Executed in 7 Parts
Counterpart No. ( )
NATIONAL MUNICIPAL TRUST
SERIES 194
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated February 24,
1999 among Prudential Securities Incorporated, as Depositor,
The Chase Manhattan Bank, as Trustee, and Xxxxx S&P Evaluation
Services, a division of X.X. Xxxxx Co., Inc., as Evaluator,
sets forth certain provisions in full and incorporates other
provisions by reference to the document entitled "National Mu-
nicipal Trust, Trust Indenture and Agreement" (the "Basic
Agreement") dated September 6, 1989, as amended. Such provi-
sions as are incorporated by reference constitute a single in-
strument (the "Indenture").
WITNESSETH THAT:
In consideration of the premises and of the mutual
agreements herein contained, the Depositor, the Trustee, and
the Evaluator 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 Basic Agreement are herein incorpo-
rated 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 in-
strument except that the Basic Agreement is hereby amended in
the following manner:
A. Article I, entitled "Definitions" shall be amended to
add the following numbered paragraphs and renumber
the succeeding paragraphs accordingly:
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"1. "Additional Bonds" shall mean such
Bonds (as defined herein) as are listed in
schedules of a Supplemental Reference Trust
Agreement and which are deposited in connection
with an increase in the number of Units ini-
tially specified in a Reference Trust Agree-
ment."
"2. "Additional Deposited Units" shall
mean such Deposited Units (as defined herein)
as are listed in schedules of a Supplemental
Reference Trust Agreement and which are depos-
ited in connection with an increase in the num-
ber of Units initially specified in a Reference
Trust Agreement."
"3. "Additional Securities" shall mean
such Securities (as defined herein) as are
listed in schedules of a Supplemental Reference
Trust Agreement and which are deposited in con-
nection with an increase in the number of Units
initially specified in a Reference Trust Agree-
ment. "Additional Securities" may consist of
"Additional Bonds" and/or "Additional Deposited
Units."
"4. "Additional Units" shall mean such
Units (as defined herein) as are issued in re-
spect of Additional Securities."
"11. "Deferred Sales Charge" shall mean
any deferred sales charge payable in accordance
with the provisions of Section 3.15 hereof, as
set forth in the prospectus for a Trust."
"32. "Supplemental Reference Trust Agree-
ment" shall mean a document pursuant to which
Additional Units are deposited in connection
with an increase in the number of Units ini-
tially specified in a Reference Trust Agree-
ment."
and to insert the following language in renum-
bered paragraph (6) defining "Bonds" after each
reference to Reference Trust Agreement:
"and Supplemental Reference Trust
Agreements"
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and to replace the last word in renumbered
paragraph (6) defining "Bonds" with the word
"relate" and to insert the following language
in renumbered paragraph (10) defining "Contract
Bonds" after the reference to Reference Trust
Agreement and redesignate the subsequent clause
accordingly:
"(ii) Bonds listed in schedules of
Supplemental Reference Trust Agree-
ments"
and to add the following language to the end of
renumbered paragraph (28) defining
"Securities":
"deposited in trust and listed on a
schedule attached to the Reference
Trust Agreement or on any schedule
of a Supplemental Reference Trust
Agreement."
and to amend renumbered paragraph (33) defining
"Trustee" as follows:
"Trustee shall mean The Chase Man-
xxxxxx Bank, or any successor trus-
tee appointed as hereinafter pro-
vided."
and to add the following language to the end of
renumbered paragraph (36) defining "Unit":
"hereof and increased by the number
of Additional Units created pursu-
ant to Section 2.05 hereof."
B. Article II, entitled "Deposit of Securities; Accep-
tance of Trust; Issuance of Units; Form of Certifi-
xxxxx", shall be amended to add a new Section 2.05
entitled "Deposit of Additional Securities" to read
as follows:
"From time to time and in the discre-
tion of the Depositor, the Depositor
may make deposits of Additional Secu-
rities duly endorsed in blank or ac-
companied by all necessary instruments
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of assignment and transfer in proper
form (or contracts to purchase Addi-
tional Securities and cash or an ir-
revocable letter of credit in an
amount necessary to consummate the
purchase of any Additional Securities
pursuant to such contracts
("Additional Contract Securities"))
and Cash (as defined below), if Cash
is an asset of the Trust immediately
prior to the supplemental deposit,
provided that each deposit of Addi-
tional Securities and Cash, if any,
deposited during the 90-day period
following the first deposit of Securi-
ties in the Trust shall replicate, to
the extent practicable as hereinafter
provided, the Securities (including
Contract Bonds) and shall exactly rep-
licate Cash (other than Cash to be
distributed only to the Sponsor or in
respect of Units issued and outstand-
ing prior to the deposit) held in the
Trust immediately prior to each such
deposit; and, provided further that
each deposit of Additional Securities
and Cash, if any, subsequent to such
90-day period shall exactly replicate
the Securities (including Contract
Bonds) and Cash (other than Cash to be
distributed only to the Sponsor or in
respect of Units issued and outstand-
ing prior to the deposit) held in the
Trust immediately prior to each such
deposit. For purposes of this Section
2.05 Cash means cash on hand in the
Trust and/or cash receivable by the
Trust as of the date of the supplemen-
tal deposit in respect of a coupon
date which has occurred on or before
the date of such supplemental deposit,
reduced by payables and accrued ex-
penses on such date, but shall not in-
clude cash received on any Security
which is allocable to the amount paid
to the Unit Holders of record on the
first settlement date for the Trust.
