iSHARES SILVER TRUST DISTRIBUTION AGREEMENT

Exhibit 1.1

[            ] iShares

iSHARES SILVER TRUST

DISTRIBUTION AGREEMENT

[            ], 2005

DISTRIBUTION AGREEMENT

[            ], 2005

Barclays Capital Inc.

200 Park Avenue

New York, NY 10166

Ladies and Gentlemen:

Barclays Global Investors International Inc., a Delaware corporation (the “Sponsor”), has sponsored the formation of a trust, known as “iShares Silver Trust” (the “Trust”) pursuant to the laws of the State of New York. Subject to the terms hereof, the Trust has issued to Barclays Capital Inc. (“Barclays Capital”) an aggregate of [            ] units of fractional undivided beneficial interest in and ownership of the Trust (each such unit, an “iShare ^® ”) upon the deposit by Barclays Capital with JPMorgan Chase Bank N.A., a national banking association organized under the laws of the United States of America acting through its London branch as custodian of the Trust (in such capacity, the “Custodian”), of an aggregate amount of [            ] Ounces of silver bullion, (equal to [            ] baskets as described in the Prospectus, the “Initial Deposit”). The iShares are described in the Prospectus which is referred to below.

The Sponsor has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively, the “Act”), with the Securities and Exchange Commission (the “Commission”) a registration statement on Form S-1 (Registration No. 333-[            ]) including a prospectus, relating to the iShares. The Sponsor has furnished to you, for use by Barclays Capital, the form of what is expected to be the final prospectus (constituting a part of the registration statement, each such prospectus being herein called a “Prospectus”) relating to the iShares. Except where the context otherwise requires, the registration statement, as amended when it becomes effective, including all documents filed as a part thereof, and including any information contained in any prospectus subsequently filed with the Commission pursuant to Rule 424(b) under the Act and also including any registration statement filed pursuant to Rule 462(b) under the Act, is herein called the “Registration Statement”. As used herein, “business day” shall mean a day on which the American Stock Exchange is open for trading. Capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Depositary Trust Agreement (as defined below).

The Sponsor, on its own behalf and in its capacity as sponsor of the Trust, and Barclays Capital agree as follows:

1. Sale and Purchase . Upon the basis of the representations and warranties and subject to the terms and conditions herein set forth (including satisfaction of the conditions set forth in section 6 hereof), Barclays Capital is purchasing from the Trust [            ] iShares (such iShares, collectively, the “Purchased Shares”) in exchange for silver bullion which, in the amount of the Initial Deposit, has been delivered by Barclays Capital to the Custodian on the date hereof. The Sponsor and the Trust are advised by Barclays Capital that, upon satisfaction (or waiver by Barclays Capital) of the conditions set forth in section 6 hereof, Barclays Capital intends to make a public offering of its iShares as soon after the effective date of the Registration Statement, and on such terms, as in its judgment is advisable.

2. Deposit of Silver and Delivery of the Purchased Shares . Pursuant to the Depositary Trust Agreement of the iShares Silver Trust between the Sponsor and the Trustee (the “Depositary Trust Agreement”), dated the date hereof, Barclays Capital has on the date hereof made delivery of the Initial

Deposit to the Custodian, with irrevocable instructions to transfer such Initial Deposit to the account of the Trust, and the Trust has caused the Purchased Shares to be delivered to Barclays Capital through the facilities of The Depository Trust Company (“DTC”) for the account of Barclays Capital.

3. Representations and Warranties of the Sponsor . The Sponsor, on its own behalf and in its capacity as sponsor of the Trust, represents and warrants to and agrees with Barclays Capital that:

(a) at the time the conditions set forth in section 6 hereof have been waived or satisfied (such time, the “time of closing”) (i) the Registration Statement shall have become effective and no stop order of the Commission with respect thereto shall have been issued and no proceedings for such purpose shall have been instituted or, to the Sponsor’s knowledge after due inquiry, will then be contemplated by the Commission; (ii) each Prospectus, at the time of filing thereof, shall have complied in all material respects with the requirements of the Act and the last Prospectus distributed in connection with the offering of the shares shall not contain an 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 light of the circumstances under which they were made, not misleading; (iii) the Registration Statement shall comply, and shall have complied at the time it became effective, in all material respects with the requirements of the Act and the Prospectus will comply, as of its date and at the time of closing, in all material respects with the requirements of the Act and any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed; (iv) the conditions to the use of Form S-1 have been satisfied; (v) the Registration Statement shall not contain, and shall have not contained at the time it became effective, an 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 not misleading; provided, however, that the Sponsor makes no warranty or representation with respect to any statement contained in the Registration Statement or the Prospectus in reliance upon and in conformity with information concerning Barclays Capital and furnished in writing by or on behalf of Barclays Capital to the Sponsor expressly for use in the Registration Statement or such Prospectus; and (vi) the Sponsor and the Trust shall have not distributed and will not distribute any offering material in connection with the offering or creation of the shares other than the Registration Statement or the then most recent Prospectus;

