Registration No. 33-53189
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF SECURITIES
OF UNIT INVESTMENT TRUSTS REGISTERED ON FORM N-8B-2
A. Exact name of trust:
The First Trust Special Situations Trust, Series 94
B. Name of depositor:
NIKE SECURITIES L.P.
C. Complete address of depositor's principal executive offices:
NIKE SECURITIES L.P.
1001 Warrenville Road
Lisle, Illinois 60532
D. Name and complete address of agent for service:
Copy to:
JAMES A. BOWEN ERIC F. FESS
c/o Nike Securities L.P. c/o Chapman and Cutler
1001 Warrenville Road 111 West Monroe Street
Lisle, Illinois 60532 Chicago, Illinois 60603
E. Title and Amount of Securities Being Registered:
An indefinite number of Units pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended
F. Proposed Maximum Aggregate Offering Price to the Public of
the Securities Being Registered: Indefinite
G. Amount of Filing Fee (as required by Rule 24f-2): $500.00*
H. Approximate date of proposed sale to public:
As soon as practicable after the effective date of the
Registration Statement.
|XXX|Check box if it is proposed that this filing will become
effective on April 29, 1994 at 2:00 p.m. pursuant to Rule
487.
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 ITEM NUMBER FORM S-6 HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Statement of Net
Assets
Form S-6 Auditors
* Inapplicable, answer negative or not required.
First Trust (registered trademark) U.S. Treasury Securities Trust,
Short-Intermediate, Series 3
The Trust. The First Trust Special Situations Trust, Series 94
(the "Trust") is a unit investment trust consisting of a portfolio
of taxable U.S. Treasury Securities that are backed by the full
faith and credit of the United States Government, delivery statements
relating to contracts for the purchase of certain such securities
and an irrevocable letter of credit (the "Securities"). All of
the U.S. Treasury Securities in Series 3 of the Trust consist
of maturities of approximately 2-5.5 years which are "laddered"
to return approximately 20% of the Unit holders' principal annually,
commencing in 1996.
The objective of the Trust is to obtain safety of capital and
current monthly distributions of interest through an investment
in a fixed portfolio of Securities. Series 3 of the Trust will
be a "laddered" portfolio to provide flexibility of principal
investment with maturities ranging from 1996 to 2000. The average
weighted maturity of the Trust will be no less than two years
nor more than five years. With the deposit of the Securities in
the Trust on April 29, 1994, the Initial Date of Deposit, the
Sponsor established for Series 3 a percentage relationship between
the principal amount of Securities of specified interest rates
and ranges of maturities in the related Portfolio. From time to
time, pursuant to the Indenture, following the Initial Date of
Deposit, the Sponsor may deposit additional Securities in Series
3 of 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
additional Securities deposited in Series 3 of the Trust will
maintain as far as practicable the original percentage relationship
between the principal amounts of Securities of specified interest
rates and ranges of maturities in the original Portfolio of the
Trust.
The guaranteed payment of interest and principal afforded by the
Securities may make an investment in Series 3 of the Trust particularly
well suited for purchase by Individual Retirement Accounts, Keogh
Plans, pension funds and other tax-deferred retirement plans.
In addition, the ability to buy single Units (minimum purchase
$1,000, $250 for tax-deferred retirement plans such as IRA accounts)
during the initial offering period at a Public Offering Price
per Unit of approximately $1.00 enables such investors to tailor
the dollar amount of their purchases of Units to take the maximum
possible advantage of the annual deductions available for contributions
to such plans. Investors should consult with their tax advisers
before investing. See "Why are Investments in Series 3 of the
Trust Suitable for Retirement Plans?"
STANDARD & POOR'S CORPORATION HAS RATED UNITS OF EACH SERIES OF
THE TRUST "AAA." THIS IS THE HIGHEST RATING ASSIGNED BY STANDARD
& POOR'S CORPORATION. SEE "WHAT IS THE RATING OF THE UNITS?" AND
"DESCRIPTION OF STANDARD & POOR'S CORPORATION RATING."
Attention Foreign Investors: Your interest income from the Trust
may be exempt from federal withholding taxes if you are not a
United States citizen or resident and certain conditions are met.
See "What is the Federal Tax Status of Unit Holders?"
For Information on Estimated Current Return (if applicable) and
Estimated Long-Term Return including the estimated life of the
portfolio of Series 3 of the Trust, see "Special Information."
Estimated cash flows for Series 3 of the Trust are set forth herein
under "Estimated Cash Flows to Unit Holders."
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.
First Trust (registered trademark)
The date of this Prospectus is April 29, 1994
Page 1
The Public Offering Price per 1,000 Units is equal to the aggregate
offering price of the Securities in the portfolio of a Series
of the Trust divided by the number of Units outstanding multiplied
by 1,000, plus a sales charge of 1.95% of the Public Offering
Price (1.989% of the net amount invested) for Series 3. In addition,
on transactions entered into for settlement after May 6, 1994,
there will be added an amount equal to accrued interest from May
6, 1994 to the date of settlement (five business days after order)
less distributions from the Interest Account subsequent to May
6, 1994. The secondary market Public Offering Price per 1,000
Units will be equal to the aggregate bid price of the Securities
in the portfolio of a Series of the Trust divided by the number
of Units outstanding multiplied by 1,000, plus a sales charge
of 1.95% of the public offering price (1.989% of the net amount
invested) for Series 3. At the opening of business on the Initial
Date of Deposit, April 29, 1994, the Public Offering Price per
1,000 Units would have been $1,008.40 for Series 3. The sales
charge is reduced on a graduated scale for sales involving at
least $500,000. See "How is the Public Offering Price Determined?",
particularly for the method of evaluation.
Each Unit represents an undivided interest in the principal and
net income of a Series of the Trust in the ratio of one Unit for
each $1.00 principal amount of Securities initially deposited
in such Series.
Distributions of interest received by a Series of the Trust will
be paid in cash monthly unless the Unit holder elects to have
them automatically reinvested as described herein. See "How Can
Distributions to Unit Holders be Reinvested?" Monthly distributions
will be made on the last day of each month to all Unit holders
of record on the 15th day of such month, commencing with the First
Distribution on May 31, 1994 to Unit holders of record on May
15, 1994.
The Sponsor, although not obligated to do so, intends to maintain
a market for the Units of Series 3 at prices based upon the aggregate
offering price of the Securities in the portfolio of Series 3
of the Trust during the initial offering period and at prices
based upon the aggregate bid price of the Securities in the portfolio
of Series 3 of the Trust after the initial offering period. In
the absence of such a market, a Unit holder will nonetheless be
able to dispose of the Units through redemption at prices based
upon the bid prices of the underlying Securities. See "How May
Units be Redeemed?"
Page 2 Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-April 29, 1994
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
<S> <C>
General Information
Principal Amount of Securities in the Trust $ 300,000
Number of Units 300,000
Fractional Undivided Interest in the Trust per Unit 1/300,000
Principal Amount (Par Value) of Securities per 1,000 Units $ 1,000.00
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $ 296,621
Aggregate Offering Price Evaluation per 1,000 Units $ 988.74
Sales Charge (1) $ 19.66
Public Offering Price per 1,000 Units (2) $ 1,008.40
Sponsor's Initial Repurchase Price per 1,000 Units (2) $ 988.74
Redemption Price per 1,000 Units (3) $ 987.49
Excess of Public Offering Price per 1,000 Units Over Redemption
Price per 1,000 Units $ 20.91
Excess of Sponsor's Initial Repurchase Price per 1,000 Units Over
Redemption Price per 1,000 Units $ 1.25
</TABLE>
First Settlement Date May 6, 1994
Mandatory Termination Date December 31, 2000
Discretionary Liquidation Amount A Trust may be terminated if
the principal amount thereof
is less than the lower of
$1,000,000 or 10% of the
total principal amount of
Securities deposited in a Trust
during the primary offering
period.
Supervisory Fee Maximum of $.10 per 1,000 Units
outstanding annually. (4)
Evaluator's Fee $.25 per 1,000 Units outstanding
annually.
Evaluations for purposes of sale, purchase or redemption of Units
are made at 4:00 p.m. Eastern time.
[FN]
______________
(1) Sales charges for the Trust, expressed as a percentage of
the Public Offering Price per Unit and in parenthesis as a percentage
of the Aggregate Offering Price Evaluation per 1,000 Units, are
as follows: 1.95% (1.989%) for Series 3.
(2) Anyone ordering Units for settlement after the First Settlement
Date will pay accrued interest from such date to the date of settlement
(normally five business days after order) less distributions from
the Interest Account subsequent to the First Settlement Date.
For purchases settling on the First Settlement Date, no accrued
interest will be added to the Public Offering Price. After the
initial offering period, the Sponsor's Repurchase Price per 1,000
Units, will be determined as described under the caption "Will
There Be a Secondary Market?"
(3) See "How May Units be Redeemed?"
(4) Payable to an affiliate of the Sponsor.
Page 3
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3
The First Trust Special Situations Trust, Series 94
What is the First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 94 is one of
a series of investment companies created by the Sponsor under
the name of The First Trust Special Situations Trust, all of which
are generally similar but each of which is separate and is designated
by a different series number (the "Trust"). This Series consists
of an underlying separate unit investment trust designated as:
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3. The Trust was created under the laws of the State of
New York pursuant to a Trust Agreement (the "Indenture"), dated
the Initial Date of Deposit, with Nike Securities L.P., as Sponsor,
United States Trust Company of New York, as Trustee, Securities
Evaluation Service, Inc., as Evaluator and First Trust Advisors
L.P., as Portfolio Supervisor. On the Initial Date of Deposit,
the Sponsor deposited with the Trustee $300,000 for Series 3 principal
amount of taxable, interest-bearing U.S. Treasury Obligations,
delivery statements relating to contracts for the purchase of
certain such obligations and an irrevocable letter of credit issued
by a financial institution in the amount required for such purchases
(the "Securities"). The Trustee thereafter credited to the account
of the Sponsor 300,000 Units for Series 3 representing the entire
ownership of the Trust at the Initial Date of Deposit, which Units
are being offered hereby.
The objective of each Series of the Trust is to obtain safety
of capital and current monthly distributions of interest through
an investment in a fixed portfolio of taxable U.S. Treasury Securities.
Series 3 of the Trust will be a "laddered" portfolio to provide
flexibility of principal investment with maturities ranging from
1996 to 2000. The Trust may be an appropriate medium for investors
who desire to participate in a portfolio of taxable fixed income
securities offering the safety of capital provided by securities
backed by the full faith and credit of the United States but who
do not wish to invest the minimum amount which is required for
a direct investment in the Securities. Because regular payments
of principal are to be received in accordance with the "laddered"
maturities of the Securities and certain Securities may be sold
under circumstances described herein, and because additional Securities
may be deposited in the Trust as described herein, the Trust is
not expected to retain its present size and composition. Units
will remain outstanding until redeemed upon tender to the Trustee
by any Unit holder (which may include the Sponsor) or until the
termination of a Series of the Trust pursuant to the Indenture.
Many investors in the First Trust U.S. Treasury Securities Trust,
Short-Intermediate Series may benefit from the exemption from
state and local personal income taxes that will pass through the
Trust to Unit holders in all states. The Trust has the additional
purpose of providing income which is exempt from withholding for
U.S. Federal income taxes for non-resident alien investors. A
foreign investor must provide a completed W-8 Form to his financial
representative or the Trustee to avoid withholding on his account.
In selecting the Securities for deposit in the Trust, the following
factors, among others, were considered by the Sponsor: (i) the
types of such securities available; (ii) the prices and yields
of such securities relative to other comparable securities, including
the extent to which such securities are trading at a premium or
at a discount from par; (iii) whether the Securities were issued
after July 18, 1984; and (iv) the maturities of such securities.
See "Portfolio" for information with respect to the Securities
initially selected for deposit in the Trust.
The Portfolio of the Trust may contain Securities which were acquired
at a market discount. Such Securities trade at less than par value
because the interest coupons thereon are lower than interest coupons
on comparable debt securities being issued at currently prevailing
interest rates. If such interest rates for newly issued and otherwise
comparable securities increase, the market discount of previously
issued securities will become greater, and if such interest rates
for newly issued comparable securities decline, the market discount
of previously issued securities will be reduced, other things
being equal. Investors should also note that the value of Securities
purchased at a market discount will increase in value faster than
Securities purchased at a market premium if interest rates decrease.
Conversely, if interest rates increase the value of Securities
purchased at a market discount will decrease faster than Securities
purchased at a premium. Market
Page 4
discount attributable to interest changes does not indicate a
lack of market confidence in the issue. Neither the Sponsor nor
the Trustee shall be liable in any way for any default, failure
or defect in any of the Securities.
The Portfolio of the Trust may contain U.S. Treasury Obligations
which have been stripped of their unmatured interest coupons.