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Accordingly, for a deposit subsequent to
the 90-day period following the first deposit
of Securities:
(1) Any Additional Bonds included in a
deposit shall be identical to Bonds held in the
Trust immediately prior to the deposit and in
face amounts such that (i) the face amount of
Additional Bonds of a particular issue included
in a deposit divided by (ii) the aggregate of
the face amounts of all Additional Bonds in-
cluded in the deposit results in a fraction
which is the same as the fraction resulting
from division of (iii) the aggregate face
amount of the Bonds of the same issue held in
the Trust divided by (iv) the aggregate face
amount of all Bonds held in the Trust immedi-
ately prior to the deposit;
(2) Any deposit of Additional Securities
shall be accompanied by Cash in an amount bear-
ing the same ratio to the aggregate face amount
of all Additional Bonds in the deposit as the
Cash held in the Trust immediately prior to the
deposit bears to the aggregate face amount of
all Bonds held in the Trust immediately prior
to the deposit, exclusive of Cash held in the
Trust and designated for distribution only to
the Sponsor or with respect to Units issued and
outstanding prior to the deposit; and
(3) Any Additional Deposited Units in-
cluded in a deposit shall be identical with De-
posited Units then held in the Trust and shall
be in numbers determined by multiplying the
number of Deposited Units with respect to a
particular prior series of the National Munici-
pal Trust held in the Trust immediately prior
to the deposit by the fraction obtained by di-
viding the face amount of all Additional Bonds
included in the deposit by the face amount of
all Bonds included in the Trust immediately
prior to the deposit;
and for a deposit during the 90-day period fol-
lowing the first deposit of Securities in the
Trust, the rules stated in paragraphs (1), (2)
and (3) of this Section 2.05 shall apply ex-
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cept that any Additional Securities (including
Additional Contract Securities) need be only
substantially similar (rather than identical
to) Securities held in the Trust immediately
prior to the deposit and the proportionality
requirements need be met only to the extent
practicable. Without limiting the generality
of the phrase "to the extent practicable", if
the Depositor specifies a minimum face amount
of a Bond or minimum number of Deposited Units
with respect to a particular trust to be in-
cluded in a deposit and such minimum require-
ment cannot be met or if a Security identical
to a Security held in the Trust is not readily
obtainable, substitution of other substantially
similar Securities (including Securities of an
issue originally deposited) in order to meet
the foregoing proportionality requirements
shall be considered as a meeting of such re-
quirements "to the extent practicable".
Each deposit of Additional Securities shall be
listed in and made in accordance with a Supple-
mentary Schedule to the Reference Trust Agree-
ment stating the date of such deposit and the
number of Additional Units being issued there-
for. The execution by the Depositor in connec-
tion with the deposit of Additional Securities
of a Supplementary Schedule to the Reference
Trust Agreement shall constitute the approval
by the Depositor as satisfactory in form and
substance of the contracts to be entered into
or assumed by the Trustee with regard to any
Additional Securities listed on such Supplemen-
tary Schedule and authorization to the Trustee
on behalf of the Trust to enter into or assume
such contracts and otherwise to carry out the
terms and provisions thereof or to take other
appropriate action in order to complete the
deposit of the Additional Securities covered
thereby into the Trust."
C. Article III, entitled "Administration of Trust",
shall be amended as follows:
(i) Section 3.01 Initial Costs shall be
amended to substitute the following lan-
guage:
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Section 3.01. Initial Cost The costs
of organizing the Trust and sale of the
Trust Units shall, to the extent of the
expenses reimbursable to the Depositor
provided below, be borne by the Unit
Holders, provided, however, that, to the
extent all of such costs are not borne
by Unit Holders, the amount of such costs
not borne by Unit Holders shall be borne by
the Depositor and, provided further,
however, that the liability on the part
of the Depositor under this section shall
not include any fees or other expenses
incurred in connection with the
administration of the Trust subsequent
to the deposit referred to in Section 2.01.
