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As filed with the Securities and Exchange Commission on February 25, 2011
File No. 811-9170
File No. 333-31247
 
 
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 14
TO
Form S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS REGISTERED
ON FORM N-8B-2
A. Exact name of Trust:
SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST
(formerly: DIAMONDS TRUST SERIES 1)
B. Name of Depositor:
PDR SERVICES LLC
C. Complete address of Depositor’s principal executive office:
PDR SERVICES LLC c/o NYSE Euronext
11 Wall Street New York, New York 10005
D. Name and complete address of agent for service:
Marija Willen, Esq.
PDR SERVICES LLC
c/o NYSE Euronext
11 Wall Street New York,
New York 10005
Copy to:
Nora M. Jordan, Esq.
Davis Polk & Wardwell LLP
450 Lexington Avenue
New York, New York 10017
E. Title of securities being registered:
An indefinite number of Trust Units pursuant to Rule 24f-2 under the
Investment Company Act of 1940.
F. Approximate date of proposed public offering:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
  þ   Check box if it is proposed that this filing should become effective on February 25, 2011 pursuant to paragraph (b) of Rule 485.
 
 

 


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SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST
Cross Reference Sheet
Pursuant to Regulation C
Under the Securities Act of 1933, as amended
(Form N-8B-2 Items required by Instruction 1
as to Prospectus in Form S-6)
                 
Form N-8B-2   Form S-6
Item Number   Heading in Prospectus
I. Organization and General Information
                 
1.   (a)   Name of Trust   Prospectus Front Cover
                 
    (b)   Title of securities issued   Prospectus Front Cover
                 
2.   Name, address and Internal Revenue Service Employer Identification Number of Depositor   Sponsor
                 
3.   Name, address and Internal Revenue Service Employer Identification Number of Trustee   Trustee
                 
4.   Name, address and Internal Revenue Service Employer Identification Number of principal underwriter   *
                 
5.   State of organization of Trust   Summary — Highlights
                 
6.   (a)   Dates of execution and termination of Trust Agreement   Summary — Essential Information as of October 31, 2010
                 
    (b)   Dates of execution and termination of Trust Agreement   Same as set forth in 6(a)
                 
7.   Changes of name   *
                 
8.   Fiscal Year   Summary — Essential Information as of October 31, 2010
                 
9.   Material Litigation   *
                 
II. General Description of the Trust and Securities of the Trust
                 
10.   (a)   Registered or bearer securities   The Trust — Securities Depository; Book-Entry-Only System
                 
    (b)   Cumulative or distributive   Summary — Highlights
                 
    (c)   Rights of holders as to withdrawal or redemption   Redemption of Trust Units
                 
    (d)   Rights of holders as to conversion, transfer, etc.   Administration of the Trust — Rights of Beneficial Owners
                 
    (e)   Lapses or defaults in principal payments with respect to periodic payment plan certificates   *
                 
    (f)   Voting rights   Administration of the Trust — Rights of Beneficial Owners
                 
    (g)   Notice to holders as to change in:    
                 
       
(1) Composition of Trust assets
  *
                 
       
(2) Terms and conditions of Trust’s securities
    Administration of the Trust — Amendments to the Trust Agreement
                 
       
(3) Provisions of Trust Agreement
    Same as set forth in 10(g)(2)

 


Table of Contents

                 
Form N-8B-2   Form S-6
Item Number   Heading in Prospectus
       
(4) Identity of depositor and trustee
    Sponsor; Trustee
                 
    (h)   Consent of holders required to change:    
                 
       
(1) Composition of Trust assets
    *
                 
       
(2) Terms and conditions of Trust’s securities
    Administration of the Trust — Amendments to the Trust Agreement
                 
       
(3) Provisions of Trust Agreement
    Same as set forth in 10(h)(2)
                 
       
(4) Identity of depositor and trustee
    Sponsor; Trustee
                 
    (i)   Other principal features of the securities   The Trust
                 
11.   Type of securities comprising units   The Portfolio
                 
12   Certain information regarding securities comprising
periodic payment certificates
  *
                 
13   (a)   Certain information regarding loads, fees, expenses and charges   Expenses of the Trust; Redemption of Trust Units
                 
    (b)   Certain information regarding periodic payment plan certificates   *
                 
    (c)   Certain percentages   Same as set forth in 13(a)
                 
    (d)   Reasons for certain differences in prices   *
                 
    (e)   Certain other loads, fees, or charges payable by holders   *
                 
    (f)   Certain profits receivable by depositor, principal underwriters, custodian, trustee or affiliated persons   The Portfolio — Adjustments to the Portfolio Deposit
                 
    (g)   Ratio of annual charges and deductions to income   *
                 
14.   Issuance of Trust’s securities   The Trust — Creation of Creation Units
                 
15.   Receipt and handling of payments from purchasers   The Trust
                 
16.   Acquisition and disposition of underlying securities   The Trust — Creation of Creation Units; The Portfolio; Administration of the Trust
                 
17.   (a)   Withdrawal or redemption by holders   Administration of the Trust — Rights of Beneficial Owners; Redemption of Trust Units
                 
    (b)   Persons entitled or required to redeem or repurchase securities   Same as set forth in 17(a)
                 
    (c)   Cancellation or resale of repurchased or redeemed securities   Same as set forth in 17(a)
                 
18.   (a)   Receipt, custody and disposition of income   Administration of the Trust — Distributions to Beneficial Owners
                 
    (b)   Reinvestment of distributions   Dividend Reinvestment Service
                 
    (c)   Reserves or special funds   Same as set forth in 18(a)
                 
    (d)   Schedule of distributions   Administration of the Trust — Distributions to Beneficial Owners
                 
19.   Records, accounts and reports   The DJIA; Distribution of Trust Units; Expenses of the Trust; Administration of the Trust — Distributions to Beneficial Owners; Statements to Beneficial Owners; Annual Reports

 


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Form N-8B-2   Form S-6
Item Number   Heading in Prospectus
20.   Certain miscellaneous provisions of Trust Agreement    
                 
    (a)   Amendments   Administration of the Trust — Amendments to the Trust Agreement
                 
    (b)   Extension or termination   Administration of the Trust — Termination of the Trust Agreement
                 
    (c)   Removal or resignation of trustee   Trustee
                 
    (d)   Successor trustee   Same as set forth in 20(c)
                 
    (e)   Removal or resignation of depositor   Sponsor
                 
    (f)   Successor depositor   Same as set forth in 20(e)
                 
21.   Loans to security holders   *
                 
22.   Limitations on liabilities   Trustee; Sponsor
                 
23.   Bonding arrangements   *
                 
24.   Other material provisions of Trust Agreement   *
                 
III. Organization, Personnel and Affiliated Persons of Depositor
                 
25.   Organization of depositor   Sponsor
                 
26.   Fees received by depositor   *
                 
27.   Business of depositor   Sponsor
                 
28.   Certain information as to officials and affiliated persons of depositor   Sponsor
                 
29.   Ownership of voting securities of depositor   Sponsor
                 
30.   Persons controlling depositor   Sponsor
                 
31.   Payments by depositor for certain services rendered to Trust   *
                 
32.   Payments by depositor for certain other services rendered to Trust   *
                 
33.   Remuneration of employees of depositor for certain services rendered to Trust   *
                 
34.   Compensation of other persons for certain services rendered to Trust   *
                 
IV. Distribution and Redemption of Securities
                 
35.   Distribution of Trust’s securities in states   *
                 
36.   Suspension of sales of Trust’s securities   *
                 
37.   Denial or revocation of authority to distribute   *
                 
38.   (a)   Method of distribution   The Trust — Creation of Creation Units
                 
    (b)   Underwriting agreements   Summary — Highlights
                 
    (c)   Selling agreements   Same as set forth in 38(b)
                 
39.   (a)   Organization of principal underwriter   Summary — Highlights
                 
    (b)   NASD membership of principal underwriter   Summary — Highlights
                 
40.   Certain fees received by principal underwriters   *
                 
41.   (a)   Business of principal underwriters   Summary — Highlights
                 
    (b)   Branch offices of principal underwriters   *

 


Table of Contents

                 
Form N-8B-2   Form S-6
Item Number   Heading in Prospectus
    (c)   Salesmen of principal underwriters   *
                 
42.   Ownership of Trust’s securities by certain persons   *
                 
43.   Certain brokerage commissions received by principal
underwriters
  *
                 
44.   (a)   Method of valuation for determining offering price   The Portfolio; Valuation
                 
    (b)   Schedule as to components of offering price   *
                 
    (c)   Variation in offering price to certain persons   *
                 
45.   Suspension of redemption rights   Redemption of Trust Units
                 
46.   (a)   Certain information regarding redemption or withdrawal valuation   Valuation; Redemption of Trust Units
                 
    (b)   Schedule as to components of redemption price   *
                 
47.   Maintenance of position in underlying securities   The Trust; The Portfolio; Valuation; Administration of the Trust — Distribution to Beneficial Owners
                 
V. Information Concerning the Trustee or Custodian
                 
48.   Organization and regulation of trustee   Trustee
                 
49.   Fees and expenses of trustee   Expenses of the Trust; Redemption of Trust Units
                 
50.   Trustee’s lien   Expenses of the Trust; Redemption of Trust Units
                 
VI. Information Concerning Insurance of Holders of Securities
                 
51.   (a)   Name and address of insurance company   *
                 
    (b)   Types of policies   *
                 
    (c)   Types of risks insured and excluded   *
                 
    (d)   Coverage   *
                 
    (e)   Beneficiaries   *
                 
    (f)   Terms and manner of cancellation   *
                 
    (g)   Method of determining premiums   *
                 
    (h)   Aggregate premiums paid   *
                 
    (i)   Recipients of premiums   *
                 
    (j)   Other material provisions of Trust Agreement relating to insurance   *
                 
VII. Policy of Registrant
                 
52.   (a)   Method of selecting and eliminating securities from the Trust   The Trust — Creation of Creation Units; The Portfolio; Administration of the Trust
                 
    (b)   Elimination of securities from the Trust   The Portfolio
                 
    (c)   Policy of Trust regarding substitution and elimination of securities   The Portfolio; Administration of the Trust
                 
    (d)   Description of any other fundamental policy of the Trust   *
                 
    (e)   Code of Ethics pursuant to Rule 17j-1 of the 1940 Act   Code of Ethics
                 
53.   (a)   Taxable status of the Trust   Federal Income Taxes
                 
    (b)   Qualification of the Trust as a regulated investment company   Same as set forth in 53(b)
                 
VIII. Financial and Statistical Information
                 
54.   Information regarding the Trust’s last ten fiscal years   *

 


Table of Contents

                 
Form N-8B-2   Form S-6
Item Number   Heading in Prospectus
55.   Certain information regarding periodic payment plan
certificates
  *
                 
56.   Certain information regarding periodic payment plan
certificates
  *
                 
57.   Certain information regarding periodic payment plan
certificates
  *
                 
58.   Certain information regarding periodic payment plan
certificates
  *
                 
59.   Financial statements (Instruction 1(c) to Form S-6)   *
 
*   Not applicable, answer negative or not required.

 


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Undertaking to File Reports
     Subject to the terms and conditions of Section 15(d) of the Securities Exchange Act of 1934, the undersigned registrant hereby undertakes to file with the Securities and Exchange Commission such supplementary and periodic information, documents, and reports as may be prescribed by any rule or regulations of the Commission heretofore or hereafter duly adopted pursuant to authority conferred in that section.

 


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Prospectus
 
SPDR ® DOW JONES INDUSTRIAL AVERAGE sm
ETF TRUST
(“SPDR DJIA TRUST”)
(formerly, “DIAMONDS ® Trust, Series 1”)
(A Unit Investment Trust)
 
 
 
 
•   SPDR DJIA Trust is an exchange traded fund designed to generally correspond to the price and yield performance of the Dow Jones Industrial Average.
 
•   SPDR DJIA Trust holds all of the Dow Jones Industrial Average stocks.
 
•   Each Trust Unit represents an undivided ownership interest in the SPDR DJIA Trust.
 
•   The SPDR DJIA Trust issues and redeems Trust Units only in multiples of 50,000 Units in exchange for Dow Jones Industrial Average stocks and cash.
 
•   Individual Trust Units trade on NYSE Arca, Inc. like any other equity security.
 
•   Minimum trading unit: 1 Trust Unit.
 
 
 
 
SPONSOR: PDR SERVICES LLC
(Wholly Owned by NYSE Euronext)
 
(SPDRS LOGO)
 
 
 
 
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES NOR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
 
 
 
Prospectus Dated February 25, 2011
 
 
 
 
COPYRIGHT 2011 PDR Services LLC


 

 
SPDR DJIA TRUST
 
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“Dow Jones Industrial Average sm ”, “DJIA ® ”, “Dow Jones ® ”, “The Dow ® ” and “DIAMONDS ® ” are trademarks and service marks of Dow Jones & Company, Inc. (“Dow Jones”) and have been licensed for use for certain purposes by State Street Global Markets, LLC pursuant to a “License Agreement” with Dow Jones and have been sublicensed for use for certain purposes to the Trust, PDR Services LLC and NYSE Arca, Inc. pursuant to separate “Sublicenses.” SPDR DJIA Trust is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in the Trust.
 
“SPDR ® ” is a registered trademark of Standard & Poor’s Financial Services LLC (“S&P”) and has been licensed for use by State Street Corporation. No financial product offered by State Street Corporation or its affiliates is sponsored, endorsed, sold or promoted by S&P or its Affiliates, and S&P and its affiliates make no representation, warranty or condition regarding the advisability of buying, selling or holding units/shares in such products.


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SUMMARY
 
Essential Information as of October 31, 2010*
 
     
Glossary:
  All defined terms used in this Prospectus and page numbers on which their definitions appear are listed in the Glossary.
     
Total Trust Assets:
  $8,071,923,758
     
Net Trust Assets:
  $8,058,639,107
     
Number of Trust Units:
  72,442,867
     
Fractional Undivided Interest in the Trust Represented by each Unit:
  1/72,442,867th
     
Dividend Record Dates:
  Monthly, on the second (2 nd ) Business Day after the third (3 rd ) Friday.
     
Dividend Payment Dates:
  Monthly, on the Monday preceding the third (3 rd ) Friday of the next calendar month.
     
Trustee’s Annual Fee:
  From 6 / 100 of one percent to 10 / 100 of one percent, based on the NAV of the Trust, as the same may be adjusted by certain amounts.
     
Estimated Ordinary Operating Expenses of the Trust:
  Estimated not to exceed 18 / 100 of one percent (0.18%) (inclusive of Trustee’s annual fee and Sponsor reimbursement of certain expenses, if any).**
     
NAV per Unit (based on the value of the Portfolio Securities, other net assets of the Trust and number of Units outstanding):
  $111.24
     
Evaluation Time:
  Closing time of the regular trading session on the New York Stock Exchange, LLC. (ordinarily 4:00 p.m. New York time).


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Licensor:
  Dow Jones & Company, Inc.
     
Mandatory Termination Date:
  The Trust is scheduled to terminate no later than January 13, 2123, but may terminate earlier under certain circumstances.
     
Discretionary Termination:
  The Trust may be terminated if at any time the value of the securities held by the Trust is less than $350,000,000, as adjusted for inflation. The Trust may also be terminated under other circumstances.
     
Market Symbol:
  Units trade on NYSE Arca, Inc. under the symbol “DIA”.
     
Fiscal Year End:
  October 31
     
CUSIP:
  78467X109
 
 
* The Trust Agreement became effective, the initial deposit was made and the Trust commenced operation as the DIAMONDS Trust, Series 1 on January 13, 1998 (“Initial Date of Deposit”).
 
** As of the fiscal year ended October 31, 2010, gross ordinary operating expenses of the Trust were 0.18% of the Trust’s daily NAV. Future expense accruals will depend primarily on the level of the Trust’s net assets and the level of Trust expenses. The amount of the earnings credit will be equal to the then current Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance, if any, in the Trust’s cash account, reduced by the amount of reserves, if any, for that account required by the Federal Reserve Board of Governors. Until further notice, the Sponsor has undertaken that it will not permit the ordinary operating expenses of the Trust to exceed an amount that is 18/100 of 1% (0.18%) per annum of the daily NAV of the Trust after taking into account any expenses that offset credits. During the fiscal year ended October 31, 2010, no expenses of the Trust were assumed by the Sponsor. The Sponsor may discontinue or change this undertaking at any time and therefore there is no guarantee that the Trust’s ordinary operating expenses will not exceed 0.18% of the Trust’s daily NAV. See “Expenses of the Trust — Trustee Fee Scale” for a description of the Trustee’s fee.

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Highlights
 
•    Units are Ownership Interests in the SPDR DJIA Trust
 
SPDR DJIA Trust (“Trust”) is a unit investment trust that issues securities called “Trust Units” or “Units”. The Trust is organized under the laws of the State of New York and is governed by a trust agreement between State Street Bank and Trust Company (“Trustee”) and PDR Services LLC (“Sponsor”), dated and executed as of January 13, 1998, as amended (“Trust Agreement”). The Trust is an investment company registered under the Investment Company Act of 1940. Trust Units represent an undivided ownership interest in a portfolio of all of the common stocks of the Dow Jones Industrial Average (“DJIA”).
 
•    Units Should Closely Track the Value of the Stocks Included in the DJIA
 
The Trust intends to provide investment results that, before expenses, generally correspond to the price and yield performance of the DJIA. Current information regarding the value of the DJIA is available from market information services. Dow Jones obtains information for inclusion in, or for use in the calculation of, the DJIA from sources Dow Jones considers reliable. None of Dow Jones, the Sponsor, the Trust, the Trustee, NYSE Arca, Inc. or its affiliates accepts responsibility for or guarantees the accuracy and/or completeness of the DJIA or any data included in the DJIA.
 
The Trust holds securities and cash and is not actively “managed” by traditional methods, which would typically involve effecting changes in an investment portfolio on the basis of judgments relating to economic, financial and market considerations. To maintain the correspondence between the composition and weightings of stocks held by the Trust (“Portfolio Securities” or, collectively, “Portfolio”) and the component stocks of the DJIA (“Index Securities”), the Trustee adjusts the Portfolio from time to time to conform to periodic changes in the identity and/or relative weightings of Index Securities. The Trustee generally makes these adjustments to the Portfolio within three (3) Business Days (defined below) before or after the day on which changes in the DJIA are scheduled to take effect. Any change in the identity or weighting of an Index Security will result in a corresponding adjustment to the prescribed Portfolio Deposit effective on any day that the New York Stock Exchange, LLC (“NYSE”) is open for business (“Business Day”) either prior to, on, or following the day on which the change to the DJIA takes effect after the close of the market.
 
The value of Trust Units fluctuates in relation to changes in the value of the Portfolio. The market price of each individual Unit may not be identical to the net asset value (“NAV”) of such Unit but historically, these two valuations have generally been close. See the table “Frequency Distribution of Discounts and Premiums for the


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SPDR DJIA Trust: Bid/Ask Price vs. Net Asset Value (NAV) as of 12/31/2010” herein.
 
•    Units are Listed and Trade on NYSE Arca, Inc.
 
Units are listed for trading on NYSE Arca, Inc. (the “Exchange” or “NYSE Arca”), and are bought and sold in the secondary market like ordinary shares of stock at any time during the trading day. Units are traded on the Exchange in 100 Unit round lots, but can be traded in odd lots of as little as one Unit. The Exchange may halt trading of Units under certain circumstances, as summarized herein (see “Exchange Listing”).
 
•    Brokerage Commissions on Units
 
Secondary market purchases and sales of Units are subject to ordinary brokerage commissions and charges.
 
•    The Trust Issues and Redeems Units in Multiples of 50,000 Units Called “Creation Units”*
 
The Trust issues and redeems Units only in specified large lots of 50,000 Units or multiples thereof referred to as “Creation Units.” Fractional Creation Units may be created or redeemed only in limited circumstances. *
 
Creation Units are issued by the Trust to certain persons known as “Authorized Participants” who, after placing a creation order with ALPS Distributors, Inc. (“Distributor”), deposit with the Trustee a specified portfolio of securities substantially similar in composition and weighting to Index Securities along with a cash payment generally equal to dividends (net of expenses) accumulated up to the time of the deposit. If the Trustee determines that one or more Index Securities are likely to be unavailable, or available in insufficient quantity, for delivery upon creation of Creation Units, the Trustee may permit the cash equivalent value of one or more of these Index Securities to be included in the Portfolio Deposit as a part of the Cash Component in lieu thereof. If a creator is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee may permit the cash equivalent value of such Index Securities to be included in the Portfolio Deposit based on the market value of such Index Securities as of the Evaluation Time on the date such creation order is deemed received by the Distributor as part of the Cash Component in lieu of the inclusion of such Index Securities in the stock portion of the Portfolio Deposit.
 
 
 See, however, the discussion of termination of the Trust in this Prospectus for a description of the circumstances in which Units may be redeemed in less than a Creation Unit size aggregation of 50,000 Units.


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Creation Units are redeemable in kind only and are not redeemable for cash. Upon receipt of one or more Creation Units, the Trust delivers to the redeeming holder a portfolio of Index Securities (based on NAV of the Trust), together with a Cash Redemption Payment that on any given Business Day is an amount identical to the Cash Component of a Portfolio Deposit. If the Trustee determines that one or more Index Securities are likely to be unavailable or available in insufficient quantity for delivery by the Trust upon the redemption of Creation Units, the Trustee may deliver the cash equivalent value of one or more of these Index Securities, based on their market value as of the Evaluation Time on the date the redemption order is deemed received by the Trustee, as part of the Cash Redemption Payment in lieu thereof.
 
•    Creation Orders Must be Placed with the Distributor
 
All orders for Creation Units must be placed with the Distributor. To be eligible to place these orders, an entity or person must be an “Authorized Participant,” which is either (a) a “Participating Party,” or (b) a “DTC Participant”, and in each case must have executed an agreement with the Distributor and the Trustee, as may be amended from time to time (“Participant Agreement”). The term “Participating Party” means a broker-dealer or other participant in the Clearing Process (as defined below), through the Continuous Net Settlement (“CNS”) System of the National Securities Clearing Corporation (“NSCC”), a clearing agency registered with the Securities and Exchange Commission (“SEC”) and the term “DTC Participant” means a participant in The Depository Trust Company (“DTC”). Payment for orders is made by deposits with the Trustee of a portfolio of securities, substantially similar in composition and weighting to Index Securities, and a cash payment in an amount equal to the Dividend Equivalent Payment (as defined below), plus or minus the Balancing Amount (as defined below). “Dividend Equivalent Payment” is an amount equal, on a per Creation Unit basis, to the dividends on the Portfolio (with ex-dividend dates within the accumulation period), net of expenses and accrued liabilities for such period (including, without limitation, (i) taxes or other governmental charges against the Trust not previously deducted, if any, and (ii) accrued fees of the Trustee and other expenses of the Trust (including legal and auditing expenses) and other expenses not previously deducted), calculated as if all of the Portfolio Securities had been held for the entire accumulation period for such distribution. The Dividend Equivalent Payment and the Balancing Amount collectively are referred to as “Cash Component” and the deposit of a portfolio of securities and the Cash Component collectively are referred to as a “Portfolio Deposit.” Persons placing creation orders with the Distributor must deposit Portfolio Deposits either (i) through the CNS clearing process of NSCC, as such processes have been enhanced to effect creations and redemptions of Creation Units (such processes referred to herein as the “Clearing Process”) or (ii) with the Trustee outside the Clearing Process (i.e., through the facilities of DTC).


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The Distributor acts as underwriter of Trust Units on an agency basis. The Distributor maintains records of the orders placed with it and the confirmations of acceptance and furnishes confirmations of acceptance of the orders to those placing such orders. The Distributor also is responsible for delivering a prospectus to persons creating Trust Units. The Distributor also maintains a record of the delivery instructions in response to orders and may provide certain other administrative services, such as those related to state securities law compliance.
 
The Distributor is a corporation organized under the laws of the State of Colorado and is located at 1290 Broadway, Suite 1100, Denver, CO 80203, toll free number: 1-866-732-8673. The Distributor is a registered broker-dealer and a member of the Financial Industry Regulatory Authority (“FINRA”). The Sponsor of the Trust pays the Distributor for its services a flat annual fee. The Sponsor will not seek reimbursement for such payment from the Trust without obtaining prior exemptive relief from the SEC.
 
•    Expenses of the Trust
 
The expenses of the Trust are accrued daily and reflected in the NAV of the Trust.
 
         
Shareholder Fees:
    None*  
(fees paid directly from your investment)
       
 
         
Estimated Trust Annual Ordinary Operating Expenses:
       
 
         
Current Trust Annual Ordinary
  As a % of Trust
 
Operating Expenses
  Average Net Assets  
 
Trustee’s Fee
    0.06 %
Dow Jones License Fee
    0.04 %
Registration Fees
    0.00 %
Marketing
    0.06 %
Other Operating Expenses
    0.02 %
         
Net Expenses**
    0.18 %
         
 
Future expense accruals will depend primarily on the level of the Trust’s net assets and the level of expenses.
 
 
* Investors do not pay shareholder fees directly from their investment, but purchases and redemptions of Creation Units are subject to Transaction Fees (described below in “A Transaction Fee is Payable For Each Creation and For Each Redemption of Creation Units”), and purchases and sales of Units in the secondary market are subject to ordinary brokerage commissions and charges (described above in “Brokerage Commissions on Units”).
 
** Until the Sponsor otherwise determines, the Sponsor has undertaken that the ordinary operating expenses of the Trust will not be permitted to exceed 0.18% of the Trust’s daily NAV. Gross expenses of the Trust for the year ended October 31, 2010, without regard to this undertaking, did not exceed 0.18% of the daily NAV of the Trust and therefore no expenses of the Trust were assumed by the


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Sponsor. The Sponsor reserves the right to discontinue this undertaking in the future. Therefore, there is no guarantee that the Trust’s ordinary operating expenses will not exceed 0.18% of the Trust’s daily NAV. Trust expenses were reduced during the same period by a Trustee’s earnings credit of less than 0.01% of the Trust’s daily NAV as a result of uninvested cash balances in the Trust. The amount of earnings credit will be equal to the then current Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance, if any, in the Trust’s cash account, reduced by the amount of reserves, if any, for that account required by the Federal Reserve Board of Governors.
 
•    Bar Chart and Table
 
The bar chart below (“Bar Chart”) and the table on the next page entitled “Average Annual Total Returns (For Periods Ending December 31, 2010)” (“Table”) provide some indication of the risks of investing in the Trust by showing the variability of the Trust’s returns based on net assets and comparing the Trust’s performance to the performance of the DJIA. Past performance (both before and after tax) is not necessarily an indication of how the Trust will perform in the future.
 
The after-tax returns presented in the Table are calculated using the highest historical individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your specific tax situation and may differ from those shown below. After-tax returns are not relevant to investors who hold Units through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. The total returns in the Bar Chart below, as well as the total and after-tax returns presented in the Table, do not reflect Transaction Fees payable by those persons purchasing and redeeming Creation Units, nor brokerage commissions incurred by those persons purchasing and selling Units in the secondary market (see footnotes (2) and (3) to the Table).
 
(PERFORMANCE GRAPH)
 
This bar chart shows the performance of the Trust for each full calendar year for the past 10 years ended December 31, 2010. During the period shown above (January 1, 2001 through December 31, 2010), the highest quarterly return for the Trust was 15.71% (for the quarter ended September 30, 2009), and the lowest was −18.39% (for the quarter ended December 31, 2008).


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Average Annual Total Returns* (For Periods Ending December 31, 2010)
 
                         
    Past
    Past
    Past
 
    One Year     Five Years     Ten Years  
 
SPDR DJIA Trust
                       
Return Before Taxes (1)(2)(3)
    13.82 %     4.15 %     2.99 %
Return After Taxes on Distributions (1)(2)(3)
    13.39 %     3.76 %     2.51 %
Return After Taxes on Distributions and Redemption of Creation Units (1)(2)(3)
    9.50 %     3.52 %     2.40 %
DJIA (4)
    14.06 %     4.31 %     3.15 %
 
 
Total returns assume that dividends and capital gain distributions have been reinvested in the Trust at the net asset value per unit.
 
(1) Includes all applicable ordinary operating expenses set forth above in the section of “Highlights” entitled “Estimated Trust Annual Ordinary Operating Expenses”.
 
(2) Does not include the Transaction Fee (as defined below), which is payable to the Trustee only by persons purchasing and redeeming Creation Units, as discussed below in the section of “Highlights” entitled “A Transaction Fee is Payable For Each Creation and For Each Redemption of Creation Units”. If these amounts were reflected, returns would be less than those shown.
 
(3) Does not include brokerage commissions and charges incurred only by persons who make purchases and sales of Units in the secondary market, as discussed above in the section of “Highlights” entitled “Brokerage Commissions on Units”. If these amounts were reflected, returns would be less than those shown.
 
(4) Does not reflect deductions for taxes, operating expenses, Transaction Fees, brokerage commissions, or fees of any kind.


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SPDR DJIA TRUST
 
GROWTH OF $10,000 INVESTMENT
SINCE INCEPTION (1)
 
(PERFORMANCE GRAPH)
 
 
(1) Past performance is not necessarily an indication of how the Trust will perform in the future.
 
•    A Transaction Fee is Payable for Each Creation and for Each Redemption of Creation Units
 
The transaction fee payable to the Trustee in connection with each creation and redemption of Creation Units made through the Clearing Process (“Transaction Fee”) is non-refundable, regardless of the NAV of the Trust. The Transaction Fee is $1,000 per Participating Party per day, regardless of the number of Creation Units created or redeemed on such day. The $1,000 charge is subject to a limit not to exceed 10 / 100 of one percent (10 basis points) of the value of one Creation Unit at the time of creation (“10 Basis Point Limit”).
 
For creations and redemptions outside the Clearing Process, an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit is charged per Creation Unit per day. Under the current schedule, therefore, the total fee charged in connection with creating or redeeming one Creation Unit outside the Clearing Process would be $1,000 (the Transaction Fee for the creation or redemption of one Creation Unit) plus an additional amount up to $3,000 (3 times $1,000), for a total not to exceed $4,000. Creators and redeemers restricted from engaging in transactions in one or more Index Securities may pay the Trustee the Transaction Fee and may pay an additional amount per Creation Unit not to exceed three (3) times the Transaction Fee applicable for one Creation Unit.


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•    Units are Held in Book Entry Form Only
 
DTC or its nominee is the record or registered owner of all outstanding Units. Beneficial ownership of Units is shown on the records of DTC or its participants. Individual certificates are not issued for Units. See “The Trust — Securities Depository; Book-Entry-Only System.”
 
•    SPDR DJIA Trust Makes Periodic Dividend Payments
 
Unitholders receive each calendar month an amount corresponding to the amount of any cash dividends declared on the Portfolio Securities during the applicable period, net of fees and expenses associated with operation of the Trust, and taxes, if applicable. Because of such fees and expenses, the dividend yield for Units is ordinarily less than that of the DJIA. Investors should consult their tax advisors regarding tax consequences associated with Trust dividends, as well as those associated with Unit sales or redemptions.
 
Monthly distributions based on the amount of dividends payable with respect to Portfolio Securities and other income received by the Trust, net of fees and expenses, and taxes, if applicable, are made via DTC and its participants to Beneficial Owners on each Dividend Payment Date. Any capital gain income recognized by the Trust in any taxable year that is not previously distributed during the year ordinarily is to be distributed at least annually in January of the following taxable year. The Trust may make additional distributions shortly after the end of the year in order to satisfy certain distribution requirements imposed by the Internal Revenue Code of 1986, as amended (“Code”). Although all income distributions are currently made monthly, under certain limited circumstances the Trustee may vary the periodicity with which distributions are made. Those Beneficial Owners interested in reinvesting their monthly distributions may do so through a dividend reinvestment service, if one is offered by their broker-dealer. Under limited certain circumstances, special dividend payments also may be made to the Beneficial Owners. See “Administration of the Trust — Distributions to Beneficial Owners”.
 
•    The Trust Intends to Qualify as a Regulated Investment Company
 
For its taxable year ended October 31, 2010, the Trust believes that it qualified for tax treatment as a “regulated investment company” under Subchapter M of the Code (a “RIC”). The Trust intends to continue to qualify as a RIC. As a RIC, the Trust will generally not be subject to U.S. federal income tax for any taxable year on income, including net capital gains, that it distributes to the holders of Units, provided that it distributes on a timely basis at least 90% of its “investment company taxable income” (generally, its taxable income other than net capital gain) for such taxable year. In addition, provided that the Trust distributes during each calendar year substantially all of its ordinary income and capital gains, the Trust will not be subject to U.S. federal excise tax. The Trust intends to distribute annually its entire “investment company taxable income” and net capital gain. For U.S. federal income tax purposes, (a) distributions to an


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individual or other non-corporate investor during a taxable year of such investor beginning before January 1, 2013 will be treated as “qualified dividend income,” which is subject to tax at rates applicable to long-term capital gains, to the extent that such distributions are made out of “qualified dividend income” received by the Trust and (b) distributions to a corporate investor will qualify for the dividends-received deduction to the extent that such distributions are made out of qualifying dividends received by the Trust, provided, in each case, that the investor meets certain holding period and other requirements with respect to its Units. The Trust’s regular monthly distributions are based on the dividend performance of the Portfolio during such monthly distribution period rather than the actual taxable income of the Trust. As a result, a portion of the distributions of the Trust may be treated as a return of capital or a capital gain dividend for federal income tax purposes or the Trust may be required to make additional distributions to maintain its status as a RIC or to avoid imposition of income or excise taxes on undistributed income.
 
Subchapter M of the Code imposes certain asset diversification requirements. The Trustee may adjust the composition of the Portfolio at any time if, in the Trustee’s view, such adjustment is necessary to ensure continued qualification of the Trust as a “regulated investment company” for tax purposes.
 
•    Termination of the Trust
 
The Trust has a specified term. The Trust is scheduled to terminate on the first to occur of (a) January 13, 2123 or (b) the date 20 years after the death of the last survivor of fifteen persons named in the Trust Agreement, the oldest of whom was born in 1994 and the youngest of whom was born in 1997. Upon termination, the Trust may be liquidated and pro rata shares of the assets of the Trust, net of certain fees and expenses, distributed to holders of Units.
 
•    Restrictions on Purchases of Trust Units by Investment Companies
 
Purchases of Trust Units by investment companies are subject to restrictions set forth in Section 12(d)(1) of the Investment Company Act of 1940. The Trust has received an SEC order that permits registered investment companies to invest in Units beyond these limits, subject to certain conditions and terms. One such condition is that registered investment companies relying on the order must enter into a written agreement with the Trust. Registered investment companies wishing to learn more about the order and the agreement should contact the Distributor by telephone at 1-866-732-8673.
 
The Trust itself is also subject to the restrictions of Section 12(d)(1). This means that, absent an exemption or SEC relief, (a) the Trust cannot invest in any registered investment company, to the extent that the Trust would own more than 3% of that registered investment company’s outstanding share position, (b) the Trust cannot invest more than 5% of its total assets in the securities of any one registered investment company, and (c) the Trust cannot invest more than 10% of its total assets in the securities of registered investment companies in the aggregate.


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Risk Factors
 
Investors can lose money by investing in Units. Investors should carefully consider the risk factors described below together with all of the other information included in this Prospectus before deciding to invest in Units.
 
Investment in the Trust involves the risks inherent in an investment in any equity security.   An investment in the Trust is subject to the risks of any investment in a portfolio of large-capitalization common stocks, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of such investment. The value of Portfolio Securities may fluctuate in accordance with changes in the financial condition of the issuers of Portfolio Securities, the value of common stocks generally and other factors. The identity and weighting of Index Securities and the Portfolio Securities also change from time to time.
 
The financial condition of the issuers may become impaired or the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of the Portfolio and thus in the value of Units). Common stocks are susceptible to general stock market fluctuations and to volatile increases and decreases in value as market confidence in and perceptions of their issuers change. These investor perceptions are based on various and unpredictable factors including expectations regarding government, economic, monetary and fiscal policies, inflation and interest rates, economic expansion or contraction, and global or regional political, economic and banking crises.
 
Holders of common stocks of any given issuer incur more risk than holders of preferred stocks or debt obligations of the issuer because the rights of common stockholders, as owners of the issuer, generally are inferior to the rights of creditors of, or holders of debt obligations or preferred stocks issued by, such issuer. Further, unlike debt securities that typically have a stated principal amount payable at maturity, or preferred stocks that typically have a liquidation preference and may have stated optional or mandatory redemption provisions, common stocks have neither a fixed principal amount nor a maturity. Common stock values are subject to market fluctuations as long as the common stock remains outstanding. The value of the Portfolio will fluctuate over the entire life of the Trust.
 
There can be no assurance that the issuers of Portfolio Securities will pay dividends.   Distributions generally depend upon the declaration of dividends by the issuers of Portfolio Securities and the declaration of such dividends generally depends upon various factors, including the financial condition of the issuers and general economic conditions.
 
The Trust is not actively managed.   The Trust is not actively “managed” by traditional methods, and therefore the adverse financial condition of an issuer will not result in its elimination from the Portfolio unless such issuer is removed from the DJIA.


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A liquid trading market for certain Portfolio Securities may not exist.   Although most of the Portfolio Securities are listed on a national securities exchange, the principal trading market for some may be in the over-the-counter market. The existence of a liquid trading market for certain Portfolio Securities may depend on whether dealers will make a market in such stocks. There can be no assurance that a market will be made or maintained for any Portfolio Securities or that any such market will be or remain liquid. The price at which Portfolio Securities may be sold and the value of the Portfolio will be adversely affected if trading markets for Portfolio Securities are limited or absent.
 
The Trust may not exactly replicate the performance of the DJIA.   The Trust may not be able to replicate exactly the performance of the DJIA because the total return generated by the Portfolio is reduced by Trust expenses and transaction costs incurred in adjusting the actual balance of the Portfolio. In addition, it is possible that the Trust may not always fully replicate the performance of the DJIA due to the unavailability of certain Index Securities in the secondary market or due to other extraordinary circumstances. In addition, the Trust’s portfolio may deviate from the DJIA to the extent required to ensure continued qualification as a “regulated investment company” under Subchapter M of the Code.
 
Investment in the Trust may have adverse tax consequences.   Investors in the Trust should consider the U.S. federal, state, local and other tax consequences of the acquisition, ownership and disposition of Trust Units. For a discussion of certain U.S. federal income tax consequences of the acquisition, ownership and disposition of Trust Units, see “Federal Income Taxes” herein.
 
NAV may not always correspond to market price.   The NAV of Units in Creation Unit size aggregations and, proportionately, the NAV per Unit, change as fluctuations occur in the market value of Portfolio Securities. Investors should be aware that the aggregate public trading market price of 50,000 Units may be different from the NAV of a Creation Unit (i.e., 50,000 Units may trade at a premium over, or at a discount to, the NAV of a Creation Unit) and similarly the public trading market price per Unit may be different from the NAV of a Creation Unit on a per Unit basis. This price difference may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for Units are closely related to, but not identical to, the same forces influencing the prices of Index Securities trading individually or in the aggregate at any point in time. Investors also should note that the size of the Trust in terms of total assets held may change substantially over time and from time to time as Creation Units are created and redeemed.
 
The Exchange may halt trading in Trust Units.   Units are listed for trading on the Exchange under the market symbol DIA. Trading in Trust Units may be halted under certain circumstances as summarized herein (see “Exchange Listing”). Also, there can be no assurance that the requirements of the Exchange necessary to maintain the


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listing of Trust Units will continue to be met or will remain unchanged. The Trust will be terminated if Trust Units are delisted from the Exchange.
 
An investment in Trust Units is not the same as a direct investment in the Index Securities or other equity securities.   Trust Units are subject to risks other than those inherent in an investment in the Index Securities or other equity securities, in that the selection of the stocks included in the Portfolio, the expenses associated with the Trust, or other factors distinguishing an ownership interest in a trust from the direct ownership of a portfolio of stocks may affect trading in Trust Units differently from trading in the Index Securities or other equity securities.
 
Additionally, Trust Units may perform differently than other investments in portfolios containing large capitalization stocks based upon or derived from an index other than the DJIA. For example, the great majority of component stocks of the DJIA are drawn from among the largest of the large capitalization universe, while other indexes may represent a broader sampling of large capitalization stocks. Also, other indexes may use different methods for assigning relative weights to the index components than the price weighted method used by the DJIA. As a result, DJIA accords relatively more weight to stocks with a higher price-to-market capitalization ratio than a similar market capitalization-weighted index.
 
The regular settlement period for Creation Units may be reduced.   Except as otherwise specifically noted, the time frames for delivery of stocks, cash, or Trust Units in connection with creation and redemption activity within the Clearing Process are based on NSCC’s current “regular way” settlement period of three (3) days during which NSCC is open for business (each such day an “NSCC Business Day”). NSCC may, in the future, reduce such “regular way” settlement period, in which case there may be a corresponding reduction in settlement periods applicable to Units creations and redemptions.
 
Clearing and settlement of Creation Units may be delayed or fail.   The Trustee delivers a portfolio of stocks for each Creation Unit delivered for redemption substantially identical in weighting and composition to the stock portion of a Portfolio Deposit as in effect on the date the request for redemption is deemed received by the Trustee. If the redemption is processed through the Clearing Process, the stocks that are not delivered are covered by NSCC’s guarantee of the completion of such delivery. Any stocks not received on settlement date are marked-to-market until delivery is completed. The Trust, to the extent it has not already done so, remains obligated to deliver the stocks to NSCC, and the market risk of any increase in the value of the stocks until delivery is made by the Trust to NSCC could adversely affect the NAV of the Trust. Investors should note that the stocks to be delivered to a redeemer submitting a redemption request outside of the Clearing Process that are not delivered to such redeemer are not covered by NSCC’s guarantee of completion of delivery.


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Buying or selling Trust Units incurs costs.   Purchases and sales of exchange traded securities involve both brokerage and “spread” costs. Investors buying or selling Trust Units will incur a commission, fee or other charges imposed by the broker executing the transaction. In addition, investors will also bear the cost of the “spread”, which is the difference between the “bid” (the price at which securities professionals will buy Trust Units) and the “ask” or “offer” (the price at which securities professionals are willing to sell Trust Units). Frequent trading in Trust Units by an investor may involve brokerage and spread costs that may have a significant negative effect upon the investor’s overall investment results. This may be especially true for investors who make frequent periodic investments in small amounts of Trust Units over a lengthy time period.


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SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
To the Trustee and Unitholders of SPDR Dow Jones Industrial Average ETF Trust
 
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of SPDR Dow Jones Industrial Average ETF Trust (the “Trust”) at October 31, 2010, the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Trustee. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at October 31, 2010 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
 
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 17, 2010


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SPDR Dow Jones Industrial Average ETF Trust
Statement of Assets and Liabilities
October 31, 2010
         
 
Assets
       
Investments in securities, at value
  $ 8,044,134,113  
Cash
    16,681,153  
Receivable for units of fractional undivided interest (“Units”) issued in-kind
    45,207  
Dividends receivable
    11,063,285  
         
Total Assets
    8,071,923,758  
         
         
Liabilities
       
Income distribution payable
    6,576,257  
Accrued Trustee expense
    414,570  
Accrued expenses and other liabilities
    6,293,824  
         
Total Liabilities
    13,284,651  
         
Net Assets
  $ 8,058,639,107  
         
         
Net Assets Consist of:
       
Paid in capital (Note 4)
  $ 11,111,430,615  
Undistributed net investment income
    22,812,991  
Accumulated net realized loss on investments
    (1,582,810,357 )
Net unrealized depreciation on investments
    (1,492,794,142 )
         
Net Assets
  $ 8,058,639,107  
         
         
Net asset value per Unit
  $ 111.24  
         
Units outstanding, unlimited Units authorized, $0.00 par value
    72,442,867  
         
         
Cost of investments
  $ 9,536,928,255  
         
 
See accompanying notes to financial statements.


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SPDR Dow Jones Industrial Average ETF Trust
Statements of Operations
 
                         
    For the Year
    For the Year
    For the Year
 
    Ended
    Ended
    Ended
 
    October 31, 2010     October 31, 2009     October 31, 2008  
 
Investment Income
                       
Dividend income
  $ 222,616,182     $ 258,082,109     $ 234,266,377  
                         
                         
Expenses
                       
Trustee expense
    5,170,959       4,465,047       4,878,701  
Marketing expense
    4,956,465       4,583,583       5,319,946  
DJIA license fee
    3,404,310       3,155,722       4,152,507  
Legal and audit services
    436,458       199,547       181,128  
Other expenses
    596,111       337,558       389,842  
                         
Total Expenses
    14,564,303       12,741,457       14,922,124  
                         
Net Investment Income
    208,051,879       245,340,652       219,344,253  
                         
                         
Realized and Unrealized Gain (Loss) on Investments
                       
Net realized gain (loss) on investment transactions
    56,806,457       (1,286,963,860 )     (172,099,218 )
Net change in unrealized appreciation (depreciation)
    908,029,583       1,286,025,132       (3,238,666,792 )
                         
Net Realized and Unrealized Gain (Loss) on Investments
    964,836,040       (938,728 )     (3,410,766,010 )
                         
                         
Net Increase (Decrease) in Net Assets From Operations
  $ 1,172,887,919     $ 244,401,924     $ (3,191,421,757 )
                         
 
See accompanying notes to financial statements.


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SPDR Dow Jones Industrial Average ETF Trust
Statements of Changes in Net Assets
 
                         
    For the Year
    For the Year
    For the Year
 
    Ended
    Ended
    Ended
 
    October 31, 2010     October 31, 2009     October 31, 2008  
 
Increase (decrease) in net assets resulting from operations:
                       
Net investment income
  $ 208,051,879     $ 245,340,652     $ 219,344,253  
Net realized gain (loss) on investment transactions
    56,806,457       (1,286,963,860 )     (172,099,218 )
Net change in unrealized appreciation (depreciation)
    908,029,583       1,286,025,132       (3,238,666,792 )
                         
                         
Net increase (decrease) in net assets resulting from operations:
    1,172,887,919       244,401,924       (3,191,421,757 )
                         
                         
Net equalization credits and charges
    (6,394,413 )     (12,761,900 )     1,639,517  
                         
                         
Distributions to unitholders from net investment income
    (201,712,941 )     (231,359,719 )     (218,527,182 )
                         
                         
Increase (decrease) in net assets from Unit transactions:
                       
Net proceeds from sale of Units
    13,886,085,189       24,458,446,137       43,007,862,019  
Net proceeds from reinvestment of distributions
    70,649       1,820,420       1,388,124  
Cost of Units repurchased
    (14,187,655,154 )     (26,198,575,593 )     (39,824,961,718 )
Net income equalization
    6,394,413       12,761,900       (1,639,517 )
                         
                         
Net increase (decrease) in net assets from issuance and redemption of Units
    (295,104,903 )     (1,725,547,136 )     3,182,648,908  
                         
                         
Net increase (decrease) in net assets during period
    669,675,662       (1,725,266,831 )     (225,660,514 )
                         
Net assets beginning of period
    7,388,963,445       9,114,230,276       9,339,890,790  
                         
                         
Net assets end of period*
  $ 8,058,639,107     $ 7,388,963,445     $ 9,114,230,276  
                         
                         
Unit transactions:
                       
Units sold
    131,950,000       286,350,000       366,850,000  
Units issued from reinvestment of distributions
    679       21,340       11,778  
Units redeemed
    (135,550,000 )     (308,100,000 )     (336,200,000 )
                         
                         
Net increase (decrease)
  $ (3,599,321 )   $ (21,728,660 )   $ 30,661,778  
                         
                         
*Includes undistributed (distribution in excess of) net investment income
  $ 22,812,991     $ 16,474,053     $ 2,493,120  
                         
 
See accompanying notes to financial statements.


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Table of Contents

SPDR Dow Jones Industrial Average ETF Trust
Financial Highlights
Selected Data for a Unit Outstanding Throughout Each Year
 
                                         
    For the
    For the
    For the
    For the
    For the
 
    Year Ended
    Year Ended
    Year Ended
    Year Ended
    Year Ended
 
    October 31,
    October 31,
    October 31,
    October 31,
    October 31,
 
    2010     2009     2008     2007     2006  
 
Net asset value, beginning of year
  $ 97.17     $ 93.22     $ 139.17     $ 120.69     $ 104.31  
                                         
Investment operations:
                                       
Net investment income (1)
    2.64       2.76       2.96       2.85       2.45  
Net realized and unrealized gain (loss)
    14.14       4.01       (45.91 )     18.57       16.37  
                                         
                                         
Total from investment operations
    16.78       6.77       (42.95 )     21.42       18.82  
                                         
Net equalization credits and charges (1)
    (0.08 )     (0.14 )     0.02       (0.24 )     (0.03 )
                                         
Less distributions from:
                                       
Net investment income
    (2.63 )     (2.68 )     (3.02 )     (2.70 )     (2.41 )
                                         
Net asset value, end of year
  $ 111.24     $ 97.17     $ 93.22     $ 139.17     $ 120.69  
                                         
                                         
Total investment return (2)
    17.36 %     7.56 %     (31.23 )%     17.72 %     18.23 %
Ratios and supplemental data
                                       
Ratio to average net assets:
                                       
Net investment income
    2.52 %     3.21 %     2.49 %     2.19 %     2.21 %
Total expenses
    0.18 %     0.17 %     0.17 %     0.16 %     0.18 %
Total expenses excluding Trustee earnings credit
    0.18 %     0.17 %     0.17 %     0.14 %     0.17 %
Portfolio turnover rate (3)
    0.12 %     5.39 %     11.27 %     1.45 %     0.01 %
Net assets, end of year (000’s)
  $ 8,058,639     $ 7,388,963     $ 9,114,230     $ 9,339,891     $ 6,559,618  
 
(1)   Per unit numbers have been calculated using the average shares method, which more appropriately presents per share data for the year.
 
(2)   Total return is calculated assuming a purchase of Units at net asset value per Unit on the first day and a sale at net asset value per Unit on the last day of each period reported. Distributions are assumed, for the purposes of this calculation, to be reinvested at the net asset value per Unit on the respective payment dates of the Trust. Broker commission charges are not included in this calculation.
 
(3)   Portfolio turnover ratio excludes securities received or delivered from processing creations or redemptions of Units.
 
See accompanying notes to financial statements.


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
NOTE 1 — ORGANIZATION
 
SPDR Dow Jones Industrial Average ETF Trust (the “Trust”), formerly DIAMONDS Trust, Series 1, is a unit investment trust created under the laws of the State of New York and registered under the Investment Company Act of 1940, as amended. The Trust was created to provide investors with the opportunity to purchase a security representing a proportionate undivided interest in a portfolio of securities consisting of substantially all of the component common stocks, in substantially the same weighting, which comprise the Dow Jones Industrial Average (the “DJIA”). Each unit of fractional undivided interest in the Trust is referred to as a “Unit”. The Trust commenced operations on January 14, 1998 upon the initial issuance of 500,000 Units (equivalent to ten “Creation Units” — see Note 4) in exchange for a portfolio of securities assembled to reflect the intended portfolio composition of the Trust.
 
Under the Amended and Restated Standard Terms and Conditions of the Trust, as amended (“Trust Agreement”), PDR Services, LLC, as Sponsor of the Trust (“Sponsor”), and State Street Bank and Trust Company, as Trustee of the Trust (“Trustee”), are indemnified against certain liabilities arising from the performance of their duties to the Trust. Additionally, in the normal course of business, the Trust enters into contracts that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred. However, based on experience, the Trust expects the risk of material loss to be remote.
 
