Exhibit 4.3
CLAYMORE MACROSHARES OIL
PARTICIPANTS AGREEMENT
This Claymore MACROshares Oil Participants Agreement (the "Participants
Agreement"), dated as of November 24, 2006 is hereby entered into by and among
the parties listed from time to time on Schedule I attached hereto
(individually, an "Authorized Participant" and collectively, the "Authorized
Participants"), MACRO Securities Depositor, LLC, as depositor (the "Depositor"),
Investors Bank & Trust Company, a Massachusetts trust company, not in its
individual capacity but solely (i) as trustee of the Claymore MACROshares Oil Up
Holding Trust (the "Up-MACRO Holding Trust" and the "Up-MACRO Holding Trustee,"
respectively), (ii) as trustee of the Claymore MACROshares Oil Down Holding
Trust (the "Down-MACRO Holding Trust" and the "Down-MACRO Holding Trustee,"
respectively; the Down-MACRO Holding Trust together with the Up-MACRO Holding
Trust will be referred to herein as the "Paired Holding Trusts"), (iii) as
trustee of the Claymore MACROshares Oil Up Tradeable Trust (the "Up-MACRO
Tradeable Trust" and the "Up-MACRO Tradeable Trustee," respectively), and (iv)
as trustee of the Claymore MACROshares Oil Down Tradeable Trust (the "Down-MACRO
Tradeable Trust" and the "Down-MACRO Tradeable Trustee," respectively; the
Down-MACRO Tradeable Trust together with the Up-MACRO Tradeable Trust will be
referred to herein as the "Tradeable Trusts" and collectively, with the Paired
Holding Trusts, the "MACRO Trusts") (such entity, in its capacities set forth
above, the "Trustee") and Claymore Securities, Inc., not in its individual
capacity but solely as administrative agent of the MACRO Trusts (the
"Administrative Agent").
SUMMARY
Pursuant to the Amended and Restated Claymore MACROshares Oil Up
Holding Trust Agreement, dated as of November 24, 2006 (the "Up-MACRO Holding
Trust Agreement"), among the Depositor, the Up-MACRO Holding Trustee, the
Administrative Agent, Claymore Securities, Inc., not in its individual capacity
but as a marketing agent and MACRO Financial, LLC, not in its individual
capacity but also as a marketing agent (together, in their respective
capacities, the "Marketing Agents") of the MACRO Shares (as defined below), the
Up-MACRO Holding Trust will issue a global certificate which shall be registered
in the name of Cede & Co., as nominee of The Depository Trust Company ("DTC"),
and which will represent all of the undivided beneficial interests in the
Up-MACRO Holding Trust (such beneficial interests, the "Up-MACRO Holding
Shares"), and pursuant to the Amended and Restated Claymore MACROshares Oil Down
Holding Trust Agreement, dated as of November 24, 2006 (the "Down-MACRO Holding
Trust Agreement" and, together with the Up-MACRO Holding Trust Agreement, the
"Holding Trust Agreements"), among the Depositor, the Down-MACRO Holding Trustee
(together with the Up-MACRO Holding Trustee, the "Holding Trustees"), the
Administrative Agent and the Marketing Agents the Down-MACRO Holding Trust will
issue a global certificate which shall be registered in the name of Cede & Co.,
as nominee of DTC, and
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which will represent all of the undivided beneficial interests in the
Down-MACRO Holding Trust (such beneficial interests, the "Down-MACRO Holding
Shares" and, together with the Up-MACRO Holding Shares, the "Paired Holding
Shares" or if referencing either an Up-MACRO Holding Share or a Down-MACRO
Holding Share, a "Holding Share").
Pursuant to the Amended and Restated Claymore MACROshares Oil Up
Tradeable Trust Agreement, dated as of November 27, 2006 (the "Up-MACRO
Tradeable Trust Agreement"), among the Depositor, the Up-MACRO Tradeable
Trustee, the Administrative Agent and the Marketing Agents, the Up-MACRO
Tradeable Trust will issue a global certificate which shall be registered in the
name of Cede & Co., as nominee of DTC, and which will represent all of the
undivided beneficial interests in the Up-MACRO Tradeable Trust (such beneficial
interests, the "Up-MACRO Tradeable Shares"), and pursuant to the Amended and
Restated Claymore MACROshares Oil Down Tradeable Trust Agreement, dated as of
November 24, 2006 (the "Down-MACRO Tradeable Trust Agreement" and, together with
the Up-MACRO Tradeable Trust Agreement, the "Tradeable Trust Agreements" and,
together with the Holding Trust Agreements, the "Trust Agreements"), among the
Depositor, the Down-MACRO Tradeable Trustee (and, together with the Up-MACRO
Tradeable Trustee, the "Tradeable Trustees"), the Administrative Agent and the
Marketing Agents, the Down-MACRO Tradeable Trust will issue a global certificate
which shall be registered in the name of Cede & Co., as nominee of DTC, and
which will represent all of the undivided beneficial interests in the Down-MACRO
Tradeable Trust (such beneficial interests, the "Down-MACRO Tradeable Shares"
and, together with the Up-MACRO Tradeable Shares, the "Tradeable Shares" and,
together with the Paired Holding Shares, the "MACRO Shares").
The MACRO Shares are being offered pursuant to (i) a Prospectus, dated
as of November 27, 2006, relating to the Up-MACRO Holding Shares and the
Up-MACRO Tradeable Shares (the "Up-MACRO Prospectus"), which has been filed in
connection with the registration statement on Form S-1, as amended, File No.:
333-116566, dated and filed with the Securities and Exchange Commission ("SEC")
on November 27, 2006 (as the same may be amended from time to time thereafter,
the "Up-MACRO Registration Statement") and (ii) a Prospectus, dated as of
November 27, 2006, relating to the Down-MACRO Holding Shares and the Down-MACRO
Tradeable Shares (the "Down-MACRO Prospectus" and together with the Up-MACRO
Prospectus, each a "Prospectus"), which has been filed in connection with the
registration statement on Form S-1, as amended, File No.: 333-135120, dated and
filed with the SEC on November 27, 2006 (as the same may be amended from time to
time thereafter, the "Down- MACRO Registration Statement" and together with the
Up-MACRO Registration Statement, the "Registration Statements").
In accordance with this Participants Agreement, the Trustee, acting
together with the Administrative Agent on behalf of the Paired Holding Trusts,
may create or redeem Paired Holding Shares in units of 50,000 Up-MACRO Holding
Shares and 50,000 Down-MACRO Holding Shares (such pairs, a "MACRO Unit") at the
instructions of an Authorized Participant and in accordance with the procedures
set forth herein.
Under the Holding Trust Agreements, the Administrative Agent will
instruct the Trustee to issue MACRO Units to, and redeem MACRO Units from,
Authorized Participants, only
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through the facilities of DTC or a successor depository. In exchange for a
deposit of cash with an aggregate purchase price set forth herein and in the
applicable Holding Trust Agreement, an Authorized Participant may create MACRO
Units. In exchange for a deposit of Paired Holding Shares constituting one or
more MACRO Units, an Authorized Participant may redeem one or more MACRO Units
for cash and/or Eligible Treasuries (as defined in the applicable Holding Trust
Agreement) as further described herein. This Participants Agreement sets forth
the specific procedures by which an Authorized Participant may create or redeem
MACRO Units.
In accordance with this Participants Agreement, the Administrative
Agent may cause the Trustee to create or exchange additional Tradeable Shares in
units of 50,000 Up-MACRO Tradeable Shares or 50,000 Down-MACRO Tradeable Shares
at the instructions of an Authorized Participant. The creation or exchange of
Up-MACRO Tradeable Shares and Down-MACRO Tradeable Shares does not need to occur
simultaneously. Up-MACRO Tradeable Shares may be created independently by the
deposit of Up-MACRO Holding Shares into the Up-MACRO Tradeable Trust, and
Down-MACRO Tradeable Shares may be created independently by the deposit of
Down-MACRO Holding Shares into the Down-MACRO Tradeable Trust. Accordingly,
Up-MACRO Tradeable Shares may be exchanged independently to Up-MACRO Holding
Shares by the deposit of Up-MACRO Tradeable Shares into the Up-MACRO Tradeable
Trust and Down MACRO Tradeable Shares may be exchanged independently to
Down-MACRO Holding Shares by the deposit of Down-MACRO Tradeable Shares into the
Down-MACRO Tradeable Trust.
Under the Tradeable Trust Agreements, the Administrative Agent will
authorize the Trustee to issue additional Tradeable Shares to, and redeem
Tradeable Shares from, Authorized Participants, only through the facilities of
DTC or a successor depository. This Participants Agreement sets forth the
specific procedures by which an Authorized Participant may create or redeem
Tradeable Shares.
Because new MACRO Shares can be created and issued on an ongoing basis,
on every Business Day, at any point during the life of the MACRO Trusts, a
"distribution," as such term is used in the Securities Act of 1933, as amended
("Securities Act"), may be occurring. Each Authorized Participant is cautioned
that some of its activities may result in its being deemed a participant in a
distribution which would render it a statutory underwriter and subject it to the
prospectus-delivery requirements and the liability provisions of the Securities
Act. Each Authorized Participant should review the "Plan of Distribution"
portion of the Prospectuses and consult with its own counsel in connection with
entering into this Participants Agreement and placing a Creation Order, a
Redemption Order or an Exchange Order (as defined in Section 3, 4 or 5 hereof,
as applicable).
Capitalized terms used but not defined in this Participants Agreement
shall have the meanings assigned to such terms in the applicable Trust
Agreement. To the extent there is a conflict between any provision of this
Participants Agreement and the provisions of the Trust Agreements, the
provisions of this Participants Agreement will govern insofar as they relate to
the Procedures (as defined below).
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To give effect to the foregoing premises and in consideration of the
mutual covenants and agreements set forth below, the parties hereto agree as
follows:
Section 1. Order Placement.
(a) To create one or more MACRO Units and concurrently exchange
them into Tradeable Shares or to create one or more MACRO Units, Authorized
Participants must follow the procedures for creation set forth in Section 3 of
this Participants Agreement and the procedures described in Attachment A.I
hereto (the "Creation Procedures"), as each may be amended, modified or
supplemented from time to time.
(b) To exchange Tradeable Shares into Holding Shares and
concurrently redeem such Holding Shares as one or more MACRO Units for cash or
for cash and/or Eligible Treasuries or to redeem MACRO Units for cash or for
cash and/or Eligible Treasuries, Authorized Participants must follow the
procedures for redemption set forth in Section 4 of this Participants Agreement
and the procedures described in Attachment A.II hereto (the "Redemption
Procedures"), as each may be amended, modified or supplemented from time to
time.
(c) To exchange Holding Shares into their respective Tradeable
Shares or to exchange Tradeable Shares into their respective Holding Shares,
Authorized Participants must follow the procedures for exchange set forth in
Section 5 of this Participants Agreement and the procedures described in
Attachment A.III hereto (the "Exchange Procedures" and, together with the
Creation Procedures and the Redemption Procedures, the "Procedures"), as each
may be amended, modified or supplemented from time to time.
Section 2. Status of Authorized Participant. Each Authorized
Participant, individually and severally, represents, warrants and covenants
that:
(a) It is a DTC Participant or an Indirect Participant. If it
ceases to be a DTC Participant or an Indirect Participant, such Authorized
Participant shall give immediate notice to the Trustee, the Depositor and the
Administrative Agent of such event, and this Participants Agreement shall
terminate immediately (with respect to that Authorized Participant only) as of
the date such Authorized Participant ceases to be a DTC Participant or an
Indirect Participant.
(b) Unless Section 2(c) applies, it either (i) is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), or (ii) is exempt from being, or
otherwise is not required to be, licensed as a broker-dealer or a member of the
NASD, and in either case is qualified to act as a broker or dealer in the states
or other jurisdictions where the nature of its business so requires. Such
Authorized Participant shall maintain any such registrations, qualifications and
membership in good standing and in full force and effect throughout the term of
this Participants Agreement. Such Authorized Participant shall comply with all
applicable federal laws, the laws of the states or other jurisdictions
concerned, and the rules and regulations promulgated thereunder, and with the
Constitution, By-Laws and Conduct Rules of the NASD (if it is a NASD member),
and will not offer or sell Holding Shares
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or Tradeable Shares in any state or other jurisdiction where they may not
lawfully be offered and/or sold.
(c) If it is offering or selling Holding Shares or Tradeable
Shares in jurisdictions outside the several states, territories and possessions
of the United States and is not otherwise required to be registered, qualified
or a member of the NASD as set forth in Section 2(b) above, such Authorized
Participant shall (i) observe the applicable laws of the jurisdiction in which
such offer and/or sale is made, (ii) comply with the full disclosure
requirements of the Securities Act and the regulations promulgated thereunder,
and (iii) conduct its business in accordance with the spirit of the NASD Conduct
Rules.
(d) It is in compliance with the anti-money laundering and related
provisions of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot
Act") and the regulations promulgated thereunder, if such Authorized Participant
is subject to the requirements of the Patriot Act.
(e) It has the capability to send and receive communications via authenticated
electronic facilities to and from the Trustee and the Administrative Agent. Such
Authorized Participant shall confirm such capability to the satisfaction of the
Trustee and the Administrative Agent by the end of the Business Day before
placing its first Order (as set forth in Section 3, 4 or 5, as applicable) with
the Administrative Agent.
(f) Each Authorized Participant, by its acquisition or holding of
any Paired Holding Share, is deemed to have represented and warranted that it is
not, and is not using assets of, any (i) "employee benefit plan" (as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), subject to Title I of ERISA, (ii) "plan" (as defined in section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code")),
subject to section 4975 of the Code, including without limitation individual
retirement accounts and Xxxxx plans, or (iii) entity whose underlying assets
include plan assets by reason of such an employee benefit plan's or plan's
investment in such entity, including without limitation, as applicable, an
insurance company general account (each of (i), (ii) and (iii), a "Benefit Plan
Investor"). Any purported purchase or transfer of an Up-MACRO Holding Share or a
Down-MACRO Holding Share to a Benefit Plan Investor shall be null and void ab
initio.
