997 Series?" for a
general description of the companies.
Risk Factors. The Trust will continue to consist of such of the Equity
Securities listed under "Schedule of Investments" as may continue to be
held from time to time in the Trust and any additional Equity Securities
acquired and held by the Trust pursuant to the provisions of the
Indenture together with cash held in the Income and Capital Accounts.
There is no guarantee that the Trust's objective will be achieved or
that the Trust will provide capital appreciation. Neither the Sponsor,
the Trustee nor Janney Montgomery Scott Inc. shall be liable in any way
for the failure of any of the contracts to purchase the Equity
Securities. However, should any contract for the purchase of any of the
Equity 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 Equity Securities in accordance
with the Indenture, refund the cash and sales charge attributable to
such failed contract to all Unit holders on the next distribution date.
Because certain of the Equity 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 Trust's
portfolio is not managed, the Sponsor may instruct the Trustee to sell
Equity 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 Equity 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 Equity Securities be Removed
from the Trust?" Equity Securities, however, will not be sold by the
Trust to take advantage of market fluctuations or changes in anticipated
rates of appreciation or depreciation. In fact, no Equity Security will
be sold prior to termination of the Trust (except to satisfy redemption
requests or to pay expenses and in certain other limited circumstances)
even if Mr. Peroni comes to believe that such Equity Security no longer
has the potential for capital appreciation, or issues a "sell"
recommendation with respect to such Equity Security. Moreover, except in
the limited circumstances described above, no Equity Security will be
sold even if Mr. Peroni's methodology results in advice to liquidate
common stock investments generally.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be
in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers
will make a market in the Equity Securities. There can be no assurance
that a market will be made for any of the Equity Securities, that any
market for the Equity Securities will be maintained or of the liquidity
of the Equity Securities in any markets made. In addition, the Trust may
be restricted under the Investment Company Act of 1940 from selling
Equity Securities to the Sponsor. The price at which the Equity
Securities may be sold to meet redemptions, and the value of the Trust,
will be adversely affected if trading markets for the Equity 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 Equity Securities or the
general condition of the common stock market may worsen and the value of
the Equity Securities and therefore the value of the Units may decline.
Common stocks are especially susceptible to general stock market
Page 12
movements and to volatile increases and decreases of value as market
confidence in and 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, military, 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 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 by an issuer of common 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 Equity 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.
Unit holders will be unable to dispose of any of the Equity Securities
in the Portfolio, as such, and will not be able to vote the Equity
Securities. As the holder of the Equity 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.
The Underwriter has acquired or will acquire the Equity Securities for
the Sponsor and thereby benefits from transaction fees. The Underwriter
in its general securities business acts as agent or principal in
connection with the purchase and sale of equity securities, including
the Equity Securities in the Trust, and may act as a market maker in
certain of the Equity Securities. The Underwriter also from time to time
may issue reports on and make recommendations relating to equity
securities, which may include the Equity Securities.
What are the Equity Securities Selected for Peroni Top Ten Growth Trust,
1997 Series?
Atlantic Richfield Company (ARCO), headquartered in Los Angeles,
California, is a large integrated oil company with its principal
operations conducted in the United States. The company explores for,
develops and produces petroleum gas, buys and sells petroleum liquids
and natural gas and mines and sells coal. Atlantic Richfield Company
also manufactures and sells chemicals and specialty products and
refines, transports and markets petroleum products.
Avon Products, Inc., headquartered in New York, New York, is the world's
leading direct seller of beauty and related products, with $4.5 billion
in annual revenues. Avon Products, Inc. markets to women in
approximately 125 countries through nearly two million independent sales
representatives. The company's product lines include such recognizable
brands as Anew, Skin-So-Soft, Avon Color, Far Away, Rare Gold and
Natori. Avon Products, Inc. is also one of the world's largest
manufacturers of fashion jewelry, and markets an extensive line of gifts
and collectibles.
CVS Corporation, headquartered in Woonsocket, Rhode Island, is the
leading drugstore chain in the Northwest and Middle Atlantic regions.
With annual sales of $4.9 billion in 1995, the company holds the No. 1
market position in 21 of the 30 markets it serves and the No. 2 position
in four others.
Page 13
Compaq Computer Corporation, headquartered in Houston, Texas, is the
fifth largest computer company in the world and the largest global
supplier of personal computers, delivering useful innovation through
products that connect people with people and people with information.
The company is strategically organized to meet the current and future
needs of its customers, offering Internet and enterprise computing
solutions, networking products, commercial PC products and consumer PCs.
Conseco, Inc., headquartered in Carmel, Indiana, is a financial services
organization. Through its subsidiaries, Conseco, Inc. is one of the
nation's leading providers of supplemental health insurance, retirement
annuities and universal life insurance.
Honeywell, Inc., headquartered in Minneapolis, Minnesota, is a global
controls company focused on creating value through technology that
enhances comfort, improves productivity, saves energy, protects the
environment and increases safety. The company is comprised of three
global business groups-Home and Building Control, Industrial Automation
and Control, and Space and Aviation Control.
Lexmark International Group, Inc. (Class A), headquartered in Lexington,
Kentucky, is the parent company of Lexmark International, Inc., a global
developer, manufacturer and supplier of printing solutions and products.
The company's products include laser, inkjet and dot-matrix printers and
associated consumable supplies for the office and home markets.
Loral Space & Communications, Ltd., headquartered in New York, New York,
is a high-technology company that concentrates on satellite
manufacturing and satellite-based services. The company manages and is
the largest equity owner of both Globalstar, in which it holds a 34%
interest, and Space Systems/Loral, a leading manufacturer of large, high-
powered satellites for telecommunications and environmental
applications, in which it currently holds a 51% interest.
SPX Corporation, headquartered in Muskegon, Michigan, is a global leader
in the design, manufacture and marketing of specialty service tools and
original equipment components for the motor vehicle industry.
Varco International, Inc., headquartered in Orange, California, is a
worldwide leader in the design and manufacture of drilling equipment and
machinery and rig instrumentation for oil and gas well drilling.
The Peroni Top Ten Growth Trust, 1997 Series is a unit investment trust
containing a fixed portfolio of common stocks selected by Eugene E.
Peroni, Jr., Director of Technical Research for Janney Montgomery Scott
Inc. This investment is structured with a mandatory termination date of
approximately one year, and is designed for investors seeking the
potential for capital appreciation.
In choosing the portfolio for the Trust, Mr. Peroni has relied on a
methodology utilizing technical analysis. This approach to choosing
stocks takes into account such things as trading volume, price studies
and price trends, as well as sociological, psychological, political and
economic factors. Technical analysis is a form of security analysis
which is usually contrasted with fundamental analysis of investment
securities. Fundamental analysis takes account of a company's revenues,
earnings, dividends, price to earnings ratio, debt service coverage
ratio, debt to equity ratio, and similar factors. These factors are not
considered in technical analysis.
Mr. Peroni has used this method to choose Top Ten Picks yearly since
1988. As set forth in the chart on the following page, his Top Ten Picks
have increased 377.75% on a cumulative basis (as of December 6, 1996),
while the Dow Jones Industrial Average (DJIA) was up 202.79% over the
same period of time. (Both of the foregoing calculations exclude
dividends, transaction charges and taxes.)
The following table compares the actual performance of the yearly Top
Ten Picks as compared to the DJIA from December 16, 1988 through
December 6, 1996.
Page 14
Please refer to the APPENDIX following the last page of this document
for details on the chart included at this point.
* It is assumed that the Top Ten Picks were purchased in equal dollar
amounts at the closing price at 4:00 p.m. New York City time on the last
trade date before the Peroni Top Ten Picks report is published and sold
at the closing price at 4:00 p.m. New York City time on the last trade
date before the subsequent year Peroni's Top Ten Picks recommendation
report is published. Proceeds are then assumed to have been reinvested
in new Top Ten Picks. No commissions, dividends or taxes are taken into
account with respect to calculating the Top Ten Picks or the DJIA
cumulative results. Past performance is not indicative of future
results. There can be no assurance that the Trust will outperform the
DJIA over its approximate one-year life or over consecutive rollover
periods, if available.
The hypothetical returns shown above are not guarantees of future
performance and should not be used as a predictor of returns to be
expected in connection with the Trust. Both stock prices (which may
appreciate or depreciate) and dividends (which may be increased, reduced
or eliminated) will affect the Trust's actual returns. The results of
ownership of Units will differ from the results of ownership of the
underlying Equity Securities of the Trust for various reasons, including
sales charges and expenses of the Trust. Additionally, results of
ownership to different Unit holders will vary from the returns in the
above chart depending on the net asset value of the Trust, which is
based on the value of the underlying Equity Securities on the days such
Unit holders bought and sold (or redeemed) their Units and because the
availability of the Trust will not coincide exactly with the publication
and dissemination of the recommendation report. Of course, any purchaser
of securities, including Units, will have to pay sales charges or
commissions, which will reduce total return. There is, of course, no
assurance that any of the Equity Securities in the Trust will appreciate
in value, and indeed any or all of the Equity Securities may depreciate
in value at any time in the future.