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
 
The following is a summary of significant accounting policies followed by the Trust in the preparation of its financial statements:
 
The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from these estimates.
 
Security Valuation
 
The value of the Trust’s portfolio securities is based on the market price of the securities, which generally means a valuation obtained from an exchange or other market (or based on a price quotation or other equivalent indication of value supplied by an exchange or other market) or a valuation obtained from an independent pricing service. If a security’s market price is not readily available or does not otherwise


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
accurately reflect the fair value of the security, the security will be valued by another method that the Trustee believes will better reflect fair value in accordance with the Trust’s valuation policies and procedures. The Trustee has established a Pricing and Investment Committee (the “Committee”) for purposes of valuing securities for which market quotations are not readily available or do not otherwise accurately reflect the fair value of the security. The Committee, subject to oversight by the Trustee, may use fair value pricing in a variety of circumstances, including but not limited to, situations when trading in a security has been suspended or halted. Accordingly, the Trust’s net asset value may reflect certain portfolio securities’ fair values rather than their market prices. Fair value pricing involves subjective judgments and it is possible that the fair value determination for a security is materially different than the value that could be received on the sale of the security.
 
The Trust continues to follow the authoritative guidance for fair value measurements and the fair value option for financial assets and financial liabilities. The guidance for the fair value option for financial assets and financial liabilities provides the Trust the irrevocable option to measure many financial assets and liabilities at fair value with changes in fair value recognized in earnings. The guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The guidance establishes three levels of inputs that may be used to measure fair value:
 
•  Level 1 — quoted prices in active markets for identical investments
 
•  Level 2 — other significant observable inputs (including, but not limited to, quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.)
 
•  Level 3 — significant unobservable inputs (including the Trust’s own assumptions in determining the fair value of investments)
 
Investments that use Level 2 or Level 3 inputs may include, but are not limited to: (i) an unlisted security related to corporate actions; (ii) a restricted security (e.g., one that may not be publicly sold without registration under the Securities Act of 1933, as amended); (iii) a security whose trading has been suspended or which has been de-listed from its primary trading exchange; (iv) a security that is thinly traded; (v) a security in default or bankruptcy proceedings for which there is no current market quotation; (vi) a security affected by currency controls or restrictions; and (vii) a security affected by a significant event (e.g., an event that occurs after the close of the markets on which the security is traded but before the time as of which the


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
Trust’s net assets are computed and that may materially affect the value of the Trust’s investments). Examples of events that may be “significant events” are government actions, natural disasters, armed conflicts, acts of terrorism, and significant market fluctuations.
 
Fair value pricing could result in a difference between the prices used to calculate the Trust’s net asset value and the prices used by the DJIA, which, in turn, could result in a difference between the Trust’s performance and the performance of the DJIA. The inputs or methodology used for valuation are not necessarily an indication of the risk associated with investing in those investments. The type of inputs used to value each security is identified in the schedule of investments, which also includes a breakdown of the Trust’s investments by industry.
 
Subsequent Events
 
Management has determined there are no subsequent events or transactions that would have materially impacted the Trust’s financial statements as presented.
 
Investment Risk
 
The Trust’s investments are exposed to risks, such as market risk. Due to the level of risk associated with certain investments it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.
 
An investment in the Trust involves risks similar to those of investing in any fund of equity securities, such as market fluctuations caused by such factors as economic and political developments, changes in interest rates and perceived trends in stock prices. The value of a Unit will decline, more or less, in correlation with any decline in value of the DJIA. The values of equity securities could decline generally or could underperform other investments. The Trust would not sell an equity security because the security’s issuer was in financial trouble unless that security is removed from the DJIA.
 
Investment Transactions
 
Investment transactions are recorded on the trade date. Realized gains and losses from the sale or disposition of securities are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date.


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
Distributions to Unitholders
 
The Trust declares and distributes dividends from net investment income to its Unitholders monthly. The Trust declares and distributes net realized capital gains, if any, at least annually.
 
Effective October 30, 2009, the Trust’s Dividend Reinvestment Service was discontinued. Broker-dealers, at their own discretion, may offer a dividend reinvestment service under which additional Units may be purchased in the secondary market at current market prices. Investors should consult their broker-dealer for further information regarding any dividend reinvestment service offered by such broker-dealer.
 
Equalization
 
The Trust follows the accounting practice known as “Equalization” by which a portion of the proceeds from sales and costs of reacquiring the Trust’s Units, equivalent on a per Unit basis to the amount of distributable net investment income on the date of the transaction, is credited or charged to undistributed net investment income. As a result, undistributed net investment income per Unit is unaffected by sales or reacquisitions of the Trust’s Units.
 
Federal Income Tax
 
The Trust has qualified and intends to continue to qualify as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying and electing, the Trust will not be subject to federal income taxes to the extent it distributes its taxable income, including any net realized capital gains, for each fiscal year. In addition, by distributing during each calendar year substantially all of its net investment income and capital gains, if any, the Trust will not be subject to federal excise tax. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from those determined in accordance with U.S. generally accepted accounting principles. These differences are primarily due to differing treatments for tax equalization, in-kind transactions and losses deferred due to wash sales. Net investment income per unit calculations in the financial highlights for all years presented exclude these differences.
 
The Trust has reviewed the tax positions for the open tax years as of October 31, 2010 and has determined that no provision for income tax is required in the Trust’s Financial Statements. The Trust’s federal tax returns for the prior three fiscal years


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
remain subject to examination by the Trust’s major tax jurisdictions, which include the United States of America and the State of New York.
 
During the year ended October 31, 2010, the Trust reclassified $61,522,152 of non-taxable security gains realized in the in-kind redemption of Creation Units (Note 4) as an increase to paid in capital in the Statement of Assets and Liabilities. At October 31, 2010, the cost of investments for federal income tax purposes was $9,538,505,522. Accordingly, gross unrealized appreciation was $145,128,015 and gross unrealized depreciation was $1,639,499,424, resulting in net unrealized depreciation of $1,494,371,409.
 
At October 31, 2010, the Trust had the following capital loss carryforwards which may be used to offset any net realized gains, expiring October 31:
 
       
2011
  $ 68,716,435
2012
    221,460,584
2014
    52,316
2016
    506,750,845
2017
    779,537,215
2018
    4,715,695
 
During the tax year ended October 31, 2010, the Trust had $2,065,467 of capital loss carryforward expire.
 
The tax character of distributions paid during the years ended October 31, 2010, 2009 and 2008 were as follows:
 
             
Distributions paid from :
  2010   2009   2008
Ordinary Income
  $201,712,941   $231,359,719   $218,527,182
 
As of October 31, 2010, the components of distributable earnings (excluding unrealized appreciation/depreciation) on the tax basis were undistributed ordinary income of $29,389,248 undistributed long term capital gain of $0 and unrealized depreciation of $1,494,371,409.
 
NOTE 3 — TRANSACTIONS WITH THE TRUSTEE AND SPONSOR
 
In accordance with the Trust Agreement, the Trustee maintains the Trust’s accounting records, acts as custodian and transfer agent to the Trust, and provides administrative services, including filing of certain regulatory reports. The Trustee is also responsible for determining the composition of the portfolio of securities which must be delivered and/or received in exchange for the issuance and/or redemption of


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
Creation Units of the Trust, and for adjusting the composition of the Trust’s portfolio from time to time to conform to changes in the composition and/or weighting structure of the DJIA. For these services, the Trustee received a fee at the following annual rates for the year ended October 31, 2010:
 
     
    Fee as a percentage of
Net asset value of the Trust
 
net asset value of the Trust
 
$0 – $499,999,999
  10/100 of 1% per annum plus or minus the Adjustment Amount
$500,000,000 – $2,499,999,999
  8/100 of 1% per annum plus or minus the Adjustment Amount
$2,500,000,000 – and above
  6/100 of 1% per annum plus or minus the Adjustment Amount
 
The Adjustment Amount is the sum of (a) the excess or deficiency of transaction fees received by the Trustee, less the expenses incurred in processing orders for creation and redemption of units and (b) the amounts earned by the Trustee with respect to the cash held by the Trustee for the benefit of the Trust. During the year ended October 31, 2010, the Adjustment Amount reduced the Trustee’s fee by $441,597. The Adjustment Amount included an excess of net transaction fees from processing orders of $415,053 and a Trustee earning credit of $26,544.
 
The Sponsor, a wholly-owned subsidiary of NYSE Euronext, agreed to reimburse the Trust for, or assume, the ordinary operating expenses of the Trust which exceeded 18.00/100 of 1% per annum of the daily net asset value of the Trust. There were no such reimbursements by the Sponsor for the fiscal years ended October 31, 2010, October 31, 2009 and October 31, 2008.
 
Dow Jones and State Street Global Markets, LLC (“SSGM”) have entered into a License Agreement. The License Agreement grants SSGM, an affiliate of the Trustee, a license to use the DJIA as a basis for determining the composition of the Portfolio and to use certain trade names and trademarks of Dow Jones in connection with the Portfolio. The Trustee on behalf of the Trust, the Sponsor and NYSE Arca, Inc. have each received a sublicense from SSGM for the use of the DJIA and such trade names and trademarks in connection with their rights and duties with respect to the Trust. The License Agreement may be amended without the consent of any of the owners of beneficial interest of Units. Currently, the License Agreement is scheduled to terminate on December 31, 2017, but its term may be extended without the consent of any of the owners of beneficial interests of Units. Pursuant to such arrangements and in accordance with the Trust Agreement, the Trust reimburses the Sponsor for payment of fees under the License Agreement to Dow


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SPDR Dow Jones Industrial Average ETF Trust
Notes to Financial Statements
October 31, 2010
 
Jones equal to 0.05% on the first $1 billion of the then rolling average asset balance, and 0.04% on any excess rolling average asset balance over and above $1 billion. The minimum annual fee for the Trust is $1 million.
 
The Sponsor has entered into an agreement with SSGM (the “Marketing Agent”) pursuant to which the Marketing Agent has agreed to market and promote the Trust. The Marketing Agent is reimbursed by the Sponsor for the expenses it incurs for providing such services out of amounts that the Trust reimburses the Sponsor. Expenses incurred by the Marketing Agent include but are not limited to: printing and distribution of marketing materials describing the Trust, associated legal, consulting, advertising and marketing costs and other out-of-pocket expenses.
 
NOTE 4 — SHAREHOLDER TRANSACTIONS
 
Units are issued and redeemed by the Trust only in Creation Unit size aggregations of 50,000 Units. Such transactions are only permitted on an in-kind basis, with a separate cash payment which is equivalent to the undistributed net investment income per unit (income equalization) and a balancing cash component to equate the transaction to the net asset value per Unit of the Trust on the transaction date. A transaction fee of $1,000 is charged in connection with each creation or redemption of Creation Units through the clearing process per participating party per day, regardless of the number of Creation Units created or redeemed. In the case of creations and redemptions outside of the clearing process, the Transaction Fee plus an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit per Creation Unit redeemed, and such amount is deducted from the amount delivered to the redeemer. Transaction fees are received by the Trustee and used to defray the expense of processing orders.
 
NOTE 5 — INVESTMENT TRANSACTIONS
 
For the year ended October 31, 2010, the Trust had net in-kind contributions, net in-kind redemptions, purchases and sales of investment securities of $9,351,351,057, $9,633,407,205, $9,887,705 and $23,383,750 respectively. Net realized gain (loss) on investment transactions in the Statement of Operations includes net gains resulting from in-kind transactions of $61,522,152.


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Table of Contents

SPDR Dow Jones Industrial Average ETF Trust
Other Information
October 31, 2010 (unaudited)
 
Tax Information
 
For Federal income tax purposes, the percentage of Trust distributions which qualify for the corporate dividends paid deduction for the fiscal year ended October 31, 2010 is 100.00%.
 
For the fiscal year ended October 31, 2010 certain dividends paid by the Trust may be designated as qualified dividend income and subject to a maximum tax rate of 15%, as provided for the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2010 Form 1099-DIV.
 
FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS
 
Bid/Ask Price (1)  vs. Net Asset Value (“NAV”)
As of October 31, 2010
 
                         
    Bid/Ask Price
  Bid/Ask Price
    Above NAV   Below NAV
    50-99
  100-199
  >200
  50-99
  100-199
  >200
    BASIS
  BASIS
  BASIS
  BASIS
  BASIS
  BASIS
    POINTS   POINTS   POINTS   POINTS   POINTS   POINTS
 
2010
  0   0   0   0   0   0
2009
  0   0   0   0   0   0
2008
  3   2   2   2   0   0
2007
  1   0   0   0   0   0
2006
  0   0   0   0   0   0
 
Comparison of Total Returns Based on NAV and Bid/Ask Price (1)
 
The table below is provided to compare the Trust’s total pre-tax returns at NAV with the total pre-tax returns based on bid/ask price and the performance of the DJIA. Past performance is not necessarily an indication of how the Trust will perform in the future.
 
 
Cumulative Total Return
 
                         
    1 Year     5 Year     10 Year  
 
SPDR DJIA Trust
                       
Return Based on NAV
    17.36 %     20.83 %     26.52 %
Return Based on Bid/Ask Price
    17.49 %     21.05 %     26.85 %
DJIA
    17.62 %     21.70 %     28.36 %


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SPDR Dow Jones Industrial Average ETF Trust
Other Information
October 31, 2010 (unaudited)
 
Average Annual Total Return
 
                         
    1 Year     5 Year     10 Year  
 
SPDR DJIA Trust
                       
Return Based on NAV
    17.36 %     3.86 %     2.38 %
Return Based on Bid/Ask Price
    17.49 %     3.89 %     2.41 %
DJIA
    17.62 %     4.01 %     2.53 %
 
 
(1)   The Bid/Ask Price is the midpoint of the Consolidated Bid/Ask price at the time the Trust’s NAV is calculated. From April 3, 2001 to November 28, 2008, the Bid/Ask price was the Bid/Ask price on the NYSE Amex (formerly the American Stock Exchange) at the close of trading, ordinarily 4:00 p.m. Prior to April 3, 2001, the Bid/Ask price was the Bid/Ask price at the close of trading on the American Stock Exchange, ordinarily 4:15 p.m.


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SPDR Dow Jones Industrial Average ETF Trust
Schedule of Investments
October 31, 2010
 
                 
Common Stocks
  Shares     Value  
 
3M Co. 
    5,475,627     $ 461,157,306  
Alcoa, Inc. 
    5,475,627       71,894,982  
American Express Co. 
    5,475,627       227,019,495  
AT&T, Inc. 
    5,475,627       156,055,369  
Bank of America Corp. 
    5,475,627       62,641,173  
Caterpillar, Inc. 
    5,475,627       430,384,282  
Chevron Corp. 
    5,475,627       452,341,546  
Cisco Systems, Inc.*
    5,475,627       125,008,564  
E. I. du Pont de Nemours & Co. 
    5,475,627       258,887,645  
Exxon Mobil Corp. 
    5,475,627       363,964,927  
General Electric Co. 
    5,475,627       87,719,545  
Hewlett-Packard Co. 
    5,475,627       230,304,872  
Intel Corp. 
    5,475,627       109,895,834  
International Business Machines Corp. 
    5,475,627       786,300,037  
Johnson & Johnson
    5,475,627       348,633,171  
JPMorgan Chase & Co. 
    5,475,627       206,047,844  
Kraft Foods, Inc. (Class A)
    5,475,627       176,698,483  
McDonald’s Corp. 
    5,475,627       425,839,512  
Merck & Co., Inc. 
    5,475,627       198,655,748  
Microsoft Corp. 
    5,475,627       145,870,703  
Pfizer, Inc. 
    5,475,627       95,275,910  
The Boeing Co. 
    5,475,627       386,798,291  
The Coca-Cola Co. 
    5,475,627       335,765,448  
The Home Depot, Inc. 
    5,475,627       169,087,362  
The Procter & Gamble Co. 
    5,475,627       348,085,608  
The Travelers Cos., Inc. 
    5,475,627       302,254,610  
The Walt Disney Co. 
    5,475,627       197,724,891  
United Technologies Corp. 
    5,475,627       409,412,631  
Verizon Communications, Inc. 
    5,475,627       177,793,609  
Wal-Mart Stores, Inc. 
    5,475,627       296,614,715  
                 
                 
                 
Total Common Stocks (a) (Cost $9,536,928,255)
          $ 8,044,134,113  
                 
*   Non-income producing security
 
(a)  The values of the securities of the Trust are determined based on Level 1 inputs. (Note 2)
 
See accompanying notes to financial statements.


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SPDR Dow Jones Industrial Average ETF Trust
Schedule of Investments (continued)
October 31, 2010
 
INDUSTRY BREAKDOWN AS OF OCTOBER 31, 2010*
 
         
Industry**   Value  
 
 
Oil, Gas & Consumable Fuels
  $ 816,306,473  
Aerospace & Defense
    796,210,922  
IT Services
    786,300,037  
Pharmaceuticals
    642,564,829  
Industrial Conglomerates
    548,876,851  
Machinery
    430,384,282  
Hotels, Restaurants & Leisure
    425,839,512  
Household Products
    348,085,608  
Beverages
    335,765,448  
Diversified Telecommunication Services
    333,848,978  
Insurance
    302,254,610  
Food & Staples Retailing
    296,614,715  
Diversified Financial Services
    268,689,017  
Chemicals
    258,887,645  
Computers & Peripherals
    230,304,872  
Consumer Finance
    227,019,495  
Media
    197,724,891  
Food Products
    176,698,483  
Specialty Retail
    169,087,362  
Software
    145,870,703  
Communications Equipment
    125,008,564  
Semiconductors & Semiconductor Equipment
    109,895,834  
Metals & Mining
    71,894,982  
         
Total
  $ 8,044,134,113  
         
*   SPDR Dow Jones Industrial Average ETF Trust’s industry breakdown is expressed as market value by industry and may change over time.
 
**  Each security is valued based on Level 1 inputs. (Note 2)
 
See accompanying notes to financial statements.


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THE TRUST
 
The Trust, an exchange traded fund or “ETF”, is a registered investment company that both (a) continuously issues and redeems “in-kind” its Trust Units only in large lot sizes called Creation Units at their once-daily NAV and (b) lists Units individually for trading on the Exchange at prices established throughout the trading day, like any other listed equity security trading in the secondary market on the Exchange.
 
Creation of Creation Units
 
Before trading on the Exchange in the secondary market, Trust Units are created at NAV in Creation Units. This occurs when Portfolio Deposits are made either through the Clearing Process or outside the Clearing Process, but only by a person who executed a Participant Agreement with the Distributor and the Trustee. The Distributor will reject any order that is not submitted in proper form. A creation order is deemed received by the Distributor on the date on which it is placed (“Transmittal Date”) if (a) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (b) all other procedures set forth in the Participant Agreement are properly followed. The Transaction Fee is charged at the time of creation of a Creation Unit, and an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit is charged for creations outside the Clearing Process, in part due to the increased expense associated with settlement.
 
The Trustee, at the direction of the Sponsor, may increase, * reduce or waive the Transaction Fee (and/or the additional amounts charged in connection with creations and/or redemptions outside the Clearing Process) for certain lot-size creations and/or redemptions of Creation Units. The Sponsor has the right to vary the lot-size of Creation Units subject to such an increase, reduction or waiver. The existence of any such variation will be disclosed in the then current Prospectus.
 
The DJIA is a price-weighted stock index; that is, the component stocks of the DJIA are represented in exactly equal share amounts and therefore are accorded relative importance in the DJIA based on their prices. The shares of common stock of the stock portion of a Portfolio Deposit on any date of deposit will reflect the composition of the component stocks of the DJIA on such day. The portfolio of Index Securities that is the basis for a Portfolio Deposit varies as changes are made in the composition of the Index Securities. Further, the Trustee is permitted to take account of changes to the identity or weighting of any Index Security resulting from a change to the Index by making a corresponding adjustment to the Portfolio Deposit on the day prior to the day on which the change to the DJIA takes effect.
 
 
  * Such increase is subject to the 10 Basis Point Limit.


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The Trustee makes available to NSCC ** before the commencement of trading on each Business Day a list of the names and required number of shares of each of the Index Securities in the current Portfolio Deposit as well as the amount of the Dividend Equivalent Payment for the previous Business Day. Under certain extraordinary circumstances which may make it impossible for the Trustee to provide such information to NSCC on a given Business Day, NSCC will use the information regarding the identity of the Index Securities of the Portfolio Deposit on the previous Business Day. The identity of each Index Security required for a Portfolio Deposit, as in effect on October 31, 2010, is set forth in the above Schedule of Investments. The Sponsor makes available (a) on each Business Day, the Dividend Equivalent Payment effective through and including the previous Business Day, per outstanding Unit, and (b) every 15 seconds throughout the day at the Exchange a number representing, on a per Unit basis, the sum of the Dividend Equivalent Payment effective through and including the previous Business Day, plus the current value of the securities portion of a Portfolio Deposit as in effect on such day (which value may occasionally include a cash in lieu amount to compensate for the omission of a particular Index Security from such Portfolio Deposit). Such information is calculated based upon the best information available to the Sponsor and may be calculated by other persons designated to do so by the Sponsor. The inability of the Sponsor to provide such information will not in itself result in a halt in the trading of Units on the Exchange.
 
Upon receipt of one or more Portfolio Deposits following placement with the Distributor of an order to create Units, the Trustee (a) delivers one or more Creation Units to DTC, (b) removes the Unit position from its account at DTC and allocates it to the account of the DTC Participant acting on behalf of the investor creating Creation Unit(s), (c) increases the aggregate value of the Portfolio, and (d) decreases the fractional undivided interest in the Trust represented by each Unit.
 
Under certain circumstances, (a) a portion of the stock portion of a Portfolio Deposit may consist of contracts to purchase certain Index Securities or (b) a portion of the Cash Component may consist of cash in an amount required to enable the Trustee to purchase such Index Securities. If there is a failure to deliver Index Securities that are the subject of such contracts to purchase, the Trustee will acquire such Index Securities in a timely manner. To the extent the price of any such Index Security increases or decreases between the time of creation and the time of its purchase and delivery, Units will represent fewer or more shares of such Index Security. Therefore, price fluctuations during the period from the time the cash is
 
 
  ** As of December 31, 2010, the Depository Trust and Clearing Corporation (“DTCC”) owned 100% of the issued and outstanding shares of common stock of NSCC. Also as of such date, NYSE Euronext, the parent company of the Sponsor, and its affiliates collectively owned less than 0.40% of the issued and outstanding shares of common stock of DTCC (“DTCC Shares”), and the Trustee owned 6.19% of DTCC Shares.


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received by the Trustee to the time the requisite Index Securities are purchased and delivered will affect the value of all Units.
 
Procedures for Creation of Creation Units
 
All creation orders must be placed in Creation Units and must be received by the Distributor by no later than the closing time of the regular trading session on the NYSE (“Closing Time”) (ordinarily 4:00 p.m. New York time), in each case on the date such order is placed, in order for creation to be effected based on the NAV of the Trust as determined on such date. Orders must be transmitted by telephone, through the Internet or other transmission method(s) acceptable to the Distributor and the Trustee, pursuant to procedures set forth in the Participant Agreement and/or described in this Prospectus. In addition, orders submitted through the Internet must also comply with the terms and provisions of the State Street Fund Connect Buy-Side User Agreement and other applicable agreements and documents, including but not limited to the applicable Fund Connect User Guide or successor documents. Severe economic or market disruptions or changes, or telephone or other communication failure, may impede the ability to reach the Distributor, the Trustee, a Participating Party or a DTC Participant.
 
Units may be created in advance of receipt by the Trustee of all or a portion of the Portfolio Deposit. In these circumstances, the initial deposit has a value greater than the NAV of the Units on the date the order is placed in proper form, because in addition to available Index Securities, cash collateral must be deposited with the Trustee in an amount equal to the sum of (a) the Cash Component, plus (b) 115% of the market value of the undelivered Index Securities (“Additional Cash Deposit”). The Trustee holds such Additional Cash Deposit as collateral in an account separate and apart from the Trust. The order is deemed received on the Business Day on which the order is placed if the order is placed in proper form before the Closing Time on such date and federal funds in the appropriate amount are deposited with the Trustee by 11:00 a.m. New York time the next Business Day.
 
If the order is not placed in proper form by the Closing Time or federal funds in the appropriate amount are not received by 11:00 a.m. New York time on the next Business Day, the order may be deemed to be rejected and the investor will be liable to the Trust for any losses resulting therefrom. An additional amount of cash must be deposited with the Trustee, pending delivery of the missing Index Securities, to the extent necessary to maintain the Additional Cash Deposit with the Trustee in an amount at least equal to 115% of the daily mark-to-market value of the missing Index Securities. If missing Index Securities are not received by 1:00 p.m. New York time on the third Business Day following the day on which the purchase order is deemed received and if a mark-to-market payment is not made within one Business Day following notification by the Distributor that such a payment is required, the Trustee may use the Additional Cash Deposit to purchase the missing Index Securities of the


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Portfolio Deposit. The Trustee will return any unused portion of the Additional Cash Deposit once all of the missing Index Securities have been properly received or purchased by the Trustee and deposited into the Trust. In addition, a Transaction Fee will be imposed in an amount not to exceed that charged for creations outside the Clearing Process as disclosed under the heading “Highlights — A Transaction Fee is Payable for Each Creation and for Each Redemption of Creation Units”. The delivery of Creation Units so created will occur no later than the third (3rd) Business Day following the day on which the purchase order is deemed received. The Participant Agreement for any Participating Party intending to follow these procedures contains terms and conditions permitting the Trustee to buy the missing portion(s) of the Portfolio Deposit at any time and will subject the Participating Party to liability for any shortfall between the cost to the Trust of purchasing such stocks and the value of such collateral. The Participating Party is liable to the Trust for the costs incurred by the Trust in connection with any such purchases. The Trust will have no liability for any such shortfall.
 
All questions as to the number of shares of each Index Security, the amount of the Cash Component and the validity, form, eligibility (including time of receipt) and acceptance for deposit of any Index Securities to be delivered are resolved by the Trustee. The Trustee may reject a creation order if (a) the depositor or group of depositors, upon obtaining the Units ordered, would own 80% or more of the current outstanding Units, (b) the Portfolio Deposit is not in proper form; (c) acceptance of the Portfolio Deposit would have certain adverse tax consequences; (d) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance of the Portfolio Deposit would otherwise have an adverse effect on the Trust or the rights of Beneficial Owners; or (f) circumstances outside the control of the Trustee make it for all practical purposes impossible to process creations of Units. The Trustee and the Sponsor are under no duty to give notification of any defects or irregularities in the delivery of Portfolio Deposits or any component thereof and neither of them shall incur any liability for the failure to give any such notification.
 
Placement of Creation Orders Using the Clearing Process
 
Creation Units created through the Clearing Process must be delivered through a Participating Party that has executed a Participant Agreement. The Participant Agreement authorizes the Trustee to transmit to the Participating Party such trade instructions as are necessary to effect the creation order. Pursuant to the trade instructions from the Trustee to NSCC, the Participating Party agrees to transfer the requisite Index Securities (or contracts to purchase such Index Securities that are expected to be delivered through the Clearing Process in a “regular way” manner by the third NSCC Business Day) and the Cash Component to the Trustee, together with such additional information as may be required by the Trustee.


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Placement of Creation Orders Outside the Clearing Process
 
Creation Units created outside the Clearing Process must be delivered through a DTC Participant that has executed a Participant Agreement and has stated in its order that it is not using the Clearing Process and that creation will instead be effected through a transfer of stocks and cash. The requisite number of Index Securities must be delivered through DTC to the account of the Trustee by no later than 11:00 a.m. of the next Business Day immediately following the Transmittal Date. The Trustee, through the Federal Reserve Bank wire transfer system, must receive the Cash Component no later than 2:00 p.m. New York time on the next Business Day immediately following the Transmittal Date. If the Trustee does not receive both the requisite Index Securities and the Cash Component in a timely fashion, the order will be cancelled. Upon written notice to the Distributor, the cancelled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the current NAV of the Trust. The delivery of Units so created will occur no later than the third (3rd) Business Day following the day on which the creation order is deemed received by the Distributor.
 
Securities Depository; Book-Entry-Only System
 
DTC acts as securities depository for Trust Units. Units are represented by one or more global securities, registered in the name of Cede & Co., as nominee for DTC and deposited with, or on behalf of, DTC.
 
DTC is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC * was created to hold securities of its participants referred to herein as DTC Participants and to facilitate the clearance and settlement of securities transactions among the DTC Participants through electronic book-entry changes in their accounts, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. Access to the DTC system also is available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect Participants”).
 
Upon the settlement date of any creation, transfer or redemption of Units, DTC credits or debits, on its book-entry registration and transfer system, the amount of Units so created, transferred or redeemed to the accounts of the appropriate DTC Participants. The accounts to be credited and charged are designated by the Trustee to
 
 
  * As of December 31, 2010 , DTCC owned 100% of the issued and outstanding shares of the common stock of DTC.


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NSCC, in the case of a creation or redemption through the Clearing Process, or by the Trustee and the DTC Participant, in the case of a creation or redemption outside of the Clearing Process. Beneficial ownership of Units is limited to DTC Participants, Indirect Participants and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Units (owners of such beneficial interests are referred to herein as “Beneficial Owners”) is shown on, and the transfer of ownership is effected only through, records maintained by DTC (with respect to DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and Beneficial Owners that are not DTC Participants). Beneficial Owners are expected to receive from or through the DTC Participant a written confirmation relating to their purchase of Units. The laws of some jurisdictions may require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in Units.
 
As long as Cede & Co., as nominee of DTC, is the registered owner of Units, references to the registered or record owner of Units shall mean Cede & Co. and shall not mean the Beneficial Owners of Units. Beneficial Owners of Units are not entitled to have Units registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered the record or registered holders thereof under the Trust Agreement. Accordingly, each Beneficial Owner must rely on the procedures of DTC, the DTC Participant and any Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights under the Trust Agreement.
 
The Trustee recognizes DTC or its nominee as the owner of all Units for all purposes except as expressly set forth in the Trust Agreement. Pursuant to the agreement between the Trustee and DTC (“Depository Agreement”), DTC is required to make available to the Trustee upon request and for a fee to be charged to the Trust a listing of the Units holdings of each DTC Participant. The Trustee inquires of each such DTC Participant as to the number of Beneficial Owners holding Units, directly or indirectly, through the DTC Participant. The Trustee provides each such DTC Participant with copies of such notice, statement or other communication, in the form, number and at the place as the DTC Participant may reasonably request, in order that the notice, statement or communication may be transmitted by the DTC Participant, directly or indirectly, to the Beneficial Owners. In addition, the Trust pays to each such DTC Participant a fair and reasonable amount as reimbursement for the expense attendant to such transmittal, all subject to applicable statutory and regulatory requirements. The foregoing interaction between the Trustee and DTC Participants may be direct or indirect (i.e., through a third party.)
 
Distributions are made to DTC or its nominee, Cede & Co. DTC or Cede & Co., upon receipt of any payment of distributions in respect of Units, is required immediately to credit DTC Participants’ accounts with payments in amounts proportionate


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to their respective beneficial interests in Units, as shown on the records of DTC or its nominee. Payments by DTC Participants to Indirect Participants and Beneficial Owners of Units held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street name,” and will be the responsibility of such DTC Participants. Neither the Trustee nor the Sponsor has or will have any responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in Units, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between DTC and the DTC Participants or the relationship between such DTC Participants and the Indirect Participants and Beneficial Owners owning through such DTC Participants.
 
DTC may discontinue providing its service with respect to Units at any time by giving notice to the Trustee and the Sponsor and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trustee and the Sponsor shall take action either to find a replacement for DTC to perform its functions at a comparable cost or, if such a replacement is unavailable, to terminate the Trust.
 
REDEMPTION OF TRUST UNITS
 
Trust Units are redeemable only in Creation Units. Creation Units are redeemable in kind only and are not redeemable for cash except as described under “Summary — Highlights — Termination of the Trust.”
 
Procedures for Redemption of Creation Units
 
Redemption orders must be placed with a Participating Party (for redemptions through the Clearing Process) or DTC Participant (for redemptions outside the Clearing Process), as applicable, in the form required by such Participating Party or DTC Participant. A particular broker may not have executed a Participant Agreement, and redemption orders may have to be placed by the broker through a Participating Party or a DTC Participant who has executed a Participant Agreement. At any given time, there may be only a limited number of broker-dealers that have executed a Participant Agreement. Redeemers should afford sufficient time to permit (a) proper submission of the order by a Participating Party or DTC Participant to the Trustee and (b) the receipt of the Units to be redeemed and any Excess Cash Amounts (as defined below) by the Trustee in a timely manner. Orders for redemption effected outside the Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected using the Clearing Process. These deadlines vary by institution. Persons redeeming outside the Clearing Process are


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required to transfer Units through DTC and the Excess Cash amounts, if any, through the Federal Reserve Bank wire transfer system in a timely manner.
 
Requests for redemption may be made on any Business Day to the Trustee and not to the Distributor. In the case of redemptions made through the Clearing Process, the Transaction Fee is deducted from the amount delivered to the redeemer. In the case of redemptions outside the Clearing Process, the Transaction Fee plus an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit per Creation Unit redeemed, and such amount is deducted from the amount delivered to the redeemer.
 
The Trustee transfers to the redeeming Beneficial Owner via DTC and the relevant DTC Participant(s) a portfolio of stocks for each Creation Unit delivered, generally identical in weighting and composition to the stock portion of a Portfolio Deposit as in effect (a) on the date a request for redemption is deemed received by the Trustee or (b) in the case of the termination of the Trust, on the date that notice of the termination of the Trust is given. The Trustee also transfers via the relevant DTC Participant(s) to the redeeming Beneficial Owner a “Cash Redemption Payment,” which on any given Business Day is an amount identical to the amount of the Cash Component and is equal to a proportional amount of the following: dividends on the Portfolio Securities for the period through the date of redemption, net of expenses and liabilities for such period including, without limitation, (i) taxes or other governmental charges against the Trust not previously deducted if any, and (ii) accrued fees of the Trustee and other expenses of the Trust, as if the Portfolio Securities had been held for the entire accumulation period for such distribution, plus or minus the Balancing Amount. The redeeming Beneficial Owner must deliver to the Trustee any amount by which the amount payable to the Trust by such Beneficial Owner exceeds the amount of the Cash Redemption Payment (“Excess Cash Amounts”). For redemptions through the Clearing Process, the Trustee effects a transfer of the Cash Redemption Payment and stocks to the redeeming Beneficial Owner by the third (3rd) NSCC Business Day following the date on which request for redemption is deemed received. For redemptions outside the Clearing Process, the Trustee transfers the Cash Redemption Payment and the stocks to the redeeming Beneficial Owner by the third (3rd) Business Day following the date on which the request for redemption is deemed received. The Trustee will cancel all Units delivered upon redemption.
 
If the Trustee determines that an Index Security is likely to be unavailable or available in insufficient quantity for delivery by the Trust upon redemption, the Trustee may elect to deliver the cash equivalent value of any such Index Securities, based on its market value as of the Evaluation Time on the date such redemption is deemed received by the Trustee as a part of the Cash Redemption Payment in lieu thereof.


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If a redeemer is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee may elect to deliver the cash equivalent value based on the market value of any such Index Securities as of the Evaluation Time on the date of the redemption as a part of the Cash Redemption Payment in lieu thereof. In such case, the investor will pay the Trustee the standard Transaction Fee, and may pay an additional amount equal to the actual amounts incurred in connection with such transaction(s) but in any case not to exceed three (3) times the Transaction Fee applicable for one Creation Unit.
 
The Trustee upon the request of a redeeming investor, may elect to redeem Creation Units in whole or in part by providing such redeemer, with a portfolio of stocks differing in exact composition from Index Securities but not differing in NAV from the then-current Portfolio Deposit. Such a redemption is likely to be made only if it were determined that it would be appropriate in order to maintain the Trust’s correspondence to the composition and weighting of the DJIA Index.
 
The Trustee may sell Portfolio Securities to obtain sufficient cash proceeds to deliver to the redeeming Beneficial Owner. To the extent cash proceeds are received by the Trustee in excess of the required amount, such cash proceeds shall be held by the Trustee and applied in accordance with the guidelines applicable to residual cash set forth under “The Portfolio — Portfolio Securities Conform to the DJIA”.
 
All redemption orders must be transmitted to the Trustee by telephone, through the Internet or by other transmission method acceptable to the Trustee so as to be received by the Trustee not later than the Closing Time on the Transmittal Date, pursuant to procedures set forth in the Participant Agreement and/or described in this Prospectus. In addition, orders submitted through the Internet must also comply with the terms and provisions of the State Street Fund Connect Buy-Side User Agreement and other applicable agreements and documents, including but not limited to the applicable Fund Connect User Guide or successor documents. Severe economic or market disruption or changes, or telephone or other communication failure, may impede the ability to reach the Trustee, a Participating Party, or a DTC Participant.
 
The calculation of the value of the stocks and the Cash Redemption Payment to be delivered to the redeeming Beneficial Owner is made by the Trustee according to the procedures set forth under “Valuation” and is computed as of the Evaluation Time on the Business Day on which a redemption order is deemed received by the Trustee. Therefore, if a redemption order in proper form is submitted to the Trustee by a DTC Participant not later than the Closing Time on the Transmittal Date, and the requisite Units are delivered to the Trustee prior to DTC Cut-Off Time on such Transmittal Date, then the value of the stocks and the Cash Redemption Payment to be delivered to the Beneficial Owner is determined by the Trustee as of the Evaluation Time on such Transmittal Date. If, however, a redemption order is submitted not later than the Closing Time on a Transmittal Date but either (a) the requisite Units are not delivered by DTC Cut-Off Time on the next Business Day immediately following such


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Transmittal Date or (b) the redemption order is not submitted in proper form, then the redemption order is not deemed received as of such Transmittal Date. In such case, the value of the stocks and the Cash Redemption Payment to be delivered to the Beneficial Owner is computed as of the Evaluation Time on the Business Day that such order is deemed received by the Trustee, i.e., the Business Day on which the Units are delivered through DTC to the Trustee by DTC Cut-Off Time on such Business Day pursuant to a properly submitted redemption order.
 
The Trustee may suspend the right of redemption, or postpone the date of payment of the NAV for more than five (5) Business Days following the date on which the request for redemption is deemed received by the Trustee (a) for any period during which the NYSE is closed, (b) for any period during which an emergency exists as a result of which disposal or evaluation of the Portfolio Securities is not reasonably practicable, (c) or for such other period as the SEC may by order permit for the protection of Beneficial Owners. Neither the Sponsor nor the Trustee is liable to any person or in any way for any loss or damages that may result from any such suspension or postponement.
 
Placement of Redemption Orders Using the Clearing Process
 
A redemption order made through the Clearing Process is deemed received on the Transmittal Date if (a) such order is received by the Trustee not later than the Closing Time on such Transmittal Date and (b) all other procedures set forth in the Participant Agreement are properly followed. The order is effected based on the NAV of the Trust as determined as of the Evaluation Time on the Transmittal Date. A redemption order made through the Clearing Process and received by the Trustee after the Closing Time will be deemed received on the next Business Day immediately following the Transmittal Date. The Participant Agreement authorizes the Trustee to transmit to NSCC on behalf of the Participating Party such trade instructions as are necessary to effect the Participating Party’s redemption order. Pursuant to such trade instructions from the Trustee to NSCC, the Trustee transfers the requisite stocks (or contracts to purchase such stocks which are expected to be delivered in a “regular way” manner) by the third (3rd) NSCC Business Day following the date on which the request for redemption is deemed received, and the Cash Redemption Payment.
 
Placement of Redemption Orders Outside the Clearing Process
 
A DTC Participant who wishes to place an order for redemption of Units to be effected outside the Clearing Process need not be a Participating Party, but its order must state that the DTC Participant is not using the Clearing Process and that redemption will instead be effected through transfer of Units directly through DTC. An order is deemed received by the Trustee on the Transmittal Date if (a) such order is received by the Trustee not later than the Closing Time on such Transmittal Date,


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(b) such order is preceded or accompanied by the requisite number of Units specified in such order, which delivery must be made through DTC to the Trustee no later than 11:00 a.m. on the next Business Day immediately following such Transmittal Date (“DTC Cut-Off Time”) and (c) all other procedures set forth in the Participant Agreement are properly followed. Any Excess Cash Amounts owed by the Beneficial Owner must be delivered no later than 2:00 p.m. on the next Business Day immediately following the Transmittal Date.
 
The Trustee initiates procedures to transfer the requisite stocks (or contracts to purchase such stocks that are expected to be delivered within three Business Days and the Cash Redemption Payment to the redeeming Beneficial Owner by the third Business Day following the Transmittal Date.


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THE PORTFOLIO
 
Because the objective of the Trust is to provide investment results that, before expenses, generally correspond to the price and yield performance of the DJIA, the Portfolio at any time will consist of as many of Index Securities as is practicable. It is anticipated that cash or cash items (other than dividends held for distribution) normally would not be a substantial part of the Trust’s net assets. Although the Trust may at any time fail to own certain of Index Securities, the Trust will be substantially invested in Index Securities and the Sponsor believes that such investment should result in a close correspondence between the investment performance of the DJIA and that derived from ownership of Units.
 
Portfolio Securities Conform to the DJIA
 
The DJIA is a price-weighted index of 30 component common stocks, the components of which are determined by the editors of The Wall Street Journal , without any consultation with the companies, the respective stock exchange or any official agency.
 
The Trust is not managed and therefore the adverse financial condition of an issuer does not require the sale of stocks from the Portfolio. The Trustee on a non-discretionary basis adjusts the composition of the Portfolio to conform to changes in the composition and/or weighting structure of Index Securities. To the extent that the method of determining the DJIA is changed by Dow Jones in a manner that would affect the adjustments provided for herein, the Trustee and the Sponsor have the right to amend the Trust Agreement, without the consent of DTC or Beneficial Owners, to conform the adjustments to such changes and to maintain the objective of tracking the DJIA.
 
The Trustee directs its stock transactions only to brokers or dealers, which may include affiliates of the Trustee, from whom it expects to obtain the most favorable prices or execution of orders. Adjustments are made more frequently in the case of significant changes to the DJIA. Specifically, the Trustee is required to adjust the composition of the Portfolio whenever there is a change in the identity of any Index Security (i.e., a substitution of one security for another) within three (3) Business Days before or after the day on which the change is scheduled to take effect. While other DJIA changes may lead to adjustments in the Portfolio, the most common changes are likely to occur as a result of changes in the Index Securities included in the DJIA and as a result of stock splits. The Trust Agreement sets forth the method of adjustments which may occur thereunder as a result of corporate actions to the DJIA, such as stock splits or changes in the identity of the component stocks.


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For example, in the event of an Index Security change (in which the common stock of one issuer held in the DJIA is replaced by the common stock of another), the Trustee may sell all shares of the Portfolio Security corresponding to the old Index Security and use the proceeds of such sale to purchase the replacement Portfolio Security corresponding to the new Index Security. If the share price of the removed Portfolio Security was higher than the price of its replacement, the Trustee will calculate how to allocate the proceeds of the sale of the removed Portfolio Security between the purchase of its replacement and purchases of additional shares of other Portfolio Securities so that the number of shares of each Portfolio Security after the transactions would be as nearly equal as practicable. If the share price of the removed Portfolio Security was lower than the price of its replacement, the Trustee will calculate the number of shares of each of the other Portfolio Securities that must be sold in order to purchase enough shares of the replacement Portfolio Security so that the number of shares of each Portfolio Security after the transactions would be as nearly equal as practicable.
 
In the event of a stock split, the price weighting of the stock which is split will drop. The Trustee may make the corresponding adjustment by selling the additional shares of the Portfolio Security received from the stock split. The Trustee may then use the proceeds of the sale to buy an equal number of shares of each Portfolio Security-including the Portfolio Security which had just experienced a stock split. In practice, of course, not all the shares received in the split would be sold: enough of those shares would be retained to make an increase in the number of split shares equal to the increase in the number of shares in each of the other Portfolio Securities purchased with the proceeds of the sale of the remaining shares resulting from such split.
 
As a result of the purchase and sale of stock in accordance with these requirements, or the creation of Creation Units, the Trust may hold some amount of residual cash (other than cash held temporarily due to timing differences between the sale and purchase of stock or cash delivered in lieu of Index Securities or undistributed income or undistributed capital gains). This amount may not exceed, for more than two (2) consecutive Business Days, 5/10th of 1 percent of the value of the Portfolio. If the Trustee has made all required adjustments and is left with cash in excess of 5/10th of 1 percent of the value of the Portfolio, the Trustee will use such cash to purchase additional Index Securities.
 
All portfolio adjustments are made as described herein unless such adjustments would cause the Trust to lose its status as a “regulated investment company” under Subchapter M of the Code. Additionally, the Trustee is required to adjust the composition of the Portfolio at any time to insure the continued qualification of the Trust as a regulated investment company.
 
The Trustee relies on Dow Jones for information as to the composition and weightings of Index Securities. If the Trustee becomes incapable of obtaining or


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processing such information or NSCC is unable to receive such information from the Trustee on any Business Day, the Trustee shall use the composition and weightings of Index Securities for the most recently effective Portfolio Deposit for the purposes of all adjustments and determinations (including, without limitation, determination of the stock portion of the Portfolio Deposit) until the earlier of (a) such time as current information with respect to Index Securities is available or (b) three (3) consecutive Business Days have elapsed. If such current information is not available and three (3) consecutive Business Days have elapsed, the composition and weightings of Portfolio Securities (as opposed to Index Securities) shall be used for the purposes of all adjustments and determinations (including, without limitation, determination of the stock portion of the Portfolio Deposit) until current information with respect to Index Securities is available.
 
If the Trust is terminated, the Trustee shall use the composition and weightings of Portfolio Securities as of such notice date for the purpose and determination of all redemptions or other required uses of the basket.
 
From time to time Dow Jones may adjust the composition of the DJIA because of a merger or acquisition involving one or more Index Securities. In such cases, the Trust, as shareholder of an issuer that is the object of such merger or acquisition activity, may receive various offers from would-be acquirors of the issuer. The Trustee is not permitted to accept any such offers until such time as it has been determined that the stocks of the issuer will be removed from the DJIA. As stocks of an issuer are often removed from the DJIA only after the consummation of a merger or acquisition of such issuer, in selling the securities of such issuer the Trust may receive, to the extent that market prices do not provide a more attractive alternative, whatever consideration is being offered to the shareholders of such issuer that have not tendered their shares prior to such time. Any cash received in such transactions is reinvested in Index Securities in accordance with the criteria set forth above.
 
Any stocks received as a part of the consideration that are not Index Securities are sold as soon as practicable and the cash proceeds of such sale are reinvested in accordance with the criteria set forth above.
 
Adjustments to the Portfolio Deposit
 
On each Business Day (each such day an “Adjustment Day”), the number of shares and identity of each Index Security in a Portfolio Deposit are adjusted in accordance with the following procedure. At the close of the market the Trustee calculates the NAV of the Trust. The NAV is divided by the number of outstanding Units multiplied by 50,000 Units in one Creation Unit, resulting in a NAV per Creation Unit (“NAV Amount”). The Trustee then calculates the number of shares (without rounding) of each of the component stocks of the DJIA in a Portfolio Deposit for the following Business Day (“Request Day”), so that (a) the market value at the close of the market on the Adjustment Day of the stocks to be included in the


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Portfolio Deposit on Request Day, together with the Dividend Equivalent Payment effective for requests to create or redeem on the Adjustment Day, equals the NAV Amount and (b) the identity and weighting of each of the stocks in a Portfolio Deposit mirrors proportionately the identity and weightings of the stocks in the DJIA, each as in effect on Request Day. For each stock, the number resulting from such calculation is rounded down to the nearest whole share. The identities and weightings of the stocks so calculated constitute the stock portion of the Portfolio Deposit effective on Request Day and thereafter until the next subsequent Adjustment Day, as well as Portfolio Securities to be delivered by the Trustee in the event of request for redemption on the Request Day and thereafter until the following Adjustment Day.
 
In addition to the foregoing adjustments, if a corporate action such as a stock split, stock dividend or reverse split occurs with respect to any Index Security that results in an adjustment to the DJIA divisor, the Portfolio Deposit shall be adjusted to take into account the corporate action in each case rounded to the nearest whole share. Further, the Trustee is permitted to take account of changes to the identity or weighting of any Index Security resulting from a change to the Index by making a corresponding adjustment to the Portfolio Deposit on the day prior to the day on which the change to the DJIA takes effect.
 
On the Request Day and on each day that a request for the creation or redemption is deemed received, the Trustee calculates the market value of the stock portion of the Portfolio Deposit as in effect on the Request Day as of the close of the market and adds to that amount the Dividend Equivalent Payment effective for requests to create or redeem on Request Day (such market value and Dividend Equivalent Payment are collectively referred to herein as “Portfolio Deposit Amount”). The Trustee then calculates the NAV Amount, based on the close of the market on the Request Day. The difference between the NAV Amount so calculated and the Portfolio Deposit Amount is the “Balancing Amount”. The Balancing Amount serves the function of compensating for any differences between the value of the Portfolio Deposit Amount and the NAV Amount at the close of trading on Request Day due to, for example, (a) differences in the market value of the securities in the Portfolio Deposit and the market value of the Securities on Request Day and (b) any variances from the proper composition of the Portfolio Deposit.
 
The Dividend Equivalent Payment and the Balancing Amount in effect at the close of business on the Request Date are collectively referred to as the Cash Component or the Cash Redemption Payment. If the Balancing Amount is a positive number (i.e., if the NAV Amount exceeds the Portfolio Deposit Amount) then, with respect to creation, the Balancing Amount increases the Cash Component of the then effective Portfolio Deposit transferred to the Trustee by the creator. With respect to redemptions, the Balancing Amount is added to the cash transferred to the redeemer by the Trustee. If the Balancing Amount is a negative number (i.e., if the NAV Amount is less than the Portfolio Deposit Amount) then, with respect to creation, this


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amount decreases the Cash Component of the then effective Portfolio Deposit to be transferred to the Trustee by the creator or, if such cash portion is less than the Balancing Amount, the difference must be paid by the Trustee to the creator. With respect to redemptions, the Balancing Amount is deducted from the cash transferred to the redeemer or, if such cash is less than the Balancing Amount, the difference must be paid by the redeemer to the Trustee.
 
If the Trustee has included the cash equivalent value of one or more Index Securities in the Portfolio Deposit because the Trustee has determined that such Index Securities are likely to be unavailable or available in insufficient quantity for delivery, or if a creator or redeemer is restricted from investing or engaging in transactions in one or more of such Index Securities, the Portfolio Deposit so constituted shall determine the Index Securities to be delivered in connection with the creation of Units in Creation Unit size aggregations and upon the redemption of Units until the time the stock portion of the Portfolio Deposit is subsequently adjusted.
 
THE DJIA
 
The DJIA was first published in 1896. Initially comprised of 12 companies, the DJIA has evolved into the most recognizable stock indicator in the world, and the only index composed of companies that have sustained earnings performance over a significant period of time. In its second century, the DJIA is the oldest continuous barometer of the U.S. stock market, and the most widely quoted indicator of U.S. stock market activity.
 
The companies represented by the 30 stocks now comprising the DJIA are all leaders in their respective industries, and their stocks are widely held by individuals and institutional investors. These stocks represent more than 16% of the $15.47 trillion market value of all US common stocks.
 
