Document:

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                                                                   Exhibit 10.70

                                                          EXECUTION COPY

                              EMPLOYMENT AGREEMENT
                              --------------------

            EMPLOYMENT AGREEMENT (this "Agreement"), dated as of November 1,
1999, by and between RSL COM U.S.A., Inc., a Delaware corporation (the
"Company"), and Michael A. Marino ("Executive").

                               W I T N E S S E T H:
                               - - - - - - - - - -

            WHEREAS, the Company desires to employ Executive, effective as of
January 3, 2000 (the "Commencement Date") and to set out the terms and
conditions of Executive's employment by the Company from and after the
Commencement Date; and

            WHEREAS, the Executive desires to enter into the employment of the
Company from and after the Commencement Date under those terms and conditions;

            NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the Company and Executive hereby agree as follows:

1.    Employment.

      (a) Agreement to Employ. Upon the terms and subject to the conditions of
this Agreement, the Company hereby employs Executive, and Executive hereby
accepts continued employment by the Company.

      (b) Term of Employment. The Company shall employ Executive for a term (the
"Term") commencing on the Commencement Date and ending January 3, 2003, unless
extended by a written agreement signed by both parties. The period commencing on
the Commencement Date and ending on the earlier of (i) the expiration of the
Term, or (ii) the date of Executive's termination of employment pursuant to
Section 5(a) shall be referred to as the "Employment Period."

2.    Position and Duties.

      (a) In general. Executive shall be employed as President and Chief
Executive Officer of the Company and shall perform such duties and services,
consistent with such position for the Company and as may be assigned to him from
time to time by the Company's Board of Directors and the Chief Operating Officer
(the "COO") of RSL Communications, Ltd., a company organized under the laws of
Bermuda ("RSL COM"). The duties of the Executive shall include serving as an
officer or director for any Affiliate

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(as defined herein) of the Company as requested by the Company. Executive shall
report to the COO of RSL COM and the Board of Directors of the Company.

      (b) Full-time employment. During the Employment Period, Executive shall
devote his full business time to the services required of him hereunder, except
for time devoted to services required by him to be performed for any "Affiliate"
of the Company, vacation time and reasonable periods of absence due to sickness,
personal injury or other disability, and shall use his best efforts, judgement,
skill and energy to perform such services in a manner consonant with the duties
of his position and to improve and advance the business and interests of the
Company. Executive shall not be engaged in any other business activity which, in
the reasonable judgment of the COO, conflicts with the duties of the Executive
under this Agreement and shall not serve on the Board of Directors of any other
company; provided however that with the Company's consent (which shall not be
unreasonably withheld) Executive shall be permitted to serve on the board of
directors of a reasonable number of nonprofit organizations and/or other
charitable activities so long as such activities do not interfere with the
performance of his duties hereunder. Executive shall be required to relocate to
Pittsburgh in connection with the commencement of his employment hereunder, and
may thereafter be required to relocate to the New York Metropolitan area, in the
sole discretion of the Company. Executive shall travel to such location or
locations as may be requested by the Company, or which Executive believes is
necessary or advisable, in the performance by Executive of his duties hereunder
or to the extent appropriate to improve and advance the interests of the Company
and its Affiliates. There is no formal disciplinary procedure, but Executive is
expected at all times to behave in a manner befitting his employment.

3.    Compensation.

      (a) Base Salary. During the Employment Period, the Company shall pay
Executive a base salary at the annual rate of US$375,000; provided that,
Executive's annual base salary shall be increased as of January 1 of each year,
commencing January 1, 2001, by an amount equal to the base salary then in
effect, multiplied by the percentage increase in the Cost of Living Index during
the preceding year. The "Cost of Living Index" means the consumer price index
for all urban consumers in the New York metropolitan area published by the
Department of Labor, or if such index is no longer available, such other
generally available index measuring changes in consumer purchasing power (in the
New York metropolitan area or nationally) designated by the Board of Directors.
Any delay in increase in Executive's annual base salary by reason of the
unavailability of any such index at the time any such increase shall otherwise
be due shall be made up by a lump sum payment promptly after the index becomes
available. Executive's salary, as adjusted for any increase in the Cost of
Living Index, may be further increased at the option and in the discretion of
the Board of Directors (such salary, as the same may be increased from time to
time, is referred to herein as the "Base Salary"). The Base Salary shall be
payable in such installments (but not less frequent than monthly) as the
salaries of other executives of the Company are paid.

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      (b) Performance Incentive Plan. During the Employment Period, Executive
shall be eligible to participate in RSL COM's 1997 Performance Incentive Plan
(the "Bonus Plan") and be given an opportunity to earn up to one times Base
Salary upon the achievement of targets determined by RSL COM's Compensation
Committee (the "Compensation Committee").

      (c) Equity Participation. RSL COM, by action of the Compensation
Committee, shall grant Executive a non-qualified stock option (the "Option")
under RSL COM's 1997 Stock Incentive Plan (the "Stock Plan") to purchase 200,000
shares of the Company's Class A Common Stock (the "Common Stock") at an exercise
price of US $20.91 per share (the "Exercise Price"), the "Fair Market Value" as
defined in the Stock Plan on November 1, 1999, the date of grant, with the
quantity of shares and exercise price being subject to adjustment in accordance
with Section 4(c) of the Stock Plan. The option price adjustment set forth in
the first sentence of Section 5(b) of the Stock Plan shall not be applied. The
Option shall become vested and exercisable as set forth below, provided that
Executive is employed by the Company on such date, and once exercisable shall,
except as otherwise provided below, remain exercisable until the expiration of
seven years from the date of grant. However, the Option shall be immediately
terminated upon a Termination for Cause (as hereinafter defined):

            Date First Exercisable                    Percentage Exercisable
            ----------------------                    ----------------------

First Anniversary of the Commencement Date                  33 1/3%
Second Anniversary of the Commencement Date                 66 2/3%
Third Anniversary of the Commencement Date                  100%

      The Option shall become immediately exercisable in full upon a Change in
Control; provided however, that no acceleration of exercisability or vesting
shall occur with respect to the Option if the Compensation Committee reasonably
determines in good faith prior to the occurrence of a Change in Control that the
Option shall be honored or assumed, or a new stock option substituted therefor
(such honored, assumed or substituted option hereinafter called an "Alternative
Option") by the Executive's new employer (or the parent or a subsidiary of such
employer) immediately following the Change in Control (the "Successor"). If
following a Change in Control, Executive is Terminated Without Cause or
Successor conditions Executive's continued employment on relocation of
Executive's principal place of employment outside of Pittsburgh or the New York
Metropolitan area, the Option shall become immediately exercisable in full. The
Option shall also become immediately exercisable in full in the event
Executive's employment with the Company is Terminated due to Disability or by
reason of the death of the Executive.