Section 3. Creation Order.
(a) All orders to create one or more MACRO Units and concurrently
exchange them into their respective Tradeable Shares or, in the event that the
Authorized Participant instruct otherwise, to create one or more MACRO Units,
shall be made in accordance with the terms of the applicable Trust Agreement,
this Participants Agreement and the Creation Procedures. Each party will comply
with such foregoing terms and procedures to the extent applicable. Each
Authorized Participant hereby consents to the use of recorded telephone lines
whether or not such use is reflected in the Creation Procedures. The applicable
Trustee, the Administrative Agent and the Depositor may issue additional or
other procedures from time to time relating to the manner of creation of MACRO
Units or creation of MACRO Units and concurrently exchanging all or part of such
Holding Shares into Tradeable Shares, which are not related
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to the Creation Procedures, and each Authorized Participant shall comply with
such procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf of itself and
any party for which it is acting (whether such party is a customer or otherwise)
that each order to create a MACRO Unit and concurrently exchange such MACRO Unit
into Tradeable Shares or to create a MACRO Unit (a "Creation Order") may not be
revoked by such Authorized Participant after the placement and acceptance of
such Order with the Administrative Agent. Such order shall be a binding
obligation of the Authorized Participant that placed such order. A form of a
Creation Order is attached hereto as EXHIBIT B (the "Creation Order Form"). The
Creation Order Form shall not be required if such Creation Order is conducted
through the electronic facilities of the Administrative Agent; provided,
however, that the Administrative Agent, in its sole discretion, may require the
use of the Creation Order Form for any reason as an alternative for its
electronic facilities. The information required by such electronic facilities
shall be substantially similar to the information on the Creation Order Form
attached hereto.
(c) The Administrative Agent and the Depositor shall each have the
absolute right, but shall have no obligation, to reject any Creation Order (i)
if the Administrative Agent determines that the Creation Order is not in the
required form, (ii) if the Administrative Agent determines that the Authorized
Participant or Authorized Participants have deposited an insufficient amount of
money with the Trustee, (iii) if the Depositor determines, based upon an opinion
of counsel, that such Creation Order would have adverse tax or securities law
consequences for one or more of the MACRO Trusts or the holders of any of the
MACRO Shares, (iv) the acceptance or fulfillment of which would, in the opinion
of counsel to the Depositor acceptable to the Trustee, be unlawful, (v) if the
trustee of one of the Paired Holding Trusts or of one of the Tradeable Trusts
notifies the other applicable trustees that the Creation Order for additional
MACRO Shares made in connection with such order has been or will be rejected by
it, by the Depositor or by the Administrative Agent, (vi) if such Creation Order
will cause one of the Tradeable Trusts to hold fifty percent or less of the
outstanding related Holding Shares or (vii) if circumstances outside the control
of the Trustee, the Depositor or the Administrative Agent make it impractical or
not feasible to process the Creation Order on the Creation Order Date or the
Creation Date. None of the Trustee, the Depositor or the Administrative Agent
shall be liable to any Person by reason of the rejection of any Creation Order.
(d) The Administrative Agent shall suspend the applicable right of
creation (i) for any period during which the AMEX or NYMEX is closed, or trading
on the AMEX or the NYMEX is suspended or restricted, (ii) for any period during
which an emergency exists as a result of which delivery or acquisition of
Eligible Treasuries by the Paired Holding Trusts is not reasonably practicable
or (iii) for such other period as the Depositor, the Trustee or the
Administrative Agent determines to be necessary for the protection of the
Beneficial Owners of any of the MACRO Shares. None of the Trustee, the Depositor
or the Administrative Agent shall be liable to any Person or in any way for any
loss or damage that may result from any such postponement.
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Section 4. Redemption Order.
(a) Except as otherwise provided for herein, all orders to
exchange Tradeable Shares into Holding Shares and concurrently redeem such
Holding Shares as one or more MACRO Units based on the default procedure or to
redeem Holding Shares pursuant to instructions submitted by the Authorized
Participant for cash or for cash and/or Eligible Treasuries shall be made in
accordance with the terms of the applicable Trust Agreements, this Participants
Agreement and the Redemption Procedures. Each party will comply with such
foregoing terms and procedures to the extent applicable. Each Authorized
Participant hereby consents to the use of recorded telephone lines whether or
not such use is reflected in the Redemption Procedures. The applicable Trustee,
the Administrative Agent and the Depositor may issue additional or other
procedures from time to time relating to the manner of exchanging Tradeable
Shares and concurrently redeeming such shares as part of one or more MACRO
Units or redeeming Paired Holding Shares consisting of one or more MACRO Units
which are not related to the Redemption Procedures, and each Authorized
Participant shall comply with such procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf
of itself and any party for which it is acting (whether such party is a customer
or otherwise) that each order to exchange Tradeable Shares into Holding Shares
and concurrently redeem such Holding Shares or to redeem Holding Shares as one
or more MACRO Units for cash or for cash and/or Eligible Treasuries (a
"Redemption Order") may not be revoked by such Authorized Participant after the
placement and acceptance of such order with the Administrative Agent. Such
Orders shall be a binding obligation of the Authorized Participant that placed
such Order. A form of Redemption Order is attached hereto as EXHIBIT C (a
"Redemption Order Form"). The Redemption Order Form shall not be required if
such Redemption Order is conducted through the electronic facilities of the
Administrative Agent; provided, however, that the Administrative Agent, in its
sole discretion, may require the use of the Redemption Order Form for any reason
as an alternative for its electronic facilities. The information required by
such electronic facilities shall be substantially similar to the information on
the Redemption Order Form attached hereto.
(c) The Administrative Agent and the Depositor shall each have the
absolute right but shall have no obligation to reject any Redemption Order (i)
if the Administrative Agent determines that the Redemption Order is not in the
required form, (ii) if the Administrative Agent determines that the Authorized
Participant or Authorized Participants have deposited an insufficient number of
shares with the Trustee, (iii) if the Depositor has determined, based upon an
opinion of counsel, and advised the Trustee and the Administrative Agent that
such Redemption Order would have adverse tax or securities laws consequences to
one or more of the MACRO Trusts or any of the holders of the MACRO Shares, (iv)
if the acceptance of the Redemption Order would, in the opinion of counsel to
the Depositor, be unlawful, (v) if the trustee of one of the Paired Holding
Trusts notifies the trustee of the other Paired Holding Trust that the related
Redemption Order will be rejected by it, by the Depositor or by the
Administrative Agent, (vi) if such Redemption Order will cause one or both of
the Tradeable Trusts to hold fifty percent or less of the related outstanding
Holding Shares or (vii) if circumstances outside the control of the Trustee, the
Depositor or the Administrative Agent make
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it impractical or not feasible to process the Redemption Order on the
Redemption Order Date or on the Order Date. None of the Trustee, the Depositor
or the Administrative Agent shall be liable to any Person by reason of the
rejection of any Redemption Order.
(d) The Administrative Agent shall suspend the right of redemption
or postpone the applicable settlement date, (i) for any period during which the
AMEX or the NYMEX is closed, or trading on the AMEX or the NYMEX is suspended or
restricted, (ii) for any period during which an emergency exists as a result of
which delivery or acquisition of Eligible Treasuries by the paired Holding
Trusts is not reasonably practicable, (iii) if any such redemption would cause
the Up-MACRO or Down-MACRO Investment Amount to equal less than 10 million
dollars or (iv) for such other period as the Depositor, the Trustee or the
Administrative Agent determines to be necessary for the protection of the
Beneficial Owners of any of the MACRO Shares. Neither the Depositor, the
Administrative Agent nor the Trustee shall be liable to any Person or in any way
for any loss or damages that may result from any such suspension or
postponement.
Section 5. Exchange Order.
(a) All orders to exchange Holding Shares into their related
Tradeable Shares or exchange Tradeable Shares into their related Holding Shares
shall be made in accordance with the terms of the applicable Trust Agreements,
this Participants Agreement and the Exchange Procedures. Each party will comply
with such foregoing terms and procedures to the extent applicable. Each
Authorized Participant hereby consents to the use of recorded telephone lines
whether or not such use is reflected in the Exchange Procedures. The Trustee,
the Administrative Agent and the Depositor may issue additional or other
procedures from time to time relating to the manner of exchanging Holding Shares
or exchanging Tradeable Shares, which are not related to the Exchange
Procedures, and each Authorized Participant shall comply with such procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf
of itself and any party for which it is acting (whether such party is a customer
or otherwise) that each order to exchange Holding Shares or to exchange
Tradeable Shares (an "Exchange Order," and together with a Creation Order and a
Redemption Order, each an "Order") may not be revoked by such Authorized
Participant after the placement and acceptance of such Order with the
Administrative Agent. Such order shall be a binding obligation of the Authorized
Participant that placed such order. A form of an Exchange Order is attached
hereto as EXHIBIT D (the "Exchange Order Form"). The Exchange Order Form shall
not be required if such Exchange Order is conducted through the electronic
facilities of the Administrative Agent; provided, however, that the
Administrative Agent, in its sole discretion, may require the use of the
Exchange Order Form for any reason as an alternative for its electronic
facilities. The information required by such electronic facilities shall be
substantially similar to the information on the Exchange Order Form attached
hereto.
(c) The Administrative Agent and the Depositor shall each have the
absolute right but shall have no obligation to reject any Exchange Order (i) if
the Administrative Agent determines that the Exchange Order is not in the
required form, (ii) if the Administrative Agent
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determines that the Authorized Participant or Authorized Participants have
deposited an insufficient number of shares with the Trustee, (iii) if the
Depositor determines, based upon an opinion of counsel, that such Exchange
Order would have adverse tax or securities law consequences for one or more of
the MACRO Trusts or the holders of any of the MACRO Shares, (iv) the acceptance
or fulfillment of which would, in the opinion of counsel to the Depositor
acceptable to the Trustee, be unlawful or (v) if circumstances outside the
control of the Trustee, the Depositor or the Administrative Agent make it
impractical or not feasible to cause the Tradeable Trusts to issue additional
Tradeable Shares. None of the Trustee, the Depositor or the Administrative
Agent shall be liable to any Person by reason of the rejection of any Exchange
Order.
(d) The Administrative Agent shall suspend the right of exchange
(i) for any period during which the AMEX or the NYMEX is closed, or trading on
the AMEX or the NYMEX is suspended or restricted (ii) if such Exchange Order
will cause one of the Tradeable Trusts to hold fifty percent or less of the
outstanding related Holding Shares or (iii) for such other period as the
Depositor, the Trustee or the Administrative Agent determines to be necessary
for the protection of the Beneficial Owners of any of the MACRO Shares. None of
the Trustee, the Depositor or the Administrative Agent shall be liable to any
Person or in any way for any loss or damage that may result from any such
suspension.
Section 6. Transfers.
(a) Any MACRO Shares or Eligible Treasuries to be transferred in
connection with any Order shall be transferred between that Authorized
Participant's designated account at DTC and the Netting Account or the
Securities Account of the applicable MACRO Trust in accordance with the
Procedures. Any transfer of MACRO Shares shall be conducted through the Deposit
and Withdrawal At Custodian process (the "DWAC process") of the DTC system. The
Authorized Participant shall be responsible for all costs and expenses relating
to or connected with any transfer of MACRO Shares or Eligible Treasuries between
its designated account and the Netting Account or the Securities Account of the
applicable MACRO Trust. Any transfer of cash in connection with the Orders shall
be made between a bank account designated by that Authorized Participant and the
Netting Account or the Distribution Account of the applicable Holding Trust in
accordance with the Procedures. Any transfer of cash shall be conducted through
the Federal Wire Electronic Transfer System. The Authorized Participant shall be
responsible for all costs and expenses relating to or in connection with any
transfers of cash between its designated bank account and the applicable Netting
Account or Distribution Account.
(b) Each of the MACRO Trusts, the Depositor, the Trustee and the
Administrative Agent shall have no liability for loss or damages suffered by an
Authorized Participant in respect of the Authorized Participant's Participant
Custodian Account. The Authorized Participant acknowledges that it is an
unsecured creditor of the applicable Trustee, on behalf of the applicable Trust,
with respect to any MACRO Shares, Eligible Treasuries and/or cash held in each
Authorized Participant's Participant Custodian Account and that such MACRO
Shares, Eligible Treasuries and/or cash are at risk in the event that the
Trustee becomes insolvent.
Section 7. Fees.
(a) In connection with each Creation Order, the Authorized
Participant shall pay to the Trustee a fee (such fee, the "Creation Transaction
Fee") for such creation. The initial Creation Transaction Fee shall be two
thousand dollars ($2,000) for the creation of one or more MACRO Units and the
concurrent exchange of such MACRO Units to their related Tradeable Shares or for
the creation of one or more MACRO Units. The Creation Transaction Fee may be
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adjusted from time to time in accordance with Section 7(c) of this Participants
Agreement. A single Creation Transaction Fee shall be due for each Creation
Order from a single Authorized Participant.
(b) In connection with each Redemption Order, the Authorized Participant shall
pay to the Trustee a fee (such fee, the "Redemption Transaction Fee," and
together with the Creation Transaction Fee, the "Transaction Fee") for such
redemption of shares. The initial Redemption Transaction Fee for the exchange
of Tradeable Shares which constitute one or more MACRO Units and the concurrent
redemption of such MACRO Units for cash and/or Eligible Treasuries or for the
redemption of Holding Shares that constitute one or more MACRO Units for cash
and/or Eligible Treasuries shall be two thousand dollars ($2,000). The
Redemption Transaction Fee may be adjusted from time to time in accordance with
Section 7(c) of this Participants Agreement. A single Redemption Transaction
Fee shall be due for each Redemption Order from a single Authorized Participant
regardless of the aggregate amount of redemptions on such Redemption Order.