(b) on the date of the Initial Deposit, the statement of financial position is as set forth in the section of the Registration Statement and the Prospectus entitled “Statement of Financial Condition”;

(c) as of the date hereof, the Trust has been duly formed and is validly existing as an investment trust under the laws of the State of New York, as described in the Registration Statement and the Prospectus, and has all power and authority to issue and deliver the iShares as contemplated herein;

(d) the Sponsor is a Delaware corporation, with full power and authority to conduct its business as described in the Registration Statement and the Prospectus;

(e) the Sponsor is duly qualified, validly existing and in good standing under the laws of its jurisdiction of organization; and the Trust is not required to so qualify in any jurisdiction;

(f) complete and correct copies of the Depositary Trust Agreement, and any and all amendments thereto, have been delivered to Barclays Capital, and no changes thereto have been made subsequent to the date hereof and prior to the time of closing;

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(g) the iShares have been duly and validly authorized and, when issued and delivered against payment therefor as provided herein, will be duly and validly issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, rights of first refusal and similar rights;

(h) the iShares conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus and the holders of the iShares will not be subject to personal liability by reason of being such holders;

(i) this Agreement has been duly authorized, executed and delivered by the Sponsor;

(j) neither the Sponsor nor the Trust is in material breach or material violation of or in material default under (nor has any event occurred which with notice, lapse of time or both would result in any material breach or material violation of, constitute a material default under or give the holder of any indebtedness (or a person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a part of such indebtedness under) its respective constitutive documents, or any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to which the Sponsor or the Trust is a party or by which either of them or any of their properties may be bound or affected, and the execution, delivery and performance of this Agreement, the issuance and sale of the iShares and the consummation of the transactions contemplated hereby will not conflict with, result in any breach or violation of or constitute a default under (nor constitute any event which with notice, lapse of time or both would result in any breach or violation of or constitute a default under), respectively, the constitutive documents of the Sponsor or the Depositary Trust Agreement, or any indenture, mortgage, deed of trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease, contract or other agreement or instrument to which the Sponsor or the Trust is a party or by which either of them or any of their respective properties may be bound or affected, or any federal, state, local or foreign law, regulation or rule or any decree, judgment or order applicable to the Sponsor or the Trust;

(k) no approval, authorization, consent or order of or filing with any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency is required in connection with the issuance and sale of the iShares or the consummation by the Sponsor and the Trust of the transactions contemplated hereby other than registration of the iShares under the Act, which has been or will be effected, and any necessary qualification under the securities or blue sky laws of the various jurisdictions in which the shares are being offered by Barclays Capital or under the rules and regulations of the National Association of Securities Dealers (the “NASD”);

(l) except as set forth in the Registration Statement and the Prospectus, (i) no person has the right, contractual or otherwise, to cause the Trust to issue or sell to it any iShares or other equity interest of the Trust, and (ii) no person has the right to act as an underwriter or as a financial advisor to the Trust in connection with the offer and sale of the iShares, in the case of each of the foregoing clauses (i) and (ii), whether as a result of the filing or effectiveness of the Registration Statement or the sale of the iShares as contemplated thereby or otherwise; no person has the right, contractual or otherwise, to cause the Sponsor on behalf of the Trust to register under the Act any other equity interests of the Trust, or to include any such shares or interests in the Registration Statement or the offering contemplated thereby, whether as a result of the filing or effectiveness of the Registration Statement or the sale of the shares as contemplated thereby or otherwise;

(m) each of the Sponsor and the Trust has all necessary licenses, authorizations, consents and approvals and has made all necessary filings required under any federal, state, local or foreign law, regulation or rule, and has obtained all necessary authorizations, consents and approvals from other persons, in order to conduct its respective business; neither the Sponsor nor the Trust is in violation