      The exercisable portion of the Option shall, following any termination of
Executive's employment (other than Termination for Cause), expire and be no
longer

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exercisable on the earlier of (x) 90 days after the Company provides
notice, following such termination, to Executive that the Fair Market Value of
the Common Stock has met or exceeded the Target Price (as defined below) for 10
consecutive business days (the "Trigger Date") and (y) the three year
anniversary of the Commencement Date; however, if Executive's employment does
not terminate before the three year anniversary of the Commencement Date, the
Option shall remain exercisable through April 3, 2003; provided, however, that
if Executive terminates his employment hereunder other than for Good Reason,
then the notice provision in the preceding sentence shall no longer be required.
Notwithstanding the foregoing, if the termination occurs by reason of
Executive's death, the Option shall expire 180 days following the later of the
date of death and the Trigger Date.

      The Company shall make available to Executive a "cashless exercise"
procedure with respect to the Option, under which the exercise price and any
taxes payable by Executive at the time of exercise may be paid through the
disposition and/or withholding of shares otherwise deliverable to Executive upon
exercise, such that the Option may be exercised without any out-of-pocket cash
outlay by Executive.

      In the sole and absolute discretion of, and subject to approval by, the
Compensation Committee, Executive shall also be eligible to receive additional
grants of options to purchase Common Stock from time to time. Such options, if
granted, would vest equally over a five year period beginning on the first
anniversary of the date of grant.

      The Option, and any additional stock options granted to Executive during
the Term, shall be transferable to "Family Members" (as defined in the Stock
Plan), trusts for their exclusive benefit, and partnerships and limited
liability companies owned by Family Members, to the maximum extent permitted by
Section 11(c) of the Stock Plan and any similar provision of a successor plan
under which such options are issued; and any option so transferred shall be
exercisable by the transferee to the extent it would have been exercisable by
Executive but for such transfer.

      (d)   Guaranteed Return Amount.   Subject to the terms and conditions set
forth in this Section 3(d):

            (i) if the Option expires or is forfeited other than by reason of
Termination for Cause (within the scope of clauses (i) through (iv) of the
definition herein of "Termination for Cause") or Termination by Executive other
than for Good Reason, and during the three year period following the
Commencement Date the vested and exercisable portion thereof did not provide the
Executive with the opportunity (over a period of ten business days and with such
notice to the Executive as is required by clauses (ii) and (iii) below) to
exercise the Option, or a portion thereof, and realize a pre-tax gain of at
least $4,500,000 (the "Guaranteed Return Amount"), in exchange for the Option
the Company shall pay Executive (the "Guaranteed Return Payment") the Guaranteed
Return Amount less any Realizable Gain (as defined herein).

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            (ii) if at any time following the date that any portion of the
Option becomes vested and exercisable, the Fair Market Value of the Common Stock
equals or exceeds $43.41 (the "Target Price") and remains equal to or in excess
of the Target Price for ten consecutive business days, the Company's obligations
with respect to the Guaranteed Return Payment shall be reduced by an amount (the
"Realizable Gain") equal to the product of (x) the number of shares underlying
the portion of the Option that is vested and exercisable and (y) the difference
between the average of the Fair Market Value of the Common Stock during such ten
business day period and the Exercise Price of the vested and exercisable portion
of the Option. If the Fair Market Value of the Common Stock equals or exceeds
the Target Price for ten consecutive business days and as a result, the
aggregate Realizable Gain exceeds the Guaranteed Return Amount, the Company's
obligations with respect to the Guaranteed Return Payment shall cease and the
Company shall be under no obligation to pay the Guaranteed Return Payment to
Executive. The Company shall give Executive written notice that the Fair Market
Value of the Common Stock has equaled or exceeded the Target Price at least two
business days prior to the Target Price having been reached for ten consecutive
business days; provided, however that if the Company fails to give notice on a
timely basis, Executive shall have two business days from the date of such
notice before the Guaranteed Return Payment shall be reduced in accordance with
the provisions of this Section, and such reduction shall be made only if the
Fair Market Value of the Common Stock equals or exceeds the Target Price on each
of such two consecutive business days. After such notice has been given, if
Executive has not exercised the vested portion of the Option, the Realizable
Gain shall be calculated using the highest average of the Fair Market Value of
the Common Stock during any ten business day period after such notice until
Executive has exercised the vested portion of the Option.

            (iii) if at any time after the Option is fully vested and
exercisable, there is a period during which for ten consecutive business days
the Realizable Gain equals or exceeds the Guaranteed Return Amount, the
Company's obligations with respect to the Guaranteed Return Payment shall cease
and the Company shall be under no obligation to pay the Guaranteed Return
Payment to Executive. The Company shall be subject to the same obligations with
respect to providing notice to Executive as are described in clause (ii) above.

            (iv) if at any time during the term of the Option, Executive
exercises any portion thereof, the Company's obligations with respect to the
Guaranteed Return Payment shall be reduced by the greater of (a) the difference
between the Exercise Price and the Fair Market Value on the date of such
exercise (or, if applicable, calculated in accordance with the last sentence of
Section 3(d)(ii) hereof) multiplied by such number of shares of Common Stock
underlying the portion of the Option exercised by Executive and (b) the
difference between the Exercise Price and the Target Price on the date of such
exercise multiplied by such number of shares of Common Stock underlying the
portion of the Option exercised by Executive (it being understood that the
Company's obligation

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shall not be reduced under this paragraph (iv) by amounts which would duplicate
amounts previously taken into account under paragraph (ii) in reducing the
Guaranteed Return Payment).

      Subject to the terms of this Agreement, the Guaranteed Return Payment, if
any, shall be payable in cash, in six equal monthly installments following
written notice by the Executive or his duly authorized representative or estate
at any time following expiration of the Option. In the event there is a Change
in Control where an Alternative Option is exchanged for the Option, the
Guaranteed Return Payment may be payable, at the Successor's option, in cash or
common stock of the Successor; provided that such stock is traded on a stock
exchange or other established securities market, is immediately tradable without
restriction, and has a fair market value on the date of delivery to Executive
(as determined in the manner described in the definition of Fair Market Value
herein) equal to the Guaranteed Return Payment.