What are Some Additional Considerations for Investors?
Investors should be aware of certain other considerations before making
a decision to invest in the Trust.
Page 15
The value of the Equity Securities will fluctuate over the life of the
Trust and may be more or less than the value at the time they were
deposited in the Trust. The Equity Securities may appreciate or
depreciate in value (or pay dividends) depending on the full range of
economic and market influences affecting these securities, including the
impact of the Sponsor's purchase and sale of the Equity Securities
(especially during the primary offering period of Units of the Trust and
during the Special Redemption and Liquidation Period) and other factors.
Neither the Sponsor, the Trustee nor Janney Montgomery Scott Inc. shall
be liable in any way for any default, failure or defect in any Equity
Security. In the event of a notice that any Equity 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
Equity 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
paragraph 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 Replacement
Securities 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
Equity Securities or cash (including a letter of credit) with
instructions to purchase additional Equity 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 Equity Securities between
the time of the cash deposit and the actual purchase of the Equity
Securities and because the Trust will pay the brokerage fees associated
therewith.
The Trust consists of the Equity Securities listed under "Schedule of
Investments" (or contracts to purchase such Securities) as may continue
to be held from time to time in the Trust and any additional Equity
Securities acquired and held by the Trust pursuant to the provisions of
the Indenture (including provisions with respect to deposits into the
Trust of Equity Securities in connection with the issuance of additional
Units).
Investors should also consider the fact that as a unit investment trust,
the Trust differs from a mutual fund in that in most cases a mutual fund
has a portfolio manager whose responsibility is to decide on asset
allocations (as between cash, equity securities and debt securities),
whether to purchase, sell or hold existing securities in the portfolio,
as well as how to resolve other investment questions. By contrast, once
all of the Equity 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 Equity Securities
only under limited circumstances. See "How May Equity Securities be
Removed from the Trust?" and "What are Equity Securities?-Risk Factors."
To the best of the Sponsor's knowledge, there is no litigation pending
as of the Initial Date of Deposit in respect of any Equity 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 Equity
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.
Legislation. From time to time Congress considers proposals to reduce
the rate of the dividends-received deductions. Enactment into law of a
proposal to reduce the rate would adversely affect the after-tax return
to investors who can take advantage of the deduction. Unit holders are
urged to consult their own tax advisers. Further, at any time after the
Initial Date of Deposit, legislation may be enacted with respect to the
Page 16
Equity Securities in the Trust or the issuers of the Equity Securities.
Changing approaches to regulation, particularly with respect to the
environment, may have a negative impact on certain companies represented
in the Trust. There can be no assurance that future legislation,
regulation or deregulation will not have a material adverse effect on
the Trust or will not impair the ability of the issuers of the Equity
Securities to achieve their business goals.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price, which is based on the
aggregate underlying value of the Equity Securities in the Peroni Top
Ten Growth Trust, 1997 Series (generally determined by the closing sale
prices of listed Equity Securities and the ask prices of over-the-
counter traded Equity Securities) plus or minus cash and receivables
(including declared but unpaid dividends), if any, in the Income and
Capital Accounts of such Trust, plus an initial sales charge with
respect to the Trust equal to the difference between the maximum sales
charge for the Trust (2.95% of the Public Offering Price) and the
maximum deferred sales charge ($0.195 per Unit for the Trust) divided by
the number of Units of the Trust outstanding. Commencing February 28,
1997, and on the last business day of each month thereafter, through
November 28, 1997, Unit holders will be assessed a deferred sales charge
of $0.0195 per Unit per month. Units purchased subsequent to the initial
deferred sales charge payment will be subject to the initial sales
charge and the remaining deferred sales charge payments. The deferred
sales charge will be paid from funds in the Capital Account, if
sufficient, or from the periodic sale of Equity Securities. The total
maximum sales charge assessed to Unit holders on a per Unit basis will
be 2.95% of the Public Offering Price (equivalent to 2.980% of the net
amount invested, exclusive of the deferred sales charge). Declared but
unpaid dividends on the Equity Securities included in the Trust will
only be considered receivables of the Trust to the extent that the Trust
was holder of record of the respective Equity Securities on the
applicable record date for receiving such dividends.
During the initial offering period, the Sponsor's Repurchase Price is
based on the aggregate underlying value of the Equity Securities in the
Trust, plus or minus cash and receivables (including declared but unpaid
dividends), 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 Equity Securities in the Trust, plus or minus cash and receivables
(including declared but unpaid dividends), if any, in the Income and
Capital Accounts of the Trust, plus an initial sales charge equal to the
difference between the maximum sales charge for the Trust, 2.95% of the
Public Offering Price, and the maximum deferred sales charge and the
remaining deferred sales charge payments, divided by the number of
outstanding Units of the Trust.
The minimum amount an investor may purchase in the Trust is $2,500. The
applicable sales charge of the Peroni Top Ten Growth Trust, 1997 Series
for primary market sales is reduced by a discount as indicated below for
volume purchases as a percentage of the Public Offering Price:
Maximum
Sales
Number of Units Discount Charge
_______________ ________ _______
5,000 but less than 10,000 0.30% 2.65%
10,000 but less than 15,000 0.65% 2.30%
15,000 or more 1.00% 1.95%
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
broker/dealer, bank or other selling agent. Unit holders of Peroni Top
Ten Growth Trust, Series 1 who elected to become Rollover Unit holders
may purchase Units of the Trust subject only to the deferred portion of
the sales charge. Unit holders of prior series of the Trust who have not
elected to become Rollover Unit holders into the Trust may, however,
utilize their redemption or termination proceeds to purchase Units of
the Trust subject only to the deferred portion of the sales charge.
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,
Page 17
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 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, 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 and the Underwriter, broker/dealers, banks or other selling
agents and their subsidiaries may purchase Units of the Trust subject
only to the deferred portion of the sales charge as described above.
Had the Units of the Trust been available for sale on the opening of
business on 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 will vary from the amount stated under "Summary
of Essential Information" in accordance with fluctuations in the prices
of the underlying Equity 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 Equity Securities therein
plus or minus cash and receivables (including declared but unpaid
dividends), if any, in the Income and Capital Accounts of the Trust. The
aggregate underlying value of the Equity Securities will be determined
in the following manner: if the Equity 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
Equity 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
Equity 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 Equity Securities therein, plus or minus cash and
receivables (including declared but unpaid dividends), if any, in the
Income and Capital Accounts of the Trust plus the applicable sales
charge. The calculation of the aggregate underlying value of the Equity
Securities for secondary market sales is determined 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 of Units (the "date of settlement"), payment may be
made prior thereto. A person will become the owner of Units ("Record
Owner") on the date of settlement provided payment has been received.
Cash, if any, made available to the Sponsor prior to the date of
settlement for the purchase of Units may be used in the Sponsor's
business and may be deemed to be a benefit to the Sponsor, subject to
the limitations of the Securities Exchange Act of 1934. 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 Equity Securities or cash are deposited by the Sponsor, Units
will be distributed to the public at the then current Public Offering
Price. During such period, the Sponsor may deposit additional Equity
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 Equity Securities in
the Trust plus or minus a pro rata share of cash and receivables
(including declared but unpaid dividends), 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,
if sold, will be sold or resold at the then current Public Offering Price.
Page 18
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 will be made to dealers and others at
prices which represent a concession or agency commission of 1.50% of the
Public Offering Price for primary and secondary market sales. However,
resales of Units of the Trust by such dealers and others 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. In the event the Sponsor
reacquires, or the Trustee redeems, Units from brokers, dealers and
others while a market is being maintained for such Units, such entities
agree to repay immediately to the Sponsor any such concession or agency
commission relating to such reacquired Units. Certain commercial banks
may be making Units of the Trusts 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 a maximum of 2.95% of the Public Offering Price of the Units
(equivalent to 2.980% 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?" The Sponsor will receive
from the Underwriter 0.95% of the Public Offering Price per Unit. See
"Underwriting" for information regarding additional concessions
available to the Underwriter, dealers and other selling agents. 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 Equity Securities to the Trust (which
is based on the Evaluator's determination of the aggregate offering
price of the underlying Equity Securities of such Trust on the Initial
Date of Deposit as well as on subsequent Dates of Deposit) and the cost
of such Equity Securities to the Sponsor. See "Underwriting" and Note
(2) of "Schedule of Investments." During the initial offering period,
the Underwriter may realize profits or sustain losses as a result of
fluctuations after the Date of Deposit in the Public Offering Price
received by the Underwriter upon the sale of Units held in the
Underwriter's inventory.
