Executed in 6 Parts
Counterpart No. ( )
NATIONAL EQUITY TRUST
LOW FIVE PORTFOLIO SERIES 206
REFERENCE TRUST AGREEMENT
This Reference Trust Agreement dated , 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:
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) 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 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
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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 accounts available
for such distribution to Unit Holders of
record on such dates as the Depositor
shall direct, provided however, that no
such distribution shall be made if the
assets of the Trust subsequent to such
distribution would not exceed any
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Deferred Sales Charge payable and other
trust expenses."
(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. 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 206.
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
as of the date hereof.
F. A Unit of the Trust is hereby declared
initially equal to 1/ th of the Trust.
G. The term "First Settlement Date" shall mean
, 1998.
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H. The terms "Computation Day" and "Record
Date" shall mean quarterly on the tenth day of ,
, , and commencing 10, 1998.
10.
I. The term "Distribution Date" shall mean
quarterly on the twenty-fifth day of , ,
, and commencing 25, 1998 or as soon thereafter as
possible.
J. The term "Termination Date" shall mean
, 2000.
K. The Trustee's Annual Fee shall be $
(per 1,000 Units) for 100,000,000 and above units
outstanding; $0.80 (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 $0.25 per 1,000 Units.
[Signatures and acknowledgments on separate pages]