      The Target Price shall be adjusted in a manner consistent with adjustments
made under Section 4(c) of the Stock Plan to preserve the intended benefit to
Executive. For purposes of Section 3 of this Agreement, where the Fair Market
Value of the Common Stock equals or exceeds the Target Price for ten consecutive
business days and the Guaranteed Return Payment would otherwise be reduced, but
the Executive is prohibited (in a writing from the Company's legal counsel) from
exercising the Option on any one of such dates by terms of the Stock Plan, this
Agreement, Company policy, or applicable law, the Guaranteed Return Payment will
not be reduced in accordance with the provisions of this Section until after the
second consecutive business day in which Executive is thereafter no longer
subject to such prohibitions, provided that the Fair Market Value of the Common
Stock remains equal to or in excess of the Target Price on such two consecutive
days. The Executive shall be deemed to be prohibited from exercising the Option,
for purposes of the preceding sentence, if Executive delivers a completed notice
of exercise under the Stock Plan and Executive is prevented from exercising. In
such event exercise shall be deemed to be continued to be prohibited until such
exercise is permitted. The Company shall use reasonable efforts to assist in the
prompt administration of such exercise (it being understood that the Company
shall have no liability for expenses, losses or any claims by Executive due to
administrative delay so long as the Company is acting in good faith). For
purposes of the Stock Plan, this Agreement shall be considered to be an Award
Agreement described in Section 11(b) of the Stock Plan.

4.    Benefits, Perquisites and Expenses.

      (a) Benefits. During the Employment Period, Executive shall be eligible to
participate in (i) each welfare benefit plan sponsored or maintained by the
Company, including, without limitation, each group life, hospitalization,
medical, dental, health, accident or disability insurance or similar plan or
program of the Company, and (ii) each pension, 401-K, profit sharing,
retirement, deferred compensation or savings plan

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sponsored or maintained by the Company, in each case, whether now existing or
established hereafter, on the same basis as generally made available to other
senior officers of the Company. The Company may amend or terminate any such plan
in its sole and absolute discretion.

      (b) Perquisites. During the Employment Period, Executive shall be entitled
to four weeks' paid vacation annually and shall also be entitled to receive such
perquisites as are generally provided to other senior officers of the Company in
accordance with the then current policies and practices of the Company.
Executive shall not be entitled to receive remuneration for unused vacation and
shall not be permitted to carry-over unused vacation to the following year.

      (c) Business Expenses. During the Employment Period, the Company shall pay
or reimburse Executive for all reasonable expenses incurred or paid by Executive
in the performance of Executive's duties hereunder, upon presentation of expense
statements or vouchers and such other information as the Company may require and
in accordance with the generally applicable policies and procedures of the
Company.

      (d) Indemnification. The Company shall indemnify Executive and hold
Executive harmless from and against any claim, loss or cause of action arising
from or out of Executive's performance as an officer, director or employee of
the Company or any of its subsidiaries or affiliates or in any other capacity,
including any fiduciary capacity, in which Executive serves at the request of
the Company to the maximum extent permitted by applicable law and the Company's
Certificate of Incorporation and By-Laws in effect on the date hereof. The
Company shall provide directors and officers liability coverage in amounts
maintained on the Commencement Date for directors and officers of the Company
and its Affiliates in the United States.

      (e) Relocation Expenses. The Company shall reimburse the Executive,
promptly following the Commencement Date up to a maximum of $50,000 for all
reasonable direct, out-of-pocket, moving costs, closing costs, traveling
expenses, and all other fees, costs or expenses incurred by the Executive and
members of his household in connection with the Executive's relocation to
Pittsburgh, including, without limitation, househunting trips; provided,
however, that Employee shall be obligated to return the $50,000 to the Company
if, before the first anniversary of the Commencement Date, Executive's
employment is terminated either pursuant to a Termination for Cause (within the
scope of clauses (i) through (iv) of the definition hereof of "Termination for
Cause") or a Termination by Executive other than for Good Reason, each as
defined in Section 5(e). In addition, Executive shall be reimbursed up to a
maximum of $3,000 per month, beginning on the first month anniversary of the
Commencement Date, for a maximum of six months, for all temporary housing costs
during such six month period. Reimbursements under this Section 4(e) shall be
made by the Company upon the presentation of appropriate documentation therefor.

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5.    Termination of Employment.

      (a) Termination of the Employment Period. The Employment Period shall end
upon the earliest to occur of (i) a termination of Executive's employment on
account of Executive's death, (ii) a Termination due to Disability or
Retirement, (iii) a Termination for Cause, (iv) a Termination Without Cause, (v)
a Termination by Executive for Good Reason, (vi) a Termination by Executive
other than for Good Reason, or (vii) the expiration of the Term. The Company or
the Executive may initiate a termination in any manner permitted hereunder by
giving the other party written notice thereof (the "Termination Notice"). The
effective date (the "Termination Date") of any termination shall be deemed to be
the later of (i) in the case of a Termination Notice from Executive, 45 days
after the receipt by the Company of the Termination Notice, (ii) the date on
which the Termination Notice is given, or (iii) the date specified in the
Termination Notice; provided, however, that in the case of the Executive's
death, the Termination Date shall be the date of death. Upon termination of his
employment for any reason, Executive will immediately resign from all positions
that he holds with the Company and its Affiliates and, should Executive fail to
tender his resignation within two days of the request, the Company is
irrevocably authorized to appoint an agent in his name and on his behalf to sign
any documents and do anything necessary or desirable to give effect to his
resignation.

      (b)   Payments Upon Certain Terminations.

            (i) Termination Without Cause or Termination by Executive for Good
Reason. In the event that Executive's employment is terminated by the Company
Without Cause or by Executive for Good Reason, the Company shall pay Executive
his Earned Salary, Vested Benefits and a Severance Benefit (as such terms are
hereinafter defined). In addition, if required pursuant to Section 3(d) hereof,
Executive shall be entitled to receive the Guaranteed Return Payment, or a
portion thereof, if any.

