Registration No. 33-57157
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 113
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 January 5, 1995 at 2:00 p.m. pursuant to Rule
487.
*Previously paid
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
Cross-Reference Sheet
(Form N-8B-2 Items required by Instructions as
to the Prospectus in Form S-6)
FORM N-8B-2 ITEM NUMBER FORM S-6 HEADING IN PROSPECTUS
I. ORGANIZATION AND GENERAL INFORMATION
1. (a) Name of trust Prospectus front cover
(b) Title of securities issued Summary of Essential
Information
2. Name and address of each depositor Information as to
Sponsor, Trustee and
Evaluator
3. Name and address of trustee Information as to
Sponsor, Trustee and
Evaluator
4. Name and address of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
5. State of organization of trust The First Trust
Special Situations
Trust
6. Execution and termination of Other Information
trust agreement
7. Changes of name *
8. Fiscal year *
9. Litigation *
II. GENERAL DESCRIPTION OF THE TRUST AND SECURITIES OF THE TRUST
10. (a) Registered or bearer Public Offering
securities
(b) Cumulative or distributive The First Trust
securities Special Situations
Trust
(c) Redemption Rights of Unitholders
(d) Conversion, transfer, etc. Rights of Unitholders
(e) Periodic payment plan *
(f) Voting rights Rights of Unitholders
(g) Notice of certificateholders Other Information
(h) Consents required Rights of Unitholders;
Other Information
(i) Other provisions The First Trust
Special Situations
Trust
11. Types of securities comprising The First Trust
units Special
Situations Trust
Schedule of
Investments
12. Certain information regarding
periodic payment certificates *
13. (a) Load, fees, expenses, etc. Summary of Essential
Information; Public
Offering; The First
Trust Special
Situations Trust
(b) Certain information regarding
periodic payment certificates *
(c) Certain percentages Summary of Essential
Information; The
First Trust Special
Situations Trust;
Public Offering
(d) Certain other fees, etc.
payable by holders Rights of Units
Holders
(e) Certain profits receivable
by depositor, principal,
underwriters, trustee or The First Trust
affiliated persons Special
Situations Trust
(f) Ratio of annual charges *
to income
14. Issuance of trust's securities Rights of Unit Holders
15. Receipt and handling of payments
from purchasers *
16. Acquisition and disposition of
underlying securities The First Trust
Special Situations
Trust; Rights of Unit
Holders;
17. Withdrawal or redemption The First Trust
Special Situations
Trust; Public
Offering; Rights of
Unit Holders
18. (a) Receipt, custody and Rights of Unit Holders
disposition of income
(b) Reinvestment of distributions Rights of Unit Holders
(c) Reserves or special funds Information as to
Sponsor, Trustee and
Evaluator
(d) Schedule of distributions *
19. Records, accounts and reports Rights of Unit Holders
20. Certain miscellaneous provisions
of trust agreement
(a) Amendment Other Information
(b) Termination Other Information
(c) and (d) Trustee, removal Information as
and successor to Sponsor, Trustee
and Evaluator
(e) and (f) Depositor, removal Information as
and successor to Sponsor, Trustee
and Evaluator
21. Loans to security holders *
22. Limitations on liability The First Trust
Special Situations
Trust;
Information as to
Sponsor, Trustee
and Evaluator
23. Bonding arrangements Contents of
Registration
Statement
24. Other material provisions *
of trust agreement
III. ORGANIZATION, PERSONNEL AND AFFILIATED PERSONS OF DEPOSITOR
25. Organization of depositor Information as to
Sponsor, Trustee and
Evaluator
26. Fees received by depositor *
27. Business of depositor Information as to
Sponsor, Trustee and
Evaluator
28. Certain information as to
officials and affiliated *
persons of depositor
29. Voting securities of depositor *
30. Persons controlling depositor *
31. Payment by depositor for certain
services rendered to trust *
32. Payment by depositor for certain
other services rendered to trust *
33. Remuneration of employees of
depositor for certain services
rendered to trust *
34. Remuneration of other persons
for certain services rendered *
to trust
IV. DISTRIBUTION AND REDEMPTION
35. Distribution of trust's Public Offering
securities by states
36. Suspension of sales of trust's
securities *
37. Revocation of authority to *
distribute
38. (a) Method of distribution Public Offering
(b) Underwriting agreements Public Offering
(c) Selling agreements Public Offering
39. (a) Organization of principal Information as
underwriters to Sponsor, Trustee
and Evaluator
(b) N.A.S.D. membership of
principal underwriters Information as to
Sponsor, Trustee and
Evaluator
40. Certain fees received by See Items 13(a) and
principal underwriters 13(e)
41. (a) Business of principal Information as to
underwriters Sponsor, Trustee and
Evaluator
(b) Branch offices of
principal underwriters *
(c) Salesmen of principal *
underwriters
42. Ownership of trust's securities
by certain persons *
43. Certain brokerage commissions
received by principal *
underwriters
44. (a) Method of valuation Summary of Essential
Information; The
First Trust Special
Situations Trust,
Public Offering
(b) Schedule as to offering *
price
(c) Variation in offering Public Offering
price to certain persons
45. Suspension of redemption rights *
46. (a) Redemption valuation Rights of Unit Holders
(b) Schedule as to redemption *
price
47. Maintenance of position in Public Offering;
underlying securities Rights
of Unit Holders
V. INFORMATION CONCERNING THE TRUSTEE OR CUSTODIAN
48. Organization and regulation of Information as
trustee to Sponsor, Trustee
and Evaluator
49. Fees and expenses of trustee The First Trust
Special Situations
Trust
50. Trustee's lien The First Trust
Special Situations
Trust
VI. INFORMATION CONCERNING THE INSURANCE OF HOLDERS OF
SECURITIES
51. Insurance of holders of
trust's ecurities *
VII. POLICY OF REGISTRANT
52. (a) Provisions of trust The First Trust
agreement with respect to Special
selection or elimination of Situations Trust;
underlying securities Rights of Unit Holders
(b) Transactions involving
elimination of underlying *
securities
(c) Policy regarding substitution The First Trust
or elimination of underlying Special
securities Situations Trust;
Rights of Unit Holders
(d) Fundamental policy not
otherwise covered *
53. Tax status of Trust The First Trust
Special Situations
Trust
VIII. FINANCIAL AND STATISTICAL INFORMATION
54. Trust's securities during *
last ten years
55.
56.
57. Certain information regarding
period payment certificates *
58.
59. Financial statements Report of Independent
(Instruction 1(c) to Form S-6) Auditors, Statement of
Net Assets
* Inapplicable, answer negative or not required.