The zero coupon Securities evidence the right to receive a fixed
payment at a future date from the U.S. Government, and are backed
by the full faith and credit of the U.S. Government. Zero coupon
Securities are purchased at a deep discount because the buyer
obtains only the right to a fixed payment at a fixed date in the
future and does not receive any periodic interest payments. The
effect of owning deep discount bonds which do not make current
interest payments (such as the zero coupon Securities) is that
a fixed yield is earned not only on the original investment, but
also, in effect, on all earnings during the life of the discount
obligation. This implicit reinvestment of earnings at the same
rate eliminates the risk of being unable to reinvest the income
on such obligations at a rate as high as the implicit yield on
the discount obligation, but at the same time eliminates the holder's
ability to reinvest at higher rates in the future. For this reason,
the zero coupon Securities are subject to substantially greater
price fluctuations during periods of changing interest rates than
are securities of comparable quality which make regular interest
payments.
The Portfolio of the Trust may contain Securities which were acquired
at a market premium. Such Securities trade at more than par value
because the interest coupons thereon are higher than interest
coupons on comparable debt securities being issued at currently
prevailing interest rates. If such interest rates for newly issued
and otherwise comparable securities decrease, the market premium
of previously issued securities will be increased, and if such
interest rates for newly issued comparable securities increase,
the market premium of previously issued securities will be reduced,
other things being equal. The current returns of securities trading
at a market premium are initially higher than the current returns
of comparably rated debt securities of a similar type issued at
currently prevailing interest rates because premium securities
tend to decrease in market value as they approach maturity when
the face amount becomes payable. Market premium attributable to
interest changes does not indicate market confidence in the issue.
The contracts to purchase Securities delivered to the Trustee
represent an obligation by issuers or dealers to deliver Securities
to the Sponsor for deposit in the Trust. Contracts are typically
settled and the Securities delivered within a few business days
subsequent to the Initial Date of Deposit. The percentage of the
aggregate principal amount of the Securities, if any, relating
to "when, as and if issued" Securities or other Securities with
delivery dates after the date of settlement for a purchase made
on the Initial Date of Deposit is indicated in the Portfolio.
Interest on "when, as and if issued" and delayed delivery Securities
begins accruing to the benefit of Unit holders on their dates
of delivery. Because "when, as and if issued" Securities have
not yet been issued, as of the Initial Date of Deposit the Trust
is subject to the risk that the issuers thereof might decide not
to proceed with the offering of such Securities or that the delivery
of such Securities or the delayed delivery Securities may be delayed.
If such Securities, or replacement securities described below,
are not acquired by the Trust or if their delivery is delayed,
the Estimated Returns shown under "Special Information" may be
reduced.
In the event of a failure to deliver any Securities that have
been purchased for a Series of the Trust under a contract ("Failed
Securities"), the Sponsor is authorized under the Indenture to
direct the Trustee to acquire other specified securities ("Replacement
Securities") to make up the original corpus of the Series of the
Trust. The Replacement Securities must be purchased within 20
days after delivery of the notice of the failed contract and the
purchase price (exclusive of accrued interest) may not exceed
the amount of funds reserved for the purchase of the Failed Securities.
The Replacement Securities (i) must satisfy the criteria previously
described for Securities originally included in a Series of the
Trust, (ii) must maintain as far as practicable the original percentage
relationship between the principal amounts of Securities of specified
interest rates and years of maturities in the Portfolio, and (iii)
shall not be "when, as and if issued" securities. Whenever Replacement
Securities have been acquired for a Series of the Trust, the Trustee
shall, within five days thereafter, notify all Unit holders of
such Series of the Trust of the acquisition of the Replacement
Securities and shall, on the next monthly distribution date which
is more than 30 days thereafter, make a pro rata distribution
Page 5
of the amount, if any, by which the cost to the affected Series
of the Trust of the Failed Securities exceeded the cost of the
Replacement Securities plus accrued interest. Except as provided
below, once the original corpus of the Trust is acquired, the
Trustee will have no power to vary the investment of a Series
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.
If the right of limited substitution described in the preceding
paragraph shall not be utilized to acquire Replacement Securities
in the event of a failed contract, the Sponsor shall refund the
sales charge attributable to such failed contract pro rata to
all Unit holders, and the principal and accrued interest (at the
coupon rate of the relevant Securities to the date the Sponsor
is notified of the failure) attributable to such failed contract
shall be distributed not more than thirty days after the determination
of such failure or at such earlier time as the Trustee in its
sole discretion deems to be in the interest of the Unit holders.
Unit holders should be aware that at the time of the receipt of
such refunded principal they may not be able to reinvest such
principal in other securities at a yield equal to or in excess
of the yield which such principal would have earned for Unit holders
had the Failed Securities been delivered to a Series of the Trust.
The Sponsor may, from time to time, deposit additional Securities
in Series 3 of the Trust (while additional Units are to be offered
to the public) maintaining, as close as practicable, the original
percentage relationship between the principal amounts of Securities
of specified interest rates and years of maturities in the Portfolio
of such Series. With respect to Series 3 of the Trust, the Sponsor
has the limited right to direct the Trustee to purchase additional
securities, which must satisfy the criteria previously described
for Securities originally included in Series 3 of the Trust, with
moneys held in the Principal Account of Series 3 of the Trust
representing the proceeds of Securities sold as described under
the caption "How May Securities be Removed from the Trust?" or
the proceeds of Securities sold which proceeds are not required
for the purpose of redemption of Units.
Each Unit initially offered represents the fractional undivided
interest in a Series of the Trust set forth in the "Summary of
Essential Information." To the extent that any Units are redeemed
by the Trustee, the fractional undivided interest in a Series
of the Trust represented by each unredeemed Unit will increase,
although the actual interest in such Series represented by such
fraction will remain substantially unchanged. However, if additional
Units are issued by Series 3 of the Trust (in connection with
the deposit by the Sponsor of additional Securities), the aggregate
value of Securities in such Series of the Trust will be increased
by amounts allocable to additional Units, and the fractional undivided
interest represented by each Unit in the balance will be decreased.
Units will remain outstanding until redeemed upon tender to the
Trustee by any Unit holder, which may include the Sponsor, or
until the termination of the Indenture.
Special Considerations. The Securities are direct obligations
of the United States and are backed by its full faith and credit
although the Units of the Trust are not so backed. The Securities
are not rated but in the opinion of the Sponsor have credit characteristics
comparable to those of securities rated "AAA" by nationally recognized
rating agencies.
An investment in Units of the Trust should be made with an understanding
of the risks which an investment in fixed rate debt obligations
may entail, including the risk that the value of the Securities
and hence the Units will decline with increases in interest rates.
The high inflation of prior years, together with the fiscal measures
adopted to attempt to deal with it, have resulted in wide fluctuations
in interest rates and, thus, in the value of fixed rate debt obligations
generally. The Sponsor cannot predict whether such fluctuations
will continue in the future.
What is the Rating of the Units?
Standard & Poor's Corporation has rated Units of each Series of
the Trust "AAA." This is the highest rating assigned by Standard
& Poor's Corporation. See "Description of Standard & Poor's Corporation
Rating." The obtaining of this rating by the Trust should not
be construed as an approval of the offering of the Units by Standard
& Poor's Corporation or as a guarantee of the market value of
a Series of the Trust or the Units. Standard & Poor's Corporation
has indicated that this rating is not a recommendation to buy,
hold or sell Units nor does it take into account the extent to
which expenses of a Series of the Trust or sales by the Trust
Page 6
of Securities for less than the purchase price paid by a Series
of the Trust will reduce payment to Unit holders of the interest
and principal required to be paid on such Securities. There is
no guarantee that the "AAA" investment rating with respect to
the Units will be maintained. Standard & Poor's Corporation will
be compensated by the Sponsor for its services in rating Units
of a Series of the Trust.
What are Estimated Current Return and Estimated Long-Term Return?
Debt securities are customarily offered to investors on a "yield
price" basis (as contrasted to a "dollar price" basis) at the
lesser of the price as computed to maturity of such debt security
or to an earlier redemption date. Since Units of each Series of
the Trust are offered on a dollar price basis, the estimated rate
of return on an investment in Units of a Series of the Trust is
stated in terms of "Estimated Current Return and Estimated Long-Term
Return."
At the opening of business on the Initial Date of Deposit, the
Estimated Current Return (if applicable) and the Estimated Long-Term
Return for each Series is as set forth in the "Special Information"
herein. Estimated Current Return is computed by multiplying the
Estimated Net Annual Interest Rate per 1,000 Units by $1,000 and
dividing the result by the Public Offering Price per 1,000 Units.
The Estimated Net Annual Interest Rate per Unit will vary with
changes in fees and expenses of the Trustee and the Evaluator
and with the principal prepayment, redemption, maturity, exchange
or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current
Return will be realized in the future. Estimated Current Return
does not take into account timing of distributions of income and
other amounts (including delays in distribution to Unit Holders),
and it only partially reflects the effects of premiums paid and
discounts realized in the purchase price of Units.
Unlike Estimated Current Return, Estimated Long-Term Return is
a measure of the estimated return to the investor earned over
the estimated life of a Series of the Trust. The Estimated Long-Term
Return represents an average of the yields to estimated retirements
of the Securities in a Series of the Trust and adjusted to reflect
expenses and sales charges.
Both Estimated Current Return (if applicable) and Estimated Long-Term
Return are subject to fluctuation with changes in the compositions
of the Portfolio of a Series of the Trust and changes in market
value of the underlying Securities and changes in fees and expenses,
including sales charges, and therefore can be materially different
than the figures set forth in "Special Information" herein. In
addition, return figures may not be directly comparable to yield
figures used to measure other investments, and since return figures
are based on certain assumptions and variables, the actual returns
received by a Unit holder may be higher or lower. For information
on the estimated cash flows of each Series of the Trust, see "Estimated
Cash Flows to Unit Holders."
In order to acquire certain of the Securities contracted for by
the Sponsor for deposit in a Series of the Trust, it may be necessary
to pay on the settlement dates for delivery of such Securities
amounts covering accrued interest on such Securities which exceed
the amounts furnished by the Sponsor. The Trustee has agreed to
pay for any amounts necessary to cover any such excess and will
be reimbursed therefor, without interest, when funds become available
from interest payments on the particular Securities with respect
to which such payments have been made.
Record Dates for distributions of interest are the fifteenth day
of each month. The Distribution Dates for distributions of interest
are the last day of such month.
How is Accrued Interest Treated?
Accrued interest is the accumulation of unpaid interest on a security
from the last day on which interest thereon was paid. Interest
on Securities in the Trust generally is paid semi-annually, although
the Trust accrues such interest daily. Because of this, the Trust
always has an amount of interest earned but not yet collected
by the Trustee. For this reason, with respect to sales settling
subsequent to the First Settlement Date, the Public Offering Price
of Units will have added to it the proportionate share of accrued
interest to the date
Page 7
of settlement. Unit holders will receive on the next distribution
date of the Trust the amount, if any, of accrued interest paid
on their Units.
In an effort to reduce the amount of accrued interest which would
otherwise have to be paid in addition to the Public Offering Price
in the sale of Units to the public, the Trustee will advance the
amount of accrued interest as of the First Settlement Date and
the same will be distributed to the Sponsor as the Unit holder
of record as of the First Settlement Date. Consequently, the amount
of accrued interest to be added to the Public Offering Price of
Units will include only accrued interest from the First Settlement
Date to the date of settlement less any distributions from the
Interest Account subsequent to the First Settlement Date. See
"Rights of Unit Holders - How are Interest and Principal Distributed?"
Because of the varying interest payment dates of the Securities,
accrued interest at any point in time will be greater than the
amount of interest actually received by the Trust and distributed
to Unit holders. Therefore, there will always remain an item of
accrued interest that is added to the value of the Units. If a
Unit holder sells or redeems all or a portion of his Units, he
will be entitled to receive his proportionate share of accrued
interest from the purchaser of his Units. Since the Trustee has
the use of the funds held in the Interest Account for distributions
to Unit holders and since such Account is non-interest bearing
to Unit holders, the Trustee benefits thereby.
What are the Expenses and Charges?
At no cost to the Trust, the Sponsor has borne all the expenses
of creating and establishing the Trust, including the cost of
the initial preparation, printing and execution of the Indenture
and the certificates for the Units, legal and accounting expenses
of the Trustee. The Sponsor will not receive any fees in connection
with its activities relating to the Trust. However, First Trust
Advisors L.P., an affiliate of the Sponsor, will receive an annual
supervisory fee, which is not to exceed the amount set forth under
"Summary of Essential Information," for providing portfolio supervisory
services for the Trust. The fee may exceed the actual costs of
providing such supervisory services for this Trust, but at no
time will the total amount received for portfolio supervisory
services rendered to 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.
