Exhibit 99.3.1
================================================================================
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor,
INVESTORS BANK & TRUST COMPANY,
as Trustee,
CLAYMORE SECURITIES, INC.,
as the Administrative Agent and a Marketing Agent
and
MACRO FINANCIAL, LLC,
as a Marketing Agent
AMENDED AND RESTATED CLAYMORE MACROSHARES
OIL DOWN TRADEABLE TRUST AGREEMENT
================================================================================
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions................................................................2
Section 1.2 Other Definitional Provisions..............................................9
ARTICLE 2
FORM OF THE CERTIFICATES;
DELIVERY AND REGISTRATION OF TRANSFER
OF DOWN-MACRO TRADEABLE SHARES
Section 2.1 Redemption of Founders' Shares.............................................9
Section 2.2 Acceptance by Trustee.....................................................10
Section 2.3 Limited Purpose of the Down-MACRO Tradeable Trust.........................10
Section 2.4 Representations and Warranties of the Depositor...........................10
Section 2.5 Form of Shares; Book-Entry System; Transferability of Down-MACRO
Tradeable Shares..........................................................12
ARTICLE 3
APPOINTMENT OF THE TRUSTEE,
ADMINISTRATIVE AGENT AND MARKETING AGENTS;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the Trustee.............15
Section 3.2 Representations, Warranties and Covenants of the Trustee..................17
Section 3.3 Acceptance of Appointment and Matters Relating to the
Administrative Agent and the Marketing Agents.............................19
Section 3.4 Representations, Warranties and Covenants of the Administrative
Agent and the Marketing Agents............................................20
Section 3.5 Establishment of the Securities Account...................................23
Section 3.6 Establishment of the Distribution Account.................................24
Section 3.7 Establishment of the Netting Account......................................24
ARTICLE 4
CALCULATIONS
Section 4.1 Calculations on Price Determination Days....................................
Section 4.2 Calculation of Intraday Indicative Values.................................26
i
ARTICLE 5
DISTRIBUTIONS ON THE DOWN-MACRO TRADEABLE SHARES
Section 5.1 Rights of Holders of the Down-MACRO Tradeable Shares......................26
Section 5.2 Distributions.............................................................26
Section 5.3 Payment of Fees and Expenses..............................................26
ARTICLE 6
EXCHANGES OF DOWN-MACRO TRADEABLE SHARES
Section 6.1 Exchanges in Connection with Paired Optional Redemptions..................27
Section 6.2 Paired Issuances..........................................................28
Section 6.3 Exchanges of Down-MACRO Tradeable Shares Other than in Paired
Optional Redemptions or Paired Issuances..................................29
Section 6.4 Suspension or Delay of Settlement.........................................29
Section 6.5 The Participants Agreement................................................30
ARTICLE 7
[RESERVED].
ARTICLE 8
REPORTING TO HOLDERS OF THE DOWN-MACRO TRADEABLE SHARES
Section 8.1 Calculations for the Down-MACRO Tradeable Shares..........................30
Section 8.2 Periodic Reports..........................................................31
Section 8.3 Form 8-K Disclosure.......................................................31
Section 8.4 Listing of the Down-MACRO Tradeable Shares................................32
Section 8.5 Disclosure Controls and Procedures........................................32
Section 8.6 TrustAccounting Agent Responsibilities....................................32
ARTICLE 9
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor................................................32
Section 9.2 Limitations on Liability of the Depositor , Claymore Securities,
Inc. and MACRO Financial LLC..............................................32
Section 9.3 Liabilities; Indemnification..............................................33
ARTICLE 10
MATTERS RELATING TO THE
ADMINISTRATIVE AGENT AND THE MARKETING AGENTS
Section 10.1 Role of the Administrative Agent..........................................34
Section 10.2 Liability of the Administrative Agent.....................................34
Section 10.3 Limitation on Liability of the Administrative Agent.......................34
ii
Section 10.4 Administrative Agent Indemnification of the Down-MACRO Tradeable
Trust and the Trustee.....................................................34
Section 10.5 Delegation of Duties......................................................35
Section 10.6 Resignation or Removal of Administrative Agent............................36
Section 10.7 Role of the Marketing Agents..............................................36
Section 10.8 Liability of the Marketing Agents.........................................36
Section 10.9 Limitation on Liability of the Marketing Agents...........................36
Section 10.10 Marketing Agent Indemnification of the Down-MACRO Tradeable Trust
and the Trustee...........................................................37
Section 10.11 Delegation of Duties......................................................38
ARTICLE 11
EARLY TERMINATION
Section 11.1 Termination Triggers......................................................38
ARTICLE 12
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events................................................40
Section 12.2 Force Majeure.............................................................41
Section 12.3 Notification to Holders of the Down-MACRO Tradeable Shares................41
ARTICLE 13
THE TRUSTEE
Section 13.1 Liability of Trustee......................................................41
Section 13.2 Rights of the Trustee.....................................................42
Section 13.3 Trustee Not Liable for Recitals in Down-MACRO Tradeable Shares............43
Section 13.4 Holders May Direct Trustee................................................43
Section 13.5 Compensation..............................................................43
Section 13.6 Indemnification...........................................................43
Section 13.7 Eligibility Requirements..................................................44
Section 13.8 Resignation or Removal of Trustee.........................................44
Section 13.9 Successor Trustee.........................................................45
Section 13.10 Merger or Consolidation...................................................45
Section 13.11 Appointment of Co-Trustee or Separate Trustee.............................46
Section 13.12 Books, Records; Taxes; Audit..............................................47
Section 13.13 Trustee May Enforce Claims Without Possession of Down-MACRO
Tradeable Shares..........................................................48
Section 13.14 Suits for Enforcement.....................................................48
Section 13.15 Maintenance of Office or Agency...........................................48
ARTICLE 14
TERMINATION
Section 14.1 Termination of Trust......................................................48
iii
ARTICLE 15
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination........................49
Section 15.2 Registration (Initial and Continuing) of Down-MACRO Tradeable
Shares; Certain Securities Law Filings....................................50
Section 15.3 Prospectus Delivery.......................................................51
Section 15.4 Protection of Right, Title and Interest to Trust Assets...................51
Section 15.5 Limitation on Rights of Holders of the Down-MACRO Tradeable Shares........52
Section 15.6 Certain Rights of Holders of Down-MACRO Tradeable Shares; Voting..........52
Section 15.7 MACRO Licensing Agreement.................................................53
Section 15.8 Governing Law; Jurisdiction...............................................53
Section 15.9 Notices...................................................................53
Section 15.10 Severability of Provisions................................................55
Section 15.11 Down-MACRO Tradeable Shares Nonassessable and Fully Paid..................55
Section 15.12 Further Assurances........................................................55
Section 15.13 Non-Petition Covenant; No Proceedings.....................................55
Section 15.14 No Waiver; Cumulative Remedies............................................56
Section 15.15 Counterparts..............................................................56
Section 15.16 Third-Party Beneficiaries.................................................56
Section 15.17 Actions or Notices by Holders of the Down-MACRO Tradeable Shares..........56
Section 15.18 Merger and Integration....................................................56
Section 15.19 Headings..................................................................57
iv
EXHIBITS
EXHIBIT A FORM OF DOWN-MACRO TRADEABLE SHARE
EXHIBIT B FORM OF PARTICIPANTS AGREEMENT
EXHIBIT C FORM OF MACRO LICENSING AGREEMENT
EXHIBIT D FORM OF NYMEX SUBLICENSING AGREEMENT
v
This AMENDED AND RESTATED TRUST AGREEMENT, dated as of November 24,
2006 (this "Trust Agreement"), is hereby entered into among MACRO SECURITIES
DEPOSITOR, LLC, a Delaware limited liability company, as depositor (the
"Depositor"), INVESTORS BANK & TRUST COMPANY, not in its individual capacity but
solely as trustee (the "Trustee"), CLAYMORE SECURITIES, INC., not in its
individual capacity but solely as administrative agent (in such capacity, the
"Administrative Agent") and as a marketing agent (in such capacity, a "Marketing
Agent"), and MACRO FINANCIAL, LLC, not in its individual capacity but solely as
an additional marketing agent (in such capacity, also a "Marketing Agent").
WHEREAS, the Depositor and the Trustee have entered into a trust
agreement, dated as of November 15, 2006, pursuant to which a trust was formed
under the laws of the State of New York which is known as the "Claymore
MACROshares Oil Down Tradeable Trust" and referred to herein as the "Down-MACRO
Tradeable Trust;" and
WHEREAS, the parties hereto now wish to amend and restate in its
entirety the original trust agreement for the Down-MACRO Tradeable Trust to
provide for the issuance of shares to be known as the "Claymore MACROshares Oil
Down Tradeable Shares" (referred to herein as the "Down-MACRO Holding Shares")
and to specify, among other things, the respective powers and duties of the
Trustee, the Administrative Agent, the Marketing Agents and the Depositor.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties intending to be legally bound hereby agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Trust Agreement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms. Defined terms used herein and not otherwise defined shall
have the respective meanings ascribed to such terms in the Down-MACRO Holding
Trust Agreement.
"Account" or "Accounts" shall mean any or all of the Securities Account,
the Distribution Account and the Netting Account.
"Administrative Agent" shall mean Claymore Securities, Inc., in its
capacity as administrative agent hereunder, and its successors and assigns.
"Administrative Agent Indemnified Party" shall have the meaning set forth
in Section 10.4.
"Affiliate" shall mean with respect to any specified Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing. A company is assumed to be an
Affiliate if the parent corporation owns 20 percent or more of the outstanding
shares.
"Aggregate Par Amount" shall mean, (i) with respect to any Down-MACRO
Holding Shares, an amount equal to the number of such Down-MACRO Holding Shares
multiplied by the Down-MACRO Stated Par Amount, (ii) with respect to any
Up-MACRO Holding Shares, an amount equal to the number of such Up-MACRO Holding
Shares multiplied by the Up-MACRO Stated Par Amount, (iii) with respect to any
Down-MACRO Tradeable Shares, an amount equal to the number of such Down-MACRO
Tradeable Shares multiplied by the Down-MACRO Stated Par Amount, and (iv) with
respect to any Up-MACRO Tradeable Shares, an amount equal to the number of such
Up-MACRO Tradeable Shares multiplied by the Up-MACRO Stated Par Amount.
"AMEX" shall mean the American Stock Exchange, LLC.
"Authorized Participant" shall mean any entity that (i) is a registered
broker-dealer and a member in good standing with the NASD, or a participant in
the securities markets such as a bank or other financial institution that is not
required to register as a broker-dealer or be a member of the NASD in order to
engage in securities transactions, (ii) is a participant in DTC or has indirect
access to the clearing facilities of DTC by virtue of a custodial relationship
with a DTC Participant, (iii) is not a Benefit Plan Investor and (iv) has
entered into a Participants Agreement.
"Beneficial Owner" shall mean, with respect to a beneficial interest in a
Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by the Depository as set forth in Section 2.5 of this
Trust Agreement, a Person who is the
2
beneficial owner of such interest in a Global Certificate, as reflected on the
books of the Depository, or on the books of a Person maintaining an account with
the Depository (directly as a DTC Participant or as an Indirect Participant, or
in each case in accordance with the rules of the Depository).
"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions and stock exchanges in New York, New York are
authorized or required by law, regulation or executive order to close.
"Business Office" shall mean the offices of the Administrative Agent,
which shall be located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx, XX 00000.
"Calculation Agency Agreement" shall mean the Calculation Agency
Agreement, dated as of the date hereof, by and among the Trustee, the Down-MACRO
Holding Trustee, the Up-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee,
the NYMEX and the AMEX, pursuant to which the AMEX shall render the calculations
set forth therein and post such calculations on its website.
"Calculation Agent" shall mean the AMEX in its role as calculation agent
under the Calculation Agency Agreement.
"Closing Date" shall mean November 28, 2006.
"Code" shall mean U.S. Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall have the meaning set forth under Section
13.15.
"Creation Order" shall have the meaning set forth in Section 3(b) of the
Participants Agreement.
"Depositor" shall mean MACRO Securities Depositor, LLC and its successors
and assigns.
"Depositor Indemnified Party" shall have the meaning set forth in Section
9.3(c).
"Depository Agreement" shall mean the Blanket Letter of Representations,
together with the Issuer Letter of Representations, both dated on or about the
date hereof and delivered by the Trustee, on behalf of the Down-MACRO Tradeable
Trust, to the Depository.
"Distribution Account" shall have the meaning set forth in Section 3.6(a).
"Distribution Date" shall mean the second Business Day preceding each
Record Date.
"Distribution Payment Date" means the third Business Day of the month
immediately following the month in which the related Distribution Date occurred.
"Down-MACRO Fees" shall have the meaning specified in Section 5.4 of the
Down-MACRO Holding Trust Agreement.
"Down-MACRO Holding Shares" shall mean the pass-through securities issued
by the Down-MACRO Holding Trust pursuant to the Up-MACRO Holding Trust
Agreement.
3
"Down-MACRO Holding Trust" shall mean the Claymore MACROshares Oil Down
Holding Trust formed under the Down-MACRO Holding Trust Agreement.
"Down-MACRO Holding Trust Agreement" shall mean the Down-MACRO Holding
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agents and the Down-MACRO Holding Trustee.
"Down-MACRO Holding Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Down-MACRO Holding
Trust.
"Down-MACRO Stated Par Amount" shall mean the stated par amount of $60 per
Down-MACRO Holding Share or Down-MACRO Tradeable Share.
"Down-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Down-MACRO Tradeable Trust pursuant to the Down-MACRO Tradeable
Trust Agreement.
"Down-MACRO Tradeable Trust" shall mean the Claymore MACROshares Oil Down
Tradeable Trust formed under the Down-MACRO Tradeable Trust Agreement.
"Down-MACRO Tradeable Trust Agreement" shall mean the Amended and Restated
Down-MACRO Tradeable Trust Agreement, dated as of the date hereof, among the
Depositor, the Administrative Agent, the Marketing Agents and the Down-MACRO
Tradeable Trustee.
"Down-MACRO Tradeable Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Down-MACRO Tradeable
Trust.
"DTC" shall mean The Depository Trust Company.
"Early Termination Date" shall mean with respect to any date of
determination, the next Distribution Date that follows the occurrence of a
Termination Trigger.
"Event of Bankruptcy" shall occur with respect to any specified Person,
if:
(a) a case or other proceeding shall be commenced, without the application
or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or any substantial part of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding under
any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors; or
4
(c) the board of directors (or similar body) of such Person or the trustee
for such Person (in the case of a business or statutory trust) shall vote to
implement any of the actions set forth in clause (b) above.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Order" shall have the meaning set forth in Section 5(b) of the
Participants Agreement.
"Final Distribution" shall mean any distribution made in redemption of all
or a portion of the Down-MACRO Tradeable Shares pursuant to Section 5.2(b) on
the earlier of the Final Scheduled Termination Date or an Early Termination
Date.
"Final Scheduled Termination Date" shall mean the Distribution Date
scheduled to occur in December of 2026.
"Founders' Shares" shall mean 1,000 shares with a par value of $1 per
share, 500 of which were issued to MACRO Securities Depositor, LLC and 500 of
which were issued to Claymore Securities, Inc., in exchange for the Initial
Deposit.
"Global Certificate" shall have the meaning set forth in Section 2.5(a) of
this Trust Agreement.
"Holder" shall mean any Beneficial Owner of an Down-MACRO Tradeable Share,
an Down-MACRO Holding Share, a Up-MACRO Holding Share or a Up-MACRO Tradeable
Share, as the context requires.
"Holding Share" shall mean either an Down-MACRO Holding Share or a
Up-MACRO Holding Share.
"Independent" shall mean, as to any Person, any other Person (including a
firm of accountants or lawyers and any member thereof) who (i) does not have and
is not committed to acquire any material direct or any material indirect
financial interest in such Person or in any Affiliate of such Person, (ii) is
not connected with such Person as an officer, employee, promoter, underwriter,
voting trustee, partner, director or Person performing similar functions and
(iii) is not Affiliated with a Person who fails to satisfy the criteria set
forth in clauses (i) and (ii). "Independent" when used with respect to any
accountant may include an accountant who audits the books of any Person if in
addition to satisfying the criteria set forth above the accountant is
independent with respect to such Person within the meaning of Rule 101 of the
Code of Ethics of the American Institute of Certified Public Accountants.
Whenever any Independent Person's opinion, certificate or report is to be
furnished hereunder, such document shall state that the signer has read this
definition and that the signer is Independent within the meaning hereof.
"Initial Deposit" shall mean the initial deposit by the Depositor and the
Administrative Agent of $1,000 into the Down-MACRO Tradeable Trust in connection
with the formation thereof.
"Investment Company Act" shall mean the Investment Company Act of 1940, as
amended.
5
"Loss" shall have the meaning set forth in Section 9.3(b).
"MACROshares Website" shall mean the website maintained by the
Administrative Agent at xxxx://xxx.xxxxxxxxxxxxxxxxxxx.xxx.
"MACRO Unit" shall mean 50,000 Down-MACRO Holding Shares and 50,000
Up-MACRO Holding Shares.
"Marketing Agent Indemnified Party" shall have the meaning set forth in
Section 10.10.
"Marketing Agents" shall mean Claymore Securities, Inc., in its capacity
as marketing agent hereunder, and its successors and assigns, and MACRO
Financial, LLC, in its capacity as marketing agent hereunder, and its successors
and assigns.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Netting Account" shall have the meaning set forth in Section 3.7(a) of
this Trust Agreement.
"Notices" shall have the meaning set forth in Section 15.9(a) hereof.
"NYMEX" shall mean New York Mercantile Exchange, Inc. and its successors
and assigns.
"Officer's Certificate" shall mean a certificate signed by an officer of
the Depositor or the Administrative Agent that is authorized to make such
certification.
"Outstanding" shall mean, with respect to the Down-MACRO Holding Shares or
the Down-MACRO Tradeable Shares, as applicable, and any date of determination,
an amount equal to the aggregate number of Down-MACRO Holding Shares or
Down-MACRO Tradeable Shares, issued by the Down-MACRO Holding Trust or the
Down-MACRO Tradeable Trust, as applicable, in Paired Issuances occurring prior
to such date of determination minus any such Down-MACRO Holding Shares redeemed
prior to such date of determination in a Paired Optional Redemption or any such
Down-MACRO Tradeable Shares exchanged prior to such date of determination for
the underlying Down-MACRO Holding Shares.
"Paired Holding Shares" shall mean the Down-MACRO Holding Shares together
with the Up-MACRO Holding Shares.
"Paired Holding Trusts" shall mean the Down-MACRO Holding Trust together
with the Up-MACRO Holding Trust.
"Paired Optional Redemption" shall have the meaning set forth in Section
6.1(a) hereof.
"Paired Issuance" shall have the meaning set forth in Section 6.2(a)
hereof.
"Participants Agreement" shall mean the participants agreement, dated as
of November 22, 2006, substantially in the form attached hereto as Exhibit B,
entered into among the Depositor, the Trustee, the Up-MACRO Trusts, the
Administrative Agent and the Authorized Participants who may be party thereto
from time to time, which specifies certain procedures for the Paired Issuance
and Paired Optional Redemption of Paired Holding Shares and procedures for the
creation and exchange of Tradeable Shares for Holding Shares and Holding Shares
for Tradeable Shares.
6
"Per Share Underlying Value" means, with respect to any date of
determination occurring during any Calculation Period and (i) each Down-MACRO
Holding Share, an amount calculated by dividing the Down-MACRO Underlying Value
by the number of Down-MACRO Holding Shares Outstanding on that date, (ii) each
Up-MACRO Holding Share, an amount calculated by dividing the Up-MACRO Underlying
Value by the number of Up-MACRO Holding Shares Outstanding on that date, (iii)
each Down-MACRO Tradeable Share, an amount equal to the Per Share Underlying
Value of one Down-MACRO Holding Share on that date, and (iv) each Up-MACRO
Tradeable Share, an amount equal to the Per Share Underlying Value of one
Up-MACRO Holding Share on that date.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, partnership, limited liability company, limited
liability partnership, joint stock company, trust, unincorporated organization
or Governmental Authority or other entity.
"Prospectus" shall mean the prospectus, in the form filed by the Depositor
on behalf of the Down-MACRO Holding Trust and the Down-MACRO Tradeable Trust
with the SEC on or before the second Business Day after the date hereof (or such
earlier time as may be required under the Securities Act) or, if no such filing
is required, the form of final prospectus included in the Registration Statement
on and after the date on which such Registration Statement becomes effective.