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 or redeemed and the price
at which Units are resold (which price includes a sales charge of
2.95%). The secondary market public offering price of Units may be
greater or less than the cost of such Units to the Sponsor and
Underwriter.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated to do
so, the Sponsor and 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
Equity Securities in a Trust plus or minus cash and receivables
(including declared but unpaid dividends), if any, in the Income and
Capital Accounts of such 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 may discontinue purchases of
Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF HIS OR HER
UNITS, HE OR SHE SHOULD INQUIRE OF THE SPONSOR OR THE UNDERWRITER AS TO
CURRENT MARKET PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE
TRUSTEE. Units sold or tendered for redemption prior to such time as the
entire deferred sales charge on such Units has been collected will be
assessed the amount of the remaining deferred sales charge at the time
of sale or redemption.
Page 19
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 or her name appears on the face of the
certificate with 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. Record ownership may occur before
settlement.
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 (book
entry) 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 (book entry) 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 owned by such holder.
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 as part of the final liquidation
distribution. 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. Proceeds received on the sale of any Equity Securities in the
Trust, to the extent not used to meet redemptions of Units, pay the
deferred sales charge or pay expenses, will, however, be distributed on
the last day of each month to Unit holders of record on the fifteenth
day of each month if the amount available for distribution equals at
least $0.01 per Unit. The Trustee is not required to pay interest on
funds held in the Capital Account of a 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 as part of the final liquidation distribution, and in
certain circumstances, earlier. See "What is the Federal Tax Status of
Unit Holders?"
It is anticipated that the deferred sales charge will be collected from
the Capital Account and that amounts in the Capital Account will be
sufficient to cover the cost of the deferred sales charge. However, to
the extent that amounts in the Capital Account are insufficient to
satisfy the then current deferred sales charge obligation, Equity
Page 20
Securities may be sold to meet such shortfall. Distributions of amounts
necessary to pay the deferred portion of the sales charge will be made
to an account designated by the Sponsor for purposes of satisfying Unit
holders' deferred sales charge obligations.
Under regulations issued by the Internal Revenue Service, the Trustee is
required to withhold a specified percentage of any distribution made by
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 under certain circumstances by
contacting the Trustee, otherwise the amount may be recoverable 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
who is not a Rollover Unit holder will, upon surrender of his or her
Units for redemption, receive (i) the pro rata share of the amounts
realized upon the disposition of Equity Securities, unless he or she
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 30 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 Equity Securities (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 Equity
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
requesting an In-Kind Distribution will receive cash in lieu of
fractional shares of the Equity Securities. A Unit holder receiving an
In-Kind Distribution may, of course, at any time after the Equity
Securities are distributed to him or her by the Trust, sell all or a
portion of the Equity Securities.
The Trustee will credit to the Income Account of the Trust any dividends
received on the Equity 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 such Trust for such year; (2) any Equity
Securities sold during the year and the Equity Securities held at the
end of such year by such 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 or her Units by tender
to the Trustee at its corporate trust office in the City of New York of
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
Page 21
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 (if such day is a
day on which the New York Stock Exchange is open for trading), except
that as regards Units received after 4:00 p.m. Eastern time (or as of
any earlier closing time on a day on which the New York Stock Exchange
is scheduled in advance to close at such earlier time), the date of
tender is the next day on which the New York Stock Exchange is open for
trading 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. Units tendered for
redemption prior to such time as the entire deferred sales charge on
such Units has been collected will be assessed the amount of the
remaining deferred sales charge at the time of redemption.
Any Unit holder tendering 2,500 Units or more of the Trust 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 Equity Securities in an amount and value of Equity 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 ("In-Kind Distributions") shall be made by the Trustee
through the distribution of each of the Equity 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 or her pro rata number of whole shares of each of the
Equity Securities comprising a portfolio and cash from the Capital
Account equal to the fractional shares to which the tendering Unit
holder is entitled. The Trustee may adjust the number of shares of any
issue of Equity 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 Equity 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 Equity 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. For further information regarding this withholding, see
"How are Income and Capital Distributed?" 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 Equity Securities of the Trust in order
to make funds available for redemption. To the extent that Equity
Securities are sold, the size of the Trust will be and the diversity of
the Trust may be reduced. Such sales may be required at a time when
Equity Securities would not otherwise be sold and might result in lower
prices than might otherwise be realized.
The Redemption Price per Unit and the Public Offering Price per Unit
(which includes the sales charge) during the initial offering period (as
well as the secondary market Public Offering Price) will be determined
on the basis of the aggregate underlying value of the Equity Securities
in the Trust plus or minus cash and receivables (including declared but
unpaid dividends), 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 Equity Securities not
applied to the purchase of such Equity Securities; (2) the aggregate
value of the Equity Securities (including "when issued" contracts, if
any) held in the Trust, as determined by the Evaluator on the basis of
the aggregate underlying value of the Equity Securities in the Trust
next computed; and (3) dividends receivable on the Equity 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 fees), the Evaluator and supervisory fees, if
any; (4) cash held for distribution to Unit holders of record of the
Page 22
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 REDEMPTION PRICE PER UNIT WILL
BE ASSESSED THE AMOUNT, IF ANY, OF THE REMAINING DEFERRED SALES CHARGE
AT THE TIME OF REDEMPTION.
The aggregate value of the Equity Securities will be determined in the
following manner: if the Equity 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 bid prices. If the
Equity Securities are not so listed or, if so listed and the principal
market therefor is other than on the exchange or system, 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 Equity
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 Equity 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.
Special Redemption, Liquidation and Investment in a New Trust
If the 1998 Trust is offered to investors, a special redemption and
liquidation will be made of all Units of the Trust held by any Unit
holder (a "Rollover Unit holder") who affirmatively notifies the Trustee
in writing that he or she desires to take advantage of such special
redemption and liquidation by the Rollover Notification Date specified
in the "Summary of Essential Information."
All Units of Rollover Unit holders will be redeemed In-Kind during the
Special Redemption and Liquidation Period and the underlying Equity
Securities will be distributed to the Distribution Agent on behalf of
the Rollover Unit holders. During the Special Redemption and Liquidation
Period (as set forth in "Summary of Essential Information"), the
Distribution Agent will be required to sell all of the underlying Equity
Securities on behalf of Rollover Unit holders. The sales proceeds will
be net of brokerage fees, governmental charges or any expenses involved
in the sales.
The Distribution Agent will engage the Sponsor as its agent to sell the
distributed Equity Securities. The Sponsor will attempt to sell the
Equity Securities as quickly as is practicable during the Special
Redemption and Liquidation Period. The Sponsor does not anticipate that
the period will be longer than ten business days, and it could be as
short as one day, given that the Equity Securities are usually highly
liquid. The liquidity of any Equity Security depends on the daily
trading volume of the Equity Security and the amount that the Sponsor
has available for sale on any particular day.
It is expected (but not required) that the Sponsor will generally follow
the following guidelines in selling the Equity Securities: for highly
liquid Equity Securities, the Sponsor will generally sell Equity
Securities on the first day of the Special Redemption and Liquidation
Period; for less liquid Equity Securities, on each of the first two days
of the Special Redemption and Liquidation Period, the Sponsor will
generally sell any amount of any underlying Equity Securities at a price
no less than 1/2 of one point under the closing sale price of those
Equity Securities on the preceding day. Thereafter, the Sponsor intends
to sell without any price restrictions at least a portion of the
remaining underlying Equity Securities, the numerator of which is one
and the denominator of which is the total number of days remaining
(including that day) in the Special Redemption and Liquidation Period.
The Rollover Unit holders' proceeds will be invested in the next new
series of the Peroni Top Ten Growth Trust (the "1998 Trust") created in
conjunction with the termination of the Peroni Top Ten Growth Trust,
Page 23
1997 Series, if then registered in the Unit holder's state and being
offered, the portfolio of which is expected to contain equity
securities. The proceeds of redemption available on each day will be
used to buy 1998 Trust Units as the proceeds become available at the
Public Offering Price of the 1998 Trust, including a reduced sales
charge per Unit. Units purchased other than with redemption proceeds
will be subject to the full sales charge.
The Sponsor intends to create 1998 Trust Units as quickly as possible,
dependent upon the availability of the equity securities included in the
1998 Trust portfolio. There can be no assurance, however, that the 1998
Trust will be created, or if created, as to the exact timing of the
creation of the 1998 Trust Units or the aggregate number of 1998 Trust
Units which the Sponsor will create. The Sponsor may, in its sole
discretion, stop creating new Units (whether permanently or temporarily)
at any time it chooses, regardless of whether all proceeds of the
Special Redemption and Liquidation have been invested on behalf of
Rollover Unit holders. Cash which has not been invested on behalf of the
Rollover Unit holders in 1998 Trust Units will be distributed within a
reasonable time after such occurrence. However, because the Sponsor can
create Units, the Sponsor anticipates that sufficient Units can be
created, although moneys in the 1998 Trust may not be fully invested
immediately.
