Exhibit A(1)(a)

EXECUTION COPY

NASDAQ-100 TRUST, SERIES 1

and

ANY SUBSEQUENT AND SIMILAR
SERIES OF THE

NASDAQ-100 TRUST

STANDARD TERMS

AND

CONDITIONS OF TRUST

DATED AS OF MARCH 1, 1999

between

NASDAQ-AMEX INVESTMENT PRODUCT SERVICES, INC.
as Sponsor

and

THE BANK OF NEW YORK
as Trustee

Effective MARCH 4, 1999

                                TABLE OF CONTENTS

                                                                                             PAGE

INTRODUCTION....................................................................................2

ARTICLE I
     Definitions................................................................................3
             Section 1.01.......................................................................3
             Section 1.02.......................................................................8

ARTICLE II
     Declaration of Trust; Deposit of Securities; The Portfolio; Creation
     and Issuance of Nasdaq-100 Shares in Creation Unit Size Aggregations.......................9
             Section 2.01 Declaration of Trust..................................................9
             Section 2.02 Deposit of Securities.................................................9
             Section 2.03 Creation and Issuance of Creation Units. ............................11
             Section 2.04 Portfolio and Portfolio Deposit Adjustments..........................17
             Section 2.05 Bank Accounts........................................................26

ARTICLE III
     Administration of Trust...................................................................27
             Section 3.01 Collection of Income.  ..............................................27
             Section 3.02 Collection of Other Moneys...........................................27
             Section 3.03 Establishment of Reserves............................................28
             Section 3.04 Certain Deductions and Distributions.................................28
             Section 3.05 Statements and Reports...............................................33
             Section 3.06 Purchase and Sale of Securities......................................34
             Section 3.07 Substitute Securities................................................36
             Section 3.08 Counsel..............................................................36
             Section 3.09 Dividend Reinvestment................................................37
             Section 3.10 Action by Trustee Regarding Voting...................................38
             Section 3.11 Book-Entry-Only System.  ............................................38

ARTICLE IV
     Evaluation of Securities and Trust Fund...................................................42
             Section 4.01 Evaluation of Securities.............................................42
             Section 4.02 Trust Fund Evaluation................................................43
             Section 4.03 Responsibility of the Trustee........................................43

ARTICLE V
     Redemption of Creation Units..............................................................44
             Section 5.01 Redemption of Nasdaq-100 Shares in Creation Unit Size
                     Aggregations..............................................................44

                                        i

ARTICLE VI
     Transfer of  Nasdaq-100 Shares in
     Creation Unit Size Aggregations...........................................................48
             Section 6.01 Transfer of Nasdaq-100 Shares in Creation Unit Size
                     Aggregations..............................................................48

ARTICLE VII
     Sponsor...................................................................................49
             Section 7.01 Responsibilities and Duties..........................................49
             Section 7.02 Certain Matters Regarding Successor Sponsor..........................50
             Section 7.03 Resignation, Discharge or Removal of Sponsor; Successors.............50
             Section 7.04 Liability of Sponsor and Indemnification.............................52

ARTICLE VIII
     Trustee...................................................................................54
             Section 8.01 General Definition of Trustee's Rights, Duties and
                     Responsibilities..........................................................54
             Section 8.02 Books, Records, and Reports..........................................58
             Section 8.03 Indenture and List of Securities on File.............................59
             Section 8.04 Compensation of Trustee..............................................59
             Section 8.05 Indemnification of Trustee...........................................61
             Section 8.06 Resignation, Discharge or Removal of Trustee; Successors.............62
             Section 8.07 Qualifications of Trustee............................................64
             Section 8.08 Trustee's Duties Expressly Provided for Herein.......................65

ARTICLE IX
     Termination...............................................................................65
             Section 9.01 Procedure Upon Termination...........................................65
             Section 9.02 Moneys to Be Held Without Interest to Beneficial Owners..............69
             Section 9.03 Dissolution of Sponsor Not to Terminate Trust........................69

ARTICLE X
     Miscellaneous Provisions...................................................................70
             Section 10.01 Amendment and Waiver.................................................70
             Section 10.02 Registration (Initial and Continuing) of Nasdaq-100 Shares...........71
             Section 10.03 License Agreement with Nasdaq........................................72
             Section 10.04 Certain Matters Relating to Beneficial Owners........................72
             Section 10.05 New York Law to Govern...............................................73
             Section 10.06 Notices..............................................................73
             Section 10.07 Severability.........................................................74
             Section 10.08 Separate and Distinct Series.........................................74
             Section 10.09 Counterparts.........................................................75
             Section 10.10 Exclusive Benefit of Parties and Holders of Nasdaq-100 Shares........75
             Section 10.11 Headings.............................................................75

Exhibit A - Form of Nasdaq-100 Participant Agreement

NASDAQ-100 TRUST, SERIES 1
and
ANY SUBSEQUENT AND SIMILAR SERIES OF
THE NASDAQ-100 TRUST

STANDARD TERMS AND CONDITIONS OF TRUST
for all or similar Series formed on

or subsequent to the effective date specified below

Effective March 4, 1999

This Standard Terms and Conditions of Trust (this "Agreement") dated as of March 1, 1999 and effective March 4, 1999 is executed between Nasdaq-Amex Investment Product Services, Inc., a Delaware corporation, as Sponsor, and The Bank of New York, a New York corporation with trust powers, as Trustee.

W I T N E S S E T H :

WHEREAS, the Sponsor desires to establish one or more unit investment trusts pursuant to the provisions of the Investment Company Act of 1940, as amended, 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 Nasdaq-100 Index-Registered Trademark- (the "Index");

WHEREAS, the Sponsor desires to provide for the adjustment by the Trustee of the Securities of each Trust to reflect the composition and weighting of securities in the Index, the collection by the Trustee of the dividends and other income and capital gains on such Securities held in the Trust, and the distribution by the Trustee to the Depository (as hereinafter defined), as the record owner of the Trust, of such dividends, capital gains, and other Trust income to the extent that dividends, capital gains, and other Trust income exceed fees and expenses of the

Trust, 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 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:

INTRODUCTION

This Agreement, effective as of the day and year first above written, shall be applicable to the Nasdaq-100 Trust, Series 1 (a unit investment trust) and to all Series of the Nasdaq-100 Trust formed on or subsequent to the date hereof for which this Agreement's applicability and its incorporation by reference is specified in the applicable Indenture relating to such Series. For each Series of the Nasdaq-100 Trust to which this Agreement is to be applicable, the Sponsor and the Trustee shall execute an Indenture (or supplement or amendment to such Indenture) incorporating by reference this Agreement 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 (each of the following terms as defined herein): (i) the Initial Portfolio Deposit to be deposited in trust pursuant to Section 2.02 hereof and the number of Creation Unit size aggregations of Nasdaq-100 Shares to be delivered by the

Trustee in exchange for the Initial Portfolio Deposit, (ii) the initial undivided interest represented by each Creation Unit size aggregation of Nasdaq-100 Shares, (iii) the number of Nasdaq-100 Shares which, when aggregated, constitute one Creation Unit, (iv) the Mandatory Termination Date, (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 Nasdaq-100 Trust.

ARTICLE I

DEFINITIONS

Section 1.01 DEFINED TERMS. Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

"ACCUMULATION PERIOD" shall mean a period during which Securities held by the Trust earn their respective dividends, such period being measured from the most recent Ex-Dividend Date to and including the current Business Day; provided, however, that the initial Accumulation Period shall begin on the Business Day following the Initial Date of Deposit.

"AGREEMENT" the Standard Terms and Conditions of Trust embodied in this instrument and all amendments and supplements hereto.

"AMEX" is the American Stock Exchange LLC

"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, and in the case of the Trustee shall also include any Assistant Vice President, Treasurer and Assistant Treasurer.

"BENEFICIAL OWNER" shall mean an owner of beneficial interests in Nasdaq-100 Shares held through the Depository.

"BUSINESS DAY" any day that the Nasdaq Stock Market is open for business.

"CNS SYSTEM" the continuous net settlement system of NSCC.

"COMMISSION" the Securities and Exchange Commission.

"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 Nasdaq-100 Shares that may be created at any one time as described below in Section 2.03, which is 50,000 Nasdaq-100 Shares, unless (1) a different aggregate number of Nasdaq-100 Shares necessary to constitute a Creation Unit is set forth in the Indenture for a particular Series, (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, or (3) a different aggregate number of Nasdaq-100 Shares necessary to constitute a Creation Unit is utilized by the Trustee in connection with the implementation of a dividend reinvestment plan or service pursuant to the provisions of Section 3.09.

"DEPOSITOR" each person or organization that has entered into a Nasdaq-100 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.

"DEPOSITORY OR DTC" shall mean 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 Representations among the Trustee, the Sponsor and the Depository, dated as March 4, 1999, as the same may be from time to time amended in accordance with its terms.

"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.

"EVALUATION TIME" closing time of the regular trading session on the Nasdaq Stock Market (currently 4:00 p.m. New York time) unless another meaning is assigned to such term in the Indenture.

"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.

"INCOME NET OF EXPENSE AMOUNT" the cash amount required to be paid by either the Trustee on behalf of the Trust or the Depositor in connection with a deposit of securities into the Trust as specified in Section 2.03(b).

"INDENTURE" the Indenture into which this Agreement will be, as to each Series, incorporated and all amendments and supplemental indentures thereto.

"INDEX" the Nasdaq-100 Index-Registered Trademark-.

"INDEX SECURITIES" the securities that constitute the Index.

"INITIAL DATE OF DEPOSIT" the date so designated in the Indenture.

"INITIAL PORTFOLIO DEPOSIT" the Portfolio Deposit(s) deposited into the Trust on the Initial Date of Deposit.

"INTERNAL REVENUE CODE" the Internal Revenue Code of 1986, as amended, or any successor provisions.

"LICENSE AGREEMENT" the License Agreement dated as of August 7, 1998 between Nasdaq and the Sponsor pursuant to which the Sponsor has been granted the license to use certain trademarks and service marks of Nasdaq.

"MANDATORY TERMINATION DATE" the date specified in the Indenture.

"NASDAQ" shall mean The Nasdaq Stock Market, Inc.

"NASDAQ-100 SHARES" shall mean a unit of fractional undivided interest in and ownership of the Trust Fund.

"NASDAQ-100 CLEARING PROCESS" the CNS System of NSCC, as such processes have been enhanced to effect creations and redemptions of Creation Unit size aggregations of Nasdaq-100 Shares.

"NASDAQ-100 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.

"NSCC" the National Securities Clearing Corporation.

"NSCC BUSINESS DAY" a day NSCC is open for business.

"ORDER" the exemptive order granted by the Commission with respect to the Trust in Release IC - 23702 dated February 22, 1999.

"PARTICIPATING PARTY" a participant in the Nasdaq-100 Clearing Process.

"PORTFOLIO" the Securities held by the Trust consisting of a portfolio of equity securities 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.

"PROSPECTUS" the Prospectus relating to a particular Trust filed with the Commission pursuant to Rule 424 of the Securities Act of 1933, as amended.

"REGULATED INVESTMENT COMPANY" a trust which qualifies as a "regulated investment company" under the current provisions of the Internal Revenue Code.

"SECURITIES" publicly traded common stocks and other securities convertible into or representing equity securities 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 composition and weighting of the securities in the Index, 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, 1each as may from time to time continue to be held as part of the Trust.

"SERIES" any series of the Trust.

"SPONSOR" shall mean Nasdaq-Amex Investment Product Services, Inc., 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.

"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.

"TRUSTEE" (a) The Bank of New York 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 liabilities hereunder and thereunder, in each case acting as trustee and not individually, unless otherwise indicated.

         TERM                                                DEFINED IN SECTION

"Adjustment Day"........................................................2.04(g)
"Available Cash"...........................................................3.09
"Balancing Amount"......................................................2.04(h)
"Cash Component"........................................................2.03(c)
"Cash Redemption Amount"...................................................5.01
"Discretionary Termination Amount"......................................9.01(a)
"Dividend Payment Date".................................................3.04(g)
"Dividend Reinvestment Service"............................................3.09
"DTC Participant".......................................................3.11(c)
"Ex-Dividend Date"......................................................3.04(g)
"Indirect Participant"..................................................3.11(c)
"Misweighting"..........................................................2.04(a)
"Misweighting Amount"...................................................2.04(a)
"NAV Amount"............................................................2.04(g)
"Portfolio Deposit".....................................................2.03(c)
"Portfolio Deposit Amount"..............................................2.04(h)
"Record Date"...........................................................3.04(g)
"Reinvesting Beneficial Owners"............................................3.09
"Request Day"...........................................................2.04(g)
"Share Register"........................................................3.11(a)
"Sponsor Indemnified Party".............................................7.04(b)
"Transaction Fee".......................................................2.03(i)
"Trust Fund Evaluation"....................................................4.02
"Trustee Indemnified Party"................................................8.05

ARTICLE II
DECLARATION OF TRUST; DEPOSIT OF SECURITIES; THE PORTFOLIO; CREATION AND
ISSUANCE OF NASDAQ-100 SHARES IN CREATION UNIT SIZE AGGREGATIONS

Section 2.01 DECLARATION OF TRUST. The Trustee declares that 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 8.02(b) hereof to continue the qualification of the Trust as a Regulated Investment Company. The Trustee is 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 or delivered through the Depository, 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 shall also be 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 issued by a commercial bank or banks rated A or better (or 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 or delivered through the Depository, to be held and applied by the Trustee as herein provided. To permit the Trustee to ensure that the process of settlement is working satisfactorily, there shall be no further Portfolio Deposits accepted by the Trustee for a period of three (3) Business Days following the Initial Date of Deposit, and the Sponsor and the Trustee shall jointly announce the day thereafter on which further Portfolio Deposits will be accepted. The Trustee shall ensure that the securities portion of each Portfolio Deposit shall be comprised of such Index Securities and in such numbers as are specified in accordance with Section 2.04. The Trustee shall also ensure that, in the event certain Securities held by the Trust Fund are removed from the Index or the composition or weighting of the Index Securities 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 or to hold the Securities in its account at the Depository.

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 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 Nasdaq-100 Shares 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 certain cases to the extent applicable as specified below, with a cash payment equal to the Income Net of Expense Amount (as defined below), plus or minus, as the case may be, the Balancing Amount (as hereinafter defined - see Section 2.04). The "Income Net of Expense Amount" is an amount equal, on a per Creation Unit basis, to the dividends accrued on all the Securities with ex-dividend dates within the applicable Accumulation Period as if all of the Securities had been held for such period, net of accrued expenses and liabilities for such period not previously deducted (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 Income Net of Expense Amount 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 connection with an order to create Nasdaq-100 Shares on any given day, the Cash Component of the Portfolio Deposit may be payable by either the Trustee on behalf of the Trust to the creator of Nasdaq-100 Shares or by the creator of Nasdaq-100 Shares to the Trustee on behalf of the Trust, depending upon the respective amounts of the Income Net of Expense Amount and the Balancing Amount. If the Cash Component has a positive value (i.e., the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, exceeds the accrued expenses and liabilities of the Trust for such period), then the creator of Nasdaq-100 Shares will be obligated to pay such amount to the Trustee on behalf of the Trust in connection with an order to create Nasdaq-100 Shares. Conversely, if the Cash Component has a negative value (i.e., the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, is less than the accrued expenses and liabilities of the Trust for such period), then such Cash Component will be paid to the entity placing an order to create Nasdaq-100 Shares by the Trustee on behalf of the Trust.

(d) Requests to create Nasdaq-100 Shares in Creation Unit size aggregations through the Distributor must be made by or through a Participating Party or a DTC Participant who has executed a Nasdaq-100 Participant Agreement. A Participating Party, pursuant to the Nasdaq- 100 Participant Agreement, agrees to transfer the requisite Index Securities (or contracts to purchase such Index Securities which are expected to be delivered through NSCC in a "regular

way" manner in three (3) NSCC Business Days) and the Cash Component, if required, to the Trustee by means of the Nasdaq-100 Clearing Process, together with such additional information as may be required by the Trustee. The Nasdaq-100 Participant Agreement shall set forth the procedures for requesting the creation of Creation Units and delivering Portfolio Deposits, making payment of the Cash Component (either by the entity placing the order to create Nasdaq- 100 Shares or by the Trustee on behalf of the Trust), confirming requests for creations, and for delivering Nasdaq-100 Shares in Creation Unit size aggregations. The Trustee shall maintain, and make available for inspection during normal business hours, a list of the entities that are parties to the Nasdaq-100 Participant Agreement at its office at 101 Barclay Street, New York, New York 10286 or at such other address as may be specified to the Sponsor in writing.

(e) Under certain circumstances, Nasdaq-100 Shares in Creation Unit size aggregations may be created by or through a DTC Participant through the Distributor outside the Nasdaq-100 Clearing Process. In such cases, the DTC Participant, pursuant to the Nasdaq-100 Participant Agreement, shall effectuate the transfer of the requisite Index Securities and the Cash Component, if required, to the Trustee directly through DTC on the Business Day immediately following the day on which the order is accepted by the Distributor, in exchange for Nasdaq-100 Share 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. The Nasdaq- 100 Participant Agreement shall set forth the procedures for requesting the creation of Creation Unit size aggregations of Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process.

(f) Upon receipt of a Portfolio Deposit or Deposits following acceptance by the Distributor of an order to create Nasdaq-100 Shares, the Trustee will (i) transfer Nasdaq-100 Shares 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, and (ii) when required, deliver the Cash Component to 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, in each case in accordance with the procedures set forth in the Nasdaq-100 Participant Agreement. 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 debit or credit to the Trust, as applicable, (a) the Income Net of Expense Amount, if any, made in connection with such Portfolio Deposit(s) and (b) the Balancing Amount, if any. Any such amounts received by the Trust shall 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 weighting of the Index 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 for 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 Nasdaq-100 Shares in Creation Unit size aggregations transmitted to it if the Depositor or group of Depositors on obtaining the Nasdaq- 100 Shares ordered would own or appear to own eighty percent (80%) or more of the outstanding Nasdaq-100 Shares 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 Nasdaq-100 Share ownership pursuant to the Nasdaq-100 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 Nasdaq-100 Shares. 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 circumstances outside the control of the Trustee make it for all practical purposes not feasible to process creations of Nasdaq-100 Shares. The Trustee will provide notice to the Depositor of its reasons for rejection of a creation order in respect of a Portfolio Deposit or any component thereof. The Trustee and the Sponsor shall not incur any liability in connection with any notification of defects or irregularities in the delivery of Portfolio Deposits or any component thereof or in connection with the rejection of the creation order itself.

(i) A transaction fee will be payable to the Trustee for its own account in connection with each creation and each redemption of Creation Unit size aggregations of Nasdaq-100 Shares (the "Transaction Fee"). The Transaction Fee charged in connection with the creation of Creation Units through the Nasdaq-100 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. The Transaction Fee charged in connection with redemptions through the Nasdaq-100 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.

(j) If one or more Creation Units are created or redeemed outside the Nasdaq-100 Clearing Process by a Depositor on any one day, 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 Nasdaq-100 Clearing Process.

(k) The Transaction Fee may subsequently be waived, modified, reduced, increased or otherwise changed by the Trustee, upon the consent of the Sponsor, but will not in any event exceed 1/10th of one percent of the value of a Creation Unit at the time of creation or redemption, as the case may be. From time to time, and for such periods as the Sponsor and the Trustee together may determine, the Transaction Fee (as well as any additional amounts charged in connection with creations and/or redemptions outside the Nasdaq-100 Clearing Process) may be increased, decreased, or otherwise modified or waived in its entirety for certain numbers of Creation Units of Nasdaq-100 Shares created or redeemed, or for creations and/or redemptions made under certain specified circumstances, in each case without the consent of Beneficial Owners, but will not in any event exceed 1/10 of one percent of the value of a Creation Unit at the time of creation or redemption, as the case may be. The Sponsor also reserves the right, from time to time, to vary the number of Nasdaq-100 Shares per Creation Unit and such change may or may not be made in conjunction with a change to the Transaction Fee. 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 Trustee shall make available upon request the amount of the Transaction Fee in effect at any given time.

(l) So long as the Depository Agreement is in effect, Nasdaq-100 Shares will be transferable solely through the book-entry system of the Depository as provided in Section 3.11. The Depository may determine to discontinue providing its service with respect to Nasdaq-100 Shares 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 weighting of the Index Securities. The Trustee will aggregate certain of these adjustments and make conforming changes to the Portfolio; however, adjustments will be made more frequently in the case of changes to the Index that are significant as described below. To further the investment objective of the Trust, minor misweightings will generally be permitted within the guidelines set forth below. 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 date 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 shall adjust the composition of the Portfolio at any time that the weighting of any Security in the Portfolio varies in excess of one hundred and fifty percent (150%) of the Misweighting Amount (set forth in the table below) from the weighting of such Security in the Index (a "Misweighting"):

NET ASSET VALUE                                      MISWEIGHTING
  OF THE TRUST                                         AMOUNT

Less than $25,000,000                                    0.25%
$25,000,000 - $99,999,999                                0.20%
$100,000,000 - $499,999,999                              0.10%
$500,000,000 - $999,999,999                              0.05%
$1,000,000,000 and over                                  0.02%

The Trustee shall examine each Security in the Portfolio on each Business Day, comparing the weighting of each such Security in the Portfolio to the weighting of the corresponding Index Security in the Index, based on prices at the close of the market on the preceding Business Day (a "Weighting Analysis"). In the event that there is a Misweighting in any Security in excess of one hundred and fifty percent (150%) of the applicable Misweighting Amount, the Trustee shall calculate an adjustment to the Portfolio in order to bring the Misweighting of such Security within the Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. Also, on a monthly basis, the Trustee shall perform a Weighting Analysis for each Security in the Portfolio, and in any case where there exists a Misweighting exceeding one hundred percent (100%) of the applicable Misweighting Amount, the Trustee shall calculate an adjustment to the Portfolio in order to bring the Misweighting of such Security within the applicable Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. In the case of any adjustment to the Portfolio due to a Misweighting as described herein, the purchase or sale of securities necessitated by such adjustment shall be made within three (3) Business Days of the day on which such Misweighting occurs. In addition to the foregoing adjustments, the Trustee reserves the right to make additional adjustments

periodically to Securities that may be misweighted by an amount within the applicable Misweighting Amount in order to reduce the overall Misweighting of the Portfolio.

(b) From time to time Nasdaq may make adjustments to the composition of the Index 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 Index. In selling the securities of such issuer after it has been determined that the security will be removed from the Index, 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 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 or redemption 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 any Income Net of Expense Amount payments to the Trust) or undistributed capital gains) as a result of such transactions, which amount shall not exceed for more than five (5) consecutive Business Days 5/l0ths 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/l0ths of 1 percent of the value of the Securities, the Trustee shall use such cash to purchase additional Index Securities applying such cash first to purchase Index Securities that are under-weighted in the Portfolio as compared to their relative weightings in the Index, although the Misweighting of such Index Securities may not be in excess of the applicable Misweighting Amount.

(e) All adjustments to the Portfolio held by the Trustee will be made by the Trustee pursuant to the foregoing specifications 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 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 Portfolio to deviate from that of the Index. The adjustments provided herein are intended to conform the composition and weighting of securities in the Portfolio, to the extent practicable, to the composition and weighting of the Index Securities. Such adjustments are based upon the Index as it is determined by Nasdaq. To the extent that the method of determining the Index is changed by Nasdaq in a manner that would affect the adjustments provided for herein, the Trustee and the Sponsor shall have the right to amend the Indenture and this Agreement, without the consent of

the Depository or Beneficial Owners, to conform the adjustments provided herein to such changes so that the objective of tracking the Index is maintained.

(f) 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 prices for execution of orders. The net proceeds of any sales of Securities shall either be reinvested in accordance with this
Section 2.04 or distributed in accordance with Section 3.07.

(g) On each Business Day after the Initial Date of Deposit (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 Evaluation Time on each Adjustment Day, the Trustee will calculate the net asset value of the Trust as provided in Section 4.02. The net asset value will be divided by the number of outstanding Nasdaq-100 Shares, then multiplied by the number of Nasdaq-100 Shares 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 Index in a Portfolio Deposit for the following Business Day ("Request Day"), such that (1) the market value at the Evaluation Time on an Adjustment Day of the securities to be included in the Portfolio Deposit on Request Day, together with the Income Net of Expense Amount effective for requests to create or redeem on Adjustment Day, will equal the NAV Amount and (2) the identity and weighting of each of the securities in a Portfolio Deposit will mirror proportionately, to the extent practicable, the identity and weighting of the securities in the Index, each as in effect on Request Day. For each security, the number resulting from such calculation will be rounded to the nearest whole share, with a fraction of 0.50 being rounded up. 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 Nasdaq-100 Shares in Creation Unit size aggregations on Request Day and thereafter until the following Adjustment Day pursuant to Section 5.01. In addition to the foregoing adjustments, in the event that there shall occur a stock split, stock dividend, or reverse stock split with respect to any Index Security, the Portfolio Deposit shall be adjusted to take account of such stock split, stock dividend, or reverse stock split by applying the stock split, stock dividend or reverse stock split multiple (e.g., in the event of a two-for-one stock split of an Index Security, by doubling the number of shares of such Index Security in the prescribed Portfolio Deposit); in each such case each Index Security will be rounded to the nearest whole share, with a fraction of 0.50 being rounded up.

(h) On Request Day and on each day that a request for the creation or redemption of Nasdaq-100 Shares 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 Evaluation Time and add or subtract to that amount, as applicable, the Income Net of Expense Amount effective for requests to create or redeem on Request Day (such market value and Income Net of Expense Amount are collectively referred to herein as the "Portfolio Deposit Amount"). The Trustee will then calculate the NAV Amount, based on the Evaluation Time 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 Evaluation Time 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 (2) any variances from the proper composition of the Portfolio Deposit.

(i) Notwithstanding the foregoing, on any Adjustment Day on which (a) no change in the identity and/or share weighting of any Index Security is scheduled to take effect that would cause the Index divisor to be adjusted after the close of the market on such Business Day,* and (b) no stock split, stock dividend, or reverse stock split with respect to any Index Security has been declared to take effect on the corresponding Request 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 weighting of the Index Securities for the most recently effective Portfolio Deposit for the Request Day following such Adjustment Day. In addition, the Trustee further reserves the right to calculate the adjustment to the number of shares 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. Notwithstanding the foregoing, the amount of the Cash Component shall at all times be determined in accordance with the procedures set forth above.

(j) In making the adjustments described in this Section 2.04, the Trustee shall rely on information made publicly available by Nasdaq to third parties as to the composition and weighting 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 weighting 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 weightings of the Securities (as opposed to the Index Securities) shall be used for the purposes of all adjustments and determinations herein (including, without limitation, determination of the securities portion of the Portfolio Deposit) until current information with respect to the Index Securities is available.

(k) 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 Income Net of Expense Amount effective through and including 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 share amounts of the Index Securities of the Portfolio Deposit on the previous Business Day.

(l) 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 held in the Trust as of such date for the purpose and determination of all redemptions or other required uses of the securities portion of the Portfolio Deposit.

(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 Nasdaq-100 Shares 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 in the calculation of the Cash Component in lieu of the inclusion of the Index Security in the securities portion of the 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 Nasdaq-100 Shares in Creation Unit size aggregations for all purposes hereunder until such time as the securities portion of the Portfolio Deposit is subsequently adjusted. The amount of such equivalent payment shall be used by the Trustee in accordance with the foregoing guidelines regarding allowable Misweightings and 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 at the time such security is available for purchase.

(n) In connection with the creation of Nasdaq-100 Shares, 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 Security or Index Securities (determined in accordance with the protocols listed in Section 4.01 hereof) in the Portfolio Deposit in the calculation of the Cash Component in lieu of the inclusion of such Index Security or Index Securities in the securities portion of the Portfolio Deposit for the affected investor. The amount of such equivalent payment shall be used by the Trustee in accordance with the foregoing guidelines regarding allowable Misweightings and 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 the creator shall pay the

Trustee the standard Transaction Fee plus an additional amount not to exceed three (3) times the standard Transaction Fee.

(o) By the fifth Business Day of each month the Trustee shall furnish the Sponsor a report showing, as of each day of the prior calendar month on which trading in any one or more of the Index Securities occurred on the Nasdaq Stock Market, the investment performance of the Trust in relation to that of the Index, measured by way of tracking error in a reasonable and meaningful manner and with an explanation as to the source(s) of any unusually large values of such tracking error on any day or days in the month. Among such sources, the Trustee will identify, but not otherwise be responsible for, the portion of tracking error, if any, attributable to differences between (i) the closing value of the Index available to the Trustee at the time it ordinarily calculates the Trust's net asset value following its usual daily procedures and (ii) subsequently reported changes to such closing Index value. The Trustee shall also be available to explain the tracking error of the Trust upon request of the Sponsor from time to time.

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 uninvested 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. Except as provided for in
Section 3.04(f), neither the Trust, any Series of the Trust, the Depository or any Beneficial Owner shall derive any benefit or receive any income or interest, directly or indirectly, from this bank account or accounts or any balance therein from time to time. Except as provided for in Section 3.04(f), all benefit from such

bank account or accounts or any balance therein from time to time shall be the property of the Trustee.

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 Income Net of Expense Amount (when such amount is paid to the Trustee on behalf of the Trust by a creator of Nasdaq-100 Shares) 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 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.

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 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, 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 and 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 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 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.

Section 3.04 CERTAIN DEDUCTIONS AND DISTRIBUTIONS.

(a) On each Business Day, to the extent applicable, the Trustee shall deduct from moneys held as described above and pay to itself individually the amounts that it is on such day entitled to receive pursuant to Sections 8.01 and 8.04 on account of its services performed. 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 Nasdaq-100 Shares (whether in Creation Unit size

aggregations or otherwise); (6) expenses and costs of an action taken by a Trustee Indemnified Party or a Sponsor Indemnified Party to protect the Trust and the rights and interests of Beneficial Owners of Nasdaq-100 Shares (whether in Creation Unit size aggregations or otherwise); (7) indemnification of the Trustee or the Sponsor for any losses, liabilities or expenses incurred by them 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 Nasdaq-100 Shares both during the life of the Trust and upon termination of the Trust; (9) brokerage commissions incurred by the Trustee when acquiring or selling Index Securities pursuant to the provisions hereof; and (10) other out-of-pocket expenses of the 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 Nasdaq for all periods after September 30, 1999 in respect of annual licensing fees due under the License Agreement pursuant to Section 10.03, (ii) federal and state annual registration fees in keeping the registration of Nasdaq-100 Shares on a current basis pursuant to Section 10.02 for the issuance of Nasdaq-100 Shares, and (iii) expenses of the Sponsor relating to the printing and distribution of marketing materials describing Nasdaq-100 Shares and the Trust (including, but not limited to, associated legal, consulting, advertising, and marketing costs and other out-of-pocket expenses such as printing).*

(continued...)

(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(j), 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.

(e) 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 in order to assure that the Trust remains economically attractive to current as well as prospective investors. 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.

(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 as provided in Section 3.06. The Trustee may also, in its discretion, make advances to the Trust out of its own funds in such amounts as may be necessary to permit (i) distributions to Beneficial Owners via the Depository pursuant to this Section 3.04, (ii) payment of the Cash Component to creators of Nasdaq-100 Shares pursuant to Section 2.03 (when such Cash Component is payable by the Trustee on behalf of the Trust), and (iii) payments in respect of redemptions of Nasdaq-100 Shares pursuant to Section
5.01. The Trustee will 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 plus Federal Reserve Board

(...continued)

* not to carry such excess forward into the following calendar year. In the event the Sponsor absorbs such excess costs during the year, the Sponsor shall have the right to be repaid the amount of any expenses absorbed to the extent that subsequently during the year such expenses fall below the 20 basis point level per year.

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, unless the Trustee, in its discretion, determines not to sell Securities because future anticipated dividend payments on the Securities and other income of the Trust are expected to be sufficient to reimburse the Trustee for such advance and accrued interest thereon or because the Trustee otherwise determines that a sale of Securities to reimburse itself for such advance is not advisable at such time. At the time the Trustee sells Securities to reimburse itself for the amount of an advance and accrued interest thereon, the Trustee shall first sell Securities that are overweighted in the Portfolio as compared to their relative weighting in the Index. The Trustee shall have a lien against and a security interest in the assets of the Trust for the payment of such advances plus interest as provided in Section 8.04.

(g) The Trustee shall compute on a daily basis the dividends accumulated and declared for the Securities within each Accumulation Period. The regular quarterly ex-dividend date for Nasdaq-100 Shares will be the third Friday in each of March, June, September and December, 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 (if any) representing dividends accumulated on the Securities through the quarterly Accumulation Period which ends

on the Business Day preceding such Ex-Dividend Date (including securities with ex-dividend dates falling within such quarterly divided period) and other income, if any, received by the Trust, net of fees and expenses of the Trust, accrued daily for such period. In the event that Trust fees and expenses exceed dividends accumulated on the Securities for such period, no distributions to Beneficial Owners shall be made. In addition, no dividend distribution shall be made for any given quarter, and such amount shall be rolled over into the next quarterly Accumulation Period, if the aggregate dividend distribution so determined would be in an amount less than 5/100 of one percent (0.05%) of the net asset value of the Trust as of the Friday in the week immediately preceding the Ex-Dividend Date, unless the Trustee determines that such dividend distribution is required to be made to maintain the Trust's status as a Regulated Investment Company or to avoid the imposition of income or excise taxes on undistributed income. For the purposes of all dividend distributions, dividends per Nasdaq-100 Share 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 (if any) to be distributed through the Depository to Beneficial Owners as described in Section 3.11 which shall be paid on the last Business Day in the calendar month following each Ex-Dividend Date (the "Dividend Payment Date"). On each Dividend Payment Date, the Trustee shall distribute to the Depository (i) the aggregate amount of funds to be distributed to each Beneficial Owner pursuant to this Section 3.04 and (ii) the aggregate amount of Nasdaq-100 Shares and cash, if any, to Beneficial Owners participating in a dividend reinvestment plan or service pursuant to Section 3.09, if and when established. All such distributions shall be made in accordance with the provisions of Section 3.11.

(h) The Trustee shall make additional distributions to Beneficial Owners via the Depository as described in Section 3.11 at least annually 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 (e.g., from sales of Securities in connection with adjustments to the Portfolio, to generate cash for such distributions or to pay the fees and expenses of the Trust), 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.

(i) 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.

(j) The Trustee further reserves the right without the consent of the Depository or the Beneficial Owners to vary the frequency with which periodic distributions, if any, are made (e.g., from quarterly to semi-annually) 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. In addition, the Trustee reserves the right to change the regular Ex-Dividend Date for Nasdaq-100 Shares to another date if it is reasonably determined jointly by the Sponsor and the Trustee, in their discretion, that such change would be advantageous to the Trust. Notice of any such variance or change (which notice shall include changes to the Record Date, the Ex-Dividend Date, the Dividend Payment Date and the Accumulation Period resulting from such variance) shall be provided to Beneficial Owners via the Depository and the DTC Participants.

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 Nasdaq- 100 Shares 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. With each distribution, the Trustee will furnish to the DTC Participants for distribution to Beneficial Owners a statement setting forth the amount being distributed expressed as a dollar amount per Nasdaq-100 Share.

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 Index 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.

(b) 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 is also empowered, in its discretion, to sell the requisite amount of Securities held in the Trust Fund to permit (i) payments of the Cash Component to creators of Nasdaq-100 Shares pursuant to Section 2.03 (when such Cash Component is payable by the Trustee on behalf of the Trust to creators of Nasdaq-100 Shares), (ii) payment of Trust fees and expenses, (iii) payments in respect of the redemption of Nasdaq-100 Shares pursuant to Section 5.01, and
(iv) payment of advances made by the Trustee. In the case of any advance, the Trustee will reimburse itself for such advance plus interest in accordance with
Section 3.04(f) and shall have a lien against and a security interest in the assets of the Trust for the payment of such advance plus interest as provided in
Section 8.04.

(c) The Trustee shall also sell Securities whenever it determines that projected annualized fees and expenses accrued on a daily basis exceed projected annualized dividends and other Trust income accrued on a daily basis by more than 1/100 of one percent (0.01%) of the net asset value of the Trust. Whenever the 0.01% threshold is exceeded, the Trustee shall sell sufficient Securities to cover such excess no later than the next occasion it is required to make adjustments to the Portfolio due to a Misweighting pursuant to Section 2.04, unless the Trustee determines, in its discretion, that such a sale is unnecessary because the cash to be generated is not needed by the Trust at that time for the payment of expenses then due or because the Trustee otherwise determines that such sale is not warranted or advisable.

(d) At the time the Trustee sells Securities pursuant to this Section, the Trustee shall first sell Securities that are overweighted in the Portfolio as compared to their relative weighting in the Index. 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 this Section and Sections 3.04, 3.07, 5.01 or 8.04. In the case of each and every sale required hereunder, the Trustee shall not be responsible for (i) any depreciation or loss incurred by reason of such sale,
(ii) underperformance of the Trust in relation to that of the Index by reason of such sale, and (iii) any out of the ordinary costs as a result of such sale.

(e) 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 or the price of an Index Security, the Trustee may not sell such Securities unless and until such Securities are removed from the Index or as otherwise permitted in accordance with this Section and Section 3.07. The Trustee shall not be liable or

responsible in an way for depreciation or loss incurred by reason of the failure to make a sale when not required by the terms of this Agreement.

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 Index. In the event that a security of an issuer is removed from the Index 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 securities in exchange for the Security of the issuer held in the Portfolio and removed from the Index, and such securities received in exchange are not included in the Index, the Trustee shall sell such securities as soon as practicable and reinvest the proceeds of the sale in Index Securities as provided in Section 2.04.

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, among others, any legal matters relating to (i) the possible disposition or acquisition of any Securities pursuant to any provision hereof and (ii) the administration of the Trust. The fees and expenses of such counsel shall be paid by the Trustee from the assets of the Trust.

Section 3.09 DIVIDEND REINVESTMENT.

(a) The Sponsor reserves the right to make a dividend reinvestment plan or service available to Beneficial Owners of one or more Series of the Trust for reinvestment of their cash proceeds, including but not limited to the Dividend Reinvestment Service as provided for in subsection (b) below, and this Agreement may be amended to the extent necessary to implement such plan or service without the consent of any Beneficial Owner. The Sponsor shall cause the Prospectus for the affected Series to be amended to include disclosure concerning such plan or service and the Trustee, upon the direction of the Sponsor, shall give notice to all Beneficial Owners via the Depository of such plan or service, in accordance with the provisions of Section 3.11.

(b) The Sponsor may direct the Trustee to make the book-entry dividend reinvestment service of the Depository available for use by Beneficial Owners (the "Dividend Reinvestment Service"). The Trustee shall, as of each Record Date, establish the number of Beneficial Owners currently participating in the Dividend Reinvestment Service ("Reinvesting Beneficial Owners"). On or before each Dividend Payment Date following each such Record Date, the Trustee shall deduct from the available cash as of the close of business on such Dividend Payment Date the sum of all amounts due and owing all such Reinvesting Beneficial Owners (the "Available Cash"). The Trustee may then utilize such Available Cash to obtain Index Securities in an amount necessary to create the requisite number of Nasdaq-100 Shares valued at the Evaluation Time on the Dividend Payment Date. The Trustee is authorized to (1) deposit additional Portfolio Deposits in accordance with the provisions of Section 2.02, (2) deposit one or more Index Securities as is necessary to adjust for a Misweighting in accordance with the provisions of Section 2.04 or (3) utilize a combination of deposits in accordance with clauses (1) and (2) above in connection with

the issuance of the appropriate amount and number of corresponding Nasdaq-100 Shares to be distributed to all Reinvesting Beneficial Owners via the Depository. Alternatively, the Trustee, in its discretion, may utilize such Available Cash to purchase the requisite number of Nasdaq-100 Shares on the open market, valued at the Evaluation Time on the Dividend Payment Date, to be distributed to all Reinvesting Beneficial Owners via the Depository. The Trustee is authorized to create whole Nasdaq-100 Shares only in this manner; no fractional Nasdaq-100 Shares shall be created or distributed. Cash balances, if any, remaining after the requisite number of whole Nasdaq-100 Shares have been created or purchased on the open market shall be distributed, on a PRO RATA basis, to all Reinvesting Beneficial Owners in the manner provided in Section
3.04(g). The Trustee is authorized to pay all brokerage commissions, if any, necessary to acquire Index Securities for the creation of Nasdaq-100 Shares, or in purchasing Nasdaq-100 Shares on the open market, in connection with the Dividend Reinvestment Service and such commissions shall be treated as an expense of the Trust pursuant to the provisions of Section 3.04.

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.

(a) The Trustee shall keep or cause to be kept a share register (the "Share Register") in which, subject to such reasonable regulations as it may prescribe, the Trustee shall provide for the registration of ownership of Nasdaq-100 Shares. Nasdaq-100 Shares will be issued in book-

entry form only, and the Trustee shall cause the Share Register to reflect such issuance of Nasdaq-100 Shares in such amounts as have been issued, and such Nasdaq-100 Shares shall be registered on the Share Register in the name of the owner thereof. After the Initial Date of Deposit, Nasdaq-100 Shares shall only be registered in the name of the Depository or its agent or nominee. Upon such issuance and registration on the Share Register, Nasdaq-100 Shares shall be validly issued and entitled to the benefits of this Agreement and the Indenture. Certificates will not be issued for Nasdaq-100 Shares in Creation Unit size aggregations or otherwise.

(b) On the Initial Date of Deposit, the Trustee shall record in the Share Register the number of Creation Unit size aggregations of Nasdaq-100 Shares delivered in exchange for the Initial Portfolio Deposit as set forth in the Indenture, which Nasdaq-100 Shares shall be registered in the name of the Depositor, and such Depositor shall receive a confirmation of such registration from the Trustee. The Depository will act as securities depository for Nasdaq-100 Shares prior to the day that the Sponsor and the Trustee shall jointly announce that further Portfolio Deposits will be accepted in accordance with Section 2.02(b). On such day, the Nasdaq-100 Shares issued on the Initial Date of Deposit shall be re-registered by the Trustee on the Share Register in the name of Cede & Co., as nominee for the Depository, for the account of the initial Depositor, if such Depositor is a DTC Participant, or for the account of the DTC Participant through which the initial Depositor maintains a custodial relationship, if the initial Depositor is not a DTC Participant. Thereafter, Cede & Co. will be the registered owner in the Share Register of the aggregate amount of Nasdaq-100 Shares outstanding at all times. The Trustee shall further record on the Share Register any change in the number of Nasdaq-100 Shares outstanding and registered in the name of Cede & Co. in order to reflect creations or redemptions of Nasdaq-100 Shares.

(c) Upon the settlement date of any creation or redemption of Nasdaq-100 Shares, the Trustee will notify the Depository or NSCC, as the case may be, of the DTC Participant the accounts of which the Depository will credit or debit, on its book-entry registration and transfer system, the number of Nasdaq-100 Shares so created or redeemed. Beneficial ownership of Nasdaq-100 Shares will be limited to participants of the Depository (the "DTC Participants"), others that maintain a custodial relationship with a DTC Participant, either directly or indirectly (the "Indirect Participant"), and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Nasdaq-100 Shares (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).

(d) So long as Cede & Co., as nominee of the Depository, is the registered owner of Nasdaq-100 Shares, references herein to the registered or record owners of Nasdaq-100 Shares shall mean Cede & Co. and shall not mean the Beneficial Owners of Nasdaq-100 Shares. Beneficial Owners of Nasdaq-100 Shares will not be entitled to have Nasdaq-100 Shares 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 this Agreement.

(e) As described above, the Trustee will recognize the Depository or its nominee as the owner of all Nasdaq-100 Shares for all purposes except as expressly set forth in this Agreement. Where notices, statements, and other communications are to be conveyed to Beneficial Owners, the Trustee shall first request from the Depository, at the expense of the Trust,

a listing of the Nasdaq-100 Share holdings of each DTC Participant. The Trustee shall inquire of each such DTC Participant of which it has notice from the Depository that it is a holder of Nasdaq-100 Shares, as to the number of Beneficial Owners holding Nasdaq-100 Shares, 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 amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements. The Trustee and the Sponsor may rely and shall be fully protected in relying upon information furnished by the Depository and its DTC Participants and Indirect Participants with respect to the Beneficial Owners.

(f) Nasdaq-100 Share distributions shall be made to the Depository or its nominee, Cede & Co., as the registered owner of all Nasdaq-100 Shares. Neither the Trustee nor the Sponsor will have any responsibility or liability for any aspects of the records of the Depository, DTC Participants or Indirect Participants relating to or notices to Beneficial Owners, or payments by the Depository, DTC Participants or Indirect Participants made on account of beneficial ownership interests in Nasdaq-100 Shares, 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.

(g) The Depository may determine to discontinue providing its services with respect to Nasdaq-100 Shares at any time 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 jointly 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 AND TRUST FUND

Section 4.01 EVALUATION OF SECURITIES. 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: the value of a Security shall generally be based on the closing sale price for the Security on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the Nasdaq Stock Market or, if there is no such appropriate closing sale price on the Nasdaq Stock Market, at the closing bid price (unless the Trustee deems such price inappropriate as a basis for evaluation). If a Security is not so quoted on the Nasdaq Stock Market or, if so quoted and the principal market therefor is other than on the Nasdaq Stock Market or there is no such closing bid price available, such evaluation shall generally be made by the Trustee in good faith based (a) on the closing price for the Security on another market on which the security is traded (unless the Trustee deems such price inappropriate as a basis for evaluation) or if there is no such appropriate closing price, at the closing bid price on such other market, (b) on current bid prices on the Nasdaq Stock Market or such other markets, (c) if bid prices are not available, on the basis

of current bid prices for comparable securities, (d) by the Trustee's appraising the value of the Securities in good faith on the bid side of the market, or (e) by any combination thereof.

Section 4.02 TRUST FUND EVALUATION. As of the Evaluation Time
(l) 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 of the Trust (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 Nasdaq-100 Shares. 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 on each Business Day.

Section 4.03 RESPONSIBILITY OF THE TRUSTEE. The Sponsor and the Beneficial Owners may rely on an 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.

ARTICLE V
REDEMPTION OF CREATION UNITS

Section 5.01 REDEMPTION OF NASDAQ-100 SHARES IN CREATION UNIT SIZE AGGREGATIONS.

(a) Nasdaq-100 Shares in Creation Unit size aggregations will be redeemable in kind only when Creation Unit size aggregations are owned by a Beneficial Owner and held in the account of a single Participating Party (with respect to redemptions through the Nasdaq-100 Clearing Process) or a single DTC Participant (with respect to redemptions outside the Nasdaq- 100 Clearing Process), in each case by submitting a request for redemption to the Trustee in the manner specified below and in accordance with the Nasdaq-100 Participant Agreement.

(b) Requests for redemptions of Creation Units may be made on any Business Day to the Trustee through the Nasdaq-100 Clearing Process. Requests for redemptions of Creation Units may also be made directly to the Trustee outside the Nasdaq-100 Clearing Process on any Business Day. Requests for redemptions shall not be made to the Distributor. In the case of redemptions made through the Nasdaq-100 Clearing Process, the Transaction Fee will be deducted from the amount delivered to the redeemer or added to the amount owed by the redeemer to the Trustee, as described below. In case of redemptions tendered directly to the Trustee outside the Nasdaq-100 Clearing Process, the Transaction Fee plus an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit will also be deducted from the amount delivered to the redeemer or added to the amount owed by the redeemer to the Trustee, as described below. In all cases, both the tender of Nasdaq-100 Shares for redemption and distributions to the redeemer (or payments to the Trustee, as applicable) in respect of Nasdaq-100 Shares redeemed will be effected through the Depository, the relevant

DTC Participant(s), and the Beneficial Owner thereof or the relevant DTC Participant, as the case may be.

(c) The Trustee will transfer to the DTC Participant acting for the redeeming Beneficial Owner via the Depository a portfolio of Securities for each Creation Unit size aggregation of Nasdaq-100 Shares delivered, in most cases
(other than as provided in the next sentence and in subsections (f), (g) and (h) hereof) identical in composition and weighting to the securities portion of a Portfolio Deposit as in effect on the date a request for redemption is deemed received by the Trustee. At and after such time as notice of the termination of the Trust has been given, the portfolio of securities so delivered shall be identical in composition and weighting to the Securities in the Trust on the date of such notice. Each redemption also includes a cash amount, the "Cash Redemption Amount," which will either be paid to the Trustee on behalf of the Trust by or for the redeemer or paid to or for the redeemer by the Trustee on behalf of the Trust as described below. On any given Business Day the Cash Redemption Amount is an amount in most cases (other than as provided in subsections (f), (g) and (h) hereof) identical to the amount of the Cash Component and is equal to the Income Net of Expense Amount plus or minus the Balancing Amount. To the extent the Cash Redemption Amount has a positive value, then the Trustee on behalf of the Trust will transfer payment thereof via the relevant DTC Participant(s) for the redeeming Beneficial Owner. Conversely, to the extent the Cash Redemption Amount has a negative value, then such Beneficial Owner is required to deliver payment of such amount to the Trustee on behalf of the Trust. In the case of redemptions made through the Nasdaq-100 Clearing Process, the Trustee on behalf of the Trust will effect a transfer of the Cash Redemption Amount (if required) and the securities for the redeeming Beneficial Owner by the third (3rd) NSCC Business Day following the date on which request for redemption

is deemed received in accordance with the procedures in the Nasdaq-100 Participant Agreement. In the case of redemptions made outside the Nasdaq-100 Clearing Process, the Trustee on behalf of the Trust will transfer the Cash Redemption Amount (if required) and the securities for the redeeming Beneficial Owner by the third (3rd) Business Day following the date on which the request for redemption is deemed received in accordance with the procedures in the Nasdaq-100 Participant Agreement. Where the Cash Redemption Amount is payable by the redeemer to the Trustee, the redeeming Beneficial Owner (via the Depository and the relevant DTC Participants(s)) is required to make payment of such cash amount by the third (3rd) NSCC Business Day, for redemptions made through the Nasdaq-100 Clearing Process, or the first (1st) Business Day, for redemptions outside the Nasdaq-100 Clearing Process, following the date on which the request for redemption is deemed received, in each case in accordance with the Nasdaq-100 Participant Agreement. The Trustee will cancel all Nasdaq-100 Shares delivered upon redemption.