"Quarterly Distribution" shall mean with respect to each Distribution
Date, the distribution to be made to the Holders of the Down-MACRO Tradeable
Shares that are Outstanding on the Distribution Date pursuant to Section 5.2(a).
"Record Date" shall mean the last Business Day of each March, June,
September and December of each year, commencing in December of 2006.
"Redemption Order" shall have the meaning set forth in Section 4(b) of the
Participants Agreement.
"Registration Statement" means the registration statement, file no.
333-116566, dated and filed with the SEC on November 27, 2006, relating to the
Down-MACRO Holding Shares and Down-MACRO Tradeable Shares, as amended,
supplemented or otherwise modified from time to time.
"Registered Owner" shall mean the Depository or a nominee thereof in whose
name the Down-MACRO Tradeable Shares are registered in the Share Register.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Account" shall have the meaning set forth in Section 3.5(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share Register" shall have the meaning set forth in Section 2.5(e)
hereof.
"Substitute Reference Price Licensing Agreement" shall mean any licensing
arrangement pursuant to which the Paired Holding Trusts and the Down-MACRO
Tradeable Trust acquire the right to use a Substitute Reference Oil Price for
the purposes of calculating the Down-MACRO Underlying Value under the Down-MACRO
Holding Trust Agreement.
7
"Successor Administrative Agent" shall have the meaning set forth in
Section 10.6(b) hereof.
"Successor Trustee" shall have the meaning set forth in Section 13.8(b)
hereof.
"Termination Trigger" shall have the meaning set forth in Section 11.1(a)
hereof.
"Tradeable Shares" shall mean the Down-MACRO Tradeable Shares and the
Up-MACRO Tradeable Shares.
"Tradeable Trusts" shall mean the Down-MACRO Tradeable Trust and the
Up-MACRO Tradeable Trust.
"Transaction Documents" shall mean this Trust Agreement, the MACRO
Licensing Agreement, the NYMEX Sublicensing Agreement, the Calculation Agency
Agreement and the Participants Agreement.
"Transfer Agent and Registrar" shall have the meaning set forth in Section
2.5(e) hereof.
"Trust Assets" shall have the meaning set forth in Section 2.1 hereof.
"Trust Officer" shall mean any officer or employee of the Trustee, in each
case having responsibility for the administration of this Trust Agreement or
authority to execute any documents on behalf of the Trustee, in its capacity as
Trustee hereunder.
"Trustee" shall mean Investors Bank & Trust Company, not in its individual
capacity but solely as Trustee under this Trust Agreement, or its successor in
interest in such capacity, or any successor trustee appointed as herein
provided.
"Trustee Indemnified Party" shall have the meaning set forth in hereof.
"Trustee Termination Event" shall have the meaning set forth in Section
12.1 hereof.
"Up-MACRO Fees" shall have the meaning specified in Section 5.4 of the
Up-MACRO Holding Trust Agreement.
"Up-MACRO Holding Shares" shall mean the pass-through securities issued by
the Up-MACRO Holding Trust pursuant to the Up-MACRO Holding Trust Agreement.
"Up-MACRO Holding Trust" shall mean the Claymore MACROshares Oil Up
Holding Trust created under the Up-MACRO Holding Trust Agreement.
"Up-MACRO Holding Trust Agreement" shall mean the Amended and Restated
Up-MACRO Holding Trust Agreement, dated as of the date hereof, among the
Depositor, the Administrative Agent, the Marketing Agents and the Up-MACRO
Holding Trustee.
"Up-MACRO Holding Trustee" shall mean Investors Bank & Trust Company, not
in its individual capacity but solely as trustee of the Up-MACRO Holding Trust.
"Up-MACRO Stated Par Amount" shall mean the stated par amount of $60 per
Up-MACRO Holding Share or Up-MACRO Tradeable Share.
8
"Up-MACRO Tradeable Shares" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Tradeable Trust" shall have the meaning specified in the
Recitals to this Trust Agreement.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any share, certificate or other document made or delivered
pursuant hereto or thereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any share, certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Trust Agreement or in any such share, certificate or other
document, and accounting terms partly defined in this Trust Agreement or in any
such share, certificate or other document to the extent not defined, shall have
the respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such share, certificate or other document are inconsistent
with the meanings of such terms under generally accepted accounting principles,
the definitions contained in this Trust Agreement or in any such share,
certificate or other document shall control.
(c) The agreements, representations and warranties of MACRO
Securities Depositor, LLC in this Trust Agreement in its capacity as Depositor
shall be deemed to be the agreements, representations and warranties of MACRO
Securities Depositor, LLC solely in such capacity for so long as MACRO
Securities Depositor, LLC acts in such capacity under this Trust Agreement.
(d) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
(e) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Trust Agreement shall refer to this Trust
Agreement as a whole and not to any particular provision of this Trust
Agreement; references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or to this Trust
Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation."
ARTICLE 2
FORM OF THE CERTIFICATES;
DELIVERY AND REGISTRATION OF TRANSFER
OF DOWN-MACRO TRADEABLE SHARES
Section 2.1 Redemption of Founders' Shares. Concurrently with the
first issuance of Down-MACRO Tradeable Shares in accordance with the terms of
the Down-MACRO Tradeable Trust Agreement, the portion of the Initial Deposit
made into the Down-MACRO Tradeable Trust by the Depositor and the Administrative
Agent shall be transferred to each of them in redemption of their respective
Founder's Shares and such Founders' Shares shall thereafter be cancelled and
shall not be reissued. At no time shall the Initial Deposit be included in the
calculation of the Per Share Underlying Value of the Down-MACRO Tradeable Shares
or any other calculation performed at any time pursuant to ARTICLE 4 or ARTICLE
8 of this Trust Agreement. The Down-MACRO Holding Shares on deposit from time to
time in the Securities
9
Account, all monies on deposit from time to time in the Distribution Account and
the Netting Account and the Down-MACRO Holding Trust's rights under the MACRO
Licensing Agreement and the NYMEX Sublicensing Agreement (or any Substitute
Reference Price Licensing Agreement), shall collectively constitute the assets
of the Down-MACRO Tradeable Trust (the "Trust Assets").
Section 2.2 Acceptance by Trustee. The Trustee hereby (i)
acknowledges its acceptance on behalf of the Down-MACRO Tradeable Trust of all
right and title to and interest in the Trust Assets, both now existing and
hereafter created, and (ii) declares that it shall maintain such right, title
and interest, upon the Down-MACRO Tradeable Trust herein set forth, for the
benefit of all Holders of the Down-MACRO Tradeable Shares.
Section 2.3 Limited Purpose of the Down-MACRO Tradeable Trust. The
Down-MACRO Tradeable Trust shall not engage in any business or activity other
than those specified in this Section 2.3 or any activity that is incidental and
necessary to carrying out the business or activities enumerated by this Section
2.3. The exclusive purposes and functions of the Down-MACRO Tradeable Trust
shall consist of:
(a) redeeming the Founders' Shares concurrently with the first
issuance of Down-MACRO Tradeable Shares;
(b) issuing Down-MACRO Tradeable Shares in connection with each
deposit of Down-MACRO Holding Shares into the Down-MACRO Tradeable Trust on a
continuous basis and exchanging Outstanding Down-MACRO Tradeable Shares for the
underlying Down-MACRO Holding Shares that have been deposited in the Down-MACRO
Tradeable Trust, in each case on a continuous basis and in accordance with the
provisions and subject to the conditions set forth in this Trust Agreement;
(c) entering into the other Transaction Documents with the other
parties thereto; and
(d) maintaining a listing for the Down-MACRO Tradeable Shares on the
AMEX or another national stock exchange.
Section 2.4 Representations and Warranties of the Depositor. The
Depositor hereby makes the following representations and warranties to the
Down-MACRO Tradeable Trust and agrees that the Trustee may rely on each such
representation and warranty as of the Closing Date and on each Issuance Date:
(a) Organization and Good Standing. The Depositor is a limited
liability company validly existing and in good standing under the laws of the
State of Delaware and has full power, authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Trust Agreement.
(b) Due Qualification. The Depositor is duly qualified to do
business and is in good standing as a foreign company (or is exempt from such
requirements) and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would result in the performance by the Depositor of its obligations
under this Trust Agreement to violate any applicable law and would have a
material adverse effect on the interests of the Holders of the Down-MACRO
Tradeable Shares hereunder.
10
(c) Due Authorization. The execution, delivery and performance of
this Trust Agreement by the Depositor, the execution and delivery to the Trustee
of the Down-MACRO Tradeable Shares by the Depositor and the consummation by the
Depositor of the transactions provided for in this Trust Agreement and the
performance of its obligations hereunder have been duly authorized by the
Depositor by all necessary action on the part of the Depositor and this Trust
Agreement will remain, from the time of its execution, an official record of the
Depositor.
(d) No Conflict. The execution and delivery by the Depositor of this
Trust Agreement and the Down-MACRO Tradeable Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement and the
fulfillment by the Depositor of the terms hereof will not conflict with, result
in any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which the Depositor is a party or by which it or any of its properties are
bound.
(e) No Violation. The execution and delivery by the Depositor of
this Trust Agreement and the Down-MACRO Tradeable Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement and its
obligations hereunder and the fulfillment by the Depositor of the terms hereof
will not conflict with or violate any Requirements of Law applicable to the
Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Depositor, threatened against the
Depositor before any Governmental Authority (i) asserting the invalidity of this
Trust Agreement or the Down-MACRO Tradeable Shares, (ii) seeking to prevent the
issuance of the Down-MACRO Tradeable Shares or the consummation of any of the
transactions contemplated by this Trust Agreement or the Down-MACRO Tradeable
Shares, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Depositor, would materially and adversely affect the performance
by the Depositor of its obligations under this Trust Agreement, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Trust Agreement or the Down-MACRO Tradeable Shares or
(v) seeking to affect adversely the income tax attributes of the Down-MACRO
Tradeable Trust under the federal or applicable state income or franchise tax
systems.
(g) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery by the Depositor of this Trust
Agreement and the Down-MACRO Tradeable Shares, the performance by the Depositor
of the transactions contemplated by this Trust Agreement and its obligations
hereunder and the Down-MACRO Tradeable Shares and the fulfillment by the
Depositor of the terms hereof and thereof have been obtained.
(h) Bankruptcy; Insolvency. No Event of Bankruptcy with respect to
the Depositor has occurred which would materially and adversely affect the
validity or enforceability of this Trust Agreement or the Down-MACRO Tradeable
Shares.
(i) Binding Obligation. This Trust Agreement constitutes a legal,
valid and binding obligation of the Depositor, enforceable against the Depositor
in accordance with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect which affect the enforcement of creditors'
rights in general, and except as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in equity).
11
(j) No Conflicting Claim. Neither the Depositor nor any Person
claiming through or under the Depositor has any claim to or interest in the
Securities Account, the Distribution Account or the Netting Account.
The representations and warranties of the Depositor set forth in
this Section 2.4 shall survive following the execution of this Trust Agreement
and shall be deemed to be made on each Issuance Date. Upon discovery by the
Depositor, the Trustee or the Administrative Agent of a breach of any of the
representations and warranties by the Depositor set forth in this Section 2.4,
the party discovering such breach shall give prompt written notice to the other
parties hereto. The Depositor agrees to cooperate with the Trustee and the
Administrative Agent in attempting to cure any such breach.
Section 2.5 Form of Shares; Book-Entry System; Transferability of
Down-MACRO Tradeable Shares.
(a) Form of Shares. The Down-MACRO Tradeable Shares shall be
evidenced by one or more global certificates substantially in the form set forth
in Exhibit A attached hereto, with appropriate insertions, modifications and
omissions as hereinafter provided (each such certificate, a "Global
Certificate"). No Down-MACRO Tradeable Shares shall be entitled to any benefits
under this Trust Agreement or be valid or obligatory for any purpose unless a
Global Certificate evidencing those Down-MACRO Tradeable Shares has been
executed by the Trustee by the manual or facsimile signature of a duly
authorized signatory of the Trustee and countersigned by the manual or facsimile
signature of a duly authorized officer of the Depositor. The Trustee shall
maintain books on which the registered ownership of each Global Certificate and
transfers, if any, of such registered ownership shall be recorded. Global
Certificates evidencing the Down-MACRO Tradeable Shares bearing the manual or
facsimile signature of a duly authorized signatory of the Trustee and the manual
or facsimile signature of a duly authorized officer of the Depositor, if
applicable, who was, at the time such Global Certificates were executed, a
proper signatory of the Trustee or the Depositor, as applicable, shall bind the
Trustee, notwithstanding that such signatory has ceased to hold such office
prior to the delivery of such Global Certificates. The Global Certificates may
be endorsed with or have incorporated in the text thereof such legends or
recitals or modifications not inconsistent with the provisions of this Trust
Agreement as may be required by the Trustee or required to comply with any
applicable law or regulations promulgated thereunder or with the rules and
regulations of any securities exchange upon which the Down-MACRO Tradeable
Shares may be listed or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which the Down-MACRO
Tradeable Shares are subject.
The Founders' Shares and the beneficial ownership thereof by the
Depositor and the Administrative Agent shall be recorded on the books and
records maintained by the Trustee on behalf of the Down-MACRO Tradeable Trust
and no physical certificates shall be issued in respect of such Founders'
Shares. Concurrently with the first issuance of Down-MACRO Tradeable Shares, the
Founders' Shares shall be cancelled and shall not thereafter be reissued.
(b) Book-Entry Settlement. The Depositor and the Trustee shall apply
to the Depository for acceptance of the Global Certificates in its book-entry
settlement system. The Global Certificates shall be deposited with the Trustee,
as the custodian for the Depository, shall be registered in the name of Cede &
Co., as nominee for the Depository, and shall bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
12
CORPORATION (THE "DEPOSITORY"), TO THE AGENT AUTHORIZED BY THE DEPOSITOR FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
So long as the Down-MACRO Tradeable Shares are eligible for
book-entry settlement with the Depository, (i) no Beneficial Owner of Down-MACRO
Tradeable Shares will be entitled to receive a physical certificate evidencing
those shares, (ii) the interest of a Beneficial Owner in the Down-MACRO
Tradeable Shares will be shown only on, and transfer of that interest will be
effected only through, records maintained by the Depository or a DTC Participant
or Indirect Participant through which the Beneficial Owner holds that interest
and (iii) the rights of a Beneficial Owner of Down-MACRO Tradeable Shares will
be exercised only to the extent allowed by, and in compliance with, the
arrangements in effect between such Beneficial Owner and the Depository or the
DTC Participant or Indirect Participant through which that Beneficial Owner
holds an interest in the Down-MACRO Tradeable Shares.
As provided in the Depository Agreement, upon the settlement date
for any transfer or any creation, exchange or redemption of the Down-MACRO
Tradeable Shares, the Depository will credit or debit, on its book-entry
registration and transfer system, the amount of Down-MACRO Tradeable Shares so
transferred or so created, exchanged or redeemed to the accounts of the
appropriate DTC Participants. The accounts to be credited and charged shall be
designated by the Trustee, as instructed by the Administrative Agent and the
applicable Holder of Down-MACRO Tradeable Shares. The Beneficial Owners of the
Down-MACRO Tradeable Shares will be shown on, and the transfer of beneficial
ownership by Beneficial Owners will be effected only through, in the case of DTC
Participants, records maintained by the Depository and, in the case of Indirect
Participants and Beneficial Owners holding through a DTC Participant or an
Indirect Participant, through those records or the records of the relevant DTC
Participants. Beneficial Owners are expected to receive from or through the
broker or bank that maintains the account through which the Beneficial Owner has
purchased Down-MACRO Tradeable Shares a written confirmation relating to their
purchase of Down-MACRO Tradeable Shares.
Upon the settlement date for any creation, transfer, exchange or
redemption of Down-MACRO Tradeable Shares, the Trustee shall make a notation on
Schedule A attached to the Global Certificate indicating the resulting Net Par
Amount Increase or Net Par Amount Decrease in the Aggregate Par Amount of
Outstanding Down-MACRO Tradeable Shares represented by such Global Certificate.
Upon the settlement date for a transfer of a Global Certificate to a new
Registered Owner as described in clause (e)(ii) of this Section 2.5, the Trustee
shall cancel such Global Certificate and issue a new Global Certificate in the
name of such transferee Registered Owner.
The Depository may discontinue providing its services with respect
to the Down-MACRO Tradeable Shares by giving notice to the Trustee, the
Administrative Agent and the Depositor pursuant to and in conformity with the
provisions of the Depository Agreement and discharging its responsibilities with
respect thereto under applicable law. In such event, the Trustee, the
Administrative Agent and the Depositor shall seek to find a replacement for the
Depository to perform the functions thereof on terms acceptable to the
Administrative Agent and
13
the Depositor. If no such replacement can be found or is willing to assume the
duties of the Depository, then a Termination Trigger will occur pursuant to
Section 11.1 of this Trust Agreement.
(c) Notices to Beneficial Owners. As described above, the Trustee
will recognize the Depository or its nominee as the owner of all Down-MACRO
Tradeable Shares for all purposes except as expressly set forth in this Trust
Agreement. Conveyance of all notices, statements and other communications
required to be delivered to Beneficial Owners will be effected as follows: The
Administrative Agent shall inquire of each such DTC Participant as to the number
of Beneficial Owners holding Down-MACRO Tradeable Shares, directly or
indirectly, through such DTC Participant. The Administrative Agent shall provide
each such DTC Participant with sufficient copies of such notice, statement or
other communication, in such form, number and at such place as such DTC
Participant may reasonably request, in order that such notice, statement or
communication may be transmitted by such DTC Participant, directly or
indirectly, to such Beneficial Owners. In addition, the Down-MACRO Tradeable
Trust shall reimburse each such DTC Participant for the expenses attendant to
such transmittal, subject to applicable statutory and regulatory requirements.
The Administrative Agent or Depositor will instruct the Trust to pay said
expenses.
(d) Distributions on Book-Entry Certificates. All distributions on
the Down-MACRO Tradeable Shares shall be made to the Depository or its nominee,
Cede & Co., as the registered owner of all Down-MACRO Tradeable Shares. The
Trustee and the Depositor expect that the Depository or its nominee, upon
receipt of any distributions made in respect of the Down-MACRO Tradeable Shares,
shall credit immediately the DTC Participants' accounts with payments in amounts
proportionate to their respective beneficial interests in the Down-MACRO
Tradeable Shares as shown on the records of the Depository or its nominee. The
Trustee and the Depositor also expect that payments by DTC Participants to
Indirect Participants and Beneficial Owners held through such DTC Participants
and Indirect Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in a "street name," and shall be the
responsibility of such DTC Participants and Indirect Participants. None of the
Trustee, the Depositor or the Administrative Agent shall have any responsibility
or liability for any aspects of the records relating to or notices to Beneficial
Owners, or payments made on account of beneficial ownership interests in the
Down-MACRO Tradeable Shares, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests or for any other aspect
of the relationship between the Depository and the DTC Participants or the
relationship between such DTC Participants and the Indirect Participants and
Beneficial Owners owning through such DTC Participants or Indirect Participants
or between or among the Depository, any Beneficial Owner and any Person by or
through which such Beneficial Owner is considered to own Down-MACRO Tradeable
Shares.
(e) Registration of Transfer; Restrictions on Transfer.
(i) The Trustee shall cause to be kept at its Corporate Trust
Office a register (the "Share Register") in which, subject to such
reasonable regulations as it may prescribe, a transfer agent and registrar
(the "Transfer Agent and Registrar") shall provide for the registration of
the Down-MACRO Tradeable Shares and of transfers and exchanges of such
shares as herein provided. The Transfer Agent and Registrar shall
initially be the Trustee. The Depositor may revoke such appointment and
remove any Transfer Agent and Registrar if the Depositor determines in its
sole discretion that such Transfer Agent and Registrar failed to perform
the responsibilities of the Transfer Agent
14
and Registrar set forth in this Trust Agreement in any material respect.
Any Transfer Agent and Registrar shall be permitted to resign as Transfer
Agent and Registrar upon thirty (30) days' notice to the Depositor and the
Trustee; provided, however, that such resignation shall not be effective
and such Transfer Agent and Registrar shall continue to perform its duties
as Transfer Agent and Registrar until the Trustee has appointed a
successor Transfer Agent and Registrar reasonably acceptable to the
Depositor.