Any Rollover Unit holder will thus be redeemed out of the Trust and may
become a holder of an entirely different Trust, the 1998 Trust, with a
different portfolio of equity securities. The Rollover Unit holders'
Units will be redeemed In-Kind and the distributed Equity Securities
shall be sold during the Special Redemption and Liquidation Period. In
accordance with the Rollover Unit holders' offer to purchase the 1998
Trust Units, the proceeds of the sales (and any other cash distributed
upon redemption) will be invested in the 1998 Trust, at the public
offering price, including a reduced sales charge per Unit.
This process of redemption, liquidation, and investment in a new Trust
is intended to allow for the fact that the portfolios selected are
chosen on the basis of capital appreciation potential only for a year,
at which point a new portfolio is chosen. It is contemplated that a
similar process of redemption, liquidation and investment in a new trust
will be available for the 1998 Trust and each subsequent series of the
Trust, approximately a year after that Series' creation. However, there
is no assurance that any such subsequent series of the Trust will be
offered.
The Sponsor believes that the gradual redemption, liquidation and
investment in the Trust will help mitigate any negative market price
consequences stemming from the trading of large volumes of securities
and of the underlying Equity Securities in the Trust in a short,
publicized period of time. The above procedures may, however, be
insufficient or unsuccessful in avoiding such price consequences. In
fact, market price trends may make it advantageous to sell or buy more
quickly or more slowly than permitted by these procedures. Rollover Unit
holders could then receive a less favorable average Unit price than if
they bought all their Units of the Trust on any given day of the period.
It should also be noted that Rollover Unit holders may realize taxable
capital gains on the Special Redemption and Liquidation but, in certain
unlikely circumstances, will not be entitled to a deduction for certain
capital losses and, due to the procedures for investing in the 1998
Trust, no cash would be distributed at that time to pay any taxes.
Included in the cash for the Special Redemption and Liquidation may be
an amount of cash attributable to the distribution of dividend income;
accordingly, Rollover Unit holders also will not have cash distributed
to pay any taxes. See "What is the Federal Tax Status of Unit holders?"
In addition, during this period a Unit holder will be at risk to the
extent that Equity Securities are not sold and will not have the benefit
of any stock appreciation to the extent that moneys have not been
invested; for this reason, the Sponsor will be inclined to sell and
purchase the Equity Securities in as short a time period as it can
without materially adversely affecting the price of the Equity
Securities.
Unit holders who do not inform the Distribution Agent that they wish to
have their Units so redeemed and liquidated ("Remaining Unit holders")
will continue to hold Units of the Trust as described in this Prospectus
until the Trust is terminated or until the Mandatory Termination Date
listed in the Summary of Essential Information, whichever occurs first.
These Remaining Unit holders will not realize capital gains or losses
due to the Special Redemption and Liquidation, and will not be charged
any additional sales charge. If a large percentage of Unit holders
become Rollover Unit holders, the aggregate size of the Trust will be
sharply reduced. As a consequence, expenses, if any, in excess of the
amount to be borne by the Trustee might constitute a higher percentage
amount per Unit than prior to the Special Redemption, Liquidation and
Page 24
Investment in the 1998 Trust. The Trust might also be reduced below the
Discretionary Liquidation Amount listed in the Summary of Essential
Information because of the lesser number of Units in the Trust, and
possibly also due to a value reduction, however temporary, in Units
caused by the Sponsor's sales of Equity Securities; if so, the Sponsor
could then choose to liquidate the Trust without the consent of the
remaining Unit holders. See "How May the Indenture be Amended or
Terminated?" The Equity Securities remaining in the Trust after the
Special Redemption and Liquidation Period will be sold by the Sponsor as
quickly as possible without, in its judgment, materially adversely
affecting the market price of the Equity Securities.
The Sponsor may for any reason, in its sole discretion, decide not to
sponsor the 1998 Trust or any subsequent series of the Trust, without
penalty or incurring liability to any Unit holder. If the Sponsor so
decides, the Sponsor shall notify the Unit holders before the Special
Redemption and Liquidation Period would have commenced. All Unit holders
will then be Remaining Unit holders, with rights to ordinary redemption
as before. See "How May Units be Redeemed?" The Sponsor may modify the
terms of the 1998 Trust or any subsequent series of the Trust from those
applicable to this Trust. The Sponsor may also modify, suspend or
terminate the Rollover Option upon notice to the Unit holders of such
amendment at least 60 days prior to the effective date of such amendment.
How May Units be Purchased by the Sponsor?
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 or she 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 Equity Securities be Removed from the Trust?
The Portfolio of the Trust is not "managed" by the Sponsor, the Trustee,
Janney Montgomery Scott Inc. or Mr. Peroni. Their respective 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 an Equity 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 Equity Security, that the issuer of the Equity 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 Equity Security, that the issuer has defaulted on the
payment on any other of its outstanding obligations, that the price of
the Equity 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 Equity Securities would be detrimental to the Trust. 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 Equity Securities is
prohibited. Pursuant to the Indenture and with limited exceptions, the
Trustee may sell any securities or other property acquired in exchange
for Equity 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). Proceeds from the sale of
Equity 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, from time to time, retain and pay compensation to the
Sponsor (or an affiliate of the Sponsor) to act as agent for the Trust
Page 25
with respect to selling Equity Securities from the Trust. In acting in
such capacity, the Sponsor or its affiliate will be held subject to the
restrictions under the Investment Company Act of 1940, as amended.
The Trustee may also sell Equity Securities designated by the Sponsor,
or if not so directed, in its own discretion, for the purpose of
redeeming Units of a Trust tendered for redemption and the payment of
expenses.
The Sponsor, in designating Equity Securities to be sold by the Trustee,
will generally make selections to maintain, to the extent practicable,
the proportionate relationship among the number of shares of individual
issues of Equity Securities. To the extent this is not practicable, the
composition and diversity of the Equity 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 Equity Securities are to be sold. The Sponsor may consider
sales of Units of unit investment trusts which it sponsors in making
recommendations to the Trustee as to the selection of broker/dealers to
execute the Trust's portfolio transactions.
INFORMATION AS TO UNDERWRITER, SPONSOR, TRUSTEE AND EVALUATOR
Who is the Underwriter?
Janney Montgomery Scott Inc., the Underwriter, is a full-service
securities firm headquartered at 1801 Market Street, Philadelphia,
Pennsylvania 19103; telephone number 1-800-526-6397. A wholly-owned
subsidiary of the Penn Mutual Life Insurance Company, Janney Montgomery
Scott Inc. has more than 45 offices located throughout the northeastern
part of the United States. The Underwriter is a member of the New York
Stock Exchange and other major exchanges, the National Association of
Securities Dealers, Inc. and Securities Investors Protection Corporation.
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, The
First Trust GNMA, Templeton Growth and Treasury Trust, Templeton Foreign
Fund & U.S. Treasury Securities Trust and The Advantage Growth and
Treasury Securities Trust. 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 (630) 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 Trusts 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, with its principal executive
office located at 270 Park Avenue, New York, New York 10017 and its unit
investment trust office at 4 New York Plaza, 6th floor, New York, New
York 10004-2413. Unit holders who have questions regarding the Trust may
call the Customer Service Help Line at 1-800-682-7520. For current
pricing, investors may call the Trustee at 1-800-446-0132 and provide
them with the security code of 53776. The Trustee is subject to
supervision by the Superintendent of Banks of the State of New York, the
Federal Deposit Insurance Corporation and the Board of Governors of the
Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not
participated in the selection of the Equity 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
Page 26
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
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 Equity 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 Equity Securities or upon the
interest thereon or upon it as Trustee under the Indenture or upon or in
respect of a 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 and 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
Page 27
(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
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
Equity Securities owned by such Trust as shown by any evaluation, is
less than the lower of $2,000,000 or 20% of the total value of Equity
Securities deposited in the 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 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?" The Special Redemption and Liquidation in a New Trust
could cause the Trust to be reduced below the Discretionary Liquidation
Amount and the Trust could therefore be terminated at that time before
the Mandatory Termination Date of the Trust.