(c) The Transaction Fee may subsequently be waived, modified,
reduced, increased or otherwise changed by the Trustee, with the prior written
consent of the Depositor, and without the required consent of the Authorized
Participants at that time, but will not in any event exceed 0.10% of the value
of a MACRO Unit at the time of creation or redemption, as the case may be (in
each case determined at the proportionate underlying value of a MACRO Unit on
the date of either the Creation Order or the Redemption Order). Promptly after
agreeing to and prior to implementing such change, the Depositor shall file,
with the cooperation of the Trustee, a post-effective amendment with the SEC
disclosing any such change in the Transaction Fee and the Administrative Agent
shall, concurrently, notify the Depository and each Authorized Participant. Any
such change in the Transaction Fee shall not be implemented until thirty (30)
days after the filing of the applicable post-effective amendment. The amount of
the Transaction Fee in effect at any given time shall be made available by the
Administrative Agent upon request.
Section 8. Authorized Persons. Concurrently with the execution of this
Participants Agreement and from time to time thereafter, each Authorized
Participant shall deliver to the Administrative Agent, with copies to the
Trustee, notarized and duly certified as appropriate by its secretary or other
duly authorized official, a certificate in the form of EXHIBIT A setting forth
the names and signatures of all persons authorized to give instructions relating
to activity contemplated hereby or by any other notice, request or instruction
given on behalf of the Authorized Participant (each, an "Authorized Person").
The Administrative Agent may accept and rely upon such certificate as conclusive
evidence of the facts set forth therein and shall consider such certificate to
be in full force and effect until the Administrative Agent receives a
superseding certificate bearing a subsequent date. Upon the termination or
revocation of
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authority of any Authorized Person by the Authorized Participant, the
Authorized Participant shall give immediate written notice of such fact to the
Administrative Agent and such notice shall be effective upon receipt by the
Administrative Agent. The Administrative Agent shall issue to each Authorized
Person a unique personal identification number (the "PIN Number") by which such
Authorized Person shall be identified and which shall be used as authentication
for Orders placed by that Authorized Person. The Administrative Agent shall
provide to the Depositor and the Trustee, if so requested, a list of the
Authorized Persons and their corresponding PIN Numbers and shall promptly
update such list upon any changes to such list.
The PIN Number shall be kept confidential by the Authorized Participant and
shall only be provided to the Authorized Person. If, after issuance, the
Authorized Person's PIN Number is changed, the new PIN Number shall become
effective within two Business Days after the new PIN Number has been issued to
the Authorized Person.
Section 9. Representation regarding Securities Delivered. Each
redeeming Authorized Participant represents and warrants that it will not obtain
a Submission Number (as described in the Procedures) from the Administrative
Agent for a Redemption Order or an Exchange Order unless such Authorized
Participant first ascertains that (i) it or its customer or any other person on
whose behalf it is acting, as the case may be, owns outright or has full legal
authority and legal and beneficial right to tender the MACRO Shares and (ii)
such MACRO Shares have not been loaned or pledged to another party and are not
the subject of a repurchase agreement, securities lending agreement or any other
arrangement which would preclude the delivery of such securities to the Trustee
on the first Business Day following the applicable order date.
Section 10. Role of the Authorized Participant.
(a) Each Authorized Participant acknowledges that, for all
purposes of this Participants Agreement and the Trust Agreements, it is and
shall be deemed to be an independent contractor and has and shall have no
authority to act as agent for the Paired Holding Trusts, the Tradeable Trusts,
the Depositor, the Administrative Agent or the Trustee in any matter or in any
respect.
(b) Each Authorized Participant will make itself and its employees
available, upon request, during normal business hours to consult with the
Trustee and the Administrative Agent concerning the performance of such
Authorized Participant's responsibilities under this Participants Agreement.
(c) With respect to any Order made by an Authorized Participant
pursuant to this Participants Agreement for the benefit of any customer or any
other DTC Participant or Indirect Participant or any other beneficial owner,
such Authorized Participant shall extend to any such party all of the rights,
and shall be bound by all of the obligations, of a DTC Participant in addition
to any obligations that it undertakes hereunder or in accordance with the Trust
Agreements.
(d) Each Authorized Participant will maintain records of all sales
and redemptions of Holding Shares or Tradeable Shares made by or through it and
will furnish copies of such records to the Depositor upon the reasonable request
of the Depositor.
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Section 11. Indemnification.
(a) Each Authorized Participant, individually and severally,
hereby indemnifies and holds harmless the Paired Holding Trusts, the Tradeable
Trusts, the Trustee, the Administrative Agent, the Depositor, their respective
direct or indirect affiliates (as defined below) and their respective
directors, officers, managers, members, employees and agents, and each person,
if any, who controls such persons within the meaning of Section 15 of the
Securities Act (each, an "AP Indemnified Party") from and against any losses,
liabilities, damages, costs and expenses (including attorney's fees and the
reasonable cost of investigation) incurred by such AP Indemnified Party as a
result of or in connection with: (i) any breach by such Authorized Participant
of any provisions of this Participants Agreement, including its
representations, warranties and covenants, (ii) any failure on the part of such
Authorized Participant to perform any of its obligations set forth in this
Participants Agreement, (iii) any failure by such Authorized Participant to
comply with applicable laws and the rules and regulations of self-regulatory
organizations, (iv) any actions of such AP Indemnified Party in reliance upon
any instructions issued in accordance with the Procedures believed by the AP
Indemnified Party to be genuine and to have been given by such Authorized
Participant, or (v) (A) any representation by such Authorized Participant, its
employees or its agents or other representatives about any type of MACRO Shares
or any AP Indemnified Party that is not consistent with the then-current
Prospectuses made in connection with the offer or the solicitation of an offer
to buy or sell any type of MACRO Shares and (B) any untrue statement or alleged
untrue statement of a material fact contained in any Participant Written
Communication described in Section 15(b) herein or any alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading to the extent that such statement or
omission relates to the MACRO Shares or any AP Indemnified Party, unless, in
either case, such representation, statement or omission was made or included by
the Authorized Participant at the written direction of the Depositor or is
based upon any omission or alleged omission by the Depositor to state a
material fact in connection with such representation, statement or omission
necessary to make such representation, statement or omission not misleading.
(b) The Paired Holding Trusts, on behalf of themselves and their
related Tradeable Trusts, hereby agree to indemnify and hold harmless, severally
and not jointly, each Authorized Participant, its respective subsidiaries,
affiliates, directors, officers, employees and agents, and each person, if any,
who controls such persons within the meaning of Section 15 of the Securities Act
(each, a "Trust Indemnified Party") from and against any losses, liabilities,
damages, costs and expenses (including reasonable attorneys' fees) incurred by
such Trust Indemnified Party as a result of (i) any breach by a MACRO Trust of
any provision of this Participants Agreement that relates to a MACRO Trust, (ii)
any failure on the part of a MACRO Trust to perform any of its obligations set
forth in this Participants Agreement or (iii) any untrue statement or alleged
untrue statement of a material fact contained in the Prospectuses as originally
filed with the SEC or in any amendment thereof, or in any amendment thereof or
supplement thereto, or arising out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except those statements
in the Prospectuses based on information furnished in writing by or on behalf of
the Authorized Participant expressly for use in the Prospectuses.
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(c) This Section 11 shall not apply to the extent any such losses,
liabilities, damages, costs and expenses are incurred as a result of or in
connection with any gross negligence, bad faith or willful misconduct on the
part of the AP Indemnified Party or the Trust Indemnified Party, as the case may
be. The term "affiliate" in this Section 11 shall include, with respect to any
person, entity or organization, any other person, entity or organization which
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person, entity or
organization.
(d) If the indemnification provided for in this Section 11 is
unavailable to an AP Indemnified Party under Section 11(a) or a Trust
Indemnified Party under Section 11(b) or insufficient to hold an indemnified
party harmless in respect of any losses, liabilities, damages, costs and
expenses referred to therein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, liabilities, damages, costs and expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by a Paired Holding
Trust, on the one hand, and by the Authorized Participant, on the other hand,
from the services provided hereunder or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of a Paired Holding Trust, on the one hand,
and of the Authorized Participant, on the other hand, in connection with, to
the extent applicable, the statements or omissions which resulted in such
losses, liabilities, damages, costs and expenses, as well as any other relevant
equitable considerations. The relative benefit of a Paired Holding Trust shall
be deemed to be in the same proportion as the total net proceeds from the
offering (after deducting expenses) received by that Paired Holding Trust. To
the extent applicable, the relative fault of a Paired Holding Trust and its
related Tradeable Trust, on the one hand, and of the Authorized Participant, on
the other hand, shall be determined by reference to, among other things,
whether the untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by that trust or
by the Authorized Participant and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the losses,
liabilities, damages, costs and expenses referred to in this Section 11(d)
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any action, suit or proceeding (each, a "Proceeding") related to such
losses, liabilities, damages, costs and expenses.
(e) Each Paired Holding Trust and each Authorized Participant
agree that it would not be just and equitable if contribution pursuant to this
Section 11 were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in Section 11(d) above. Each Authorized Participant shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Paired Holding Shares or Tradeable Shares, as applicable, created by the
Authorized Participant and distributed to the public exceeds the amount of any
damage which the Authorized Participant has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
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(f) The indemnity and contribution provisions contained in this
Section 11 shall remain in full force and effect regardless of any
investigation made by or on behalf of an Authorized Participant, its partners,
stockholders, members, directors, officers, employees and or any person
(including each partner, stockholder, member, director, officer or employee of
such person) who controls an Authorized Participant within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on
behalf of each of the Paired Holding Trusts, its managers, members, officers,
employees or any person who controls the Paired Holding Trusts within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and shall survive any termination of this Participants Agreement. Each Paired
Holding Trust and each Authorized Participant agree promptly to notify each
other of the commencement of any Proceeding against it and, in the case of a
Paired Holding Trust, against the Trustee or the Depositor, in connection with
the issuance and sale of the Paired Holding Shares or Tradeable Shares or in
connection with the Registration Statement or the Prospectuses.
(g) Pursuant to the Holding Trust Agreements, each Paired Holding
Trust hereby agrees jointly and severally to pay any Trust Indemnified Party
such amounts when due under this Section 11 (including any amount in
contribution thereof that may be owed to such Trust Indemnified Party pursuant
to this Section 11), and to pay any and all expenses (including reasonable and
documented counsel fees and expenses) incurred by the Trust Indemnified Party in
enforcing its rights under this Section 11(g).
Section 12. Limitation of Liability.
(a) None of the Depositor, the Trustee, the Administrative Agent
or the Authorized Participant shall be liable to each other or to any other
Person, including any AP Indemnified Party or any other person claiming by,
through or on behalf of an Authorized Participant, for any losses, liabilities,
damages, costs or expenses arising out of any mistake or error in data or other
information provided to any of them by any of the others or any other person or
out of any interruption or delay in the electronic means of communications used
by them.
(b) Tax Liability. Each Authorized Participant shall be
responsible for the payment of any transfer tax, sales or use tax, stamp tax,
recording tax, value added tax and any other similar tax or government charge
applicable to (i) the creation or redemption of any MACRO Unit or (ii) the
creation or redemption of Tradeable Shares made pursuant to this Participants
Agreement, regardless of whether or not such tax or charge is imposed directly
on each Authorized Participant. To the extent the Trustee, the Administrative
Agent, the Depositor, the Paired Holding Trusts or the Tradeable Trusts are
required by law to pay any such tax or charge, the Authorized Participant agrees
to promptly indemnify such party for any such payment, together with any
applicable penalties, additions to tax or interest thereon.
Section 13. Acknowledgment. Each Authorized Participant acknowledges receipt of
a copy of (i) the Trust Agreements, (ii) the current Up-MACRO Prospectus and
(iii) the current Down-MACRO Prospectus and represents that it has reviewed and
understands such documents.
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Section 14. Effectiveness and Termination. Upon the execution of this
Participants Agreement by the parties hereto, this Participants Agreement shall
become effective in this form as of the date first set forth above and may be
terminated at any time by any party upon thirty (30) days' prior written notice
to the other parties unless earlier terminated: (i) in accordance with Section
2(a), (ii) upon notice to the Authorized Participant by the Trustee in the event
of a breach by the Authorized Participant of this Participants Agreement or the
Procedures described or incorporated herein, (iii) immediately in the
circumstances described in Section 21(j), or (iv) at such time as the Paired
Holding Trusts are terminated pursuant to the Holding Trust Agreements.
Section 15. Marketing Materials; Representations Regarding Paired
Holding Shares; Identification in Registration Statement.
(a) Each Authorized Participant represents, warrants and covenants
that, without the prior written consent of the Depositor, (i) such Authorized
Participant will not make, or permit any of its representatives to make any
representations concerning the Paired Holding Shares, the Tradeable Shares or
any AP Indemnified Party other than representations contained (A) in the
then-current Prospectuses, (B) in printed information approved by the Depositor
as information supplemental to such Prospectuses or (C) in any promotional
materials or sales literature furnished to such Authorized Participant by the
Depositor and (ii) such Authorized Participant will not prepare, make, use,
authorize, approve, disseminate or refer to any "written communication" (as
defined in Rule 405 under the Act) that constitutes an offer to sell or
solicitation of an offer to buy any of the MACRO Shares other than the
then-current Prospectuses. Copies of the then-current Prospectuses and any such
printed supplemental information will be supplied by the Depositor to the
Authorized Participant in reasonable quantities upon request.