First Trust (registered trademark) U.S. Treasury Securities Trust,
Short-Term, Series 5
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6
The Trust. The First Trust Special Situations Trust, Series 113
consists of the underlying separate unit investment trusts set
forth above. The various trusts are sometimes collectively referred
to herein as the "Trusts." First Trust U.S. Treasury Securities
Trust, Short-Term, Series 5 is sometimes individually referred
to herein as the "Short-Term Trust." First Trust U.S. Treasury
Securities Trust, Short-Intermediate Series 6 is sometimes individually
referred to herein as the "Short-Intermediate Trust." Each Trust
consists 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 the Short-Term Trust consist
of maturities of approximately 1-3 years which are "laddered"
to return approximately 40% of the Unit holders' principal in
1996, 40% in 1997 and 20% in 1998. All of the U.S. Treasury Securities
in the Short-Intermediate Trust consist of maturities of approximately
2-6 years which are "laddered" to return approximately 20% of
the Unit holders' principal in 1997, 20% in 1998, 20% in 1999
and 40% in 2000.
The objective of the Trusts is to obtain safety of capital and
current monthly distributions of interest through an investment
in a fixed portfolio of Securities. The Short-Term Trust contains
a "laddered" portfolio to provide flexibility of principal investment
with maturities ranging from 1996 to 1998. The average weighted
maturity of the Short-Term Trust is 2.02 years. The Short-Intermediate
Trust contains a "laddered" portfolio to provide flexibility of
principal investments with maturities ranging from 1997 to 2000.
The average weighted maturity of the Short-Intermediate Trust
is 4.03 years. With the deposit of the Securities in the Trusts
on January 5, 1995, the Initial Date of Deposit, the Sponsor established
for each Trust 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 the Trusts and Units may
be continuously offered for sale to the public by means of this
Prospectus resulting in a potential increase in the outstanding
number of Units of a Trust. Any additional Securities deposited
in a 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 such Trust.
The guaranteed payment of interest and principal afforded by the
Securities may make an investment in the Trusts 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 a Trust Suitable
for Retirement Plans?"
STANDARD & POOR'S CORPORATION HAS RATED UNITS OF EACH SERIES OF
THE TRUSTS "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."
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 January 5, 1995
Page 1
Attention Foreign Investors: Your interest income from the Trusts
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 each of the Trusts, see "Special Information" for each Trust.
Estimated cash flows for the Trusts are set forth herein under "Estimated
Cash Flows to Unit Holders."
The Public Offering Price per Unit is equal to the aggregate offering
price of the Securities in the portfolio of a Trust divided by
the number of Units outstanding, plus a sales charge of 1.85%
of the Public Offering Price (1.885% of the net amount invested)
for the Short-Term Trust and 1.95% of the Public Offering Price
(1.989% of the net amount invested) for the Short-Intermediate
Trust. In addition, on transactions entered into for settlement
after January 12, 1995, there will be added an amount equal to
accrued interest from January 12, 1995 to the date of settlement
(five business days after order) less distributions from the Interest
Account subsequent to January 12, 1995. The secondary market Public
Offering Price per Unit will be equal to the aggregate bid price
of the Securities in the portfolio of a Trust divided by the number
of Units outstanding, plus a sales charge of 1.85% of the Public
Offering Price (1.885% of the net amount invested) for the Short-Term
Trust and 1.95% of the Public Offering Price (1.989% of the net
amount invested) for the Short-Intermediate Trust. At the opening
of business on the Initial Date of Deposit, January 5, 1995, the
Public Offering Price per Unit would have been $1.00781 for the
Short-Term Trust and $1.00722 for the Short-Intermediate Trust.
The sales charge for each Trust is reduced on a graduated scale
for aggregate sales involving at least $250,000. 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 Trust in the ratio of one Unit for each $1.00
principal amount of Securities initially deposited in such Trust.
Distributions of interest received by a 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 from each Trust
will be made on the last day of each month to all Unit holders
of record on the fifteenth day of such month, commencing with
the First Distribution on January 31, 1995 to Unit holders of
record on January 15, 1995.
The Sponsor, although not obligated to do so, intends to maintain
a market for the Units of the Trusts at prices based upon the
aggregate offering price of the Securities in the portfolio of
a Trust during the initial offering period and at prices based
upon the aggregate bid price of the Securities in the portfolio
of a 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?"
Risk Factors. An investment in a Trust should be made with an
understanding of the risks associated therewith, including, among
other factors, the volatility of interest rates. See "What is
the First Trust Special Situations Trust? - Risk Factors."
Page 2
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-January 5, 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
First Trust
U.S. Treasury
Securities Trust,
Short-Term,
Series 5
_________________
General Information
<S> <C>
Principal Amount of Securities in the Trust $ 500,000
Number of Units 500,000
Fractional Undivided Interest in the Trust per Unit 1/500,000
Principal Amount (Par Value) of Securities per Unit $ 1.0000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $ 494,584
Aggregate Offering Price Evaluation per Unit $ .98917
Sales Charge (1) $ .01864
Public Offering Price per Unit (2) $ 1.00781
Sponsor's Initial Repurchase Price per Unit (2) $ .98917
Redemption Price per Unit (3) $ .98717
Excess of Public Offering Price per Unit Over Redemption
Price per Unit $ .02064
Excess of Sponsor's Initial Repurchase Price per Unit Over
Redemption Price per Unit $ .00200
</TABLE>
First Settlement Date January 12, 1995
Mandatory Termination Date December 31, 1998
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 (4) Maximum of $0.0001 per Unit
outstanding annually. (5)
Evaluator's Fee $0.00025 per Unit 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 Unit, are as follows:
1.85% (1.885%) for Series 5.
(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 Unit,
will be determined as described under the caption "Will There
Be a Secondary Market?"
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0001 per Unit.
(5) Payable to an affiliate of the Sponsor.
Page 3
Summary of Essential Information
At the Opening of Business on the Initial Date of Deposit
of the Securities-January 5, 1995
Sponsor: Nike Securities L.P.
Trustee: United States Trust Company of New York
Evaluator: Securities Evaluation Service, Inc.