            (ii) Termination due to Death. In the event of the termination of
Executive's employment due to Executive's death, the Company shall pay
Executive's estate Executive's Earned Salary, Vested Benefits and a lump sum
payment equal to 12 months of Executive's Base Salary (at the rate in effect on
the date of his death). In addition, if required pursuant to Section 3(d)
hereof, Executive shall be entitled to receive the Guaranteed Return Payment, or
a portion thereof, if any.

            (iii) Termination due to Disability or Retirement. In the event of
termination of Executive's employment by the Company due to Disability or a
Termination due to Retirement, the Company shall pay Executive his Earned Salary
and Vested Benefits, plus, in the event of Termination due to Disability, to the
Executive or his estate his Base Salary at the Termination Date on a monthly
basis for 12 months following the month in which Executive's employment is
terminated. In the event that

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Executive's employment with the Company is terminated due to Disability,
Executive's benefits under this subsection (iii) shall be reduced by the amount
of any Company sponsored (and paid for) disability benefits paid to Executive.
In addition, if required pursuant to Section 3(d) hereof, Executive shall be
entitled to receive the Guaranteed Return Payment, or a portion thereof, if any.

               (iv) Termination by Executive Other Than for Good Reason. In the
event of a Termination by Executive other than a Termination for Good Reason,
the Company shall pay Executive his Earned Salary and Vested Benefits.

               (v) Termination for Cause. In the event of a termination of
Executive's employment by the Company for Cause, the Company shall pay Executive
his Earned Salary and Vested Benefits. In addition, if the termination is under
clause (v) of the definition herein of "Termination for Cause," Executive shall
still be entitled to receive the Guaranteed Return Payment, if any, in
accordance with the terms and subject to the conditions of Section 3(d) of this
Agreement.

      (c)  Timing of Payments. Earned Salary shall be paid in a single lump sum
as soon as practicable, but in no event later than the earlier of 60 days
following the end of the Employment Period or the day such Earned Salary would
have been payable under the Company's normal payroll practices. Vested Benefits
shall be payable in accordance with the terms of the plan, policy, practice,
program, contract or agreement under which such benefits have accrued except as
otherwise expressly modified by this Agreement. Fifty percent (50%) of Severance
Benefits shall be paid within 30 days after the Termination Date and the
remaining 50% of the Severance Benefits shall be paid in equal monthly
installments during the eleven month period following the payment of the first
50% of Severance Benefits. The Guaranteed Return Payment, if required pursuant
to Section 3(d) hereof, shall be payable in accordance with Section 3(d).

      (d)  Retention of monies owed. The Company may at any time during
Executive's employment or upon his termination for any reason deduct and retain
from any monies owed by it to Executive any sum properly paid by it or any
Affiliate to, on behalf or at the request of Executive (other than expenses
properly incurred in connection with the employment of Executive under this
Agreement) or due to it from Executive including, but not limited to,
unauthorized expenses or excess vacation.

      (e)   Definitions.  The following capitalized terms have the following
meanings:

            "Affiliate" shall mean (i) Ronald S. Lauder and (ii) any person or
entity who directly or indirectly through one or more intermediaries, is
controlled by the Company or RSL COM.

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            "Change in Control" means the occurrence of (i) a sale or other
disposition of stock of RSL COM, other than a spin-off or any other form of
distribution of RSL COM's shares, or an issuance of stock of RSL COM as a result
of which any "person" (as such term is used in section 13(d) and 14(d) of the
Exchange Act), other than RSL COM, or Ronald S. Lauder ("Lauder"), or any of his
controlled entities, is or becomes the beneficial owner of more than 50% of the
total voting power of RSL COM and those persons who are members of the Board of
Directors of RSL COM immediately prior to the closing of such transaction
constitute less than one half of the membership of the Board of Directors of RSL
COM immediately following the closing of such transaction, (ii) any merger,
consolidation or reorganization following which those persons who are members of
the Board of Directors of RSL COM immediately prior to the closing of such
transaction constitute less than one half of the membership of the board of
directors of the surviving entity immediately following the closing of such
transaction, (iii) a transaction pursuant to which more than 50% of the total
value of the assets of RSL COM and its consolidated subsidiaries are transferred
and the transferee of such assets is not Lauder or a company controlled by him,
or (iv) a complete liquidation of RSL COM.

            "Earned Salary" means any Base Salary earned, but unpaid, for
services rendered to the Company on or prior to the date on which the Employment
Period ends.

            "Fair Market Value" means on any date, the closing price of a share
of Common Stock as reported on the National Association of Securities Dealers
Automated Quotation/National Market System ("NASDAQ/NMS") (or on such other
recognized market or quotation system on which the trading prices of the Share
are traded or quoted at the relevant time) on such date.

            "Normal Retirement Age" means the first day of the month following
Executive attaining age 65.

            "Severance Benefit" means an amount equal to Executive's annual Base
Salary as in effect immediately prior to the Termination Date.

            "Termination due to Disability" means a termination of Executive's
employment by the Company because Executive has been incapable of substantially
fulfilling the positions, duties, responsibilities and obligations set forth in
this Agreement because of physical, mental or emotional incapacity resulting
from injury, sickness or disease for a period of (i) at least six consecutive
months or (ii) more than nine months in any twelve month period. Any question as
to the existence, extent or potentiality of Executive's disability upon which
Executive and the Company cannot agree shall be determined by a qualified,
independent physician selected by the Company and reasonably acceptable to
Executive. The determination of any such physician shall be final and conclusive
for all purposes of this Agreement. Executive or his legal representative or any
adult member of his immediate family shall have the right to present

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to such physician such information and arguments as to Executive's disability as
he, she or they deem appropriate, including the opinion of Executive's personal
physician.

            "Termination due to Retirement" means termination of employment by
Executive other than for Good Reason, or termination of Executive's employment
by the Company other than a Termination for Cause, on or after Executive's
Normal Retirement Age.