(ii) Transfers of the Global Certificates shall be limited to
transfers of such Global Certificates in whole, but not in part, to
nominees of the Depository or to a successor of the Depository or such
successor's nominee. When a Global Certificate is presented for
registration of transfer, the Depositor shall execute, the Trustee shall
authenticate and the Transfer Agent and Registrar shall register one or
more new Global Certificates in the name of the designated transferee or
transferees. Each Global Certificate presented for registration of
transfer shall be accompanied by a written instrument of transfer in a
form satisfactory to the Trustee or the Transfer Agent and Registrar duly
executed by the Registered Owner or the attorney-in-fact thereof duly
authorized in writing. No service charge shall be made for any
registration of transfer or exchange of Down-MACRO Tradeable Shares, but
the Transfer Agent and Registrar may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in
connection with any such transfer or exchange.
(f) Mutilated, Destroyed, Lost or Stolen Global Certificate. If (a)
any mutilated Global Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence to its
satisfaction of the destruction, loss or theft of any Global Certificate and (b)
there is delivered to the Transfer Agent and Registrar and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice to the Trustee that such Global Certificate has
been acquired by a bona fide purchaser, the Depositor shall execute, the Trustee
shall authenticate and the Transfer Agent and Registrar shall deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen Global
Certificate, a new Global Certificate of like tenor and aggregate beneficial
interest. In connection with the issuance of any new Global Certificate under
this Section 2.5(f), the Trustee or the Transfer Agent and Registrar may require
the payment by the Registered Owner of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Transfer Agent
and Registrar) connected therewith. Any duplicate Global Certificate issued
pursuant to this Section 2.5(f) shall constitute complete and indefeasible
evidence of ownership in the Down-MACRO Tradeable Trust, as if originally
issued, whether or not the lost, stolen or destroyed Global Certificate shall be
found at any time.
ARTICLE 3
APPOINTMENT OF THE TRUSTEE,
ADMINISTRATIVE AGENT AND MARKETING AGENTS;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the
Trustee.
(a) Investors Bank & Trust Company agrees to act as Trustee, Trust
Accounting Agent, Custodian, Transfer Agent and Registrar under this Trust
Agreement and has concurrently agreed to act as the Down-MACRO Holding Trustee
under the Down-MACRO
15
Holding Trust Agreement, the Up-MACRO Holding Trustee under the Up-MACRO Holding
Trust Agreement and the Up-MACRO Tradeable Trustee under the Up-MACRO Tradeable
Trust Agreement. The Holders of the Down-MACRO Tradeable Shares, by their
acceptance of their shares, consent to Investors Bank & Trust Company acting as
Trustee under this Trust Agreement and as trustee for the Down-MACRO Holding
Trust under the Down-MACRO Holding Trust Agreement, as trustee for the Up-MACRO
Holding Trust under the Up-MACRO Holding Trust Agreement and as trustee for the
Up-MACRO Tradeable Trust under the Up-MACRO Tradeable Trust Agreement.
(b) Subject to the limited purposes and functions of the Down-MACRO
Tradeable Trust specified in Section 2.3 hereof, the Trustee is hereby
authorized, instructed and empowered (i) to make deposits and withdrawals from
the Securities Account, the Distribution Account and the Netting Account, as set
forth in this Trust Agreement; (ii) to make distributions on the Down-MACRO
Tradeable Shares in accordance with Section 5.2 hereof; (iii) to administer the
Down-MACRO Tradeable Trust; (iv) to furnish to the Down-MACRO Holding Trustee
and the Administrative Agent notification of and all documentation relating to
the fees and expenses incurred by the Down-MACRO Tradeable Trust, pursuant to
Section 5.3 of this Trust Agreement; (v) to effect the exchange of Down-MACRO
Tradeable Shares in connection with Paired Optional Redemptions and Paired
Issuances in accordance with the provisions of Section 6.1 and Section 6.2
hereof, and to effect exchanges of Down-MACRO Tradeable Shares pursuant to
Section 6.3 hereof; (vi) to enter into the Participants Agreement, the MACRO
Licensing Agreement, the NYMEX Sublicensing Agreement and the Calculation Agency
Agreement; (vii) to make certain calculations on behalf of the Down-MACRO
Tradeable Trust; and (viii) to take any action required or permitted under this
Trust Agreement and any action needed for the daily operation of the Down-MACRO
Tradeable Trust. Without limiting the generality of the foregoing and with the
prior written consent of the Depositor, the Trustee is hereby authorized and
empowered to make any filings, reports, notices, applications and registrations
with, and to seek any consents or authorizations from, the SEC and any state
securities authority on behalf of the Down-MACRO Tradeable Trust as may be
necessary or advisable to comply with any federal or state securities laws or
reporting requirements; provided, however, that the Depositor shall make all
filings with the SEC and under state securities laws on behalf of the Down-MACRO
Tradeable Trust to the extent required to do so hereby.
(c) Pursuant to Section 3.1(c) of the Down-MACRO Holding Trust
Agreement the Trustee shall be entitled to be reimbursed for any expenses
incurred by it, with the prior approval of the Depositor or the Administrative
Agent, in connection with the performance of its duties under this Trust
Agreement, including, without limitation, the fees and disbursements of any
custodian, Transfer Agent and Registrar, the reasonable fees and expenses of
legal counsel, the fees and disbursements of Independent accountants, and the
expenses associated with failed Creation and Exchange Orders under the
Participants Agreement. If so instructed by the Depositor or the Administrative
Agent, the Trustee may expend its own funds on behalf of the Down-MACRO
Tradeable Trust and shall be reimbursed therefor on the next scheduled
Distribution Payment Date.
(d) The Down-MACRO Tradeable Trust shall not, and the Trustee shall
not cause the Down-MACRO Tradeable Trust to, nor shall the Depositor direct the
Trustee to, engage in any activity other than as required or authorized by this
Trust Agreement. In particular, the Down-MACRO Tradeable Trust shall not and the
Trustee shall not cause the Down-MACRO Tradeable Trust to:
16
(i) invest any interest or other distributions paid in respect
of the Trust Assets, but shall distribute all such proceeds to the Holders
on the date of receipt thereof pursuant to the terms of this Trust
Agreement and of the Down-MACRO Tradeable Shares;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust Assets for a purpose other than those
described in Section 2.3;
(iv) sell, pledge, hypothecate or transfer the Down-MACRO
Holding Shares (except in accordance with Section 6.2 or Section 6.3);
(v) make any loans or incur any indebtedness or acquire any
securities other than Down-MACRO Holding Shares;
(vi) except as expressly permitted pursuant to Section 15.1,
act in such a way as to vary the terms of the Down-MACRO Tradeable Shares
in any way whatsoever;
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Down-MACRO Tradeable Trust,
other than the Down-MACRO Tradeable Shares and the Founders' Shares, which
shall be redeemed and cancelled by the Trustee upon the first issuance of
Down-MACRO Tradeable Shares and shall not thereafter be reissued;
(viii) (A) direct the time, method and place of conducting any
proceeding for any remedy available to the Down-MACRO Tradeable Trust as
the holder of the Down-MACRO Holding Shares or exercising any power
conferred upon Holders of Down-MACRO Holding Shares, (B) waive any past
default or violation that is waivable under the terms of the Down-MACRO
Holding Shares or (C) consent to any amendment or modification of the
terms of any Down-MACRO Holding Shares where such consent shall be
required, except, in each case, if permitted hereby or after receiving
instructions from the Holders of the Down-MACRO Tradeable Shares pursuant
to Section 15.6(b) hereof;
(ix) file a certificate of cancellation of the Down-MACRO
Tradeable Trust or take any other action to terminate the Down-MACRO
Tradeable Trust, except in connection with a liquidation thereof pursuant
to ARTICLE 14 hereof;
(x) take any action that would cause the Down-MACRO Tradeable
Trust to be classified other than as a grantor trust for U.S. federal
income tax purposes; or
(xi) take any action that would cause the Down-MACRO Tradeable
Trust to be required to register as an investment company under the
Investment Company Act or as a commodity pool under the CEAct.
Section 3.2 Representations, Warranties and Covenants of the
Trustee. Investors Bank & Trust Company, in its capacity as initial Trustee
under this Trust Agreement, hereby makes, and any successor Trustee by its
appointment hereunder shall make, on the Closing Date (or on the applicable date
of appointment), the following representations, warranties and covenants to the
Down-MACRO Tradeable Trust (and agrees that the Depositor, the
17
Administrative Agent and the Holders of the Down-MACRO Tradeable Shares may rely
on each such representation, warranty and covenant):
(a) Organization and Good Standing. The Trustee is a Massachusetts
trust company and a wholly-owned subsidiary of a bank holding company (or with
respect to any successor Trustee, such other corporate entity as may be
applicable), duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts (or with respect to any successor
Trustee, under the laws of the applicable jurisdiction of organization), and has
full trust power, authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned and
as such business is presently conducted.
(b) Due Qualification. The Trustee is duly qualified to do business
and is in good standing as a foreign trust company (or is exempt from such
requirements), and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the interests of the Holders
of the Down-MACRO Tradeable Shares hereunder.
(c) Due Authorization. The execution, delivery, and performance of
this Trust Agreement has been duly authorized by the Trustee by all necessary
trust action on the part of the Trustee.
(d) Binding Obligation. This Trust Agreement constitutes a legal,
valid and binding obligation of the Trustee, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditors' rights in general and except as
such enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust Agreement
by the Trustee, the performance of the transactions contemplated by this Trust
Agreement and the fulfillment of the terms hereof applicable to the Trustee,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any Requirement of Law applicable to the
Trustee or any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Trustee is a party or by which it or any of its
properties are bound.
(f) No Proceedings. There are no proceedings or investigations
pending or threatened against the Trustee before any Governmental Authority
seeking to prevent the issuance of the Down-MACRO Tradeable Shares or the
consummation of any of the transactions contemplated by this Trust Agreement,
seeking any determination or ruling that, in the reasonable judgment of the
Trustee, would materially and adversely affect the performance by the Trustee of
its obligations under this Trust Agreement, or seeking any determination or
ruling that would materially and adversely affect the validity or enforceability
of this Trust Agreement.
(g) Compliance with Requirements of Law. The Trustee shall duly
satisfy all of its obligations and duties under this Trust Agreement and shall
maintain in effect all qualifications and will comply in all material respects
with all of the Requirements of Law in connection with its duties hereunder,
inasmuch as a failure to comply with such requirements would have a material
adverse effect on the interests of the Holders of the Down-MACRO Tradeable
Shares.
18
(h) Protection of the Rights of Holders of the Down-MACRO Tradeable
Shares. The Trustee shall take no action which, nor omit to take any action the
omission of which, would materially impair the rights of Holders of the
Down-MACRO Tradeable Shares, nor shall it revise amounts to be distributed on
the Down-MACRO Tradeable Shares.
(i) All Consents Required. All approvals, authorizations, consents,
orders or other actions of any Person or of any Governmental Authority required
in connection with the execution and delivery by the Trustee of this Trust
Agreement, the performance by the Trustee of the transactions contemplated by
this Trust Agreement and the fulfillment by the Trustee of the terms hereof,
have been obtained; provided, however, that the Trustee makes no representation
or warranty regarding state securities or "blue sky" laws in connection with the
distribution of the Down-MACRO Tradeable Shares.
(j) No Affiliation. The Trustee is not an Affiliated Person with
respect to the Depositor, the Down-MACRO Tradeable Trust, either of the Paired
Holding Trusts, the Up-MACRO Tradeable Trust, the Administrative Agent, either
Marketing Agent or any Authorized Participant, and it is not an Affiliated
Person with respect to any Person who is an Affiliated Person with respect to
any of the foregoing entities; further, the Trustee does not, and will not for
so long as it acts as Trustee hereunder, offer or provide credit or credit
enhancement to any of the MACRO Trusts, with the exception of extensions of
credit incurred in the normal course of the Trustee's custody services to the
Down-MACRO Tradeable Trust, including overdrafts.
(k) Eligibility Requirements. The Trustee meets, and shall at all
times during which it acts as Trustee hereunder meet, the eligibility
requirements set forth in Section 13.7 hereof.
(l) No Holding of MACRO Shares. The Trustee shall not, for so long
as it acts as Trustee hereunder, acquire or hold any Down-MACRO Holding Shares,
Up-MACRO Holding Shares, Down-MACRO Tradeable Shares or Up-MACRO Tradeable
Shares for its own account.
(m) Maintenance of Records and Books of Account. The Trustee shall
maintain and implement administrative and operating procedures (including the
ability to recreate records evidencing any transaction entered into by the
Down-MACRO Tradeable Trust in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, computer records and other
information, reasonably necessary or advisable for no less than five years after
the termination of the Trust. Such documents, books and computer records shall
reflect all facts giving rise to such transactions, all payments and credits
with respect thereto, and, to the extent required, such documents, books and
computer records shall indicate the interests of the Down-MACRO Tradeable Trust
in such transactions.
Section 3.3 Acceptance of Appointment and Matters Relating to the
Administrative Agent and the Marketing Agents.
(a) Claymore Securities, Inc. agrees to act as Administrative Agent
under this Agreement and the Holders of the Down-MACRO Tradeable Shares by their
acceptance of their shares consent to Claymore Securities, Inc. acting as
Administrative Agent under this Trust Agreement and as administrative agent for
the Down-MACRO Holding Trust under the Down-MACRO Holding Trust Agreement, for
the Up-MACRO Holding Trust under the Up-MACRO Holding Trust Agreement and for
the Up-MACRO Tradeable Trust under the Up-MACRO Tradeable Trust Agreement.
Claymore Securities, Inc. and MACRO Financial, LLC each agree to act as a
Marketing Agent under this Trust Agreement and the Holders of the Down-MACRO
19
Tradeable Shares by their acceptance of their shares consent to each of Claymore
Securities, Inc. and MACRO Financial, LLC acting as a Marketing Agent under this
Trust Agreement and as a marketing agent for the Down-MACRO Holding Trust under
the Down-MACRO Holding Trust Agreement, for the Up-MACRO Holding Trust under the
Up-MACRO Holding Trust Agreement and for the Up-MACRO Tradeable Trust under the
Up-MACRO Tradeable Trust Agreement.
(b) The Administrative Agent shall direct the Trustee in effecting
exchanges of Down-MACRO Tradeable Shares for the underlying Down-MACRO Holding
Shares in connection with Paired Issuances and Paired Optional Redemptions. The
Administrative Agent shall have full power and authority, acting alone or
through any party properly designated by it hereunder, to do any and all things
in connection with the foregoing duties which it may deem necessary or
desirable. The Administrative Agent shall not be obligated to use separate
offices, employees or accounts in carrying out its duties hereunder. The
Depositor and the Trustee shall furnish to the Administrative Agent any powers
of attorney or other documents necessary or appropriate to enable the
Administrative Agent to carry out its administrative duties hereunder.
(c) The Administrative Agent shall comply with and perform its
administrative obligations set forth in the Down-MACRO Holding Trust Agreement
and the Up-MACRO Holding Trust Agreement in accordance with the terms of each
such agreement and the Holders of the Down-MACRO Tradeable Shares shall be third
party beneficiaries of the Administrative Agent's covenants to perform its
obligations under such agreements. The Administrative Agent shall also at all
times maintain the MACROshares Website.
(d) Each Marketing Agent shall comply with and perform its
obligations with respect to the Down-MACRO Tradeable Shares in accordance with
the terms of a separate letter agreement entered into between the Depositor and
each such Marketing Agent.
(e) As compensation for acting as the Administrative Agent and a
Marketing Agent under the terms of this Trust Agreement, Claymore Securities,
Inc. will be entitled to receive the Down-MACRO Administration and Marketing
Fee, which shall be payable to it in arrears on each Distribution Payment Date
in accordance with the provisions of Section 5.4 of the Down-MACRO Holding Trust
Agreement. The Administrative Agent shall not be liable for any expenses
incurred by it on behalf of the Down-MACRO Tradeable Trust, but shall be
responsible for its overhead expenses related to the performance of its
obligations under this Trust Agreement.
(f) As compensation for acting as a Marketing Agent, MACRO
Financial, LLC will be entitled to receive the Down-MACRO Marketing Fee, which
shall be payable to it in arrears on each Distribution Payment Date in
accordance with the provisions of Section 5.4 of the Down-MACRO Holding Trust
Agreement.
Section 3.4 Representations, Warranties and Covenants of the
Administrative Agent and the Marketing Agents.
(a) Claymore Securities, Inc., in its capacity as the Administrative
Agent, hereby makes, and any successor Administrative Agent by its appointment
hereunder shall make, on the Closing Date (or on the date of any such
appointment), the following representations, warranties and covenants to the
Down-MACRO Tradeable Trust (and agrees that the Depositor and the Trustee may
rely on each such representation, warranty and covenant in fulfilling their
respective duties hereunder):
20
(i) Organization and Good Standing. The Administrative Agent
is a Kansas corporation (or with respect to any successor Administrative
Agent, such other corporate entity as may be applicable) duly organized,
validly existing and in good standing under the laws of the State of
Kansas (or with respect to any successor Administrative Agent, the
applicable jurisdiction of its organization), and has full corporate
power, authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and, in all material respects, to
own its properties and conduct its business as such properties are
presently owned and as such business is presently conducted.
(ii) Due Qualification. The Administrative Agent is duly
qualified to do business and is in good standing as a foreign corporation
(or is exempt from such requirements), and has obtained all necessary
licenses and approvals in each jurisdiction in which failure to so qualify
or to obtain such licenses and approvals would have a material adverse
effect on the interests of the Holders of the Down-MACRO Tradeable Shares
hereunder.
(iii) Due Authorization. The execution, delivery and
performance of this Trust Agreement has been duly authorized by the
Administrative Agent by all necessary corporate action on the part of the
Administrative Agent.
(iv) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Administrative Agent,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect, affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(v) No Violation. The execution and delivery of this Trust
Agreement by the Administrative Agent, the performance of the transactions
contemplated by this Trust Agreement and the fulfillment of the terms
hereof applicable to the Administrative Agent will not conflict with,
violate, result in any breach of any of the material terms and provisions
of, or constitute (with or without notice or lapse of time or both) a
material default under, any Requirement of Law applicable to the
Administrative Agent or any indenture, contract, agreement, mortgage, deed
of trust or other instrument to which the Administrative Agent is a party
or by which it or any of its properties are bound.
(vi) No Proceedings. There are no proceedings or
investigations pending or threatened against the Administrative Agent
before any Governmental Authority seeking to prevent the consummation of
any of the transactions contemplated by this Trust Agreement, seeking any
determination or ruling that, in the reasonable judgment of the
Administrative Agent, would materially and adversely affect the
performance by the Administrative Agent of its obligations under this
Trust Agreement, or seeking any determination or ruling that would
materially and adversely affect the validity or enforceability of this
Trust Agreement.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by the
Administrative Agent of this Trust Agreement, the performance by the
Administrative Agent of the transactions contemplated by this Trust
Agreement and the fulfillment by the Administrative Agent of
21
the terms hereof, have been obtained; provided, however, that the
Administrative Agent makes no representation or warranty regarding state
securities or "blue sky" laws in connection with the distribution of the
Down-MACRO Tradeable Shares.
(viii) Additional Registration of Shares. The Administrative
Agent will make commercially reasonable efforts to maintain a sufficient
number of Down-MACRO Tradeable Shares registered pursuant to the
Securities Act available for the fulfillment of Creation Orders as they
are received.
(b) Claymore Securities, Inc. and MACRO Financial, LLC, each in its
capacity as a Marketing Agent hereunder, hereby makes, and any successor
Marketing Agent by its appointment hereunder shall make, on the Closing Date (or
on the date of any such appointment), the following representations, warranties
and covenants to the Down-MACRO Tradeable Trust (and agrees that the Depositor
and the Trustee may rely on each such representation, warranty and covenant in
fulfilling their respective duties hereunder):
(i) Organization and Good Standing. Claymore Securities, Inc.
is a Kansas corporation and MACRO Financial, LLC is a Delaware limited
liability company (or with respect to any successor Marketing Agent, such
other corporate entity as may be applicable) duly organized, validly
existing and in good standing under the laws of the State of Kansas and
Delaware, as applicable (or with respect to any successor Marketing Agent,
the applicable jurisdiction of its organization), and each of them has
full corporate or other power, authority and legal right to execute,
deliver and perform its obligations under this Trust Agreement and, in all
material respects, to own its properties and conduct its business as such
properties are presently owned and as such business is presently
conducted.
(ii) Due Qualification. Each Marketing Agent is duly qualified
to do business and is in good standing as a foreign corporation (or is
exempt from such requirements), and has obtained all necessary licenses
and approvals in each jurisdiction in which failure to so qualify or to
obtain such licenses and approvals would have a material adverse effect on
the interests of the Holders of the Down-MACRO Tradeable Shares hereunder.