<TABLE>
<CAPTION>
First Trust
U.S. Treasury
Securities Trust,
Short-Intermediate,
Series 6
__________________
General Information
<S> <C>
Principal Amount of Securities in the Trust $ 500,000
Number of Units 500,000
Fractional Undivided Interest in the Trust per Unit 1/500,000
Principal Amount (Par Value) of Securities per Unit $ 1.0000
Public Offering Price:
Aggregate Offering Price Evaluation of Securities in the Portfolio $ 493,789
Aggregate Offering Price Evaluation per Unit $ .98758
Sales Charge (1) $ .01964
Public Offering Price per Unit (2) $ 1.00722
Sponsor's Initial Repurchase Price per Unit (2) $ .98758
Redemption Price per Unit (3) $ .98558
Excess of Public Offering Price per Unit Over
Redemption Price per Unit $ .02164
Excess of Sponsor's Initial Repurchase Price per Unit Over
Redemption Price per Unit $ .00200
</TABLE>
First Settlement Date January 12, 1995
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 (4) Maximum of $0.0001 per Unit
outstanding annually. (5)
Evaluator's Fee $0.00025 per Unit 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 Unit, are as follows:
1.95% (1.989%) for Series 6.
(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 Unit,
will be determined as described under the caption "Will There
Be a Secondary Market?"
(3) See "How May Units be Redeemed?"
(4) In addition, the Sponsor will be reimbursed for bookkeeping
and other administrative expenses currently at a maximum annual
rate of $0.0001 per Unit.
(5) Payable to an affiliate of the Sponsor.
Page 4
First Trust U.S. Treasury Securities Trust, Short-Term, Series 5
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6
The First Trust Special Situations Trust, Series 113
What is the First Trust Special Situations Trust?
The First Trust Special Situations Trust, Series 113 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. This Series consists of the underlying
separate unit investment trusts designated as: First Trust U.S.
Treasury Securities Trust, Short-Term, Series 5 and First Trust
U.S. Treasury Securities Trust, Short-Intermediate, Series 6 (collectively,
the "Trusts" and each individually a "Trust"). First Trust U.S.
Treasury Securities Trust, Short-Term, Series 5 is sometimes individually
referred to herein as the "Short-Term Trust." First Trust U.S.
Treasury Securities Trust, Short-Intermediate, Series 6 is sometimes
referred to herein as the "Short-Intermediate Trust." Each 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 $500,000 for the Short-Term Trust and $500,000
for the Short-Intermediate Trust principal amount of taxable,
interest-bearing U.S. Treasury Obligations, delivery statements
relating to contracts for the purchase of certain such obligations
and irrevocable letters 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
500,000 Units for the Short-Term Trust and 500,000 Units for the
Short-Intermediate Trust representing the entire ownership of
each respective Trust at the Initial Date of Deposit, which Units
are being offered hereby.
The objective of each 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. Each
Trust contains a "laddered" portfolio to provide flexibility of
principal investment with maturities ranging from 1996 to 1998
with respect to the Short-Term Trust and 1997 to 2000 with respect
to the Short-Intermediate Trust. The Trusts 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 Trusts as described
herein, the Trusts are not expected to retain their 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 Trust pursuant to the
Indenture.
Many investors in the Short-Term Trust and the Short-Intermediate
Trust may benefit from the exemption of interest income from state and
local personal income taxes that will pass through the Trusts to Unit
holders in all states. Each Trust has the additional purpose of
providing income which is exempt from withholding for U.S. Federal
income taxes for non-resident alien investors providing certain
conditions are met. 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 Trusts, 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 each Trust for information with respect to
the Securities initially selected for deposit in the Trusts.
The Portfolio of a 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
Page 5
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 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 a 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 a 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 a 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 for
a Trust. 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 a
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 a 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 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 a 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 Trust, (ii) must maintain as far as practicable
the original percentage relationship
Page 6
between the principal amounts of Securities of specified interest
rates and years of maturities in a Portfolio, and (iii) shall
not be "when, as and if issued" securities. Whenever Replacement
Securities have been acquired for a Trust, the Trustee shall,
within five days thereafter, notify all Unit holders of such 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 of the amount, if any,
by which the cost to the affected Trust of the Failed Securities
exceeded the cost of the Replacement Securities plus accrued interest.
Except as provided below, once the original corpus of a Trust
is acquired, the Trustee will have no power to vary the investment
of a 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 Trust.
The Sponsor may, from time to time, deposit additional Securities
in a 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
Trust. With respect to each 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 each Trust, with moneys held in the Principal
Account of a Trust representing the proceeds of Securities sold
as described under the caption "How May Securities be Removed
from a 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 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 Trust represented by each unredeemed
Unit will increase, although the actual interest in such Trust
represented by such fraction will remain substantially unchanged.
However, if additional Units are issued by a Trust (in connection
with the deposit by the Sponsor of additional Securities), the
aggregate value of Securities in such 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.
Risk Factors
The Securities are direct obligations of the United States and
are backed by its full faith and credit although the Units of
a 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 a 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 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 a Trust should not be construed as
an approval of the offering of the Units by Standard & Poor's
Page 7
Corporation or as a guarantee of the market value of a 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 Trust
or sales by a Trust of Securities for less than the purchase price
paid by a 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 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 Trust are
offered on a dollar price basis, the estimated rate of return
on an investment in Units of a 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 Trust is as set forth in the "Special Information"
herein for each Trust. Estimated Current Return is computed by
dividing the Estimated Net Annual Interest Rate per Unit by the
Public Offering Price per Unit. 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 Trust. The Estimated Long-Term Return
represents an average of the yields to estimated retirements of
the Securities in a 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 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 for each
Trust. 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 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 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 a 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. Additionally, with respect to sales settling subsequent
to the First Settlement Date, the Public Offering Price of Units
will have added to it the proportionate share of accrued interest
to the date of
Page 8
settlement. Unit holders will receive on the next distribution
date of a 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 a 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 Trusts, the Sponsor has borne all the expenses
of creating and establishing the Trusts, 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. With the exception of bookkeeping and other administrative
services provided to the Trusts, for which the Sponsor will be
reimbursed in amounts as set forth under "Summary of Essential
Information," the Sponsor will not receive any fees in connection
with its activities relating to the Trusts. Such bookkeeping and
administrative charges may be increased without approval of the
Unit holders by amounts not exceeding proportionate increases
under the category "All Services Less Rent of Shelter" in the
Consumer Price Index published by the United States Department
of Labor. The fees payable to the Sponsor for such services may
exceed the actual costs of providing such services for these Trusts,
but at no time will the total amount received for such services
rendered to unit investment trusts of which Nike Securities L.P.
is the Sponsor in any calendar year exceed the aggregate cost
to the Sponsor of supplying such services in such year. First
Trust Advisors L.P., 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 each Trust. The fee may exceed
the actual costs of providing such supervisory services for these
Trusts, 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 Trust, the Evaluator
will receive a fee as indicated in "Summary of Essential Information."