            "Termination for Cause" means a termination of Executive's
employment by the Company due to (i) Executive's conviction of a felony or the
entering by Executive of a plea of nolo contendere with respect to a charged
felony, (ii) Executive's gross negligence, recklessness, dishonesty, fraud,
willful malfeasance or willful misconduct in the performance of the services
contemplated by this Agreement, (iii) a willful failure without reasonable
justification to comply with a reasonable written order of the Board of
Directors of the Company, or the COO; (iv) a willful and material breach of
Executive's duties or obligations under this Agreement, including, without
limitation, Executive's failure to devote full business time to the Company in
accordance with Section 2(b) of this Agreement; or (v) material nonperformance
of Executive's duties as reasonably determined by the COO; provided, however;
that if Executive is Terminated for Cause under clause (v) above, he shall still
be entitled to receive the Guaranteed Return Payment in accordance with the
terms and subject to the conditions of Section 3(d) of this Agreement.
Notwithstanding the foregoing, a termination shall not be treated as a
Termination for Cause unless the Company shall have delivered a written notice
to Executive stating that it intends to terminate his employment for Cause and
specifying the factual basis for such termination, and the event or events that
form the basis for the notice, if capable of being cured, shall not have been
cured within 30 days of the receipt of such notice.

            "Termination Without Cause" means any termination by the Company of
Executive's employment hereunder other than (i) a Termination due to Disability,
(ii) a Termination due to Retirement or (iii) a Termination for Cause.

            "Termination for Good Reason" means a termination of Executive's
employment by Executive within 90 days following (i) a material reduction in
Executive's positions, duties, responsibilities or reporting lines from those
described in Section 2 hereof; or (ii) a material breach of this Agreement by
the Company; or (iii) a reduction in opportunity under the Bonus Plan below the
levels contemplated by Section 3(b). Notwithstanding the foregoing, a
termination shall not be treated as a Termination for Good Reason (x) if
Executive shall have consented in writing to the occurrence of the event giving
rise to the claim of Termination for Good Reason or (y) unless Executive shall
have delivered a written notice to the Company within 60 days of his having
actual knowledge of the occurrence of one of the events specified in clause (i),
(ii) or (iii) above stating that he intends to terminate his employment for Good
Reason and specifying the factual basis for such termination, and such event, if
capable of being cured, shall not

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have been cured within 30 days of the receipt of such notice or (z) if the
opportunity under the Bonus Plan is reduced by action of the Compensation
Committee or Board of Directors of the Company or RSL COM. Following a "Change
in Control", Executive shall not be deemed to have Good Reason under clause (i)
or (ii) above so long as he continues to receive the compensation and
substantially the same benefits as he is entitled to under this Agreement and
have substantially the responsibilities he had at the time of the Change in
Control and he is not required to relocate following the Change of Control.

            "Vested Benefits" means amounts which are vested or which Executive
is otherwise entitled to receive under the terms of or in accordance with any
plan, policy, practice or program of, or any contract or agreement with, the
Company, including the Options (to the extent provided in Section 3(c)), at or
subsequent to the date of his termination without regard to the performance by
Executive of further services or the resolution of a contingency and expenses
incurred prior to termination of employment that are reimbursable under Section
4(c).

      (f)   Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 5 following termination of his employment
(including amounts payable with respect to Vested Benefits) shall be in full and
complete satisfaction of Executive's rights under this Agreement and any other
claims he may have in respect of his employment by the Company or any of its
subsidiaries. Such amounts shall constitute liquidated damages with respect to
any and all such rights and claims and, upon Executive's receipt of such
amounts, the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in connection with
Executive's employment with the Company and its subsidiaries and Affiliates,
other than Executive's rights to indemnification under Section 4(d).

6.    Agreement Not to Compete With Company

             (a) During the Employment Period and for a period of one year
thereafter (the "Applicable Period"), Executive shall not directly or indirectly
own, manage, operate, finance, join, control, advise, consult, render services
to, have an interest or future interest or participate in the ownership,
management, operation, financing or control of, or be employed by or connected
in any manner with any Competing Business (other than as a holder of common
stock of the Company, and not in excess of 1% of the outstanding voting shares
of any other publicly traded company). "Competing Business" means the business
of telecommunication services and solutions in any country where the Company or
an Affiliate conducts such business at any time during the Term. Any opportunity
directly or indirectly related to any telecommunications services and solutions
business engaged in by the Company, its subsidiaries and Affiliates of which
Executive becomes aware during the Term shall be deemed a corporate opportunity
of the Company, and Executive shall promptly make reasonable efforts to make
such opportunity available to the Company.

                                       12

<PAGE>

            (b) If, during the period of one year immediately following
expiration of the Employment Period, Executive proposes to engage directly or
indirectly in what may be a Competing Business, Executive shall so notify the
Company in a writing which shall fully set forth and describe in detail the
nature of the activity which may be a competitive Business, the names of the
companies or other entities with or for whom such activity is proposed to be
engaged in by Executive or by an Affiliate of Executive (the "Section 6
Notice"). If, within 30 days after receipt by the Company of a Section 6 Notice,
the Company shall fail to notify Executive that it deems the proposed activity
to be a Competing Business, then Executive shall be free to engage in the
activities described in the Section 6 Notice without violation of Section 6(a).
If, however, the Company notifies Executive that the proposed activities
constitute a Competing Business, then (i) Executive shall not engage in such
Competing Business during the one year period immediately following expiration
of the Employment Period, and (ii) the Company shall pay Executive, during such
one year period, in equal monthly installments, an amount equal to his highest
Base Salary; provided that the amount payable under this Section 6(b) shall be
reduced by the amount of Severance Benefit that Executive is receiving for such
period.

7.    Confidential Information

      (a) Without the prior written consent of the Company, Executive shall not
disclose at any time during the Employment Period or any time thereafter any
Confidential Information (as defined below) to any third person other than in
the course of fulfilling Executive's responsibilities under this Agreement
unless such Confidential Information has been previously disclosed to the public
by the Company or an Affiliate or is in the public domain (other than by reason
of Executive's breach of the provisions of this paragraph).

