EXHIBIT 4.3
FORM OF MACROSHARES OIL
PARTICIPANTS AGREEMENT
This MACROShares Oil Participants Agreement (the "Participants
Agreement"), dated as of [ ], 2006 is hereby entered into by and among the
parties listed from time to time on Schedule I attached hereto (individually, an
"Authorized Participant" and collectively, the "Authorized Participants"), MACRO
Securities Depositor, LLC, as depositor (the "Depositor"), [ ], not in its
individual capacity but solely as administrative agent of the Paired Holding
Trusts (the "Administrative Agent") and [ ], a
Massachusetts trust company, not in its individual capacity but 2solely (i) as
trustee of the MACROShares Up Oil Benchmark Holding Trust (the "Up-MACRO Holding
Trust"), (ii) as trustee of the MACROShares Down Oil Benchmark Holding Trust
(the "Down-MACRO Holding Trust" and together with the Up-MACRO Holding Trust,
the "Paired Holding Trusts"), (iii) as trustee of the MACROShares Up Oil
Benchmark Tradeable Trust (the "Up-MACRO Tradeable Trust"), and (iv) as trustee
of the MACROShares Down Oil Benchmark Tradeable Trust (the "Down-MACRO Tradeable
Trust" and together with the Up-MACRO Tradeable Trust, the "Tradeable Trusts"
and collectively, with the Paired Holding Trusts, the "MACRO Trusts") (such
entity, in its capacities set forth above, the "Trustee").
SUMMARY
Pursuant to the MACROShares Up Oil Benchmark Holding Trust Agreement,
dated as of [ ], 2006 (the "Up-MACRO Holding Trust Agreement"), among the
Depositor, [ ], not in its individual capacity
but solely as trustee of the Up-MACRO Holding Trust (the "Up-MACRO Holding
Trustee"), [ ], in its capacity as marketing agent (the "Marketing Agent") and
the Administrative Agent, the Up-MACRO Holding Trust will issue a global
certificate that will be deposited with The Depository Trust Company ("DTC") and
which will represent all of the undivided beneficial interests in the Up-MACRO
Holding Trust (such beneficial interests, the "Up-MACRO Holding Shares"), and
pursuant to the MACROShares Down Oil Benchmark Holding Trust Agreement, dated as
of [ ], 2006 (the "Down-MACRO Holding Trust Agreement" and together with the
Up-MACRO Holding Trust Agreement, the "Holding Trust Agreements"), among the
Depositor, [ ], not in its individual capacity but
solely as trustee of the Down-MACRO Holding Trust (the "Down-MACRO Holding
Trustee" and, together with the Up-MACRO Holding Trustee, the "Holding
Trustees"), the Marketing Agent and the Administrative Agent, the Down-MACRO
Holding Trust will issue a global certificate that will be deposited with DTC
and which will represent all of the undivided beneficial interests in the
Down-MACRO Holding Trust (such beneficial interests, the "Down-MACRO Holding
Shares" and together with the Up-MACRO Holding Shares, the "Paired Holding
Shares" or if referencing either Up-MACRO Holding Share or Down-MACRO Holding
Share, a "Holding Share").
In accordance with this Participants Agreement, the Trustee, acting
together with the Administrative Agent on behalf of the Paired Holding Trusts,
may create or redeem additional Paired Holding Shares in units of 100,000
Up-MACRO Holding Shares and 100,000 Down-MACRO Holding Shares (such pairs, a
"MACRO Unit") at the instructions of an Authorized Participant and in accordance
with the procedures set forth herein.
The Up-MACRO Holding Shares and the Down-MACRO Holding Shares,
constituting a MACRO Unit, are being offered pursuant to (i) a Prospectus, dated
as of [ ], 2006, relating to the Up-MACRO Holding Shares and the Up-MACRO
Tradeable Shares (the "Up-MACRO Prospectus"), which has been filed in connection
with the registration statement on Form S-1, as amended, file No.: 333-116566,
as declared effective by the Securities and Exchange Commission ("SEC") on [ ],
2006 (as the same may be amended from time to time thereafter, the "Up-MACRO
Registration Statement") and (ii) a Prospectus, dated as of [ ], 2006, relating
to the Down-MACRO Holding Shares and the Down-MACRO Tradeable Shares (the
"Down-MACRO Prospectus" and together with the Up-MACRO Prospectus, each a
"Prospectus"), which has been filed in connection with the registration
statement on Form S-1, as amended, file No.: 333-[ ], as declared effective by
the SEC on [ ], 2006 (as the same may be amended from time to time thereafter,
the "Down- MACRO Registration Statement" and together with the Up-MACRO
Registration Statement, the "Registration Statements").