For purposes of evaluation of the Securities in a Series of the
Trust, the Evaluator will receive a fee as indicated in "Summary
of Essential Information." The Trustee pays certain expenses of
a Series of the Trust for which it is reimbursed by such Series
of the Trust. The Trustee will receive for its ordinary recurring
services to each Series of the Trust an annual fee as indicated
in "Special Information." For a discussion of the services performed
by the Trustee pursuant to its obligations under the Indentures,
reference is made to the material set forth under "Rights of Unit
Holders." The Trustee's and Evaluator's fees are payable monthly
on or before each Distribution Date from the Interest Account
to the extent funds are available and then from the Principal
Account. Since the Trustee has the use of the funds being held
in the Principal and Interest Accounts for future distributions,
payment of expenses and redemptions and since such Accounts are
non-interest bearing to 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.
The following additional charges with respect to a Series of the
Trust are or may be incurred by a Series of the Trust: all expenses
(including legal and annual auditing expenses) of the Trustee
incurred in connection with its responsibilities under the Indentures,
except in the event of negligence, bad faith or willful misconduct
on its part; the expenses and costs of any action undertaken by
the Trustee to protect a Series of 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 connections with its acceptance or administration
of a Series of the Trust; indemnification of the Sponsor for any
loss, liability or expense incurred without gross negligence,
bad faith or willful misconduct in acting as Depositor of the
Trust;
Page 8
all taxes and other government charges imposed upon the Securities
or any part of a Series of the Trust (no such taxes or charges
are being levied or made upon termination of a Series of the Trust).
The above expenses and the Trustee's annual fee, when paid or
owing to the Trustee, are secured by a lien on each Series of
the Trust. In addition, the Trustee is empowered to sell Securities
in order to make funds available to pay all these amounts if funds
are not otherwise available in the Interest and Principal Accounts.
Due to the minimum principal amount in which Securities may be
required to be sold, the proceeds of such sales may exceed the
amount necessary for the payment of such fees and expenses.
Unless the Sponsor determines that such an audit is not required,
the Indenture requires the accounts of a Series of the Trust shall
be audited on an annual basis at the expense of such Series by
independent auditors selected by the Sponsor. So long as the Sponsor
is making a secondary market for Units, the Sponsor shall bear
the cost of such annual audits to the extent such cost exceeds
$.50 per 1,000 Units. Unit holders of a Series of the Trust covered
by an audit may obtain a copy of the audited financial statements
from the Trustee upon request.
What is the Tax Status of Unit Holders?
In the opinion of Chapman and Cutler, 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 the Trust under the Internal
Revenue Code (the "Code") and income of such Trust will be treated
as the income of the Unit holders under the Code.
2. Each Unit holder will have a taxable event when the Trust
disposes of a Security, or when the Unit holder redeems or sells
his Units. Unit holders must reduce the tax basis of their Units
for their share of accrued interest received by the Trust, if
any, on Securities delivered after the Unit holders pay for their
Units to the extent that such interest accrued on such Securities
during the period from the Unit holder's settlement date to the
date such Securities are delivered to the Trust and, consequently,
such Unit holders may have an increase in taxable gain or reduction
in capital loss upon the disposition of such Units. Gain or loss
upon the sale or redemption of Units is measured by comparing
the proceeds of such sale or redemption with the adjusted basis
of the Units. If the Trustee disposes of Securities (whether by
sale, payment on maturity, redemption or otherwise), gain or loss
is recognized to the Unit holder. The amount of such gain or loss
is measured by comparing the Unit holder's pro rata share of the
total proceeds from such disposition with the Unit holder's basis
for his or her fractional interest in the asset disposed of. In
the case of a Unit holder who purchases Units, such basis (before
adjustment for earned original issue discount, amortized bond
premium and accrued market discount (if the Unit holder has elected
to include such market discount in income as it accrues), if any)
is determined by apportioning the cost of the Units among each
of the Trust assets ratably according to value as of the date
of acquisition of the Units. The tax cost reduction requirements
of the Code relating to amortization of bond premium may, under
some circumstances, result in the Unit holder realizing a taxable
gain when his Units are sold or redeemed for an amount equal to
or less than his original cost.
3. The Trust may contain certain "zero coupon" Securities (the
"Stripped Treasury Securities") that are treated as bonds that
were originally issued at an original issue discount provided,
pursuant to a Treasury Regulation (the "Regulation") issued on
December 28, 1992, that the amount of original issue discount
determined under Section 1286 of the Code is not less than a "de
minimis" amount as determined thereunder. Because the Stripped
Treasury Securities represent interests in "stripped" U.S. Treasury
bonds, a Unit holder's initial cost for his pro rata portion of
each Stripped Treasury Security held by the Trust (determined
at the time he acquires his Units, in the manner described above)
shall be treated as its "purchase price" by the Unit holder. Original
issue discount is effectively treated as interest for Federal
income tax purposes, and the amount of original issue discount
in this case is generally the difference between the bond's purchase
price and its stated redemption price at maturity. A Unit holder
will be required to include in gross income for each taxable
Page 9
year the sum of his daily portions of original issue discount
attributable to the Stripped Treasury Securities held by the Trust
as such original issue discount accrues and will, in general,
be subject to Federal income tax with respect to the total amount
of such original issue discount that accrues for such year even
though the income is not distributed to the Unit holders during
such year to the extent it is not less than a "de minimis" amount
as determined under the Regulation. To the extent that the amount
of such discount is less than the respective "de minimis" amount,
such discount shall be treated as zero. In general, original issue
discount accrues daily under a constant interest rate method which
takes into account the semi-annual compounding of accrued interest.
In the case of the Stripped Treasury Securities, this method will
generally result in an increasing amount of income to the Unit
holders each year. Unit holders should consult their tax advisers
regarding the Federal income tax consequences and accretion of
original issue discount.
4. The Unit holder's aliquot share of the total proceeds received
on the disposition of, or principal paid with respect to, a Security
held by the Trust will constitute ordinary income (which will
be treated as interest income for most purposes) to the extent
it does not exceed the accrued market discount on such Security
that has not previously been included in taxable income by such
Unit holder. A Unit holder may generally elect to include market
discount in income as such discount accrues. In general, market
discount is the excess, if any, of the Unit holder's pro rata
portion of the outstanding principal balance of a Security over
the Unit holder's initial tax cost for such pro rata portion,
determined at the time such Unit holder acquires his Units. However,
market discount with respect to any Security will generally be
considered zero if it amounts to less than 0.25% of the obligation's
stated redemption price at maturity times the number of years
to maturity. The market discount rules do not apply to Stripped
Treasury Securities because they are stripped debt instruments
subject to special original issue discount rules as discussed
above. If a Unit holder sells his Units, gain, if any, will constitute
ordinary income to the extent of the aggregate of the accrued
market discount on the Unit holder's pro rata portion of each
Security that is held by the Trust that has not previously been
included in taxable income by such Unit holder. In general, market
discount accrues on a ratable basis unless the Unit holder elects
to accrue such discount on a constant interest rate basis. However,
a Unit holder should consult his own tax adviser regarding the
accrual of market discount. The deduction by a Unit holder for
any interest expense incurred to purchase or carry Units will
be reduced by the amount of any accrued market discount that has
not yet been included in taxable income by such Unit holder. In
general, the portion of any interest expense which is not currently
deductible would be ultimately deductible when the accrued market
discount is included in income.
5. The Code provides that "miscellaneous itemized deductions"
are allowable only to the extent that they exceed two percent
of an individual taxpayer's adjusted gross income. Miscellaneous
itemized deductions subject to this limitation under present law
include a Unit holder's pro rata share of expenses paid by the
applicable series of the Trust, including fees of the Trustee
and the Evaluator but does not include amortizable bond premium
on Securities held by the Trust.
"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. 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.
A Unit holder of the Trust who is not a citizen or resident of
the United States or a United States domestic corporation (a "Foreign
Investor") will generally not be subject to U.S. Federal income
taxes, including withholding taxes on amounts distributed from
the Trust (including any original issue discount) on, or any gain
from the sale or other disposition of, his Units or the sale or
disposition of any Securities by the Trustee, provided that (i)
the interest income or gain is not effectively connected with
the conduct by the Foreign Investor of a trade or business within
the United States, (ii) with respect to any gain, the Foreign
Investor (if an individual) is not present in the United States
for 183 days or more during the taxable year, and (iii) the Foreign
Page 10
Investor provides the required certification of his status and
of the matters contained in clauses (i) and (ii) above, and further
provided that the exemption from withholding for U.S. Federal
income taxes for interest on any U.S. Securities shall only apply
to the extent the Securities were issued after July 18, 1984.
Amounts otherwise distributable by the Trust to a Foreign Investor
will generally be subject to withholding taxes under Section 1441
of the Code unless the Unit holder timely provides his financial
representative or the Trustee with a statement that (i) is signed
by the Unit holder under penalties of perjury, (ii) certifies
that such Unit holder is not a United States person, or in the
case of an individual, that he is neither a citizen nor a resident
of the United States, and (iii) provides the name and address
of the Unit holder. The statement may be made, at the option of
the person otherwise required to withhold, on Form W-8 or on a
substitute form that is substantially similar to Form W-8. If
the information provided on the statement changes, the beneficial
owner must so inform the person otherwise required to withhold
within 30 days of such change.
Each Unit holder (other than a foreign investor who has properly
provided the certifications described in the preceding paragraph)
will be requested to provide the Unit holder's taxpayer identification
number to the Trustee and to certify that the Unit holder has
not been notified that payments to the Unit holder are subject
to back-up withholding. If the proper taxpayer identification
number and appropriate certification are not provided when requested,
distributions by the Trust to such Unit holder will be subject
to back-up withholding.
Investment in Series 3 of the Trust may be particularly well suited
for purchase by funds and accounts of individual investors that
are exempt from Federal income taxes such as Individual Retirement
Accounts, Keogh Plans, pension funds and other tax-deferred retirement
plans (see "Why are Investments in a Series of the Trust Suitable
for Retirement Plans?").
The foregoing discussions relate only to Federal income taxes
on distributions by the Trust. Foreign holders should consult
their own tax advisers with respect to the foreign and United
States Federal income tax consequences of ownership of Units.
The Sponsor believes that Unit holders who are individuals will
not be subject to any state personal income taxes on the interest
received by the Trust and distributed to them. However, Unit holders
(including individuals) may be subject to state and local taxes
on any capital gains (or market discount treated as ordinary income)
derived from the Trust and to other state and local taxes (including
corporate income or franchise taxes, personal property or intangible
taxes, and estate or inheritance taxes) on their Units or the
income derived therefrom. In addition, individual Unit holders
(and any other Unit holders which are not subject to state and
local taxes on the interest income derived from the Trust) will
probably not be entitled to a deduction for state and local tax
purposes for their share of the fees and expenses paid by the
Trust, for any amortized bond premium or for any interest on indebtedness
incurred to purchase or carry their Units. Therefore, even though
the Sponsor believes that interest income from the Trust is exempt
from state personal income taxes in all states, Unit holders should
consult their own tax advisers with respect to state and local
taxation of the purchase, ownership and disposition of Units.
It should be remembered that even if distributions are reinvested
through the Distribution Reinvestment Option they are still treated
as distributions for income tax purposes (see "How Can Distributions
to Unit Holders be Reinvested?").
Why are Investments in a Series of the Trust Suitable for Retirement
Plans?
A Series 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 with respect to
the establishment and maintenance of any such plan. Such plans
are offered by brokerage firms and other financial institutions.
The Trust will waive the $1,000 minimum investment requirement
for tax-deferred
Page 11
retirement plan accounts. The minimum investment is $250 for tax-deferred
retirement plans such as IRA accounts. Fees and charges with respect
to such plans may vary.
How Can Distributions to Unit Holders be Reinvested?
Universal Distribution Option. Unit holders may elect participation
in a Universal Distribution Option which permits a Unit holder
to direct the Trustee to distribute principal and interest payments
to any other investment vehicle of which the Unit holder has an
existing account. For example, at a Unit holder's direction, the
Trustee would distribute automatically on the applicable distribution
date interest income, capital gains or principal on the participant's
Units to, among other investment vehicles, a Unit holder's checking,
bank savings, money market, insurance, reinvestment or any other
account. All such distributions, of course, are subject to the
minimum investment and sales charges, if any, of the particular
investment vehicle to which distributions are directed. The Trustee
will notify the participant of each distribution pursuant to the
Universal Distribution Option. The Trustee will distribute directly
to the Unit holder any distributions which are not accepted by
the specified investment vehicle. A participant may at any time,
by so notifying the Trustee in writing, elect to terminate his
participation in the Universal Distribution Option and receive
directly future distributions on his Units.
PUBLIC OFFERING
How is the Public Offering Price Determined?
Units are offered at the Public Offering Price. During the initial
offering period, the Public Offering Price is determined by adding
to the Evaluator's determination of the aggregate offering price
of the Securities in the Trust, including any money in the Principal
Account other than money required to redeem tendered Units, a
sales charge of 1.95% of the Public Offering Price (which is equivalent
to 1.989% of the net amount invested) for Series 3 of the Trust.