(d) 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 Amount to a redeemer of Nasdaq-100 Shares, the Trustee may advance out of its own funds any amounts necessary in respect of redemptions of Nasdaq-100 Shares; otherwise, the Trustee may sell Securities in an amount sufficient to effect such redemptions in accordance with Section 3.06. The Trustee will reimburse itself for such advance plus interest in accordance with
Section 3.04(f) and shall have a security interest for the payment of such monies pursuant to Section 8.04.

(e) 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 the request for redemption is received by

the Trustee (1) for any period during which the New York Stock Exchange is closed or trading is suspended; (2) for any period during which an emergency exists as a result of which disposal or evaluation of the Securities is not reasonably practicable; or (3) 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.

(f) 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 Nasdaq-100 Shares in Creation Unit size aggregations, the cash equivalent value, based on the market value of such Index Security (determined in accordance with the protocols listed in Section 4.01 hereof ) at the close of the market on the date the redemption request is deemed received by the Trustee, may be included as a part of the Cash Redemption Amount, in lieu of delivering such Index Security as part of the portfolio of securities delivered to a redeemer.

(g) Upon the specific request of a redeemer, the Trustee may, in its discretion, redeem Nasdaq-100 Shares 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 (l) differs in exact composition and/or weighting from the Index Securities 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 such as, among others, in order to maintain the Portfolio's correlation to the composition and weighting of the Index, for example, in connection with a replacement of one of the Index Securities (e.g., due to a merger, acquisition, or bankruptcy). In determining whether

to agree to such a redemption, the Trustee may consult with counsel as to the tax consequences to the Trust from such a redemption or on such other matters as it may deem appropriate.

(h) In connection with the redemption of Nasdaq-100 Shares, 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 Security or Index Securities (determined in accordance with the protocols listed in Section 4.01 hereof) in the calculation of the Cash Redemption Amount, in lieu of delivering such Index Security as part of the portfolio of securities delivered to such redeeming investor. In any such case, the investor shall pay the Trustee the standard Transaction Fee plus an additional amount not to exceed three (3) times the standard Transaction Fee, regardless of whether the redemption is through the Nasdaq-100 Clearing Process or outside of the Nasdaq- 100 Clearing Process.

ARTICLE VI
TRANSFER OF NASDAQ-100 SHARES IN
CREATION UNIT SIZE AGGREGATIONS

Section 6.01 TRANSFER OF NASDAQ-100 SHARES IN CREATION UNIT SIZE AGGREGATIONS. Nasdaq-100 Shares 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 a securities entitlement as against their securities intermediary under applicable law.

ARTICLE VII
SPONSOR

Section 7.01 RESPONSIBILITIES AND DUTIES.

In addition to and notwithstanding the other duties, rights, and responsibilities of the Sponsor as otherwise set forth in this Agreement, the duties, rights, and responsibilities of the Sponsor are further defined as follows:
(a) The Sponsor presently intends, but is not obligated, to cause to be announced, or may designate other persons to announce, on each Business Day, a list of the names and the required number of shares for each of the Index Securities in the current Portfolio Deposit as well as the Income Net of Expense Amount effective through and including the previous Business Day per outstanding Nasdaq-100 Share as shall be provided to it by the Trustee. The Sponsor may choose within its discretion to determine and cause to be announced, frequently throughout each Business Day, a number representing, on a per Nasdaq-100 Share basis, the sum of the Income Net of Expense Amount 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). If the Sponsor elects to make such information available, it 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.

(b) The Sponsor reserves the right to direct the Trustee to declare a split or reverse split in the number of Nasdaq-100 Shares outstanding in the event that the per Nasdaq-100 Share price in the secondary market changes to an amount that the Sponsor believes falls outside a desirable retail range. The Sponsor also reserves the right, but is not obligated, to direct the

Trustee to make a corresponding change in the number of Nasdaq-100 Shares constituting a Creation Unit. For example, if a 2-for-1 split were declared and the Sponsor also determined to make a corresponding change in the number of Nasdaq-100 Shares per Creation Unit, the number of Nasdaq-100 Shares in a Creation Unit would double. Prior to implementing such change, the Sponsor shall cause the current Prospectus for the Trust to be amended to reflect any such change.

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, limited liability company, or business trust 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, limited liability company, or business trust 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.

Section 7.03 RESIGNATION, DISCHARGE OR REMOVAL OF SPONSOR; SUCCESSORS.

(a) 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 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 (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. The Trustee shall terminate this Agreement and the Indenture and liquidate the Trust pursuant to Section 9.01 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.

(b) 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 and the Indenture 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 Trustee of such failure, or if the Sponsor shall be adjudged a 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: (i) 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 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 (ii) agree to act as Sponsor hereunder without appointing a successor Sponsor and without terminating this Agreement or the Indenture; or (iii) terminate this Agreement and the Indenture and liquidate the Trust pursuant to Section 9.01.

(c) Any resignation or removal of the Sponsor and appointment of a successor Sponsor shall become effective upon such acceptance of appointment by the successor Sponsor, and thereupon the resigning or removed 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 or removal, and the new Sponsor shall thereupon undertake and perform all duties and be entitled to all rights and compensation as Sponsor under this Agreement. The successor Sponsor shall not be under any liability hereunder for occurrences or omissions occurring prior to the execution of such instrument. The indemnification of the resigning or removed Sponsor and any other Sponsor Indemnified Party provided for in Section 7.04 shall survive any resignation, discharge, or removal of the Sponsor hereunder.

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 and believed by it to be authorized or within its discretion, rights, or powers conferred upon it by 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 the 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, subsidiaries, shareholders, officers, employees, and affiliates (as such term is defined in the Commission's Regulation S-X) (each a "Sponsor Indemnified Party") shall be indemnified from the Trust Fund and held harmless against any loss, liability, or expense incurred without (l) 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 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 (including counsel fees) 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 against and a security interest in 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 in 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.

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 in proper form and 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 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 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 and a security interest in 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 and a security interest in, 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 by it 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 via the Depository as described in
Section 3.11 in accordance with Section 3.05 and 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 evaluation of the Trust Fund as shown by any Trust Fund Evaluation shall be less than the Discretionary Termination Amount, the Trustee shall give notice thereof to the Sponsor, and 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.

(h) 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 (other than taxes based upon the income of the Trustee) 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 taxing authority having jurisdiction in the premises. For all

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 against and a security interest in the Trust Fund.

(i) The Trustee shall not be liable except by reason of (i) 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 (ii) reckless disregard of its obligations and duties hereunder or under or under the Indenture.

(j) 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 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 Commission may permit by the Order, including the fees payable under the License Agreement as provided in Section 10.03.

(k) 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 of Nasdaq-100 Shares 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.

(l) The Trustee is hereby authorized to acknowledge its acceptance of Nasdaq-100 Participant Agreements entered into by the Distributor and Depositors from time to time by executing such Nasdaq-100 Participant Agreements, substantially in the form of Exhibit A hereto. The Trustee shall discharge all of its obligations and perform all of its duties under the Nasdaq- 100 Participant Agreement.

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 at 101 Barclay Street, New York, New York 10286 or such office as it may subsequently designate upon notice to the Sponsor. The books and records of the Trust Fund shall be open to inspection by any Beneficial Owner, the Sponsor or the agents of the Sponsor 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 such 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 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. The Trustee shall also 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, each as amended, and including, but not limited to, Form N-SAR and filings pursuant to Rule 24f-

2 under the Investment Company Act of 1940, and shall make, or cause to be made, 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. 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 available for inspection a current list of the Securities in the Portfolio, including the identity and number of shares of each of the Securities.

TRUSTEE FEE SCALE*

NET ASSET VALUE                          FEE AS A PERCENTAGE OF NET
OF THE TRUST                             ASSET VALUE OF THE TRUST

0 - $499,999,999                         10/100 of 1% per annum

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* The fee indicated applies to that portion of the net asset value of the Trust which falls in the size category indicated.

$500,000,000 - $2,499,999,999 8/100 of 1% per annum

$2,500,000,000 and above 6/100 of 1% per annum

(b) Notwithstanding the fee schedule set forth in the table above, the Trustee's minimum fee shall be $180,000 per annum. To the extent that the Trustee's annual fee as determined pursuant to the fee scale above is less than $180,000, the Sponsor hereby agrees to pay to the Trustee the amount of the shortfall.

(c) The Trustee shall also charge the Trust for those expenses and disbursements incurred hereunder as contemplated by this Agreement, including, but not limited to, 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, sell the requisite amount of securities necessary to make payment of such amounts in accordance with Section 3.06 or may 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 in accordance with Section 3.04(f). The Trustee will reimburse itself in the amount of any such advance in accordance with Section 3.04(f).

(d) 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 jointly agree that additional compensation to the Trustee is warranted and appropriate, subject to the agreement of the Sponsor, the Trustee may

be paid 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 Nasdaq-100 Shares.

(e) The Trustee shall have a lien upon and a security interest in all assets of the Trust superior in right to any interest or claims of the Depository and any and all Beneficial Owners, but equal in right to any claim, lien upon or security interest in the assets of the Trust in right of the Sponsor provided for in this Agreement, to secure payment of all monies, compensation, reimbursement of expenses, repayment of advances, payment of indemnification and all other debts made to or claims of the Trustee against the Trust.

Section 8.05 INDEMNIFICATION OF TRUSTEE. The Trustee and its directors, subsidiaries, shareholders, officers, employees, and affiliates (as such term is defined in the Commission's Regulation S-X) (each a "Trustee Indemnified Party") shall be indemnified from the Trust Fund and held harmless against any loss, liability, or expense incurred without (l) 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 the Indenture or arising out of the administration of this Agreement or the Indenture or (2) reckless disregard on the part of such Trustee Indemnified Party of its obligations and duties under this Agreement, the Indenture or under applicable law. Such indemnity shall include payment from the Trust Fund of the costs and expenses (including counsel fees) 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 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 against and a security interest in 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, 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 sixty (60) days before the date specified in such instrument when, subject to Section 8.06(c), such resignation is scheduled to take effect. 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 and the Indenture 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 of such failure, or the Trustee 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 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% of the Nasdaq-100 Shares then outstanding may at any time also 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 occurring 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 the Indenture and liquidate the Trust pursuant to Section 9.01.

(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 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 which are 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 the retiring Trustee 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 only 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, 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.

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 and the Indenture, the Trustee shall have no duties or obligations hereunder.

ARTICLE IX
TERMINATION

Section 9.01 PROCEDURE UPON TERMINATION.

(a) If within 90 days from the Initial Date of Deposit, 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 also 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 or if at any time on or 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 and thereby. Any termination pursuant to the preceding sentences shall

be at the complete discretion of the Sponsor subject to the terms hereof, and the Sponsor and the Trustee 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 this Agreement, the Indenture or the Trust because the value of the Trust Fund is below the Discretionary Termination Amount. The Trustee shall terminate this Agreement, the Indenture and the Trust Fund in the event that Nasdaq-100 Shares are delisted from the Amex and are not subsequently relisted on a national securities exchange or a quotation medium operated by a national securities association. This 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 Nasdaq-100 Shares; (b) if the Depository is unable or unwilling to continue to perform its functions as set forth herein and a suitable replacement is unavailable; (c) if NSCC no longer provides clearance services with respect to Nasdaq-100 Shares and a suitable replacement is unavailable, or if the Trustee is no longer a participant in NSCC or any successor to NSCC providing clearance services; (d) if Nasdaq ceases publishing the Index; or (e) if the License Agreement is terminated. 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 this 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 Trust pursuant to the provisions hereof. The Trustee shall also terminate this Agreement, the Indenture and the Trust in the event that the Trustee shall be removed or shall resign and no successor Trustee shall have been appointed pursuant to Section 8.06 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. Notwithstanding the foregoing, this Agreement, the Indenture and the Trust Fund in any event shall terminate by their terms on the Mandatory Termination Date. As soon as practicable after notice of termination of the Trust, the Trustee will distribute to redeemers tendering Nasdaq-100 Shares in Creation Unit size aggregations prior to the termination date the Securities and cash, if any, as provided in Section 5.01 and upon termination of the Trust, the Trustee will sell the Securities held in the Trust as provided below.

(b) If any of the events specified in Section 9.01 hereof shall occur which give the Sponsor the right to terminate this Agreement and the Indenture, the Sponsor shall exercise such right by giving written notice to the Trustee of the event giving rise to the right and the Sponsor's exercise of the right to terminate this Agreement and the Indenture. If (i) any of the events specified in Section 9.01 shall occur which give the Trustee the right to terminate this Agreement and the Indenture, (ii) the Trustee shall receive notice of the occurrence of any of the events specified in Section 9.01 receipt of which gives the Trustee the right to terminate this Agreement and the Indenture, or (iii) any of the events specified in Section 9.01 requiring the Trustee to terminate this Agreement and the Indenture shall occur and the Trust shall be given written notice of such occurrence, then the Trustee shall exercise such right or perform such required act by giving written notice to the Sponsor of the event giving rise to the right or requirement to terminate this Agreement and the Indenture and the Trustee's termination of this Agreement and the Indenture. Promptly after giving or receipt of such notice, the Trustee shall give written notice of termination, specifying (i) the date of termination, (ii) the period during which the assets of the Trust will be liquidated and the date on which Beneficial Owners of Nasdaq-100 Shares (whether in Creation Unit size aggregations or otherwise) will receive in cash the net asset value

of the Nasdaq-100 Shares they hold, and (iii) 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 via the Depository 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 held in the Trust as of such date (rather than the securities portion of the Portfolio Deposit determined in accordance with Section 2.04). 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 Nasdaq-100 Shares in Creation Unit size aggregations, as provided in Section 5.01, 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 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, 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

(v) disseminate to each Beneficial Owner via the Depository as provided in Section 3.11 a final statement as of the date of the computation of the gross amount distributable to the Beneficial Owners, 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 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 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.

ARTICLE X
MISCELLANEOUS PROVISIONS

Section 10.01 AMENDMENT AND WAIVER.

(a) This Agreement and the Indenture 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 Internal Revenue Code; (4) to add or change any provision thereof as may be necessary or advisable in the event that either NSCC or the Depository is unable or unwilling to continue to perform its functions; (5) to add or change any provision thereof to conform the adjustments to the Portfolio and the Portfolio Deposit to changes made by Nasdaq in its method of determining the Index; (6) to add or change any provision thereof as may be necessary to implement a dividend reinvestment plan; (7) to make changes to the Transaction Fee and to other amounts charged in connection with creations and redemptions of Nasdaq-100 Shares within the parameters set forth herein; (8) to change the number of Nasdaq-100 Shares constituting a Creation Unit; and (9) to make changes to the level of net dividends specified in Section 3.04(g) below which dividends will not be paid in a given quarter but will instead be rolled into the next Accumulation Period. This Agreement and the Indenture 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 Nasdaq-100 Shares to add provisions to or change or eliminate any of the provisions

of this Agreement and the Indenture or to modify the rights of Beneficial Owners; provided, however, that this Agreement and the Indenture may not be amended without the consent of the Beneficial Owners of all outstanding Nasdaq-100 Shares if such amendment would (x) permit, except in accordance with the terms and conditions of this Agreement, the acquisition of any securities other than those acquired in accordance with the terms and conditions of this 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.

(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 Nasdaq-100 Shares. The Trustee shall inquire of each such DTC Participant as to the number of Beneficial Owners for whom such DTC Participant holds Nasdaq-100 Shares, 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 Participation 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 NASDAQ-100 SHARES. The Sponsor agrees and undertakes on its own part to register or appoint an agent, which may include the Trustee, to register Nasdaq-100 Shares with the 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 Nasdaq-100 Shares with the 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 Nasdaq-100 Shares 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 LICENSE AGREEMENT WITH NASDAQ. The Sponsor has obtained a License Agreement with Nasdaq under which it may use the trademarks and service marks "Nasdaq-Registered Trademark-", "The Nasdaq Stock Market-Registered Trademark-", "Nasdaq-100 Index-Registered Trademark- ", "Nasdaq-100-Registered Trademark- ", "Nasdaq- 100 Trust-SM-" and "Nasdaq-100 Shares-SM-" to the extent deemed necessary by the Sponsor under federal and state securities laws and to indicate the source of the Index as a basis for determining the composition of the Trust. The Trust shall pay to Nasdaq or shall reimburse the Sponsor for its payment to Nasdaq in accordance with Section 3.04, a licensing fee as set forth in an exhibit to the License Agreement; provided, however, that the Sponsor hereby commits not to seek reimbursement from the Trust, nor shall the Trust pay to Nasdaq, licensing fees to Nasdaq pursuant to the License Agreement for the period through September 30, 1999.

Section 10.04 CERTAIN MATTERS RELATING TO BENEFICIAL OWNERS.

(a) By the purchase and acceptance or other lawful delivery and acceptance of Nasdaq-100 Shares (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 to be bound by all of the terms and conditions of this Agreement and the Indenture.

(b) The death or incapacity of any Beneficial Owner shall not operate to terminate this Agreement and the Indenture, 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 this Agreement and the Indenture, for the Securities or moneys from time to time received, held and applied by the Trustee hereunder.

(c) 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 Agreement and the Indenture 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 Agreement and the Indenture, or for any other cause whatsoever.

Section 10.05 NEW YORK LAW TO GOVERN. This Agreement and the Indenture shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflicts of laws thereof, and all laws or rules of construction of such State shall govern the rights of the parties hereto and the Beneficial Owners and the interpretation of the provisions hereof. This Agreement and the Indenture shall be deemed effective when 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, delivered to or sent by facsimile transmission (with confirmation of receipt) to the Sponsor at the following address: Nasdaq-Amex Investment Product Services, Inc., c/o The Nasdaq Stock Market, Inc., 1735 K Street, N.W., Washington,

D.C. 20006, Attention: John L. Jacobs, facsimile number (202) 496-2696, or at such other address as shall be specified by the Sponsor to the Trustee 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 (with confirmation of receipt) to the Trustee at the following address: The Bank of New York, 101 Barclay Street, New York, New York 10286, Attention: Thomas Centrone, facsimile number 212-815-2948, or such other address as shall be specified to the Sponsor by the Trustee in writing. Any notice to be given to Beneficial Owners shall be duly given if mailed or delivered to DTC Participants for delivery to Beneficial Owners in accordance with Section 3.11(f).

Section 10.07 SEVERABILITY. If any one or more of the covenants, agreements, provisions or terms of this Agreement and the 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 the Indenture and shall in no way affect the validity or enforceability of the other provisions of this Agreement and the Indenture or the rights of the Beneficial Owners.

Section 10.08 SEPARATE AND DISTINCT SERIES. Each Series of the Nasdaq-100 Trust to which this Agreement 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 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.

Section 10.10 EXCLUSIVE BENEFIT OF PARTIES AND HOLDERS OF NASDAQ-100 SHARES. This Agreement and the Indenture is for the exclusive benefit of the parties hereto, their respective successors hereunder, and the holders of Nasdaq-100 Shares, and shall not be deemed to give any legal or equitable right, remedy, or claim to any other person whatsoever.

Section 10.11 HEADINGS. The headings of Articles and Sections in this Agreement and the Indenture have been inserted for convenience only and are not to be regarded as part of this Agreement or the Indenture or to have any bearing upon the meaning or interpretation of any provision contained herein or therein.

IN WITNESS WHEREOF, the parties hereto have caused these Standard Terms and Conditions of Trust dated as of March 1, 1999 to be duly executed and attested.

NASDAQ-AMEX INVESTMENT PRODUCT
SERVICES, INC.
as Sponsor

                              By /s/ L. BRIAN HOLLAND
                                 -----------------------------
                                 Name: L. Brian Holland
                                 Title:President and Chief Executive Officer

ATTEST:

/s/ JOHN L. JACOBS
-------------------------
Name: John L. Jacobs
Title:Executive Vice President

THE BANK OF NEW YORK
as Trustee

                              By /s/ THOMAS J. CENTRONE
                                 -----------------------------
                                 Name: Thomas J. Centrone
                                 Title:Vice President

ATTEST:

/s/ STEVEN FARLESE
-------------------------
Name:  Steven Farlese
Title: Vice President

Effective Date: March 4, 1999

EXHIBIT A

FORM OF NASDAQ-100 PARTICIPANT AGREEMENT

Included as Exhibit (A)(9)(c) to this Registration Statement

Exhibit A(1)(b)

EXECUTION COPY

NASDAQ-100 TRUST, SERIES 1

TRUST INDENTURE AND AGREEMENT
Dated March 4, 1999

Incorporating
Standard Terms and Conditions of Trust
for NASDAQ-100 TRUST, SERIES 1
and subsequent and similar
series of the NASDAQ-100 TRUST
Dated as of March 1, 1999,

Effective Date
March 4, 1999

Between

NASDAQ-AMEX INVESTMENT PRODUCT SERVICES, INC.,
As Sponsor

and
THE BANK OF NEW YORK
As Trustee

This TRUST INDENTURE AND AGREEMENT dated March 4, 1999 (the "Indenture"), is between Nasdaq-Amex Investment Product Services, Inc., a Delaware corporation, as Sponsor, and The Bank of New York, a New York corporation with trust powers, as Trustee, and sets forth certain of its provisions in full and incorporates other of its provisions by reference to a document entitled "Standard Terms and Conditions of Trust" dated as of March 1, 1999, between the parties hereto (hereinafter called the "Agreement;" and together with the Indenture, the "Indenture and Agreement"), such provisions as are set forth in full and such provisions as are incorporated by reference constituting a single instrument.

W I T N E S S E T H:

WHEREAS, the parties hereto have entered into the Agreement in order to facilitate the creation of series of securities issued under a unit investment trust in accordance with the provisions of the Investment Company Act of 1940, as amended, and the laws of the State of New York, such series representing undivided interests in a trust fund composed primarily of Securities (as defined in the Agreement) included from time to time in the Nasdaq-100 Index (R) (the "Index");

WHEREAS, the parties now desire to create the first of the aforesaid series; and

WHEREAS, this first series of the Trust shall be designated and known as the "Nasdaq-100 Trust, Series 1" and shall be subject to the terms and provisions of this Indenture and of the Agreement incorporated herein;

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trustee agree as follows:

Section 1. INCORPORATION OF AGREEMENT. Subject to the provisions of
Section 2 hereof, all of the provisions of the Agreement are incorporated herein by reference in their entirety and shall be deemed to be a part of this instrument as though such provisions had been set forth in full in this instrument.

Section 2. SPECIFIC TERMS OF THIS SERIES. The parties hereby agree to the following terms for the Nasdaq-100 Trust, Series 1:

A. The securities portion of the Initial Portfolio Deposit deposited on the date hereof pursuant to Section 2.02 of the Agreement is comprised of the securities set forth in Schedule A hereto. The Cash Component of the Initial Portfolio Deposit deposited on the date hereof is also set forth on Schedule A hereto.

B. (1) The number of Creation Unit size aggregations of Nasdaq-100 Shares to be delivered on the Initial Date of Deposit in exchange for the Initial Portfolio Deposit for this Series is three (3).

(2) The initial fractional undivided interest represented by each Creation Unit size aggregation of Nasdaq-100 Shares shall be one-third (1/3).

(3) The number of Nasdaq-100 Shares which, when aggregated, constitute one Creation Unit is 50,000.

C. The Initial Date of Deposit of this Series of the Trust is the date hereof.

D. The Mandatory Termination Date for the Trust shall be (1) one hundred-twenty- five years from the Initial Date of Deposit, which is March 4, 2124 or (2) the date twenty (20) years after the death of the last survivor of the fifteen (15) persons named below under the List of Measuring Lives, whichever occurs first:

            NAME AND ADDRESS                           DATE OF BIRTH
1.       Thomas Busher Jacobs                            12/25/90
         6433 Fairest Dream Lane
         Columbia, MD 21044-6023

2.       Elian Busher Jacobs                             09/20/93
         6433 Fairest Dream Lane
         Columbia, MD 21044-6023

3.       Jack Busher Jacobs                              10/25/95
         6433 Fairest Dream Lane
         Columbia, MD 21044-6023

4.       Colleen Elizabeth Mitchel                       03/12/93
         10702 St. Margarets Way
         Silver Spring, MD 20902

5.       James Hemingway Mitchel                         07/06/96
         10702 St. Margarets Way
         Silver Spring, MD 20902

6.       Thomas Pearce Bloom                             03/14/95
         915 Leighmill Road
         Great Falls, VA 22066

7.       Talia Libby Wolfson                             08/17/95
         8034 Ellingson Drive
         Chevy Chase, MD 20815

8.       Gabriel Henry Wolfson                           05/09/90
         8034 Ellingson Drive
         Chevy Chase, MD 20815

9.       Noah Ariel Wolfson                              01/31/86
         8034 Ellingson Drive
         Chevy Chase, MD 20815

10.      Kaitlyn Marie Ryan                              01/10/95
         12306 Woodlawn Court
         Lake Ridge, VA 22192

11.      Austin William Downing                          09/24/96
         4152 Zinnia Lane
         Fairfax, VA 22030

12.      Samuel Faulkner Graves                          12/12/91
         4218 Sleaford Road
         Bethesda, MD 20814

13.      Luke Kenefick Graves                            07/12/94
         4218 Sleaford Road
         Bethesda, MD 20814

14.      Catherine Ann Sodano                            08/29/88
         11 Oldwood Road
         St. James, NY 11780

15.      Elizabeth Rose Sodano                           04/03/91
         11 Oldwood Road
         St. James, NY 11780

E. The Trust's taxable year shall be the year ending each September 30.

F. This Indenture 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.

G. The Sponsor hereby undertakes, at its sole discretion and until further notice, that on each day during each fiscal year of the Trust up to and including the fiscal year ending September 30, 2000, the ordinary operating expenses of the Trust as calculated by the Trustee will not be permitted to exceed an amount which is 18/100 of one percent (0.18%) per annum of the daily net asset value of the Trust. To the extent during such period the ordinary operating expenses of the Trust do exceed such 0.18% level, the Sponsor will reimburse the Trust or assume invoices on behalf of the Trust for such excess ordinary operating expenses. 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 by the Sponsor, ordinary operating expenses of the Trust shall not include taxes, brokerage commissions, and such extraordinary non-recurring expenses as may arise, including without limitation the cost of any litigation to which the Trust or Trustee may be a party. After September 30, 2000, the Sponsor may discontinue its undertaking to limit ordinary operating expenses of the Trust or renew this undertaking for an additional period of time, or may choose to reimburse or assume certain Trust expenses in later periods in order to keep Trust expenses at a level lower than what would reflect ordinary operating expenses of the Trust, but is not obligated to do so.

IN WITNESS WHEREOF, Nasdaq-Amex Investment Product Services, Inc. and The Bank of New York have caused this Indenture to be executed and attested as of the date first above written.

NASDAQ-AMEX INVESTMENT PRODUCT
SERVICES, INC., as Sponsor

                                           By: /s/ L. BRIAN HOLLAND
                                               ---------------------------
                                               Name:  L. Brian Holland
                                               Title: President and Chief
                                                      Executive Officer

Attest:

/s/ JOHN L. JACOBS
------------------------------
Name:  John L. Jacobs
Title:  Executive Vice President

THE BANK OF NEW YORK,
as Trustee

                                           By: /s/ THOMAS J. CENTRONE
                                               ---------------------------
                                               Name:  Thomas J. Centrone
                                               Title:  Vice President


Attest:

/s/ STEVEN FARLESE
------------------------------
Name:  Steven Farlese
Title: Vice President

NAME OF ISSUER                                                        SHARES                        VALUE
--------------                                                        -------                  --------------
Microsoft Corporation                                                  14,427                   $2,196,510.75
Intel Corporation                                                       9,825                    1,113,909.38
Cisco Systems, Inc.                                                     9,483                      931,704.75
MCI WordCom, Inc.                                                      11,088                      907,830.00
Dell Computer Corporation                                               7,887                      645,748.13
Oracle Corporation                                                     10,218                      371,679.75
Sun Microsystems, Inc.                                                  2,784                      282,228.00
Amgen Inc.                                                              3,990                      258,103.13
Yahoo! Inc.                                                             1,596                      241,794.00
Tele-Communications, Inc.                                               3,630                      235,950.00
Amazon.com, Inc.                                                        1,767                      212,260.88
Level 3 Communications, Inc.                                            3,585                      207,705.94
Comcast Corporation                                                     2,715                      194,801.25
Applied Materials, Inc.                                                 3,210                      184,775.63
Qwest Communications International Inc.                                 2,955                      176,561.25
Nextel Communications, Inc.                                             5,838                      170,761.50
Costco Companies, Inc.                                                  1,929                      167,340.75
Netscape Communications Corporation                                     2,094                      159,929.25
Biogen, Inc.                                                            1,521                      159,705.00
Ascend Communications, Inc.                                             2,043                      157,055.63
Nordstrom Inc.                                                          3,666                      153,972.00
Cintas Corporation                                                      2,118                      153,422.63
Linear Technology Corporation                                           3,378                      150,321.00
Tellabs, Inc.                                                           1,860                      148,916.25
Staples, Inc.                                                           5,205                      148,342.50
Novell, Inc.                                                            7,098                      142,403.63
Chancellor Media Corporation                                            2,928                      141,825.00
Maxim Integrated Products, Inc.                                         3,081                      140,185.50
Immunex Corporation                                                       924                      137,964.75
LM Ericsson Telephone Company                                           5,202                      131,350.50
Altera Corporation                                                      2,301                      124,110.19
Xilinx, Inc.                                                            1,722                      119,033.25
Starbucks Corporation                                                   2,082                      117,763.13
PanAmSat Corporation                                                    3,381                      115,376.63
Intuit Inc.                                                             1,263                      115,090.88
ADC Telecommunications, Inc.                                            2,829                      112,099.13

NAME OF ISSUER                                                         SHARES                       VALUE
--------------                                                        -------                   -------------
Paychex, Inc.                                                           2,607                      111,775.13
Network Associates, Inc.                                                2,358                      107,289.00
QUALCOMM Incorporated                                                   1,434                      106,743.38
BMC Software, Inc.                                                      2,760                      106,432.50
Apple Computer, Inc.                                                    3,156                      105,528.75
PeopleSoft, Inc.                                                        5,535                      102,051.56
Bed Bath & Beyond Inc.                                                  3,138                       99,435.38
Compuware Corporation                                                   3,810                       96,916.88
Biomet, Inc.                                                            2,541                       96,716.81
KLA-Tencor Corporation                                                  1,782                       94,000.50
Parametric Technology Corporation                                       6,216                       91,297.50
USA Networks, Inc.                                                      2,382                       91,111.50
Chiron Corporation                                                      4,200                       90,825.00
Fiserv, Inc.                                                            1,725                       85,818.75
NTL Incorporated                                                        1,050                       83,868.75
Genzyme General                                                         1,701                       81,966.94
Quintiles Transnational Corp.                                           1,836                       81,013.50
3Com Corporation                                                        3,060                       76,500.00
American Power Conversion Corporation                                   2,115                       70,059.38
Citrix Systems, Inc.                                                      852                       68,213.25
Quantum Corporation                                                     3,423                       67,176.38
Synopsys, Inc.                                                          1,368                       63,355.50
Smurfit-Stone Container Corporation                                     3,543                       63,109.69
Vitesse Semiconductor Corporation                                       1,335                       62,745.00
Jacor Communications, Inc.                                                897                       62,677.88
PACCAR Inc.                                                             1,473                       62,142.19
VERITAS Software Corporation                                              816                       61,404.00
Concord EFS, Inc.                                                       1,854                       60,486.75
Comverse Technology, Inc.                                                 780                       56,452.50
Sanmina Corporation                                                       996                       53,784.00
Centocor, Inc.                                                          1,155                       47,932.50
Sigma-Aldrich Corporation                                               1,779                       47,588.25
Adobe Systems Incorporated                                                996                       45,442.50
Electronic Arts Inc.                                                    1,032                       42,828.00
Reuters Group PLC                                                         483                       41,296.50
Apollo Group, Inc.                                                      1,215                       36,981.56
Dollar Tree Stores, Inc.                                                  906                       36,636.38
PacifiCare Health Systems, Inc.                                           471                       35,737.13
Molex Incorporated                                                      1,260                       35,673.75
Comair Holdings, Inc.                                                     903                       35,668.50
McLeodUSA Incorporated                                                    861                       35,301.00

NAME OF ISSUER                                                         SHARES                      VALUE
--------------                                                        -------                    ------------
Food Lion, Inc.                                                         3,468                       33,813.00
Adaptec, Inc.                                                           1,497                       31,437.00
Ross Stores, Inc.                                                         600                       28,687.50
Northwest Airlines Corporation                                          1,128                       28,341.00
Lincare Holdings Inc.                                                     819                       28,050.75
Autodesk, Inc.                                                            654                       26,405.25
McCormick & Company, Incorporated                                         894                       25,032.00
Electronics for Imaging, Inc.                                             702                       24,657.75
Stewart Enterprises, Inc.                                               1,563                       22,858.88
FORE Systems, Inc.                                                      1,545                       21,726.56
Atmel Corporation                                                       1,254                       21,082.88
Microchip Technology Incorporated                                         717                       20,389.69
Herman Miller, Inc.                                                     1,140                       18,667.50
Cambridge Technology Partners, Inc.                                       714                       17,939.25
Fastenal Company                                                          474                       17,775.00
Andrew Corporation                                                      1,098                       16,058.25
Micron Electronics, Inc.                                                1,320                       15,840.00
Worthington Industries, Inc.                                            1,074                       14,096.25
CBRL Group, Inc.                                                          753                       13,601.06
Tech Data Corporation                                                     741                       12,735.94
Rexall Sundown, Inc.                                                      759                       11,385.00
First Health Group Corp.                                                  681                       11,023.69
Corporate Express, Inc.                                                 1,089                        5,649.19


Total Investments- (Cost $14,497,769.75)                                                       $14,497,769.75
                                                                                              ---------------
                                                                                              ---------------


AMOUNT OF CASH COMPONENT DEPOSITED
WITH THE TRUST ON THE INITIAL DATE OF DEPOSIT                                              $       0
---------------------------------------------                                        --------------------
                                                                                     --------------------

Exhibit A(3)

EXECUTION COPY

DISTRIBUTION AGREEMENT

DISTRIBUTION AGREEMENT (the "Agreement") made as of March 1, 1999, effective March 4, 1999, by and among NASDAQ-AMEX INVESTMENT PRODUCT SERVICES, INC., a Delaware corporation (the "Sponsor"); NASDAQ-100 TRUST-sm-, SERIES 1, a unit investment trust (the "Trust") to be organized under the laws of the State of New York by The Bank of New York, as Trustee of such Trust; and ALPS MUTUAL FUNDS SERVICES, INC., a Colorado corporation (the "Distributor").

WITNESSETH

WHEREAS, the Trust is to be governed by a Trust Indenture and Agreement (the "Trust Agreement") between the Sponsor and The Bank of New York, as trustee (the "Trustee") pursuant to which there will be created units of fractional undivided interest in the Trust referred to as Nasdaq-100 Shares and representing proportionate interests in the portfolio of securities and assets held by the Trust;

WHEREAS, the Sponsor and the Trust have filed with the Securities and Exchange Commission (the "Commission") a registration statement on Form S-6 (Registration No. 333-61001), including as part thereof a prospectus, under the Securities Act of 1933, as amended (the "1933 Act"), and a registration statement on Form N-8B-2 (Registration No. 811-08947) under the Investment Company Act of 1940, as amended (the "1940 Act"), the forms of which have heretofore been delivered to the Distributor; and

WHEREAS, the Trust will create and redeem Nasdaq-100 Shares only in aggregations constituting a Creation Unit, as such term is used in the Registration Statement (as defined herein), in accordance with the terms and conditions set forth therein; and

WHEREAS, the Distributor is a registered broker-dealer under the Securities Exchange Act of 1934, as amended (the "1934 Act"); and

WHEREAS, the Trust and the Sponsor desire to retain the Distributor to act as distributor with respect to the creation and distribution of Nasdaq-100 Shares in Creation Unit size aggregations as set forth in the Trust's Registration Statement, to hold itself available to receive and process orders for Nasdaq-100 Shares in the manner set forth in the Trust's then-current prospectus and to enter into arrangements with dealers; and

WHEREAS, the Distributor desires to render these services to the Trust;

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Sponsor, the Trust and the Distributor hereby agree as follows:

SECTION 1

DISTRIBUTION AND BENEFICIAL OWNERS

1.1 APPOINTMENT. The Trust and the Sponsor hereby appoint the Distributor as the exclusive distributor for Nasdaq-100 Shares in Creation Unit size aggregations on the terms and for the periods set forth in this Agreement, and the Distributor hereby accepts such appointment and agrees to act in such capacity hereunder.

1.2 DEFINITIONS.

(a) The term "Registration Statement" shall mean the registration statement most recently filed from time to time by the Trust with the Commission and effective under the 1933 Act and the 1940 Act, as such registration statement is amended by any amendments thereto at the time in effect.

(b) The term "Prospectus" shall mean the prospectus included as part of the Trust's Registration Statement, as such prospectus may be amended or supplemented from time to time.

(c) The term "Depository" shall mean The Depository Trust Company, New York, New York.

(d) All capitalized terms used but not defined in this Agreement shall have the meanings ascribed to such terms in the Registration Statement.

1.3 DISTRIBUTOR'S DUTIES. The Distributor shall have the following duties:

(a) The Distributor agrees, as agent for the Trust, that all orders to create Nasdaq-100 Shares in Creation Unit size aggregations must be placed with the Distributor, and it is the responsibility of the Distributor to transmit such orders to the Trustee, as described in the Registration Statement and in accordance with the provisions thereof.

(b) The right granted to the Distributor to receive all orders to create Nasdaq-100 Shares in Creation Unit size aggregations and to transmit such orders to the Trustee shall be exclusive, and no other principal underwriter or distributor shall be granted such right; provided, however, that nothing herein shall affect or limit the right and ability of the Trustee to accept Portfolio Deposits and related Cash Components (each as defined in the Prospectus) through or outside of the Nasdaq-100 Clearing Process, and as provided in and in accordance with the then-current Prospectus. The exclusive right to place creation orders for Nasdaq-100 Shares granted to the Distributor may be waived by the Distributor by notice to the Trust and the Sponsor in writing, either unconditionally or subject to such conditions and limitations as may be set forth in such notice to the Trust and the Sponsor. The Trust and the Sponsor hereby acknowledge that the

Distributor may render principal underwriting, distribution and other services to other parties, including other unit investment trusts.

(c) At the request of the Trust and the Sponsor, the Distributor shall enter into Nasdaq-100 Participant Agreements between and among Participating Parties, the Distributor and the Trustee, in accordance with the provisions of the Registration Statement and current Prospectus and in the form attached hereto as Exhibit A. The Distributor shall make available for inspection during normal business hours at its offices at 370 17th Street, Suite 3100, Denver, Colorado, a list of the Participating Parties who have entered into Nasdaq-100 Participant Agreements with the Distributor and the Trustee.

(d) Except as otherwise noted in the Registration Statement and current Prospectus, the offering price for all Creation Units sold to investors by the Distributor will be the net asset value per Creation Unit calculated in the manner described in the Registration Statement and current Prospectus.

(e) In performing its duties hereunder, the Distributor shall act in conformity with the Trust Agreement, Registration Statement and the then-current Prospectus relating to Nasdaq-100 Shares and the Trust, and in conformity with the instructions and directions of the Sponsor and the Trustee of the Trust, and will comply with and conform in all material respects to the requirements of the 1933 Act, the 1934 Act and the 1940 Act and all other applicable federal and state laws, regulations and rulings, and the rules and regulations of the National Association of Securities Dealers, Inc. ("NASD").

(f) The Distributor shall not be obligated to accept any certain number of orders for Creation Unit size aggregations of Nasdaq-100 Shares; provided, however, that the Distributor shall accept all orders submitted to it in proper form. Nothing herein contained shall

prevent the Distributor from entering into like distribution arrangements with other investment companies.

(g) The Distributor shall review, clear and file all advertising, sales, marketing and promotional materials of the Trust provided to the Distributor, or in the preparation of which it has participated, with the NASD as required by the 1933 Act and the 1940 Act, and the rules promulgated thereunder, and by the rules of the NASD. The Distributor is not authorized to give any information or to make any representations other than those contained in the Registration Statement or current Prospectus, as amended from time to time, or contained in reports to Beneficial Owners or other materials that may be prepared by the Trustee or Sponsor on behalf of the Trust for the Distributor.

(h) The Distributor shall consult with the Sponsor and the Trust with respect to the production and printing of Prospectuses to be used in connection with creations by creators of Creation Unit size aggregations of Nasdaq-100 Shares.

(i) In performing its duties hereunder the Distributor shall be entitled to rely on and shall not be responsible in any way for information provided to it by the Trustee, the Sponsor or the Trust and their respective service providers and shall not be liable or responsible for the errors and omissions of such service providers, provided that the foregoing shall not be construed to protect the Distributor against any liability to the Trustee, the Sponsor, the Trust or the Trust's Beneficial Owners to which the Distributor would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties or by reason of its reckless disregard of its obligations and duties under this Agreement.

(j) The Distributor has as of the date hereof, and shall at all times have and maintain, net capital of not less than that required by Rule 15c3-1 of the 1934 Act, or any successor provision thereto. In the event that the net capital of the Distributor shall fall below that required by Rule 15c3-1,

or any successor provision thereto, the Distributor shall promptly provide notice to the Trustee and the Sponsor of such event.

1.4 THE TRUST'S AND SPONSOR'S DUTIES. The Trust and Sponsor shall have the following duties:

(a) The Trust agrees to issue Creation Unit size aggregations of Nasdaq-100 Shares, subject to paragraph (e) of this Section 1.4, and to request the Depository to record on its books the ownership of such Nasdaq-100 Shares in accordance with the book-entry system procedures described in the Prospectus in such amounts as the Distributor has requested in writing or other means of data transmission, as promptly as practicable after receipt by the Trustee on behalf of the Trust of the requisite Portfolio Deposit and Cash Component, if any, (together with any fees) for such creations and acceptance by the Trustee or by the Distributor on behalf of the Trust of a creation order for such Nasdaq-100 Shares, upon the terms described in the Registration Statement.

(b) The Trust and Sponsor shall furnish to the Distributor copies of all information, financial statements and other papers which the Distributor may reasonably request for use in connection with the distribution of Creation Units. The Trust and the Sponsor shall make available to the Distributor such number of copies of the current Prospectus as the Distributor may reasonably request. The Trust and the Sponsor authorize the Distributor to use the Prospectus, but the Trust and the Sponsor shall not be responsible in any way for any information, statements or representations given or made by the Distributor or its representatives or agents other than such information, statements or representations as are contained in the Prospectus or financial reports filed on behalf of the Trust or in any sales literature or advertisements specifically approved by the Trust and the Sponsor in writing.

(c) The Sponsor agrees that it will take all necessary action to register an indefinite number of Nasdaq-100 Shares under the 1933 Act. The Sponsor shall take, from time to time, such

steps, including payment of the related filing fees, as may necessary to register Nasdaq-100 Shares under the 1933 Act and the Trust under the 1940 Act to the end that all Creation Unit size aggregations of Nasdaq-100 Shares will be properly registered under the 1933 Act and the 1940 Act. The Sponsor agrees to file from time to time such amendments, reports and other documents as may be necessary in order that there may be in a Registration Statement or Prospectus no (i) untrue statement of a material fact or (ii) omission to state a material fact necessary in order to make the statements therein, in the case of the Prospectus, in light of the circumstances in which made, not misleading. The Distributor shall furnish such information and other material relating to its affairs and activities as may be required by the Trust and the Sponsor for inclusion in the Registration Statement or Prospectus.

(d) The Trust and the Sponsor shall keep the Distributor informed of the states and other foreign and domestic jurisdictions in which the Trust has effected notice filings of Nasdaq-100 Shares for sale under the securities laws thereof. The Distributor shall furnish such information and other material relating to its affairs and activities as may be required by the Trust and the Sponsor in connection with such filings.

(e) In accordance with the provisions of the then-current Prospectus, the Trust may reject any creation order for Creation Unit size aggregations of Nasdaq-100 Shares or stop all receipts of creation orders for Nasdaq-100 Shares at any time or from time to time upon reasonable notice to the Distributor.

(f) The Trust and the Sponsor shall notify the Distributor promptly of:

1. any amendments to the Trust's Registration Statement or Prospectus;

2. any inquiries by the Commission regarding additional information or of any stop order suspending the effectiveness of the Trust's Registration Statement or the initiation of any proceeding for that purpose; and

3. all significant actions of the Commission having a material impact with respect to any amendment to the Trust's Registration Statement or Prospectus.

1.5 REPRESENTATIONS.

(a) The Distributor represents and warrants to the Trust and the Sponsor that (i) it is duly organized as a Colorado corporation and is and at all times will remain duly authorized and licensed to carry out its services as contemplated herein; (ii) the execution, delivery and performance of this Agreement are within its power and have been duly authorized by all necessary action; and (iii) its entering into this Agreement or providing the services contemplated hereby does not conflict with or constitute a default or require a consent under or breach of any provision of any agreement or document to which the Distributor is a party or by which it is bound, including, but not limited to, any Members Agreement with the National Association of Securities Dealers, Inc. (except for any consent in writing which shall have been obtained by the date hereof).

(b) The Sponsor represents and warrants to the Distributor that (i) the Registration Statement and the Prospectus have been prepared in conformity in all material respects with the 1933 Act, the 1940 Act and the rules and regulations of the Commission (the "Rules and Regulations"); (ii) the Registration Statement and Prospectus contain all statements required to be stated therein in accordance with the 1933 Act, the 1940 Act and the Rules and Regulations; and (iii) all statements of fact contained therein are true and correct in all material respects at the time indicated or the effective date, as the case may be, and neither the Registration Statement nor the Prospectus shall include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading. The Trust and the Sponsor shall from time to time file such amendment or amendments to the Registration Statement and the Prospectus as, in the light of future developments, shall, in the opinion of the Trust's counsel, be necessary in order to have the Registration Statement and the Prospectus at all times contain all material facts required to be stated therein or necessary to make

the statements therein, in the case of the Prospectus in light of the circumstances in which made, not misleading to a purchaser of Nasdaq-100 Shares. The Trust shall not file any amendment to the Registration Statement or the Prospectus without giving the Distributor reasonable notice thereof in advance, provided that nothing in this Agreement shall in any way limit the Trust's right to file at any time such amendments to the Registration Statement or the Prospectus as the Trust may deem advisable. Notwithstanding the foregoing, the Trust and the Sponsor shall not be deemed to make any representation or warranty as to any information or statement provided by the Distributor for inclusion in the Registration Statement or the Prospectus.

SECTION 2

FEES AND EXPENSES

2.1 COMPENSATION OF THE DISTRIBUTOR. The Sponsor shall pay to the Distributor, for its services described in this Agreement, an annual distribution fee of $35,000; 1/12 of such fee shall be paid monthly in advance on the first day of each calendar month with the first payment to be delivered upon the effectiveness of this Agreement in a prorated amount.

2.2 EXPENSES.

(a) Each party hereto will bear its own expenses in connection with this Agreement unless otherwise agreed by the parties hereto in writing. In addition, the expenses of the Trust shall be borne by the Trust as described under the caption "Expenses of the Trust" in the Prospectus.

(b) The Distributor shall bear the following costs and expenses relating to the distribution of Nasdaq-100 Shares: (i) the costs (other than those payable pursuant to the Trust's agreement with the Depository) of processing and maintaining records of creations of Creation Units; (ii) all costs of maintaining the records required of a broker/dealer registered under the 1934 Act; (iii) the expenses of maintaining its registration or qualification as a dealer or broker under federal or state

laws; (iv) the expenses incurred by the Distributor in connection with normal NASD filing fees (expedited NASD filing fees will be billed to the Sponsor); and
(v) all other expenses incurred in connection with the distribution services as contemplated herein, except as otherwise specifically provided in this Agreement.

SECTION 3

INDEMNIFICATION

3.1 INDEMNIFICATION OF DISTRIBUTOR. The Sponsor agrees to indemnify, defend and hold the Distributor, any person who controls the Distributor within the meaning of Section 15 of the 1933 Act, and their respective officers and directors (any of the Distributor, such control persons, and their respective officers and directors, for purposes of this Section 3.1, an "Indemnitee"), free and harmless from and against any and all claims, demands, liabilities, and expenses (including costs reasonably incurred in connection with investigating or defending such claims, demands or liabilities and any counsel fees reasonably incurred in connection therewith) which the Indemnitee may incur, under the 1933 Act or under common law or otherwise, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Trust's Registration Statement, or the omission or alleged omission to state in such document a material fact required to be stated thereon or necessary to make the statements therein not misleading or, with respect to the Prospectus or any amendment or supplement thereto, any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state in such document a material fact required to be stated therein or necessary to make the statements therein in the light of the circumstances under which they were made, not misleading; provided, however, that nothing in this Section 3.1 shall protect the Indemnitee against any liability to the Trust or its Beneficial Owners that the Indemnitee would otherwise be subject to (i) by reason of willful malfeasance, bad faith, or gross negligence in the performance of its duties, (ii) by

reason of the Indemnitee's reckless disregard of its obligations and duties under this Agreement, or (iii) where such liability arises out of or is based upon an untrue statement or omission or alleged untrue statement or omission in the Trust's Registration Statement or Prospectus that was made in reliance upon and in conformity with written information furnished by the Distributor to the Trust and the Sponsor; and provided, further, that the Trust will not be liable in any such case to the Indemnitee with respect to any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement or the Prospectus that is subsequently corrected in such document (or an amendment thereof or supplement thereto), if a copy of the Prospectus (or such amendment thereof or supplement thereto) was not sent or given to the person asserting any such claim, demand, liability or expense at or before the written confirmation of the sale to such person in any case where such delivery is required by the 1933 Act, and the Trust had notified the Distributor of the amendment or supplement prior to the sending of the written confirmation of sale.

