Executed in 6 Parts
Counterpart No. ( )
NATIONAL EQUITY TRUST
S&P 500 STRATEGY TRUST SERIES 2
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated October 13, 1998 among
Prudential Securities Incorporated, as Depositor and The Chase Manhat-
tan Bank, as Trustee, sets forth certain provisions in full and incor-
porates 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 provi-
sions as are set forth in full herein and such provisions as are in-
corporated by reference constitute a single instrument (the
"Indenture").
WITNESSETH THAT:
----------------
In consideration of the premises and of the mutual agree-
ments herein contained, the Depositor and the Trustee agree as fol-
lows:
Part I.
-------
STANDARD TERMS AND CONDITIONS OF TRUST
Subject to the provisions of Part II hereof, all the provi-
sions 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:
-2-
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) Section 3.01 Initial Costs shall be amended to
substitute the following language:
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
-3-
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, 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) 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."
-4-
D. 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, S&P 500
Strategy Trust Series 2.
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 Sec-
tions 2.03 and 9.01 of the Basic Agreement is 375,000 as of the
date hereof.
F. A Unit of the Trust is hereby declared initially equal
to 1/375,000th of the Trust.
G. The term "First Settlement Date" shall mean
October 19, 1998.
H. The terms "Computation Day" and "Record Date" shall
mean on the tenth day of January 1999, April 1999, July 1999,
and October 1999.
I. The term "Distribution Date" shall mean on the twenty-
fifth day of January 1999, April 1999, July 1999, and
October 1999 or as soon thereafter as possible.
J. The term "Termination Date" shall mean November 17, 1999.
-5-
K. The Trustee's Annual Fee shall be $.74 (per 1,000
Units) for 100,000,000 and above units outstanding; $.80 (per
1,000 Units) for 50,000,000 - 99,999,999 units outstanding; $0.86
(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 $0.15 per 1,000 Units.
[Signatures and acknowledgments on separate pages]
-6-
The Schedule of Portfolio Securities in Part A of the pro-
spectus included in this Registration Statement for National
Equity Trust, S&P 500 Strategy Trust Series 2 is hereby in-
corporated by reference herein as Schedule A hereto.