Executed in 6 Parts
Counterpart No. ( )
NATIONAL EQUITY TRUST
EQUITY PORTFOLIO SERIES 2
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated February 11, 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
expenses. 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 accounts 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 organizational 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, Equity
Portfolio Series 2.
B. The Units of the Trust shall not 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 as of 200,000 the date hereof.
F. A Unit of the Trust is hereby declared initially equal to
1/200,000th of the Trust.
G. The term "First Settlement Date" shall mean February 18, 1998.
H. The terms "Computation Day" and "Record Date" shall mean
quarterly on the tenth day of April, July, October, and January.
I. The term "Distribution Date" shall mean quarterly on the
twenty-fifth day of April, July, October, and January or as soon thereafter
as possible.
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J. The term "Termination Date" shall mean February 15, 1999.
K. The Trustee's Annual Fee shall be $0.79 (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, Equity
Portfolio Series 2 is hereby incorporated by reference herein as Schedule
A hereto.