The Trustee pays certain expenses of a Trust for which it is reimbursed
by such Trust. The Trustee will receive for its ordinary recurring
services to each 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 Indenture, 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 a 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 Trust are or
may be incurred by such 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
Page 9
and costs of any action undertaken by the Trustee to protect a
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 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 a Trust; all taxes and other government charges imposed
upon the Securities or any part of a Trust (no such taxes or charges
are being levied or made upon termination of a Trust). The above
expenses and the Trustee's annual fee, when paid or owing to the
Trustee, are secured by a lien on each 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 Trust shall be audited
on an annual basis at the expense of such Trust 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 $0.0005
per Unit. Unit holders of a 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. Each Trust is not an association taxable as a corporation
for Federal income tax purposes; each Unit holder will be treated
as the owner of a pro rata portion of each 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. Each Unit holder
will be considered to have received his or her pro rata share
of income derived from each Trust asset when such income is received
by a Trust.
2. Each Unit holder will have a taxable event when each 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 a 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 respective 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 a 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. Each 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 a Trust (determined at
the time he acquires his Units, in the manner described
Page 10
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 year the sum of his daily portions of original issue
discount attributable to the Stripped Treasury Securities held
by a 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 a 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 a 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 Trust, including fees of the Trustee and the Evaluator
but does not include amortizable bond premium on Securities held
by a 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 for taxpayers other than corporations.
Because some or all capital gains are taxed at a comparatively
lower rate under the Tax Act, the Tax Act includes a provision
that recharacterizes capital gains as ordinary income in the case
of certain financial transactions that are "conversion transactions"
effective for transactions entered into after April 30, 1993.
Unit holders and prospective investors should consult with their
tax advisers regarding the potential effect of this provision
on their investment in Units.
A Unit holder of a Trust who is not a citizen or resident of the
United States or a United States domestic corporation (a "Foreign
Investor") will not be subject to U.S. Federal income taxes, including
withholding taxes
Page 11
on amounts distributed from a 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 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 a 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 a Trust to such Unit holder will be subject to
back-up withholding.
Investment in a 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 Trust Suitable for Retirement Plans?").
The foregoing discussions relate only to Federal income taxes
on distributions by a 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 a 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 a 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 a 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 a 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 a 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 Trust Suitable for Retirement Plans?
A 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
Page 12
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. Each Trust will waive the $1,000
minimum investment requirement for tax-deferred 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 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 1.85% of the Public Offering Price (which is equivalent
to 1.885% of the net amount invested) for the Short-Term Trust
and 1.95% of the Public Offering Price (which is equivalent to
1.989% of the net amount invested) for the Short-Intermediate
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 a 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 a Trust, including
any money in the Principal Account other than money required to
redeem tendered Units, and also includes a sales charge of 1.85%
of the Public Offering Price (which is equivalent to 1.885% of
the net amount invested) for the Short-Term Trust and 1.95% of
the Public Offering Price (which is equivalent to 1.989% of the
net amount invested) for the Short-Intermediate 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 "How is Accrued Interest
Treated?").
The applicable sales charge for each Trust 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 shall be the responsibility of the
selling dealer. This reduced sales charge structure will apply
on all purchases of Units in either Trust by the same person on
any one day from any one dealer. For purposes of calculating the
applicable sales charge, purchases of Units in the Trusts will
be aggregated together but 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
Page 13
sponsored by Nike Securities L.P. Additionally, Units purchased
in the name of the spouse of a purchaser or in the name of a child
of such purchaser under 21 years of age will be deemed for the
purposes of calculating the applicable sales charge to be additional
purchases by the purchaser. The reduced sales charges will also
be applicable to a trustee or other fiduciary purchasing securities
for a single trust or single fiduciary account.
On the Initial Date of Deposit, the Public Offering Price per
Unit with respect to each Trust is as indicated in the "Summary
of Essential Information" for each Trust. In addition to fluctuations
in the amount of interest accrued but unpaid on Securities in
a 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 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 a 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 a 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 Unit of the Securities
in a 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 Trust plus the applicable sales charge. The offering price
of Securities in a Trust was greater than the bid price of such
Securities on the Initial Date of Deposit by the aggregate amount
and the amount per Unit indicated in "Portfolio" for each Trust.
Although payment is normally made five business days following
the order for purchase, payment may be made prior thereto. A person
will become owner of the Units on the date of settlement provided
payment has been received. Cash, if any, made available to the
Sponsor prior to the date of settlement for the purchase of Units
may be used in the Sponsor's business and may be deemed to be
a benefit to the Sponsor, subject to the limitations of the Securities
Exchange Act of 1934. 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 a 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 a 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.
Page 14
Upon completion of the initial offering, Units repurchased in
the secondary market (see "Will There be a Secondary Market?")
may be offered by this prospectus at the secondary market public
offering price determined in the manner described above.
It is the intention of the Sponsor to qualify Units of a 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 1.0% of the Public Offering Price for the Short-Term
Trust and 1.1% of the Public Offering Price for the Short-Intermediate
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 may be making Units of a 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 as indicated
above. Under the Glass-Steagall Act, banks are prohibited from
underwriting Trust Units; however, the Glass-Steagall Act does
permit certain agency transactions and the banking regulators
have not indicated that these particular agency transactions are
not permitted under such Act. In Texas and in certain other states,
any banks making Units available must be registered as broker/dealers
under state law.
What are the Profits of the Sponsor?
The Sponsor will receive a gross sales commission equal to 1.85%
of the Public Offering Price (equivalent to 1.885% of the net
amount invested) for the Short-Term Trust and 1.95% of the Public
Offering Price (equivalent to 1.989% of the net amount invested)
for the Short-Intermediate Trust, less any reduced sales charge
for volume purchases as described under "Public Offering-How is
the Public Offering Price Determined?" See "Public Offering-How
are Units Distributed?" for information regarding additional concessions
available to 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 such Trust and the cost of such Securities to the
Sponsor. See "Portfolio" for each Trust 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
dealers and others also may realize profits or sustain losses
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 dealers and others upon the sale
of Units.
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 of the
Securities in a Trust) and the price at which Units are resold
(which price is also based on the bid prices of the Securities
in such Trust and includes a sales charge of 1.85% for the Short-Term
Trust and 1.95% for the Short-Intermediate 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 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 the Trusts, the prices at which Units of a Trust will be repurchased
will be based upon the aggregate offering side evaluation of the
Securities in the portfolio of a Trust. The aggregate bid prices
of the underlying Securities in each 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
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.