(b) Notwithstanding the foregoing, each Authorized Participant
may, without the written approval of the Depositor, prepare and circulate to one
or more of its potential investors one or more "written communications" (as
defined under Rule 405 under the Securities Act) containing no more than the
following: information contemplated by Rule 134 under the Securities Act ("Rule
134 Information") which is consistent with the then-current prospectuses and
information included in the then-current prospectuses (a "Participant Free
Writing Prospectus", and together with Rule 134 Information, the "Participant
Written Communication").
(c) Each Authorized Participant severally represents, warrants,
covenants and agrees with the Trustee, the Administrative Agent and the
Depositor that:
(i) each Participant Written Communication prepared by it
will not, as of the date such Participant Written Communication was
conveyed or delivered to any prospective purchaser of MACRO Shares,
include any untrue statement of a material fact or omit any material
fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading;
provided, however, that no Authorized Participant makes such
representation, warranty or agreement to the extent such misstatements
or omissions were the result of any inaccurate information which was
included in the Prospectuses or any written information furnished to
the related Authorized
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Participant by the Trustee, the Administrative Agent and the Depositor
expressly for use therein, which information was not corrected by
information subsequently filed with the SEC or by such information
subsequently delivered by the Trustee, the Administrative Agent or the
Depositor to the related Authorized Participant prior to the time of
use of such Participant Written Communication;
(ii) each Rule 134 Information prepared by it shall contain a
legend substantially in the form of and in compliance with Rule 134(b)
or (d) of the Securities Act, as applicable, and shall otherwise
conform to all of the requirements of Rule 134 under the Securities
Act;
(iii) each Participant Free Writing Prospectus prepared by it
shall contain a legend substantially in the form of and in compliance
with Rule 433(c)(2)(i) of the Securities Act, and shall otherwise
conform to all of the requirements for "Free Writing Prospectus" (as
defined under Rule 405 under the Securities Act) under the Securities
Act; and
(iv) each Participant Free Writing Prospectus prepared by it
shall be delivered to the Trustee, the Administrative Agent and the
Depositor no later than the time of first use and, unless otherwise
agreed to by the Trustee, the Administrative Agent and the Depositor
and the related Authorized Participant, such delivery shall occur no
later than the close of business for the applicable MACRO Trust
(Eastern Time) on the date of first use; provided, however, if the date
of first use is not a Business Day, such delivery shall occur no later
than the close of business for the applicable MACRO Trust (Eastern
Time) on the first Business Day preceding such date of first use.
(d) Each Authorized Participant severally represents and agrees
(i) that it did not enter into any contract of sale for any MACRO Share prior to
the initial time of sale as determined by the Depositor (the "Initial Time of
Sale") and (ii) that it will, at any time that such Authorized Participant is
acting as an "underwriter" (as defined in Section 2(a)(11) of the Securities
Act) with respect to any type of MACRO Share, deliver to each investor to whom
the MACRO Shares are offered a copy of the then-current Prospectuses as required
under the Securities Act.
(e) Each Authorized Participant hereby agrees that, for the term
of this Participants Agreement, the Depositor may deliver the then-current
Prospectuses, and any supplements or amendments thereto or recirculation
thereof, to such Authorized Participant in Portable Document Format ("PDF") via
electronic mail in lieu of delivering the Prospectuses in paper form. Each
Authorized Participant may revoke the foregoing agreement at any time by
delivering written notice to the Depositor and the Administrative Agent and,
whether or not such agreement is in effect, each Authorized Participant may, at
any time, request reasonable quantities of the Prospectuses, and any supplements
or amendments thereto or recirculation thereof, in paper form from the
Depositor. Each Authorized Participant acknowledges that it has the capability
to access, view, save and print material provided to it in PDF and that it will
incur no appreciable extra costs by receiving the Prospectuses in PDF instead of
in paper form.
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(f) For as long as this Participants Agreement is effective, each
Authorized Participant agrees to be identified as an authorized participant of
the Paired Holding Trusts and the Tradeable Trusts (i) in the section of the
Prospectuses included within the Registration Statements entitled "Plan of
Distribution" and in any other section as may be required by the SEC, (ii) in
any SEC filing as may be required under the Securities Act or the Exchange Act
and (iii) on any website relating to the Paired Holding Trusts or the Tradeable
Trusts.
Section 16. Certain Covenants of the Depositor. The Depositor covenants
and agrees:
(a) to advise the Authorized Participant promptly of the
happening of any event during the term of this Participants Agreement which
could require the making of any change in the Prospectuses then being used so
that the Prospectuses would not include an untrue statement of a 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, to prepare and furnish, at the expense of the Paired Holding
Trusts, to each Authorized Participant promptly such amendments or supplements
to such Prospectuses as may be necessary to reflect any such change;
(b) to deliver a certification by a duly authorized officer of the
Depositor in the form attached hereto as EXHIBIT E to each Authorized
Participant, upon the occurrence of (i) an amendment to any of the Registration
Statements or the Prospectuses by the filing of a post-effective amendment, (ii)
the filing of a new Registration Statement to register additional Paired Holding
Shares in reliance on Rule 429 under the Securities Act, or (iii) incorporation
by reference of new financial information into the Registration Statements or
the Prospectuses. In addition, any certificate signed by any officer of the
Depositor and delivered to each Authorized Participant or counsel for each
Authorized Participant pursuant hereto shall be deemed to be a representation
and warranty by the Depositor as to matters covered thereby to each Authorized
Participant;
(c) upon (i) amending any of the Registration Statements or (ii)
the filing and effectiveness of a new Registration Statement to register
additional Paired Holding Shares or Tradeable Shares in reliance on Rule 429
under the Securities Act, to furnish to each Authorized Participant, an agreed
upon opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Depositor, addressed to each Authorized Participant and dated such dates;
(d) to deliver letters from the MACRO Trusts' accountants, dated
as of the date of such events below, that are addressed to each Authorized
Participant and the MACRO Trusts' certified independent public accountants and
stating in effect that they have performed certain specified procedures as a
result of which they have determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records of the
MACRO Trusts) set forth in the Prospectuses, agrees with the accounting records
of the MACRO Trusts, excluding any questions of legal interpretation, upon the
occurrence of (i) an amendment to any of the Registration Statements or the
Prospectuses by the filing of a post-effective amendment or (ii) incorporation
by reference of new financial information into the Registration Statements or
the Prospectuses; and
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(e) on behalf of each of the MACRO Trusts, to file a
post-effective amendment to their respective Registration Statements no less
frequently than once per calendar quarter on or about the same time that the
Depositor files a quarterly or annual report pursuant to Section 13 or 15(d) of
the Exchange Act (including the information contained in such report), until
such time as the MACRO Trusts' reports filed pursuant to Section 13 or 15(d) of
the Exchange Act are incorporated by reference in the Registration Statement.
Section 17. Addition and Removal of Authorized Participants.
(a) On any Business Day, any Person who satisfied the
requirements set forth in Section 2 of this Participants Agreement may notify
the Administrative Agent and the Depositor of its desire to be added to
Schedule I of this Participants Agreement. The Administrative Agent shall
review such Person's request, and if such Person is acceptable to the
Depositor, the Administrative Agent shall prepare, or cause to be prepared, a
supplement to this Participants Agreement under which such Person will be added
to Schedule I attached hereto and pursuant to which such Person shall assume
the role, responsibilities and privileges of an Authorized Participant as set
forth in this Participants Agreement. Upon instruction from the Depositor, each
of the Administrative Agent and Trustee hereby acknowledge and agree that it
will execute and deliver such supplement to the extent permitted by law.
Furthermore, each Authorized Participant acknowledges and agrees that its
execution and delivery of such supplement shall not be required to bind any
future Authorized Participant to the terms and conditions set forth herein. The
Trustee shall use commercially reasonable efforts to submit on behalf of such
Person an application to create an account at DTC pursuant to which it can
effectuate creations, redemptions and/or exchanges in accordance with
Attachment A attached hereto. Upon an approval from DTC and the execution and
delivery of such supplement by such Person, the Administrative Agent, the
Trustee and the Depositor, such Person shall be deemed to be an Authorized
Participant under this Participants Agreement. To the extent required under the
Exchange Act, the Depositor shall file within four (4) Business Days of
executing a supplement a Form 8-K disclosing the addition of an Authorized
Participant.
(b) Upon five (5) Business Days' written notice, an Authorized
Participant may terminate its role with respect to this Participants Agreement.
The Administrative Agent shall prepare, or cause to be prepared, an amendment to
Schedule I under which such Authorized Participant shall be removed from such
schedule. The Administrative Agent, the Depositor, the Trustee and such
Administrative Agent shall execute such amendment upon its preparation and
delivery. Each Authorized Participant acknowledges and agrees that the execution
and delivery by it of such amendment is not required for the removal of an
Authorized Participant from the Schedule. To the extent required under the
Exchange Act, the Depositor shall file within four (4) Business Days of
executing an amendment a Form 8-K disclosing the removal of such Authorized
Participant.
Section 18. Third Party Beneficiaries. Each AP Indemnified Party, to
the extent it is not a party to this Participants Agreement, is a third-party
beneficiary of this Participants Agreement (each, a "Third Party Beneficiary")
and may proceed directly against each Authorized Participant (including by
bringing proceedings against each Authorized Participant in its own name) to
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enforce any obligation of each Authorized Participant under this Participants
Agreement which directly or indirectly benefits such Third Party Beneficiary.
Section 19. Force Majeure. No party to this Participants Agreement
shall incur any liability for any delay in performance, or for the
non-performance, of any of its obligations under this Participants Agreement by
reason of any cause beyond its reasonable control. This includes any act of God
or war or terrorism, any breakdown, malfunction or failure of transmission in
connection with or other unavailability of any wire, communication or computer
facilities, any transport, port or airport disruption, industrial action, acts
and regulations and rules of any governmental or supra-national bodies or
authorities or regulatory or self-regulatory organization or failure of any such
body, authority or organization for any reason, to perform its obligations.
Section 20. Ambiguous Instructions. If any Creation, Redemption or
Exchange Order Form otherwise in good form contains order terms that differ from
the information provided in the telephone call at the time of issuance of the
applicable order number, the Administrative Agent will attempt to contact one of
the Authorized Persons of the Authorized Participant to request confirmation of
the terms of the Order. If an Authorized Person confirms the terms as they
appear in the Order, then the Order will be accepted and processed. If an
Authorized Person contradicts the Order terms, the Order will be deemed invalid,
and a corrected Order must be received by the Administrative Agent, as the case
may be, not later than within fifteen (15) minutes of such contact with the
Authorized Person. If the Administrative Agent is not able to contact an
Authorized Person, then the Order shall be accepted and processed in accordance
with its terms notwithstanding any inconsistency from the terms of the telephone
information. In the event that an Order contains terms that are illegible, the
Order will be deemed invalid and the Administrative Agent will attempt to
contact one of the Authorized Persons of each Authorized Participant to request
retransmission of the Order. A corrected Order must be received by the
Administrative Agent not later than within fifteen (15) minutes of such contact
with the Authorized Person. The Administrative Agent will incur no liabilities
under this Section 20.
Section 21. Miscellaneous.
(a) Amendment and Modification. This Participants Agreement, the
Procedures attached hereto and the Exhibits hereto may be amended, modified or
supplemented by the Trustee, the Administrative Agent and the Depositor, without
consent of any holder of the MACRO Shares or the Authorized Participants;
provided, however, that the Trustee will not be required to enter into any
amendment or modification of this Participants Agreement that would (i) alter
the status of any Paired Holding Trust as a partnership or any of the Tradeable
Trusts as grantor trust for federal income tax purposes or (ii) cause any Trust
to be required to register as an investment company under the Investment Company
Act of 1940, as amended, or (iii) cause or potentially cause the assets of any
MACRO Trust to constitute "plan assets" within the meaning of ERISA unless (in
each case) it has obtained a favorable opinion of counsel at the expense of the
applicable trust to the effect that such amendment would not have such effect.
After the amendment, modification or supplement has been agreed to, the
Administrative Agent shall mail a copy of the proposed amendment, modification
or supplement to each Authorized Participant. The Administrative Agent may also
deliver such amendment, modification or supplement thereto by electronic mail;
provided, however, that physical delivery via the United States postal system or
similar system shall be required. For the purposes of this Participants
Agreement, mail will be deemed received by the recipient thereof on the third
(3rd) calendar day following the deposit of such mail into the United
19
States postal system or similar system. Within ten (10) calendar days after its
deemed receipt, the amendment, modification or supplement will become part of
this Participants Agreement, the Attachments or the Exhibits, as the case may
be, in accordance with its terms. If at any time there is any material
amendment, modification or supplement of any Participants Agreement (other than
this Participants Agreement), the Administrative Agent will promptly mail a
copy of such amendment, modification or supplement to each Authorized
Participant.
Notwithstanding the foregoing, any amendment, modification or
supplement to any creation or redemption procedural item in the Procedures
shall be made in accordance with the terms of such agreements. After the
amendment, modification or supplement has been agreed to, the Trustee will mail
a copy of the amendment, modification or supplement to each Authorized
Participant.
(b) Waiver of Compliance. Any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but any such written
waiver, or the failure to insist upon strict compliance with any obligation,
covenant, agreement or condition herein, shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
(c) Notices. Except as otherwise specifically provided in this
Participants Agreement, all notices required or permitted to be given pursuant
to this Participants Agreement shall be given in writing and delivered by
personal delivery, by postage prepaid registered or certified United States
first-class mail, return receipt requested, by nationally recognized overnight
courier (delivery confirmation received) or by telex, telegram, telephonic
facsimile, electronic mail or similar means of same day delivery (transmission
confirmation received), with a confirming copy regular mail, postage prepaid.