The Sponsor's obligation to indemnify the Indemnitee is expressly conditioned upon the Indemnitee's notification of the Sponsor of the commencement of any action against the Indemnitee, which notification shall be given by letter or by facsimile transmission addressed to the Sponsor at its principal offices in Washington, DC, and sent to the Sponsor by the person against whom such action is brought within 10 days after the summons or other first legal process shall have been served. The Indemnitee's failure to so notify the Sponsor shall not relieve the Sponsor of any liability which it may have to the Indemnitee by reason of any such untrue statement or omission or alleged untrue statement or omission independent of this indemnification. The Sponsor will be entitled to assume the defense of any suit brought to enforce any such claim, demand or liability and to retain legal counsel of good standing chosen by the Sponsor and approved by the Indemnitee (such approval not to be unreasonably withheld). If the Sponsor elects to assume the defense of any such suit and retain counsel approved by

the Indemnitee, the defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them. In the event the Sponsor does not elect to assume the defense of any such suit and retain counsel of good standing approved by the Indemnitee, or the Indemnitee does not approve of the counsel chosen by the Sponsor (such approval not to be unreasonably withheld), the Sponsor shall bear the fees and expenses of any counsel retained by the Indemnitee. The indemnification agreement contained in this Section 3.1 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Indemnitee and shall survive the sale of any Creation Units made pursuant to purchase orders obtained by the Indemnitee or the termination of this Agreement. This indemnification will inure exclusively to the benefit of the Indemnitee and its successors, assigns and estate. The Trust and the Sponsor shall promptly notify the Distributor of the commencement of any litigation or proceeding against the Trust or the Sponsor in connection with the issue and sale of any Creation Units.

3.2 INDEMNIFICATION OF THE SPONSOR. The Distributor agrees to indemnify, defend, and hold the Sponsor, any person who controls the Sponsor within the meaning of Section 15 of the 1933 Act, and their respective officers and directors (for purposes of this Section 3.2, the Sponsor, its controlling persons, and their respective officers and directors are collectively referred to as the "Sponsor Affiliates"), free and harmless from and against any and all claims, demands, liabilities, and expenses (including costs reasonably incurred in investigating or defending such claims, demands or liabilities and any counsel fees reasonably incurred in connection therewith) which the Sponsor Affiliates may incur, under the 1933 Act or under common law or otherwise, arising out of or based upon (i) any untrue statement or alleged untrue statement of a material fact contained in information furnished by the Distributor to the Sponsor for use in the Registration Statement or Prospectus in effect from time to time, or (ii) any omission or alleged omission, on the part of the Distributor, to state a material fact in

connection with such information required to be stated in the Registration Statement or Prospectus or necessary to make such information not misleading, it being understood that the Sponsor will rely upon the information provided by the Distributor for use in the preparation of the Registration Statement and the Prospectus, or (iii) any alleged act or omission on the Distributor's part as the Trust's agent that has not been expressly authorized by the Sponsor in writing.

The Distributor's obligation to indemnify the Sponsor Affiliates is expressly conditioned upon the Distributor being notified of the commencement of any action brought against the Sponsor Affiliates, which notification shall be given by letter or facsimile transmission addressed to the Distributor at its principal offices in Denver, Colorado and sent to the Distributor by the person against whom such action is brought within 10 days after the summons or other first legal process shall have been served. The Sponsor Affiliates' failure to notify the Distributor of the commencement of any such action shall not relieve the Distributor from any liability which it may have to the Sponsor Affiliates by reason of any such untrue statement or omission, alleged untrue statement or omission, or alleged act or omission on the part of the Distributor independent of this indemnification. The Distributor will be entitled to assume the defense of any suit brought to enforce any such claim, demand or liability and to retain legal counsel of good standing chosen by the Distributor and approved by the Sponsor Affiliate (such approval not to be unreasonably withheld). If the Distributor elects to assume the defense of any such suit and retain counsel approved by the Sponsor Affiliate, the defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them. In the event the Distributor does not elect to assume the defense of any such suit and retain counsel of good standing approved by the Sponsor Affiliate, or the Sponsor Affiliate does not approve of the counsel chosen by the Distributor (such approval not to be unreasonably withheld), the Distributor shall bear the fees and expenses of any counsel retained by the Sponsor Affiliate. The indemnification agreement contained in

this Section 3.2 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Sponsor Affiliate and shall survive the sale of any Creation Units made pursuant to purchase orders obtained by the Distributor or the termination of this Agreement. This indemnification will inure exclusively to the benefit of the Sponsor Affiliate and its successors, assigns and estate. The Distributor shall promptly notify the Trust and the Sponsor of the commencement of any litigation or proceeding against the Distributor in connection with the issue and sale of any Creation Units.

3.3 SETTLEMENT OF CLAIMS. No Indemnitee or indemnified Sponsor Affiliate shall settle any claim against it for which it intends to seek indemnification from the indemnifying party, under the terms of Section 3.1 or 3.2 above, without the prior written notice to and consent from the indemnifying party, which consent shall not be unreasonably withheld. No indemnified or indemnifying party shall settle any claim unless the settlement contains a full release of liability with respect to the other party in respect of such action. This section shall survive the termination of this Agreement.

SECTION 4

DURATION, TERMINATION, AND AMENDMENT

4.1 DURATION. This Agreement shall become effective on March 4, 1999, and continue, unless terminated as provided in Section 4.2 or until the termination of the Trust.

4.2 TERMINATION. Subject to Section 4.3, this Agreement may be terminated at any time, without penalty, upon 60 days' prior written notice to the other party by the Trust and the Sponsor, or by the Distributor.

4.3 ASSIGNMENT. This Agreement shall automatically terminate in the event of its "assignment." As used in this Agreement, the term "assignment" shall have the meaning such term has in the 1940 Act.

4.4 AMENDMENT. This Agreement may be amended by mutual consent, provided that no provision of this Agreement may be changed, waived, discharged or terminated except by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought.

SECTION 5

NOTICE

5.1 NOTIFICATION OF PARTIES. Any notice or other communication required or permitted to be given pursuant to this Agreement shall be deemed duly given if addressed and delivered, mailed by registered mail, postage prepaid, or sent by facsimile transmission (with confirmation of receipt) to (l) ALPS Mutual Funds Services, Inc., at 370 17th Street, Suite 3100, Denver, CO 80202, Attention: Thomas Carter, Chief Financial Officer, facsimile # (303) 623-7850, (2) Nasdaq-Amex Investment Product Services, Inc., c/o The Nasdaq Stock Market, Inc., 1735 K Street, NW, Washington, DC 20006-1500, Attention: John L. Jacobs, Executive Vice President, facsimile # (202) 496-2696, and (3) the Nasdaq-100 Trust, Series 1, c/o The Bank of New York, 101 Barclay Street, New York, NY 10286, Attention: Thomas J. Centrone, facsimile # (212) 815-2948.

SECTION 6

MISCELLANEOUS

6.1 CHOICE OF LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

6.2 CAPTIONS. The captions in this Agreement are included for convenience only and in no way define or limit any of the provisions hereof or otherwise affect their construction.

6.3 SEVERABILITY. If any provisions of this Agreement shall be held or made invalid, in whole or in part, then the other provisions of this Agreement shall remain in force. Invalid provisions shall, in

accordance with this Agreement's intent and purpose, be amended, to the extent legally possible, by valid provisions in order to effectuate the intended results of the invalid provisions.

6.4 INSURANCE. The Distributor will maintain at its expense an errors and omissions insurance policy which covers services by the Distributor hereunder.

6.5 FORCE MAJEURE. In the event a party hereto is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable to any other party for any damages resulting from such failure to perform or otherwise from such causes.

6.6 COUNTERPARTS. This Agreement may be executed in 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 have caused this Agreement to be executed as of the day and year first written above.

NASDAQ-100 TRUST-sm-, SERIES 1

By: The Bank of New York, on behalf of the
Trust to be created, as Trustee of such Trust

By:  /s/ THOMAS J. CENTRONE
     ----------------------------------
     Name:     Thomas J. Centrone
     Title:    Vice President

NASDAQ-AMEX INVESTMENT PRODUCT
SERVICES, INC.

By:  /s/ JOHN L. JACOBS
     ----------------------------------
     Name:     John L. Jacobs
     Title:    Executive Vice President

ALPS MUTUAL FUNDS SERVICES, INC.

By:  /s/ EDMUND BURKE
     ----------------------------------
     Name:     Edmund Burke
     Title:    Executive Vice President

BOOK-ENTRY-ONLY UNIT INVESTMENT TRUST ISSUES

Letter of Representations
[To be Completed by Sponsor and Trustee]

Attention: General Counsel's Office
The Depository Trust Company
55 Water Street 49th Floor
New York, NY 10041-0099

Ladies and Gentlemen:

This letter sets forth our understanding with respect to certain matters relating to the above-referenced units (the "Securities"), CUSIP number 631097 10 2. The Securities of a unit investment trust ("UIT") were created by a trust indenture or other such document authorizing the issuance of the Securities dated as of March 4, 1999, between The Bank of New York, as trustee (the "Trustee") and * , as sponsor (the "Sponsor"). Sponsor is distributing the Securities through The Depository Trust Company ("DTC").

*Nasdaq-Amex Investment Product Services, Inc.

To induce DTC to accept the Securities as eligible for deposit at DTC, and to act in accordance with its Rules with respect to the Securities, Trustee makes the following representations to DTC:

1. Following the closing on the Securities on March 9, 1999, Trustee

shall utilize DTC's Fast Reject and Confirmation ("FRAC") function available on the Participant Terminal System to confirm shipment control list ("SCL"), or some other statement, such as an initial transaction statement, evidencing the issuance of Securities recorded on the Trustee's books and records in the name of Cede & Co. Trustee shall also confirm to DTC the amount of the Security recorded in the name of Cede & Co. on a daily or other periodic basis in accordance with the provisions of the Balance Certificate Agreement currently in effect between Trustee and DTC. Trustee agrees that such confirmation by Trustee shall be deemed to be a statement that there are no liens, restrictions, or adverse claims arising through the company or issuer to which the Security is or may be subject.

2. In the event of any solicitation of consents from or voting by holders of the Securities, Trustee shall establish a record date for such purposes (with no provision for revocation of consents or votes by subsequent holders) and shall send notice of such record date to DTC not less than 15 calendar days in advance of such record date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Reorganization Department at
(212) 855-5181 or (212) 855-5182, and receipt of such notices shall be confirmed by telephoning (212) 855-5202. Notices to DTC pursuant to this Paragraph by mail or by any other means shall be sent to DTC's Reorganization Department as indicated in Paragraph 6.

3. On each day on which Trustee is open for business and on which it receives an instruction originated by a DTC Participant through DTC's Deposit/Withdrawal at Custodian ("DWAC") system to increase the Participant's account by a specified number of units of interest (a "Deposit Instruction"), Trustee shall, before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Deposit Instruction through the DWAC system.

On each day on which Trustee is open for business and on which it receives an instruction originated by a Participant through DTC's Deposit/Withdrawal at Custodian ("DWAC") system to decrease the Participant's account by a specified number of units of interest (a "Withdrawal Instruction"), Trustee shall, before 6:30 p.m. (Eastern Time) that day, either approve or cancel the Withdrawal Instruction through the DWAC system.

Trustee agrees that its approval of a Deposit or Withdrawal Instruction shall be deemed to be the receipt by DTC of a new reregistered certificated security or registration of transfer to the name of Cede & Co. for the quantity of Securities evidenced by the Balance Certificate after the Deposit or Withdrawal Instruction is effected.

4. Trustee shall confirm in writing the number of units of interest represented by the Balance Certificate as often as DTC may reasonably request.

5. In the event of an offering or issuance of rights with respect to the Securities outstanding, Trustee shall send DTC's Dividend and Reorganization Departments a notice specifying: (a) the amount of and conditions, if any, applicable to such rights offering or issuance; (b) any applicable expiration or deadline date, or any date by which any action on the part of holders of such Securities is required; and (c) the date such notice shall be distributed (the "Publication Date") of such notice.

The Publication Date will be as soon as practicable after the announcement by the Company of any such offering or issuance of rights with respect to the Securities represented thereby. DTC requires that the Publication Date be but not less than 30 days nor more than 60 days prior to the related offering or issuance date, respectively.

Notices to DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Dividend Department at (212) 855-4555 and receipt of such notice shall be confirmed by telephoning (212) 855-4550. Notices to DTC pursuant to the above by mail or by any other means shall be sent to:

Supervisor, Stock Dividends Dividend Department The Depository Trust Company 55 Water Street 25th Floor New York, NY 10041-0099

Additionally, notices to DTC pursuant to this Paragraph by telecopy shall be sent to DTC's Reorganization Department at (212) 855-5259 and receipt of such notice shall be confirmed by telephoning (212) 855-5260. Notices to DTC pursuant to the above by mail or by any other means shall be sent to:

Supervisor, Rights Offerings Reorganization Department The Depository Trust Company 55 Water Street 50th Floor New York, NY 10041-0099

6. Except for termination of the UIT, the Securities will not be callable or otherwise redeemable except at the option of the holders. In the event of termination, except by vote of the holders, and to the extent possible in the event of termination by vote of the holders, Trustee shall give DTC notice of such event not less than 30 days nor more than 60 days prior to the termination date.

Such notice, if by telecopy, shall be sent to DTC's Reorganization Department at (212) 855-5488 and receipt of such notice shall be confirmed by telephoning (212) 855-5290. Notices to DTC pursuant to the above by mail or by any other means shall be sent to:

Manager, Reorganization Department Reorganization Window The Depository Trust Company 55 Water Street 50th Floor New York, NY 10041-0099

7. General notices, other than notices of distributions, to DTC shall be forwarded by telecopy to DTC's Reorganization Department at (212) 855-5488, and receipt of such notices shall be confirmed by telephoning (212) 855-5135. Such notices sent by mail or by any other means shall be sent to the address set forth in paragraph 6.

8. DTC shall provide to Sponsor or Trustee, at either's request and expense, listings of the positions of Participants ("Security Position Listings") with respect to the Securities. Sponsor or Trustee shall provide DTC's Proxy Unit with a written request indicating: (a) the CUSIP number;
(b) the purpose of the request; and (c) the request dates of such listing(s). Sponsor or Trustee will also provide DTC with such exemplars of signatures and authorizations to act as may reasonably be deemed necessary by DTC to permit DTC to discharge its obligations to its Participants and regulatory authorities upon DTC's request.

Requests for Security Position Listings shall be sent to DTC's Reorganization Department by telecopy at (212) 855-5183 and receipt of such requests shall be confirmed by telephoning (212) 855-5200. Requests by mail or any other means shall be addressed to:

Supervisor, Proxy Unit Reorganization Department The Depository Trust Company 55 Water Street 50th Floor New York, NY 10041-0099

9. All notices and payment advices sent to DTC shall contain the CUSIP number of the Securities and the accompanying description of such Securities as indicated on Schedule A hereto.

10. In the event of a distribution or payment with respect to the Securities, Trustee shall establish a record date for such purposes and shall send notice to DTC not less than 15 calendar days in advance of such record date. Trustee shall also notify DTC of the distribution date for any distribution of income with respect to the Securities. On the record date, Trustee shall notify DTC of the amount per unit of any such distribution. This notice shall be marked "TIME CRITICAL" and forwarded by telecopy to DTC's Dividend Department at (212) 855-4555 or by hand delivery (with receipt) to:

Manager, Announcements Dividend Department The Depository Trust Company 55 Water Street 25th Floor New York, NY 10041-0099

11. After establishing the dividend or distribution payment to be made on the Securities in question, Trustee will notify DTC's Dividend Department of the payment and payment date not less than five business days prior to the effective date for such transaction.

12. Trustee shall provide a written notice of dividend payment information to a standard dividend announcement service subscribed to by DTC as soon as the information is available. Trustee shall also provide such notice directly to DTC electronically, as previously arranged by Trustee and DTC, as soon as the payment information is available. If electronic transmission has not been arranged, such notice shall be sent by telecopy to DTC's Dividend Department at (212) 855-4555 OR (212) 855-

4556, and receipt of such notice shall be confirmed by telephoning (212) 855-4550. Notice to DTC pursuant to the above by mail or by any other means shall be sent to:

Manager, Announcements Dividend Department The Depository Trust Company 55 Water Street 25th Floor New York, NY 10041-0099

13. Trustee shall provide DTC, no later than 12:00 noon (Eastern Time) on each payment date, automated notification of CUSIP-level detail. If the circumstances prevent the funds paid to DTC from equaling the dollar amount associated with the detail payments by 12:00 noon (Eastern Time), Trustee must provide CUSIP-level reconciliation to DTC no later than 2:30 p.m. (Eastern Time). Reconciliation can be provided by automated means or written format.

14. Dividend payments and distributions shall be received by Cede & Co. as nominee of DTC, or its registered assigns, in same-day funds no later than 2:30 p.m. (Eastern Time) on each payment date. Absent any other arrangements between Trustee and DTC, such funds shall be wired as follows:

The Chase Manhattan Bank
ABA # 021 000 021
For credit to a/c Cede & Co.
c/o The Depository Trust Company
Dividend Deposit Account # 066-026776

15. DTC may direct Trustee to use any other number or address as the number or address to which notices or payments of dividends or distributions may be sent.

16. In the event that Sponsor determines that beneficial owners of Securities shall be able to obtain credit for Securities, Sponsor shall cause Trustee to notify DTC of a withdrawal of securities through DWAC and Trustee shall credit Participants holding Securities in their accounts. Subsequently, Participants shall credit any beneficial owners of Securities.

17. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to Trustee (at which time DTC will confirm with Trustee the aggregate principal amount of Securities outstanding). Under such circumstances, at DTC's request, Sponsor and Trustee shall cooperate fully with DTC by taking appropriate action to confirm position and credit any DTC Participant having Securities credited to its DTC accounts.

18. Nothing herein shall be deemed to require Trustee to advance funds on behalf of Sponsor.

19. This LETTER OF REPRESENTATIONS may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original, but all such counterparts together shall

constitute but one and the same instrument.

20. This LETTER OF REPRESENTATIONS is governed by, and shall be constructed in accordance with, the laws of the State of New York without giving effect to principles of conflicts of law.

21. The following rider(s), attached hereto, are hereby incorporated into this LETTER OF REPRESENTATIONS:

NOTES:

A. IF THERE IS AN SPONSOR (AS DEFINED IN THIS LETTER OF REPRESENTATIONS), SPONSOR, AS WELL AS TRUSTEE, MUST SIGN THIS LETTER. IF THERE IS NO SPONSOR, IN SIGNING THIS LETTER TRUSTEE ITSELF UNDERTAKES TO PERFORM ALL OF THE OBLIGATIONS SET FORTH HEREIN.

B. SCHEDULE B CONTAINS STATEMENTS THAT DTC BELIEVES ACCURATELY DESCRIBE DTC, THE METHOD OF EFFECTING BOOK- ENTRY TRANSFERS OF SECURITIES DISTRIBUTED THROUGH DTC, AND CERTAIN RELATED MATTERS.

Very truly yours,

     /s/ JOHN L. JACOBS
By: ---------------------------------------------
                  (Authorized Officer's Signature)

    /s/ THOMAS J. CENTRONE
By: ---------------------------------------------
                  (Authorized Officer's Signature)

Received and Accepted:
THE DEPOSITORY TRUST COMPANY

By: ------------------------------------

cc: Underwriter
Underwriter's Counsel

CUSIP Number                   Share Total                   Offering ($) Value
------------                   -----------                   ------------------
631097 10 2                      150,000                       $14,497,769.75

1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC.
[If, however, the aggregate principal amount of [any] issue exceeds $200 million, one certificate will be issued with respect to each $200 million of principal amount and an additional certificate will be issued with respect to any remaining principal amount of such issue.]

2. DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, 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 holds securities that its participants ("Participants") deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to DTC and its Participants are on file with the Securities and Exchange Commission.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC's record. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC's records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct

Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners, or in the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.]

[6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.]

7. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy to Sponsor as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts, upon DTC's receipt of funds and corresponding detail information from Sponsor or Trustee, on payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Trustee, or Sponsor, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividends to Cede & Co. is the responsibility of Sponsor or Trustee, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants.

[9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing Agent or] Trustee, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to [Tender/Remarketing Agent or] Trustee. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC's records and followed by a book-entry credit of tendered securities to
[Tender/Remarketing Agent's or] Trustee's DTC account.]

10. DTC may discontinue providing its services as securities depository with respect to the Securities at any time by giving reasonable notice to Sponsor or Trustee. Under such circumstances, in the event that a successor securities depository is not obtained, Security certificates are required to be printed and delivered.

11. Sponsor may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered.

12. The information in this section concerning DTC and DTC's book-entry system has been obtained from sources that Sponsor believes to be reliable, but Sponsor takes no responsibility for the accuracy thereof.

AGREEMENT FOR THE NASDAQ-100 INDEX -Registered Trademark-

THIS AGREEMENT, dated as of August 7, 1998, is made by and between The Nasdaq Stock Market, Inc. (NASDAQ), a Delaware Corporation which is a wholly-owned subsidiary of the National Association of Securities Dealers, Inc. (NASD) (NASD with its affiliates (other than the Licensee) are collectively referred to as the CORPORATIONS), whose principal offices are located at 1735 K Street, N.W., Washington, D.C. 20006, and Investment Product Services, Inc., subsequently renamed Nasdaq-Amex Investment Product Services, Inc. (LICENSEE), a Delaware corporation which is a wholly-owned subsidiary of Nasdaq.

WHEREAS, Nasdaq possesses certain rights in the Nasdaq-100 Index -Registered Trademark- (INDEX); and

WHEREAS, Nasdaq possesses certain rights to Nasdaq -Registered Trademark-, Nasdaq-100 -Registered Trademark-, the Nasdaq-100 Index -Registered Trademark-, The Nasdaq Stock Market -Registered Trademark-, Nasdaq GOLD -SM-, Nasdaq-100 Shares -SM-, and Nasdaq-100 Trust -SM- as trade names, trademarks or service marks (MARKS); and

WHEREAS, Nasdaq determines the components of the Index, calculates, maintains, and disseminates the Index; and

WHEREAS, Licensee desires to use and Nasdaq desires to license the right to use the Index as the basis of the product designated as Nasdaq-100 Shares -SM- and described in Attachment II(a) (the DERIVATIVE PRODUCT); and

WHEREAS, Licensee is legally authorized to issue, enter into, write, sell, purchase and/or renew (ISSUE, ISSUING, OR ISSUANCE) the Derivative Product, and the Derivative Product will be Issued as legally required under applicable law; and Licensee desires to use and Nasdaq desires to license the Marks in connection with the Issuance, exchange or market trading, redemption,

marketing and promotion of the Derivative Product and in connection with making disclosure about the Derivative Product under applicable laws, rules, and regulations in order to describe the Derivative Product and indicate that Nasdaq is the source of the Index;

NOW THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, Licensee and Nasdaq, intending to be legally bound, agree as follows:

Section 1. TERM AND LIFE OF AGREEMENT.

1.1 The initial term of this Agreement is from the date of this Agreement to the date which is five years from the date on which trading of the Derivative Product commences (such date hereinafter referred to as the EFFECTIVE DATE); provided, that Licensee may extend the initial term for an additional five-year period by giving Nasdaq Notice (as defined in Section 24) of its decision to do so at least 90 days prior to the date that is five years after the Effective Date; and provided further, that neither party has terminated this Agreement earlier in accordance with the terms of this Agreement. Licensee shall give Notice to Nasdaq of the date on which trading of the Derivative Product commences. The period of time commencing on the date of this Agreement and ending on the date of termination of this Agreement is referred to in this Agreement as the TERM of this Agreement. Each anniversary of the Effective Date during the Term of this Agreement is referred to in this Agreement as an ANNIVERSARY. Each period between the Effective Date or an Anniversary and the next succeeding Anniversary or the date of termination of the Term of this Agreement is referred to in this Agreement as a CONTRACT YEAR.

1.2 The LIFE for the Derivative Product is until one year after the date of the redemption or cancellation of the last of the Derivative Product Issued under this Agreement.

Section 2. SCOPE OF LICENSE. Nasdaq hereby grants Licensee a non-exclusive, non-transferable and non-sub-licensable (except as provided herein) license (i) to use the Index as the basis of the Derivative Product (as defined in Attachment II(a)) Issued by Licensee during the Term of this Agreement and (ii) to use and refer to the Marks in materials referring or relating to the Derivative Product during the Life of this Agreement in connection with the exchange or market trading, marketing, and promotion of the Derivative Product and in connection with making such disclosure about the Derivative Product as Licensee deems necessary or desirable under any applicable laws, rules, or regulations. No license is granted to use the Index or Marks for any other use, including as part of a news service or for collateral products, without Consent of Nasdaq. During the Life of this Agreement, no further Consent of Nasdaq need be obtained for use of the Index or Marks by any syndicator or underwriter of an offering of the Derivative Product, or for any secondary or other resale of the Derivative Product, provided such secondary or other resale, syndication, or underwriting is legal under applicable law.

Section 3. FEES. Licensee shall pay Nasdaq the fees specified in Attachment II(b) (FEES), in immediately available United States funds. Where there are Annual Fees, such are due as of the Effective Date of this Agreement, or on each Anniversary thereof. Fees established as due by a particular date, are due by that date. All other Fees are due within 30 days of the date established for the production of the report or invoice upon which the Fee is based. Any amount not paid within 30 days after its due date is subject to interest at the rate of 12% per month (or the highest rate permitted by law) until paid, plus costs of collection, including reasonable in-house and outside attorneys' fees. Licensee shall also assume full and complete responsibility for the payment of any taxes, charges or assessments imposed on Licensee, any sub-licensee, or the Corporations by any foreign or domestic national, state, provincial, local or other government

bodies, or subdivisions thereof, and any penalties or interest (other than personal property or income taxes imposed on Nasdaq) relating to this Agreement. In addition, if Licensee is required by applicable law to deduct or withhold any such tax, charge or assessment from the amounts due Nasdaq, then such amounts due shall be increased so that the net amount actually received by Nasdaq after the deduction or withholding of any such tax, charge, or assessment will equal one hundred percent (100%) of the charges specified.

Section 4. AUDIT RIGHTS. During the Life of this Agreement, Nasdaq shall have the right, with reasonable Notice to Licensee, during normal business hours, to audit on a Confidential basis, any relevant books and records of Licensee or its sub-licensees to ensure that the type and amount of Fees calculated or stated to be payable to Nasdaq are complete and accurate. Licensee shall bear the costs of such audit (including reasonable in-house and outside accountant and attorneys' fees, if incurred) if Nasdaq determines that Licensee (together with its sub-licensees) has not paid, calculated, and/or reported Fees of more than five percent of that due Nasdaq under this Agreement.

Section 5. REVIEW OF MATERIALS.

5.1. Licensee shall submit to Nasdaq for review a copy of any material submitted to any regulatory body or governmental agency, which is required in order to obtain approval for the Issuance, exchange or market trading, or resale of the Derivative Product. To the extent practicable, such materials or a copy of the then best draft shall be given to Nasdaq at least 3 business days before their submittal to the body or agency (but in any event, a copy of the final document shall be sent by Notice to Nasdaq no later than 3 business days after submittal to the agency or body).

5.2. Licensee shall give Nasdaq a copy within 3 business days of receipt, of any notice, correspondence, process, or other material received from any regulatory body, governmental agency, or any court, during or after the approval process which indicates that the Derivative Product is or might be in violation of, or is otherwise not subject to approval because of, any law, or any rule, regulation, or order of any applicable body or agency.

5.3. Licensee shall provide Nasdaq with a copy of any informational or promotional materials referring or relating to the offering of the Derivative Product, including any prospectus, offering memorandum, registration statement, circular, advertisement, or brochure at least 3 business days prior to its initial dissemination to third parties. Licensee need not resupply a copy of any material which is substantially like material previously submitted to Nasdaq and is identical as it describes the Corporations or their operations, the markets operated by the Corporations, the Index or the Marks, or the authorization, review, or endorsement by the Corporations of the Derivative Product.

5.4. If Nasdaq reasonably objects by Notice or fax transmission to Licensee to any material as it describes the Corporations or their operations, the markets operated by the Corporations, the Index or the Marks, or the authorization, review, or endorsement of the Corporations of the Derivative Product, Licensee shall alter or withdraw such material to Nasdaq's satisfaction within 30 days of receipt of Nasdaq=s objection. If Licensee refuses to so alter or withdraw, Nasdaq may terminate the Term of this License upon 30 days Notice to Licensee, unless cure is made within that period.

Section 6. PROTECTION OF MARKS. Nasdaq will use reasonable efforts to maintain and protect the value of its Index and Marks. Except as provided in
Section 11, nothing shall obligate Nasdaq to undertake an action or settlement, or refrain from an action or settlement with respect

to any particular potential, threatened, or actual infringement of its Index or Marks. Licensee shall cooperate with Nasdaq in maintenance, registrations, and policing of Nasdaq's rights in the Index and the Marks. Such cooperation is not a waiver of, nor shall it require either party to violate its attorney/client, work product, or other privilege.

Section 7. CALCULATION OF INDEX.

7.1. Licensee agrees that the Index is a product of the selection, coordination, arrangement, and editing of Nasdaq and that such efforts involve the considerable expenditure by Nasdaq of time, effort, and judgment. As between the parties, Licensee recognizes that Nasdaq is the rightful licensor of the Index and the Marks. No license is granted to Licensee to calculate the Index. While Nasdaq will use reasonable efforts based on sources deemed reliable in calculating the Index, NASDAQ DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA USED TO CALCULATE THE INDEX OR DETERMINE THE INDEX COMPONENTS. NASDAQ DOES NOT GUARANTEE THE UNINTERRUPTED OR UN-DELAYED CALCULATION OR DISSEMINATION OF THE INDEX. NASDAQ DOES NOT GUARANTEE THAT THE INDEX ACCURATELY REFLECTS PAST, PRESENT, OR FUTURE MARKET PERFORMANCE. Nasdaq is free to pick and alter the components and method of calculation of the Index without Consent of Licensee, the Nasdaq-100 Trust, or the beneficial owners of units of beneficial interest in the Nasdaq-100 Trust.

7.2. Nasdaq shall give Licensee 90 days Notice of the cessation of public calculation or dissemination of the Index. However, Nasdaq, in its sole discretion, shall either continue to provide Licensee with a calculation of the Index for the Life of this Agreement, or, on a Confidential basis, provide Licensee with the then applicable method of calculation of the Index.

Licensee may terminate the Term of this Agreement on the date Noticed by Nasdaq for the cessation or dissemination of the Index.

Section 8. MARKING OF LICENSEE'S USE.

8.1. In any prospectus, offering memorandum, contract, or in some other conspicuous written manner, for the Derivative Product to each third party involved in such Issuance, Licensee shall insure that substantially the following language appears (in conspicuous type, such as at least 11 point type) so as to be enforceable under applicable local law(s):

The Nasdaq-100 -Registered Trademark-, Nasdaq-100 Index -Registered Trademark-, Nasdaq -Registered Trademark-, The Nasdaq Stock Market -Registered Trademark-, Nasdaq-100 Shares -SM-, and Nasdaq-100 Trust -SM- are trademarks and service marks of The Nasdaq Stock Market, Inc. (NASDAQ) and have been licensed for use for certain purposes by [LICENSEE] (LICENSEE) pursuant to a License Agreement with Nasdaq. The Nasdaq-100 Index -Registered Trademark- (the INDEX) is determined, composed, and calculated by Nasdaq without regard to the Licensee, the Nasdaq-100 Trust, or the beneficial owners of Nasdaq-100 Shares. Nasdaq has complete control and sole discretion in determining, comprising, or calculating the Index or in modifying in any way its method for determining, comprising, or calculating the Index in the future.

NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA USED TO CALCULATE THE INDEX OR DETERMINE THE INDEX COMPONENTS. NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THE UNINTERRUPTED OR UN-DELAYED CALCULATION OR DISSEMINATION OF THE INDEX. NASDAQ AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THAT

THE INDEX ACCURATELY REFLECTS PAST, PRESENT, OR FUTURE MARKET PERFORMANCE. NASDAQ AND ITS AFFILIATES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE LICENSEE, THE NASDAQ-100 TRUST, BENEFICIAL OWNERS OF NASDAQ-100 SHARES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. NASDAQ AND ITS AFFILIATES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. NASDAQ AND ITS AFFILIATES, OTHER THAN THE SPONSOR, MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND BEAR NO LIABILITY WITH RESPECT TO NASDAQ-100 SHARES. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL NASDAQ OR ITS AFFILIATES 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.

8.2. In the product description for the Derivative Product made available by the American Stock Exchange to members and member organizations for distribution by them to customers purchasing the Derivative Product pursuant to American Stock Exchange Rule 1000, Licensee shall insure that substantially the following language be included:

The Nasdaq-100 -Registered Trademark-, Nasdaq-100 Index -Registered Trademark-, Nasdaq -Registered Trademark-, The Nasdaq Stock Market -Registered Trademark-, Nasdaq-100 Shares -SM-, and Nasdaq-100 Trust -SM- are trademarks and service marks of The Nasdaq Stock Market, Inc. (NASDAQ) and have been licensed for use for certain purposes by [LICENSEE] (LICENSEE) pursuant to a License Agreement with Nasdaq. The Nasdaq-100 Index -Registered Trademark- (the INDEX) is determined, composed, and calculated by Nasdaq without regard to the Licensee, the Nasdaq-100 Trust, or the beneficial owners of

Nasdaq-100 Shares. Nasdaq does not guarantee the accuracy and/or completeness of the Nasdaq-100 Index or any data included therein. Nasdaq and the American Stock Exchange (the EXCHANGE) make no express or implied warranties, and disclaim all warranties of merchantability or fitness for a particular purpose with respect to the Nasdaq-100 Index, its use, the results to be obtained from its use, or any data included therein. Nasdaq and the Exchange shall have no liability for any lost profits or special, punitive, incidental, indirect, or consequential damages, even if notified of the possibility of such damages. Nasdaq and the Exchange shall have no liability for any damages, claims, losses or expenses caused by any errors or delays in calculating or disseminating the Nasdaq-100 Index.

In addition, Licensee shall cause the American Stock Exchange to file a rule, whose text is acceptable to Nasdaq, providing for disclaimers of liability by the Corporations with respect to the Derivative Product and the use of the Index.

8.3. In all other materials relating or referring to the Derivative Product, Licensee shall include at least this much of the above language, or similar formulation:

"Nasdaq" and related marks are trademarks or service marks of The Nasdaq Stock Market, Inc. (NASDAQ, and collectively with its affiliates except Licensee, the CORPORATIONS) and have been licensed for certain purposes by Licensee. The Nasdaq-100 Index is composed and calculated by Nasdaq without regard to Nasdaq-100 Shares -SM-. The Corporations make no warranty, express or implied, and bear no liability with respect to Nasdaq-100 Shares. The Corporations make no warranty, express or implied, and bear no liability with respect to the Nasdaq-100 Index, its use, or any data included therein.

Section 9. SUB-LICENSEES. Licensee agrees that, prior to the Issuance of the Derivative Product, it will obtain an agreement with any person that Issues the Derivative Product (other than Licensee) which is enforceable under applicable local law and contains the provisions set forth in Attachment I, modified solely to make them enforceable under applicable local law(s).

Licensee may not waive any provision of the sub-license or of this Agreement without Consent of Nasdaq. Licensee shall assume all responsibility for and will hold harmless and indemnify the Corporations against any action or inaction by a sub-licensee as if such action or inaction were that of the Licensee.

Section 10. LIMITED WARRANTY.

10.1. Nasdaq warrants that it will calculate the Index in accordance with its then applicable method for calculation of the Index. LICENSEE'S SOLE REMEDY IN EVENT OF A FAILURE OF THIS WARRANTY IS TO HAVE NASDAQ RECALCULATE THE INDEX FOR THE AFFECTED TIMES ACCORDING TO NASDAQ'S APPLICABLE METHOD FOR CALCULATION OF THE INDEX AT THE AFFECTED TIME(S). IN THE EVENT THAT NASDAQ IS UNABLE OR UNWILLING TO RECALCULATE THE INDEX FOR AN AFFECTED PERIOD OF OVER SEVEN CONSECUTIVE BUSINESS DAYS, NASDAQ WILL CREDIT TO THE LICENSEE THE PORTION OF FEES CALCULATED IN SECTION 3. THE CORPORATIONS DO NOT REPRESENT OR WARRANT THAT THE INDEX OR THE MEANS BY WHICH NASDAQ CALCULATES THE INDEX IS FREE OF DEFECTS. THE CORPORATIONS DO NOT REPRESENT OR WARRANT THE TIMELINESS, SEQUENCE, ACCURACY OR COMPLETENESS OF THE CALCULATION OF THE INDEX, OR THAT THE INDEX WILL MEET LICENSEE'S REQUIREMENTS. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL CONDITIONS OR WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE, ANY IMPLIED WARRANTY ARISING FROM TRADE USAGE,

COURSE OF DEALING, OR COURSE OF PERFORMANCE, AND OF ANY OTHER WARRANTY OR OBLIGATION ON THE PART OF THE CORPORATIONS.

Section 11. INDEMNIFICATION.

11.1. Nasdaq warrants and represents that it has the right to grant the rights to use the Index and Marks specified in this Agreement and that, to the best of its knowledge, the license shall not infringe the title or any patent, copyright, trade secret, trademark, service mark, or other proprietary (INTELLECTUAL PROPERTY) right of any third party. Nasdaq will as its sole and entire liability and obligation to Licensee (and any third party or sub-licensee): defend, indemnify, and hold harmless (INDEMNIFY) Licensee (including its and its sub-licensee's officers, directors, employees, and agents) against any and all claims, demands, actions, suits, or proceedings (DISPUTES) asserting that the Index or any Mark infringes any Intellectual Property right of any third party and Nasdaq will pay the third party the total amount of any award, judgment, or settlement (including all damages however designated) awarded to such third party resulting from the Dispute to the extent caused by failure of Nasdaq's warranty.

11.2. Licensee agrees to Indemnify Corporations (including its and their officers, directors, employees, and agents) from any and all Disputes as the result of Licensee=s (including any sub-licensee) failure to fulfill its obligations under this Agreement, any Licensee (including any sub-licensee) use of the Index or any Mark that is not expressly permitted by this Agreement, claims relating to or arising from the Derivative Product, or any other matter relating or arising out of this Agreement, except to the extent directly caused by actions of the Corporations, and will pay the third party the total amount of any award, judgment, or settlement (including all damages however designated) awarded such third party resulting from such Dispute except to the extent directly caused by actions of the Corporations.

11.3. The right to be Indemnified shall apply to a dispute only if:

(a) the party seeking indemnification promptly, and within no more than 5 calendar days of its receipt of notice of such Dispute, gives Notice to the other party of the Dispute;

(b) the party seeking to be Indemnified cooperates fully with the other in the defense thereof (such cooperation does not require and is without waiver by either party of attorney/client, work product, or other privilege);

(c) the Indemnifying party has sole control of the defense and all related settlement negotiations.

11.4. In the event of a Dispute involving infringement or if in Nasdaq's opinion such a Dispute is likely to occur, or if the use of the Index or Mark is enjoined, Nasdaq may, at its sole option and expense, procure for Licensee the right to continue using the Index or Mark, replace or modify the Index or Mark to become non-infringing, or terminate the Term of the Agreement.

Section 12. LIMITATION OF LIABILITY. EXCEPT FOR LIABILITY RESULTING FROM THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE CORPORATIONS AND EXCEPT TO THE EXTENT STATED IN SECTIONS 11, OR 15, THE TOTAL AMOUNT OF THE CORPORATIONS' LIABILITY FOR CLAIMS OR LOSSES BASED UPON, ARISING OUT OF, RESULTING FROM OR IN ANY WAY CONNECTED WITH THE PERFORMANCE OR BREACH OF THIS AGREEMENT, WHETHER BASED UPON CONTRACT, TORT, WARRANTY, OR OTHERWISE, SHALL IN NO CASE EXCEED THE GREATER OF ONE YEAR'S FEES UNDER THIS AGREEMENT OR $20,000. THE ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT THE CORPORATIONS' LIABILITY UNDER THIS AGREEMENT. BOTH PARTIES UNDERSTAND AND AGREE THAT THE TERMS OF THIS AGREEMENT

REFLECT A NEGOTIATED AND REASONABLE ALLOCATION OF RISK AND LIMITATIONS GIVEN COMMERCIAL REALITIES OF THE TRANSACTION.

Section 13. CONSEQUENTIAL DAMAGES. EXCEPT AS NOTED IN SECTION 11 AND EXCEPT FOR A BREACH OF SECTION 15, THE CORPORATIONS SHALL NOT BE LIABLE TO THE LICENSEE, ANY SUB-LICENSEE, OR ANY OTHER PERSON FOR ANY LOST PROFITS, ANTICIPATED PROFITS, LOSS BY REASON OF SHUTDOWN IN OPERATION OR INCREASED EXPENSES OF OPERATION, LOSS OF GOODWILL, FOR LOSS CAUSED IN SALE OF, OR PURCHASE OF, THE DERIVATIVE PRODUCT, CONSEQUENTIAL, INCIDENTAL, INDIRECT, PUNITIVE, OR SPECIAL DAMAGES, EVEN IF THE CORPORATIONS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

Section 14. FORCE MAJEURE. Notwithstanding any other term or condition of this Agreement, neither Nasdaq nor Licensee shall be obligated to perform or observe its obligations undertaken in this Agreement (except for obligations to make payments hereunder) if prevented or hindered from doing so by any circumstances beyond its control, including, without limitation, acts of God, perils of the sea and air, fire, flood, drought, war, explosion, sabotage, terrorism, embargo, civil commotion, acts of any governmental body, supplier delays, communications, or power failure, equipment or software malfunction, and labor disputes.

Section 15. CONFIDENTIALITY. Each party shall protect information declared by the other to be CONFIDENTIAL or PROPRIETARY. In fulfilling its confidentiality obligations, each party shall use a reasonable standard of care, at least the same standard of care which it uses to protect its own similar confidential or proprietary information. All confidential or proprietary information must be conspicuously marked PROPRIETARY or CONFIDENTIAL. Information revealed

orally becomes subject to protection when related to marked written materials or when designated as PROPRIETARY or CONFIDENTIAL as long as the designation is confirmed in writing within 10 calendar days of the designation. Either party (including the Corporations) may disclose information to the extent demanded by a court, revealed to a government agency with regulatory jurisdiction over the party (including the Corporations), or in the party's regulatory responsibilities over its members, associated persons, issuers, or others under the Exchange Act of 1934, or similar applicable law. The obligation of non-disclosure shall not extend to: (1) information which is then already in the possession of the party (including the Corporations) while not under a duty of non-disclosure; (2) information which is generally known or revealed to the public or within the applicable industry; (3) information which is revealed to the party (including the Corporations) by a third party unless the party (including the Corporations) knows that such third party is under a duty of non-disclosure; or (4) information which that party (including the Corporations) develops independently of the disclosure. Each copy, including its storage media, shall be marked with all notices which appear on the original.

The obligation of non-disclosure shall survive for a period of three years from the date of disclosure.

Section 16. NON-USE OF NASD NAME AND MARKS. Except as provided hereunder, Licensee shall not use the names National Association of Securities Dealers, Inc. or "NASD", in any advertising or promotional media without the prior written consent of Nasdaq. Except as provided hereunder, Licensee shall not use any trademark, service mark, copyright, or patent of the Corporations, registered or unregistered, without written consent of Nasdaq.

Section 17. SURVIVAL OF PROVISIONS. The terms of this Agreement shall apply to any rights that survive through the Life of this Agreement, or the cancellation, termination, or rescission of

this Agreement, namely--Confidentiality, Non-Use of NASD Name and Marks, Indemnification, and any warranties.

Section 18. CANCELLATION.

18.1. Either party may elect, without prejudice to any other rights or remedies, to terminate the Term this Agreement, upon 30 days notice with an opportunity to cure within the stated period, if the other party has failed to perform any material obligation under this Agreement.

18.2. Either party may elect, without prejudice to any other rights or remedies, to terminate the Term of this Agreement without notice, if a petition in bankruptcy has been filed by or against the other party or the other party has made an assignment for the benefit of creditors, or a receiver has been appointed for the other party or any substantial portion of other party's property, or the other party's or its officers or directors takes action approving or makes an application for any of the above.

18.3 Licensee represents and warrants that at each time there is any Issuance of the Derivative Product, that it and each of its sub-licensees and involved entities shall have all applicable authority to Issue such Derivative Product and that the Derivative Product is Issued strictly in accordance with all applicable legal requirements. Nasdaq may elect, without prejudice to any other rights or remedies, to terminate the Term of this Agreement with reasonable notice with an opportunity to cure within such period, if Nasdaq reasonably believes that any Derivative Product is illegal or has been illegally Issued, or if the Licensee or any sub-licensee or any involved entity does not have the power to Issue any of the Derivative Product which it has or is attempting to Issue.

18.4. Either party may elect, without prejudice to any other rights or remedies, to terminate the Term of this Agreement with 30 days Notice (or in the event of an emergency, with such Notice as is practicable), if either party's ability to perform its obligations under this Agreement is substantially impaired by any new statute, or new rule, regulation, order, opinion, judgment, or injunction of the Securities and Exchange Commission (SEC), a court, an arbitration panel, or governmental body or self-regulatory organization with jurisdiction over the party.

18.5. Licensee acknowledges that NASD is registered with the SEC as a registered national securities association pursuant to Section 15A of the United States Securities and Exchange Act (ACT) and that as such NASD has a statutory obligation to protect investors and the public interest, that Section 19(g)(1) of the Act mandates that NASD, as a self-regulatory organization, comply with the provisions of the Act, the rules and regulations thereunder, and its own rules. Accordingly, Licensee agrees that Nasdaq, as a subsidiary of NASD, when required to do so by NASD, may by written Notice to Licensee unilaterally limit or terminate the Term of this Agreement or Licensee's right to Issue the Derivative Product. Licensee shall have available to it those procedural protections provided by the Act and applicable rules thereunder.

Section 19. SUBSEQUENT PARTIES; LIMITED RELATIONSHIP. The Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective permitted successors or assigns. Licensee shall not assign this Agreement (including by operation of law) without the written consent of Nasdaq. Nothing in the Agreement, express or implied, is intended to or shall (a) confer on any person other than the parties hereto (and any of the Corporations), or their respective permitted successors or assigns, any rights to remedies under or by reason of this Agreement; (b) constitute the parties hereto partners or participants in a joint venture; or (c) appoint one party the agent of the other.

Section 20. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof, and supersedes all prior negotiations, communications, writings, and understandings.

Section 21. GOVERNING LAW. This Agreement shall be deemed to have been made in the United States, District of Columbia and shall be construed and enforced in accordance with, and the validity and performance hereof shall be governed by, the laws of the District of Columbia, without reference to principles of conflicts of laws thereof.

Licensee and Nasdaq each hereby consent to submit to the jurisdiction of the courts for or in the District of Columbia in connection with any action or proceeding instituted relating to this Agreement.

Section 22. AUTHORIZATION. This Agreement shall not be binding upon a party unless executed by an authorized officer of that party. Licensee, Nasdaq, and the persons executing this Agreement represent that such persons are duly authorized by all necessary and appropriate corporate or other action to execute this Agreement on behalf of Nasdaq or Licensee.

Section 23. HEADINGS. Section headings are included for convenience only and are not to be used to construe or interpret this Agreement.

Section 24. NOTICES. All notices, invoices, and other communications required to be given in writing under this Agreement shall be directed to the persons identified in subsections (a) and (b) below and shall be deemed to have been duly given upon actual receipt by the parties, or upon constructive receipt if sent by certified mail, return receipt requested (as of the date of signature or of first refusal of the return receipt), or by any other delivery method which obtains a signed delivery receipt, addressed to the person named below to the following addresses or to such other

address as any party hereto shall hereafter specify by written notice to the other party or parties hereto (NOTICE):

(a) if to Licensee:

Name:             John L.  Jacobs
Title:            Executive Vice President
Address:          Nasdaq-Amex Investment Product Services, Inc.
                  c/o The Nasdaq Stock Market, Inc.
                  1735 K Street, N.W.
                  Washington, D.C. 20006

Telephone #:      (202) 496-2552

(b) if to Nasdaq:

Name:             J. Patrick Campbell
Title:            Executive Vice President and
                  Chief Operating Officer
Address:          The Nasdaq Stock Market, Inc.
                  11th Floor
                  1735 K Street, N.W.
                  Washington, D.C. 20006

Telephone #:      (202) 728-8200

With, in the event of notices of Dispute or default, a required copy to:

The Nasdaq Stock Market, Inc. 1735 K Street, N.W.

Washington, D.C. 20006

Attn: Office of General Counsel - Nasdaq Contracts Group

Section 25. AMENDMENT, WAIVER, AND SEVERABILITY. Except as otherwise provided herein, no provision of this Agreement may be amended, modified, or waived, unless by an instrument in writing executed by a duly authorized officer of the party against whom enforcement of such amendment, modification, or waiver is sought (CONSENT).

25.1. No failure on the part of Nasdaq or Licensee to exercise, no delay in exercising, and no course of dealing with respect to any right, power, or privilege under this Agreement shall

operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege under this Agreement.

25.2. If any of the provisions of this Agreement, or application thereof to any person or circumstance, shall to any extent be held invalid or unenforceable, the remainder of this Agreement, or the application of such terms or provisions to persons or circumstances other than those as to which they are held invalid or unenforceable, shall not be affected thereby and each such term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

Attachment I.              -- Nasdaq-100 Index -Registered Trademark-
                              Sub-license Agreement
Attachment II(a).          -- Product Description
           II(b).          -- Fee Schedule

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers.