During the initial offering period, the Sponsor's Repurchase Price
is equal to the Evaluator's determination of the aggregate offering
price of the Securities in the Trust. For secondary market sales
after the completion of the initial offering period, the Public
Offering Price is based on the Evaluator's determination of the
aggregate bid price of the Securities in the Trust, including
any money in the Principal Account other than money required to
redeem tendered Units, and also includes a sales charge of 1.95%
of the Public Offering Price (which is equivalent to 1.989% of
the net amount invested) for Series 3 of the Trust. Also added
to the Public Offering Price is a proportionate share of interest
accrued but unpaid on the Securities after the First Settlement
Date to the date of settlement of Units (see "The First Trust
U.S. Treasury Securities Trust, Short-Intermediate, Series 3-How
is Accrued Interest Treated?").
The sales charge during the initial offering period is reduced
by a discount as indicated below for volume purchases:
<TABLE>
<CAPTION>
Dollar Amount Discount
of Transaction Expressed as a
at Public Percentage of
Offering Price Public Offering Price
______________ _____________________
<S> <C>
$ 250,000 to 499,999 .05%
$ 500,000 to 999,999 .10%
$1,000,000 or more .25%
</TABLE>
Any such reduced sales charge, including pursuant to a Letter
of Intent described below, shall be the responsibility of the
selling Underwriter or dealer. This reduced sales charge structure
will apply on all purchases of Units in the Trust by the same
person on any one day from any one Underwriter or dealer. For
purposes of calculating the applicable sales charge, purchases
of Units in the Trust will not be aggregated with any other purchases
by the same person of units in any series of tax-exempt or other
unit investment trusts sponsored by Nike Securities L.P. with
the exception of purchases of Units of Global Corporate Income
Trust, Intermediate Series, which will be aggregated with purchases
of Units in the Trust. Additionally, Units purchased in the name
of the spouse of a purchaser or in the name of a child of such
purchaser under 21 years of age will be deemed for the purposes
of calculating the applicable sales charge to be additional
Page 12
purchases by the purchaser. The reduced sales charges will also
be applicable to a trustee or other fiduciary purchasing securities
for a single trust or single fiduciary account.
On the Initial Date of Deposit, the Public Offering Price per
1,000 Units with respect to each Series of the Trust is as indicated
in the "Summary of Essential Information." In addition to fluctuations
in the amount of interest accrued but unpaid on Securities in
a Series of the Trust, the Public Offering Price at any time during
the initial offering period will vary from the Public Offering
Price stated herein in accordance with fluctuations in the prices
of the underlying Securities.
The aggregate price of the Securities in a Series of the Trust
is determined by Securities Evaluation Service, Inc. acting as
evaluator (the "Evaluator") on the basis of bid prices or offering
prices as is appropriate, (1) on the basis of current market prices
for the Securities obtained from dealers or brokers who customarily
deal in Securities comparable to those held by the Trust; (2)
if such prices are not available for any of the Securities, on
the basis of current market prices for comparable securities;
(3) by determining the value of the Securities by appraisal; or
(4) by any combination of the above.
During the initial public offering period, a determination of
the aggregate price of the Securities in each Series of the Trust
is made by the Evaluator on an offering price basis, as of the
close of trading on the New York Stock Exchange on each day on
which it is open, effective for all sales made subsequent to the
last preceding determination. For secondary market purposes, the
Evaluator will be requested to make such a determination, on a
bid price basis, as of the close of trading on the New York Stock
Exchange (4:00 p.m. Eastern time) on each day on which it is open,
effective for all sales, purchases or redemptions made subsequent
to the last preceding determination.
The Public Offering Price of the Units during the initial offering
period is equal to the offering price per 1,000 Units of the Securities
in a Series of the Trust plus the applicable sales charge. After
the completion of the initial offering period, the secondary market
Public Offering Price will be equal to the bid price per Unit
of the Securities in a Series of the Trust plus the applicable
sales charge. The offering price of Securities in a Series of
the Trust was greater than the bid price of such Securities on
the Initial Date of Deposit by the aggregate amount and the amount
per 1,000 Units indicated in the "Portfolio."
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. Cash,
if any, made available to the Sponsor prior to the date of settlement
for the purchase of Units may be used in the Sponsor's business
and may be deemed to be a benefit to the Sponsor, subject to the
limitations of the Securities Exchange Act of 1934. Delivery of
Certificates representing Units so ordered will be made five business
days following such order or shortly thereafter. Initial transaction
statements for Units held in uncertificated form representing
Units so ordered will be issued to the registered owner of such
Units within two business days of the issuance of such Units.
See "Rights of Unit Holders - How May Units be Redeemed?" for
information regarding the ability to redeem Units ordered for
purchase.
How are Units Distributed?
During the initial offering period (i) for Units issued on the
Initial Date of Deposit and (ii) for additional Units issued after
such date as additional Securities are deposited by the Sponsor,
Units will be distributed to the public at the then current Public
Offering Price. The initial offering period may be up to approximately
360 days. During such period, the Sponsor may deposit additional
Securities in the Trust and create additional Units. Units reacquired
by the Sponsor during the initial offering period (at prices based
upon the aggregate underlying value of the Securities in the Trust
plus or minus a pro rata share of cash, if any, in the Income
and Capital Accounts of such Trust) may be resold at the then
current Public Offering Price. Upon the termination of the initial
offering period, unsold Units created or reacquired during the
initial offering period will be sold or resold at the then current
Public Offering Price.
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
Page 13
It is the intention of the Sponsor to qualify Units of the Trust
for sale in a number of states. Sales initially will be made to
dealers and others at prices which represent a concession or agency
commission of 1.10% of the Public Offering Price on Series 3 of
the Trust, but the Sponsor reserves the right to change the amount
of the concession to dealers and others from time to time. Certain
commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge paid
by these customers is retained by or remitted to the banks in
the amounts indicated in the second preceding sentence. 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. Volume concessions of an additional 0.10% of the Public
Offering Price will be given to any broker/dealer or bank, who
reach cumulative firm sales for purchases made from the Sponsor
of at least $1,000,000 from the initial date of the offering through
May 29, 1994. After a firm has met the minimum $1,000,000 volume
level, volume concessions will be given on all trades originated
from or by that firm, including those placed prior to reaching
the $1,000,000 level, and will continue to be given during the
entire initial offering period.
What are the Profits of the Sponsor?
The Underwriters, including the Sponsor, will receive a gross
sales commission equal to 1.95% of the Public Offering Price (equivalent
to 1.989% of the net amount invested) for Series 3 of the Trust.
The Sponsor will receive from the other Underwriters the excess
of such gross sales commission over 1.95% of the Public Offering
Price for Series 3 of the Trust. Although any reduced sales charge
shall be the responsibility of the selling Underwriter or dealer,
the Sponsor will reimburse Underwriters or dealers for discounts
made available to purchasers as described in "How is the Public
Offering Price Determined?" See "Underwriting" for information
regarding additional concessions available to Underwriters, dealers
and others. In addition, the Sponsor may be considered to have
realized a profit or the Sponsor may be considered to have sustained
a loss, as the case may be for each Trust, in the amount of any
difference between the cost of the Securities to each Series of
the Trust and the cost of such Securities to the Sponsor. See
"Portfolio" under the heading "Profit or (Loss) to Sponsor" for
the Sponsor's profit or loss on the Initial Date of Deposit. During
the initial offering period, the Underwriters also may realize
profits or sustain losses from the sale of Units to other Underwriters
or as a result of fluctuations after the Initial Date of Deposit
in the offering prices of the Securities and hence in the Public
Offering Price received by the Underwriters.
In maintaining a market for the Units, the Sponsor will also realize
profits or sustain losses in the amount of any difference between
the price at which Units are purchased (based on the bid prices
of the Securities in a Series of the Trust) and the price at which
Units are resold (which price is also based on the bid prices
of the Securities in such Series and includes a sales charge of
1.95% for Series 3 of the Trust) or redeemed. The secondary market
public offering price of Units may be greater or less than the
cost of such Units to the Sponsor.
Will There be a Secondary Market?
After the initial offering period, although it is not obligated
to do so, the Sponsor intends to maintain a market for the Units
and continuously to offer to purchase Units at prices, subject
to change at any time, based upon the aggregate bid price of the
Securities in the portfolio of a Series of the Trust plus interest
accrued to the date of settlement. To the extent that a secondary
market is maintained during the initial offering period with respect
to Series 3 of the Trust, the prices at which Units of a Series
of the Trust will be repurchased will be based upon the aggregate
offering side evaluation of the Securities in the portfolio of
the Series of the Trust. The aggregate bid prices of the underlying
Securities in each Series of the Trust, upon which the Sponsor's
Repurchase Price and the Redemption Price are based, are expected
to be less than the related aggregate offering prices (which is
the evaluation method used during the initial public offering
period). 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
Page 14
of Units at such prices. IF A UNIT HOLDER WISHES TO DISPOSE OF
HIS UNITS, HE SHOULD INQUIRE OF THE SPONSOR AS TO CURRENT MARKET
PRICES PRIOR TO MAKING A TENDER FOR REDEMPTION TO THE TRUSTEE.
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 five
business days following such order or shortly thereafter. Certificates
are transferable by presentation and surrender to the Trustee
properly endorsed or accompanied by a written instrument or instruments
of transfer. Certificates to be redeemed must be properly endorsed
or accompanied by a written instrument or instruments of transfer.
A Unit holder must sign exactly as his name appears on the face
of the certificate with the signature guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP")
or such other signature guaranty program in addition to, or in
substitution for, STAMP, as may be accepted by the Trustee. In
certain instances the Trustee may require additional documents
such as, but not limited to, trust instruments, certificates of
death, appointments as executor or administrator or certificates
of corporate authority. 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 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 a Series 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 issues and any adverse
claims to which such Units are or may be subject or a statement
that there are no such liens, restrictions or adverse claims;
and the date the transfer was registered. Uncertificated Units
are transferable through the same procedures applicable to Units
evidenced by certificates (described above), except that no certificate
need be presented to the Trustee and no certificate will be issued
upon transfer unless requested by the Unit holder. A Unit holder
may at any time request the Trustee to issue certificates for
Units.
Although no such charge is now made or contemplated, a Unit holder
may be required to pay $2.00 to the Trustee per certificate reissued
or transferred, and to pay any governmental charge that may be
imposed in connection with each such transfer or exchange. For
new certificates issued to replace destroyed, stolen or lost certificates,
the Unit holder may be required to furnish indemnity satisfactory
to the Trustee and pay such expenses as the Trustee may incur.
Mutilated certificates must be surrendered to the Trustee for
replacement.
How are Interest and Principal Distributed?
The pro rata share of cash in the Principal Account will be computed
as of the fifteenth day of each month and distributions to the
Unit holders as of such Record Date will be made on the last day
of such month. Proceeds from the disposition of any of the Securities
or amounts representing principal on the Securities received after
such Record Date and prior to the following Distribution Date
will be held in the Principal Account and not distributed until
the next Distribution Date. The Trustee is not required to pay
interest on funds held in the Principal or Interest Account (but
may itself earn interest thereon and therefore benefits from the
use of such funds) nor to make a distribution from the Principal
Account unless the amount available for distribution shall equal
at least $1.00 per 1,000 Units.
The Trustee will credit to the Interest Account all interest received
by a Series of the Trust, including moneys representing penalties
for the failure to make timely payments on Securities or liquidated
damages for default or breach of any condition or term of the
Securities and that part of the proceeds of any disposition of
Securities which represents accrued interest. Other receipts will
be credited to the Principal Account. Persons
Page 15
who purchase Units between a Record Date and a Distribution Date
will receive their first distribution on the second Distribution
Date after the purchase.
As of the fifteenth day of each month, the Trustee will deduct
from the Interest Account and, to the extent funds are not sufficient
therein, from the Principal Account, amounts necessary to pay
the expenses of a Series of the Trust. The Trustee also may withdraw
from said accounts such amounts, if any, as it deems necessary
to establish a reserve for any governmental charges payable out
of a Series of the Trust. Amounts so withdrawn shall not be considered
a part of the assets of such Series of the Trust until such time
as the Trustee shall return all or any part of such amounts to
the appropriate account. In addition, the Trustee may withdraw
from the Interest Account and the Principal Account such amounts
as may be necessary to cover redemption of Units by the Trustee.
Record Dates for monthly distributions will be the fifteenth day
of each month. Distributions will be made on the last day of such
month. Distributions for an IRA, Keogh, pension fund or other
tax-deferred retirement plan will not be sent to the individual
Unit holder; these distributions will go directly to the custodian
of the plan to avoid the penalties associated with premature withdrawals
from such accounts.
What Reports Will Unit Holders Receive?