(iii) Due Authorization. The execution, delivery and
performance of this Trust Agreement has been duly authorized by each
Marketing Agent by all necessary corporate or other action.
(iv) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of each of the Marketing Agents,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect, affecting the
enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(v) No Violation. The execution and delivery of this Trust
Agreement by each of the Marketing Agents, the performance of the
transactions contemplated by this Trust Agreement and the fulfillment of
the terms hereof applicable to each Marketing Agent, will not conflict
with, violate, result in any breach of any of the material terms and
provisions of, or constitute (with or without notice or lapse of time or
both) a material default under, any Requirement of Law applicable to
either Marketing
22
Agent or any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which either MarketingAgent is a party or by which it
or any of its properties are bound.
(vi) No Proceedings. There are no proceedings or
investigations pending or threatened against either Marketing Agent before
any Governmental Authority seeking to prevent the consummation of any of
the transactions contemplated by this Trust Agreement, seeking any
determination or ruling that, in the reasonable judgment of such Marketing
Agent, would materially and adversely affect the performance by it of its
obligations under this Trust Agreement, or seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Trust Agreement.
(vii) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by each
Marketing Agent of this Trust Agreement, the performance by each Marketing
Agent of the transactions contemplated by this Trust Agreement and the
fulfillment by each Marketing Agent of the terms hereof, have been
obtained; provided, however, that neither Marketing Agent makes any
representation or warranty regarding state securities or "blue sky" laws
in connection with the distribution of the Down-MACRO Tradeable Shares.
Section 3.5 Establishment of the Securities Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Down-MACRO Tradeable Trust and for the benefit of the
Holders of the Down-MACRO Tradeable Shares, an Eligible Deposit Account bearing
a designation clearly indicating that the Down-MACRO Holding Shares deposited
therein are held for the benefit of the Holders of the Down-MACRO Tradeable
Shares (the "Securities Account").
(b) The Securities Account shall initially be established with the
Trustee. The Trustee shall possess all right, title and interest in and to all
of the Down-MACRO Holding Shares on deposit from time to time in the Securities
Account and in all proceeds thereof for the benefit of the Holders of the
Down-MACRO Tradeable Shares.
(c) The Securities Account shall be under the sole dominion and
control of the Trustee for the benefit of the Holders of the Down-MACRO
Tradeable Shares. Except as expressly provided in this Trust Agreement, each of
the Depositor, the Administrative Agent and the Trustee agree that it shall have
no right of set-off or banker's lien against, and no right to otherwise deduct
from, any assets held in the Securities Account for any amount owed to it by the
Down-MACRO Tradeable Trust or any Holder of Down-MACRO Tradeable Shares. If at
any time the Securities Account ceases to be an Eligible Deposit Account, the
Trustee shall within twenty (20) Business Days establish a new account, transfer
any assets to such new account, and from the date such new account is
established it shall be the "Securities Account" for purposes of this Trust
Agreement.
(d) In connection with each deposit of Down-MACRO Holding Shares
into the Down-MACRO Tradeable Trust, whether done as part of a Paired Issuance
or otherwise, the Trustee shall credit all Down-MACRO Holding Shares delivered
to it by the Down-MACRO Holding Trustee to the Securities Account on the date on
which the Down-MACRO Tradeable Trust becomes the beneficial owner of such shares
on the records of the Depository.
23
(e) In connection with each exchange of Down-MACRO Tradeable Shares
for the underlying Down-MACRO Holding Shares, whether done as part of a Paired
Optional Redemption or otherwise, the Trustee shall remove such Down-MACRO
Holding Shares from the Securities Account and debit the Securities Account such
Down-MACRO Holding Shares in the amount and on the date specified to the Trustee
by the Administrative Agent.
(f) In connection with the Final Scheduled Termination Date or an
Early Termination Date, the Trustee shall remove all remaining Down-MACRO
Holding Shares from the Securities Account and deliver such Down-MACRO Holding
Shares to the Down-MACRO Holding Trustee for cancellation and debit the
Securities Account from all such Down-MACRO Holding Shares.
Section 3.6 Establishment of the Distribution Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Down-MACRO Tradeable Trust and for the benefit of the
Holders of the Down-MACRO Tradeable Shares, an Eligible Deposit Account bearing
a designation clearly indicating that the funds deposited therein are held for
the benefit of the Holders of the Down-MACRO Tradeable Shares (the "Distribution
Account").
(b) The Distribution Account shall initially be established with the
Trustee. The Trustee shall possess all right, title and interest in and to all
funds on deposit from time to time in the Distribution Account and in all
proceeds thereof. The Distribution Account shall be under the sole dominion and
control of the Trustee for the benefit of the Holders of the Down-MACRO
Tradeable Shares.
(c) Except as expressly provided in this Trust Agreement, each of
the Depositor, the Administrative Agent and the Trustee agree that it shall have
no right of set-off or banker's lien against, and no right to otherwise deduct
from, any funds held in the Distribution Account for any amount owed to it by
the Down-MACRO Tradeable Trust or any Holder of Down-MACRO Tradeable Shares. If,
at any time, the Distribution Account ceases to be an Eligible Deposit Account,
the Trustee shall within twenty (20) Business Days establish a new account,
transfer any funds on deposit therein to such new account, and from the date
such new account is established, it shall be the "Distribution Account" for
purposes of this Trust Agreement.
(d) Immediately upon receipt thereof, the Trustee shall deposit into
the Distribution Account any distribution amount received on the Down-MACRO
Holding Shares held by the Down-MACRO Tradeable Trust and shall distribute such
amount, on the same Business Day on which such amount is received, to the
Holders of the Down-MACRO Tradeable Shares, ratably based on the Aggregate Par
Amount of Down-MACRO Tradeable Shares held by each such Holder.
Section 3.7 Establishment of the Netting Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Down-MACRO Tradeable Trust and for the benefit of the
Holders of the Down-MACRO Tradeable Shares, an Eligible Deposit Account bearing
a designation that the securities deposited therein are held for the benefit of
the Holders of the Down-MACRO Tradeable Shares (the "Netting Account").
24
(b) The Netting Account shall initially be established with the
Trustee. The Trustee shall possess all right, title and interest in and to all
the securities on deposit from time to time in the Netting Account. The Netting
Account shall be under the sole dominion and control of the Trustee for the
benefit of the Holders of the Down-MACRO Tradeable Shares.
(c) On the Redemption Date, the Issuance Date or the Business Day
following the Business Day in which an Exchange Order was submitted, on which
(i) both a Redemption Order in which Tradeable Shares are submitted and an
Issuance Order in which Tradeable Shares are requested, are to be executed, (ii)
both a Redemption Order in which Tradeable Shares are submitted and an Exchange
Order pursuant to Section 6.3 in which Down-MACRO Tradeable Shares are
requested, are to be executed or (iii) both an Issuance Order in which Tradeable
Shares are requested and an Exchange Order pursuant to Section 6.3 in which
Down-MACRO Tradeable Shares are submitted, are to be executed, the Trustee shall
net such Down-MACRO Tradeable Shares to be redeemed and/or exchanged against the
Down-MACRO Tradeable Shares to be issued and/or exchanged as follows:
(i) if there is a positive difference between the number of
shares to be redeemed and/or exchanged and the number of shares to be
issued and/or exchanged, the Trustee shall cancel the number of Down-MACRO
Tradeable Shares equal to such positive difference and deliver all
remaining Down-MACRO Tradeable Shares credited to the Netting Account to
the Authorized Participants who directed the issuance or exchange, as
applicable, of such shares; or
(ii) if there is a positive difference between the number of
shares to be issued and/or exchanged and the number of shares to be
redeemed and/or exchanged, the Trustee shall cause the Down-MACRO
Tradeable Trust to issue new Down-MACRO Tradeable Shares in the amount of
such positive difference and deliver such newly-issued Down-MACRO
Tradeable Shares and all Down-MACRO Tradeable Shares credited to the
Netting Account to the Authorized Participants who directed the issuance
of such shares.
(iii) No Down-MACRO Tradeable Shares shall remain on deposit
in the Netting Account at the end of each Business Day.
ARTICLE 4
CALCULATIONS
Section 4.1 Calculations on Price Determination Days.
(a) With respect to each Price Determination Day, the Trustee shall
calculate and provide to the Administrative Agent and the Calculation Agent,
within the time period agreed upon by the Trustee, the Administrative Agent and
the Calculation Agent, the following data: (i) the number of Down-MACRO Holding
Shares on deposit in the Down-MACRO Tradeable Trust on such preceding Business
Day; (ii) the aggregate amount of Down-MACRO Tradeable Shares Outstanding on
such Business Day; and (iii) the Per Share Underlying Value of an Down-MACRO
Tradeable Share on such Business Day.
For purposes of calculating the foregoing amounts on any Business
Day, any issuances or exchanges of Down-MACRO Tradeable Shares scheduled to
settle on such Business Day shall be taken into account in making such
calculations.
25
(b) The Trustee's calculations pursuant to clause (a) of this
Section 4.1 shall be conclusive and binding upon the Holders of the Down-MACRO
Tradeable Shares and all other Persons.
Section 4.2 Calculation of Intraday Indicative Values.
Intraday indicative values for the Per Share Underlying Value of the
Down-MACRO Tradeable Shares based on the intraday trading prices of the
Applicable Reference Price of Crude Oil will be calculated by the Calculation
Agent under the Calculation Agency Agreement based upon the Applicable Reference
Price of Crude Oil and the data provided to the Calculation Agent by the Trustee
pursuant to Section 4.1 of this Trust Agreement, by the Down-MACRO Holding
Trustee pursuant to Section 4.1 of the Down-MACRO Holding Trust Agreement and by
the Up-MACRO Holding Trustee pursuant to Section 4.1 of the Up-MACRO Holding
Trust Agreement.
ARTICLE 5
DISTRIBUTIONS ON THE DOWN-MACRO TRADEABLE SHARES
Section 5.1 Rights of Holders of the Down-MACRO Tradeable Shares.
Each Down-MACRO Tradeable Share represents an undivided beneficial interest in
the Down-MACRO Tradeable Trust and the Beneficial Owner thereof is entitled to
receive distributions on such Down-MACRO Tradeable Share on the dates and in the
amounts specified in Section 5.2 from assets on deposit in the Down-MACRO
Tradeable Trust.
Section 5.2 Distributions. The Trustee, on behalf of the Down-MACRO
Tradeable Trust, shall make the following distributions from amounts on deposit
in the Distribution Account:
(a) Quarterly Distributions. On the Distribution Payment Date that
follows each Distribution Date, the Trustee shall distribute to each Person who
was a Registered Owner of the Down-MACRO Tradeable Shares as of the Record Date
that preceded such Distribution Payment Date an amount equal to the portion of
the Quarterly Distribution received by the Down-MACRO Tradeable Trust on the
Down-MACRO Holding Shares it holds on deposit, in cash, for delivery thereof by
the Depository to each Person who was a Beneficial Owner of Down-MACRO Tradeable
Shares on such Record Date.
(b) Final Distributions. On the Distribution Payment Date that
follows the Final Scheduled Termination Date or an Early Termination Date, the
Trustee shall distribute to each Person who was a Registered Owner of the
Down-MACRO Tradeable Shares as of the Record Date that preceded such
Distribution Payment Date an amount equal to the portion of the Final
Distribution received by the Down-MACRO Tradeable Trust on the Down-MACRO
Holding Shares it holds on deposit, in cash, for delivery thereof by the
Depository to each Person who was a Beneficial Owner of Down-MACRO Tradeable
Shares on such Record Date.
Section 5.3 Payment of Fees and Expenses. All fees and expenses of
the Down-MACRO Tradeable Trust shall be paid by the Down-MACRO Holding Trust
pursuant to the provisions of Section 5.3 and Section 5.4 of the Down-MACRO
Holding Trust Agreement. The Trustee shall promptly deliver to the Down-MACRO
Holding Trustee and the Administrative Agent, notice of and any documentation
relating to any expense incurred by and on behalf of the Down-MACRO Tradeable
Trust and any fee payable by the Down-MACRO Tradeable Trust.
26
ARTICLE 6
EXCHANGES OF DOWN-MACRO TRADEABLE SHARES
Section 6.1 Exchanges in Connection with Paired Optional
Redemptions.
(a) On any Price Determination Day occurring after the Closing Date
but prior to the Final Scheduled Termination Date or an Early Termination Date,
any Authorized Participant may direct the redemption of Paired Holding Shares by
delivering a Redemption Order to the Administrative Agent and satisfying the
conditions set forth in Section 6.1 of the Down-MACRO Holding Trust Agreement
(such redemption, a "Paired Optional Redemption"). Any Authorized Participant
who wishes to direct a Paired Optional Redemption pursuant to Section 6.1 of the
Down-MACRO Holding Trust Agreement and who holds Down-MACRO Tradeable Shares,
may direct an exchange and concurrent redemption of its Down-MACRO Tradeable
Shares for their underlying Down-MACRO Holding Shares pursuant to and in
accordance with the procedures specified in the Participants Agreement. The
Authorized Participant directing the Paired Optional Redemption must be the
Beneficial Owner of the Paired Holding Shares or the Down-MACRO and Up-MACRO
Tradeable Shares which are being tendered for redemption, as shown on the
records of the Depository.
(b) Following the Redemption Date, the redeeming Authorized
Participant must transfer to the Trustee, not later than the date and time
specified in the Participants Agreement, the requisite number of Paired Holding
Shares or Down-MACRO Tradeable Shares and Up-MACRO Tradeable Shares constituting
at least one MACRO Unit or integral multiples thereof, plus the applicable
Redemption Cash Component, if any, and the transaction fee as specified in
Section 6.1(d), and provide written or electronic evidence of such deposit to
the Administrative Agent in accordance with the Participants Agreement.
(c) Pursuant to Section 6.1(c) of the Down-MACRO Holding Trust
Agreement, the Administrative Agent may, in its discretion, reject any
Redemption Order (i) if the Administrative Agent determines that the Redemption
Order is not in the required form, (ii) if Paired Holding Shares or Down-MACRO
and Up-MACRO Tradeable Shares constituting at least one or more whole MACRO
Units are not tendered to the Trustee for redemption, (iii) if the Depositor has
determined, based upon an opinion of counsel, and advised the Trustee, that such
Redemption Order would have adverse tax or securities laws consequences for
either of the Paired Holding Trusts, the Down-MACRO Tradeable Trust or Up-MACRO
Tradeable Trust, the Holders of the Paired Holding Shares or the Holders of the
Down-MACRO Tradeable Shares or Up-MACRO Tradeable Shares, (iv) if the acceptance
or receipt of the Redemption Order would, in the opinion of counsel to the
Depositor acceptable to the Trustee, be unlawful, (v) if any such redemption
would cause the Down-MACRO Tradeable Trust to hold fifty percent or less of the
Outstanding Down-MACRO Holding Shares, (vi) if circumstances outside the control
of the Trustee, the Depositor or the Administrative Agent make it impractical or
not feasible to process the Redemption Order on the Redemption Order Date or the
Redemption Date, or (vii) if the Up-MACRO Holding Trustee has notified the
Trustee that it has rejected the related Redemption Order or the related
Exchange Order delivered under the Up-MACRO Holding Trust Agreement for one of
the reasons described in Section 6.1(c) of the Up-MACRO Holding Trust Agreement.
None of the Trustee, the Depositor or the Administrative Agent shall be liable
to any Person for rejecting a Redemption Order pursuant to Section 6.1(c) of the
Down-MACRO and/or Up-MACRO Holding Trust Agreement.
27
(d) A non-refundable transaction fee will be payable to the
Down-MACRO Holding Trustee for its own account in the amount specified in
Section 7 of the Participants Agreement in connection with each Redemption
Order.
(e) On any Distribution Date that is an Early Termination Date, or
the Final Scheduled Termination Date, the Trustee shall redeem all of the
Down-MACRO Tradeable Shares that are Outstanding on such Distribution Date at
their Per Share Underlying Value, as calculated on the immediately preceding
Price Determination Day, using the funds received on such date from the
Down-MACRO Holding Trustee pursuant to the terms of the Down-MACRO Holding Trust
Agreement.
Section 6.2 Paired Issuances.
(a) On any Price Determination Day that occurs after the Closing
Date but prior to the Final Scheduled Termination Date or an Early Termination
Date, the Down-MACRO Holding Trust shall issue additional Down-MACRO Holding
Shares contemporaneously with the issuance of additional Up-MACRO Holding Shares
in the form of MACRO Units (such an issuance, a "Paired Issuance") and, if
applicable, concurrently exchange such MACRO Units to their related Tradeable
Shares following the receipt of, and in accordance with, a Creation Order
delivered by an Authorized Participant and forwarded to the Trustee by the
Administrative Agent. Any Authorized Participant who directs a Paired Issuance
pursuant to Section 6.2 of the Down-MACRO Holding Trust Agreement shall be
deemed (unless it has specifically directed that Paired Holding Shares be
delivered to it) to direct the deposit of the Paired Holding Shares created in
such Paired Issuance into the Down-MACRO Tradeable Trust and the issuance in
exchange therefor of Down-MACRO Tradeable Shares which shall be delivered to the
Authorized Participant pursuant to and in accordance with the procedures
specified in the Participants Agreement.
(b) Subject to the requirements and limitations set forth herein, in
the Participants Agreement and in the Down-MACRO Holding Trust Agreement, the
number of Down-MACRO Tradeable Shares that the Down-MACRO Tradeable Trust may
issue is unlimited.
(c) Pursuant to Section 6.2(c) of the Down-MACRO Holding Trust
Agreement, the Administrative Agent may, in its discretion, reject any Creation
Order (i) if the Administrative Agent determines that the Creation Order is not
in the required form, (ii) if the Trustee notifies the Administrative Agent that
the Authorized Participant directing the Paired Issuance has not deposited
sufficient funds with the Trustee, (iii) if the Depositor determines, based upon
an opinion of counsel, that such Creation Order would have adverse tax or
securities law consequences for either of the Paired Holding Trusts, the
Down-MACRO Tradeable Trust or Up-MACRO Tradeable Trust, the Holders of the
Paired Holding Shares or the Holders of the Down-MACRO Tradeable Shares or Down
MACRO Tradeable Shares, (iv) the acceptance or fulfillment of which would, in
the opinion of counsel to the Depositor acceptable to the Trustee, be unlawful,
(v) if any such creation would cause the Down-MACRO Tradeable Trust to hold
fifty percent or less of the Outstanding Down-MACRO Holding Shares (vi) if the
Up-MACRO Holding Trustee notifies the Trustee that the Creation Order for
additional Up-MACRO Holding Shares has been or will be rejected by it, by the
Administrative Agent on behalf of the Up-MACRO Holding Trust, (vii) if
circumstances outside the control of the Trustee, the Depositor or the
Administrative Agent make it impractical or not feasible to process the Creation
Order on the Issuance Order Date or on the Issuance Date, or (viii) if there are
not sufficient Up-MACRO Tradeable Shares registered pursuant to the Securities
Act to fulfill such Creation Order. None of
28
the Trustee, the Depositor or the Administrative Agent shall be liable to any
Person by reason of the rejection of any Creation Order.
(d) A non-refundable transaction fee will be payable to the
Down-MACRO Holding Trustee for its own account in the amount specified in
Section 7 of the Participants Agreement in connection with each Creation Order.
Section 6.3 Exchanges of Down-MACRO Tradeable Shares Other than in
Paired Optional Redemptions or Paired Issuances.
(a) On any Business Day, an Authorized Participant may submit an
Exchange Order to the Administrative Agent requesting an exchange of its
Down-MACRO Tradeable Shares for the underlying Down-MACRO Holding Shares, and
the Administrative Agent, upon processing such Exchange Order, shall provide the
Trustee with the requisite information needed in order to effectuate such order.
The Administrative Agent shall provide such information at the times set forth
in Attachment A-III to the Participants Agreement. The Trustee and the
Administrative Agent, in effectuating each Exchange Order, shall follow the
procedures set forth herein and in Attachment A-III to the Participants
Agreement.
(b) The Administrative Agent will accept Exchange Orders only from
Authorized Participants with respect to which the Participants Agreement is in
full force and effect.