      (b) "Confidential Information" is any non-public information pertaining to
the Company or an Affiliate, any of their businesses or the business or personal
affairs of Lauder or his family and how any of them conducts its or his business
or affairs. "Confidential Information" includes not only information disclosed
by the Company or an Affiliate to Executive, but non-public information
developed, created or learned by Executive during the course of or as a result
of Executive's employment with the Company. "Confidential Information"
specifically includes non-public information and documents concerning the
Company's and its Affiliates' methods of doing business; research,
telecommunications technology, its actual and potential clients, transactions
and suppliers (including the Company's or an Affiliate's terms, conditions and
other business arrangements with them); client or potential client or
transaction lists and billing; advertising, marketing and business plans and
strategies (including prospective or pending licensing applications or
investments in license holders or applicants); profit margins, goals, objectives
and projections; compilations, analyses and projections regarding the Company,
its Affiliates or any of its clients or potential clients or their businesses;
trade secrets; salary, staffing, management organization or employment

                                       13

<PAGE>

information; information relating to members of the Board of Directors and
management of the Company or an Affiliate; files, drawings or designs;
information regarding product development, marketing plans, sales plans or
manufacturing plans; operating policies or manuals, business plans, financial
records or packaging design; or any other non-public financial, commercial,
business or technical information relating to the Company, an Affiliate, Lauder
or his family or non-public information designated as confidential or
proprietary that the Company, an Affiliate or Lauder may receive belonging to
others who do business with any of them.

      (c) Nothing herein shall prevent the disclosure by Executive of any
information required by an order of a court having competent jurisdiction or
under subpoena or other legal compulsion from a government agency, provided
that, if Executive receives a request for the disclosure of any Confidential
Information pursuant to court process or by a government agency, Executive shall
promptly (and at the latest within five business days but not less than three
days prior to the date Executive is required to respond to the request) notify
the Company of that request and cooperate to the maximum extent authorized by
law with the Company in protecting the Company's and its Affiliates' interest in
maintaining the confidentiality of any Confidential Information. The Company
will reimburse Executive for reasonable out-of-pocket costs or expenses incurred
by Executive in connection with his cooperation with the Company and its
Affiliates hereunder.

8.    No Disparaging Comments

Each of the parties hereto agrees not to make disparaging or derogatory comments
about the other party or the Affiliates, members of the Board of Directors of
the Company, or members of the Boards of Directors of Affiliates, except to the
extent required by law, and then only after consultation with the other party to
the maximum extent possible in order to maintain goodwill for each of the
parties. If the Company learns that disparaging or derogatory remarks are being
made by the Affiliates, members of the Board of Directors of the Company, or
members of the Board of Directors of Affiliates, regarding Executive, the
Company shall use reasonable efforts to cause such remarks to cease.

9.    Return of Company Property

Promptly (and at the latest within ten business days) following Executive's
termination of services, Executive shall:

      (i)   return to the Company all documents, records, notebooks, computer
            diskettes and tapes and anything else containing the Company's
            Confidential Information (as defined above), and any other property
            or Confidential Information of the Company or its Affiliates,
            including all copies thereof in Executive's possession, custody or
            control, and

                                       14

<PAGE>

      (ii)  delete from any computer or other electronic storage medium owned by
            Executive any of the proprietary or Confidential Information of the
            Company or its Affiliates.

10.   No Soliciting or Hiring Company Employees

During the Employment Period and for a twelve month period thereafter, Executive
shall not directly or indirectly induce any employee of the Company or any
Affiliate, other than Executive's secretary or personal assistant, to terminate
employment with such entity. Additionally, during the Employment Period and for
a twelve month period thereafter, Executive shall not directly or indirectly,
either individually or as owner, agent, employee, consultant or otherwise,
employ or offer employment to any person who is, on the date of termination of
employment of Executive, or, for the six months prior to the end of the
Employment Period, was employed by the Company or any Affiliate as an employee;
provided, however, that Executive shall not be deemed to have breached the
provisions of this sentence in the event that Executive had no prior knowledge
of such hiring (or offer of employment).

11.   Continuing Obligations Following Termination

Executive agrees that his obligations and restrictions with respect to
noncompetition, confidentiality, Company property, nondisparagement and
nonsolicitation, and the Company obligations to indemnify Executive under
Section 4(d), will continue to apply following the termination of Executive's
relationship (to the extent set forth in the relevant provisions of this
Agreement) regardless of the manner in which his relationship with the Company
is terminated, whether voluntarily, pursuant to a Termination for Cause,
Termination for Good Reason, Termination Without Cause or otherwise.

12.   Arbitration of All Disputes

      (a) Any dispute, controversy or claim between the Executive and the
Company or any of its officers, directors, employees or shareholders (who are
expressly made third-party beneficiaries of this agreement) arising out of,
relating to or in connection with this agreement, or the breach, termination or
validity thereof, shall be finally resolved by binding and non-appealable
arbitration, before a single arbitrator selected by the procedure set forth
below, conducted in New York, New York.

      (b) Either party may commence an arbitration proceeding by giving written
notice to the other party of its desire to arbitrate.

      (c) The single arbitrator (the "Arbitrator") shall be selected from among
the New York City members of the New York Regional Panel of Distinguished
Neutrals (the "Panel") of the Center for Public Resources ("CPR") by mutual
agreement of the parties, or if the parties are unable to agree, by the
following means:

                                       15

<PAGE>

                        (A) The Company, on one hand, and Executive on the other
            hand, shall simultaneously exchange lists each containing the names
            of five members of their choice of the Panel who have indicated a
            willingness to serve.

                        (B) If a single name appears on both lists, that
            individual shall be appointed.

                        (C) If more than one name appears on both parties'
            lists, the Arbitrator shall be selected from the common names by
            mutual agreement of the parties or by the toss of a coin.

                        (D) If the lists contain no names in common, each party
            shall strike four names from the other party's list and the
            Arbitrator shall be selected from the remaining two names by mutual
            agreement of the parties or by the toss of a coin.

                        (E) If the CPR ceases to have a Panel or it is otherwise
            impossible to select the Arbitrator from the Panel as contemplated
            by this Agreement, the Arbitrator shall be selected by the President
            of the CPR in the manner that the President deems closest to
            satisfying the purposes of this Section. If such person is unable to
            do so, or if such person is unavailable or unwilling to act, the
            arbitrator shall be selected from a panel comprised of members of
            JAMS/Endispute in a manner that approximates the means described
            above.

      (d) The Arbitrator, after appropriate consultation with the parties, shall
(i) determine, in his or her sole discretion, the rules governing the
arbitration proceeding, including whether and to what extent the parties shall
have any right to pre-hearing discovery or other forms of disclosure, the manner
of presentation of arguments and/or evidence before or at any hearing, whether
and to what extent formal rules of evidence shall govern the proceeding and the
parties' rights following the proceeding, and (ii) be governed in exercising
such discretion by the goal of reaching a fair and reasonable decision in an
expeditious and efficient manner while endeavoring to streamline the process and
avoid undue litigation costs.