The Trustee shall furnish Unit holders in connection with each
distribution a statement of the amount of interest, if any, and
the amount of other receipts, if any, which are being distributed,
expressed in each case as a dollar amount per 1,000 Units. Within
a reasonable time after the end of each calendar year, the Trustee
will furnish to each person who at any time during the calendar
year was a Unit holder of record, a statement as to (1) the Interest
Account: interest received (including amounts representing interest
received upon any disposition of Securities, penalties for the
failure to make timely payments on Securities or liquidated damages
for default or breach of any condition or term of the Securities),
deductions for payment of applicable taxes and for fees and expenses
of a Series of the Trust, redemption of Units and the balance
remaining after such distributions and deductions, expressed both
as a total dollar amount and as a dollar amount representing the
pro rata share per 1,000 Units outstanding on the last business
day of such calendar year; (2) the Principal Account: payments
of principal on Securities, the dates of disposition of any Securities
and the net proceeds received therefrom (excluding any portion
representing interest), deduction for payment of applicable taxes
and for fees and expenses of a Series of the Trust, redemptions
of Units, and the balance remaining after such distributions and
deductions expressed both as a total dollar amount and as a dollar
amount per 1,000 Units; (3) the Securities held and the number
of Units outstanding on the last business day of such calendar
year; (4) the Redemption Price per 1,000 Units based upon the
last computation thereof made during such calendar year; (5) the
dollar amounts actually distributed during such calendar year
from the Interest Account and from the Principal Account, separately
stated; and (6) such other information as the Trustee may deem
appropriate. Unit holders of Units in uncertificated form shall
receive no less frequently than once each year a dated written
statement containing the name, address and taxpayer identification
number, if any, of the registered owner, the number of Units registered
in the name of the registered owner on the date of the statement
and certain other information, that will be provided as required
under applicable law.
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 furnished to it by the Evaluator.
How May Units be Redeemed?
A Unit holder may redeem all or a portion of his 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 will be charged. On the seventh
calendar day following such tender, or if the seventh calendar
day is not a business day, on the first business day prior thereto,
the Unit holder will be entitled to receive
Page 16
in cash an amount for each Unit equal to the Redemption Price
per Unit next computed after receipt by the Trustee of such tender
of Units. The "date of tender" is deemed to be the date on which
Units are received by the Trustee, except that as regards Units
received after the close of trading on the New York Stock Exchange
(4:00 p.m. Eastern time), the date of tender is the next day on
which such 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 canceled.
Accrued interest to the settlement date paid on redemption shall
be withdrawn from the Interest Account or, if the balance therein
is insufficient, from the Principal Account. All other amounts
paid on redemption shall be withdrawn from the Principal Account.
The Redemption Price per Unit (as well as the secondary market
Public Offering Price) will be determined on the basis of the
bid price of the Securities in a Series of the Trust while the
Public Offering Price of Units during the initial offering period
will be determined on the basis of the offering price of the Securities
as of the close of trading on the New York Stock Exchange (4:00
p.m. Eastern time) on the date any such determination is made.
At the opening of business on the Initial Date of Deposit the
Public Offering Price per Unit (which is based on the offering
prices of the Securities in the Trust and includes the sales charge)
exceeded the Unit value at which Units could have been redeemed
(based upon the current bid prices of the Securities in each Series
of the Trust) by the amount per 1,000 Units set forth in the "Summary
of Essential Information." The Redemption Price per 1,000 Units
is the pro rata share of each Unit determined by the Trustee on
the basis of (1) the cash on hand in the Trust or moneys in the
process of being collected, (2) the value of the Securities in
a Series of the Trust based on the bid prices of the Securities
and (3) interest accrued on the Securities, less (a) amounts representing
taxes or other governmental charges payable out of a Series of
the Trust and (b) the accrued expenses of a Series of the Trust.
The Evaluator may determine the value of the Securities in a Series
of the Trust (1) on the basis of current bid prices of the Securities
obtained from dealers or brokers who customarily deal in securities
comparable to those held by a Series of the Trust, (2) on the
basis of bid prices for securities comparable to any securities
for which bid prices are not available, (3) by determining the
value of the Securities by appraisal, or (4) by any combination
of the above.
The difference between the bid and offering prices of such Securities
may be expected to average 1/16 to 1/8 of 1% of the principal
amount of such Securities. Therefore, the price at which Units
may be redeemed could be less than the price paid by the Unit
holder. At the opening of business on the Initial Date of Deposit
the aggregate current offering price of such Securities exceeded
the Redemption Price (based upon current bid prices of such Securities)
by the aggregate amount and the amount per 1,000 Units indicated
in the "Portfolio."
The Trustee is empowered to sell underlying Securities in order
to make funds available for redemption. To the extent that Securities
are sold, the size and diversity of the Trust will be reduced.
Such sales may be required at a time when Securities would not
otherwise be sold and might result in lower prices than might
otherwise be realized.
The right of redemption may be suspended and payment postponed
for any period during which the New York Stock Exchange is closed,
other than for customary weekend and holiday closings, or during
which the Securities and Exchange Commission determines that trading
on that Exchange is restricted or an emergency exists, as a result
of which disposal or evaluation of the Securities is not reasonably
practicable, or for such other periods as the Securities and Exchange
Commission may by order permit.
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 the close of business
on the second succeeding 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.
Page 17
The offering price of any Units acquired by the Sponsor will be
in accord with the Public Offering Price described in the then
currently effective prospectus describing such Units. Any profit
or loss resulting from the resale or redemption of such Units
will belong to the Sponsor.
How May Securities be Removed from the Trust?
The Sponsor is empowered, but not obligated, to direct the Trustee
to dispose of Securities in the event certain events occur that
adversely affect the value of Securities including default in
payment of interest or principal, default in payment of interest
or principal of other obligations guaranteed or backed by the
full faith and credit of the United States of America, institution
of legal proceedings, default under other documents adversely
affecting debt service, decline in price or the occurrence of
other market or credit factors.
If any default in the payment of principal or interest on any
Security occurs and if the Sponsor fails to instruct the Trustee
to sell or to hold such Security within thirty days after notification
by the Trustee to the Sponsor of such default, the Trustee may,
in its discretion, sell the defaulted Security and not be liable
for any depreciation or loss thereby incurred.
The Trustee is also empowered to sell, for the purpose of redeeming
Units tendered by any Unit holder, and for the payment of expenses
for which funds may not be available, such of the Securities in
a list furnished by the Sponsor as the Trustee in its sole discretion
may deem necessary. Except as stated under "What is the First
Trust U.S. Treasury Securities Trust, Short-Intermediate, Series?",
the acquisition by the Trust of any securities other than the
Securities initially deposited is prohibited.
INFORMATION AS TO SPONSOR, TRUSTEE AND EVALUATOR
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 $8 billion in First Trust unit investments
trusts have been deposited. The Sponsor's employees include a
team of professionals with many years of experience in the unit
investment trust industry. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and Securities Investor
Protection Corporation and has its principal offices at 1001 Warrenville
Road, Lisle, Illinois 60532; telephone number (708) 241-4141.
As of December 31, 1993, the total partners' capital of Nike Securities
L.P. was $12,743,032 (audited). (This paragraph relates only to
the Sponsor and not to the Trust or to any series thereof or to
any other Underwriter. The information is included herein only
for the purpose of informing investors as to the financial responsibility
of the Sponsor and its ability to carry out its contractual obligations.
More detailed financial information will be made available by
the Sponsor upon request.)
Who is the Trustee?
The Trustee is United States Trust Company of New York with its
principal place of business at 45 Wall Street, New York, New York
10005 and its unit investment trust offices at 770 Broadway, New
York, New York 10003. Unit holders who have questions regarding
the Fund may call the Customer Service Help Line at 1-800-682-7520.
The Trustee is a member of the New York Clearing House Association
and is subject to supervision and examination by the Comptroller
of the Currency, the Federal Deposit Insurance Corporation and
the Board of Governors of the Federal Reserve System.
The Trustee, whose duties are ministerial in nature, has not participated
in the selection of the Securities. For information relating to
the responsibilities of the Trustee under the Indenture, reference
is made to the material set forth under "Rights of Unit Holders."
The Trustee and any successor trustee may resign by executing
an instrument in writing and filing the same with the Sponsor
and mailing a copy of a notice of resignation to all Unit holders.
Upon receipt of such notice,
Page 18
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 Trustee shall be under no liability to Unit holders
for taking any action or for refraining from taking any action
in good faith pursuant to the Indenture, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad
faith, gross negligence (ordinary negligence in the case of the
Trustee) or reckless disregard of their obligations and duties.
The Trustee shall not be liable for depreciation or loss incurred
by reason of the sale by the Trustee of any of the Securities.
In the event of the failure of the Sponsor to act under the Indenture,
the Trustee may act thereunder and shall not be liable for any
action taken by it in good faith under the Indenture.
The Trustee shall not be liable for any taxes or other governmental
charges imposed upon or in respect of the Securities or upon the
interest thereon or upon it as Trustee under the Indenture or
upon or in respect of a Series of the Trust which the Trustee
may be required to pay under any present or future law of the
United States of America or of any other taxing authority having
jurisdiction. In addition, the Indenture contains other customary
provisions limiting the liability of the Trustee.
If the Sponsor shall fail to perform any of its duties under the
Indenture or become incapable of acting or become 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 Securities Evaluation Service, Inc., 531 East
Roosevelt Road, Suite 200, Wheaton, Illinois 60187. 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 amendment
is (1) to cure any ambiguity or to correct or supplement any provision
of the
Page 19
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),
provided that the Indenture is not amended to increase the number
of Units issuable thereunder or to permit the deposit or acquisition
of securities either in addition to or in substitution for any
of the Securities initially deposited in a Series of the Trust,
except for the substitution of Replacement Securities for Failed
Securities or the purchase of additional Securities pursuant to
the Indenture. In the event of any amendment, the Trustee is obligated
to notify promptly all Unit holders of the substance of such amendment.
A Series of the Trust may be liquidated at any time by consent
of 100% of the Unit holders or by the Trustee when the principal
amount of the Securities owned by such Series as shown by any
evaluation, is less than the lower of $1,000,000 or 10% of the
total principal amount of the Securities initially deposited in
such Series, or in the event that Units not yet sold aggregating
more than 60% of the Units initially deposited are tendered for
redemption by the Underwriters, including the Sponsor. If a Series
of the Trust is liquidated because of the redemption of unsold
Units by the Underwriters, the Sponsor will refund to each purchaser
of Units the entire sales charge paid by such purchaser. The Indenture
will terminate upon the redemption, sale or other disposition
of the last Security held thereunder, but in no event shall it
continue beyond December 31, 2000. In the event of termination,
written notice thereof will be sent by the Trustee to all Unit
holders. Within a reasonable period after termination, the Trustee
will sell any Securities remaining in a Series of the Trust, and,
after paying all expenses and charges incurred by a Series of
the Trust, will distribute to each Unit holder (including the
Sponsor if it then holds any Units), upon surrender for cancellation
of his Units, his pro rata share of the balances remaining in
the Interest and Principal Accounts, all as provided in the Indenture.
Legal Opinions
The legality of the Units offered hereby will be passed upon by
Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois
60603, as counsel for the Sponsor. Carter, Ledyard & Milburn,
2 Wall Street, New York, New York 10005, will act as counsel for
the Trustee.
Experts
The statement of net assets, including the portfolio, 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, independent auditors, as set forth in their
report thereon appearing elsewhere herein and in the Registration
Statement, and is included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
UNDERWRITING
On the Initial Date of Deposit, the Underwriters of the Trust
became the owners of the Units of the Trust and entitled to the
benefits thereof, as well as the risks inherent therein.
<TABLE>
<CAPTION>
Name Address Units
____ _______ _____
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532 200,000
Underwriters*
Fidelity Capital Markets, A division 161 Devonshire Street D5, Boston, MA 02110 100,000
of National Financial Services _______
Corporation
300,000
=======
</TABLE>
[FN]
________________
* Each Underwriter has indicated an intention to purchase a
total of 1,000,000 Units from the Sponsor either on the Initial
Date of Deposit or during the initial offering period.
The Agreement Among Underwriters provides that a public offering
of the Units will be made at the Public Offering Price described
in the Prospectus. Units may also be sold to dealers and others
at prices representing a concession or agency commission of 1.10%
of the Public Offering Price per Unit for primary and secondary
Page 20
market sales for Series 3 of the Trust. See "Public Offering -
How is the Public Offering Price Determined?" for additional dealer
concessions for volume purchases. However, resales of Units 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.
