Exhibit 4.b
Executed in 7 Parts
Counterpart No. ( )
NATIONAL MUNICIPAL TRUST
SERIES 185
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated , 1996
among Prudential Securities Incorporated, as Depositor, The
Chase Manhattan Bank (National Association), 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 Municipal Trust, Trust Indenture and
Agreement" (the "Basic Agreement") dated September 6, 1989, as
amended. Such provisions as are incorporated by reference
constitute a single instrument (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
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 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:
-2-
"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 initially specified in a
Reference Trust Agreement."
"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 deposited in
connection with an increase in the number 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 connection
with an increase in the number of Units initially
specified in a Reference Trust Agreement.
"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 respect 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 Agreement"
shall mean a document pursuant to which Additional
Units are deposited in connection with an increase in
the number of Units initially specified in a
Reference Trust Agreement."
and to insert the following language in renumbered
paragraph (6) defining "Bonds" after each reference
to Reference Trust Agreement:
"and Supplemental Reference Trust
Agreements"
and to replace the last word in renumbered paragraph
(6) defining "Bonds" with the word "relate"
-3-
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 Agreements"
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 Manhattan
Bank (National Association), or any
successor trustee appointed as
hereinafter provided."
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 pursuant to
Section 2.05 hereof."
B. Article II, entitled "Deposit of Securities;
Acceptance of Trust; Issuance of Units; Form of
Certificates", 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 discretion
of the Depositor, the Depositor may make
deposits of Additional Securities duly
endorsed in blank or accompanied by all
necessary instruments of assignment and
transfer in proper form (or contracts to
purchase Additional Securities and cash
or an irrevocable 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
-4-
the Trust immediately prior to the
supplemental deposit, provided that each
deposit of Additional Securities and
Cash, if any, deposited during the
90-day period following the first
deposit of Securities in the Trust shall
replicate, to the extent practicable as
hereinafter provided, the Securities
(including Contract Bonds) and shall
exactly replicate Cash (other than Cash
to be distributed only to the Sponsor or
in respect of Units issued and
outstanding 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 outstanding
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 supplemental deposit in
respect of a coupon date which has
occurred on or before the date of such
supplemental deposit, reduced by
payables and accrued expenses on such
date, but shall not include 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.
Accordingly, for a deposit
subsequent to the 90-day period
following the first deposit of
Securities:
(l) 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
-5-
of the face amounts of all Additional
Bonds included 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
immediately prior to the deposit;
(2) Any deposit of Additional
Securities shall be accompanied by Cash
in an amount bearing 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
included in a deposit shall be identical
with Deposited 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 Municipal Trust
held in the Trust immediately prior to
the deposit by the fraction obtained by
dividing 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 following the first deposit of
Securities in the Trust, the rules
stated in paragraphs (1), (2) and (3) of
this Section 2.05 shall apply except
that any Additional Securities
(including Additional Contract
Securities) need be only substantially
similar (rather than identical to)
Securities held in the Trust immediately
-6-
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 included in a
deposit and such minimum requirement
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 requirements "to the
extent practicable".
Each deposit of Additional Securities
shall be listed in and made in
accordance with a Supplementary Schedule
to the Reference Trust Agreement stating
the date of such deposit and the number
of Additional Units being issued
therefor. The execution by the
Depositor in connection 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
Supplementary 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:
-7-
(i) The first part of the first sentence of
Section 3.01 Initial Costs shall be
amended to substitute the following
language before the phrase "provided,
however":
"With respect to the Trust, the cost of
the preparation and printing of the
Certificates, Indenture, Registration
Statement and other documents relating
to the Trust, Federal and State
registration fees and costs, the initial
fees and expenses of the Trustee and
Evaluator, legal and auditing expenses
and other out-of-pocket organizational
expenses, to the extent not borne by the
Depositor, shall be paid by the Trust;"
Section 3.01 shall be further amended to
add the following language:
"To the extent the funds in the Interest
and Principal Accounts of the Trust
shall be insufficient to pay the
expenses borne by the Trust specified in
this Section 3.01, the Trustee shall
advance out of its own funds and cause
to be deposited and credited to the
Interest Account such amount as may be
required to permit payment of such
expenses. The Trustee shall be
reimbursed for such advance in the
manner provided in Section 3.05 at the
rate of accrual set forth in the next
sentence, and the provisions of
Section 6.04 with respect to the
reimbursement of disbursements for Trust
expenses including, without limitation,
the lien in favor of the Trustee
therefor, shall apply to the payment of
expenses made pursuant to this Section.
For purposes of calculation of
distributions under Section 3.05 and the
addition provided in clause (4) of
Section 5.01, the expenses borne by the
Trust pursuant to this Section shall be
deemed to accrue at a daily rate over
the time period specified for their
amortization provided in the Prospectus;
provided, however, that nothing herein
-8-
shall be deemed to prevent, and the
Trustee shall be entitled to, full
reimbursement for any advances made
pursuant to this Section no later than
the termination of the Trust;
The Depositor will provide the Trustee
with a written estimate of
organizational expenses upon which the
Trustee shall be entitled to rely unless
and until a revised written estimate of
such expenses is delivered to the
Trustee by the depositor, in which event
the Trustee shall make appropriate
adjustments to Unit Value and the
evaluation of the Trust pursuant to
Section 5.01, and to the accrual of such
expenses of purposes of calculating
distributions."
(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 account created pursuant
to Section 3.15 the amount of the
Deferred Sales Charge payable 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 paid".
