Document:

<PAGE>   1
                                                                   EXHIBIT 10.18

[SMITH & WESSON LOGO]
Smith & Wesson(R)
February 3, 1998

Mr. Charles Finkelstein, President
Canadian Security Agency
4480 Cote de Liesse, Suite 306
Montreal, Quebec H4N 2R1, Canada

 .
Dear Charles:

This letter will serve as a Letter of Amendment to the License Agreement between
Smith & Wesson and Canadian Security Agency of May, 1996.

Contingent upon the full compliance by Canadian Security Agency with the terms
and conditions of the Agreement between Smith & Wesson and Canadian Security
Agency of May, 1996, that Agreement shall be renewed for a five (5) year term
beyond the expiration thereof on December 31, 2006. The forgoing modification
shall supersede all terms as to renewals or extension in the Agreement as
originally executed for the five (5) year period. The Minimum Guaranteed Royalty
for each Contract Year for said five (5) year term shall be the greater of (1)
the value set forth below:
<TABLE>
<CAPTION>
<S>                        <C>
Twelfth Contract Year      $699,600
Thirteenth Contract Year   $799,600
Fourteenth Contract Year   $846,600
Fifteenth Contract Year    $931,300
Sixteenth Contract Year    $1,024,430
</TABLE>

or, (2) an Alternative Minimum Guaranteed Royalty for each Contract Year which
equals eighty percent (80%) of the total royalties due for the preceding
Contract Year. All references to "dollars", "royalties", "taxes", "credits", as
well as any and all other monetary values set forth herein and in the May 1996
Agreement shall refer to or be computed in U.S. Dollars.

An additional (5) five year period renewal beyond Year 16 will be executed if
full compliance of all terms and conditions through Year 16 have taken place,
based on a 10% increase in Minimum Guaranteed Royalty each subsequent year, or
the Alternative Minimum Guaranteed Royalty as described above.
<PAGE>   2
Sincerely,

/s/ John Steele                            /s/ Charles Finkelstein
------------------------------             -------------------------------------
John Steele                                    Charles Finkelstein
Director of Licensing and Merchandising        President

2100 ROOSEVELT AVENUE, PO. BOX 2208, SPRINGFIELD, MA 01102-2208 * (413) 781-8300

                                       2
<PAGE>   3
[SMITH & WESSON LOGO]
Smith & Wesson(R)

                              ASSIGNMENT OF LICENSE

WHEREAS Canadian Security Agency, Inc. (the "Licensee") is the licensee under a
certain license, dated May 31, 1996, titled "Trademark License Agreement", a
copy of which is annexed hereto (the "License"), by and between the Licensee and
Smith & Wesson Corp. (the "Licensor");

WHEREAS Charles Finkelstein and Terrence Corcoran, sole shareholders of the
Licensee (the "Shareholders"), have formed and incorporated International
Licensing Corporation, a Florida corporation, for the purpose of succeeding to
the rights of the Licensee, for the purpose of holding, developing and operating
the License (the Assignee"); and

WHEREAS the Assignee is controlled by the Shareholders of the Licensee and the
present directors of Licensee have voting control of the Assignee, in accordance
with the requirements of Section 18 of the Trademark License Agreement,

NOW THEREFORE, for good and valuable consideration, receipt of which is hereby
acknowledged, Licensee, Licensor and Assignee, hereby agree to the following
assignment (the "Assignment"):

Licensee hereby assigns, transfers and conveys to Assignee all its rights and
interests under the Trademark License Agreement and the License.

This Assignment shall remain in full force and effect from October 19, 1998 for
all of the remainder of the License term, including all amendments or extensions
thereto, subject to as conditions, covenants, and terms, including payment of
royalties to Licensor.

This Assignment shall inure to be benefit of, and be binding on, the parties
hereto, their heirs, successors and assigns.

Dated this 21 day of October 1998.

Canadian Security Agency, Inc.        Smith & Wesson Corp.

/s/ Terrence Corcoran                 /s/ George Colclough
------------------------------        ------------------------------------------
By: T. Corcoran                       G. Colclough
<PAGE>   4
International Licensing Corporation

/s/ Charles Finkelstein
-----------------------------------
By C. Finkelstein

2100 ROOSEVELT AVENUE, PO. BOX 2208, SPRINGFIELD, MA 01102-2208 * (413) 781-8300

                                       2
<PAGE>   5
                              SMITH & WESSON CORP.

                           TRADEMARK LICENSE AGREEMENT

This Agreement effective as of May 31, 1996, by and between SMITH & WESSON
CORP., a Delaware Corporation with its principal office at 2100 Roosevelt
Avenue, Springfield, Massachusetts 01102-2208, (hereinafter called Licensor"),
and Canadian Security Agency Inc., a Corporation, having its principal office at
4480 Cote de Liesse, Suite 306, Montreal, Quebec, Canada, H4N 2R1, (hereinafter
called "Licensee"). In consideration of the mutual promises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by Licensor and Licensee, the parties agree as follows:

1.       Definitions: As used in this Agreement, the following terms shall have
         the following meanings:

         a.       "Marks" shall mean those trademarks and service marks
                  identified in Exhibit A, attached hereto, and all of the
                  Licensor's rights in such Marks including, without limitation,
                  common law rights, and registrations and applications for
                  registration of any such Marks in any state, federal or other
                  jurisdiction.

         b.       "Licensed Articles" shall mean the articles of merchandise
                  listed in Exhibit B, attached hereto and marked with one or
                  more of the Marks.

         c.       "Licensed Services" shall mean the services listed in Exhibits
                  C & D attached hereto and carried out in association with one
                  or more of the Marks.

         d.       "Net Sales Price" shall be the invoiced price at which
                  Licensed Articles and Licensed Services are sold or provided
                  by Licensee, less any sales tax, and less any credits for
                  returns actually made or allowances in lieu of returns,
                  provided that such returns and/or allowances relate to sales
                  which were previously included in royalty calculations under
                  this Agreement and less trade discounts and/or retailer
                  promotional programs. The Net Sales Price on account of sales,
                  giveaways, or other transactions, without charge or at
                  discounted prices, and sales to, any person directly or
                  indirectly related to or affiliated with Licensee shall be
                  computed based on regular selling prices to the trade. There
                  shall be no deduction from the Net Sale Price on which
                  royalties are due hereunder for uncollectible accounts,
                  advertising expenses or other expenses of any kind except
                  those specifically identified in this Section.
<PAGE>   6
         e.       "Territory" is the geographic area identified in Section 2(a)
                  of this Agreement.

         f.       "Minimum Guaranteed Royalties" shall have the meaning set
                  forth in Section 3(e) of this Agreement.

         g.       "Contract Year" and "First Contract Year" shall have the
                  meanings given those respective terms set forth in Section
                  2(c) of this Agreement.