      (e) The Arbitrator shall assess the costs of the proceeding (including the
prevailing party's reasonable attorney's fees) on any unsuccessful party to the
extent the Arbitrator concludes that such party is unsuccessful, unless he or
she concludes that (i) matters of equity or important considerations of fairness
dictate otherwise or (ii) in the case of Executive, the Arbitrator determined
that Executive acted reasonably and in good faith in pursuing all of the claims
asserted by him in such arbitration.

                                       16

<PAGE>

      (f) The Arbitrator shall be required to state his or her decision in
writing and may, but shall not be required to, elaborate on the reasons for such
decision.

      (g) The arbitrator(s) shall have the authority upon application by a party
to direct specific performance, including preliminary or interim specific
performance pending the final resolution of the arbitration, of any portion of
this agreement. The parties expressly consent to the jurisdiction and power of
any federal or state court in New York to enforce the terms of such a direction
upon application by a party. If the arbitrator(s) have not yet been appointed,
the parties may obtain injunctive or other appropriate relief from a court to
enforce the terms of this agreement pending the appointment of the arbitrator(s)
who shall thereafter have full power to continue, modify or vacate the terms of
any injunctive relief ordered by the court.

      (h) The arbitration proceeding and the provisions in this agreement
dealing with arbitration shall be governed by the United States (Federal)
Arbitration Act, 9 U.S.C. ss.ss. 1-16, the provisions of which shall be
controlling in the event of any conflict with provisions of New York Law.
Judgment on or enforcement of the award or any direction for specific
performance rendered by the arbitrators may be entered by any court having
jurisdiction thereof or having jurisdiction over the relevant party or assets of
such party.

      (i) If, notwithstanding the parties' agreement to arbitrate, any issue is
presented to a court for decision, the parties hereby waive any right to trial
by jury.

      (j) The parties agree that any dispute between the parties and the
arbitration itself shall be kept confidential and that the existence of the
arbitration and any element of it (including but not limited to any pleading,
brief or other document submitted or exchanged, any testimony or other oral
submission, and any award) shall not be disclosed except to the arbitrator(s),
the CPR Institute for Dispute Resolution, the parties, their counsel and any
person necessary to the conduct of the proceeding, except as may be lawfully
required in judicial proceedings relating to the arbitration or otherwise.

13.  No Punitive or Emotional Damages

The parties hereto agree that neither the Executive nor the Company will be
entitled to seek or obtain punitive, exemplary or similar damages of any kind
from the other or, in the case of Executive, from the Company's officers,
directors, employees or shareholders, or to seek or obtain damages or
compensation for emotional distress, as a result of any dispute, controversy or
claim arising out of, relating to or in connection with this Agreement, or the
performance, breach, termination or validity thereof. Nothing herein shall
preclude an award of compensatory or punitive damages against any other third
party.

                                       17

<PAGE>

14.  Injunctive Relief to Avoid Irreparable Injury

      (a) Executive acknowledges and agrees that the individualized services and
capabilities that he will provide to the Company under this Agreement are of a
personal, special, unique, unusual, extraordinary and intellectual character.

      (b) Executive acknowledges and agrees that because the international
telecommunications industry is globally integrated and that its constituent
companies are dependent for their survival on protection of their confidential
information which is highly advanced and technical and on carefully developed
knowledge of customer systems and requirements, the restrictions in this
agreement are reasonable to protect the Company's rights under this Agreement
and to safeguard the Company's and its Affiliates' Confidential Information.

      (c) Executive acknowledges and agrees that the covenants and obligations
of Executive with respect to noncompetition, nonsolicitation, confidentiality
and Company property relate to special, unique and extraordinary matters and
that a violation of any of the terms of such covenants and obligations will
cause the Company and its Affiliates irreparable injury for which adequate
remedies are not available at law. Executive therefore agrees that the Company
shall be entitled to an order of specific performance, injunction, restraining
order or such other interim or permanent equitable relief (without the
requirement to post bond) restraining Executive from committing any violation of
the covenants and obligations contained in this Agreement. Executive
acknowledges and agrees that if any one or more of any part of such restrictions
shall be rendered or judged invalid or unenforceable, such restriction or part
shall be deemed to be severed from this Agreement and such invalidity or
unenforceability shall not in any way affect the validity of the remaining
provisions.

      (d) These injunctive remedies are cumulative and are in addition to any
other rights and remedies the Company may have at law or in equity.

      (e) Executive represents that his economic means and circumstances are
such that the provisions of this Agreement, including the noncompetition,
nonsolicitation, confidentiality and Company property provisions, will not
prevent him from providing for himself and his family on a basis satisfactory to
him and them.

15.  Automatic Amendment by Court Order and Interim Enforcement

      (a) If the Arbitrator(s) or a court determines that, but for the
provisions of this paragraph, any part of this agreement is illegal, void as
against public policy or otherwise unenforceable, the relevant part will
automatically be amended to the extent necessary to make it sufficiently narrow
in scope, time and geographic area to be legally enforceable. All other terms
will remain in full force and effect.

                                       18

<PAGE>

      (b) If the Executive raises any question as to the enforceability of any
part or terms of this agreement, including, without limitation, the provisions
relating to noncompetition, nonsolicitation, confidentiality and Company
property, the Executive specifically agrees that he will comply fully with this
Agreement unless and until the entry of an arbitral award to the contrary.

16.  Notices

All notices and other communications required or permitted hereunder shall be
sufficiently given if (a) delivered personally, (b) sent by facsimile
transmission (with confirmation received and followed with a duplicate copy
promptly sent in the manner described in clause (a) or (c) of this Section), (c)
sent by a nationally-recognized air courier assuring overnight delivery, or (d)
mailed (by registered or certified mail, return receipt requested and postage
prepaid) as follows:

            if to the Executive, to the Executive at:

            371 Pine Valley Road, NW
            Winston-Salem, NC 27104-1809

            with a copy to:

            David E. Kahen, Esq.
            Roberts & Holland LLP
            825 Eighth Avenue, 37th Floor
            New York, NY 10019-7416

            if to the Company,  to the Company at:

            RSL COM U.S.A., Inc.
            435 Park Avenue 5TH Floor
            New York, NY 10022

            with a copy to:

            RSL Communications, N. America, Inc.
            Suite 4300
            767 Fifth Avenue
            New York, New York 10153
            Fax: (212) 317-0600
            Attention:  General Counsel

or to such other address as shall be furnished by notice from time to time by
one party hereto to the other party. Any such communication shall be deemed to
have been given,

                                       19

<PAGE>

(i) in the case of personal delivery, on the date of delivery, (ii) in the case
of facsimile, on the date such facsimile is sent (provided confirmation of such
is received), (iii) in the case of delivery by air courier, on the first
business day following the day on which such communication was posted, and (iv)
in the case of mailing, on the third business day following the day on which
such notice was posted.