Dow Jones is not responsible for and shall not participate in the creation or sale of Units or in the determination of the timing of, prices at, or quantities and proportions in which purchases or sales of Index Securities or Securities shall be made. The information in this Prospectus concerning Dow Jones and the DJIA has been obtained from sources that the Sponsor believes to be reliable, but the Sponsor takes no responsibility for the accuracy of such information.
 
The following table shows the actual performance of the DJIA for the years 1896 through 2010. Stock prices fluctuated widely during this period and were higher at the end than at the beginning. The results shown should not be considered as a representation of the income yield or capital gain or loss that may be generated by the


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DJIA in the future, nor should the results be considered as a representation of the performance of the Trust.
 
                                         
Year
  DJIA
    Point
    Year %
          %
 
Ended   Close     Change     Change     Divs     Yield  
 
2010
    11577.51       1149.46       11.02 %     286.88       2.54 %
2009
    10428.05       1651.66       18.82       277.38       2.63  
2008
    8776.39       −4488.42       −33.84       316.40       3.61  
2007
    13264.82       801.67       6.43       298.97       2.35  
2006
    12463.15       1745.65       16.29       267.75       2.24  
2005
    10717.50       −65.51       −.61       246.85       2.30  
2004
    10783.01       329.09       3.15       239.27       2.22  
2003
    10453.92       2112.29       25.32       209.42       2.00  
2002
    8341.63       −1679.87       −16.76       189.68       2.27  
2001
    10021.50       −765.35       −7.10       181.07       1.81  
2000
    10786.85       −710.27       −6.18       172.08       1.60  
1999
    11497.12       2315.69       25.20       168.52       1.47  
1998
    9181.43       1273.18       16.10       151.13       1.65  
1997
    7908.25       1459.98       22.60       136.10       1.72  
1996
    6448.27       1331.20       26.00       131.14       2.03  
1995
    5117.12       1282.70       33.50       116.56       2.28  
1994
    3834.44       80.30       2.10       105.66       2.76  
1993
    3754.09       453.00       13.70       99.66       2.65  
1992
    3301.11       132.30       4.20       100.72       3.05  
1991
    3168.83       535.20       20.30       95.18       3.00  
1990
    2633.66       −119.50       −4.30       103.70       3.94  
1989
    2753.20       584.60       27.00       103.00       3.74  
1988
    2168.57       229.70       11.80       79.53       3.67  
1987
    1938.83       42.90       2.30       71.20       3.67  
1986
    1895.95       349.30       22.60       67.04       3.54  
1985
    1546.67       335.10       27.70       62.03       4.01  
1984
    1211.57       −47.10       −3.70       60.63       5.00  
1983
    1258.64       212.10       20.30       56.33       4.48  
1982
    1046.54       171.50       19.60       54.14       5.17  
1981
    875.00       −89.00       −9.20       56.22       6.43  
1980
    963.99       125.30       14.90       54.36       5.64  
1979
    838.74       33.70       4.20       50.98       6.08  
1978
    805.01       −26.20       −3.10       48.52       6.03  
1977
    831.17       −173.50       −17.30       45.84       5.52  
1976
    1004.65       152.20       17.90       41.40       4.12  
1975
    852.41       236.20       38.30       37.46       4.39  
1974
    616.24       −234.60       −27.60       37.72       6.12  
1973
    850.86       −169.20       −16.60       35.33       4.15  
1972
    1020.02       129.80       14.60       32.27       3.16  
1971
    890.20       51.30       6.10       30.86       3.47  
1970
    838.92       38.60       4.80       31.53       3.76  
1969
    800.36       −143.40       −15.20       33.90       4.24  
1968
    943.75       38.60       4.30       31.34       3.32  
1967
    905.11       119.40       15.20       30.19       3.34  


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Year
  DJIA
    Point
    Year %
          %
 
Ended   Close     Change     Change     Divs     Yield  
 
1966
    785.69       −183.60       −18.90       31.89       4.06  
1965
    969.26       95.10       10.90       28.61       2.95  
1964
    874.13       111.20       14.60       31.24       3.57  
1963
    762.95       110.90       17.00       23.41       3.07  
1962
    652.10       −79.00       −10.80       23.30       3.57  
1961
    731.14       115.30       18.70       22.71       3.11  
1960
    615.89       −63.50       −9.30       21.36       3.47  
1959
    679.36       95.70       16.40       20.74       3.05  
1958
    583.65       148.00       34.00       20.00       3.43  
1957
    435.69       −63.80       −12.80       21.61       4.96  
1956
    499.47       11.10       2.30       22.99       4.60  
1955
    488.40       84.00       20.80       21.58       4.42  
1954
    404.39       123.50       44.00       17.47       4.32  
1953
    280.90       −11.00       −3.80       16.11       5.74  
1952
    291.90       22.70       8.40       15.43       5.29  
1951
    269.23       33.80       14.40       16.34       6.07  
1950
    235.41       35.30       17.60       16.13       6.85  
1949
    200.13       22.80       12.90       12.79       6.39  
1948
    177.30       −3.90       −2.10       11.50       6.49  
1947
    181.16       4.00       2.20       9.21       5.08  
1946
    177.20       −15.70       −8.10       7.50       4.23  
1945
    192.91       40.60       26.60       6.69       3.47  
1944
    152.32       16.40       12.10       6.57       4.31  
1943
    135.89       16.50       13.80       6.30       4.64  
1942
    119.40       8.40       7.60       6.40       5.36  
1941
    110.96       −20.20       −15.40       7.59       6.84  
1940
    131.13       −19.10       −12.70       7.06       5.38  
1939
    150.24       −4.50       −2.90       6.11       4.07  
1938
    154.76       33.90       28.10       4.98       3.22  
1937
    120.85       −59.10       −32.80       8.78       7.27  
1936
    179.90       35.80       24.80       7.05       3.92  
1935
    144.13       40.10       38.50       4.55       3.16  
1934
    104.04       4.10       4.10       3.66       3.52  
1933
    99.90       40.00       66.70       3.40       3.40  
1932
    59.93       −18.00       −23.10       4.62       7.71  
1931
    77.90       −86.70       −52.70       8.40       10.78  
1930
    164.58       −83.90       −33.80       11.13       6.76  
1929
    248.48       −51.50       −17.20       12.75       5.13  
1928
    300.00       97.60       48.20       NA       NA  
1927
    202.40       45.20       28.80       NA       NA  
1926
    157.20       0.50       0.30       NA       NA  
1925
    156.66       36.20       30.00       NA       NA  
1924
    120.51       25.00       26.20       NA       NA  
1923
    95.52       −3.20       −3.30       NA       NA  
1922
    98.73       17.60       21.70       NA       NA  
1921
    81.10       9.10       12.70       NA       NA  
1920
    71.95       −35.30       −32.90       NA       NA  

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Year
  DJIA
    Point
    Year %
          %
 
Ended   Close     Change     Change     Divs     Yield  
 
1919
    107.23       25.00       30.50       NA       NA  
1918
    82.20       7.80       10.50       NA       NA  
1917
    74.38       −20.60       −21.70       NA       NA  
1916
    95.00       −4.20       −4.20       NA       NA  
1915
    99.15       44.60       81.70       NA       NA  
1914
    54.58       −24.20       −30.70       NA       NA  
1913
    78.78       −9.10       −10.30       NA       NA  
1912
    87.87       6.20       7.60       NA       NA  
1911
    81.68       0.30       0.40       NA       NA  
1910
    81.36       −17.70       −17.90       NA       NA  
1909
    99.05       12.90       15.00       NA       NA  
1908
    86.15       27.40       46.60       NA       NA  
1907
    58.75       −35.60       −37.70       NA       NA  
1906
    94.35       −1.90       −1.90       NA       NA  
1905
    96.20       26.60       38.20       NA       NA  
1904
    69.61       20.50       41.70       NA       NA  
1903
    49.11       −15.20       −23.60       NA       NA  
1902
    64.29       −0.30       −0.40       NA       NA  
1901
    64.56       −6.10       −8.70       NA       NA  
1900
    70.71       4.60       7.00       NA       NA  
1899
    66.08       5.60       9.20       NA       NA  
1898
    60.52       11.10       22.50       NA       NA  
1897
    49.41       9.00       22.20       NA       NA  
1896
    40.45       NA       NA       NA       NA  
 
 
Source: Dow Jones Indexes. Year-end index values reflect neither reinvestment of dividends nor costs associated with investing, such as brokerage commissions. Yields are calculated by dividing the sum of the most recent four quarterly per-share dividend payments of all components by the sum of the component prices.
 
The DJIA is a price-weighted stock index, meaning that the component stocks of the DJIA are accorded relative importance based on their prices. In this regard, the DJIA is unlike many other stock indexes which weight their component stocks by market capitalization (price times shares outstanding). The DJIA is called an “average” because originally it was calculated by adding up the component stock prices and then dividing by the number of stocks. The method remains the same today, but the number of significant digits in the divisor (the number that is divided into the total of the stock prices) has been increased to eight significant digits to minimize distortions due to rounding and has been adjusted over time to insure continuity of the DJIA after component stock changes and corporate actions, as discussed below.
 
The DJIA divisor is adjusted due to corporate actions that change the price of any of its component shares. The most frequent reason for such an adjustment is a stock split. For example, suppose a company in the DJIA issues one new share for

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each share outstanding. After this two-for-one “split,” each share of stock is worth half what it was immediately before, other things being equal. But without an adjustment in the divisor, this split would produce a distortion in the DJIA. An adjustment must be made to compensate so that the “average” will remain unchanged. At Dow Jones, this adjustment is handled by changing the divisor. * The formula used to calculate divisor adjustments is:
 
             
        Current Divisor x Adjusted Sum of Prices    
New Divisor
  =  
   
        Unadjusted Sum of Prices    
 
Changes in the composition of the DJIA are made entirely by the editors of The Wall Street Journal without consultation with the companies, the respective stock exchange, or any official agency. Additions or deletions of components may be made to achieve better representation of the broad market and of American industry.
 
In selecting components for the DJIA, the following criteria are used: (a) the company is not a utility or in the transportation business; (b) the company has a premier reputation in its field; (c) the company has a history of successful growth; and (d) there is wide interest among individual and institutional investors. Whenever one component is changed, the others are reviewed. For the sake of historical continuity, composition changes are made rarely.
 
LICENSE AGREEMENT
 
The License Agreement grants SSGM, an affiliate of the Trustee, a license to use the DJIA as a basis for determining the composition of the Portfolio and to use certain trade names and trademarks of Dow Jones in connection with the Portfolio. The Trustee on behalf of the Trust, the Sponsor and the Exchange have each received a sublicense from SSGM for the use of the DJIA and certain trade names and trademarks in connection with their rights and duties with respect to the Trust. The License Agreement may be amended without the consent of any of the Beneficial Owners of Trust Units. Currently, the License Agreement is scheduled to terminate on December 31, 2017, but its term may be extended without the consent of any of the Beneficial Owners of Trust Units.
 
None of the Trust, the Trustee, the Exchange, the Sponsor, SSGM, the Distributor, DTC, NSCC, any Authorized Participant, any Beneficial Owner of Trust Units or any other person is entitled to any rights whatsoever under the foregoing licensing arrangements or to use the trademarks and service marks “Dow Jones”, “The Dow”, “DJIA” or “Dow Jones Industrial Average” or to use
 
 
  *  Currently, the divisor is adjusted after the close of business on the day prior to the occurrence of the split; the divisor is not adjusted for regular cash dividends.


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the DJIA except as specifically described in the License Agreement or sublicenses or as may be specified in the Trust Agreement.
 
The Trust is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation or warranty, express or implied, to the Beneficial Owners of Trust Units or any member of the public regarding the advisability of investing in securities generally or in the Trust particularly. Dow Jones’ only relationship to the Trust is the licensing of certain trademarks, trade names and service marks of Dow Jones and of the DJIA which is determined, comprised and calculated by Dow Jones without regard to the Trust or the Beneficial Owners of Trust Units. Dow Jones has no obligation to take the needs of the Sponsor, the Exchange, the Trust or the Beneficial Owners of Trust Units into consideration in determining, comprising or calculating the DJIA. Dow Jones is not responsible for and has not participated in any determination or calculation made with respect to issuance or redemption of Trust Units. Dow Jones has no obligation or liability in connection with the administration, marketing or trading of Trust Units.
 
DOW JONES DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE DJIA OR ANY DATA INCLUDED THEREIN AND DOW JONES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. DOW JONES MAKES NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, THE EXCHANGE, THE TRUST, BENEFICIAL OWNERS OF TRUST UNITS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE DJIA OR ANY DATA INCLUDED THEREIN. DOW JONES MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE DJIA OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL DOW JONES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES. THERE ARE NO THIRD PARTY BENEFICIARIES OF ANY AGREEMENTS OR ARRANGEMENTS BETWEEN DOW JONES, THE SPONSOR AND THE EXCHANGE.
 
SPDR Trademark
 
The “SPDR” trademark is used under license from Standard & Poor’s Financial Services, LLC, an affiliate of The McGraw-Hill Companies, Inc. (“S&P”). No financial product offered by the Trust, or its affiliates is sponsored, endorsed, sold or promoted by S&P. S&P makes no representation or warranty, express or implied, to the owners of any financial product or any member of the public regarding the advisability of investing in securities generally or in financial products particularly or


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the ability of the index on which financial products are based to track general stock market performance. S&P is not responsible for and has not participated in any determination or calculation made with respect to issuance or redemption of financial products. S&P has no obligation or liability in connection with the administration, marketing or trading of financial products.
 
WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
 
EXCHANGE LISTING
 
On October 1, 2008, NYSE Euronext acquired the American Stock Exchange LLC, which was renamed “NYSE Alternext US” and subsequently renamed “NYSE Amex.” Following the acquisition, the listing and trading of all exchange traded funds on NYSE Euronext US markets was consolidated on a single trading venue, NYSE Arca. The Sponsor and the Trustee therefore decided to move the listing for the Trust from NYSE Alternext US (now NYSE Amex) to NYSE Arca and Trust Units have been listed on NYSE Arca as of November 7, 2008. The Trust was not required to pay an initial listing fee to the Exchange. Transactions involving Trust Units in the public trading market are subject to customary brokerage charges and Commissions.
 
Trust Units also are listed and traded on the Singapore Exchange Securities Trading Limited and Euronext Amsterdam. In the future, Trust Units may be listed and traded on other non-U.S. exchanges pursuant to similar arrangements. Euronext Amsterdam is an indirect wholly owned subsidiary of NYSE Euronext.
 
There can be no assurance that Units will always be listed on the Exchange. The Trust will be terminated if Trust Units are delisted. Trading in Units may be halted under certain circumstances as set forth in the Exchange rules and procedures. The Exchange will consider the suspension of trading in or removal from listing of Units if: (a) the Trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Units for 30 or more consecutive trading days; (b) the value of the DJIA is no longer calculated or available; or (c) such other event occurs or condition exists which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable. In addition, trading is subject to trading halts caused by extraordinary market volatility pursuant to Exchange “circuit breaker” rules that require trading to be halted for a specified period based on a specified market decline. The Exchange also must halt trading if required intraday valuation information is not disseminated for longer than one Business Day.
 
The Sponsor’s aim in designing the Trust was to provide investors with a security whose initial market value would approximate one-hundredth (1/100th) the value of the DJIA. Of course, the market value of a Unit is affected by a variety of


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factors, including capital gains distributions made, and expenses incurred, by the Trust, and therefore, over time, a Unit may no longer approximate (1/100th) the value of the DJIA. The market price of a Unit should reflect its share of the dividends accumulated on Portfolio Securities and may be affected by supply and demand, market volatility, sentiment and other factors.
 
FEDERAL INCOME TAXES
 
The following is a description of the material U.S. federal income tax consequences of owning and disposing of Units. The discussion below provides general tax information relating to an investment in Units, but it does not purport to be a comprehensive description of all the U.S. federal income tax considerations that may be relevant to a particular person’s decision to invest in Units. This discussion does not describe all of the tax consequences that may be relevant in light of a Beneficial Owner’s particular circumstances. For example, this summary does not include any discussion of U.S. estate taxes. In addition, this discussion does not describe alternative minimum tax consequences and tax consequences applicable to Beneficial Owners subject to special rules, such as:
 
  •   certain financial institutions;
 
  •   regulated investment companies;
 
  •   real estate investment trusts;
 
  •   dealers or traders in securities who use a mark-to-market method of tax accounting;
 
  •   persons holding Units as part of a hedging transaction, straddle, wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the Units;
 
  •   U.S. Holders (as defined below) whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
 
  •   entities classified as partnerships or other pass-through entities for U.S. federal income tax purposes;
 
  •   former U.S. citizens and certain expatriated entities;
 
  •   tax-exempt entities, including an “individual retirement account” or “Roth IRA”; or
 
  •   insurance companies.
 
If an entity that is classified as a partnership for U.S. federal income tax purposes holds Units, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership.


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Partnerships holding Units and partners in such partnerships should consult their tax advisers as to the particular U.S. federal income tax consequences of holding and disposing of the Units.
 
The following discussion applies only to a Beneficial Owner of Units that (i) is treated as the beneficial owner of such Units for U.S. federal income tax purposes, (ii) holds such Units as capital assets and (iii), unless otherwise noted, is a U.S. Holder. A “U.S. Holder” is a person that, for U.S. federal income tax purposes, is a beneficial owner of Units and is (i) an individual who is a citizen or resident of the United States; (ii) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
 
This discussion is based on the Code, administrative pronouncements, judicial decisions, and final, temporary and proposed Treasury regulations all as of the date hereof, any of which is subject to change, possibly with retroactive effect.
 
Prospective purchasers of Units are urged to consult their tax advisers with regard to the application of the U.S. federal income tax laws to their particular situations, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.
 
Taxation of the Trust
 
The Trust believes that it qualified as a RIC under Subchapter M of the Code for its taxable year ended September 30, 2010, and it intends to qualify as a RIC in the current and future taxable years. Assuming that the Trust so qualifies and that it satisfies the distribution requirements described below, the Trust generally will not be subject to U.S. federal income tax on income distributed in a timely manner to its unitholders.
 
To qualify as a RIC for any taxable year, the Trust must, among other things, satisfy both an income test and an asset diversification test for such taxable year. Specifically, (i) at least 90% of the Trust’s gross income for such taxable year must consist of dividends; interest; payments with respect to certain securities loans; gains from the sale or other disposition of stock, securities or foreign currencies; other income (including, but not limited to, gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities or currencies; and net income derived from interests in “qualified publicly traded partnerships” (such income, “Qualifying RIC Income”) and (ii) the Trust’s holdings must be diversified so that, at the end of each quarter of such taxable year, (a) at least 50% of the value of the Trust’s total assets is represented by cash and cash items, securities of other RICs, U.S. government securities and other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5%


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of the value of the Trust’s total assets and not greater than 10% of the outstanding voting securities of such issuer and (b) not more than 25% of the value of the Trust’s total assets is invested (x) in securities (other than U.S. government securities or securities of other RICs) of any one issuer or of two or more issuers that the Trust controls and that are engaged in the same, similar or related trades or businesses or (y) in the securities of one or more “qualified publicly traded partnerships.” A “qualified publicly traded partnership” is generally defined as an entity that is treated as a partnership for U.S. federal income tax purposes if (i) interests in such entity are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof and (ii) less than 90% of such entity’s gross income for the relevant taxable year consists of Qualifying RIC Income. The Trust’s share of income derived from a partnership other than a “qualified publicly traded partnership” will be treated as Qualifying RIC Income only to the extent that such income would have constituted Qualifying RIC Income if derived directly by the Trust.
 
In order to be exempt from U.S. federal income tax on its distributed income, the Trust must distribute to its Unitholders on a timely basis at least 90% of its “investment company taxable income” and at least 90% of its net tax-exempt interest income for each taxable year. In general, a RIC’s “investment company taxable income” for any taxable year is its taxable income, determined without regard to net capital gain (that is, the excess of net long-term capital gains over net short-term capital losses) and with certain other adjustments. Any taxable income, including any net capital gain, that the Trust does not distribute to its Unitholders in a timely manner will be subject to U.S. federal income tax at regular corporate rates.
 
A RIC will be subject to a nondeductible 4% excise tax on certain amounts that it fails to distribute during each calendar year. In order to avoid this excise tax, a RIC must distribute during each calendar year an amount at least equal to the sum of (i) 98% of its ordinary taxable income for the calendar year, (ii) 98.2% of its capital gain net income for the one-year period ended on October 31 of the calendar year and (iii) any ordinary income and capital gains for previous years that were not distributed during those years. For purposes of determining whether the Trust has met this distribution requirement, (i) certain ordinary gains and losses that would otherwise be taken into account for the portion of the calendar year after October 31 will be treated as arising on January 1 of the following calendar year and (ii) the Trust will be deemed to have distributed any income or gains on which it has paid U.S. federal income tax.
 
If the Trust failed to qualify as a RIC or failed to satisfy the 90% distribution requirement in any taxable year, the Trust would be subject to U.S. federal income tax at regular corporate rates on its taxable income, including its net capital gain, even if such income were distributed to its Unitholders, and all distributions out of earnings and profits would be taxable as dividend income. Such distributions generally would


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be eligible for the dividends-received deduction in the case of corporate U.S. Holders and, prior to January 1, 2013, would constitute “qualified dividend income” for individual U.S. Holders. See “Tax Consequences to U.S. Holders — Distributions.” In addition, the Trust could be required to recognize unrealized gains, pay taxes and make distributions (which could be subject to interest charges) before requalifying for taxation as a RIC. If the Trust fails to satisfy the income test or diversification test described above, however, it may be able to avoid losing its status as a RIC by timely curing such failure, paying a tax and/or providing notice of such failure to the Internal Revenue Service (the “IRS”).
 
In order to meet the distribution requirements necessary to be exempt from U.S. federal income tax on its distributed income, the Trust may be required to make distributions in excess of the yield performance of the Portfolio Securities.
 
Tax Consequences to U.S. Holders
 
Distributions.   Distributions of the Trust’s ordinary income and net short-term capital gains will, except as described below with respect to distributions of “qualified dividend income,” generally be taxable to U.S. Holders as ordinary income to the extent such distributions are paid out of the Trust’s current or accumulated earnings and profits, as determined for U.S. federal income tax purposes. Distributions (or deemed distributions, as described below), if any, of net capital gains will be taxable as long-term capital gains, regardless of the length of time the U.S. Holder has owned Units. A distribution of an amount in excess of the Trust’s current and accumulated earnings and profits will be treated as a return of capital that will be applied against and reduce the U.S. Holder’s basis in its Units. To the extent that the amount of any such distribution exceeds the U.S. Holder’s basis in its Units, the excess will be treated as gain from a sale or exchange of the Units.
 
The ultimate tax characterization of the distributions that the Trust makes during any taxable year cannot be determined until after the end of the taxable year. As a result, it is possible that the Trust will make total distributions during a taxable year in an amount that exceeds its current and accumulated earnings and profits. Return-of-capital distributions may result if, for example, the Trust makes distributions of cash amounts deposited in connection with Portfolio Deposits. Return-of-capital distributions may be more likely to occur in periods during which the number of outstanding Units fluctuates significantly.
 
Distributions of “qualified dividend income” to an individual or other non-corporate U.S. Holder during a taxable year of such U.S. Holder beginning before January 1, 2013 will be treated as “qualified dividend income” and will therefore be taxed at rates applicable to long-term capital gains, provided that the U.S. Holder meets certain holding period and other requirements with respect to its Units and that the Trust meets certain holding period and other requirements with respect to the underlying shares of stock. It is unclear whether any legislation will be enacted that


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would extend this treatment to taxable years beginning on or after January 1, 2013. “Qualified dividend income” generally includes dividends from domestic corporations and dividends from foreign corporations that meet certain specified criteria.
 
Dividends distributed by the Trust to a corporate U.S. Holders will qualify for the dividends-received deduction only to the extent that the dividends consist of distributions of qualifying dividends received by the Trust. In addition, any such dividends-received deduction will be disallowed or reduced if the corporate U.S. Holder fails to satisfy certain requirements, including a holding period requirement, with respect to its Units.
 
The Trust intends to distribute its net capital gains at least annually. If, however, the Trust retains any net capital gains for reinvestment, it may elect to treat such net capital gains as having been distributed to its Unitholders. If the Trust makes such an election, each U.S. Holder will be required to report its share of such undistributed net capital gain as long-term capital gain and will be entitled to claim its share of the U.S. federal income taxes paid by the Trust on such undistributed net capital gain as a credit against its own U.S. federal income tax liability, if any, and to claim a refund on a properly-filed U.S. federal income tax return to the extent that the credit exceeds such tax liability. In addition, each U.S. Holder will be entitled to increase the adjusted tax basis of its Units by the difference between its shares of such undistributed net capital gain and the related credit. There can be no assurance that the Trust will make this election if it retains all or a portion of its net capital gain for a taxable year.
 
Because the taxability of a distribution depends upon the Trust’s current and accumulated earnings and profits, a distribution received shortly after an acquisition of Units may be taxable, even though, as an economic matter, the distribution represents a return of the U.S. Holder’s initial investment.
 
Although dividends generally will be treated as distributed when paid, dividends declared in October, November or December, payable to Unitholders of record on a specified date in one of those months, and paid during the following January, will be treated as having been distributed by the Trust and received by the Unitholders on December 31, of the year in which declared.
 
Sales and Redemptions of Units.   Upon the sale or other disposition of Units, a U.S. Holder will recognize gain or loss in an amount equal to the difference, if any, between the amount realized on the sale or other disposition and the U.S. Holder’s adjusted tax basis in the relevant Units. Such gain or loss generally will be long-term gain capital gain or loss if the U.S. Holder’s holding period for the relevant Units is more than one year. Under current law, net capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at lower rates than the rates applicable to ordinary income.


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Losses recognized by a U.S. Holder on the sale or exchange of Units held for six months or less will be treated as long-term capital losses to the extent of any distribution of long-term capital gain received (or deemed received, as discussed above) with respect to such Units. In addition, no loss will be allowed on a sale or other disposition of Units if the U.S. Holder acquires, or enters into a contract or option to acquire, Units within 30 days before or after such sale or other disposition. In such a case, the basis of the Units acquired will be adjusted to reflect the disallowed loss.
 
If a U.S. Holder receives an in-kind distribution in redemption of Units, the U.S. Holder will recognize gain or loss in an amount equal to the difference between the sum of the aggregate fair market value as of the redemption date of the stocks and cash received in the redemption and the U.S. Holder’s adjusted tax basis in the relevant Units. The U.S. Holder will generally have an initial tax basis in the distributed stocks equal to their respective fair market values on the redemption date. The IRS may assert that any resulting loss may not be deducted on the ground that there has been no material change in the U.S. Holder’s economic position. The Trust will not recognize gain or loss for U.S. federal income tax purposes on an in-kind distribution of stocks.
 
Under U.S. Treasury regulations, if a U.S. Holder recognizes losses with respect to Units of $2 million or more for an individual U.S. Holder or $10 million or more for a corporate U.S. Holder, the U.S. Holder must file with the IRS a disclosure statement on IRS Form 8886. Direct shareholders of portfolio securities are in many cases exempted from this reporting requirement, but under current guidance, shareholders of a RIC are not exempted. The fact that a loss is reportable under these regulations does not affect the legal determination of whether the U.S. Holder’s treatment of the loss is proper. Certain states may have similar disclosure requirements.
 
Portfolio Deposits.   Upon the transfer of a Portfolio Deposit to the Trust, a U.S. Holder will generally recognize gain or loss with respect to each stock included in the Portfolio Deposit in an amount equal to the difference, if any, between the amount realized with respect to such stock and the U.S. Holder’s basis in the stock. The amount realized with respect to each stock included in a Portfolio Deposit is determined by allocating among all of the stocks included in the Portfolio Deposit an amount equal to the fair market value of the Creation Units received (determined as of the date of transfer of the Portfolio Deposit) plus the amount of any cash received from the Trust, reduced by the amount of any cash paid to the Trust. This allocation is made among such stocks in accordance with their relative fair market values as of the date of transfer of the Portfolio Deposit. The IRS may assert that any loss resulting from the transfer of a Portfolio Deposit to the Trust may not be deducted on the ground that there has been no material change in the economic position of the


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U.S. Holder. The Trust will not recognize gain or loss for U.S. federal income tax purposes on the issuance of Creation Units in exchange for Portfolio Deposits.
 
Backup Withholding and Information Returns.   Payments on the Units and proceeds from a sale or other disposition of Units will generally be subject to information reporting. A U.S. Holder will be subject to backup withholding on all such amounts unless (i) the U.S. Holder is an exempt recipient or (ii) the U.S. Holder provides its correct taxpayer identification number (generally, on IRS Form W-9) and certifies that it is not subject to backup withholding. Backup withholding is not an additional tax. Any amounts withheld pursuant to the backup withholding rules will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is furnished to the IRS on a timely basis.
 
Tax Consequences to Non-U.S. Holders
 
A “Non-U.S. Holder” is a person that, for U.S. federal income tax purposes, is a beneficial owner of Units and is a nonresident alien individual, a foreign corporation, a foreign trust or a foreign estate. The U.S. federal income taxation of a Non-U.S. Holder depends on whether the income that the Non-U.S. Holder derives from the Trust is “effectively connected” with a trade or business that the Non-U.S. Holder conducts in the United States.
 
If the income that a Non-U.S. Holder derives from the Trust is not “effectively connected” with a U.S. trade or business conducted by such Non-U.S. Holder, distributions of “investment company taxable income” to such Non-U.S. Holder will be subject to U.S. federal withholding tax at a rate of 30% (or lower rate under an applicable tax treaty). Provided that certain requirements are satisfied, however, this withholding tax will not be imposed on dividends paid by the Trust in its taxable years beginning before January 1, 2012 to the extent that the underlying income out of which the dividends are paid consists of U.S.-source interest income or short-term capital gains that would not have been subject to U.S. withholding tax if received directly by the Non-U.S. Holder (“interest-related dividends” and “short-term capital gain dividends,” respectively). It is unclear whether any legislation will be enacted that would extend this exemption from withholding to the Trust’s taxable years beginning on or after January 1, 2012.
 
A Non-U.S. Holder whose income from the Trust is not “effectively connected” with a U.S. trade or business will generally be exempt from U.S. federal income tax on capital gain dividends and any amounts retained by the Trust that are designated as undistributed capital gains. In addition, such a Non-U.S. Holder will generally be exempt from U.S. federal income tax on any gains realized upon the sale or exchange of Units. If, however, such a Non-U.S. Holder is a nonresident alien individual and is physically present in the United States for 183 days or more during the taxable year and meets certain other requirements, such capital gain dividends, undistributed


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capital gains and gains from the sale or exchange of Units, net of certain U.S. source capital losses, will be subject to a 30% U.S. tax.
 
If the income from the Trust is “effectively connected” with a U.S. trade or business carried on by a Non-U.S. Holder, any distributions of “investment company taxable income,” any capital gain dividends, any amounts retained by the Trust that are designated as undistributed capital gains and any gains realized upon the sale or exchange of Units will be subject to U.S. federal income tax, on a net income basis at the rates applicable to U.S. Holders. If the Non-U.S. Holder is a corporation, it may also be subject to the U.S. branch profits tax.
 
Information returns will be filed with the Internal Revenue Service (the “IRS”) in connection with certain payments on the Units. A Non-U.S. Holder may be subject to backup withholding on distributions in respect of the Units or on proceeds from a sale or other disposition of Units if such Non-U.S. Holder does not certify its non-U.S. status under penalties of perjury or otherwise establish an exemption.
 
Backup withholding is not an additional tax. Any amounts withheld pursuant to the backup withholding rules will be allowed as a credit against the Non-U.S. Holder’s U.S. federal income tax liability, if any, and may entitle the Non-U.S. Holder to a refund, provided that the required information is furnished to the IRS on a timely basis.
 
Recent legislation generally imposes withholding at a rate of 30% on payments to certain foreign entities (including financial intermediaries), after December 31, 2012, of U.S.-source dividends and the gross proceeds of dispositions of property that can produce U.S.-source dividends, unless the relevant foreign entity satisfies various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in, or accounts with, those entities). Non-U.S. Holders should consult their tax advisors regarding the possible implications of this legislation on their investment in Units.
 
In order to qualify for the exemption from U.S. withholding tax on “interest-related dividends,” to qualify for an exemption from U.S. backup withholding and to qualify for a reduced rate of U.S. withholding tax on Trust distributions pursuant to an income tax treaty, a Non-U.S. Holder must generally deliver to the Trust a properly executed IRS form (generally, Form W-8BEN). In order to claim a refund of any Trust-level taxes imposed on undistributed net capital gains, any withholding taxes or any backup withholding, a Non-U.S. Holder must obtain a U.S. taxpayer identification number and file a U.S. federal income tax return, even if the Non-U.S. Holder would not otherwise be required to obtain a U.S. taxpayer identification number or file a U.S. income tax return.


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BENEFIT PLAN INVESTOR CONSIDERATIONS
 
In considering the advisability of an investment in Units, fiduciaries of pension, profit sharing or other tax-qualified retirement plans and funded welfare plans (collectively, “Plans”) subject to the fiduciary responsibility requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), should consider whether an investment in Units (a) is permitted by the documents and instruments governing the Plan, (b) is made solely in the interest of participants and beneficiaries of the Plans, (c) is consistent with the prudence and diversification requirements of ERISA, and that the acquisition and holding of Units does not result in a non-exempt “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code. Individual retirement account (“IRA”) investors and certain other investors not subject to ERISA, such as Keogh Plans, should consider that such arrangements may make only such investments as are authorized by the governing instruments and that IRAs, Keogh Plans and certain other types of arrangements are subject to the prohibited transaction rules of Section 4975 of the Code. Employee benefit plans that are government plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA) and non-U.S. plans (as described in Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code. The fiduciaries of governmental plans should, however, consider the impact of their respective state pension codes or other applicable law, which may include restrictions similar to ERISA and Section 4975 of the Code, on investments in Units and the considerations discussed above, to the extent such considerations apply. Each purchaser and transferee of a Unit who is subject to ERISA or Section 4975 of the Code or any similar laws will be deemed to have represented by its acquisition and holding of each Unit that its acquisition and holding of any Units does not give rise to a non-exempt prohibited transaction under ERISA, the Code or any similar law.
 
As described in the preceding paragraph, ERISA imposes certain duties on Plan fiduciaries, and ERISA and/or Section 4975 of the Code prohibit certain transactions involving “plan assets” between Plans or IRAs and persons who have certain specified relationships to the Plan or IRA (that is, “parties in interest” as defined in ERISA or “disqualified persons” as defined in the Code). The fiduciary standards and prohibited transaction rules that apply to an investment in Units by a Plan will not apply to transactions involving the Trust’s assets because the Trust is an investment company registered under the Investment Company Act of 1940. As such, the Trust’s assets are not deemed to be “plan assets” under ERISA and U.S. Department of Labor regulations by virtue of Plan and/or IRA investments in Units.
 
Each purchaser or transferee should consult legal counsel before purchasing the Units. Nothing herein shall be construed as a representation that an investment in the Units would meet any or all of the relevant legal requirements with respect to investments by, or is appropriate for, an employee benefit plan subject to ERISA or Section 4975 of the Code or a similar law.


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CONTINUOUS OFFERING OF UNITS
 
Creation Units are offered continuously to the public by the Trust through the Distributor. Persons making Portfolio Deposits and creating Creation Units receive no fees, commissions or other form of compensation or inducement of any kind from the Sponsor or the Distributor, and no such person has any obligation or responsibility to the Sponsor or Distributor to effect any sale or resale of Units.
 
Because new Units can be created and issued on an ongoing basis, at any point during the life of the Trust, a “distribution”, as such term is used in the Securities Act of 1933 (“1933 Act”), may be occurring. Broker-dealers and other persons are cautioned that some of their activities may result in their being deemed participants in a distribution in a manner which could render them statutory underwriters and subject them to the prospectus-delivery and liability provisions of the 1933 Act. For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes Creation Units after placing a creation order with the Distributor, breaks them down into the constituent Units and sells the Units directly to its customers; or if it chooses to couple the creation of a supply of new Units with an active selling effort involving solicitation of secondary market demand for Units. A determination of whether one is an underwriter must take into account all the facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of all the activities that could lead to categorization as an underwriter.
 
Dealers who are not “underwriters” but are participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus dealing with Units that are part of an “unsold allotment” within the meaning of Section 4(3)(C) of the 1933 Act, would be unable to take advantage of the prospectus-delivery exemption provided by Section 4(3) of the 1933 Act.
 
The Sponsor intends to qualify Units in states selected by the Sponsor and through broker-dealers who are members of FINRA. Investors intending to create or redeem Creation Units in transactions not involving a broker-dealer registered in such investor’s state of domicile or residence should consult their legal advisor regarding applicable broker-dealer or securities regulatory requirements under the state securities laws prior to such creation or redemption.
 
DIVIDEND REINVESTMENT SERVICE
 
No dividend reinvestment service is provided by the Trust. Broker-dealers, at their own discretion, may offer a dividend reinvestment service under which additional Units are purchased in the secondary market at current market prices. Investors should consult their broker dealer for further information regarding any dividend reinvestment service offered by such broker dealer.


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Distributions in cash that are reinvested in additional Units through of a dividend reinvestment service, if offered by an investor’s broker-dealer, will nevertheless be taxable dividends to the same extent as if such dividends had been received in cash.
 
EXPENSES OF THE TRUST
 
Ordinary operating expenses of the Trust are currently being accrued at an annual rate of less than 0.18%. Future accruals will depend primarily on the level of the Trust’s net assets and the level of Trust expenses. There is no guarantee that the Trust’s ordinary operating expenses will not exceed 0.18% of the Trust’s daily net asset value and such rate may be changed without notice.
 
Until further notice, the Sponsor has undertaken that it will not permit the ordinary operating expenses of the Trust, as calculated by the Trustee, to exceed an amount that is 18/100 of 1% (0.18%) per annum of the daily NAV of the Trust after taking into account any expense offset credits. To the extent the ordinary operating expenses of the Trust do exceed such 0.18% amount, the Sponsor will reimburse the Trust for, or assume, the excess. The Sponsor retains the ability to be repaid by the Trust for expenses so reimbursed or assumed to the extent that subsequently during the fiscal year expenses fall below the 0.18% per annum level on any given day. For purposes of this undertaking, ordinary operating expenses of the Trust do not include taxes, brokerage commissions and any extraordinary non-recurring expenses, including the cost of any litigation to which the Trust or the Trustee may be a party. The Sponsor may discontinue this undertaking or renew it for a specified period of time, or may choose to reimburse or assume certain Trust expenses in later periods to keep Trust expenses at a level it believes to be attractive to investors. In any event, on any day and during any period over the life of the Trust, total fees and expenses of the Trust may exceed 0.18% per annum.
 
Subject to any applicable cap, the Sponsor may charge the Trust a special fee for certain services the Sponsor may provide to the Trust which would otherwise be provided by the Trustee in an amount not to exceed the actual cost of providing such services. The Sponsor or the Trustee from time to time may voluntarily assume some expenses or reimburse the Trust so that total expenses of the Trust are reduced. Neither the Sponsor nor the Trustee is obligated to do so and either one or both parties may discontinue such voluntary assumption of expenses or reimbursement at any time without notice.
 
The following charges are or may be accrued and paid by the Trust: (a) the Trustee’s fee; (b) fees payable to transfer agents for the provision of transfer agency services; (c) fees of the Trustee for extraordinary services performed under the Trust Agreement; (d) various governmental charges; (e) any taxes, fees and charges payable by the Trustee with respect to Units (whether in Creation Units or otherwise);


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(f) expenses and costs of any action taken by the Trustee or the Sponsor to protect the Trust and the rights and interests of Beneficial Owners of Units (whether in Creation Units or otherwise); (g) indemnification of the Trustee or the Sponsor for any losses, liabilities or expenses incurred by it in the administration of the Trust; (h) expenses incurred in contacting Beneficial Owners of Units during the life of the Trust and upon termination of the Trust; and (i) other out-of-pocket expenses of the Trust incurred pursuant to actions permitted or required under the Trust Agreement.
 
In addition, the following expenses are or may be charged to the Trust: (a) reimbursement to the Sponsor of amounts paid by it to Dow Jones in respect of annual licensing fees pursuant to the License Agreement; (b) federal and state annual registration fees for the issuance of Units; and (c) expenses of the Sponsor relating to the printing and distribution of marketing materials describing Units and the Trust (including, but not limited to, associated legal, consulting, advertising, and marketing costs and other out-of-pocket expenses such as printing). Pursuant to the provisions of an exemptive order, the expenses set forth in this paragraph may be charged to the Trust by the Trustee in an amount equal to the actual costs incurred, but in no case shall such charges exceed 20/100 of 1% (0.20%) per annum of the daily NAV of the Trust.
 
With respect to the marketing expenses described in item (c) above, the Sponsor has entered into an agreement with the Marketing Agent, pursuant to which the Marketing Agent has agreed to market and promote the Trust, the Marketing Agent is reimbursed by the Sponsor for the expenses it incurs for providing such services out of amounts that the Trust reimburses the Sponsor.
 
If the income received by the Trust in the form of dividends and other distributions on Portfolio Securities is insufficient to cover Trust expenses, the Trustee may make advances to the Trust to cover such expenses. Otherwise, the Trustee may sell Portfolio Securities in an amount sufficient to pay such expenses. The Trustee may reimburse itself in the amount of any such advance, together with interest thereon at a percentage rate equal to the then current overnight federal funds rate, by deducting such amounts from (a) dividend payments or other income of the Trust when such payments or other income is received, (b) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (c) the sale of Portfolio Securities. Notwithstanding the foregoing, if any advance remains outstanding for more than forty-five (45) Business Days, the Trustee may sell Portfolio Securities to reimburse itself for such advance and any accrued interest thereon. These advances will be secured by a lien on the assets of the Trust in favor of the Trustee. The expenses of the Trust are reflected in the NAV of the Trust.
 
For services performed under the Trust Agreement, the Trustee is paid a fee at an annual rate of 6/100 of 1% to 10/100 of 1% of the NAV of the Trust, as shown below, such percentage amount to vary depending on the NAV of the Trust, plus or minus the Adjustment Amount. The compensation is computed on each Business Day based on


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the NAV of the Trust on such day, and the amount thereof is accrued daily and paid quarterly. To the extent that the amount of the Trustee’s compensation, before any adjustment in respect of the Adjustment Amount, is less than specified amounts, the Sponsor has agreed to pay the amount of any such shortfall. Notwithstanding the fee schedule set forth in the table below, in the fourth year of the Trust’s operation and in subsequent years, the Trustee shall be paid a minimum fee of $400,000 per annum as adjusted by the CPI-U to take effect at the beginning of the fourth year and each year thereafter. To the extent that the amount of the Trustee’s compensation, prior to any adjustment in respect of the Adjustment Amount, is less than specified amounts, the Sponsor has agreed to pay the amount of any such shortfall. The Trustee also may waive all or a portion of such fee.
 
Trustee Fee Scale
 
     
Net Asset Value of the Trust
 
Fee as a Percentage of Net Asset Value of the Trust
 
$0 – $499,999,999
  10/100 of 1% per annum plus or minus the Adjustment Amount*
$500,000,000 – $2,499,999,999
  8/100 of 1% per annum plus or minus the Adjustment Amount*
$2,500,000,000 and above
  6/100 of 1% per annum plus or minus the Adjustment Amount*
 
 
* The fee indicated applies to that portion of the net asset value of the Trust which falls in the size category indicated.
 
As of October 31, 2010, and as of December 31, 2010, the NAV of the Trust was $8,058,639,107 and $8,692,197,339, respectively. No representation is made as to the actual NAV of the Trust on any future date as it is subject to change at any time due to fluctuations in the market value of the Portfolio Securities or to creations or redemptions made in the future.
 
The Adjustment Amount is calculated at the end of each quarter and applied against the Trustee’s fee for the following quarter. “Adjustment Amount” is an amount which is intended, depending upon the circumstances, either to (a) reduce the Trustee’s fee by the amount that the Transaction Fees paid on creation and redemption exceed the costs of those activities, and by the amount of excess earnings on cash held for the benefit of the Trust ** or (b) increase the Trustee’s fee by the amount that the Transaction Fee (plus additional amounts paid in connection with creations or redemptions outside the Clearing Process), paid on creations or redemptions, falls short of the actual costs of these activities. If in any quarter the Adjustment Amount exceeds the fee payable to the Trustee as set forth above, the Trustee uses such excess amount to reduce other Trust expenses, subject to certain federal tax limitations. To the extent that the amount of such excess exceeds the Trust’s expenses for such quarter, any remaining excess is retained by the Trustee as part of its compensation. If in any quarter the costs of processing creations and redemptions exceed the amounts charged as a Transaction Fee (plus the additional amounts paid in connection with
 
 
  ** The excess earnings on cash amount is currently calculated, and applied, on a monthly basis.


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creations or redemptions outside the Clearing Process) net of the excess earnings, if any, on cash held for the benefit of the Trust, the Trustee will augment the Trustee’s fee by the resulting Adjustment Amount. The net Adjustment Amount is usually a credit to the Trust. The amount of the earnings credit will be equal to the then current Federal Funds Rate, as reported in nationally distributed publications, multiplied by each day’s daily cash balance in the Trust’s cash account, reduced by the amount of reserves for that account required by the Federal Reserve Board of Governors.
 
VALUATION
 
The NAV of the Trust is computed as of the Evaluation Time shown under “Summary — Essential Information” on each Business Day. The NAV of the Trust on a per Unit basis is determined by subtracting all liabilities (including accrued expenses and dividends payable) from the total value of the Portfolio and other assets and dividing the result by the total number of outstanding Units. For the most recent NAV information, please go to www.spdrs.com.
 
The value of the Portfolio is determined by the Trustee in good faith in the following manner. If Portfolio Securities are listed on one or more national securities exchanges, such evaluation is generally based on the closing sale price on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the exchange which is deemed to be the principal market thereof or, if there is no such appropriate closing price on such exchange at the last sale price (unless the Trustee deems such price inappropriate as a basis for evaluation). If the stocks are not so listed or, if so listed and the principal market therefor is other than on such exchange or there is no such closing sale price available, such evaluation shall generally be made by the Trustee in good faith based on the closing price on the over-the-counter market (unless the Trustee deems such price inappropriate as a basis for evaluation) or if there is no such appropriate closing price, (a) on current bid prices, (b) if bid prices are not available, on the basis of current bid prices for comparable stocks, (c) by the Trustee’s appraising the value of the stocks in good faith on the bid side of the market, or (d) by any combination thereof.


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ADMINISTRATION OF THE TRUST
 
Distributions to Beneficial Owners
 
The regular monthly ex-dividend date for Units is the third Friday in each calendar month, unless such day is not a Business Day, in which case the ex-dividend date is the immediately preceding Business Day (“Ex-Dividend Date”). Beneficial Owners reflected on the records of DTC and the DTC Participants on the second Business Day following the Ex-Dividend Date (“Record Date”) are entitled to receive an amount representing dividends accumulated on Portfolio Securities through the monthly dividend period which ends on the Business Day preceding such Ex-Dividend Date (including stocks with ex-dividend dates falling within such monthly dividend period), net of fees and expenses, accrued daily for such period. For the purposes of all dividend distributions, dividends per Unit are calculated at least to the nearest 1/1000th of $0.01. The payment of dividends is made on the Monday preceding the third (3rd) Friday of the next calendar month or the next subsequent Business Day if such Monday is not a Business Day (“Dividend Payment Date”). Dividend payments are made through DTC and the DTC Participants to Beneficial Owners then of record with funds received from the Trustee.
 
Dividends payable to the Trust in respect of Portfolio Securities are credited by the Trustee to a non-interest bearing account as of the date on which the Trust receives such dividends. Other moneys received by the Trustee in respect of the Portfolio, including but not limited to the Cash Component, the Cash Redemption Payment, all moneys realized by the Trustee from the sale of options, warrants or other similar rights received or distributed in respect of Portfolio Securities as dividends or distributions and capital gains resulting from the sale of Portfolio Securities are credited by the Trustee to a non-interest bearing account. All funds collected or received are held by the Trustee without interest until distributed in accordance with the provisions of the Trust Agreement. To the extent the amounts credited to the account generate interest income or an equivalent benefit to the Trustee, such interest income or benefit is used to reduce the Trustee’s annual fee.
 
Any additional distributions the Trust may need to make so as to continue to qualify as a RIC under the Code and to avoid U.S. federal excise tax would consist of (a) an increase in the distribution scheduled for January to include any amount by which the Trust’s estimated “investment company taxable income” and net capital gains for a year exceeds the amount of Trust taxable income previously distributed with respect to such year or, if greater, the minimum amount required to avoid imposition of such excise tax, and (b) a distribution soon after actual annual investment company taxable income and net capital gains of the Trust have been computed, of the amount, if any, by which such actual income exceeds the distributions already made. The NAV of the Trust is reduced in direct proportion to the amount of such additional distributions. The magnitude of the additional


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distributions, if any, depends upon a number of factors, including the level of redemption activity experienced by the Trust. Because substantially all proceeds from the sale of stocks in connection with adjustments to the Portfolio are used to purchase shares of Index Securities, the Trust may have no cash or insufficient cash with which to pay such additional distributions. In that case, the Trustee typically has to sell an approximately equal number of shares of each of the Portfolio Securities sufficient to produce the cash required to make such additional distributions.
 
The Trustee may declare special dividends if such action is necessary or advisable to preserve the status of the Trust as a regulated investment company or to avoid imposition of income or excise taxes on undistributed income, and to vary the frequency with which periodic distributions are made (e.g., from monthly to quarterly) if it is determined by the Sponsor and the Trustee that such a variance would be advisable to facilitate compliance with the rules and regulations applicable to regulated investment companies or would otherwise be advantageous to the Trust. In addition, the Trustee may change the regular ex-dividend date for Units to another date within the month or the quarter if it is determined by the Sponsor and the Trustee that such a change would be advantageous to the Trust. Notice of any such variance or change shall be provided to Beneficial Owners via DTC and the DTC Participants.
 
As soon as practicable after notice of termination of the Trust, the Trustee will distribute via DTC and the DTC Participants to each Beneficial Owner redeeming Creation Units before the termination date specified in such notice a portion of Portfolio Securities and cash as described above. Otherwise, the Trustee will distribute to each Beneficial Owner (whether in Creation Unit size aggregations or otherwise), as soon as practicable after termination of the Trust, such Beneficial Owner’s pro rata share of the NAV of the Trust.
 
All distributions are made by the Trustee through DTC and the DTC Participants to Beneficial Owners as recorded on the book entry system of DTC and the DTC Participants.
 
The settlement date for the creation of Units or the purchase of Units in the secondary market must occur on or before the Record Date in order for such creator or purchaser to receive a distribution on the next Dividend Payment Date. If the settlement date for such creation or a secondary market purchase occurs after the Record Date, the distribution will be made to the prior securityholder or Beneficial Owner as of such Record Date.
 
Statements to Beneficial Owners; Annual Reports
 
With each distribution, the Trustee furnishes for distribution to Beneficial Owners a statement setting forth the amount being distributed, expressed as a dollar amount per Unit.


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Promptly after the end of each fiscal year, the Trustee furnishes to the DTC Participants for distribution to each person who was a Beneficial Owner of Units at the end of such fiscal year, an annual report of the Trust containing financial statements audited by independent accountants of nationally recognized standing and such other information as may be required by applicable laws, rules and regulations.
 