2.       Grant of License, Term, Licensee's Duties

         a.       Except as set forth hereinafter in paragraph F, Licensor
                  hereby grants to Licensee an exclusive worldwide license to
                  use and/or sublicense the use of the Marks in connection with
                  the retail sale of Licensed Articles and Services in the
                  private and proprietary security industry. Under this grant,
                  Licensee may only sublicense in strict accordance with the
                  provisions of this Agreement. Licensee shall not use, or
                  permit the use of, the Marks with any other product or for any
                  other services, except as specifically provided in this
                  Agreement. No sublicense agreement shall be concluded with any
                  third party without the Licensor's prior written consent,
                  which consent shall not be unreasonably withheld, and unless
                  such sub-license agrees in writing to be bound by all of the
                  terms and conditions of this Agreement. A copy of such written
                  agreement shall be provided directly to the Licensor. Licensee
                  shall take all steps and timely notify Licensor of all steps
                  as shall be necessary to protect Licensor's trademark rights
                  in such marks, and to assure Licensor's exclusive ownership
                  thereof.

         b.       Notwithstanding the provisions of sub-paragraph (a) above, at
                  any time after the expiry of the Third Contract Year, the
                  Licensor shall have the option to terminate this Agreement
                  with regard to any Licensor specified licensed product(s)
                  and/or licensed service(s) in a Licensor specified country,
                  provided it first gives the Licensee prior written notice of
                  One Hundred and Eighty (180) days of its intention to do so,
                  which termination will only become effective should the
                  Licensee and/or a duly appointed sub-licensee not commence to
                  market the specified licensed product(s) and/or licensed
                  service(s) in such specified country, or submit to Licensor an
                  acceptable business plan to market said specified licensed
                  product(s) and/or licensed service(s) in such specified
                  country prior to the expiry of such one hundred and eighty day
                  period.

         c.       The term of this Agreement shall be for ten (10) years and
                  seven (7) months commencing May 31, 1996 and ending December
                  31, 2006 at midnight, unless sooner terminated. Each period
                  from January 1

                                       2
<PAGE>   7
                  through December 31 during the term hereof is hereinafter
                  referred to as a "Contract Year", with the exception of the
                  "First Contract Year", which shall be for the period from the
                  date hereof through December 31, 1996. This Agreement shall be
                  automatically extended for successive Contract Years after
                  termination of the initial term unless Licensor or Licensee
                  gives the other party written notice of its intention not to
                  so extend this Agreement at least one hundred eighty (180)
                  days one (1) year prior to the expiration date of the current
                  Contract Year. Moreover, the Licensee shall have the option to
                  terminate this Agreement during the First and Second Contract
                  Years, provided it gives the Licensor written notice of such
                  intention at least one hundred and eighty (180) days prior to
                  the expiration date thereof. A party's determination not to
                  extend this Agreement may be effected without cause.

         d.       Licensee shall use its best efforts to promote the sale of
                  Licensed Articles and Services in the Territory and shall
                  maintain resources and a sales force sufficient and adequate
                  to accomplish Licensee's obligations hereunder.

         e.       The articles of merchandise and services respectfully set
                  forth on Exhibits B, C and D are exemplary and can be modified
                  from time to time by written agreement of the parties without
                  altering the scope of the license grant or other terms of this
                  Agreement.

         f.       If Licensee shall enter into any sublicense agreement pursuant
                  to the authority granted in this Agreement, then

                           (1) Licensee shall be jointly and severally liable
                  with such sublicensee to indemnify Licensor in. accordance
                  with the terms of this Agreement (regardless of whether or not
                  such sublicensee is legally determined to have direct
                  liability to Licensor hereunder) with respect to any actions
                  by such sublicensee or any party acting through such
                  sublicensee which would give rise to an indemnification
                  obligation of Licensee under this Agreement were such actions
                  taken by Licensee itself;

                           (2) Licensee shall be fully liable to Licensor for
                  the payment of any costs and expenses which are incurred as
                  the result of the exercise of any rights hereunder by Licensee
                  or its sublicensees under this Agreement where this Agreement
                  provides that such costs and expenses shall be for the account
                  of Licensee or its sublicensees; and

                           (3) All Licensed Articles and Licensed Services sold,
                  distributed, rendered or otherwise provided under any
                  sublicense granted pursuant to this Agreement shall be subject
                  to the royalty and

                                       3
<PAGE>   8
                  revenue provisions in this Agreement as though sold,
                  distributed or otherwise provided by Licensee; and Licensee
                  guarantees the payment of any and all royalties due to
                  Licensor under any sublicense, and agrees to monitor all of
                  its sublicensees to ensure the accurate and prompt payment of
                  all royalties accruing under such sublicenses.

         g.       Licensee acknowledges that Licensor has and continues to
                  develop and market products and services for the security
                  industry either directly or through third parties. These same
                  products and services are separate from this Agreement and are
                  not governed by its terms and conditions. No provisions of
                  this Agreement shall be interpreted to preclude Licensor from
                  continuing to develop or from continuing to make or have made
                  these products or from rendering or causing to be rendered
                  these services to the security industry.

         h.       Licensee shall make available to Licensor or its designated
                  agent(s) any Licensed Article and/or Licensed Service on the
                  most favorable terms and conditions offered by Licensee for
                  that Licensed Article and/or Licensed Service.

3.       Royalties and Payment, Minimum Guaranteed Royalties, Reporting

         a.       Licensee shall pay Licensor a royalty equal to two and
                  one-half (2 1/2%) percent of the Net Sales Price of all
                  Licensed Articles and/or Licensed Services as set out in
                  Exhibits B and C sold, distributed or otherwise provided by
                  Licensee or any of its sub-licensees during or after the term
                  of this Agreement.

         b.       Licensee shall pay Licensor a fifty percent (50%) share of the
                  gross revenue derived from the provision of those Licensed
                  Services as set out in Exhibit D by the Licensee or any of its
                  sub-licensees.

         c.       On or before the fifteenth day of the first month of each
                  calendar quarter, Licensee shall furnish to Licensor full and
                  accurate statements, certified by the Chief Financial Officer
                  of Licensee, showing the number, description, total Net Sales
                  Prices and gross revenue of the Licensed Articles and Licensed
                  Services sold, distributed or otherwise provided by the
                  Licensee and any of its sublicensees during the preceding
                  calendar quarter. Licensee shall, simultaneously with such
                  statements, pay to Licensor the royalties and/or gross revenue
                  share due thereon. Licensee may credit against any such
                  payment any Minimum Guaranteed Royalty payment made by
                  Licensee contemporaneously with such quarterly statement. Any
                  Minimum Guaranteed Royalty paid for any Contract Year shall
                  not be refunded to Licensee, and may not be credited to
                  royalties due in any subsequent Contract Year, regardless

                                       4
<PAGE>   9
                  of the sales of Licensed Products and Licensed Services. On or
                  before the first day of the fourth month following the end of
                  each Contract Year, Licensee shall furnish to Licensor a
                  statement certified by the Chief Financial Officer of Licensee
                  showing total sales of Licensed Articles and Licensed
                  Services, gross revenues therefrom as well as royalties and/or
                  gross revenue share due and royalties and/or gross revenue
                  share paid for the preceding Contract Year. If such statement
                  discloses that the amount of royalties and/or gross revenue
                  share paid during any period to which such statement relates
                  were less than the amount required to be paid, Licensee shall
                  pay such deficiency concurrently with the delivery of the
                  statement. The quarterly and yearly statements shall each show
                  in detail all calculations used in the computation of
                  royalties and gross revenue share.