Page 15
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 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 make a distribution from the Principal
Account unless the amount available for distribution shall equal
at least $0.001 per Unit.
The Trustee will credit to the Interest Account all interest received
by a 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 who purchase Units between a Record
Date and a Distribution Date will receive their first distribution
on the second Distribution Date after the purchase.
Page 16
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 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 Trust.
Amounts so withdrawn shall not be considered a part of the assets
of such 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 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 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 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.
Page 17
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 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 a 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 Trust) by the
amount per Unit set forth in the "Summary of Essential Information."
The Redemption Price per Unit is the pro rata share of each Unit
determined by the Trustee on the basis of (1) the cash on hand
in a Trust or moneys in the process of being collected, (2) the
value of the Securities in a 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 Trust and (b) the accrued expenses of a Trust. The Evaluator
may determine the value of the Securities in a 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 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 1/4 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 Unit indicated in "Portfolio"
for each Trust.
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 a 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.
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 a 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.
Page 18
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 Special Situations Trust?", the acquisition by a 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. 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 Trusts 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, 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
Page 19
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 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 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 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 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
Page 20
that Units not yet sold aggregating more than 60% of the Units
initially deposited are tendered for redemption by the Sponsor.
If a Trust is liquidated because of the redemption of unsold Units
by 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, 1998 with respect to the Short-Term Trust or December 31,
2000 with respect to the Short-Intermediate Trust. 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 Trust, and,
after paying all expenses and charges incurred by a 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 statements of net assets, including the portfolios, of the
Trusts at the opening of business on the Initial Date of Deposit,
appearing in this Prospectus and Registration Statement have been
audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon appearing elsewhere herein and in the
Registration Statement, and are 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 each Trust
became the owners of the Units of such Trust and entitled to the
benefits thereof, as well as the risks inherent therein.
</R
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Term, Series 5
Name Address Units
____ _______ _____
<S> <C> <C>
Sponsor
Nike Securities L.P. 1001 Warrenville Road, Lisle, IL 60532 300,000
Underwriters*
Fidelity Capital Markets, A division World Trade Center, 164 Northern Avenue, ZT3, 100,000
of National Financial Services Boston, MA 02210
Corporation
Gruntal & Co., Incorporated 14 Wall Street, 20th Floor, New York, NY 10005 100,000
________
500,000
========
</TABLE>
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Intermediate, Series 6
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 World Trade Center, 164 Northern Avenue, ZT3, 100,000
of National Financial Services Boston, MA 02210
Corporation
Gruntal & Co., Incorporated 14 Wall Street, 20th Floor, New York, NY 10005 100,000
Raymond James & Associates, Inc. 880 Carillon Parkway, St. Petersburg, FL 33710 100,000
________
500,000
========
</TABLE>
[FN]
Page 21
________________
* 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 1.0%
of the Public Offering Price per Unit for the Short-Term Trust
and 1.1% of the Public Offering Price per Unit for the Short-Intermediate
Trust for primary and secondary market sales. 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 the Short-Intermediate 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
Trusts Underwritten Public Offering Price
________________________ ________________ _______________________
<S> <C> <C>
First Trust U.S. Treasury
Securities Trust,
Short-Term, Series 5 $1,000,000 or more 1.10%
First Trust U.S. Treasury
Securities Trust,
Short-Intermediate, Series 6 $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 a 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 either Trust 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 a Trust. Such payments are made by the Sponsor out
of its own assets, and not out of the assets of a Trust. These
programs will not change the price Unit holders pay for their
Units or the amount that a 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 a 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 Trusts. 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
Trusts are described more fully elsewhere in this Prospectus.
Page 22
First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5
<TABLE>
<CAPTION>
Special Information
<S> <C>
Calculation of Estimated Net Annual Unit Income
Estimated Annual Interest Income per Unit $ .06525
Less: Estimated Annual Expense per Unit $ .00244
Estimated Net Annual Interest Income per Unit $ .06281
Calculation of Interest Distribution per Unit
Estimated Net Annual Interest Income per Unit $ .06281
Divided by 12 $ .00523
Estimated Daily Rate of Net Interest Accrual per Unit $ .000174472
Estimated Current Return Based on Public Offering Price (1) 6.23%
Estimated Long-Term Return Based on Public Offering Price (1) 7.21%
CUSIP 33734W 707
</TABLE>
Trustee's Annual Fee $.00144 per Unit outstanding annually,
exclusive of expenses of the Trust,
commencing January 5, 1995.
Distributions
Estimated first distribution of $.00052 per Unit will be paid
on January 31, 1995 to Unit holders of record on January 15, 1995
(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 $0.001 per Unit.
[FN]
______________
(1) The Estimated Current Return is computed by dividing the
Estimated Net Annual Interest Income per Unit by the Public Offering
Price per Unit. 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 23
Portfolio
First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5
The First Trust Special Situations Trust, Series 113
At the Opening of Business on the Initial Date of Deposit
January 5, 1995
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities (1) Rate Maturity Sponsor (2) to Trust (3) to Sponsor
________________ ________ ________ __________ __________ __________
<S> <C> <C> <C> <C> <C>
$ 100,000 4.000% 1/31/1996 $ 96,641 $ 96,689 $ 48
100,000 6.000% 6/30/1996 97,953 98,062 109
100,000 6.250% 1/31/1997 97,390 97,455 65
100,000 8.500% 7/15/1997 101,719 101,856 137
100,000 7.875% 1/15/1998 100,313 100,522 209
________________ __________ __________ __________
$ 500,000 $494,016 $494,584 $ 568
================ ========== ========== ==========
</TABLE>
[FN]
(1) The First Trust U.S. Treasury Securities Trust, Short-Term,
Series 5 consists of five obligations. Each of the Securities
represents 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 5 consist
of maturities of approximately 1-3 years which are "laddered"
to return 40% of the Unit holders' principal in 1996, 40% in 1997
and 20% in 1998.
(2) 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 January 4, 1995. Interest will
begin accruing to the benefit of Unit holders from January 12,
1995, the First Settlement Date of the Trust.
(3) 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 $493,584, which
is $1,000 ($.002 per Unit; .20% of the aggregate principal amount)
lower than the aggregate cost of the Securities to the Trust based
on the offering side evaluation.