INVESTMENT PRODUCT SERVICES, INC.
(Subsequently re-named Nasdaq-Amex Investment Product Services, Inc.)
(LICENSEE)

By: /s/ JOHN L. JACOBS
  -----------------------------
Name:  JOHN L. JACOBS
     --------------------------
Title: EXECUTIVE VICE PRESIDENT
     --------------------------
         AUTHORIZED OFFICER

THE NASDAQ STOCK MARKET, INC.
(NASDAQ)

By: /s/ L. BRIAN HOLLAND
  -----------------------------
Name:   L. BRIAN HOLLAND
     --------------------------
Title:  EXECUTIVE VICE PRESIDENT
     --------------------------
        AUTHORIZED OFFICER

ATTACHMENT I

NASDAQ-100 INDEX -Registered Trademark- SUB-LICENSE AGREEMENT

THIS AGREEMENT, dated as of ___________, is made by and among Investment Product Services, Inc., subsequently renamed Nasdaq-Amex Investment Product Services, Inc. (LICENSEE), a Delaware corporation, The Nasdaq Stock Market, Inc. (NASDAQ), a Delaware Corporation which is a wholly-owned subsidiary of the National Association of Securities Dealers, Inc. (NASD) (NASD with its affiliates (other than the Licensee) are collectively referred to as the CORPORATIONS), whose principal offices are located at 1735 K Street, N.W., Washington, D.C. 20006 and ______________________________ (SUB-LICENSEE), whose principal offices are located at _____________________________________________.

WHEREAS, Nasdaq possesses certain rights in the Nasdaq-100 Index -Registered Trademark- (INDEX); and

WHEREAS, Nasdaq possesses certain rights to Nasdaq -Registered Trademark-, Nasdaq-100 -Registered Trademark-, the Nasdaq-100 Index -Registered Trademark-, The Nasdaq Stock Market -Registered Trademark-, Nasdaq GOLD -SM-, Nasdaq-100 Shares -SM-, and Nasdaq-100 Trust -SM- as trade names, trademarks or service marks (MARKS); and

WHEREAS, Nasdaq determines the components of the Index, calculates, maintains, and disseminates the Index; and

WHEREAS, Nasdaq and Licensee have previously entered into a separate agreement concerning use of the Index and Marks relating to a certain Derivative Product (LICENSE AGREEMENT); and

WHEREAS, Sublicensee wishes to Issue the Derivative Product and in connection therewith to use and refer to the Index and Marks in connection with the exchange or market trading, marketing and promotion of the Derivative Product; and

WHEREAS, Licensee is legally authorized to issue, enter into, write, sell, purchase and/or renew (ISSUE, ISSUING, OR ISSUANCE) the Derivative Product, and the Derivative Product will be Issued as legally required under applicable law;

NOW THEREFORE, in consideration of the premises and the mutual covenants and conditions herein contained, Licensee, Sub-Licensee, and Nasdaq, intending to be legally bound, agree as follows:

Section 1. SCOPE OF SUB-LICENSE. Sub-Licensee hereby acknowledges that it has received, reviewed, and understands the License Agreement entered into between Licensee and Nasdaq relating to use of the Index and Marks. Except as noted herein, Sub-Licensee hereby agrees to obligate itself to all the terms, conditions, and obligations of that License Agreement as if Sub-Licensee were the Licensee, other than the obligation to pay the license fees imposed by
Section 3 of the License Agreement. Sub-Licensee agrees that Nasdaq may exercise any rights against Sub-Licensee (including, for example, limitation of liability, indemnification, or audit rights) Nasdaq has against the Licensee to the same extent as if Sub-Licensee were directly contracting with Nasdaq. Sub-Licensee agrees it will not assert against Nasdaq any defense, claim, or right Sub-Licensee may have against Licensee, including those of set-off, abatement, counter-claim, contribution, or indemnification.

Section 2. NO FURTHER SUB-LICENSE. All references in the License Agreement to sub-licenses and sub-licensees, including any right of sub-licensee to grant further sub-licenses or to

permit further sub-licensees are not applicable to this Sub-Licensee Agreement and are as if deleted from the License Agreement.

Section 3. TERM. The Term of this Sub-License Agreement automatically terminates, without Notice, if the Term of the License Agreement terminates for any reason. Section

Section 4. GENERAL PROVISIONS. Sections from 20, through and including,
Section 26 of the License Agreement govern this Sub-License Agreement. All terms and definitions used in this Sub-License Agreement, unless otherwise indicated, have the same meanings and definitions as in the License Agreement. LICENSEE HAS NO AUTHORITY TO WAIVE, RENEGOTIATE, OR FORGIVE ANY PROVISION OF THE LICENSE AGREEMENT AS IT APPLIES TO SUB-LICENSEE.

IN WITNESS WHEREOF, the parties hereto have caused this Sub-License Agreement to be executed by their duly authorized officers.

INVESTMENT PRODUCT SERVICES, INC.
(subsequently re-named Nasdaq-Amex Investment Product Services, Inc.)
(LICENSEE)

THE NASDAQ STOCK MARKET, INC.
(NASDAQ)

ATTACHMENT II(A)

PRODUCT DESCRIPTION

Nasdaq-100(R) Trust

PRODUCT DESCRIPTION

Nasdaq-100 Shares(SM) ARE INTERESTS
IN A UNIT INVESTMENT TRUST

Nasdaq-100 Shares are securities that represent an interest in the portfolio of equity securities held by a unit investment trust ("Trust"), but that trade like a share of common stock. The Trust underlying Nasdaq-100 Shares is formed by Nasdaq-Amex Investment Product Services, Inc., as Sponsor, a wholly-owned subsidiary of The Nasdaq Stock Market, Inc. ("Nasdaq"), and is intended to provide investment results that generally correspond to the price and yield performance of the Nasdaq-100 Index(R) ("Index") The trustee of the Trust is The Bank of New York ("Trustee"). The distributor for the Trust is ALPS Mutual Funds Services, Inc. ("Distributor"), a registered broker-dealer.

NASDAQ-100 SHARES ARE BASED ON A BROAD MARKET INDEX

The Trust Sponsor selected the Nasdaq-100 Index as the basis for Trust shares because it constitutes a broadly diversified segment of the largest and most actively traded securities listed on the Nasdaq. The Index was first published in January 1985, and includes companies across a variety of major industry groups, including computer and office equipment, computer and software services, telecommunications, retail/wholesale trade, and biotechnology. The Nasdaq-100 Index is calculated under a "modified capitalization weighted" methodology, which is a hybrid between equal weighting and conventional capitalization weighting. Current information regarding the market value of the Index is available from Nasdaq as well as numerous market information services. The Index is determined, comprised, and calculated by Nasdaq without regard to the Sponsor, the Trust or the beneficial owners of Nasdaq-100 Shares.

The current value of the Index will ordinarily continue to be reported even when trading is interrupted in some or all of its component securities. In that event, the reported index level will be based on the current market price of those stocks still being traded (if any) and the last reported prices for those stocks that are not currently trading. As a result, reported index levels may at times be based on non-current price information with respect to some or even all of the stocks in the Index.

TRUST SHARES ARE CREATED AND REDEEMED WITH AN ACTUAL PORTFOLIO OF SECURITIES AND IN "CREATION UNITS" COMPRISING 50,000 TRUST SHARES

Most holders of Nasdaq-100 Shares purchase and sell them in the secondary trading market. However, Trust shares are initially created when they are issued by the Trust to a person or entity who, after placing a creation order with the Distributor, deposits with the Trustee a specified portfolio of Index securities, as well as in some cases a cash payment generally equal to accumulated dividends, if any, of the securities net of

II(a)-1

accrued expenses and liabilities up to the time of deposit. Conversely, the Trust will deliver an Index portfolio (based on net asset value of the Trust), together, in some cases, with a cash payment (generally equal to accumulated dividends, if any, net of accrued expenses and liabilities as of the date of redemption) to a holder upon tender of an established minimum number of Trust shares to the Trust. While Trust shares can be traded in lots of any size like ordinary shares of stock, Trust shares are issued by the Trust only in specified large-sized minimum numbers, for example, 50,000 Trust shares (or multiples thereof), which are referred to as "creation units". Similarly, Trust shares can be redeemed only by tendering to the Trust 50,000 Trust shares (or multiples thereof) -- the same Creation Unit-sized minimum number. Procedures to be followed when engaging in these creation and redemption transactions are set forth in the Nasdaq-100 Trust, Series 1 prospectus.

To maintain the correlation between the composition of securities held by the Trust and that of the Index securities, the Trust securities will be adjusted by the Trustee from time to time to conform to periodic changes in the identity and/or capitalization weights of Index securities.

NASDAQ-100 SHARES TRADE ON THE AMERICAN STOCK EXCHANGE

Once issued to a depositor of securities, Trust shares may be bought and sold in the secondary market like other equity securities at any time during the trading day. The Nasdaq-100 Trust is listed for trading on the American Stock Exchange and Trust shares are cleared through facilities of the National Securities Clearing Corporation ("NSCC"). Certificates will not be issued for Trust shares, which will be held by the Depository Trust Company ("DTC") in book entry form only. Trust shares are traded on the Exchange in 100 share round lots, and can be traded in odd lots as well. Note that trading of Trust shares on the Exchange will be halted whenever exchange trading in equity securities generally is halted as a result of activation of market-wide "circuit breakers" which are tied to large decreases in the Dow Jones Industrial Average(SM). Trading in Trust shares on the Exchange may also be halted if Exchange officials determine that such action is appropriate in the interest of a fair and orderly market or to protect investors.

NASDAQ-100 TRUST DIVIDEND PAYMENTS

Trust share holders as of the record dates may be paid a quarterly Income Net of Expenses Amount corresponding to the amount of any cash dividends or other income that accrue to the portfolio of securities in the Trust during the applicable period, net of fees and expenses of the Trust (as discussed below). If the fees and expenses of the Trust exceed the dividend and other income received by the Trust, the Trust may be required to pay any such excess expenses with the proceeds realized from the sale of Index securities. BASED ON HISTORICAL DIVIDEND PAYMENT RATES OF SECURITIES IN THE INDEX AND ESTIMATED ORDINARY OPERATING EXPENSES OF THE TRUST, LITTLE OR NO SUCH NET DIVIDEND DISTRIBUTIONS ARE CURRENTLY ANTICIPATED. The regular quarterly ex-dividend date for the Trust will be the third Friday in each of March, June, September, and December, unless such date is not a Business Day, in which case the ex-dividend date will be the immediately preceding Business Day. There shall be no net dividend distribution in any given quarter, and any net dividend amounts will be rolled into the next quarterly accumulation period, if the aggregate net distribution would be in an amount less than 5/100 of one percent (0.05%) of the net asset value of the Trust as of the Friday in the week immediately preceding

II(a)-2

the ex-dividend date, unless the Trustee determines that a distribution is required for reasons set forth in the Trust prospectus. The Trust share holder should be aware of the tax consequences associated with Trust dividends, as well as those associated with Trust share sales or redemptions. Investors may wish to consult their tax advisors in this regard.

The Sponsor reserves the right to make the DTC Dividend Reinvestment Service ("Service") available in the future for use by Trust share holders through DTC Participants for reinvestment of their periodic cash distributions, if any. In the event the Service is made available, not all DTC Participants may choose to utilize this Service, and an interested investor should consult his or her broker to ascertain the availability of dividend reinvestment through such broker as well as the specific procedures that apply.

EXPENSES OF THE TRUST

Fees and expenses to be charged to the Trust are described in the Nasdaq-100 Trust prospectus. Such fees and expenses include the Trustee's fees; licensing fees; federal and state annual registration fees; expenses of the Sponsor relating to the printing and distribution of marketing materials; and certain other expenses and fees of the Trust, as described in the Trust prospectus. The expenses of the Trust will be accrued daily and reflected in the net asset value of the Trust.

Please note that secondary market purchases and sales of Trust shares are subject to ordinary brokerage commissions.

THE TRUSTEE VOTES THE UNDERLYING SHARES

The Trustee will have the right to vote any voting securities held by the Trust, and will vote the voting securities of each issuer in the same proportion as all other voting shares of that issuer are voted. Consequently, holders of Trust shares will not be able to vote the shares of the securities of the issuers of the underlying Nasdaq-100 Trust.

THE NASDAQ-100 TRUST HAS A SPECIFIED LIFETIME TERM

The mandatory termination date of the Trust will be the first to occur of (i) a specified date in 2124 or (ii) the date 20 years after the death of the last survivor of fifteen (15) persons named in the Trust Agreement. However, the Trust may terminate at an earlier time under certain circumstances, such as delisting of the Nasdaq-100 Trust from the American Stock Exchange and no subsequent relisting on a national securities exchange or a quotation medium operated by a national securities association; if the license from Nasdaq is terminated; or if the Trustee, Sponsor, DTC, or NSCC are unable to perform their respective functions or duties with respect to operation of the Trust and a suitable successor entity is not available. In addition, the Sponsor may terminate the Trust if the Trust net asset value, after six months from inception, is below $150,000,000, or, after three years from inception, Trust net asset value is below $350,000,000, as such dollar amount shall be adjusted annually for inflation. Trading of Trust shares cannot occur after termination of the underlying Trust. However, on termination the Trust will be liquidated, and Trust share holders at that time will receive a distribution of their pro-rata share of the assets of the Trust, net of certain fees and expenses.

NASDAQ-100 SHARES SHOULD TRACK THE VALUE OF THE UNDERLYING STOCKS

The value of Trust shares will fluctuate in relation to changes in the value of the portfolio of securities held by the Trust, and a significant decline in the value of the Trust portfolio can be expected to result in a similar decline in value of the corresponding Trust

II(a)-3

shares. However, the market price of Trust shares may not be equivalent to the pro-rata value of the Index securities. The portfolio of Index securities held by the Trust will be adjusted as necessary to track changes made to the Index from time to time by Nasdaq. The Trust Agreement contains directions to the Trustee specifying how those changes to the Index are to be replicated by the Trust.

SPECIAL CONSIDERATIONS AND RISK FACTORS

Trust shares are subject to the risks of an investment in a broadly based portfolio of equity securities, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of such investment. Therefore, the value received upon sale of a Trust share may be less than the purchase price. Moreover, an investment in Nasdaq-100 Shares should be made with an understanding that the Trust may not be able to replicate exactly the performance of the Index because of transaction costs incurred by the Trust or because of the temporary unavailability of certain Index securities. Trust shares are also subject to the risks of an investment in a portfolio of equity securities in which the Index may be highly concentrated (e.g., technology) and, due to concentration in sectors characterized by relatively higher volatility in price performance, may be more volatile when compared to other broad-based stock index products. Trust shares are also subject to the risks specific to the performance of a few individual component securities which currently represent a highly concentrated weighting in the Nasdaq-100 Index, as described in the Trust's prospectus.

The identity of securities held by the Trust will change from time to time, based on changes in the Index. There can be no assurance that the issuers of securities held by the Trust will pay dividends, and distributions on such securities will generally depend upon the declaration of dividends by the issuers of those securities.

Nasdaq does not guarantee the accuracy and/or completeness of the Nasdaq-100 Index or any data included therein. Nasdaq and the Exchange make no express or implied warranties, and disclaim all warranties of merchantability or fitness for a particular purpose with respect to the Nasdaq-100 Index, its use, the results to be obtained from its use, or any data included therein. Nasdaq and the Exchange shall have no liability for any lost profits or special, punitive, incidental, indirect, or consequential damages, even if notified of the possibility of such damages. Nasdaq and the Exchange shall have no liability for any damages, claims, losses or expenses caused by any errors or delays in calculating or disseminating the Nasdaq-100 Index.

This product description is required to be provided to Trust share purchasers by American Stock Exchange members and member organizations pursuant to Exchange rules. It is not to be construed as investment advice or as a recommendation to buy or sell Trust shares. Upon request, your broker will furnish you with a copy of the Nasdaq-100 Trust prospectus, which provides more specific information with respect to these securities. The Nasdaq-100 Trust prospectus may also be obtained by writing to Nasdaq-Amex Investment Product Services, Inc., c/o the American Stock Exchange, 86 Trinity Place, New York, NY 10006, or by calling 1-800-843-2639. If you have any questions about the Nasdaq-100 Trust, they should be addressed to your broker.

II(a)-4

ATTACHMENT II(b)

FEE SCHEDULE

Licensee shall pay license fees in accordance with the following:

1. Licensee shall pay to Nasdaq a license fee at a rate of 4/100 of one percent (0.04%) per annum, times the average daily net asset value of the Nasdaq-100 Trust (the ANNUAL FEE).

2. The Annual Fee shall be computed and paid as follows:

a) At the end of each quarter during a Contract Year (ending on the three month anniversary of the Effective Date or the prior quarter), Licensee shall calculate the average daily net asset value of the Nasdaq-100 Trust during the quarter by (i) adding together the daily net asset values of the Nasdaq-100 Trust, as determined by the trustee of the Nasdaq-100 Trust on each business day during the quarter, and then (ii) dividing such sum by the number of daily net asset value amounts determined in (i) above. The resulting average daily net asset value shall then be multiplied by (0.0004) and divided by four, resulting in the quarterly payment to be paid to Nasdaq by Licensee.

b) Each quarterly payment shall be accompanied by a statement setting forth the calculations on which the payment is based and shall be paid within 15 days after the close of the quarter.

Exhibit A(9)(c)

FORM OF
NASDAQ-100 PARTICIPANT AGREEMENT

This Nasdaq-100 Participant Agreement (this "Agreement") is entered into between ALPS Mutual Funds Services, Inc. (the "Distributor") and _ _ _ _ _ _ _ _ _ _ _ (the "Participant") and is subject to acceptance by The Bank of New York (the "Trustee"). The Trustee serves as the trustee of the Nasdaq-100 Trust, Series 1 (the "Trust") pursuant to certain Standard Terms and Conditions of Trust dated as of March 1, 1999 and the Trust Indenture and Agreement dated March 4, 1999 (collectively, the "Trust Agreement") and is an Index Receipt Agent as that term is defined in the rules of the National Securities Clearing Corporation ("NSCC"). The Distributor has been retained to provide certain services with respect to acting as principal underwriter of the Trust in connection with the creation and distribution of Nasdaq-100 Shares. As specified in the Nasdaq-100 Shares prospectus and the Trust Agreement, Nasdaq-100 Shares may be created or redeemed only in aggregations of 50,000 Nasdaq-100 Shares, referred to therein and herein as a "Creation Unit". The Trust Agreement provides that Creation Units be issued in exchange for a Portfolio Deposit delivered by the Participant to the Trustee. Capitalized terms not otherwise defined herein are used herein as defined in the Nasdaq-100 Shares prospectus or the Trust Agreement.

This Agreement is intended to set forth certain premises and the procedures by which the Participant may create and/or redeem Creation Units
(i) through the Continuous Net Settlement ("CNS") clearing processes of NSCC as such processes have been enhanced to effect creations and redemptions of Creation Units, such processes being referred to herein as the "Nasdaq-100 Clearing Process", or (ii) outside the Nasdaq-100 Clearing Process (i.e., through the facilities of the Depository Trust Company ("DTC" )). The parties hereto in consideration of the premises and of the agreements contained herein agree as follows:

1. STATUS OF PARTICIPANT. The Participant hereby represents, covenants and warrants that (i) with respect to orders for the creation or redemption of Creation Units by means of the Nasdaq-100 Clearing Process, it is a member of NSCC and a participant in the CNS System of NSCC (as defined in the Nasdaq-100 Shares prospectus, a "Participating Party"); and (ii) with respect to orders for the creation or redemption of Creation Units outside the Nasdaq-100 Clearing Process, it is a DTC Participant (as defined in the Nasdaq-100 Shares prospectus, a "DTC Participant"). The Participant may place orders for the creation or redemption of Creation Units either through the Nasdaq-100 Clearing Process or outside the Nasdaq-100 Clearing Process, subject to the procedures for creation and redemption referred to in paragraph 2 of this Agreement ("Execution of Orders") and the procedures described in Attachment A hereto. Any change in the foregoing status of the Participant shall terminate this Agreement, and the Participant shall give immediate notice to the Distributor and the Trustee of such change.

The Participant further represents that it is a broker-dealer registered with the Securities and Exchange Commission and a member of the National Association of Securities Dealers, Inc. (the "NASD") or is exempt from or otherwise not required to be licensed as a broker-dealer or a member of the NASD. The Participant is qualified as a broker or dealer, or otherwise, under all applicable state laws where it is required to do so in order that Nasdaq-100 Shares may be sold in such states where the Participant intends to sell Nasdaq-100 Shares. The Participant agrees to conform to the rules of the NASD (if it is a member of NASD) and the securities laws of any jurisdiction in which it sells, directly or indirectly, Nasdaq-100 Shares.

2. EXECUTION OF ORDERS. All orders for the creation or redemption of Creation Units shall be handled in accordance with the terms of the Nasdaq-100 Shares prospectus, the Trust Agreement and the procedures described in Attachment A to this Agreement. Each party hereto agrees to comply with the provisions of such documents to the extent applicable to it. In the event the procedures include the use of recorded telephone lines, the Participant hereby consents to such use. The Trustee reserves the right to issue additional or other procedures relating to the manner of creating or redeeming Creation Units, and the Participant and the Distributor agree to comply with such procedures as may be issued from time to time.

3. NSCC. Solely with respect to orders for the creation or redemption of Creation Units through the Nasdaq-100 Clearing Process, the Participant as a Participating Party hereby authorizes the Trustee to transmit to NSCC on behalf of the Participant such instructions, including share and cash amounts as are necessary with respect to the creation and redemption of Creation Units consistent with the instructions issued by the Participant to the Nasdaq-100 telephone representative identified in Attachment A hereto (the "Nasdaq- 100 Telephone Representative"). The Participant agrees to be bound by the terms of such instructions issued by the Trustee and reported to NSCC as though such instructions were issued by the Participant directly to NSCC.

4. ROLE OF PARTICIPANT. The Participant shall have no authority in any transaction to act as agent of the Distributor, the Trustee or the Trust. 5. FEES. In connection with the creation or redemption of Creation Units, the Trustee shall charge, and the Participant agrees to pay to the Trustee, the Transaction Fee prescribed in the Nasdaq-100 Shares prospectus applicable to creations or redemptions through the

Nasdaq-100 Clearing Process, or the Transaction Fee and such additional amounts as may be prescribed pursuant to the Nasdaq-100 Shares prospectus applicable to (i) creations or redemptions outside the Nasdaq-100 Clearing Process and (ii) creations within the Nasdaq-100 Clearing Process where the cash equivalent value of one or more Index Securities is being deposited in lieu of the inclusion of such Index Security in the securities portion of the Portfolio Deposit because the Participant is restricted by regulation or otherwise from investing or engaging in a transaction in such security. The Transaction Fee may be waived or otherwise adjusted from time to time subject to the provisions relating thereto and any limitations as prescribed in the Nasdaq-100 Shares prospectus and the Trust Agreement.

6. AUTHORIZED PERSONS. Concurrently with the execution of this Agreement and from time to time thereafter, the Participant shall deliver to the Distributor and the Trustee, duly certified as appropriate by its secretary or other duly authorized official, a certificate setting forth the names and signatures of all persons authorized to give instructions relating to 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 Distributor and the Trustee as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Distributor and the Trustee of a superseding certificate bearing a subsequent date. The Trustee shall issue to each Authorized Person a unique personal identification number ("PIN Number") by which such Authorized Person and the Participant shall be identified and instructions issued by the Participant hereunder shall be authenticated. Upon the termination or revocation of authority of such Authorized Person by the Participant, the

Participant shall give immediate written notice of such fact to the Distributor and the Trustee and such notice shall be effective upon receipt by both the Distributor and the Trustee.

7. REDEMPTION. The Participant represents and warrants that it will not obtain a Submission Number (as defined in Attachment A) from the Trustee for the purpose of redeeming a Creation Unit unless it first ascertains that (a) it or its customer, as the case may be, owns outright the requisite number of Nasdaq-100 Shares to be redeemed and
(b) such Nasdaq-100 Shares have not been loaned or pledged to another party nor are the subject of a repurchase agreement, securities lending agreement or such other arrangement which would preclude the delivery of such shares to the Trustee on a "regular way" basis.

8. BENEFICIAL OWNERSHIP. The Participant represents and warrants to the Distributor and the Trustee that either (i) it does not hold for the account of any single Beneficial Owner of Nasdaq-100 Shares, 80 percent (80%) or more of outstanding Nasdaq-100 Shares or (ii) if it does hold for the account of any single Beneficial Owner of Nasdaq-100 Shares, 80 percent (80%) or more of outstanding Nasdaq-100 Shares, that such a circumstance would not cause the Trust to have a basis in the Index Securities deposited with the Trust different from the market value of such Index Securities on the date of such deposit, pursuant to Section 351 of the Internal Revenue Code of 1986, as amended. The Trustee shall have the right to require information from the Participant regarding Nasdaq- 100 Share ownership and to rely thereon to the extent necessary to make a determination regarding ownership of 80 percent (80%) or more of outstanding Nasdaq-100 Shares by a Beneficial Owner as a condition to the acceptance of a Portfolio Deposit.

9. INDEMNIFICATION. The Participant hereby agrees to indemnify and hold harmless the Distributor, the Trustee, Nasdaq-Amex Investment Product Services, Inc. (the Trust sponsor and a wholly-owned subsidiary of The Nasdaq Stock Market, Inc., the "Sponsor"), their respective subsidiaries, affiliates, directors, officers, employees and agents (each, an "Indemnified Party") from and against any loss, liability, cost and expense incurred by such Indemnified Party as a result of (i) any breach by the Participant of its representations and warranties contained herein or of any provision of this Agreement; or (ii) any actions of such Indemnified Party in reliance upon any instructions issued in accordance with Attachment A (as may be amended from time to time) believed by the Distributor and/or the Trustee to be genuine and to have been given by the Participant. This paragraph shall survive the termination of this Agreement.

10. TRUSTEE CAPACITY. The parties acknowledge that the Trustee is acting in its capacity hereunder as trustee in accordance with and pursuant to the Trust Agreement and not in its general corporate capacity.

11. ACKNOWLEDGMENT. The Participant acknowledges receipt of the Nasdaq-100 Shares prospectus and represents it has reviewed such document and understands the terms thereof.

12. NOTICES. Except as otherwise specifically provided in this Agreement, all notices required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by personal delivery or by postage prepaid registered or certified United States first class mail, return receipt requested, or by telex, telegram or facsimile or similar means of same day delivery (with a confirming copy by mail as provided herein). Unless otherwise notified in writing, all notices to the Trustee shall be given or sent as follows:

The Bank of New York, 101 Barclay Street, New York, New York 10286, Attn: Nasdaq-100. All notices to the Participant and the Distributor shall be directed to the address or telephone, facsimile or telex numbers indicated below the signature line of such party.

13. TERMINATION AND AMENDMENT. This Agreement shall become effective in this form as of the date accepted by the Trustee and may be terminated at any time by any party upon thirty (30) day prior notice to the other parties (i) unless earlier terminated by the Trustee 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 pursuant to the Trust Agreement. This Agreement supersedes any prior agreement between the parties. This Agreement may be amended by the Trustee without consent of any Beneficial Owner from time to time by the following procedure. The Trustee will mail a copy of the amendment to the Distributor and the Participant. For the purposes of this Agreement, mail will be deemed received by the recipient thereof on the third (3rd) day following the deposit of such mail into the U.S. postal system. If neither the Distributor nor the Participant objects in writing to the amendment within ten (10) days after its receipt, the amendment will become part of this Agreement in accordance with its terms.

14. REPRESENTATIONS REGARDING NASDAQ-100 SHARES. The Participant shall not make, or permit any representative to make, in connection with any sale or solicitation of a sale of Nasdaq-100 Shares, any representations concerning Nasdaq-100 Shares except those contained in the then current prospectus and in printed information approved by the Distributor and the Trust as information supplemental to such prospectus. Copies of the

then current prospectus and any such printed supplemental information will be supplied by the Distributor to the Participant in reasonable quantities upon request.

15. COUNTERPARTS. This Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all shall constitute but one and the same instrument.

16. SPONSOR AS THIRD PARTY BENEFICIARY. The Sponsor shall be a third-party beneficiary of this Agreement and is entitled to enforce directly against the Participant the obligations owed to the Sponsor by the Participant (including, without limitation, bringing proceedings against the Participant in the Sponsor's name).

17. GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the conflicts of laws thereof.

NAME:         Edmund Burke
TITLE:        Executive Vice President
ADDRESS:      370 17th Street, Suite 3100
              Denver CO 80202-5631

TELEPHONE:    (303) 623-2577
FACSIMILE:    (303) 623-7850

{NAME OF PARTICIPANT}

NAME:        Thomas J. Centrone
TITLE:       Vice President
ADDRESS:     101 Barclay Street
             New York, NY 10286
TELEPHONE:   (212) 815-2533
FACSIMILE:   (212) 815-2948

ATTACHMENT A

This document supplements the Nasdaq-100 Shares prospectus and the Trust Agreement, and is an attachment to the Nasdaq-100 Participant Agreement with respect to the procedures to be used by (i) the Distributor and the Trustee in processing an order for the creation of Nasdaq-100 Shares and
(ii) the Trustee in processing a request for the redemption of Nasdaq-100 Shares, and (iii) the Participants and the Trustee in delivering or arranging for the delivery of requisite cash payments, Portfolio Deposits or Nasdaq-100 Shares, as the case may be, in connection with the submission of orders for creation or requests for redemption.

A Participant is first required to have signed the Nasdaq-100 Participant Agreement. Upon acceptance of the Nasdaq-100 Participant Agreement by the Trustee, the Trustee will assign a personal identification number 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 Nasdaq-100 Shares.

I. TO PLACE AN ORDER FOR CREATION OR REDEMPTION OF NASDAQ-100 SHARES

1. CALL TO RECEIVE A SUBMISSION NUMBER. An Authorized Person for the Participant will call the Nasdaq-100 Telephone Representative at (212) 815-4520 not later than the closing time of the regular trading session on The Nasdaq Stock Market (the "Nasdaq Closing Time") (ordinarily 4:00 p.m. New York time) to receive a Submission Number. Upon verifying the authenticity of the caller (as determined by the use of the appropriate PIN Number) and the terms of the order for creation or request for redemption, the Nasdaq-100 Telephone Representative will issue a unique Submission Number. All orders with respect to the creation or redemption of Nasdaq-100 Shares are required to be in writing and accompanied by the designated Submission Number.

Incoming telephone calls are queued and will be handled in the sequence received. Calls placed before the Nasdaq Closing 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 NASDAQ CLOSING TIME WILL NOT BE ACCEPTED.

2. ASSEMBLE THE SUBMISSION. The Authorized Person submitting an order to create or a request to redeem shall assemble (a) written instructions regarding such creation order or redemption request, (b) the designated Submission Number and
(c) the PIN Number in one document and transmit such document by facsimile or telex to the Nasdaq-100 Telephone Representative and the Distributor, as applicable, according to the procedures set forth below in subsection 3. The document so transmitted is hereinafter referred to as the "Submission", and the Business Day on which a Submission is made is hereinafter referred to as the "Transmittal Date".

NOTE THAT THE TELEPHONE CALL IN WHICH THE SUBMISSION NUMBER IS ISSUED INITIATES THE ORDER PROCESS BUT DOES NOT ALONE CONSTITUTE THE ORDER. AN ORDER OR REQUEST IS ONLY COMPLETED AND PROCESSED UPON RECEIPT OF THE SUBMISSION.

3. TRANSMIT THE SUBMISSION. A Submission Number is only valid for a limited time. The Submission for either creations or redemptions of Nasdaq-100 Shares must be sent by facsimile or telex to the Nasdaq-100 Telephone Representative and the Distributor, as applicable, within 15 minutes of the issuance of the Submission Number. In the event that the Submission is not received within such time period, the Nasdaq-100 Telephone Representative will attempt to contact the Participant to request immediate transmission of the Submission.

(a) In the case of a Submission for creation, unless the Submission is received by the Nasdaq-100 Telephone Representative with a copy to the Distributor upon the earlier of within (i)

15 minutes of contact with the Participant or (ii) 45 minutes after the Nasdaq Closing Time, the Submission will be deemed invalid.

(b) In the case of a Submission for redemption, unless such Submission is received by the Nasdaq-100 Telephone Representative within (i) 15 minutes of contact with the Participant or (ii) 45 minutes after the Nasdaq Closing Time, whichever is earlier, such order for redemption contained therein shall be Deemed Received (as hereinafter defined in Section IV) by the Trustee on the Business Day following such Transmittal Date in accordance with the procedures set forth in Section IV(2) and (4) hereof.

4. AWAIT RECEIPT OF CONFIRMATION.

(a) NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. The Distributor shall issue to both the Participating Party and the Trustee a confirmation of acceptance of an order to create Nasdaq- 100 Shares in Creation Unit size aggregations through the Nasdaq-100 Clearing Process within 15 minutes of its receipt of a Submission received in good form. In the event the Participating Party does not receive a timely confirmation from the Distributor, it should contact the Distributor and the Nasdaq-100 Telephone Representative at the business numbers indicated.

(b) NASDAQ-100 CLEARING PROCESS-REQUESTS FOR REDEMPTIONS. The Trustee shall issue to the Participating Party a confirmation of acceptance of a request to redeem Nasdaq-100 Shares in Creation Unit size aggregations through the Nasdaq-100 Clearing Process within 15 minutes of its receipt of a Submission received in good form. In the event the Participating Party does not receive a timely confirmation from the Trustee, it should contact the Trustee directly at the business number indicated.

(c) OUTSIDE THE NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. The Distributor shall issue to both the DTC Participant and the Trustee an acknowledgment of receipt of an order to

create Nasdaq-100 Shares in Creation Unit size aggregations outside the Nasdaq-100 Clearing Process within 15 minutes of its receipt of a Submission received in good form. In the event the DTC Participant does not receive a timely acknowledgment from the Distributor, it should contact the Distributor and the Nasdaq-100 Telephone Representative at the business numbers indicated.

(d) OUTSIDE THE NASDAQ-100 CLEARING PROCESS-REQUESTS FOR REDEMPTION. The Trustee shall issue to the DTC Participant an acknowledgment of receipt of an order to redeem Nasdaq- 100 Shares in Creation Unit size aggregations outside the Nasdaq-100 Clearing Process within 15 minutes of its receipt of a Submission received in good form. In the event the DTC Participant does not receive a timely acknowledgment from the Trustee, it should contact the Trustee directly at the business number indicated.

II. PARTICIPANTS' RESPONSIBILITY FOR DELIVERING OR EFFECTING THE DELIVERY OF REQUISITE PORTFOLIO DEPOSITS OR NASDAQ-100 SHARES AND CASH PAYMENTS IN CONNECTION WITH ORDERS FOR CREATION OR REQUESTS FOR REDEMPTION

1. NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. The Participating Party notified of confirmation of an order to create Nasdaq-100 Shares through the Nasdaq-100 Clearing Process shall be required to transfer or arrange for the transfer of
(a) the requisite Index Securities (or contracts to purchase such Index Securities expected to be delivered through NSCC by the "regular way" settlement date) and (b) the Cash Component, if any, to the Trustee by means of the Nasdaq-100 Clearing Process so as to be received no later than on the "regular way" settlement date following the Business Day on which such order is Deemed Received by the Distributor as set forth below in Section IV.

2. NASDAQ-100 CLEARING PROCESS - REDEMPTION REQUESTS. The Participating Party notified of confirmation of a request to redeem Nasdaq-100 Shares through the Nasdaq-100 Clearing Process shall be required to transfer or arrange for the transfer of the requisite Nasdaq-100 Shares and the Cash Redemption Amount, if any, to the Trustee by means of the Nasdaq-100 Clearing Process so as to be received no later than on the "regular way" settlement date following the Business Day on which such order is Deemed Received by the Trustee as set forth below in Section IV.

3. OUTSIDE THE NASDAQ-100 CLEARING PROCESS - CREATION ORDERS. The DTC Participant notified of acknowledgment of an order to create Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process shall be required to effect a transfer to the Trustee of (a) the requisite Index Securities through DTC so as to be received by the Trustee no later than 11:00 a.m. on the next Business Day immediately following the Business Day on which such order is Deemed Received by the Distributor as set forth below in Section IV, in such a way as to replicate the Portfolio Deposit established on the Transmittal Date by the Trustee and (b) the Cash Component, if any, through the Federal Reserve Bank wire system so as to be received by the Trustee by 1:00 p.m. on the next Business Day immediately following the day such order is Deemed Received. If the Trustee does not receive the Index Securities by 11:00 a.m. and the Cash Component, if any, by 1:00 p.m. on the Business Day immediately following the day such order is Deemed Received, the creation order contained in such Submission shall be canceled. Upon written notice to the Distributor and the Nasdaq-100 Telephone Representative, the DTC Participant may resubmit such canceled order on the following Business Day using a Portfolio Deposit as newly constituted.

4. OUTSIDE THE NASDAQ-100 CLEARING PROCESS - REDEMPTION REQUESTS. The DTC Participant notified of acknowledgment of a request to redeem Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process shall be required to effect a transfer to the Trustee of (a) the requisite number of Nasdaq-100 Shares through DTC no later than the Nasdaq Closing Time on the Business Day on which such order is Deemed Received by the Trustee and (b) the Cash Redemption Amount, if any, through the Federal Reserve Bank wire system by no later than 1:00 p.m. on the next Business Day immediately following the Business Day on which such order is Deemed Received by the Trustee.

5. TRANSACTION FEE. In connection with the creation or redemption of Creation Units, the Trustee shall charge, and the Participant agrees to pay to the Trustee, the Transaction Fee prescribed in the Nasdaq-100 Shares prospectus applicable to (i) creations or redemptions through the Nasdaq-100 Clearing Process, or the Transaction Fee and such additional amounts as may be prescribed pursuant to the Nasdaq-100 Shares prospectus applicable to creations or redemptions outside the Nasdaq-100 Clearing Process and (ii) creations within the Nasdaq-100 Clearing Process where the cash equivalent value of one or more Index Securities is being deposited in lieu of the inclusion of such Index Security in the securities portion of the Portfolio Deposit because the Participant is restricted by regulation or otherwise from investing or engaging in a transaction in such security. Such Transaction Fee and additional amounts, if any, shall be included in the calculation of the Cash Component or Cash Redemption Amount payable or to be received, as the case may be, by the Participant in connection with the creation or redemption order.

III. TRUSTEE'S RESPONSIBILITY FOR EFFECTING DELIVERY OF REQUISITE NASDAQ-100 SHARES OR SECURITIES AND CASH PAYMENTS IN

CONNECTION WITH ORDERS FOR CREATION OR REQUESTS FOR
REDEMPTION.

1. NASDAQ-100 CLEARING PROCESS - CREATION ORDER. After the Trustee has received notification of a Submission from the Distributor for a creation order for Nasdaq-100 Shares through the Nasdaq-100 Clearing Process which has been Deemed Received by the Distributor as set forth below in Section IV, the Trustee shall initiate procedures to transfer the requisite Nasdaq-100 Shares and the Cash Component, if any, through the Nasdaq-100 Clearing Process so as to be received by the creator no later than on the "regular way" settlement date following the Business Day on which the Submission is Deemed Received by the Distributor.

2. NASDAQ-100 CLEARING PROCESS - REDEMPTION REQUESTS. After the Trustee has received a Submission for a redemption request for Nasdaq-100 Shares through the Nasdaq-100 Clearing Process and Deemed Received such submission as set forth below in Section IV, the Trustee shall initiate procedures to transfer the requisite securities (or contracts to purchase such securities expected to be delivered through NSCC by the "regular way" settlement date) and the Cash Redemption Amount, if any, through the Nasdaq-100 Clearing Process so as to be received by the Beneficial Owner no later than on the "regular way" settlement date following the Business Day on which the Submission is Deemed Received by the Trustee.

3. OUTSIDE THE NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. After the Trustee has received notification of a Submission from the Distributor for a creation order for Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process which has been Deemed Received by the Distributor as set forth below in Section IV, the Trustee shall initiate procedures to transfer the requisite Nasdaq-100 Shares through DTC and the DTC Participants and the Cash Component, if any, through the Federal Reserve Bank wire system so as to be received by the creator no later

than on the third (3rd) Business Day following the Business Day on which the Submission is Deemed Received by the Distributor.

4. OUTSIDE THE NASDAQ-100 CLEARING PROCESS-REDEMPTION REQUESTS. After the Trustee has received a Submission for a redemption request for Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process and Deemed Received such submission as set forth below in Section IV, the Trustee shall initiate procedures to transfer the requisite securities (or contracts to purchase such securities expected to be delivered within three Business Days) through DTC and the DTC Participants and the Cash Redemption Amount, if any, through the Federal Reserve Bank wire system so as to be received by the Beneficial Owner no later than on the third
(3rd) Business Day following the Business Day on which the Submission is Deemed Received by the Trustee.

IV. PROCEDURES BY WHICH AN ORDER TO CREATE OR A REQUEST TO REDEEM SHALL BE "DEEMED RECEIVED."

1. NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. An order to create Nasdaq-100 Shares through the Nasdaq-100 Clearing Process shall be "Deemed Received" by the Distributor on the Transmittal Date only if (a) the Submission containing such order is in proper form and (b) such Submission is received by the Distributor no later than the time on such Transmittal Date as set forth in Section I(3)(a) hereof. Orders to create Nasdaq-100 Shares contained in Submissions transmitted after such time on a Transmittal Date shall be deemed invalid.

2. NASDAQ-100 CLEARING PROCESS-REDEMPTION REQUESTS. A request to redeem Nasdaq-100 Shares through the Nasdaq-100 Clearing Process shall be Deemed Received by the Trustee on the Transmittal Date only if (a) the Submission containing such request is in proper order and (b) such Submission is received by the Trustee no later than the time on such Transmittal Date as set forth in
Section I(3)(b) hereof. Requests to redeem Nasdaq-100 Shares contained in Submissions

transmitted after such time on a Transmittal Date shall be "Deemed Received" by the Trustee on the next Business Day immediately following such Transmittal Date.

3. OUTSIDE THE NASDAQ-100 CLEARING PROCESS-CREATION ORDERS. An order to create Nasdaq- 100 Shares outside the Nasdaq-100 Clearing Process shall be Deemed Received by the Distributor on the Transmittal Date only if: (a) the Submission containing such order is in proper form, (b) such Submission is received by the Distributor no later than the time on such Transmittal Date as set forth in
Section I(3)(a) hereof, (c) the requisite number of Index Securities is transferred through DTC to the account of the Trustee by no later than 11:00
a.m. on the Business Day next following the Transmittal Date and (d) the cash equal to the Cash Component, if any, is transferred via the Federal Reserve Bank wire system to the account of the Trustee by no later than 1:00 p.m. on the Business Day next following the Transmittal Date. If either the Submission, the requisite Index Securities or the cash equal to the Cash Component is not received by the Trustee within the time periods set forth above, such order shall be deemed invalid.

4. OUTSIDE THE NASDAQ-100 CLEARING PROCESS - REDEMPTION REQUESTS. A request to redeem Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process shall be Deemed Received by the Trustee on the Transmittal Date only if (a) the Submission containing such request is in proper form, (b) such Submission is received by the Trustee no later than the time as set forth in Section I(3)(b) hereof, (c) the requisite number of Nasdaq-100 Shares is transferred via DTC to the account of the Trustee by the Nasdaq Closing Time on such Transmittal Date and (d) the Cash Redemption Amount owed to the Trustee, if any, is received by the Trustee no later than 1:00 p.m. of the Business Day next following such Transmittal Date. If either the Submission, the Nasdaq-100 Shares or cash equal to the Cash Redemption Amount, if any, is not received by the Trustee within the time periods set forth above, such redemption request shall be Deemed

Received by the Trustee on the Business Day on which both the Submission and the requisite number of Nasdaq-100 Shares are delivered to the Trustee within the proper time periods as set forth above; provided that the Cash Redemption Amount, if any, is then paid on the next Business Day within the time period set forth above.

5. AMBIGUOUS INSTRUCTIONS. In the event that a Submission contains terms that differ from the information provided in the telephone call at the time of issuance of the Submission Number, the Nasdaq-100 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 Submission then the Submission will be accepted and processed. If an Authorized Person contradicts its terms, the Submission will be deemed invalid, and a corrected Submission must be received by the Nasdaq-100 Telephone Representative and the Distributor, as applicable, not later than the earlier of (i) within 15 minutes of such contact with the Participant or (ii) 45 minutes after the Nasdaq Closing Time. If the Nasdaq-100 Telephone Representative is not able to contact an Authorized Person, then the Submission shall be accepted and processed in accordance with its terms notwithstanding any inconsistency from the terms of the telephone information. In the event that a Submission contains terms that are illegible, the Submission will be deemed invalid and the Nasdaq-100 Telephone Representative will attempt to contact the Participant to request retransmission of the Submission. A corrected Submission must be received by the Nasdaq-100 Telephone Representative, and the Distributor, as applicable, not later than the earlier of (i) within 15 minutes of such contact with the Participant or (ii) 45 minutes after the Nasdaq Closing Time.

6. SUSPENSION OR REJECTION OF AN ORDER. The Distributor or Trustee reserves the right to suspend a Submission in the event that its acceptance would appear to result in the Participant or

a Beneficial Owner owning 80 percent (80%) or more of all outstanding Nasdaq-100 Shares and if pursuant to Section 351 of the Internal Revenue Code of 1986, as amended, such a circumstance would result in the Trust having a basis in the securities deposited different from the market value of such securities on the date of deposit. In such event, the Distributor or the Nasdaq-100 Telephone Representative will attempt to contact an Authorized Person for purposes of confirmation of the fact that with respect to such Participant no Beneficial Owner would own 80 percent (80%) or more of all outstanding Nasdaq-100 Shares upon execution of the Submission or that such a circumstance would not result in the Trust having a basis in the securities deposited different from the market value of such securities on the date of deposit. In the event that (i) the Distributor or the Nasdaq-100 Telephone Representative is unable to contact an Authorized Person or (ii) the Participant fails to transmit an identical Submission containing a representation and warranty as to such fact, then the Submission shall be deemed invalid.

The Trustee further reserves the absolute right to reject a creation order transmitted to it by the Distributor in respect of any Portfolio Deposit or any component thereof if (a) the Portfolio Deposit is not in proper form; (b) acceptance of the Portfolio Deposit would have certain adverse tax consequences;
(c) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (d) the acceptance of the Portfolio Deposit would otherwise, in the discretion of the Trustee, have an adverse affect on the Trust or the rights of Beneficial Owners; or (e) in the event that circumstances outside the control of the Trustee make it for all practical purposes impossible to process creations of Nasdaq-100 Shares. The Trustee will provide notice of its reasons for rejection of a creation order in respect of a Portfolio Deposit or any component thereof. The Trustee, the Distributor and the Sponsor shall not incur any liability in connection with any

notification of defects or irregularities in the delivery of Portfolio Deposits or any component thereof or in connection with the rejection of a creation order.

V.       TELEPHONE, FACSIMILE, AND TELEX NUMBERS

ALPS MUTUAL FUNDS SERVICES, INC.:                    TELEPHONE: (303) 623-2577
                                                     FACSIMILE: (303) 623-0472

NASDAQ-100 TELEPHONE REPRESENTATIVE:                 TELEPHONE: (212) 815-4520
                                                     FACSIMILE: (212) 815-5447

TRUSTEE:                                             TELEPHONE: (212) 815-2828
                                                     FACSIMILE: (212) 815-5447

PARTICIPANT:                                         TELEPHONE:
                                                               ----------------
                                                     FACSIMILE:
                                                               ----------------

ATTACHMENT B
(OPTIONAL)

This document supplements the Nasdaq-100 Shares prospectus and the Trust Agreement, and is an attachment to the Nasdaq-100 Participant Agreement concerning procedures by which Creation Units may be created in advance of the receipt by the Trustee of all or a portion of the Portfolio Deposit relating to such Creation Units through the use of a cash deposit (the "Cash Collateralization Procedures"). A Participant is first required to have signed the Nasdaq-100 Participant Agreement, and the provisions and procedures of the Participant Agreement (including Attachment A thereto) shall apply equally to creations making use of these Cash Collateralization Procedures, except to the extent modified or supplemented by the procedures set forth below.

I. PLACING AN ORDER AND THE POSTING OF CASH COLLATERAL
1. PLACING THE ORDER. A Participating Party intending to utilize these procedures is required to place an order to create Nasdaq 100 Shares in accordance with Section 1 of Attachment A to the Participant Agreement. Such orders may be placed only through NSCC using the Nasdaq-100 Clearing Process. The following additional procedures shall also apply: at the time an Authorized Person for the Participant calls the Nasdaq-100 Telephone Representative to place the order, the caller is required to state that the Participant intends to utilize these Cash Collateralization Procedures. The Submission submitted in writing by the Participant thereafter shall further state that the Participant intends to utilize these Cash Collateralization Procedures.

2. CASH COLLATERAL.

(a) POSTING OF CASH COLLATERAL. The Participant shall be required to post collateral with the Trustee outside of NSCC consisting of cash at least equal to 115% of the closing value

(determined by the Trustee in accordance with section I(2)(c) below), on the day the order to purchase Creation Units is Deemed Received, of the portion of the Portfolio Deposit not expected to be available in the account of the Participating Party for delivery to the Trust on the third NSCC Business Day following placement of such order. For the purposes of determining the securities for which a cash collateral deposit will be required, the Participant must submit documentation by no later than 4:30 p.m. on the day the order to purchase Creation Units is Deemed Received, in a form satisfactory to the Trustee in its sole discretion, as to securities comprising the Portfolio Deposit which are currently owned by the Participant and reserved for delivery to the Trust and/or orders in good form for the purchase of securities comprising the Portfolio Deposit which are expected to be available for delivery to the Trust through the Nasdaq- 100 Clearing Process on the third NSCC Business Day following placement of such order. All securities comprising the Portfolio Deposit for which such documentation has not been provided in a timely manner and in a form satisfactory to the Trustee will be presumed not to be available in the account of the Participating Party for delivery to the Trust on the third NSCC Business Day and will require a cash collateral deposit. The Participant must arrange for the transfer of the cash collateral amount so determined through the Federal Reserve Bank wire system so as to be received by the Trustee by 11:00 a.m. on the morning of the NSCC Business Day following the day such order is Deemed Received by the Distributor. If the Trustee does not receive the required cash amount by the time indicated above, the Trustee shall cancel the creation order. All moneys received from the Participant shall be held by the Trustee without interest and without benefit to the Participant in a custodial account separate and apart from the assets of the Trust until required to be disbursed in accordance with Section II.(3) and (4) below, and such moneys shall be segregated by separate recordation on the books and records of the Trustee.