Certain Underwriters have agreed to underwrite additional Units
of Series 3 of the Trust as they become available. In addition
to the concessions described in "Public Offering-What are the
Profits of the Sponsor?", Underwriters may be eligible for additional
concessions as set forth in the following table:
<TABLE>
<CAPTION>
Dollar Amount Underwriting Concession
of Units as a Percentage of the
Underwritten Public Offering Price
____________ _______________________
<S> <C>
$1,000,000 or more 1.20%
</TABLE>
Total underwriting concession is based on the number of Units
an Underwriter has indicated its intention to purchase on the
Initial Date of Deposit.
From time to time the Sponsor may implement programs under which
Underwriters and dealers of the Trust may receive nominal awards
from the Sponsor for each of their registered representatives
who have sold a minimum number of UIT Units (for this purpose,
1,000 Units of the First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3 equals one UIT Unit) during a specified
time period. In addition, at various times the Sponsor may implement
other programs under which the sales force of an Underwriter or
dealer may be eligible to win other nominal awards for certain
sales efforts, or under which the Sponsor will reallow to any
such Underwriter or dealer that sponsors sales contests or recognition
programs conforming to criteria established by the Sponsor, or
participates in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales
generated by such person at the public offering price during such
programs. Also, the Sponsor in its discretion may from time to
time pursuant to objective criteria established by the Sponsor
pay fees to qualifying Underwriters or dealers for certain services
or activities which are primarily intended to result in sales
of Units of the Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of the Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that the Trust will receive from the Units
sold.
A comparison of estimated current returns and estimated long-term
returns with the returns on various investments is one element
to consider in making an investment decision. The Sponsor may
from time to time in its advertising and sales materials compare
the then current estimated returns on the Trust and returns over
specified periods on other similar Trusts sponsored by Nike Securities
L.P. with returns on other taxable investments such as corporate
bonds, bank CDs and money market accounts or money market funds,
each of which has investment characteristics that may differ from
those of the Trust. Bank CDs and money market accounts, for example,
are insured by an agency of the federal government. Money market
accounts and money market funds provide stability of principal,
but pay interest at rates that vary with the condition of the
short-term debt market. The investment characteristics of the
Trust are described more fully elsewhere in this Prospectus.
Page 21
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3
<TABLE>
<CAPTION>
Special Information Monthly
___________________ _______
<S> <C>
Calculation of Estimated Net Annual Unit Income
Estimated Annual Interest Income per 1,000 Units $ 60.25
Less: Estimated Annual Expense per 1,000 Units $ 2.21
Estimated Net Annual Interest Income per 1,000 Units $ 58.04
Calculation of Interest Distribution per 1,000 Units
Estimated Net Annual Interest Income per 1,000 Units $ 58.04
Divided by 12 $ 4.84
Estimated Daily Rate of Net Interest Accrual per 1,000 Units $ .161222
Estimated Current Return Based on Public Offering Price (1) 5.76%
Estimated Long-Term Return Based on Public Offering Price (1) 6.10%
CUSIP 33734W 459
Trustee's Annual Fee $1.40 per 1,000 Units outstanding annually,
exclusive of expenses of the Trust,
commencing April 29, 1994.
</TABLE>
Distributions
Estimated first distribution of $1.45 per 1,000 Units will be
paid on May 31, 1994 to Unit holders of record on May 15, 1994
(The First General Record Date).
Subsequent distributions will be paid on the last day of each
month to holders of record of Units on the fifteenth day of such
month.
No distributions need be made from the Principal Account if the
balance therein is less than $1.00 per 1,000 Units.
[FN]
______________
(1) The Estimated Current Return is computed by multiplying the
Estimated Net Annual Interest Income per 1,000 Units by $1,000
and dividing the result by the Public Offering Price per 1,000 Units.
The Estimated Net Annual Interest Income per Unit will vary with
changes in fees and expenses of the Trustee, Sponsor and Evaluator
and with the principal prepayment, redemption, maturity, exchange
or sale of Securities while the Public Offering Price will vary
with changes in the offering price of the underlying Securities;
therefore, there is no assurance that the present Estimated Current
Return indicated above will be realized in the future. The Estimated
Long-Term Return is calculated using a formula which (1) takes
into consideration, and determines and factors in the relative
weightings of, the market values, yields, (which takes into account
the amortization of premiums and the accretion of discounts) and
maturity of all of the Securities in the Trust and (2) takes into
account the expenses and sales charge associated with each Unit
of such Series. Since the market values and the expenses of the
Trust will change, there is no assurance that the present Estimated
Long-Term Return as indicated above will be realized in the future.
The Estimated Current Return and Estimated Long-Term Return are
expected to differ because the calculation of the Estimated Long-Term
Return reflects the date and estimated amount of principal returned
while the Estimated Current Return calculation includes only the
Net Annual Interest Income and Public Offering Price. Neither
rate reflects the true return to Unit holders which is lower because
neither includes the effect of certain delays in distributions
to Unit holders. These figures are based on per 1,000 Unit cash
flows. Cash flows will vary with changes in fees and expenses,
with the principal prepayment, redemption, maturity, exchange
or sale of the underlying Securities. For the Estimated Cash Flows
for this Series, see "Estimated Cash Flows to Unit Holders."
Page 22
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3 Trust Summary
The First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3 consists of five obligations. Each of the Securities
represents approximately 20% of the aggregate principal amount
of the Securities in the Trust. See "What is the First Trust Special
Situations Trust?" All of the U.S. Treasury Securities in Series
3 consist of maturities of approximately 2-5.5 years which are
"laddered" to return approximately 20% of the Unit holders' principal
annually, commencing in 1996.
Page 23
Portfolio
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3
The First Trust Special Situations Trust, Series 94
At the Opening of Business on the Initial Date of Deposit
April 29, 1994
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities Rate Maturity Sponsor (1) to Trust (2) to Sponsor
________________ _______ ________ ___________ ____________ __________
<S> <C> <C> <C> <C> <C>
$ 60,000 5.500% 4/30/1996 $ 59,757 $ 59,766 $ 9
60,000 6.375 6/30/1997 60,314 60,341 27
60,000 5.375 5/31/1998 57,638 57,680 42
60,000 6.500 4/30/1999 59,648 59,697 49
60,000 6.375 1/15/2000 59,081 59,137 56
________________ __________ __________ __________
$ 300,000 $ 296,438 $ 296,621 $ 183
================ ========== ========== ==========
</TABLE>
[FN]
(1) All Securities on the Initial Date of Deposit are represented
by the Sponsor's contracts to purchase such Securities. Such contracts
were acquired by the Sponsor on April 28, 1994. Interest will
begin accruing to the benefit of Unit holders from May 6, 1994,
the First Settlement Date of the Trust.
(2) The cost of the Securities to the Trust represents the offering
side evaluation of the Securities as determined by Securities
Evaluation Service, Inc. The offering side evaluation is greater
than the current bid side evaluation of the Securities which is
the basis on which Redemption Price per Unit is determined. The
aggregate value based on the bid side evaluation at the opening
of business on the Initial Date of Deposit was $296,246, which
is $375 ($1.25 per 1,000 Units; .125% of the aggregate principal
amount) lower than the aggregate cost of the Securities to the
Trust based on the offering side evaluation.
Page 24
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3
We have audited the accompanying statement of net assets, including
the portfolio, of the First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3, comprising The First Trust Special
Situations Trust, Series 94, as of the opening of business on
April 29, 1994. 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 at the opening of business on April 29, 1994. 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 U.S. Treasury Securities Trust, Short-Intermediate,
Series 3, comprising the First Trust Special Situations Trust,
Series 94, at the opening of business on April 29, 1994 in conformity
with generally accepted accounting principles.
ERNST & YOUNG
Chicago, Illinois
April 29, 1994
Page 25
Statement of Net Assets
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3
The First Trust Special Situations Trust, Series 94
At the Opening of Business on the Initial Date of Deposit
April 29, 1994
<TABLE>
<CAPTION>
NET ASSETS
<S> <C>
Delivery statements relating to Sponsor's contracts to purchase
Securities (1)(2) $ 296,621
Accrued interest on underlying Securities (2)(3) 3,685
__________
300,306
Less distributions payable (3) 3,685
__________
Net assets $ 296,621
==========
Outstanding Units of fractional undivided interest 300,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C>
Cost to investors (4) $ 302,520
Less gross underwriting commissions (4) 5,899
__________
Net assets $ 296,621
==========
</TABLE>
[FN]
NOTES TO STATEMENT OF NET ASSETS
(1) The aggregate offering price of the Securities of the Trust
listed under "Portfolio" on the Initial Date of Deposit herein
and their cost to the Trust are the same. The offering price shown
above has been determined by Securities Evaluation Service, Inc.,
certain shareholders of which are officers of the Sponsor.
(2) Pursuant to delivery statements relating to contracts to purchase
Securities, an irrevocable letter of credit held by the Trustee
has been deposited in the Trust as collateral. The amount of available
letter of credit and the amount expected to be utilized for the
Trust is shown below. The amount expected to be utilized is (a)
the cost to the Trust of the principal amount of the Securities
to be purchased, (b) accrued interest on those Securities to the
Initial Date of Deposit and (c) accrued interest on those Securities
from the Initial Date of Deposit to the expected dates of delivery
of the Securities.
<TABLE>
<CAPTION>
Accrued Accrued
Aggregate Interest to Interest to
Letter of Credit Offering Initial Expected
To be Price of Date of Dates of
Series Available Utilized Securities Deposit Delivery
______ _________ ________ __________ __________ ___________
<S> <C> <C> <C> <C> <C>
First Trust U.S. Treasury
Securities Trust,
Short-Intermediate, Series 3 $500,000 $300,545 $296,621 $3,685 $ 239
</TABLE>
(3) The Trustee will advance to the Trust the amount of accrued
interest to May 6, 1994, the First Settlement Date of the Trust, for
distribution to the Sponsor as the Unit Holder of record.
(4) The aggregate cost to investors (exclusive of accrued interest)
and the aggregate gross underwriting commissions of 1.95% for
the Trust are computed assuming no reduction of sales charge for
quantity purchases.
Page 26
DESCRIPTION OF STANDARD & POOR'S CORPORATION RATING*
* As described by Standard & Poor's Corporation.
A Standard & Poor's Corporation's rating on the units of an investment
trust (hereinafter referred to collectively as "units" and "trust")
is a current assessment of creditworthiness with respect to the
investments held by such trust. This assessment takes into consideration
the financial capacity of the issuers and of any guarantors, insurers,
lessees or mortgagors with respect to such investments. The assessment,
however, does not take into account the extent to which trust
expenses or portfolio asset sales for less than the trust's purchase
price will reduce payment to the Unit holder of the interest and
principal required to be paid on the portfolio assets. In addition,
the rating is not a recommendation to purchase, sell, or hold
units, inasmuch as the rating does not comment as to market price
of the units or suitability for a particular investor.
Trusts rated "AAA" are composed exclusively of assets that are
rated "AAA" by Standard & Poor's or, have, in the opinion of Standard
& Poor's, credit characteristics comparable to assets rated "AAA,"
or certain short-term investments. Standard & Poor's defines its
"AAA" rating for such assets as the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is very strong.
Page 27
Estimated Cash Flows to Unit Holders
The table below sets forth the per Unit estimated monthly distributions
of interest and distributions of principal to Unit holders. The
table assumes no changes in the current interest rates, no exchanges,
redemptions, or sales of the underlying securities prior to their
maturity or expected retirement date. To the extent the foregoing
assumptions change, actual distributions will vary.
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3
<TABLE>
<CAPTION>
Monthly
_______
Estimated Estimated Estimated
Interest Principal Total
Date (Each Month) Distribution Distribution Distribution
_________________ ____________ ____________ ____________
<S> <C> <C> <C>
May 1994 1.45 1.45
June 1994-April 1996 4.84 4.84
May 1996 4.84 200.00 204.84
June 1996-June 1997 3.94 3.94
July 1997 3.94 200.00 203.94
August 1997-May 1998 2.91 2.91
June 1998 2.91 200.00 202.91
July 1998-April 1999 2.03 2.03
May 1999 2.03 200.00 202.03
June 1999-January 2000 0.98 0.98
February 2000 0.98 200.00 200.98
</TABLE>
Page 28
This page is intentionally left blank.
Page 29
This page is intentionally left blank.
Page 30
This page is intentionally left blank.
Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information 3
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3
The First Trust Special Situations Trust, Series 94:
What is the First Trust Special Situations Trust? 4
What is the Rating of the Units? 6
What are Estimated Current Return and Estimated
Long-Term Return? 7
How is Accrued Interest Treated? 7
What are the Expenses and Charges? 8
What is the Tax Status of Unit Holders? 9
Why are Investments in a Series of the Trust
Suitable for Retirement Plans? 11
How Can Distributions to Unit Holders be
Reinvested? 12
Public Offering:
How is the Public Offering Price Determined? 12
How are Units Distributed? 13
What are the Profits of the Sponsor? 14
Will There be a Secondary Market? 14
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 15
How are Interest and Principal Distributed? 15
What Reports Will Unit Holders Receive? 16
How May Units be Redeemed? 16
How May Units be Purchased by the Sponsor? 17
How May Securities be Removed from the Trust? 18
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 18
Who is the Trustee? 18
Limitations on Liabilities of Sponsor and Trustee 19
Who is the Evaluator? 19
Other Information:
How May the Indenture be Amended or
Terminated? 19
Legal Opinions 20
Experts 20
Underwriting 20
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 3 22
Portfolio 24
Report of Independent Auditors 25
Statement of Net Assets 26
Description of Bond Ratings 27
Estimated Cash Flows to Unit Holders 28
__________
</TABLE>
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.
