Executed in 6 Parts
Counterpart No. ( )
NATIONAL EQUITY TRUST
EQUITY PORTFOLIO SERIES 1
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated December 17, 1997 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, as amended. 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 in-
strument except that the Basic Agreement is hereby amended in the following
manner:
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."
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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 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
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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 Sec- tion 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."
D. Article V, entitled "Trust Evaluation, Redemption, Transfer of Units,"
Section 5.01 Trust Evaluation shall be amended as follows:
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(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 de-
posit 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 in-
curred, 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
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no adjustment shall be made in respect thereof.
(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 1.
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 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 December 23, 1997.
H. The terms "Computation Day" and "Record Date" shall mean
quarterly on February 10, May 10, August 10, and November 10.
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I. The term "Distribution Date" shall mean quarterly on February 25,
May 25, August 25, and November 25.
J. The term "Termination Date" shall mean December 20, 1999.
K. The Trustee's Annual Fee shall be $ .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 an-
nual 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 1 is hereby incorporated by reference herein as Schedule A
hereto.