Rights of Beneficial Owners
 
Beneficial Owners may sell Units in the secondary market, but must accumulate enough Units to constitute a full Creation Unit in order to redeem through the Trust. The death or incapacity of any Beneficial Owner does not operate to terminate the Trust nor entitle such Beneficial Owner’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust.
 
Beneficial Owners shall not (a) have the right to vote concerning the Trust, except with respect to termination and as otherwise expressly set forth in the Trust Agreement, (b) in any manner control the operation and management of the Trust, or (c) be liable to any other person by reason of any action taken by the Sponsor or the Trustee. The Trustee has the right to vote all of the voting stocks in the Trust. The Trustee votes the voting stocks of each issuer in the same proportionate relationship as all other shares of each such issuer are voted to the extent permissible and, if not permitted, abstains from voting. The Trustee shall not be liable to any person for any action or failure to take any action with respect to such voting matters.
 
Amendments to the Trust Agreement
 
The Trust Agreement may be amended from time to time by the Trustee and the Sponsor without the consent of any Beneficial Owners (a) to cure any ambiguity or to correct or supplement any provision that may be defective or inconsistent or to make such other provisions as will not adversely affect the interests of Beneficial Owners; (b) to change any provision as may be required by the SEC; (c) to add or change any provision as may be necessary or advisable for the continuing qualification of the Trust as a “regulated investment company” under the Code; (d) to add or change any provision as may be necessary or advisable if NSCC or DTC is unable or unwilling to continue to perform its functions; and (e) to add or change any provision to conform the adjustments to the Portfolio and the Portfolio Deposit to changes, if any, made by Dow Jones in its method of determining the DJIA. The Trust Agreement may also be amended by the Sponsor and the Trustee with the consent of the Beneficial Owners of 51% of the outstanding Units to add provisions to, or change or eliminate any of the provisions of, the Trust Agreement or to modify the rights of Beneficial Owners; although, the Trust Agreement may not be amended without the consent of the Beneficial Owners of all outstanding Units if such amendment would (a) permit the


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acquisition of any securities other than those acquired in accordance with the terms and conditions of the Trust Agreement; (b) reduce the interest of any Beneficial Owner in the Trust; or (c) reduce the percentage of Beneficial Owners required to consent to any such amendment.
 
Promptly after the execution of an amendment, the Trustee receives from DTC, pursuant to the terms of the Depository Agreement, a list of all DTC Participants holding Units. The Trustee inquires of each such DTC Participant as to the number of Beneficial Owners for whom such DTC Participant holds Units, and provides each such DTC Participant with sufficient copies of a written notice of the substance of such amendment for transmittal by each such DTC Participant to Beneficial Owners.
 
Termination of the Trust Agreement
 
The Trust Agreement provides that the Sponsor has the discretionary right to direct the Trustee to terminate the Trust if at any time the NAV of the Trust is less than $350,000,000, as such dollar amount shall be adjusted for inflation in accordance with the CPI-U. This adjustment is to take effect at the end of the fourth year following the Initial Date of Deposit and at the end of each year thereafter and to be made so as to reflect the percentage increase in consumer prices as set forth in the CPI-U for the twelve month period ending in the last month of the preceding fiscal year.
 
The Trust may be terminated (a) by the agreement of the Beneficial Owners of 66 2 / 3 % of outstanding Trust Units; (b) if DTC is unable or unwilling to continue to perform its functions as set forth under the Trust Agreement and a comparable replacement is unavailable; (c) if NSCC no longer provides clearance services with respect to Trust Units, or if the Trustee is no longer a participant in NSCC; (d) if Dow Jones ceases publishing the DJIA; (e) if the License Agreement is terminated; or (f) if Trust Units are delisted from the Exchange. The Trust will also terminate by its terms on the Termination Date.
 
The Trust will terminate if either the Sponsor or the Trustee resigns or is removed and a successor is not appointed. The dissolution of the Sponsor or its ceasing to exist as a legal entity for any cause whatsoever, however, will not cause the termination of the Trust Agreement or the Trust unless the Trustee deems termination to be in the best interests of Beneficial Owners.
 
Prior written notice of the termination of the Trust must be given at least twenty (20) days before termination of the Trust to all Beneficial Owners. The notice must set forth the date on which the Trust will be terminated, the period during which the assets of the Trust will be liquidated, the date on which Beneficial Owners of Trust Units (whether in Creation Unit size aggregations or otherwise) will receive in cash the NAV of the Units held, and the date upon which the books of the Trust shall be closed. The notice shall further state that, as of the date thereof and thereafter,


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neither requests to create additional Creation Units nor Portfolio Deposits will be accepted, and that, as of the date thereof and thereafter, the portfolio of stocks delivered upon redemption shall be identical in composition and weighting to Portfolio Securities as of such date rather than the stock portion of the Portfolio Deposit as in effect on the date request for redemption is deemed received. Beneficial Owners of Creation Units may, in advance of the Termination Date, redeem in kind directly from the Trust.
 
Within a reasonable period after the Termination Date, the Trustee shall, subject to any applicable provisions of law, use its best efforts to sell all of the Portfolio Securities not already distributed to redeeming Beneficial Owners of Creation Units. The Trustee shall not be liable for or responsible in any way for depreciation or loss incurred because of any such sale. The Trustee may suspend such sales upon the occurrence of unusual or unforeseen circumstances, including but not limited to a suspension in trading of a stock, the closing or restriction of trading on a stock exchange, the outbreak of hostilities, or the collapse of the economy. The Trustee shall deduct from the proceeds of sale its fees and all other expenses and transmit the remaining amount to DTC for distribution, together with a final statement setting forth the computation of the gross amount distributed.
 
Trust Units not redeemed before termination of the Trust will be redeemed in cash at NAV based on the proceeds of the sale of Portfolio Securities, with no minimum aggregation of Trust Units required.
 
SPONSOR
 
The Sponsor is a Delaware limited liability company incorporated on April 6, 1998 with offices c/o NYSE Euronext, 11 Wall Street, New York, New York 10005. The Sponsor’s Internal Revenue Service Employer Identification Number is 26-4126158. On October 1, 2008, the Sponsor became an indirect wholly-owned subsidiary of NYSE Euronext following the acquisition by NYSE Euronext of the American Stock Exchange LLC (which was renamed “NYSE Alternext US LLC” and later, “NYSE Amex LLC”) and all of its subsidiaries. NYSE Euronext is a “control person” of the Sponsor as such term is defined in the Securities Act of 1933.
 
The Sponsor, at its own expense, may from time to time provide additional promotional incentives to brokers who sell Units to the public. In certain instances, these incentives may be provided only to those brokers who meet certain threshold requirements for participation in a given incentive program, such as selling a significant number of Units within a specified period.
 
If at any time the Sponsor fails to undertake or perform or becomes incapable of undertaking or performing any of the duties required under the Trust Agreement, or resigns, or becomes bankrupt or its affairs are taken over by public authorities, the Trustee may appoint a successor Sponsor, agree to act as Sponsor itself, or may


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terminate the Trust Agreement and liquidate the Trust. Notice of the resignation or removal of the Sponsor and the appointment of a successor shall be mailed by the Trustee to DTC and the DTC Participants for distribution to Beneficial Owners. Upon a successor Sponsor’s execution of a written acceptance of appointment as Sponsor of the Trust, the successor Sponsor becomes vested with all of the rights, powers, duties and obligations of the original Sponsor. Any successor Sponsor may be compensated at rates deemed by the Trustee to be reasonable.
 
The Sponsor may resign by executing and delivering to the Trustee an instrument of resignation. Such resignation shall become effective upon the appointment of a successor Sponsor and the acceptance of appointment by the successor Sponsor, unless the Trustee either agrees to act as Sponsor or terminates the Trust Agreement and liquidates the Trust. The dissolution of the Sponsor or its ceasing to exist as a legal entity for any cause whatsoever will not cause the termination of the Trust Agreement or the Trust unless the Trustee deems termination to be in the best interests of the Beneficial Owners of Units.
 
The Trust Agreement provides that the Sponsor is not liable to the Trustee, the Trust or to the Beneficial Owners of Units for taking any action, or for refraining from taking any action, made in good faith or for errors in judgment, but is liable only for its own gross negligence, bad faith, willful misconduct or willful malfeasance in the performance of its duties or its reckless disregard of its obligations and duties under the Trust Agreement. The Sponsor is not liable or responsible in any way for depreciation or loss incurred by the Trust because of the sale of any Portfolio Securities. The Trust Agreement further provides that the Sponsor and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Sponsor shall be indemnified from the assets of the Trust and held harmless against any loss, liability or expense incurred without gross negligence, bad faith, willful misconduct or willful malfeasance on the part of any such party in the performance of its duties or reckless disregard of its obligations and duties under the Trust Agreement, including the payment of the costs and expenses of defending against any claim or liability.
 
TRUSTEE
 
The Trustee is a bank and trust company organized under the laws of the Commonwealth of Massachusetts with its principal place of business at One Lincoln Street, Boston, Massachusetts 02111. The Trustee’s Internal Revenue Service Employer Identification Number is 04-1867445. The Trustee is subject to supervision and examination by the Federal Reserve as well as by the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation, and the regulatory authorities of those states and countries in which a branch of the Trustee is located.


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Information regarding Cash Redemption Payment amounts, number of outstanding Trust Units and Transaction Fees may be obtained from the Trustee at the toll-free number: 1-800-545-4189. Complete copies of the Trust Agreement and a list of the parties that have executed a Participant Agreement may be obtained from the Trustee’s principal office.
 
The Trustee may resign and be discharged of the Trust created by the Trust Agreement by executing a notice of resignation in writing and filing such notice with the Sponsor and mailing a copy of the notice of resignation to all DTC Participants reflected on the records of DTC as owning Units for distribution to Beneficial Owners as provided above not less than sixty (60) days before the date such resignation is to take effect. Such resignation becomes effective upon the appointment of and the acceptance of the Trust by a successor Trustee. The Sponsor, upon receiving notice of such resignation, is obligated to use its best efforts to appoint a successor Trustee promptly. If no successor is appointed within sixty (60) days after the date such notice of resignation is given, the Trust shall terminate.
 
If the Trustee becomes incapable of acting as such or is adjudged bankrupt or is taken over by any public authority, the Sponsor may discharge the Trustee and appoint a successor Trustee as provided in the Trust Agreement. The Sponsor shall mail notice of such discharge and appointment via the DTC Participants to Beneficial Owners. Upon a successor Trustee’s execution of a written acceptance of an appointment as Trustee for the Trust, the successor Trustee becomes vested with all the rights, powers, duties and obligations of the original Trustee. A successor Trustee must be (a) a trust company, corporation or national banking association organized, doing business under the laws of the United States or any state thereof; (b) authorized under such laws to exercise corporate trust powers; and (c) at all times have an aggregate capital, surplus and undivided profit of not less than $50,000,000.
 
Beneficial Owners of 51% of the then outstanding Units may at any time remove the Trustee by written instrument(s) delivered to the Trustee and the Sponsor. The Sponsor shall thereupon use its best efforts to appoint a successor Trustee as described above.
 
The Trust Agreement limits the Trustee’s liabilities. It provides, among other things, that the Trustee is not liable for (a) any action taken in reasonable reliance on properly executed documents or for the disposition of monies or stocks or for the evaluations required to be made thereunder, except by reason of its own gross negligence, bad faith, willful malfeasance, willful misconduct, or reckless disregard of its duties and obligations; (b) depreciation or loss incurred by reason of the sale by the Trustee of any Portfolio Securities; (c) any action the Trustee takes where the Sponsor fails to act; and (d) any taxes or other governmental charges imposed upon or in respect of Portfolio Securities or upon the interest thereon or upon it as Trustee or upon or in respect of the Trust which the Trustee may be required to pay under any


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present or future law of the United States of America or of any other taxing authority having jurisdiction.
 
The Trustee and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Trustee will be indemnified from the assets of the Trust and held harmless against any loss, liability or expense incurred without gross negligence, bad faith, willful misconduct, willful malfeasance on the part of such party or reckless disregard of its duties and obligations, arising out of, or in connection with its acceptance or administration of the Trust, including the costs and expenses (including counsel fees) of defending against any claim or liability.
 
DEPOSITORY
 
DTC is a limited purpose trust company and member of the Federal Reserve System.
 
LEGAL OPINION
 
The legality of the Trust Units offered hereby has been passed upon by Davis Polk & Wardwell LLP, New York, New York.
 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
The financial statements as of October 31, 2010 included in this Prospectus have been so included in reliance upon the report of PricewaterhouseCoopers LLP, independent registered public accounting firm, 125 High Street, Boston, Massachusetts, given on the authority of said firm as experts in auditing and accounting.
 
CODE OF ETHICS
 
The Trust has adopted a code of ethics in compliance with Rule 17j-1 requirements under the Investment Company Act of 1940. The code is designed to prevent fraud, deception and misconduct against the Trust and to provide reasonable standards of conduct. The code is on file with the SEC and you may obtain a copy by visiting the SEC at the address listed on the back cover of this prospectus. The code is also available on the SEC’s Internet site at http:/www.sec.gov. A copy may be obtained, after paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by writing the SEC at the address listed on the back cover of this prospectus.
 
DAILY TRUST TRADING INFORMATION
 
The Sponsor makes available daily a list of the names and the required number of shares of each of the securities in the current Portfolio Deposit. The Sponsor also


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intends to make available (a) on a daily basis, the Dividend Equivalent Payment effective through and including the previous Business Day, per outstanding Unit, and (b) every 15 seconds throughout the trading day at the Exchange a number representing, on a per Unit basis, the sum of the Dividend Equivalent Payment effective through and including the previous Business Day, plus the current value of the securities portion of a Portfolio Deposit as in effect on such day (which value may include a cash in lieu amount to compensate for the omission of a particular Index Security from such Portfolio Deposit). Intra-day information will be available with respect to trades and quotes and underlying trading values will be published every 15 seconds throughout the trading day. Information with respect to net asset value, net accumulated dividend, final dividend amount to be paid, shares outstanding, estimated cash amount and total cash amount per Creation Unit will be available daily prior to the opening of trading on the Exchange.
 
INFORMATION AND COMPARISONS RELATING TO TRUST,
SECONDARY MARKET TRADING, NET ASSET SIZE, PERFORMANCE AND TAX TREATMENT
 
Information regarding various aspects of the Trust, including the net asset size thereof, as well as the secondary market trading, the performance and the tax treatment of Trust Units, may be included from time to time in advertisements, sales literature and other communications and in reports to current or prospective Beneficial Owners. Any such performance-related information will reflect only past performance of Trust Units, and no guarantees can be made of future results.
 
Specifically, information may be provided to investors regarding the ability to engage in short sales of Trust Units. Selling short refers to the sale of securities which the seller does not own, but which the seller arranges to borrow before effecting the sale. Institutional investors may be advised that lending their Trust Units to short sellers may generate stock loan credits that may supplement the return they can earn from an investment in Trust Units. These stock loan credits may provide a useful source of additional income for certain institutional investors who can arrange to lend Trust Units. Potential short sellers may be advised that a short rebate (functionally equivalent to partial use of proceeds of the short sale) may reduce their cost of selling short.
 
In addition, information may be provided to prospective or current investors comparing and contrasting the tax efficiencies of conventional mutual funds with Trust Units. Both conventional mutual funds and the Trust may be required to recognize capital gains incurred as a result of adjustments to the composition of the DJIA and therefore to their respective portfolios. From a tax perspective, however, a significant difference between a conventional mutual fund and the Trust is the process by which their shares are redeemed. In cases where a conventional mutual fund experiences redemptions in excess of subscriptions (“net redemptions”) and has


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insufficient cash available to fund such net redemptions, such mutual fund may have to sell stocks held in its portfolio to raise and pay cash to redeeming shareholders. A mutual fund will generally experience a taxable gain or loss when it sells such portfolio stocks in order to pay cash to redeeming fund shareholders. In contrast, the redemption mechanism for Trust Units typically does not involve selling the portfolio stocks. Instead, the Trust delivers the actual portfolio of stocks in an in-kind exchange to any person redeeming Trust Units in Creation Unit size aggregations. While this in-kind exchange is a taxable transaction to the redeeming Unitholder (usually a broker/dealer), it generally does not constitute a taxable transaction at the Trust level and, consequently, there is no realization of taxable gain or loss by the Trust with respect to such in-kind redemptions. In a period of market appreciation of the DJIA and, consequently, appreciation of the portfolio stocks held in the Trust, this in-kind redemption mechanism has the effect of eliminating the recognition and distribution of those net unrealized gains at the Trust level. Although the same result would apply to conventional mutual funds utilizing an in-kind redemption mechanism, the opportunities to redeem fund shares by delivering portfolio stocks in kind are limited in most mutual funds.
 
Investors may be informed that, while no unequivocal statement can be made as to the net tax impact on a conventional mutual fund resulting from the purchases and sales of its portfolio stocks over a period of time, conventional funds that have accumulated substantial unrealized capital gains, if they experience net redemptions and do not have sufficient available cash, may be required to make taxable capital gains distributions that are generated by changes in such fund’s portfolio. In contrast, the in-kind redemption mechanism of Trust Units may make them more tax-efficient investments under most circumstances than comparable conventional mutual fund shares. As discussed above, this in-kind redemption feature tends to lower the amount of annual net capital gains distributions to Unitholders as compared to their conventional mutual fund counterparts. Since Unitholders are generally required to pay income tax on capital gains distributions, the smaller the amount of such distributions, the smaller will be the Unitholders’ tax liability. To the extent that the Trust is not required to recognize capital gains, the Unitholder is able, in effect, to defer tax on such gains until he sells or otherwise disposes of his shares, or the Trust terminates. If such Unitholder retains his shares until his death, under current law the tax basis of such shares would be adjusted to their then fair market value.
 
One important difference between Trust Units and conventional mutual fund shares is that Trust Units are available for purchase or sale on an intraday basis on the Exchange. An investor who buys shares in a conventional mutual fund will buy or sell shares at a price at or related to the closing NAV per share, as determined by the fund. In contrast, Trust Units are not offered for purchase or redeemed for cash at a fixed relationship to closing NAV. The tables below illustrate the distribution relationship of Trust Units closing prices to NAV for the period 1/20/98 (the first trading date of the Trust) through 12/31/10, the distribution relationships of high, low and closing


77


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prices over the same period, and distribution of bid/ask spreads for 2010. These tables should help investors evaluate some of the advantages and disadvantages of Trust Units relative to funds sold and redeemed at prices related to closing NAV. Specifically, the tables illustrate in an approximate way the risks of buying or selling Trust Units at prices less favorable than closing NAV and, correspondingly, the opportunities to buy or sell at prices more favorable than closing NAV.
 
The investor may wish to evaluate the opportunity to buy or sell on an intraday basis versus the assurance of a transaction at or related to closing NAV. To assist investors in making this comparison, the table immediately below illustrates the distribution of percentage ranges between the high and the low price each day and between each extreme daily value and the closing NAV for all trading days from 1/20/98 through 12/31/10. The investor may wish to compare these ranges with the average bid/ask spread on Trust Units and add any commissions charged by a broker. The trading ranges for this period will not necessarily be typical of trading ranges in future years and the bid/ask spread on Trust Units may vary materially over time and may be significantly greater at times in the future. There is some evidence, for example, that the bid/ask spread will widen in markets that are more volatile and narrow when markets are less volatile. Consequently, the investor should expect wider bid/ask spreads to be associated with wider daily spread ranges.


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Table of Contents

Daily Percentage Price Ranges: Average and Frequency Distribution for
Dow Jones Industrial Average and DIAMONDS Trust:
Highs and Lows vs. Close*
(From Inception of Trading through 12/31/2010)
 
Dow Jones Industrial Average
 
                                                 
          Intraday High Value
    Intraday Low Value
 
    Daily % Price Range     Above Closing Value     Below Closing Value  
Range
  Frequency     % of Total     Frequency     % of Total     Frequency     % of Total  
 
0 — 0.25%
    1       0.03 %     1,067       32.73 %     823       25.25 %
0.25 — 0.5%
    139       4.26 %     649       19.91 %     704       21.60 %
0.5 — 1.0%
    954       29.26 %     754       23.13 %     863       26.47 %
1.0 — 1.5%
    936       28.71 %     356       10.92 %     434       13.31 %
1.5 — 2.0%
    570       17.48 %     204       6.26 %     200       6.13 %
2.0 — 2.5%
    287       8.80 %     104       3.19 %     112       3.44 %
2.5 — 3.0%
    164       5.03 %     50       1.53 %     49       1.50 %
3.0 — 3.5%
    76       2.33 %     29       0.89 %     29       0.89 %
> 3.5%
    133       4.08 %     47       1.44 %     46       1.41 %
                                                 
Total
    3,260       100.00 %     3,260       100.00 %     3,260       100.00 %
                                                 
 
Average Daily Range: 1.5166%
 
SPDR DJIA TRUST
 
                                                 
          Intraday High Value
    Intraday Low Value
 
    Daily % Price Range     Above Closing Value     Below Closing Value  
Range
  Frequency     % of Total     Frequency     % of Total     Frequency     % of Total  
 
0 — 0.25%
    4       0.12 %     1,051       32.24 %     787       24.14 %
0.25 — 0.5%
    169       5.18 %     696       21.35 %     731       22.42 %
0.5 — 1.0%
    984       30.18 %     749       22.98 %     937       28.74 %
1.0 — 1.5%
    952       29.20 %     364       11.17 %     420       12.88 %
1.5 — 2.0%
    519       15.92 %     189       5.80 %     183       5.61 %
2.0 — 2.5%
    290       8.90 %     101       3.10 %     75       2.30 %
2.5 — 3.0%
    148       4.54 %     43       1.32 %     64       1.96 %
3.0 — 3.5%
    75       2.30 %     25       0.77 %     19       0.58 %
> 3.5%
    119       3.65 %     42       1.29 %     44       1.35 %
                                                 
Total
    3,260       100.00 %     3,260       100.00 %     3,260       100.00 %
                                                 
 
Average Daily Range: 1.4757%
 
 
Source: Bloomberg


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Frequency Distribution of Discounts and Premiums for the SPDR DJIA Trust: Closing Price vs. Net Asset Value (NAV) as of 12/31/2010
 
                                           
            Calendar
    Calendar
    Calendar
    Calendar
          From
            Quarter
    Quarter
    Quarter
    Quarter
    Calendar
    1/20/1998
            Ending
    Ending
    Ending
    Ending
    Year
    Through
Range     3/31/2010     6/30/2010     9/30/2010     12/31/2010     2010     12/31/2010
> 200
    Days                         0
                                           
Basis Points
    %                         0.0%
                                           
150 — 200
    Days                         0
                                           
Basis Points
    %                         0.0%
                                           
100 — 150
    Days                         5
                                           
Basis Points
    %                         0.2%
                                           
50 — 100
    Days                         21
                                           
Basis Points
    %                         0.6%
                                           
25 — 50
    Days         1             1     163
                                           
Basis Points
    %         1.6%             0.4%     5.0%
                                           
0 — 25
    Days     27     38     32     37     134     1461
                                           
Basis Points
    %     44.3%     60.3%     50.0%     57.8%     53.2%     44.8%
                                           
Total Days
    Days     27     39     32     37     135     1650
                                           
at Premium
    %     44.3%     61.9%     50.0%     57.8%     53.6%     50.6%
                                           
Closing Price
    Days     0     0     1     0     1     61
                                           
Equal to NAV
    %     0.0%     0.0%     1.6%     0.0%     0.4%     1.9%
                                           
Total Days
    Days     34     24     31     27     116     1549
                                           
at Discount
    %     55.7%     38.1%     48.4%     42.2%     46.0%     47.5%
                                           
0 — −25
    Days     34     24     31     25     114     1359
                                           
Basis Points
    %     55.7%     38.1%     48.4%     39.1%     45.2%     41.7%
                                           
−25 — −50
    Days                 2     2     160
                                           
Basis Points
    %                 3.1%     0.8%     4.9%
                                           
−50 — −100
    Days                         25
                                           
Basis Points
    %                         0.8%
                                           
−100 — −150
    Days                         3
                                           
Basis Points
    %                         0.1%
                                           
−150 — −200
    Days                         1
                                           
Basis Points
    %                         0.0%
                                           
<−200
    Days                         1
                                           
Basis Points
    %                         0.0%
                                           
 
Close was within 0.25% of NAV better than 88% of the time from 1/20/98 (the first day of trading on the AMEX) through 12/31/2010.
 
 
Source: NYSE Euronext


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Frequency Distribution of Discounts and Premiums for the SPDR DJIA Trust: Bid/Ask Price vs. Net Asset Value (NAV) as of 12/31/2010
 
                                           
            Calendar
    Calendar
    Calendar
    Calendar
          From
            Quarter
    Quarter
    Quarter
    Quarter
    Calendar
    1/20/1998
            Ending
    Ending
    Ending
    Ending
    Year
    Through
Range     3/31/2010     6/30/2010     9/30/2010     12/31/2010     2010     12/31/2010
> 200
    Days                         2
                                           
Basis Points
    %                         0.1%
                                           
150 — 200
    Days                         0
                                           
Basis Points
    %                         0.0%
                                           
100 — 150
    Days                         3
                                           
Basis Points
    %                         0.1%
                                           
50 — 100
    Days                         11
                                           
Basis Points
    %                         0.3%
                                           
25 — 50
    Days         1             1     117
                                           
Basis Points
    %         1.6%             0.4%     3.6%
                                           
0 — 25
    Days     23     31     35     30     119     1477
                                           
Basis Points
    %     37.7%     49.2%     54.7%     46.9%     47.2%     45.3%
                                           
Total Days
    Days     23     32     35     30     120     1610
                                           
at Premium
    %     37.7%     50.8%     54.7%     46.9%     47.6%     49.4%
                                           
Closing Price
    Days     0     0     1     0     1     73
                                           
Equal to NAV
    %     0.0%     0.0%     1.6%     0.0%     0.4%     2.2%
                                           
Total Days
    Days     38     31     28     34     131     1577
                                           
at Discount
    %     62.3%     49.2%     43.8%     53.1%     52.0%     48.4%
                                           
0 — −25
    Days     38     31     28     34     131     1460
                                           
Basis Points
    %     62.3%     49.2%     43.8%     53.1%     52.0%     44.8%
                                           
−25 — −50
    Days                         98
                                           
Basis Points
    %                         3.0%
                                           
−50 — −100
    Days                         17
                                           
Basis Points
    %                         0.5%
                                           
−100 — −150
    Days                         0
                                           
Basis Points
    %                         0.0%
                                           
−150 — −200
    Days                         0
                                           
Basis Points
    %                         0.0%
                                           
< −200
    Days                         2
                                           
Basis Points
    %                         0.1%
                                           
 
Close was within 0.25% of NAV better than 92% of the time from 1/20/98 (the first day of trading on the AMEX) through 12/31/2010.
 
 
Source: NYSE Euronext


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Comparison of Total Returns Based on NAV and Bid/Ask Price (1)
as of 12/31/10*
 
The table below is provided to compare the Trust’s total pre-tax returns at NAV with the total pre-tax returns based on bid/ask price and the performance of the Dow Jones Industrial Average. Past performance is not necessarily an indication of how the Trust will perform in the future.
 
Cumulative Total Return
 
                         
    1 Year     5 Year     10 Year  
 
SPDR DJIA Trust
                       
Return Based on NAV (2)(3)(4)
    13.82 %     22.56 %     34.23 %
Return Based on Bid/Ask Price (2)(3)(4)
    13.94 %     22.74 %     35.51 %
Dow Jones Industrial Average
    14.06 %     23.47 %     99.40 %
 
Average Annual Total Return
 
                         
    1 Year     5 Year     10 Year  
 
SPDR DJIA Trust
                       
Return Based on NAV (2)(3)(4)(5)
    13.82 %     4.15 %     2.99 %
Return Based on Bid/Ask Price (2)(3)(4)(5)
    13.94 %     4.18 %     3.09 %
Dow Jones Industrial Average
    14.06 %     4.31 %     6.49 %
 
 
(1) Currently, the Bid/Ask Price is calculated based on the best bid and best offer on NYSE Arca at 4:00 p.m. From November 6, 2008 to April 3, 2001, the Bid/Ask Price was calculated based on the best bid and the best offer on NYSE Alternext US (formerly the American Stock Exchange) at 4 pm. However, prior to April 3, 2001, the calculation of the Bid/Ask Price was based on the midpoint of the best bid and best offer at the close of trading on the American Stock Exchange, ordinarily 4:15 p.m.
 
(2) Total return figures have been calculated in the manner described above under the section of “Highlights” entitled “Bar Chart and Table”.
 
(3) Includes all applicable ordinary operating expenses set forth in “Expenses of the Trust”.
 
(4) Does not include the Transaction Fee which is payable to the Trustee only by persons purchasing and redeeming Creation Units as discussed above in the section of “Highlights” entitled “A Transaction Fee is Payable For Each Creation and For Each Redemption of Creation Units”. If these amounts were reflected, returns would be less than those shown.
 
(5) Does not include brokerage commissions and charges incurred only by persons who make purchases and sales of Units in the secondary market as discussed above in the section of “Highlights” entitled “Brokerage Commissions on Units”. If these amounts were reflected, returns would be less than those shown.
 
 
* Source: NYSE Euronext and State Street Bank & Trust Company


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GLOSSARY
 
         
    Page
 
“1933 Act”
    63  
“10 Basis Point Limit”
    9  
“Additional Cash Deposit”
    34  
“Adjustment Amount”
    66  
“Adjustment Day”
    45  
“Authorized Participant”
    5  
“Balancing Amount”
    46  
“Bar Chart”
    7  
“Beneficial Owners”
    37  
“Business Day”
    3  
“Cash Component”
    5  
“Cash Redemption Payment”
    39  
“Clearing Process”
    5  
“Closing Time”
    34  
“CNS”
    5  
“Code”
    10  
“Committee”
    22  
“Creation Units”
    4  
“Depository Agreement”
    37  
“Distributor”
    4  
“Dividend Equivalent Payment”
    5  
“Dividend Payment Date”
    68  
“DJIA”
    3  
“Dow Jones”
    i  
“DTC”
    5  
“DTCC”
    33  
“DTCC Shares”
    33  
“DTC Cut-Off Time”
    42  
“DTC Participant”
    5  
“ERISA”
    62  
“ETF”
    32  
“Evaluation Time”
    4  
“Excess Cash Amounts”
    39  
“Ex-Dividend Date”
    68  
“Exchange”
    4  
“FINRA”
    6  
“Index Securities”
    3  
“Indirect Participants”
    36  
“Initial Date of Deposit”
    2  
“IRA”
    62  
“IRS”
    61  
“License Agreement”
    i  
“Marketing Agent”
    27  
“NAV”
    3  
“NAV Amount”
    45  
“Non-U.S. Holder”
    60  
“NSCC”
    5  
“NSCC Business Day”
    14  
“NYSE”
    3  
“NYSE Alternext US LLC”
    72  
“NYSE Amex LLC”
    72  
“NYSE Arca”
    4  
“Participant Agreement”
    5  
“Participating Party”
    5  
“Plans”
    61  
“Portfolio”
    3  
“Portfolio Deposit”
    5  
“Portfolio Deposit Amount”
    46  
“Portfolio Securities”
    3  
“Qualifying RIC Income”
    55  
“Record Date”
    68  
“Request Day”
    45  
“RIC”
    10  
“S&P”
    i  
“SEC”
    5  
“SPDR”
    i  
“Sponsor”
    3  
“SSGM”
    26  
“Table”
    7  
“Transaction Fee”
    9  
“Transmittal Date”
    32  
“Trust”
    3  
“Trust Agreement”
    3  
“Trustee”
    3  
“Trust Units”
    3  
“Units”
    3  
“U.S. Holder”
    55  


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SPDR DOW JONES INDUSTRIAL
AVERAGE ETF TRUST
(“SPDR DJIA TRUST”)
 
 
SPONSOR:
PDR SERVICES LLC
 
This Prospectus does not include all of the information with respect to the SPDR DJIA Trust set forth in its Registration Statement filed with the SEC in Washington, D.C. under the:
 
  •   Securities Act of 1933 (File No. 333-31247) and
 
  •   Investment Company Act of 1940 (File No. 811-9170).
 
To obtain copies from the SEC at prescribed rates —
WRITE: Public Reference Section of the SEC
100 F Street N.E., Washington, D.C. 20549
CALL: 1-800-SEC-0330
VISIT: http://www.sec.gov
 
No person is authorized to give any information or make any representation about the SPDR DJIA Trust not contained in this Prospectus, and you should not rely on any other information. Read and keep this Prospectus for future reference.
 
PDR Services LLC has filed a registration statement on Form S-6 and Form N-8B-2 with the SEC covering SPDR DJIA Trust. While this prospectus is a part of the registration statement on Form S-6, it does not contain all the exhibits filed as part of the registration statement on Form S-6. You should consider reviewing the full text of those exhibits.
 
Prospectus dated February 25, 2011


Table of Contents

CONTENTS OF REGISTRATION STATEMENT
This amendment to the Registration Statement on Form S-6 comprises the following papers and documents:
The facing sheet.
The cross-reference sheet.
The prospectus.
The undertaking to file reports.
The signatures.
    Written Consents of the following persons:
PricewaterhouseCoopers LLP
(included in Exhibit 99.C1)
Davis Polk & Wardwell LLP
(included in Exhibit 99.2)
The following exhibits:
         
Ex-99.2
    Opinion of Counsel as to legality of securities being registered and consent of Counsel.
 
       
Ex-99.A1
    Standard Terms and Conditions of Trust between PDR Services Corporation, as Sponsor and State Street Bank and Trust Company, as Trustee dated as of January 1, 1998.
 
       
Ex-99.A1(1)
    Amendment to Standard Terms and Conditions of Trust dated as of November 1, 2004.
 
       
Ex-99.A1(2)
    Amendment to Standard Terms and Conditions of Trust dated as of February 14, 2008.
 
       
Ex-99.A1(3)
    Amendment to Standard Terms and Conditions of Trust dated as of October 24, 2008.
 
       
Ex-99.A1(4)
    Amendment to Standard Terms and Conditions of Trust dated as of December 22, 2009.
 
       
Ex-99.A4
    Form of Participant Agreement.
 
       
Ex-99.A11
    Code of Ethics dated and effective January 26, 2011.
 
       
Ex-99.C1
    Consent of Independent Registered Public Accounting Firm.
 
       
 
       

 


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FINANCIAL STATEMENTS
     1. Statement of Financial Condition of the Trust as shown in the current Prospectus for this series herewith.
     2. Financial Statements of the Depositor:
     PDR Services LLC — Financial Statements, as part of NYSE Euronext’s current consolidated financial statements incorporated by reference to Form 10-K dated February 26. 2010.

 


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SIGNATURES
     Pursuant to the requirements of the Securities Act of 1933, the registrant, SPDR Dow Jones Industrial Average ETF Trust, certifies that it meets all of the requirements for effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, all in the City of New York, and State of New York, on the 25th day of February, 2011.
         
  SPDR DOW JONES INDUSTRIAL AVERAGE
ETF TRUST
(Registrant)
 
 
  By:   PDR Services LLC    
    /s/ Lisa Dallmer   
    President   
 
     Pursuant to the requirements of the Securities Act of 1933, this amendment to the Registration Statement has been signed below on behalf of PDR Services LLC, the Depositor, by the following persons in the capacities and on the date indicated.
PDR Services LLC
     
Name   Title/Office
 
/s/ Lisa Dallmer
 
Lisa Dallmer
  President of PDR Services LLC*
/s/ Laura Morrison
 
Laura Morrison
  Vice President of PDR Services LLC
 
*   The President of PDR Services LLC also undertakes all the duties and responsibilities of, and performs all functions of, the principal financial officer of PDR Services LLC.

 


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EXHIBIT INDEX
         
1.    Ex-99.2
    Opinion of Counsel as to legality of securities being registered and consent of Counsel.
 
       
2.    Ex-99.A1
    Standard Terms and Conditions of Trust between PDR Services Corporation, as Sponsor and State Street Bank and Trust Company, as Trustee dated as of January 1, 1998.
 
       
3.    Ex-99.A1(1)
    Amendment to Standard Terms and Conditions of Trust dated as of November 1, 2004.
 
       
4.    Ex-99.A1(2)
    Amendment to Standard Terms and Conditions of Trust dated as of February 14, 2008.
 
       
5.    Ex-99.A1(3)
    Amendment to Standard Terms and Conditions of Trust dated as of October 24, 2008.
 
       
6.    Ex-99.A1(4)
    Amendment to Standard Terms and Conditions of Trust dated as of December 22, 2009.
 
       
7.    Ex-99.A4
    Form of Participant Agreement
 
       
8.    Ex-99.A11
    Code of Ethics dated and effective January 26, 2011
 
       
9.    Ex-99.C1
    Consent of Independent Registered Public Accounting Firm.
 
       
 
       

 

(LETTERHEAD)
Exhibit 99.2
February 25, 2011
PDR Services LLC
c/o NYSE Euronext
11 Wall Street
New York, New York 10005
Ladies and Gentlemen:
SPDR Dow Jones Industrial Average ETF Trust, a unit investment trust organized under the laws of the State of New York (the “ Trust ”), is filing with the Securities and Exchange Commission (the " Commission ”) Post-Effective Amendment No. 14 to the Trust’s registration statement (“ Post-Effective Amendment No. 14 ”) in connection with the continued issuance by the Trust of an indefinite number of units of fractional undivided interest in the Trust (“ Units ”) pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.
We, as your counsel, have examined such documents and such matters of fact and law that we have deemed necessary for the purpose of rendering the opinion expressed herein. Based on the foregoing, we advise you that, in our opinion, when the Units have been duly issued and delivered against the consideration therefore in accordance with the terms of Trust Documents (as defined below), the Units will be validly issued, fully paid and non-assessable.
In rendering this opinion, we have assumed the due authorization, execution and delivery by PDR Services LLC, as sponsor of the Trust, and State Street Bank and Trust Company, as trustee of the Trust, of (i) the Standard Terms and Conditions of Trust of the Trust dated as of January 1,1998 (the “ Standard Terms ”), (ii) the Trust Indenture and Agreement into which the Standard Terms are incorporated (the “ Indenture ”) and (iii) each amendment to the Standard Terms and the Indenture (collectively, the “ Trust Documents ”), in each case in the form filed with the Commission via the Electronic Data Gathering, Analysis and Retrieval System.
We are members of the Bar of the State of New York, and the foregoing opinion is limited to the laws of the State of New York and the federal laws of the United States of America.
This opinion is rendered solely to you in connection with Post-Effective Amendment No. 14. This opinion may not be relied upon by you for any other purpose or relied upon by any other person without our prior written consent.
We hereby represent that Post-Effective Amendment No. 14 does not contain disclosures that would render it ineligible to become effective immediately upon filing pursuant to paragraph (b) of Rule 485 under the Securities Act of 1933, as amended (the “ Securities Act ”).

 


 

         
PDR Services LLC
  2   February 25, 2011
We hereby consent to the filing of this opinion as an exhibit to Post-Effective Amendment No. 14 and further consent to the reference to our name under the caption “Legal Opinion” in the Prospectus which is a part of Post-Effective Amendment No. 14. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act.
Very truly yours,
/s/ Davis Polk & Wardwell LLP

 

Exhibit 99.A1
DIAMONDS TRUST, SERIES 1
AND
ANY SUBSEQUENT AND SIMILAR SERIES OF
THE DIAMONDS TRUST
STANDARD TERMS AND CONDITIONS OF TRUST
for all or similar Series formed on
or subsequent to the effective date specified below
Effective January 13, 1998
          These Standard Terms and Conditions of Trust dated as of January 1,1998 and effective January 13, 1998 are executed between PDR Services Corporation, as Sponsor, and State Street Bank and Trust Company, as Trustee.
WITNESSETH THAT:
          WHEREAS, the Sponsor desires to establish one or more unit investment trusts pursuant to the provisions of the Investment Company Act of 1940 and the laws of the State of New York and each such trust may issue a Series (as hereinafter defined) of redeemable securities, each series representing undivided interests in a Trust or Trust Fund (as hereinafter defined) that will be composed primarily of Securities (as hereinafter defined) included from time to time in the DJIA (as hereinafter defined);

 


 

          WHEREAS, the Sponsor desires to provide for the adjustment by the Trustee of the Securities of each Trust to reflect the DJIA, the collection by the Trustee of the dividends and other income of and capital gains on such Securities held in the Trust for each Series, and the distribution by the Trustee of such dividends and other income of and capital gains on such Securities to the Depository (as hereinafter defined) for distribution to Beneficial Owners as provided herein, and to provide for other terms and conditions upon which such Trusts shall be established and administered as hereinafter provided; and
          WHEREAS, in order to facilitate the creation of various series of unit investment trusts as aforesaid, the terms and conditions of establishment and administration of which will be in many respects substantially similar, it is desirable to set forth standard terms and conditions of trust upon which such Trusts will be established and administered, subject to the terms and provisions of this Agreement (as hereinafter defined) and the terms and conditions of an Indenture (as hereinafter defined) into which this Agreement will be, as to each Series, incorporated;
          NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trustee hereby agree as follows:

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INTRODUCTION
          These Standard Terms and Conditions of Trust effective as of the day and year first above written shall be applicable to DIAMONDS Trust, Series 1 (a unit investment trust) and to all Series of DIAMONDS Trust formed on or subsequent to the date hereof for which their applicability and their incorporation by reference is specified in the applicable Indenture relating to such Series. For each Series of DIAMONDS Trust to which these Standard Terms and Conditions of Trust are to be applicable, the Sponsor and the Trustee shall execute an Indenture (or supplement or amendment to such Indenture) incorporating by reference these Standard Terms and Conditions of Trust and designating any exclusion from or exception to such incorporation by reference for the purposes of that Series or variation of the terms hereof for the purposes of that Series and specifying for that Series (i) the Initial Portfolio Deposit to be deposited in trust pursuant to Section 2.02 and the number of Creation Unit size aggregations of DIAMONDS to be delivered by the Trustee in exchange for the Initial Portfolio Deposit so deposited, (ii) the initial undivided interest represented by each Creation Unit size aggregations of DIAMONDS, (iii) the number of DIAMONDS which, when aggregated, constitute one Creation Unit, (iv) the Mandatory Termination Date, and the date on which the Trustee will begin to distribute or sell Securities pursuant to Section 9.01, (v) the Initial Date of Deposit and the Series name of the Trust, (vi) the fiscal year of the Trust and (vii) any other terms specific to any Series of the DIAMONDS Trust.

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ARTICLE I
Definitions
     Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:
Accumulation Period
          Shall mean any period during which Securities held by the Trust earn their respective dividends, each such period being measured from one ex-dividend Date to but not including the next succeeding Ex-Dividend Date.
Adjustment Amount
          Shall have the meaning assigned to such term in Section 3.04.
Adjustment Day
          The day(s) specified in Section 2.04.
Agreement
          The Standard Terms and Conditions of Trust embodied in this instrument and all amendments and supplements hereto.

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Authorized Officer
          Shall mean the President, any Vice President, any Secretary and any other person or category of persons named in the resolution(s) authorizing the Sponsor to establish the Trust or authorizing the Trustee to act as such.
Balancing Amount
          Shall have the meaning assigned to such term in Section 2.04(i).
Beneficial Owner
          Shall have the meaning assigned to such term in Section 3.11.
Business Day
          Any day that the New York Stock Exchange is open for business.
Cash Component
          Shall have the meaning assigned to such term in Section 2.03(c).
Cash Redemption Payment
          Shall have the meaning assigned to such term in Section 5.02.

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CNS System
          The continuous net settlement system of NSCC.
CPI — U
          The National Consumer Price Index for All Urban Consumers, as published by the United States Department for Labor, or any successor index.
Creation Unit
          The minimum number of DIAMONDS that may be created at any one time as described below in Section 2.03 is 50,000, unless otherwise provided in the Indenture or the Registration Statement.
Depositor
          Each person or organization having a Participant Agreement with the Trustee and that may from time to time deposit Portfolio Deposits with the Trustee, including, without limitation, the Depositor making the Initial Portfolio Deposit(s) on the Initial Date of Deposit.

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Depository
          The Depository Trust Company, New York, New York, or such other depository as may be selected by the Trustee as specified herein.
Depository Agreement
          The agreement or Letter of Representation among the Trustee, the Sponsor and the Depository, dated as of January 13, 1998, as the same may be from time to time amended in accordance with its terms.
DIAMONDS
          Shall mean the DIAMONDS Units, which constitute, in 50,000 DIAMONDS Unit aggregations, a Creation Unit, unless (1) a different aggregate number of DIAMONDS Units necessary to constitute a Creation Unit is set forth in the Indenture for a particular Series or (2) a different aggregate number for an existing series is effectuated by means of an amendment to the Indenture and current Prospectus for such series.
DIAMONDS Clearing Process
          The CNS system of NSCC, as such processes have been enhanced to effect creations and redemptions of Creation Unit size aggregations of DIAMONDS.

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DIAMONDS Unit
          Each unit of fractional undivided interest in and ownership of the Trust Fund, which shall be initially equal to the fraction specified in the Indenture, the denominator of which shall be decreased by the number of any DIAMONDS Units redeemed as provided in Section 5.02 and shall be increased by the number of any DIAMONDS Units created and issued pursuant to Section 2.02.
Distributor
          ALPS Mutual Funds Services, Inc., any successor corporation thereto and any other corporation appointed by the Sponsor and the Trustee to act as the Distributor hereunder, provided that such corporation is identified as the Distributor in the current version of the Trust Prospectus.
Discretionary Termination Amount
          The amount specified in Section 9.01.
Dividend Equivalent Payment
          The cash payment required to accompany a deposit of Securities into the Trust as specified in Section 2.03(b).

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Dividend Payment Date
          The date(s) specified in Section 3.04.
DJIA
          Dow Jones Industrial Average.
DOW JONES
          Dow Jones & Company, Inc.
DTC Participant
          Shall have the meaning assigned to such term in Section 3.11.
Evaluation Time
          Closing time at the New York Stock Exchange, Inc. of the regular trading session (currently 4:00 p.m. New York time) unless another meaning is assigned to such term in the Indenture, or is otherwise provided for in the Registration Statement.
Ex-Dividend Date
          The date(s) specified in Section 3.04.

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Exchange
          The American Stock Exchange, Inc.
Global Security
          The global certificate issued to the Depository as provided in the Depository Agreement, substantially in the form attached hereto as Exhibit B.
Income
          Any income or cash or other dividend distribution by an issuer of a Security, whether or not such payment or distribution is taxable to the recipient thereof.
Indenture
          The indenture into which this Agreement will be, as to each Series, incorporated and all amendments and supplemental indentures thereto.
Index Securities
          The securities that constitute the DJIA.
Indirect Participant
          Shall have the meaning assigned to such term in Section 3.11.

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Initial Date of Deposit
          The date so designated in the Indenture.
Initial Portfolio Deposit
          The Portfolio Deposit(s) as in effect on the Initial Date of Deposit.
Internal Revenue Code
          The Internal Revenue Code of 1986, as amended, or any successor provisions.
License Agreement
          The Agreement dated June 5, 1997 among Dow Jones, the Exchange and the Sponsor under which the Sponsor has been granted the license to use certain trademarks and service marks of Dow Jones.
Mandatory Termination Date
          The date specified in the Indenture.
NAV Amount
          The amount specified in Section 2.04.

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NSCC
          The National Securities Clearing Corporation.
Participant Agreement
          An Agreement among the Distributor, the Trustee and either (1) a Participating Party or (2) a DTC Participant, substantially in the form set forth in Exhibit A hereto, as the same may be from time to time amended in accordance with its terms.
Participating Party
          A participant in the DIAMONDS Clearing Process.
Portfolio
          The Securities held by the Trust consisting of a portfolio of common stocks or, in the case of securities not yet delivered on the Initial Date of Deposit (or, subsequently, securities not yet delivered in connection with purchases made by the Trust or subsequent Portfolio Deposits), confirmations of contracts to purchase such securities.
Portfolio Deposit
          Shall have the meaning assigned to such term in Section 2.03(c).

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Portfolio Deposit Amount
          Shall have the meaning assigned to such term in Section 2.04(i).
Prospectus
          The prospectus relating to a particular Trust filed with the Securities and Exchange Commission pursuant to Rule 424 of the Securities Act of 1933, as amended.
Record Date
          The date(s) specified in Section 3.04.
Redemption Date
          Shall have the meaning assigned to such term in Section 5.02.
Regulated Investment Company
          A trust which qualifies as a “regulated investment company” under the current provisions of the Internal Revenue Code of 1986, as amended or successor provisions.
Request Day
          Shall have the meaning assigned to such term in Section 2.04(h)

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Securities
          Publicly traded common stocks and other securities convertible into or representing common stock of issuers, including contracts to purchase securities, (a) that are listed or referred to as securities in Schedule A to the Indenture, (b) that have been received by the Trust in subsequent Portfolio Deposits pursuant to Section 2.02, (c) that have been acquired by the Trust as a result of the reinvestment of proceeds from any sale of securities or as a result of purchases and sales of securities to conform the Portfolio to the DJIA all pursuant to Section 2.04, (d) that have been received by the Trust as a distribution or dividend in respect of any of the securities held by the Trust, or (e) that have been received by the Trust in exchange or substitution pursuant to Section 3.07, each as may from time to time continue to be held as a part of the Trust, unless another meaning is assigned to such term in the Indenture.
Series
          Any series of or series similar to the Trusts.
Sponsor
          PDR Services Corporation, or any corporation into which it may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which it shall be a party, or any corporation succeeding to all or substantially all of its business as sponsor of unit investment trusts, or any successor Sponsor designated as such by operation of law or any successor Sponsor appointed as herein provided.

