EXHIBIT 4.3
FORM OF CLAYMORE MACROSHARES OIL
PARTICIPANTS AGREEMENT
This Claymore MACROshares Oil Participants Agreement (the "Participants
Agreement"), dated as of [ ], 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 and
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 Trust Trustee," respectively)
(ii) as trustee of the Claymore MACROshares Oil Down Holding Trust (the
"Down-MACRO Holding Trust" and the "Down-MACRO Holding Trust 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 Trust Trustee," respectively), and
(iv) as trustee of the Claymore MACROshares Oil Down Tradeable Trust (the
"Down-MACRO Tradeable Trust" and the "Down-MACRO Tradeable Trust 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 Claymore MACROshares Oil Up Holding Trust Agreement,
dated as of [ ], 2006 (the "Up-MACRO Holding Trust Agreement"), among the
Depositor, the Up-MACRO Holding Trustee, the Administrative Agent and Claymore
Securities, Inc., in its capacity as the Marketing Agent of the MACRO Shares
(the "Marketing Agent"), 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 Claymore
MACROshares Oil Down Holding Trust Agreement, dated as of [ ], 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 Agent, 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 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 Up-MACRO Holding Share or Down-MACRO
Holding Share, a "Holding Share").
Pursuant to the Claymore MACROshares Oil Up Tradeable Trust Agreement,
dated as of [ ], 2006 (the "Up-MACRO Tradeable Trust Agreement"), among the
Depositor, the Up-MACRO Tradeable Trustee, the Administrative Agent and the
Marketing Agent, 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 Claymore MACROshares Oil Down Tradeable Trust Agreement,
dated as of [ ], 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 Agent, 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
interest 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 [ ], 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,
as declared effective by the Securities and Exchange Commission ("SEC") on
[ ], 2006 (as the same may be amended from time to time thereafter, the
"Up-MACRO Registration Statement") and (ii) a Prospectus, dated as of [ ],
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-[ ], as declared effective
by the SEC on [ ], 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 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
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more MACRO Units for cash and/or Treasuries (as defined in the Holding Trust
Agreements) 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 redeem 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 redemption 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 applicable Tradeable Trust. Accordingly,
Up-MACRO Tradeable Shares may be redeemed 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 redeemed 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,
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 Creation Order, a Redemption Order or an
Exchange Order (as defined, herein, in Sections 3, 4 and 5, 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).
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 or to create one or more
MACRO Units and concurrently exchange them into Tradeable Shares, Authorized
Participants must
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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 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 4 of this Participants Agreement and the procedures described in
Attachment A.II hereto (the "Exchange Procedures"), as each may be amended,
modified or supplemented from time to time.
(c) To redeem Holding Shares for cash and/or Treasuries upon a
deposit of Holding Shares and/or to exchange Tradeable Shares into Holding
Shares and concurrently redeem such Holding Shares as part of one or more MACRO
Units, Authorized Participants must follow the procedures for redemption set
forth in Section 5 of this Participants Agreement and the procedures described
in Attachment A.III hereto (the "Redemption Procedures" and, together with the
Creation Procedures and the Exchange 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 and warrants and covenants
the following:
(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 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 or Tradeable Shares in any state or
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
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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 defined in Sections 3, 4 and
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"), whether or not subject to Title I of ERISA, including without
limitation governmental plans, foreign pension plans and church plans, (ii)
"plan" (as defined in section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended, (the "Code"), whether or not 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 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 or to create
one or more MACRO Units and concurrently exchange all or part of such MACRO
Units into Tradeable Shares 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 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 shares into Tradeable Shares, which are not related 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 or to create a
MACRO Unit and concurrently exchange such MACRO Unit into Tradeable Shares (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
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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 Authorized Participant or
Authorized Participants have deposited an insufficient amount of money with the
Trustee, (ii) if the Depositor determines that such Creation Order would have
adverse tax or securities law consequences for either of the Paired Holding
Trusts, the Tradeable Trusts or the holders of any of the MACRO Shares, (iii)
the acceptance or fulfillment of which would, in the opinion of counsel to the
Depositor acceptable to the Trustee, be unlawful, (iv) 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 its Administrative Agent 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 Paired Holding Trusts to issue additional Paired
Holding Shares or one, or both, of the Tradeable Trusts, as applicable, 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 Purchase Order.
(d) The Administrative Agent may, in its sole discretion, and
will when so directed by the Depositor, suspend the right of creation (i) for
any period during which the American Stock Exchange is closed other than for
customary weekend or holiday closings, or trading is suspended or restricted,
(ii) for any period during which an emergency exists as a result of which
delivery, disposal or evaluation of the Treasuries is not reasonably
practicable, (iii) for any period during which, such creation will cause one of
the Tradeable Trusts to hold fifty percent or less of the outstanding related
Holding Shares; and or (iv) for such other period as the Depositor determines to
be necessary for the protection of the holders 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 or
postponement.
