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                                                             Executed in 6 Parts
                                                           Counterpart No. (   )


                              NATIONAL EQUITY TRUST


                        FORBES FORTY INDEX TRUST SERIES 3


                            REFERENCE TRUST AGREEMENT


                  This Reference Trust Agreement dated April 13, 2000 among
Prudential Securities Incorporated, as Depositor and The Bank of New York, as
Trustee, sets forth certain provisions in full and incorporates other provisions
by reference to the document entitled "National Equity Trust, Trust Indenture
and Agreement" (the "Basic Agreement") dated February 2, 2000. 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:
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                  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.


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                                    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, Forbes Forty Index
Trust Series 3.

     B.  The Units of the Trust shall be subject to a deferred sales charge.

     C.  The publicly traded stocks 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 125,000 as of the date hereof.

     F.  A Unit of the Trust is hereby declared initially equal to 1/125,000th
of the Trust.

     G.  The term "First Settlement Date" shall mean April 19, 2000.

     H.  The terms "Computation Day" and "Record Date" shall be on such dates as
the Sponsor shall direct.

     I.  The term "Distribution Date" shall be on such dates as the Sponsor
shall direct.

     J.  The term "Termination Date" shall mean June 15, 2001.

     K.  The Trustee's Annual Fee shall be $.90 (per 1,000 Units) for 49,999,999
and below units outstanding $.84 (per 1,000 Units) on the next 50,000,000 Units,
$.78 (per 1,000 Units) on the next 100,000,000 Units, and $.66 (per 1,000 Units)
on Units in excess of 200,000,000 Units. In calculating the Trustee's annual
fee, the fee applicable to the number of units outstanding shall apply to all
units outstanding.

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     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, Forbes Forty Index Trust Series 3 is
          hereby incorporated by reference herein as Schedule A hereto.