(b) MARKING-TO-MARKET OF THE CASH COLLATERAL. The cash collateral amount shall be marked-to-the-market daily by the Trustee only for increases in value in accordance with the following procedures. On each NSCC Business Day beginning on the second NSCC Business Day following the day such order is Deemed Received by the Distributor, the Trustee shall determine the closing value of each security which is not expected to be delivered by the regular way settlement date, or has not already been delivered to the Trust on such date, as the case may be. The Trustee shall aggregate upward movements in the value for all such securities and notify the Participant by 6:00 p.m. that day of the aggregate increase in value. The Participant must arrange for the transfer of such amount through the Federal Reserve Bank wire system so as to be received by the Trustee by 1:00 p.m. on the following NSCC Business Day. Upward movements in value for purposes hereof shall be measured solely against the value of each security established on the day the order to purchase Creation Units is Deemed Received. In other words, a decrease in the value of a security followed by an increase in value will not necessarily trigger a mark-to-market obligation unless the value increases above the value of the security established on the day the order to purchase Creation Units is Deemed Received. The obligation to mark-to market described in this Section shall cease upon the delivery or buy-in of the last of the securities comprising the Portfolio Deposit.

(c) DETERMINATION OF VALUE. For the purposes of this section, the closing value of a given security shall be determined by the Trustee in accordance with the Trust Agreement valuation procedures.

II. TRUSTEE'S RESPONSIBILITIES FOR EFFECTING DELIVERY OF THE REQUISITE NASDAQ-100 SHARES, BUYING IN THE MISSING SECURITIES, AND RETURNING THE CASH COLLATERAL

Under customary NSCC practices, by midnight of the day following the receipt by NSCC of such order to create Creation Units, NSCC is required to determine either (1) to guarantee the Participating Party's obligations for delivery and receipt of securities and cash in connection with the order to create Creation Units, or (2) in certain circumstances to cease to act on behalf of the Participating Party with respect to such obligations.

1. NSCC GUARANTEE ESTABLISHED. Provided that the NSCC guarantee is established in accordance with (1) above, the Trustee will issue the Creation Units ordered no later than the time required in accordance with the procedures set forth in Attachment A to the Participant Agreement. If the Trustee does not receive the requisite securities in the Portfolio Deposit by the end of business on the third NSCC Business Day following receipt of such order (or such other date as determined under Rule 15c6-1 of the Securities Exchange Act of 1934, or a successor provision thereto), the Trustee is required to submit promptly (i.e., on the same day if practicable) a notice of intention to buy-in to NSCC with respect to the missing portion of Portfolio Deposit in conformance with NSCC's buy-in rules. Two NSCC Business Days following the day on which such notice of buy-in has been submitted, if all requisite securities in the Portfolio Deposit have still not been received by the Trustee, the Trustee shall effect a buy-in of the undelivered Portfolio Deposit in accordance with NSCC's buy-in procedures.

2. NSCC GUARANTEE NOT ESTABLISHED OR ESTABLISHED IN PART. Alternatively, in accordance with (2) above, if NSCC, by midnight on the day following receipt by NSCC of an order by a Participating Party for the purchase of Creation Units, determines to cease to act on behalf of the

Participating Party with respect to its delivery and/or receipt obligations of securities and cash in connection with such order, the Trustee shall act in one of three ways as described below:

(i) in the case in which NSCC elects not to guarantee the delivery of the Portfolio Deposit by the Participating Party to the Trustee and the receipt of Creation Units by the Participating Party from the Trustee, the Trustee shall deem the order to purchase Creation Units canceled altogether outside the NSCC system;

(ii) in the case in which NSCC elects only to guarantee the delivery of the Portfolio Deposit by the Participating Party to the Trustee, the Trustee shall deem the order to purchase Creation Units canceled and return as promptly as practicable through DTC, against payment through the Federal Reserve Bank wire system, any securities delivered to the Trustee; or

(iii) in the case where NSCC elects only to guarantee the receipt of Creation Units by the Participating Party from the Trustee, the Trustee shall issue the Creation Units ordered no later than the time required in accordance with the procedures set forth in Attachment A to the Participant Agreement. The Trustee shall further be required to buy promptly (i.e., on the same day, if practicable) the requisite securities in the Portfolio Deposit utilizing cash received by the Trustee pursuant to NSCC's rules in connection with its delivery of Creation Units, together with the 115% cash collateral held separately by the Trustee, to cover all buy-in costs and expenses.

3. USE OF CASH COLLATERAL. The Trustee shall utilize the cash collateral deposited with the Trustee and the cash received by the Trustee pursuant to NSCC's rules, to cover the costs and expenses (including brokerage commissions) for buying-in the securities comprising the Portfolio

Deposit. The Participant shall remain liable for any shortfall between the cost (including commissions and any other buy-in expenses) of purchasing the securities comprising the Portfolio Deposit and the collective amounts of cash collateral deposited with the Trustee and amounts received by the Trustee from NSCC, in the event that such cash amounts are insufficient to cover such costs and expenses for whatever reason.

4. RETURN OF CASH COLLATERAL. The Trustee shall return the cash collateral deposited with the Trustee to the Participant net of commissions and other buy-in expenses incurred by the Trustee, if any, promptly upon settlement of delivery of all of the securities in the Portfolio Deposit, or buy-in of all missing securities in the Portfolio Deposit, or cancellation of the order to create Creation Units.

III. MISCELLANEOUS

1. INDEMNIFICATION. The Participant hereby agrees to indemnify and hold harmless each Indemnified Party (as defined in the Participant Agreement) from and against any loss, liability, cost, and expense incurred by such Indemnified Party as a result of any actions of such Indemnified Party in reliance upon any instructions issued in accordance with this Attachment and believed by the Distributor and/or the Trustee to be genuine and to have been given by the Participant. This paragraph shall survive the termination of the Participant Agreement.

2. REJECTION OF AN ORDER. The Trustee reserves the absolute right to reject either a creation order transmitted to it, the use of the Cash Collateralization Procedures, or both, for the reasons set forth in Attachment A to the Participant Agreement.

ALPS MUTUAL FUNDS SERVICES, INC.

{NAME OF PARTICIPANT}

ACCEPTED BY:
THE BANK OF NEW YORK,
AS TRUSTEE

PROSPECTUS

The Nasdaq-100 Trust, Series 1 (the "Trust") was formed by Nasdaq-Amex Investment Product Services, Inc., a Delaware corporation (the "Sponsor") and a wholly-owned subsidiary of The Nasdaq Stock Market, Inc. ("Nasdaq"), to provide investors with the opportunity to purchase units of beneficial interest in the Trust representing proportionate undivided interests in the portfolio of securities held by the Trust (the "Securities") consisting of substantially all of the securities, in substantially the same weighting, as the component securities of the Nasdaq-100 Index-Registered Trademark- (the "Index").* While the investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the Index, there is no assurance that this investment objective can be fully achieved. Each unit of fractional undivided interest in the Trust is referred to as a "Nasdaq-100 Share(SM)".* The value of the Securities and, consequently, the value of Nasdaq-100 Shares, will fluctuate. The minimum number of Nasdaq-100 Shares that may be created or redeemed at any one time as described below is 50,000, which aggregation is referred to herein as a "Creation Unit."

Nasdaq-100 Shares have been approved for listing on the American Stock Exchange (the "Amex"), subject to official notice of issuance. The market symbol for Nasdaq-100 Shares is "QQQ". Once created, Nasdaq-100 Shares may be traded in the secondary market on a per Nasdaq-100 Share basis, and need not be traded in Creation Unit size aggregations. Prior to the date of this Prospectus, there has been no market for Nasdaq-100 Shares trading individually or in Creation Unit size aggregations and, consequently, there can be no assurance that active trading markets will develop, nor is there a certain basis for predicting the actual price levels at which Nasdaq-100 Shares may trade.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Prospectus dated March 5, 1999

* The "Nasdaq-100 Index-Registered Trademark-", "Nasdaq-100-Registered Trademark-", "Nasdaq-Registered Trademark-", "The Nasdaq Stock Market-Registered Trademark-", "Nasdaq-100 Shares(SM)", and "Nasdaq-100 Trust(SM)" are trademarks and service marks of Nasdaq and have been licensed for use for certain purposes by Nasdaq-Amex Investment Product Services, Inc. pursuant to a License Agreement with Nasdaq.

COPYRIGHT -C- 1999 by Nasdaq-Amex Investment Product Services, Inc., all rights reserved

Number of Nasdaq-100 Shares:                                                150,000

Fractional Undivided Interest in the Trust
Represented by each Nasdaq-100 Share:
                                                                             1/150,000th

Net Asset Value per Nasdaq-100 Share (based on the
value of the Securities, other net assets of the Trust,
and the number of Nasdaq-100 Shares outstanding):
                                                                              $96.65


Annual Trust Ordinary                                                        AMOUNT
Operating Expenses                                         AS A % OF          PER
(as a percentage of average                               AVERAGE NET       NASDAQ-100
net assets)*                                                ASSETS          SHARE**
                                                         -------------      --------
                              Trustee's Fee............     0.10%***          $0.09
                              Licensee Fee.............     0.00%****         $0.00
                              Estimated Other Operating
                                Expenses...............     0.08%             $0.08
                                                           ------           --------
                              Total Expenses...........     0.18%*****        $0.17
                                                           ------           --------
                                                           ------           --------

* The expenses listed do not include expenses incident to the organization of the Trust, as Nasdaq has agreed to assume these expenses. For a more complete description of the various costs and expenses of the Trust, see "Expenses of the Trust."

** Assumes the per Nasdaq-100 Share net asset value is $94.

*** The Trustee's annual fee will range from 0.06% to 0.10%, based on the net asset value of the Trust. See "Expenses of the Trust."

**** The Sponsor has committed not to seek reimbursement from the Trust for licensing fees paid to Nasdaq for the period through the Trust's fiscal year ending September 30, 1999. Thereafter, the Sponsor intends to charge the Trust for the annual licensing fee it pays for use of the Index as the basis for the Trust. The annual license fee, without regard to this commitment, is 0.04% per annum of the net asset value of the Trust.

***** Until further notice, the Sponsor has undertaken that for the period through the Trust's fiscal year ending September 30, 2000, the ordinary operating expenses of the Trust as calculated by the Trustee will not be permitted to exceed an amount which, on a per-annum basis, is 0.18% of the net asset value of the Trust. Gross expenses of the Trust, without regard to this undertaking, are estimated to be 0.22% of the net asset value of the Trust. After September 30, 2000, the Sponsor may, in its sole discretion, discontinue its undertaking to limit ordinary operating expenses of the Trust or renew this undertaking for an additional period of time and, if renewed, such 0.18% level may be changed and may exceed 0.18%. See "Expenses of the Trust."

Example of Expenses:   An investor would pay the following expenses on
                       a $1,000 investment, assuming the estimated
                       operating expense ratio of 0.18% set forth above
                       and a 5% annual return on investment throughout
                       the periods:

                           Cumulative Expenses Paid for Period of:

 1 YEAR      3 YEARS
---------  -----------

$    1.84   $    5.80

                       The above example assumes the reinvestment of
                       all dividends and distributions and utilizes a
                       5% annual rate of return as mandated by
                       Securities and Exchange Commission regulations
                       applicable to mutual funds. Although the Trust
                       is a unit investment trust rather than a mutual
                       fund, this information is presented to permit a
                       comparison of fees. The example should not be
                       considered a representation of past or future
                       expenses or annual rate of return; the actual
                       expenses and annual rate of return may be more
                       or less than those assumed for purposes of this
                       example. Investors should also note that the
                       presentation of a $1,000 investment is for
                       illustration purposes only.

Dividend Payment
Dates:                 Quarterly, on the last Business Day of April,
                       July, October, and January. Distributions (if
                       any) will be of the dividends accumulated in
                       respect of the Securities held by the Trust net
                       of Trust fees and expenses. Based on historical
                       rates of dividend payments of the portfolio of
                       securities comprising the Index and estimated
                       ordinary operating expenses of the Trust, little
                       or no net dividend distributions to Beneficial
                       Owners of Nasdaq-100 Shares are expected to be
                       made.++

Record Dates:          Quarterly, on the second Business Day following
                       the third Friday in each of March, June,
                       September, and December.++

Evaluation Time:       Closing time of the regular trading session on
                       the Nasdaq Stock Market (ordinarily 4:00 p.m.
                       New York time).

Licensor:              The Nasdaq Stock Market, Inc.

Mandatory
Termination Date:      The first to occur of (i) March 4, 2124 or (ii)
                       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 1986
                       and the youngest of whom was born in 1996.

Discretionary
Termination:           The Trust may be terminated if at any time after
                       six months following and prior to three years
                       following the Initial Date of Deposit the value
                       of the Securities held by the Trust is less than
                       $150,000,000 or if at any time on or after three
                       years following the Initial Date of Deposit the
                       value of the Securities held by the Trust is
                       less than $350,000,000, as such amount shall be
                       adjusted for inflation.+++

Minimum and
Maximum
Transaction Fee:       A transaction fee is payable to the Trustee in
                       connection with each creation and each
                       redemption of Nasdaq-100 Shares. The minimum
                       transaction fee payable for the creation or
                       redemption of Creation Unit size aggregations of
                       Nasdaq-100 Shares is $1,000, and the maximum
                       transaction fee payable for the creation or
                       redemption of Creation Unit size aggregations of
                       Nasdaq-100 Shares is $4,000.++++

+ The Trust Agreement became effective and the initial deposit was made on March 4, 1999 (the "Initial Date of Deposit").

++ See "Administration of the Trust--Distributions to Beneficial Owners" and "Special Considerations and Risk Factors--Little or No Expected Net Dividend Distributions to Beneficial Owners."

+++ The Trust may also be terminated under other circumstances. See "Administration of the Trust--Termination."

++++ See "Prospectus Summary--Transaction Fee."

PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED

INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS.

OBJECTIVES

The Sponsor formed the Trust to provide investors with the opportunity to purchase units of beneficial interest in the Trust representing proportionate undivided interests in the Securities, which consist of substantially all of the securities, in substantially the same weighting, as the component securities of the Nasdaq-100 Index-Registered Trademark- (the "Index") in the form of a security that closely tracks the Index and that may be traded as a share of common stock. The investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the component securities of the Index (the component securities of the Index are sometimes referred to herein as "Index Securities"). There can be no assurance that this investment objective will be met fully. For example, it may not be possible for the Trust to replicate and maintain exactly the composition of the Index Securities. It is also possible that, from time to time, the Trust will be unable to purchase all of the Index Securities. In certain circumstances, the Trust may also be required to make distributions in excess of the yield performance of the Index Securities (see "Tax Status of the Trust"). The value of the Securities and, consequently, the value of Nasdaq-100 Shares, are subject to changes in the value of common stocks generally and to other factors. Further, the payment, if any, of dividends (net of Trust fees and expenses) and the maintenance of capital are subject to a number of conditions, including the financial condition of the issuers of the Securities (see "Special Considerations and Risk Factors").

THE TRUST

The Trust is a unit investment trust organized under the laws of the State of New York. The Trust is governed by a trust agreement (the "Trust Agreement") between The Bank of New York, a corporation organized under the laws of the State of New York with trust powers (the "Trustee"), and the Sponsor dated and executed as of March 4, 1999.

DISTRIBUTOR

The Distributor for Nasdaq-100 Shares is ALPS Mutual Funds Services, Inc., a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. (see "Underwriting").

PORTFOLIO DEPOSITS

All orders to create Nasdaq-100 Shares in Creation Unit size aggregations must be placed with the Distributor (see "Underwriting" and "The Trust-- Procedures for Creation of Creation Units"). To be eligible to place orders with the Distributor to create Creation Unit size aggregations of Nasdaq-100 Shares, an entity or person either must be (1) a "Participating Party", as hereinafter defined or (2) a Depository Trust Company Participant (see "Book Entry Ownership of Nasdaq-100 Shares"), and in each case must have executed a Nasdaq-100 Participant Agreement, as hereinafter defined (see "The Trust--Procedures for Creation of Creation Units" and "The Trust--Placement of Creation Orders Using the Nasdaq-100 Clearing Process"). As used herein, the term "Participating Party" means a broker-dealer or other participant in the Nasdaq-100 Clearing Process, as hereinafter defined, through the Continuous Net Settlement ("CNS") System of the National Securities Clearing Corporation ("NSCC"), a clearing agency that is registered with the Securities and Exchange Commission (the "Commission").(*) Upon acceptance of an order to create Nasdaq-100 Shares, the Distributor will transmit such order to the Trustee and instruct the Trustee to initiate the book entry movement of the appropriate number of Nasdaq-100 Shares to the account of the entity placing the order. Payment for orders to create Nasdaq-100 Shares will be made by deposits with the Trustee of a portfolio of securities that is substantially similar in composition and weighting to the Index Securities (see "The Trust--Creation of Nasdaq-100 Shares"), together, in certain cases, with a cash payment in an amount which shall be equal to the Income Net of Expense Amount (as hereinafter defined), plus or minus, as the case may be, the Balancing Amount (as hereinafter defined). The "Income Net of Expense Amount" is an amount equal, on a per Creation Unit basis, to the dividends on all the Securities with ex-dividend dates within the period beginning on the most recent ex-dividend date for Nasdaq-100 Shares (generally, the third Friday in each of March, June, September, and December, see "Distributions") through and including the current Business Day (the "Accumulation Period") as if all of the Securities had been held for such period, net of accrued expenses and liabilities for such period not previously deducted (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 (see "Expenses of the Trust")). The "Balancing Amount" serves the function of

* As of December 31, 1998, the National Association of Securities Dealers, Inc. owned indirectly 66 2/3% of the issued and outstanding shares of common stock of NSCC. The National Association of Securities Dealers, Inc. is also the parent company of Nasdaq.

compensating for any differences between (1) the value of the portfolio of securities deposited with the Trustee in connection with a creation of Nasdaq-100 Shares, together with the Income Net of Expense Amount, and (2) the net asset value of the Trust on a per Creation Unit basis (see "The Portfolio--Adjustments to the Portfolio Deposit" for a further description thereof).

The Income Net of Expense Amount 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 connection with an order to create Nasdaq-100 Shares on any given day, the Cash Component of the Portfolio Deposit may be payable either by the Trustee on behalf of the Trust to the creator of Nasdaq-100 Shares or by the creator of Nasdaq-100 Shares to the Trustee on behalf of the Trust, depending upon the respective amounts of the Income Net of Expense Amount and the Balancing Amount. For example, if the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, exceeds the accrued expenses and liabilities of the Trust for such period (I.E., the Cash Component has a positive value), then the creator of Nasdaq-100 Shares will be obligated to pay such amount to the Trustee on behalf of the Trust in connection with an order to create Nasdaq-100 Shares. Conversely, if the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, is less than the accrued expenses and liabilities of the Trust for such period (I.E., the Cash Component has a negative value), then the Trustee on behalf of the Trust will pay such Cash Component to the entity placing an order to create Nasdaq-100 Shares.

All matters as to the number of shares of each of the Index Securities and the amount of the Cash Component comprising the Portfolio Deposit shall be determined by the Trustee in its discretion, whose determination shall be final and binding. In certain instances, the securities portion of the Portfolio Deposit may differ in composition and weighting relative to the composition and weighting of the securities in the Index. For example, in connection with the creation of Nasdaq-100 Shares, in the event that the Trustee determines, in its discretion, that one or more Index Securities are likely to be unavailable for delivery or available in insufficient quantity for delivery to the Trust upon the creation of Nasdaq-100 Shares in Creation Unit size aggregations, then the Trustee shall have the right in its discretion to permit the cash equivalent value of such Index Security or Index Securities to be included in the Portfolio Deposit in the calculation of the Cash Component in lieu of the inclusion of such Index Security or Index Securities in the securities portion of the Portfolio Deposit (see "The Portfolio--Adjustments to the Portfolio Deposit").

Similarly, in connection with the creation of Nasdaq-100 Shares, if a creator is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities, the Trustee shall have the right, in its discretion, to permit the cash equivalent value of such Index Security or Index Securities to be included in the Portfolio Deposit, based on the market value of such Index Security or Index Securities as of the Evaluation Time on the date such creation order is deemed received by the Distributor, in the calculation of the Cash Component in lieu of the inclusion of such Index Security or Index Securities in the securities portion of the Portfolio Deposit. In such case the creator will pay the Trustee the standard Transaction Fee described below, plus an additional amount not to exceed three (3) times the Transaction Fee applicable for one Creation Unit.

An entity or person placing creation orders with the Distributor must either
(i) initiate instructions pertaining to Portfolio Deposits through the CNS clearing processes of NSCC, as such processes have been enhanced to effect creations and redemptions of Creation Unit size aggregations of Nasdaq-100 Shares, such processes being referred to herein as the "Nasdaq-100 Clearing Process", or (ii) deposit Portfolio Deposits with the Trustee outside the Nasdaq-100 Clearing Process (I.E., through the facilities of The Depository Trust Company).

TRANSACTION FEE

A transaction fee is payable to the Trustee in connection with each creation and each redemption made through the Nasdaq-100 Clearing Process of Creation Unit size aggregations of Nasdaq-100 Shares (the "Transaction Fee"), subject to the changes, modifications or waivers, if any, described below. Such Transaction Fee is non-refundable, regardless of the net asset value of the Trust.

Until further notice is given as described below, the Transaction Fee charged in connection with each creation of Creation Units through the Nasdaq-100 Clearing Process (see "The Trust--Procedures for Creation of Creation Units") is $1,000 per Participating Party per day, regardless of the number of Creation Units created on such day by such Participating Party. Likewise, until further notice is given as described below, the Transaction Fee charged in connection with the redemption of Creation Units through the Nasdaq-100 Clearing Process is $1,000 per Participating Party per day, regardless of the number of Creation Units redeemed on such day by such Participating Party. This Transaction Fee may subsequently be changed by the Trustee, upon the consent of the Sponsor, but will not in any event exceed 10/100 of one percent (10 basis points) of the value of a Creation Unit at the time of

creation or redemption as the case may be (the "10 Basis Point Limit"). No modifications to, or reductions, discounts or waivers of, the Transaction Fee charged in connection with the creation of Creation Units are scheduled or currently contemplated by the Sponsor or the Trustee.

If Creation Units are created or redeemed outside the Nasdaq-100 Clearing Process, an additional amount not to exceed three (3) times the applicable Transaction Fee will be charged to the creator or redeemer. Under the current schedule, therefore, the total fee charged in connection with the creation or redemption of Creation Units outside the Nasdaq-100 Clearing Process would be $1,000 (the Transaction Fee for the creation or redemption of a Creation Unit) plus an additional amount not to exceed $3,000 (3 times $1,000) for a total of $4,000.

From time to time, and for such periods as the Sponsor and the Trustee together may determine, the Transaction Fee (as well as any additional amounts charged in connection with creations and/or redemptions outside the Nasdaq-100 Clearing Process) may be increased, decreased, or otherwise modified or waived in its entirety for certain numbers of Creation Units of Nasdaq-100 Shares created or redeemed, or for creations and/or redemptions made under certain specified circumstances, in each case without the consent of Beneficial Owners, subject to certain conditions (see "The Trust--Creation of Creation Units" and "The Trust--Procedures for Redemption of Nasdaq-100 Shares"). The Sponsor also reserves the right, from time to time, to vary the number of Nasdaq-100 Shares per Creation Unit (currently 50,000 shares) and such change may or may not be made in conjunction with a change to the Transaction Fee. Any change to the Transaction Fee so made will not cause the amount of the Transaction Fee to exceed the 10 Basis Point Limit at the time of a creation or redemption, as the case may be. Such changes or variations will be effected by an amendment to the current Trust prospectus. The amount of the Transaction Fee in effect at any given time will be available from the Trustee.

SIZE OF CREATION UNIT AGGREGATIONS OF NASDAQ-100 SHARES

Nasdaq-100 Shares may be created or redeemed only in Creation Unit size aggregations of 50,000 shares, or in multiples thereof (E.G., 100,000, 150,000 Nasdaq-100 Shares), and in no event will fractional Creation Units be created or redeemed. The Sponsor reserves the right to direct the Trustee to declare a split or reverse split in the number of Nasdaq-100 Shares outstanding in the event that the per Nasdaq-100 Share price in the secondary market changes to an amount that the Sponsor believes falls outside a desirable retail range. The Sponsor also reserves the right to make a corresponding change in

the number of Nasdaq-100 Shares constituting a Creation Unit. For example, if a 2-for-1 split were declared and the Sponsor also determined to make a corresponding change in the number of Nasdaq-100 Shares per Creation Unit, the number of Nasdaq-100 Shares in a Creation Unit size aggregation of Nasdaq-100 Shares would double (E.G., from 50,000 to 100,000 Nasdaq-100 Shares).

PORTFOLIO ADJUSTMENTS

To maintain the correspondence between the composition and weighting of Securities held in the Trust and that of the Index Securities, the composition and weighting of the Securities are adjusted from time to time to conform to periodic changes in the composition and weighting of the Index Securities made by Nasdaq. The Trustee aggregates certain of these adjustments and makes conforming changes to the Trust's portfolio at least monthly; adjustments are made more frequently, however, in the case of changes to the Index that are significant (see "The Portfolio--Adjustments to the Portfolio"). The composition and weighting of the securities portion of a Portfolio Deposit are also adjusted to conform to changes in the Index. Any change in the identity or weighting of an Index Security will result in a corresponding adjustment to the prescribed Portfolio Deposit effective on the Business Day (a "Business Day" being any day that the Nasdaq Stock Market is open for business) on which the change to the Index takes effect. Changes to the Index are made after the close of the market (see "The Portfolio--Adjustments to the Portfolio Deposit").

BOOK-ENTRY OWNERSHIP OF NASDAQ-100 SHARES

The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York (referred to herein as "DTC" or the "Depository") or its nominee will be the record or registered owner of all outstanding Nasdaq-100 Shares. Beneficial ownership of Nasdaq-100 Shares will be shown on the records of the Depository or its participants. Certificates will not be issued for Nasdaq-100 Shares, whether in Creation Unit size aggregations or otherwise (see "The Trust-- Book-Entry-Only System").

EXPENSES

The Trustee's fees are set forth generally in the "Summary of Essential Information" and more specifically in "Expenses of the Trust" below. Other expenses of the Trust are also described more fully in "Expenses of the Trust."

If the income received by the Trust in the form of dividends and other distributions on the Securities is insufficient to cover Trust fees and expenses (which would currently be the case if the Trust were in existence and its ordinary operating expenses were 0.18% per annum of the net asset value of the Trust consistent with the Sponsor's undertaking to limit the Trust's ordinary operating expenses to such 0.18% per annum level, see "Expenses of the Trust"), then the Trustee will be required to sell Securities in an amount sufficient to pay the shortfall. Such a sale of Securities will ordinarily be required to occur whenever the Trustee determines that projected annualized fees and expenses accrued on a daily basis exceed projected annualized dividends and other Trust income accrued on a daily basis by more than 1/100 of one percent (0.01%) of the net asset value of the Trust and will ordinarily be made no later than the next occurring adjustment to the Securities held in the Trust to conform to changes in the composition and weighting of the Index Securities (see "Expenses of the Trust" and "The Portfolio--Adjustments to the Portfolio").

FEDERAL INCOME TAX CONSIDERATIONS

The Trust intends to adopt a fiscal year ending on September 30 of each year. The Trust intends to qualify for and elect tax treatment as a "regulated investment company" under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code") and to distribute annually its entire investment company taxable income and net capital gain. Distributions that are taxable as ordinary income to Beneficial Owners generally are expected to constitute dividend income for federal income tax purposes and to be eligible for the dividends-received deduction available to many corporations to the extent of qualifying dividend income received by the Trust (see "Tax Status of the Trust"). The quarterly distributions, if any, made by the Trust will be based on the dividend performance of the Securities held during such quarterly distribution period, net of Trust fees and expenses, rather than the actual taxable income of the Trust. (See "Administration of the Trust--Distributions to Beneficial Owners.") As a result, a portion of any such 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 regulated investment company or to avoid imposition of income or excise taxes on undistributed income (see "Tax Status of the Trust" and "Administration of the Trust--Distributions to Beneficial Owners").

ERISA CONSIDERATIONS

In considering the advisability of an investment in Nasdaq-100 Shares, fiduciaries of pension, profit sharing, or other tax-qualified retirement plans (including Keogh Plans) and 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 Nasdaq-100 Shares is permitted by the documents and instruments governing the Plan and whether the investment satisfies the exclusive benefit, prudence, and diversification requirements of ERISA. Individual retirement account ("IRA") investors should consider that an IRA may make only such investments as are authorized by its governing instruments.

The fiduciary standards and prohibited transactions rules of ERISA and
Section 4975 of the Code will not apply to transactions involving the Trust's assets while Nasdaq-100 Shares are held by a Plan or IRA. Unlike many other investment vehicles offered to Plans and IRAs, the Trust's assets will not be treated as "plan assets" of the Plans or IRAs which acquire or purchase Nasdaq-100 Shares. Although 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 their fiduciaries or certain related persons, those rules will not apply to transactions involving the Trust's assets because Nasdaq-100 Shares represent an interest in the Trust, and the Trust is registered as an investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). ERISA, the Code, and U.S. Department of Labor regulations contain unconditional language exempting the assets of registered investment companies from treatment as "plan assets" in applying the fiduciary and prohibited transaction provisions of ERISA and the Code.

RESTRICTIONS ON PURCHASES BY INVESTMENT COMPANIES

The acquisition of Nasdaq-100 Shares by registered investment companies is subject to the restrictions set forth in section 12(d)(l) of the 1940 Act.

INVESTMENT MANAGEMENT

The Trust will hold the Securities and cash and will not be actively "managed" by traditional methods, which typically involve effecting changes in the Securities on the basis of judgments made relating to economic, financial, and market considerations. The composition of the Securities will be adjusted, however, to conform to changes in the composition of the Index Securities in the manner set forth in the Trust Agreement as described herein (see "The Portfolio--Adjustments to the Portfolio").

DISTRIBUTIONS

Distributions by the Trust will be made quarterly to the extent that dividends accumulated in respect of the Securities and other income, if any,

received by the Trust exceed Trust fees and expenses accrued during the quarterly Accumulation Period which ends on the Business Day preceding each ex-dividend date for Nasdaq-100 Shares. The regular quarterly ex-dividend date with respect to net dividends, if any, for Nasdaq-100 Shares will be the third Friday in each of March, June, September, and December, 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"). However, no net dividend distribution will be made in any given quarter, and any net dividend amounts will be rolled into the next Accumulation Period, if the aggregate net dividend distribution would be in an amount less than 5/100 of one percent (0.05%) of the net asset value of the Trust, unless the Trustee determines that such distribution is required to be made in order to maintain the Trust's status as a regulated investment company or to avoid the imposition of income or excise taxes on undistributed income. (See "Administration of the Trust--Distributions to Beneficial Owners.")

At present, and possibly for extended periods of time during the life of the Trust, the expenses of the Trust may be as great as or in excess of the dividend and other income to be received by the Trust during any quarter and, under such circumstances, no quarterly net dividend distributions would be made (see "Special Consideration and Risk Factors--Little or No Expected Net Dividend Distributions to Beneficial Owners"). Distributions (if any) will be made on Dividend Payment Dates to Beneficial Owners via the Depository and its participants (see "The Trust--Book-Entry-Only System"). For federal income tax purposes, a portion of any net dividend distributions may result in a return of capital to Beneficial Owners of Nasdaq-100 Shares (see "Tax Status of the Trust").

Any net capital gains recognized by the Trust in any taxable year will be distributed at least annually. The Trust may make additional distributions after the end of the year in order to satisfy certain distribution requirements imposed by the Code (see "Tax Status of the Trust" and "Administration of the Trust--Distributions to Beneficial Owners"). Although income distributions, if any, are currently planned to be made on a quarterly basis, the Trustee reserves the right to vary the frequency of distributions (see "Administration of the Trust--Distributions to Beneficial Owners").

REDEMPTION

Nasdaq-100 Shares in Creation Unit size aggregations are ordinarily redeemable in kind only and are not redeemable for cash except under certain circumstances (see "Redemption of Nasdaq-100 Shares"). Nasdaq-100 Shares

can be redeemed only in Creation Unit size aggregations effected by a Participating Party (with respect to redemptions through the Nasdaq-100 Clearing Process) or a DTC Participant (with respect to redemptions outside the Nasdaq-100 Clearing Process), in either case which has executed a Nasdaq-100 Participant Agreement (see "Redemption of Nasdaq-100 Shares--Procedure for Redemption of Nasdaq-100 Shares"). Individual Nasdaq-100 Shares are not redeemable, but entitle the owners thereof to certain payments upon termination of the Trust (see "Administration of the Trust--Termination"). Prior to termination, Nasdaq-100 Share owners may aggregate individual Nasdaq-100 Shares to Creation Unit size or multiples thereof (E.G., 50,000, 100,000 shares, etc.) and request that the Trustee redeem the Nasdaq-100 Shares so aggregated. There can be no assurance, however, that there will always be sufficient depth and liquidity in the public trading market to complete all such transactions (see "Special Considerations and Risk Factors"). Owners of Nasdaq-100 Shares in less than Creation Unit size aggregations may have to pay brokerage fees and commissions to acquire sufficient Nasdaq-100 Shares (I.E., 50,000 shares) to constitute a Creation Unit. Persons redeeming Nasdaq-100 Shares in Creation Unit size aggregations may also be entitled to receive, or be required to pay, a Cash Redemption Amount (as hereinafter defined, see "Redemption of Nasdaq-100 Shares--Procedure for Redemption of Nasdaq-100 Shares"). On any given Business Day, the Cash Redemption Amount will be an amount typically identical to the Cash Component of a Portfolio Deposit.

In the event that the Trustee determines in its discretion that an Index Security is likely to be unavailable for delivery or available in insufficient quantity for delivery by the Trust upon the redemption of Nasdaq-100 Shares in Creation Unit size aggregations, then the Trustee shall have the right in its discretion to include the cash equivalent value of such Index Security or Index Securities, based on the market value of such Index Security or Index Securities as of the Evaluation Time on the date such redemption order is deemed received by the Trustee (see "Redemption of Nasdaq-100 Shares"), in the calculation of the Cash Redemption Amount in lieu of delivering the Index Security or Index Securities to the redeeming investor.

Similarly, in connection with the redemption of Nasdaq-100 Shares, if a redeeming investor requests redemption in cash, rather than in kind, with respect to one or more Index Securities (for example, because a redeeming investor is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities), the Trustee shall have the right in its discretion to include the cash equivalent value of such Index Security or Index Securities, based on the market value of such Index Security or Index Securities as of the Evaluation Time on the date such redemption order is deemed received by the Trustee, in the calculation of the Cash Redemption

Amount in lieu of delivering such Index Security or Index Securities to the redeeming investor. In all such cases, such investor will pay the Trustee the standard Transaction Fee, plus an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit.

Furthermore, the Trustee, in its discretion, upon the request of a redeeming investor, may redeem Creation Units in whole or in part by providing such redeeming investor with a Portfolio Deposit differing in composition, but not differing in net asset value, from the then-current Portfolio Deposit. Such a redemption is likely to be made only if it were determined to be appropriate in order to maintain the Trust portfolio's correspondence to the composition and weighting of the Index when a change to the composition and/or weighting of the Index Securities occurs (see "The Portfolio", "The Index", and "The Index--Rebalancing of the Index").

The Transaction Fee will be charged in connection with the redemption of Creation Unit size aggregations of Nasdaq-100 Shares. If a request for redemption is made directly to the Trustee outside the Nasdaq-100 Clearing Process, an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit will be charged to the redeemer due to the increased expense associated with delivery outside the Nasdaq-100 Clearing Process (see "Transaction Fee").

TERMINATION

The Trust will terminate by its terms on the first to occur of: (i) the date one hundred twenty-five (125) years from the Initial Date of Deposit (I.E., March 4, 2124) or (ii) the date twenty (20) years after the death of the last survivor of fifteen persons named in the Trust Agreement, the oldest of whom was born in 1986 and the youngest of whom was born in 1996 (the "Mandatory Termination Date"). The Trust may also be terminated earlier upon the agreement of the Beneficial Owners of 66 2/3% of the then outstanding Nasdaq-100 Shares. The Sponsor will also have the discretionary right to direct the Trustee to terminate the Trust if at anytime 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 or if on or after three years following the Initial Date of Deposit the net asset value of the Trust is less than $350,000,000, as such dollar amount shall be adjusted for inflation in accordance with the National Consumer Price Index for All Urban Consumers (the "CPI-U")(*) as published by the United States Department of Labor, such adjustment to take effect at the end of the fourth year following the Initial

* The CPI-U measures the inflation rate of specified commodities deemed representative of the purchases of all urban consumers.

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 month preceding the month in which such adjustment is made. The Trustee shall have the right to terminate the Trust in the event that (a) the Sponsor resigns or becomes incapable of discharging its duties and a successor is not appointed; (b) the Depository is unable or unwilling to continue to perform its functions as set forth under the Trust Agreement and a suitable replacement is unavailable; (c) NSCC no longer provides clearance services with respect to Nasdaq-100 Shares and a suitable replacement is unavailable, or if the Trustee is no longer a member of NSCC or any successor to NSCC providing clearance services; (d) Nasdaq ceases publishing the Index;
(e) Nasdaq-100 Shares are delisted from the Amex and are not subsequently relisted on a national securities exchange or a quotation medium operated by a national securities association (see "Marketplace Listing"); or (f) the License Agreement (as hereinafter defined) is terminated. The License Agreement currently is scheduled to terminate five years from the commencement date of trading of Nasdaq-100 Shares, subject to a five-year renewal period following such date (see "License Agreement"). The Trust shall also terminate if the Trustee resigns or becomes incapable of discharging its duties and a successor is not appointed (see "Administration of the Trust--Termination").

UNDERWRITING

ALPS Mutual Funds Services, Inc. (the "Distributor") acts as underwriter of Nasdaq-100 Shares on an agency basis. All orders to create Nasdaq-100 Shares in Creation Unit size aggregations must be placed with the Distributor, and it is the responsibility of the Distributor to transmit such orders to the Trustee. The Distributor will furnish to those placing such orders confirmation that the orders have been accepted, but the Distributor will reject any order which is not submitted in proper form. Upon acceptance of an order to create Nasdaq-100 Shares, the Distributor will instruct the Trustee to initiate the book-entry movement of the appropriate number of Nasdaq-100 Shares to the account of the entity placing the order. The Distributor is also responsible for delivering a prospectus to those persons creating Nasdaq-100 Shares. The Distributor also maintains records of both the orders placed with it for the creation of Nasdaq-100 Shares and the confirmations of acceptance issued by it. In addition, the Distributor maintains a record of the instructions given to implement delivery of Nasdaq-100 Shares in response to orders placed with it. The Distributor may also 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 370

17th Street, Suite 3100, Denver, CO 80202. The Distributor is a registered broker-dealer and a member of the National Association of Securities Dealers, Inc. The Sponsor 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 Commission.

SPECIAL CONSIDERATIONS AND RISK FACTORS

GENERAL

Investment in the Trust should be made with an understanding that the value of the Securities may fluctuate in accordance with changes in the financial condition of the issuers of the Securities, the value of common stocks generally, and other factors. The composition and weighting of the Index Securities and hence the composition and weighting of the Securities held in the Trust also change from time to time (see "The Portfolio--Adjustments to the Portfolio", "The Portfolio--Selection and Acquisition of Securities", and "The Index--Rebalancing of the Index"). There can be no assurance that the issuers of the Securities will pay dividends on outstanding shares of common stock. Distributions on the Securities will generally depend upon the declaration of dividends by the issuers of the Securities; the declaration of such dividends generally depends upon various factors, including the financial condition of the issuers and general economic conditions. As discussed above, the Trust, unlike a managed investment company, will not be actively "managed" by traditional methods, and therefore the adverse financial condition of an issuer will not result in the elimination of its securities from the Securities held by the Trust unless the Securities of such issuer are removed from the Index (see "The Portfolio--Adjustments to the Portfolio").

An investment in the Trust should also be made with an understanding of the risks inherent in an investment in equity securities, including the risk that the financial condition of the issuers of the Securities may become impaired or that the general condition of the stock market may deteriorate (either of which may cause a decrease in the value of the Securities and thus in the value of Nasdaq-100 Shares). 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. As discussed above, the Trust will not be actively "managed" and therefore securities held by the Trust will not be disposed of as a result of or in anticipation of normal fluctuations in the market.

Holders of common stocks of any given issuer incur more risk than holders of preferred stocks and debt obligations of such issuer because common stockholders, as owners of such issuer, have generally inferior rights to receive payments from such issuer in comparison with the rights of creditors of, or holders of debt obligations or preferred stocks issued by, such issuer. Further, unlike debt securities which typically have a stated principal amount payable at

maturity (whose value, however, will be subject to market fluctuations prior thereto), or preferred stocks which typically have a liquidation preference and which 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 Securities may therefore be expected to fluctuate over the entire life of the Trust to values higher or lower than those prevailing on the Initial Date of Deposit (see "Market Risks").

All of the Securities are currently listed on the Nasdaq Stock Market. The existence of a liquid trading market for certain Securities may depend on whether dealers will make a market in such Securities. There can be no assurance that a market will be made for any of the Securities, that any market for the Securities will be maintained, or that any such market will be or remain liquid. The price at which the Securities may be sold and the value of the Trust will be adversely affected if trading markets for the Securities are limited or absent.

An investment in the Trust should also be made with an understanding that the Trust will not be able to replicate exactly the performance of the Index because the total return generated by the Securities will be reduced by transaction costs incurred in adjusting the actual balance of the Securities and other Trust expenses, whereas such transaction costs and expenses are not included in the calculation of the Index. It is also possible that for short periods of time, the Trust may not fully replicate the performance of the Index due to the temporary unavailability of certain Index Securities in the secondary market or due to other extraordinary circumstances. Such events are unlikely to continue for an extended period of time because the Trustee is required to correct such imbalances by means of adjusting the composition of the Securities (see "The Portfolio--Adjustments to the Portfolio"). It is also possible that the composition of the Trust may not exactly replicate the composition of the Index if the Trust has to adjust its portfolio holdings in order to continue to qualify as a "regulated investment company" under the Code (see "Tax Status of the Trust").

Neither the Depository nor Beneficial Owners of Nasdaq-100 Shares are entitled either to dispose of any of the Securities in the Trust, as such, or to vote the Securities. As the beneficial owner of the Securities, the Trustee has the right to vote all of the voting Securities (see "Administration of the Trust-- Voting").

Except as otherwise specifically noted, the time frames for delivery of Securities, cash, or Nasdaq-100 Shares in connection with creation and redemption activity within the Nasdaq-100 Clearing Process as set forth herein

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 or increase such "regular way" settlement period, in which case it is anticipated that there would be a corresponding reduction or increase in settlement periods applicable to Nasdaq-100 Share creations and redemptions. Investors should note that NSCC Business Days do not always coincide with the days during which the Trustee is open for business.

LITTLE OR NO EXPECTED NET DIVIDEND DISTRIBUTIONS TO BENEFICIAL OWNERS

The Trust Agreement provides for quarterly distributions to Beneficial Owners via the Depository and its participants (see "The Trust-- Book-Entry-Only System") on Dividend Payment Dates in the event that dividends accumulated in respect of the Securities and other income, if any, received by the Trust exceed Trust fees and expenses accrued during the quarterly Accumulation Period which ends on the Business Day preceding each Ex-Dividend Date; subject, however, to such amount falling below a floor for de-minimus distributions, in which event a net dividend distribution may not be paid and such amount will be rolled into the next Accumulation Period (see "Administration of the Trust--Distributions to Beneficial Owners"). Historically, the portfolio of securities comprising the Index has paid relatively low dividends when compared to the securities comprising other broad-based stock indices. For example, for the 1996, 1997, and 1998 calendar years, the ratio of the aggregate dividends paid to total capitalization for the securities comprising the Index in those periods was 0.11%, 0.13%, and 0.07%, respectively. In comparison, the comparable dividend ratio for the securities comprising the Standard & Poor's 500 Index-Registered Trademark- in those periods was 2.01%, 1.60%, and 1.68%, respectively. (See "The Index" for the historical aggregate dividend yields of the securities comprising the Index.)

The Sponsor has undertaken that on each day during each fiscal year up to and including the fiscal year ending September 30, 2000, the ordinary operating expenses of the Trust will not be permitted to exceed an amount which is 18/100 of one percent (0.18%) per annum of the daily net asset value of the Trust (see "Expenses of the Trust"). Notwithstanding such limitation on Trust expenses, the fees and expenses of the Trust may exceed the dividend and other income on the Securities received by the Trust during each quarter. In such event, no net dividend distributions would be made by the Trust. Based on the 1998 dividend yield noted above of the securities comprising the Index in that year, no net dividend distributions would have been made by the Trust if it were in existence during the 1998 calendar year and if ordinary operating

expenses were 0.18% per annum of the net asset value of the Trust consistent with the Sponsor's undertaking to limit the Trust's ordinary operating expenses.

Moreover, after September 30, 2000, the Sponsor may, in its sole discretion, discontinue its undertaking to limit ordinary operating expenses of the Trust, or may renew this undertaking for an additional period of time but at a different level which may be higher than 0.18%. In such event, the likelihood may increase that expenses of the Trust would exceed the dividend and other income received by the Trust during each quarter. The Trust will pay any such excess expenses with the proceeds realized from the sale of Securities effected ordinarily whenever the Trustee determines that projected annualized fees and expenses accrued on a daily basis exceed projected annualized dividends and other Trust income accrued on a daily basis by more than 1/100 of one percent (0.01%) of the net asset value of the Trust (see "Expenses of the Trust"). Such a sale of Securities will ordinarily be required to occur no later than the next occurring adjustment to the Securities held in the Trust to conform to changes in the composition and weighting of the Index Securities (see "The Portfolio-- Adjustments to the Portfolio").

Dividend payment rates of the securities comprising the Index may change based on numerous factors, including the financial condition of the issuers and general economic conditions, as well as from changes to the price level of Index Securities, and from changes to the composition of Index Securities (I.E., the substitution of one security in the Index with another paying higher or lower dividends than the security being replaced). (See "The Index" for a discussion of the selection criteria for determining the Index Securities.) In addition, the Trust has no operating history by which to measure Trust expenses and although the amounts of certain ordinary Trust expenses can be estimated, the growth rate of the Trust, which cannot be anticipated, will directly affect the level of Trust expenses as a percentage of the Trust's net asset value (I.E., as the Trust grows in net asset value, certain relatively fixed Trust expenses will be borne by a greater number of holders of Nasdaq-100 Shares). Accordingly, no assurances can be given as to the actual level of dividends payable by the issuers of the Securities or the actual level of Trust expenses, and no representations are being made as to the level of net dividend distributions, if any, that may be payable by the Trust.

NET ASSET VALUE AND MARKET PRICES

The Trust's assets consist primarily of the Securities. Therefore, the net asset value of Nasdaq-100 Shares in Creation Unit size aggregations and, proportionately, the net asset value per Nasdaq-100 Share changes as fluctuations occur in the market value of the Securities. Investors should also be aware that

the aggregate public trading market price of 50,000 Nasdaq-100 Shares may be different from the net asset value of a Creation Unit size aggregation of Nasdaq-100 Shares (I.E., 50,000 Nasdaq-100 Shares may trade at a premium over or at a discount to the net asset value of a Creation Unit) and similarly the public trading market price per Nasdaq-100 Share may be different from the net asset value of a Creation Unit on a per Nasdaq-100 Share basis (see "--Market Risks"). 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 Nasdaq-100 Shares will be closely related to, but not identical to, the same forces influencing the prices of the Index component securities trading individually or in the aggregate at any point in time. The expenses of the Trust are reflected in the net asset value of Nasdaq-100 Shares in Creation Unit size aggregations and the expenses of the Trust are accrued daily (see "Expenses of the Trust").

TRADING CONSIDERATIONS

Prior to the date of this Prospectus, there has been no market for Nasdaq-100 Shares trading individually or in Creation Unit size aggregations and, consequently, there can be no assurance that active trading markets will develop, nor is there a certain basis for predicting the actual price levels at which Nasdaq-100 Shares may trade.

Further, there can be no assurance that Nasdaq-100 Shares will experience trading or pricing patterns similar to those of market-traded securities which are issued by investment companies based upon indexes other than the Index (E.G., SPDRs-Registered Trademark-, MidCap SPDRs-TM-, DIAMONDS(SM), and WEBS(SM)).*

The Sponsor's aim in designing Nasdaq-100 Shares was to provide investors with a security whose initial market value would approximate one-twentieth (1/20th) the value of the Index. Thus, for example, if the Index were at 1600, investors might expect a Nasdaq-100 Share to trade initially at approximately $80. Investors should be aware, however, that the market price of a Nasdaq-100 Share may be affected by supply and demand, market volatility, sentiment, and other factors. In addition, due to these factors as well as other factors including required distributions for tax purposes (see "Tax Status of the Trust") or the sale of Securities to meet Trust expenses in excess of the dividends received on the Securities (see "Expenses of the Trust"), the

* SPDRs-Registered Trademark- and MidCap SPDRs-TM- are trademarks of The McGraw-Hill Companies, Inc., DIAMONDS-SM- is a service mark of Dow Jones & Company, Inc., and WEBS-SM- is a service mark of Morgan Stanley, Dean Witter, Discover & Co.

one-twentieth (1/20th) relationship between the initial value of a Nasdaq-100 Share and the value of the Index is not expected to persist indefinitely.