Section 4. Exchange Order.
(a) All orders to exchange Holding Shares into their related
Tradeable Shares or exchange Tradeable Shares for 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,
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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 "Exchane 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 Exchange Order is attached
hereto as EXHIBIT C (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 Authorized Participant or
Authorized Participants have deposited an insufficient number of shares with the
Trustee, (ii) if the Depositor determines that such Exchange Order would have
adverse tax or securities law consequences for either of the MACRO Trusts or the
holders of any of the MACRO Shares, (iii) the acceptance or fulfillment of which
would, in the opinion of counsel to the Depositor acceptable to the Trustee, be
unlawful or (iv) 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 Redemption Order.
(d) The Administrative Agent may, in its sole discretion, and
will when so directed by the Depositor, suspend the right of exchange (i) for
any period during which the American Stock Exchange is closed other than for
customary weekend or holiday closings, or trading is suspended or restricted,
(ii) for any period during which an emergency exists as a result of which
delivery, disposal or evaluation of Holding or Tradeable Shares is not
reasonably practicable, (iii) for any period during which, such exchange will
cause one of the Tradeable Trusts to hold fifty percent or less of the
outstanding related Holding Shares; and or (iv) for such other period as the
Depositor determines to be necessary for the protection of the holders 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 or postponement.
Section 5. Redemption Order.
(a) Except as otherwise provided for herein, all orders to
redeem one or more MACRO Units upon a deposit of Paired Holding Shares
consisting of one or more MACRO Units into cash and/or Treasuries and/or
exchange Tradeable Shares and concurrently redeem such shares as part of one or
more MACRO Units upon a deposit of Tradeable Shares shall be
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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 Redemption Procedures. The Administrative Agent
and the Depositor may issue additional or other procedures from time to time
relating to the manner of redeeming of Paired Holding Shares consisting of one
or more MACRO Units or exchanging Tradeable Shares and concurrently redeeming
such shares as part of a MACRO-Unit 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 redeem Paired Holding Shares and/or
exchange Tradeable Shares into Holding Shares and concurrently redeem such
shares as part of a MACRO Unit upon a deposit of the related Holding Shares (a
"Redemption Order," and, together with a Creation Order and an Exchange 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
Orders shall be a binding obligation of the Authorized Participant that placed
such Order. A form of Redemption Order is attached hereto as EXHIBIT D (an
"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 Authorized Participant or
Authorized Participants have deposited an insufficient number of shares with the
Trustee, (ii) if the Depositor has determined and advised the Trustee and the
Administrative Agent that such Redemption Order would have adverse tax
consequences to one or more of the MACRO Trusts or any holders of the MACRO
Shares, (iii) if the acceptance of which would, in the opinion of counsel to the
Depositor, be unlawful, (iv) if the trustee of one of the Paired Holding Trusts
notifies the trustee of the paired trust that the related Redemption Order will
be rejected by it, by the Depositor or by its Administrative Agent or (v) if
circumstances outside the control of the Trustee, the Depositor or the
Administrative Agent make it impractical or not feasible to process a redemption
of Holding Shares and/or an exchange of Tradeable Shares and concurrently
redeeming such shares as part of one or more MACRO Units. 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 may, in its sole and absolute
discretion, and will when so directed by the Depositor suspend the right of
redeem or postpone the applicable settlement date, (i) for any period during
which the American Stock Exchange is closed other than for customary weekend or
holiday closings, or trading is suspended or restricted, (ii) for any period
during which an emergency exists as a result of which delivery of cash and/or
Treasuries, or the redemption of Holding or Tradeable Shares are not reasonably
practicable, (iii) for any period during which, such redemption will cause the
one or both of the Tradeable Trusts to hold
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fifty percent or less of their related outstanding Holding Shares, (iv) if such
redemption would cause the Up-MACRO or Down-MACRO Investment Amount to equal
less than 10 million dollars or (v) for such other period as the Depositor
determines to be necessary for the protection of any of the MACRO Trusts or the
holders 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 6. Transfers.