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of, or in default under, or has received notice of any proceedings relating to revocation or modification of, any such license, authorization, consent or approval or any federal, state, local or foreign law, regulation or rule or any decree, order or judgment applicable to the Sponsor or the Trust;

(n) all legal or governmental proceedings, affiliate transactions, off-balance sheet transactions, contracts, licenses, agreements, leases or documents of a character required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed as required;

(o) except as set forth in the Registration Statement and the Prospectus, there are no material actions, suits, claims, investigations or proceedings pending or threatened or, to the Sponsor’s knowledge after due inquiry, contemplated to which the Sponsor or the Trust, or (to the extent that is or could be material in the context of the offering and sale of the iShares) any of their respective directors or officers, is or would be a party or of which any of their respective properties are or would be subject at law or in equity, before or by any federal, state, local or foreign governmental or regulatory commission, board, body, authority or agency;

(p) PricewaterhouseCoopers, whose report on the audited statement of financial condition of the Trust is filed with the Commission as part of the Registration Statement and the Prospectus, are independent public accountants as required by the Act;

(q) the audited statement of financial condition included in the Prospectus, together with the related notes and schedules, presents fairly the financial position of the Trust as of the date indicated and has been prepared in compliance with the requirements of the Act and in conformity with generally accepted accounting principles; there are no financial statements (historical or pro forma) that are required to be included in the Registration Statement and the Prospectus that are not included as required; and the Trust does not have any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not disclosed in the Registration Statement and the Prospectus;

(r) subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any (i) material adverse change, or any development involving a prospective material adverse change affecting the Sponsor or the Trust, (ii) transaction which is material to the Sponsor or the Trust taken as a whole, (iii) obligation, direct or contingent (including any off-balance sheet obligations), incurred by the Sponsor or the Trust, which is material to the Trust, (iv) change in the iShares or outstanding indebtedness of the Trust, or (v) dividend or distribution of any kind declared, paid or made on the iShares;

(s) the Trust is not and, after giving effect to the offering and sale of the iShares, will not be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the investment Company Act of 1940, as amended (the “Investment Company Act”);

(t) except as set forth in the Registration Statement and the Prospectus, (i) the Sponsor and the Trust own, or have obtained valid and enforceable licenses for, or other rights to use, the inventions, patent applications, patents, trademarks (both registered and unregistered), tradenames, copyrights, trade secrets and other proprietary information described in the Registration Statement and the Prospectus as being owned or licensed by them or which are necessary for the conduct of their respective businesses, (collectively, “Intellectual Property”); (ii) there are no third parties who have or, to the Sponsor’s knowledge after due inquiry, will be able to establish rights to any Intellectual Property, except for the ownership rights of the owners of the Intellectual Property which is licensed to the Sponsor or the Trust; (iii) there is no infringement by third parties of any Intellectual Property; (iv) there is no pending or threatened action, suit, proceeding or claim by others challenging the Sponsor’s or the Trust’s rights in or

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to any Intellectual Property, and the Sponsor and the Trust are unaware of any facts which could form a reasonable basis for any such claim; (v) there is no pending or threatened action, suit, proceeding or claim by others challenging the validity or scope of any Intellectual Property, and the Sponsor and the Trust are unaware of any facts which could form a reasonable basis for any such claim; and (vi) there is no pending or threatened action, suit, proceeding or claim by others that the Sponsor or the Trust infringes or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Sponsor and the Trust are unaware of any facts which could form a reasonable basis for any such claim.

(u) the Trust is not subject to any tax filing or any payment obligation of any tax or other assessment of a similar nature (whether imposed directly or through withholding) including any interest, additions to tax or penalties applicable thereto due or claimed to be due;

(v) neither the Sponsor nor the Trust has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in, or filed as an exhibit to, the Registration Statement, and no such termination or non-renewal has been threatened by the Sponsor or the Trust or, to the Sponsor’s or the Trust’s knowledge, any other party to any such contract or agreement;