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Sponsor Indemnified Party
          Shall have the meaning assigned to such term in Section 7.04.
Transaction Fee
          Shall have the meaning assigned to such term in Section 2.03(i).
Trust or Trust Fund
          Shall mean the individual trust fund created by a particular Indenture which shall consist of the Portfolio and all undistributed income or other amounts received or receivable thereon and any undistributed cash held or realized from the sale or liquidation of the Securities, or from the deposit of Portfolio Deposits.
Trust Fund Evaluation
          Shall have the meaning assigned to such term in Section 5.01.
Trustee
          (a) State Street Bank and Trust Company or its successor or (b) any successor Trustee designated by operation of law or appointed as herein provided or (c) any other bank, trust company, corporation or national banking association designated as Trustee in the Indenture for the applicable Trust Series which bank, trust company, corporation or national banking association shall be a party to such Indenture and whose execution thereof shall subject such bank, trust company, corporation or national banking association to all rights, duties and

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liabilities hereunder and thereunder, in each case acting as Trustee and not individually, unless otherwise indicated.
Trustee Indemnified Party
          Shall have the meaning assigned to such term in Section 8.05.
ARTICLE II
Declaration of Trust;
Deposit of Securities;
The Portfolio;
Creation and Issuance
of DIAMONDS in
Creation Unit
Size Aggregations
          Section 2.01. Declaration of Trust . The Trustee declares it holds and will hold the Trust Fund as Trustee for the use and benefit of all present and future Beneficial Owners and subject to the terms and conditions of the Indenture and this Agreement. The Trustee hereby declares on behalf of the Trust that it elects the treatment for tax purposes as a Regulated Investment Company and covenants to comply with the provisions of Section 4.03 hereof to continue the qualification of the Trust as a Regulated Investment Company. The Trustee is

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hereby directed to make such elections, including any appropriate election to be taxed as a corporation, as shall be necessary to effect such qualification.
          Section 2.02. Deposit of Securities . (a) Concurrently with the execution and delivery of the Indenture, a Depositor will deposit the Initial Portfolio Deposit with the Trustee, and from time to time thereafter, Depositors may make, as provided below in this Section 2.02, additional deposits of Portfolio Deposits with the Trustee, and in each case the Trustee will be granted and conveyed all right, title and interest in and to, and there will be conveyed and deposited with the Trustee in an irrevocable trust, all cash and securities so deposited in connection with each such Portfolio Deposit. With respect to the Initial Portfolio Deposit made by a Depositor concurrently with the execution and delivery of the Indenture, the securities portion of the Initial Portfolio Deposit will be comprised of the securities listed in Schedule A to the Indenture, and each of such securities will be duly endorsed in blank or accompanied by all necessary instruments of assignment and transfer in proper form, to be held and applied by the Trustee as herein provided. There also will be a Cash Component (as hereinafter defined in Section 2.03(c))included in the Initial Portfolio Deposit, which is listed in Schedule A to the Indenture. The first accrual period for dividends payable on the first Dividend Payment Date will commence on the Business Day following the Initial Date of Deposit. Upon the delivery of the Initial Portfolio Deposit, the Depositor will also deliver to the Trustee one of the following: a certified check or checks, cash or cash equivalent or an irrevocable letter or letters of credit or an irrevocable loan commitment issued by a commercial bank or banks rated A or better (or

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other equivalent rating) by a nationally recognized rating agency in an amount necessary to satisfy applicable regulatory requirements.
          (b) From time to time following the Initial Date of Deposit, the Trustee is authorized to accept on behalf of the Trust additional deposits of Portfolio Deposits, and all Index Securities deposited in connection therewith shall be duly endorsed in blank or accompanied by all necessary instruments of assignment and transfer in proper form, to be held and applied by the Trustee as herein provided. The Trustee shall ensure that the securities portion of each Portfolio Deposit shall be comprised of such Index Securities and in such numbers as specified in Section 2.04. The Trustee shall also ensure that, in the event certain Securities held by the Trust Fund are removed from the DJIA or the composition of the DJIA changes, or certain corporate actions relating to the Index Securities occur as specified in Section 2.04, the Trustee shall recalculate the composition of the Portfolio Deposit and adjust the composition of the Portfolio, in each case as required by the provisions of Section 2.04.
          (c) The Trustee is hereby irrevocably authorized to effect registration or transfer of the Securities in fully registered form to the name of the Trustee or to the name of its nominee or the nominee of its agent.
          Section 2.03. Creation and Issuance of Creation Units . (a) The Trustee acknowledges that the Initial Portfolio Deposit(s) specified in the Indenture (which include the Securities and Cash Component listed in Schedule A to the Indenture) have been deposited with

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it by the Depositor on the Initial Date of Deposit. The Trustee shall accept such Initial Portfolio Deposit(s) and issue an appropriate corresponding number of DIAMONDS in Creation Unit size aggregations in exchange therefor.
          (b) The Portfolio Deposits accepted by the Trustee from time to time thereafter shall include a portfolio of securities (initially the securities listed in Exhibit A to the Indenture and thereafter, such securities as the composition and number of shares thereof may be adjusted as required by Section 2.04) together, in each case, with a cash payment, to the extent applicable, equal to the Dividend Equivalent Payment (as hereinafter defined), plus or minus, as the case may be, the Balancing Amount (as hereinafter defined — see Section 2.04). The “Dividend Equivalent Payment” enables the Trustee to make a distribution of dividends on the next Dividend Payment Date (as hereinafter defined), as if all of the Securities had been held for the entire Accumulation Period for such distribution, and is an amount equal, on a per Creation Unit basis, to the dividends accrued on all the Securities for such Accumulation Period, net of expenses for such period (including, without limitation, (x) taxes or other governmental charges against the Trust not previously deducted, if any and (y) accrued fees of the Trustee and other expenses of the Trust (including legal and auditing expenses) and other expenses not previously deducted).
          (c) The Dividend Equivalent Payment and the Balancing Amount are collectively referred to herein as the “Cash Component” and the deposit of such a portfolio of securities and the Cash Component are collectively referred to herein as a “Portfolio Deposit”. In the event

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that the Trustee determines, in its discretion, that an Index Security is likely to be unavailable or available in insufficient quantity for delivery to the Trust upon the creation of DIAMONDS in Creation Unit size aggregations, or upon the redemption of DIAMONDS in Creation Unit size aggregations, the cash equivalent value of such Index Security may be included in the Portfolio Deposit as a part of the Cash Component in lieu of the inclusion of such Index Security in the securities portion of the Portfolio Deposit. The cash equivalent value of such Index Security will be calculated in accordance with the provisions of Section 4.01.
          (d) Requests to create DIAMONDS in Creation Unit size aggregations through the Distributor must be made by or through a Participating Party or a DTC Participant as specified below. A Participating Party, pursuant to the Participant Agreement described below, agrees to transfer the requisite Index Securities (or contracts to purchase such Index Securities which are expected to be delivered in a “regular way” manner in three (3) Business Days) and the Cash Component to the Trustee by means of the DIAMONDS Clearing Process, together with such additional information as may be required by the Trustee. The Participant Agreement shall set forth the procedures for requesting the creation of Creation Units and delivering Portfolio Deposits, confirming requests for creations, and for delivering DIAMONDS in Creation Unit size aggregations for redemption. A list of the entities that are party to the Participant Agreement is available at the office of the Trustee at 1776 Heritage Drive, North Quincy, Massachusetts 02171 and the office of the Distributor at 370 17th Street, Suite 3100, Denver, CO 80202 during normal business hours or at such other address as may be specified to the other parties hereto in writing.

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          (e) Under certain circumstances, DIAMONDS in Creation Unit size aggregations may be created by or through a DTC Participant through the Distributor outside the DIAMONDS Clearing Process. In such cases, the DTC Participant shall effectuate the transfer of the requisite Index Securities and the Cash Component to the Trustee directly through DTC on the day on which the order is accepted by the Distributor for DIAMONDS delivery to the creating party directly through DTC not later than on the third (3rd) Business Day following the day on which the order is accepted by the Distributor.
          (f) Upon receipt of a Portfolio Deposit or Deposits following acceptance by the Distributor of an order to create DIAMONDS, the Trustee will deliver DIAMONDS thereby created in Creation Unit size aggregations to the Depository in the name of Cede & Co. for the account of such Depositor, if such Depositor is a DTC Participant, or for the account of the DTC Participant acting on behalf of such Depositor. The Trustee shall acknowledge the deposit of such Portfolio Deposit(s) by recording on its books the name of the Depositor and the aggregate number of Creation Unit(s) created in respect of the Portfolio Deposit(s) so deposited. The Trustee shall also credit (a) the Dividend Equivalent Payment, if any, accompanying such Portfolio Deposit(s) to the Trust, to be added to dividends to be received on the deposited Index Securities for distribution pursuant to Section 3.04, and (b) the Balancing Amount, if any, to the Trust to be applied or distributed as provided in this Agreement.
          (g) The identity and number of shares of the Index Securities required for a Portfolio Deposit, which will change as the composition and number of shares of the Index

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Securities change, shall be determined in the manner specified in Section 2.04. The Trustee shall, as set forth in this Agreement, determine the number of shares of each of the Index Securities and the Cash Component in each Portfolio Deposit. Such determination by the Trustee shall be final and binding in connection with all Portfolio Deposits.
          (h) The Trustee may reject an order to create DIAMONDS in Creation Unit size aggregations transmitted to it by the Distributor if the Depositor or group of Depositors, upon obtaining the DIAMONDS ordered, would own or appear to own eighty percent (80%) or more of the outstanding DIAMONDS Units and if pursuant to Section 351 of the Internal Revenue Code, such circumstance would result in the Trust having a basis in the Index Securities deposited different from the market value of such Index Securities on the date of such deposit. The Trustee shall have the right to require information regarding DIAMONDS Unit ownership pursuant to the Participant Agreement and from the Depository and to rely thereon to the extent necessary to make the foregoing determination as a condition to the acceptance of an order to create DIAMONDS. The Trustee further reserves the absolute right to reject any Portfolio Deposit or any component thereof (a) determined by it not to be in proper form; (b) that the Trustee believes would have adverse tax consequences to the Trust or to Beneficial Owners; (c) the acceptance for deposit of which would, in the opinion of counsel, be unlawful; (d) that would otherwise, in the discretion of the Trustee, have an adverse effect on the Trust or the rights of Beneficial Owners; or (e) in the event of the inability of the creator to deliver or cause to be delivered the Portfolio Deposit through the Depository or otherwise in the event that

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circumstances outside the control of the Trustee make it for all practical purposes not feasible to process creations of DIAMONDS.
          (i) The Trustee will not issue certificates for DIAMONDS in Creation Unit size aggregations or otherwise, other than the Global Security issued to the Depository. The Trustee and the Sponsor are under no duty to give notification of any defects or irregularities in the delivery of Portfolio Deposits or any component thereof nor shall either of them incur any liability for the failure to give any such notification. A transaction fee will be payable to the Trustee for its own account in connection with each creation and each redemption of each Creation Unit size aggregation of DIAMONDS (the “Transaction Fee”). The Transaction Fee charged in connection with the creation of Creation Units through the DIAMONDS Clearing Process shall be $1,000 per Participating Party per day, regardless of the number of Creation Units created on such day by such Participating Party.
          (j) The Transaction Fee charged in connection with redemptions through the DIAMONDS Clearing Process shall be $1,000 per Participating Party per day, regardless of the number of Creation Units redeemed on such day by such Participating Party.
          (k) The Transaction Fee may subsequently be waived, modified, reduced, increased or otherwise changed by the Trustee in consideration of the advice of the Sponsor but in the Trustee’s sole discretion, but will not in any event exceed 1/10th of one percent of the

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value of a Creation Unit at the time of creation or redemption, as the case may be. Prior to implementing such change, the Sponsor shall cause the current Prospectus for the Trust to be amended to reflect any such changes in the Transaction Fee. The amount of the Transaction Fee in effect at any given time shall be made available upon request by the Trustee. If one or more Creation Units are created or redeemed outside the DIAMONDS Clearing Process, an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit will be charged to the creator or redeemer in part due to the increased expense associated with settlement outside the DIAMONDS Clearing Process.
          (l) So long as the Depository Agreement is in effect, DIAMONDS in Creation Unit size aggregations will be transferable solely through the book-entry system of the Depository. The Depository may determine to discontinue providing its service with respect to DIAMONDS by giving notice to the Trustee and the Sponsor pursuant to and in conformity with the provisions of the Depository Agreement and discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trustee and the Sponsor shall take action either to find a replacement for the Depository to perform its functions at a comparable cost or, if such a replacement is unavailable, to terminate the Trust.
          Section 2.04. Portfolio and Portfolio Deposit Adjustments . (a) The Trustee will adjust the composition of the Portfolio from time to time to conform, to the extent practicable, to changes in the composition and/or price weightings of the Index Securities. Generally, this will require the Trustee to hold as nearly as practicable an equal number of shares of each of the

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Index Securities. Specifically, the Trustee will be required to adjust the composition of the Portfolio at any time that there is a change in the identity of any Index Security (i.e., a substitution of one security in replacement of another), which adjustment shall be made within three (3) Business Days before or after the day on which the change in the identity of such Index Security is scheduled to take effect at the close of the market. In addition, the Trustee will be required to adjust, to the extent practicable, the composition of the Portfolio any time there is a corporate action, such as a stock split in one of the Index Securities, which requires Dow Jones to change the “divisor” in the computation of the DJIA. The Trustee will be required to adjust the Portfolio holdings to track the adjusted DJIA, such adjustment to be made within three (3) Business Days before or after the day on which the change in the DJIA divisor is scheduled to take effect.
          (b) From time to time Dow Jones may make adjustments to the composition of the DJIA as a result of a merger or acquisition involving one or more of the Index Securities. In such cases, the Trust, as shareholder of securities of an issuer that is the object of such merger or acquisition activity, may receive various offers from would-be acquirors of the issuer. The Trustee will not be permitted to accept any such offers until such time as it has been determined that the securities of the issuer will be removed from the DJIA. Since securities of an issuer are often removed from the DJIA only after the consummation of a merger or acquisition of such issuer, in selling the securities of such issuer the Trust may receive, to the extent that market prices do not provide a more attractive alternative, whatever consideration is being offered to the shareholders of such issuer that have not tendered their shares prior to such time. Any cash

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received in such transactions will be reinvested in Index Securities in accordance with the criteria set forth in subparagraph (a) above. Any securities received as a part of the consideration that are not Index Securities will be sold as soon as practicable and the cash proceeds of such sale will be reinvested in Index Securities in accordance with the criteria set forth in subparagraph (a) above.
          (c) Purchases and sales of securities resulting from the adjustments described herein will be made in the share amounts dictated by the specifications set forth herein, whether round lot or odd lot. All Portfolio adjustments will be made as described herein unless such adjustments would cause the Trust to lose its status as a Regulated Investment Company.
          (d) Pursuant to these guidelines the Trustee will calculate the required adjustments and will purchase and sell the appropriate securities. As a result of the purchase and sale of securities in accordance with these requirements, or the creation of Creation Units, the Trust may hold some amount of residual cash (other than cash held temporarily due to timing differences between the sale and purchase of securities or cash delivered in lieu of Index Securities or undistributed income (including but not limited to Dividend Equivalent Payments) or undistributed capital gains) as a result of such transactions, which amount shall not exceed for more than two (2) consecutive Business Days 5/10ths of 1 percent of the aggregate value of the Securities. In the event that the Trustee has made all required adjustments and is left with cash in excess of 5/10ths of 1 percent of the aggregate value of the Securities, the Trustee shall use such cash to purchase additional Index Securities.

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          (e) All adjustments to the Portfolio held by the Trustee will be made by the Trustee pursuant to the foregoing specifications and as set forth in the Trust Agreement and will be non-discretionary. In addition, the Trustee shall have the power and shall be required to adjust the composition of the Portfolio at any time if it determines that if such action is necessary to insure the continued qualification of the Trust as a Regulated Investment Company, even if such adjustment will cause the composition of the Portfolio to deviate from that of the DJIA. The adjustments provided herein are intended to conform the composition and security weightings of the Portfolio, to the extent practicable, to the composition and security weightings of the Index Securities. Such adjustments are based upon the DJIA as it is determined by Dow Jones. To the extent that the method of determining the DJIA is changed by Dow Jones in a manner that would affect the adjustments provided for herein, the Trustee and the Sponsor shall have the right to amend the Trust Agreement, without the consent of the Depository or Beneficial Owners, to conform the adjustments provided herein and in the Trust Agreement to such changes so that the objective of tracking the DJIA is maintained.
          (f) At such time as the Trustee gives written notice of the termination of the Trust as provided in Section 9.01, from and after the date of such notice the Trustee shall use the composition and weightings of the Securities as of such date for the purpose and determination of all redemptions or other required uses of the basket.
          (g) The Trustee will direct its securities transactions only to brokers or dealers, which may include affiliates of the Trustee, from whom it expects to obtain the most favorable

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prices for execution of orders. The net proceeds of any sales of Securities shall either be reinvested in accordance with Section 2.04 or distributed in accordance with Section 3.07.
          (h) After the Initial Date of Deposit, on each Business Day thereafter (each such day an “Adjustment Day”), the number of shares and/or identity of each of the Index Securities in a Portfolio Deposit will be adjusted in accordance with the following procedure. At the close of the market on each Adjustment Day, the Trustee will calculate the net asset value of the Trust as provided in Section 5.01. The net asset value will be divided by the number of outstanding DIAMONDS, then multiplied by the number of DIAMONDS in one Creation Unit size aggregation, resulting in a net asset value per Creation Unit (the “NAV Amount”). The Trustee will then calculate the number of shares (without rounding) of each of the component stocks of the DJIA in a Portfolio Deposit for the following Business Day (“Request Day”), such that (1) the market value at the close of the market on Adjustment Day of the securities to be included in the Portfolio Deposit on Request Day, together with the Dividend Equivalent Payment effective for requests to create or redeem on Adjustment Day, will equal the NAV Amount and (2) the identity and price weighting of each of the securities in a Portfolio Deposit will mirror proportionately, to the extent practicable, the identity and price weighting of the securities in the DJIA, each as in effect on Request Day. For each security, the number resulting from such calculation will be rounded down to the nearest whole share. The identities and number of shares of the securities so calculated will constitute the securities portion of the Portfolio Deposit effective on Request Day and thereafter until the next subsequent Adjustment Day, as well as the Securities to be delivered by the Trustee in the event of request for redemption of DIAMONDS

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in Creation Unit size aggregations on Request Day and thereafter until the following Adjustment Day pursuant to Section 5.02. In addition to the foregoing adjustments, in the event that there shall occur a stock split, stock dividend, or other corporate action with respect to any Index Security that results in an adjustment to the DJIA Index divisor, the Portfolio Deposit in effect on the day prior to the effective day of the adjustment to the DJIA Index divisor shall be adjusted to take account of such stock split, stock dividend, or other corporate action by adjusting the price of the Index Security so affected to reflect the impact of such stock split, stock dividend, or other corporate action before applying the actions set forth in (1) and (2) of this subsection (h); in each such case each Index Security will be rounded down to the nearest whole share.
          (i) On Request Day and on each day that a request for the creation or redemption of DIAMONDS in Creation Unit size aggregations is made, the Trustee will calculate the market value of the securities portion of the Portfolio Deposit as in effect on Request Day as of the close of the market and add to that amount the Dividend Equivalent Payment effective for requests to create or redeem on Request Day (such market value and Dividend Equivalent Payment are collectively referred to herein as the “Portfolio Deposit Amount”). The Trustee will then calculate the NAV Amount, based on the close of the market on Request Day. The difference between the NAV Amount so calculated and the Portfolio Deposit Amount shall be the “Balancing Amount”. The Balancing Amount serves the function of compensating for any differences between the value of the Portfolio Deposit Amount and the NAV Amount at the close of trading on Request Day due to, for example, (1) differences in the market value of the securities in the Portfolio Deposit and the market value of the Securities on Request Day and

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(2) any variances of the actual Portfolio Deposit from the proper composition of the Portfolio Deposit due to rounding.
          (j) Notwithstanding the foregoing, on any Adjustment Day on which no change in the identity and/or price weighting of any Index Security is scheduled to take effect that would cause the DJIA divisor to be adjusted after the close of the market on such Business Day,/*/ the Trustee reserves the right to forego making any adjustment to the Securities portion of the Portfolio Deposit and to use the composition and price weightings of the Index Securities for the most recently effective Portfolio Deposit for the Request Day following such Adjustment Day. Notwithstanding the foregoing, the amount of the Cash Component shall at all times be determined in accordance with the procedures set forth above. In addition, the Trustee further reserves the right to calculate the adjustment to the price weighting and/or identity of the Index Securities in a Portfolio Deposit as described above except that such calculation would be employed for two (2) Business Days rather than one (1) Business Day prior to Request Day.
          (k) As previously discussed, the Dividend Equivalent Payment and the Balancing Amount in effect at the close of business on Request Date are collectively referred to as the Cash Component or the Cash Redemption Payment. If the Balancing Amount is a positive number (i.e., if the NAV Amount exceeds the Portfolio Deposit Amount) then with respect to the creation of DIAMONDS, the Balancing Amount shall increase the Cash Component of the then
 
/*/   Dow Jones publicly announces any change in identity of the DJIA component securities two (2) or three (3) trading days in advance of the implementation of such change on the following Business Day.

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effective Portfolio Deposit, and with respect to redemptions of DIAMONDS in Creation Unit size aggregations, the Balancing Amount shall be added to the cash transferred to a redeemer by the Trustee. If the Balancing Amount is a negative number (i.e. if the NAV Amount is less than the Portfolio Deposit Amount), then with respect to the creation of DIAMONDS such amount shall decrease the Cash Component of the then effective Portfolio Deposit or, if such cash portion is less than the Balancing Amount, the difference shall be paid by the Trustee to the creator, and with respect to redemptions of DIAMONDS in Creation Unit size aggregations, the Balancing Amount shall be deducted from the cash transferred to the redeemer or, if such cash is less than the Balancing Amount, the difference shall be paid by the redeemer to the Trustee.
          (l) In making the adjustments described above, the Trustee will rely on industry sources generally available for information as to the composition and price weightings of the Index Securities. If the Trustee becomes incapable of obtaining or processing such information or NSCC is unable to receive such information from the Trustee on any Business Day, then the Trustee shall use the composition and price weightings of the Index Securities for the most recently effective Portfolio Deposit for the purposes of all adjustments and determinations described herein (including, without limitation determination of the securities portion of the Portfolio Deposit) until the earlier of (a) such time as current information with respect to the Index Securities is available or (b) three (3) consecutive Business Days have elapsed. If such current information is not available and three (3) consecutive Business Days have elapsed, the composition and price weightings of the Securities shall be used for the purposes of all adjustments and determinations herein (including, without limitation, determination of the

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securities portion of the Portfolio Deposit) until current information with respect to the Index Securities is available.
          (m) If the Trustee shall determine, in its discretion, that an Index Security is likely to be unavailable or available in insufficient quantity for delivery upon the creation of DIAMONDS in Creation Unit size aggregations for the following Business Day or for any period thereafter, the Trustee shall have the right to include the cash equivalent value of such Index Security determined in accordance with the protocols listed in Section 4.01 hereof in the Portfolio Deposit as a part of the Cash Component, in lieu of the inclusion of such Index Security in the securities portion of such Portfolio Deposit. In the event that such a determination is made, the Portfolio Deposit so constituted shall dictate the Index Securities to be delivered in connection with the creation of DIAMONDS in Creation Unit size aggregations for all purposes hereunder until such time as the securities portion of the Portfolio Deposit is subsequently adjusted.
          (n) In connection with creation of DIAMONDS, if an investor is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee, in its discretion, shall have the right to include the cash equivalent value of such Index Securities (determined in accordance with the protocols listed in Section 4.01 hereof) in the Portfolio Deposit as part of the Cash Component in lieu of the inclusion of such Index Securities in the securities portion of the Portfolio Deposit for the affected investor. The amount of such cash equivalent payment shall be used by the Trustee in accordance with the

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foregoing guidelines regarding permissible amounts of cash. In such cases, the Trustee, to effectuate the policy described above, may purchase the appropriate number of shares of the Index Security that the investor was unable to purchase. In any such case an investor shall pay the Trustee the standard Transaction Fee plus an additional amount not to exceed 3 times the standard Transaction Fee.
          Section 2.05 Bank Accounts . The Trustee shall open and maintain a separate bank account or accounts in the banking department of the Trustee in the name, and for the benefit, of the Trust, subject only to draft or order by the Trustee acting pursuant to the terms of this Agreement, and shall hold in such account or accounts all cash received by it from or for the account of the Trust. Each Series of the Trust shall be separately identified and shall have an account or accounts unique to it.
ARTICLE III
Administration of Trust
          Section 3.01. Collection of Income . (a) The Trustee shall collect, or claim on, any Income on the Securities as it becomes payable (including the Dividend Equivalent Payment and that part of the proceeds of the sale or liquidation of any of the Securities which represents accrued dividends or distributions and capital gains thereon). Income so collected shall be held uninvested until distributed pursuant to the provisions of this Agreement. The Trustee shall

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accrue all Income to the Trust as of the date on which the Trust is entitled to such Income as a holder of record of the Securities.
          (b) The Trustee may, in its discretion, sell securities pursuant to Section 3.06 or advance out of its own funds such amounts as may be necessary to permit distributions pursuant to Section 3.04 and payments in respect of the redemption of DIAMONDS in Creation Unit size aggregations pursuant to Section 5.02. The Trustee shall pay to itself the amounts which it is entitled to receive as reimbursement for amounts advanced pursuant to the preceding sentence, by deducting such amounts from the Income on the Securities when funds are available. The Trustee will reimburse itself in the amount of such advance, plus Federal Reserve Board requirements, together with interest thereon at a percentage rate equal to then current overnight federal funds rate, by deducting such amounts from (1) dividend payments or other income of the Trust when such payments or other income is received, (2) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (3) the sale of Securities. In the event any such advance remains outstanding for more than forty-five (45) Business Days, the Trustee shall sell Securities to reimburse itself for such advance and any accrued interest thereon. The Trustee shall be deemed to be the beneficial owner of the Income payments in question to the extent of all amounts advanced by it pursuant to this Section 3.01(b), and such advances shall be secured by a lien on the Trust.
          Section 3.02. Collection of Other Moneys . All moneys other than amounts received by the Trustee in respect of the Securities under this Agreement as described in

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Section 3.01 or reinvested in the purchase of Index Securities as provided in Section 2.04 (including, but not limited to, the Balancing Amount and all moneys realized by the Trustee from the sale of options, warrants or other similar rights received in respect of the Securities representing dividends or distributions thereon), including any capital gains dividends, shall be credited to the Trust in accordance with generally accepted accounting principles; provided, however, that moneys which are required to cover the price of securities purchased by the Trust but not yet delivered shall be held for such purchase. Moneys so collected shall be held uninvested. Any moneys collected other than amounts collected pursuant to Section 3.01 in respect of the Securities may be reinvested in additional Securities in lieu of distributions of dividend payments and other income, if necessary, as provided in Section 3.04.
          Section 3.03. Establishment of Reserves . From time to time the Trustee may, as required by generally accepted accounting principles, establish reserves for any applicable taxes or other governmental charges that may be payable out of the Trust Fund. The Trustee shall not be required to transmit to the Depository for distribution to Beneficial Owners as described in Section 3.11 any of the amounts held in such reserves; provided, however, that if the Trustee, in its sole discretion, determines that such amounts are no longer necessary for payment of any applicable taxes or other governmental charges, then such amounts shall no longer be considered to be held in such reserves. If the Trust Fund has been terminated or is in the process of termination, the Trustee shall transmit to the Depository for distribution to Beneficial Owners as described in Section 3.11 such Beneficial Owners’ interest in the amounts previously reserved in accordance with Section 9.01.

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          Section 3.04. Certain Deductions and Distributions . (a) On each Business Day, the Trustee shall deduct from moneys held as described above and pay to itself individually the amounts that it is at the time entitled to receive pursuant to Sections 8.01 and 8.04 on account of its services performed, in accordance with the fee schedule set forth below (based on the net asset value of the Trust on such Business Day). Expenses of the Trust will be annualized and accrued on each Business Day.
          (b) The following charges are or may be accrued and paid by the Trust:
          The (1) Trustee’s fees as set forth below, (2) fees payable to transfer agents for the provision of transfer agency services, if any,; (3) fees of the Trustee for extraordinary services performed under this Agreement; (4) various governmental charges; (5) any taxes, fees and charges payable by the Trustee with respect to DIAMONDS (whether in Creation Unit size aggregations or otherwise); (6) expenses and costs of any action taken by the Trustee Indemnified Party or the Sponsor Indemnified Party to protect the Trust and the rights and interests of Beneficial Owners of DIAMONDS (whether in Creation Unit size aggregations or otherwise); (7) indemnification of the Trustee or the Sponsor for any losses, liabilities or expenses incurred by it in the administration of the Trust without gross negligence, bad faith, wilful misconduct, wilful malfeasance on their part or reckless disregard of their obligations and duties; (8) expenses incurred in contacting Beneficial Owners of DIAMONDS both during the life of the Trust and upon termination of the Trust; and (9) other out-of-pocket expenses of the

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Trust not otherwise stated above incurred pursuant to actions permitted or required under this Agreement or the Indenture.
          (c) In addition to those discussed above, the following expenses will be charged to the Trust: (i) reimbursement to the Sponsor of amounts paid by it to Dow Jones in respect of annual licensing fees due under the License Agreement pursuant to Section 10.03, (ii) federal and state annual fees in keeping the registration of DIAMONDS on a current basis pursuant to Section 10.02 for the issuance of DIAMONDS, (iii) expenses of the Sponsor relating to the printing and distribution of marketing materials describing DIAMONDS and the Trust (including but not limited to, associated legal, consulting, advertising and marketing costs and other out-of-pocket expenses), and (iv) initial fees and expenses totaling approximately $300,000, in connection with the organization of the Trust (“Initial Costs”), which will be capitalized and amortized ratably over five years on a straight-line basis unless (1) the Trust is sooner terminated, in which case all amounts still due and owing shall be payable to the Trustee from the assets of the Trust or (2) by law or regulation the Trust is required to amortize such Initial Costs over a period of time shorter than five years, in which case the Trustee shall follow the requisite time period for such amortization./*/
 
/*/   In accordance with the provisions of the exemptive order granted by the Commission in Release IC-22979 dated December 30, 1997 (the “Order”), the expenses listed in clauses (i), (ii), (iii) and (iv) above may only be charged by the Trustee to the Trust in an amount equal to their actual costs, but in no case may exceed 20 basis points (20/100 of 1%) of the net asset value of the Trust per year. Further, if in any one year such cost exceeds such 20 basis point limit, the Sponsor shall absorb such excess costs and shall not authorize the Trustee to carry such excess forward into the following calendar year.

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          (d) The Sponsor reserves the right to charge the Trust a special sponsor fee from time to time, pursuant to the provisions of Section 8.01(k), in reimbursement for certain services it may provide to the Trust which would otherwise be provided by the Trustee in an amount not to exceed the actual cost of providing such services. The Sponsor or the Trustee from time to time may voluntarily assume some expenses or reimburse the Trust so that total expenses of the Trust are reduced, although neither the Sponsor nor the Trustee is obligated to do so and either one or both parties may discontinue such voluntary assumption of expenses or reimbursement at any time without notice.
          (e) The Sponsor intends to monitor the actual expenses of the Trust, and may choose to reimburse the Trust for or assume some or all of the expenses and charges mentioned above in order to assure that the Trust remains economically attractive to current as well as prospective investors, but the Sponsor is not obligated to do so for any period of time. In the event the Sponsor chooses to so reimburse or assume certain expenses on behalf of the Trust, the Sponsor shall have the right to be repaid the amount of any such reimbursement or assumption to the extent that subsequently during the year expenses fall below the 20/100 of 1% per annum level on any given day.
          (f) If the income received by the Trust in the form of dividends and other distributions on the Securities is insufficient to cover these above-mentioned expenses, the Trustee may make advances to the Trust to cover the expenses discussed above; otherwise the Trustee may sell Securities in an amount sufficient to pay such expenses. The Trustee will

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reimburse itself in the amount of any such advance, including those advances made pursuant to Section 3.01(b), together with interest thereon at a percentage rate equal to the then current overnight federal funds rate plus Federal Reserve Board requirements, by deducting such amounts from (1) dividend payments or other income of the Trust when such payments or other income is received, (2) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (3) the sale of Securities. Notwithstanding the foregoing, in the event that any advance remains outstanding for more than forty-five (45) Business Days, the Trustee shall sell Securities to reimburse itself for the amount of such advance and any accrued interest thereon. Such advances will be secured by a lien on the assets of the Trust in favor of the Trustee. The expenses of the Trust will be reflected in the net asset value of the Trust.
          (g) For services performed under the Trust Agreement, the Trustee will be paid by the Trust a fee at an annual rate of 11/100 of 1% to 15/100 of 1% of the net asset value of the Trust, as shown below, such percentage amount to vary depending on the net asset value of the Trust, plus or minus the Adjustment Amount (as hereinafter defined). Such compensation will be computed on each Business Day on the basis of the net asset value of the Trust on such day, and the amount thereof shall be accrued daily and paid quarterly.

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      TRUSTEE FEE SCALE *
     
Net Asset Value   Fee as a Percentage of Net
of the Trust   Asset Value of the Trust
0 — $499,999,999
  15/100 of 1% per annum plus or minus the Adjustment Amount
$500,000,000 — $999,999,999
  13/100 of 1% per annum plus or minus the Adjustment Amount
$1,000,000,000 and above
  11/100 of 1% per annum plus or minus the Adjustment Amount
 
*   During the first two years of operation of the Trust, the Trustee’s fee shall be reduced to 12/100 of 1% per annum plus or minus the Adjustment Amount for any day on which the net asset value of the Trust is below $350,000,000. The fee indicated applies to that portion of the net asset value of the Trust which falls in the size category indicated.
          (h) Notwithstanding the fee schedule set forth in the table above, in the fourth year of the Trust’s operation and in subsequent years, the Trustee’s minimum fee shall be $400,000 per annum, as adjusted by the CPI-U to take effect at the beginning of the fourth year and each year thereafter. The Adjustment Amount shall be calculated at the end of each quarter commencing April 30, 1998 and applied against the Trustee’s fee for the following quarter. The Adjustment Amount is an amount which is intended, depending upon the circumstances, either to (x) reduce the Trustee’s fee by the amount that Transaction Fees paid on creation and redemption exceed the costs of those activities, and by the amounts of excess earnings on cash held for the benefit of the Trust or (y) increase the Trustee’s fee by the amount that the Transaction Fee (plus additional amounts paid in connection with creations or redemptions outside the DIAMONDS Clearing Process), if any, paid on creations or redemptions, falls short of the actual costs of such

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activities. Therefore, the “Adjustment Amount” shall equal the sum of (z) the amount of the Transaction Fees paid to the Trustee during the most recent quarter, net of the expenses of issuance and settlement incurred in processing the associated creations and redemptions (which expenses shall include but not be limited to the cost of transactions with the Depository, telephone and other costs incurred in processing creation and redemption information with NSCC, direct systems hardware and software costs as well as telephone and other costs associated with taking and processing orders from Participants, collectively referred to herein as the “Processing Costs”), plus (zz) the amounts earned or benefits derived by the Trustee during the previous quarter in respect of cash held by the Trustee for the benefit of the Trust not otherwise utilized or expended for the benefit of the Trust. If in any quarter the Adjustment Amount exceeds the fee payable to the Trustee for such quarter as set forth above, the Trustee shall use such excess amount to reduce other Trust expenses, subject to certain federal tax limitations. To the extent that the amount of such excess exceeds the Trust’s expenses for such quarter, any remaining excess shall be retained by the Trustee as part of its compensation. If in any quarter the total amount of the Processing Costs calculated in accordance with subparagraph (z) above exceed the sum of (1) the amounts received by the Trustee as Transaction Fees, (2) the additional amounts paid in connection with creations or redemptions outside the DIAMONDS Clearing Process, if any, and (3) the excess earnings on cash held by the Trust calculated in accordance with subparagraph (zz) above, then the Trustee shall be entitled to augment the Trustee’s Fee by such sum. The Transaction Fee and any additional amounts prescribed in the Registration Statement shall be payable to the Trustee for each Creation Unit size aggregation of

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DIAMONDS created pursuant to Sections 2.02, 2.03 and 2.04 and for each Creation Unit size aggregation of DIAMONDS tendered for redemption pursuant to Section 5.02.
          (i) The Trustee shall compute on a daily basis the dividends accumulated and declared for the Securities within each Accumulation Period. The regular monthly ex-dividend date for DIAMONDS will be the third Friday in each calendar month, commencing in April, 1998, unless such day is not a Business Day, in which case the ex-dividend date will be the immediately preceding Business Day (the “Ex-Dividend Date”). Beneficial Owners as reflected on the records of the Depository and the DTC Participants on the second (2nd) Business Day following the Ex-Dividend Date (the “Record Date”) will be entitled to receive an amount representing dividends accumulated on the Securities through such Ex-Dividend Date, net of fees and expenses, accrued daily for such period. For the purposes of all dividend distributions, dividends per DIAMOND Unit will be calculated at least to the nearest 1/100th of $0.01. On each Record Date, the Trustee shall compute the aggregate amount of funds to be distributed through the Depository to Beneficial Owners as described in Section 3.11 on the Monday preceding the third (3rd) Friday in the next calendar month following each such Ex-Dividend Date, unless such day is not a Business Day, in which case the funds shall be distributed on the next following Business Day (the “Dividend Payment Date”) by deducting from available cash as of the close of business on the Dividend Payment Date the amount of (a) cash required for the redemption of unredeemed tendered DIAMONDS in Creation Unit size aggregations and (b) the sum of the amounts to be deducted on or before such Dividend Payment Date and pursuant to the foregoing provisions of this Section 3.04. On each Dividend Payment Date, the Trustee shall

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distribute to the Depository the aggregate amount of funds to be distributed to each Beneficial Owner pursuant to this Section 3.04 as described in Section 3.11.
          (j) Distribution of funds made to the Depository for distribution to Beneficial Owners as described in Section 3.11 with respect to moneys received by the Trust other than Income shall be made at least annually as described below.
          (k) The proceeds of any sale of Securities sold pursuant to Section 3.06 shall be used, subject to the provisions of such Section 3.06, to purchase shares of Index Securities pursuant to Section 2.04 in lieu of a distribution of capital as provided in this Section 3.04.
          (l) The Trustee further reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Trust as a Regulated Investment Company or to avoid imposition of income or excise taxes on undistributed income.
          (m) The Trustee further reserves the right to vary the frequency with which periodic distributions are made (e.g., from monthly to quarterly) if it is determined by the Sponsor and the Trustee, in their discretion, that such a variance would be advisable to facilitate compliance with the rules and regulations applicable to Regulated Investment Companies or would otherwise be advantageous to the Trust. Notice of any such variance (which notice shall include changes to the Record Date, the Ex-Dividend Date and the accumulation period resulting

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from such variance) shall be provided to Beneficial Owners via the Depository and the DTC Participants.
          (n) During the term of the Trust, the Trustee and the Sponsor shall undertake to ensure that the Trustee is adequately and reasonably compensated for its services hereunder. In the event that the Trustee and the Sponsor agree that additional compensation to the Trustee is warranted and appropriate to the Trustee, subject to the agreement of the Sponsor, the Trustee may be paid an additional compensation over and above the fees described above either (i) directly from the Sponsor or (ii) from the Trust subject to approval by the Beneficial Owners of 51% or more of the then outstanding DIAMONDS Units.
          Section 3.05. Statements and Reports . After the end of each fiscal year and within the time period required by applicable laws, rules and regulations, the Trustee will furnish to the DTC Participants for distribution to each person who was a Beneficial Owner of DIAMONDS at the end of such fiscal year, an annual report of the Trust containing financial statements audited by independent accountants of nationally recognized standing and such other information as may be required by such laws, rules and regulations.
          Section 3.06. Purchase and Sale of Securities . (a) The Trustee shall be required to purchase or sell Index Securities to conform the Portfolio to changes in the DJIA as described in Section 2.04. The Trustee shall calculate the adjustments to the Portfolio and place the appropriate buy or sell orders at such times and in the manner so prescribed in Section 2.04.

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          (b) The Trustee intends to make additional distributions with respect to moneys received by the Trust other than Income to the minimum extent necessary (i) to distribute the entire annual investment company taxable income of the Trust, plus any net capital gains (from sales of Securities in connection with adjustments to the Portfolio or to generate cash for such distributions), and (ii) to avoid imposition of the excise tax imposed by section 4982 of the Internal Revenue Code or any successor provision or any similarly imposed tax on income or gains.
          (c) The Trustee is empowered, in its discretion, to sell the requisite amount of Securities held in the Trust Fund to permit the payment of distributions pursuant to Section 3.04 in the event that the Trustee has insufficient amounts available in the Trust Fund to make such distributions. The Trustee shall not be responsible in any way for depreciation or loss incurred by reason of such sale.
          Section 3.07. Substitute Securities . In the event that an offer by the issuer of any of the Securities held in the Portfolio shall be made to issue new securities in exchange or substitution for any issue of Securities, the Trustee shall not accept such offer or take any other action with respect thereto until such time as it has been determined that the securities of the issuer will be removed from the DJIA. In the event that a security of an issuer is removed from the DJIA as a result of the consummation of merger or acquisition activity of such issuer and the Trust receives cash in exchange for the Security of such issuer held in the Portfolio, the Trustee shall reinvest such cash in Index Securities as provided in Section 2.04. If the Trust receives any

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securities in exchange for the Security of the issuer held in the Portfolio and removed from the DJIA, and such securities received in exchange are not included in the DJIA, the Trustee shall sell such securities as soon as practicable and reinvest the proceeds of the sale in the new Index Securities as provided in Section 2.04. The purchases and sales of Securities for the Trust Portfolio pursuant to this Section 3.07 shall be subject to the terms and conditions of this Agreement to the same extent as Portfolio Deposits. The Trustee shall not be liable or responsible in any way for any loss incurred by reason of a purchase or sale pursuant to this Section 3.07.
          Section 3.08. Counsel . The Trustee may employ from time to time counsel to act on behalf of the Trust and perform any legal services in connection with the Securities and the Trust, including any legal matters relating to the possible disposition or acquisition of any Securities pursuant to any provision hereof. The fees and expenses of such counsel shall be paid by the Trustee from the assets of the Trust.
          Section 3.09. Sale by Trustee . (a) Notwithstanding any provision contained in this Agreement, the Trustee shall not sell any Securities in the Portfolio unless such sale is required as a Portfolio Adjustment pursuant to and in accordance with Section 2.04 or is otherwise permitted in accordance with the provisions of Sections 3.01(b), 3.04(f), 3.06, 3.07, 5.02(e) or 8.04(b).

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          (b) If at any time the issuer of any Security fails to pay or declare an anticipated dividend or interest and provision for such payment has not been duly made, or there has been a material event affecting an issuer’s Security, the Trustee may not sell such Securities unless and until such Securities are removed from the DJIA or as otherwise permitted in accordance with Sections 3.06 and 3.07. The Trustee shall not be liable or responsible in any way for depreciation or loss incurred by reason of such sale or the failure to make such a sale.
          Section 3.10. Action by Trustee Regarding Voting . The Trustee shall have the exclusive right to vote all of the voting Securities of the Trust, and shall vote each of the Securities in the same proportion as all shares of each such Security are voted by all the shareholders of each such Security to the extent permissible, but if not permitted, shall abstain from voting. The Trustee shall not be liable to any person for any action or failure to take action with respect to this Section 3.10.
          Section 3.11. Book-Entry-Only System; Global Security . (a) The Depository will act as securities depository for DIAMONDS. DIAMONDS will be represented by a single Global Security, which will be registered in the name of Cede & Co., as nominee for the Depository and deposited with, or on behalf of, the Depository. Certificates will not be issued for DIAMONDS. The Global Security shall either be (1) in the form attached hereto as Exhibit B or (2) in a form substantially similar to the form in Exhibit C that shall represent such DIAMONDS as shall be specified therein and may provide that it shall represent the aggregate amount of outstanding DIAMONDS from time to time endorsed thereon and that the aggregate

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amount of outstanding DIAMONDS represented thereby may from time to time be reduced or increased to reflect exchanges. Any endorsement of a Global Security to reflect the amount, or any increase or decrease in the amount, of outstanding DIAMONDS represented thereby shall be made in such manner and upon instructions given by the Trustee as specified in the Depository Agreement.
          (b) The Trustee shall authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the outstanding DIAMONDS to be represented by one or more Global Securities, (ii) shall be registered in the name of the Depository for such Global Security or Global Securities or the nominee of such Depository, (iii) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instruction, and (iv) shall bear a legend substantially to the following effect: “Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.”

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          (c) The Depository has advised the Sponsor and the Trustee as follows: The Depository is a limited-purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. The Depository was created to hold securities of its participants (the “DTC Participants”) and to facilitate the clearance and settlement of securities transactions among the DTC Participants in such securities through electronic book-entry changes in accounts of the DTC Participants, thereby eliminating the need for physical movement of securities certificates. DTC Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations, some of whom (and/or their representatives) own the Depository./*/ Access to the Depository system is also available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (the “indirect Participants”). The Depository agrees with and represents to its participants that it will administer its book-entry system in accordance with its rules and by-laws and requirements of law.
          (d) Upon the settlement date of any creation, transfer or redemption of DIAMONDS, the Depository will credit or debit, on its book-entry registration and transfer
 
/*/   As of December 31, 1997, the Exchange owned 4.68347 of the issued and outstanding shares of common stock of the Depository and an affiliate of the Exchange, AMEX Clearing Corp., owned 0.00188 of the issued and outstanding shares of common stock of the Depository and the Trustee owned 4.35685% of the issued and outstanding shares of common stock of the Depository.

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system, the amount of DIAMONDS so created, transferred or redeemed to the accounts of the appropriate DTC Participants. The accounts to be credited and charged shall be designated by the Trustee to NSCC, in the case of a creation or redemption through the DIAMONDS Clearing Process, or by the Trustee and the DTC Participant, in the case of a creation or redemption transacted outside of the DIAMONDS Clearing Process. Beneficial ownership of DIAMONDS will be limited to DTC Participants, indirect Participants and persons holding interests through DTC Participants and indirect Participants. Ownership of beneficial interests in DIAMONDS (owners of such beneficial interests are referred to herein as “Beneficial Owners”) will be shown on, and the transfer of ownership will be effected only through, records maintained by the Depository (with respect to DTC Participants) and on the records of DTC Participants (with respect to indirect Participants and Beneficial Owners that are not DTC Participants or indirect Participants). Beneficial Owners are expected to receive from or through the DTC Participant a written confirmation relating to their purchase of DIAMONDS.
          (e) So long as Cede & Co., as nominee of the Depository, is the registered owner of DIAMONDS, references herein to the registered or record owners of DIAMONDS shall mean Cede & Co. and shall not mean the Beneficial Owners of DIAMONDS. Beneficial Owners of DIAMONDS will not be entitled to have DIAMONDS registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered the record or registered holder thereof under the Trust Agreement. Accordingly, each Beneficial Owner must rely on the procedures of the DTC Participant or Depository and, if such Beneficial Owner is not a DTC Participant, on the procedures of the

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indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of DIAMONDS under the Trust Agreement. The Trustee and the Sponsor understand that under existing industry practice, in the event the Trustee requests any action of DIAMONDS holders, or a Beneficial Owner desires to take any action that the Depository, as the record owner of all outstanding DIAMONDS, is entitled to take, the Depository would authorize the DTC Participants to take such action and that the DTC Participants would authorize the indirect Participants and Beneficial Owners acting through such DTC Participants to take such action or would otherwise act upon the instructions of Beneficial Owners owning through them.
          (f) As described above, the Trustee will recognize the Depository or its nominee as the owner of all DIAMONDS for all purposes except as expressly set forth in this Agreement. Conveyance of all notices, statements and other communications to Beneficial Owners will be effected as follows. Pursuant to the Depository Agreement, the Depository is required to make available to the Trustee upon request and for a fee to be charged to the Trust a listing of the DIAMONDS Unit holdings of each DTC Participant. The Trustee shall inquire of each such DTC Participant as to the number of Beneficial Owners holding DIAMONDS, directly or indirectly, through such DTC Participant. The Trustee shall provide each such DTC Participant with sufficient copies of such notice, statement or other communication, in such form, number and at such place as such DTC Participant may reasonably request, in order that such notice, statement or communication may be transmitted by such DTC Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each such DTC Participant an

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amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.
          (g) DIAMONDS Unit distributions shall be made to the Depository or its nominee, Cede & Co., as the registered owner of all DIAMONDS. The Trustee and the Sponsor expect that the Depository or its nominee, upon receipt of any payment of distributions in respect of DIAMONDS, shall credit immediately DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in DIAMONDS as shown on the records of the Depository or its nominee. The Trustee and the Sponsor also expect that payments by DTC Participants to indirect Participants and Beneficial Owners of DIAMONDS held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in a “street name,” and will be the responsibility of such DTC Participants. Neither the Trustee nor the Sponsor will have any responsibility or liability for any aspects of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in DIAMONDS, or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests or for any other aspect of the relationship between the Depository and the DTC Participants or the relationship between such DTC Participants and the indirect Participants and Beneficial Owners owning through such DTC Participants.
          (h) The Depository may determine to discontinue providing its services with respect to DIAMONDS at any time by giving notice to the Trustee and the Sponsor and

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discharging its responsibilities with respect thereto under applicable law. Under such circumstances, the Trustee and the Sponsor shall take action either to find a replacement for the Depository to perform its functions at a comparable cost or, if such a replacement is unavailable, to terminate the Trust as provided in Article IX.
ARTICLE IV
Evaluation of Securities
          Section 4.01. Evaluation of Securities . The Trustee shall make available to NSCC prior to the commencement of trading on each Business Day a list of the names and required number of shares of each of the Index Securities in the current Portfolio Deposit as well as the amount of the Dividend Equivalent Payment for the previous Business Day. Under certain extraordinary circumstances which may make it impossible for the Trustee to provide such information to NSCC on a given Business Day, NSCC shall use the information regarding the identity and required number of shares of the Index Securities of the Portfolio Deposit on the previous Business Day. Any such determination shall be effective for all creations and redemptions made at the close of the Business Day of such creations and redemptions. The evaluation with respect to the aggregate value of the Securities as used in calculating the net asset value of the Trust shall be made as follows: If the Securities are listed on one or more national securities exchanges, such evaluation shall generally be based on the closing sale price on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the exchange which is deemed to be the principal market therefor (the New York or American Stock

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Exchange, if the securities are listed thereon) or, if there is no such appropriate closing sale price on such exchange, at the closing bid price (unless the Trustee deems such price inappropriate as a basis for evaluation). If the Securities are not so listed or, if so listed and the principal market therefor is other than on such exchange or there is no such closing bid price available, such evaluation shall generally be made by the Trustee in good faith based on the closing price on the over-the-counter market (unless the Trustee deems such price inappropriate as a basis for evaluation) or if there is no such appropriate closing price, (a) on current bid prices, (b) if bid prices are not available, on the basis of current bid prices for comparable securities, (c) by the Trustee’s appraising the value of the securities in good faith on the bid side of the market, or (d) by any combination thereof.
          Section 4.02. Responsibility of the Trustee . The Sponsor and the Beneficial Owners may rely on any evaluation furnished by the Trustee and the Sponsor shall have no responsibility for the accuracy thereof. The determinations made by the Trustee hereunder shall be made in good faith upon the basis of, and the Trustee shall not be liable for any errors contained in, information reasonably available to it. The Trustee shall be under no liability to the Sponsor, or to Beneficial Owners, for errors in judgment, provided, however, that this provision shall not protect the Trustee against any liability to which it would otherwise be subject by reason of wilful misfeasance, wilful misconduct, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties hereunder.