Unless otherwise notified in writing, all notices to any MACRO Trusts shall be
given or sent to the Administrative Agent, with copies to the Trustee. All
notices shall be directed as follows:
If to the Trustee:
INVESTORS BANK & TRUST COMPANY
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: MACROshares Transfer Agent
Copy to: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20
If to the Depositor:
MACRO Securities Depositor, LLC
00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Telephone: (888) MACROS1
Facsimile: (000) 000-0000
If to the Administrative Agent:
CLAYMORE SECURITIES, INC.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to each Authorized Participant:
KV EXECUTION SERVICES LLC
Attention: Xxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or to the address listed on Schedule I attached hereto; or to such other address
as any of the parties hereto shall have communicated in writing to the remaining
parties in compliance with the provisions hereof.
(d) Successors and Assigns. This Participants Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
(e) Assignment. Neither this Participants Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
without the prior written consent of the other parties, except that any entity
into which a party hereto may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion or
consolidation to which such party hereunder shall be a party, or any entity
succeeding to all or substantially all of the business of the party, shall be
the successor of the party under this Participants Agreement. The party
resulting from any such merger, conversion, consolidation or
21
succession shall notify the other parties hereto of the change. Any purported
assignment in violation of the provisions hereof shall be null and void.
Notwithstanding the foregoing, this Participants Agreement shall be
automatically assigned to any successor Trustee, Administrative Agent or
Depositor at such time such successor qualifies as a successor Trustee,
Administrative Agent or Depositor under the terms of the Trust Agreements.
(f) Governing Law; Consent to Jurisdiction. This Participants
Agreement shall be governed by and construed in accordance with the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable New York conflict of laws principles other than Section 5-1401 et
seq. of the General Obligations Law of the State of New York) as to all matters,
including matters of validity, construction, effect, performance and remedies.
Each party hereto irrevocably consents to the jurisdiction of the courts of the
State of New York and of any federal court located in the Borough of Manhattan
in such state in connection with any action, suit or other proceeding arising
out of or relating to this Participants Agreement or any action taken or omitted
hereunder, and waives any claim of forum non conveniens and any objections as to
laying of venue. Each party further waives personal service of any summons,
complaint or other process and agrees that service thereof may be made by
certified or registered mail directed to such party at such party's address for
purposes of notices hereunder.
(g) Counterparts. This Participants Agreement may be executed in
one or more counterparts, each of which will be deemed to be an original copy of
this Participants Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement, and it shall not be necessary
in making proof of this Participants Agreement as to any party hereto to produce
or account for more than one such counterpart executed and delivered by such
party.
(h) Interpretation. The section, paragraph and other subdivision
headings contained in this Participants Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any way
affect the meaning or interpretation of this Participants Agreement.
(i) Entire Agreement. This Participants Agreement and the Trust
Agreements, along with any other agreement or instrument delivered pursuant to
this Participants Agreement and the Trust Agreements, supersede all prior
agreements and understandings between the parties with respect to the subject
matter hereof; provided however, that each Authorized Participant shall not be
deemed by this provision to be a party to the Trust Agreements.
(j) Severance. If any provision of this Participants Agreement is
held by any court or any act, regulation, rule or decision of any other
governmental or supra-national body or authority or regulatory or
self-regulatory organization to be invalid, illegal or unenforceable for any
reason, it shall be invalid, illegal or unenforceable only to the extent so held
and shall not affect the validity, legality or enforceability of the other
provisions of this Participants Agreement and this Participants Agreement will
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein, unless the Depositor determines in its discretion, after
consulting with the Trustee and the Administrative Agent, that the provision of
22
this Participants Agreement that was held invalid, illegal or unenforceable does
affect the validity, legality or enforceability of one or more other provisions
of this Participants Agreement, and that this Participants Agreement should not
be continued without the provision that was held invalid, illegal or
unenforceable, and in that case, upon the Depositor's notification of the
Trustee and the Administrative Agent of such a determination, this Participants
Agreement shall immediately terminate and the Administrative Agent will so
notify each Authorized Participant immediately.
(k) No Strict Construction. The language used in this Participants
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.
(l) Survival. Section 11 (Indemnification) and Section 18 (Third
Party Beneficiaries) hereof shall survive the termination of this Participants
Agreement.
(m) Other Usages. The following usages shall apply in interpreting
this Participants Agreement: (i) references to a governmental or
quasi-governmental agency, authority or instrumentality shall also refer to a
regulatory body that succeeds to the functions of such agency, authority or
instrumentality; and (ii) "including" means "including, but not limited to."
IN WITNESS WHEREOF, each Authorized Participant, the Depositor, the
Administrative Agent and the Trustee have caused this Participants Agreement to
be executed by their duly authorized representatives as of the date first set
forth above.
INVESTORS BANK & TRUST COMPANY
not in its individual capacity, but solely as the
Trustee for the Paired Holding Trusts and the
Tradeable Trusts
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
CLAYMORE SECURITIES, INC.
not in its individual capacity, but solely as the
Administrative Agent of the Paired Holding Trusts and
the Tradeable Trusts
By: /s/ Xxxxxx X. Xxxx
----------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Managing Director
Address: 0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
23
MACRO SECURITIES DEPOSITOR, LLC
Depositor of the Paired Holding Trusts and the
Tradeable Trusts
By: /s/ Xxxxxx Xxxxxxx, III
---------------------------------------------
Name: Xxxxxx Xxxxxxx, III
Title: President
Address: 00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Telephone: (800) MACROS1
Facsimile: (000) 000-0000
[Authorized Participant]
KV EXECUTION SERVICES LLC
By: /s/ Xxxx Xxxxxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Chief Operating Officer
Address: 0000 Xx. 00, Xxxxx 000
Xxxxxxxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
DTC Number: 0407
24
KV EXECUTION SERVICES LLC
By: /s/ Xxxx Xxxxxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxxxxx
Title: Chief Operating Officer
Address: 0000 Xx. 00, Xxxxx 000
Xxxxxxxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
DTC Number: 0407
25
SCHEDULE I
LIST OF AUTHORIZED PARTICIPANTS
1. KV EXECUTION SERVICES LLC
SCHEDULE I-1
EXHIBIT A
CLAYMORE MACROSHARES OIL UP HOLDING TRUST
CLAYMORE MACROSHARES OIL DOWN HOLDING TRUST
CLAYMORE MACROSHARES OIL UP TRADEABLE TRUST
CLAYMORE MACROSHARES OIL DOWN TRADEABLE TRUST
FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT
The following are the names, titles, addresses, e-mail addresses and
signatures of all persons (each, an "Authorized Person") authorized to give
instructions relating to any activity contemplated by the Participants Agreement
or any other notice, request or instruction on behalf of the Authorized
Participant pursuant to the Participants Agreement.
Authorized Participant: (the "Authorized Participant")
----------------------- ----------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------- ---------------------------------
Address: Address:
------------------------------- ---------------------------------
------------------------------- ---------------------------------
E-Mail: E-Mail:
------------------------------- ---------------------------------
PH: PH:
------------------------------- ---------------------------------
Signature: Signature:
------------------------------- ---------------------------------
Name: Name:
------------------------------- ---------------------------------
Title: Title:
------------------------------- ---------------------------------
Address: Address:
------------------------------- ---------------------------------
------------------------------- ---------------------------------
E-Mail: E-Mail:
------------------------------- ---------------------------------
A-1
PH: PH:
------------------------------- ---------------------------------
Signature: Signature:
------------------------------- ---------------------------------
The undersigned, [name], [title] of [company], does hereby certify that
the persons listed above have been duly elected to the offices set forth beneath
their names, that they presently hold such offices, that they have been duly
authorized to act as Authorized Persons pursuant to the Participants Agreement,
dated as of [date], by and among the Authorized Participant, the Trustee, the
Administrative Agent and the Depositor, and that their signatures set forth
above are their own true and genuine signatures.
E-Mail Address to Confirm the Above Information: .
-----------------------
A-2
IN WITNESS WHEREOF, I, the undersigned, a duly authorized officer of
the Authorized Participant hereby execute this certificate as of the date first
set forth above.
--------------------------------------------
NAME OF AUTHORIZED PARTICIPANT
By:
-----------------------------------------
Name:
Title:
Subscribed and sworn to before me this _____ day of
____________, 20
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date:
--------------------------------------
Notary Public:
---------------------------------
A-3
EXHIBIT B
FORM OF
CLAYMORE MACROSHARES OIL
CREATION ORDER
Authorized Participant: (the "Authorized Participant")
--------------------- ----------------------
Date:
--------------------
Submission Number:
----------------------------
PIN Number:
----------------------------
Number of MACRO Units to which this order applies:
You will be receiving Tradeable Shares in exchange for the MACRO Units being
created unless you indicate otherwise below.
Do you wish to receive Holding Shares?
-------
Yes
All Creation Orders are subject to the terms and conditions of the
applicable Trust Agreements as currently in effect and the Participants
Agreement, dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
The Authorized Participant by executing this Creation Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Creation Order.
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Creation Order Form to the Administrative Agent
and the Trustee on behalf of the Authorized Participant.
The Authorized Participant, by placing this order, acknowledges that a
"distribution" as such term is used in the Securities Act of 1933, as amended
(the "Securities Act"), may be occurring. The Authorized Participant is
cautioned that some of its activities may result in its being deemed a
participant in a distribution which would render it a statutory underwriter
pursuant to Section 2(a)(11) of the Securities Act and subject it to the
prospectus-delivery
B-1
requirements and the liability provisions of the Securities Act. The Authorized
Participant should review the "Plan of Distribution" portion of the
Prospectuses and consult with its own counsel prior to placing this Creation
Order.
B-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Creation Order as of the date set
forth below.
NAME OF AUTHORIZED PARTICIPANT
By:
------------------------------------
Name:
Title:
Date:
------------------------------------
B-3
EXHIBIT C
FORM OF
CLAYMORE MACROSHARES OIL REDEMPTION ORDER
Authorized Participant: (the "Authorized Participant")
------------------------ ----------------------
Date:
-----------------------------
Submission Number:
---------------------------------
PIN Number:
-------------------------------
Number of MACRO Units to which this order applies:
------------------
You will be submitting Tradeable Shares to be exchanged into Holding Shares
which constitute one or more MACRO Units and concurrently be redeemed, unless
you indicate otherwise below.
CUSIP Numbers:
------------------------- ---------------------------
Up-MACRO Tradeable Shares Down-MACRO Tradeable Shares
Authorized Participant's account details:
Bank's Name:
-----------
ABA No.:
---------------
Account No.:
-------------
Do you wish to submit Holding Shares?
-------
Yes
CUSIP Numbers:
------------------------- ---------------------------
Up-MACRO Holding Shares Down-MACRO Holding Shares
All Redemption Orders are subject to the terms and conditions of the
applicable Trust Agreements as currently in effect and the Participants
Agreement, dated as of [ ] (the
C-1
"Participants Agreement"), among the Authorized Participant, the Trustee, the
Administrative Agent and the Depositor named therein.
The Authorized Participant by executing this Redemption Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Redemption Order.
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Redemption Order Form to the Trustee on behalf of
the Authorized Participant.
C-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Redemption Order as of the date set
forth below.
NAME OF AUTHORIZED PARTICIPANT
By:
------------------------------------
Name:
Title:
Date:
------------------------------------
C-3
EXHIBIT D
FORM OF
CLAYMORE MACROSHARES OIL EXCHANGE ORDER
Authorized Participant: (the "Authorized Participant")
------------------------ ----------------------
Date:
-----------------------------
Submission Number:
--------------------------
PIN Number:
-------------------------------
Number of Up-MACRO Holding Shares to be exchanged into Up-MACRO Tradeable
Shares:
(Number) (check if not applicable)
------------------ ---------
Number of Down-MACRO Holding Shares to be exchanged into Down-MACRO Tradeable
Shares:
(Number) (check if not applicable)
------------------ ---------
Number of Up-MACRO Tradeable Shares to be exchanged into Up-MACRO Holding
Shares:
(Number) (check if not applicable)
------------------ ---------
Number of Down-MACRO Tradeable Shares to be exchanged into Down-MACRO Holding
Shares:
(Number) (check if not applicable)
------------------ ---------
CUSIP Number(s):
------------------------- ---------------------------
Up-MACRO Holding Shares Down-MACRO Holding Shares
------------------------- ---------------------------
Up-MACRO Tradeable Shares Down-MACRO Tradeable Shares
All Exchange Orders are subject to the terms and conditions of the
applicable Trust Agreements as currently in effect and the Participants
Agreement, dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
D-1
The Authorized Participant by executing this Exchange Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Exchange Order.
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Exchange Order Form to the Trustee on behalf of
the Authorized Participant.
The Authorized Participant, by placing this order, acknowledges that a
"distribution" as such term is used in the Securities Act of 1933, as amended
(the "Securities Act"), may be occurring. The Authorized Participant is
cautioned that some of its activities may result in its being deemed a
participant in a distribution which would render it a statutory underwriter
pursuant to Section 2(a)(11) of the Securities Act and subject it to the
prospectus-delivery requirements and the liability provisions of the Securities
Act. The Authorized Participant should review the "Plan of Distribution" portion
of the Prospectuses and consult with its own counsel prior to placing this
Exchange Order.
D-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Exchange Order as of the date set
forth below.