         d.       For purposes of this Agreement, a Licensed Article or Service
                  shall be considered sold or provided when such Article or
                  Service has been shipped, distributed, rendered, paid for,
                  billed or invoiced, whichever first occurs.

         e.       Notwithstanding anything to the contrary set forth herein,
                  Licensee shall pay to Licensor minimum royalties ("Minimum
                  Guaranteed Royalties"), as follows for each Contract Year, or
                  portion thereof, included in the term of this Agreement, until
                  changed by mutual written agreement of the parties:
<TABLE>
<CAPTION>
                  <S>                                <C>
                  First Contract year                $15,000
                  Second Contract year               $45,000
                  Third Contract year                $65,000
                  Fourth Contract year               $90,000
                  Fifth Contract year                $132,000
                  Sixth Contract year                $171,000
                  Seventh Contract year              $223,000
                  Eighth Contract year               $290,000
                  Ninth Contract year                $377,000
                  Tenth Contract year                $489,000
                  Eleventh Contract year             $636,000
</TABLE>

         f.       For the First Contract Year, the Minimum Guaranteed Royalty
                  shall be payable as follows: Five Thousand Dollars ($5,000.00)
                  upon signing of the Agreement, Ten Thousand Dollars ($10,000)
                  August 31, 1996. For the Second Contract Year the Minimum
                  Guaranteed Royalty shall be payable as follows: Fifteen
                  Thousand ($15,000) March 30, 1997, August 31, 1997, November
                  30, 1997. Thereafter, for each Contract Year during which this
                  Agreement is in effect, the Minimum Guaranteed Royalty shall
                  be paid in four equal installments on the dates

                                       5
<PAGE>   10
                  on which each royalty payment is due, pursuant to Section 3(c)
                  of this Agreement

         g.       Any delinquent amounts under this Agreement shall bear simple
                  interest at the rate of 1.5 percent per month, or if lower,
                  the highest rate permitted by Massachusetts law, from the due
                  date thereof until paid.

4.       Protection of Marks

         a.       Licensee acknowledges Licensor's exclusive right, title and
                  interest in and to the Marks; both at common law and under
                  applicable laws in the United States and all other
                  jurisdictions, and will not, either directly or indirectly, at
                  any time, do anything to discredit, encumber or diminish any
                  part of such right, title or interest or challenge the
                  validity of this License. Licensee agrees that its use and any
                  use by its sublicensees of the Marks will inure entirely to
                  the benefit of Licensor. Licensee shall assist Licensor, to
                  the extent necessary or appropriate, upon request by Licensor,
                  in the procurement of any protection of Licensor's rights in
                  the Marks. Upon Licensor's request from time to time, Licensee
                  shall provide Licensor with six specimens of any Mark used on
                  Licensed Articles and Licensed Services and whatever other
                  documentation or information may be requested by Licensor for
                  the registration of any Mark in any category into which the
                  Licensed Articles and Licensed Services fall.

         b.       Licensee shall use the Marks only in the form and manner and
                  with appropriate legends as prescribed from time to time by
                  Licensor, and shall not use any other trademark or service
                  mark in combination with any Mark without prior written
                  approval of Licensor. In any written materials, such as the
                  packaging, advertising materials, catalogs, brochures and the
                  like associated with the Licensed Articles or Licensed
                  Services, in addition to the "(R)" symbol displayed adjacent
                  to the Mark, as appropriate, Licensee shall use the following
                  notice at least once in each such document: "Licensed
                  Trademark of Smith & Wesson Corp."

         c.       Licensee recognizes that the SMITH & WESSON name, all trade
                  dress and associated marks are world famous and that, even if
                  not registered in any country, the unauthorized use thereof
                  would seriously dilute the distinctiveness of such name, trade
                  dress and the associated marks and would irreparably harm the
                  Licensor.

         d.       Licensee shall immediately notify Licensor in writing of any
                  infringements or third party imitations of any Mark or other
                  act of a third party which may concern the mark(s), of which
                  Licensee becomes

                                       6
<PAGE>   11
                  aware. Licensor shall have the sole right to determine whether
                  or not any action shall be taken on account of such
                  infringements or imitations. Licensee shall not institute any
                  suit or take any action on account of any such infringements
                  or imitations without first obtaining the written consent of
                  Licensor to do so.

         e.       Licensor shall undertake to apply for and obtain registration,
                  in its name and at its own expense, of any of the Marks in
                  association with the Licensed Articles and Licensed Services
                  in any country in which Licensee may request and as deemed by
                  Licensor to be necessary or appropriate to protect the Marks
                  and the goodwill associated therewith, provided Licensee
                  provides Licensor with bona fide evidence of use or intended
                  imminent use of such Marks in association with any of the
                  Licensed Articles or Licensed Services in such country.

5.       Assignment of Marks

         If Licensee shall acquire by act or operation of law by deed or
         operation of law any rights in the marks in any country, Licensee shall
         notify Licensor and immediately assign such rights to Licensor,
         together with any goodwill that may have inured to the benefit of the
         Licensee. Licensee shall not permit any other person to use any of the
         Marks without Licensor's prior written consent, and shall cause any
         sub-licensee, manufacturer or other person involved in the production,
         promotion, sale or provision of Licensed Articles and Licensed Services
         to agree to assign to Licensor any rights in any Mark acquired by such
         sub-licensee, manufacturer or other person.

6.       Indemnification

         a.       Licensee shall at all times, and to the fullest extent
                  permitted by law, indemnify and hold harmless Licensor and its
                  successors, assigns, franchisees, subsidiaries, affiliates,
                  licensing agents and distributors, and the directors,
                  officers, agents and employees of each of the foregoing
                  entities, from and against any and all damages, demands,
                  claims, suits, actions, investigations, charges, costs and
                  expenses including, without limitation, attorneys fees and
                  court costs, settlement amounts, judgments, compensation for
                  damages to Licensor's reputation and any losses of any nature
                  which arise out of or are based upon any of the following:

                  (1) Any actual or alleged design defect, manufacturing defect,
                  failure to warn or instruct, breach of warranty, negligence,
                  strict liability in tort, or any other product liability legal
                  theory associated with Licensed Articles and Licensed
                  Services;

                                       7
<PAGE>   12
                  (2) The infringement, alleged infringement or any other
                  violation or alleged violation of any patent, trademark or
                  copyright rights or other proprietary rights owned or
                  controlled by third parties by reason of the manufacture, use,
                  advertising, sale, distribution or provision of the Licensed
                  Articles and Licensed Services;

                  (3) The violation, or alleged violation, of any federal, state
                  or local law, regulation, ruling, standard or directive or of
                  any industry standard with respect to the Licensed Articles
                  and Licensed Services;