The Sponsor does not maintain a secondary market in Nasdaq-100 Shares. Nasdaq-100 Shares have been approved for listing on the Amex, subject to official notice of issuance. The market symbol for Nasdaq-100 Shares is "QQQ". Trading in Nasdaq-100 Shares on the Amex may be halted due to market conditions or, in light of Amex rules and procedures, for reasons that, in the view of the Amex, make trading in Nasdaq-100 Shares inadvisable. In addition, trading in Nasdaq-100 Shares on the Amex is subject to trading halts caused by extraordinary market volatility pursuant to Amex "circuit breaker" rules that require trading in securities on the Amex to be halted for a specified time period based on a specified market decline. There can be no assurance that the requirements of the Amex necessary to maintain the listing of Nasdaq-100 Shares will continue to be met or will remain unchanged. The Trust will be terminated in the event Nasdaq-100 Shares are delisted from the Amex and are not subsequently relisted on a national securities exchange or a quotation medium operated by a national securities association. (For a description of the conditions for the listing of Nasdaq-100 Shares and the circumstances under which the Amex would consider the suspension of trading in or the delisting of Nasdaq-100 Shares, see "Marketplace Listing.") Further, the Trust may be terminated, among other reasons, in the event that the net asset value of the Trust falls below a specified level (see "Administration of the Trust--Termination").

MARKET RISKS

Nasdaq-100 Shares are subject to the risk of an investment in a broad market portfolio of equity securities, including the risk that the general level of stock prices may decline, thereby adversely affecting the value of such investment. Nasdaq-100 Shares are also subject to the risk of an investment in a portfolio of equity securities in economic sectors in which the Index may be highly concentrated (E.G., technology, see "The Index") as well as to the risks specific to the performance of a few individual component securities which currently represent a highly concentrated weighting in the Index (E.G., Microsoft Corporation and Intel Corporation, see "The Index"). These include the risks that the level of stock prices in these sectors or the stock prices of these specific companies may decline, thereby adversely affecting the value of Nasdaq-100 Shares. In addition, because it is the policy of the Trust to invest in the securities that comprise the Index, if the Index is concentrated in an industry or group of industries, the portfolio of Securities also will be concentrated in that industry or group of industries. Furthermore, investors should be aware that in the event that one or more stocks which currently have a highly

concentrated weighting in the Index were to leave the Nasdaq Stock Market, if a company with a large market capitalization were to list its shares on the Nasdaq Stock Market, or if there were a significant rebalancing of the Index (see "The Index--Rebalancing of the Index"), then the composition and weighting of the Index, and hence the composition and weighting of the Securities in the Trust, would change significantly and the performance of Nasdaq-100 Shares would reflect the performance of the new Index as reconfigured (see "The Portfolio--Adjustments to the Portfolio").

Furthermore, due to the concentration of the Index in sectors characterized by relatively higher volatility in price performance when compared to other economic sectors, the performance of the Index may be more volatile when compared to other broad based stock indices. For example, the annual volatility of the Index for the 1998 calendar year was 32.2%, while the annual volatility of the Standard & Poor's 100 Index-Registered Trademark- and the Standard & Poor's 500 Index-Registered Trademark- for the same period was 20.9% and 20.3%, respectively. For this reason, it is anticipated that the price volatility of Nasdaq-100 Shares may be greater than the price volatility of other market-traded securities which are issued by investment companies based upon indices other than the Index.

Nasdaq-100 Shares are also subject to risks other than those associated with an investment in a broad market portfolio of equity securities in that the selection of the securities included in the Trust's 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 securities may affect trading in Nasdaq-100 Shares as compared with trading in a broad market portfolio of equity securities. Nasdaq-100 Shares are further subject to the risk that extraordinary events may cause any of the parties providing services to the Trust, such as the Trustee, the Sponsor, the Distributor, the Depository, NSCC, or Nasdaq (as the licensor of the Index and the Index calculator) to be closed or otherwise unable to perform such party's obligations as set forth herein and in the agreements between and among such parties. According to the terms of the Trust Agreement, if any of the above named entities fails or is otherwise unable to perform adequately its duties, a successor entity may be named or appointed to assume all duties and obligations of its predecessor. If, however, no suitable successor is available or willing to undertake all such duties and obligations, under the Trust Agreement the Trust will then be terminated (see "Administration of the Trust--Termination").

The Trustee will ordinarily deliver a portfolio of Securities for each Creation Unit size aggregation of Nasdaq-100 Shares delivered for redemption, identical in composition to the Securities portion of a Portfolio Deposit as in effect on the date a request for redemption is deemed received by the Trustee

(see "Redemption of Nasdaq-100 Shares"). If a redemption is processed through the Nasdaq-100 Clearing Process, to the extent that the Securities to be delivered on settlement date are not delivered, they will be covered by NSCC's guarantee of the completion of such delivery. Any Securities not received on settlement date will be marked to the market on a daily basis until delivery is completed. The Trust, to the extent it has not already done so, remains obligated to deliver such Securities to NSCC, and the market risk of any increase in the value of such Securities until delivery is made by the Trust to NSCC could adversely affect the net asset value of the Trust. Investors should note that the Securities to be delivered to a redeemer submitting a redemption request outside of the Nasdaq-100 Clearing Process that are not delivered to such redeemer are not covered by NSCC's guarantee of completion of such delivery.

Investors should also note that the size of the Trust in terms of total assets held may change substantially over time and from time to time as Nasdaq-100 Shares in Creation Unit size aggregations are created and redeemed. Such fluctuations in Trust size should not adversely impact the net asset value per Nasdaq-100 Share at any time because the amount of the Cash Component or the Cash Redemption Amount upon creations or redemptions, respectively, of Nasdaq-100 Shares in Creation Unit size aggregations is determined each day to equate the value of the Portfolio Deposit to the net asset value of the Trust, on a per Creation Unit basis, at the close of business on the day such request is deemed received by the Trustee (see "The Portfolio-- Adjustments to the Portfolio Deposit").

Investors in the Trust should also be aware that there are tax consequences associated with the ownership of Nasdaq-100 Shares resulting from the distribution, if any, of Trust net dividends and sales of Nasdaq-100 Shares, as well as the sale of underlying Securities held by the Trust in connection with redemptions or changes in the Index under certain circumstances (see "Tax Status of the Trust--Tax Consequences to Beneficial Owners").

RECENT REVISIONS TO THE INDEX

Effective after the close of trading on December 18, 1998, the method for calculating the Index was revised to a "modified capitalization weighted" methodology which resulted in changes to the weighting of the component securities in the Index after such date. This methodology is expected to promote portfolio weight diversification (thereby limiting domination of the Index by a few large common stocks) while retaining in general the economic attributes of capitalization weighting. Under this methodology, the Index share weights of the component securities of the Index are subject to quarterly rebalancing, if

necessary, to ensure that the relative weighting of the Index Securities continues to meet minimum pre-established requirements for a diversified portfolio (see "The Index--Rebalancing of the Index"). Accordingly, the composition and weighting of the Securities in the Trust will be based upon the Index as calculated in accordance with this new methodology.

IMPACT OF THE YEAR 2000 PROBLEM

Like other investment funds and financial and business organizations around the world, the Trust relies significantly upon the smooth functioning of computer systems. The Trust could be adversely affected if computer systems, including those used by the Trustee in the administration of the Trust or those used by Nasdaq in the calculation of the Index, do not properly process and calculate date-related information concerning dates after January 1, 2000. Many computer systems in use today were originally written using two digits rather than four to define a particular year. As a result, these computer programs have time-sensitive software that may recognize a date using "00" as the year 1900 rather than the year 2000. That failure could have a negative impact on the handling of securities trades, pricing, and trust services, among other things. This is commonly known as the "Year 2000 Problem." As discussed below, both Nasdaq and the Trustee have taken steps in their view reasonably necessary to address the Year 2000 Problem with respect to the computer systems they use and to monitor Year 2000 compliance by vendors and external service providers.

THE TRUSTEE

The Bank of New York Company, Inc. ("BNY"), of which the Trustee is a wholly owned subsidiary, has established a Year 2000 compliance program consisting of updating major BNY-owned application systems, business-areas supported systems, and BNY's proprietary customer software and evaluating the Year 2000 compliance efforts of vendors of major vendor-supplied systems.

BNY divided major proprietary applications systems designated by BNY as "mission critical" into three business-line groups. The applications in each group were subjected to a four-phase process of assessment, renovation, certification testing, and implementation. These systems have completed all four phases and are currently in use in production environments. BNY has also identified its critical vendor-supplied systems. All but one of these systems have been certified as Year 2000 compliant in accordance with certification procedures established by BNY. BNY expects to receive a Year 2000 compliant version of the remaining system in May 1999.

One-third of BNY's business-area supported systems has been designated as exempt from the Year 2000 compliance effort as those systems are scheduled to be retired or replaced. An additional third has been successfully tested or is undergoing certification testing. The remaining third is scheduled to complete testing by March 31, 1999. Lastly, BNY has developed an inventory of its business partners, including other financial service providers, correspondents, counterparties, sub-custodians, vendors, and settlement agencies, for the purpose of assessing their Year 2000 compliance. BNY is conducting a review of the Year 2000 readiness of each significant third party.

BNY's Year 2000 compliance program is currently on schedule to meet the needs of its customers and compliance deadlines defined by its regulators.

NASDAQ

In 1996, Nasdaq's parent, the National Association of Securities Dealers, Inc., established the NASD Year 2000 Program Office responsible for coordinating all Year 2000 compliance activities for the NASD and its operating subsidiaries, including Nasdaq. All Nasdaq systems have been analyzed and a determination has been made about whether to retire, replace, or repair systems. As of December 1998, Nasdaq had completed modifications and upgrades for Year 2000 compliance for mission critical, mission essential, and other applications (including the programs responsible for calculating the Index). Nasdaq has also established a test center which has begun testing external systems that interact with Nasdaq; ongoing testing is expected to continue through 1999. Nasdaq is also in the process of providing for independent back-up calculations of the Index to be performed on an intra-day basis beginning well in advance of the Year 2000.

POSSIBLE IMPACT ON THE TRUST

Due to the general uncertainty inherent in the Year 2000 Problem, at this time there can be no assurance that the steps taken by BNY and Nasdaq will be sufficient to avoid any adverse impact to the Trust, and interaction with other non-complying computer systems of other service providers, including the Distributor, DTC, and NSCC, may have an adverse effect on the Trust.

In addition, the Year 2000 Problem is expected to affect business entities, including issuers whose securities are included in the Index, to varying extents based upon a number of factors, including, but not limited to, industry sector and level of technological sophistication. The Sponsor is unable to predict what impact, if any, the Year 2000 Problem will have on issuers of securities included in the Index and hence included in the Trust.

AFFILIATED RELATIONSHIPS AND TRANSACTIONS

Investors in the Trust should be aware that the Sponsor of the Trust is a wholly-owned subsidiary of Nasdaq. Nasdaq is the proprietor of the Index as well as the operator of the Nasdaq Stock Market, the marketplace where the Index Securities trade. Effective as of November 2, 1998, Nasdaq and the Amex, the exchange on which Nasdaq-100 Shares will be listed, operate as separate subsidiaries of The Nasdaq-Amex Market Group, a newly created subsidiary of The National Association of Securities Dealers, Inc.

Under the terms of a license agreement with Nasdaq, the Sponsor has been granted a license to use the Index as a basis for determining the composition of the Trust and to use certain service marks and trademarks of Nasdaq in connection with the Trust (see "License Agreement"). Under the terms of the license agreement, the Sponsor pays to Nasdaq an annual licensing fee for use of the Index. The Sponsor ordinarily will seek reimbursement from the Trust for the amount of licensing fees (see "Expenses of the Trust"). However, the Sponsor has committed not to seek reimbursement from the Trust for licensing fees to Nasdaq for the period through the Trust's fiscal year ending September 30, 1999. Thereafter, the Sponsor intends to charge the Trust for the annual licensing fee. The Trust is not required to pay a listing fee to the Amex in connection with the listing of Nasdaq-100 Shares on the Amex.

The Index is determined, composed, and calculated by Nasdaq without regard to the Sponsor, the Trust, or the Beneficial Owners of Nasdaq-100 Shares. Nasdaq has complete control and sole discretion in determining, composing, or calculating the Index or in modifying in any way its method for determining, composing, or calculating the Index in the future.

NASDAQ-100 TRUST, SERIES 1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

TO THE SPONSOR, TRUSTEE AND THE UNITHOLDERS OF THE NASDAQ-100 TRUST, SERIES 1:

We have audited the accompanying statement of financial condition, including the schedule of investments, of the Nasdaq-100 Trust, Series 1 as of the opening of business on March 5, 1999. The statement of financial condition is the responsibility of the Trust's Sponsor, Nasdaq-Amex Investment Product Services, Inc. Our responsibility is to express an opinion on this statement of financial condition based on our audit.

We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of financial condition is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement of financial condition. Our procedures included confirmation of the irrevocable letter of credit held by the Trustee and deposited in the Trust on March 4, 1999. An audit also includes assessing the accounting principles used and significant estimates made by the Sponsor, as well as evaluating the overall presentation of the statement of financial condition. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of financial condition, including the schedule of investments, referred to above presents fairly, in all material respects, the financial position of the Nasdaq-100 Trust, Series 1 at the opening of business on March 5, 1999, in conformity with generally accepted accounting principles.

                                             /s/ Ernst & Young LLP



Washington, D.C.
March 5, 1999

ASSETS
    Investment in Securities, at market value (cost
      $14,497,770) (Note 1)............................  $  14,497,770

        TOTAL ASSETS...................................     14,497,770
                                                         -------------

LIABILITIES AND INTEREST OF NASDAQ-100 SHARE HOLDERS

        TOTAL LIABILITIES..............................              0
                                                         -------------

TOTAL NET ASSETS.......................................  $  14,497,770
                                                         -------------
                                                         -------------

NET ASSET VALUE PER NASDAQ-100 SHARE...................         $96.65
                                                         -------------
                                                         -------------
(comprised of $14,497,770/150,000 Nasdaq-100 Shares
 outstanding)

NOTES TO STATEMENT OF FINANCIAL CONDITION:

1. Nasdaq-100 Trust, Series 1 (the "Trust") is a unit investment trust created under the laws of the State of New York and registered under the Investment Company Act of 1940. The Trust was created to provide investors with the opportunity to purchase units of beneficial interest in the Trust representing proportionate undivided interests in the portfolio of securities held by the Trust consisting of substantially all of the securities, in substantially the same weighting, as the component securities of the Nasdaq-100 Index-Registered Trademark-. On the Initial Date of Deposit, Portfolio Deposits were received by The Bank of New York, the Trust's Trustee, in the form of executed securities transactions which will settle within three business days of the Initial Date of Deposit, in exchange for three (3) Creation Units of the Trust equivalent to 150,000 Nasdaq-100 Shares. An irrevocable letter of credit issued by The Chase Manhattan Bank, in the amount of $20,000,000 has been delivered to the Trustee, to be drawn on if necessary, for the benefit of the Trust to collateralize the settlement of the executed securities transactions. The value of the Securities is based on the March 4, 1999 closing sale prices therefor on The Nasdaq Stock Market.

2. It is anticipated that the Trust will pay the expenses of its operation, including the fees of its Trustee and payments to The Nasdaq Stock Market, Inc. ("Nasdaq") for a license to use the Nasdaq-100 Index-Registered Trademark- as a basis for determining the composition and weighting of Securities held by the Trust, as described under "Expenses of the Trust" and "License Agreement" in this Prospectus. Nasdaq has agreed to pay fees and expenses incurred in connection with the organization of the Trust and its registration as an investment company, and such expenses will not be borne by the Trust.

Nasdaq-Amex Investment Product Services, Inc., the Sponsor of the Trust, has undertaken that on each day during each fiscal year up to and including the fiscal year ending September 30, 2000, the ordinary operating expenses of the Trust as calculated by the Trustee will not be permitted to exceed an amount which is 18/100 of one percent (0.18%) per annum of the daily net asset value of the Trust. To the extent during such period the ordinary operating expenses of the Trust do exceed such 0.18% amount, the Sponsor will reimburse the Trust or assume invoices on behalf of the Trust for such excess ordinary operating expenses. 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 (see "Expenses of the Trust" in this Prospectus). The Sponsor has also undertaken for the fiscal year ending September 30, 1999, not to seek reimbursement from the Trust for licensing fees paid to Nasdaq for use of the Index during such period (see "License Agreement" in this Prospectus).

3. Nasdaq-100 Shares are created and redeemed by the Trust only in Creation Unit size aggregations of 50,000 Nasdaq-100 Shares. Transaction fees of varying amounts are charged to those persons creating or redeeming Creation Units. See "Prospectus Summary--Portfolio Deposits" and "The Trust-- Creation of Creation Units" in this Prospectus for further description.

NAME OF ISSUER AND TITLE OF ISSUE                   SHARES          VALUE
-----------------------------------------------  ---------  -------------
Microsoft Corporation..........................     14,427  $   2,196,511
Intel Corporation..............................      9,825      1,113,909
Cisco Systems, Inc.............................      9,483        931,705
MCI WordCom, Inc...............................     11,088        907,830
Dell Computer Corporation......................      7,887        645,748
Oracle Corporation.............................     10,218        371,680
Sun Microsystems, Inc..........................      2,784        282,228
Amgen Inc......................................      3,990        258,103
Yahoo! Inc.....................................      1,596        241,794
Tele-Communications, Inc.......................      3,630        235,950
Amazon.com, Inc................................      1,767        212,261
Level 3 Communications, Inc....................      3,585        207,706
Comcast Corporation............................      2,715        194,801
Applied Materials, Inc.........................      3,210        184,776
Qwest Communications International Inc.........      2,955        176,561
Nextel Communications, Inc.....................      5,838        170,762
Costco Companies, Inc..........................      1,929        167,341
Netscape Communications Corporation............      2,094        159,929
Biogen, Inc....................................      1,521        159,705
Ascend Communications, Inc.....................      2,043        157,056
Nordstrom Inc..................................      3,666        153,972
Cintas Corporation.............................      2,118        153,423
Linear Technology Corporation..................      3,378        150,321
Tellabs, Inc...................................      1,860        148,916
Staples, Inc...................................      5,205        148,343
Novell, Inc....................................      7,098        142,404
Chancellor Media Corporation...................      2,928        141,825
Maxim Integrated Products, Inc.................      3,081        140,186
Immunex Corporation............................        924        137,965
LM Ericsson Telephone Company..................      5,202        131,351
Altera Corporation.............................      2,301        124,110
Xilinx, Inc....................................      1,722        119,033
Starbucks Corporation..........................      2,082        117,763
PanAmSat Corporation...........................      3,381        115,377
Intuit Inc.....................................      1,263        115,091

See accompanying notes to Statement of Financial Condition.

NAME OF ISSUER AND TITLE OF ISSUE                   SHARES          VALUE
-----------------------------------------------  ---------  -------------
ADC Telecommunications, Inc....................      2,829  $     112,099
Paychex, Inc...................................      2,607        111,775
Network Associates, Inc........................      2,358        107,289
QUALCOMM Incorporated..........................      1,434        106,743
BMC Software, Inc..............................      2,760        106,432
Apple Computer, Inc............................      3,156        105,529
PeopleSoft, Inc................................      5,535        102,052
Bed Bath & Beyond Inc..........................      3,138         99,435
Compuware Corporation..........................      3,810         96,917
Biomet, Inc....................................      2,541         96,717
KLA-Tencor Corporation.........................      1,782         94,000
Parametric Technology Corporation..............      6,216         91,297
USA Networks, Inc..............................      2,382         91,111
Chiron Corporation.............................      4,200         90,825
Fiserv, Inc....................................      1,725         85,819
NTL Incorporated...............................      1,050         83,869
Genzyme General................................      1,701         81,967
Quintiles Transnational Corp...................      1,836         81,013
3Com Corporation...............................      3,060         76,500
American Power Conversion Corporation..........      2,115         70,059
Citrix Systems, Inc............................        852         68,213
Quantum Corporation............................      3,423         67,176
Synopsys, Inc..................................      1,368         63,355
Smurfit-Stone Container Corporation............      3,543         63,110
Vitesse Semiconductor Corporation..............      1,335         62,745
Jacor Communications, Inc......................        897         62,678
PACCAR Inc.....................................      1,473         62,142
VERITAS Software Corporation...................        816         61,404
Concord EFS, Inc...............................      1,854         60,487
Comverse Technology, Inc.......................        780         56,452
Sanmina Corporation............................        996         53,784
Centocor, Inc..................................      1,155         47,932
Sigma-Aldrich Corporation......................      1,779         47,588
Adobe Systems Incorporated.....................        996         45,442
Electronic Arts Inc............................      1,032         42,828

See accompanying notes to Statement of Financial Condition.

NAME OF ISSUER AND TITLE OF ISSUE                   SHARES          VALUE
-----------------------------------------------  ---------  -------------
Reuters Group PLC..............................        483  $      41,296
Apollo Group, Inc..............................      1,215         36,982
Dollar Tree Stores, Inc........................        906         36,636
PacifiCare Health Systems, Inc.................        471         35,737
Molex Incorporated.............................      1,260         35,674
Comair Holdings, Inc...........................        903         35,669
McLeodUSA Incorporated.........................        861         35,301
Food Lion, Inc.................................      3,468         33,813
Adaptec, Inc...................................      1,497         31,437
Ross Stores, Inc...............................        600         28,688
Northwest Airlines Corporation.................      1,128         28,341
Lincare Holdings Inc...........................        819         28,051
Autodesk, Inc..................................        654         26,405
McCormick & Company, Incorporated..............        894         25,032
Electronics for Imaging, Inc...................        702         24,658
Stewart Enterprises, Inc.......................      1,563         22,859
FORE Systems, Inc..............................      1,545         21,727
Atmel Corporation..............................      1,254         21,083
Microchip Technology Incorporated..............        717         20,390
Herman Miller, Inc.............................      1,140         18,668
Cambridge Technology Partners, Inc.............        714         17,939
Fastenal Company...............................        474         17,775
Andrew Corporation.............................      1,098         16,058
Micron Electronics, Inc........................      1,320         15,840
Worthington Industries, Inc....................      1,074         14,096
CBRL Group, Inc................................        753         13,601
Tech Data Corporation..........................        741         12,736
Rexall Sundown, Inc............................        759         11,385
First Health Group Corp........................        681         11,024
Corporate Express, Inc.........................      1,089          5,649

Total Investments--(Cost $14,497,770)..........             $  14,497,770
                                                            -------------
                                                            -------------

See accompanying notes to Statement of Financial Condition.

THE TRUST

The Trust is a unit investment trust created under the laws of the State of New York pursuant to the Trust Agreement.* The Securities held by the Trust consist of a portfolio of equity securities or, in the case of securities not yet delivered in connection with purchases made by the Trust or Portfolio Deposits, confirmations of contracts to purchase such securities (collectively, the "Portfolio").

CREATION OF CREATION UNITS

On the Initial Date of Deposit, Portfolio Deposits were deposited with the Trustee via instructions submitted through the clearing processes of NSCC, following placement with the Distributor of orders to create Nasdaq-100 Shares. The Distributor shall reject any order that is not submitted in proper form. To permit the Trustee to ensure that the process of settlement is working satisfactorily, there shall be no further Portfolio Deposits accepted by the Trustee for a period of three (3) Business Days following the Initial Date of Deposit, and the Sponsor and the Trustee shall jointly announce the day thereafter on which further Portfolio Deposits will be accepted, and trading of Nasdaq-100 Shares on the Amex shall not commence until such date. On or after such date, Portfolio Deposits may be deposited with the Trustee via instructions submitted through the clearing processes of NSCC, following placement with the Distributor of orders to create Nasdaq-100 Shares. Investors may deposit Portfolio Deposits through the Nasdaq-100 Clearing Process or directly with the Trustee outside the Nasdaq-100 Clearing Process. The Transaction Fee will be charged at the time of creation of a Creation Unit size aggregation of Nasdaq-100 Shares. An additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit will be charged to a creator creating outside the Nasdaq-100 Clearing Process (I.E., depositing Portfolio Deposits directly with the Trustee through DTC), in part due to the increased expense associated with settlement outside the Nasdaq-100 Clearing Process. See "Prospectus Summary--Transaction Fee" for a detailed description of the amount of the Transaction Fee and the additional amounts and reductions, limitations, and waivers applicable thereto, if any. The shares of the Index Securities in a Portfolio Deposit on the Initial Date of Deposit had an aggregate market value of $14,497,770 (see "Schedule of Investments").

* Reference is hereby made to the Trust Agreement (a copy of which is available to prospective purchasers of Nasdaq-100 Shares at the corporate trust office of the Trustee at 101 Barclay Street, New York, New York 10286 during normal business hours), and any statements contained herein are qualified in their entirety by the provisions of the Trust Agreement.

Nasdaq-100 Shares will be initially priced to approximate 1/20th of the value of the Index (see "Marketplace Listing").

The Trustee and the Sponsor, from time to time and for such periods as they may determine, together may increase* or reduce the amount and/or waive the imposition altogether of the Transaction Fee (and/or the additional amounts charged in connection with creations and/or redemptions outside the Nasdaq-100 Clearing Process) for certain numbers of Creation Units of Nasdaq-100 Shares created or redeemed, whether applied solely to creations and/or redemptions made through the Nasdaq-100 Clearing Process (see "Procedures for Creation of Creation Units"), solely to creations and/or redemptions made outside the Nasdaq-100 Clearing Process, or to both methods of creation and/or redemption. The Sponsor also reserves the right, from time to time, to vary the number of Nasdaq-100 Shares per Creation Unit (currently 50,000 shares) and such change may or may not be made in conjunction with a change to the Transaction Fee. The occurrence of any increase, reduction, or waiver of the Transaction Fee (as well as any additional amounts, if applicable) and the number of Creation Units created or redeemed to which such increase, reduction, or waiver applies shall be disclosed in the current Nasdaq-100 Share Prospectus (see "Prospectus Summary--Transaction Fee"). As of the date hereof, the Sponsor and the Trustee do not contemplate the increase, reduction, variation by lot-size, or waiver of Transaction Fees in connection with the creation or redemption of Nasdaq-100 Shares or of the additional amounts charged in connection with the creation or redemption of Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process beyond that which is discussed herein under the caption "Prospectus Summary--Transaction Fee."

The shares of equity securities comprising the securities portion of a Portfolio Deposit on any date of deposit will reflect the composition and weighting of the component securities of the Index on such day. The portfolio of Index Securities that is the basis for a Portfolio Deposit varies as changes are made in the composition and weighting of the Index Securities (see "The Portfolio-- Adjustments to the Portfolio Deposit"). 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 current Portfolio Deposit as well as the amount of the Income Net of Expense Amount 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 share amounts of the Index Securities of the

* Such increase is subject to the 10 Basis Point Limit discussed above under "Prospectus Summary--Transaction Fee."

Portfolio Deposit on the previous Business Day. The identity and share amounts of each of the Index Securities required for a Portfolio Deposit, as in effect on the Initial Date of Deposit, is set forth in the above Schedule of Investments.

The Sponsor intends to make available, or may designate other persons to make available, on each Business Day, a list of the names and the required number of shares for each of the securities in the current Portfolio Deposit as well as the Income Net of Expense Amount effective through and including the previous Business Day per outstanding Nasdaq-100 Share. The Sponsor may choose within its discretion to make available, frequently throughout each Business Day, a number representing, on a per Nasdaq-100 Share basis, the sum of the Income Net of Expense Amount 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, see "The Portfolio--Adjustments to the Portfolio Deposit"). If the Sponsor elects to make such information available, it would 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. If the Sponsor elects to make such information available, the inability of the Sponsor or its designee to provide such information for any period of time will not in itself result in a halt in the trading of Nasdaq-100 Shares on the Amex. If such information is made available, investors interested in creating Nasdaq-100 Shares or purchasing Nasdaq-100 Shares in the secondary market should not rely solely on such information in making investment decisions but should also consider other market information and relevant economic and other factors (including, without limitation, information regarding the Index, the Index Securities, and financial instruments based on the Index).

Upon receipt of a Portfolio Deposit or Deposits following placement with the Distributor of an order to create Nasdaq-100 Shares, the Trustee will register the ownership of the Nasdaq-100 Shares in Creation Unit size aggregations in the name of the Depository or its nominee. In turn, the Nasdaq-100 Share position will be removed from the Trustee's account at the Depository and will be allocated to the account of the DTC Participant acting on behalf of the depositor creating Creation Unit(s) (see "Procedures for Creation of Creation Units" and "Book-Entry-Only System"). Each Nasdaq-100 Share will represent a fractional undivided interest in the Trust in an amount equal to one (1) divided by the total number of Nasdaq-100 Shares outstanding. The Trustee may reject a request to create Creation Units made by any depositor or group of depositors if such depositor(s), upon the acceptance by the Trustee of such request and the issuance to such depositor(s) of Nasdaq-100 Shares, would

own eighty percent (80%) or more of the outstanding Nasdaq-100 Shares (see "Tax Status of the Trust"). The Trustee also may reject any Portfolio Deposit or any component thereof under certain other circumstances (see "Procedures for Creation of Creation Units").

Additional Nasdaq-100 Shares in Creation Unit size aggregations will be created upon receipt of the appropriate Portfolio Deposits from creators. As additional Nasdaq-100 Shares in Creation Unit size aggregations are created, the aggregate value of the Portfolio will be increased and the fractional undivided interest in the Trust represented by each Nasdaq-100 Share will be decreased. As discussed above, under certain circumstances (1) a portion of the securities portion of a Portfolio Deposit may consist of contracts to purchase certain Index Securities that are expected to be delivered in a "regular way" manner through NSCC or (2) a portion of the Cash Component may consist of cash in an amount sufficient to enable the Trustee to purchase such Index Securities (E.G., in the event that the Trustee determines that one or more Index Securities are likely to be unavailable or available in insufficient quantity, or if an entity placing an order to create Nasdaq-100 Shares is restricted by regulation or otherwise from engaging in a transaction in an Index Security, see "The Portfolio--Adjustments to the Portfolio Deposit"). In the event there is a failure to deliver the Index Securities which are the subject of such contracts to purchase or the Cash Component includes cash in lieu of the delivery of one or more Index Securities, the Trustee will be instructed pursuant to the Trust Agreement to acquire such Index Securities in an expeditious manner. To the extent the price of any such Index Security increases or decreases between the time of creation and the time any such Index Security is purchased and delivered, Nasdaq-100 Shares will represent fewer or more shares of such Index Security and more or fewer of the other Index Securities in the Trust. Hence, price fluctuations during the period from the time the cash is received by the Trustee to the time the requisite Index Securities are purchased and delivered will affect the value of all Nasdaq-100 Shares.

The identity and appropriate number of shares of the Index Securities required for a Portfolio Deposit are determined in the manner described herein. Due to changes in the composition and weighting of the Index Securities, the composition and weighting of the Securities and the prescribed Portfolio Deposit will also change from time to time (see "The Portfolio--Adjustments to the Portfolio" and "The Portfolio--Adjustments to the Portfolio Deposit"). The composition and weighting of the Index Securities to be delivered as part of a Portfolio Deposit are determined daily and reflect the composition of the Index and, together with the Cash Component, have a value equal to the net asset value of the Trust on a per Creation Unit basis at the close of business on the day of request for creation. The composition of the

Portfolio is also adjusted from time to time to conform to changes to the Index as described herein and as set forth in the Trust Agreement. As the composition and weighting of the Index Securities change, substantially identical changes to the composition and weighting of the securities portion of the required Portfolio Deposit are made contemporaneously. Corresponding adjustments to the composition and weighting of the Portfolio, however, are not necessarily made contemporaneously with adjustments to the required Portfolio Deposit, but in all cases will be made in accordance with the specifications set forth in the Trust Agreement and described herein (see "The Portfolio--Adjustments to the Portfolio"). Although the composition and weighting of the securities portion of a Portfolio Deposit change from time to time, the interests of Beneficial Owners will not be adversely affected because the composition of such securities and the aggregate value thereof together with the Cash Component (which may itself have a positive or negative value, as the case may be), will be calculated based upon the proportionate net asset value of the Trust (see "The Portfolio--Adjustments to the Portfolio").

PROCEDURES FOR CREATION OF CREATION UNITS

To be eligible to place orders with the Distributor to create Nasdaq-100 Shares in Creation Unit size aggregations, an entity or person must be (1) a Participating Party, with respect to creations through the Nasdaq-100 Clearing Process or (2) a DTC Participant with respect to creations/redemptions outside the Nasdaq-100 Clearing Process, and in either case must have executed a Nasdaq-100 Participant Agreement with the Distributor and the Trustee. All Nasdaq-100 Shares, however created, will be entered on the records of the Depository in the name of Cede & Co. for the account of a DTC Participant (see "The Trust--Book-Entry-Only System").

All orders to create Nasdaq-100 Shares must be placed in multiples of 50,000 Nasdaq-100 Shares (Creation Unit size). All orders to create Nasdaq-100 Shares, whether through the Nasdaq-100 Clearing Process or outside the Nasdaq-100 Clearing Process, must be received by the Distributor by no later than the closing time of the regular trading session on the Nasdaq Stock Market ("Closing Time") (ordinarily 4:00 p.m. New York time) in each case on the date such order is placed in order for creation of Nasdaq-100 Shares to be effected based on the net asset value of the Trust as determined on such date. The date on which a creation order (or order to redeem as discussed below) is placed is herein referred to as the "Transmittal Date." Orders must be transmitted by telephone or other transmission method acceptable to the Distributor and Trustee, pursuant to procedures set forth in the Nasdaq-100 Participant Agreement, as described below (see "Placement of Creation Orders Using the Nasdaq-100 Clearing Process" and "Placement of

Creation Orders Outside the Nasdaq-100 Clearing Process"). Severe economic or market changes or disruptions, or telephone or other communication failure, may impede the ability to reach the Trustee, the Distributor, a Participating Party, or a DTC Participant.

Orders to create Creation Unit size aggregations of Nasdaq-100 Shares shall be placed with a Participating Party or DTC Participant, as applicable, in the form required by such Participating Party or DTC Participant. Investors should be aware that their particular broker may not have executed a Nasdaq-100 Participant Agreement, and that, therefore, orders to create Creation Unit size aggregations of Nasdaq-100 Shares may have to be placed by the investor's broker through a Participating Party or a DTC Participant who has executed a Nasdaq-100 Participant Agreement. At any given time there may be only a limited number of broker-dealers that have executed a Nasdaq-100 Participant Agreement. Those placing orders to create Nasdaq-100 Shares through the Nasdaq-100 Clearing Process should afford sufficient time to permit proper submission of the order to the Distributor prior to the Closing Time on the Transmittal Date.

Orders for creation that are effected outside the Nasdaq-100 Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected using the Nasdaq-100 Clearing Process. Those persons placing orders outside the Nasdaq-100 Clearing Process should ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effectuating such transfer of securities and the Cash Component (if required). The DTC Participant notified of an order to create Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process shall be required to effect a transfer of (1) the requisite Index Securities through DTC by 11:00 a.m. on the next Business Day immediately following the Transmittal Date in such a way as to replicate the Portfolio Deposit established on the Transmittal Date by the Trustee in calculating the net asset value of the Trust and (2) the Cash Component (if required) through the Federal Reserve Bank wire system so as to be received by the Trustee by 1:00 p.m. on the next Business Day immediately following the Transmittal Date. If the Trustee does not receive both the Index Securities by 11:00 a.m. and the Cash Component (if required) by 1:00 p.m. on the Business Day immediately following the Transmittal Date, such order shall be canceled. Upon written notice to the Distributor, such canceled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the current net asset value of the Trust. If the Cash Component has a negative value, requiring payment of such amount by the Trustee on behalf of the Trust to the creator of Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process (I.E., if the sum of dividends on all Securities with

ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, is less than the accrued expenses and liabilities of the Trust for such period) then payment of such amount by the Trustee to the creator of Nasdaq-100 Shares via the Depository and the DTC Participants is required to be made no later than 1:00 p.m. on the third (3rd) Business Day immediately following the Transmittal Date.

All questions as to the number of shares of each of the Index Securities, the amount and identity of the payor of the Cash Component (I.E., the Trustee on behalf of the Trust or the Nasdaq-100 Share creator), and the validity, form, eligibility (including time of receipt), and acceptance for deposit of any Index Securities to be delivered shall be determined by the Trustee, whose determination shall be final and binding. The Trustee reserves the absolute right to reject a creation order transmitted to it by the Distributor in respect of any Portfolio Deposit or any component thereof if (a) the depositor or group of depositors, upon obtaining the Nasdaq-100 Shares ordered, would own 80% or more of the current outstanding Nasdaq-100 Shares (see "Tax Status of the Trust"); (b) the Portfolio Deposit is not in proper form; (c) acceptance of the Portfolio Deposit would have certain adverse tax consequences (see "Tax Status of the Trust"); (d) the acceptance of the Portfolio Deposit would, in the opinion of counsel, be unlawful; (e) the acceptance of the Portfolio Deposit would otherwise, in the discretion of the Trustee, have an adverse effect on the Trust or the rights of Beneficial Owners; or (f) in the event that circumstances outside the control of the Trustee make it for all practical purposes impossible to process creations of Nasdaq-100 Shares. The Trustee will provide notice of its reasons for rejection of a creation order in respect of a Portfolio Deposit or any component thereof. The Trustee and the Sponsor shall not incur any liability in connection with any notification of defects or irregularities in the delivery of Portfolio Deposits or any component thereof or in connection with the rejection of a creation order.

A list of the Participating Parties or DTC Participants that have executed a Nasdaq-100 Participant Agreement (as hereinafter defined) is available at the office of the Trustee at 101 Barclay Street, New York, New York 10286 and the office of the Distributor at 370 17th Street, Suite 3100, Denver, CO 80202 during normal business hours.

PLACEMENT OF CREATION ORDERS USING THE NASDAQ-100 CLEARING PROCESS

Portfolio Deposits created through the Nasdaq-100 Clearing Process must be delivered through a Participating Party (see "Prospectus Summary--Portfolio Deposits") that has executed a participant agreement with the Distributor and with the Trustee (as the same may be from time to time amended in accordance with its terms, the "Nasdaq-100 Participant Agreement"). The Nasdaq-100 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 creation order. Pursuant to such 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 in a "regular way" manner through NSCC by the third
(3rd) NSCC Business Day) and the Cash Component (if required) to the Trustee, together with such additional information as may be required by the Trustee. An order to create Nasdaq-100 Shares through the Nasdaq-100 Clearing Process is deemed received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (ii) all other procedures set forth in the Nasdaq-100 Participant Agreement are properly followed.

Nasdaq-100 Shares may also be created in advance of the receipt by the Trustee of all or a portion of the securities portion of the Portfolio Deposit relating to such Nasdaq-100 Shares, but only through the Nasdaq-100 Clearing Process. In such cases, the Participating Party intending to utilize this procedure will be required to post collateral with the Trustee outside of NSCC consisting of cash at least equal to 115% of the closing value, on the day the order is deemed received, of the portion of the Portfolio Deposit not expected to be available in the account of the Participating Party for delivery to the Trust on the third NSCC Business Day following placement of such order, as such amount is marked-to-the market daily by the Trustee only for increases in such value. This cash collateral will be required to be posted with the Trustee by 11:00 a.m. on the morning of the NSCC Business Day following the day such order is deemed received by the Distributor, or else the order to create Nasdaq-100 Shares will be canceled. The Trustee will hold such collateral in an account separate and apart from the Trust. Under customary NSCC practices, by midnight of the day following the receipt by NSCC of such order, NSCC will guarantee to the Trustee the delivery of the Portfolio Deposit on the third NSCC Business Day following receipt of such order or on a later date. Provided that the NSCC guarantee is established, the Trustee will issue the Nasdaq-100 Shares (in Creation Unit size aggregations) so ordered on such third NSCC Business Day, relying on the NSCC guarantee to make good on the delivery of the Portfolio Deposit. In the event that the required securities

are not delivered on such third NSCC Business Day, the Trustee will take steps to "buy-in" the missing portion of the Portfolio Deposit in accordance with NSCC rules. The 115% cash collateral received from the creator will be returned net of commissions and other buy-in expenses incurred by the Trustee, if any, promptly upon settlement of delivery of all of the securities portion of the Portfolio Deposit, or buy-in of all missing securities, or cancellation of the order to create Nasdaq-100 Shares. Information concerning the procedures for such cash collateralization is available from the Distributor.

The requirement to post collateral will not apply in instances where the Trustee, in its discretion, has included in the Cash Component of a Portfolio Deposit the cash equivalent value of one or more Index Securities either because the Trustee determines that one or more Index Securities are likely to be unavailable or available in insufficient quantity, or if the entity placing an order to create Nasdaq-100 Shares is restricted by regulation or otherwise from engaging in a transaction in an Index Security (see "The Portfolio--Adjustments to the Portfolio Deposit").

PLACEMENT OF CREATION ORDERS OUTSIDE THE NASDAQ-100 CLEARING PROCESS

Portfolio Deposits created outside the Nasdaq-100 Clearing Process must be delivered through a DTC Participant that has executed a Nasdaq-100 Participant Agreement with the Distributor and with the Trustee. A DTC Participant who wishes to place an order creating Nasdaq-100 Shares to be effected outside the Nasdaq-100 Clearing Process need not be a Participating Party, but such orders must state that the DTC Participant is not using the Nasdaq-100 Clearing Process and that the creation of Nasdaq-100 Shares will instead be effected through a transfer of securities and cash. The Portfolio Deposit transfer must be ordered by the DTC Participant in a timely fashion so as to ensure the delivery of the requisite number of Index Securities through DTC to the account of the Trustee by no later than 11:00 a.m. on the next Business Day immediately following the Transmittal Date. All questions as to the number of Index Securities to be delivered, and the validity, form, and eligibility (including time of receipt) for the deposit of any tendered securities will be determined by the Trustee, whose determination shall be final and binding. On days when the Cash Component is an amount payable to the Trustee (I.E., when the Cash Component has a positive value), the cash equal to the Cash Component must be transferred directly to the Trustee through the Federal Reserve Bank wire system in a timely manner so as to be received by the Trustee no later than 1:00 p.m. on the next Business Day immediately following the Transmittal Date. An order to create Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process is deemed received by the Distributor on the Transmittal Date if (i) such order is received by the Distributor not later than the Closing Time on such Transmittal Date and (ii) all other procedures set forth in the Nasdaq-100

Participant Agreement are properly followed. However, if the Trustee does not receive both the requisite Index Securities and the Cash Component (if required) in a timely fashion on the next Business Day immediately following the Transmittal Date, such order will be canceled. Upon written notice to the Distributor, such canceled order may be resubmitted the following Business Day using a Portfolio Deposit as newly constituted to reflect the current net asset value of the Trust. The delivery of Nasdaq-100 Shares 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. The payment of the Cash Component (at times when such amount is to be paid to the creator of Nasdaq-100 Shares from the Trustee) is required to be made through the Federal Reserve Bank wire system no later than the third (3rd) Business Day immediately following the Transmittal Date. Under the current schedule, the total fee charged in connection with the creation of one Creation Unit outside the Nasdaq-100 Clearing Process would be an amount not to exceed $4,000 (see "Prospectus Summary--Transaction Fee").

BOOK-ENTRY-ONLY SYSTEM

The Depository acts as securities depository for Nasdaq-100 Shares. Cede & Co., as nominee for the Depository, is registered as the record owner of all Nasdaq-100 Shares on the books of the Trustee. Certificates will not be issued for Nasdaq-100 Shares.

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

* As of December 31, 1998, the National Association of Securities Dealers, Inc. and the Amex combined owned 9.30610% of the issued and outstanding shares of common stock of the Depository. Also as of such date, the Trustee owned 4.19892% of the issued and outstanding shares of the common stock of the Depository.

banks, brokers, dealers, and trust companies that 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.

Upon the settlement date of any creation, transfer, or redemption of Nasdaq-100 Shares, the Depository will credit or debit, on its book-entry registration and transfer system, the number of Nasdaq-100 Shares 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 Nasdaq-100 Clearing Process, or by the Trustee and the DTC Participant, in the case of a creation or redemption transacted outside of the Nasdaq-100 Clearing Process (see "The Trust--Procedures for Creation of Creation Units" and "Redemption of Nasdaq-100 Shares"). Beneficial ownership of Nasdaq-100 Shares is limited to DTC Participants, Indirect Participants, and persons holding interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in Nasdaq-100 Shares (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). Beneficial Owners are expected to receive from or through the DTC Participant a written confirmation relating to their purchase of Nasdaq-100 Shares. 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 Nasdaq-100 Shares.

So long as Cede & Co., as nominee of the Depository, is the registered owner of Nasdaq-100 Shares, references herein to the registered or record owners of Nasdaq-100 Shares shall mean Cede & Co. and shall not mean the Beneficial Owners of Nasdaq-100 Shares. Beneficial Owners of Nasdaq-100 Shares will not be entitled to have Nasdaq-100 Shares 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 Depository, the DTC Participant, and any Indirect Participant through which such Beneficial Owner holds its interests, to exercise any rights of a holder of Nasdaq-100 Shares under the Trust Agreement. The Trustee and the Sponsor understand that under existing industry practice, in the event the Trustee requests any action of Nasdaq-100 Share

holders, or a Beneficial Owner desires to take any action that the Depository, as the record owner of all outstanding Nasdaq-100 Shares, 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.

As described above, the Trustee recognizes the Depository or its nominee as the owner of all Nasdaq-100 Shares for all purposes except as expressly set forth in the Trust Agreement. Conveyance of all notices, statements, and other communications to Beneficial Owners is effected as follows. Pursuant to the agreement between the Trustee and the Depository (as the same may be from time to time amended in accordance with its terms, 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 Nasdaq-100 Share holdings of each DTC Participant. The Trustee shall inquire of each such DTC Participant as to the number of Beneficial Owners holding Nasdaq-100 Shares, directly or indirectly, through such DTC Participant. The Trustee shall provide each such DTC Participant with 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 Trustee on behalf of the Trust shall pay to each such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to such transmittal, all subject to applicable statutory and regulatory requirements.

Nasdaq-100 Share distributions shall be made to the Depository or its nominee, Cede & Co., as the registered owner of all Nasdaq-100 Shares. The Trustee and the Sponsor expect that the Depository or its nominee, upon receipt of any payment of distributions in respect of Nasdaq-100 Shares, shall credit immediately DTC Participants' accounts with payments in amounts proportionate to their respective beneficial interests in Nasdaq-100 Shares 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 Nasdaq-100 Shares 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 aspect of the records relating to or notices to Beneficial Owners, or payments made on account of beneficial ownership interests in

Nasdaq-100 Shares, 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.

The Depository may determine to discontinue providing its service with respect to Nasdaq-100 Shares 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 the Depository to perform its functions at a comparable cost or, if such a replacement is unavailable, to terminate the Trust (see "Administration of the Trust--Termination").

THE PORTFOLIO

Because the objective of the Trust is to provide investment results that correspond substantially to the price and yield performance of the Index, the Portfolio will at any time consist of as many of the Index Securities as is practicable and under most circumstances, all of the Index Securities. It is anticipated that cash or cash items 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 the 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 Index and that derived from ownership of Nasdaq-100 Shares.

ADJUSTMENTS TO THE PORTFOLIO

The Index is a modified capitalization-weighted index of 100 of the largest non-financial companies listed on the Nasdaq National Market tier of the Nasdaq Stock Market (see "The Index"). At any moment in time, the value of the Index equals the aggregate value of the then-current Index share weights of each of the component 100 Index Securities multiplied by each such security's respective last sale price on the Nasdaq Stock Market, and divided by a scaling factor (the "divisor") which becomes the basis for the reported Index value. The divisor serves the purpose of scaling such aggregate value (otherwise in the trillions) to a lower order of magnitude which is more desirable for Index reporting purposes.*

* For example, on December 31, 1998 the aggregate value of the then- current Index share weights of each of the Index Securities multiplied by their respective last sale price on the Nasdaq Stock Market was $1,545,528,762,347, the divisor was 841,786,680, and the reported Index value was 1,836.01.

Periodically (typically, several times per quarter), Nasdaq may determine that total shares outstanding have changed in one or more Index Securities due to secondary offerings, repurchases, conversions, or other corporate actions. Under such circumstances, in accordance with Nasdaq policies and procedures for making adjustments to the Index, the Index share weights would be adjusted by the same percentage amounts by which the total shares outstanding have changed in such Index Securities. Additionally, Nasdaq may periodically (ordinarily, several times per quarter) replace one or more component securities in the Index due to mergers, acquisitions, bankruptcies, or other market conditions, or due to delistings if an issuer chooses to list its securities on another marketplace, or if the issuers of such component securities fail to meet the criteria for continued inclusion in the Index (see "The Index"). For example, for the 1997 and 1998 calendar years, there were 8 and 5 company changes, respectively, made during those years due to corporate actions (E.G., mergers, acquisitions, bankruptcies) and 11 and 9 other company changes, respectively, made at year-end in connection with Nasdaq's annual evaluation process for determining the securities comprising the Index for the upcoming year (see "The Index--Index Security Eligibility Criteria and Annual Ranking Review"). The ratio of the market capitalization of the securities replaced in the Index in 1997 and 1998 to the total market capitalization of the securities comprising the Index at year-end was 5.7% and 3.1%, respectively.

The Index share weights, which are based upon the total shares outstanding in each of the 100 Index Securities, are additionally subject, in certain cases, to a rebalancing in order to ensure that the relative weightings of the Index Securities continue to meet minimum pre-established requirements for a diversified portfolio (see "The Index--Rebalancing of the Index"). Ordinarily, whenever there is a change in Index share weights or a change in a component security included in the Index, Nasdaq adjusts the divisor to assure that there is no discontinuity in the value of the Index which might otherwise be caused by any such change.

Because the investment objective of the Trust is to provide investment results that generally correspond to the price and yield performance of the Index, composition and weighting changes, and associated divisor changes to the Index, create the need for the Trustee to make corresponding adjustments to the Securities held in the Trust as described below.