(c) After receiving an Authorized Participant's Exchange Order from
the Administrative Agent, the Trustee will, as directed in such Exchange Order,
either (i) withdraw Down-MACRO Holding Shares in an equal number to the
Down-MACRO Tradeable Shares delivered by such Authorized Participant from the
Securities Account and deliver those Down-MACRO Holding Shares to the Authorized
Participant or (ii) deposit the Down-MACRO Holding Shares delivered by such
Authorized Participant into the Down-MACRO Tradeable Trust and cause the
Down-MACRO Tradeable Trust to deliver to such Authorized Participant Down-MACRO
Tradeable Shares on deposit in the Netting Account on the applicable day of
settlement, if any, and, if the Down-MACRO Tradeable Shares on deposit in the
Netting Account are insufficient to satisfy such Exchange Order, to issue one
Down-MACRO Tradeable Share for each Down-MACRO Holding Share delivered by it, in
each case, in accordance with, and subject to the satisfaction of, the terms and
conditions set forth in the Participants Agreement.
(d) Any Exchange Order is subject to suspension or delay by the
Administrative Agent pursuant to Section 6.1(c), Section 6.2(c) or Section 6.4,
as applicable.
Section 6.4 Suspension or Delay of Settlement.
(a) The Administrative Agent may, in its discretion, and will when
so directed by the Depositor, suspend the right of exchange for the Down-MACRO
Tradeable Shares, or postpone the date of settlement for any such exchange,
(i) for any period during which the AMEX or NYMEX is closed,
or trading is suspended or restricted;
(ii) for any period during which an emergency exists as a
result of which delivery or acquisition of Eligible Treasuries by the
Paired Holding Trusts is not reasonably practicable;
29
(iii) if any such redemption would cause the Down-MACRO or
Up-MACRO Investment Amount to equal less than 10 million dollars; and
(iv) for such other period as the Depositor, the Trustee or
the Administrative Agent determines to be necessary for the protection of
the Beneficial Owners of any of the Paired Holding Shares, the Down-MACRO
Tradeable Shares or the Up-MACRO Tradeable Shares.
None of the Depositor, the Trustee or the Administrative Agent will
be liable to any Person for any loss or damages that may result from any such
suspension or postponement.
Section 6.5 The Participants Agreement.
(a) Each Paired Optional Redemption, each Paired Issuance and each
Exchange Order shall be effected in accordance with the procedures set forth in
Attachment A to the Participants Agreement, which may be amended from time to
time with the written consent of the Trustee, the Down-MACRO Holding Trustee,
the Up-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee and the
Administrative Agent in accordance with the provisions thereof.
(b) The Trustee and the Administrative Agent shall only process
Redemption Orders, Creation Orders and Exchange Orders from Authorized
Participants who have executed a Participants Agreement that is in full force
and effect at the time when the Redemption Order, the Creation Order or the
Exchange Order is placed. The Administrative Agent will maintain and make
available at its Business Office during normal business hours a current list of
the Authorized Participants eligible to participate in a Paired Issuance.
(c) In the event that the provisions of this Trust Agreement and the
Participants Agreement conflict in any way, the provisions of the Participants
Agreement will prevail insofar as they relate to the requirements and procedures
for directing and effecting Paired Optional Redemptions, Paired Issuances and
Exchange Orders.
ARTICLE 7
[RESERVED].
ARTICLE 8
REPORTING TO HOLDERS OF THE DOWN-MACRO TRADEABLE SHARES
Section 8.1 Calculations for the Down-MACRO Tradeable Shares.
(a) On each Price Determination Day, the Trustee shall calculate and
provide to the Administrative Agent for posting on the MACROshares Website,
within the time period agreed upon between the Administrative Agent and the
Trustee, the Per Share Underlying Value of an Down-MACRO Tradeable Share and the
number of Down-MACRO Holding Shares on deposit in the Down-MACRO Tradeable
Trust.
(b) Not later than the 10 Business Days following each calendar
quarter, the Trustee shall calculate and provide to the Depositor for inclusion
in the quarterly report on Form 10-Q that the Depositor will prepare and file
with the SEC on behalf of the Down-MACRO Holding Trust the following
information:
30
(i) a record of the aggregate exchanges of Down-MACRO
Tradeable Shares for the underlying Down-MACRO Holding Shares in
connection with Paired Optional Redemptions or otherwise and the aggregate
number of Down-MACRO Holding Shares deposited into the Down-MACRO
Tradeable Trust in connection with Paired Issuances or otherwise; and
(ii) the aggregate number of Down-MACRO Tradeable Shares
Outstanding as of the date of the applicable report.
(c) The Administrative Agent shall post all of the information
calculated and provided to them by the Trustee pursuant to clause (a) of this
Section 8.1 on the MACROshares Website on each Price Determination Day.
Section 8.2 Periodic Reports.
(a) After the end of each fiscal year, the Depositor shall prepare
an annual report on Form 10-K for the Down-MACRO Tradeable Trust containing
financial statements prepared by the Depositor and audited by Independent
accountants engaged by the Depositor. The annual report shall contain such
information as shall be required by applicable laws, rules and regulations and
may contain such additional information as the Depositor or the Administrative
Agent determines shall be included. The Depositor shall file such annual report
with the SEC in such manner as shall be required by applicable laws, rules and
regulations.
(b) After the end of each calendar quarter, the Depositor shall
prepare a quarterly report on Form 10-Q for the Down-MACRO Tradeable Trust
containing unaudited financial statements prepared by the Depositor. The
quarterly report shall be in such form and contain such information as shall be
required by applicable laws, rules and regulations and may contain such
information as the Depositor determines shall be included. The Depositor shall
file such quarterly report with the SEC in such manner as shall be required by
applicable laws, rules and regulations.
(c) Reports on Form 10-Q and Form 10-K pursuant to this Section
8.2 shall be made in accordance with instructions set forth in such Form 10-Q
or Form 10-K, as applicable.
Section 8.3 Form 8-K Disclosure. Within four Business Days (or such
shorter period as required under the general instructions to Form 8-K), the
Depositor shall file a Form 8-K with the SEC disclosing:
(a) the occurrence of a Trustee Termination Event;
(b) the appointment of a Successor Trustee;
(c) the resignation of the Trustee, the Down-MACRO Holding Trustee,
the Up-MACRO Holding Trustee, the Administrative Agent, either Marketing Agent
or the Calculation Agent under the Calculation Agency Agreement;
(d) the appointment of a successor trustee for the Down-MACRO
Holding Trust and/or the Up-MACRO Holding Trust, a successor Administrative
Agent, any successor Marketing Agent or a successor Calculation Agent under the
Calculation Agency Agreement;
(e) the occurrence of a Termination Trigger;
31
(f) an amendment to this Trust Agreement, the Down-MACRO Holding
Trust Agreement, the Up-MACRO Holding Trust Agreement, the Participants
Agreement or any other Transaction Document;
(g) at the sole discretion of the Depositor, a change to the list of
Authorized Participants set forth on Schedule I to the Participants Agreement;
and
(h) any other event that would be material to the Holders of the
Down-MACRO Tradeable Shares and which is, accordingly, required to be disclosed
by means of the filing of a Form 8-K.
Section 8.4 Listing of the Down-MACRO Tradeable Shares. The
Depositor shall use its best efforts to obtain and maintain the listing of the
Down-MACRO Tradeable Shares on a national stock exchange. Within three (3)
Business Days following receipt of notice of any actual, proposed or
contemplated de-listing of the Down-MACRO Tradeable Shares by any such stock
exchange, the Depositor shall terminate the listing on such stock exchange.
Section 8.5 Disclosure Controls and Procedures. The Depositor shall
establish and maintain disclosure controls and procedures (as defined in Rule
13a-14 and 15d-14 under the Exchange Act, giving effect to the rules and
regulations and SEC interpretations (whether or not public) thereunder) that
shall be designed to ensure that (i) material information relating to the
Down-MACRO Tradeable Trust is made known to the Depositor, (ii) such disclosure
controls and procedures are effective to perform the functions for which they
were established; (iii) the Depositor will be advised, on behalf of the
Down-MACRO Tradeable Trust, of: (A) any significant deficiencies in the design
or operation of such controls which could adversely affect the Trust Accounting
Agent's or the Depositor's ability to record, process, summarize, and report
financial data; and (B) any fraud, whether or not material, that involves
management or other employees who have a role in the Trust Accounting Agent's or
the Depositor's internal controls; and (iv) any material weaknesses in such
controls are able to be identified for the Down-MACRO Tradeable Trust's
auditors.
Section 8.6 Trust Accounting Agent Responsibilities. The Trustee, in
its capacity as the Fund Accounting Agent, shall maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with this Trust Agreement and the
Trustee's duties hereunder; (ii) transactions with respect to the Down-MACRO
Tradeable Trust and notified to the Trustee are recorded as necessary to permit
preparation of financial statements and to maintain accountability for the Trust
Assets; and (iii) the Trust Assets are held for the Down-MACRO Tradeable Trust
by the Trustee in accordance with this Trust Agreement.
ARTICLE 9
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor. The Depositor shall be
liable in all respects for the obligations, covenants, representations and
warranties of the Depositor arising under or related to this Trust Agreement.
The Depositor shall be liable only to the extent of the obligations specifically
undertaken by it in its capacity as Depositor.
Section 9.2 Limitations on Liability of the Depositor , Claymore
Securities, Inc. and MACRO Financial LLC. None of the Depositor, Claymore
Securities, Inc.,
32
MACRO Financial, LLC or any of their respective directors, officers, employees
or agents acting in such capacities shall be under any liability to the
Down-MACRO Tradeable Trust, the Trustee, the Holders of the Down-MACRO Tradeable
Shares or any other Person for taking any action or for refraining from taking
any action in good faith in their capacities as Depositor, Administrative Agent
or Marketing Agents, as applicable, pursuant to this Trust Agreement; provided,
however, that this provision shall not protect the Depositor, Claymore
Securities, Inc., MACRO Financial, LLC or any of their respective directors,
officers, employees or agents against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. The Depositor, Claymore Securities, Inc., MACRO Financial,
LLC and each of their respective directors, officers, employees and agents may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person (other than, in the case of the Depositor, the
Depositor, in the case of Claymore Securities, Inc., Claymore Securities, Inc.
and, in the case of MACRO Financial, LLC, MACRO Financial, LLC) respecting any
matters arising hereunder.
Section 9.3 Liabilities; Indemnification.
(a) Notwithstanding the other provisions of this Trust Agreement,
the Depositor, by entering into this Trust Agreement, agrees to be liable,
directly to the injured party, for the entire amount of any losses, claims,
damages or liabilities (other than those incurred by a Holder as a result of
market fluctuations or other similar market or investment risks associated with
ownership of the Down-MACRO Tradeable Shares) arising out of or based on the
arrangement created by this Trust Agreement or the actions of the Depositor
taken pursuant hereto or arising from any allegation of infringement of the
intellectual property rights of third parties (to the extent that, if the Trust
Assets at the time the claim is made were not used to pay in full all
Outstanding Down-MACRO Tradeable Shares, the Trust Assets would be used to pay
any such losses, claims, damages or liabilities).
(b) The Depositor shall indemnify and hold harmless the Trustee and
its officers, directors, employees and agents from and against any loss,
liability, expense, damage or injury (collectively, a "Loss") suffered or
sustained by reason of the acts performed or omitted by the Trustee pursuant to
this Trust Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim including, without limitation, any
action, proceeding or claim relating to or arising from any alleged infringement
of intellectual property rights of third parties; provided, however, that the
Depositor's duty to indemnify under this Section 9.3(b) shall not extend to any
Losses (i) for which the Trustee has a right to indemnification under any other
provision of this Trust Agreement, or (ii) that are caused by or result from the
breach of contract by, or the fraud, negligence or willful misconduct of, the
Trustee or its officers, directors, employees or agents.
(c) The Depositor and its members, managers, officers, employees,
affiliates (as such term is defined in Regulation S-X of the Securities Act) and
subsidiaries (each, a "Depositor Indemnified Party") shall be indemnified by the
Down-MACRO Tradeable Trust and held harmless against any loss, liability or
expense incurred hereunder without (1) gross negligence, bad faith, willful
misconduct or willful malfeasance on the part of such Depositor Indemnified
Party arising out of or in connection with the performance of its obligations
hereunder or any actions taken in accordance with the provisions of this Trust
Agreement or (2) reckless disregard on the part of such Depositor Indemnified
Party of its obligations and duties under this Trust Agreement. Each Depositor
Indemnified Party shall also be indemnified by the
33
Down-MACRO Tradeable Trust and held harmless against any loss, liability or
expense arising under the Participants Agreement insofar as such loss, liability
or expense arises from any untrue statement or alleged untrue statement of a
material fact contained in any written statement provided to the Depositor by
any of the Calculation Agent, the Administrative Agent and the Trustee. Such
indemnity shall include payment from the Down-MACRO Tradeable Trust of the costs
and expenses incurred by such Depositor Indemnified Party in defending itself
against any such indemnified claim or liability.
(d) Any obligation owed by the Down-MACRO Tradeable Trust pursuant
to this Section 9.3 shall be paid by the Down-MACRO Holding Trust in accordance
with the provisions of Section 5.3 of the Down-MACRO Holding Trust Agreement.
ARTICLE 10
MATTERS RELATING TO THE
ADMINISTRATIVE AGENT AND THE MARKETING AGENTS
Section 10.1 Role of the Administrative Agent. The Administrative
Agent hereby acknowledges and accepts its role pursuant to its duties set forth
in this Trust Agreement.
Section 10.2 Liability of the Administrative Agent. The
Administrative Agent shall be liable under this Trust Agreement only to the
extent of the obligations specifically undertaken hereunder by the
Administrative Agent in its capacity as Administrative Agent.
Section 10.3 Limitation on Liability of the Administrative Agent.
Neither the Administrative Agent nor any of the directors, officers, employees
or agents of the Administrative Agent shall be under any liability to the
Down-MACRO Tradeable Trust, the Trustee, the Holders of the Down-MACRO Tradeable
Shares or any other Person for any action taken or for refraining from taking
any action in good faith in its capacity as Administrative Agent pursuant to
this Trust Agreement; provided, however, that this provision shall not protect
the Administrative Agent or any director, officer, employee or agent of the
Administrative Agent against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
hereunder. The Administrative Agent and any director, officer, employee or agent
of the Administrative Agent may rely in good faith on any document properly
executed and delivered under this Trust Agreement by the Depositor, the Trustee,
the Up-MACRO Holding Trustee, the Down-MACRO Holding Trustee, the Up-MACRO
Tradeable Trustee or any Authorized Participant respecting any matters arising
hereunder. The Administrative Agent shall not be under any obligation to appear
in, prosecute or defend any legal action which is not incidental to its duties
as Administrative Agent in accordance with this Trust Agreement and which in its
reasonable judgment may involve it in any expense or liability unless the
Administrative Agent has obtained an indemnity from the Holders of the
Down-MACRO Tradeable Shares sufficient to hold it harmless from such liability.
The Administrative Agent may, in its sole discretion, undertake any such legal
action which it may deem necessary or desirable for the benefit and interests of
the Holders of the Down-MACRO Tradeable Shares and the rights and duties of the
parties hereto.
Section 10.4 Administrative Agent Indemnification of the Down-MACRO
Tradeable Trust and the Trustee. The Administrative Agent shall indemnify and
hold harmless the Down-MACRO Tradeable Trust, the Depositor and the Trustee and
their respective officers, directors, employees and agents (each, an
"Administrative Agent Indemnified Party") from and
34
against any loss, liability, expense, damage or injury suffered or sustained by
reason of any acts or omissions of the Administrative Agent under this Trust
Agreement, including any judgment, award, settlement, reasonable attorneys' fees
and other costs or expenses incurred in connection with the defense of any
action, proceeding or claim; provided, however, that the Administrative Agent
shall not indemnify the Trustee if such acts or omissions, or alleged acts or
omissions, constitute or are caused by fraud, negligence, or willful misconduct
of the Trustee; provided, further that the Administrative Agent shall not
indemnify the Depositor if such acts or omissions, or alleged acts or omissions,
constitute or are caused by fraud, gross negligence, or willful misconduct of
the Depositor; provided, further, that the Administrative Agent shall not
indemnify the Down-MACRO Tradeable Trust or the Holders of the Down-MACRO
Tradeable Shares for any liabilities, costs or expenses of the Down-MACRO
Tradeable Trust with respect to any action taken by the Trustee at the request
of the Holders of the Down-MACRO Tradeable Shares; provided, further, that the
Administrative Agent shall not indemnify the Down-MACRO Tradeable Trust or the
Holders of the Down-MACRO Tradeable Shares as to any losses, claims or damages
incurred by any of them in their capacities as investors, including, without
limitation, losses with respect to market or investment risks associated with
ownership of the Down-MACRO Tradeable Shares; and provided, further, that the
Administrative Agent shall not indemnify the Down-MACRO Tradeable Trust or the
Holders of the Down-MACRO Tradeable Shares for any liabilities, costs or
expenses of the Down-MACRO Tradeable Trust or the Holders of the Down-MACRO
Tradeable Shares arising under any tax law, including any federal, state, local
or foreign income or franchise taxes or any other tax imposed on or measured by
income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by the Down-MACRO Tradeable
Trust or the Holders of the Down-MACRO Tradeable Shares in connection herewith
to any taxing authority. Indemnification pursuant to this Section 10.4 shall not
be payable from the Trust Assets. The provisions of this indemnity shall run
directly to and be enforceable by an Administrative Agent Indemnified Party,
subject to the limitations hereof. The obligations of the Administrative Agent
under this Section 10.4 shall survive the termination of the Down-MACRO
Tradeable Trust and the resignation or removal of the Administrative Agent or
the resignation or removal of any of the entities which constitute
Administrative Agent Indemnified Parties at the time of the execution of this
Trust Agreement and the appointment of successors thereto.
Section 10.5 Delegation of Duties. In the ordinary course of
business, the Administrative Agent may at any time delegate any duties hereunder
to any Person who agrees to conduct such duties in accordance with this Trust
Agreement. Any such delegations shall not relieve the Administrative Agent of
its liability and responsibility with respect to such duties and shall not
constitute a resignation, and the Administrative Agent will remain jointly and
severally liable with such Person for any amounts which would otherwise be
payable pursuant to this ARTICLE 10 as if the Administrative Agent had performed
such duty; provided, however, that in the case of any significant delegation to
a Person other than an Affiliate of the Administrative Agent, (1) at least
thirty (30) days' prior written notice shall be given to the Trustee and the
Depositor of such delegation to any entity that is not an Affiliate of the
Administrative Agent and (2) the prior written consent of the Depositor must be
obtained. Notwithstanding anything herein to the contrary, the Administrative
Agent shall not assign any of its duties and responsibilities hereunder,
provided, that the Administrative Agent shall be entitled to assign or pledge
its right to receive the Down-MACRO Administration and Marketing Fee hereunder
to any third party.
35
Section 10.6 Resignation or Removal of Administrative Agent.
(a) An Administrative Agent appointed to office shall hold office
until its successor shall have been appointed by the Holders in accordance with
this Trust Agreement or until its termination, removal or resignation.
(b) Subject to the provisions of this Section 10.6, the
Administrative Agent may be appointed, removed or replaced with or without cause
at any time by the Depositor, upon written notice; provided, however, that the
Administrative Agent shall not be removed in accordance with this Section 10.6
until a successor administrative agent possessing the qualifications to act as
Administrative Agent and willing and able to make the representations contained
in Section 3.4 (a "Successor Administrative Agent") has been appointed by the
Depositor and has accepted such appointment by written instrument executed by
such Successor Administrative Agent and delivered to the Depositor.
(c) Any Administrative Agent may resign hereunder by an instrument
in writing signed by the Administrative Agent and delivered to the Depositor,
the Trustee and each Registered Owner, which shall become effective on the date
specified in such instrument; provided, however, that no such resignation of a
Administrative Agent shall become effective:
(i) until a Successor Administrative Agent has been appointed
and has accepted such appointment by instrument executed by such Successor
Administrative Agent and delivered to the Down-MACRO Tradeable Trust, the
Depositor and the resigning Administrative Agent; or
(ii) until the assets of the Down-MACRO Tradeable Trust have
been completely liquidated and the proceeds thereof distributed to the
Holders.
If no Successor Administrative Agent shall have been appointed and accepted such
appointment within thirty (30) days after delivery to the Depositor and the
Down-MACRO Tradeable Trust of an instrument of resignation, the resigning
Administrative Agent may petition at the expense of the Down-MACRO Tradeable
Trust any court of competent jurisdiction for appointment of a Successor
Administrative Agent. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Administrative Agent.
(d) No Administrative Agent shall be liable for anything that occurs
after it has ceased to act in such capacity, including, without limitation, the
acts or omissions to act of any Successor Administrative Agent
Section 10.7 Role of the Marketing Agents. Each Marketing Agent
hereby acknowledges and accepts its role pursuant to its duties set forth in
Exhibit G to the Down-MACRO Holding Trust Agreement.