Page 24
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6
<TABLE>
<CAPTION>
Special Information
<S> <C>
Calculation of Estimated Net Annual Unit Income
Estimated Annual Interest Income per Unit $ .07050
Less: Estimated Annual Expense per Unit $ .00249
Estimated Net Annual Interest Income per Unit $ .06801
Calculation of Interest Distribution per Unit
Estimated Net Annual Interest Income per Unit $ .06801
Divided by 12 $ .00567
Estimated Daily Rate of Net Interest Accrual per Unit $.000188916
Estimated Current Return Based on Public Offering Price (1) 6.75%
Estimated Long-Term Return Based on Public Offering Price (1) 7.33%
CUSIP 33734W 715
</TABLE>
Trustee's Annual Fee $.00149 per Unit outstanding annually,
exclusive of expenses of the Trust,
commencing January 5, 1995.
Distributions
Estimated first distribution of $.00057 per Unit will be paid
on January 31, 1995 to Unit holders of record on January 15, 1995
(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 $0.001 per Unit.
[FN]
______________
(1) The Estimated Current Return is computed by dividing the
Estimated Net Annual Interest Income per Unit by the Public Offering
Price per Unit. 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 25
Portfolio
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6
The First Trust Special Situations Trust, Series 113
At the Opening of Business on the Initial Date of Deposit
January 5, 1995
<TABLE>
<CAPTION>
Principal Amount Cost of Profit
of U.S. Treasury Coupon Cost to Securities or (Loss)
Securities (1) Rate Maturity Sponsor (2) to Trust (3) to Sponsor
________________ ________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
$100,000 6.250% 1/31/1997 $ 97,406 $ 97,455 $ 49
100,000 5.625% 1/31/1998 94,219 94,265 46
100,000 6.375% 1/15/1999 95,062 95,319 257
100,000 8.500% 2/15/2000 102,891 103,250 359
100,000 8.500% 11/15/2000 103,219 103,500 281
________________ __________ __________ __________
$500,000 $492,797 $ 493,789 $992
================ ========== ========== ==========
</TABLE>
[FN]
(1) The First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6 consists of five obligations. Each of the Securities
represents 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 6 consist
of maturities of approximately 2-6 years which are "laddered"
to return 20% of the Unit holders' principal in 1997, 20% in 1998,
20% in 1999 and 40% in 2000.
(2) 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 January 4, 1995. Interest will
begin accruing to the benefit of Unit holders from January 12,
1995, the First Settlement Date of the Trust.
(3) 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 $492,789, which
is $1,000 ($.002 per Unit; .20% of the aggregate principal amount)
lower than the aggregate cost of the Securities to the Trust based
on the offering side evaluation.
Page 26
REPORT OF INDEPENDENT AUDITORS
The Sponsor, Nike Securities L.P., and Unit Holders
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
We have audited the accompanying statements of net assets, including
the portfolios, of the First Trust Special Situations Trust, Series
113, comprised of First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5 and First Trust U.S. Treasury Securities
Trust, Short-Intermediate, Series 6, as of the opening of business
on January 5, 1995. These statements of net assets are the responsibility
of the Trusts' Sponsor. Our responsibility is to express an opinion
on these statements 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 statements
of net assets are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the statements of net assets. Our procedures included
confirmation of the letters of credit held by the Trustee and
deposited in the Trusts at the opening of business on January
5, 1995. 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 statements of net assets.
We believe that our audit of the statements of net assets provides
a reasonable basis for our opinion.
In our opinion, the statements of net assets referred to above
present fairly, in all material respects, the financial position
of the First Trust Special Situations Trust, Series 113, comprised
of First Trust U.S. Treasury Securities Trust, Short-Term, Series
5 and First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6 at the opening of business on January 5, 1995 in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
January 5, 1995
Page 27
Statements of Net Assets
The First Trust Special Situations Trust, Series 113
At the Opening of Business on the Initial Date of Deposit
January 5, 1995
<TABLE>
<CAPTION>
First Trust First Trust
U.S. Treasury U.S. Treasury
Securities Trust, Securities Trust,
Short-Term, Short-Intermediate,
Series 5 Series 6
_________________ __________________
NET ASSETS
<S> <C> <C>
Delivery statements relating to Sponsor's
contracts to purchase Securities (1)(2) $494,584 $493,789
Accrued interest on underlying Securities (2)(3) 12,226 12,613
__________ _________
506,810 506,402
Less distributions payable (3) 12,226 12,613
__________ _________
Net assets $494,584 $493,789
========== =========
Outstanding Units of fractional undivided interest 500,000 500,000
</TABLE>
<TABLE>
<CAPTION>
ANALYSIS OF NET ASSETS
<S> <C> <C>
Cost to investors (4) $503,906 $503,609
Less gross underwriting commissions (4) (9,322) (9,820)
__________ _________
Net assets $494,584 $493,789
========== =========
</TABLE>
[FN]
NOTES TO STATEMENTS OF NET ASSETS
(1) The aggregate offering price of the Securities each Trust
listed under "Portfolio" on the Initial Date of Deposit herein
and their cost to the applicable 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 each Trust as collateral. The amount of
available letter of credit and the amount expected to be utilized
as collateral for each Trust is shown below. The amount expected
to be utilized is (a) the cost to the respective 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-Term, Series 5 $750,000 $506,810 $494,584 $12,226 $0
First Trust U.S. Treasury
Securities Trust,
Short-Intermediate,
Series 6 $750,000 $506,402 $493,789 $12,613 $0
</TABLE>
(3) The Trustee will advance to each Trust the amount of accrued
interest to January 12, 1995, the First Settlement Date of each
Trust, for distribution to the Sponsor as the Unit Holder of record.
Page 28
(4) The aggregate cost to investors (exclusive of accrued interest)
and the aggregate gross underwriting commissions of 1.85% for
the Short-Term Trust and 1.95% for the Short-Intermediate Trust
are computed assuming no reduction of sales charge for quantity
purchases.
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 29
Estimated Cash Flows to Unit Holders
The table below sets forth the estimated monthly distributions
of interest and distributions of principal per 1,000 Units 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.