The Trustee adjusts the composition of the Portfolio from time to time to conform to changes in the composition and/or weighting of the Index Securities. The Trustee aggregates certain of these adjustments and makes conforming changes to the Trust's Portfolio at least monthly; however, adjustments

are made more frequently in the case of changes to the Index that are significant. Specifically, the Trustee is 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 is to 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. Although the investment objective of the Trust is to provide investment results which resemble the performance of the Index, it is not always efficient to replicate identically the share composition of the Index if the transaction costs incurred by the Trust in so adjusting the Portfolio would exceed the expected misweighting that would ensue by failing to replicate identically minor and insignificant share changes to the Index. Accordingly, to further the investment objective of the Trust, minor misweightings are generally permitted within the guidelines set forth below. The Trustee is required to adjust the composition of the Portfolio at any time that the weighting of any Security varies in excess of one hundred and fifty percent (150%) of a specified percentage (a "Misweighting Amount"), from the weighting of such Security in the Index (a "Misweighting"). The Misweighting Amounts vary depending on the net asset value of the Trust and are set forth in the table below:

NET ASSET VALUE                                         MISWEIGHTING
  OF THE TRUST                                             AMOUNT
-----------------------------------------------------  ---------------
Less than $25,000,000................................          0.25%
$25,000,000--$99,999,999.............................          0.20%
$100,000,000--$499,999,999...........................          0.10%
$500,000,000--$999,999,999...........................          0.05%
$1,000,000,000 and over..............................          0.02%

The Trustee shall examine each Security in the Portfolio on each Business Day, comparing the weighting of each such Security in the Portfolio to the weighting of the corresponding Index Security in the Index, based on prices at the close of the market on the preceding Business Day (a "Weighting Analysis"). In the event that there is a Misweighting in any Security in excess of one hundred and fifty percent (150%) of the applicable Misweighting Amount, the Trustee shall calculate an adjustment to the Portfolio in order to bring the Misweighting of such Security within the Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. Also, on a monthly basis, the Trustee shall perform a Weighting Analysis for each Security in the Portfolio, and in any case in which there exists a Misweighting exceeding one hundred percent (100%) of the applicable Misweighting Amount, the Trustee shall calculate an adjustment to the Portfolio in

order to bring the Misweighting of such Security within the applicable Misweighting Amount, based on prices at the close of the market on the day on which such Misweighting occurs. In the case of any adjustment to the Portfolio due to a Misweighting as described herein, the purchase or sale of securities necessitated by such adjustment shall be made within three (3) Business Days of the day on which such Misweighting is determined. In addition to the foregoing adjustments, the Trustee reserves the right to make additional adjustments periodically to Securities that may be misweighted by an amount within the applicable Misweighting Amount in order to reduce the overall Misweighting of the Portfolio.

The foregoing guidelines with respect to Misweightings shall also apply to any Index Security that (1) is likely to be unavailable for delivery or available in insufficient quantity for delivery or (2) cannot be delivered to the Trustee due to restrictions prohibiting a creator from engaging in a transaction involving such Index Security. Upon receipt of an order for a Creation Unit that will involve such an Index Security, the Trustee shall determine whether the substitution of cash for such Index Security will cause a Misweighting in the Trust's Portfolio with respect to such Index Security. If a Misweighting results, the Trustee shall purchase the required number of shares of such Index Security on the opening of the market on the following Business Day. If a Misweighting does not result and the Trustee would not hold cash in excess of the permitted amounts described below, the Trustee may hold such cash or, if such an excess would result, make the required adjustments to the Portfolio in accordance with the procedures described herein.

Pursuant to these guidelines the Trustee shall calculate the required adjustments and shall 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 or undistributed capital gains) as a result of such transactions, which amount shall not exceed for more than five (5) consecutive Business Days 5/10th 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 5/10th of 1 percent of the aggregate value of the Securities, the Trustee shall use such cash to purchase additional Index Securities that are under-weighted in the Portfolio as compared to their relative weighting in the Index, although the Misweighting of such Index Securities may not be in excess of the applicable Misweighting Amount.

In addition to adjustments to the Portfolio from time to time to conform to changes in the composition or weighting of the Index Securities, the Trustee is also ordinarily required to sell Securities to obtain sufficient cash proceeds for the payment of Trust fees and expenses at any time that projected annualized fees and expenses accrued on a daily basis exceed projected annualized dividends and other Trust income accrued on a daily basis by more than 1/100 of one percent (0.01%) of the net asset value of the Trust (see "Expenses of the Trust"). Whenever the 0.01% threshold is exceeded, the Trustee will sell sufficient Securities to cover such excess no later than the next occasion it is required to make adjustments to the Portfolio due to a Misweighting, unless the Trustee determines, in its discretion, that such a sale is unnecessary because the cash to be generated is not needed by the Trust at that time for the payment of expenses then due or because the Trustee otherwise determines that such a sale is not warranted or advisable. At the time of the sale, the Trustee shall first sell Securities that are over-weighted in the Portfolio as compared to their relative weighting in the Index.

All adjustments to the Portfolio held by the Trustee shall be made by the Trustee pursuant to the foregoing specifications and as set forth in the Trust Agreement and shall be non-discretionary. 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" under Subchapter M of the Internal Revenue Code. Additionally, the Trustee is required to adjust the composition of the Portfolio at any time if it is necessary to ensure the continued qualification of the Trust as a regulated investment company (see "Tax Status of the Trust"). The adjustments provided herein are intended to conform the composition and weighting of the Portfolio, to the extent practicable, to the composition and weighting of the Index Securities. Such adjustments are based upon the Index as it is currently determined by Nasdaq. To the extent that the method of determining the Index is changed by Nasdaq 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 Index is maintained.

In making the adjustments described herein, the Trustee shall rely on information made publicly available by Nasdaq as to the composition and weighting 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 weighting 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 weighting of the Securities (as opposed to the Index Securities) shall be used for the purposes of all adjustments and determinations herein (including, without limitation, determination of the securities portion of the Portfolio Deposit) until current information with respect to the Index Securities is available.

At such time as the Trustee gives written notice of the termination of the Trust (see "Administration of the Trust--Termination"), from and after the date of such notice the Trustee shall use the composition and weighting of the Securities held in the Trust as of such notice date (as opposed to the composition and weighting of the Index Securities) for the purpose and determination of all redemptions or other required uses of the securities portion of the Portfolio Deposit.

From time to time Nasdaq may make adjustments to the composition of the Index 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 is not 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 Index. In selling the securities of such issuer after it has been determined that the security will be removed from the Index, 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 will be reinvested in Index Securities in accordance with the criteria set forth 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 accordance with the criteria set forth above.

Purchases and sales of Securities resulting from the adjustments described above will be made in the share amounts dictated by the foregoing specifications, whether round lot or odd lot. Certain Index Securities, however, may at times not be available in the quantities that the foregoing calculations require. For this and other reasons, precise duplication of the proportionate relationship between the Portfolio and the Index Securities may not ever be attained

but nevertheless will continue to be the objective of the Trust in connection with all acquisitions and dispositions of Securities.

The Trust is a unit investment trust registered under the 1940 Act and is not a managed fund. Traditional methods of investment management for a managed fund typically involve frequent changes to a portfolio of securities on the basis of economic, financial, and market analyses. The Portfolio held by the Trust, however, is not managed. Instead, the only purchases and sales that are made with respect to the Portfolio will be those necessary to create, to the extent feasible, a portfolio that is designed to replicate the Index to the extent practicable, taking into consideration the adjustments referred to above. Since no attempt is made to "manage" the Trust in the traditional sense, the adverse financial condition of an issuer will not be the basis for the sale of its securities from the Portfolio unless the issuer is removed from the Index.

The Trust will be liquidated on the fixed Mandatory Termination Date unless terminated earlier under certain circumstances (see "Administration of the Trust--Termination"). In addition, Beneficial Owners of Nasdaq-100 Shares in Creation Unit size aggregations have the right to redeem in kind (see "Redemption of Nasdaq-100 Shares").

ADJUSTMENTS TO THE PORTFOLIO DEPOSIT

On each Business Day following the Initial Date of Deposit (each such day an "Adjustment Day"), the number of shares and/or identity of each of the Index Securities in a Portfolio Deposit is adjusted in accordance with the following procedure. At the close of the market on each Adjustment Day, the Trustee calculates the net asset value of the Trust (see "Valuation"). The net asset value is divided by the number of all outstanding Nasdaq-100 Shares multiplied by 50,000 shares in one Creation Unit aggregation resulting in a net asset value per Creation Unit (the "NAV Amount"). The Trustee then calculates the number of shares (without rounding) of each of the component securities of the Index 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 Income Net of Expense Amount effective for requests to create or redeem on Adjustment Day, equals the NAV Amount and (2) the identity and weighting of each of the securities in a Portfolio Deposit mirrors proportionately the identity and weighting of the securities in the Index, each as in effect on Request Day. For each security, the number resulting from such calculation is rounded to the nearest whole share, with a fraction of 0.50 being rounded up. The identities and number of shares of the securities so calculated 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 ordinarily to be delivered by the Trustee in the event of a request for redemption of Nasdaq-100 Shares in Creation Unit size aggregations on Request Day and thereafter until the following Adjustment Day (see "Redemption of Nasdaq-100 Shares"). In addition to the foregoing adjustments, in the event that there shall occur a stock split, stock dividend, or reverse split with respect to any Index Security, the Portfolio Deposit shall be adjusted to take account of such stock split, stock dividend, or reverse split by applying the stock split, stock dividend, or reverse stock split multiple (E.G., in the event of a two-for-one stock split of an Index Security, by doubling the number of shares of such Index Security in the prescribed Portfolio Deposit), in each case rounded to the nearest whole share, with a fraction of 0.50 being rounded up.

On Request Day and on each day that a request for the creation or redemption of Nasdaq-100 Shares in Creation Unit size aggregations is deemed received, the Trustee calculates 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 adds to that amount the Income Net of Expense Amount effective for requests to create or redeem on Request Day (such market value and Income Net of Expense Amount are collectively referred to herein as the "Portfolio Deposit Amount"). The Trustee then calculates 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 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, (1) differences in the market value of the securities in the Portfolio Deposit and the market value of the Securities on Request Day and (2) any variances from the proper composition of the Portfolio Deposit.

Notwithstanding the foregoing, on any Adjustment Day on which (a) no change in the identity and/or share weighting of any Index Security is scheduled to take effect that would cause the Index divisor to be adjusted after the close of the market on such Business Day,* and (b) no stock split, stock dividend, or reverse stock split with respect to any Index Security has been declared to take effect on the corresponding Request 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 weighting of the Index Securities for the most recently effective Portfolio Deposit for the Request Day following such Adjustment Day. In addition, the Trustee further reserves the

* Nasdaq normally publicly announces changes in the identity and/or weighting of the Index Securities in advance of the actual changes.

right to calculate the adjustment to the number of shares and/or identity of the Index Securities in a Portfolio Deposit as described above except that such calculation would be employed two (2) Business Days rather than one (1) Business Day prior to Request Day.

As previously discussed, the sum of the Income Net of Expense Amount and the Balancing Amount in effect at the close of business on Request Day are collectively referred to as the Cash Component (with respect to creations of Nasdaq-100 Shares) or the Cash Redemption Amount (with respect to redemptions of Nasdaq-100 Shares) (see "Prospectus Summary--Portfolio Deposits" and "Prospectus Summary--Redemption"). If the resulting Cash Component has a positive value, then the creator of Nasdaq-100 Shares will be obligated to pay such cash to the Trustee in connection with orders to create Nasdaq-100 Shares; if the resulting Cash Component has a negative value, then such cash shall be paid by the Trustee on behalf of the Trust to the creator of Nasdaq-100 Shares. Similarly, if the resulting Cash Redemption Amount has a positive value, then such cash shall be transferred to a redeemer by the Trustee on behalf of the Trust in connection with orders to redeem Nasdaq-100 Shares; if the resulting Cash Redemption Amount has a negative value, then such cash shall be paid by the redeemer of Nasdaq-100 Shares to the Trustee on behalf of the Trust.

In the event that 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, the Portfolio Deposit so constituted shall dictate the Index Securities to be delivered in connection with the creation of Nasdaq-100 Shares in Creation Unit size aggregations and upon the redemption of Nasdaq-100 Shares in Creation Unit size aggregations for all purposes hereunder until such time as the securities portion of the Portfolio Deposit is subsequently adjusted. Brokerage commissions incurred by the Trustee in connection with the acquisition of any such Index Securities will be at the expense of the Trust and will affect the value of all Nasdaq-100 Shares.

In connection with the creation or redemption of Nasdaq-100 Shares, 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 in the Portfolio Deposit in the calculation of the Cash Component (or the Cash Redemption Amount as the case may be) in lieu of the inclusion of such Index Securities in the securities portion of the Portfolio Deposit for the particular affected investor. The amount of such cash equivalent payment shall be used by the Trustee in accordance with the guidelines regarding allowable Misweightings and permitted amounts of cash (see "Adjustments to the Portfolio")

which may require the Trustee to purchase the appropriate number of shares of the Index Security that such investor was unable to purchase. In any such case, such investor shall pay the Trustee the standard Transaction Fee, plus an additional amount not to exceed (3) times the Transaction Fee applicable for a Creation Unit.

The Trustee, in its discretion, upon the request of the redeeming investor, may redeem Creation Units in whole or in part by providing such redeemer with a portfolio of Securities differing in exact composition from the Index Securities but not differing in net asset value from the then-current Portfolio Deposit. Such a redemption is likely to be made only if it were to be determined that this composition would be appropriate in order to maintain the Portfolio of the Trust in correlation to the modified capitalization-weighted composition of the Index, for instance, in connection with a replacement of one of the Index Securities (E.G., due to a merger, acquisition, or bankruptcy).

SELECTION AND ACQUISITION OF SECURITIES

In prescribing the method described above for selecting the Index Securities that constitute the prescribed Portfolio Deposit from time to time, the Sponsor intends to replicate, to the extent practicable, the composition and weighting of the Index Securities as of the relevant date.

Because certain of the Securities from time to time may be sold or their relative percentages changed under certain circumstances as described herein, no assurance can be given that the Trust will retain for any length of time its size and composition (see "Adjustments to the Portfolio"). Also, the deposit of additional Portfolio Deposits and the redemption of Nasdaq-100 Shares in Creation Unit size aggregations will affect the size and composition of the Trust. Neither the Sponsor nor the Trustee shall be liable in any way for any default, failure, or defect in any of the Securities.

THE INDEX

The Sponsor selected the Nasdaq-100 Index(-Registered Trademark-) as the basis for the selection of the Securities to be held by the Trust because, in the opinion of the Sponsor, the Index constitutes a broadly diversified segment of the largest and most actively traded securities listed on the Nasdaq Stock Market. Additionally, the Index has achieved wide acceptance by both investors and market professionals. Specifically, the Index is composed of 100 of the largest and most actively traded non-financial companies listed on the Nasdaq National Market tier of the Nasdaq Stock Market.

The Index was first published in January 1985, and includes companies across a variety of major industry groups. As of December 31, 1998, the major

industry groups covered in the Index (listed according to their respective capitalization in the Index) were as follows: computer and office equipment (32.6%), computer software/services (30.2%), telecommunications (17.8%), retail/wholesale trade (8.0%), biotechnology (5.0%), services (2.4%), health care (2.1%), manufacturing (1.5%) and transportation (0.4%). The identity and capitalization weightings of the five largest companies represented in the Index as of December 31, 1998 were as follows: Microsoft Corporation (14.5%), Intel Corporation (8.4%), Cisco Systems, Inc. (6.4%), MCI WORLDCOM, Inc. (5.8%), and Dell Computer Corporation (4.2%). Current information regarding the market value of the Index is available from Nasdaq as well as numerous market information services. The Index is determined, comprised, and calculated by Nasdaq without regard to the Trust.

The Sponsor, which is wholly-owned by Nasdaq, has been granted a license to use the Index as a basis for determining the composition of the Trust and to use certain service marks and trademarks of Nasdaq in connection with the Trust (see "License Agreement"). Nasdaq is not responsible for and shall not participate in the creation or sale of Nasdaq-100 Shares 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 Index share weights of the component securities of the Index at any time are based upon the total shares outstanding in each of the 100 Index Securities and are additionally subject, in certain cases, to rebalancing to ensure that the relative weighting of the Index Securities continues to meet minimum pre-established requirements for a diversified portfolio (see "Rebalancing of the Index"). Accordingly, each Index Security's influence on the value of the Index is directly proportional to the value of its Index share weight. The percentage of the Trust's assets invested in each of the Index Securities is intended to approximate the percentage each Index Security represents in the Index.

The following table shows the actual performance of the Index for the years 1985 through 1998. 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 Index in the future, nor should the results be considered as a representation of the performance of the Trust. In addition, after the close of trading on December 18, 1998 the Index share weights of the component securities in the Index were rebalanced in accordance with the "modified capitalization weighted" methodology implemented on such date (see "Rebalancing of the Index"). Hence, the performance of the Index after December 18, 1998 will reflect the performance of the securities in the Index as calculated in accordance with the revised Index methodology.

              CALENDAR YEAR-
                END INDEX
                  VALUE*      POINT CHANGE IN                  CALENDAR YEAR- END
               (JANUARY 31,      INDEX FOR     YEAR % CHANGE       DIVIDEND
YEAR          1985 = 125.00)  CALENDAR YEAR*     IN INDEX*          YIELD**
------------  --------------  ---------------  --------------  -----------------
1985***.....        132.29            7.29             5.83%          N/A
1986........        141.41            9.12             6.89%            0.33%
1987........        156.25           14.84            10.49%            0.41%
1988........        177.41           21.16            13.54%            0.47%
1989........        223.84           46.43            26.17%            0.91%
1990........        200.53          -23.31           -10.41%            1.07%
1991........        330.86          130.33            64.99%            0.53%
1992........        360.19           29.33             8.86%            0.55%
1993........        398.28           38.09            10.57%            0.52%
1994........        404.27            5.99             1.50%            0.46%
1995 .......        576.23          171.96            42.54%            0.26%
1996........        821.36          245.13            42.54%            0.11%
1997........        990.80          169.44            20.63%            0.13%
1998........       1836.01          845.21            85.31%            0.07%

* Source: Nasdaq. Year-end index values shown do not reflect reinvestment of dividends or costs, such as brokerage charges and transaction costs.

** Source: Nasdaq. Dividend yields are obtained by dividing the aggregate cash dividends for the year by the aggregate market value of the component securities in the Index at year-end.

*** 1985 data is for the eleven month period from January 31, 1985 through December 31, 1985.

The Index value as of March 2, 1999 was 1888.66.

INDEX SECURITY ELIGIBILITY CRITERIA AND ANNUAL RANKING REVIEW

To be eligible for inclusion in the Index, a security must be traded on the Nasdaq National Market tier of the Nasdaq Stock Market and meet the following criteria:

- the security must be of a non-financial company;

- only one class of security per issuer is allowed;

- the security may not be issued by an issuer currently in bankruptcy proceedings;

- the security must have average daily trading volume of at least 100,000 shares per day;

- the security must have "seasoned" on the Nasdaq Stock Market or another recognized market (generally, a company is considered to be seasoned by Nasdaq if it has been listed on a market for at least two years; in the case of spin-offs, the operating history of the spin-off will be considered);

- if a security would otherwise qualify to be in the top 25% of the issuers included in the Index by market capitalization, then a one year "seasoning" criteria would apply;

- if the security is of a foreign issuer, the company must have a worldwide market value of at least $10 billion, a U.S. market value of at least $4 billion, and average trading volume on the Nasdaq Stock Market of at least 200,000 shares per day; in addition, foreign securities must be eligible for listed options trading; and

- the issuer of the security may not have entered into a definitive agreement or other arrangement which would result in the security no longer being listed on the Nasdaq Stock Market within the next six months.

These Index eligibility criteria may be revised from time to time by the National Association of Securities Dealers, Inc. without regard to the Trust.

The Index Securities are evaluated annually as follows (such evaluation is referred to herein as the "Annual Ranking Review"). Securities listed on the Nasdaq Stock Market which meet the above eligibility criteria are ranked by market value. Index-eligible securities which are already in the Index and which are in the top 150 eligible securities (based on market value) are retained in the Index provided that such security was ranked in the top 100 eligible securities as of the previous year's annual review. Securities not meeting such criteria are replaced. The replacement securities chosen are those Index-eligible securities not currently in the Index which have the largest market capitalization. The list of annual additions and deletions is publicly announced via a press release in the early part of December. Replacements are made effective after the close of trading on the third Friday in December. Moreover, if at any time during the year an Index Security is no longer traded on the Nasdaq Stock Market, or is otherwise determined by Nasdaq to become ineligible for continued inclusion in the Index, the security will be replaced with the largest market capitalization security not currently in the Index and meeting the Index eligibility criteria listed above.

In addition to the Annual Ranking Review, the securities in the Index are monitored every day by Nasdaq with respect to changes in total shares outstanding arising from secondary offerings, stock repurchases, conversions, or other corporate actions. Nasdaq has adopted the following quarterly scheduled

weight adjustment procedures with respect to such changes. If the change in total shares outstanding arising from such corporate action is greater than or equal to 5.0%, such change is ordinarily made to the Index on the evening prior to the effective date of such corporate action. Otherwise, if the change in total shares outstanding is less than 5%, then all such changes are accumulated and made effective at one time on a quarterly basis after the close of trading on the third Friday in each of March, June, September, and December. In either case, the Index share weights for such Index Securities are adjusted by the same percentage amount by which the total shares outstanding have changed in such Index Securities. Ordinarily, whenever there is a change in Index share weights or a change in a component security included in the Index, Nasdaq adjusts the divisor to assure that there is no discontinuity in the value of the Index which might otherwise be caused by any such change.

REBALANCING OF THE INDEX

Effective after the close of trading on December 18, 1998, the Index has been calculated under a "modified capitalization-weighted" methodology, which is a hybrid between equal weighting and conventional capitalization weighting. This methodology is expected to: (1) retain in general the economic attributes of capitalization weighting; (2) promote portfolio weight diversification (thereby limiting domination of the Index by a few large stocks); (3) reduce Index performance distortion by preserving the capitalization ranking of companies; and (4) reduce market impact on the smallest Index Securities from necessary weight rebalancings.

Under the methodology employed, on a quarterly basis coinciding with Nasdaq's quarterly scheduled weight adjustment procedures, the Index Securities are categorized as either "Large Stocks" or "Small Stocks" depending on whether their current percentage weights (after taking into account such scheduled weight adjustments due to stock repurchases, secondary offerings, or other corporate actions) are greater than, or less than or equal to, the average percentage weight in the Index (i.e., as a 100-stock index, the average percentage weight in the Index is 1.0%).

Such quarterly examination will result in an Index rebalancing if either one or both of the following two weight distribution requirements are not met: (1) the current weight of the single largest market capitalization Index Security must be less than or equal to 24.0% and (2) the "collective weight" of those Index Securities whose individual current weights are in excess of 4.5%, when added together, must be less than or equal to 48.0%.

If either one or both of these weight distribution requirements are not met upon quarterly review, a weight rebalancing will be performed in accordance with the following plan. First, relating to weight distribution requirement (1) above, if the current weight of the single largest Index Security exceeds 24.0%, then the weights of all Large Stocks will be scaled down proportionately towards 1.0% by enough for the adjusted weight of the single largest Index Security to be set to 20.0%. Second, relating to weight distribution requirement (2) above, for those Index Securities whose individual current weights or adjusted weights in accordance with the preceding step are in excess of 4.5%, if their "collective weight" exceeds 48.0%, then the weights of all Large Stocks will be scaled down proportionately towards 1.0% by just enough for the "collective weight," so adjusted, to be set to 40.0%.

The aggregate weight reduction among the Large Stocks resulting from either or both of the above rescalings will then be redistributed to the Small Stocks in the following iterative manner. In the first iteration, the weight of the largest Small Stock will be scaled upwards by a factor which sets it equal to the average Index weight of 1.0%. The weights of each of the smaller remaining Small Stocks will be scaled up by the same factor reduced in relation to each stock's relative ranking among the Small Stocks such that the smaller the Index Security in the ranking, the less the scale-up of its weight. This is intended to reduce the market impact of the weight rebalancing on the smallest component securities in the Index.

In the second iteration, the weight of the second largest Small Stock, already adjusted in the first iteration, will be scaled upwards by a factor which sets it equal to the average index weight of 1.0%. The weights of each of the smaller remaining Small Stocks will be scaled up by this same factor reduced in relation to each stock's relative ranking among the Small Stocks such that, once again, the smaller the stock in the ranking, the less the scale-up of its weight.

Additional iterations will be performed until the accumulated increase in weight among the Small Stocks exactly equals the aggregate weight reduction among the Large Stocks from rebalancing in accordance with weight distribution requirement (1) and/or weight distribution requirement (2).

Then, to complete the rebalancing procedure, once the final percent weights of each Index Security are set, the Index share weights will be determined anew based upon the last sale prices and aggregate capitalization of the Index at the close of trading on the Thursday in the week immediately preceding the week of the third Friday in March, June, September, and December. Changes to the Index share weights will be made effective after the close of

trading on the third Friday in March, June, September, and December and an adjustment to the Index divisor will be made to ensure continuity of the Index.

Effective after the close of trading on December 18, 1998, the Index was rebalanced in accordance with the above methodology. As a result of the rebalancing, the Index share weights of the five (5) stocks whose unadjusted weights were in excess of 4.5% were adjusted downwards on such date. As of the close of trading on December 31, 1998, the weights of these five stocks in the Index as rebalanced, in relation to what they would have been if the Index were not rebalanced, were as follows: Microsoft Corporation (14.5% vs. 22.5%), Intel Corporation (8.4% vs. 12.8%), Cisco Systems, Inc. (6.4% vs. 9.5%), MCI WORLDCOM, Inc. (5.8% vs. 8.5%), and Dell Computer Corporation (4.2% vs. 6.1%).

LICENSE AGREEMENT

Under the terms of a license agreement with Nasdaq (the "License Agreement"), the Sponsor has been granted a license to use the Index as a basis for determining the composition of the Trust and to use certain trade names, trademarks, and service marks of Nasdaq in connection with the Trust. The License Agreement may be amended by the parties thereto without the consent of any of the Beneficial Owners of Nasdaq-100 Shares. Currently, the License Agreement is scheduled to expire five years from the commencement date of trading of Nasdaq-100 Shares, in accordance with its terms and is subject to a five year renewal period following such date. The parties thereto may extend the term of the License Agreement beyond such date without the consent of any of the Beneficial Owners of Nasdaq-100 Shares.

Under the terms of the License Agreement, the Sponsor pays to Nasdaq an annual licensing fee for use of the Index. The Sponsor ordinarily will seek reimbursement from the Trust for the amount of licensing fees (see "Expenses of the Trust"). However, the Sponsor has committed not to seek reimbursement from the Trust for licensing fees to Nasdaq for the period through the Trust's fiscal year ending September 30, 1999. Thereafter, the Sponsor intends to charge the Trust for the annual licensing fee.

None of the Trust, the Trustee, the Distributor, the Depository, or any Beneficial Owner of Nasdaq-100 Shares is entitled to any rights whatsoever under the foregoing licensing arrangements or to use the trademarks and service marks "Nasdaq-100 Index(-Registered Trademark-)", "Nasdaq-100(-Registered Trademark-)", "Nasdaq(-Registered Trademark-)", "The Nasdaq Stock Market(-Registered Trademark-)", "Nasdaq-100 Shares(SM)", or "Nasdaq-100 Trust(SM)" or to use the Index except as specifically described herein or as may be specified in the Trust Agreement.

The Index is determined, composed, and calculated by Nasdaq without regard to the Sponsor, the Trust, or the Beneficial Owners of Nasdaq-100 Shares. Nasdaq has complete control and sole discretion in determining, comprising, or calculating the Index or in modifying in any way its method for determining, comprising, or calculating the Index in the future.

NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE INDEX OR ANY DATA USED TO CALCULATE THE INDEX OR DETERMINE THE INDEX COMPONENTS. NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THE UNINTERRUPTED OR UN-DELAYED CALCULATION OR DISSEMINATION OF THE INDEX. NASDAQ AND ITS AFFILIATES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN. NASDAQ AND ITS AFFILIATES DO NOT GUARANTEE THAT THE INDEX ACCURATELY REFLECTS PAST, PRESENT, OR FUTURE MARKET PERFORMANCE. NASDAQ AND ITS AFFILIATES MAKE NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE SPONSOR, THE TRUST, BENEFICIAL OWNERS OF NASDAQ-100 SHARES, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDEX OR ANY DATA INCLUDED THEREIN. NASDAQ AND ITS AFFILIATES MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL WARRANTIES, OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, WITH RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. NASDAQ AND ITS AFFILIATES, OTHER THAN THE SPONSOR, MAKE NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AND BEAR NO LIABILITY WITH RESPECT TO NASDAQ-100 SHARES. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL NASDAQ OR ITS AFFILIATES 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.

MARKETPLACE LISTING

Nasdaq-100 Shares have been approved for listing on the Amex, subject to official notice of issuance. Transactions involving Nasdaq-100 Shares in the public trading market are subject to customary brokerage charges and commissions.

The Sponsor's aim in designing Nasdaq-100 Shares was to provide investors with a security whose initial market value would approximate one-twentieth (1/20th) the value of the Index. Thus, for example, if the Index were at 1600, investors might expect a Nasdaq-100 Share to trade initially at approximately $80. Note, however, that the market price of a Nasdaq-100 Share may be affected by supply and demand, market volatility, sentiment, and other factors (see "Special Considerations and Risk Factors"). Note also, that due to these factors as well as other factors including required distributions for tax purposes (see "Tax Status of the Trust") or the sale of Securities to meet Trust expenses in excess of the dividends received on the Securities (see

"Expenses of the Trust"), the one-twentieth (1/20th) relationship between the initial value of a Nasdaq-100 Share and the value of the Index is not expected to persist indefinitely.

There can be no assurance that Nasdaq-100 Shares will always be listed on the Amex. The Amex will consider the suspension of trading in or removal from listing of Nasdaq-100 Shares:

(a) if the Trust has more than 60 days remaining until termination and there are fewer than 50 record and/or beneficial holders of Nasdaq-100 Shares for 30 or more consecutive trading days;

(b) if the Index is no longer calculated or available; or

(c) if such other event shall occur or condition exists which, in the opinion of the Amex, makes further dealings on the Amex inadvisable.

The Trust is not required to pay a listing fee to the Amex.

The Trust will be terminated in the event that Nasdaq-100 Shares are delisted from the Amex and are not subsequently relisted on a national securities exchange or a quotation medium operated by a national securities association (see "Administration of the Trust--Termination").

TAX STATUS OF THE TRUST

The Trust intends to qualify for and elect tax treatment as a "regulated investment company" under Subchapter M of the Code. The Trust intends to adopt a fiscal year ending on September 30 of each year. To qualify as a regulated investment company, the Trust must, among other things, (a) derive in each taxable year at least 90% of its gross income from dividends, interest, gains from the sale or other disposition of stock, securities or foreign currencies, or certain other sources, (b) meet certain diversification tests, and (c) distribute in each year at least 90% of its investment company taxable income. If the Trust qualifies as a regulated investment company, subject to certain conditions and requirements, the Trust will not be subject to federal income tax to the extent its income is distributed in a timely manner. Any undistributed income may be subject to tax, including a four percent (4%) excise tax imposed by section 4982 of the Code on certain undistributed income of a regulated investment company that does not distribute to shareholders in a timely manner at least ninety-eight percent (98%) of its taxable income (including capital gains).

TAX CONSEQUENCES TO BENEFICIAL OWNERS

Any net dividends paid by the Trust from its investment company taxable income (which includes dividends, interest, and the excess of net short-term capital gains over net long-term capital losses) will be taxable to Beneficial Owners as ordinary income. A net dividend, if any, paid in January will be considered for federal income tax purposes to have been paid by the Trust and received by Beneficial Owners on the preceding December 31 if the net dividend was declared in the preceding October, November, or December to Beneficial Owners of record shown on the records of the Depository and the DTC Participants (see "The Trust--Book-Entry-Only System") on a date in one of those months.

Distributions paid by the Trust from the excess of net long-term capital gains over net short-term capital losses ("net capital gain") are taxable as long-term capital gain, regardless of the length of time an investor has owned Nasdaq-100 Shares. Any loss on the sale or exchange of a Nasdaq-100 Share held for six months or less may be treated as a long-term capital loss to the extent of any capital gain dividends received by the Beneficial Owner. For corporate investors, net dividends from net investment income (but not return of capital distributions or capital gain dividends) generally will qualify for the corporate dividends-received deduction to the extent of qualifying dividend income received by the Trust, subject to the limitations contained in the Code. Investors should note that the quarterly net dividends paid by the Trust, if any, will not be based on the Trust's investment company taxable income and net capital gain, but rather will be based on the dividends paid with respect to the Securities net of accrued expenses and liabilities 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 make additional distributions in excess of the yield performance of the Securities in order to distribute all of its investment company taxable income and net capital gain.

Distributions in excess of the Trust's current or accumulated earnings and profits (as specially computed) generally will be treated as a return of capital for federal income tax purposes and will reduce a Beneficial Owner's tax basis in Nasdaq-100 Shares. Return of capital distributions may result, for example, if a portion of the net dividends, if any, declared represents cash amounts deposited in connection with Portfolio Deposits rather than dividends actually received by the Trust. Under certain circumstances, a significant portion of any quarterly net dividends of the Trust could be treated as return of capital distributions. Such circumstances may be more likely to occur in periods during which the number of outstanding Nasdaq-100 Shares fluctuates significantly, as

may occur during the initial years of the Trust. Beneficial Owners will receive annually notification from the Trustee through the DTC Participants as to the tax status of the Trust's distributions (see "The Trust--Book-Entry-Only System"). A distribution, if any, paid shortly after a purchase or creation of Nasdaq-100 Shares may be taxable even though in effect it may represent a return of capital.

The sale of Nasdaq-100 Shares by a Beneficial Owner is a taxable event, and may result in a gain or loss, which generally should be a capital gain or loss for Beneficial Owners that are not dealers in securities.

Under the Code, an in-kind redemption of Nasdaq-100 Shares will not result in the recognition of taxable gain or loss by the Trust but generally will constitute a taxable event for the redeeming shareholder. Upon redemption, a Beneficial Owner generally will recognize gain or loss measured by the difference on the date of redemption between the aggregate value of the cash and securities received and its tax basis in the Nasdaq-100 Shares redeemed. Securities received upon redemption (which will be comprised of the securities portion of the Portfolio Deposit in effect on the date of redemption) generally will have an initial tax basis equal to their respective market values on the date of redemption. The U.S. Internal Revenue Service ("IRS") may assert that any resulting loss may not be deducted by a Beneficial Owner on the basis that there has been no material change in such Beneficial Owner's economic position or that the transaction has no significant economic or business utility apart from the anticipated tax consequences. Beneficial Owners of Nasdaq-100 Shares in Creation Unit size aggregations should consult their own tax advisors as to the consequences to them of the redemption of Nasdaq-100 Shares.

Net dividend distributions, capital gains distributions, and capital gains from sales or redemptions may also be subject to state, local and foreign taxes.

Deposit of a Portfolio Deposit with the Trustee in exchange for Nasdaq-100 Shares in Creation Unit size aggregations will not result in the recognition of taxable gain or loss by the Trust but generally will constitute a taxable event to the depositor under the Code, and a depositor generally will recognize gain or loss with respect to each security deposited equal to the difference between the amount realized in respect of the security and the depositor's tax basis therein. The amount realized with respect to a security deposited should be determined by allocating the value on the date of deposit of the Nasdaq-100 Shares received (less any cash paid to the Trust, or plus any cash received from the Trust, in connection with the deposit) among the securities deposited on the basis of their respective fair market values at that time. The IRS may assert that any resulting losses may not be deducted by a depositor on the basis that there has been no material change in the depositor's

economic position or that the transaction has no significant economic or business utility or purpose apart from the anticipated tax consequences. Depositors should consult their own tax advisors as to the tax consequences to them of a deposit to the Trust.

After the initial deposit of Portfolio Deposits with the Trustee, the Trustee has the right to reject the order to create Creation Units transmitted to it by the Distributor if the depositor or group of depositors, upon obtaining the Nasdaq-100 Shares ordered, would own eighty percent (80%) or more of the outstanding Nasdaq-100 Shares, and if pursuant to section 351 of the Code such a circumstance would result in the Trust having a basis in the securities deposited different from the market value of such securities on the date of deposit. The Trustee has the right to require information regarding Nasdaq-100 Share ownership pursuant to the Nasdaq-100 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 a Portfolio Deposit.

Ordinary income dividends received via the Depository by Beneficial Owners who are non-resident aliens will be subject to a thirty percent (30%) United States withholding tax unless a reduced rate of withholding or a withholding exemption is provided under applicable tax treaties. Non-resident shareholders are urged to consult their own tax advisors concerning the applicability of United States withholding tax.

Backup withholding at a rate of 31% will apply to dividends, capital gain distributions, redemptions and sales of Nasdaq-100 Shares unless (a) the Beneficial Owner is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact, or (b) provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding, and otherwise complies with applicable requirements of the backup withholding rules. The amount of any backup withholding from a payment to a Beneficial Owner will be allowed as a credit against the holder's U.S. federal income tax liability and may entitle such holder to a refund from the IRS, provided that the required information is furnished to the IRS.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE FEDERAL, STATE, LOCAL, AND FOREIGN TAX CONSEQUENCES TO THEM OF AN INVESTMENT IN THE TRUST, INCLUDING THE EFFECT OF POSSIBLE LEGISLATIVE CHANGES.

CONTINUOUS OFFERING OF NASDAQ-100 SHARES

Nasdaq-100 Shares in Creation Unit size aggregations will be offered continuously to the public by the Trust through the Distributor and will be delivered upon the deposit of a Portfolio Deposit (see "The Trust--Procedures for

Creation of Creation Units"). A list of the identity and number of shares of each of the Index Securities in the current Portfolio Deposit and the amount of the Income Net of Expense Amount effective through and including the previous Business Day is made available by the Trustee to NSCC on each 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 composition and weighting of the Index Securities of the Portfolio Deposit on the previous Business Day. The minimum number of Nasdaq-100 Shares that may be created as described herein is 50,000 or one Creation Unit. Persons making Portfolio Deposits and creating Creation Unit size aggregations of Nasdaq-100 Shares will receive no fees, commissions, or other form of compensation or inducement of any kind from the Sponsor or the Distributor, nor will any such person have any obligation or responsibility to the Sponsor or Distributor to effect any sale or resale of Nasdaq-100 Shares. Notwithstanding the above, the Sponsor reserves the right, in its sole discretion, to periodically reimburse in whole or in part the Transaction Fees paid by eligible entities in connection with the creation or redemption of certain lot-sizes of Nasdaq-100 Shares.

Because new Nasdaq-100 Shares 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, as amended (the "Securities Act"), may be occurring. Broker-dealers and other persons are cautioned that some activities on their part may, depending on the circumstances, 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 Securities 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 Nasdaq-100 Shares, and sells the Nasdaq-100 Shares directly to its customers, or if it chooses to couple the creation of a supply of new Nasdaq-100 Shares with an active selling effort involving solicitation of secondary market demand for Nasdaq-100 Shares. 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 Nasdaq-100 Shares that are part of an "unsold allotment" within the meaning of Section 4(3)(C) of the Securities Act, would be unable to take advantage of the prospectus-delivery exemption provided by Section 4(3) of the

Securities Act. Firms that do incur a prospectus delivery obligation with respect to Nasdaq-100 Shares are reminded that under Securities Act Rule 153, a prospectus-delivery obligation under Section 5(b)(2) of the Securities Act owed to an Amex member in connection with a sale on the Amex is satisfied by the fact that Nasdaq-100 Share prospectuses will be available at the Amex upon request. Of course, the prospectus-delivery mechanism provided in Rule 153 is only available with respect to transactions on an exchange.

The Sponsor intends to market Nasdaq-100 Shares through broker-dealers who are members of the National Association of Securities Dealers, Inc. Investors intending to create or redeem Creation Unit size aggregations of Nasdaq-100 Shares in transactions not involving a broker-dealer registered in such investor's state of domicile or residence should consult counsel regarding applicable broker-dealer or securities regulatory requirements under such state securities laws prior to such creation or redemption.

EXPENSES OF THE TRUST

Until further notice, the Sponsor has undertaken that on each day during each fiscal year up to and including the fiscal year ending September 30, 2000, the ordinary operating expenses of the Trust as calculated by the Trustee will not be permitted to exceed an amount which is 18/100 of one percent (0.18%) per annum of the daily net asset value of the Trust. To the extent during such period the ordinary operating expenses of the Trust do exceed such 0.18% level, the Sponsor will reimburse the Trust or assume invoices on behalf of the Trust for such excess ordinary operating expenses. 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 by the Sponsor, ordinary operating expenses of the Trust shall not include taxes, brokerage commissions, and such extraordinary non-recurring expenses as may arise, including without limitation the cost of any litigation to which the Trust or Trustee may be a party. After September 30, 2000, the Sponsor may discontinue its undertaking to limit ordinary operating expenses of the Trust or renew this undertaking for an additional period of time, or may choose to reimburse or assume certain Trust expenses in later periods in order to keep Trust expenses at a level lower than what would reflect ordinary operating expenses of the Trust, but is not obligated to do so. In any event, it is possible that, 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 reserves the right to charge the Trust a special sponsor fee from time to time 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. In connection therewith, Nasdaq, on behalf of the Sponsor, has agreed to assume the expenses incident to the organization of the Trust and its registration as an investment company, and such expenses will not be borne by the Trust.

The following charges are or may be accrued and paid by the Trust: (a) the Trustee's fee as discussed more fully below; (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 Nasdaq-100 Shares (whether in Creation Unit size aggregations or otherwise); (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 Nasdaq-100 Shares (whether in Creation Unit size aggregations or otherwise);
(g) indemnification of the Trustee or the Sponsor for any losses, liabilities or expenses incurred by them in the administration of the Trust without gross negligence, bad faith, wilful misconduct, or wilful malfeasance on their part or reckless disregard of their obligations and duties; (h) expenses incurred in contacting Beneficial Owners of Nasdaq-100 Shares during the life of the Trust and upon termination of the Trust; (i) brokerage commissions incurred by the Trustee when acquiring or selling Index Securities pursuant to the provisions of the Trust Agreement; and (j) other out-of-pocket expenses of the Trust incurred pursuant to actions permitted or required under the Trust Agreement.

In addition to the specific expenses discussed in the previous paragraph, the following expenses are or may be charged to the Trust: (a) reimbursement to the Sponsor of amounts paid by it to Nasdaq in respect of annual licensing fees pursuant to the License Agreement (the Sponsor has, however, committed not to seek reimbursement from the Trust for licensing fees paid for the period through the Trust's fiscal year ending September 30, 1999, see "License Agreement"), (b) federal and state annual registration fees for the issuance of Nasdaq-100 Shares, and (c) expenses of the Sponsor relating to the printing and distribution of marketing materials describing Nasdaq-100 Shares 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 net asset value of the Trust.

Trust fees and expenses will first be paid out of income received by the Trust in the form of dividends and other distributions on the Securities. It is currently expected that Trust income may be insufficient to cover Trust fees and expenses (see "Special Considerations and Risk Factors--Little or No Expected Net Dividend Distributions to Beneficial Owners"). In such circumstances, the Trustee will sell Securities in an amount sufficient to pay the excess of accrued fees and expenses over the dividends and other Trust accrued income. Specifically, the Trustee will ordinarily be required to sell Securities whenever the Trustee determines that projected annualized fees and expenses accrued on a daily basis exceed projected annualized dividends and other Trust income accrued on a daily basis by more than 1/100 of one percent (0.01%) of the net asset value of the Trust. Whenever the 0.01% threshold is exceeded, the Trustee will sell sufficient Securities to cover such excess no later than the next occasion it is required to make adjustments to the Portfolio due to a Misweighting (see "The Portfolio--Adjustments to the Portfolio"), unless the Trustee determines, in its discretion, that such a sale is unnecessary because the cash to be generated is not needed by the Trust at that time for the payment of expenses then due or because the Trustee otherwise determines that such sale is not warranted or advisable. At the time of the sale, the Trustee shall first sell Securities that are over-weighted in the Portfolio as compared to their relative weighting in the Index.

The Trustee may also make advances to the Trust to cover expenses. The Trustee may reimburse itself in the amount of any such advance, plus any amounts required by the Federal Reserve Board which are related to such advances, 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 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 ordinarily sell Securities to reimburse itself for the amount of such advance and any accrued interest thereon. Such advances, as well as rights of the Trustee to the payment of its fee, reimbursement of expenses and other claims, will be secured by a lien upon and a security interest in the assets of

the Trust in favor of the Trustee. The expenses of the Trust are reflected in the net asset value of the Trust (see "Valuation").

For services performed under the Trust Agreement, the Trustee is paid by the Trust a fee at an annual rate of 6/100 of 1% to 10/100 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. Such compensation is computed on each Business Day on the basis of the net asset value of the Trust on such day, and the amount thereof is accrued daily and paid monthly. The Trustee, in its discretion, may waive all or a portion of such fee. Notwithstanding the fee schedule set forth in the table below, the Trustee shall be paid a minimum annual fee of $180,000 per annum. To the extent that the amount of the Trustee's compensation is less than such minimum annual fee, the Sponsor has agreed to pay the amount of any such shortfall.

NET ASSET VALUE                                            FEE AS A PERCENTAGE OF NET
  OF THE TRUST                                              ASSET VALUE OF THE TRUST
--------------------------------------------------------  -----------------------------
$0-$499,999,999.........................................        10/100 of 1% per annum*
$500,000,000-$2,499,999,999.............................         8/100 of 1% per annum*
$2,500,000,000 and above................................         6/100 of 1% per annum*

* The fee indicated applies to that portion of the net asset value of the Trust which falls in the size category indicated.

REDEMPTION OF NASDAQ-100 SHARES

Nasdaq-100 Shares in Creation Unit size aggregations are ordinarily redeemable in kind only and are not redeemable for cash except under certain circumstances. Nasdaq-100 Shares in Creation Unit size aggregations may be redeemed by submitting a request for redemption, the requisite number of Nasdaq-100 Shares, and the Cash Redemption Amount (as defined below), if applicable, to the Trustee in the manner specified below. Beneficial Owners of Nasdaq-100 Shares may sell Nasdaq-100 Shares in the secondary market, but must accumulate enough Nasdaq-100 Shares to constitute a Creation Unit (I.E., 50,000 shares) in order to redeem through the Trust. Nasdaq-100 Shares can be redeemed only when Creation Unit size aggregations are owned by a Beneficial Owner and held in the account of a single Participating Party (with respect to redemptions through the Nasdaq-100 Clearing Process) or a single DTC Participant (with respect to redemptions outside the Nasdaq-100 Clearing Process). Nasdaq-100 Shares will remain outstanding until redeemed or until the termination of the Trust.

PROCEDURE FOR REDEMPTION OF NASDAQ-100 SHARES

Requests for redemptions of Creation Units may be made on any Business Day through the Nasdaq-100 Clearing Process to the Trustee at its trust office at 101 Barclay Street, New York, New York 10286, or at such other office as may be designated by the Trustee. Requests for redemptions of Creation Units may also be made directly to the Trustee outside the Nasdaq-100 Clearing Process. Requests for redemptions shall not be made to the Distributor. In the case of redemptions made through the Nasdaq-100 Clearing Process, the Transaction Fee will be deducted from the amount delivered to the redeemer or added to the amount owed by the redeemer to the Trustee, as applicable. In case of redemptions tendered directly to the Trustee outside the Nasdaq-100 Clearing Process, a total fee will be charged equal to the Transaction Fee plus an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit (due in part to the increased expense associated with delivery outside the Nasdaq-100 Clearing Process), and such amount will be deducted from the amount delivered to the redeemer or added to the amount owed by the redeemer to the Trustee on behalf of the Trust, as applicable (see "Prospectus Summary--Transaction Fee"). In all cases, the tender of Nasdaq-100 Shares for redemption and distributions to the redeemer (or payments to the Trustee, as applicable) in respect of Nasdaq-100 Shares 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 (see "The Trust--Book-Entry-Only System").

The Trustee will transfer to the redeeming Beneficial Owner via the Depository and the relevant DTC Participant(s) a portfolio of Securities for each Creation Unit size aggregation of Nasdaq-100 Shares delivered, typically identical in composition and weighting to the securities portion of a Portfolio Deposit as in effect (1) on the date a request for redemption is deemed received by the Trustee as described below, in the case of redemptions made either through the Nasdaq-100 Clearing Process or outside the Nasdaq-100 Clearing Process or (2) on the date that notice of the termination of the Trust is given, in the case of the termination of the Trust (see "Administration of the Trust--Termination" and "The Portfolio--Adjustments to the Portfolio"). Each redemption also includes a cash amount, the "Cash Redemption Amount," which will either be paid to the Trustee on behalf of the Trust by the redeemer or paid to the redeemer by the Trustee on behalf of the Trust as described below. On any given Business Day, the Cash Redemption Amount is typically an amount identical to the amount of the Cash Component and is equal to a proportional amount of the following: dividends on all the Securities for the period through the date of redemption, net of accrued expenses and liabilities

for such period not previously deducted (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 (see "Expenses of the Trust")), plus or minus the Balancing Amount. To the extent the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, exceeds the accrued expenses and liabilities of the Trust for such period (I.E., the Cash Redemption Amount has a positive value), then the Trustee on behalf of the Trust will transfer payment thereof via the relevant DTC Participant(s) to the redeeming Beneficial Owner. Conversely, to the extent the sum of dividends on all Securities with ex-dividend dates within the Accumulation Period, plus or minus the Balancing Amount, is less than the accrued expenses and liabilities of the Trust for such period (I.E., the Cash Redemption Amount has a negative value), then such Beneficial Owner shall be required to deliver payment thereof via the relevant DTC Participant(s) to the Trustee on behalf of the Trust. In the case of redemptions made through the Nasdaq-100 Clearing Process, the Trustee on behalf of the Trust will effect a transfer of the Cash Redemption Amount (if required) and the securities to the redeeming Beneficial Owner by the third
(3rd) NSCC Business Day following the date on which request for redemption is deemed received. In the case of redemptions made outside the Nasdaq-100 Clearing Process, the Trustee on behalf of the Trust will transfer the Cash Redemption Amount (if required) and the securities to the redeeming Beneficial Owner by the third (3rd) Business Day following the date on which the request for redemption is deemed received. In cases in which the Cash Redemption Amount is payable by the redeemer to the Trustee, the redeeming Beneficial Owner (via the Depository and the relevant DTC Participants(s)) is required to make payment of such cash amount by the third (3rd) NSCC Business Day, for redemptions made through the Nasdaq-100 Clearing Process, or the first (1st) Business Day, for redemptions outside the Nasdaq-100 Clearing Process, following the date on which the request for redemption is deemed received. The Trustee will cancel all Nasdaq-100 Shares delivered upon redemption.