FIRST TRUST
(registered trademark)
First Trust
U.S. Treasury Securities Trust,
Short-Intermediate,
Series 3
First Trust (registered trademark)
1001 Warrenville Road, Suite 300
Lisle, Illinois 60532
1-708-241-4141
Trustee:
United States Trust Company
of New York
770 Broadway
New York, New York 10003
1-800-682-7520
PLEASE RETAIN THIS PROSPECTUS
FOR FUTURE REFERENCE
April 29, 1994
Page 32
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. THIS REGISTRATION STATEMENT ON FORM S-6 COMPRISES
THE FOLLOWING PAPERS AND DOCUMENTS:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
S-1
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 94, hereby identifies The First Trust Special Situations
Trust, Series 4 Great Lakes Growth and Treasury Trust, Series 1
and The First Trust Special Situations Trust, Series 18 Wisconsin
Growth and Treasury Securities Trust, Series 1, 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
94, 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
April 29, 1994.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 94
By NIKE SECURITIES L.P.
Depositor
By Carlos E. Nardo
Senior 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 ) April 29, 1994
General Partner of )
Nike Securities L.P. )
)
)
) Carlos E. Nardo
)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 Special Situations Trust, Series 18 (File No.
33-42683) 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 April 29, 1994 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 33-53189) and related Prospectus of The First Trust Special
Situations Trust, Series 94.
ERNST & YOUNG
Chicago, Illinois
April 29, 1994
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 SECURITIES EVALUATION SERVICE, INC.
The consent of Securities Evaluation Service, Inc. 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.
CONSENT OF STANDARD & POOR'S CORPORATION
The consent of Standard & Poor's Corporation to the use of
its name in the Prospectus included in the Registration Statement
is filed as Exhibit 4.2 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 24 and
certain subsequent Series effective January 23, 1992 among
Nike Securities L.P., as Depositor, United States Trust
Company of New York as Trustee, Securities Evaluation
Service, Inc., as Evaluator, and Nike Financial Advisory
Services L.P. as Portfolio Supervisor (incorporated by
reference to Amendment No. 1 to Form S-6 [File
No. 33-45903] filed on behalf of The First Trust Special
Situations Trust, Series 24).
1.1.1 Form of Trust Agreement for Series 94 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.
1.2 Copy of Certificate of Limited Partnership of Nike
Securities L.P. (incorporated by reference to Amendment
No. 1 to Form S-6 [File No. 33-42683] filed on behalf of
The First Trust Special Situations Trust, Series 18).
1.3 Copy of Amended and Restated Limited Partnership
Agreement of Nike Securities L.P. (incorporated by
reference to Amendment No. 1 to Form S-6 [File No. 33-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
1.4 Copy of Articles of Incorporation of Nike Securities
Corporation, the general partner of Nike Securities L.P.,
Depositor (incorporated by reference to Amendment No. 1 to
Form S-6 [File No. 33-42683] filed on behalf of The First
Trust Special Situations Trust, Series 18).
1.5 Copy of By-Laws of Nike Securities Corporation, the
general partner of Nike Securities L.P., Depositor
(incorporated by reference to Amendment No. 1 to Form S-6
[File No. 33-42683] filed on behalf of The First Trust
Special Situations Trust, Series 18).
1.6 Underwriter Agreement (incorporated by reference to
Amendment No. 1 to Form S-6 [File No. 33-42755] filed on
behalf of The First Trust Special Situations Trust, Series
19).
2.1 Copy of Certificate of Ownership (included in Exhibit
1.1 filed herewith on page 2 and incorporated herein by
reference).
S-5
3.1 Opinion of counsel as to legality of securities being
registered.
3.2 Opinion of counsel as to Federal income tax status of
securities being registered.
3.3 Opinion of counsel as to New York income tax status of
securities being registered.
3.4 Opinion of counsel as to advancement of funds by
Trustee.
4.1 Consent of Securities Evaluation Service, Inc.
4.2 Consent of Standard & Poor's Corporation.
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-
42683] filed on behalf of The First Trust Special
Situations Trust, Series 18).
S-6
Exhibit 1.1.1
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
TRUST AGREEMENT
Dated: April 29, 1994
This Trust Agreement 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, 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 24" effective January 23, 1992 (herein called
the "Standard Terms and Conditions of Trust"), and such provisions as are
set forth in full 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 Portfolio
Supervisor agree as follows:
PART I
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the Provisions of Part II hereof, all the provisions
contained in the Standard Terms and Conditions of Trust are herein
incorporated by reference in their entirety and shall be deemed to be a
part of this instrument as fully and to the same extent as though said
provisions had been set forth in full in this instrument.
PART II
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby agreed to:
(a) The Securities defined in Section 1.01(5) listed in
Schedule A hereto have been deposited in trust under this Trust
Agreement.
(b) The fractional undivided interest in and ownership of the
Trust Fund represented by each Unit for a Trust is the amount set forth
under the captions "Summary of Essential Information - Fractional
Undivided Interest in the Trust per Unit" in the Prospectus.
(c) The number of units in a Trust referred to in Section 2.03
is set forth under the caption "Summary of Essential Information -
Number of Units" in the Prospectus.
(d) For each Trust the First General Record Date and the
amount of the second distribution of funds from the Interest Account
shall be the record date for the Interest Account and the amount set
forth under "Trust Summary-Initial Distribution" for such Trust in the
Prospectus.
(e) For each Trust the "First Settlement Date" is the date set
forth under "Summary of Essential Information-First Settlement Date"
for such Trust in the Prospectus.
PART III
Notwithstanding any provision to the contrary contained in the
Standard Terms and Conditions of Trust and in lieu of the receipt of
Certificates evidencing ownership of Units of the Fund, the Sponsor or
any Underwriter of the Fund listed under the caption "Underwriting" in
the Prospectus, at its option, may elect that Units of the Fund owned by
it be reflected by book entry on the books and records of the Trustee.
For all purposes such Sponsor or Underwriter shall be deemed the owner of
such Units as if a Certificate evidencing ownership of Units of the Fund
had actually been issued by the Trustee. The Units reflected by book
entry on the books and records of the Trustee may be transferable by the
registered owner of such Units by written instrument in form satisfactory
to the Trustee. The registered owner of Units reflected by book entry on
the books and records of the Trustee shall have the right at any time to
obtain Certificates evidencing ownership of such Units.
PART IV
(a) Section 1.01(5) of the Standard Terms and Conditions of Trust
is hereby amended to delete the words "such of the interest-bearing
corporate debt obligations (the "Corporate Bonds") and U.S. Treasury
bonds" in the first sentence thereof and inserting in their place the
words "U.S. Treasury bonds (the "Bonds")."
(b) All references in the Standard Terms and Conditions of Trust to
"Corporate Bonds" are hereby amended to refer to "Bonds".
(c) Section 1.01(12), Section 1.01(13) and Section 2.05 of the
Standard Terms and Conditions of Trust are hereby deleted in their
entirety.
(d) The sixth paragraph of Section 5.02 of the Standad Terms and
Conditions of Trust is hereby amended by deleting the third and fourth
sentences thereof.
(e) All references in the Standard Terms and Conditions of Trust to
the "Insurer", "Insurance" or "Permanent Insurance" are hereby deleted.
(f) The reference to "20%" in the first sentence of Section 6.01(g)
of the Standard Terms and Conditions of Trust is hereby amended to read
"the lower of $1,000,000 or 10%".
(g) 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."
(h) The first paragraph of Section 3.05 shall be amended to read as
follows:
"The Trustee, as of the "First Settlement Date", as defined in Part
II of the Trust Agreement, shall advance from its own funds and
shall pay to the Depositor the amount of interest accrued to such
date on the Bonds deposited in the respective Trusts. The Trustee,
as of the "First Settlement Date," as defined in Part II of the
Trust Agreement, shall also advance to the Trust from its own funds
and distribute to the Depositor the amount specified in Part II of
the Trust Agreement, which is the amount by which the Trustee's fee
is reduced in respect of interest accrued on "when-issued" Bonds and
on Contract Bonds delivered to the Trustee subsequent to the First
Settlement Date pursuant to Section 6.04. The Trustee shall be
entitled to reimbursement, without interest, for such advancements
from interest received by the Trust. Subsequent distributions shall
be made as hereinafter provided."
-3-
(i) Notwithstanding anything to the contrary in Section 3.05,
Certificateholders may not elect to receive distributions on a semiannual
basis.
-4-
IN WITNESS WHEREOF, Nike Securities L.P., United States Trust
Company of New York, Securities Evaluation Service, Inc. and First Trust
Advisors L.P. have each caused this Trust Agreement to be executed and
the respective corporate seal to be hereto affixed and attested (if
applicable) by authorized officers; all as of the day, month and year
first above written.
NIKE SECURITIES L.P.,
Depositor
By Carlos E. Nardo
Senior Vice President
UNITED STATES TRUST COMPANY OF NEW YORK,
Trustee
(SEAL) By Thomas Porrazzo
Vice President
Attest:
Desmond O'Regan
Assistant Secretary
SECURITIES EVALUATION SERVICE, INC.,
Evaluator
(SEAL) By James R. Couture
President
Attest:
James G. Prince
Vice President and
Assistant Secretary
FIRST TRUST ADVISORS L.P.,
Portfolio Supervisor
By Carlos E. Nardo
Senior Vice President
-5-
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
(Note: Incorporated herein and made a part hereof is the "Portfolio" as
set forth for each Trust in the Prospectus.)
- -8-
Exhibit 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
April 29, 1994
Nike Securities L.P.
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 94
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations Trust,
Series 94 in connection with the preparation, execution and
delivery of a Trust Agreement dated April 29, 1994 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,
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. 33-53189) 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:jlg
Exhibit 3.2
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
April 29, 1994
Nike Securities L.P.
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
United States Trust Company of New York
770 Broadway
New York, New York 10003
Re: The First Trust Special Situations Trust, Series 94
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 94 (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 April 29, 1994 (the "Indenture")
between 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.
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 as 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 Treasury Obligations and
may include "stripped" U.S. Treasury bonds (the "Stripped
Treasury Securities") (collectively "the 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 but will be governed by the provisions of
Subchapter J (relating to Trusts) of Chapter 1, Internal
Revenue Code of 1986 (the "Code").
(ii) Each Unit holder will be considered the owner of a
pro rata portion of each Security in the Trust and will be
considered to have received the interest on his pro rata
portion of each Security when interest on such Security is
received by the Trust. Each Unit holder will also be
required to include in taxable income for federal income tax
purposes, original issue discount with respect to his
interest in any Security held by the Trust which was issued
with original issue discount at the same time and in the
same manner as though the Unit holder were the direct owner
of such interest. Original issue discount will be treated
as zero with respect to the Securities if it is "de minimis"
within the meaning of Section 1273 of the Code and, based
upon a Treasury Regulation (the "Regulation") which was
issued on December 28, 1992 regarding the stripped bond
rules of the Code, original issue discount with respect to a
Stripped Treasury Security will be treated as zero if it is
"de minimis" as determined thereunder.
(iii) Each Unit holder will be considered the owner
of a pro rata portion of each asset in the Trust. The total
cost to a Unit holder of his Units, including sales charges,
is allocated among his pro rata portion of each asset held
by the Trust (in proportion to the fair market values
thereof on the date the Unit holder purchases Units) in
order to determine his initial tax basis for his pro rata
portion of each asset held by the Trust. The Stripped
Treasury Securities are treated as bonds that were
originally issued at an original issue discount. Because
the Stripped Treasury Securities represent interests in
"stripped" U.S. Treasury bonds, a Unit holder's initial cost
for his pro rata portion of each Stripped Treasury Security
held by the Trust (determined at the time he acquires his
units, in the manner described above) shall be treated as
its "purchase price" by the Unit holder. Under the special
rules relating to stripped bonds, original issue discount
applicable to the Stripped Treasury securities is
effectively treated as interest for Federal income tax
purposes and the amount of original issue discount in this
case is generally the difference between the bond's purchase
price and its stated redemption price at maturity. A Unit
holder will be required to include in gross income for each
taxable year the sum of his daily portions of original issue
discount attributable to the Stripped Treasury Securities
held by the Trust as such original issue discount accrues
and will in general be subject to Federal income tax with
respect to the total amount of such original issue discount
that accrues for such year even though the income is not
distributed to the Unit holders during such year to the
extent is greater than or equal to the "de minimis" amount
described below. To the extent the amount of such discount
is less than the respective "de minimis" amount, such
discount shall be treated as zero. In general, original
issue discount accrues daily under a constant interest rate
method which takes into account the semi-annual compounding
of accrued interest. In the case of Stripped Treasury
Securities this method will generally result in an
increasing amount of income to the Unit holders each year.