                  (4) Licensee's breach of any warranty, representation,
                  agreement or obligation hereunder; or

                  (5) Any other acts or omissions of Licenses, or its agents,
                  servants or contractors with respect to the manufacture,
                  promotion, provision or sale of Licensed Articles and Licensed
                  Services.

         b.       Licensee shall promptly give Licensor notice of any action,
                  suit, proceeding, claim, demand, inquiry or investigation
                  relating to the Marks or Licensed Articles and Licensed
                  Services. Licensor may, at its sole option, elect to undertake
                  the defense of any such action, suit, proceeding, claim,
                  demand, inquiry or investigation, provided that such an
                  undertaking by Licensor shall not diminish Licensee's
                  obligation hereunder to indemnify Licensor and to hold it
                  harmless. Licensor may, at any time and without notice, order
                  or consent to a recall, the making of refunds or settlements,
                  or the giving of notice to consumers or similar remedies with
                  respect to the Licensed Articles and Licensed Services. All
                  losses and expenses incurred under this Section shall be
                  chargeable to License pursuant to its obligations to indemnity
                  under this Section, regardless of any actions, activity or
                  defense undertaken by Licensor or Licensee or the subsequent
                  success or failure of such actions, activity or defense.

         c.       Licensor assumes no liability whatsoever for the acts and
                  omissions of Licensee, or any of those with whom Licensee may
                  contract for the promotion, manufacture, distribution, sale or
                  provision of Licensed Articles and Licensed Services,
                  notwithstanding any prior consent by Licensor to such
                  contract.

7.       Insurance

         Licensee shall maintain, throughout the term of this Agreement, at its
         own expense, liability insurance from an insurance company, with such
         liability coverages and limits as are acceptable to Licensor with an
         amount of ($5,000,000) five million dollars per occurrence, including a
         contracted

                                       8
<PAGE>   13
         liability endorsement. Such policies shall name Licensor as an
         additional insured and shall provide that Licensor shall receive at
         least 30 days prior written notice of intent to cancel, alter or amend
         such policy. Licensee shall provide Licensor within thirty (30) days of
         the execution of this Agreement and upon Licensor's request from time
         to time thereafter, with certificates or other evidence of insurance
         required by this Section. Licensee shall keep all insurance coverages
         required by this Agreement in full force and effect for a period of
         three years after the termination of this Agreement.

8.       Quality of Licensed Articles

         a.       Licensee agrees, represents and warrants to Licensor, that all
                  Licensed Articles and Services shall be state-of-the-art, of
                  high safety and structural standards, of such style,
                  appearance, quality and consistency as shall be suitable for
                  distribution and satisfactory for consumer usage, and
                  otherwise merchantable and fit for the purposes for which they
                  are intended to be used. At least 30 days before manufacturing
                  or promoting, and again before distributing, selling or
                  providing any Licensed Article or Licensed Service, and upon
                  Licensor's request from time to time, Licensee shall submit to
                  Licensor, for its written approval, not to be unreasonably
                  withheld, of the Mark usage, samples or description of each
                  Licensed Article or Licensed Service together with any
                  labeling, packaging, or promotion material and literature in
                  respect of which such Licensed Article is to be marketed, sold
                  or provided. The number of samples to be furnished by Licensee
                  shall be such reasonable number as Licensor may from time to
                  time request. All samples shall be provided without charge to
                  Licensor. No Licensed Article or Service shall be distributed,
                  sold or provided pursuant to this Agreement until Licensee has
                  obtained Licensor's written approval of the samples submitted.
                  It is understood, however, that failure of the Licensor to
                  provide Licensee with written approval or rejection of the
                  samples submitted within twenty (20) business days of the
                  Licensor's receipt of such samples shall be deemed to
                  constitute approval on the part of the Licensor of such
                  samples.

                  b.       All Licensed Articles and Licensed Services shall be
                           of the same quality and workmanship as the approved
                           sample, and in the manufacture and provision thereof,
                           Licensee shall cause to be used state-of-the-art
                           manufacturing processes, techniques and quality
                           control procedures in order to ensure that the
                           Licensed Articles and Licensed Services will
                           consistently comply with the highest product quality
                           standards. Under no circumstances shall Licensee
                           sell, distribute, give away or otherwise deal or
                           cause to have sold, distributed, given away or
                           otherwise dealt Licensed Articles or Licensed
                           Services that are seconds or

                                       9
<PAGE>   14
                           sub-standard, that bear a distortion of the Marks or
                           that otherwise do not comply with this Agreement.

                  c.       Licensee shall consistently distinguish the Licensed
                           Articles and Licensed Services from other products
                           and services manufactured, sold and provided by
                           Licensee and shall avoid any confusing similarity
                           between such other products and services and the
                           Licensed Articles and Licensed Services. Licensee
                           shall take such actions as are necessary to maintain
                           the Licensed Articles and Licensed Services as
                           separate and distinct lines of styling, design and
                           merchandising from any other product and service
                           manufactured, sold or provided by Licensee.

                  d.       Licensee shall, no later than 90 days before the
                           expiration of any Contract Year, furnish Licensor a
                           statement showing the number and description of
                           Licensed Articles in inventory and in process and of
                           Licensed Services being provided.

9.       Compliance with Government, Regulations, Industry Standards and Product
         Testing

                  a.       Licensee agrees that the manufacture, distribution
                           and sale of the Licensed Articles and rendering of
                           Licensed Services will conform at all times to all
                           applicable federal, state and local laws,
                           regulations, industry standards, ordinances and other
                           enactments, including, without limitation, those
                           relating to product and service safety.

                  b.       The Licensed Articles and Licensed Services shall
                           comply with all relevant government regulations and
                           meet all industry standards applicable thereto. All
                           those individuals engaged in the offering of the
                           Licensed Services shall be the highest ethical and
                           moral character and shall be certified by the
                           appropriate industry boards and/or government
                           agencies to the highest level appropriate to each
                           individual's respective position.

10.      Promotional Material

                  Licensee shall not use the Marks or any reproduction thereof
                  in any advertising, promotional or display material without
                  Licensor's prior written approval. Under no circumstances will
                  promotional materials or programs be used by Licensee that
                  reflect unfavorably on the Marks or disparage marks of third
                  parties. All advertising, display or promotional copy
                  utilizing or in any way connected with the Marks, shall carry
                  a

                                       10
<PAGE>   15
                  notice that the Marks are the property of Licensor, and at
                  least six copies of such advertising, display or promotional
                  copy shall be submitted to Licensor for prior written
                  approval, not to be unreasonably withheld, at least 30 days in
                  advance of production and upon Licensor's request from time to
                  time thereafter. Any approval granted by Licensor under this
                  Section will extend only to Licensee's use of the Marks. It is
                  understood, however, that failure of the Licensor to provide
                  Licensee with written approval or rejection of the copies
                  submitted within twenty (20) business days of the Licensor's
                  receipt of such copies shall be deemed to constitute approval
                  on the part of the Licensor of such copies. Licensor shall not
                  be liable for content or accuracy of such advertising,
                  promotional or display material nor for infringement of
                  patents, copyrights, trademarks, or any other proprietary
                  rights owned, used, or controlled by third parties, by reason
                  of Licensee's promotional activities.