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 Nasdaq-100 Shares in Creation Unit size aggregations, the Trustee shall have the right in its discretion to include the cash equivalent value of such Index Security or Index Securities, based on the market value of such Index Security or Index Securities as of the

Evaluation Time on the date such redemption is deemed received by the Trustee, in the calculation of the Cash Redemption Amount in lieu of delivering such Index Security or Index Securities to the redeemer.

In connection with the redemption of Nasdaq-100 Shares, if a redeeming investor requests redemption in cash, rather than in kind, with respect to one or more Securities (for example, because such a redeemer is restricted by regulation or otherwise from investing or engaging in a transaction in one or more Index Securities), the Trustee shall have the right in its discretion to include the cash equivalent value of such Index Security or Index Securities, based on the market value of such Index Security or Index Securities as of the Evaluation Time on the date such redemption order is deemed received by the Trustee, in the calculation of the Cash Redemption Amount in lieu of delivering such Index Security or Index Securities to the redeemer. In such case, such investor will pay the Trustee the standard Transaction Fee, plus an additional amount not to exceed three (3) times the Transaction Fee applicable for a Creation Unit (see "Prospectus Summary--Transaction Fee").

The Trustee, in its discretion, upon the request of a redeeming investor, may redeem Creation Units in whole or in part by providing such redeemer with a portfolio of Securities differing in exact composition from the Index Securities but not differing in net asset value from the then-current Portfolio Deposit. Such a redemption is likely to be made only if it were to be determined that this composition would be appropriate in order to maintain the Portfolio's correlation to the composition and weighting of the Index, for instance, in connection with a replacement of one of the Index Securities (E.G., due to a merger, acquisition or bankruptcy). (See "The Portfolio" and "The Index".)

The Trustee may sell 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 amount required to be provided to the redeeming Beneficial Owner, such cash amounts shall be held by the Trustee and shall be applied in accordance with the guidelines applicable to Misweightings (see "The Portfolio--Adjustments to the Portfolio").

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 Amount to a redeemer of Nasdaq-100 Shares, the Trustee may advance out of its own funds any amounts necessary in respect of redemptions of Nasdaq-100 Shares; otherwise, the Trustee may sell Securities in an amount sufficient to effect such redemptions. The Trustee may reimburse itself in the amount of such advance, plus any amounts required by the Federal Reserve Board which are related to such advance, 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 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 ordinarily sell Securities to reimburse itself for such advance and any accrued interest thereon. Such advances will be secured by a lien upon and a security interest in the assets of the Trust in favor of the Trustee.

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 the request for redemption is deemed received by the Trustee (1) for any period during which the New York Stock Exchange is closed; (2) for any period during which an emergency exists as a result of which disposal or evaluation of the Securities is not reasonably practicable; or (3) 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.

To be eligible to place orders with the Trustee to redeem Nasdaq-100 Shares in Creation Unit size aggregations, an entity or person must be (1) a Participating Party, with respect to redemptions through the Nasdaq-100 Clearing Process, or (2) a DTC Participant, with respect to redemptions outside the Nasdaq-100 Clearing Process, and in either case must have executed a Nasdaq-100 Participant Agreement with the Distributor and the Trustee.

All orders to redeem Nasdaq-100 Shares must be placed in multiples of 50,000 shares (Creation Unit size). Orders must be transmitted to the Trustee by telephone or 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 Nasdaq-100 Participant Agreement. Severe economic or market changes or disruptions, or telephone or other communication failure, may impede the ability to reach the Trustee, a Participating Party, or a DTC Participant.

Orders to redeem Creation Unit size aggregations of Nasdaq-100 Shares shall be placed with a Participating Party or DTC Participant, as applicable, in the form required by such Participating Party or DTC Participant. Investors should be aware that their particular broker may not have executed a

Nasdaq-100 Participant Agreement, and that, therefore, orders to redeem Creation Unit size aggregations of Nasdaq-100 Shares may have to be placed by the investor's broker through a Participating Party or a DTC Participant who has executed a Nasdaq-100 Participant Agreement. At any given time there may be only a limited number of broker-dealers that have executed a Nasdaq-100 Participant Agreement. Those placing orders to redeem Nasdaq-100 Shares should afford sufficient time to permit (1) proper submission of the order by a Participating Party or DTC Participant to the Trustee and (2) the receipt of the Nasdaq-100 Shares to be redeemed and the Cash Redemption Amount, if any, by the Trustee in a timely manner, as described below. Orders for redemption that are effected outside the Nasdaq-100 Clearing Process are likely to require transmittal by the DTC Participant earlier on the Transmittal Date than orders effected using the Nasdaq-100 Clearing Process. Those persons placing orders outside the Nasdaq-100 Clearing Process should ascertain the deadlines applicable to DTC and the Federal Reserve Bank wire system by contacting the operations department of the broker or depository institution effectuating such transfer of Nasdaq-100 Shares and Cash Redemption Amount. These deadlines will vary by institution. The Participant notified of an order to redeem outside the Nasdaq-100 Clearing Process will be required to transfer Nasdaq-100 Shares through DTC and the Cash Redemption Amount, if any, through the Federal Reserve Bank wire system in a timely manner (see "Placement of Redemption Orders Outside the Nasdaq-100 Clearing Process"). Information regarding the Cash Redemption Amount, number of outstanding Nasdaq-100 Shares, and Transaction Fees may be obtained from the Trustee at the toll-free number: (800) 545-5256.

PLACEMENT OF REDEMPTION ORDERS USING THE NASDAQ-100 CLEARING PROCESS

Orders to redeem Nasdaq-100 Shares in Creation Unit size aggregations through the Nasdaq-100 Clearing Process must be delivered through a Participating Party (see "Prospectus Summary--Portfolio Deposit") that has executed the Nasdaq-100 Participant Agreement with the Distributor and with the Trustee (as the same may be from time to time amended in accordance with its terms). An order to redeem Nasdaq-100 Shares using the Nasdaq-100 Clearing Process is deemed received by the Trustee on the Transmittal Date if (i) such order is received by the Trustee not later than the Closing Time on such Transmittal Date and (ii) all other procedures set forth in the Nasdaq-100 Participant Agreement are properly followed; such order will be effected based on the net asset value of the Trust as determined as of the Evaluation Time on the Transmittal Date. An order to redeem Nasdaq-100 Shares using the Nasdaq-100 Clearing Process made in proper form but received by the Trustee after the Closing Time will be deemed received on the next Business Day

immediately following the Transmittal Date. The Nasdaq-100 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 will transfer the requisite Securities (or contracts to purchase such Securities which are expected to be delivered in a "regular way" manner through NSCC) by the third (3rd) NSCC Business Day following the date on which such request for redemption is deemed received, and the Cash Redemption Amount, if any. If the Cash Redemption Amount is owed by the Beneficial Owner to the Trustee, such amount must be delivered by the third (3rd) NSCC Business Day following the date on which the redemption request is deemed received. The calculation of the value of the Securities and the Cash Redemption Amount will be made according to the procedures set forth under "Valuation," computed as of the Evaluation Time on the Business Day on which a redemption order is deemed received by the Trustee.

PLACEMENT OF REDEMPTION ORDERS OUTSIDE THE NASDAQ-100 CLEARING PROCESS

Orders to redeem Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process must be delivered through a DTC Participant that has executed the Nasdaq-100 Participant Agreement with the Distributor and with the Trustee. A DTC Participant who wishes to place an order for redemption of Nasdaq-100 Shares to be effected outside the Nasdaq-100 Clearing Process need not be a Participating Party, but such orders must state that the DTC Participant is not using the Nasdaq-100 Clearing Process and that redemption of Nasdaq-100 Shares will instead be effected through transfer of Nasdaq-100 Shares directly through DTC. An order to redeem Nasdaq-100 Shares outside the Nasdaq-100 Clearing Process is deemed received by the Trustee on the Transmittal Date if (i) such order is received by the Trustee not later than the Closing Time on such Transmittal Date, (ii) such order is preceded or accompanied by the requisite number of Nasdaq-100 Shares specified in such order, which delivery must be made through DTC to the Trustee no later than the Closing Time of the regular trading session on the Nasdaq Stock Market on such Transmittal Date and (iii) all other procedures set forth in the Nasdaq-100 Participant Agreement are properly followed. The Cash Redemption Amount owed by the Beneficial Owner, if any, must be delivered no later than 1:00 p.m. on the Business Day immediately following the Transmittal Date.

After the Trustee has deemed an order for redemption outside the Nasdaq-100 Clearing Process received, the Trustee will initiate procedures to transfer the requisite Securities (or contracts to purchase such Securities which are expected to be delivered within three Business Days) and the Cash

Redemption Amount to the redeeming Beneficial Owner (where such amount is payable from the Trustee to the Beneficial Owner) by the third (3rd) Business Day following the Transmittal Date on which such redemption order is deemed received by the Trustee.

The calculation of the value of the Securities and the Cash Redemption Amount will be made by the Trustee according to the procedures set forth under "Valuation," 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 Nasdaq-100 Shares are also delivered to the Trustee prior to the Closing Time on such Transmittal Date, then the value of the Securities and the Cash Redemption Amount will be determined by the Trustee as of the Evaluation Time on such Transmittal Date. If, however, a redemption order is submitted to the Trustee by a DTC Participant not later than the Closing Time on a Transmittal Date but either (1) the requisite Nasdaq-100 Shares are NOT delivered by the Closing Time on such Transmittal Date or (2) the redemption order is not submitted in proper form, then the redemption order will NOT be deemed received as of such Transmittal Date. In such case, the value of the Securities and the Cash Redemption Amount will be 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 Nasdaq-100 Shares are delivered through DTC to the Trustee by the Closing Time on such Business Day pursuant to a properly submitted redemption order.

VALUATION

The net asset value of the Trust is computed as of the Evaluation Time shown under "Essential Information" on each Business Day. The net asset value of the Trust on a per Nasdaq-100 Share basis is determined by subtracting all liabilities (including accrued expenses and dividends payable) from the total value of the Trust's investments and other assets and dividing the result by the total number of outstanding Nasdaq-100 Shares.

The aggregate value of the Securities shall be determined by the Trustee in good faith in the following manner. The value of a Security shall generally be based on the closing sale price for the Security on that day (unless the Trustee deems such price inappropriate as a basis for evaluation) on the Nasdaq Stock Market or, if there is no such appropriate closing sale price on the Nasdaq Stock Market, at the closing bid price (unless the Trustee deems such price inappropriate as a basis for evaluation). If a Security is not so quoted on the Nasdaq Stock Market or, if so quoted and the principal market therefor is other than on the Nasdaq Stock Market or there is no such closing

bid price available, such evaluation shall generally be made by the Trustee in good faith based (a) on the closing price for the Security on another market on which the Security is traded (unless the Trustee deems such price inappropriate as a basis for evaluation) or if there is no such appropriate closing price, at the closing bid price on such other market, (b) on current bid prices on the Nasdaq Stock Market or such other markets, (c) if bid prices are not available, on the basis of current bid prices for comparable securities, (d) by the Trustee's appraising the value of the Securities in good faith on the bid side of the market, or (e) by any combination thereof.

ADMINISTRATION OF THE TRUST

RECORDS

The Trustee maintains records of the transactions of the Trust, including a current list of the identity and number of shares of each of the Securities in the Portfolio. Records of the creation of Nasdaq-100 Shares in Creation Unit size aggregations are also maintained by the Distributor. Record of ownership of Nasdaq-100 Shares is maintained by the Depository and by DTC Participants as described above (see "The Trust--Book-Entry-Only System").

A complete copy of the Trust Agreement is maintained by the Trustee. A copy of the Trust Agreement is available to Beneficial Owners at the corporate trust office of the Trustee at 101 Barclay Street, New York, New York 10286 during normal business hours.

VOTING

The Trustee has the right to vote all of the voting securities in the Trust. The Trustee votes the voting securities 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.

DISTRIBUTIONS TO BENEFICIAL OWNERS

Distributions by the Trust will be made quarterly in the event that dividends accumulated in respect of the Securities and other income, if any, received by the Trust, exceed Trust fees and expenses accrued during the quarterly Accumulation Period which ends on the Business Day preceding each Ex-Dividend Date. Based on historical dividend payment rates of the portfolio of securities comprising the Index and estimated ordinary operating expenses of the Trust, little or no such distributions are currently anticipated (see "Special Considerations and Risk Factors--Little or No Expected Net Dividend Distributions to Beneficial Owners").

The regular quarterly Ex-Dividend Date with respect to net dividends, if any, for Nasdaq-100 Shares will be the third Friday in each of March, June, September, and December, unless such day is not a Business Day, in which case the Ex-Dividend Date will be the immediately preceding Business Day. Beneficial Owners as reflected on the records of the Depository and the DTC Participants on the second Business Day following the Ex-Dividend Date (the "Record Date") are entitled to receive an amount, if any, representing dividends accumulated on the Securities through the quarterly Accumulation Period which ends on the Business Day preceding such Ex-Dividend Date (including Securities with ex-dividend dates falling within such quarterly dividend period) and other income, if any, received by the Trust, net of the fees and expenses of the Trust, accrued daily for such period. For the purposes of such distributions, dividends per Nasdaq-100 Share are calculated at least to the nearest 1/100th of $0.01. However, there shall be no net dividend distribution in any given quarter, and any net dividend amounts will be rolled into the next Accumulation Period, if the aggregate net dividend distribution would be in an amount less than 5/100 of one percent (0.05%) of the net asset value of the Trust as of the Friday in the week immediately preceding the Ex-Dividend Date, unless the Trustee determines that such net dividend distribution is required to be made in order to maintain the Trust's status as a regulated investment company or to avoid the imposition of income or excise taxes on undistributed income (see "Tax Status of the Trust"). When net dividend payments are to be made by the Trust, payment will be made on the last Business Day in the calendar month following each Ex-Dividend Date (the "Dividend Payment Date"). Dividend payments will be made through the Depository and the DTC Participants to Beneficial Owners then of record with funds received from the Trustee. Nasdaq-100 Shares are registered in book-entry only, which records are kept by the Depository (see "The Trust--Book-Entry-Only System").

Dividends payable to the Trust in respect of the 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 Securities, including but not limited to the Cash Component, the Cash Redemption Amount, all moneys realized by the Trustee from the sale of options, warrants, or other similar rights received or distributed in respect of the Securities as dividends or distributions and capital gains resulting from the sale of Securities are also credited by the Trustee to a non-interest bearing account. All funds collected or received are held by the Trustee without interest until distributed or otherwise utilized in accordance with the provisions of the Trust Agreement. To the extent the amounts credited to such accounts generate interest income or an equivalent benefit to the Trustee, such interest income or benefit is used to reduce any charges made in connection with

advances made by the Trustee on behalf of the Trust to cover Trust expenses in those cases when the Trust income is insufficient to pay such expenses when due (see "Expenses of the Trust").

The Trust intends to qualify as a regulated investment company for federal income tax purposes. A regulated investment company is not subject to federal income tax on its net investment income and capital gains that it distributes to shareholders, so long as it meets certain overall distribution and diversification requirements and other conditions under Subchapter M of the Code. The Trust intends to satisfy these overall distribution and diversification requirements and to otherwise satisfy any required conditions. The Trustee intends to make additional distributions 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, payment of the expenses of the Trust, or to generate cash for such distributions), and (ii) to avoid imposition of the excise tax imposed by section 4982 of the Code (see "Tax Status of the Trust"). The additional distributions, if needed, would consist of (a) any amount by which estimated Trust investment company taxable income and net capital gains for a fiscal 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 the 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 net asset value of the Trust will be reduced by the amount of such additional distributions. The magnitude of the additional distributions, if any, will depend upon a number of factors, including the level of redemption activity experienced by the Trust. Because substantially all proceeds from the sale of Securities in connection with adjustments to the Portfolio will have been used to purchase shares of Index Securities, the Trust may have no cash or insufficient cash with which to pay any such additional distributions. In that case, the Trustee typically will have to sell shares of the Securities sufficient to produce the cash required to make such additional distributions. In selecting the Securities to be sold to produce cash for such distributions, the Trustee will choose among the Securities that are over-weighted in the Portfolio relative to their weighting in the Index first and then from among all other Securities in a manner so as to maintain the weighting of each of the Securities within the applicable Misweighting Amount (see "The Portfolio--Adjustments to the Portfolio").

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.

The Trustee further reserves the right to vary the frequency with which periodic distributions, if any, are to be made from the Trust (E.G., from quarterly to semi-annually) 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. In addition, the Trustee reserves the right to change the regular Ex-Dividend Date for Nasdaq-100 Shares to another regular date if it is determined by the Sponsor and the Trustee, in their discretion, that such a change would be advantageous to the Trust. Notice of any such variance or change (which notice shall include changes to the Record Date, the Ex-Dividend Date, the Dividend Payment Date, and the Accumulation Period resulting from such variance) shall be provided to Beneficial Owners via the Depository and the DTC Participants (see "The Trust--Book-Entry-Only System").

The Trustee may, in its discretion, advance out of its own funds any amounts necessary to permit distributions via the Depository to Beneficial Owners. The Trustee may reimburse itself in the amount of such advance, together with interest thereon at a percentage rate equal to then current overnight federal funds rate, plus Federal Reserve Bank 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 ordinarily sell Securities to reimburse itself for such advance and any accrued interest thereon. Such advances will be secured by a lien upon and a security interest in the assets of the Trust in favor of the Trustee.

In addition, as soon as practicable after notice of termination of the Trust, the Trustee will distribute via the Depository and the DTC Participants to each Beneficial Owner redeeming Nasdaq-100 Shares in Creation Unit size aggregations prior to the termination date specified in such notice, a portion of the Securities and cash as described above (see "Redemption of Nasdaq-100 Shares" and "Administration of the Trust--Termination"). Otherwise, the Trustee will distribute to each Beneficial Owner (whether in Creation Unit size aggregations or otherwise), as soon as practical after termination of the Trust,

such Beneficial Owner's pro rata share in cash of the net asset value of the Trust (see "Administration of the Trust--Termination").

All distributions are made by the Trustee through the Depository and the DTC Participants to Beneficial Owners as recorded on the book entry system of the Depository and the DTC Participants (see "The Trust-- Book-Entry-Only System").

The settlement date for the creation of Nasdaq-100 Shares in Creation Unit size aggregations or the purchase of Nasdaq-100 Shares in the secondary market must occur on or prior to the Record Date in order for such creator or purchaser to receive any distributions made by the Trust 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 security holder or Beneficial Owner as of such Record Date.

TRUST SUPERVISION

The Trust's Portfolio is not managed and therefore the adverse financial condition of an issuer of securities in the Trust does not, in itself, require the sale of Securities from the Portfolio. The Trustee shall, on a non-discretionary basis, make changes to the Portfolio as described above (see "The Portfolio-- Adjustments to the Portfolio").

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 prices for execution of orders.

STATEMENTS TO BENEFICIAL OWNERS

With each distribution, the Trustee will furnish for distribution to Beneficial Owners (see "The Trust--Book-Entry-Only System") a statement setting forth the amount being distributed expressed as a dollar amount per Nasdaq-100 Share.

Promptly after the end of each fiscal year, the Trustee will furnish to the DTC Participants, for distribution to each person who was a Beneficial Owner of Nasdaq-100 Shares 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.

REGISTER OF OWNERSHIP AND TRANSFER

The Trustee maintains a record of the creation and redemption of Nasdaq-100 Shares in Creation Unit size aggregations. The Depository maintains a record on its book-entry system of the DTC Participant ownership of Nasdaq-100 Shares and the number of Nasdaq-100 Shares owned (see "The Trust--Book-Entry-Only System"). Certificates are not issued for Nasdaq-100 Shares, whether in Creation Unit size denominations or otherwise. Beneficial Owners have the rights accorded to holders of "book-entry" securities under applicable law. Beneficial Owners may transfer Nasdaq-100 Shares through the Depository by instructing the DTC Participant(s) holding the Nasdaq-100 Shares for such Beneficial Owner in accordance with standard securities industry procedures.

RIGHTS OF BENEFICIAL OWNERS

Nasdaq-100 Shares in Creation Unit size aggregations (I.E., 50,000 Nasdaq-100 Shares) may be tendered to the Trustee for redemption (see "Redemption of Nasdaq-100 Shares"). Beneficial Owners may sell Nasdaq-100 Shares in the secondary market, but must accumulate enough Nasdaq-100 Shares (I.E., 50,000 shares) to constitute a full Creation Unit in order to redeem through the Trust. The death or incapacity of any Beneficial Owner will 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. By its purchase of a Nasdaq-100 Share, each Beneficial Owner expressly waives any right he or she may have under law to require the Trustee at any time to account, in any manner other than as expressly provided in the Trust Agreement, for the Securities or moneys from time to time received, held, and applied by the Trustee under the Trust.

Beneficial Owners shall not have the right to vote concerning the Trust, except as described below with respect to termination and as otherwise expressly set forth in the Trust Agreement or in any manner control the operation and management of the Trust, nor shall any Beneficial Owner be liable to any other person by reason of any action taken by the Sponsor or the Trustee.

AMENDMENT

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 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; (b) to change any provision thereof as may be required by the Commission; (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 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; (e) to add or change any provision thereof to conform the adjustments to the Portfolio and the Portfolio Deposit to changes, if any, made by Nasdaq in its method of determining the Index; (f) to add or change any provision thereof as may be necessary to implement a dividend reinvestment plan or service; (g) to make changes to the Transaction Fee and to other amounts charged in connection with creations and redemptions of Nasdaq-100 Shares within the original parameters set forth in the Trust Agreement; and (h) to make changes to the level of net dividends below which a dividend distribution will not be paid in a given quarter and will instead be rolled into the next Accumulation Period.

The Trust 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 Nasdaq-100 Shares 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 Nasdaq-100 Shares if such amendment would (1) 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; (2) reduce the interest of any Beneficial Owner in the Trust; or (3) reduce the percentage of Beneficial Owners required to consent to any such amendment.

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 Nasdaq-100 Shares. The Trustee shall inquire of each such DTC Participant as to the number of Beneficial Owners for whom such DTC Participant holds Nasdaq-100 Shares, 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 (see "The Trust--Book-Entry-Only System").

TERMINATION

The Trust Agreement provides that the Sponsor has 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 or if at any time on or after three years following the Initial Date of Deposit the net asset value of the Trust 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 Trust Agreement also provides that the Trustee shall, at the direction of the Sponsor, terminate the Trust if within 90 days from the Initial Date of Deposit the net asset value is less than $100,000. The Trust will also terminate in the event that Nasdaq-100 Shares are delisted from the Amex and are not subsequently relisted on a national securities exchange or a quotation medium operated by a national securities association. The Amex will consider the suspension of trading in or the delisting of Nasdaq-100 Shares as discussed above (see "Marketplace Listing").

The Trust may also be terminated (a) by the agreement of the Beneficial Owners of 66 2/3% of outstanding Nasdaq-100 Shares; (b) if the Depository is unable or unwilling to continue to perform its functions as set forth under the Trust Agreement and a suitable replacement is unavailable; (c) if NSCC no longer provides clearance services with respect to Nasdaq-100 Shares and a suitable replacement is unavailable, or if the Trustee is no longer a participant in NSCC or any successor to NSCC providing clearance services; (d) if Nasdaq ceases publishing the Index; and (e) if the License Agreement is terminated. Currently, the License Agreement is scheduled to expire five years from the commencement date of trading of Nasdaq-100 Shares in accordance with its terms and is subject to a five year renewal period following such date. The Trust will also terminate by its terms on the Mandatory Termination Date.

If either the Sponsor or the Trustee shall resign or be removed and a successor is not appointed, the Trust will terminate (see "Resignation, Removal and Liability--The Trustee" and "Resignation, Removal and Liability--The Sponsor"). 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 will be given at least twenty (20) days prior to termination of the Trust to all Beneficial Owners in the manner described above (see "The Trust--Book-Entry-Only System"). The

notice will set forth the date on which the Trust will be terminated (the "Termination Date"), the period during which the assets of the Trust will be liquidated, the date on which Beneficial Owners of Nasdaq-100 Shares (whether in Creation Unit size aggregations or otherwise) will receive in cash the net asset value of the Nasdaq-100 Shares held, and the date determined by the Trustee upon which the books of the Trust shall be closed. Such notice shall further state that, as of the date thereof and thereafter, 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 Securities delivered upon redemption shall be essentially identical in composition and weighting to the Securities held in the Trust as of such date rather than the securities portion of the Portfolio Deposit as in effect on the date the request for redemption is deemed received. Beneficial Owners of Nasdaq-100 Shares in Creation Unit size aggregations may, in advance of the Termination Date, redeem in kind directly from the Trust (see "Redemption of Nasdaq-100 Shares").

Within a reasonable period of time after the Termination Date the Trustee shall, subject to any applicable provisions of law, use its best efforts to sell all of the 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 by reason of any such sale or sales. 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 Security, the closing or restriction of trading, the outbreak of hostilities, or the collapse of the economy. Upon receipt of proceeds from the sale of the last Security, the Trustee shall deduct therefrom its fees and all other expenses (see "Expenses of the Trust"). The remaining amount shall be transmitted to the Depository for distribution via the DTC Participants, together with a final statement setting forth the computation of the gross amount distributed. Nasdaq-100 Shares not redeemed prior to termination of the Trust will be redeemed in cash at net asset value based on the proceeds of the sale of the Securities. Such redemptions in cash at net asset value shall be available to all Beneficial Owners, with no minimum aggregation of Nasdaq-100 Shares required.

RESIGNATION, REMOVAL, AND LIABILITY

THE TRUSTEE

Under the Trust Agreement, 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 that are reflected on the records

of the Depository as owning Nasdaq-100 Shares, for distribution to Beneficial Owners as provided above (see "The Trust--Book-Entry-Only System") not less than sixty (60) days before the date such resignation is to take effect. Such resignation will become effective upon the appointment of and the acceptance of the Trust by a successor Trustee or, if no successor is appointed within sixty
(60) days after the date such notice of resignation is given, the Trust shall terminate (see "Administration of the Trust--Termination"). The Sponsor, upon receiving notice of such resignation, is obligated to use its best efforts to appoint a successor Trustee promptly.

In case the Trustee becomes incapable of acting as such or is adjudged a 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. Notice of such discharge and appointment shall be mailed by the Sponsor to the Depository and the DTC Participants for distribution to Beneficial Owners.

Upon a successor Trustee's execution of a written acceptance of an appointment as Trustee for the Trust, such successor Trustee will become vested with all the rights, powers, duties, and obligations of the original Trustee.

A successor Trustee is required to 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, to be authorized under such laws to exercise corporate trust powers, and to have at all times an aggregate capital, surplus, and undivided profit of not less than $50,000,000.

Beneficial Owners of 51% of the then outstanding Nasdaq-100 Shares 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 in the manner specified above and in the Trust Agreement.

The Trust Agreement provides that the Trustee is not liable for any action taken in reasonable reliance on properly executed documents or for the disposition of moneys or Securities or for the evaluations required to be made thereunder, except by reason of its own gross negligence, bad faith, wilful malfeasance, wilful misconduct, or reckless disregard of its duties and obligations, nor is the Trustee liable or responsible in any way for depreciation or loss incurred by reason of the sale by the Trustee of any Securities in the Trust. In the event of the failure of the Sponsor to act, the Trustee may act and is not liable for any such action taken by it in good faith. The Trustee is not personally liable for any taxes or other governmental charges imposed upon or

in respect of the 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 present or future law of the United States of America or of any other taxing authority having jurisdiction. In addition, the Trust Agreement contains other customary provisions limiting the liability of the Trustee. The Trustee and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Trustee (each a "Trustee Indemnified Party") will be indemnified from the assets of the Trust and held harmless against any loss, liability, or expense incurred without gross negligence, bad faith, wilful misconduct, wilful malfeasance on the part of such Trustee Indemnified 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.

THE SPONSOR

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 of it to be undertaken or performed, or shall resign, or shall become bankrupt or its affairs shall be taken over by public authorities, the Trustee may appoint a successor Sponsor as shall be satisfactory to the Trustee, agree to act as Sponsor itself, or may terminate the Trust Agreement and liquidate the Trust (see "Administration of the Trust-- Termination"). Notice of the resignation or removal of the Sponsor and the appointment of a successor shall be mailed by the Trustee to the Depository and the DTC Participants for distribution to Beneficial Owners (see "The Trust--Book-Entry-Only System"). Upon a successor Sponsor's execution of a written acceptance of such appointment as Sponsor of the Trust, such successor Sponsor shall become 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 such appointment by the successor Sponsor, unless the Trustee either agrees to act as Sponsor or terminates the Trust Agreement and liquidates the Trust, which the Trustee shall do if no successor Sponsor is appointed (see "Administration of the Trust--Termination").

The dissolution of the Sponsor or its ceasing to exist as a legal entity for any reason 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 Nasdaq-100 Shares.

The Trust Agreement provides that the Sponsor is not liable to the Trustee, the Trust, or to the Beneficial Owners of Nasdaq-100 Shares 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, wilful misconduct, or wilful 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 by reason of the sale of any Securities of the Trust. The Trust Agreement further provides that the Sponsor and its directors, subsidiaries, shareholders, officers, employees, and affiliates under common control with the Sponsor (each a "Sponsor Indemnified Party") shall be indemnified from the assets of the Trust and held harmless against any loss, liability, or expense incurred without gross negligence, bad faith, wilful misconduct, or wilful malfeasance on the part of any Sponsor Indemnified 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 (including counsel fees) of defending against any claim or liability.

SPONSOR

The Sponsor of the Trust is Nasdaq-Amex Investment Product Services, Inc., a Delaware corporation incorporated on August 7, 1998 with offices c/o The Nasdaq Stock Market, Inc., 1735 K Street NW, Washington, DC 20006-1500. The Sponsor's Internal Revenue Service Employer Identification Number is 52-2115391. Nasdaq owns all of the Sponsor's outstanding shares of common stock. Nasdaq is a "control person" of the Sponsor as such term is defined in the Securities Act.

The Sponsor, at its own expense, may from time to time provide additional promotional incentives to brokers who sell Nasdaq-100 Shares 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 Nasdaq-100 Shares within a specified time period.

TRUSTEE

The Trustee is The Bank of New York, a corporation organized under the laws of the State of New York with trust powers. The Trustee has a trust office at 101 Barclay Street, New York, New York 10286 and its Internal Revenue Service Employer Identification Number is 135-160382. The Trustee is subject to supervision and examination by the Federal Reserve Bank of New York, the

Federal Deposit Insurance Corporation and the New York State Banking Department.

DEPOSITORY

The Depository Trust Company, New York, New York, a limited purpose trust company and member of the Federal Reserve System, acts as Depository for Nasdaq-100 Shares. The Depository receives customary fees for its services.

LEGAL OPINION

The legality of the Nasdaq-100 Shares offered hereby has been passed upon by Jones, Day, Reavis & Pogue, New York, New York, as counsel for the Sponsor. Winston & Strawn, New York, New York, has acted as counsel for the Trustee.

INDEPENDENT AUDITORS AND FINANCIAL STATEMENTS

The statement of financial condition, including the schedule of investments, as of March 5, 1999 appearing in this Prospectus and Registration Statement have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given upon the authority of such firm as experts in accounting and auditing.

INFORMATION AND COMPARISON 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 Nasdaq-100 Shares, may be included from time to time in advertisements, sales literature, and other communications as well as in reports to current or prospective Beneficial Owners.

Information may be provided to prospective investors to help such investors assess their specific investment goals and to aid in their understanding of various financial strategies. Such information may present current economic and political trends and conditions and may describe general principles of investing such as asset allocation, diversification, and risk tolerance, as well as specific investment techniques such as indexing and hedging. In addition, information may be presented to prospective or current Beneficial Owners regarding the purchase of Nasdaq-100 Shares in the secondary market, such as margin requirements, types of orders that may be entered, and information concerning short sales. Similarly, market data symbols, trading fractions, other

trading information, and the CUSIP number relating to Nasdaq-100 Shares may be included in such information. Comparisons with other investment vehicles, such as mutual funds, may be made with respect to the application of such requirements, costs of fund management and administration, costs and advantages of intraday trading, and rules applicable to short sales.

Information regarding the Trust's net asset size may be stated in communications to prospective or current Beneficial Owners for one or more time periods, including annual, year-to-date, or daily periods. Such information may also be expressed in terms of the total number of Nasdaq-100 Shares outstanding as of one or more time periods. Factors integral to the size of the Trust's net assets, such as creation volume and activity, may also be discussed and may be specified from time to time or with respect to various periods of time. Comparisons of such information during various periods may also be made and may be expressed by means of percentages.

Information may be provided to investors regarding the ability to engage in short sales of Nasdaq-100 Shares, including reference to any applicable exemption from the "tick test" provision of the Commission's "short sale rule" (Rule 10a-1 under the Securities Exchange Act of 1934), to permit short sales on "minus" or "zero-minus" ticks. Selling short refers to the sale of securities which the seller does not own, but which the seller arranges to borrow prior to effecting the sale. Institutional investors may be advised that lending their Nasdaq-100 Shares to short sellers may generate stock loan credits which may supplement the return they can earn from an investment in Nasdaq-100 Shares. These stock loan credits may provide a useful source of additional income for certain institutional investors who can arrange to lend Nasdaq-100 Shares. 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.

Information may be provided to investors regarding capital gains distributions by the Trust, including historical information relating to such distributions. Comparisons between the Trust and other investment vehicles such as mutual funds may be made regarding such capital gains distributions, as well as relative tax efficiencies between the Trust and such other investment vehicles (E.G., realization of capital gains or losses to the Trust and to such other investment vehicles in connection with redemption of their respective securities). (See "Tax Status of the Trust" for discussion of tax consequences to Beneficial Owners of Nasdaq-100 Shares in connection with the sale or redemption of Nasdaq-100 Shares.) Based on projected differences between Nasdaq-100 Shares and conventional mutual funds with regard to capital gains

distributions, projections may be made regarding comparative capital gains distributions and tax rates for taxable investors holding Nasdaq-100 Shares over a long period of time. Comparisons may also be provided regarding the probable tax impact resulting from rebalancing of the Trust portfolio (see "The Portfolio--Adjustments to the Portfolio") and adjustments to the portfolio of an actively managed investment vehicle.

Specifically, information may be provided to prospective or current investors comparing and contrasting the tax efficiencies of conventional mutual funds with Nasdaq-100 Shares. Both conventional mutual funds and the Trust may be required to recognize capital gains incurred as a result of adjustments to the composition and weighting of the Index 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 insufficient cash available to fund such net redemptions, such 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 Nasdaq-100 Shares does not ordinarily involve selling the Securities held by the Trust in the event of a redemption. Instead, the Trust delivers an actual portfolio of securities in an "in-kind" exchange to any person redeeming Nasdaq-100 Shares in Creation Unit size aggregations (I.E., 50,000 Nasdaq-100 Shares per Creation Unit). While this "in-kind" exchange is a taxable transaction to the redeeming entity (usually a broker/dealer) making the exchange, 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" exchanges. In a period of market appreciation of the Index and, consequently, appreciation of Nasdaq-100 Shares, this "in-kind" redemption mechanism has the effect of eliminating the recognition and distribution of those net unrealized gains at the Trust level. Investors should note that although the same result would occur for 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 Nasdaq-100 Shares may make them more tax efficient investments under most circumstances than comparable conventional mutual fund shares. As discussed above, the "in-kind" redemption feature of the Trust tends to lower the amount of annual net capital gains distributions to Nasdaq-100 Share holders as compared to their conventional mutual fund counterparts. Since shareholders are generally required to pay income tax on capital gains distributions, the smaller the amount of such distributions, the less taxes that are payable currently. To the extent that the Trust is not required to recognize capital gains, the Nasdaq-100 Share holder 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 holder retains his shares until his death, under current law the tax basis of such shares would be adjusted to their then fair market value.

Information regarding the secondary market trading activity of Nasdaq-100 Shares also may be presented over one or more stated time periods, such as for daily, monthly, quarterly, or annual periods. Nasdaq-100 Share secondary market trading volume information may be compared with similar information relating to other issues trading on the Amex during the same reporting period. Average daily secondary market trading volume of Nasdaq-100 Shares may also be reported from time to time. Comparisons of such information during various periods may also be made, and may be expressed by means of percentages.

Information may also be provided in communications to prospective investors or current Beneficial Owners comparing and contrasting the relative advantages of investing in Nasdaq-100 Shares as compared to other investment vehicles, such as mutual funds, both on an individual and a group basis (E.G., stock index mutual funds). Such information may include comparisons of costs and expense ratios, expressed either in dollars or basis points, stock lending activities, permitted investments and hedging activities (E.G., engaging in options or futures transactions), and portfolio turnover data and analyses. In addition, such information may quote, reprint, or include portions of financial, scholarly, or business publications or periodicals, including model allocation schedules or portfolios, as the foregoing relate to the comparison of Nasdaq-100 Shares to other investment vehicles, current economic, financial and political conditions, investment philosophy or techniques, or the desirability of owning Nasdaq-100 Shares.

In addition, information on the performance of Nasdaq-100 Shares on the basis of changes in price per Nasdaq-100 Share with or without reinvesting all dividends, if any, and/or any distributions of capital in additional Nasdaq-100

Shares may be included from time to time in such information. Average annualized performance may be stated for various periods. Total return figures may also be stated for a period from the Initial Date of Deposit, a date at least twelve months prior to the end of the reporting period or for annual periods for the life of the Trust. Total return measures the percentage growth in the total dollar value of an investment in Nasdaq-100 Shares (reflecting dividends, if any, and capital appreciation but without provision for any income taxes payable).

Information on the Index contained in this Prospectus, as updated from time to time, may also be included from time to time in such material. The performance of the Trust, of the Index (provided information is also given reflecting the performance of the Trust in comparison to the Index) or both may also be compared to the performance of money managers as reported in market surveys such as SEI Fund Evaluation Survey (a leading database of tax-exempt funds) or mutual funds such as those reported by Lipper Analytical Services Inc., Money Magazine Fund Watch, Wiesenberger Investment Companies Service, Morningstar Incorporated, and Value Line Investment Survey, each of which measures performance following their own specific and well-defined calculation measures, or of the New York Stock Exchange Composite Index, the American Stock Exchange Composite Index, the Nasdaq Composite Index (indices of stocks traded on the New York and American Stock Exchanges and the Nasdaq Stock Market, respectively), the S&P 500 Index-Registered Trademark- (a broad-based index of 500 publicly traded companies), the S&P MidCap 400 Index-TM- (a broad-based index of 400 publicly traded middle capitalization companies), the Dow Jones Industrial Average(SM) (an index currently comprising 30 publicly traded large capitalization companies), or similar domestic or foreign measurement standards during the same period of time. In addition to all other sources of comparative information, comparative performance figures published by other funds or money managers may be included from time to time. Information may also be included regarding the aggregate amount of assets committed to index investing generally by various types of investors, such as pension funds and other institutional investors, which currently exceeds $300 billion.

Information on the relative price performance of Nasdaq-100 Shares in relation to other securities and/or indices may be represented in the form of "correlation." Correlation is a standard measure of the degree of linear association between two price series, and ranges from minus one hundred percent (-100%) (I.E., perfect negative linear association) to positive one hundred percent (100%) (I.E., perfect positive linear association).

One important difference between Nasdaq-100 Shares and conventional mutual fund shares is that Nasdaq-100 Shares are available for purchase or sale on an intraday basis on the Amex. An investor who buys shares in a conventional mutual fund will usually buy or sell shares at a price at or related to the closing net asset value per share, as determined by the fund. In contrast, Nasdaq-100 Shares are not offered for purchase or redeemed for cash at a fixed relationship to closing NAV. Information may be presented to help investors evaluate potential advantages and disadvantages of Nasdaq-100 Shares relative to funds sold and redeemed at prices related to closing NAV.

Information relating to the relative price performance of Nasdaq-100 Shares may be compared against a wide variety of investment categories and asset classes, including common stocks, small capitalization stocks, long and intermediate term corporate and government bonds, Treasury bills, the rate of inflation in the United States (based on the Consumer Price Index ("CPI")) and combinations of various capital markets. Historical returns of these and other capital markets in the United States may be provided by independent statistical studies and sources, such as those provided by Ibbotson Associates of Chicago, Illinois. The performance of these capital markets is based on the returns of different indices. Information may be presented using the performance of these and other capital markets to demonstrate general investment strategies. For example, the performance of Nasdaq-100 Shares may be compared to the performance of selected asset classes such as short-term U.S. Treasury bills, long-term U.S. Treasury bonds, long-term corporate bonds, mid-capitalization stocks, foreign stocks, and small capitalization stocks and may also be measured against the rate of inflation as set forth in well-known indices (such as the CPI). Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. Performance of Nasdaq-100 Shares may also be compared to that of other indices or compilations that may be developed and made available to the investing public in the future. Of course, such comparisons will only reflect past performance of Nasdaq-100 Shares and the investment categories, indices, or compilations chosen, and no guarantees can be made of future results regarding the performance of either Nasdaq-100 Shares or the asset classes chosen for such comparisons.

DIVIDEND REINVESTMENT SERVICE

The Sponsor reserves the right in the future to make the DTC book-entry Dividend Reinvestment Service (the "Service") available for use by Beneficial Owners through DTC Participants for reinvestment of their cash proceeds, if

any. The Sponsor may choose to make the Service available within its discretion and without the consent of Beneficial Owners. Some or all DTC Participants may not elect to utilize the Service; therefore, if the Service is made available for Nasdaq-100 Shares, an interested Nasdaq-100 Share investor may wish to contact his or her broker to ascertain the availability of the Service through such broker at such time. Interested Beneficial Owners should also note that each broker may require investors to adhere to specific procedures and timetables in order to participate in the Service and investors should ascertain from their broker such necessary details at the time when the Service is made available for Nasdaq-100 Shares.

If and when the Service is utilized, the Trustee may use the cash proceeds of dividends received from all Beneficial Owners participating in reinvestment through the Service to obtain Index Securities necessary to create the requisite number of Nasdaq-100 Shares at the close of business on each Nasdaq-100 Share distribution date. Alternatively, the Trustee may choose to implement the reinvestment of dividends through other means (E.G., through trade executions for Nasdaq-100 Shares on the open market). Any cash balance remaining after the requisite number of Nasdaq-100 Shares have been created or otherwise acquired will be distributed, on a pro rata basis, to all Beneficial Owners who participated in the Service. Brokerage commissions, if any, incurred in obtaining the Index Securities necessary to create additional Nasdaq-100 Shares with the cash from the distributions, or in purchasing Nasdaq-100 Shares on the open market, will be an expense of the Trust.

Nasdaq-100 Shares acquired pursuant to the Service will be held by the Beneficial Owners in the same manner, and subject to the same terms and conditions, as original ownership of Nasdaq-100 Shares. Distributions reinvested in additional Nasdaq-100 Shares through the Service will nevertheless be taxable dividends to Beneficial Owners to the same extent as if received in cash.

ADDITIONAL INFORMATION

A Registration Statement on Form S-6, including amendments thereto, relating to the Trust, of which this Prospectus forms a part, has been filed with the Commission. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits thereto. Statements contained in this Prospectus as to the contents of any contract or other document referred to are not necessarily complete and in each instance reference is made to the copy of such contract or other document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. For further information with respect to the Trust, reference is

made to such Registration Statement and the exhibits thereto. A copy of the Registration Statement may be inspected by anyone without charge at the Commission's principal office located at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, the Northeast Regional Office located at 7 World Trade Center, 13th Floor, New York, New York 10048, and the Midwest Regional Office located at Citicorp Center, 500 West Madison Street, 14th Floor, Chicago, Illinois 60661-2511, and copies of all or any part thereof may be obtained from the Public Reference Branch of the Commission upon the payment of certain fees prescribed by the Commission. In addition, the Registration Statement may be accessed electronically at the Commission's site on the World Wide Web located at http://www.sec.gov. Such information is also available from Nasdaq-Amex by calling: 1-800-843-2639.

                                                                                     PAGE
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"10 Basis Point Limit"..........................................................           9
"1940 Act"......................................................................          12
"Accumulation Period"...........................................................           6
"Adjustment Day"................................................................          53
"Amex"..........................................................................           1
"Annual Ranking Review".........................................................          59
"Balancing Amount"..............................................................          54
"BNY"...........................................................................          26
"Beneficial Owners".............................................................          45
"Business Day"..................................................................          10
"Cash Component"................................................................           7
"Cash Redemption Amount"........................................................          73
"Closing Time"..................................................................          39
"CNS"...........................................................................           6
"Code"..........................................................................          11
"Commission"....................................................................           6
"CPI"...........................................................................          97
"CPI-U".........................................................................          15
"Creation Unit".................................................................           1
"Depository Agreement"..........................................................          46
"Depository"....................................................................          10
"Distributor"...................................................................          16
"Dividend Payment Date".........................................................          81
"DTC"...........................................................................          10
"DTC Participants"..............................................................          44
"ERISA".........................................................................          12
"Evaluation Time"...............................................................           4
"Ex-Dividend Date"..............................................................          13
"Income Net of Expense Amount"..................................................           6
"Index Securities"..............................................................           5
"Index".........................................................................           1
"Indirect Participants".........................................................          45
"Initial Date of Deposit".......................................................           4
"IRA"...........................................................................          12
"Large Stocks"..................................................................          60
"License Agreement".............................................................          62
"Mandatory Termination Date"....................................................          15
"Nasdaq"........................................................................           1
"Nasdaq-100 Shares".............................................................           1
"Nasdaq-100 Clearing Process"...................................................           8

                                                                                     PAGE
                                                                                     -----
"Nasdaq-100 Participant Agreement"..............................................          42
"NAV Amount"....................................................................          53
"NSCC Business Day".............................................................          20
"NSCC"..........................................................................           6
"Participating Party"...........................................................           6
"Plans".........................................................................          11
"Portfolio Deposit Amount"......................................................          54
"Portfolio Deposit".............................................................           7
"Portfolio".....................................................................          35
"Record Date"...................................................................          81
"Request Day"...................................................................          53
"Securities Act"................................................................          68
"Securities"....................................................................           1
"Service".......................................................................          97
"Small Stocks"..................................................................          60
"Sponsor".......................................................................           1
"Sponsor Indemnified Party".....................................................          91
"Termination Date"..............................................................          88
"Transaction Fee"...............................................................           8
"Transmittal Date"..............................................................          39
"Trust Agreement"...............................................................           5
"Trust".........................................................................           1
"Trustee".......................................................................           5
"Trustee Indemnified Party".....................................................          90

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND ANY INFORMATION OR REPRESENTATIONS NOT STATED IN IT, OR IN THE REGISTRATION STATEMENT AND EXHIBITS OF WHICH IT IS A PART, MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE TRUST, THE SPONSOR, OR THE TRUSTEE. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, ANY SECURITY OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES, OR AN OFFER TO SELL, OR A SOLICITATION OF ANY OFFER TO BUY, SECURITIES IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION IN IT IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. HOWEVER, IF ANY MATERIAL CHANGE OCCURS WHILE THIS PROSPECTUS IS REQUIRED TO BE DELIVERED, THIS PROSPECTUS WILL BE AMENDED OR SUPPLEMENTED ACCORDINGLY.

THE TRUST IS REGISTERED AS A UNIT INVESTMENT TRUST UNDER THE INVESTMENT COMPANY ACT OF 1940. REGISTRATION DOES NOT IMPLY THAT THE TRUST OR NASDAQ-100 SHARES HAVE BEEN GUARANTEED, SPONSORED, RECOMMENDED, OR APPROVED BY THE UNITED STATES OR ANY STATE OR ANY AGENCY OR OFFICER THEREOF.

Until April 5, 1999, all dealers effecting transactions in the registered securities, whether or not participating in this distribution, may be required to deliver a prospectus.

NASDAQ-100 SHARES(SM)

PROSPECTUS

SPONSOR:

TABLE OF CONTENTS

                                        PAGE
                                        -----
Essential Information..............           2
Prospectus Summary.................           5
Special Considerations and Risk
  Factors..........................          18
Report of Ernst & Young LLP,
  Independent Auditors.............          29
Statement of Financial Condition...          30
Schedule of Investments............          32
The Trust..........................          35
The Portfolio......................          47
The Index..........................          56
License Agreement..................          62
Marketplace Listing................          63
Tax Status of the Trust............          64
Continuous Offering of Nasdaq-100
  Shares...........................          67
Expenses of the Trust..............          69
Redemption of Nasdaq-100 Shares....          72
Valuation..........................          79
Administration of the Trust........          80
Resignation, Removal, and
  Liability........................          88
Sponsor............................          91
Trustee............................          91
Depository.........................          92
Legal Opinion......................          92
Independent Auditors and Financial
  Statements.......................          92
Information and Comparison Relating
  to Trust, Secondary Market
  Trading,
  Net Asset Size, Performance, and
  Tax Treatment....................          92
Dividend Reinvestment Service......          97
Additional Information.............          98
Glossary of Defined Terms..........         100

March 5, 1999