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          Section 4.03. Continued Qualification as Regulated Investment Company . The Trustee shall perform such reviews, file such reports or take any and all such action as it is advised by counsel or accountants employed by the Trustee as required in order to continue the qualification of the Trust as a Regulated Investment Company.
ARTICLE V
Trust Fund Evaluation and Redemption of Creation Units
     Section 5.01. Trust Fund Evaluation . As of the Evaluation Time (1) on each Business Day and (2) upon termination of the Trust, the Trustee shall, in determining the net asset value of the Trust:
(a) subtract all Liabilities (including accrued expenses and dividends payable) from the total value of the Trust’s investments and other assets and (b) divide the resulting figure by the total number of outstanding DIAMONDS. The resulting figure is herein called a “Trust Fund Evaluation.” The amount of cash held by the Trust (including dividends receivable on stocks trading ex-dividend) is computed as of such Evaluation Time (a) on each day on which DIAMONDS in Creation Unit size aggregations are tendered for redemption and (b) on any other day desired by the Trustee.
          Section 5.02. Redemption of DIAMONDS in Creation Unit Size Aggregations . (a) DIAMONDS in Creation Unit size aggregations will be redeemable in kind when such Creation

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Unit size aggregation is in the account of a single DTC Participant by submitting a request for redemption to the Trustee in the manner specified below.
          (b) Requests for redemptions of Creation Units may be made on any Business Day to the Trustee through the DIAMONDS Clearing Process. Requests for redemptions of Creation Units may also be made directly to the Trustee outside the DIAMONDS Clearing Process. Requests for redemption shall not be made to the Distributor. In the case of redemptions made through the DIAMONDS Clearing Process, the Transaction Fee will be deducted from the amount delivered to the redeemer and in case of redemptions tendered directly to the Trustee outside the DIAMONDS Clearing Process, an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit, will be deducted from the amount delivered to the redeemer due in part to the increased expense associated with delivery outside the DIAMONDS Clearing Processes. In all cases, both the tender of DIAMONDS for redemption and distributions to the redeemer in respect of DIAMONDS redeemed will be effected through the Depository and the relevant DTC Participant(s) to the Beneficial Owner thereof as recorded on the book entry system of the Depository or the relevant DTC Participant, as the case may be.
          (c) The Trustee will transfer to the redeemer via the Depository and the relevant DTC Participant(s) a portfolio of securities for each Creation Unit size aggregation of DIAMONDS delivered, in most cases (other than as provided in subsections (g) and (h) hereof) identical in price weightings and composition to the securities portion of a Portfolio Deposit as in effect on the date a request for redemption is made, other than at such time as notice of the

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termination of the Trust is given, in which case the portfolio of securities so delivered shall be identical in price weightings and composition to the Securities in the Trust on the date of such notice. The Trustee will also transfer via the relevant DTC Participant(s) to the redeeming Beneficial Owner in cash the “Cash Redemption Payment”, which on any given Business Day is an amount in most cases identical to the amount of the Cash Component and is equal to a proportional amount of the following: dividends, on a per Creation Unit basis, on all the Securities for the period through the date of redemption, net of expenses for such period (including, without limitation, (x) taxes or other governmental charges against the Trust not previously deducted if any, and (y) accrued fees of the Trustee and other expenses of the Trust (including legal and auditing expenses) and other expenses not previously deducted, as if all the Securities had been held for the entire Accumulation Period for such distribution, plus or minus the Balancing Amount. To the extent that any amounts payable to the Trust by the redeeming Beneficial Owner exceed the amount of the Cash Redemption Payment, such Beneficial Owner shall be required to deliver payment thereof to the Trustee. The Trustee will transfer the cash and securities to the redeeming Beneficial Owner on the third (3rd) NSCC Business Day following the date on which request for redemption is made. The Trustee will cancel all DIAMONDS delivered upon redemption.
          (d) In the event that the Trustee determines, in its discretion, that an Index Security is likely to be unavailable or available in insufficient quantity for delivery by the Trust upon the redemption of DIAMONDS in Creation Unit size aggregations, the cash equivalent based on the market value of such Index Security (determined in accordance with the protocols listed in

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Section 4.01 hereof), at the close of the market on the date redemption is requested may be included in the Portfolio Deposit as a part of the Cash Redemption Payment, in lieu of the inclusion of such Index Security in the securities portion of the Portfolio Deposit.
          (e) If the income received by the Trust in the form of dividends and other distributions on the Securities is insufficient to allow distribution of the Cash Redemption Payment, the Trustee may advance out of its own funds any amounts necessary in respect of redemptions of DIAMONDS pursuant to Section 3.01(b); otherwise, the Trustee may sell Securities in an amount sufficient to effect such redemptions. The Trustee will reimburse itself in the amount of such advance plus Federal Reserve Board reserve requirements together with interest thereon at a percentage rate equal to then current overnight federal funds rate by deducting such amounts from (1) dividend payments or other income of the Trust when such payments or other income is received, (2) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (3) the sale of Securities. Notwithstanding the foregoing, in the event that any advance remains outstanding for more than forty-five (45) Business Days, the Trustee shall sell Securities to reimburse itself for such advance and any accrued interest thereon. Such advances will be secured by a lien on the assets of the Trust in favor of the Trustee.
          (f) The Trustee may, in its discretion, and will when so directed by the Sponsor, suspend the right of redemption, or postpone the date of payment of the net asset value for more than five (5) Business Days following the date on which request for redemption is made, for any

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period during which the New York Stock Exchange is closed or trading is suspended; for any period during which an emergency exists as a result of which disposal or evaluation of the Securities is not reasonably practicable; or for such other period as the Commission may by order permit for the protection of Beneficial Owners. Neither the Sponsor nor the Trustee is liable to any person or in any way for any loss or damages which may result from any such suspension or postponement.
          (g) Upon the specific request of a redeemer, the Trustee may, in its discretion, redeem DIAMONDS in Creation Unit size aggregations delivered by such redeemer, either in whole or in part, by providing such redeemer with a portfolio of Securities then held by the Trust which (1) differs in exact composition and/or weighting from the Index Securities held in the DJIA at such time (2) but does not differ in net asset value from the then-current Portfolio Deposit. The Trustee may agree to such redemption if the Trustee were to determine that such differing portfolio of Securities would be appropriate in order to maintain the Trust Portfolio’s correspondence to the price weighted composition of the DJIA, for example, when a stock split of one or more of the Index Securities occurs.
          (h) In connection with redemption of DIAMONDS, if an investor states its belief that it is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee, in its discretion, shall have the right to include the cash equivalent value of such Index Securities (determined in accordance with the protocols listed in Section 4.01 hereof) in the Portfolio Deposit as part of the Cash Redemption Payment, in lieu of

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the inclusion of such Index Securities in the securities portion of the Portfolio Deposit for the affected investor. In any such case an investor shall pay the Trustee the standard Transaction Fee plus an additional amount not to exceed 3 times the standard Transaction Fee.
ARTICLE VI
Transfer of DIAMONDS in Creation Unit Size Aggregations
          Section 6.01. Transfer of DIAMONDS in Creation Unit Size Aggregations . DIAMONDS in Creation Unit size aggregations may be transferred only through the book-entry system of the Depository as provided in Section 3.11. Beneficial Owners have the rights accorded to holders of “book-entry” securities under applicable law. Beneficial Owners may transfer DIAMONDS through the Depository by instructing the DTC Participant holding the DIAMONDS for such Beneficial Owner in accordance with standard securities industry practice.
ARTICLE VII
Sponsor
          Section 7.01. Responsibility and Duties . The Sponsor shall be liable in accordance herewith for the obligations imposed upon and undertaken by the Sponsor hereunder. The Trustee will make available to NSCC prior to the commencement of trading on each Business Day a list of the names and required number of shares of each of the Index Securities in the

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current Portfolio Deposit as well as the amount of the Dividend Equivalent Payment effective through and including the previous Business Day. The Sponsor presently intends, but is not obligated, to determine and cause to be announced (a) on a daily basis, the Dividend Equivalent Payment effective through and including the previous Business Day, per outstanding DIAMOND Unit, and (b) throughout the day at the Exchange a number representing, on a per DIAMOND Unit basis, the sum of the Dividend Equivalent Payment effective through and including the previous Business Day, plus the current value of the securities portion of a Portfolio Deposit as in effect on such day (which value will occasionally include a cash in lieu amount to compensate for the omission of a particular Index Security from such Portfolio Deposit). Such information will be calculated based upon the best information available to the Sponsor and may be calculated by other persons designated to do so by the Sponsor.
          Section 7.02. Certain Matters Regarding Successor Sponsor . The covenants, provisions and agreements herein contained shall in every case be binding upon any successor to the business of the Sponsor, except that no successor Sponsor may be a partnership. In the event of an assignment by the Sponsor to a successor corporation as permitted by the next following sentence, the Sponsor shall be relieved of all further liability under this Agreement. The Sponsor may transfer all or substantially all of its assets to a corporation which carries on the business of the Sponsor, if at the time of such transfer such successor duly assumes all the obligations of the Sponsor under this Agreement.

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          Section 7.03. Resignation of Sponsor; Successors . If at any time the Sponsor desires to resign its position as Sponsor hereunder, it may resign by delivering to the Trustee an instrument of resignation executed by the Sponsor. Such resignation shall not become effective until the earlier of (i) the appointment by the Trustee of a successor Sponsor to assume, with such compensation from the Trust Fund as the Trustee may deem reasonable under the circumstances, but not exceeding the amounts prescribed by the Securities and Exchange Commission, the duties and obligations of the resigning Sponsor hereunder by an instrument of appointment and assumption executed by the Trustee and the successor Sponsor; or (ii) the Trustee shall have agreed to act as Sponsor hereunder succeeding to all the rights and duties of the resigning Sponsor without appointing a successor Sponsor and without terminating this Agreement or the Indenture; or (iii) the Trustee shall have terminated this Agreement and liquidated the Trust, which action the Trustee shall have taken if, within sixty (60) days following the date on which a notice of resignation shall have been delivered by the Sponsor, a successor Sponsor has not been appointed or the Trustee has not agreed to act as Sponsor hereunder. If the Sponsor shall fail to undertake or perform or become incapable of undertaking or performing its duties hereunder or shall become bankrupt or its affairs shall be taken over by public authorities, the Trustee shall act in accordance with the provisions set forth in Section 8.01(g). Any such successor Sponsor shall be satisfactory to the Trustee. Upon effective resignation hereunder, the resigning Sponsor shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring prior to such resignation, and the new Sponsor shall thereupon undertake and perform all duties and be entitled to all rights and

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compensation as Sponsor under this Agreement. The successor Sponsor shall not be under any liability hereunder for occurrences or omissions prior to the execution of such instrument.
          Section 7.04. Liability of Sponsor and Indemnification . (a) The Sponsor shall not be under any liability to the Trust, the Trustee, or any Beneficial Owner for any action taken or for refraining from the taking of any action in good faith pursuant to this Agreement, or for errors in judgment or for depreciation or loss incurred by reason of the purchase or sale of any Securities; provided, however, that this provision shall not protect the Sponsor against any liability to which it would otherwise be subject by reason of its own gross negligence, bad faith, wilful misconduct or wilful malfeasance in the performance of its duties hereunder or reckless disregard of its obligations and duties hereunder. The Sponsor may rely in good faith on any paper, order, notice, list, affidavit, receipt, evaluation, opinion, endorsement, assignment, draft or any other document of any kind prima facie properly executed and submitted to it by the Trustee, the Trustee’s counsel or by any other person for any matters arising hereunder. The Sponsor shall in no event be deemed to have assumed or incurred any liability, duty, or obligation to any Beneficial Owner or to the Trustee other than as expressly provided for herein.
          (b) The Sponsor and its directors, shareholders, officers, employees, affiliates (as such term is defined in Regulation S-X) and subsidiaries (each a “Sponsor Indemnified Party”) shall be indemnified from the Trust Fund and held harmless against any loss, liability or expense incurred without (1) gross negligence, bad faith, wilful misconduct or wilful malfeasance on the part of such Sponsor Indemnified Party arising out of or in connection with the performance of

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its obligations hereunder or any actions taken in accordance with the provisions of this Agreement or the Indenture or (2) reckless disregard on the part of such Sponsor Indemnified Party of its obligations and duties under this Agreement or the Indenture. Such indemnity shall include payment from the Trust Fund of the costs and expenses incurred by such Sponsor Indemnified Party in defending itself against any claim or liability in its capacity as Sponsor hereunder. Any amounts payable to a Sponsor Indemnified Party under this Section 7.04 may be payable in advance or shall be secured by a lien on the Trust Fund. The Sponsor shall not be under any obligation to appear in, prosecute or defend any legal action which in its opinion may involve it in any expense or liability; provided, however, that if in the Sponsor’s opinion action is required with respect to an event or condition which would have a material adverse effect on the Trust, the Sponsor shall notify the Trustee of such event or condition. If the Trustee does not act within ten days after receipt of such notice, the Sponsor may undertake any such action it may deem necessary or desirable in respect of this Agreement and the rights and duties of the parties hereto and the interests of the Beneficial Owners and, in such event, the legal expenses and costs of any such action shall be expenses and costs of the Trust Fund and the Sponsor shall be entitled to be reimbursed therefor by the Trust.
          (c) The Sponsor shall not be liable except by reason of its own gross negligence, bad faith, wilful misconduct or wilful malfeasance for any action taken or suffered to be taken by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Agreement, or reckless disregard of its obligations and duties hereunder or under the Indenture.

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ARTICLE VIII
Trustee
          Section 8.01. General Definition of Trustee’s Rights, Duties and Responsibilities . In addition to and notwithstanding the other duties, rights, privileges and liabilities of the Trustee as otherwise set forth in this Agreement, the duties, rights, privileges and liabilities of the Trustee are further defined as follows:
          (a) All monies deposited with or received by the Trustee hereunder shall be held by it, without interest other than as provided in Section 3.04, as a deposit for the account of the Trust in accordance with the provisions of Section 2.05, until required to be disbursed in accordance with the provisions of this Agreement. Such monies shall be deemed segregated by maintaining such monies in an account for the exclusive benefit of the Trust in accordance with the provisions of Section 2.05.
          (b) The Trustee shall not be under any liability for any action taken in good faith reliance on any appraisal, paper, certification, order, list, demand, request, consent, affidavit notice, opinion, direction, valuation, endorsement, assignment, resolution, draft or other documents prima facie properly executed, provided, however that where a list of authorized officials and their signatures are on file with the Trustee, the Trustee shall be required to compare such manual signatures to the signature on any such documents. (Such requirement

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shall not apply to “personal identification numbers” or “PINS” or other forms of electronic security devices which function as a proxy for a manual signature.)
          (c) The Trustee shall not be under any liability for the disposition of monies, or of any of the Securities, or in respect of any evaluation which it is required to make under this Agreement or otherwise, except by reason of its own gross negligence, bad faith, wilful misconduct or wilful malfeasance, or reckless disregard of its duties and obligations hereunder and the Trustee may construe any of the provisions of this Agreement, insofar as the same may be ambiguous or inconsistent with any other provisions hereof, and any reasonable construction of any such provision hereof by the Trustee in good faith shall be binding upon the parties hereto and all Beneficial Owners.
          (d) The Trustee shall not be responsible for the due execution hereof by the Sponsor or for the form, character, genuineness, sufficiency, value or validity of any of the Securities, or for the due execution thereof by any Depositor, and the Trustee shall in no event assume or incur any liability, duty or obligation to any Beneficial Owner or the Sponsor, other than as expressly provided for herein.
          (e) The Trustee shall not be under any obligation to appear in, prosecute or defend any action which in its opinion may involve it in expense or liability, unless it shall be furnished with reasonable security and indemnity against such expense or liability. Any pecuniary cost of

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the Trustee resulting from the Trustee’s appearance in, prosecution of or defense of any such actions shall be deductible from and constitute a lien against the assets of the Trust. Subject to the foregoing, the Trustee shall, in its discretion, undertake such action as it may deem necessary at any and all times to protect the Trust Fund and the rights and interest of all Beneficial Owners pursuant to the terms of this Agreement; provided, however, that the expenses and costs of such actions, undertakings or proceedings shall be deductible from the assets of the Trust or otherwise reimbursable to the Trustee from, and shall constitute a lien against, the assets of the Trust.
          (f) The Trustee may employ agents, attorneys, accountants, auditors and other professionals and shall not be answerable for the default or misconduct of any such agents, attorneys, accountants, auditors and other professionals if such agents, attorneys, accountants, auditors or other professionals shall have been selected in good faith. The Trustee shall not be liable in respect of any action taken under this Agreement or the Indenture, or suffered, in good faith by the Trustee, in accordance with the opinion of its counsel. The accounts of the Trust Fund shall be audited, as required by law, by independent certified public accountants designated from time to time by the Trustee, and the report of such accountants shall be furnished by the Trustee to Beneficial Owners as described in Section 3.11 upon request. The fees and expenses charged by such agents, attorneys, accountants, auditors or other professionals shall constitute an expense of the Trust.
          (g) If the Sponsor shall fail to undertake or perform or shall become incapable of undertaking or performing any of the duties which by the terms of this Agreement are required to

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be undertaken or performed by it, and such failure shall not be cured within fifteen (15) Business Days following receipt of notice from the Trustee of such failure, or if the Sponsor shall be adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property shall be appointed, or a trustee or liquidator or any public officer shall take charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then in any such case, the Trustee may do any one or more of the following: (1) appoint a successor Sponsor to assume, with such compensation from the Trust Fund as the Trustee may deem reasonable under the circumstances, but not exceeding the reasonable amounts prescribed by the Securities and Exchange Commission in accordance with Section 26(a)(2)(C) of the Investment Company Act of 1940, or any successor provision, the duties and obligations of the resigning Sponsor hereunder by an instrument of appointment and assumption executed by the Trustee and the successor Sponsor; or (2) agree to act as Sponsor hereunder without appointing a successor Sponsor and without terminating this Agreement or the Indenture; or (3) terminate this Agreement and Indenture and liquidate the Trust pursuant to Section 9.01.
          (h) If the evaluation of the Trust Fund as shown by any Trust Fund Evaluation shall be less than the Discretionary Liquidation Value, the Trustee shall, only when so directed in writing by the Sponsor, terminate this Agreement and the applicable Indenture and the Trust Fund created hereby and thereby and liquidate such Trust Fund, all in the manner provided in Section 9.01.

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          (i) In no event shall the Trustee be personally liable for any taxes or other governmental charges imposed upon or in respect of the Securities or upon the Income thereon or upon it as Trustee hereunder or upon or in respect of the Trust Fund which it may be required to pay under any present or future law of the United States of America or of any other taxing authority having jurisdiction in the premises. For all such taxes and charges and for any expenses, including counsel’s fees, which the Trustee may sustain or incur with respect to such taxes or charges, the Trustee shall be reimbursed and indemnified out of the assets of the Trust Fund and the payment of such amounts shall be secured by a lien on the Trust Fund.
          (j) The Trustee shall not be liable except by reason of its own gross negligence, bad faith, wilful misconduct or wilful malfeasance for any action taken or suffered to be taken by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Agreement or reckless disregard of its obligations and duties hereunder or under the Indenture.
          (k) So long as required by Section 26(a)(2)(C) of the Investment Company Act of 1940, or any successor provision, and the rules promulgated thereunder, no payment to the Sponsor or to any affiliated person (as so defined) or agent of the Sponsor shall be allowed as an expense of the Trust except for payment not in excess of such reasonable amounts as the Securities and Exchange Commission may prescribe as compensation for performing bookkeeping and other administrative services of a character normally performed by the Trustee itself and except as the Securities and Exchange Commission may permit by order.

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          (l) The Trustee in its individual or any other capacity may become an owner or pledgee of, or be an underwriter or dealer in respect of, bonds or other obligations issued by the same issuer (or an affiliate of such issuer) of any Securities at any time held as part of the Trust Fund or DIAMONDS and may deal in any manner with the same or with the issuer (or an affiliate of the issuer) with the same rights and powers as if it were not the Trustee hereunder, including, but not limited to making loans or maintaining other banking relationships with any such issuer.
          (m) The Trustee shall discharge all of its obligations and perform all of its duties under the Participant Agreement.
          (n) The Trustee shall not be under any liability for the furnishing of any information to the Sponsor and the subsequent distribution of any such information, to Beneficial Owners or potential Beneficial Owners of DIAMONDS except by reason of its own gross negligence, bad faith, wilful misconduct or wilful malfeasance, or reckless disregard of its duties and obligations hereunder. Subject to the foregoing, the Trustee shall undertake to provide to the Sponsor information necessary for the Sponsor to compute an estimate of the net asset value, on an intraday basis, and provide such estimate to Beneficial Owners of DIAMONDS.
          Section 8.02. Books, Records and Reports . (a) The Trustee shall keep proper books of record and account of all the transactions under this Agreement at its office located in Quincy, Massachusetts or such office as it may subsequently designate upon notice to the other

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parties hereto. The books and records of the Trust Fund shall be open to inspection by any Beneficial Owner at all reasonable times during the usual business hours of the Trustee. The Trustee shall keep proper record of the creation and redemption of Creation Units at its Quincy Office. Such records of the creation and redemption of Creation Units shall be open to inspection at all reasonable times during the usual business hours of the Trustee.
          (b) The Trustee shall make, or cause to be made, such annual or other reports and file such documents as it is advised by counsel or accountants employed by it as are required of the Trust by the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Company Act of 1940 and including, but not limited to, Form N-SAR and filings pursuant to Rule 24f-2 under the Investment Company Act of 1940, make such elections and file such tax returns as it is advised by counsel or accountants employed by it as are from time to time required under any applicable state or federal statute or rule or regulation thereunder, in particular, for the continuing qualification of the Trust as a Regulated Investment Company. The Trust’s fiscal year shall be set forth in the Indenture and may be changed from time to time by the Trustee and the Sponsor without consent of the Beneficial Owners.
          Section 8.03. Indenture and List of Securities on File . The Trustee shall keep a certified copy or duplicate original of this Agreement on file in its office and available for inspection at all reasonable times during its usual business hours by any Beneficial Owner, together with the Indenture for each Series then in effect and the Trustee shall keep and so make

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available for inspection a current list of the Securities in the Portfolio, including the identity and number of shares of each of the Securities.
          Section 8.04. Compensation of Trustee . (a) The Trustee shall receive, at the times set forth in this Agreement, as compensation for performing its services under this Agreement, an amount equal to the amount specified as compensation for the Trustee in Section 3.04. The computation of such compensation shall be made as set forth in Section 3.04. Such compensation shall be accrued daily by the Trustee in accordance with Section 3.04.
          (b) The Trustee shall charge the Trust for those expenses and disbursements incurred hereunder as contemplated by this Agreement, including legal, brokerage and auditing expenses; provided, however, that the amount of any such charge which has not been finally determined as of any Dividend Payment Date may be estimated and any necessary adjustments shall be made in the succeeding month. The Trustee may direct that all such expenses and disbursements shall be paid directly from the assets of the Trust. If the cash balances of the Trust shall be insufficient to provide for amounts payable pursuant to this Section 8.04, the Trustee may, in its discretion, advance out of its own funds such amounts as are payable and reimburse itself for such advances as funds become available or from the proceeds of Securities sold to reimburse such advances. The Trustee will reimburse itself in the amount of any such advance, plus Federal Reserve Board reserve requirements, including those amounts made pursuant to Section 3.01(b) together with interest thereon at a percentage rate equal to the then current overnight federal funds rate, by deducting such amounts from (1) dividend payments or

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other income of the Trust when such payments or other income is received, (2) the amounts earned or benefits derived by the Trustee on cash held by the Trustee for the benefit of the Trust, and (3) the sale of Securities. Notwithstanding the foregoing, in the event that any advance remains outstanding for more than forty-five (45) Business Days, the Trustee shall sell Securities to reimburse itself for the amount of such advance and any accrued interest thereon. Such advances will be secured by a lien on the assets of the Trust in favor of the Trustee.
          Section 8.05. Indemnification of Trustee . The Trustee and its directors, shareholders, officers, employees, agents, affiliates (as such term is defined in Regulation S-X) and subsidiaries (each a “Trustee Indemnified Party”) shall be indemnified from the Trust Fund and held harmless against any loss, liability or expense incurred without (1) gross negligence, bad faith, wilful misconduct or wilful malfeasance on the part of such Trustee Indemnified Party arising out of or in connection with the acceptance or administration of this Trust and any actions taken in accordance with the provisions of this Agreement or arising out of the administration of any Section of this Agreement or any Section of the Indenture or (2) reckless disregard on the part of such Trustee Indemnified Party of its obligations and duties under this Agreement or the Indenture. Such indemnity shall include payment from the Trust Fund of the costs and expenses incurred by such Trustee Indemnified Party in defending itself against any claim or liability relating to this Agreement, the Indenture or the Trust Fund, including any loss, liability or expense incurred in acting pursuant to written directions or instructions to the Trustee given by the Sponsor or counsel to the Trust from time to time in accordance with the provisions of this Agreement or in undertaking actions from time to time which the Trustee deems necessary in its

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discretion to protect the Trust Fund and the rights and interest of all Beneficial Owners pursuant to the terms of this Agreement. Any amounts payable to a Trustee Indemnified Party under this Section 8.05 may be payable in advance or shall be secured by a lien on the Trust Fund.
          Section 8.06. Resignation, Discharge or Removal of Trustee; Successors. (a) The Trustee may resign and be discharged of the Trust created by this Agreement and the Indenture by executing an instrument in writing resigning as such Trustee, filing the same with the Sponsor, if any, and mailing a copy of a notice of resignation to all DTC Participants for distribution to Beneficial Owners as provided in Section 3.11 not less than 60 days before the date specified in such instrument when, subject to Section 8.06(c), such resignation is to take effect. The Trustee shall be advised by the Depository as to the holdings of all DTC Participants pursuant to the Depository Agreement. In case at any time the Trustee shall not meet the requirements set forth in Section 8.07 hereof, shall fail to undertake or perform or shall become incapable of undertaking or performing any of the duties which by the terms of this Agreement are required to be undertaken or performed by it, and such failure shall not be cured within fifteen (15) Business Days following receipt of notice from the Sponsor of such failure, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or a trustee or liquidator or any public officer shall take charge or control of such Trustee or of its property or affairs for the purposes of rehabilitation, conservation or liquidation, then in any such case, the Sponsor may, subject to the requirements of Section 8.06(b) and (c), remove such Trustee and appoint a successor Trustee by written instrument or instruments delivered to the Trustee so removed and to the successor Trustee. Upon receiving notice of

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resignation or removal of the Trustee, the Sponsor shall use its best efforts promptly to appoint a successor Trustee in the manner and meeting the qualifications hereinafter provided, by written instrument or instruments delivered to such resigning Trustee and the successor Trustee. Notice of such appointment of a successor Trustee shall be mailed promptly after acceptance of such appointment by the successor Trustee to all DTC Participants for distribution to Beneficial Owners as provided in Section 3.11. Beneficial Owners of 51 percent of the DIAMONDS then outstanding may at any time remove the Trustee by written instrument or instruments delivered to the Trustee and Sponsor. The Sponsor shall thereupon use its best efforts to appoint a successor Trustee in the manner provided herein. Upon effective resignation hereunder, the resigning Trustee shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring prior to such resignation, and the new Trustee shall thereupon undertake and perform all duties and be entitled to all rights and compensation as Trustee under this Agreement. The successor Trustee shall not be under any liability hereunder for occurrences or omissions prior to the execution of such instrument.
          (b) In case at any time the Trustee shall be removed or shall resign and no successor Trustee shall have been appointed within sixty (60) days after the date notice of removal has been received by the Trustee or the Trustee has issued its notice of resignation, the Trustee shall terminate this Agreement and Indenture and liquidate the Trust pursuant to Section 9.01.

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          (c) Any successor Trustee appointed hereunder shall execute and acknowledge to the Sponsor and to the retiring Trustee an instrument accepting such appointment hereunder, and such successor Trustee without any further act, deed or conveyance shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder with like effect as if originally named a Trustee herein and shall be bound by all the terms and conditions of this Agreement and the Indenture. Upon the request of such successor Trustee the retiring Trustee and the Sponsor shall, upon payment of all amounts due the retiring Trustee, execute and deliver an instrument acknowledged by it transferring to such successor Trustee all the rights and powers of the retiring Trustee; and the retiring Trustee shall transfer, deliver and pay over to the successor Trustee all Securities and monies at the time held by it hereunder, if any, together with all necessary instruments of transfer and assignment or other documents properly executed necessary to effect such transfer and such of the records or copies thereof maintained by the retiring Trustee in the administration hereof as may be requested by the successor Trustee and shall thereupon be discharged from all duties and responsibilities under this Agreement. Any resignation or removal of a Trustee and appointment of a successor Trustee pursuant to this Section 8.06 shall become effective upon such acceptance of appointment by the successor Trustee. The indemnification of such Trustee and any other Trustee Indemnified Party provided for under Section 8.05 hereof shall survive any resignation, discharge or removal of the Trustee hereunder.
          (d) Any bank, trust company, corporation or national banking association into which a Trustee hereunder may be merged or with which it may be consolidated, or any bank,

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trust company, corporation or national banking association resulting from any merger or consolidation to which such Trustee hereunder shall be a party, or any bank, trust company, corporation or national banking association succeeding to all or substantially all of the business of the Trustee, shall be the successor Trustee under this Agreement without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto, anything herein, or in any agreement relating to such merger, consolidation or succession, by which any such Trustee may seek to retain certain powers, rights and privileges theretofore obtaining for any period of time following such merger or consolidation, to the contrary notwithstanding.
          Section 8.07. Qualifications of Trustee . The Trustee or successor Trustee shall be a bank, trust company, corporation or national banking association organized and doing business under the laws of the United States or any state thereof, and shall be authorized under such laws to exercise corporate trust powers. The Trustee and any successor Trustee shall have at all times an aggregate capital, surplus, and undivided profits of not less than $50,000,000.
          Section 8.08. Trustee’s Duties Expressly Provided for Herein. Except as otherwise expressly provided for in this Agreement, the Trustee shall have no duties or obligations hereunder.

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ARTICLE IX
Termination
          Section 9.01. Procedure Upon Termination . (a) If within 90 days from the date that the registration statement relating to the Trust becomes effective under the Securities Act of 1933 the net worth of the Trust shall have fallen to less than $100,000, the Trustee shall, upon the direction of the Sponsor, terminate the Trust and distribute to each Beneficial Owner such Beneficial Owner’s pro rata share of the assets of the Trust. The Sponsor will have the discretionary right to direct the Trustee to terminate the Trust if at any time after six months following and prior to three years following the Initial Date of Deposit the net asset value of the Trust falls below $150,000,000 and if at any time after three years following the Initial Date of Deposit such value is less than $350,000,000, as such dollar amount shall be adjusted for inflation in accordance with the CPI-U, such adjustment to take effect at the end of the fourth year following the Initial Date of Deposit and at the end of each year thereafter and to be made so as to reflect the percentage increase in consumer prices as set forth in the CPI-U for the twelve month period ending in the last month of the preceding fiscal year (the “Discretionary Termination Amount”). In such case, the Trustee shall, upon receipt of instruction from the Sponsor, terminate this Agreement, the Indenture and the Trust created hereby. Any termination pursuant to the two preceding sentences shall be at the complete discretion of the Sponsor subject to the terms hereof, and the Sponsor shall not be liable in any way for depreciation or loss occurring as a result of any such termination. The Trustee shall have no power to terminate the Agreement, the Indenture or the Trust because the value of the Trust Fund is below the Discretionary Termination Amount. The Trustee shall terminate the Agreement, the Indenture

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and the Trust Fund in the event that DIAMONDS are de-listed from the Exchange. /*/ The Agreement, the Indenture and the Trust Fund may also be terminated upon receipt by the Trustee of written notice of the occurrence of any one or more of the following events: (a) by the agreement of the Beneficial Owners of 66-2/3% of outstanding DIAMONDS; (b) if the Depository is unable or unwilling to continue to perform its functions as set forth herein and a comparable replacement is unavailable; (c) if NSCC no longer provides clearance services with respect to DIAMONDS, or if the Trustee is no longer a participant in NSCC; (d) if Dow Jones ceases publishing the DJIA; or (e) if the License Agreement is terminated. Notwithstanding the foregoing, the Agreement, the Indenture and the Trust Fund in any event shall terminate by their terms on the Mandatory Termination Date or the date 20 years after the death of the last survivor of the eleven persons named in the Indenture, whichever occurs first, unless sooner terminated as specified herein. If at any time the Sponsor shall fail to undertake or perform or become incapable of undertaking or performing any of the duties which by the terms of the Trust Agreement are required to be undertaken or performed, or if the Sponsor resigns pursuant to Section 7.03, the Trustee may, in its discretion, in lieu of appointing a successor Sponsor pursuant to Section 8.01, terminate this Agreement, the Indenture and the Trust and liquidate the
 
/*/   It is intended that DIAMONDS will be listed for trading on the Exchange. Transactions involving DIAMONDS in the public trading market will be subject to customary brokerage charges and commissions. There can be no assurance, however, that DIAMONDS will always be listed on the Exchange. Following the initial twelve-month period following formation of the Trust and commencement of trading on the Exchange, the Exchange will consider the suspension of trading in or removal from listing DIAMONDS when, in its opinion, further dealings appear unwarranted if (a) the Trust interest has more than sixty (60) days remaining until termination and there are fewer than 50 record Beneficial Owners of DIAMONDS for thirty (30) or more consecutive trading days; (b) Dow Jones ceases publishing the DJIA; or (c) such other event shall occur or condition shall exist which, in the opinion of the Exchange, makes further dealings on the Exchange inadvisable.

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Trust pursuant to the provisions hereof. Notwithstanding the foregoing, in no event shall the Trust Fund, the Indenture and this Agreement continue past the Mandatory Termination Date set forth in the Indenture unless sooner terminated as specified herein. As soon as practicable after notice of termination of the Trust, the Trustee will distribute to redeemers tendering DIAMONDS in Creation Unit size aggregations prior to the termination date the Securities and cash as provided in Section 5.02 and upon termination of the Trust the Trustee will sell the Securities held in the Trust as provided below.
          (b) Written notice of termination, specifying the date of termination, the period during which the assets of the Trust will be liquidated and DIAMONDS will be redeemed in cash at net asset value, and the date determined by the Trustee upon which the books of the Trustee, maintained pursuant to Section 6.01, shall be closed, shall be given by the Trustee to each Beneficial Owner at least twenty (20) days prior to termination of the Trust. Such notice shall further state that, as of the date thereof and thereafter, neither requests to create additional Creation Units nor additional Portfolio Deposits will be accepted and that, as of the date thereof, the portfolio of securities delivered upon redemption shall be identical in composition and weighting to the Securities rather than the securities portion of the Portfolio Deposit as in effect on the date request for redemption is made. Within a reasonable period of time after such termination the Trustee shall, subject to any applicable provisions of law, sell all of the Securities not already distributed to redeemers of DIAMONDS in Creation Unit size aggregations, as provided herein, if any, in such a manner so as to effectuate orderly sales and a minimal market impact. The Trustee shall not be liable for or responsible in any way for

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depreciation or loss incurred by reason of any sale or sales made in accordance with the provisions of this Section 9.01. The Trustee may suspend its sales of the Securities upon the occurrence of unusual or unforeseen circumstances, including, but not limited to, a suspension in trading of a Security, the closing or restriction of trading on a stock exchange, the outbreak of hostilities or the collapse of the economy. Upon receipt of proceeds from the sale of the last Security, the Trustee shall:
     (i) pay to itself individually from the Trust Fund an amount equal to the sum of (1) its accrued compensation for its ordinary services, (2) any reimbursement due to it for its extraordinary services, (3) any advances made but not yet repaid and (4) any other services and disbursements as provided herein;
     (ii) deduct any and all fees and expenses from the Trust Fund in accordance with the provisions of Section 3.04 hereof; provided , however , that no portion of such amount shall be deducted or paid unless the payment thereof from the Trust is at that time lawful;
     (iii) deduct from the Trust Fund any amounts which it, in its sole discretion, shall deem requisite to be set aside as reserves for any applicable taxes or other governmental charges that may be payable out of the Trust Fund;
     (iv) transmit to the Depository for distribution each Beneficial Owner’s interest in the remaining assets of the Trust; and

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          (v) disseminate to each Beneficial Owner as provided in Section 3.11 a final statement as of the date of the computation of the amount distributable to the Beneficial Owners, setting forth the data and information in substantially the form and manner provided for in Section 3.05 hereof.
          (c) Dividends to be received by the Trust on Securities sold in liquidation pursuant to this Section 9.01 subsequent to redemption shall be aggregated and distributed ratably when all such dividends have been received.
          Section 9.02. Moneys to Be Held Without Interest to Beneficial Owners. The Trustee shall be under no liability with respect to moneys held upon termination, except to hold the same as a deposit without interest for the benefit of the Beneficial Owners.
          Section 9.03. Dissolution of Sponsor Not to Terminate Trust . The dissolution of the Sponsor, or its ceasing to exist as a legal entity from, or for, any cause, shall not operate to terminate this Agreement and the Indenture insofar as the duties and obligations of the Trustee are concerned unless the Trustee terminates the Trust pursuant to Section 9.01.

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ARTICLE X
Miscellaneous Provisions
     Section 10.01. Amendment and Waiver . (a) The Indenture and Agreement may be amended from time to time by the Trustee and the Sponsor without the consent of any Beneficial Owners (1) to cure any ambiguity or to correct or supplement any provision thereof which may be defective or inconsistent or to make such other provisions in regard to matters or questions arising thereunder as will not adversely affect the interests of Beneficial Owners; (2) to change any provision thereof as may be required by the Commission; (3) to add or change any provision as may be necessary or advisable for the continuing qualification of the Trust as a Regulated Investment Company under the Code; (4) to add or change any provision thereof as may be necessary or advisable in the event that NSCC or the Depository is unable or unwilling to continue to perform its functions as set forth therein; and (5) to add or change any provision thereof to conform the adjustments to the Portfolio and the Portfolio Deposit to changes, if any, made by Dow Jones in its method of determining the DJIA. The Indenture and Agreement may also be amended from time to time by the Sponsor and the Trustee with the consent of the Beneficial Owners of 51% of the outstanding DIAMONDS to add provisions to or change or eliminate any of the provisions of the Trust Agreement or to modify the rights of Beneficial Owners; provided, however, that the Trust Agreement may not be amended without the consent of the Beneficial Owners of all outstanding DIAMONDS if such amendment would (x) permit, except in accordance with the terms and conditions of the Trust Agreement, the acquisition of any securities other than those acquired in accordance with the terms and conditions of the Trust Agreement; (y) reduce the interest of any Beneficial Owner in the Trust; or (z) reduce the percentage of Beneficial Owners required to consent to any such amendment.

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     (b) Promptly after the execution of any such amendment, the Trustee shall receive from the Depository, pursuant to the terms of the Depository Agreement, a list of all DTC Participants holding DIAMONDS. The Trustee shall inquire of each such DTC Participant as to the number of Beneficial Owners for whom such DTC Participant holds DIAMONDS, and provide each such DTC Participant with sufficient copies of a written notice of the substance of such amendment for transmittal by each such DTC Participant to such Beneficial Owners.
     (c) It shall not be necessary for the consent of Beneficial Owners under this Section 10.01 or under Section 9.01 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of the execution thereof by Beneficial Owners shall be subject to such reasonable regulations as the Trustee may prescribe.
     Section 10.02. Registration (Initial and Continuing) of DIAMONDS . The Sponsor agrees and undertakes on its own part to register or appoint an agent,which may include the Trustee, to register DIAMONDS with the Securities and Exchange Commission and under the blue sky laws of such states as the Sponsor may select and as may be required. If, and to the extent permitted by the Order, the registration of DIAMONDS with the Securities and Exchange Commission and under the applicable securities laws of such states shall be payable out of the Trust. Registration charges, blue sky fees, printing costs, mailing costs, attorney’s fees, and other miscellaneous out-of-pocket expenses incurred pursuant to this Section and related to all

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DIAMONDS shall be borne by the Trust only to the extent and in the manner provided for by Section 3.04 and pursuant to the Order.
     Section 10.03. (a) License Agreement with Dow Jones & Company, Inc . The Sponsor shall, prior to the Initial Date of Deposit, obtain a license agreement with Dow Jones & Company, Inc. under which the Trust may use the trademarks and service marks “Dow Jones Industrial Average”, “DJIA”, “Dow Jones”, “DIAMONDS” and “THE DOW INDUSTRIALS” to the extent deemed necessary by the Sponsor under federal and state securities laws and to indicate the source of the DJIA as a basis for determining the composition of the Trust pursuant to Section 2.04.
     (b) The Trust shall pay to Dow Jones & Company, Inc., or shall reimburse the Sponsor for its payment to Dow Jones & Company, Inc., in accordance with Section 3.04, a licensing fee as set forth in an exhibit to the License Agreement.
     Section 10.04. Certain Matters Relating to Beneficial Owners . (a) By the purchase and acceptance or other lawful delivery and acceptance of DIAMONDS (whether in Creation Unit size aggregations or otherwise), each Beneficial Owner thereof shall be deemed to be a beneficiary of the Trust created by this Agreement and the Indenture and vested with all right, title and interest in the Trust Fund therein created to the extent of the DIAMONDS in Creation Unit size aggregations or DIAMONDS set forth, subject to the terms and conditions of this Agreement and the Indenture.

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     (b) A redeemer may at any time tender DIAMONDS in Creation Unit size aggregations to the Trustee for redemption, subject to and in accordance with Section 5.02.
     (c) The death or incapacity of any Beneficial Owner shall not operate to terminate the Indenture and Agreement or the Trust Fund, nor entitle such Beneficial Owner’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust Fund, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. Each Beneficial Owner expressly waives any right such Beneficial Owner may have under any rule of law, or the provisions of any statute, or otherwise, to require the Trustee at any time to account, in any manner other than as expressly provided in the Indenture and Agreement, in respect of the Securities or moneys from time to time received, held and applied by the Trustee hereunder.
     (d) No Beneficial Owner shall have any right to vote except as provided in Sections 9.01 and 10.01 or in any manner otherwise to control the operation and management of the Trust Fund, or the obligations of the parties hereto. Nothing set forth in this Indenture and Agreement shall be construed so as to constitute the Beneficial Owners from time to time as partners or members of an association; nor shall any Beneficial Owner ever be liable to any third person by reason of any action taken by the parties to this Indenture, or for any other cause whatsoever.
     Section 10.05. New York Law to Govern . The Indenture and Agreement are executed and delivered in the State of New York, and all laws or rules of construction of such

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State shall govern the rights of the parties hereto and the Beneficial Owners and the interpretation of the provisions hereof. The Indenture and Agreement shall be deemed effective when it is executed by the Sponsor and the Trustee.
     Section 10.06. Notices . Any notice, demand, direction or instruction to be given to the Sponsor hereunder shall be in writing and shall be duly given if mailed, by certified or registered mail, return receipt requested, or delivered to the Sponsor, at the following address: PDR Services Corporation, c/o American Stock Exchange, Inc., 86 Trinity Place, New York, New York 10006, Attention: Secretary, or at such other address as shall be specified by the Sponsor to the other parties hereto in writing. Any notice, demand, direction or instruction to be given to the Trustee shall be in writing and shall be duly given if mailed, by certified or registered mail, return receipt requested, delivered to or sent by facsimile transmission and received by State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110, Attention: Executive Vice President, Mutual Funds — DIAMONDS, or such other address as shall be specified to the other parties hereto by the Trustee in writing. Any notice to be given to a Beneficial Owner shall be duly given if mailed or delivered to DTC Participants for delivery to Beneficial Owners.
     Section 10.07. Severability . If any one or more of the covenants, agreements, provisions or terms of this Indenture shall be for any reason whatsoever held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or terms of this Agreement and shall in no way affect the

87


 

validity or enforceability of the other provisions of this Agreement or the rights of the Beneficial Owners.
     Section 10.08. Separate and Distinct Series . Each Series of the DIAMONDS Trust to which these Standard Terms and Conditions of Trust shall be applicable shall, for all financial and administrative purposes, be considered separate and distinct from every other Series, and the assets of one Series shall not be commingled with the assets of another Series nor shall the expenses of any one Series be charged against any other Series.
     Section 10.09. Counterparts . This Standard Terms and Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

88


 

     IN WITNESS WHEREOF, the parties hereto have caused these Standard Terms and Conditions of Trust dated as of January 1, 1998 to be duly executed.
                 
        PDR SERVICES CORPORATION,
    as Sponsor
   
 
               
 
      By  /s/ Joseph B. Stefanelli
 
Title:
   
 
               
ATTEST: /s/ Geraldine Brendisi
 
               
Title: Secretary
               
 
               
        STATE STREET BANK AND TRUST COMPANY, as Trustee    
 
               
 
      By /s/ Kathleen C. Cuocolo
 
Title: Senior Vice President
   
 
               
ATTEST: /s/ [Illegible]
 
               
Title:
               
 
               
Effective Date: January 13, 1998            

 


 

             
STATE OF NEW YORK
    )      
 
    :   ss.:  
COUNTY OF NEW YORK
    )      
     On the 13 th day of January in the year 1998 before me personally came Joseph Stefanelli to me known, who, being by me duly sworn, did depose and say that she is the President of PDR Services Corporation, the corporation described in and which executed the above instrument; and that he signed his name thereto by like authority.
     
 
   
 
  /s/ Deborah E. Ferraro
 
   
 
  Notary Public

 


 

             
COMMONWEALTH OF MASSACHUSETTS
    )      
 
    :   ss.:  
COUNTY OF NORFOLK
    )      
     On this 13 th day of January, 1998, before me personally appeared Kathleen C. Cuocolo, to me known, who, being by me duly sworn, did depose and say that she is Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that she signed her name thereto by authority of the board of directors of said bank and trust company.
     
 
  /s/ [Illegible]
 
   
 
  Notary Public

 


 

EXHIBIT B
[FORM A OF GLOBAL CERTIFICATE.]
CERTIFICATE OF BENEFICIAL INTEREST
-Evidencing-
All Undivided Interests
-in-
DIAMONDS TRUST SERIES 1
     This is to certify that CEDE & CO. is the owner and registered holder of this Certificate evidencing the ownership of all of the fractional undivided interests in the DIAMONDS Trust Series 1 (herein called the “Trust”) (“DIAMONDS”), created under the laws of the State of New York by the Standard Terms and Conditions of Trust and the Trust Indenture and Agreement (hereinafter called the “Agreement and Indenture”), each between PDR Services Corporation (hereinafter called the “Sponsor”), and State Street Bank and Trust Company, as Trustee (hereinafter called the “Trustee”), copies of which are available at the offices of the Trustee.
     At any given time this Certificate shall represent all undivided interests in the Trust which shall be the total number of Creation Unit size aggregations of DIAMONDS of undivided interest which are outstanding at such time. The Agreement and Indenture provide for the deposit of additional Securities from time to time with the Trustee, at which times the Trustee will create DIAMONDS in the corresponding number of Creation Unit size aggregations representing the additional Securities deposited with the Trust.

B - 1


 

     The Sponsor and ________________ as the initial depositor of the Securities hereby grant and convey all of their rights, title and interest in and to the Trust to the extent of the undivided interest represented hereby to the registered holder of this Certificate subject to and in pursuance of the Agreement and Indenture, all the terms, conditions and covenants of which are incorporated herein as if fully set forth at length.
     The registered holder of this Certificate is entitled at any time upon tender of this Certificate to the Trustee, endorsed in blank or accompanied by all necessary instruments of assignment and transfer in proper form, at its Quincy office in the Commonwealth of Massachusetts and, upon payment of any tax or other governmental charges, to receive on or before the seventh calendar day following the day on which such tender is made or, if such calendar day is not a Business Day (as defined in the Indenture), on the next succeeding Business Day following such calendar day, such holder’s ratable portion of each of the Securities for each Creation Unit size aggregation of DIAMONDS tendered and evidenced by this Certificate and a check or, if elected, a wire transfer, in an amount proportionate to money due such holder for each Creation Unit size aggregations of DIAMONDS tendered.
     The holder hereof may be required to pay a charge specified in the Agreement and Indenture issued in connection with the issuance, transfer or interchange of this Certificate and any tax or other governmental charge that may be imposed in connection with the transfer, interchange or other surrender of this Certificate.

B - 2


 

     The holder of this Certificate, by virtue of the purchase and acceptance hereof, assents to and shall be bound by the terms of the Agreement and Indenture, copies of which are on file and available for inspection at reasonable times during business hours at the Quincy office of the Trustee, to which reference is made for all the terms, conditions and covenants thereof.
     The Trustee may deem and treat the person in whose name this Certificate is registered upon the books of the Trustee as the owner hereof for all purposes and the Trustee shall not be affected by any notice to the contrary.
     The Agreement and Indenture permits, with certain exceptions as therein provided, the amendment thereof, the modification of the rights and the obligations of the Sponsor, the Trustee and the holders of DIAMONDS in Creation Unit size aggregations thereunder and the waiver of the performance of any of the provisions thereof at any time with the consent of the holders of DIAMONDS in Creation Unit size aggregations or DIAMONDS, evidencing 51% of Creation Unit size aggregations of DIAMONDS or, proportionately, DIAMONDS at any time outstanding under the Indenture. Any such consent or waiver by the holder of DIAMONDS shall be conclusive and binding upon such holder of DIAMONDS and upon all future holders of DIAMONDS, and shall be binding upon any DIAMONDS, whether evidenced by a Certificate or held in uncertificated form, issued upon the registration or transfer hereof whether or not notation of such consent or waiver is made upon this Certificate and whether or not the DIAMONDS in Creation Unit size aggregations evidenced hereby are at such time in

B - 3


 

uncertificated form. The Agreement and Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of any holders of DIAMONDS.
     This Certificate shall not become valid or binding for any purpose until properly executed by the Trustee under the Agreement and Indenture.
     Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trustee or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

B - 4


 

     IN WITNESS WHEREOF, State Street Bank and Trust Company, as Trustee, has caused this Certificate to be manually executed in its corporate name by an Authorized Officer and PDR Services Corporation, as Sponsor, has caused this Certificate to be executed in its name by the manual or facsimile signature of one of its Authorized Officers.
                     
STATE STREET BANK AND TRUST COMPANY, As Trustee       PDR SERVICES CORPORATION,
      As Sponsor
   
 
                   
By 

 
Authorized Officer
      By
 
Authorized Officer
   
 
                   
Date: January __, 1998                

B - 5


 

EXHIBIT C
[FORM B OF GLOBAL CERTIFICATE.]
CERTIFICATE OF BENEFICIAL INTEREST
____ Creation Units
-Evidencing-An Undivided Interest
-in-DIAMONDS TRUST, SERIES ____
     This is to certify that ______________ is the owner and registered holder of this Certificate evidencing the ownership of DIAMONDS in the amount of ____ Creation Unit size aggregations of fractional undivided interest in the series of DIAMONDS Trust noted on the face hereof (herein called the “Trust”), created under the laws of the State of New York by the Standard Terms and Conditions of Trust and the Trust Indenture and Agreement (hereinafter called the “Agreement and Indenture”), each between PDR Services Corporation (hereinafter called the “Sponsor”), and State Street Bank and Trust Company, as Trustee (hereinafter called the “Trustee”), copies of which are available at the offices of the Trustee.
     At any given time this Certificate shall represent an undivided interest in the Trust, the numerator of which fraction shall be the number of Creation Unit size aggregations of DIAMONDS set forth on the face hereof and the denominator of which shall be the total number of Creation Unit size aggregations of DIAMONDS of undivided interest which are outstanding at such time. The Agreement and Indenture provide for the deposit of additional Securities from

C - 1


 

time to time with the Trustee, at which times the Trustee will deliver DIAMONDS in Creation Unit size aggregations representing the additional Securities deposited with the Trust.
     The Sponsor hereby grants and conveys all of its right, title and interest in and to the Trust to the extent of the undivided interest represented hereby to the registered holder of this Certificate subject to and in pursuance of the Agreement and Indenture, all the terms, conditions and covenants of which are incorporated herein as if fully set forth at length.
     The registered holder of this Certificate is entitled at any time upon tender of this Certificate to the Trustee, endorsed in blank or accompanied by all necessary instruments of assignment and transfer in proper form, at its office in the City of New York and, upon payment of any tax or other governmental charges, to receive on or before the seventh calendar day following the day on which such tender is made or, if such calendar day is not a Business Day (as defined in the Indenture), on the next succeeding Business Day following such calendar day, such holder’s ratable portion of the each of the Securities for each Creation Unit size aggregation of DIAMONDS tendered and evidenced by this Certificate and a check or, if elected, a wire transfer, in an amount proportionate to money due such holder for each Creation Unit size aggregations of DIAMONDS tendered.
     The holder hereof may be required to pay a charge specified in the Agreement and Indenture issued in connection with the issuance, transfer or interchange of this Certificate

C - 2


 

and any tax or other governmental charge that may be imposed in connection with the transfer, interchange or other surrender of this Certificate.
     The holder of this Certificate, by virtue of the purchase and acceptance hereof, assents to and shall be bound by the terms of the Agreement and Indenture, copies of which are on file and available for inspection at reasonable times during business hours at the corporate trust office of the Trustee, to which reference is made for all the terms, conditions and covenants thereof.
     The Trustee may deem and treat the person in whose name this Certificate is registered upon the books of the Trustee as the owner hereof for all purposes and the Trustee shall not be affected by any notice to the contrary.
     The Agreement and Indenture permits, with certain exceptions as therein provided, the amendment thereof, the modification of the rights and the obligations of the Sponsor, the Trustee and the holders of DIAMONDS in Creation Unit size aggregations thereunder and the waiver of the performance of any of the provisions thereof at any time with the consent of the holders of DIAMONDS in Creation Unit size aggregations or DIAMONDS, evidencing 51% of Creation Unit size aggregations of DIAMONDS or, proportionately, DIAMONDS at any time outstanding under the Indenture. Any such consent or waiver by the holder of DIAMONDS shall be conclusive and binding upon such holder of DIAMONDS and upon all future holders of DIAMONDS, and shall be binding upon any DIAMONDS, whether

C - 3


 

evidenced by a Certificate or held in uncertificated form, issued upon the registration or transfer hereof whether or not notation of such consent or waiver is made upon this Certificate and whether or not the DIAMONDS in Creation Unit size aggregations evidenced hereby are at such time in uncertificated form. The Agreement and Indenture also permits the amendment thereof, in certain limited circumstances, without the consent of any holders of DIAMONDS.
     This Certificate shall not become valid or binding for any purpose until properly executed by the Trustee under the Agreement and Indenture.
     Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.
     IN WITNESS WHEREOF, State Street Bank and Trust Company, as Trustee, has caused this Certificate to be manually executed in its corporate name by an authorized officer and PDR Services Corporation, as Sponsor, has caused this Certificate to be executed in its names by the facsimile signature of one of its Authorized Officers.