(a) Any MACRO Share or Treasuries to be transferred in
connection with any Order shall be transferred between that Authorized
Participant's designated account at DTC and the Securities Account of the
applicable MACRO Trust in accordance with the Procedures. The Authorized
Participant shall be responsible for all costs and expenses relating to or
connected with any transfer of MACRO Shares or Treasuries between its designated
account and the Securities Account of the applicable MACRO Trust. Any transfer
of cash in connection with the Orders and Quarterly Distributions shall be
transferred between a bank account designated by that Authorized Participant and
the Distribution Account of the applicable MACRO Trust in accordance with the
Procedures. Any transfers 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 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 Trustee with respect to any MACRO Shares, Treasuries
and/or cash held in each Authorized Participant's Participant Custodian Account
and that such 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 one
thousand dollars ($1,000) for the creation of one or more MACRO Units and an
additional five hundred dollars ($500) fee for an exchange of one of the Paired
Holding Shares to its related Tradeable Shares or one thousand dollars ($1,000)
for the exchange of both Paired Holding Shares to their related Tradeable
Shares. The Creation Transaction Fee may be adjusted from time to time in
accordance with Section 7(d) of this Participants Agreement. A single Creation
Transaction Fee shall be due for each Creation Order from a single Authorized
Participant that relates to creation of multiple MACRO Units or to creation of
multiple MACRO Units and a concurrent exchange of such shares into Tradeable
Shares.
(b) In connection with each Exchange Order, the Authorized
Participant shall pay to the Trustee a fee (such fee, the "Exchange Transaction
Fee") for such exchange. The initial five hundred dollars ($500) for each
exchange of Holding Shares to their related Tradeable
9
Shares or exchange of Tradeable Shares to their related Holding Shares. The
Exchange Transaction Fee may be adjusted from time to time in accordance with
Section 7(d) of this Participants Agreement. A single Exchange Transaction Fee
shall be due for each Exchange Order from a single Authorized Participant that
relates to exchange of multiple Holding Shares or Tradeable Shares to their
related Tradeable Shares.
(c) 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 and the
Exchange Transaction Fee, the "Transaction Fee") for such redemption of shares.
The initial Redemption Transaction Fee, for each redemption of the Paired
Holding Shares consisting of one or more MACRO Units to cash and/or Treasuries
will be one thousand dollars ($1,000) and concurrent exchange of one of the
Tradeable Shares into their related Holding Shares as part of the Redemption
Order will incur an additional fee of five hundred dollars ($500). The
Redemption Transaction Fee may be adjusted from time to time in accordance with
Section 7(d) 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.
(d) 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, redemption or exchange, 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, the Exchange Order or the
Redemption Order). Promptly after agreeing to and prior to implementing such
change, the Trustee shall file [a From 8-K] with the Commission to notify of 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 such notice. 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 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
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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 on the second Business Day 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 each 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 Holding Shares, Tradeable Shares, cash or Treasuries, as
applicable, and (ii) such Holding Shares, Tradeable Shares, cash or Treasuries,
as applicable, 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 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 (i) any creation of one or more MACRO
Units or the creation of one or more MACRO Units and concurrently exchanging
such shares into Tradeable Shares, (ii) redemption of MACRO Units into cash
and/or Treasuries and/or any exchange of Tradeable Shares into their related
Holding Shares and concurrently redeeming such shares as part of a MACRO Unit or
(iii) any exchange of Tradeable Shares into their related Holding Shares or any
exchange of Holding Shares into their related Tradeable Shares, 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 obligation 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 their
related Tradeable Trusts, 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.
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
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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, (i) without the prior written consent of the Depositor, 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
furnish or cause to be furnished to any person or display or publish any
information or material relating to the Paired Holding Shares, the Tradeable
Shares, any AP Indemnified Person, the Paired Holding Trusts or the Tradeable
Trusts that is not consistent with the 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") and information included in the Prospectuses (a "Participant
Free Writing Prospectus", and together with Rule 134 Information, the
"Participant Written Communication").
(c) Each Authorized Participant severally represents, warrants
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 Participant by the Trustee, the Administrative Agent and the
Depositor expressly for use therein, which information was not
corrected by information subsequently
15
filed with the Commission 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 any 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 any requirements for "Free Writing Prospectus" (as
defined under Rule 405 under the Securities Act) under the Securities
Act; and
(iv) each Participant Written Communication 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, the Depositor and
the Authorized Participant, such delivery shall occur no later than the
close of business for the Depositor (New York City 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 Depositor (New York City 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 time 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.
(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
16
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 and (ii) 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 of the Securities Act, or (iii) incorporated 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 of
the Securities Act, to furnish to each Authorized Participant, an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Depositor, addressed
to each Authorized Participant and dated such dates substantially in the form of
Exhibit F attached hereto.
(d) to deliver letters from the MACRO Trust's accountants,
dated as of the date of such events below, that are addressed to each Authorized
Participant, 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) incorporated by reference of new
financial information into the Registration Statements or the Prospectuses; and
(e) [to cause 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 such
MACRO Trusts file a quarterly or annual report pursuant to Section 13 or 15(d)
of the Exchange Act (including the information contained in such report),
17
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 for 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 Securities
Exchange Act of 1934, as amended, the Trustee 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
Securities Exchange Act of 1934, as amended, the Trustee 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
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
18
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 an 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 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) day following the deposit of such mail into the United 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
19
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 AND TRUST COMPANY
Attention: [ ]
Telephone: ( )
Facsimile: ( )
If to the Depositor:
MACRO Securities Depositor, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Telephone: (000) 000-0000
Facsimile: ( )
20
If to the Administrative Agent:
CLAYMORE SECURITIES, INC.