Upon notification from the Depositor that
the primary offering period is concluded,
the Trustee shall withdraw from the Account
or Accounts specified in the Prospectus or,
if no Account is therein specified, from
the Principal Account, and pay to the
Depositor the Depositor's reimbursable
expenses of organizing the Trust and
sale of the Trust Units in an amount
certified to the Trustee by the Depositor.
If the balance of the Principal Account
is insufficient to make such withdrawal,
the Trustee shall, as directed by the
Depositor, sell Securities identified
by the Depositor, or distribute to
the Depositor Securities having a value,
as determined under Section 4.01 as of
the date of distribution, sufficient for
such reimbursement. The reimbursement
provided for in this section shall be
for the account of the Unitholders of
record at the conclusion of the primary
offering period and shall not be reflected
in the computation of the Unit Value prior
thereto. As used herein, the Depositor's
reimbursable expenses of organizing the
Trust and sale of the Trust Units shall
include the cost of the initial preparation
and typesetting of the registration
statement, prospectuses (including
preliminary prospectuses), the indenture,
and other documents relating to the Trust,
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SEC and state blue sky registration fees,
the cost of the initial valuation of the
portfolio and audit of the Trust, the
initial fees and expenses of the Trustee,
and legal and other out-of-pocket expenses
related thereto, but not including the
expenses incurred in the printing of
preliminary prospectuses and prospectuses,
expenses incurred in the preparation and
printing of brochures and other advertising
materials and any other selling expenses.
Any cash which the Depositor has identified
as to be used for reimbursement of expenses
pursuant to this Section shall be reserved
by the Trustee for such purpose and shall
not be subject to distribution or, unless
the Depositor otherwise directs, used for
payment of redemptions in excess of the
per-Unit amount allocable to Units
tendered for redemption.
(ii) section 3.05 Distribution shall be amended
by replacing "$1.00" with "$5.00" in the
first and last sentences of the third
paragraph;
(iii) section 3.05 shall be further amended to
add the following paragraph after the end
thereof: "On each Deferred Sales Charge
payment date set forth in the prospectus
for a Trust, the Trustee shall pay the ac-
count created pursuant to Section 3.15 the
amount of the Deferred Sales Charge pay-
able on each such date as stated in the
prospectus for a Trust. Such amount shall
be withdrawn from the Principal Account
and the Income Account from the amounts
therein designated for such purpose or
otherwise deducted from such accounts."
(iv) sections 3.06 A(3) and 3.06B(3) shall be
amended by adding the following: "and any
Deferred Sales Charge and organization
costs paid".
(v) section 3.07 shall be amended by adding
the following at the end thereof: "In or-
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der to pay the Deferred Sales Charge and
the organization costs, the Trustee shall
sell or liquidate such an amount of Secu-
rities at such time and from time to time
and in such manner as the Depositor shall
direct such that the proceeds of such sale
or liquidation shall be sufficient to pay
the amount required to be paid to the De-
positor pursuant to the Deferred Sales
Charge program and pursuant to the organi-
zation cost disclosure as set forth in the
prospectus for a Trust."