C - 4


 

                     
STATE STREET BANK AND TRUST COMPANY,
      As Trustee
    PDR SERVICES CORPORATION,
      As Sponsor
   
 
                   
By 
 
      By  
   
 
               
 
Authorized Officer         Authorized Officer    
 
                   
Date: January __, 1998                

C - 5


 

EXHIBIT A
FORM OF PARTICIPANT AGREEMENT
     [Form of Participant Agreement is filed as Exhibit A(9)(b) of this Amendment No. 1 to Form N-8b-2]

A - 1

Exhibit 99.A1(1)
AMENDMENT No. 1
TO
STANDARD TERMS AND CONDITIONS OF TRUST
DATED AS OF JANUARY 1, 1998
AND
EFFECTIVE JANUARY 13, 1998
For
DIAMONDS TRUST, SERIES 1
AND
ANY SUBSEQUENT AND SIMILAR
SERIES OF THE
DIAMONDS TRUST
between
PDR SERVICES LLC
as Sponsor
and
STATE STREET BANK AND TRUST COMPANY
as Trustee
Dated as of November 1, 2004 and
Effective as of November 8, 2004
This Amendment (the “Amendment Agreement”) dated as of November 1, 2004 between PDR Services LLC, as sponsor (the “Sponsor”), and State Street Bank and Trust Company, as trustee (the “Trustee”), amends the document entitled “Standard Terms and Conditions of Trust dated as of January 1, 1998 and effective January 13, 1998 for DIAMONDS Trust, Series 1 and any subsequent and similar series of the DIAMONDS Trust between PDR Services Corporation as Sponsor and State Street Bank and Trust Company as Trustee” (hereinafter referred to as the “Standard Terms”).

 


 

     WITNESSETH THAT:
     WHEREAS, the parties hereto have entered into the Standard Terms to facilitate the creation of the DIAMONDS Trust (the “Trust”); and
     WHEREAS, the parties hereto desire to amend the Standard Terms as more fully set forth below;
     NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the Sponsor and the Trustee agree as follows:
1. Section 3.04(1) of the Standard Terms which states:
     “The Trustee further reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Trust as a Regulated Investment Company or to avoid imposition of income or excise taxes on undistributed income.”
shall be amended by adding the phrase “or would be otherwise advantageous to the Beneficial Owners” to the end of the paragraph, so that the entirety of the paragraph shall now read as follows:
     “The Trustee further reserves the right to declare special dividends if, in its reasonable discretion, such action is necessary or advisable to preserve the status of the Trust as a Regulated Investment Company or to avoid imposition of income or excise taxes on undistributed income or would be otherwise advantageous to the Beneficial Owners.”
2. Pursuant to Section 10.01 of the Standard Terms, both parties to this Amendment Agreement hereby agree that paragraph (1) of this Amendment Agreement is made in made in regard to matters as will not adversely affect the interests of Beneficial Owners in compliance with the provisions of Section 10.01(a) thereof.

 


 

3. Pursuant to Section 10.01 of the Standard Terms, the Trustee agrees that it shall promptly furnish each DTC Participant with sufficient copies of a written notice of the substance of the terms of this Amendment Agreement for transmittal by each such DTC Participant to the Beneficial Owners of the Trust.
4. Except as amended hereby, the Standard Terms now in effect is in all respects ratified and confirmed hereby and this Amendment Agreement and all of its provisions shall be deemed to be a part of the Standard Terms.
5. This Amendment Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
[Remainder of page intentionally left blank.]

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the date hereof.
         
  PDR SERVICES LLC, s Sponsor
 
 
  By:   /s/ Clifford J. Weber    
    Name:  Clifford J. Weber   
    Title:   President   
 
ATTEST:   /s/ Marija Willen                                        
TITLE: Associate General Counsel
         
  STATE STREET BANK AND TRUST COMPANY,
as Trustee
 
 
  By:   /s/ Donald A. Gignac   
    Name:   Donald A. Gignac   
    Title:   Senior Vice President   
 
ATTEST:   /s/ [Illegible]                                        
TITLE:

 


 

STATE OF NEW YORK          )
:ss.:
COUNTY OF NEW YORK      )
On the 9 day of November in the year 2004 before me personally came Clifford J. Weber to me known, who, being by me duly sworn, did depose and say that he is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that he signed his name thereto by like authority.
/s/ Arlene M. Collins-Day
 
Notary Public
(LOGO)

 


 

COMMONWEALTH OF MASSACHUSETTS           )
:ss.:
COUNTY OF NORFOLK                                             )
     On this 8 day of November in the year 2004 before me personally appeared Donald A. Gignac, to me known, who, being by me duly sworn, did depose and say that he is Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said bank and trust company.
/s/ Lauren M. Richardson
 
Notary Public
(LOGO)

 


 

CERTIFICATE OF PDR SERVICES LLC
AS TO COMPLIANCE WITH SECTION 10.01 (a) OF THE
STANDARD TERMS AND CONDITIONS OF TRUST FOR THE
DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998
(THE “STANDARD TERMS”)
     The undersigned, as President of PDR Services LLC (“PDR”) does hereby certify in the name and on behalf of PDR that, as of the date hereof:
1. I am a duly appointed and qualified President of PDR acting as such;
2. I have both read and understood the text of the Amendment Agreement dated as of November 1, 2004 and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
     IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of PDR and under its corporate seal this 9 th day of November, 2004.
         
  PDR SERVICES LLC
 
 
  By:   /s/ Clifford J.Weber    
    Name:  Clifford J.Weber   
    Title:   President   
 

 


 

CERTIFICATE OF STATE STREET BANK AND TRUST COMPANY
AS TO COMPLIANCE WITH SECTION 10.01(a) OF THE
STANDARD TERMS AND CONDITIONS OF TRUST FOR THE
DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998
(THE “STANDARD TERMS”)
     The undersigned, as Senior Vice President of State Street Bank and Trust Company (“State Street”) does hereby certify in the name and on behalf of State Street that, as of the date hereof:
1. I am a duly appointed and qualified Senior Vice President of State Street, acting as such;
2. I have both read and understood the text of the Amendment Agreement dated as of November 1, 2004; and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
     IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Corporation and under its corporate seal this 8 th day of November, 2004.
         
  STATE STREET BANK AND TRUST COMPANY
 
 
  By:   /s/ Donald A. Gignac    
    Name:   Donald A. Gignac   
    Title:   Senior Vice President   
 

 

Exhibit 99.A1(2)
 
AMENDMENT DATED FEBRUARY 14, 2008
TO
STANDARD TERMS AND CONDITIONS OF TRUST
DATED AS OF JANUARY 1, 1998
AND
EFFECTIVE JANUARY 13, 1998
FOR
DIAMONDS TRUST, SERIES 1
AND
SUBSEQUENT AND SIMILAR
SERIES OF THE
DIAMONDS TRUST
BETWEEN
PDR SERVICES LLC,
AS SPONSOR
AND
STATE STREET BANK AND TRUST COMPANY
AS TRUSTEE
EFFECTIVE FEBRUARY 14, 2008
 

 


 

THIS AMENDMENT AGREEMENT
(“AMENDMENT AGREEMENT”)
DATED AND EFFECTIVE FEBRUARY 14, 2008
BETWEEN
PDR SERVICES LLC, AS SPONSOR (“SPONSOR”),
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE (“TRUSTEE”),
AMENDS THE DOCUMENT ENTITLED
“STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF
JANUARY 1, 1998 AND EFFECTIVE JANUARY 13, 1998
FOR
DIAMONDS TRUST, SERIES 1
AND SUBSEQUENT AND SIMILAR SERIES OF
THE DIAMONDS TRUST
BETWEEN
PDR SERVICES LLC, AS SPONSOR
AND
STATE STREET BANK AND TRUST COMPANY AS TRUSTEE”
(HEREINAFTER REFERRED TO AS “STANDARD TERMS”),
AND THE DOCUMENT ENTITLED
“TRUST INDENTURE AND AGREEMENT
DATED JANUARY 13, 1998
INCORPORATING BY
REFERENCE STANDARD TERMS AND CONDITIONS OF TRUST
FOR
DIAMONDS TRUST, SERIES 1
DATED AS OF JANUARY 1, 1998 AND
EFFECTIVE JANUARY 13, 1998” .
(HEREINAFTER CALLED THE “TRUST INDENTURE”)
(THE STANDARD TERMS AND THE TRUST INDENTURE AND ANY AND ALL PREVIOUS AMENDMENTS THERETO HEREINAFTER CALLED THE “TRUST DOCUMENTS”).
     WITNESSETH THAT:
      WHEREAS, the parties hereto have entered into the Trust Documents to facilitate the creation of the DIAMONDS TRUST, Series 1 (“Trust”); and
      WHEREAS, all of the defined terms in this Amendment Agreement shall have the same meanings assigned to them in the Trust Documents unless as otherwise expressly altered in this Amendment Agreement; and

 


 

      WHEREAS, the parties hereto acknowledge that the Trust Documents in general, and the provisions of Section 2.04(a) of the Standard Terms in particular, require the Trustee to adjust the composition of the Portfolio from time to time to conform, to the extent practicable, to changes in the composition and/or price weightings of the Index Securities; and
      WHEREAS, the parties hereto acknowledge that the terms of Section 2.04 of the Standard Terms require the Trustee to adjust the composition of the Trust’s Portfolio any time that there is a change in the identity of any Index Security (such as substitution of one security in replacement of another or a stock split) within 3 Business Days before or after the day on which the change in the identity of such Index Security is scheduled to take effect at the close of the market; and
      WHEREAS, the parties hereto acknowledge that the terms of Section 2.04 of the Standard Terms (1) permit the Trustee to take account of stock splits and other corporate actions by adjusting the composition of the Portfolio Deposit on the day prior to the effective day of the adjustment to the Index but (2) require the Trustee to take account of changes in the identity of any Index Security by adjusting the composition of the Trust’s Portfolio Deposit following the effective day of the adjustment to the Index; and
      WHEREAS, the parties hereto intend that all adjustments made to the Portfolio, the Portfolio Securities and the Portfolio Deposits shall be effected by the Trustee so as to conform the composition and security weightings of the Portfolio, to the fullest extent practicable, to the composition and security weightings of the Index Securities in the Index; and
      WHEREAS, in furtherance of the aforesaid intention, the parties hereto desire to amend the Standard Terms to permit the Trustee to take account of changes in the identity of any Index Security by adjusting the composition of the Trust’s Portfolio Deposit within one Business Day before or after the effective day of the adjustment to the Index, as more fully set forth below;
      NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the Sponsor and the Trustee agree as follows:
     1. Section 2.04 of the Standard Terms shall be amended by adding an additional paragraph lettered “o” to the end of the section following the paragraph lettered “n”.
     2. The entirety of paragraph “o” shall read as follows:
“o. Notwithstanding the foregoing, the Trustee shall be permitted to take account of changes in the identity of any Index Security (such as substitution of one security in replacement of another) resulting from a change to the Index by adjusting the composition of the Portfolio Deposit within one (1) Business Day before or after the effective day of the adjustment to the Index at the close of the market.”

 


 

     3. Pursuant to Section 10.01 of the Standard Terms, both parties to this Amendment Agreement hereby agree that paragraph (1) of this Amendment Agreement is made to cure any ambiguity or to correct or supplement any provision thereof which may be defective or inconsistent or to make such other provisions in regard to matters or questions arising thereunder as will not adversely affect the interests of Beneficial Owners in compliance with the provisions of Section 10.01(a) thereof.
     4. Pursuant to Section 10.01 of the Standard Terms, the Trustee agrees that it shall promptly furnish each DTC Participant with sufficient copies of a written notice of the substance of the terms of this Amendment Agreement for transmittal by each such DTC Participant to the Beneficial Owners of the Trust.
     5. Except as amended hereby, the Trust Documents now in effect are in all respects ratified and confirmed hereby and this Amendment Agreement and all of its provisions shall be deemed to be a part of the Trust Documents.
     6. This Amendment Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the date hereof.
         
  PDR SERVICES LLC, as Sponsor
 
 
  By:   /s/ Clifford J. Weber  
    Name:   Clifford J. Weber  
    Title:   President  
 
         
ATTEST:
  /s/ Marija Willen    
TITLE:
 
 
Vice President & Associate General Counsel, American Stock Exchange
   
         
  STATE STREET BANK AND TRUST COMPANY,
as Trustee
 
 
  By:   /s/ Gary L. French  
    Name:   Gary L. French  
    Title:   Senior Vice President  
 
         
ATTEST:
  /s/ Ryan M. Louvar    
 
 
 
   
TITLE:
  Vice President and Senior Counsel    

 


 

     STATE OF NEW YORK        )
                             : ss.:
     COUNTY OF NEW YORK    )
     On the 14th day of February in the year 2008 before me personally came to me known, who, being by me duly sworn, did depose and say that he is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that he signed his name thereto by like authority.
Deborah E. Ferraro
 
Notary Public

 


 

     COMMONWEALTH OF MASSACHUSETTS )
                             : ss.:
     COUNTY OF NORFOLK                                      )
     On this 14th day of February in the year 2008 before me personally appeared Gary French to me known, who, being by me duly sworn, did depose and say that he is Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said bank and trust company.
/s/ Timothy P. Walch
Notary Public

 


 

CERTIFICATE OF STATE STREET BANK AND TRUST COMPANY
AS TO COMPLIANCE WITH SECTION 10.01(a)
OF THE STANDARD TERMS AND CONDITIONS OF
TRUST FOR THE DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1,1998, as amended
(THE “STANDARD TERMS”)
          The undersigned, as Senior V.P. of State Street Bank and Trust Company (the “Trustee”), does hereby certify in the name and on behalf of the Trustee, that, as of the date hereof:
1. I am a duly appointed and qualified Senior V.P. of the Trustee, acting as such;
2. I have both read and understood the text of the Amendment Agreement dated February 14, 2008 between PDR Services LLC, as Sponsor of the Trust and the Trustee (the “Amendment Agreement”); and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners, of the Trust.
          IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Trustee this 14th day of February, 2008.
         
  STATE STREET BANK AND TRUST COMPANY
 
 
  By:   /s/ Gary L. French    
    Name:   Gary L. French   
    Title:   Senior Vice President   
 

Exhibit 99.A1(3)
AMENDMENT NO. 2
TO
STANDARD TERMS AND CONDITIONS OF TRUST
DATED AS OF JANUARY 1, 1998
AND
EFFECTIVE JANUARY 13, 1998,
AS AMENDED
FOR
DIAMONDS TRUST, SERIES 1
AND
SUBSEQUENT AND SIMILAR
SERIES OF THE
DIAMONDS TRUST
BETWEEN
PDR SERVICES LLC,
AS SPONSOR
AND
STATE STREET BANK AND TRUST COMPANY
AS TRUSTEE
DATED AS OF OCTOBER 24, 2008
AND
EFFECTIVE OCTOBER 24, 2008


 

THIS AMENDMENT No. 2 (‘‘AMENDMENT AGREEMENT’’) DATED AS OF AND EFFECTIVE OCTOBER 24, 2008 BETWEEN PDR SERVICES LLC, AS SPONSOR (‘‘SPONSOR’’), AND STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (‘‘TRUSTEE’’), AMENDS THE DOCUMENT ENTITLED ‘‘STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF JANUARY 1, 1998 AND EFFECTIVE JANUARY 13, 1998 FOR DIAMONDS TRUST, SERIES 1 AND SUBSEQUENT AND SIMILAR SERIES OF THE DIAMONDS TRUST BETWEEN PDR SERVICES LLC, AS SPONSOR AND STATE STREET BANK AND TRUST COMPANY AS TRUSTEE’’, AS AMENDED (HEREINAFTER REFERRED TO AS ‘‘STANDARD TERMS’’).
WITNESSETH THAT:
      WHEREAS, the parties hereto have entered into the Standard Terms to facilitate the creation of the DIAMONDS TRUST, Series 1 (‘‘Trust’’); and
      WHEREAS, since its inception, the Trust has been listed, and its shares have been traded, on the American Stock Exchange, LLC (“AMEX”), and;
      WHEREAS , on October 1, 2008, NYSE Euronext (“NYSE”) completed its acquisition of AMEX and all of its subsidiaries, including the Sponsor, and;
      WHEREAS , AMEX has been renamed “NYSE Alternext US LLC (“NYSE Alternext US”); and
      WHEREAS , NYSE has decided to consolidate the listing and trading of exchange-traded funds and structured products now listed on NYSE Alternext US and NYSE Arca, Inc. (“ NYSE Arca”) on NYSE Arca, and;
      WHEREAS , the Sponsor and the Trustee have determined that it will be in the best interests of the Trust and its shareholders to move the listing of the units of the Trust from NYSE Alternext US to NYSE Arca on or before December 31, 2008; and make all changes and amendments to the Standard Terms to accomplish such purpose as more fully set forth below; and
      WHEREAS , the parties hereto desire make certain other changes to the Standard Terms as more fully set forth below;
      NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the Sponsor and the Trustee agree as follows:


 

     1. The definition of the word “Exchange” in Section 1 of the Standard Terms shall be changed from the “American Stock Exchange LLC” to now read “ NYSE Arca and any successor corporation thereto.”
     2. The definitions of the terms “Depository” and “NSCC” in Section 1 of the Standard Terms shall be amended to include the phrase: “and any successor corporation thereto.”
     3. The definitions of the term “License” in Section 1 of the Standard Terms shall be amended to include the phrase: “,as further amended and restated by the Licensee and Dow Jones on November 1, 2005, including the Sublicense, as the same may be from time to time amended in accordance with its terms.”
     4. The definition of “Sublicense” shall be added to Section 1 of the Standard Terms as follows: “The agreement dated November 1, 2005 among State Street Bank and Trust Company, as Trustee, State Street Global Markets, LLC, and Dow Jones, as the same may be from time to time amended in accordance with its terms.”
     5. Any reference in the Standard Terms to an entity, whether by specific name or by duties and responsibilities, shall be deemed to include any successor corporation thereto.
     6. Section 10.06 of the Standard Terms shall be amended to include the new address and contact information of the Sponsor and Trustee.
     7. Pursuant to Section 10.01 of the Standard Terms, both parties to this Amendment Agreement hereby agree that paragraphs (1)- (4) of this Amendment Agreement are made in regard to matters as will not adversely affect the interests of Beneficial Owners in compliance with the provisions of Section 10.01(a) thereof.
     8. Pursuant to Section 10.01, the Trustee agrees that it shall promptly furnish each DTC Participant with sufficient copies of a written notice of the substance of the terms of this Amendment Agreement for transmittal by each such DTC Participant to the Beneficial Owners of the Trust.
     9. Except as amended hereby, the Standard Terms and any and all amendments thereto adopted prior the date hereof (collectively, the “Standard Terms”), now in effect are in all respects ratified and confirmed hereby and this Amendment Agreement and all of its provisions shall be deemed to be a part of the Standard Terms.
     10. This Amendment Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the date hereof.
PDR SERVICES LLC, as Sponsor
           
 
  By:   /s/ Lisa A. Dallmer  
 
      Name: Lisa A. Dallmer
 
      Title: Senior President
       
ATTEST:    /s/ Scott Ebner  
TITLE:   Vice President  
STATE STREET BANK AND TRUST COMPANY,
as Trustee
           
 
  By:   /s/ Gary L. French  
 
      Name: Gary L. French
 
      Title: Senior Vice President
       
ATTEST:    /s/ James J. Dwyer  
Name:   James J. Dwyer  
Title:   Vice President  


 

STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
     On the 24 th day of October in the year 2008 before me personally came to me known, who, being by me duly sworn, did depose and say that she is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that she signed her name thereto by like authority.
/s/ Rose Tatalone
 
Notary Public


 

COMMONWEALTH OF MASSACHUSETTS )
: ss.:
COUNTY OF NORFOLK )
     On this 23 rd day of October in the year 2008 before me personally appeared to me known, who, being by me duly sworn, did depose and say that he is Gary L. French, Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said bank and trust company.
/s/ Lisa M. Murphy
Notary Public

 


 

CERTIFICATE OF PDR SERVICES LLC
AS TO COMPLIANCE WITH SECTION 10.01(a)
OF THE STANDARD TERMS AND CONDITIONS OF
TRUST FOR THE DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998, as amended
(THE “STANDARD TERMS”)
          The undersigned, as President of PDR Services LLC (the “Sponsor”), does hereby certify in the name and on behalf of the Sponsor, that, as of the date hereof
1. I am a duly appointed and qualified President of the Sponsor, acting as such;
2. I have both read and understood the text of the Amendment No. 2. to the “Standard Terms and Conditions of Trust Dated as of January 1, 1998 and Effective January 13, 1998 for Diamonds Trust, Series 1 and Subsequent and Similar Series of the Diamonds Trust Between PDR Services LLC, as Sponsor and State Street Bank and Trust Company as Trustee”, as amended (“Standard Terms”) dated as of and effective October 24, 2008 between PDR Services LLC, as Sponsor and State Street Bank And Trust Company, as Trustee (“Amendment Agreement”); and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
          IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Trustee this 24th day of October, 2008
         
  PDR SERVICES, LLC
 
 
  By:   /s/ Lisa Dallmer    
    Name:   Lisa Dallmer   
    Title:   President   

 


 

         
STATE OF NEW YORK )
                  :ss.:
COUNTY OF NEW YORK )
          On the 24 th day of October in the year 2008 before me personally came to me known, who, being by me duly sworn, did depose and say that she is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that she signed her name thereto by like authority.
         
     
  /s/ Rose Tatalone    
  Notary Public   
     
 
Signed and Sworn before me this 24 th day of October 2008.
(SEAL)                 (SEAL)

 


 

CERTIFICATE OF STATE STREET BANK AND TRUST COMPANY
AS TO COMPLIANCE WITH SECTION 10.01(a)
OF THE STANDARD TERMS AND CONDITIONS OF
TRUST FOR THE DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998, as amended
(THE “STANDARD TERMS”)
          The undersigned, as Senior Vice President of State Street Bank and Trust Company (the “Trustee”), does hereby certify in the name and on behalf of the Trustee, that, as of the date hereof:
1. I am a duly appointed and qualified executive of the Trustee, acting as such;
2. I have both read and understood the text of the Amendment No. 2 to the “Standard Terms and Conditions of Trust Dated as of January 1, 1998 and Effective January 13, 1998 for Diamonds Trust, Series 1 and Subsequent and Similar Series of the Diamonds Trust Between PDR Services LLC, as Sponsor and State Street Bank and Trust Company as Trustee”, as amended (“Standard Terms”) dated as of and effective October 24, 2008 between PDR Services LLC, as Sponsor and State Street Bank And Trust Company, as Trustee (“Amendment Agreement”); and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Trustee this 23 rd day of October, 2008.
         
  STATE STREET BANK AND TRUST COMPANY
 
 
  By:   /s/ Gary L. French    
    Name:   Gary L. French   
    Title:   Senior Vice President   
 

 


 

COMMONWEALTH OF MASSACHUSETTS      )
                              :ss.:
COUNTY OF SUFFOLK           )
          On this 23rd day of October in the year 2008 before me personally appeared to me known, who, being by me duly sworn, did depose and say that he is Gary L. French, Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by proper authority.
         
 
  /s/ Lisa M. Murphy
 
Notary Public Lisa M. Murphy
My Commission Expires: 8/18/2011
  (GRAPHICS LOGO)

 

Exhibit 99.A1.(4)
AMENDMENT NO. 4
TO AMENDED AND RESTATED
STANDARD TERMS AND CONDITIONS OF TRUST
DATED AS OF JANUARY 1, 1998
AND
EFFECTIVE JANUARY 13, 1998,
As Amended
FOR
DIAMONDS ® TRUST, SERIES 1
(“DIAMONDS TRUST”)
AND
ANY SUBSEQUENT AND SIMILAR
SERIES OF THE
DIAMONDS TRUST
BETWEEN
PDR SERVICES LLC,
AS SPONSOR
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
DATED AS OF DECEMBER 22, 2009
AND
TO BE EFFECTIVE SIMULTANEOUSLY WITH THE FILING OF
POST-EFFECTIVE AMENDMENT No. 13 TO THE TRUST’S REGISTRATION
STATEMENT ON FORM S-6 ANTICIPATED TO BE MADE
ON OR ABOUT FEBRUARY 26, 2010


 

This Amendment No. 4 (“Amendment Agreement”) dated as of December 22, 2009 and to be effective simultaneously with the filing of Post-Effective Amendment No. 13 to the Trust’s Registration Statement on Form S-6 anticipated to be made on or about February 26, 2010, between PDR Services LLC, as Sponsor (“Sponsor”), and State Street Bank and Trust Company, as Trustee (“Trustee”), amends the document entitled “STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF JANUARY 1, 1998 AND EFFECTIVE JANUARY 13, 1998 FOR DIAMONDS TRUST, SERIES 1 AND SUBSEQUENT AND SIMILAR SERIES OF THE DIAMONDS TRUST BETWEEN PDR SERVICES LLC, AS SPONSOR AND STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE”, as amended (hereinafter referred to as “Standard Terms”).
WITNESSETH THAT:
      WHEREAS, the parties hereto have entered into the Standard Terms to facilitate the creation of the DIAMONDS Trust, Series 1 (“Trust”); and
      WHEREAS, the Trust is named DIAMONDS Trust Series 1, and;
      WHEREAS , upon the advice of State Street Global Markets, LLC as the Marketing Agent for the Trust, the Sponsor and the Trustee have determined to change the name of the Trust from “DIAMONDS Trust Series 1” to “SPDR ® Dow Jones Industrial Average SM ETF Trust” to aid in the marketing and distribution of the Trust’s units and to make all changes and amendments to the Standard Terms to accomplish such purpose as more fully set forth below;
      NOW THEREFORE, in consideration of the premises and of the mutual agreements contained herein, the Sponsor and the Trustee agree as follows:
     1. The name of the Trust shall be changed in the Standard Terms from “DIAMONDS Trust Series 1” to “SPDR ® Dow Jones Industrial Average SM ETF Trust” in each instance that it appears.
     2. The short form name of the Trust’s units shall be changed in the Standard Terms from “DIAMOND” or “DIAMONDS” to “Trust Unit” or “Unit”, or “Trust Units” or “Units”, as applicable, in each instance that it appears.
     3. In Article I of the Standard Terms “DIAMONDS” shall be replaced with “‘Trust Unit’ or ‘Unit’”, in alphabetical order.
     4. The short form name of the Trust shall be changed in the Standard Terms from “DIAMONDS Trust” to “SPDR DJIA Trust”, or such other short-form term as is consistent with the Trust’s contractual arrangements and deemed appropriate by the Sponsor and the Trustee, in each instance that it appears.


 

     5. All references in the Standard Terms to “DIAMONDS Trust, Series 1” shall be replaced with “SPDR Dow Jones Industrial Average ETF Trust”.
     6. All references in the Standard Terms to “DIAMONDS Clearing Process” shall be replaced with “Clearing Process”.
     7. Section 10.03 of the Standard Terms shall be amended to remove the word “DIAMONDS”.
     8. Section 10.06 of the Standard Terms shall be amended to replace “ — DIAMONDS” with “ — SPDR Dow Jones Industrial Average ETF Trust”.
     9. Section 12 of Exhibit A of the Standard Terms shall be amended to replace “DIAMONDS” with “SPDR Dow Jones Industrial Average ETF Trust”.
     10. The first reference in the Standard Terms to “DIAMONDS telephone representative” shall be replaced with “SPDR Dow Jones Industrial Average ETF Trust telephone representative”, and thereafter it shall be replaced with “telephone representative”.
     11. Pursuant to Section 10.01, the Trustee has arranged that the Trust’s Annual Report dated October 31, 2009 contain a description of the substance of the terms of this Amendment Agreement for transmittal by each DTC Participant to the Beneficial Owners of the Trust.
     12. Except as amended hereby, the Standard Terms and any and all amendments thereto, including the document entitled “Standard Terms And Conditions Of Trust Dated As Of January 1, 1998 And Effective January 13, 1998, As Amended” between the Sponsor and the Trustee; the document entitled “Amendment Dated As Of November 1, 2004 To Standard Terms And Conditions Of Trust, As Amended”; the document entitled “Amendment Dated February 14, 2008 To Standard Terms And Conditions Of Trust, As Amended”; and, the document entitled “Amendment Dated As Of October 24, 2008 To Standard Terms And Conditions Of Trust, As Amended” between the Sponsor and the Trustee, now in effect are in all respects ratified and confirmed hereby and this Amendment Agreement and all of its provisions shall be deemed to be a part of the Standard Terms.
     13. This Amendment Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the date hereof.
         
PDR SERVICES LLC, as Sponsor
 
   
By:   /s/ Lisa Dallmer     
  Name:   Lisa Dallmer     
  Title:   President     
ATTEST: /s/ Pier Tisdel
TITLE:


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly executed as of the date hereof.
         
STATE STREET BANK AND TRUST COMPANY,
as Trustee
 
   
By:   /s/ Gary L. French    
  Name:   Gary L. French    
  Title:   Senior Vice President    
 
ATTEST:   /s/ Ryan M. Louvar    
TITLE: Vice President    


 

STATE OF NEW YORK     )
: ss.:
COUNTY OF NEW YORK     )
     On the 22 nd day of December in the year 2009, before me personally came Lisa Dallmer to me known, who, being by me duly sworn, did depose and say that she is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that she signed her name thereto by like authority.
         
  /s/ Pier Tisdel  
  Notary Public   

 


 

         
COMMONWEALTH OF MASSACHUSETTS     )
: ss.:
COUNTY OF NORFOLK     )
     On this 22 nd day of December in the year 2009, before me personally appeared Gary L. French to me known, who, being by me duly sworn, did depose and say that he is Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said bank and trust company.
         
  /s/ Mark E. Tuttle  
  Notary Public   

 


 

         
CERTIFICATE OF PDR SERVICES LLC
AS TO COMPLIANCE WITH SECTION 10.01(a)
OF THE AMENDED AND RESTATED
STANDARD TERMS AND CONDITIONS OF
TRUST FOR THE DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998 AND
EFFECTIVE JANUARY 13, 1998,
as amended
(THE “STANDARD TERMS”)
          The undersigned, as President of PDR Services LLC (the “Sponsor”), does hereby certify in the name and on behalf of the Sponsor, that, as of the date hereof:
1. I am a duly appointed and qualified officer of the Sponsor, acting as such;
2. I have both read and understood the text of the Amendment No. 4 to the “STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF JANUARY 1, 1998, AND EFFECTIVE JANUARY 13, 1998, AS AMENDED”, dated as of 22 December, 2009, and to be effective simultaneously with the filing of Post-Effective Amendment No. 13 to the Trust’s Registration Statement on Form S-6 anticipated to be made on or about February 26, 2010, between PDR Services LLC, as Sponsor and State Street Bank And Trust Company, as Trustee (“Amendment Agreement”); and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
          IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Sponsor this 22 nd day of December, 2009.
         
  PDR SERVICES, LLC
 
 
  By:   /s/ Lisa Dallmer  
    Name:   Lisa Dallmer   
    Title:   President   

 


 

         
STATE OF NEW YORK     )
: ss.:
COUNTY OF NEW YORK     )
     On the 22 nd day of December in the year 2009, before me personally came Lisa Dallmer to me known, who, being by me duly sworn, did depose and say that she is the President of PDR Services LLC, the limited liability company described in and which executed the above instrument; and that she signed her name thereto by like authority.
         
  /s/ Pier Tisdel  
  Notary Public   

 


 

         
CERTIFICATE OF STATE STREET BANK AND TRUST COMPANY
AS TO COMPLIANCE WITH SECTION 10.01(a)
OF THE AMENDED AND RESTATED
STANDARD TERMS AND CONDITIONS OF
TRUST FOR THE DIAMONDS TRUST (“THE TRUST”)
DATED AS OF JANUARY 1, 1998 AND
EFFECTIVE JANUARY 13, 1998,
as amended
(THE “STANDARD TERMS”)
          The undersigned, as Senior Vice President of State Street Bank and Trust Company (the “Trustee”), does hereby certify in the name and on behalf of the Trustee, that, as of the date hereof:
1. I am a duly appointed and qualified Senior Vice President of the Trustee, acting as such;
2. I have both read and understood the text of the Amendment No. 4 to the “STANDARD TERMS AND CONDITIONS OF TRUST DATED AS OF JANUARY 1, 1998, AND EFFECTIVE JANUARY 13, 1998, AS AMENDED”, dated as of December 22, 2009, and to be effective simultaneously with the filing of Post-Effective Amendment No. 13 to the Trust’s Registration Statement on Form S-6 anticipated to be made on or about February 26, 2010, between PDR Services LLC, as Sponsor and State Street Bank And Trust Company, as Trustee (“Amendment Agreement”); and
3. Upon due consideration of the facts and circumstances deemed to be relevant to the determination required by Section 10.01 of the Standard Terms, such Amendment Agreement will not adversely affect the interests of Beneficial Owners of the Trust.
          IN WITNESS WHEREOF, the undersigned has executed this certificate in the name and on behalf of said Trustee this 22 nd day of December, 2009.
         
  STATE STREET BANK AND TRUST COMPANY
 
 
  By:   /s/ Gary L. French  
    Name:   Gary L. French  
    Title:   Senior Vice President  


 

         
COMMONWEALTH OF MASSACHUSETTS     )
: ss.:
COUNTY OF NORFOLK     )
     On this 22 nd day of December in the year 2009, before me personally appeared Gary L. French to me known, who, being by me duly sworn, did depose and say that he is a Senior Vice President of State Street Bank and Trust Company, the bank and trust company described in and which executed the above instrument; and that he signed his name thereto by authority of the board of directors of said bank and trust company.
         
  /s/ Mark E. Tuttle  
  Notary Public   

Exhibit 99.A4
SPDR ® DOW JONES INDUSTRIAL AVERAGE ETF TRUST
PARTICIPANT AGREEMENT
     This Participant Agreement (the “Agreement”) is entered into by and among ALPS Distributors, Inc. (the “Distributor”), State Street Bank and Trust Company, providing certain transfer agency services in its capacity as trustee (the “Transfer Agent”) and                      [Participant’s Name and NSCC#] (the “Participant”), and is subject to acceptance by State Street Bank and Trust Company, as trustee (“Trustee”) for SPDR Dow Jones Industrial Average ETF Trust (the “Trust” or “Fund”). The Trustee serves as trustee of the Trust pursuant to Standard Terms and Conditions of the Trust, as may have been or may be amended and/or restated from time to time. The Distributor has been retained as principal underwriter of the Trust and provides certain services in connection with the sale and distribution of shares of beneficial interest of the Fund (the “Shares”). The Transfer Agent has been retained to provide certain transfer agency services with respect to the purchase and redemption of Shares.
     As specified in the Trust’s prospectus, as may be amended or supplemented from time to time (together, the “Prospectus”), Shares may be purchased or redeemed from the Fund only in aggregations of a specified number of Shares as set forth in the Prospectus (each, a “Creation Unit” and collectively, the “Creation Units”). The Prospectus describes the primary form of consideration to be provided to the Fund by the Participant for its own account or on behalf of any party for which it is acting (whether a customer or otherwise) (“Participant Client”), which generally includes a designated portfolio of securities (the “Deposit Securities”) and/or cash. Creation Units shall generally be redeemed in exchange for Fund securities (“Fund Securities”) and/or cash, as described in the Prospectus. The Participant also pays applicable transaction fees (“Transaction Fees”) and Taxes (as defined below). All references to “cash” shall refer to US Dollars. Capitalized terms not otherwise defined herein are used herein as defined in the Prospectus.
     This Agreement is intended to set forth the terms and procedures pursuant to which the Participant may create and/or redeem Creation Units through the Continuous Net Settlement (“CNS”) clearing processes of the National Securities Clearing Corporation (“NSCC”) as such processes have been enhanced to effect purchases and redemptions of Creation Units, such processes being referred to herein as the “Clearing Process”, or (ii) outside the Clearing Process ( i.e., through the facilities of The Depository Trust Company (“DTC”)).
     The parties hereto in consideration of the premises and of the mutual agreements contained herein agree as follows:
1.   STATUS AND ROLE OF PARTICIPANT .
a. Clearing Status. The Participant represents, covenants and warrants that with respect to orders for the purchase of Creation Units (“Creation Orders”) or orders for the redemption of Creation Units (“Redemption Orders” and, together with “Creation Orders”, “Orders”) of the Fund (i) by means of the Clearing Process, it is a member in good standing of the NSCC and a participant in the CNS System of the NSCC and agrees that it will remain in good standing throughout the term of this Agreement (a “Participating Party”); (ii) outside the Clearing Process, it is a DTC Participant (a “DTC Participant”); and (iii) it has the ability to transact through the Federal Reserve System. The Participant may place Orders either through the Clearing Process or outside the Clearing Process, subject to the procedures for purchase and redemption of Creation Units set forth in the Prospectus, this Agreement and all attachments hereto, as may be amended from time to time (the “Procedures”). Any change in the foregoing status of Participant shall terminate this

1


 

Agreement and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of such change.
b. Broker-Dealer Status. The Participant represents, covenants and warrants that it is (i) registered as a broker-dealer under the Securities Exchange Act of 1934, as amended, (ii) qualified to act as a broker or dealer in the states or other jurisdictions where it transacts business, and (iii) a member in good standing of the Financial Industry Regulatory Authority (“FINRA”). The Participant agrees that it will maintain such registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Participant further agrees to comply with all applicable U.S. federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder and with the Constitution, By-Laws and Conduct Rules of FINRA (including any NASD Rules that remain operative until such rules are subsequently renamed, repealed, rescinded or are otherwise replaced by FINRA Rules), and that it will not offer or sell Shares of the Fund in any state or jurisdiction where they may not lawfully be offered and/or sold. Any change in the foregoing status of Participant shall result in the automatic termination of this Agreement and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of such change.
c. Underwriter Status. The Participant understands and acknowledges that the method by which Creation Units will be created and traded may raise certain issues under applicable securities laws. For example, because new Creation Units of Shares may be issued and sold by the Fund on an ongoing basis, a “distribution”, as such term is used in the Securities Act of 1933, as amended (“1933 Act”), may occur at any point. The Participant understands and acknowledges that some activities on its part, depending on the circumstances, may result in it being deemed a participant in a distribution in a manner which could render it a statutory underwriter and subject it to the prospectus delivery and liability provisions of the 1933 Act. The Participant also understands and acknowledges that dealers who are not “underwriters,” but who effect transactions in Shares, whether or not participating in the distribution of Shares, are generally required to deliver a prospectus.
d. Agency. The Participant shall have no authority in any transaction to act as agent of the Distributor, Transfer Agent, the Trust, Trustee or their agents. The Participant acknowledges and agrees that for all purposes of this Agreement, the Participant will be deemed to be an independent contractor. The Participant agrees to make itself and its employees available, upon request, during normal business hours to consult with the Trustee, the Transfer Agent or the Distributor or their designees concerning the performance of the Participant’s responsibilities under this Agreement.
e. Rights and Obligations as DTC Participant. The Participant agrees that in connection with any transactions in which it acts for a Participant Client, including, without limitation, for any other DTC Participant or indirect participant, or any other beneficial owner of Shares (each, a “Beneficial Owner”), that it shall extend to any such party all of the rights, and shall be bound by all of the obligations, of a DTC Participant, in addition to any obligations that it undertakes hereunder or in accordance with the Prospectus.
f. Qualified Institutional Buyer Status . The Participant represents, covenants and warrants that it currently is, and will continue to be throughout the term of this Agreement, a “qualified institutional buyer” as such term is defined in Rule 144A of the 1933 Act. Any change in the

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foregoing status of Participant shall terminate this Agreement and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of such change.
g. No Affiliation. The Participant represents, covenants and warrants that, during the term of this Agreement, it will not be an affiliated person of the Fund, a promoter or a principal underwriter of the Fund or an affiliated person of such persons, except to the extent that the Participant may be deemed to be an affiliated person under 2(a)(3)(A) or 2(a)(3)(C) of the Investment Company Act of 1940, as amended (the “1940 Act”), due to ownership of Shares. The Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of any change to the foregoing status.
h. Agent for Proxy. The Participant represents, covenants and warrants that, from time to time, it may be a Beneficial Owner or legal owner of Shares. The Participant agrees to irrevocably appoint the Distributor as its attorney and proxy with full authorization and power to vote (or abstain from voting) its beneficially or legally owned Shares which the Participant has not rehypothecated and which the Participant is or may be entitled to vote at any meeting of shareholders of the Trust held after the effective date of this Agreement, whether annual or special and whether or not an adjourned meeting, or, if applicable, to give written consent with respect thereto. The Distributor intends to vote (or abstain from voting) such Shares in the same proportion as the votes (or abstentions) of all other shareholders of the corresponding Fund (“Mirror Vote”) on any matter submitted to the vote of shareholders of the Fund with complete independence from and without any regard to any views, statements or interests of the Participant, its affiliates or any other person. The Participant acknowledges that any Mirror Vote cast by the Distributor with respect to any shareholders’ meeting will likely be an approximation of the true shareholder vote since the Distributor anticipates that it will be requested to vote such Shares in advance of any actual shareholders’ meeting ( e.g., 24 hours in advance).
For purposes of this Section 1.h., beneficially owned Shares shall not include those Shares for which the Participant is the record owner but which are held for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business, unless the Participant instructs the Distributor in writing otherwise. The Participant acknowledges that the Distributor will not exercise the voting rights applicable to such Shares unless the Participant instructs the Distributor in writing otherwise. For the avoidance of doubt, it shall be the responsibility of the Participant to instruct the Distributor in writing as to which Shares will/will not be voted by the attorney pursuant to this Section 1.h. The Participant represents that it has all the necessary legal power and authority to vote, and to appoint an attorney and proxy to vote, all such Shares as contemplated herein.
The Distributor, as attorney and proxy for the Participant hereunder: (i) is hereby given full power of substitution and revocation; (ii) may act through such agents, nominees, or attorneys as it may appoint from time to time; and (iii) may provide voting instructions to such agents, nominees, or substitute attorneys. The powers of such attorney and proxy shall include (without limiting its general powers hereunder) the power to receive and waive any notice of any meeting on behalf of the Participant. The Distributor may terminate this irrevocable proxy ( i.e., Section 1.h.) after sixty (60) days written notice to the Participant and termination of this irrevocable proxy by itself shall not serve to terminate the Agreement.

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2.   EXECUTION OF ORDERS (GENERAL TERMS) .
a. Purchase and Redemption of Creation Units. All Orders shall be handled by each party hereto in accordance with the terms of the Prospectus and this Agreement (which includes the Procedures). Each party hereto agrees to comply with the provisions of such documents to the extent applicable to it. In the event of a conflict between the Prospectus and the Procedures, the Prospectus shall control.
b. NSCC. Solely with respect to orders for the purchase or redemption of Creation Units through the Clearing Process, the Participant as a Participating Party hereby authorizes the Transfer Agent or its designee to transmit to NSCC on behalf of the Participant such instructions, including Share and cash amounts as are necessary with respect to the purchase and redemption of Creation Units, consistent with the instructions issued by the Participant. The Participant agrees to be bound by the terms of such instructions issued by the Transfer Agent or its designee on behalf of the Trust and reported to NSCC as though such instructions were issued by the Participant directly to NSCC.
c. Consent to Recording. It is contemplated that the phone lines used by the Distributor, the Transfer Agent and/or their affiliated persons will be recorded, and the Participant hereby consents to the recording of all calls with any of those parties.
d. Irrevocability. The Participant acknowledges and agrees on behalf of itself and any Participant Client that delivery of any Order shall be irrevocable, provided that the Trustee, Transfer Agent and the Distributor on behalf of the Trust each reserve the right to reject any Order for any reason.
e. Prospectus Delivery. The Participant understands a current Prospectus and all required reports for the Fund are available at www.spdrs.com (or any successor website). The Distributor will provide to the Participant copies of the prospectus, and the Participant consents to the delivery of all prospectuses electronically by e-mail at                     @                    .com [Participant’s e-mail address]. The Participant agrees to maintain a valid e-mail address and further agrees to promptly notify the other parties if its e-mail address changes. The Participant can revoke this consent upon written notice to the other parties. Notwithstanding the foregoing, the Distributor agrees to provide to the Participant upon request a reasonable number of paper copies of either (i) the Fund’s statutory prospectus or (ii) in the sole discretion of the Distributor, the Fund’s summary prospectus in accordance with Rule 498 under the 1933 Act (or any successor rule). The Participant acknowledges receipt of the Prospectus and represents it has reviewed the Prospectus and understands the terms thereof, and further acknowledges that the procedures contained therein pertaining to the purchase and redemption of Shares are incorporated herein by reference.
3.   EXECUTION OF ORDERS FOR CREATION UNITS .
a. Title to Securities; Restricted Shares. The Participant represents on behalf of itself and any Participant Client that, upon delivery of a portfolio of Deposit Securities to the Trust’s custodian (“Custodian”) and/or relevant sub-custodian (“Sub-Custodian”), the Trust will acquire good and unencumbered title to such securities, free and clear of all liens, restrictions, charges, duties and encumbrances and not subject to any adverse claims, including, without limitation, any restriction upon the sale or transfer of such securities imposed by (i) any agreement or arrangement entered into by the Participant or any Participant Client in connection with a transaction to purchase

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Shares or (ii) any provision of the 1933 Act and regulations thereunder (except that portfolio securities of issuers other than U.S. issuers shall not be required to have been registered under the Securities Act if exempt from such registration), or of the applicable laws or regulations of any other applicable jurisdiction, and no such securities are “restricted securities,” as such term is used in Rule 144(a)(3)(i) of the 1933 Act.
b. Corporate Actions. With respect to any Creation Order of the Fund, the Fund acknowledges and agrees to return to the Participant any dividend, distribution or other corporate action paid to the Fund in respect of any Deposit Security transferred to the Fund that, based on the valuation of such Deposit Security at the time of transfer, should have been paid to the Participant or Participant Client.
c. Beneficial Ownership. The Participant represents and warrants to the Distributor, Transfer Agent, Trustee and the Trust that (based upon the number of outstanding Shares of the Fund made publicly available by the Trust) (i) it does not hold, and will not as a result of the contemplated transaction hold, for the account of any single Beneficial Owner of Shares of the Fund, eighty percent (80%) or more of the outstanding Shares of the Fund, or (ii) if it does hold for the account of any single Beneficial Owner of Shares of the Fund, eighty percent (80%) or more of the outstanding Shares of the Fund, that such a circumstance would not result in the Fund acquiring a basis in the portfolio securities deposited with the Fund with respect to an order to create Shares in the Fund different from the market value of such portfolio securities on the date of such order, pursuant to Section 351 and 362 of the Internal Revenue Code of 1986, as amended. Such representation and warranty shall be deemed repeated with respect to each Creation Order for the Fund. If more than one Beneficial Owner is combined in any Creation Order, this representation is made by taking into account all such Beneficial Owners’ ownership of Shares as a group. The Participant understands and agrees that the order form relating to any Creation Order of the Fund shall state substantially the same foregoing representations and warranties.
The Distributor, Transfer Agent or the Trustee may request information from the Participant regarding Share ownership and to rely thereon to the extent necessary to make a determination regarding ownership of eighty percent (80%) or more of the outstanding Fund Shares by a Beneficial Owner as a condition to the acceptance of Deposit Securities.
d. Sub-Custodian Account. The Participant understands and agrees that in the event the Fund invests in international or global equity securities, the Trust will cause its Custodian to maintain with the applicable Sub-Custodian for the Fund an account in the relevant foreign jurisdiction to which the Participant shall deliver or cause to be delivered the Deposit Securities for itself or any Participant Client in connection with any Creation Order, with any appropriate adjustments as advised by such Sub-Custodian or Fund, in accordance with the terms and conditions applicable to such account in such jurisdiction.
e. Deposit Securities and/or Relevant Cash Amounts. The Participant understands that the amount of any cash and the identity and the required number of Deposit Securities, as applicable, to be included with respect to any Creation Order (based on information at the end of the previous Business Day) for the Fund will be made available on each Business Day, prior to the opening of business on the New York Stock Exchange (“NYSE”) through the facilities of the NSCC. The Participant understands that a Creation Unit will not be issued until the requisite cash and/or Deposit Securities, as applicable, Transaction Fees and Taxes (as defined below) are transferred to the Trust on or before the settlement date in accordance with the Prospectus and in accordance with any instructions provided by the Trust, the Custodian and/or Sub-Custodian with respect to cash payments, delivery and settlement.