Commencing on the Mandatory Termination Date, Equity 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 Equity 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 or her address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 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 Equity
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 Equity
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. Qualifying Unit
holders requesting an In-Kind Distribution will receive cash in lieu of
fractional shares of the Equity Securities. Eligible Unit holders not
electing a distribution of shares of Equity Securities and who do not
elect the Rollover Option will receive a cash distribution from the sale
of the remaining Equity 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 Equity
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 or her
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. Certain matters will be
passed upon on behalf of Janney Montgomery Scott Inc. by Mesirov,
Gelman, Jaffe, Cramer & Jamieson, 1735 Market Street, 38th Floor,
Philadelphia, Pennsylvania 19103.
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,
Page 28
and is included in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
UNDERWRITING
The Underwriter named below has purchased Units in the following amount:
<TABLE>
<CAPTION>
Number
Name Address of Units
____ _______ ________
<S> <C> <C>
Underwriter
Janney Montgomery Scott Inc. 1801 Market Street, 11th Floor, Philadelphia, PA 19103 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 others
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.
From time to time the Sponsor may implement programs under which the
Underwriter 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 the Underwriter or dealers 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 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 the Underwriter or qualifying 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 the common stocks
comprising the Dow Jones Industrial Average, corporate or U.S.
Government bonds, bank certificates of deposit and bank 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 certificates of deposit and bank money market
accounts are insured by an agency of the federal government up to
$100,000. 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.
Past performance may not be indicative of future results. The Trust's
portfolio is not managed. Unit price and return fluctuate with the value
of the common stocks in the Trust's portfolio, so there may be a gain or
loss when Units are sold.
Trust performance may be compared to performance on a total return basis
of the Dow Jones Industrial Average, the S&P 500 Composite Price Stock
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 29
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 170
We have audited the accompanying statement of net assets, including the
schedule of investments, of The First Trust Special Situations Trust,
Series 170, comprised of Peroni Top Ten Growth Trust, 1997 Series as of
the opening of business on December 9, 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 December 9,
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 170, comprised of Peroni Top Ten
Growth Trust, 1997 Series at the opening of business on December 9, 1996
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 9, 1996
Page 30
Statement of Net Assets
PERONI TOP TEN GROWTH TRUST, 1997 SERIES
The First Trust Special Situations Trust, Series 170
At the Opening of Business on the Initial Date of Deposit
December 9, 1996
<TABLE>
<CAPTION>
<S> <C>
NET ASSETS
Investment in Equity Securities represented by purchase contracts (1) (2) $148,503
Organizational and offering costs (3) 70,000
_________
218,503
Less accrued organizational and offering costs (3) (70,000)
Less liability for deferred sales charge (4) (2,925)
_________
Net assets $145,578
=========
Units outstanding 15,000
ANALYSIS OF NET ASSETS
Cost to investors (5) $150,003
Less sales charge (5) (4,425)
_________
Net assets $145,578
=========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) Aggregate cost of the Equity Securities listed under "Schedule of
Investments" is based on their aggregate underlying value.
(2) An irrevocable letter of credit totaling $200,000 issued by The Chase
Manhattan Bank has been deposited with the Trustee as collateral,
covering the monies necessary for the purchase of the Equity Securities
pursuant to purchase contracts for such Equity 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 one year from the Initial Date of Deposit. The estimated
organizational and offering costs are based on 4,000,000 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) Represents the amount of mandatory distributions from the Trust
($0.195 per Unit), payable to the Sponsor in ten equal monthly
installments beginning on February 28, 1997, and on the last business
day of each month thereafter through November 28, 1997. If Units are
redeemed prior to November 28, 1997, the remaining amount of the
deferred sales charge applicable to such Units will be payable at the
time of redemption.
(5) The aggregate cost to investors includes a maximum total sales charge
computed at the rate of 2.95% of the Public Offering Price (equivalent
to 2.980% of the net amount invested, exclusive of the deferred sales
charge) assuming no reduction of sales charge for quantity purchases or
for Rollover Unit holders of the Peroni Top Ten Growth Trust, Series 1.
Page 31
Schedule of Investments
PERONI TOP TEN GROWTH TRUST, 1997 SERIES
The First Trust Special Situations Trust, Series 170
At the Opening of Business on the Initial Date of Deposit
December 9, 1996
<TABLE>
<CAPTION>
Market Cost of
Number Percentage Value Equity
of Ticker Symbol and of Aggregate per Securities to
Shares Name of Issuer of Equity Securities (1) Offering Price Share the Trust (2)
_______ _______________________________________ ______________ ______ _____________
<C> <S> <C> <C> <C>
106 ARC Atlantic Richfield Company 10% $140.625 $ 14,906
266 AVP Avon Products, Inc. 10% 55.750 14,829
361 CVS CVS Corporation 10% 41.125 14,846
177 CPQ Compaq Computer Corporation 10% 83.750 14,824
242 CNC Conseco, Inc. 10% 61.375 14,853
225 HON Honeywell, Inc. 10% 66.000 14,850
594 LXK Lexmark International Group, Inc. (Class A) 10% 25.000 14,850
786 LOR Loral Space & Communications, Ltd. 10% 18.875 14,836
447 SPW SPX Corporation 10% 33.250 14,863
642 VRC Varco International, Inc. 10% 23.125 14,846
_____ ________
Total Investments 100% $148,503
===== ========
</TABLE>
[FN]
_______________
(1) All Equity Securities are represented by regular way contracts to
purchase such Equity Securities for the performance of which an
irrevocable letter of credit has been deposited with the Trustee. The
purchase contracts for the Equity Securities were entered into by the
Sponsor on December 9, 1996. The Trust has a mandatory termination date
of January 12, 1998.
(2) The cost of the Equity Securities to the Trust represents the
aggregate underlying value with respect to the Equity Securities
acquired (generally determined by the closing sale prices of listed
Equity Securities and the ask prices of over-the-counter traded Equity
Securities on the business day preceding the Initial Date of Deposit).
The valuation of the Equity Securities has been determined by the
Evaluator, an affiliate of the Sponsor. The aggregate underlying value
of the Equity Securities on the Initial Date of Deposit was $148,503.
Cost and loss to Sponsor relating to the Equity Securities sold to the
Trust were $150,066 and $1,563, respectively.
Page 32
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Page 33
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Page 34
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Page 35
CONTENTS:
Summary of Essential Information
Peroni Top Ten Growth Trust, 1997 Series 4
The First Trust Special Situations Trust, Series 170:
What is The First Trust Special Situations Trust? 6
What are the Expenses and Charges? 7
What is the Federal Tax Status of Unit Holders? 8
Why are Investments in the Trust Suitable for
Retirement Plans? 11
Portfolio:
What are Equity Securities? 12
Risk Factors 12
What are the Equity Securities Selected for
Peroni Top Ten Growth Trust, 1997 Series? 13
What are Some Additional Considerations
for Investors? 15
Public Offering:
How is the Public Offering Price Determined? 17
How are Units Distributed? 18
What are the Sponsor's and Underwriter's Profits? 19
Will There be a Secondary Market? 19
Rights of Unit Holders:
How is Evidence of Ownership
Issued and Transferred? 20
How are Income and Capital Distributed? 20
What Reports will Unit Holders Receive? 21
How May Units be Redeemed? 21
Special Redemption, Liquidation and
Investment in a New Trust 23
How May Units be Purchased by the Sponsor? 25
How May Equity Securities be Removed
from the Trust? 25
Information as to Underwriter, Sponsor, Trustee
and Evaluator:
Who is the Underwriter? 26
Who is the Sponsor? 26
Who is the Trustee? 26
Limitations on Liabilities of Sponsor and Trustee 27
Who is the Evaluator? 27
Other Information:
How May the Indenture be Amended
or Terminated? 27
Legal Opinions 28
Experts 28
Underwriting 29
Report of Independent Auditors 30
Statement of Net Assets 31
Schedule of Investments 32
___________
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.
Janney Montgomery
Scott Inc.
Peroni Top Ten Growth Trust 1997 Series
Janney Montgomery Scott Inc.
1801 Market Street, 11th Floor
Philadelphia, PA 19103
1-800-526-6397
Trustee:
The Chase Manhattan Bank
4 New York Plaza, 6th floor
New York, New York 10004-2413
1-800-682-7520
December 9, 1996
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
Page 36
-APPENDIX-
The graph which appears on page 15 of the prospectus represents a
comparison between a $10,000 investment made on December 16, 1988 in
those stocks which comprise the Dow Jones Industrial Average and an
identical investment in Peroni's Top Ten Picks. The chart indicates that
$10,000 invested on December 16, 1988 in the stocks which comprise the
Dow Jones Industrial Average would on December 6, 1996 be worth $30,279
as opposed to $47,775 had the $10,000 been invested in Peroni's Top Ten
Picks. Both figures assume that dividends received during each year will
be reinvested at year end and sales charges, commissions, expenses and
taxes were not considered in determining total returns.