11.      Records

         a.       Licensee shall keep accurate books of account and records
                  covering all transactions relating to the license herein
                  granted. Licensor and its duly authorized independent
                  accountants or other representatives shall, from time to time,
                  have the right at reasonable times upon Licensor's prior
                  written request of at least five (5) business days to examine
                  such books of account and records and other documents and
                  material in Licensee's possession or under its control with
                  respect to Licensee's activities in connection with this
                  Agreement, and such persons shall have free and full access
                  for such purposes and may make copies thereof or extracts
                  therefrom. Licensee shall keep all such records available to
                  Licensor for at least three years after expiration or
                  termination of this Agreement. Licensee will designate a
                  symbol or number which will be used exclusively in connection
                  with the Licensed Articles and Licensed Services and with no
                  other articles or services which Licensee may manufacture,
                  sell or distribute, and that duplicates of all billings by
                  Licensee to its customers with respect to Licensed Articles
                  and Licensed Services shall be kept by Licensee for inspection
                  as is herein provided.

         b.       If any audit by Licensor shall reveal a shortfall of royalties
                  and gross revenue share paid by Licensee against royalties and
                  gross revenue share actually due in accordance with this
                  Agreement, Licensee shall within fifteen (15) days make
                  payment to Licensor of such shortfall, plus simple interest at
                  the rate of 1.5 percent per month or if lower, the highest
                  rate permitted by Massachusetts law, for the period of such
                  shortfall. In addition, if such audit shall reveal a shortfall
                  of more than five percent of royalty and gross revenue share
                  due, Licensee shall

                                       11
<PAGE>   16
                  reimburse Licensor for the services of its accountant and for
                  any other expenses of Licensor incident thereto including,
                  without limitation, any attorneys' fees and costs of
                  collection.

12.      Licensor's Obligations

         a.       Within thirty (30) days of the execution of this Agreement,
                  Licensor will provide Licensee with its current customer list
                  and will provide Licensee with updates thereon at the
                  commencement of each Contract Year. Licensee acknowledges that
                  the customer list is a valuable asset of the Licensor and
                  remains Licensor's exclusive property. Licensee will not
                  divulge any contents of the list nor make any use of the list
                  not contemplated by this Agreement.

         b.       Within seven (7) days of the execution of this Agreement,
                  Licensor will issue a press release announcing the execution
                  of this Agreement.

         c.       Licensor will, at the sole expense of Licensee, undertake to
                  expand the contents of its annual catalogue to illustrate
                  therein the Licensed Articles and Licensed Services
                  contemplated by this Agreement.

         d.       Licensor will provide Licensee access to and full information
                  as to its existing distribution channels and will endeavor to
                  enable Licensee to make full use thereof.

         e.       Licensor will advise each of its existing Licensees of the
                  nature of the Licensed Articles and Licensed Services covered
                  by this Agreement.

13.      Termination

In addition to any other rights which Licensor may otherwise have, Licensor may
terminate this Agreement at any time, immediately upon written notice:

         a.       If within six (6) months from the date of this Agreement,
                  Licensee shall not have begun the bona fide design,
                  specification and/or concluded contracts for production,
                  distribution, sale and provision of the Licensed Articles and
                  Licensed Services; or

         b.       If Licensee shall, after said written notice, fail for a
                  period in excess of three consecutive months to continue the
                  bona fide design, specification, distribution, sale or
                  provision of the Licensed Articles and Licensed Services; or

         c.       If Licensee shall fail to make any payment due hereunder or to
                  deliver any of the statements required hereunder, and if such
                  default shall

                                       12
<PAGE>   17
                  continue for a period of 15 days after notice of such default
                  by Licensor to Licensee or if such a failure shall occur twice
                  in any consecutive 12-month period even if both failures are
                  corrected as provided hereunder; or

         d.       If Licensee or its property:

                  1)       Becomes subject to a receiver or trustee; or

                  2)       Becomes insolvent; or

                  3)       Becomes subject to an involuntary or voluntary
                           petition under the Canadian Bankruptcy Laws, or

                  4)       Makes an assignment for the benefit of its creditors;
                           or

         e.       If there is any deliberate deficiency in the Licensee's
                  reporting which affects royalties or gross revenue share
                  payable or any other aspect of this Agreement; or;

         f.       If any warranty, representation or covenant made by Licensee
                  hereunder, or any information as to product quality or safety
                  provided .by Licensee hereunder, is false or misleading; or

         g.       If Licensee fails to comply with any term or condition of this
                  Agreement, other than those specifically set forth in clauses
                  a. through f. above, and such non-compliance continues beyond
                  a period of 15 days after notice thereof is given by the
                  Licensor.

Any termination by Licensor shall be without prejudice to any of Licensor's
other rights or remedies.

14.      Effect of Termination

         a.       After expiration or other termination of this Agreement,
                  Licensee shall have no further right to manufacture,
                  distribute, sell, exploit, provide, render or otherwise deal
                  in any Licensed Articles and Licensed Services which utilize
                  the Marks, except that Licensee may dispose of Licensed
                  Articles which are on hand or in process or complete the
                  Licensed Services already in force or to be provided at the
                  time of expiration or termination so long as (1) Licensee
                  reports in writing to Licensor, no later than 30 days after
                  termination of this Agreement, the total number of Licensed
                  Articles which will be disposed of, (2) the total number of
                  contracts for Licensed Services which are in force or to be
                  provided, (3) the sale or provision thereof is completed
                  within six

                                       13
<PAGE>   18
                  months, (4) all payments when due are made to Licensor, (5)
                  such disposal or provision of Licensed Articles and Licensed
                  Services shall be in accordance with the terms of this
                  Agreement, and (6) statements and royalty and gross revenue
                  share payments with respect to that period are made by
                  Licensee in accordance with Section 3. Notwithstanding the
                  foregoing, in the event this Agreement is terminated pursuant
                  to Sections 13(c), 13(d), 13(e), 13(f), or 13(g), Licensee
                  shall not dispose of or provide any Licensed Articles or
                  Licensed Services which are on hand, in process, in force or
                  to be provided at the time of termination in association with
                  the Marks. A final statement and payment shall be made by
                  Licensee within 15 days after the end of such six-month
                  period. Upon expiration of such six-month period herein, all
                  molds, plates, prints and other materials used to reproduce
                  the Marks for the manufacture or provision of the Licensed
                  Articles and advertising of Licensed Services shall be
                  destroyed and evidence of such destruction shall be given to
                  the Licensor.

         b.       In the event this Agreement expires or is otherwise terminated
                  for any reason, Licensee shall, and hereby does agree to
                  assign to Licensor any and all rights of Licensee in the
                  Marks, including associated goodwill, and the designs trade
                  dress and styles of the Licensed Articles and Licensed
                  Services to the extent such design or styles contain or employ
                  any of the Marks, and shall not thereafter market, manufacture
                  or sell any such designs or styles or use the Marks in any
                  manner in connection with any provided services.