Attention: [ ]
Telephone: ( )
Facsimile: ( )
If to each Authorized Participant:
The information 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 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.
21
(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 article and section 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
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."
22
[Signature Page Follows]
23
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 AND TRUST COMPANY
not in its individual capacity, but solely as
the Trustee for the Paired Holding Trusts and
the Tradeable Trusts
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address:
----------------------------------
Telephone:
----------------------------------
Facsimile:
----------------------------------
CLAYMORE SECURITIES, INC.
not in its individual capacity, but solely as
Administrative Agent of the Paired Holding
Trusts and the Tradeable Trusts
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address:
----------------------------------
Telephone:
----------------------------------
Facsimile:
----------------------------------
MACRO SECURITIES DEPOSITOR, LLC
Depositor of the Paired Holding Trusts and
the Tradeable Trusts
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: [ ]
[Name of Authorized Participant]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
SCHEDULE I
[LIST OF AUTHORIZED PARTICIPANTS]
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 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:
------------------------------ ------------------------------
Signature: Signature:
-------------------------- --------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
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.
A-1
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-2
EXHIBIT B
FORM OF
CLAYMORE MACROSHARES OIL
CREATION ORDER
Authorized Participant: (the "Authorized Participant")
-------------------------
Date:
--------------------
Submission Number:
---------------------------------
PIN Number:
-------------------------------
Number of MACRO Units to be Issued:
Does the Authorized Participant wants its Up-MACRO Holding Shares to be
exchanged into Up-MACRO Tradeable Shares?
------- -------
Yes No
The Number of Up-MACRO Holding Shares to be exchanged into Up-MACRO Tradeable
Shares:
----------------------
Does the Authorized Participant wants its Down-MACRO Holding Shares to be
exchanged into Down-MACRO Tradeable Shares?
------- -------
Yes No
The Number of Down-MACRO Holding Shares to be exchanged into Down-MACRO
Tradeable Shares:
----------------------
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
Purchase 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.
B-1
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 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 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 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 Shares Tradeable 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.
C-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 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.
C-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:
---------------------------------------
C-3
EXHIBIT D
FORM OF
CLAYMORE MACROSHARES OIL REDEMPTION ORDER
Authorized Participant: (the "Authorized Participant")
------------------------
Date:
-----------------------------
Submission Number:
---------------------------------
PIN Number:
-------------------------------
Number of MACRO Units to be Redeemed:
----------------
Number of Up-MACRO Holding Shares to be Redeemed:
(Number) (check if not applicable)
------------------ ---------
Number of Down-MACRO Holding Shares to be Redeemed:
(Number) (check if not applicable)
------------------ ---------
Up-MACRO Tradeable Shares to be Exchanged into Up-MACRO Holding Shares and
immediately redeemed:
(Number) (check if not applicable)
------------------ ---------
The Number of Up-MACRO Tradeable Shares to be exchanged into Up-MACRO Holding
Shares and immediately to be redeemed:
(Number) (check if not applicable)
------------------ ---------
CUSIP Numbers:
------------------------------------ ------------------------------------
Up-MACRO Holding Shares Down-MACRO Holding Shares
------------------------------------- ------------------------------------
Up-MACRO Tradeable Shares Down -MACRO Tradeable 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 "Participants Agreement"), among the
Authorized Participant, the Trustee, the Administrative Agent and the Depositor
named therein.
D-1
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.
D-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:
---------------------------------------
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 15(d) of the Participants Agreement (the "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 and 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) the Prospectuses do 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; 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
E-1
Authorized Participant and furnished in writing by or
on behalf of any Authorized 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
E-2
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, 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 obligations 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 (the "NASD");
(n) the Depositor has all necessary licenses,
authorizations, consents and approvals and has made
all necessary filings required under any federal,
state, local or foreign law, regulation or rule, and
has obtained all
E-3
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 threatened or contemplated to which the Depositor
is or would be a party or of which any of their
respective properties are or would be subject at law
or in equity, before or by any federal, state, local
or foreign governmental or regulatory commission,
board, body, authority or agency;
(p) [ ], 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
subsequent 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;
(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;
E-4
(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.
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
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/her] genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first
set forth above.