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 170, 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, The First Trust
Special Situations Trust, Series 69 Target Equity Trust Value Ten
Series and The First Trust Special Situations Trust, Series 119
Target 5 Trust, Series 2 Target 10 Trust, Series 8, 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
170, 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
December 9, 1996.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 170
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 ) December 9, 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 December 9, 1996 in
Amendment No. 3 to the Registration Statement (Form S-6) (File
No. 333-13049) and related Prospectus of The First Trust Special
Situations Trust, Series 170.
ERNST & YOUNG LLP
Chicago, Illinois
December 9, 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 170 among Nike
Securities L.P., as Depositor, The Chase Manhattan Bank,
as Trustee, First Trust Advisors L.P., as Evaluator, and
First Trust Advisors L.P., as 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.
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 170
TRUST AGREEMENT
Dated: December 9, 1996
The Trust Agreement among Nike Securities L.P., as
Depositor, The Chase Manhattan Bank, 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
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.
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.
(2) The initial fractional undivided interest in and
ownership of the Trust represented by each Unit thereof shall be
1/15,000.
C. The Percentage Ratio is as follows on the Initial Date
of Deposit:
10% Atlantic Richfield Company, 10% Avon Products, Inc.,
10% CVS Corporation, 10% Compaq Computer Corporation,
10% Conseco, Inc., 10% Honeywell, Inc., 10% Lexmark
International Group, Inc. (Class A), 10% Loral Space &
Communications, Ltd., 10% SPX Corporation, 10% Varco
International, 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 $.0030 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, payable on a
Distribution Date. Such fee may exceed the actual cost 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 the
Evaluator of supplying such services in such year.
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 $.0116 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 December
9, 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, 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.
B. Section 1.01(26) shall be added to read as follows:
"(26) The term "Rollover Unit holder" shall be defined
as set forth in Section 5.05, herein."
C. Section 1.01(27) shall be added to read as follows:
"(27) The "Rollover Notification Date" shall be
defined as set forth in the Prospectus under "Summary of
Essential Information."
D. Section 1.01(28) shall be added to read as follows:
"(28) The term "Rollover Distribution" shall be
defined as set forth in Section 5.05, herein."
E. Section 1.01(29) shall be added to read as follows:
"(29) The term "Distribution Agent" shall refer to the
Trustee acting in its capacity as distribution agent
pursuant to Section 5.02 herein."
F. Section 1.01(30) shall be added to read as follows:
"(30) The term "Special Redemption and Liquidation
Period" shall be as set forth in the Prospectus under
"Summary of Essential Information."
G. The term "Capital Account" as set forth in the
Prospectus shall be deemed to refer to the "Principal Account."
H. Paragraph (b) of Section 2.01 shall be restated in its
entirety as follows:
(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 2.01(b) 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 purchased 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 replicate Cash (as defined below)
received or receivable by the Trust as of the date of such
deposit in the same proportion as such Cash represents to
the Trust. For purposes of this sub-paragraph(s), "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.
I. 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 cost of the initial
valuation of the portfolio and audit of the Trust, the
initial fees and expenses of the Trustee, and legal and
other out-of-pocket expenses related thereto, but not
including the expenses incurred in the printing of
preliminary prospectuses and prospectuses, expenses incurred
in the preparation and printing of brochures and other
advertising materials and any other selling expenses, 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 3.01 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."
J. 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.
K. 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,
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."
L. 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."
M. 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."
N. 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."
O. 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."
P. 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.
Q. 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 which shall not exceed that amount set forth in
the Prospectus under "Summary of Essential Information"
multiplied by 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) Securities from the current list
of Securities designated to be sold pursuant to Section 5.02
hereof, or (ii) if no such Securities have been so
designated, such Securities 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
hereof."
R. Article III of the Standard Terms and Conditions of
Trust is hereby amended by inserting the following paragraph
which shall be entitled Section 3.15:
"Section 3.15. Deferred Sales Charge. If the
prospectus related to the Trust specifies a deferred sales
charge, the Trustee shall, on the dates specified in and as
permitted by such Prospectus, withdraw from the Capital
Account, an amount per Unit specified in such Prospectus and
credit such amount to a special non-Trust account designated
by the Depositor out of which the deferred sales charge will
be distributed to the Depositor (the "Deferred Sales Charge
Account"). If the balance in the Capital Account is
insufficient to make such withdrawal, the Trustee shall, as
directed by the Depositor, advance funds in an amount
required to fund the proposed withdrawal and be entitled to
reimbursement of such advance upon the deposit of additional
monies in the Capital Account, and/or sell Securities and
credit the proceeds thereof to the Deferred Sales Charge
Account; provided, however, that the aggregate amount
advanced by the Trustee at any time for payment of the
deferred sales charge shall not exceed $15,000. Such
direction shall, if the Trustee is directed to sell a
Security, identify the Security to be sold and include
instructions as to the execution of such sale. If a Unit
holder redeems Units prior to full payment of the deferred
sales charge, the Trustee shall, if so provided in the
related Prospectus, on the Redemption Date, withhold from
the Redemption Price payable to such Unit holder an amount
equal to the unpaid portion of the deferred sales charge and
distribute such amount to the Deferred Sales Charge Account.
If the Trust is terminated for reasons other than that set
forth in Section 6.01(g)(ii), the Trustee shall, if so
provided in the related Prospectus, on the termination of
the Trust, withhold from the proceeds payable to Unit
holders an amount equal to the unpaid portion of the
deferred sales charge and distribute such amount to the
Deferred Sales Charge Account. If the Trust is terminated
pursuant to Section 6.01(g)(ii), the Trustee shall not
withhold from the proceeds payable to Unit holders any
amounts of unpaid deferred sales charges. If pursuant to
Section 5.02 hereof, the Depositor shall purchase a Unit
tendered for redemption prior to the payment in full of the
deferred sales charge due on the tendered Unit, the
Depositor shall pay to the Unit holder the amount specified
under Section 5.02 less the unpaid portion of the deferred
sales charge. All advances made by the Trustee pursuant to
this Section shall be secured by a lien on the Trust prior
to the interest of the Unit holders."
S. 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 of the Trust 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 5.02. 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."
T. The following Section 5.05 shall be added to read as
follows:
"Section 5.05. Rollover of Units. (a) If the
Depositor shall offer a subsequent series of the Trust (the
"New Series"), the Trustee shall, at the Depositor's sole
cost and expense, include in the notice sent to Unit holders
specified in Section 8.02 a form of election whereby Unit
holders, whose redemption distribution would be in an amount
sufficient to purchase at least one Unit of the New Series,
may elect to have their Units(s) redeemed in kind in the
manner provided in Section 5.02, the Securities included in
the redemption distribution sold, and the cash proceeds
applied by the Distribution Agent to purchase Units of the
New Series, all as hereinafter provided. The Trustee shall
honor properly completed election forms returned to the
Trustee, accompanied by any Certificate evidencing Units
tendered for redemption or a properly completed redemption
request with respect to uncertificated Units, by its close
of business on the Rollover Notification Date.
All Units so tendered by a Unit holder (a "Rollover
Unit holder") shall be redeemed and cancelled on the
Rollover Notification Date. Subject to payment by such
Rollover Unit holder of any tax or other governmental
charges which may be imposed thereon, such redemption is to
be made in kind pursuant to Section 5.02 by distribution of
cash and/or Securities to the Distribution Agent on the
Rollover Notification Date of the net asset value
(determined on the basis of the Trust Fund Evaluation as of
the Rollover Notification Date in accordance with
Section 4.01) multiplied by the number of Units being
redeemed (herein called the "Rollover Distribution"). Any
Securities that are made part of the Rollover Distribution
shall be valued for purposes of the redemption distribution
as of the Rollover Notification Date.
All Securities included in a Unit holder's Rollover
Distribution shall be sold by the Distribution Agent during
the Special Redemption and Liquidation Period specified in
the Prospectus pursuant to the Depositor's direction, and
the Distribution Agent shall employ the Depositor as broker
in connection with such sales. For such brokerage services,
the Depositor shall be entitled to compensation at its
customary rates, provided however, that its compensation
shall not exceed the amount authorized by applicable
Securities laws and regulations. The Depositor shall direct
that sales be made in accordance with the guidelines set
forth in the Prospectus under the heading "Special
Redemption, Liquidation and Investment in a New Trust."
Should the Depositor fail to provide direction, the
Distribution Agent shall sell the Securities in the manner
provided in the prospectus for less liquid Equity
Securities." The Distribution Agent shall have no
responsibility for any loss or depreciation incurred by
reason of any sale made pursuant to this Section.