(w) on behalf of the Trust, the Sponsor has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 and 15d-14 under the Exchange Act of 1934 (the “Exchange Act”), giving effect to the rules and regulations, and SEC staff interpretations (whether or not public), thereunder)); such disclosure controls and procedures are designed to ensure that material information relating to the Trust, is made known to the Sponsor, and such disclosure controls and procedures are effective to perform the functions for which they were established; on behalf of the Trust, the Sponsor has been advised of: (i) any significant deficiencies in the design or operation of internal controls which could adversely affect the Trust’s ability to record, process, summarize, and report financial data; and (i) any fraud, whether or not material, that involves management or other employees who have a role in the Trust’s internal controls; any material weaknesses in internal controls have been identified for the Trust’s auditors;

(x) any statistical and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources that the Sponsor believes to be reliable and accurate, and the Sponsor has obtained the written consent to the use of such data from such sources to the extent required;

(y) neither the Sponsor, nor the Trust, nor any of the Sponsor’s directors, members, officers, affiliates or controlling persons has taken, directly or indirectly, any action designed, or which has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security or asset of the Trust to facilitate the sale or resale of the iShares; and

(z) to the Sponsor’s knowledge after due inquiry, there are no affiliations or associations between any member of the NASD and any of the Sponsor’s officers, directors or 5% or greater securityholders, except for Barclays Global Investor Services, a registered broker-dealer wholly owned by an affiliate of the Sponsor (and which will take no part in any distribution of the iShares) or as set forth in the Registration Statement and the Prospectus.

In addition, any certificate signed by any officer of the Sponsor and delivered to Barclays Capital or counsel for Barclays Capital in connection with the offering of the iShares shall be deemed to be a representation and warranty by the Sponsor, as the case may be, as to matters covered thereby, to Barclays Capital.

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4. Certain Covenants of the Sponsor . The Sponsor, on its own behalf and in its capacity as sponsor of the Trust, agrees:

(a) to furnish such information as may be required and otherwise to cooperate in qualifying the iShares for offering and sale under the securities or blue sky laws of such states as Barclays Capital may reasonably designate and to maintain such qualifications in effect so long as Barclays Capital may request for the distribution of the iShares not to exceed a period of nine months; provided that the Trust shall not be required to qualify as a foreign corporation or to consent to the service of process under the laws of any such jurisdiction (except service of process with respect to the offering and sale of the iShares); and to promptly advise Barclays Capital of the receipt by the Sponsor of any notification with respect to the suspension of the qualification of the iShares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose;

(b) to make available to Barclays Capital, as soon as practicable after the Registration Statement becomes effective, and thereafter from time to time to furnish to Barclays Capital, as many copies of the Prospectus (or of the Prospectus as amended or supplemented if the Sponsor or the Trust shall have made any amendments or supplements thereto after the effective date of the Registration Statement) as Barclays Capital may request for the purposes contemplated by the Act; in case Barclays Capital is required to deliver a prospectus after the nine-month period referred to in Section 10(a)(3) of the Act in connection with the sale of the iShares, the Sponsor will prepare, at its expense, promptly upon request such amendment or amendments to the Registration Statement and the Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Act;

(c) to endeavor to cause the Registration Statement to become effective on or before the time of closing and the Sponsor will advise Barclays Capital promptly; and, if requested by Barclays Capital, to confirm in writing when the Registration Statement and any post-effective amendment thereto has become effective; and (iii) upon receipt of request from Barclays Capital therefor, to file a post-effective amendment removing any reference to Barclays Capital thereunder;

(d) to advise Barclays Capital promptly, confirming such advice in writing, of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information with respect thereto, or of notice of institution of proceedings for, or the entry of a stop order suspending the effectiveness of the Registration Statement and, if the Commission should enter a stop order suspending the effectiveness of the Registration Statement, to use its best efforts to obtain the lifting or removal of such order as soon as possible; to advise Barclays Capital promptly of any proposal to amend or supplement the Registration Statement or the Prospectus and to provide Barclays Capital and Barclays Capital’s counsel copies of any such documents for review and comment a reasonable amount of time prior to any proposed filing and to file no such amendment or supplement to which Barclays Capital shall object in writing;

(e) subject to section 4(d) hereof, to file promptly all reports and any information statement required to be filed by the Trust with the Commission in order to comply with the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the Purchased Shares;

(f) to advise Barclays Capital promptly of the happening of any event within the time during which a prospectus relating to the Purchased Shares is required to be delivered under the Act which could require the making of any change in the Prospectus then being used so that the Prospectus