By:
-----------------------------------------
Name:
Title:
E-6
EXHIBIT F
FORM OF THE DEPOSITOR'S COUNSEL OPINION
F-1
ATTACHMENT A
PROCEDURES FOR THE
CLAYMORE MACROSHARES OIL TRUSTS
I. CREATION OF PAIRED HOLDING SHARES AND CREATION OF PAIRED HOLDING SHARES AND
CONCURRENT EXCHANGE TO TRADEABLE 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 or part of the Holding Shares created into
their respective Claymore MACROshares Oil Up Tradeable Shares (the "Up-MACRO
Tradeable Shares") and/or 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 and
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 [ ], 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 the Marketing Agent (in such capacity, the
"Marketing Agent") and MACRO Securities Depositor, LLC (the "Depositor"), (ii)
the Claymore MACROshares Oil Down Holding Trust Agreement,
Attachment A-1
dated as of [ ], 2006 (the "Down-MACRO Holding 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 Agent and the Depositor, (iii) the Claymore MACROshares Oil Up
Tradeable Trust Agreement, dated as of [ ], 2006 (the "Up-MACRO Tradeable
Trust Agreement"), among the Down-MACRO Holding Trustee, the Administrative
Agent, the Marketing Agent and the Depositor or (iv) the Claymore MACROshares
Oil Down Tradeable Trust Agreement, dated as of [ ], 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 "Trusts Agreements"), among the Down-MACRO Holding Trustee,
the Administrative Agent, the Marketing Agent 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 Holding Shares may be exchanged into their respective
Tradeable Shares concurrently with the creation of the Paired 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. The creation 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
applicable Tradeable Trust.
The MACRO Shares will be created on a net daily basis. In the event
that the number of MACRO Units to be created based on the Creation Orders of
such date exceeds the number of MACRO Units to be redeemed pursuant to the
Redemption Orders on such date, the newly MACRO Units that will be issued will
be equal to the number of MACRO Units created minus the number of MACRO Units
redeemed. In contrast, 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 Settlement Contracts
created on each date, if any, any adjustment to amounts allocated under the
Income Distribution Agreement and the purchase of new Treasuries, if any, will
also be done on a net daily basis, in accordance to the daily netting of
creation and redemption of MACRO Units. 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, if applicable, of 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 Tradeable Shares that
will be issued will be equal to the number of such Tradeable Shares created
minus the number of such Tradeable Shares redeemed. In contrast, 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
Attachment A-2
Exchange Orders, if applicable, on such date, the actual number of such
Tradeable Shares to be issued will be zero (such netting, collectively, the "Net
Daily Basis").
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 for an
Authorized Participant. This will allow an Authorized Participant through its
Authorized Person(s) to place Creation Order(s), Exchange Order(s) or Redemption
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 to create
one or more MACRO Units or to create one or more MACRO Units and concurrently
exchange all or some of the such Holding Shares to their related Tradeable
Shares 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).
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 the following:
o a Transaction Fee for the MACRO Units and the Tradeable Shares, if
applicable, being created;
o cash equal to the Aggregate Underlying Value on T of the Up-MACRO
Holding Shares being created; and
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").
Upon the satisfaction of the conditions set forth below, the Paired
Holding Trusts shall issue and deliver MACRO Units to the creating Authorized
Participant in accordance to the Creation Order prior to 3:00 p.m. New York City
time on T+1. In the event that the Creation Order includes a concurrent exchange
of all or part of the newly created Holding Shares into their related Tradeable
Shares, the Tradeable Trusts shall issue and deliver Tradeable Shares to the
creating Authorized Participant in accordance to the Creation Order prior to
3:00 p.m. New York City time on T+3. The Trustee shall transfer to the
Authorized Participant's account at The Depository Trust Company ("DTC") the
number and type of MACRO Shares ordered and paid for by the Authorized
Participant. The Trustee, upon written instruction from the Administrative Agent
on a Net Daily Basis, shall adjust the amount to be allocated under the Income
Distribution Agreement in the next Distribution Date and enter, if applicable,
into additional Settlement Contracts associated with the MACRO Units being
created.
Attachment A-4
CREATION PROCEDURES
CREATION T (ORDER DATE)
1. By the earlier of (i) 2:00 p.m. New York City time or (ii) if
the close of trading of the Light Sweet Crude Oil Futures
Contract on the New York Mercantile Exchange (the "NYMEX") is
earlier than 2:30 p.m. New York City time, thirty (30) minutes
prior to the close of trading of the Light Sweet Crude Oil
Futures Contract 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 name;
(b) its PIN Number;
(c) the number of MACRO Units requested; and
(d) whether the Authorized Participant wishes to exchange
its newly created Up-MACRO Holding Shares, and the
number of shares he wishes to exchange if any in
integral of 50,000 shares, into Up-MACRO Tradeable
Shares, and whether it wishes to exchange its newly
created Down-MACRO Holding Shares, and the number of
shares he wants to exchange, if any, in integral of
50,000 shares, into Down-MACRO Tradeable Shares (the
"Concurrent Tradeable Shares Order").