(vi) section 3.14 Replacement Bond shall be
amended by deleting from part (vi) of the
second sentence the words "in the category
A or better" and inserting after the word
"organization" the words "in the same
category as the Contract Bond which it re-
places";
D. Section 3.15 shall be added as follows:
Section 3.15. Deferred Sales Charge. If the Refer-
ence Trust Agreement and prospectus for a Trust
specifies a Deferred Sales Charge, the Trustee
shall, on the dates specified in and as permitted by
the prospectus, withdraw from the Income Account or
from the Principal Account, as directed by the De-
positor, an amount per Unit specified in the pro-
spectus and credit such amount to a special, non-
Trust account maintained at the Trustee out of which
the Deferred Sales Charge will be distributed to the
Depositor. If the balances in the Income and Prin-
cipal Accounts are insufficient to make any such
withdrawal, the Trustee shall, as directed by the
Depositor, either advance funds in an amount equal
to the proposed withdrawal and be entitled to xxxx-
bursement of such advance upon the deposit of addi-
tional monies in the Income Account or the Principal
Account, sell Securities and credit the proceeds
thereof to such special Depositor's Account or
credit Securities in kind to such special Deposi-
tor's Account. Such directions shall identify the
Securities, if any, to be sold or distributed in
kind and shall contain, if the Trustee is directed
by the Depositor to sell a Security, instructions as
to execution of such sales. If a Unit Holder re-
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deems Units prior to full payment of the Deferred
Sales Charge, the Trustee shall, if so provided in
the Reference Trust Agreement and prospectus, on the
Redemption Date, withhold from the Redemption Price
payment to such Unit Holder an amount equal to the
unpaid portion of the Deferred Sales Charge as such
amount is certified by the Depositor to the Trustee
prior to the Redemption Date, upon which certifica-
tion the Trustee shall be entitled to rely, and dis-
tribute such amount to such special Depositor's Ac-
count or, if the Depositor shall purchase such Unit
pursuant to the terms of Section 5.02 hereof, the
Depositor shall pay the Redemption Price for such
Unit less the unpaid portion of the Deferred Sales
Charge. The Depositor may at any time instruct the
Trustee to distribute to the Depositor cash or Secu-
rities previously credited to the special Deposi-
tor's Account.
E. Article VI, entitled "Trustee", section 6.01 General
Definition of Trustee's Liabilities, Rights and Du-
ties shall be amended as follows:
(i) Section 6.01(g) shall be amended by delet-
ing the word "originally"
(ii) Section 6.01(g) shall be amended by in-
serting the phrase "including supplemental
deposits, if any, of Securities in the
Trust" after the first reference to
"Trust".
F. Article IX, entitled "Additional Covenants; Miscella-
neous Provisions", Section 9.01 Amendments shall be
amended as follows:
(i) To add the following phrase after the word
"Indenture" in (1):
"except as the result of the deposit of
Additional Securities, as herein provided"
(ii) To add the following phrase after the word
"Bonds" in (2):
"except in the manner permitted by the In-
denture as in effect on the first deposit
of Securities".
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G. Reference to Standard & Poor's Corporation in its ca-
pacity as Evaluator is replaced by Xxxxx S&P Evalua-
tion Services, a division of X.X. Xxxxx Co., Inc.,
throughout the Basic Agreement.
H. Reference to Prudential-Bache Securities Inc. in its
capacity as Sponsor is replaced by Prudential Securi-
ties Incorporated throughout the Basic Agreement.
I. Reference to United States Trust Company of New York
in its capacity as Trustee is replaced by The Chase
Manhattan Bank throughout the Basic Agreement.
PART II.
SPECIAL TERMS AND CONDITIONS OF TRUST
The following special terms and conditions are hereby
agreed to:
A. The Trust is denominated National Municipal
Trust, Series 194 (the "National Trust").
B. The interest-bearing obligations listed in
Schedule A hereto are those which, subject to the terms of this
Indenture, have been or are to be deposited in trust under this
Indenture.
C. The term "Depositor" shall mean Prudential Secu-
rities Incorporated.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is 10,000.
E. A Unit is hereby declared initially equal to
1/10,000th.
F. The term "First Settlement Date" shall mean March
2, 1999.
G. The term "Computation Date" shall mean March
10, 1999.
H. The term first "Distribution Date" shall mean March
25, 1999.
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I. The term "Monthly Record Date" shall mean the
tenth day of each month commencing April 10, 1999.
J. The term "Monthly Distribution Date" shall mean
the twenty-fifth day of each month following a Monthly Record
Date commencing April 25, 1999.
K. The Trust will terminate on the date of matur-
ity, redemption, sale or other disposition of the last Security
held in the Trust.
L. The first distribution to Monthly Unit Holders
will be a distribution in the amount of $1.05.
M. For purposes of this Series -- National Munici-
pal Trust, Series 194 -- the form of Certificate set forth in
this Indenture shall be appropriately modified to reflect the
title of this Series and such of the Special Terms and Condi-
tions of Trust set forth herein as may be appropriate.
N. The Sponsor's Annual Portfolio Supervision Fee
shall be a maximum of $0.25 per $1,000 principal amount of un-
derlying Bonds.
O. The Trustee's Annual Fee as set forth in the In-
denture in Section 6.04 shall be $1.27 per $1,000 principal
amount of Bonds under the monthly distribution option.
P. The Units of the Trust shall be subject to a de-
ferred sales charge.
[Signatures and acknowledgments on separate pages]
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The Schedule of Portfolio Securities in Part A of the
prospectus included in this Registration Statement for Se-
xxxx 194 is hereby incorporated by reference herein as Schedule
A hereto.