Upon each trade date for sales of Securities included
in the Rollover Unit holder's Rollover Distribution, the
Distribution Agent shall, as agent for such Rollover Unit
holder, enter into a contract with the Depositor to purchase
from the Depositor Units of the New Series (if any), at the
Depositor's public offering price for such Units on such
day, and at such reduced sales charge as shall be described
in the prospectus for such New Series. Such contract shall
provide for purchase of the maximum number of Units of the
New Series whose purchase price is equal to or less than the
cash proceeds held by the Distribution Agent for the Unit
holder on such day (including therein the proceeds
anticipated to be received in respect of Securities traded
on such day net of all brokerage fees, governmental charges
and any other expenses incurred in connection with such
sale), to the extent Units are available for purchase from
the Depositor. In the event a sale of Securities included
in the Rollover Unit holder's redemption distribution shall
not be consummated in accordance with its terms, the
Distribution Agent shall apply the cash proceeds held for
such Unit holder as of the settlement date for the purchase
of Units of a New Series to purchase the maximum number of
units which such cash balance will permit, and the Depositor
agrees that the settlement date for Units whose purchase was
not consummated as a result of insufficient funds will be
extended until cash proceeds from the Rollover Distribution
are available in a sufficient amount to settle such
purchase. If the Unit holder's Rollover Distribution will
produce insufficient cash proceeds to purchase all of the
Units of the New Series contracted for, the Depositor agrees
that the contract shall be rescinded with respect to the
Units as to which there was a cash shortfall without any
liability to the Rollover Unit holder or the Distribution
Agent. Any cash balance remaining after such purchase shall
be distributed within a reasonable time to the Rollover Unit
holder by check mailed to the address of such Unit holder on
the registration books of the Trustee. Units of the New
Series will be uncertificated unless and until the Rollover
Unit holder requests a certificate. Any cash held by the
Distribution Agent shall be held in a non-interest bearing
account which will be of benefit to the Distribution Agent
in accordance with normal banking procedures. Neither the
Trustee nor the Distribution Agent shall have any
responsibility or liability for 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.
(b) Notwithstanding the foregoing, the Depositor may,
in its discretion at any time, decide not to offer any New
Series in the future, and if so, this Section 5.05
concerning the Rollover of Units shall be inoperative.
(c) The Distribution Agent shall receive no fees for
performing its duties hereunder. The Distribution Agent
shall, however, be entitled to receive indemnification and
reimbursement from the Trust for any and all expenses and
disbursements to the same extent as the Trustee is permitted
reimbursement hereunder."
U. 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 the 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)"
V. 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."
W. 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."
X. 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
that amount as set forth in the Prospectus 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."
Y. 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."
Z. The following shall be added immediately after the
first sentence of paragraph (c) of Section 2.01:
"The Trustee may allow the Depositor to substitute for
any Letter(s) of Credit deposited with the Trustee in
connection with the deposits described in Section 2.01(a)
and (b) cash in an amount sufficient to satisfy the
obligations to which the Letter(s) of Credit relate(s). Any
such substituted Letter(s) of Credit shall be released by
the Trustee."
IN WITNESS WHEREOF, Nike Securities L.P., The Chase
Manhattan Bank and First Trust Advisors L.P. have each caused
this Trust Agreement to be executed and its 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,
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 170
(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.)
AGREEMENT
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 170
December 9, 1996
Nike Securities L.P.
1001 Warrenville Road
Third Floor
Lisle, Illinois 60532
Gentlemen:
1. General. We understand that you, Nike Securities L.P.
(the "Sponsor"), are entering into this agreement (the
"Agreement") in counterpart with us for issues of The First Trust
Special Situations Trust, Series 170 (the "Fund"), a unit
investment trust for which you will act as Sponsor. By
acceptance of this Agreement we acknowledge that our
participation as Underwriter in the proposed offering shall be
subject to the provisions of this Agreement and, as such, we
elect to act as an underwriter ("Underwriter") of units of
fractional, undivided interests in the Fund. The reference to
"Fund" in this Agreement applies only to such Fund, and such
units of fractional undivided interests in such Fund offered are
hereinafter called the "Units." You have advised us that the
Fund is registered as a "unit investment trust" under the
Investment Company Act of 1940 (the "1940 Act") by filing a
Notification of Registration on Form N-8A and a Registration
Statement on Form N-8B-2 with the Securities and Exchange
Commission (the "Commission").
The Units to be offered in any offering will be registered
under the Securities Act of 1933, as amended (the "1933 Act").
The registration statement for the Units filed under the 1933 Act
as finally amended and revised at the time it becomes effective
is herein referred to as the "Registration Statement" and the
related prospectus is herein referred to as the "Prospectus,"
except that if the prospectus filed by the Fund pursuant to
Rule 497(b) under the 1933 Act shall differ from the prospectus
on file at the time the Registration Statement shall become
effective, the term "Prospectus" shall refer to the prospectus
filed pursuant to Rule 497(b) from and after the date on which it
shall have been filed. Capitalized words used in this Agreement
which are not separately defined herein shall have the respective
meanings given to them in the Prospectus.
2. Designation and Authority of Representative. You are
hereby authorized to act as our representative (the
"Representative") in connection with the Fund for all matters to
which this Agreement relates and to take the action provided
herein to be taken by you.
You will be under no liability to us for any act or omission
except for obligations expressly assumed by you herein, and no
obligations on your part will be implied or inferred herefrom.
The rights and liabilities of the respective parties hereto are
several and not joint and nothing herein or hereunder will
constitute them a partnership, association or separate entity.
3. Profit or Loss in Acquisition of Securities. It is
understood that the acquisition of portfolio securities (the
"Securities") for deposit in the portfolio of the Fund shall be
at your cost and risk. Accordingly, if the aggregate cost of the
Securities to the Fund on the date they are delivered to the
Trustee for deposit in the Fund, on the basis of the Trustee's
determination of offering price, shall be less than their actual
aggregate acquisition cost to the Sponsor, any such loss, without
limitation or restriction, shall be borne by you alone. If the
aggregate cost of such Securities, as so determined, shall exceed
the aggregate cost of such Securities to you as Sponsor, any such
profit, without limitation or restriction, shall be received by
you alone.
We agree that you shall have no liability (as Representative
or otherwise) with respect to the issue, form, validity,
legality, enforceability, value of, or title to the Securities,
except for the exercise of due care in determining the
genuineness of such Securities and the conformance therefor with
the descriptions and qualifications appearing in the Prospectus.
4. Purchase of Units. Based upon representations made by
you as to the nature of the Fund, we have agreed to participate
in the offering of Units of the Fund. We will advise you
promptly as to the number of Units which we will purchase. Such
advice may be by telegraph, telegram or other form of wire or
facsimile transmission, including a wire transfer to your account
of funds for payment of Units purchased by us. You may rely on
and we hereby commit on the terms and conditions of this
Agreement to purchase and pay for the number of Units of the Fund
set forth in such advice (the "Unit Commitment"). Our Unit
Commitment may be increased only by mutual agreement between us
and you at any time prior to the Initial Date of Deposit. We
agree that you in your sole discretion reserve the right to
decrease our Unit Commitment at any time prior to the Initial
Date of Deposit, and if you so elect to make such a decision you
will notify us of such election by telephone and promptly confirm
the same by telegraph or writing. We hereby agree with you to
purchase from you and, to pay for on the First Settlement Date,
the number of Units (the "Initial Units") in the Fund designated
for purchase on such date by our Unit Commitment. The price to
be paid on the First Settlement Date for each such Unit shall be
the Public Offering Price per Unit, at the close of business on
the Initial Date of Deposit less the concession set forth in the
Prospectus which is applicable to the Unit Commitment, assuming
for the purposes only of the Unit Commitment that all Units
committed for are purchased on the Initial Date of Deposit. The
price we pay for the purchase of Units shall represent the only
expense for which we are responsible. All other expenses of the
Trust, to the extent not paid for by the Trust or the Trustee,
will be paid for by you.
On the Initial Date of Deposit, notwithstanding that we pay
for our Initial Units on the First Settlement Date, we will
become the owner of such Initial Units and entitled to the
benefits as well as the risks inherent therein.
You are authorized to retain custody of our Initial Units
until the Registration Statement relating thereto has become
effective under the 1933 Act.
You agree that if we commit in our Unit Commitment to
purchase $500,000 or more of the Fund, we may elect to purchase
any designated number of Units in excess of those to be purchased
pursuant to the Unit Commitment in amounts of at least $100,000
subsequent to the Initial Date of Deposit. You agree that we
may, on the date of any Subsequent Deposit (the "Subsequent Date
of Deposit"), purchase any amount of Units so deposited. The
price to be paid on the Settlement Date for Units purchased on
each Subsequent Date of Deposit shall be the Public Offering
Price per Unit as of the close of business on such Subsequent
Date of Deposit less the concession set forth in the Prospectus
applicable to the entire Unit Commitment.