NAME OF AUTHORIZED PARTICIPANT
By:
------------------------------------
Name:
Title:
Date:
------------------------------------
D-3
EXHIBIT E
MACRO SECURITIES DEPOSITOR, LLC
[month][date], [year]
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of MACRO Securities
Depositor, LLC, a Delaware limited liability company (the "Depositor"), and
pursuant to Section 16(b) of the Participants Agreement (the "Participants
Agreement"), dated as of __________, 2006 by and among the parties listed on
Schedule I attached hereto (individually, an "Authorized Participant" and
collectively, the "Authorized Participants"), the Depositor, Investors Bank &
Trust Company, a Massachusetts trust company, not in its individual capacity but
solely (i) as trustee of the Claymore MACROshares Oil Up Holding Trust (the
"Up-MACRO Holding Trust"), (ii) as trustee of the Claymore MACROshares Oil Down
Holding Trust (the "Down-MACRO Holding Trust" and, together with the Up-MACRO
Holding Trust, the "Paired Holding Trusts"), (iii) as trustee of the Claymore
MACROshares Oil Up Tradeable Trust (the "Up-MACRO Tradeable Trust"), and (iv) as
trustee of the Claymore MACROshares Oil Down Tradeable Trust (the "Down-MACRO
Tradeable Trust" and, together with the Up-MACRO Tradeable Trust, the "Tradeable
Trusts" and, collectively, with the Paired Holding Trusts, the "MACRO Trusts")
(such entity, in its capacities set forth above, the "Trustee") and Claymore
Securities, Inc., not in its individual capacity but solely as administrative
agent of the MACRO Trusts (the "Administrative Agent"), hereby certifies, based
on his/her actual knowledge and acting solely in his/her capacity as a duly
authorized officer of the Depositor, that:
1. Each of the following representations and warranties of the
Depositor is true and correct in all material respects as of the
date hereof:
(a) each Registration Statement complies in all material
respects with the requirements of the Securities Act and
each Prospectus complies in all material respects with the
requirements of the Securities Act and any statutes,
regulations, contracts or other documents that are required
to be described in the applicable Prospectus or to be filed
as exhibits to the applicable Registration Statement have
been so described or filed; the conditions to the use of
Form S-1 or S-3, if applicable, have been satisfied; each
Prospectus does 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; provided, however, that the Depositor
makes no warranty or representation with respect to any
statement contained in any Registration Statement or any
Prospectus in reliance upon and in conformity with
information concerning any Authorized Participant and
furnished in writing by or on behalf of any Authorized
E-1
Participant to the Depositor expressly for use in such
Registration Statement or such Prospectus; and neither the
Depositor nor any person known to the Depositor acting on
behalf of the MACRO Trusts has distributed nor will
distribute any offering material other than a Prospectus;
(b) each Paired Holding Trust has been duly formed and is
validly existing as a trust under the laws of the State of
New York, as described in the applicable Prospectus relating
to such Paired Holding Trust, and the Holding Trust
Agreements authorize the Trustee to issue and deliver the
Paired Holding Shares to each Authorized Participant
pursuant to the Holding Trust Agreements and the related
Participants Agreement as contemplated in each such
Registration Statement and Prospectus;
(c) each Tradeable Trust has been duly formed and is validly
existing as a trust under the laws of the State of New York,
as described in the applicable Prospectus relating to such
Tradeable Trust, and the Tradeable Trust Agreements
authorize the Trustee to issue and deliver the applicable
Tradeable Shares to each Authorized Participant pursuant to
the Tradeable Trust Agreements and the related Participants
Agreement as contemplated in each such Registration
Statement and Prospectus;
(d) the Depositor has been duly formed and is validly existing
as a limited liability company in good standing under the
laws of the State of Delaware, with full power and authority
to conduct its business as described in the applicable
Prospectus, and has all requisite power and authority to
execute and deliver the Participants Agreement;
(e) the Depositor is duly qualified and is in good standing in
each jurisdiction where the conduct of its business requires
such qualification; and each of the MACRO Trusts is not
required to so qualify in any jurisdiction;
(f) complete and correct copies of the Trust Agreements, and any
and all amendments, modifications and supplements thereto,
have been delivered to each Authorized Participant, and no
changes thereto have been made;
(g) the outstanding Paired Holding Shares have been duly and
validly issued and are fully paid and non-assessable and
free of statutory and contractual preemptive rights, rights
of first refusal and similar rights;
(h) the outstanding Tradeable Shares have been duly and validly
issued and are fully paid and non-assessable and free of
statutory and contractual preemptive rights, rights of first
refusal and similar rights;
(i) the Paired Holding Shares conform in all material respects
to the description thereof contained in the applicable
Registration Statement and Prospectus, and the holders of
the Paired Holding Shares will not be subject to personal
liability by reason of being such holders;
(j) the Tradeable Shares conform in all material respects to the
description thereof contained in the applicable Registration
Statement and Prospectus,
E-2
and the holders of the Tradeable Shares will not be subject
to personal liability by reason of being such holders;
(k) the Participants Agreement has been duly authorized,
executed and delivered by the Depositor and constitutes
the valid and binding obligation of the Depositor,
enforceable against the Depositor in accordance with
its terms;
(l) the Depositor is not in breach or violation of or in
default under any of its respective constitutive
documents, or any agreement, mortgage, deed of trust,
loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other
agreement or instrument to which the Depositor is a
party or by which any of its properties may be bound or
affected, and the execution, delivery and performance
of the Participants Agreement, the issuance and sale of
Paired Holding Shares and Tradeable Shares to each
Authorized Participant party to the Trust Agreements
and the consummation of the transactions contemplated
thereto does not conflict with, result in any breach or
violation of or constitute a default under any of its
respective constitutive documents, the Trust
Agreements, or any agreement, mortgage, deed of trust,
loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other
agreement or instrument to which the Depositor is a
party or by which the Depositor or any of its
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 Depositor;
(m) 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 Paired Holding Shares or Tradeable
Shares to any Authorized Participant under the Trust
Agreements and the related Participants Agreement or
the consummation by the Depositor of the transactions
contemplated hereunder other than registration of the
Paired Holding Shares and the Tradeable Shares under
the Securities Act, which has been effected, and any
necessary qualification under the securities or blue
sky laws of the various jurisdictions in which the
Paired Holding Shares and Tradeable Shares are being
offered or under the rules and regulations of the
National Association of Securities Dealers, Inc. (the
"NASD");
(n) the Depositor has all necessary licenses,
authorizations, consents and approvals and has made all
necessary filings required under any federal,
E-3
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; the Depositor is not in violation 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 Depositor;
(o) except as set forth in the applicable Registration
Statement and Prospectus, there are no actions, suits,
claims, investigations or proceedings pending or, to
the knowledge of the Depositor, threatened or
contemplated to which the Depositor is or would be a
party or of which any of its 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) [ ], whose report on the audited financial statements
of the MACRO Trusts are filed with the SEC as part of
each Registration Statement and each Form 10-K, are
independent public accountants as required by the
Securities Act;
(q) the audited financial statement(s) included in each
Prospectus, together with the related notes and
schedules, presents fairly the financial position of
each MACRO Trust as of the date indicated and has been
prepared in compliance with the requirements of the
Securities 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 each Registration Statement and each
Prospectus that are not included as required, and the
MACRO Trusts do not have any material liabilities or
obligations, direct or contingent (including any
off-balance sheet obligations), not disclosed in the
applicable Prospectus;
(r) subsequent to the respective dates of each Prospectus,
there has not been (i) any material adverse change, or
any development involving a prospective material
adverse change affecting the Depositor or the MACRO
Trusts, (ii) any transaction which is material to the
Depositor or the MACRO Trusts taken as a whole, (iii)
any obligation, direct or contingent (including any
off-balance sheet obligations), incurred by the
Depositor or the MACRO Trusts, which is material to the
MACRO Trusts (other than any action taken by a MACRO
Trust relating to a Paired Issuance, Paired Optional
Redemption or exchange or creation of Tradeable
Shares), and (iv) any change in the Paired Holding
Shares or Tradeable Shares purchased by each Authorized
Participant (collectively, a "Material Change") which
has not been the subject of a filing as required under
the Exchange Act;
E-4
(s) each of the MACRO Trusts is not and, after giving
effect to the offering and sale of the Paired Holding
Shares, 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;
(t) all tax returns required to be filed by the MACRO
Trusts have been filed, and all taxes and other
assessments 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 from such entities
have been paid;
(u) any statistical and market-related data included in the
Prospectuses are based on or derived from sources that
the Depositor believes to be reliable and accurate, and
the Depositor has obtained the written consent (if such
consent is required) to the use of such data from such
sources to the extent required; and
(v) neither the Depositor, nor any of the Depositor's
managers, 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 a MACRO Trust to
facilitate the sale or resale of the Paired Holding
Shares or Tradeable Shares; and there are no
affiliations or associations between any member of the
NASD and any of the Depositor's officers, managers or
5% or greater security holders, except as set forth in
the Prospectuses and except as to Claymore Securities,
Inc., which is a wholly-owned subsidiary of Claymore
Group Inc., and Macro Financial, LLC, which is a
wholly-owned subsidiary of MacroMarkets LLC. Each of
Claymore Group Inc. and MacroMarkets LLC holds a 50%
interest in the Depositor.
2. Each of the obligations of the Depositor to be performed by it on
or before the date hereof pursuant to the terms of the applicable
Trust Agreement, and each of the provisions thereof to be
complied with by the Depositor on or before the date hereof, has
been duly performed and complied with in all material respects.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the applicable Trust Agreement, and if such defined
term is not set forth therein, then such defined terms shall have the meanings
assigned to such terms in the Participants Agreement.
[SIGNATURE PAGE TO FOLLOW]
E-5
IN WITNESS WHEREOF, I, a duly authorized officer of the Depositor, on
behalf of the Depositor, have caused this Officer's Certificate to be executed
as of the date first written above.
By:
----------------------------------------
Name:
Title:
I, _______________, in my capacity as [Vice President], hereby certify
that _______________ is the duly elected President of the Depositor, and that
the signature set forth immediately above is his genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first
set forth above.
By:
----------------------------------------
Name:
Title:
E-6
ATTACHMENT A
PROCEDURES FOR THE
CLAYMORE MACROSHARES OIL TRUSTS
I. CREATION OF PAIRED HOLDING SHARES AND CONCURRENT EXCHANGE TO
TRADEABLE SHARES AND CREATION OF PAIRED HOLDING SHARES
Scope of Procedures and Overview
These procedures (the "Creation Procedures") describe the processes by
which an Authorized Participant (as defined below) may create one or more MACRO
Units (as defined below), consisting of Claymore MACROshares Oil Up Holding
Shares (the "Up-MACRO Holding Shares") and Claymore MACROshares Oil Down Holding
Shares (the "Down-MACRO Holding Shares" and, together with the Up-MACRO Holding
Shares, the "Paired Holding Shares" or each a "Holding Share") or create one or
more MACRO Units and exchange all of the Holding Shares created into their
respective Claymore MACROshares Oil Up Tradeable Shares (the "Up-MACRO Tradeable
Shares") and the Claymore MACROshares Oil Down Tradeable Shares (the "Down-MACRO
Tradeable Shares" and, together with the Up-MACRO Tradeable Shares, the
"Tradeable Shares", and, collectively with the Paired Holding Shares, the "MACRO
Shares"). The Paired Holding Shares constituting a MACRO Unit and their related
Tradeable Shares, if applicable, shall only be issued in connection with the
instructions set forth herein and in coordination with Investors Bank & Trust
Company, not in its individual capacity but solely (i) as trustee (the "Up-MACRO
Holding Trustee") of the Claymore MACROshares Oil Up Holding Trust (the
"Up-MACRO Holding Trust"), (ii) as trustee (the "Down-MACRO Holding Trustee") of
the Claymore MACROshares Oil Down Holding Trust (the "Down-MACRO Holding Trust"
and, together with the Up-MACRO Holding Trust, the "Paired Holding Trusts"),
(iii) as trustee (the "Up-MACRO Tradeable Trustee") of the Claymore MACROshares
Oil Up Tradeable Trust (the "Up-MACRO Tradeable Trust") and (iv) as trustee (the
"Down-MACRO Tradeable Trustee" and, in its various capacities under the
applicable Trust Agreements, the "Trustee") of the Claymore MACROshares Oil Down
Tradeable Trust (the "Down-MACRO Tradeable Trust" and together with the Up-MACRO
Tradeable Trust, the "Tradeable Trusts"; the Paired Holding Trusts and the
Tradeable Trusts, collectively, the "MACRO Trusts") and Claymore Securities,
Inc., not in its individual capacity but solely as administrative agent of the
MACRO Trusts (the "Administrative Agent").
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Participants Agreement and if such defined term is
not set forth therein, then such defined term shall have the meaning assigned to
such term in either (i) the Claymore MACROshares Oil Up Holding Trust Agreement,
dated as of November 24, 2006 (the "Up-MACRO Holding Trust Agreement"), among
the Up-MACRO Holding Trustee, the Administrative Agent, Claymore Securities,
Inc., not in its individual capacity but as a marketing agent, MACRO Financial,
LLC, not in its individual capacity but also as a marketing agent (together, in
their respective capacities, the "Marketing Agents") and MACRO Securities
Depositor, LLC (the "Depositor"), (ii) the Amended and Restated Claymore
MACROshares Oil Down Holding Trust Agreement, dated as of November 24, 2006 (the
"Down-MACRO Holding
Attachment A-1
Trust Agreement" and, together with the Up-MACRO Holding Trust Agreement, the
"Holding Trust Agreements"), among the Down-MACRO Holding Trustee, the
Administrative Agent, the Marketing Agents and the Depositor, (iii) the Amended
and Restated Claymore MACROshares Oil Up Tradeable Trust Agreement, dated as of
November 24, 2006 (the "Up-MACRO Tradeable Trust Agreement"), among the
Down-MACRO Holding Trustee, the Administrative Agent, the Marketing Agents and
the Depositor or (iv) the Amended and Restated Claymore MACROshares Oil Down
Tradeable Trust Agreement, dated as of November 24, 2006 (the "Down-MACRO
Tradeable Trust Agreement" and, together with the Up-MACRO Tradeable Trust
Agreement, the " Tradeable Trust Agreements", and, collectively with the
Holding Trust Agreements, the "Trust Agreements"), among the Down-MACRO Holding
Trustee, the Administrative Agent, the Marketing Agents and the Depositor.