Section 10.8 Liability of the Marketing Agents. The Marketing Agents
shall be liable under this Trust Agreement only to the extent of the obligations
specifically undertaken hereunder by each of them in their capacity as a
Marketing Agent.
Section 10.9 Limitation on Liability of the Marketing Agents. None
of the Marketing Agents or any of their respective directors, officers,
employees or agents shall be under any liability to the Down-MACRO Tradeable
Trust, the Trustee, the Administrative Agent, the Holders of the Down-MACRO
Tradeable Shares or any other Person for any action taken or for refraining from
taking any action in good faith in its capacity as Marketing Agent pursuant to
36
this Trust Agreement; provided, however, that this provision shall not protect
either Marketing Agent or their respective directors, officers, employees or
agents against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of its
duties or by reason of reckless disregard of its obligations and duties
hereunder. Each Marketing Agent and their respective directors, officers,
employees or agents may rely in good faith on any document properly executed and
delivered under this Trust Agreement by the Depositor, the Trustee, the
Administrative Agent, the Up-MACRO Holding Trustee, the Down-MACRO Holding
Trustee, the Up-MACRO Tradeable Trustee or any Authorized Participant respecting
any matters arising hereunder. Neither Marketing Agent shall be under any
obligation to appear in, prosecute or defend any legal action which is not
incidental to its duties as Marketing Agent in accordance with this Trust
Agreement and which in its reasonable judgment may involve it in any expense or
liability unless such Marketing Agent has obtained an indemnity from the Holders
of the Down-MACRO Tradeable Shares sufficient to hold it harmless from such
liability.
Section 10.10 Marketing Agent Indemnification of the Down-MACRO
Tradeable Trust and the Trustee. Each Marketing Agent shall indemnify and hold
harmless the Down-MACRO Tradeable Trust, the Depositor and the Trustee and their
respective officers, directors, employees and agents (each, a "Marketing Agent
Indemnified Party") from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions of such
Marketing Agent under this Trust Agreement, including any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any action, proceeding or claim; provided,
however, that neither Marketing Agent shall indemnify the Trustee if such acts
or omissions, or alleged acts or omissions, constitute or are caused by fraud,
negligence, or willful misconduct of the Trustee; provided, further, that
neither Marketing Agent shall indemnify the Depositor if such acts or omissions,
or alleged acts or omissions, constitute or are caused by fraud, gross
negligence, or willful misconduct of the Depositor; provided, further, that
neither Marketing Agent shall indemnify the Down-MACRO Tradeable Trust or the
Holders of the Down-MACRO Tradeable Shares for any liabilities, costs or
expenses of the Down-MACRO Tradeable Trust with respect to any action taken by
the Trustee at the request of the Holders of the Down-MACRO Tradeable Shares;
provided, further, that neither Marketing Agent shall indemnify the Down-MACRO
Tradeable Trust or the Holders of the Down-MACRO Tradeable Shares as to any
losses, claims or damages incurred by any of them in their capacities as
investors, including, without limitation, losses with respect to market or
investment risks associated with ownership of the Down-MACRO Tradeable Shares;
and provided, further, that neither Marketing Agent shall indemnify the
Down-MACRO Tradeable Trust or the Holders of the Down-MACRO Tradeable Shares for
any liabilities, costs or expenses of the Down-MACRO Tradeable Trust or the
Holders of the Down-MACRO Tradeable Shares arising under any tax law, including
any federal, state, local or foreign income or franchise taxes or any other tax
imposed on or measured by income (or any interest or penalties with respect
thereto or arising from a failure to comply therewith) required to be paid by
the Down-MACRO Tradeable Trust or the Holders of the Down-MACRO Tradeable Shares
in connection herewith to any taxing authority. Indemnification pursuant to this
Section 10.10 shall not be payable from the Trust Assets. The provisions of this
indemnity shall run directly to and be enforceable by a Marketing Agent
Indemnified Party, subject to the limitations hereof. The obligations of each
Marketing Agent under this Section 10.10 shall survive the termination of the
Down-MACRO Tradeable Trust and the resignation or removal of such Marketing
Agent or the resignation or removal of any of the entities which constitute
Marketing Agent Indemnified Parties at the time of the execution of this Trust
Agreement and the appointment of successors thereto.
37
Section 10.11 Delegation of Duties. In the ordinary course of
business, each Marketing Agent may at any time delegate any duties hereunder to
any Person who agrees to conduct such duties in accordance with this Trust
Agreement. Any such delegations shall not relieve such Marketing Agent of its
liability and responsibility with respect to such duties and shall not
constitute a resignation, and such Marketing Agent will remain jointly and
severally liable with such Person for any amounts which would otherwise be
payable pursuant to this ARTICLE 10 as if such Marketing Agent had performed
such duty; provided, however, that in the case of any significant delegation to
a Person other than an Affiliate of such Marketing Agent, (1) at least thirty
(30) days' prior written notice shall be given to the Trustee and the Depositor
of such delegation to any entity that is not an Affiliate of such Marketing
Agent and (2) the prior written consent of the Depositor must be obtained.
ARTICLE 11
EARLY TERMINATION
Section 11.1 Termination Triggers.
(a) The Down-MACRO Tradeable Trust shall terminate if any one
of the following events (each, a "Termination Trigger") occurs:
(i) any of the following circumstances persists for five (5)
consecutive Business Days: (i) the Applicable Reference Price of Crude Oil
is not established by NYMEX or the Substitute Oil Price Provider; (ii)
NYMEX or such Substitute Oil Price Provider refuses to make that price
available to the Administrative Agent for the purpose of calculating the
Down-MACRO Underlying Value; or (iii)(a) NYMEX terminates the NYMEX
License or does not agree to a renewal thereof after the expiration of its
initial 5-year term and the Depositor and MacroMarkets LLC are unable to
enter into a Substitute Reference Price Licensing Agreement with the Dow
Xxxxx Energy Service or (b) in the event that the Depositor and
MacroMarkets LLC have already entered into a Substitute Reference Price
Licensing Agreement, the Substitute Oil Price Provider which is party to
such agreement terminates that license and, in the case of either (a) or
(b), the Holders do not select a Substitute Oil Price Provider or the
Depositor and MacroMarkets LLC are unable to enter into a Substitute
Reference Price Licensing Agreement with the Substitute Oil Price Provider
that was selected by the Holders;
(ii) the Applicable Reference Price of Crude Oil rises to or
above $111, at which level the Underlying Value of the Down-MACRO Holding
Trust will be equal to 15% or less of assets it holds on deposit, or the
Applicable Reference Price of Crude Oil falls to or below $9, at which
level the Underlying Value of the Up-MACRO Holding Trust will be equal
to 15% or less of the assets it holds on deposit and, in either case, the
Applicable Reference Price of Crude Oil remains at that level for three
(3) consecutive Price Determination Days;
(iii) any of the Down-MACRO Holding Trust, the Up-MACRO
Holding Trust, the Down-MACRO Tradeable Trust or the Up-MACRO Tradeable
Trust becomes required to register as an "investment company" under the
Investment Company Act; provided, that the Down-MACRO Tradeable Trust and
the Up-MACRO Tradeable Trust shall not be required to register as
investment companies, for the purposes of determining whether a
Termination Trigger has occurred pursuant to this clause, during the
90-day cure period that will follow any date as of which the Down-MACRO
Tradeable Trust holds less than a Majority of the Outstanding Down-MACRO
Holding
38
Shares or the Up-MACRO Tradeable Trust holds less than a Majority of the
Outstanding Up-MACRO Holding Shares;
(iv) any of the Down-MACRO Holding Trust, the Up-MACRO Holding
Trust, the Down-MACRO Tradeable Trust or the Up-MACRO Tradeable Trust
becomes a commodities pool that is regulated under the CEAct;
(v) DTC becomes unwilling or unable to act as Depository under
this Trust Agreement and no suitable replacement is willing and able to
assume the duties of the Depository hereunder;
(vi) the Administrative Agent resigns or is unable to perform
its duties under the Down-MACRO Holding Trust Agreement and the Up-MACRO
Holding Trust Agreement or becomes bankrupt or insolvent, and no suitable
replacement is willing and able to assume the duties of the Administrative
Agent under such agreements;
(vii) the Depositor elects to terminate the Down-MACRO Holding
Trust and 66 and 2/3% of the Holders of the Down-MACRO Holding Trust and
the Up-MACRO Holding Trust, each voting as a separate class (with each
Holder of Tradeable Shares being entitled to vote the underlying Holding
Shares on deposit in its Tradeable Trust), consent to such termination;
(viii) a decree or order is entered by a court having
competent jurisdiction adjudging any of the Down-MACRO Holding Trust, the
Up-MACRO Holding Trust, the Down-MACRO Tradeable Trust or the Up-MACRO
Tradeable Trust to be bankrupt or insolvent or granting an order for
relief or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of any of the
Down-MACRO Holding Trust, the Up-MACRO Holding Trust, the Down-MACRO
Tradeable Trust or the Up-MACRO Tradeable Trust under the Bankruptcy Code
or any other applicable law, or appointing a receiver, liquidator,
assignee or sequestrator (or other similar official) of any of the
Down-MACRO Holding Trust, the Up-MACRO Holding Trust, the Down-MACRO
Tradeable Trust or the Up-MACRO Tradeable Trust or of any substantial part
of its property, or ordering the winding up or liquidation of its affairs,
or, in a court having jurisdiction, any of the Down-MACRO Holding Trust,
the Up-MACRO Holding Trust, the Down-MACRO Tradeable Trust or the Up-MACRO
Tradeable Trust commences a voluntary case or proceeding under the
Bankruptcy Code or any other applicable law, or an involuntary case or
proceeding is commenced against any of the Down-MACRO Holding Trust, the
Up-MACRO Holding Trust, the Down-MACRO Tradeable Trust or the Up-MACRO
Tradeable Trust, seeking any of the foregoing and such case or proceeding
continues undismissed or unstayed and in effect for a period of 90
consecutive days;
(ix) the amount of cash and Eligible Treasuries on deposit in
the Down-MACRO Holding Trust or the Up-MACRO Holding Trust is reduced to
less than ten (10) million dollars; and
(x) the amount of cash and Eligible Treasuries on deposit in
the Down-MACRO Holding Trust or the Up-MACRO Holding Trust is reduced to
fifty (50) million dollars or less after previously reaching an amount
equal to two hundred (200) million dollars or more, or the failure on the
part of the Paired Holding Trusts to each hold cash and Eligible
Treasuries in an amount equal to at least two hundred (200)
39
million dollars after six (6) months or more have elapsed since the
Closing Date and, in either case, the Depositor elects to terminate the
Paired Holding Trusts.
(b) On the next Distribution Date following the occurrence of a
Termination Trigger (an "Early Termination Date"), the Trustee shall make a
Final Distribution on all Outstanding Down-MACRO Tradeable Shares, as set forth
in Section 5.2. Upon receipt of this Final Distribution on the related
Distribution Payment Date, all Outstanding Down-MACRO Tradeable Shares shall be
deemed to be redeemed in full.
(c) The Administrative Agent will be responsible for notifying the
Depositor and the Trustee of the occurrence of the Termination Trigger set forth
in any of the following subparagraphs of ARTICLE 11(a) hereof: Section
11.1(a)(i)(i), Section 12.1(a)(i)(ii), Section 11.1(a)(vi) or Section
11.1(a)(vii). Upon obtaining knowledge of the occurrence of any of the other
Termination Triggers described above, the Trustee will be responsible for
notifying the Depositor and the Administrative Agent of such occurrence. In
addition, the Trustee will give prompt notice of that event to the Calculation
Agent, the Up-MACRO Holding Trustee, the Down-MACRO Tradeable Trustee, the
Up-MACRO Tradeable Trustee and the Registered Owners of the Down-MACRO Holding
Shares.
(d) The Depositor, upon receiving or otherwise obtaining actual
knowledge of the occurrence of any Termination Trigger, shall file a Form 8-K
with the SEC disclosing such occurrence.
ARTICLE 12
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events. Any one of the following
events shall constitute a Trustee Termination Event (a "Trustee Termination
Event"):
(a) to the extent that any Quarterly Distribution is received by the
Down-MACRO Tradeable Trust on its Down-MACRO Holding Shares, a failure by the
Trustee to pass through such Quarterly Distribution, which failure continues
unremedied for a period of five (5) or more Business Days;
(b) to the extent that any Final Distribution is received by the
Down-MACRO Tradeable Trust on its Down-MACRO Holding Shares, a failure by the
Trustee to pass through such Final Distribution, which failure continues
unremedied for a period of five (5) or more Business Days; (c) any failure by
the Trustee to observe or perform in any material respect any of its other
covenants or obligations hereunder, which failure continues unremedied for
thirty (30) days after the giving of written notice of such failure to the
Trustee by the Depositor or by not less than 25% of the Holders, voting by par
amount;
(d) the Trustee becomes ineligible or incapable of acting as Trustee
hereunder;
(e) the occurrence of a Trustee Termination Event under the
Down-MACRO Holding Trust Agreement, pursuant to the terms of the Down-MACRO
Holding Trust Agreement;
40
(f) the occurrence of a Trustee Termination Event under the Up-MACRO
Holding Trust Agreement, pursuant to the terms of the Up-MACRO Holding Trust
Agreement; or
(g) the occurrence of a Trustee Termination Event under the Up-MACRO
Tradeable Trust Agreement, pursuant to the terms of the Up-MACRO Tradeable Trust
Agreement.
Section 12.2 Force Majeure. Notwithstanding the foregoing, any delay
in or failure of performance under Section 12.1 shall not constitute a Trustee
Termination Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Trustee and such delay or failure was
caused by an act of God or the public enemy, terrorism, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Trustee from the obligation to use its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Trust Agreement and the Trustee shall provide the Depositor
with immediate notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
Section 12.3 Notification to Holders of the Down-MACRO Tradeable
Shares. Within two (2) Business Days after the Administrative Agent or the
Trustee is notified or obtains actual knowledge of any Trustee Termination
Event, the Administrative Agent or the Trustee, as applicable, shall give notice
thereof to the Depositor and the Administrative Agent or the Trustee, as
applicable, and notification of such Trustee Termination Event shall be filed by
the Depositor on Form 8-K with the SEC.
ARTICLE 13
THE TRUSTEE
Section 13.1 Liability of Trustee.
(a) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments that are
specifically required to be furnished to the Trustee pursuant to any provision
hereof, shall examine them to determine whether they conform on their face to
the requirements of this Trust Agreement. The Trustee shall give prompt written
notice to the Depositor and the Administrative Agent of any material lack of
conformity of any such instrument to the applicable provisions of this Trust
Agreement.
(b) No provision of this Trust Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith, its own reckless disregard of its
duties hereunder or its own willful misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Trust Officer, unless it is proved that
the Trustee was grossly negligent in ascertaining the pertinent facts; and
(ii) the Trustee shall not be personally liable with respect
to any action taken, suffered or omitted by it in good faith and in
accordance with the direction of the Administrative Agent, the Depositor,
the Calculation Agent or any Holder relating to the time, place or method
of conducting any proceeding for any remedy available to
41
the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Trust Agreement.
(c) The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers
hereunder, if it has reasonable grounds for believing that repayment of such
funds or adequate indemnity against any related risk or liability is not
reasonably assured to it.
(d) The Trustee shall have no power to vary the corpus of the
Down-MACRO Tradeable Trust.
(e) In the event that the Transfer Agent and Registrar (if not also
the Trustee) fails to perform any obligation, duty or agreement in the manner or
on the day required under this Trust Agreement, the Trustee shall be obligated,
as soon as possible upon knowledge of a Trust Officer of such failure and
receipt of appropriate records, if any, to perform such obligation, duty or
agreement in the manner required hereunder.
Section 13.2 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting, or in
refraining from acting, in accord with any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented to it pursuant to this Trust Agreement by the proper party
or parties.
(b) The Trustee may consult with counsel, and any advice of such
counsel or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted hereunder by the
Trustee in good faith and in accordance with such advice or Opinion of Counsel.
(c) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Trust Agreement or to institute, conduct
or defend any litigation in relation to this Trust Agreement at the request,
order or direction of any of the Holders of the Down-MACRO Tradeable Shares
pursuant to the provisions of this Trust Agreement unless such Holders have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
(d) Subject to Section 13.1(b) hereof, the Trustee shall not be
personally liable for any action taken, suffered or omitted by it in good faith
and reasonably believed by it to be authorized or within the discretion, rights
or powers conferred upon it by this Trust Agreement.
(e) The Trustee shall not be bound to make any investigation into
the accuracy of any assertions of facts made in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, appraisal, bond or other paper or document, unless the Trustee has
actual knowledge that any such assertion is incorrect or unless requested in
writing to do so by Holders evidencing more than 25% of the Aggregate Par Amount
of the Down-MACRO Tradeable Shares.
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder that are customarily executed or performed by
agents, custodians,
42
nominees or attorneys under like circumstances, either directly or by or through
agents, custodians, nominees or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney selected by it in good faith and with due care (other than an agent or
attorney that is an Affiliate of the Trustee); furthermore, the Trustee shall be
under no obligation to monitor, and shall assume no personal liability for, the
actions of the Depositor or any other Person in connection with their duties
under this Trust Agreement or in connection with the Down-MACRO Tradeable Trust
generally.
(g) Except as may be required by Section 13.1(a) and Section 13.12,
the Trustee shall not be required to make any initial or periodic examination of
any documents or records for the purpose of establishing the presence or absence
of defects, the compliance by the Depositor, the Administrative Agent or the
Marketing Agents with their respective representations and warranties or for any
other purpose.
Section 13.3 Trustee Not Liable for Recitals in Down-MACRO Tradeable
Shares. The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Down-MACRO Tradeable Shares (other than the
certificate of authentication on the Down-MACRO Tradeable Shares). Except as set
forth in Section 3.2, the Trustee makes no representations as to the validity or
sufficiency of this Trust Agreement or of the Down-MACRO Tradeable Shares (other
than the certificate of authentication on the Down-MACRO Tradeable Shares).
Section 13.4 Holders May Direct Trustee. Holders of Down-MACRO
Tradeable Shares who are the Beneficial Owners of an Aggregate Par Amount
representing at least 66 and 2/3% of all such shares that are Outstanding at any
time may direct the Trustee with respect to actions that the Trustee is
permitted to take under this Trust Agreement, subject to the limitations set
forth in Section 2.3, Section 3.1(b) and Section 15.6 hereof.
Section 13.5 Compensation. The Depositor shall cause to be paid in
the manner provided for in Section 5.4 of the Down-MACRO Holding Trust
Agreement, and the Trustee shall be entitled to receive, on each Distribution
Payment Date, the Down-MACRO Trustee Fee for all services rendered by it under
this Trust Agreement and in the exercise and performance of any of the powers
and duties hereunder of the Trustee. The entitlement of the Trustee under this
Section 13.5 for past services rendered shall survive the termination of the
Down-MACRO Tradeable Trust and the Down-MACRO Holding Trust.
Section 13.6 Indemnification. The Trustee and its directors,
shareholders, officers, employees, agents, affiliates (as such term is defined
in Regulation S-X of the Securities Act) and subsidiaries (each, a "Trustee
Indemnified Party") shall be indemnified by the Down-MACRO Holding Trust and
held harmless against any loss, liability or expense (a) arising out of or in
connection with the acceptance or administration of the Down-MACRO Tradeable
Trust and any actions taken in accordance with the provisions of this Trust
Agreement or that arises out of or is related to any offer or sale of Down-MACRO
Tradeable Shares incurred without (i) negligence, bad faith, and willful
misconduct on the part of such Trustee Indemnified Party and (ii) reckless
disregard on the part of such Trustee Indemnified Party of its obligations and
duties under this Trust Agreement, or (b) that arises out of or is related to
any filings with or submissions to the SEC in connection with or with respect to
the Down-MACRO Tradeable Shares (which, by way of illustration and not by way of
limitation, include the Registration Statement and any amendments thereof or
supplements thereto filed with the SEC or any periodic reports or updates that
may be filed under the Exchange Act), but not including any information provided
in writing by the Trustee to the Depositor for use in the Registration Statement
or any other filing with the SEC. Such indemnity shall include payment from the
Down-MACRO
43
Tradeable Trust of the costs and expenses incurred by such Trustee Indemnified
Party in investigating or defending itself against any claim or liability
relating to this Trust Agreement or the Down-MACRO Tradeable Trust, including
any loss, liability or expense incurred in acting pursuant to written directions
or instructions given by the Depositor or counsel to the Down-MACRO Tradeable
Trust to the Trustee from time to time in accordance with the provisions of this
Trust Agreement or in undertaking actions from time to time which the Trustee
deems necessary in its discretion, subject to the limitations imposed by Section
2.3 and Section 3.1(b) hereof, to protect the Down-MACRO Tradeable Trust and the
rights of all Beneficial Owners pursuant to the terms of this Trust Agreement.