Under the Holding Trust Agreements, the Trustee will issue MACRO Units
to, and redeem MACRO Units from, Authorized Participants, only through the
facilities of DTC or a successor depository. In exchange for a deposit of cash
with an aggregate purchase price set forth herein and in the applicable Holding
Trust Agreements, an Authorized Participant may create MACRO Units. In exchange
for a deposit of Paired Holding Shares constituting one or more MACRO Units, an
Authorized Participant may redeem one or more MACRO Units for cash and/or
Treasuries (as defined in the Holding Trust Agreements) as further described
herein. This Participants Agreement sets forth the specific procedures by which
an Authorized Participant may create or redeem MACRO Units.
Because new Paired Holding Shares can be created and issued on an
ongoing basis, at any point during the life of the Paired Holding Trusts, a
"distribution," as such term is used in the Securities Act of 1933, as amended
("Securities Act"), may be occurring. Each Authorized Participant is cautioned
that some of its activities may result in its being deemed a participant in a
distribution which would render it a statutory underwriter and subject it to the
prospectus-delivery requirements and the liability provisions of the Securities
Act. Each Authorized Participant should review the "Plan of Distribution"
portion of the Prospectuses and consult with its own counsel in connection with
entering into this Participants Agreement and placing a Holding Share Order (as
defined in Section 3).
Pursuant to the MACROShares Up Oil Benchmark Tradeable Trust Agreement,
dated as of [ ], 2006 (the "Up-MACRO Tradeable Trust Agreement"), among the
Depositor, [ ], not in its individual capacity but
solely as trustee of the Up-MACRO Tradeable Trust (the "Up-MACRO Tradeable
Trustee") and the Administrative Agent, the Up-MACRO Tradeable Trust will issue
a global certificate that will be deposited with DTC and which will represent
all of the undivided beneficial interests in the Up-MACRO Tradeable Trust (such
beneficial interests, the "Up-MACRO Tradeable Shares"), and pursuant to the
MACROShares Down Oil Benchmark Tradeable Trust Agreement, dated as of [ ], 2006
(the "Down-MACRO Tradeable Trust Agreement" and together with the Up-MACRO
Tradeable Trust Agreement, the "Tradeable Trust Agreements" and, together with
the Holding Trust Agreements, the "Trust Agreements"), among the Depositor,
[ ], not in its individual capacity but solely as
trustee of the Down-MACRO Tradeable Trust (the "Down-MACRO Tradeable Trustee"
and, together with the Up-MACRO Tradeable Trustee, the "Tradeable Trustees") and
the Administrative Agent, the Down-MACRO Tradeable Trust will issue a global
certificate that will be deposited with DTC and which will represent all of the
undivided beneficial interest in the Down-MACRO Tradeable Trust (such beneficial
interests, the "Down-MACRO Tradeable Shares" and, together with the Up-MACRO
Tradeable Shares, the "Tradeable Shares" and, together with the Paired Holding
Shares, the "MACRO Shares").
In accordance with this Participants Agreement, the Administrative
Agent may cause the Trustee to create or redeem additional Tradeable Shares in a
unit of [ ] Up-MACRO Tradeable Shares or [ ] Down-MACRO Tradeable Shares at the
instructions of an Authorized Participant. The creation of Up-MACRO Tradeable
Shares and Down-MACRO Tradeable Shares does not need to occur simultaneously.
Tradeable Shares may be created independently by the deposit of Up-Macro Holding
Shares into the Up-Macro Tradeable Trust, and Down-Macro Tradeable Shares may be
created independently by the deposit of Down-Macro Holding Shares into the
applicable Tradeable Trust.
The Up-MACRO Tradeable Shares are being offered to the public pursuant
to the Up-MACRO Prospectus (as described above) and are registered under the
Securities Act pursuant to the Up-MACRO Registration Statement, and the
Down-MACRO Tradeable Shares are being offered to the public pursuant to the
Down-MACRO Prospectus (as described above) and are registered under the
Securities Act pursuant to the Down-MACRO Registration Statement.