The Paired Holding Shares may be created solely by the parties listed
on Schedule I attached to the Participants Agreement (each, an "Authorized
Participant"). The Paired Holding Shares may be created only in pairs of 50,000
Up-MACRO Holding Shares and 50,000 Down-MACRO Holding Shares (each such pair, a
"MACRO Unit"). The MACRO Units will be exchanged into their respective Tradeable
Shares concurrently with the creation of the MACRO Units unless the Authorized
Participant indicates that it wishes to receive Holding Shares in the Creation
Order Form.
The MACRO Shares will be created on a net basis daily with respect to
all Orders received from all Authorized Participants on such date. In the event
that the number of Up-MACRO or Down-MACRO Tradeable Shares to be created based
on the Creation Orders and the Exchange Orders, if applicable, on such date
exceeds the number of such Tradeable Shares to be redeemed pursuant to the
Redemption Orders and, if applicable, the Exchange Orders on such date, the
newly created Tradeable Shares that will be issued will be equal to the total
number of such Tradeable Shares created minus the total number of such Tradeable
Shares redeemed. Similarly, in the event that the number of Up-MACRO or
Down-MACRO Tradeable Shares to be redeemed pursuant to the Redemption Orders
and, if applicable, the Exchange Orders on such date exceeds the number of such
Tradeable Shares to be created based on the Creation Orders and the Exchange
Orders, if applicable, on such date, the actual number of such Tradeable Shares
to be issued will be zero. Similarly, in the event that the number of MACRO
Units to be created based on the Creation Orders on such date exceeds the number
of MACRO Units to be redeemed pursuant to the Redemption Orders on such date,
the newly created MACRO Units that will be issued will be equal to the total
number of MACRO Units created minus the total number of MACRO Units redeemed.
Similarly, in the event that the number of MACRO Units to be redeemed pursuant
to the Redemption Orders on such date exceeds the number of MACRO Units to be
created based on the Creation Orders on such date, the actual number of MACRO
Units to be issued will be zero. The Exchange Order, as defined below, involves
the exchange of Holding Shares into their related Tradeable Shares or Tradeable
Shares into their related Holding Shares in integral units of 50,000 shares
each. The exchange of Holding Shares to their related Tradeable Shares or
Tradeable Shares to their related Holding Shares does not need to occur
simultaneously. The Settlement Contracts created on each date, if any, any
adjustment to amounts allocated under the Income Distribution Agreement and the
purchase of new Eligible Treasuries, if any, will also be done on a net basis
daily, in accordance to the daily netting of creation and redemption of MACRO
Units (such netting, collectively, the "Net Daily Basis").
Attachment A-2
Upon acceptance of the Participants Agreement by the Authorized
Participant, the Administrative Agent will assign a personal identification
number (a "PIN number") to each Authorized Person authorized to act on behalf of
an Authorized Participant. This will allow an Authorized Participant through its
Authorized Person(s) to place Creation Order(s), Redemption Order(s) or Exchange
Order(s) for MACRO Shares.
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Trust
Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Trust Agreements
and the Participants Agreement relating to unclear or ambiguous
instructions.
Attachment A-3
CREATION PROCESS
On any Business Day, an Authorized Participant may submit a Creation
Order, substantially in the form of EXHIBIT B to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent by the
Order Cut-Off Time (as defined below) on such Business Day (such Business Day,
"T" and any number added to T shall refer to such order day plus the number of
Business Days following such day) to create one or more MACRO Units and
concurrently exchange them into their related Tradeable Shares or, in the event
that the Authorized Participant instruct otherwise on the Creation Oder Form,
to create one or more MACRO Units without exchanging such MACRO Units to their
related Tradeable Shares. Any Creation Order that is placed after the Order
Cut-off Time shall be void and may be resubmitted on the next Business Day
based on such day's Underlying Value
In connection with the Creation Order, the Authorized Participant shall
have wired to the Trustee by 10:00 a.m. New York City time on T+1 or, in the
event that T is a Distribution Date, or the Business Day following the
Distribution Date (such date, "an X or an X+1 Date") on T+3, the following:
o a Transaction Fee for the MACRO Units being created and
concurrently exchanged into their related Tradeable Shares or, if
so instructed by the Authorized Participant, for MACRO Shares
created;
o cash equal to the aggregate Underlying Value on T of the Up-MACRO
Holding Shares being created;
o cash equal to the aggregate Underlying Value on T of the
Down-MACRO Holding Shares being created (such deposits for each
MACRO Unit, the "MACRO Unit Deposit"); and
o in the event that the Issuance Order Date is an X or an X+1 Date,
the Authorized Participant submitting such order will be required
to deposit, in addition to the MACRO Unit Deposit, a sum equal to
the Up-MACRO and Down MACRO Earned Income Accruals (each
calculated on the basis of the Applicable Reference Price of Oil
on the Issuance Order Date) for the intervening days between the
Issuance Order Date and the Issuance Date (such sum, the "MACRO
Unit Deposit Addition").
Upon the satisfaction of the conditions set forth above, the
Administrative Agent shall instruct the Trustee to allocate from the applicable
Netting Account available Trading Shares or Holding Shares, as applicable, or,
in the event that there are insufficient such shares in the applicable Netting
Account, instruct the Trustees of the Paired Holding Shares to issue Holding
Shares and, if necessary, to exchange these newly created shares to their
related Tradeable Shares and deliver such shares to the creating Authorized
Participants' accounts at the Depository Trust Company ("DTC") to satisfy all
the Creation Orders submitted, on T+1 (or on T+3 if T is an X or an X+1 Date) by
3:00 p.m. New York City time. The Trustee, upon written instruction from the
Administrative Agent on a Net Daily Basis, shall adjust the amount to be
allocated under
Attachment A-4
the Income Distribution Agreement on the next Distribution Date and enter, if
applicable, into additional Settlement Contracts associated with the MACRO
Units being created.
Attachment A-5
CREATION PROCEDURES
ISSUANCE ORDER DATE (T)
1. By the earlier of (i) thirty (30) minutes prior to the close of
trading of the Light Sweet Crude Oil Futures Contracts on the
New York Mercantile Exchange (the "NYMEX") and (ii) the
unanticipated close of trading of the Light Sweet Crude Oil
Futures Contracts on the NYMEX (such time, the "Order Cut-Off
Time"), an Authorized Person of the Authorized Participant shall
notify the Administrative Agent through the Administrative
Agent's electronic facilities that the Authorized Participant
wishes to place a Creation Order. The Authorized Person shall
provide its PIN number as identification to the Administrative
Agent. The Authorized Participant shall indicate through the
Administrative Agent's electronic facilities the following
information:
(a) the Authorized Participant's e-mail address;
(b) its PIN Number; and
(c) the number of MACRO Units to which the Creation Order
applies, which will be concurrently exchanged into their
related Tradeable Shares, unless the Authorized Participant
instruct the Administrative Agent on the Creation Oder Form
that it wishes to receive Holding Shares.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Creation Order through the Administrative Agent's
automated electronic system (and no later than 2:15 p.m. New York
City time), the Administrative Agent's automated electronic
system shall, provided such Creation Order was received in
accordance with the preceding rules, send a notice to the
Authorized Participant confirming the receipt of such Creation
Order and including a submission number (a "Submission Number")
relating to such Order.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Creation
Orders received from Authorized Participants on T prior to the
Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
efforts basis.
4. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee
and the Authorized Participant.
5. By 7:00 p.m. New York City time, but in any event, not prior to
the dissemination of the settlement price of the Light Sweet
Crude Oil Futures Contracts on such date, the Administrative
Agent shall send an authenticated electronic message to the
Authorized Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee;
Attachment A-6
(b) the MACRO Unit Deposit which will include, in the event that
the Issuance Order Date and the Issuance Date are not
consecutive days, as for example, whenever the Issuance
Order Date is a Friday, a sum equal to the Up-MACRO and Down
MACRO Earned Income Accruals (each calculated on the basis
of the Applicable Reference Price of Oil on the Issuance
Order Date) for the intervening days between the Issuance
Order Date and the Issuance Date;
(c) the MACRO Unit Deposit Addition, if applicable; and
(d) confirmation of the Authorized Participant request to
receive Holding Shares, if applicable.
ISSUANCE DATE (T+1 or T+3 if T is an X or an X+1 Date)
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Creation Order shall deposit the MACRO Unit Deposit
and, if applicable, the MACRO Unit Deposit Addition into the
Netting Accounts of each of the Holding Trusts and the
Transaction Fee into the Trustee's account using the Federal Wire
Electronic Transfer System.
2. By 10:30 a.m. New York City time, if the Trustee has not received
the MACRO Unit Deposit, the MACRO Unit Deposit Addition, if
applicable, and the Transaction Fee, the Trustee shall contact
the Authorized Participant to inquire about any missing amounts.
If the Trustee does not receive the full amount required, the
Trustee shall not be obligated to cause any issuances.
3. By 12:00 p.m. New York City time, if the Trustee has not received
the full amount of funds and a Federal Reference Number (or other
form of authenticated confirmation) for such transfer, then the
Administrative Agent shall notify the Authorized Participant of
the amount owed to the Paired Holding Trusts. The deficient
Authorized Participant shall immediately wire such amount through
the Federal Wire Electronic Transfer System or its order may be
cancelled and it will incur any costs associated with such
cancellation as determined by the Administrative Agent.
4. By 3:00 p.m. New York City time, the Trustee shall deliver the
requested Tradeable Shares or, if so instructed, the Holding
Shares to the Authorized Participant's Account at DTC using the
DWAC process.
* * *
Attachment A-7
II. EXCHANGE OF TRADEABLE SHARES AND CONCURRENT REDEMPTION OF THOSE SHARES
AS PART OF ONE OR MORE MACRO UNITS AND REDEMPTION OF PAIRED HOLDING
SHARES
Scope of Procedures and Overview
These procedures (the "Redemption Procedures") describe the processes
by which an Authorized Participant may exchange its Tradeable Shares into
Holding Shares and concurrently redeem such shares as part of one or more MACRO
Units or, if so instructed by the Authorized Participant on the Redemption Oder
Form, redeem Paired Holding Shares constituting one or more MACRO Units. The
Tradeable Shares can only be exchanged into Holding Shares and concurrently
redeemed as part of one or more MACRO Units and the Paired Holding Shares
constituting a MACRO Unit shall only be redeemed in accordance with the
Redemption Procedures set forth herein and in coordination with the Trustee and
the Administrative Agent.
The MACRO Shares may be redeemed solely in accordance with the
instructions of the Authorized Participants. The Authorized Participants shall
submit Tradeable Shares in integral multiples of 50,000 Up-MACRO Tradeable
Shares and 50,000 Down-MACRO Tradeable Shares which together will constitute one
or more MACRO Units, or if so instructed in the Redemption Order Form, submit
Paired Holding Shares which constitute one or more MACRO Units for redemption.
The Tradeable Shares will be exchanged into their respective Holding Shares and
concurrently will be redeemed, together with the Holding Shares submitted, if
any, to cash from the applicable Netting Account or, in the event that the
applicable Netting Account does not have sufficient cash, to cash and/or
Eligible Treasuries pursuant to the applicable Trust Agreement.
The MACRO Shares will be redeemed on a net basis daily with respect to
all Orders received from all Authorized Participants on such date. In the event
that the number of Up-MACRO or Down-MACRO Tradeable Shares to be redeemed
pursuant to the Redemption Orders and Exchange Orders, as applicable, on such
date exceeds the number of such Tradeable Shares to be created based on the
Creation Orders and Exchange Orders, as applicable, on such date, the Tradeable
Shares that will actually be redeemed will be equal to the total number of such
Tradeable Shares redeemed minus the total number of such Tradeable Shares
created. Similarly, in the event that the number of Up-MACRO or Down-MACRO
Tradeable Shares to be created based on the Creation Orders and the Exchange
Orders, as applicable, on such date exceeds the number of such Tradeable Shares
to be redeemed pursuant to the Redemption Orders and the Exchange Orders, as
applicable, on such date, the actual number of such Tradeable Shares to be
redeemed will be zero. Similarly, Holding Shares will be redeemed on a net
basis daily. In the event that the number of MACRO Units to be redeemed based
on the Redemption Orders on such date exceeds the number of MACRO Units to be
created pursuant to the Creation Orders on such date, the MACRO Units that will
be redeemed will be equal to the total number of MACRO Units redeemed minus the
total number of MACRO Units created. Similarly, in the event that the number of
MACRO Units to be created based on the Creation Orders on such date exceeds the
number of MACRO Units to be redeemed pursuant to the Redemption Orders on such
date, the actual number of MACRO Units that will be redeemed will equal zero.
The Exchange Order, as defined below, involves the exchange of Holding Shares
into their related Tradeable Shares or Tradeable Shares into their related
Holding Shares in integral units of 50,000 shares each. The exchange of Holding
Shares to their related Tradeable Shares or
Attachment A-8
Tradeable Shares to their related Holding Shares does not need to occur
simultaneously. The Settlement Contracts settled on each date, if any, and any
adjustment to amounts allocated under the Income Distribution Agreement, will
also be done on a net basis daily, in accordance to the daily netting of
creation and redemption of MACRO Units (such netting, collectively, the "Net
Daily Basis").
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Trust
Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Trust Agreements
and the Participants Agreement relating to unclear or ambiguous
instructions.
Attachment A-9
REDEMPTION PROCESS
On any Business Day, an Authorized Participant may submit a Redemption
Order, substantially in the form of EXHIBIT C to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent by the
Order Cut-Off Time on such Business Day (such Business Day, "T" and any number
added to T shall refer to such day plus the number of Business Days following
such day) to exchange 50,000 existing Up-MACRO Tradeable Shares and 50,000
Down-MACRO Tradeable Shares or an integral multiple thereof to their related
Holding Shares and redeem such Holding Shares as part of one or more MACRO
Units or, if so instructed on the Redemption Order Form, to redeem Paired
Holding Shares consisting of one or more MACRO Units. Any Redemption Order that
is placed after the Order Cut-off Time shall be void and may be resubmitted on
the next Business Day at such day's Underlying Value.