         c.       Except as provided in subsection (a) of this paragraph, upon
                  the expiration or termination of this Agreement, Licensee
                  shall immediately cease all further use of the Marks and any
                  names, trademarks, characters, symbols, designs, likenesses or
                  visual representations as might be likely to cause confusion
                  or deceive purchasers or prospective purchasers or dilute any
                  trade name, trademark, trade dress or service mark of Licensor
                  including, without limitation, Licensor's corporate and
                  private names, other trademarks, symbols, designations,
                  indices, slogans and other means of identifying products or
                  services of Licensor, whether or not identified herein as a
                  Mark.

         d.       Licensee agrees that the Marks are distinctive and possess
                  special, unique and extraordinary characteristics which make
                  difficult the assessment of the monetary damages that Licensor
                  would sustain by unauthorized use. Licensee recognizes that
                  irreparable injury would be caused to Licensor by any
                  unauthorized use of the Marks and agrees that preliminary
                  and/or permanent injunctive and other equitable relief

                                       14
<PAGE>   19
                  would be appropriate in the event of a breach of this
                  Agreement by Licensee provided, however, that such remedy
                  shall not be exclusive of other legal remedies otherwise
                  available.

         e.       Licensee's obligations and agreements set forth in Sections 3
                  through 11, 14, 15, 18, 20 and 21 shall survive any
                  termination or expiration of this Agreement.

15.      Notices:

All notices and statements to be given hereunder shall be in writing, any such
notice or statement shall be deemed duly given if mailed by certified mail,
return receipt requested, if to Licensor, at:

Smith & Wesson Corp.
2100 Roosevelt Avenue
P.O. Box 2208 Springfield, MA 01102-2208

                               Attention:       Robert L. Scott
                                                Vice President Sales & Marketing

and if to Licensee, at:

Canadian Security Agency, Inc.
4480 Cote de Liesse
Suite 306
Montreal, Quebec H4N 2R1

                               Attention:       Charles Finkelstein
                                                President

16.      No Joint Venture

         Nothing in this Agreement shall be construed to place the parties in
         the relationship of partners or joint ventures, and Licensee shall have
         no power to bind Licensor in any manner whatsoever.

17.      Cancellation

         Licensee acknowledges that Licensor and its subsidiaries, affiliates
         and franchisees use the Marks to advance and promote Licenser's
         business, and that Licensor has a paramount obligation to preserve its
         ability to so use such Marks. Should the use by Licensee of any mark on
         Licensed Articles or Services be deemed by Licensor in its discretion
         to be in violation of any federal, state or local law or to adversely
         affect the reputation of Licensor or affect the validity,
         enforceability or distinctiveness of the Mark as a

                                       15
<PAGE>   20
         designation or origin for Licenser's own products, then Licensor may
         terminate this Agreement on one hundred and eighty (180) days notice to
         Licensee.

18.      Assignments, Transfers and Sublicenses

         Without the prior written consent of Licensor, which may be withheld in
         Licenser's sole and reasonable discretion, a) Licensee shall not
         voluntarily or by operation of law, assign or transfer this Agreement
         or any of Licensee's rights or duties hereunder ore any interest of
         Licensee herein, except to a third party which is controlled by
         Licensee, nor shall Licensee enter into any sublicense for use of the
         Marks by other persons otherwise than as contemplated by this
         Agreement; b) Licensee shall not sell or otherwise transmit or transfer
         to any party engaged in the design or manufacture of items similar to
         any of the Licensed Articles or Licensed Services, any design, style,
         know-how, technology or other item or knowledge of a technical or
         competitive nature, furnished to Licensee by or through Licensor. Any
         transfer or attempt to transfer of this license to any entity in which
         the present directors of Licensee do not have voting control shall be
         deemed an assignment prohibited hereunder. The consent of Licensor to
         one assignment, transfer or sublicense shall not be deemed to be
         consent to any subsequent assignment, transfer or sublicense. Nothing
         provided herein shall limit Licensor's right to transfer and/or assign
         any of its rights hereunder.

19.      Scope and Modification

         This Agreement sets forth the entire agreement between the parties, and
         supersedes all prior agreements and understandings between the parties,
         relating to the subject matter hereof. None of the terms of this
         Agreement may be waived or modified except as expressly agreed in
         writing by both parties.

20.      Severability

         Should any provision of this Agreement be declared void or
         unenforceable, the validity of the remaining provisions shall not be
         affected thereby.

21.      Governing Laws

         This Agreement shall be made in the Commonwealth of Massachusetts and
         its terms shall be interpreted in accordance with and governed by the
         laws thereof.

         The parties hereto have executed this Agreement as of the date at the
         beginning hereof.

                                       16
<PAGE>   21
<TABLE>
<CAPTION>
<S>                                         <C>
                                            Licensor:

                                            SMITH & WESSON CORP.
        Witnessed By:

                                            By: /s/ Robert L. Scott
----------------------------------             --------------------------------------
                                            (Title)
                                                   ----------------------------------
                                                   Vice President & Sales & Marketing

                                            Licensee:

                                            CANADIAN SECURITY AGENCY

        Witnessed By:

                                            By: /s/ Charles Finkelstein
----------------------------------             --------------------------------------
                                            (Title)
                                                   ----------------------------------
                                                   President
</TABLE>

                                       17
<PAGE>   22
                           EXHIBIT "A" -Licensed Marks

SMITH & WESSON - Canadian Registration No. 87/21255

S & W MONOGRAM - Canadian Registration No. 92/22375

S & W - Canadian Registration No. 90/21947

S & W MONOGRAM - U.S. Registration No. 93,766

S & W - U.S. Registration No. 93,767

SMITH & WESSON - U.S. Registration No. 95,164
<PAGE>   23
                          EXHIBIT B - Licensed Articles

Electronic Security Products and
Systems:
<TABLE>
<CAPTION>
         <S>                                     <C>
         - Personal                              - Business
                  o Briefcase Lock Sensors           o Panic Button/Automatic Dial
                  o Telephone Security Devices       o Controllers
                  o Child Find Receivers/            o Card Access