Any amounts payable to a Trustee Indemnified Party under this Section 13.6 may
be payable in advance in accordance with the provisions of Section 5.3 of the
Down-MACRO Holding Trust Agreement or shall be secured by a lien on the
Down-MACRO Holding Trust.
Section 13.7 Eligibility Requirements. The Trustee hereunder shall
at all times: (i) be a bank or trust company organized and doing business under
the laws of the United States of America or any state thereof, authorized under
such laws to exercise corporate trust powers and subject to supervision or
examination by federal or state authority, (ii) have a combined capital and
surplus of at least $100,000,000, (iii) maintain any credit or deposit rating
required by nationally recognized rating organizations (as of the date hereof
"A-1" for Standard & Poor's Rating Service or "P-1" for Xxxxx'x Investors
Service, Inc.) and (iv) accept and act in the capacity of both the Trustee
hereunder and as trustee of the Up-MACRO Tradeable Trust, the Down-MACRO Holding
Trust and the Up-MACRO Holding Trust. If such bank publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 13.7, the combined capital and surplus of such bank or trust company
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee ceases to be
eligible in accordance with the provisions of this Section 13.7, the Trustee
shall resign immediately in the manner and with the effect specified in Section
13.8.
Section 13.8 Resignation or Removal of Trustee.
(a) A Trustee appointed to office shall hold office until its
successor shall have been appointed by the Holders in accordance with this Trust
Agreement or until its termination, removal or resignation.
(b) Subject to the provisions of this Section 13.8, the Trustee may
be appointed, removed or replaced without cause at any time by the Depositor,
upon written notice, or with cause upon the occurrence of a Trustee Termination
Event; provided, however, that the Trustee shall not be removed in accordance
with this Section 13.8 until a successor Trustee possessing the qualifications
to act as Trustee and willing and able to make the representations contained in
Section 3.2 (a "Successor Trustee") has been appointed by the Depositor and has
accepted such appointment by written instrument executed by such Successor
Trustee and delivered to the Depositor.
(c) Any Trustee may resign hereunder by an instrument in writing
signed by the Trustee and delivered to the Depositor, the Administrative Agent
and each Registered Owner, which shall become effective on the date specified in
such instrument; provided, however, that no such resignation of a Trustee shall
become effective:
(i) until a Successor Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor Trustee
and delivered to the
44
Down-MACRO Tradeable Trust, the Depositor, the Administrative Agent and
the resigning Trustee; or
(ii) until the assets of the Down-MACRO Tradeable Trust have
been completely liquidated and the proceeds thereof distributed to the
Holders.
If no Successor Trustee shall have been appointed and accepted such appointment
within thirty (30) days after delivery to the Depositor, the Administrative
Agent, the Marketing Agents and the Down-MACRO Tradeable Trust of an instrument
of resignation, the resigning Trustee may petition at the expense of the
Down-MACRO Tradeable Trust any court of competent jurisdiction for appointment
of a Successor Trustee. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Trustee.
(d) No Trustee shall be liable for anything that occurs after it has
ceased to act in such capacity, including, without limitation, the acts or
omissions to act of any Successor Trustee; provided, that such resigning or
terminated Trustee shall remain liable for any actions taken by it prior to its
termination or resignation as a result of which it would be liable to the
Down-MACRO Tradeable Trust pursuant to Section 13.1(b).
Section 13.9 Successor Trustee.
(a) Any Successor Trustee appointed as provided in Section 13.8
shall execute, acknowledge and deliver to the Depositor and to its predecessor
Trustee an instrument in a form acceptable to the Depositor accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such Successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the Successor Trustee all documents and statements held by it
hereunder, and the Depositor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the Successor Trustee all such
rights, powers, duties and obligations within thirty days of execution of such
instrument.
(b) No Successor Trustee shall accept appointment as provided in
this Section 13.9 unless at the time of such acceptance such Successor Trustee
is eligible under the provisions of Section 13.7 and makes in the instrument of
acceptance delivered pursuant to clause (a) of this Section 13.9 the
representations and warranties contained in Section 3.2 hereof.
(c) Upon acceptance of appointment by a Successor Trustee as
provided in this Section 13.9, such Successor Trustee shall provide prompt
notice of its succession hereunder to the Depositor, and the Depositor shall
file a Form 8-K with the SEC disclosing such succession.
(d) Without the consent of a majority of the Holders of the
Down-MACRO Tradeable Shares, voting by Aggregate Par Amount, the compensation to
be paid to the Successor Trustee may not be greater than the compensation paid
to the terminated Trustee hereunder.
Section 13.10 Merger or Consolidation. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee shall be the
successor of the Trustee hereunder without the execution or filing of any paper
or any
45
further act on the part of any of the parties hereto; provided, however, that
such corporation shall be otherwise qualified and eligible under this ARTICLE
13, including without limitation Section 13.7 hereof. The Trustee shall promptly
furnish to the Depositor and the Administrative Agent a notice of any merger or
consolidation to which the Trustee is a party.
Section 13.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Trust Agreement,
the Trustee shall have the power and may execute and deliver all instruments to
appoint, at any time, one or more Persons to act as a co-trustee or co-trustees,
or a separate trustee or separate trustees, of all or any part of the Trust
Assets, and to vest in such Person or Persons, in such capacity and for the
benefit of the Holders of the Down-MACRO Tradeable Shares, such title to the
Trust Assets or any part thereof and, subject to the other provisions of this
Section 13.11, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Trust Assets may
at the time be located; provided, that such co-trustee or co-trustees, or
separate trustee or separate trustees, shall also assume the rights, duties and
obligations of the Trustee under each of the Up-MACRO Tradeable Trust Agreement,
the Down-MACRO Holding Trust Agreement and the Up-MACRO Holding Trust Agreement;
provided, further, that the Trustee shall exercise due care in the appointment
of any co-trustee or separate trustee. Each co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility for a successor
trustee under Section 13.8 and Section 13.9. No notice to Holders of the
Down-MACRO Tradeable Shares of the appointment of any co-trustee or separate
trustee shall be required under this Section 13.11; provided, that the Trustee
shall provide notice of each such appointment to the Depositor and the
Administrative Agent.
(b) Every co-trustee and separate trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such co-trustee or separate trustee
jointly (it being understood that such co-trustee or separate trustee
shall not be authorized to act unless the Trustee joins in such act)
except to the extent that under any laws of any jurisdiction in which any
particular act or acts are to be performed the Trustee is incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
Trust Assets or any portion thereof in any such jurisdiction) shall be
exercised or performed singly by such co-trustee or separate trustee, but
solely at the direction of the Trustee;
(ii) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of any other trustee
hereunder; and
(iii) the Trustee may at any time accept the resignation of or
remove any co-trustee or separate trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then co-trustees and separate
trustees as effectively as if given to each of them. Every instrument appointing
any co-trustee or separate trustee shall refer to this Trust Agreement and the
conditions of this Article 13. Upon its acceptance of the trusts conferred by
its instrument of appointment, each co-trustee and separate trustee shall be
vested with the estates or property specified in such instrument, either jointly
with the Trustee or
46
separately, as may be provided therein, subject to all of the provisions of this
Trust Agreement, specifically including every provision of this Trust Agreement
relating to the conduct of, affecting the liability of, or affording protection
to the Trustee. Every such instrument shall be filed with the Trustee.
(d) Any co-trustee or separate trustee may at any time appoint the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect to this
Trust Agreement on its behalf and in its name. If any co-trustee or separate
trustee shall become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts under or in respect to this
Trust Agreement shall vest in and be exercised by the Trustee, to the extent
permitted by law, without the appointment of a new or successor trustee.
Section 13.12 Books, Records; Taxes; Audit.
(a) The Trustee shall keep proper books of record and account of all
the transactions under this Trust Agreement at its Corporate Trust Office or
such office as it may subsequently designate upon notice to the other parties
hereto. The books and records of the Trustee shall be open to inspection by any
Person who establishes to the Trustee's reasonable satisfaction that it is a
Beneficial Owner upon reasonable advance notice at all reasonable times during
the usual business hours of the Trustee. The Administrative Agent shall keep
proper records of all Paired Optional Redemptions and Paired Issuances effected
at any time at its Business Office. Such records shall be open to inspection by
any Person who establishes to the Administrative Agent's reasonable satisfaction
that it is a Beneficial Owner upon reasonable advance notice at all reasonable
times during the usual business hours of the Administrative Agent. Such records
shall be preserved by the Trustee or the Administrative Agent, as applicable,
for so long as the Depositor may direct.
(b) The Trustee shall provide the Depositor such financial and other
information regarding the operation of the Down-MACRO Tradeable Trust as may be
required for the Depositor to prepare such reports and filings required under
the federal securities laws as required under Section 8.2. Unless otherwise
required by applicable law or regulation, the Depositor shall be responsible for
any certification of any such reports or the contents thereof; provided, that
the Trustee shall make such representations to the Depositor with respect to
information within the Trustee's control as shall be required for the Depositor
to make such certification.
(c) The Depositor shall prepare or cause to be prepared, and the
Trustee shall sign (if it is determined that the Trustee's signature is required
thereon) and file any tax returns required to be filed by the Down-MACRO
Tradeable Trust. The Depositor shall also prepare or cause to be prepared all
tax information required by law to be distributed to Holders of the Down-MACRO
Tradeable Shares. The Trustee, the Calculation Agent, the Marketing Agents and
the Administrative Agent, upon request, shall each furnish the Depositor with
any information known to it that may be reasonably required in connection with
the preparation of such duties set forth in the preceding two sentences.
(d) In no event shall the Trustee, the Depositor or the
Administrative Agent be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Down-MACRO Tradeable Shares under any
present or future law of the United States of America or imposed by any taxing
authority having jurisdiction over the Down-MACRO Tradeable Trust. For all such
taxes and charges and for any expenses, including counsel's fees, which the
Trustee or the Administrative Agent may sustain or incur with respect to such
taxes or
47
charges, the Trustee or the Administrative Agent shall be reimbursed and
indemnified by or on behalf of the Down-MACRO Holding Trust in accordance with
the provisions of Section 5.3 of the Down-MACRO Holding Trust Agreement and the
payment of such amounts shall be secured by a lien on the Down-MACRO Holding
Trust. Any payments by the Trustee or the Administrative Agent shall be subject
to withholding regulations then in force. This paragraph shall survive
notwithstanding any termination of this Trust Agreement, the Down-MACRO
Tradeable Trust, the Down-MACRO Holding Trust Agreement or the Down-MACRO
Holding Trust, or the resignation or removal of the Trustee or the
Administrative Agent.
(e) The accounts of the Down-MACRO Tradeable Trust shall be audited,
as required by law and as may be directed by the Depositor, by Independent
certified public accountants designated from time to time by the Depositor and
the cost of such audit shall be borne by the Down-MACRO Holding Trust in
accordance with the provisions of Section 5.3 of the Down-MACRO Holding Trust
Agreement. The report of such accountants shall be furnished by the
Administrative Agent to any Beneficial Owner upon request.
Section 13.13 Trustee May Enforce Claims Without Possession of
Down-MACRO Tradeable Shares. All rights of action and claims under this Trust
Agreement or the Down-MACRO Tradeable Shares may be prosecuted and enforced by
the Trustee without the possession of any of the Down-MACRO Tradeable Shares or
the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as
trustee. Any recovery of judgment shall, after provision for payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Down-MACRO Tradeable Shares in respect of which such judgment has been obtained.
Section 13.14 Suits for Enforcement. If a Termination Trigger or a
Trustee Termination Event occurs and is continuing, the Trustee (or the
Depositor, in the case of a Trustee Termination Event) in its discretion may
proceed to protect and enforce its rights and the rights of the Holders of the
Down-MACRO Tradeable Shares under this Trust Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Trust Agreement, in
aid of the execution of any power granted in this Trust Agreement or for the
enforcement of any other legal, equitable or other remedy as the Trustee (or the
Depositor, in the case of a Trustee Termination Event), being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Holders of the Down-MACRO Tradeable Shares.
Section 13.15 Maintenance of Office or Agency. The Trustee shall
maintain at its expense an office or agency (the "Corporate Trust Office") where
notices and demands to or upon the Trustee in respect of the Down-MACRO
Tradeable Shares and this Trust Agreement may be served. The Corporate Trust
Office shall initially be located at 000 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxxxxxxxxxx
00000. The Trustee will give prompt notice to the Depositor and to Registered
Owners of the Down-MACRO Tradeable Shares of any change in the location of the
Corporate Trust Office.
ARTICLE 14
TERMINATION
Section 14.1 Termination of Trust. The Down-MACRO Tradeable Trust
and the respective obligations and responsibilities of the Depositor, the
Administrative Agent, the Marketing Agents and the Trustee created hereby shall
terminate on the earlier of an Early
48
Termination Date and the Final Scheduled Termination Date. The Down-MACRO
Tradeable Trust shall not terminate in the event that the Depositor is adjudged
to be insolvent or is liquidated or dissolved for any reason.
Upon the termination of the Down-MACRO Tradeable Trust, the Trustee
shall wind up the activities and affairs of the Down-MACRO Tradeable Trust and
shall cause its certificate of designation to be cancelled by filing a
certificate of cancellation with the New York Secretary of State, terminating
the Down-MACRO Tradeable Trust.
ARTICLE 15
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination.
(a) This Trust Agreement shall not in any circumstances be amended
(i) to modify the definition of "Per Share Underlying Value" of the Down-MACRO
Tradeable Shares or any constituent defined terms that are a part of the
foregoing defined term; or (ii) to modify the rule that one Down-MACRO Tradeable
Share shall be issued for each Down-MACRO Holding Share that is deposited into
the Down-MACRO Tradeable Trust.
(b) Subject to clause (a) of this Section 15.1, this Trust Agreement
may be amended from time to time with the written consent of the Depositor, the
Administrative Agent and the Trustee, but without the consent of any Holder of
Down-MACRO Tradeable Shares (i) to cure any ambiguity or to correct or
supplement any provision which may be defective or inconsistent with any other
provision of this Trust Agreement, the Down-MACRO Holding Trust Agreement, the
Up-MACRO Holding Trust Agreement or the Up-MACRO Tradeable Trust Agreement, (ii)
to modify any provision of or add a provision to this Trust Agreement to conform
it to the description of the terms of the Down-MACRO Tradeable Shares contained
in the Prospectus, (iii) to add to the covenants, restrictions or obligations of
any entity under this Trust Agreement for the benefit of the Holders of the
Down-MACRO Tradeable Shares or to modify any provisions of this Trust Agreement
in any manner that does not adversely affect any Holder of Down-MACRO Tradeable
Shares or any Holder of Paired Holding Shares in any material respect, (iv) to
evidence and provide for the acceptance of appointment hereunder of a Successor
Trustee, a successor Administrative Agent or any successor Marketing Agent, (v)
to modify the procedures for directing and settling Creation Orders, Redemption
Orders and Exchange Orders set forth herein in connection with an amendment of
the Participants Agreement entered into among the Trustee, the Up-MACRO
Tradeable Trustee, the Down-MACRO Holding Trustee, the Up-MACRO Holding Trustee,
the Administrative Agent and one or more Authorized Participants, (vi) to comply
with any requirements imposed by the Code, or any federal or state securities
laws , and (vii) to modify the provisions of this Trust Agreement in accordance
with any regulatory no-action letter or interpretive relief received from the
SEC or the CFTC; provided, that no amendment to this Trust Agreement may be made
if it would have the effect of causing the Down-MACRO Tradeable Trust to be
classified other than as a grantor trust for U.S. federal income tax purposes;
provided, further, that no amendment of this Trust Agreement may be made if it
would have the effect of causing the Down-MACRO Tradeable Trust to be required
to register as an investment company under the Investment Company Act or to be
regulated as a commodity pool under the CEAct. The Trustee may, but shall not be
obligated to, enter into any amendment which affects the Trustee's rights,
duties or immunities under this Trust Agreement or otherwise.
49
(c) Subject to clause (a) of this Section 15.1, this Trust Agreement
may also be amended from time to time with the written consent of the Depositor,
the Administrative Agent and the Trustee and the written consent of the Holders
of Down-MACRO Tradeable Shares evidencing not less than a majority of the
Aggregate Par Amount, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Trust Agreement or of
modifying in any manner the rights of the Holders of the Down-MACRO Tradeable
Shares; provided, that no amendment to this Trust Agreement may be made if it
would have the effect of causing the Down-MACRO Tradeable Trust to be classified
other than as a grantor trust for U.S. federal income tax purposes; provided
further, that, without the written consent of each Holder of the Down-MACRO
Tradeable Shares that would be adversely affected thereby, no amendment may (i)
modify the amount or timing of any distributions that are required to be made on
the Down-MACRO Tradeable Shares; or (ii) reduce the percentage of Holders that
are required to consent to any of the foregoing amendments.
(d) Subject to clause (a) of this Section 15.1, this Trust Agreement
may be amended at any time prior to the first issuance of Up-MACRO Tradeable
Shares with the written consent of the Depositor, the Administrative Agent and
the Trustee and the written consent of each holder of Founders' Shares for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of hereof.
(e) Promptly after the execution of any amendment or consent
pursuant to this Section 15.1, the Trustee shall furnish notification of the
substance of such amendment or consent to each Registered Owner and the
Depositor shall prepare and file a Form 8-K with the SEC setting forth the
provisions of such amendment.
(f) Where the consent of Holders is required under this Section 15.1
in order to amend this Trust Agreement, it shall be sufficient if such consent
approves the substance of the proposed amendment; the particular form of such
amendment need not be approved. The manner of obtaining such consents and of
evidencing the authorization of the execution thereof by Holders of the
Down-MACRO Tradeable Shares shall be subject to such reasonable requirements as
the Trustee may prescribe.
(g) Holders evidencing not less than a majority of the Aggregate Par
Amount may waive any default by the Depositor, the Trustee, or the
Administrative Agent in the performance of their obligations hereunder and its
consequences, except the failure to make any distributions required to be made
to Holders of the Down-MACRO Tradeable Shares. Upon any such waiver of a past
default, such default shall cease to exist, and any default arising therefrom
shall be deemed to have been remedied for every purpose of this Trust Agreement.
No such waiver shall extend to any subsequent or other default or impair any
right consequent thereon except to the extent expressly so waived.
Section 15.2 Registration (Initial and Continuing) of Down-MACRO
Tradeable Shares; Certain Securities Law Filings. The Depositor agrees to (i)
prepare and file the Registration Statement with the SEC under the Securities
Act, and take such action as is necessary from time to time to qualify the
Down-MACRO Tradeable Shares for offering and sale under the federal securities
laws of the United States, including the preparation and filing of amendments of
and supplements to such Registration Statement, (ii) promptly notify the Trustee
and the Administrative Agent of any such amendment of or supplement to the
Registration Statement and of any order preventing or suspending the use of the
Prospectus included therein, (iii) provide the Trustee and the Administrative
Agent from time to time with copies, including copies in electronic form, of the
Prospectus, in such quantities as the Trustee and the
50
Administrative Agent may reasonably request, (iv) prepare and file any periodic
reports or updates that may be required under the Exchange Act, as specified in
Section 8.2 hereof, and (v) take such action as is necessary from time to time
to register or qualify the Down-MACRO Tradeable Shares for offering and sale
under the securities or blue sky laws of those states of the United States or
other jurisdictions as the Depositor may select or as may be necessary to
continue that registration or qualification in effect for so long as the
Depositor determines that the Down-MACRO Tradeable Trust shall continue to offer
or sell Down-MACRO Tradeable Shares in that jurisdiction. Registration charges,
blue sky fees, printing costs, mailing costs, attorney's fees, and other
miscellaneous out-of-pocket expenses shall be borne by the Down-MACRO Holding
Trust in accordance with the provisions of Section 5.3 of the Down-MACRO Holding
Trust Agreement.
Section 15.3 Prospectus Delivery. The Administrative Agent shall, if
required to do so under the federal securities laws of the United States,
deliver at the time of issuance of any Down-MACRO Tradeable Shares in any manner
permitted by such laws, a copy of the Prospectus, as most recently furnished to
the Administrative Agent by the Depositor, to each person submitting a Creation
Order. The Administrative Agent shall also, if required to do so under the
federal securities laws of the United States, deliver in conjunction with any
marketing or computational materials, in any manner permitted by such laws, a
copy of the Prospectus, as most recently furnished to the Administrative Agent
by the Depositor.