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Term, Series 5
Monthly
Estimated Estimated Estimated
Interest Principal Total
Date (Each Month) Distribution Distribution Distribution
________________ __________ __________ __________
<S> <C> <C> <C>
January 1995 0.52 0.52
February 1995-January 1996 5.23 5.23
February 1996 4.91 200.00 204.91
March 1996-June 1996 4.59 4.59
July 1996 4.10 200.00 204.10
August 1996-December 1996 3.62 3.62
January 1997 3.11 200.00 203.11
February 1997-January 1997 2.60 2.60
March 1997 2.60 200.00 202.60
August 1997-December 1997 1.21 1.21
January 1998 1.21 200.00 201.21
</TABLE>
<TABLE>
<CAPTION>
First Trust U.S. Treasury Securities Trust, Short-Intermediate,
Series 6
Monthly
Estimated Estimated Estimated
Interest Principal Total
Date (Each Month) Distribution Distribution Distribution
________________ __________ __________ __________
<S> <C> <C> <C>
January 1995 0.57 0.57
February 1995-January 1997 5.67 5.67
February 1997 5.16 200.00 205.16
March 1997-January 1998 4.65 4.65
February 1998 4.19 200.00 204.19
March 1998-December 1998 3.74 3.74
January 1999 3.74 200.00 203.74
February 1999-January 2000 2.70 2.70
February 2000 2.70 200.00 202.70
March 2000-October 2000 1.31 1.31
November 2000 1.31 200.00 201.31
</TABLE>
Page 30
This page is intentionally left blank.
Page 31
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Summary of Essential Information
First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5 3
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6 4
The First Trust Special Situations Trust, Series 113:
What is the First Trust Special Situations Trust? 5
Risk Factors 7
What is the Rating of the Units? 7
What are Estimated Current Return and Estimated
Long-Term Return? 8
How is Accrued Interest Treated? 8
What are the Expenses and Charges? 9
What is the Tax Status of Unit Holders? 10
Why are Investments in a Trust
Suitable for Retirement Plans? 12
How Can Distributions to Unit Holders be
Reinvested? 13
Public Offering:
How is the Public Offering Price Determined? 13
How are Units Distributed? 14
What are the Profits of the Sponsor? 15
Will There be a Secondary Market? 15
Rights of Unit Holders:
How is Evidence of Ownership Issued and
Transferred? 16
How are Interest and Principal Distributed? 16
What Reports Will Unit Holders Receive? 17
How May Units be Redeemed? 17
How May Units be Purchased by the Sponsor? 18
How May Securities be Removed from a Trust? 18
Information as to Sponsor, Trustee and Evaluator:
Who is the Sponsor? 19
Who is the Trustee? 19
Limitations on Liabilities of Sponsor and Trustee 20
Who is the Evaluator? 20
Other Information:
How May the Indenture be Amended or
Terminated? 20
Legal Opinions 21
Experts 21
Underwriting 21
The Separate Trusts:
First Trust U.S. Treasury Securities Trust,
Short-Term, Series 5 23
First Trust U.S. Treasury Securities Trust,
Short-Intermediate, Series 6 25
Report of Independent Auditors 27
Statements of Net Assets 28
Notes to Statements of Net Assets 28
Description of Standard & Poor's Corporation Rating 29
Estimated Cash Flows to Unit Holders 30
</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-Term,
Series 5
First Trust
U.S. Treasury Securities
Trust, Short-Intermediate
Series 6
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
January 5, 1995
CONTENTS OF REGISTRATION STATEMENT
A. BONDING ARRANGEMENTS OF DEPOSITOR:
Nike Securities L.P. is covered by a Brokers' Fidelity Bond,
in the total amount of $1,000,000, the insurer being
National Union Fire Insurance Company of Pittsburgh.
B. THIS REGISTRATION STATEMENT ON FORM S-6 COMPRISES
THE FOLLOWING PAPERS AND DOCUMENTS:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
Exhibits
Financial Data Schedule
SIGNATURES
The Registrant, The First Trust Special Situations Trust,
Series 113, 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
113, 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
January 5, 1995.
THE FIRST TRUST SPECIAL SITUATIONS
TRUST, SERIES 113
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 ) January 5, 1995
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 January 5, 1995 in
Amendment No. 1 to the Registration Statement (Form S-6) (File
No. 33-57157) and related Prospectus of The First Trust Special
Situations Trust, Series 113.
ERNST & YOUNG LLP
Chicago, Illinois
January 5, 1995
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 113 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).
Exhibit 1.1.1
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
TRUST AGREEMENT
Dated: January 5, 1995
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
Standard 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."
(i) Notwithstanding anything to the contrary in
Section 3.05, Certificateholders may not elect to receive
distributions on a semiannual basis.
(j) Section 2.01. of Article II of the Standard Terms
and Conditions of Trust is hereby amended by inserting "(a)"
prior to the beginning of the text of the paragraph and
adding the following additional paragraphs:
(b) From time to time following the Initial Date
of Deposit, the Depositor is hereby authorized, in its
discretion, to assign, convey to and deposit with the
Trustee additional Bonds, in bearer form or duly
endorsed in blank or accompanied by all necessary
instruments of assignment and transfer in proper form
(or Contract Obligations relating to such Bonds), to be
held, managed and applied by the Trustee as herein
provided. Such deposit of additional Bonds shall be
made, in each case, pursuant to a Notice of Deposit of
Additional Bonds from the Depositor to the Trustee.
The Depositor, in each case, shall ensure that each
deposit of additional Bonds pursuant to this Section
shall be, as nearly as is practicable, in the identical
ratio as the Percentage Ratio for such Bonds as is
specified in the Prospectus for the Trust and the
Depositor shall ensure that such Bonds are identical to
those deposited on the Initial Date of Deposit. The
Depositor shall deliver the additional Bonds which were
not delivered concurrently with the deposit of
additional Bonds and which were represented by Contract
Obligations within 10 calendar days after such deposit
of additional Bonds (the "Additional Bonds Delivery
Period"). If a contract to buy such Bonds between the
Depositor and seller is terminated by the seller
thereof for any reason beyond the control of the
Depositor or if for any other reason the Bonds are not
delivered to the Trust by the end of the Additional
Bonds Delivery Period for such deposit, the Trustee
shall immediately draw on the Letter of Credit, if any,
in its entirety, apply the monies in accordance with
Section 2.01(d), and the Depositor shall forthwith take
the remedial action specified in Section 3.14. If the
Depositor does not take the action specified in Section
3.14 within 10 calendar days of the end of the
Additional Bonds Delivery Period, the Trustee shall
forthwith take the action specified in Section 3.14.
(c) In connection with the deposits described in
Section 2.01 (a) and (b), the Depositor has, in the
case of Section 2.01(a) deposits, and, prior to the
Trustee accepting a Section 2.01(b) deposit, will,
deposit cash and/or Letter(s) of Credit in an amount
sufficient to purchase the Contract Obligations (the
"Purchase Amount") relating to Bonds which are not
actually delivered to the Trustee at the time of such
deposit, the terms of which unconditionally allow the
Trustee to draw on the full amount of the available
Letter of Credit. The Trustee may deposit such cash or
cash drawn on the Letter of Credit in a non-interest
bearing account for the Trust.