(v) section 3.07 shall be amended by adding
the following at the end thereof: "In
order to pay the Deferred Sales Charge,
the Trustee shall sell or liquidate such
an amount of Securities at such time and
from time to time and in such manner as
the Depositor shall direct such that the
-9-
proceeds of such sale or liquidation
shall be sufficient to pay the amount
required to be paid to the Depositor
pursuant to the Deferred Sales Charge
program 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 replaces";
D. Section 3.15 shall be added as follows:
Section 3.15. Deferred Sales Charge. If the
Reference 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 Depositor,
an amount per Unit specified in the prospectus 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 Principal 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 reimbursement of such
advance upon the deposit of additional 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 Depositor'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 redeems 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 certification the Trustee shall be
-10-
entitled to rely, and distribute such amount to such
special Depositor's Account 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 Securities previously credited
to the special Depositor's Account.
E. Article V, entitled "Trust Evaluation; Redemption,
Purchase, Transfer, Interchange or Replacement of
Certificates," Section 5.01 Trust Evaluation shall be
amended as follows:
(i) the second sentence of the first
paragraph of Section 5.01 shall be
amended by deleting the word "and"
appearing immediately prior to
subsection (3) of such sentence and
inserting the following at the end of
such sentence: ", and (4) amounts
representing organizational expenses
paid less amounts representing accrued
organizational expenses of a Trust."
(ii) The following shall be added at the end
of the first paragraph of Section 5.01:
Until the Depositor has informed the
Trustee that there will be no further deposits
of Additional Securities pursuant to section
2.05, the Depositor shall provide the Trustee
with written estimates of (i) the total
organizational expenses to be borne by the Trust
pursuant to Section 3.01 and (ii) the total
number of Units to be issued in conneciton with
the initial deposit and all anticipated deposits
of Additional Securities. For purposes of
calculating the value of the Trust and Unit
Value, the Trustee shall treat all such
anticipated expenses as having been paid and all
liabilities therefor as having been incurred,
and all Units as having been issued, in each
case on the date of the Reference Trust
Agreement, and, in connection with each such
calculation, shall take into account a pro rata
portion of such expense and liability based on
the actual number of Units issued as of the date
of such calculation. In the event the Trustee
-11-
is informed by the Depositor of a revision in
its estimate of total expenses or total Units
and upon the conclusion of the deposit of
Additional Securities, the Trustee shall base
calculations made thereafter on such revised
estimates or actual expenses, respectively, but
such adjustment shall not affect calculations
made prior thereto and no adjustment shall be
made in respect thereof.
F. Article VI, entitled "Trustee", section 6.01 General
Definition of Trustee's Liabilities, Rights and
Duties shall be amended as follows:
(i) Section 6.01(g) shall be amended by deleting the
word "originally"
(ii) Section 6.01(g) shall be amended by inserting
the phrase "including supplemental deposits, if
any, of Securities in the Trust" after the first
reference to "Trust".
G. Article IX, entitled "Additional Covenants;
Miscellaneous 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
Indenture as in effect on the first
deposit of Securities".
H. Reference to Standard & Poor's Corporation in their
capacity as Evaluator is replaced by Xxxxx S&P
Evaluation Services, a division of X.X. Xxxxx Co.,
Inc., throughout the Basic Agreement.
I. Reference to Prudential-Bache Securities Inc. in
their capacity as Sponsor is replaced by Prudential
Securities Incorporated throughout the Basic
Agreement.
-12-
J. Reference to United States Trust Company of New York
in its capacity as Trustee is replaced by The Chase
Manhattan Bank (National Association) 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 185 (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
Securities Incorporated.
D. The aggregate number of Units referred to in
Sections 2.03 and 9.01 of the Basic Agreement is .
E. A Unit is hereby declared initially equal to
1/ th.
F. The term "First Settlement Date" shall mean
, 1996.
G. The term "Computation Date" shall mean
10, 1996.
H. The term first "Distribution Date" shall mean
25, 1996.
I. The term "Monthly Record Date" shall mean the
tenth day of each month commencing 10, 1996.
J. The term "semi-annual Record Date shall mean the tenth day of
July and January of each year commencing 10, 1996.
K. The term "Monthly Distribution Date" shall mean
the twenty-fifth day of each month following a Monthly Record
Date commencing 25, 1996.
L. The term "Semi-annual Distribution Date" shall mean
the twenty-fifth day of each month following each Semi-annual Record
Date commencing 25, 1996.
M. The Trust will terminate on the date of
maturity, redemption, sale or other disposition of the last
Security held in the Trust.
N. The first distribution to Monthly and Semi-annual Unit Holders
will be a distribution in the amount of $ .
O. The first distribution to Monthly Unit Holders
will be a full distribution in the amount of $ .
P. For purposes of this Series -- National
Municipal Trust, Series 185 -- 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 Conditions of Trust set forth herein as may be appropriate.
Q. The Sponsor's Annual Portfolio Supervision Fee
shall be a maximum of $ per $1,000 principal amount of
underlying Bonds.
R. The Trustee's Annual Fee as set forth in the
Indenture in Section 6.04 shall be $ per $1,000 principal
amount of Bonds under the monthly distribution option.
S. The term "Insurer" may mean AMBAC Indemnity Corporation
("AMBAC"), Capital Markets Assurance Corporation ("CapMAC"), Capital Guaranty
Insurance Company ("Cap. Gty."), Xxxxxx Xxx Insurance Co. ("Xxxxxx Xxx"),
Financial Guaranty Insurance Company ("FGIC"), Financial Security Assurance
("FSA"), Municipal Bond Insurance Association ("MBIA") and/or Municipal Bond
Investors Assurance Corporation ("MBIAC").
[Signatures and acknowledgments on separate pages]