                           Transmitters              o Closed Circuit Television
                  o Joggers Alarm                       Cameras/ Monitors
                  o Medical Alert Alarm              o Electronic Article Surveillance
                  o Bicycle Alarm                    o X-Ray Equipment
                  o Police Emergency Automatic
                     Dial                       - Vehicle
                  o Telephone Scramblers             o Tracking Modules (Satellite,
                  o Communication Line                  Emitters)
                  o Analyzers                        o Visual Alarms
                  o Marine Alarms                    o Audible Alarms
                                                     o Automatic Panic Dial Controllers
         - Domicile                                  o Perimeter Alarms
                  o Seismic Intrusion Detectors      o Glass Break Detectors
                  o Keypads                          o Motion/Gravity Change
                  o Infrared Sensors                   Sensors
                  o Main Panel Circuit Boxes         o Remote Start Controllers
                  o Closed Circuit Television        o Ignition "Kill" Switches
                  o Camera/Monitors                  o Bomb Detectors
                  o Automatic Lighting
                  o Thermal Detectors           - Crime Detection
                  o Automatic Wireless               o Voice Stress Analyzers
                  o Dial Controllers                 o Night Vision Systems
                  o Hardware and Tape Alarms         o Thermal Sensors
                  o External Motion Detectors        o Covert Camera Equipment
                                                     o Theft Detection Powders/
                                                       Pigments
         - Business                                  o RF Detectors
                  o Letter Scanners                  o Telephone Analyzers
                  o Metal Detectors                  o Lie Detectors
                  o Shredders
                  o Facsimile Encryption        - Data Recording
                  o Automated Anti-Intrusion         o Loggers
                    Software/Hardware                o Tape Recorders
                  o Telephone Security               o Video Recorders/Monitors
</TABLE>
<PAGE>   24
                    EXHIBIT B - Licensed Articles (continued)
<TABLE>
<CAPTION>
         <S>                                    <C>
         - Data Recording (continued)           - Surveillance (continued)
                  o Alarm Triggered Video            o Scanners
                  o Transmitters                     o Scopes
                  o Telephone Recorders
                  o Video Analyzers             - Illumination
                                                     o Spot Illuminators
         Safety Products:                            o Road Flairs
         - Protective                                o High Powered Beam Lights
                  o Smoke Detectors                  o Light Sticks
                  o Carbon Monoxide                  o Strobes
                    Detectors
                  o Fire Extinguishers          - Detection
                  o First Aid Kits                   o Chemical Sensors
                  o Noise Abatement Equipment        o Water Seepage Analyzers
                  o Safety Ladders                   o Pipe Burst Monitors (Gas
                  o Safety Cones                       Liquid)

         - Surveillance -                       - Measuring
                  o Wireless Microphones             o Alcho-Test
                  o "Walkie Talkies"                 o Breathalyzers
</TABLE>

                                       2
<PAGE>   25
                          EXHIBIT C -Licensed Services
<TABLE>
<CAPTION>
         <S>                                    <C>
         Security Service:
         - Monitoring Station                   - Tracking Systems (continued)
                  o Underwriter Laboratory           o Automated Video, Audio,
                  o Certified Computer Systems         Data Transmitters
                  o Analog and Digital Reception     o Mobile Patrol Stations
                    Equipment                        o Airborne Trackers
                  o Telephone Response -
                    Personal                    - Investigative
                  o Telephone Response -             o Loss Prevention
                    Automated                        o Private Investigation
                  o Guard Response                   o Personnel Certification
                  o Video Analyzers
                  o Post Alarm Response         - Surveillance
                    Recorders                        o Uniformed Guard Services
                  o Guard/Police                     o Closed Circuit Video
                    Communication Systems              Monitoring
                  o Remote Response (Voice,          o Intelligence Gathering (Air,
                    Alarm) Controllers                 Vehicle, Stationary)
                                                     o Service and Integrity Testing
         - Tracking System                           o Undercover
                  o Satellite Date Processing        o Executive Protection
                  o Computers
</TABLE>
<PAGE>   26
                          EXHIBIT D - Licensed Services

INSURANCE COVERAGE:

- Personal
         o Life Insurance

         o Disability Income Insurance
         o Medical and Hospitalization Insurance
         o Group Insurance (Medical, Dental)

- Domicile

         o Home Owner Insurance Policy
         o Tenant Insurance
         o Condominium Insurance
         o Supplemental and Travel Insurance

- Vehicle

         o Collision Insurance
         o Fire and Theft Insurance
         o Loss of Use Insurance
         o Replacement Cost Insurance
         o Accident Benefit Insurance
         o Personal Liability Insurance

- Business

         o Comprehensive General Liability
         o Business Interruption Insurance
         o Umbrella Policy Coverage
         o Failure to Perform Insurance<PAGE>

                                   Exhibit 4.2

<PAGE>

                       MORGAN STANLEY SELECT EQUITY TRUST
                       FINANCIAL SERVICES PORTFOLIO 2001-2
                            REFERENCE TRUST AGREEMENT

     This Reference Trust Agreement dated    , 2001 between MORGAN STANLEY DW
INC.,  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  "Dean  Witter  Select  Equity  Trust,  Trust  Indenture  and
Agreement" (the "Basic Agreement") dated September 30,  1993. 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:

                                       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 as follows:

          A. The first  sentence of Section 2.01 is amended to add the following
     language at the end of such  sentence:  "and/or cash (or a letter of credit
     in lieu of cash) with  instructions  to the Trustee to purchase one or more
     of such  Securities  which  cash  (or cash in an  amount  equal to the face
     amount of the letter of  credit),  to the extent not used by the Trustee to
     purchase  such  Securities  within the 90-day  period  following  the first
     deposit of Securities in the Trust, shall be distributed to Unit Holders on
     the  Distribution  Date next  following  such 90-day period or such earlier
     date as the Depositor and the Trustee determine".

          B. The first  sentence of Section 2.06 is amended to add the following
     language after "Securities"))": "and/or cash (or a letter of credit in lieu
     of  cash)  with  instructions  to the  Trustee  to  purchase  one  or  more

<PAGE>

     Additional  Securities  which cash (or cash in an amount  equal to the face
     amount of the letter of  credit),  to the extent not used by the Trustee to
     purchase such Additional  Securities within the 90-day period following the
     first  deposit of  Securities in the Trust,  shall be  distributed  to Unit
     Holders on the Distribution  Date next following such 90-day period or such
     earlier date as the Depositor and the Trustee determine".

          C.  Article  III,  entitled  "Administration  of Trust",  Section 3.01
     Initial Cost shall be amended as follows:

               Section  3.01  Initial  Cost 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  for in  this  section  shall  be for the
               account of the  Unitholders  of record at the  conclusion  of the

<PAGE>

               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.

          D. The third  paragraph of Section  3.05 is hereby  amended to add the
     following sentence after the first sentence thereof:  "Depositor may direct
     the Trustee to invest the proceeds of any sale of  Securities  not required
     for the redemption of Units in eligible money market  instruments  selected
     by the Depositor which will include only negotiable certificates of deposit
     or time deposits of domestic banks which are members of the Federal Deposit
     Insurance  Corporation  and which  have,  together  with their  branches or
     subsidiaries,   more  than  $2  billion  in  total   assets,   except  that
     certificates  of deposit or time deposits of smaller  domestic banks may be
     held  provided  the deposit does not exceed the  insurance  coverage on the
     instrument  (which  currently is $100,000),  and provided  further that the
     Trust's  aggregate  holding of  certificates  of  deposit or time  deposits
     issued  by the  Trustee  may not  exceed  the  insurance  coverage  of such
     obligations and U.S. Treasury notes or bills (which shall be held until the
     maturity  thereof)  each of which  matures prior to the earlier of the next
     following Distribution Date or 90 days after

<PAGE>

     receipt,  the  principal  thereof and interest  thereon (to the extent
     such interest is not used to pay Trust  expenses) to be  distributed on the
     earlier of the 90th day after  receipt or the next  following  Distribution
     Date."