(d) In the event that the purchase of Contract
Obligations pursuant to any contract shall not be
consummated in accordance with said contract or if the
Bonds represented by Contract Obligations are not
delivered to the Trust in accordance with Section
2.01(a) or 2.01(b) and the monies, or, if applicable,
the monies drawn on the Letter of Credit, deposited by
the Depositor are not utilized for Section 3.14
purchases of New Bonds, such funds, to the extent of
the purchase price of Failed Contract Obligations for
which no Replacement Bond was acquired pursuant to
Section 3.14, plus all amounts described in the next
succeeding two sentences, shall be credited to the
Principal Account and distributed pursuant to Section
3.05 to Unit holders of record as of the Record Date
next following the failure of consummation of such
purchase. The Depositor shall cause to be refunded to
each Unit holder his pro rata portion of the sales
charge levied on the sale of Units to such Unit holder
attributable to such Failed Contract Obligation. The
Depositor shall also pay to the Trustee, for
distribution to the Unit holders, interest on the
amount of the purchase price to the Trust of the Failed
Contract Obligation, at the rate of 5% per annum to the
date the Depositor notifies the Trustee that no
Replacement Bond will be purchased or, in the absence
of such notification, to the expiration date for
purchase of a Replacement Security specified in
Section 3.14. Any amounts remaining from monies drawn
on the Letter of Credit which are not used to purchase
New Bonds or are not used to provide refunds to Unit
holders shall be paid to the Depositor.
(e) The Trustee is hereby irrevocable authorized
to effect registration or transfer of the Bonds in
fully registered form to the name of the Trustee or to
the name of its nominee.
(f) In connection with and at the time of any
deposit of additional bonds pursuant to Section
2.01(b), the Depositor shall exactly replicate Cash (as
defined below) received or receivable by the Trust as
of the date of such deposit. For purposes of this
paragraph, "Cash" means, as to the Principal Account,
cash or other property (other than Bonds) on hand in
the Principal Account or receivable and to be credited
to the Principal Account as of the date of the deposit
(other than amounts to be distributed solely to persons
other than holders of Units created by the deposit)
and, as to the Income Account, cash or other property
(other than Bonds) received by the Trust as of the date
of the deposit or receivable by the Trust in respect of
distributions declared but not received as of the date
of the deposit, reduced by the amount of any cash or
other property received or receivable on any Bond
allocable (in accordance with the Trustee's calculation
of the monthly distribution from the Income Account
pursuant to Section 3.05) to a distribution made or to
made in respect of a Record Date occurring prior to the
deposit. Such replication will be made on the basis of
a fraction, the numerator of which is the number of
Units created by the deposit and the denominator of
which is the number of Units which are outstanding
immediately prior to the deposit.
(k) Section 3.07 of Article III of the Standard Terms
and Conditions of Trust is hereby amended by deleting "or"
immediately prior to paragraph (g) and adding the following
paragraph:
"; or (h) that Bonds need to be sold in order to meet
established principal distributions which are an
objective of the Trust as described in the Prospectus."
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:
Rosalia Raviele
Assistant Vice President
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
SCHEDULE A TO TRUST AGREEMENT
SECURITIES INITIALLY DEPOSITED
IN
THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
(Note: Incorporated herein and made a part hereof is the
"Portfolio" as set forth for each Trust in the Prospectus.)
Exhibit 3.1
CHAPMAN AND CUTLER
111 WEST MONROE STREET
CHICAGO, ILLINOIS 60603
January 5, 1995
Nike Securities L.P.
Suite 300
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust, Series 113
Gentlemen:
We have served as counsel for Nike Securities L.P., as
Sponsor and Depositor of The First Trust Special Situations Trust,
Series 113 in connection with the preparation, execution and
delivery of a Trust Agreement dated January 5, 1995 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. 33-57157) 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
January 5, 1995
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 113
Gentlemen:
We have acted as counsel for Nike Securities L.P., Depositor
of The First Trust Special Situations Trust, Series 113 (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 January 5, 1995 (the "Indenture")
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.
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 each Trust will be
administered, and investments by a Trust from proceeds of
subsequent deposits, if any, will be made, in accordance with the
terms of the Indenture. Each 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) Each 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 each 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 respective 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 each 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 each 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 each 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 each 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 a 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 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 a 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 a 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 a
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 a Unit holder's pro rata portion of each Security held by
a 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 a 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 each Trust for their share of accrued
interest received by such 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 such 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 a 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 a 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 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 a 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. 33-57157)
relating to the Units referred to above and to the use of our
name and to the reference to our firm in said Registration
Statement and in the related Prospectus.
Very truly yours
CHAPMAN AND CUTLER
EFF/jln
Exhibit 3.3
CARTER, LEDYARD & MILBURN
COUNSELLORS AT LAW
2 WALL STREET
NEW YORK, NEW YORK 10005
January 5, 1995
United States Trust Company
of New York, as Trustee of
The First Trust Special
Situations Trust, Series 113
First Trust U.S. Treasury
Securities Trust, Short Term,
Series 5
First Trust U.S. Treasury
Securities Trust, Short-Intermediate,
Series 6
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 113
First Trust U.S. Treasury Securities Trust, Short Term,
Series 5
First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 6
Dear Sirs:
We are acting as special counsel with respect to New York
tax matters for The First Trust Special Situations Trust, Series
113, First Trust U.S. Treasury Securities Trust, Short-Term,
Series 5, First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 6 (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. 33-57157) 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
January 5, 1995
United States Trust Company
of New York, as Trustee of
The First Trust Special Situations
Trust, Series 113
First Trust U.S. Treasury
Securities Trust, Short-Term, Series 5
First Trust U.S. Treasury
Securities Trust, Short-Intermediate,
Series 6
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
113
First Trust U.S. Treasury Securities Trust, Short Term,
Series 5
First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 6
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
113, First Trust U.S. Treasury Securities Trust, Short Term,
Series 5, First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 6 (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 interest in 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 Securiteis 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
January 5, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, IL 60532
Re: THE FIRST TRUST SPECIAL SITUATIONS TRUST, SERIES 113
Gentlemen:
We have examined the Registration Statement File No. 33-
57157 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
January 5, 1995
Nike Securities L.P.
1001 Warrenville Road
Lisle, Illinois 60532
Re: The First Trust Special Situations Trust Series 113,
First Trust U.S. Treasury Securities Trust, Short-Term,
Series 5
First Trust U.S. Treasury Securities Trust, Short-
Intermediate, Series 6
(SEC Reg. #33-57157)
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,
Hyman C. Grossman
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