A Unit holder's tax basis for his pro rata portion of each
asset held by the Trust may be subject to adjustment as
discussed in paragraph (v) hereof.
(iv) The Unit holder's aliquot share of the total
proceeds received on the disposition of, or principal paid
with respect to a Security held by the Trust will constitute
ordinary income, (which will be treated as interest income
for most purposes) to the extent it does not exceed the
accrued market discount on such Security that has not
previously been included in taxable income by such Unit
holder. A Unit holder may generally elect to include market
discount in income as such discount accrues. In general,
market discount is the excess, if any, of the Unit holder's
pro rata portion of the outstanding principal balance of a
Security over the Unit holder's initial tax cost for such
pro rata portion, determined at the time such Unit holder
acquires his Units. However, market discount with respect
to any Security will generally be considered zero if it
amounts to less than 0.25% of the obligation's stated
redemption price at maturity times the number of years to
maturity. The market discount rules do not apply to
Stripped Treasury Securities because they are stripped debt
instruments subject to special original issue discount rules
as discussed above. If a Unit holder sells his Units, gain,
if any, will constitute ordinary income to the extent of the
aggregate of the accrued market discount on the Unit
holder's pro rata portion of each Security that is held by
the Trust that has not previously been included in taxable
income by such Unit holder. In general, market discount
accrues on a ratable basis unless the Unit holder elects to
accrue such discount on a constant interest rate basis.
However, no opinion is expressed herein regarding the
precise manner in which market discount accrues. The
deduction by a Unit holder for any interest expense incurred
to purchase or carry Units will be reduced by the amount of
any accrued market discount that has not yet been included
in taxable income by such Unit holder. In general, the
portion of any interest expense which is not currently
deducible would be ultimately deductible when the accrued
market discount is included in income.
(v) As discussed in paragraph (iv) hereof, if a Unit
holder sells his Units, gain, if any, will constitute
ordinary income to the extent of the aggregate of the
accrued market discount (which has not previously been
included in such Unit holder' taxable income) with respect
to the Unit holder's pro rata portion of each Security held
by the Trust. Any other gains (or losses) will be capital
gains (or losses) except in the case of a dealer or a
financial institution, and will be long-term if the Unit
holder has held his Units for more than one year. A Unit
holder will recognize taxable gains ( or losses) (a) upon
redemption or sale of his Units, (b) if the Trustee disposes
of an asset or (c) upon receipt by the Trustee of payments
of principal on the Securities. The amount of any such gain
(or loss) is measured by comparing the Unit holder's pro
rata share of the total proceeds from the transaction with
his adjusted tax basis in his Units or his pro rata interest
in the asset as the case may be, and then reducing such
gain, if any, to the extent characterized as ordinary income
resulting from accrued market discount as discussed above.
A Unit holder's tax basis in his Units and his pro rata
portion of each of the underlying assets of the Trust may be
adjusted to reflect the accrual of market discount (if the
Unit holder has elected to include such discount in income
as it accrues), original issue discount and amortized bond
premium, if any. The tax cost reduction requirements of
said Code relating to amortization of bond premium may,
under some circumstances, result in the Unit holder
realizing a taxable gain when his Units are sold or redeemed
for an amount equal to his original cost. In addition, Unit
holders must reduce the tax basis of their Units and their
pro rata portion of the underlying assets of the Trust for
their share of accrued interest received by the Trust, if
any, on Securities delivered after the Unit holders pay for
their Units to the extent that such interest accrued on such
Securities during the period from the Unit holder's
settlement date to the date such Securities are delivered to
the Trust and, consequently, such Unit holders may have an
increase in taxable gain or reduction in capital loss upon
the disposition of such Units or such Securities.
(vi) The Code provides that "miscellaneous itemized
deductions" are allowable only to the extent that they
exceed two percent of an individual taxpayer's adjusted
gross income. Miscellaneous itemized deductions subject to
this limitation under present law include fees of the
Trustee and the Evaluator but does not include amortizable
bond premium on Securities held by the Trust.
The Code provides a complex set of rules governing the
accrual of original issue discount, including special rules
relating to "stripped" debt instruments such as the Stripped
Treasury Securities. These rules provide that original issue
discount generally accrues on the basis of a constant compound
interest rate. Special rules apply if the purchase price of a
Treasury Obligation exceeds its original issue price plus the
amount of original issued discount which would have previously
accrued, based upon its issue price (its "adjusted issue price").
Similarly, these special rules would apply to a Unit holder if
the tax basis of his pro rata portion of a Treasury Obligation
issued with original issue discount exceeds his pro rata portion
of its adjusted issue price. The application of these rules will
also vary depending on the value of the Treasury Obligations on
the date a Unit holder acquires his Units, and the price a Unit
holder pays for his Units. In addition, as discussed above, the
Regulation provides that the amount of original issue discount on
a stripped bond is considered zero if the actual amount of
original issue discount on such stripped bond as determined under
Section 1286 of the Code is less that a "de minimis" amount,
which, the Regulation provides, is the product of (i) 0.25
percent of the stated redemption price at maturity and (ii) the
number of full years from the date the stripped bond is purchased
(determined separately for each new purchaser thereof) to the
final maturity date of the bond.
For taxable years beginning after December 31, 1986 and
before January 1, 1996, certain corporations may be subject to
the environmental tax (the "Superfund Tax") imposed by Section
59A of the Code. Interest received from, and gains recognized
from the disposition of, a Security by the Trust or the sale of
Units by a Unit holder will be included by such corporations in
the computation of the Superfund Tax.
A Unit holder who is a foreign investor (i.e., an investor
other than a U.S. citizen or resident or U.S. corporation,
partnership, estate or trust) will not generally be subject to
United States Federal income taxes, including withholding taxes
on interest income (including any original issue discount) on, or
any gain from the sale or other disposition or redemption of a
Security held by the Trust or the sale of his Units provided that
all of the following conditions are met:
(i) the interest income or gain is not effectively
connected with the conduct by the foreign investor of a
trade or business within the United States;
(ii) with respect to any gain, the foreign investor
(if an individual) is not present in the United States for
183 days or more during his or her taxable year;
(iii) the Security was issued after July 18, 1984; and
(iv) the foreign investor provides all certification
which may be required of his status and of the matters
contained in clauses (i) and (ii) above.
We hereby consent to the filing of this opinion as an
exhibit to the Registration Statement (File No. 33-53189)
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/jlg
Exhibit 3.3
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
April 29, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special
Situations Trust, Series 94
First Trust U.S. Treasury
Securities Trust, Short-
Intermediate, Series 3
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series 94
First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 3
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
94, First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 3 (the "Trust"), which will be established
under a Standard Terms and Conditions of Trust dated January 23,
1992, and a related Trust Agreement dated as of today
(collectively, the "Indenture"), among Nike Securities L.P., as
Depositor (the "Depositor"); Securities Evaluation Service, Inc.,
as Evaluator; First Trust Advisors L.P., as Portfolio Supervisor
and United States Trust Company of New York, 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. 33-53189) 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
Exhibit 3.4
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
April 29, 1994
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 94
First Trust U.S. Treasury
Securities Trust, Short-
Intermediate, Series 3
770 Broadway - 6th Floor
New York, New York 10003
Attention: Mr. C. William Steelman
Executive Vice President
Re: The First Trust Special Situations Trust, Series
94
First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 3
Dear Sirs:
We are acting as counsel for United States Trust Company of
New York (the "Trust Company") in connection with the execution
and delivery of Standard Terms and Conditions of Trust dated
January 23, 1992, and a related Trust Agreement, dated today's
date (collectively, the "Indenture"), among Nike Securities L.P.,
as Depositor (the "Depositor"); Securities Evaluation Service,
Inc., as Evaluator; First Trust Advisors L.P., as Portfolio
Supervisor; and the Trust Company, as Trustee (the "Trustee"),
establishing The First Trust Special Situations Trust, Series 94,
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 3 (the "Trust"), and the execution by the Trust Company,
as Trustee under the Indenture, of a certificate or certificates
evidencing ownership of units (such certificate or certificates
and such aggregate units being herein called "Certificates" and
"Units"), each of which represents an undivided interestin the
Trust, which consists of taxable U.S. Treasury Securities
(including confirmations of contracts for the purchase of certain
obligations 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
obligations), such obligations being defined in the Indenture as
Bonds and listed in the Schedule to the Indenture.
We have examined the Indenture, the Closing Memorandum dated
today's date, a specimen Certificate, and such other documents as
we have deemed necessary in order to render this opinion. Based
on the foregoing, we are of the opinion that:
1. The Trust Company 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 Indenture has been duly executed and delivered by the
Trust Company and, assuming due execution and delivery by the
other parties thereto, constitutes the valid and legally binding
obligation of the Trust Company.
3. The Certificates are in proper form for execution and
delivery by the Trust Company, as Trustee.
4. The Trust Company, as Trustee, has duly executed and
delivered to or upon the order of the Depositor a Certificate or
Certificates evidencing ownership of the Units, registered in the
name of the Depositor. Upon receipt of confirmation of the
effectiveness of the registration statement for the sale of the
Units filed with the Securities and Exchange Commission under the
Securities Act of 1933, the Trustee may deliver such other
Certificates, in such names and denominations as the Depositor
may request, to or upon the order of the Depositor as provided in
the Closing Memorandum.
5. The Trust Company, as Trustee, may lawfully under the New
York Banking Law advance to the Trust amounts as may be necessary
to provide monthly interest distributions of approximately equal
amounts, and be reimbursed, without interest, for any such
advances from funds in the interest account on the ensuing record
date, as provided in the Indenture.
In rendering the foregoing opinion, we have not considered,
among other things, whether the Bonds have been duly authorized
and delivered.
Very truly yours,
Carter, Ledyard & Milburn
Exhibit 4.1
SES
Securities Evaluation Service, Inc.
Suite 200
531 E. Roosevelt Road
Wheaton, Illinois 60187
April 29, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 94
Gentlemen:
We have examined the Registration Statement File No. 33-
53189 for the above captioned fund. We hereby consent to the use
in the Registration Statement of the references to Securities
Evaluation Service, Inc. as evaluator.
You are hereby authorized to file a copy of this letter with
the Securities and Exchange Commission.
Sincerely,
Securities Evaluation Service, Inc.
James R. Couture
President
Exhibit 4.2
Standard & Poor's Ratings Group
Municipal Finance Department
25 Broadway
New York, New York 10004-1064
April 29, 1994
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust Series 94,
First Trust U.S. Treasury Securities Trust, Short-
Intermediate Series 3
(SEC Reg. #33-53189)
Pursuant to your request for a Standard & Poor's rating on
the units of the above captioned trust, we have reviewed the
information presented to us and have assigned an 'AAA' rating to
the units in the trust. The rating is a direct reflection of the
portfolio of the trust, which will be composed solely of U.S.
Treasury Debt Obligations fully guaranteed as to principal and
interest by the full faith and credit of the United States.
You have permission to use the name of Standard & Poor's
Ratings Group and the above-assigned ratings in connection with
your dissemination of information relating to these units,
provided that it is understood that the rating is not "market"
rating nor a recommendation to buy, hold, or sell the units of
the trust. Further, it should be understood the rating does not
take into account the extent to which fund expenses or portfolio
asset sales for less than the fund's purchase price will reduce
payment to the unit holders of the interest and principal
required to be paid on the portfolio assets. S&P reserves the
right to advise its own clients, subscribers, and the public of
the ratings. S&P relies on the sponsor and its counsel,
accountants, and other experts for the accuracy and completeness
of the information submitted in connection with the rating. S&P
does not independently verify the truth or accuracy of any such
information.
This letter evidences our consent to the use of the name of
Standard & Poor's Ratings Group and the above-assigned rating in
the registration statement or prospectus relating to the units or
the trust. However, this letter should not be construed as a
consent by us, within the meaning of Section 7 of the Securities
Act of 1933, to the use of the name of Standard & Poor's Ratings
Group in connection with the ratings assigned to the securities
contained in the trust. You are hereby authorized to file a copy
of this letter with the Securities and Exchange Commission.
Please be certain to send us three copies of your final
prospectus as soon as it becomes available. Should we not
receive them within a reasonable time after the closing or should
they not conform to the representations made to us, we reserve
the right to withdraw the rating.
We are pleased to have had the opportunity to be of service
to you. Our bill will be sent to you within one month. If we
can be of further help, please do not hesitate to call upon us.
Sincerely,