Any deposit of cash with the intention of concurrently
exchanging some or all of the newly created Paired Holding
Shares into Tradeable Shares shall occur in accordance with
the procedures set forth herein and the Authorized Participant
shall receive its Holding Shares, if any, on T+1 and its
Tradeable Shares, if any, on T+3.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Creation Order through its electronic facilities
(and no later than 2:15 New York City time), the
Administrative Agent's automated electronic system shall send
a notice to the Authorized Participant confirming
electronically the receipt of such Creation Order and generate
a submission number (a "Submission Number") relating to such
Creation Order and communicate that number to the Authorized
Participant.
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
Attachment A-5
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. If the Administrative Agent has received the Authorized
Participant's Creation Order Form on time and in accordance
with the preceding rules, then by 4:00 p.m. New York City time
the Administrative Agent shall return to the Authorized
Participant and the Trustee via fax (or electronic mail) a
copy of the Creation Order Form submitted, marking it
"Affirmed." If the Administrative Agent has not received the
Authorized Participant's Creation Order Form on time and in
accordance with the preceding rules, then by 4:00 p.m. New
York City time the Administrative Agent shall return to the
Authorized Participant and the Trustee via fax (or electronic
mail) a copy of the Creation Order Form submitted, marking it
"Cancelled."
5. 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.
6. By 7:00 p.m. New York City time, the Administrative Agent
shall send an authenticated electronic message to the
Authorized Participant, with a copy to the Trustee,
indicating:
(a) the Transaction Fee;
(b) the MACRO Unit Deposit; and,
(c) the Distribution Accounts information for each
Holding Trust.
CREATION T+1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Creation Order shall deposit the MACRO Unit
Deposit into the Distribution Accounts using the Federal Wire
Electronic Transfer System and provide to the Administrative
Agent and the Trustee the appropriate Federal Reference Number
for such transaction.
2. By 10:30 a.m. New York City time, if the Trustee has not
received the full amount of funds owed to the Paired Holding
Trust for the MACRO Units, the Trustee shall contact the
Authorized Participant to inquire about any missing amounts.
If the Trustee does not receive the full amount of the MACRO
Unit Deposits, the Trustee shall not be obligated to make 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
Attachment A-6
Federal Wire Electronic Transfer System and provide to the
Administrative Agent and the Trustee the appropriate Federal
Reference Number for such transaction or its order shall be
cancelled and it will incur any costs associated with such
cancellation.
4. By 3:00 p.m. New York City time, the Trustee shall release the
Up-MACRO Holding Shares and Down-MACRO Holding Shares
constituting the MACRO Units ordered to the Authorized
Participants in accordance to the Creation Orders. The
creation and issuance of MACRO Units will occur through the
DTC System. Paired Holding Shares that are to be exchanged
into Tradeable Shares will be deposited by the Trustee in the
Securities Account of the applicable Tradeable Trust through
the DTC System.
CREATION T+3
1. By 3:00 p.m. New York City time, the Trustee shall release the
Up-MACRO Tradeable Shares and Down-MACRO Tradeable Shares
constituting the Concurrent Tradeable Shares Order to the
Authorized Participants in accordance with the Creation
Orders. The creation and issuance of Tradeable Shares will
occur through the DTC system on a Net Daily Basis.
****
Attachment A-7
II. 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 (as defined below) (i) may exchange Up-MACRO
Holding Shares or Down-MACRO Holding Shares or both, into Up-MACRO Tradeable
Shares or Down-MACRO Tradeable Shares or both, as applicable, or (ii) may
exchange Up-MACRO Tradeable Shares or Down-MACRO Tradeable Shares or both, into
Up-MACRO Holding Shares or Down-MACRO Holding Shares or both, as applicable. 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 daily basis. 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, of 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 Tradeable Shares that will be issued will be equal to the number of such
Tradeable Shares created minus the number of such Tradeable Shares redeemed. In
contrast, 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
zero (such netting, collectively, the "Net Daily Basis").
Attachment A-8
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.
EXCHANGE PROCESS
On any Business Day, an Authorized Participant may submit an Exchange
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 Trustee and 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 a Transaction Fee for the for the Holding Shares and/or the
Tradeable Shares being exchanged;
o Up- MACRO Holding Shares, Down-MACRO Holding Shares or both, in
integral multiple of 50,000 shares of each, for exchange into the
respective Tradeable Shares, if applicable; and
o Up- MACRO Tradeable Shares, Down-MACRO Tradeable Shares or both,
in integral multiple of 50,000 shares of each. for exchange into
the respective Holding Shares, if applicable.
Upon the satisfaction of the conditions set forth below, the applicable
trustees shall (i) deliver the respective Tradeable Shares, if applicable, to
the designated account of the Authorized Participant in DTC to fill the Exchange
Orders prior to 3:00 p.m. New York City time on T+3 or (ii) deliver the
respective Holding Shares, if applicable, to the designated account of the
Authorized Participant in DTC to fill the Exchange Order prior to 3:00 p.m. New
York City time on T+3.