You are authorized to file an amendment to said Registration
Statement describing the Securities and furnish information based
thereon or relating thereto and any further amendments or
supplements to the Registration Statement or Prospectus which you
may deem necessary or advisable. We will furnish you upon your
request such information as will be required to insure that the
Registration Statement and Prospectus are current insofar as they
relate to us, and we will thereafter continue to furnish you with
such information as may be necessary to keep current and correct
the information previously supplied which relates to us.
We understand that you will cause the Fund to take action
with respect to the offering and sale of Units in accordance with
the Blue Sky or securities laws of certain states in which it is
proposed that the Units may be offered and sold. In addition, we
agree to provide sales information to you which will contain
detailed information regarding the number of Units sold and the
jurisdictions in which such Units were sold within thirty (30)
days of such sales.
5. Public Offering. You agree that you will advise us
promptly, confirming same in writing, when the Registration
Statement has become effective under the 1933 Act, and we agree
that when we are advised that the Units are released for public
offering we will make a public offering thereof by means of the
Prospectus. The Public Offering Price and the terms and
conditions of the public offering shall be as set forth in the
Prospectus. You shall determine the Public Offering Price in the
manner described in the Prospectus and shall rely with respect to
the offering price of the Securities upon the determination of
the Evaluator named in the Prospectus. Public advertisement of
the offering may be made by you on behalf of us on such date as
you shall determine in such form as we may mutually agree upon.
6. Public Offering Price. We agree that each day while
this Agreement is in effect for the Fund and the evaluation of
the Fund is made by the Evaluator named in the Prospectus, we
will contact you for such evaluation and the resultant Public
Offering Price for the purpose of the offering and sale of Units
to the public. We agree, as required by Section 22(d) of the
1940 Act, to offer and sell our Units at the current Public
Offering Price described in the Prospectus.
7. Permitted Transactions. It is agreed that we may make
purchases and sales from or to any other dealer firm less an
agreed upon take-down from the Public Offering Price. It is
further agreed that part or all of the Units purchased by us may
be sold to dealers at the then effective Public Offering Price,
less the dealer's concession described in the Prospectus.
From time to time prior to the termination this Agreement,
at your request, we will advise you of the number of Units which
we have purchased to such date which remain unsold.
Until the termination of this Agreement, we agree that we
will make no purchase of Units other than (i) purchases provided
for in this Agreement; (ii) purchases approved by you; and (iii)
purchases as broker in executing unsolicited orders.
8. Other Agreements. We hereby agree as follows:
(a) we will refund, on demand and without deduction,
all sales charges to purchasers of Units from us or any dealer
participating in the distribution of our Units if, within 90 days
from the time that the Registration Statement of the Units under
the 1933 Act shall have become effective, (i) the net worth of
the Fund shall be reduced to less than $100,000 or (ii) the Fund
shall have been terminated;
(b) you may instruct the Trustee of the Fund that, in
the event that redemption by the Underwriter of Units
constituting part of any unsold allotment of Units which in the
aggregate exceed 60% of the Units deposited in the Fund during
the primary offering period, the Trustee shall terminate the Fund
in the manner provided in the Indenture for the Fund and
distribute the Securities and other assets of the Fund pursuant
to the provisions of the Indenture; and
(c) in the event that the Fund shall have been
terminated pursuant to (b) above, we will refund any sales
charges to any purchaser of Units purchased from us, or purchased
from a dealer participating in the distribution of our Units, on
demand and without deduction. We authorize you to charge our
account for all refunds of sales charges in respect of our Units.
9. Termination. This Agreement shall terminate with
respect to the Fund covered hereby 30 days after the period in
which the public offering of the Units of the Fund is made in
accordance with Section 5 hereof, unless sooner terminated by
you.
We agree to pay any stamp taxes which may be assessed and
paid after settlement on account of any Units received or sold
hereunder for our account.
Notwithstanding any termination of this Agreement, no sale
of the Units of the Fund shall be made by us at any time except
in conformity with the provisions of Section 22(d) of the 1940
Act.
10. Notices. Notices hereunder shall be deemed to have
been duly given if mailed or telegraphed to us at our address set
forth herein in the case of notices to us, or to you at 3rd
Floor, 1001 Warrenville Road, Lisle, Illinois 60532, in the case
of notices to you.
11. Net Capital. You represent that you, and we represent
that we, are in compliance with the capital requirements of
Rule 15c3-1, promulgated by the Commission under the Securities
Exchange Act of 1934, and we may, in accordance with and pursuant
to such Rule 15c3-1, agree to purchase the amount of Units to be
purchased by you and us, respectively, under the Agreement.
12. Miscellaneous. We confirm that we are a member in good
standing of the National Association of Securities Dealers, Inc.
We also confirm that we will take reasonable steps to
provide the Prospectus to any person making written request
therefor to us and to each person associated with us expected to
solicit customers' orders for the Units. We understand that you
will supply us upon our request with sufficient copies of such
Prospectuses to comply with the foregoing.
This Agreement is being executed by us and delivered to you
in duplicate. Upon your confirmation hereof, this Agreement
shall constitute a valid and binding contract between us.
Very truly yours,
JANNEY MONTGOMERY SCOTT INC.
__________________________________
Your firm name and address are listed below in the exact
manner as they will appear in the Prospectus. Please indicate if
this is correct.
Janney Montgomery Scott Inc.
1801 Market Street, 11th Floor
Philadelphia, Pennsylvania 19103
Confirmed as of the date set forth at the head of this Agreement.
NIKE SECURITIES L.P.
Carlos Nardo
Senior Vice President
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
December 9, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 170
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations
Trust, Series 170 in connection with the preparation, execution
and delivery of a Trust Agreement dated December 9, 1996 among
Nike Securities L.P., as Depositor, The Chase Manhattan Bank, 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. 333-13049)
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:erg
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
December 9, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
The Chase Manhattan Bank
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Re: The First Trust Special Situations Trust, Series 170
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 170 (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 December 9, 1996 (the
"Indenture"), among Nike Securities L.P., as Depositor, The Chase
Manhattan Bank, 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 such 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 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 such 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 such 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
are 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 capital 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 Equity
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. Unit holders should
consult their tax advisers regarding the recognition of gains and
losses for Federal Income tax purposes. In particular, a
Rollover Unit holder should be aware that a Rollover Unit
holder's loss, if any, incurred in connection with the exchange
of Units for Units in the next new series of the Trust, (the
"1997 Trust") will generally be disallowed with respect to the
disposition of any Equity Securities pursuant to such exchange to
the extent that such Unit holder is considered the owner of
substantially identical securities under the wash sale provisions
of the Code taking into account such Unit holder's deemed
ownership of securities underlying the Units in the 1997 Trust in
the manner described above, if such substantially identical
securities were acquired within a period beginning 30 days before
and ending 30 days after such disposition. However, any gains
incurred in connection with such an exchange by a Rollover Unit
holder would be recognized.
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, subject to the
following limitation. 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 and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's
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 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. 333-13049)
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/erg
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
December 9, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 170
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series
170
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for the unit investment trust or trusts included in
The First Trust Special Situations Trust, Series 170 (each, a
"Trust"), which will be established under certain 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, First Trust Advisors L.P., as
Portfolio Supervisor, and The Chase Manhattan Bank, 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. 333-13049) 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
December 9, 1996
The Chase Manhattan Bank, as Trustee of
The First Trust Special Situations
Trust, Series 170
4 New York Plaza, 6th Floor
New York, New York 10004-2413
Attention: Mr. Paul J. Holland
Vice President
Re: The First Trust Special Situations Trust, Series 170
Dear Sirs:
We are acting as counsel for The Chase Manhattan Bank
("Chase") in connection with the execution and delivery of a
Trust Agreement ("the Trust Agreement") dated today's date (which
Trust Agreement incorporates by reference a 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; First Trust Advisors L.P., as
Portfolio Supervisor; and Chase, as Trustee (the "Trustee"),
establishing the unit investment trust or trusts included in The
First Trust Special Situations Trust, Series 170 (each, a
"Trust"), and the confirmation by Chase, as Trustee under the
Indenture, that it has registered on the registration books of
the Trust the ownership by the Depositor of a number of units
constituting the entire interest in the Trust (such aggregate
units being herein called "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 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), such stocks being defined in the
Indenture as Securities and referenced in the Schedule to the
Indenture.
We have examined the Indenture, a specimen of the
certificates to be issued hereunder (the "Certificates"), the
Closing Memorandum dated today's date, 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 corporation
having the powers of a Trust Company under the laws of the State
of New York.
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 registered on the registration
books of the Trust the ownership of the Units by 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 Certificates for such Units, 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.
1001 Warrenville Road
Lisle, Illinois 60532
December 9, 1996
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 170
Gentlemen:
We have examined the Registration Statement File No.
333-13049 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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