Executed in 6 Parts
Counterpart No. ( )
NATIONAL EQUITY TRUST
LOW FIVE PORTFOLIO SERIES 16
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated January 14, 1998 among Prudential
Securities Incorporated, as Depositor and The Chase Manhattan Bank, as Trustee,
sets forth certain provisions in full and incorporates other provisions by
reference to the document entitled "National Equity Trust Low Five Portfolio
Series, Trust Indenture and Agreement" (the "Basic Agreement") dated April 25,
1995. Such provisions as are set forth in full herein and 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 and the Trustee 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:
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A. Article I, entitled "Definitions", paragraph 22, shall be amended as
follows:
"Trustee shall mean The Chase Manhattan Bank or any successor trustee
appointed as hereinafter provided."
B. Article II, entitled "Deposit of Securities; Acceptance of Trust", shall
be amended as follows:
The second sentence of Section 2.03 Issue of Units shall be amended by
deleting the words "on any day on which the Depositor is the only Unit
Holder."
C. Article III, entitled "Administration of Trust", shall be amended as
follows:
(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 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,
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 Income and Principal Accounts
of the Trust shall be insufficient to pay the expenses borne by
the Trust specified in this Section 3.01, the Trustee shall
advance out of its own funds and cause to be deposited and
credited to the Income Account such amount as may be required to
permit payment of such ex- penses. The Trustee shall be
reimbursed for such
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advance on each Record Date from funds on hand in the Income
Account or, to the extent funds are not available in such
Account, from the Principal Account in the amount deemed to have
accrued as of such Record Date as provided in the following
sentence (less prior payments on account of such advances, if
any), and the provisions of Section 6.04 with respect to the
reimbursement of disbursements for Trust expenses, including,
without limitation, the lien in favor of the Trustee therefor and
the authority to sell Securities as needed to fund such
reimbursement, shall apply to the payment of expenses and the
amounts advanced pursuant to this Section. For the purposes of
the preceding sentence and the addition provided in clause (a)(3)
of Section 5.01, the expenses borne by the Trust pursuant to this
Section shall be deemed to have been paid on the date of the
Reference Trust Agreement and to accrue at a daily rate over the
time period specified for their amortization provided in the
Prospectus; provided, however, that nothing herein shall be
deemed to prevent, and the Trustee shall be entitled to, full
reimbursement for any advances made pursuant to this Section no
later than the termination of the Trust. For purposes of
calculating the accrual of organizational expenses under this
Section 3.01, the Trustee shall rely on the written estimates of
such expenses provided by the Depositor pursuant to Section
5.01."
(ii) The third paragraph of Section 3.05 Distribution shall be amended
to add the following sentence at the end thereof:
"The Trustee shall make a special distribution of the cash
balance in the Income and Principal ac- counts available for such
distribution to Unit Holders of record on such dates as the
Depositor shall direct."
(iii) The second to the last paragraph of Section 3.08 Sale of
Securities shall be amended to replace the word "equal" with the
following phrase: "be sufficient to pay."
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D. Article V, entitled "Trust Evaluation, Redemption, Transfer of Units,"
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 at the end of
subsection (a)(2) of such sentence and inserting the following
after "(a)(3)": "amounts representing organ- izational expenses
paid from the Trust less amounts representing accrued
organizational expenses of the Trust, and (a)(4)."
(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 3.06, the Depositor shall provide the Trustee with
written estimates of (i) the total organizational expenses to be
borne by the Trust pursuant to Section 3.01 and (ii) the total
number of Units to be issued in connection with the initial
deposit and all anticipated deposits of Additional Securities.
For purposes of calculating the 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 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.
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(iii) The second paragraph of Section 5.01 shall be amended by
replacing "(a)(3)" with "(a)(4)" in the first line.
E. 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 Equity Trust, Low
Five Portfolio Series 16.
B. The Units of the Trust shall be subject to a deferred sales charge.
C. The contracts for the purchase of common stock 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 as of the date hereof.
D. The term "Depositor" shall mean Prudential Securities Incorporated.
E. The aggregate number of Units referred to in Sections 2.03 and
9.01 of the Basic Agreement is 250,000 as of the date hereof.
F. A Unit of the Trust is hereby declared initially equal to
1/250,000th of the Trust.
G. The term "First Settlement Date" shall mean January 21, 1998.
H. The terms "Computation Day" and "Record Date" shall mean April 10,
1998, July 10, 1998, October 10, 1998, and January 10, 1999.
I. The term "Distribution Date" shall mean April 25, 1998, July 25,
1998, October 25, 1998, and January 25, 1999.
J. The term "Termination Date" shall mean February 17, 1999.
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K. The Trustee's Annual Fee shall be $0.90 (per 1,000 Units) for
100,000,000 and above units outstanding; $0.85 (per 1,000 Units) for
50,000,000 - 99,999,999 units outstanding; $0.91 (per 1,000 Units) for
49,999,999 and below units outstanding. In calculating the Trustee's annual
fee, the fee applicable to the number of units outstanding shall apply to all
units outstanding.
L. The Depositor's Portfolio supervisory service fee shall be $0.25 per
1,000 Units.
[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 National Equity Trust, Low Five
Portfolio Series 16 is hereby incorporated by reference herein as
Schedule A hereto.