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
Attachment A-9
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 name;
(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 Redemption or Exchange Order through the
Administrative Agent's automated electronic system shall send
a notice to the Authorized Participant confirming the receipt
of such Exchange Order and generate a submission number (a
"Submission Number") relating to such Order and communicate
that number to the Authorized Participant.
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, 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 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;
(c) 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;
Attachment A-10
(d) The Securities Accounts information of the applicable
Tradeable Trusts to which the Holding Shares and/or
the Tradeable Shares will be delivered; and
(e) the Distribution Account of the applicable Holding
Trusts, to which the Transaction Fee will be
delivered, and amount due to each of the Paired
Holding Trusts;
EXCHANGE T+1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting an Exchange Order shall have deposited the
Transaction Fee into the Distribution Account of the
applicable Holding Trust and delivered to the Trustee the
MACRO Shares to be exchanged.
2. By 10:30 a.m. New York City time, if the Trustee has not
received the foregoing, as applicable, the Trustee shall
contact the Authorized Participant to inquire about any
missing funds or securities.
3. By 12:00 p.m. New York City time, if the Trustee has still not
received the foregoing, as applicable, then the Administrative
Agent shall notify the Authorized Participant of the amount or
securities owed to the Holding Trusts. The deficient
Authorized Participant must immediately wire such amount
through the Federal Wire Electronic Transfer System or
transfer such shares to the Trustee or its order shall be
cancelled and the Authorized Participant shall incur all costs
associated with such cancellation.
EXCHANGE T+3
1. By 3:00 p.m. New York City time on T+3, the Trustee shall, in
accordance with the instructions of the Administrative Agent,
deliver to the Authorized Participant's account in DTC, the
Holding Shares and/or the Tradeable Shares as ordered by it in
the Exchange Order.
* * * *
Attachment A-11
III. REDEMPTION OF PAIRED HOLDING SHARES AND EXCHANGE OF TRADEABLE SHARES AND
CONCURRENT REDEMPTION OF THOSE SHARES AS PART OF ONE OR MORE MACRO UNITS
Scope of Procedures and Overview
These procedures (the "Redemption Procedures") describe the processes
by which an Authorized Participant may (i) redeem one or more MACRO units or
(ii) exchange its Tradeable Shares into the applicable Holding Shares and
concurrently redeem such shares as part of one or more MACRO Units. The Paired
Holding Shares constituting a MACRO Unit shall only be redeemed and the
Tradeable Shares can only be exchanged into Holding Shares and concurrently
redeemed as part of one or more MACRO Units in accordance to the Redemption
Procedures set forth herein and in coordination with the Trustee and the
Administrative Agent.
The Paired Holding Shares may be redeemed solely in accordance to the
instructions of the Authorized Participants. The Holding Shares may be redeemed
only as Paired Holding Shares consisting of one or more MACRO Units. In
accordance with this Participants Agreement, the Administrative Agent may cause
the Trustee to exchange Tradeable Shares in units of 50,000 Up-MACRO Tradeable
Shares or 50,000 Down-MACRO Tradeable Shares. The exchange of Up-MACRO Tradeable
Shares and Down-MACRO Tradeable Shares does not need to occur simultaneously.
Up-Macro Tradeable Shares may be exchanged independently into Up-Macro Holding
Shares and Down-Macro Tradeable Shares may be exchanged independently into
Down-MACRO Holding Shares. The Tradeable Shares may be exchanged into their
respective Holding Shares and concurrently redeem such Holding Shares as part of
one or more MACRO Units solely by the instructions of an Authorized
Participants.
The MACRO Shares will be redeemed on a net daily basis. In the event
that the number of MACRO Units to be redeemed based on the Redemption Orders of
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 number of MACRO Units redeemed minus the number of MACRO Units
created. In contrast, in the event that the number of MACRO Units to be created
based on the Creation Orders of 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 to zero. 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 daily basis, in
accordance to the daily netting of creation and redemption of MACRO Units.