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4.   EXECUTION OF REDEMPTION REQUESTS .
a. Order Placement. The Participant represents, covenants and warrants that it will not attempt to place a Redemption Order unless it first ascertains that (a) it or the Participant Client, as the case may be, owns outright or has full legal authority and legal beneficial right to tender for redemption the requisite number of Shares to be redeemed and receive the entire proceeds of the redemption, and (b) such Shares have not been loaned or pledged to another party nor are they the subject of a repurchase agreement, securities lending agreement or such other arrangement which would preclude the delivery of such Shares in accordance with the Prospectus and on a “regular way” basis, or as otherwise required by the Trustee. The Participant understands that Shares of the Fund may be redeemed only when one or more Creation Units of Shares are held in the account of a single Participant. In the event that the Distributor, Transfer Agent and/or the Trustee believes that a Participant does not have the requisite number of Shares to be redeemed as a Creation Unit, the Distributor, Transfer Agent and/or Trustee may reject without liability the Participant’s Redemption Order.
b. Additional Payment on Redemption . In the event that the Participant receives Fund Securities the value of which exceeds the net asset value of the Fund at the time of redemption, the Participant agrees to pay, on the same business day it is notified, or cause the Participant Client to pay, on such day, to the Fund an amount in cash equal to the difference.
c. Corporate Actions. The Participant on behalf of itself and any Participant Client acknowledges and agrees to return to the Fund any dividend, interest, distribution or other corporate action paid to it or to Participant Client in respect of any Fund Security that is transferred to the Participant or any Participant Client that, based on the valuation of the Fund Security at the time of transfer, should have been paid to the Fund. The Fund is entitled to reduce the amount of proceeds due to the Participant or Participant Client by an amount equal to any dividend, interest distribution or other corporate action paid to the Participant or to Participant Client in respect of any Fund Security that is transferred to the Participant or to Participant Client that, based on the valuation of the Fund Security at the time of transfer, should have been paid to the Fund.
5.   PARTICIPANT RECORDS, POLICIES AND REPRESENTATIONS .
a. Maintenance of Records. The Participant agrees to maintain records of all sales of Shares made by or through it and to furnish copies of such records to the Trustee, Transfer Agent and/or the Distributor upon request.
b. Privacy. The Participant represents that it has procedures in place that are reasonably designed to protect the privacy of non-public personal consumer/customer financial information to the extent required by applicable U.S. Federal and state laws, rules and regulations and will continue to do so throughout the term of this Agreement.
c. Shareholder Information . The Participant agrees: (i) subject to any privacy obligations or other obligations arising under the federal or state securities laws it may have to its customers, to assist the Distributor and/or Trustee in ascertaining certain information regarding sales of Shares made by or through Participant upon the request of the Trustee or the Distributor necessary for the Fund to comply with its obligations to distribute information to its shareholders as may be required from time to time under applicable state or federal securities laws, or (ii) in lieu thereof, and at the option of the Participant, the Participant may undertake to deliver to its customers that

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are shareholders of the Fund, the Prospectuses, as may be amended or supplemented from time to time, proxy material, annual and other reports of the Fund or other similar information that the Fund is obligated or otherwise desire to deliver to its shareholders, after receipt from the Fund or the Distributor of sufficient, reasonable quantities of the same to allow mailing thereof to such customers.
d. Anti-Money Laundering. The Participant represents, covenants and warrants that it has established an anti-money laundering program (“AML Program”) that, at a minimum, (i) designates a compliance officer to administer and oversee the AML Program, (ii) provides ongoing employee training, (iii) includes an independent audit function to test the effectiveness of the AML Program, (iv) establishes internal policies, procedures, and controls that are tailored to its particular business, (v) includes a customer identification program consistent with the rules under section 326 of the USA Patriot Act, (vi) provides for the filing of all necessary anti-money laundering reports including, but not limited to, currency transaction reports and suspicious activity reports, (vii) provides for screening all new and existing customers against reports and suspicious activity reports, (vii) provides for screening all new and existing customers against the Office of Foreign Asset Control list and any other government list that is or becomes required under the USA Patriot Act, and (viii) allows for appropriate regulators to examine its anti-money laundering books and records. The Participant agrees that, throughout the term of this Agreement, it will maintain the AML Program in substantial conformity with the foregoing provisions as may be amended or supplemented by applicable U.S. federal regulations. Any change in the foregoing shall result in the automatic termination of this Agreement, and Participant shall give prompt notice to the Distributor, Transfer Agent and the Trustee of such change.
e. Marketing Materials. The Participant represents, warrants and agrees that it will not make any representations concerning the Fund, Creation Units or Shares other than those contained in the Prospectus or in any promotional materials or sales literature furnished to the Participant by the Distributor. The Participant agrees not to furnish or cause to be furnished to any person or display or publish any information or materials relating to the Fund, Creation Units or Shares (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or other similar materials, but not including any materials prepared and used for the Participant’s internal use only or brokerage communications prepared by the Participant in the normal course of its business and consistent with the Prospectus and in accordance with applicable laws and regulations) (“Marketing Materials”), except such Marketing Materials as may be furnished to the Participant by the Distributor and such other Marketing Materials as may be approved in writing by the Distributor. The Participant understands that the Fund may not be advertised or marketed as an open-end investment company ( i.e., as a mutual fund) that offers redeemable securities, and that any advertising materials will prominently disclose that the Shares are not individually redeemable shares of beneficial interest in the Trust. In addition, the Participant understands that any advertising material that addresses redemptions of Shares, including the Prospectus, will disclose that the owners of Shares may acquire Shares and tender Shares for redemption to the Trust in Creation Unit aggregations only. Notwithstanding the foregoing, the Participant or an affiliate of the Participant may, without the written approval of the Distributor, prepare and circulate in the regular course of its business research reports that include information, opinions or recommendations relating to the Fund (i) for public dissemination, provided that such research reports compare the relative merits and benefits of Shares with other products and are not used for purposes of marketing Shares and (ii) for internal use by the Participant. The Participant acknowledges that the Trustee, Distributor, Transfer Agent, the Trust’s sponsor, PDR Services LLC (“Sponsor”) and their affiliates may disclose that the Participant is acting as an authorized participant with respect to the Trust’s Shares and has entered into this Agreement.

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6.   AUTHORIZED PERSONS .
a. Certification. Concurrently with the execution of this Agreement and from time to time thereafter, the Participant shall deliver to the Distributor, the Transfer Agent and the Trust, duly certified as appropriate by its secretary or other duly authorized official, a certificate, in the form set forth in Attachment B (or pursuant to other documentation deemed acceptable by the Trust, Transfer Agent or Distributor in their sole discretion) (the “Certificate”), setting forth the names, signatures and other requested information of all persons authorized to give instructions relating to any activity contemplated hereby or any other notice, request or instruction on behalf of the Participant (each an “Authorized Person”). Such Certificate may be accepted and relied upon by the Transfer Agent, the Distributor and the Trust as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Transfer Agent, the Distributor and the Trust of a superseding Certificate bearing a subsequent date.
b. Personal Identification Number. The Transfer Agent or Distributor, as the case may be, shall issue to each Authorized Person a unique personal identification number (“PIN”) by which such Authorized Person and the Participant shall be identified and instructions issued by the Participant hereunder shall be authenticated.
c. Termination of Authority. Upon the termination or revocation of authority of such Authorized Person by the Participant, the Participant shall give prompt written notice of such fact to the Distributor, Transfer Agent and the Trust and such notice shall be effective upon receipt by the Distributor, Transfer Agent and the Trust.
d. Verification. The Transfer Agent and Distributor shall assume that all instructions issued to them using a PIN have been properly placed by an Authorized Person, unless the Transfer Agent or Distributor, as the case may be, has actual knowledge to the contrary or the Participant has properly revoked such PIN as provided herein. Neither the Distributor nor the Transfer Agent shall have any obligation to verify that an Order is being placed by an Authorized Person.
7.   PAYMENT OF CERTAIN FEES AND TAXES .
a. Transaction Fees. In connection with the purchase or redemption of Creation Units, the Participant agrees to pay on behalf of itself or the Participant Client the Transaction Fee prescribed in the Prospectus as applicable to the Participant’s transaction. The Trustee reserves the right to adjust any Transaction Fee subject to any limitation as prescribed in the Prospectus.
b. Other Fees and Taxes . In connection with the purchase or redemption of Creation Units, the Participant acknowledges and agrees that the computation of any cash amount to be paid by or to the Participant shall exclude any taxes or other fees and expenses payable upon the transfer of beneficial ownership of Deposit Securities or Fund Securities. To the extent any payment of any transfer tax, sales or use tax, stamp tax, recording tax, value added tax or any other similar tax, fee or government charge (collectively, “Taxes”) applicable to the purchase or redemption of any Creation Units made pursuant to this Agreement is imposed, the Participant shall be also responsible for the payment of any such Taxes regardless of whether or not such Taxes are imposed directly on the Participant. To the extent the Trust, Trustee, Distributor or their agents pay any such Taxes or they are otherwise imposed, the Participant agrees to promptly indemnify and pay such party for any such payment, together with any applicable penalties, additions to tax or interest thereon. This section shall survive the termination of this Agreement.

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8.   INDEMNIFICATION .
This Section 8 shall survive the termination of this Agreement.
Participant’s Indemnification of the Distributor, Transfer Agent, Trustee, Trust and Sponsor. The Participant hereby agrees to indemnify and hold harmless the Distributor, Transfer Agent, Trustee, Trust and Sponsor and their respective subsidiaries, affiliates, directors, officers, partners, members, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each an “AP Indemnified Party”) from and against any loss, liability, cost or expense suffered or incurred by such AP Indemnified Party resulting from, in connection with or arising out of (i) any breach by the Participant of any provision of this Agreement, (ii) any failure by Participant for any reason, fraudulent, negligent or otherwise, to comply with its obligations under this Agreement, (iii) any failure by the Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations (“SROs”), in relation to its role as Participant, (iv) any actions of such AP Indemnified Party in reliance upon any instructions issued in accordance with the Procedures (as may be amended from time to time) believed by the Distributor, the Transfer Agent and/or the Trust to be genuine and to have been given by the Participant or (v)(1) any representation by the Participant, its employees or its agents or other representatives about the Fund, Creation Units, Shares or any AP Indemnified Party that is not consistent with the Trust’s then-current Prospectus made in connection with the offer or the solicitation of an offer to buy or sell Shares and (2) any untrue statement or alleged untrue statement of a material fact contained in any research reports, Marketing Material or sales literature described in Section 5.e. hereof or any alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading to the extent that such statement or omission relates to the Fund, Creation Units, Shares or any AP Indemnified Party unless, in either case, such representation, statement or omission was made or included by the Participant at the written direction of the Trust or the Distributor or is based upon any omission or alleged omission by the Trust or the Distributor to state a material fact in connection with such representation, statement or omission necessary to make such representation, statement or omission not misleading. Notwithstanding the foregoing, the Participant shall not have any obligation to indemnify any AP Indemnified Party under this Section 8 for any such losses, liabilities, damages, costs or expenses that are incurred as a result of, or in connection with, any gross negligence, bad faith or willful misconduct on the part of such AP Indemnified Party.
9.   LIMITATION OF LIABILITY .
This Section 9 shall survive the termination of this Agreement.
a. Express Duties. The Distributor and the Transfer Agent undertake to perform such duties and only such duties as are expressly set forth herein, or expressly incorporated herein by reference, and no implied covenants or obligations shall be read into this Agreement against the Distributor or the Transfer Agent. The parties understand and agree that the Trust (and the Trustee acting on behalf of the Trust for such purposes) is a limited a party to this Agreement for the sole purpose of accepting such Agreement. Accordingly, the Trust (and the Trustee acting on behalf of the Trust for such purposes) has not agreed to undertake any obligations under this Agreement nor made any representations or warranties under this Agreement and no implied covenants or obligations shall be read into this Agreement against either the Trustee or the Trust.

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The parties acknowledge that State Street Bank and Trust Company, defined as Trustee and Transfer Agent herein, is acting in its capacity hereunder as trustee in accordance with and pursuant to the Trust Agreement and not in its general corporate capacity.
The Distributor and the Transfer Agent each agree that no provision in this Section 9 shall relieve such party from its obligations to the Trust under any servicing agreement that it has entered into with the Trust.
b. Limited Liability. In the absence of bad faith, gross negligence or willful misconduct on its part, neither the Distributor nor the Transfer Agent, whether acting directly or through agents, affiliates or attorneys, shall be liable for any action taken, suffered or omitted or for any error of judgment made by any of them in the performance of their duties hereunder. Neither the Distributor nor the Transfer Agent shall be liable for any error of judgment made in good faith unless the party exercising such shall have been grossly negligent in ascertaining the pertinent facts necessary to make such judgment. In no event shall the Distributor or the Transfer Agent be liable for any special, indirect, incidental, exemplary, punitive or consequential loss or damage of any kind whatsoever (including but not limited to loss of revenue, loss of actual or anticipated profit, loss of contracts, loss of the use of money, loss of anticipated savings, loss of business, loss of opportunity, loss of market share, loss of goodwill or loss of reputation), even if such parties have been advised of the likelihood of such loss or damage and regardless of the form of action. In no event shall the Distributor or the Transfer Agent be liable for: (i) the acts or omissions of DTC, NSCC or any other securities depository or clearing corporation; or (ii) losses incurred by the Participant or Participant Client as a result of unauthorized use of any PIN. Further, the Distributor shall not be liable for any action or failure to take any action with respect to the voting matters set forth in Section 1.h. above.
c. Force Majeure. Neither the Distributor nor the Transfer Agent shall be responsible or liable for any failure or delay in the performance of their obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; terrorism; sabotage; epidemics; riots; interruptions; loss or malfunction of utilities, computer (hardware or software) or communications service; accidents; labor disputes; acts of civil or military authority or governmental actions.
d. Reliance on Instructions. The Distributor and the Transfer Agent may conclusively rely upon, and shall be fully protected in acting or refraining from acting upon, any communication authorized under this Agreement and the Procedures and upon any written or oral instruction, notice, request, direction or consent reasonably believed by them to be genuine.
e. No Advancement by Transfer Agent. The Transfer Agent shall not be required to advance, expend or risk its own funds or otherwise incur or become exposed to financial liability in the performance of its duties hereunder, except as may be required as a result of its own gross negligence, willful misconduct or bad faith.
f. Data Errors and Communication Delays. Neither the Distributor nor the Transfer Agent shall be liable to the Participant or to any other person for any damages arising out of mistakes or errors in data provided to the Distributor or the Transfer Agent by a third party, or out of interruptions or delays of electronic means of communications with the Distributor or the Transfer Agent.

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10.   NOTICES . Except as otherwise specifically provided in this Agreement, all notices and amendments required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by (i) personal delivery, (ii) postage prepaid registered or certified United States first class mail, return receipt requested, (iii) overnight traceable mail ( e.g., Federal Express), (iv) facsimile, (v) electronic mail (e-mail) or (vi) similar means of same day delivery. Unless otherwise notified in writing, all notices to the Trust and Trustee shall be given or sent as follows: State Street Bank and Trust Company, PO Box 5049, Boston, MA 02206, Attn.: SPDR Dow Jones Industrial Average ETF Trust.
 
    All notices to the Participant, Distributor or Transfer Agent, as the case may be, shall be directed to the address, telephone, facsimile numbers or e-mail addresses indicated below the signature line of such party; provided, however, in the case of communications by the Distributor or Transfer Agent to the Participant with respect to any Order as detailed in the Procedures, the Distributor and Transfer Agent shall contact an Authorized Person or other Participant designee at such telephone number, e-mail address or facsimile number provided by such person.
11.   TERMINATION AND AMENDMENT . This Agreement shall become effective in this form as of the date accepted by the Trust and may be terminated at any time by any party upon thirty days prior notice to the other parties (i) unless earlier terminated by the Trust in the event of a breach of this Agreement or the Procedures described herein by the Participant or (ii) in the event that the Trust is terminated for any reason.
 
    This Agreement may be amended by the Trust from time to time by the following procedure: the Trust will provide a copy of any such amendment to the Distributor, the Transfer Agent and the Participant. If neither the Distributor, the Transfer Agent nor the Participant objects in writing to the amendment within ten (10) days, the amendment will become part of this Agreement in accordance with its terms. Notwithstanding the foregoing, the Trust reserves the right to revise the Procedures or issue additional procedures relating to the manner of creating or redeeming Creation Units and the Participant, the Transfer Agent and the Distributor each agree to comply with such Procedures as may be issued from time to time.
12.   ENTIRE AGREEMENT . This Agreement and the Procedures, which are hereby incorporated herein by reference, supersede any prior agreement between or among the parties with respect to the subject matter contained herein and constitute the entire agreement among the parties regarding the matters contained herein.
13.   ASSIGNMENT . No party may assign its rights or obligations under this Agreement (in whole or in part) without the prior written consent of the other parties, which shall not be unreasonably withheld; provided that, any party may assign its rights and obligations hereunder (in whole, but not in part) without such consent to an entity acquiring all, or substantially all of its assets or business or to an affiliate so long as the acquiring entity is able to comply and fulfill the duties and obligations under this Agreement.
14.   SEVERANCE . If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supranational body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent so held and shall not affect the validity,

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    legality or enforceability of the other provisions of this Agreement so long as this Agreement, as so modified, continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective benefits, obligations, or expectations of the parties to this Agreement.
 
15.   COUNTERPARTS . This Agreement may be executed in several counterparts, each of which shall be an original and all shall constitute but one and the same instrument.
16.   GOVERNING LAW . This Agreement shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts without regard to the conflicts of laws provisions thereof. The parties irrevocably submit to the personal jurisdiction and service and venue of any federal or state court within the Commonwealth of Massachusetts having subject matter jurisdiction, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement.
17.   TRUST AS THIRD PARTY BENEFICIARY . The parties understand and agree that the Trust (including the Trustee acting on its behalf), as a third party beneficiary to this Agreement, is entitled and intend to proceed directly against the Participant in the event that the Participant fails to honor any of its obligations pursuant to this Agreement that benefit the Trust.
18.   INTERPRETATION . Titles and section headings are included solely for convenient reference and are not a part of this Agreement.
See next page for signatures

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the       day of                      , 2010.
         
    ALPS DISTRIBUTORS, INC.
 
       
 
  BY:    
 
       
 
  PRINTED NAME:    
 
       
 
  TITLE:    
 
       
 
  ADDRESS:   1290 Broadway, Suite 1100
 
       
 
      Denver, CO 80203
 
       
 
  TELEPHONE:   (303) 623-2577
 
       
 
  FACSIMILE:   (303) 824-3320
 
       
 
       
 
       
    STATE STREET BANK AND TRUST COMPANY,
not in its general corporate capacity but solely as Trustee of the Trust with respect to transfer agency matters
 
       
 
  BY:    
 
       
 
  PRINTED NAME:   Michael Rogers
 
       
 
  TITLE:   Executive Vice President
 
       
 
  ADDRESS:   P.O. Box 5049
 
       
 
      Boston, MA 02206-5049
 
       
 
  TELEPHONE:   (617) 662-3909
 
       
 
  FACSIMILE:   (617) 662-3805
 
       
 
       
 
       
    PARTICIPANT:
 
       
 
  NAME:    
 
       
 
  NSCC#:    
 
       
 
  TAX ID#:    
 
       
 
       
 
  BY:    
 
       
 
  PRINTED NAME:    
 
       
 
  TITLE:    
 
       
 
  ADDRESS:    
 
       
 
       
 
       
 
  TELEPHONE:    
 
       
 
  FACSIMILE:    
 
       
 
  E-MAIL:    
 
       

13


 

             
    ACCEPTED BY:
 
           
    SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST
 
           
 
  BY: STATE STREET BANK AND TRUST
COMPANY, not in its general corporate capacity but solely as Trustee of the Trust
 
           
 
  BY:        
 
     
 
           
    PRINTED NAME:   Michael Rogers  
 
       
 
           
 
  TITLE: Executive Vice President  
 
     

14


 

ATTACHMENT A
     This document supplements the Prospectus with respect to the procedures to be used by (i) the Transfer Agent and Distributor in processing orders for the purchase of Creation Units of the Fund (“Creation Orders”) and (ii) the Transfer Agent in processing orders redeeming Creation units of the Fund (“Redemption Orders,” and together with Creation Orders, “Orders”).
     A Participant is required to have signed the Participant Agreement. Upon acceptance by the Trustee of the Participant Agreement, the Transfer Agent or Distributor, as the case may be, will assign a personal identification number (“PIN”) to each Authorized Person authorized to act for the Participant. This will allow a Participant through its Authorized Person(s) to place an order with respect to Creation Units.
TO PLACE AN ORDER FOR PURCHASE OR REDEMPTION OF CREATION UNITS
1.   Orders by Telephone .
a. Order Number. Call to Receive an Order Number. An Authorized Person for the Participant will call the telephone representative at the number listed on the Fund’s order form (“Order Form”) not later than the cut-off time for placing Orders with the Fund as set forth in the Order Form (the “Order Cut-Off Time”) to receive an Order Number. Non-standard Orders generally must be arranged with the Trust in advance of Order placement. The Order Form (as may be revised from time to time) is incorporated into and made a part of this Agreement.
Upon verifying the authenticity of the caller (as determined by the use of the appropriate PIN) and the terms of the Order, the telephone representative will issue a unique Order Number. All Orders with respect to the purchase or redemption of Creation Units are required to be in writing and accompanied by the designated Order Number. Incoming telephone calls are queued and will be handled in the sequence received. Calls placed before the Order Cut-Off Time will be processed even if the call is taken after this cut-off time. ACCORDINGLY, DO NOT HANG UP AND REDIAL. INCOMING CALLS THAT ARE ATTEMPTED LATER THAN THE ORDER CUT-OFF TIME WILL NOT BE ACCEPTED.
NOTE THAT THE TELEPHONE CALL IN WHICH THE ORDER NUMBER IS ISSUED INITIATES THE ORDER PROCESS BUT DOES NOT ALONE CONSTITUTE THE ORDER. AN ORDER IS ONLY COMPLETED AND PROCESSED UPON RECEIPT OF WRITTEN INSTRUCTIONS VIA THE ORDER FORM CONTAINING THE DESIGNATED ORDER NUMBER, AUTHORIZED INDIVIDUALS’ SIGNATURES AND TRANSMITTED BY FACSIMILE.
b. Place the Order. An Order Number is only valid for a limited time. The Order Form for purchase or redemption of Creation Units must be sent by facsimile to the telephone representative within 20 minutes of the issuance of the Order Number. In the event that the Order Form is not received within such time period, the telephone representative will attempt to contact the Participant to request immediate transmission of the Order. Unless the Order Form is received by the telephone representative upon the earlier of (i) within 15 minutes of contact with the Participant or (ii) 45 minutes after the Order Cut-Off Time, the Order will be deemed invalid.

A-1


 

c. Await Receipt of Confirmation.
  (i)   Clearing Process . The Distributor (in the case of purchases) or the Transfer Agent (in the case of redemptions) shall issue a confirmation of Order acceptance within approximately 15 minutes of its receipt of an Order Form received in good form. In the event the Participant does not receive a timely confirmation from the Distributor or the Transfer Agent, it should contact the telephone representative at the business number indicated.
 
  (ii)   Outside the Clearing Process . In lieu of receiving a confirmation of Order acceptance, the DTC Participant will receive an acknowledgment of Order acceptance. The DTC Participant shall deliver on settlement date the Deposit Securities and/or cash (in the case of purchases) or the Creation Unit size aggregation of Shares on trade date plus one (in the case of redemptions) to the Trust through DTC. The Trust shall settle the transaction on the prescribed settlement date.
d. Ambiguous Instructions. In the event that an Order Form contains terms that differ from the information provided in the telephone call at the time of issuance of the Order Number, the telephone representative will attempt to contact the Participant to request confirmation of the terms of the Order. If an Authorized Person confirms the terms as they appear in the Order Form then the Order will be accepted and processed. If an Authorized Person contradicts its terms, the Order will be deemed invalid and a corrected Order Form must be received by the telephone representative not later than the earlier of (i) within 15 minutes of such contact with the Participant or (ii) 45 minutes after the Order Cut-Off Time. If the telephone representative is not able to contact an Authorized Person, then the Order shall be accepted and processed in accordance with the terms of the Order Form notwithstanding any inconsistency from the terms of the telephone information. In the event that an Order Form contains terms that are illegible, as determined in the sole discretion of the Transfer Agent or Distributor (in the case of a Creation Order) or the Transfer Agent (in the case of a Redemption Order), the Order will be deemed invalid and will not be processed. A telephone representative will attempt to contact the Participant to request retransmission of the Order Form, and a corrected Order Form must be received by the telephone representative not later than the earlier of (i) within 15 minutes of such contact with the Participant or (ii) 45 minutes after the Order Cut-Off Time.
2.   Election to Place Orders by Internet .
a. General. Notwithstanding the foregoing provisions, Orders may be submitted through the Internet (“Web Order Site” or “Fund Connect”), but must be done so in accordance with the terms of this Agreement, the Prospectus, the Web Order Site, the State Street Fund Connect Buy-Side User Agreement (which must be separately entered into by the Participant) (the “Fund Connect Agreement”) and the applicable Fund Connect User Guide (or any successor documents). To the extent that any provision of this Agreement is inconsistent with any provision of any Fund Connect Agreement, the Fund Connect Agreement shall control with respect to State Street’s provision of the Web Order Site; provided, however, it is not the intention of the parties to otherwise modify the rights, duties and obligations of the parties under the Agreement, which shall remain in full force and effect until otherwise expressly modified or terminated in accordance with its terms. Notwithstanding the forgoing, the Participant acknowledges that references to the applicable Fund Connect User Guide (or any successor documents) contained herein are for instructional purposes only, and such Fund Connect User Guide (or any successor documents)

A-2


 

does not contain any additional representations, warranties or obligations by the Trust, the Trustee, the Transfer Agent, the Distributor or their respective agents.
b. Certain Acknowledgements. The Participant acknowledges and agrees (i) that the Trust, the Trustee, the Transfer Agent, the Distributor and their respective agents may elect to review any Order placed through the Web Order Site manually before it is executed and that such manual review may result in a delay in execution of such Order; (ii) that during periods of heavy market activity or other times, it may be difficult to place Orders via the Web Order Site and the Participant may place Orders as otherwise set forth in Attachment A; and (iii) that any transaction information, content, or data downloaded or otherwise obtained through the use of the Web Order Site are done at the Participant’s own discretion and risk.
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THE FUND CONNECT AGREEMENT AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE WEB ORDER SITE IS PROVIDED “AS IS,” “AS AVAILABLE” WITH ALL FAULTS AND WITHOUT ANY WARRANTY OF ANY KIND. SPECIFICALLY, WITHOUT LIMITING THE FOREGOING, ALL WARRANTIES, CONDITIONS, OTHER CONTRACTUAL TERMS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES WITH RESPECT TO THE WEB ORDER SITE, WHETHER EXPRESS, IMPLIED OR STATUTORY, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN STATEMENTS BY THE TRUST, THE TRUSTEE, THE TRANSFER AGENT, THE DISTRIBUTOR OR THEIR RESPECTIVE AGENTS, AFFILIATES, LICENSORS OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO AS TO TITLE, SATISFACTORY QUALITY, ACCURACY, COMPLETENESS, UNINTERRUPTED USE, NON-INFRINGEMENT, TIMELINESS, TRUTHFULNESS, SEQUENCE, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES, CONDITIONS AND OTHER CONTRACTUAL TERMS ARISING FROM TRADE USAGE, COURSE OF DEALING OR COURSE OF PERFORMANCE) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
c. Election to Terminate Placing Orders by Internet . The Participant may elect at any time to discontinue placing Orders through the Web Order Site without providing notice under the Agreement.
3.   Acknowledgment Regarding Telephone and Internet Transactions. During periods of heavy market activity or other times, the Participant acknowledges it may be difficult to reach the Trust by telephone or to transact business over the Internet via the Web Order Site. Technological irregularities may also make the use of the Internet and Web Order Site slow or unavailable at times. The Trust may terminate the receipt of redemption or exchange Orders by telephone or the Internet at any time, in which case you may redeem or exchange Shares by other means.
4.   Purchase of Creation Units Without Receipt of Deposit Securities. Creation Units of the Fund may be purchased in advance of receipt by the Trust of all or a portion of the applicable Deposit Securities, provided that the Participant deposits an initial deposit of cash with the Trust having a value greater than the net asset value of the Shares on the date the Order is placed in proper form. In addition to available Deposit Securities and cash that generally comprise a Creation Unit, cash must be deposited in an amount equal to 115% of the market value of any undelivered Deposit Securities (the “Additional Cash Deposit”). The Order shall be deemed to be received on the Business Day on which the Order is placed provided that the Order is placed in proper form prior to Order Cut-Off Time on such date and cash in the appropriate amount is

A-3


 

    deposited with the Custodian by 1:00 p.m. Eastern Time or such other time as designated by the Custodian on settlement date. If the Order is not placed in proper form by Order Cut-Off Time or federal funds in the appropriate amount are not received by 1:00 p.m. Eastern Time on settlement date, then the Order may be deemed to be rejected and the Participant shall be liable to the Trust for losses, if any, resulting therefrom. An additional amount of cash shall be required to be deposited with the Trust, pending delivery of the missing Deposit Securities to the extent necessary to maintain an amount of cash on deposit with the Trust at least equal to 115% of the daily marked to market value of the missing Deposit Securities. In the event that additional cash is not paid, the Trust may use the cash on deposit to purchase the missing Deposit Securities. The Participant will be liable to the Trust for the costs incurred by the Trust in connection with any such purchases and the Participant shall be liable to the Trust for any shortfall between the cost to the Trust of purchasing any missing Deposit Securities and the value of the collateral. These costs will be deemed to include the amount by which the actual purchase price of the Deposit Securities exceeds the market value of such Deposit Securities on the day the Creation Order was deemed received by the Distributor plus the brokerage and related transaction costs associated with such purchases. The Trust will return any unused portion of the Additional Cash Deposit once all of the missing Deposit Securities have been properly received by the Custodian or purchased by the Trust and deposited into the Trust. The Trust shall charge and the Participant agrees to pay to the Trust the Transaction Fee and any additional fees prescribed in the Prospectus. The delivery of Creation Units of the Fund so created will occur no later than the prescribed settlement date following the day on which the Creation Order is deemed received by the Distributor.

A-4


 

ATTACHMENT B
AUTHORIZED PERSONS
SPDR DOW JONES INDUSTRIAL AVERAGE ETF TRUST
     The following individuals are Authorized Persons pursuant to Section 6 of the Participant Agreement between ALPS Distributors, Inc., State Street Bank and Trust Company and
     
,
   
 
   
Participant Name
  NSCC #
                     
            TELEPHONE   E-MAIL   CITY OF
NAME (1)   TITLE (1)   SIGNATURE (1)   NUMBER (2)   ADDRESS (2)   BIRTH (2)
 
                   
 
                   
 
                   
 
                   
 
                   
 
                   
 
                   
 
                   
 
                   
 
                   
     
Date:
   
 
   
     
Certified By (Signature):
   
 
   
     
Print Name:
   
 
   
     
Title:
   
 
   
 
(1)   Required information.
 
(2)   Required information to use the Web Order Site.

B-1

Exhibit 99.A11
17j-1 CODE OF ETHICS
of
SPDR ® S&P 500 ETF Trust 1 ;
SPDR ® S&P MidCap 400 ETF Trust 2 ;
and
SPDR ® Dow Jones Industrial Average SM ETF Trust 3
dated as of
January 26, 2011
I. Introduction
     Each of the SPDR ® S&P 500 ETF Trust, the SPDR ® S&P MidCap 400 ETF Trust and the SPDR ® Dow Jones Industrial Average SM ETF Trust” (collectively, the “Trusts”) is a unit investment trust (“UIT”) that is organized under New York law and is governed by trust agreement (“Trust Agreement”) between a trustee bank (“Trustee”) and PDR Services LLC (“PDR”) as Sponsor. PDR is a Delaware limited liability company incorporated on April 6, 1998 with offices c/o NYSE Euronext, 11 Wall Street, New York, New York 10005. On October 1, 2008, the Sponsor became an indirect wholly-owned subsidiary of NYSE Euronext following the acquisition by NYSE Euronext of the American Stock Exchange LLC (“AMEX”) and all of its subsidiaries.
     Each of the Trusts is registered as a UIT with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940 (“1940 Act”) and is an “exchange-traded fund” or “ETF” that operates pursuant to an order from the SEC exempting it from certain provisions of the 1940 Act permitting it, among other things, to list individual Units on an exchange for trading at market prices while issuing Units in large lot sizes at net asset value (“NAV”) as described briefly below in the next paragraph. As UITs, none of the Trusts has any directors, officers, general partners or an investment adviser. Each Trust is a passive “index” fund that holds the portfolio securities of its financial index (“Index”), plus cash, and is not actively “managed” by traditional methods. Given that each Trust follows a “replication” strategy in order to pursue its objective of providing investment results that, before expenses, generally correspond to the price and yield performance of the Index, each Trust will hold as many of the stocks in its Index as is practicable. Therefore, in order to maintain the correspondence between the composition and weightings of stocks held by each Trust (“Portfolio Securities”) and component stocks of its Index (“Index Securities”) the Trustee, pursuant to the terms of each Trust Agreement, adjusts each Trust’s Portfolio Securities from time to time to conform to periodic changes in the identity and/or relative weightings of the relevant Index Securities.
 
1   Formerly known as the “Standard & Poor’s Depositary Receipts (“SPDR”) Trust, Series 1”.
 
2   Formerly known as the “Standard & Poor’s MidCap 400 Depositary Receipts MidCap SPDR Trust, Series 1”.
 
3   Formerly known as the “DIAMONDS Trust, Series 1”.

 


 

          The individual Units of each Trust are listed for trading on NYSE Arca, Inc. (“NYSE Arca”), and are bought and sold in the secondary market like ordinary shares of stock at any time during the trading day. Each Trust issues and redeems its Units only in specified large lots referred to as “Creation Units”. Creation Units are issued by each Trust only to persons called “Authorized Participants” who, after placing a creation order with the distributor specified in each Trust’s statutory prospectus (“Distributor”), deposit with the Trustee a specified portfolio of Index Securities and a specified cash payment.
II. Purpose of the Code of Ethics
          This code of ethics (“Code”) is based on the principle that any Access Person (defined below) of the Trusts, will conduct his/her personal investment activities in accordance with:
    the duty at all times to place the interests of the Trusts’ Unitholders first;
 
    the requirement that all personal securities transactions be conducted consistent with this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility; and
 
    the fundamental standard that Access Persons of the Trusts should not take inappropriate advantage of their positions.
          This Code does not attempt to identify all possible conflicts of interest, and literal compliance with each of its specific provisions will not shield Access Persons from liability for personal trading or other conduct that violates a fiduciary duty to Trust Unitholders.
III. Legal Requirement
          Pursuant to Rule 17j-1(b) of the 1940 Act, it is unlawful for any Access Person to:
    employ any device, scheme or artifice to defraud the Trusts;
 
    make any untrue statement of a material fact to the Trusts or fail to state a material fact necessary in order to make the statements made to the Trusts, in light of the circumstances under which they were made, not misleading;
 
    engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon the Trusts; or
 
    engage in any manipulative practice with respect to the Trusts,
in connection with the purchase or sale (directly or indirectly) by such Access Person of a security “held or to be acquired” by the Trusts.

 


 

IV. Adoption of the Code and Identification of Access Persons
The Sponsor has adopted this Code on behalf of each of the applicable Trusts to specify a code of conduct for certain types of personal securities transactions which may involve conflicts of interest or an appearance of impropriety and to establish reporting requirements and enforcement procedures. The Sponsor has appointed a chief compliance officer (the “CCO”), who will be responsible for administering this Code. Any tasks assigned to the CCO herein may be carried out by a person or group designated by the CCO.
The policies and procedures of this Code apply to “Access Persons” (as defined below) of the Trusts. The Sponsor, on behalf of each Trust, is responsible for identifying Access Persons, subject to section V. below. The CCO will be responsible for monitoring the status of Access Persons on a quarterly basis. Upon the identification of any Access Person, the CCO will ensure that such Access Person is notified of the requirements of this Code.
V. Requirements Applicable to Distributors
The requirements of this Code of Ethics are not applicable to any Access Person of a Trust who is subject to a separate Code of Ethics adopted by the Distributor to such Trust, provided that:
    such Code of Ethics complies with the requirements of Rule 17j-1 and has been approved by the Sponsor; and
 
    the Distributor has certified to the Sponsor that it has adopted procedures reasonably necessary to prevent such Access Persons from violating such Code of Ethics.
Any Distributor relying upon this section V. shall:
    submit to the Sponsor a copy of its Code of Ethics adopted pursuant to Rule 17j-1;
 
    promptly report to the Sponsor in writing any material amendments to such Code;
 
    furnish to the Sponsor upon request (and in any event no less than annually) a written report that:
    describes any issues arising under its Code of Ethics or procedures during the period specified including (but not limited to) information about material violations of the Code or procedures and sanctions imposed in response to material violations; and
 
    certifies that it has adopted procedures reasonably necessary to prevent Access Persons from violating its Code.

 


 

           Exception for Distributor
Pursuant to Rule 17j-1, the requirements set forth above in this section V. do not apply to the Distributor unless:
    the Distributor is an affiliated person of the applicable Trust; or
 
    an officer, director or general partner of the Distributor serves as an officer, director or general partner of the applicable Trust.
VI. Definitions
Certain defined terms used in this Code will have the same meaning as explained in Rule 17j-1 or Section 2(a) of the 1940 Act and are summarized below.
Access Person means (i) any director, officer, general partner, or employee of the Trusts or of any company in a control relationship to the Trusts who, in connection with his/her regular functions or duties, makes, participates in, or obtains information regarding the purchase or sale of Covered Securities by the Trusts, or whose functions relate to the making of any recommendations with respect to such purchases or sales and (ii) any natural person in a control relationship to any Trust who obtains information concerning recommendations made to such Trust with regard to the purchase or sale of Covered Securities by the Trust.
Automatic Investment Plan means a program in which regular purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and equity. An Automatic Investment Plan includes a dividend reinvestment plan.
Beneficial Ownership has the same meaning as that set forth in Rule 16a-1(a)(2) of the Securities Exchange Act of 1934. 4
Control means the power to exercise a controlling influence over the management or policies of a company, unless such power is solely the result of an official position with such company. 5
Covered Security means a security as defined in Section 2(a)(36) of the 1940 Act except that it does not include:
 
4   Rule 16a-1(a)(2) under the Exchange Act specifies that, to have beneficial ownership, a person must have a direct or indirect pecuniary interest, which in general means the opportunity to profit directly or indirectly from a securities transaction. As a result, an Access Person may be deemed to have beneficial ownership of securities held by members of his or her immediate family who share the same household.
 
5   The term “control” is defined in Section 2(a)(9) of the 1940 Act. Under Section 2(a)(9), any person who owns beneficially, either directly or through one or more controlled companies, more than 25 per cent of the voting securities of a company is presumed to control such company. Any person who does not so own more than 25 per cent of the voting securities of any company is presumed not to control such company. The presumptions set forth in Section 2(a)(9) continue until a determination to the contrary is made by the Commission (either upon its own motion or application by an interested person).

 


 

(i)   Direct obligations of the Government of the United States;
 
(ii)   Bankers’ acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments 6 , including repurchase agreements; and
 
(iii)   Shares issued by open-end Funds excluding open-end Exchange Traded Funds.
Exchange Traded Fund means a registered open-end management investment company that operates pursuant to an order from the SEC exempting it from certain provisions of the 1940 Act permitting it to issue securities that trade on the secondary market. Examples of Exchange-Traded Funds include, but are not limited to, iShares and PowerShares.
Fund means an investment company registered under the 1940 Act.
Initial Public Offering means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act.
Limited Offering means an offering that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) or pursuant to Rule 504, Rule 505, or Rule 506 under the Securities Act.
Purchase or Sale of a Covered Security includes, among other things, the writing of an option to purchase or sell a Covered Security.
VII. Policies of the Trusts Regarding Personal Securities Transactions
           General
          Access Persons of the Trusts are prohibited from engaging in any act, practice or course of business that would violate the provisions of Rule 17j-1 as set forth above, or in connection with any personal investment activity, engage in conduct inconsistent with this Code.
           Prohibition
          Access Persons are not permitted to purchase or sell, directly or indirectly, any security in which he/she has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership and which he/she knows or should have known at the time of such purchase or sale:
 
6   “High quality short-term debt instrument” has been interpreted to mean any instrument that has a maturity at issuance of less than 366 days and is rated in one of the two highest rating categories by a Nationally Recognized Statistical Rating Organization.

 


 

    is being considered for purchase or sale by the Trusts; or
 
    is being purchased or sold by the Trusts.
          To monitor compliance with this policy, the CCO or a designee will review the quarterly transaction reports (discussed below) of each Access Person and document the results of the review.
           Pre-approval of Investments in IPOs and Limited Offerings
          Access Persons must obtain approval before directly or indirectly acquiring Beneficial Ownership in any securities in an Initial Public Offering or in a Limited Offering. The Access Person may request approval for an investment in an Initial Public Offering or Limited Offering by submitting the Pre-approval Request Form (Exhibit A) to the CCO or a designee.
           Pre-approval for Sale of Trust Units
          Access Persons must obtain approval, before directly or indirectly, selling any Units of a Trust. The Access Person may request approval for the sale of Units by submitting the Pre-approval Request Form (Exhibit A) to the CCO or a designee.
VIII. Reporting Procedures
          This section of the Code sets forth the personal securities reporting obligations of each Access Person. Note that Access Persons are not required to make a report under this section with respect to transactions effected for, and Covered Securities held in, any account over which the person has no direct or indirect influence or control . To rely on this exception, the Access Person must notify the CCO or a designee of the existence of such an account, and the Access Person will be required to execute a certification that confirms the account in question meets the standard intended by the applicable rule. 7
          In order to provide the Supervisory Group (as defined below) with information to enable it to determine with reasonable assurance whether the provisions of this Code are being observed, every Access Person of the Trusts must report to the CCO or a designee the following:
(a) Initial Holdings Reports . Every Access Person must report on Exhibit B attached hereto, no later than 10 days after becoming an Access Person, the following information:
    The title, number of shares and principal amount of each Covered Security in which the Access Person had any direct or indirect Beneficial Ownership when
 
7   Note that this exception is intended to be narrowly applied. An example of an account would be a blind trust in which the Access Person or his/her spouse (if she is the beneficiary of the trust) would not have any involvement in or knowledge of the decisions being made for the trust.

 


 

      the person became an Access Person;
 
    The name of any broker, dealer or bank with whom the Access Person maintained an account in which any securities were held for the direct or indirect benefit of the Access Person as of the date the person became an Access Person; and
 
    The date that the report is submitted by the Access Person.
This information must be current as of a date no more than 45 days prior to the date the person becomes an Access Person.
(b) Quarterly Transaction Reports . Every Access Person must report on Exhibit C attached hereto, no later than 30 days after the end of a calendar quarter, the following information with respect to any transaction during the quarter in a Covered Security in which the Access Person has, or by virtue of the transaction, acquires any direct or indirect Beneficial Ownership:
    The date of the transaction, the title, the interest rate and maturity date (if applicable), the number of shares (for equity securities), and the principal amount (for debt securities) of each Covered Security involved;
 
    The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);
 
    The price of the Covered Security at which the transaction was effected;
 
    The name of the broker, dealer or bank with or through whom the transaction was effected; and
 
    The date that the report is submitted by the Access Person.
          If there are no transactions during a quarter, the Access Person must indicate this fact on the quarterly transaction report (Exhibit C). Note that an Access Person need not make a quarterly transaction report with respect to transactions effected pursuant to an Automatic Investment Plan.
          Access Persons are required to direct their brokers or other financial institutions to supply to the Sponsor duplicate copies of all confirmations and monthly brokerage statements for all accounts in which Covered Securities that are reportable are held. Access Persons can rely on these confirmations and brokerage statements in lieu of completing the information on Exhibit C so long as the confirmations and statements contain the same information and are supplied within the same 30-day period after the end of each calendar quarter. Access Persons are required to indicate their reliance on this exception on the quarterly transaction report attached hereto as Exhibit C. If you have any questions regarding this exception, you may contact the CCO.

 


 

          Note that a Covered Securities transaction may not always be executed through or held in an account with a broker-dealer, and as a result, the transaction will not appear on brokerage statements or be confirmed through a trade confirmation. An example of a “non-brokerage” transaction is the purchase of a Limited Offering, such as an interest in a private investment fund. In such a case, the Access Person must ensure that he/she reports this information on the quarterly transaction report.
          With respect to any account established by the Access Person in which any securities were held during the quarter for the direct or indirect benefit of the Access Person, each Access Person must report on Exhibit C attached hereto, no later than 30 days after the end of a calendar quarter the following information:
    The name of the broker, dealer or bank with whom the Access Person established the account;
 
    The date the account was established; and
 
    The date that the report is submitted by the Access Person.
(c) Annual Holdings Reports . Every Access Person must report on Exhibit D attached hereto, annually, the following information (which information must be current as of a date no more than 45 days before the report is submitted):
    The title, number of shares and principal amount of each Covered Security in which the Access Person had any direct or indirect Beneficial Ownership;
 
    The name of any broker, dealer or bank with whom the Access Person maintains an account in which any securities are held for the direct or indirect benefit of the Access Person; and
 
    The date that the report is submitted by the Access Person.
IX. Review of Reports
          The CCO is responsible for ensuring that the reports received are reviewed, maintaining a record of the names of the persons to whom he has delegated the task of reviewing these reports, and as appropriate, comparing the reports with this Code. The CCO will periodically report the result of these reviews to the group of persons responsible for supervising the Sponsor (the “Supervisory Group”):
    any transaction that appears to evidence a possible violation of this Code; and

 


 

    apparent violations of the reporting requirements stated herein.
          The Supervisory Group will review the reports made to it hereunder and determine whether the policies under this Code have been violated, and what sanctions, if any, should be imposed on the violator. Sanctions include but are not limited to a letter of censure, suspension or termination of the employment of the violator, or the unwinding of the transaction and the disgorgement of any profits.
          The Supervisory Group will review the operation of this Code at least annually.
IX. Annual Reminder and Certification
          The CCO or a designee will notify each person (annually in January of each calendar year) considered to be an Access Person of the Trusts that he/she is subject to the requirements set forth in this Code and will deliver a copy of the Code to each such person.
          Each Access Person will be required to certify annually that he/she has read and understood the provisions of this Code and will abide by them. Each Access Person will further certify that he/she has disclosed or reported all personal securities transactions required to be reported under the Code. A form of such certification is attached hereto as Exhibit E .
          The Sponsor must certify that the Trusts have adopted procedures reasonably necessary to prevent Access Persons from violating its Code of Ethics. Such certification will be submitted to the Supervisory Group annually.

 


 

EXHIBIT A
REQUEST FOR PRE-APPROVAL
Date of Request:  
 
I, ________________________ (print name), request pre-clearance for the transaction described below (all defined terms are as defined in the Code of Ethics):
Acquisition of Initial Public Offering or Limited Offering
Security:  
 
# of Shares/Aggregate Principal Amount:  
 
Broker:  
 
If the transaction involves a Limited Offering, include a description of the proposed transaction, including your role in the proposed transaction and any business relationship between the entity in which you are investing and the Trusts or PDR or its affiliates:
 
 
Disposition of Units in a Trust
Security:  
 
# of Units:  
 
***
Access Person Signature:  
 
Compliance
Approved or Disapproved (circle one)     Date:______________
Notes:  
 
Print Name/Title:  
 
Signature:  
 

 


 

EXHIBIT B
THE TRUSTS
INITIAL HOLDINGS REPORT
To:
From:
Date:
     At the time I became an Access Person, I had a direct or indirect beneficial ownership interest in the securities listed below which are required to be reported pursuant to the Code of Ethics of the Trusts:
                 
Security   Number of Shares   Principal Amount
 
               
 
               
 
               
 
               
 
               
 
               
     The name of any broker, dealer or bank with whom I maintain an account in which my securities are held for my direct or indirect benefit are as follows:
     
Name of Broker, Dealer or Bank
 
 
 
     This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above. I understand that this information must be reported no later than ten (10) days after I became an Access Person.
***
Date Report Submitted:  
 

 


 

Print Name:  
 
Signature:  
 
Title:  
 
Compliance Review
Date Report Reviewed:  
 
Print Name/Title:  
 
Signature:  
 
Notes:  
 

 


 

EXHIBIT C
THE TRUSTS
QUARTERLY TRANSACTION REPORT
For the Calendar Quarter Ended ____________________
To:
From:
Date:
A.   Securities Transactions . During the quarter referred to above, the following transactions were effected in securities of which I had, or by reason of such transactions acquired, direct or indirect Beneficial Ownership, and which are required to be reported pursuant to the Code of Ethics of the Trusts. I understand that this information must be reported no later than 30 days after the end of the calendar quarter.
                                                                 
                                                            Broker/
            Ticker                                           Dealer or
            Exchange   Interest                                   Bank
            Symbol or   Rate &                   Nature of           Through
            CUSIP   Maturity   Number   Principal   Transaction           Whom
Date of   Title of   number (as   Date (if   of   Amount of   (Purchase,           Effected (if
Transaction   Security   applicable)   applicable)   Shares   Transaction   Sale, Other)   Price   applicable
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
Please initial any of the following representations that apply:
____ I hereby represent that the brokerage statements and confirmations that I have instructed my brokers to automatically forward to PDR Services LLC, along with any information provided in the chart above, represent all of my transactions that are required to be reported for the current

 


 

calendar quarter.
____ I hereby represent that I have no quarterly transactions to report for the current calendar quarter.
 
*   Transactions that are asterisked indicate transactions in a security where I knew at the time of the transaction or, in the ordinary course of fulfilling my official duties as a trustee or officer, should have known that during the 15-day period immediately preceding or after the date of the transaction, such security was purchased or sold, or such security was being considered for purchase or sale by the Trusts.
B. New Brokerage Accounts . During the quarter referred to above, I established the following accounts in which securities were held during the quarter for my direct or indirect benefit:
     
Name of Broker, Dealer or Bank   Date Established
 
   
 
   
 
   
 
   
 
   
C. Other Matters . This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.
***
Date Report Submitted:  
 
Print Name:  
 
Signature:  
 
Title:  
 
Compliance Review
Date Report Reviewed:  
 
Print Name/Title:  
 
Signature:  
 
Notes:  
 

 


 

EXHIBIT D
THE TRUSTS
ANNUAL HOLDINGS REPORT
For the following period: January 1, 201[ ] — December 31, 201[ ]
To:
From:
Date:
     As of the period referred to above, I have a direct or indirect beneficial ownership interest in the securities listed below which are required to be reported pursuant to the Code of Ethics of the Trusts:
                 
Security   Number of Shares   Principal Amount
 
               
 
               
 
               
 
               
 
               
 
               
     The name of any broker, dealer or bank with whom I maintain an account in which my securities are held for my direct or indirect benefit are as follows:
     
Name of Broker, Dealer or Bank
 
 
 
This report (i) excludes transactions with respect to which I had no direct or indirect influence or control, (ii) excludes other transactions not required to be reported, and (iii) is not an admission that I have or had any direct or indirect beneficial ownership in the securities listed above.
***

 


 

Date Report Submitted:  
 
Print Name:  
 
Signature:  
 
Title:  
 
Compliance Review
Date Report Reviewed:  
 
Print Name/Title:  
 
Signature:  
 
Notes:  
 

 


 

EXHIBIT E
THE TRUSTS
ANNUAL CERTIFICATE
     Pursuant to the requirements of the Code of Ethics of the Trusts, the undersigned hereby certifies as follows:
  1.   I have read the Trusts’ Code of Ethics.
 
  2.   I understand the Code of Ethics and acknowledge that I am subject to it.
 
  3.   Since the date of the last Annual Certificate (if any) given pursuant to the Code of Ethics, I have sought any approvals required by the Code and I have reported all personal securities transactions and provided any securities holding reports required to be reported under the requirements of the Code of Ethics.
         
     
  By:      
  Date:     
       
 

 

Exhibit 99.C1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-6 of our report dated December 17, 2010, relating to the financial statements and financial highlights of SPDR Dow Jones Industrial Average ETF Trust, which appears in such Registration Statement. We also consent to the reference to us under the heading “Independent Registered Public Accounting Firm” in such Registration Statement.
(-S- PRICEWATERHOUSECOOPERS LLP)
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 25, 2011