17.  Sole and Entire Understanding; Amendments

The entire understanding and agreement between the Company and Executive have
been incorporated into this Agreement. There are no other agreements, promises,
representations, understandings or inducements by the Company to Executive or
Executive to the Company other than those specifically set forth in this
Agreement. This Agreement may not be altered, amended or added to except in a
single writing signed by the Company and the Executive.

18.  Waiver of Breach

A waiver or breach of any provision of this Agreement shall not constitute or
operate as a waiver of any other breach of such provision or of any other
provision, and any failure to enforce any provision hereof shall not operate as
a waiver of such provision or of any other provision.

19.  Headings

The headings of sections in this Agreement are for convenience only, are not a
part of this Agreement and shall not affect the construction of the provisions
of this Agreement.

20.  Arm's Length

      (a) This Agreement was entered into at arm's length, without duress or
coercion, and is to be interpreted as an agreement between parties of equal
bargaining strength. Both the Company and the Executive agree that this
Agreement is clear and unambiguous as to its terms, and that no parol or other
evidence will be used or admitted to alter or explain the terms of this
Agreement, but that it will be interpreted based on the language within its four
corners in accordance with the purposes for which it is entered into.

      (b) The parties hereto expressly agree that any rule or contractual
interpretation, as applied under California law or anywhere else, that would
allow parol or extrinsic evidence to attempt to show fraud in the inducement or
duress to contradict the plain, unambiguous terms of this Agreement shall not
apply to this Agreement and its performance and enforcement. This provision is a
material part of this Agreement and, should any party try to introduce evidence
contrary to this provision, any other party shall be entitle to consider it a
breach and to rescind this contract in full.

21.  Successors and Assigns

                                       20

<PAGE>

      (a) This Agreement will inure to the benefit of, and will be binding upon,
the Company, its successors and assigns and upon the Executive and his heirs,
successors and assigns; provided, however, that, because this is an Agreement
for personal services, the Executive cannot assign any of his obligations under
this Agreement to anyone else.

      (b) This Agreement may be executed in counterparts, in which case each of
the two counterparts will be deemed to be an original and the final counterpart
shall be deemed to have been executed in New York, New York.

22.  New York Law Governs

Any questions or other matters arising under this Agreement, whether of
validity, interpretation, performance or otherwise, will therefore be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be wholly performed in New York, without reference to
principles of conflicts or choice of law under which the law of any other
jurisdiction would apply.

                                       21

<PAGE>

            IN WITNESS WHEREOF, this Agreement has been executed by Executive
and then by the Company in New York, New York on the dates shown below, but
effective as of the date and year first above written.

                                    EXECUTIVE

Date:  12-1-99                      /s/ Michael A. Marino
                                    ------------------------
                                        Michael A. Marino

                                    RSL COM U.S.A., Inc.

Date:  12-1-99                      BY: /s/ Itzhak Fisher
                                        -----------------------

                                    Title: Chairman
                                           --------------------

                                       22<PAGE>

                                                Executed in 6 Parts
                                              Counterpart No. (   )

                     NATIONAL EQUITY TRUST

                  LOW FIVE PORTFOLIO SERIES 31

                   REFERENCE TRUST AGREEMENT

       This Reference Trust Agreement dated March 29, 2000 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:

<PAGE>

                              -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

<PAGE>

                              -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.  As
            directed by the Depositor, the Trustee will advance
            funds to the Trust in an amount necessary to reimburse
            the Depositor pursuant to this Section and shall
            recover such advance from the sale or sales of
            Securities at such time as the Depositor shall direct,
            but in no event later than the termination of the
            Trust.  Repayment of any such advance shall be secured
            by a lien on the assets of the Trust prior to the
            interest of the Unit Holders as provided in Section
            6.04.

      (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

<PAGE>

                              -4-

            Holders of record on such dates as the Depositor
            shall direct."

     (iii)  The second to the last paragraph of Section 3.08
            Sale of Securities shall be  amended to replace
            the word "equal" with the following phrase: "be
            sufficient to pay."

  D.   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.

  E.   Section 6.05 shall be amended to delete the clause "if the Depositor
       shall determine in good faith that there has occurred either (1) a
       material deterioration in the creditworthiness of the Trustee or (2) one
       or more negligent acts on the part of the Trustee having a materially
       adverse effect, either singly or in the aggregate, on the Trust or on one
       or more Trusts, such that the replacement of the Trustee is in the best
       interest of the Unit Holders" and insert in place thereof "upon the
       determination of the Depositor to remove the Trustee for any reason,
       either with or without cause, including but not limited to a
       determination by the Depositor that the Trustee has materially failed to
       perform its duties under this Indenture and the interest of Unit Holders
       has been substantially impaired as a result"

                            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 31.

       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 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 4, 2000.

       H.   The terms "Computation Day" and "Record Date" shall
  mean on the tenth day of June 2000, September 2000, December 2000, and
  March 2001.

<PAGE>

                              -5-

       I.   The term "Distribution Date" shall mean on the twenty-
  fifth day of June 2000, September 2000, December 2000, and March 2001 or as
  soon thereafter as possible.

       J.   The term "Termination Date" shall mean May 8, 2001.

       K.   The Trustee's Annual Fee shall be $.96 (per 1,000
  Units) for 100,000,000 and above units outstanding; $1.01 (per
  1,000 Units) for 50,000,000 - 99,999,999 units outstanding; $1.05
  (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 $.25 per 1,000 Units.

       [Signatures and acknowledgments on separate pages]

<PAGE>

                              -6-

       The Schedule of Portfolio Securities in Part A of the pro-
       spectus included in this Registration Statement for National
       Equity Trust, Low Five Portfolio Series 31 is hereby incor-
       porated by reference herein as Schedule A hereto.

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