Similarly, Tradeable Shares will be redeemed on a net daily basis. 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, of such date, the Tradeable
Shares that will actually be redeemed will be equal to the number of such
Tradeable Shares redeemed minus the number of such Tradeable Shares created. In
contrast, 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
Attachment A-12
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 (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-13
REDEMPTION PROCESS
On any Business Day, an Authorized Participant may submit a Redemption
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 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 redeem Paired Holding Shares consisting of at least one MACRO Unit or
integral thereof and/or to exchange 50,000 existing Tradeable Shares or an
integral multiple thereof for their related Holding Shares and redeem such
Holding Shares as part of one or more MACRO Units. 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 the following:
o the Transaction Fee for the MACRO Units being redeemed and for the
Tradeable Shares, if any, being exchanged and concurrently
redeemed as communicated by the Administrative Agent in accordance
with these Procedures;
o Paired Holding Shares consisting of one or more MACRO Units;
o 50,000 or an integral multiple thereof of either Up-MACRO
Tradeable Shares or Down-MACRO Tradeable Shares or both, which
shall be exchanged into their related Holding Shares and
concurrently redeemed, together with additional Holding Shares, if
needed, as part of one or more MACRO Units (the "Tradeable Share
Deposit"); and
o The Redemption Cash Component, if needed, (such amount, the "The
Redemption Cash Component Amount"), which is an amount equal to
the excess of the fair market value of the Treasuries delivered by
the Trustee to the Authorized Participant over the aggregate
Underlying Value of the Paired Holding Shares being redeemed due
to minimum denominations on the Treasuries on deposit in the
Paired Holding Trusts.
Upon the satisfaction of the conditions set forth below, the Trustee,
on behalf of the applicable MACRO Trusts and written instruction from the
Authorized Participant, shall (i) in the event that only Paired Holding Shares
were tendered for redemption, deliver cash and/or Treasuries to the redeeming
Authorized Participant to fill the Redemption Order prior to 3:00 p.m. New York
City time on T+1 to an account designated by the Authorized Participant (ii) in
the event that Tradeable Shares, or a combination of Holding Shares and
Tradeable Shares were tendered as part of the Redemption Order, deliver cash
and/or Treasuries to the redeeming Authorized Participant to fill the Redemption
Order prior to 3:00 p.m. New York City time on T+3 to an account designated by
the Authorized Participant and (iii) 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-14
REDEMPTION PROCEDURES
REDEMPTION T (REDEMPTION 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 a Redemption Order.
The Authorized Participant shall indicate through the
Administrative Agent's electronic facilities the following
information:
(a) the Authorized Participant's name;
(b) its PIN Number;
(c) the number of Up-MACRO Holding Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any, and
their CUSIP Number;
(d) the number of Down-MACRO Holding Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any, and
their CUSIP Number;
(e) the number of Up-MACRO Tradeable Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any, and
their CUSIP Number; and
(f) the number of Down-MACRO Tradeable Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any, and
their CUSIP Number;
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Exchange Order through its electronic facilities
(and no later than 2:15 p.m. New York City time), the
Administrative Agent's automated electronic system shall send
a notice to the Authorized Participant confirming
electronically the receipt of such Redemption Order and
generate a submission number (a "Submission Number") relating
to such Redemption Order and communicate that number to the
Authorized Participant.
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.
Attachment A-15
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, 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 Holding Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any;
(c) the number of Down-MACRO Holding Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any;
(d) the number of Up-MACRO Tradeable Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any;
(e) the number of Down-MACRO Tradeable Shares that the
Authorized Participant will deliver, which number
shall be in integral multiples of 50,000, if any; and
(f) the Securities and Distribution Accounts information
of the Paired Holding Trusts;
(g) the Redemption Cash Component, if any;
REDEMPTION T+1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Redemption Order shall deposit (i) the
Transaction Fee and the Redemption Cash Component, if any,
into the Distribution Accounts of the Paired Holding Trusts as
designated by the Trustee using the Federal Wire Electronic
Transfer System, (ii) the Paired Holding Shares constituting
at least a MACRO Unit or integral multiples thereof, if any,
and (iii) the Up-MACRO Tradeable Shares and/or Down-MACRO
Tradeable Shares, if any, in integral multiples of 50,000
each, into the Securities Account of the applicable Tradeable
Trust together with the requisite type and number of Holding
Shares to constitute one or more MACRO Units.
2. By 10:30 a.m. New York City time, if the Trustee has not
received the requisite number of MACRO Shares, the Trustee
shall contact the Authorized Participant
Attachment A-16
to inquire about any missing shares. If the Trustee does not
receive the requisite number of such shares, 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, the
Administrative Agent shall notify the Authorized Participant
of the number and type of the MACRO Shares that it needs to
deposit. The deficient Authorized Participant shall
immediately transfer such shares to the Trustee or its order
shall be cancelled and the Authorized Participant shall incur
any costs associated with such cancellation.
4. By 3:00 p.m. New York City time, the Trustee, pursuant to the
instructions of the Administrative Agent shall, in the event
that only Paired Holding Shares were tendered for redemption,
deliver the cash and/or Treasuries to the redeeming Authorized
Participant's account as indicated by such Authorized
Participant.
REDEMPTION T+3
1. By 3:00 p.m. New York City time, the Trustee, pursuant to the
instructions of the Administrative Agent shall, in the event
that Tradeable Shares or Holding and Tradeable Shares were
tendered for redemption deliver cash and/or Treasuries to the
Authorized Participant's Account, as indicated by such the
Authorized Participant.
* * *
Attachment A-17