In connection with the Redemption Order, the Authorized Participant
shall have on deposit in its Participant Custodian Account and available to the
Trustee by 10:00 a.m. New York City time on T+1 or, if T is an X or an X+1
Date, on T+3 the following:
o the Transaction Fee for the Tradeable Shares being exchanged and
redeemed, or if applicable, for the Holding Shares being
redeemed;
o 50,000 or an integral multiple thereof of Up-MACRO Tradeable
Shares and Down-MACRO Tradeable Shares, which shall be exchanged
into their related Holding Shares and concurrently redeemed as
part of one or more MACRO Units or, if applicable, Paired Holding
Shares which constitute one or more MACRO Units; and
o the Redemption Cash Component, if needed, (such amount, the
"Redemption Cash Component Amount"), which is an amount equal to
the excess of the purchase price of the Eligible Treasuries
delivered by the Trustee to the Authorized Participant over the
funds to which the Authorized Participant is eligible due to
minimum denominations on the Eligible Treasuries on deposit in
the Paired Holding Trusts.
Upon the satisfaction of the conditions set forth above, the Trustee,
on behalf of the applicable MACRO Trust and as instructed by the Administrative
Agent, shall deliver cash from the applicable Netting Account or, in the event
that the amount of cash in the applicable Netting Account is insufficient,
deliver cash and/or Eligible Treasuries to the redeeming Authorized Participant
to fill the Redemption Order on T+1 (or on T+3 if T is an X or an X+1 Date) by
3:00 p.m. New York City time to an account designated by the Authorized
Participant and, as instructed by the Administrative Agent on a Net Daily Basis,
adjust the notional amount of the Income Distribution Agreement and, if
required, cancel the Settlement Contracts associated with the MACRO Units being
redeemed.
Attachment A-10
REDEMPTION PROCEDURES
REDEMPTION ORDER DATE (T)
1. By the Order Cut-Off Time, an Authorized Person of the Authorized
Participant shall notify the Administrative Agent through the
Administrative Agent's electronic facilities that the Authorized
Participant wishes to place a Redemption Order. The Authorized
Participant shall indicate through the Administrative Agent's
electronic facilities the following information:
(a) the Authorized Participant's e-mail address;
(b) its PIN Number; and
(c) the number of MACRO Units to which the Redemption Order
applies and, if applicable, whether the Authorized
Participant wishes to deliver Paired Holding Shares to be
redeemed, and the CUSIP Numbers of the MACRO Shares
submitted.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Redemption Order through the Administrative Agent's
automated electronic system (and no later than 2:15 p.m. New York
City time), the Administrative Agent's automated electronic
system shall, provided such Redemption Order was received in
accordance with the preceding rules, send a notice to the
Authorized Participant confirming the receipt of such Redemption
Order and including a Submission Number relating to such Order.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Redemption
Orders received from Authorized Participants on T prior to the
Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
efforts basis.
4. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee or
any Authorized Participant redeeming its MACRO Shares.
5. By 7:00 p.m. New York City time, but in no event, not prior to
the dissemination of the settlement price of the Light Sweet
Crude Oil Futures Contracts on such date, the Administrative
Agent shall send an authenticated electronic message to the
Authorized Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee;
(b) the number of Up-MACRO Tradeable Shares and Down MACRO
Tradeable Shares that the Authorized Participant will
deliver, which number shall be in integral multiple of
50,000 or, if so instructed, the Paired Holding Shares to be
submitted;
Attachment A-10
(c) the Redemption Cash Component, if any.
REDEMPTION DATE (T+1 or T+3 if T is an X or an X+1 Date)
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Redemption Order shall deposit (i) the Transaction
Fee into the Trustee's account and the Redemption Cash Component,
if any, into the Distribution Account of the applicable Holding
Trust as designated by the Trustee using the Federal Wire
Electronic Transfer System, (ii) the Up-MACRO Tradeable Shares
and the Down-MACRO Tradeable Shares in integral multiples of
50,000 each or, if applicable, the Paired Holding Shares, which
will constitute one or more MACRO Units into the applicable
Netting Account using the DWAC process of the DTC system.
2. By 10:30 a.m. New York City time, if the Trustee has not received
the requisite number of MACRO Shares and the cash amount as
designated by the Administrative Agent, the Trustee shall contact
the Authorized Participant to inquire about any missing
securities or funds. If the Trustee does not receive the
requisite number and type of such securities or the designated
cash amount, the Trustee shall not be obligated to make any
redemption.
3. By 12:00 p.m. New York City time, if the Trustee has not received
the requisite number of MACRO Shares and the full amount of funds
as designated by the Administrative Agent, the Administrative
Agent shall notify the Authorized Participant of the number and
type of the MACRO Shares that it needs to deposit and/or the
missing amount required. The deficient Authorized Participant
shall immediately transfer such shares and/or cash to the Trustee
or its order may be cancelled and the Authorized Participant
shall incur any costs associated with such cancellation as
determined by the Administrative Agent.
4. By 3:00 p.m. New York City time, the Trustee, pursuant to the
instructions of the Administrative Agent, shall deliver cash from
the applicable Netting Account or, in the event that there is
insufficient cash in the Netting Account, deliver cash and/or
Eligible Treasuries pursuant to the applicable Trust Agreement to
the account designated by the Authorized Participant using the
Federal Wire Electronic Transfer System. The amount delivered by
the Up-MACRO Holding Trustee and the Down-MACRO Holding Trustee
will be equal to the MACRO Unit Deposit on the Redemption Date
plus, if applicable, the MACRO Unit Deposit Addition.
* * *
Attachment A-11
III. EXCHANGE OF HOLDING SHARES TO THEIR RESPECTIVE TRADEABLE SHARES
AND EXCHANGE OF TRADEABLE SHARES TO THEIR RESPECTIVE HOLDING
SHARES
Scope of Procedures and Overview
These procedures (the "Exchange Procedures") describe the processes by
which an Authorized Participant (i) may exchange Up-MACRO Holding Shares or
Down-MACRO Holding Shares or both, into their related Tradeable Shares or (ii)
may exchange Up-MACRO Tradeable Shares or Down-MACRO Tradeable Shares or both,
into their related Holding Shares. The Tradeable Shares can only be exchanged
into Holding Shares and, the Holding Shares shall only be exchanged into
Tradeable Shares in connection with the instructions set forth herein and in
coordination with the Trustee and the Administrative Agent.
The Holding Shares may be exchanged into their respective Tradeable
Shares and the Tradeable Shares may be exchanged into their respective Holding
Shares solely by the instructions of Authorized Participants. In accordance with
this Participants Agreement, the Administrative Agent may cause the Trustee to
create additional Tradeable Shares in units of 50,000 Up-MACRO Tradeable Shares
or 50,000 Down-MACRO Tradeable Shares and to exchange Tradeable Shares to their
respective Holding Shares in units of 50,000 Up-MACRO Tradeable Shares or 50,000
Down-MACRO Tradeable Shares. The exchange of Up-MACRO Tradeable Shares or
Up-MACRO Holding Shares and Down-MACRO Tradeable Shares or Down-MACRO Holding
Shares to their respective MACRO Shares does not need to occur simultaneously.
Up-MACRO Tradeable Shares may be created independently by the deposit of
Up-MACRO Holding Shares into the Up-MACRO Tradeable Trust and Down-MACRO
Tradeable Shares may be created independently by the deposit of Down-MACRO
Holding Shares into the Down-MACRO Tradeable Trust. Similarly, Up-MACRO Holding
Shares may be exchanged independently by the deposit of Up-MACRO Tradeable
Shares into the Up-MACRO Tradeable Trust and Down-MACRO Holding Shares may be
exchanged independently by the deposit of Down-MACRO Tradeable Shares into the
Down-MACRO Tradeable Trust.
The MACRO Shares will be exchanged on a net basis daily with respect to
all Orders received from all Authorized Participants on such date. In the event
that the number of Up-MACRO or Down-MACRO Tradeable Shares to be created based
on the Creation Orders and the Exchange Orders, as applicable, on such date
exceeds the number of such Tradeable Shares to be redeemed pursuant to the
Redemption Orders and the Exchange Orders, as applicable, on such date, the
newly created Tradeable Shares that will be issued will be equal to the total
number of such Tradeable Shares created minus the total number of such Tradeable
Shares redeemed. Similarly, in the event that the number of Up-MACRO or
Down-MACRO Tradeable Shares to be redeemed pursuant to the Exchange Orders or
the Redemption Orders, as applicable, on such date exceeds the number of such
Tradeable Shares to be created based on the Creation Orders and the Exchange
Orders, as applicable, on such date, the actual number of such Tradeable Shares
to be redeemed will be equal to the total number of such Tradeable Shares
redeemed minus the total number of such Tradeable Shares created (such netting,
collectively, the "Net Daily Basis").
Attachment A-12
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Trust
Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Trust Agreements
and the Participants Agreement relating to unclear or ambiguous
instructions.
Attachment A-13
EXCHANGE PROCESS
On any Business Day, an Authorized Participant may submit an Exchange
Order, substantially in the form of EXHIBIT D to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent to exchange
Holding Shares to their related Tradeable Shares or to exchange Tradeable Shares
to their related Holding Shares by the Order Cut-Off Time on such Business Day
(such Business Day, "T" and any number added to T shall refer to such day plus
the number of Business Days following such day). In connection with this
Exchange Order, the Authorized Participant shall deliver to the Trustee by 10:00
a.m. New York City time on T+1 the following:
o Up-MACRO Holding Shares or Down-MACRO Holding Shares, in integral
multiple of 50,000 shares of each, for exchange into their
respective Tradeable Shares, if applicable; and
o Up-MACRO Tradeable Shares or Down-MACRO Tradeable Shares, in
integral multiple of 50,000 shares of each, for exchange into
their respective Holding Shares, if applicable.
Upon the satisfaction of the conditions set forth above, the applicable
Trustee, as instructed by the Administrative Agent, shall (i) deliver from the
applicable Netting Account or, in the event that there are insufficient required
Tradeable Shares in that Netting Account, cause the applicable Tradeable Trust
to issue Tradeable Shares to the designated account of the Authorized
Participant at DTC to fulfill the Exchange Order on T+1 by 3:00 p.m. New York
City time or (ii) deliver from the Netting Account or, in the event that there
are insufficient required Holding Shares in that Netting Account, cause the
applicable Trust to deliver from the applicable Securities Account Holding
Shares to the designated account of the Authorized Participant at DTC to fulfill
the Exchange Order on T+1 by 3:00 p.m. New York City time.
Attachment A-14
EXCHANGE PROCEDURES
EXCHANGE T (EXCHANGE ORDER DATE)
1. By the Order Cut-Off Time, an Authorized Person of the Authorized
Participant shall notify the Administrative Agent through the
Administrative Agent's electronic facilities that the Authorized
Participant wishes to place an Exchange Order. The Authorized Person
shall provide its PIN number as identification to the Administrative
Agent. The Authorized Participant shall indicate through the
Administrative Agent's electronic facilities the following
information:
(a) the Authorized Participant's e-mail address;
(b) its PIN Number;
(c) the number and type of Holding Shares being exchanged, if any;
(d) the number and type of Tradeable Shares being exchanged, if any;
and
(e) the CUSIP numbers of the MACRO Shares being tendered.
2. Within fifteen (15) minutes of receipt of the Authorized Participant's
Exchange Order through the Administrative Agent's automated electronic
system (and no later than 2:15 p.m. New York City time), the
Administrative Agent's automated electronic system shall, provided
such Exchange Order was received in accordance with the preceding
rules, send a notice to the Authorized Participant confirming the
receipt of such Exchange Order and including a Submission Number
relating to such Order.
3. By 3:00 p.m. New York City time, the Administrative Agent shall send
to the Trustee an electronic file indicating the Exchange Orders
received from Authorized Participants on T prior to the Order Cut-Off
Time (such file, the "Order File"). The transmission of the Order File
shall be conducted on a best efforts basis.
4. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee and the
Authorized Participant.
5. By 7:00 p.m. New York City time, but in no event, not prior to the
dissemination of the settlement price of the Light Sweet Crude Oil
Futures Contracts on such date, the Administrative Agent shall send an
authenticated electronic message to the Authorized Participant, with a
copy to the Trustee, indicating:
(a) the number and type of Holding Shares to be tendered, if any, to
the Authorized Participant and the CUSIP numbers of the shares
which will be delivered; and
Attachment A-15
(b) the number and type of Tradeable Shares to be tendered, if any,
to the Authorized Participant and the CUSIP numbers of the shares
which will be delivered.
EXCHANGE T+1 (EXCHANGE DATE)
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting an Exchange Order shall have delivered to the Netting
Account of the applicable Trustee the MACRO Shares to be exchanged.
2. By 10:30 a.m. New York City time, if the Trustee has not received the
MACRO Shares to be exchanged, the Trustee shall contact the Authorized
Participant to inquire about any missing MACRO Shares.
3. By 12:00 p.m. New York City time, if the Trustee has still not
received the required MACRO Shares, then the Trustee shall notify the
Authorized Participant of the type and number of the MACRO Shares
missing. The deficient Authorized Participant must immediately
transfer such shares or its order may be cancelled and the Authorized
Participant shall incur all costs associated with such cancellation as
determined by the Administrative Agent.
4. By 3:00 p.m. New York City time, the Trustee shall, in accordance with
the instructions of the Administrative Agent, deliver to the
Authorized Participant's account at DTC, the Holding Shares and/or the
Tradeable Shares as ordered by it in the Exchange Order.
* * *
Attachment A-16