          E. The  first  sentence  of each of  Sections  3.10,  3.11 and 3.12 is
     amended to insert the following language at the beginning of such sentence,
     "Except as otherwise provided in Section 3.13,".

          F. The following new Section 3.13 is added:

          Section 3.13.  Extraordinary Event - Security Retention and Voting. In
     the event the  Trustee is notified of any action to be taken or proposed to
     be taken by holders of the securities  held by the Trust in connection with
     any proposed merger, reorganization, spin-off, split-off or split-up by the
     issuer of stock or  securities  held in the Trust,  the Trustee  shall take
     such action or refrain  from taking any action,  as  appropriate,  so as to
     insure  that the  securities  are voted as closely as  possible in the same
     manner and in the same general  proportion  as are the  securities  held by
     owners  other than the Trust.  If stock or  securities  are received by the
     Trustee,  with or without cash, as a result of any merger,  reorganization,
     spin-off,  split-off or split-up by the issuer of stock or securities  held
     in the Trust, the Trustee at the direction of the Depositor may retain such
     stock or  securities  in the Trust.  Neither the  Depositor nor the Trustee
     shall be liable to any person for any action or failure to take action with
     respect to this section.

          G.  Section  1.01 is  amended  to add the  following  definition:  (9)
     "Deferred  Sales  Charge" shall mean any deferred  sales charge  payable in
     accordance with the provisions of Section 3.12 hereof,  as set forth in the
     prospectus for a Trust.  Definitions following this definition (9) shall be
     renumbered.

          H. Section 3.05 is hereby amended to add the following paragraph after
     the end thereof:  On each Deferred  Sales Charge  payment date set forth in
     the  prospectus  for a Trust,  the Trustee  shall pay the  account  created
     pursuant to Section 3.12 the amount of the Deferred Sales Charge payable on
     each such date as stated in the prospectus  for a Trust.  Such amount shall
     be withdrawn from the Principal Account from the amounts therein designated
     for such purpose.

<PAGE>

          I. Section 3.06B(3) shall be amended by adding the following: "and any
     Deferred Sales Charge paid".

          J.  Section  3.08 shall be amended by adding the  following at the end
     thereof: "In order to pay the Deferred Sales Charge, the Trustee shall sell
     or liquidate an amount of Securities at such time and from time to time and
     in such manner as the Depositor shall direct such that the proceeds of such
     sale or  liquidation  shall  equal the  amount  required  to be paid to the
     Depositor pursuant to the Deferred Sales Charge program as set forth in the
     prospectus for a Trust.

          K. Section 3.12 shall be added as follows:

          Section 3.12.  Deferred  Sales Charge.  If the  prospectus for a Trust
     specifies  a  Deferred  Sales  Charge,  the  Trustee  shall,  on the  dates
     specified in and as permitted by the  prospectus,  withdraw from the Income
     Account if such account is  designated  in the  prospectus as the source of
     the payments of the Deferred  Sales Charge,  or to the extent funds are not
     available in that account or if such account is not so designated, from the
     Principal  Account,  an amount per Unit  specified  in the  prospectus  and
     credit  such  amount to a  special,  non-Trust  account  maintained  at the
     Trustee out of which the Deferred  Sales Charge will be  distributed to the
     Depositor.  If the Income  Account is not  designated  as the source of the
     Deferred  Sales  Charge  payment  or if  the  balances  in the  Income  and
     Principal  Accounts  are  insufficient  to make  any such  withdrawal,  the
     Trustee shall,  as directed by the Depositor,  either advance funds,  if so
     agreed to by the Trustee, in an amount equal to the proposed withdrawal and
     be entitled to reimbursement of such advance upon the deposit of additional
     monies in the Income Account or the Principal Account,  sell Securities and
     credit the proceeds thereof to such special  Depositor's  account or credit
     Securities in kind to such special  Depositor's  Account.  Such  directions
     shall  identify the  Securities,  if any, to be sold or distributed in kind
     and shall  contain,  if the Trustee is directed by the  Depositor to sell a
     Security,  instructions  as to  execution  of such sales.  If a Unit Holder
     redeems  Units prior to full  payment of the  Deferred  Sales  Charge,  the
     Trustee shall,  if so provided in the prospectus,  on the Redemption  Date,
     withhold  from the  Redemption  Price payment to such Unit Holder an amount
     equal to the unpaid  portion of the Deferred  Sales  Charge and  distribute
     such amount to such special  Depositor's account or, if the Depositor shall

<PAGE>

     purchase  such Unit  pursuant  to the terms of  Section  5.02  hereof,  the
     Depositor  shall pay the  Redemption  Price  for such Unit less the  unpaid
     portion  of the  Deferred  Sales  Charge.  The  Depositor  may at any  time
     instruct the Trustee to  distribute  to the  Depositor  cash or  Securities
     previously credited to the special Depositor's account.

          L.  Reference  to "Dean  Witter  Select  Equity  Trust" is replaced by
     "Morgan Stanley Select Equity Trust".

                                       II.

                      SPECIAL TERMS AND CONDITIONS OF TRUST

          The following special terms and conditions are hereby agreed to:

          A. The Trust is  denominated  Morgan Stanley Select Equity Trust
     Financial Services Portfolio 2001-2 (the "Financial Services Trust").

          B. 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.

          C. The term, "Depositor" shall mean Morgan Stanley DW Inc.

          D. The aggregate number of Units referred to in Sections 2.03 and 9.01
     of the Basic Agreement is        for the Financial Services Trust.

          E. A Unit is hereby  declared  initially  equal to 1/      th  for the
     Financial Services Trust.

          F. The term "In-Kind Distribution Date" shall mean            ,      .

          G. The term "Record Dates" shall mean                 ,
               and                      ,       and such  other date as the
     Depositor may direct.

          H.  The  term   "Distribution   Dates  shall  mean
                                 ,     and                   ,    and such other
     date as the Depositor may direct.

<PAGE>

          I. The term "Termination Date" shall mean             ,    .

          J. The Depositor's Annual Portfolio Supervision Fee shall be a maximum
     of $0.25 per 100 Units.

          K.  The  Trustee's  Annual  Fee as  defined  in  Section  6.04  of the
     Indenture shall be $     per 100 Units.

          L. For a Unit Holder to receive "in-kind" distribution during the life
     of the Trust other than in  connection  with a  rollover,  such Unit Holder
     must tender at least 25,000 Units for redemption. On the In-Kind Date there
     is no minimum  amount of Units that a Unit  Holder  must tender in order to
     receive an "in-kind" distribution.

          M. The  Indenture is amended to provide  that the period  during which
     the  Trustee  shall  liquidate  the  Trust   Securities  shall  not  exceed
     14 business days commencing on the first business day following the In-Kind
     Date.

               (Signatures and acknowledgments on separate pages)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00028-of-00352.parquet"}]]