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would not include an untrue statement of material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading, and, during such time, subject to section 4(d) hereof, to prepare and furnish, at the Sponsor’s expense, to Barclays Capital promptly such amendments or supplements to such Prospectus as may be necessary to reflect any such change;

(g) to make generally available to the shareholders of the Trust, and to deliver to Barclays Capital, an earnings statement of the Trust (which will satisfy the provisions of Section 11(a) of the Act) covering a period of twelve months beginning after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act) as soon as is reasonably practicable after the termination of such twelve-month period;

(h) to furnish to Barclays Capital promptly for a period of one year from the date of this Agreement such information as Barclays Capital may reasonably request regarding the Trust;

(i) to pay all costs, expenses, fees and taxes in connection with (i) the preparation and filing of the Registration Statement, the Prospectus, and any amendments or supplements thereto, and the printing and furnishing of copies of each thereof to Barclays Capital (including costs of mailing and shipment), (ii) the registration, issue, sale and delivery of the iShares including any stock or transfer taxes and stamp or similar duties payable upon the sale, issuance or delivery of the shares to Barclays Capital, (iii) the producing, word processing and/or printing of this Agreement, any Powers of Attorney and any closing documents (including compilations thereof) and the reproduction and/or printing and furnishing of copies of each thereof to Barclays Capital and (except closing documents) to dealers (including costs of mailing and shipment), (iv) the qualification of the iShares for offering and sale under state or foreign laws and the determination of their eligibility for investment under state law as aforesaid (including the legal fees and filing fees and other disbursements of counsel for Barclays Capital) and the printing and furnishing of copies of any blue sky surveys or legal investment surveys to Barclays Capital, (v) any listing of the iShares on any securities exchange or qualification of the iShares for quotation on the American Stock Exchange and any registration thereof under the Exchange Act, (vi) any filing for review of the public offering of the iShares by the NASD, including the legal fees and filing fees and other disbursements of counsel to Barclays Capital, (vi) the fees and disbursements of the Custodian (as defined in the Depositary Trust Agreement), transfer agent or registrar for the iShares, (vii) the costs and expenses of the Trust relating to presentations or meetings undertaken in connection with the marketing of the offering and sale of the iShares to prospective investors and Barclays Capital’s sales forces, including, without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel, lodging and other expenses incurred by the officers of the Sponsor or the Trust and any such consultants, and the cost of any aircraft chartered in connection with the road show, and (ix) the performance of the Sponsor’s other obligations hereunder;

(j) to use its best efforts to cause the iShares to be listed on the American Stock Exchange;

(k) to maintain a Custodian (as defined in the Depositary Trust Agreement) and an orderly procedure for the transfer and register of the iShares; and

(l) to waive until the time of closing any fees due under Section 5.8(a) of the Depositary Trust Agreement.

5. Reimbursement of Barclays Capital’s Expenses . The Sponsor shall, at the earlier of the time of closing and the first business day immediately following the last day on which the conditions

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referred to in section 6 hereof may be satisfied, reimburse Barclays Capital for all of its out-of-pocket expenses, including the fees and disbursements of counsel, incurred by Barclays Capital in connection with the preparation of this Agreement and the transactions contemplated hereby.

6. Conditions of Barclays Capital’s Obligations . The obligations of Barclays Capital hereunder are subject to the accuracy of the representations and warranties contained herein on the date hereof (if applicable), at the time of closing, the performance by the Sponsor of its obligations hereunder and compliance with the following additional conditions precedent no later than on [            ], 2005:

(a) The Sponsor shall furnish to Barclays Capital at the time of closing an opinion of counsel for the Sponsor, addressed to Barclays Capital, and dated the time of closing and in form and substance satisfactory to Clifford Chance US LLP, counsel for Barclays Capital, stating that:

(i) the iShares issuable hereunder, when issued in accordance with the terms hereof will have been duly authorized and validly issued and fully paid and non-assessable;

(ii) the iShares conform to the description thereof contained in the Registration Statement and the Prospectus;

(iii) the Registration Statement and the Prospectus (except as to the financial statements and schedules and other financial and statistical information contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the requirements of the Act;

(iv) the Registration Statement has become effective under the Act and, to such counsel’s knowledge, no stop order proceedings with respect thereto are pending or threatened under the Act and any required filing of the Prospectus and any supplement thereto pursuant to Rule 424 under the Act has been made in the manner and within the time period required by