Section 15.4 Protection of Right, Title and Interest to Trust
Assets.
(a) The Depositor shall cause this Trust Agreement, all amendments
hereof and supplements hereto and all financing statements, continuation
statements and any other necessary documents covering the right, title and
interest of the Holders of the Down-MACRO Tradeable Shares and of the Trustee in
and to the Trust Assets to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed, all in such manner and in
such places as may be required by law fully to preserve and protect the right,
title and interest of the Holders of the Down-MACRO Tradeable Shares and the
Trustee hereunder in and to all property comprising the Trust Assets. The
Depositor shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing.
(b) Within 30 days after the Depositor makes any change in its name,
identity or corporate structure which would make any financing statement or
continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, the Depositor shall give the Trustee notice of such change and shall
file such financing statements or amendments as may be necessary to continue the
perfection of the Down-MACRO Tradeable Trust's security interest in the Trust
Assets and the proceeds thereof.
(c) The Depositor shall give the Trustee prompt notice of any
relocation of its principal executive offices or of any office from which it
performs its duties hereunder or keeps records concerning this transaction. If,
as a result of any such relocation, the applicable provisions of the UCC require
the filing of any new financing statement or of any amendment to any previously
filed financing or continuation statement, the Depositor shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of the Down-MACRO Tradeable Trust's security interest in the
Trust Assets and the proceeds thereof. The Depositor shall at all times maintain
its principal executive offices and each office from which it performs its
duties hereunder within the United States.
51
Section 15.5 Limitation on Rights of Holders of the Down-MACRO
Tradeable Shares.
(a) The death or incapacity of any Holder of the Down-MACRO
Tradeable Shares shall not operate to terminate this Trust Agreement or the
Down-MACRO Tradeable Trust, nor shall such death or incapacity entitle the legal
representatives or heirs of such Holder to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding-up of
the Down-MACRO Tradeable Trust, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Holder of the Down-MACRO Tradeable Shares shall have any
right to vote (except as expressly provided in this Trust Agreement) or in any
manner otherwise control the operation and management of the Down-MACRO
Tradeable Trust, or the obligations of the parties hereto, nor shall any Holder
of the Down-MACRO Tradeable Shares be under any liability to any third person by
reason of any action by the parties to this Trust Agreement pursuant to any
provision hereof.
(c) No Holder of the Down-MACRO Tradeable Shares shall have any
right by virtue of any provisions of this Trust Agreement to institute any suit,
action or proceeding in equity or at law upon, under or with respect to this
Trust Agreement unless such Holder previously has made, and unless the Holders
of Down-MACRO Tradeable Shares representing the beneficial ownership of at least
66 and 2/3% of all Outstanding Down-MACRO Tradeable Shares have made, written
request to the Trustee to institute such suit, action or proceeding in its own
name as Trustee hereunder and have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby and the Trustee, for sixty (60) days after its
receipt of such request and offer of indemnity, has neglected or refused to
institute any such action, suit or proceeding; it being understood and intended,
and expressly agreed to by each Holder with every other Holder and the Trustee,
that no one or more Holders of the Down-MACRO Tradeable Shares shall have any
right in any manner whatsoever by virtue of or by availing itself or themselves
of any provisions of this Trust Agreement to affect, disturb or prejudice the
rights of any other Holder of the Down-MACRO Tradeable Shares, to obtain or seek
to obtain priority over or preference to any other Holder of the Down-MACRO
Tradeable Shares or to enforce any right under this Trust Agreement except in
the manner herein provided and for the equal, ratable and common benefit of all
Holders of the Down-MACRO Tradeable Shares. For the protection and enforcement
of the provisions of this Section 15.5, each and every Holder and the Trustee
shall be entitled to such relief as can be obtained either at law or in equity.
Section 15.6 Certain Rights of Holders of Down-MACRO Tradeable
Shares; Voting.
(a) Each Holder of Down-MACRO Tradeable Shares shall be able to vote
on all matters on which shareholders may or are required to vote under this
Trust Agreement for the Down-MACRO Tradeable Shares. Holders of Down-MACRO
Tradeable Shares evidencing not less than 66 and 2/3% of the Aggregate Par
Amount shall have the right to direct the time, place and method of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred on the Trustee relating to such proceeding; provided,
however, that, subject to Section 15.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee, being advised by counsel,
determines that the action so directed may not lawfully be taken, or if a Trust
Officer in good faith determines that the proceedings so directed would be
illegal or involve the Trustee in personal liability or be unduly prejudicial to
the rights of Holders
52
of the Down-MACRO Tradeable Shares not party to such direction; provided further
that nothing in this Trust Agreement shall impair the right of the Trustee to
take any action deemed proper by the Trustee that is not inconsistent with such
direction or with the limitations imposed by Section 2.3 and Section 3.1(b)
hereof.
(b) The Holders of the Down-MACRO Tradeable Shares shall be entitled
to direct the Trustee in the exercise of the voting rights associated with the
Down-MACRO Holding Shares held on deposit in the Down-MACRO Tradeable Trust.
Each Holder of Down-MACRO Tradeable Shares shall be entitled to vote an equal
number of Down-MACRO Holding Shares as the number of Down-MACRO Tradeable Shares
owned by such Holder.
Section 15.7 MACRO Licensing Agreement. On the Closing Date, the
Down-MACRO Tradeable Trust shall enter into the MACRO Licensing Agreement with
MacroMarkets LLC, the Administrative Agent, the Down-MACRO Holding Trust, the
Up-MACRO Holding Trust and the Up-MACRO Tradeable Trust. Under such licensing
agreement, MacroMarkets LLC shall be entitled to the receipt of the Down-MACRO
Licensing Fee, which shall be payable to MacroMarkets LLC in arrears on each
Distribution Date in accordance with the provisions of Section 5.4 of the
Down-MACRO Holding Trust Agreement.
Section 15.8 Governing Law; Jurisdiction. THIS TRUST AGREEMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS. Each of the parties hereto hereby irrevocably and
unconditionally consents to submit to the exclusive jurisdiction of the courts
of the State of New York and of the federal courts sitting in the State of New
York for any litigation arising out of or relating to this Trust Agreement and
the transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts) and further agrees that service of any
process, summons, notice or document by prepaid certified mail with proof of
mailing receipt validated by the United States Postal Service to the address of
such party as set forth in Section 15.9 (or to the agent of such party appointed
and maintained in the State of New York as such party's agent for acceptance of
legal process) shall be effective service of process for any litigation brought
against it in any such court. Each of the parties hereto hereby irrevocably and
unconditionally waives any objection to the laying of venue of any litigation
arising out of this Trust Agreement or the transactions contemplated hereby in
the courts of the State of New York or of the federal courts sitting in the
State of New York and hereby further irrevocably and unconditionally waives its
right to, and agrees not to, plead or claim in any such court that any such
litigation brought in any such court has been brought in an inconvenient forum.
Section 15.9 Notices.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Trust Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered,
mailed by registered mail, return receipt requested, or sent by facsimile
transmission to the following addresses:
If to the Depositor, to: MACRO Securities Depositor, LLC
00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Facsimile: (000) 000-0000
53
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Trustee, to: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx XxXxxxx
Facsimile: (000) 000-0000
With a copy to: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
If to the Administrative Agent, to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxx Xxxx
Facsimile: (000) 000-0000
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
If to the Marketing Agents, to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
54
Or, to: MACRO Securities Depositor, LLC
00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Facsimile: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) Any Notice required or permitted to be given to a Registered
Owner of the Down-MACRO Tradeable Shares shall be given by first-class mail,
postage prepaid, at the address of such Registered Owner as shown in the Share
Register. Any Notice so mailed within the time prescribed in this Trust
Agreement shall be conclusively presumed to have been duly given, whether or not
the Registered Owner receives such Notice. Any notice to be given to a
Beneficial Owner shall be duly given if mailed or delivered to Authorized
Participants designated by the Depository for delivery to Beneficial Owners.
Section 15.10 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Trust Agreement is held
invalid for any reason whatsoever, then such provision shall be deemed severable
from the remaining provisions of this Trust Agreement and shall in no way affect
the validity or enforceability of the remaining provisions or of the Down-MACRO
Tradeable Shares or the rights of the Holders of the Down-MACRO Tradeable
Shares.
Section 15.11 Down-MACRO Tradeable Shares Nonassessable and Fully
Paid. It is the intention of the parties to this Trust Agreement that the
Holders of the Down-MACRO Tradeable Shares shall not be personally liable for
obligations of the Down-MACRO Tradeable Trust, that the interests in the
Down-MACRO Tradeable Trust represented by the Down-MACRO Tradeable Shares shall
be nonassessable for any losses or expenses of the Down-MACRO Tradeable Trust or
for any reason whatsoever and that the Down-MACRO Tradeable Shares upon
authentication thereof by the Trustee pursuant to Section 2.5 are and shall be
deemed fully paid.
Section 15.12 Further Assurances. The Depositor agrees to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Trustee more fully to effect
the purposes of this Trust Agreement, including the execution of any financing
statements or continuation statements relating to the Trust Assets for filing
under the provisions of the UCC of any applicable jurisdiction.
Section 15.13 Non-Petition Covenant; No Proceedings.
(a) Notwithstanding any prior termination of this Trust Agreement,
the Trustee, the Administrative Agent, the Marketing Agents and the Depositor
shall not, prior to the date which is one year and one day after the termination
of this Trust Agreement with respect to the Down-MACRO Tradeable Trust,
acquiesce in, petition for or otherwise invoke or cause the Down-MACRO
55
Tradeable Trust or the Depositor to invoke the process of any Governmental
Authority for the purpose of (x) commencing or sustaining a case against the
Down-MACRO Tradeable Trust or the Depositor under any federal or state
bankruptcy, insolvency or similar law, (y) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Down-MACRO Tradeable Trust or the Depositor or any substantial part of their
respective property or (z) ordering the winding-up or liquidation of the affairs
of the Down-MACRO Tradeable Trust or the Depositor.
(b) Each of the Trustee, the Depositor, the Administrative Agent,
each Marketing Agent and each Holder, by acceptance of its Down-MACRO Tradeable
Shares, hereby agrees that it will not institute against a Holder, or join any
other Person in instituting against a Holder, on account of its ownership of an
Down-MACRO Tradeable Share or its obligations hereunder, any bankruptcy,
insolvency, liquidation, readjustment of debt, marshalling of assets or any
similar proceeding so long as there has not elapsed one year plus one day since
the last day on which any Down-MACRO Tradeable Shares shall have been
Outstanding.
Section 15.14 No Waiver; Cumulative Remedies. No failure by the
Trustee or the Holders of the Down-MACRO Tradeable Shares to exercise any right,
remedy, power or privilege under this Trust Agreement, and no delay in such
exercise, shall operate as a waiver of such right, remedy, power or privilege;
nor shall any single or partial exercise of any right, remedy, power or
privilege under this Trust Agreement preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided under this Trust Agreement are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
Section 15.15 Counterparts. This Trust Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which together shall constitute
one and the same instrument.
Section 15.16 Third-Party Beneficiaries. This Trust Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders of
the Down-MACRO Holding Shares, the Holders of the Up-MACRO Holding Shares, the
Holders of the Down-MACRO Tradeable Shares, the Holders of the Up-MACRO
Tradeable Shares and their respective successors and permitted assigns. Except
as otherwise expressly provided in this Trust Agreement, no other Person will
have any right or obligation hereunder.
Section 15.17 Actions or Notices by Holders of the Down-MACRO
Tradeable Shares.
(a) Wherever a provision in this Trust Agreement states that an
action may be taken or a Notice given by Holders of the Down-MACRO Tradeable
Shares, such action or Notice may be taken or given by any Holder, unless such
provision requires a specific percentage of Holders of the Down-MACRO Tradeable
Shares.
(b) Any Notice, request, authorization, direction, consent, waiver
or other act by the Holder of an Down-MACRO Tradeable Share shall bind such
Holder and every subsequent Holder of such share and of any share issued upon
the registration of transfer thereof, in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee in reliance
thereon, whether or not notation of such action is made upon such share.
Section 15.18 Merger and Integration. Except as specifically stated
otherwise herein, this Trust Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this
56
Trust Agreement. This Trust Agreement may not be modified, amended, waived or
supplemented except as provided herein.
Section 15.19 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
57
IN WITNESS WHEREOF, the Depositor, the Trustee, the Administrative
Agent and the Marketing Agents have caused this Trust Agreement to be duly
executed by their respective officers as of the day and year first above
written.
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor
By: /S/ Xxxxxx Xxxxxxx, III
------------------------
Name: Xxxxxx Xxxxxxx, III
Title: President
INVESTORS BANK & TRUST COMPANY,
not in its individual capacity, but solely
as the Down-MACRO Tradeable Trustee
By: /S/ Xxxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
CLAYMORE SECURITIES, INC.,
as Administrative Agent
By: /S/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Senior Managing Director
CLAYMORE SECURITIES, INC.,
as a Marketing Agent
By: /S/ Xxxxxx X. Xxxx
------------------
Name: Xxxxxx X. Xxxx
Title: Senior Managing Director
MACRO FINANCIAL, LLC,
as a Marketing Agent
By: /S/ Xxxxxx Xxxxxxx, III
------------------------
Name: Xxxxxx Xxxxxxx, III
Title: Chief Executive Officer
EXHIBIT A
FORM OF GLOBAL CERTIFICATE
CERTIFICATE OF BENEFICIAL INTEREST
-Evidencing-
All Undivided Interests
-in-
CLAYMORE MACROSHARES OIL DOWN TRADEABLE TRUST
A-1
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS CERTIFICATE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE
AND TRANSFERS OF PORTIONS OF THIS CERTIFICATE SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE AGREEMENT.
A-2
This is to certify that CEDE & CO. is the owner and registered
holder of this Certificate, which is one of a duly authorized issue of
Certificates designated as Claymore MACROshares Oil Down Tradeable Share
Certificates (the "Certificates") evidencing in the aggregate the ownership of
all issued and outstanding Claymore MACROshares Oil Down Tradeable Shares
("Shares"), each of which represents a fractional undivided interest in the
Claymore MACROshares Oil Down Tradeable Trust ("Trust"), created under the laws
of the State of New York by the Amended and Restated Claymore MACROshares Oil
Down Tradeable Trust Agreement, dated as of November 24, 2006, among Macro
Securities Depositor, LLC, as depositor (the "Depositor"), Investors Bank &
Trust Company, as trustee (the "Trustee"), Claymore Securities, Inc., as
administrative agent (in such capacity, the "Administrative Agent") and as a
marketing agent (in such capacity, a "Marketing Agent"), and Macro Financial,
LLC, as an additional marketing agent (in such capacity, also a "Marketing
Agent") (hereinafter, the "Agreement"), copies of which are available at the
offices of the Trustee.
At any given time the Certificates shall represent all undivided
interests in the Trust, which shall be the total number of Shares that are
outstanding at such time. The Agreement provides for the issuance of additional
Shares from time to time as part of an issuance of one or more units which
constitutes 50,000 Claymore MACROshares Oil Down shares (the "Down MACRO Holding
Shares") and 50,000 Claymore MACROshares Oil Up Holding Shares (the "Up MACRO
Holding Shares"), which represent a fractional undivided interest in the
Claymore MACROshares Oil Down Holding Trust and the Claymore MACROshares Oil Up
Holding Trust (the "Paired Holding Trusts"), respectively, or integral thereof,
and the concurrent exchange of the Down-MACRO Holding Shares to the Shares and
the Up MACRO Holding Shares to Claymore MACROshares Oil Up Tradeable Shares (the
"Up MACRO Tradeable Shares"), which represent a fractional undivided interest in
the Claymore MACROshares Oil Up Tradeable Trust. In addition, the Agreement
provides for the discretionary one-to-one exchange of existing Down MACRO
Holding Shares into the Shares, in 50,000 increments of the Down-MACRO Holding
Shares.
The Depositor hereby grants and conveys all of its rights, title and
interest in and to the Trust to the extent of the undivided interest represented
hereby to the registered holder of this Certificate subject to and in pursuance
of the Agreement, all the terms, conditions and covenants of which are
incorporated herein as if fully set forth at length.
The Register holder of the Shares on each Record Date is entitled to
receive quarterly distributions out of the funds the Trust receives from the
Down-MACRO Holding Trust, to the extent and subject to the limitations set forth
in the Agreement, on the third Business Day of each April, July, October and
January of each year, commencing in January of 2006. In addition, such holder is
entitled at any Business Day, upon tender of the Shares represented by this
Certificate in increments of 50,000 Shares, together with the tender of Up MACRO
Tradeable Shares in the same number, endorsed in blank or accompanied by all
necessary instruments of assignment and transfer in proper form, to the
Administrative Agent, to exchange such shares into Down-MACRO Holding Shares and
Up MACRO Holding Shares, respectively, and concurrently redeem the exchanged
shares, upon payment of any tax or other governmental charges, to receive, at
the time and in the manner provided in the Agreement, such holder's ratable
portion of the assets of the Down-MACRO Holding Trust for the shares tendered.
The Register holder of the Shares can also exchange its Shares into Down-MACRO
Holding Shares in increments of 50,000 Shares.
A-3
The holder of the Shares represented by this Certificate, by virtue of the
purchase and acceptance hereof, assents to and shall be bound by the terms of
the Agreement, copies of which are on file and available for inspection at
reasonable times during business hours at the Corporate Trust Office, to which
reference is made for all the terms, conditions and covenants thereof.
The Trustee may deem and treat the person in whose name this
Certificate is registered upon the books of the Trustee as the owner hereof for
all purposes and the Trustee shall not be affected by any notice to the
contrary.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Trustee, the Administrative Agent and the Marketing Agents and
the rights of the shareholders under the Agreement at any time by the Depositor
and the Trustee with the consent of the shareholders of a majority of the
Down-MACRO Aggregate Par Amount. Any such consent by the shareholders shall be
conclusive and binding on such shareholders and upon all future shareholders
represented by this Certificate and of any Certificate issued upon the transfer
hereof or in exchange herefor or in lieu hereof whether or not notation of such
consent is made upon this Certificate. The Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the
shareholders.
The trustee will not enter into any amendment or modification which
would alter the status of the Trust as a grantor trust for federal income tax
purposes or cause any of the MACRO Trusts to be required to register as an
investment company under the Investment Company Act of 1940, as amended, or to
be regulated as a commodity pool under the Commodity Exchange Act, as amended or
which would change the calculation of underlying value.
The Register holder of the Shares shall be entitled, in addition to
its voting rights as to the Trust, to direct the Trustee in the exercise of the
voting rights associated with the Down-MACRO Holding Shares held on deposit in
the Trust, in accordance with and subject to the provisions of the Agreement.
This Certificate, is executed and delivered by MACRO Securities
Depositor, LLC as the Depositor in the exercise of the powers and authority
conferred and vested in it by the Agreement. The representations, undertakings
and agreements made on the part of the Trust in this Certificate are made and
intended not as personal representations, undertakings and agreements by MACRO
Securities Depositor, LLC but are made and intended for the purpose of binding
only the Trust. Nothing in this Certificate shall be construed as creating any
liability on MACRO Securities Depositor, LLC individually or personally, to
fulfill any representation, undertaking or agreement other than as provided in
the Agreement or this Certificate.
This Certificate shall not become valid or binding for any purpose
until properly executed by the Trustee and the Depositor under the Agreement.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF NEW YORK.
Terms not defined herein will have the same meaning as in the
Agreement.
A-4
IN WITNESS WHEREOF, MACRO Securities Depositor, LLC, as Depositor,
has caused this Certificate to be duly executed.
MACRO SECURITIES DEPOSITOR,
as Depositor
By:
----------------------------------
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CERTIFICATES REFERRED TO IN THE WITHIN- MENTIONED
TRUST AGREEMENT.
INVESTORS BANK & TRUST COMPANY,
as Trustee
By:
----------------------------------
AUTHORIZED SIGNATORY
Dated: , 2006
----------
A-5
EXHIBIT B
FORM OF PARTICIPANTS AGREEMENT
Filed as Exhibit 4.3 to this Registration Statement
B-1
EXHIBIT C
FORM OF MACRO LICENSING AGREEMENT
Filed as Exhibit 4.7 to this Registration Statement
C-1
EXHIBIT D
NYMEX SUBLICENSING AGREEMENT
Filed as Exhibit 4.8 to this Registration Statement
D-1