Under the Tradeable Trust Agreements, the Administrative Agent will
authorized the Trustee to issue additional Tradeable Shares to, and redeem
Tradeable Shares from, Authorized Participants, only through the facilities of
DTC or a successor depository. In exchange for a deposit of the Holding Shares
of a single type (i.e. Up-Macro or Down-Macro) and of a minimum number, an
Authorized Participant will create additional Tradeable Shares of the type of
Holding Shares deposited. In exchange for a deposit of Tradeable Shares of a
single type (i.e. Up-Macro or Down-Macro) and in a minimum number, an Authorized
Participant will receive Holding Shares of the type of Tradeable Shares
tendered. This Participants Agreement sets forth the specific procedures by
which an Authorized Participant may create or redeem Tradeable Shares.
Because new Tradeable Shares can be created and issued on an ongoing
basis, at any point during the life of the Tradeable Trusts, a "distribution,"
as such term is used in the Securities Act may be occurring. Each Authorized
Participant is cautioned that some of its activities may result in its being
deemed a participant in a distribution which would render it a statutory
underwriter and subject it to the prospectus-delivery requirements and the
liability provisions of the Securities Act. Each Authorized Participant should
review the "Plan of Distribution" portion of the Prospectuses and consult with
its own counsel in connection with entering into this Participants Agreement and
placing a Tradeable Share Order (as defined in Section 4).
Capitalized terms used but not defined in this Participants Agreement
shall have the meanings assigned to such terms in the applicable Trust
Agreements. To the extent there is a conflict between any provision of this
Participants Agreement and the provisions of the Trust Agreements, the
provisions of the Trust Agreements shall control.
To give effect to the foregoing premises and in consideration of the
mutual covenants and agreements set forth below, the parties hereto agree as
follows:
Section 1. Order Placement.
(a) To create or redeem one or more MACRO Units, Authorized
Participants must follow the procedures for creation and redemption set forth in
Section 3 of this Participants Agreement and the procedures described in
Attachment A hereto (the "MACRO Unit Procedures"), as each may be amended,
modified or supplemented from time to time.
(b) To exchange Tradeable Shares for the related type of Holding
Shares or to create Tradeable Shares upon a deposit of Holding Shares,
Authorized Participants must follow the procedures for exchange and creation set
forth in Section 4 of this Participants Agreement and the procedures described
in Attachment B hereto (the "Tradeable Share Procedures" and, together with the
MACRO Unit Procedures, the "Procedures"), as each may be amended, modified or
supplemented from time to time.
Section 2. Status of Authorized Participant. Each Authorized
Participant, individually and severally, represents and warrants and covenants
the following:
(a) It is a DTC Participant or an Indirect Participant. If it ceases
to be a DTC Participant or an Indirect Participant, such Authorized Participant
shall give immediate notice to the Trustee, the Depositor and the Administrative
Agent of such event, and this Participants Agreement shall terminate immediately
(with respect to that Authorized Participant only) as of the date such
Authorized Participant ceases to be a DTC Participant or Indirect Participant.
(b) Unless Section 2(c) applies, it either (i) is registered as a
broker-dealer under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and is a member in good standing of the National Association of
Securities Dealers, Inc. (the "NASD"), or (ii) is exempt from being, or
otherwise is not required to be, licensed as a broker-dealer or a member of the
NASD, and in either case is qualified to act as a broker or dealer in the states
or other jurisdictions where the nature of its business so requires. Such
Authorized Participant shall maintain any such registrations, qualifications and
membership in good standing and in full force and effect throughout the term of
this Participants Agreement. Such Authorized Participant shall comply with all
applicable federal laws, the laws of the states or other jurisdictions
concerned, and the rules and regulations promulgated thereunder, and with the
Constitution, By-Laws and Conduct Rules of the NASD (if it is a NASD member),
and will not offer or sell Paired Holding Shares or Tradeable Shares in any
state or jurisdiction where they may not lawfully be offered and/or sold.
(c) If it is offering or selling Paired Holding Shares or Tradeable
Shares in jurisdictions outside the several states, territories and possessions
of the United States and is not otherwise required to be registered, qualified
or a member of the NASD as set forth in Section 2(b) above, such Authorized
Participant shall (i) observe the applicable laws of the jurisdiction in which
such offer and/or sale is made, (ii) comply with the full disclosure
requirements of the Securities Act and the regulations promulgated thereunder,
and (iii) conduct its business in accordance with the spirit of the NASD Conduct
Rules.
(d) It is in compliance with the money laundering and related
provisions of the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "Patriot
Act") and the regulations promulgated thereunder, if such Authorized Participant
is subject to the requirements of the Patriot Act.
(e) It has the capability to send and receive communications via
authenticated electronic facilities to and from the Trustee and the
Administrative Agent. Such Authorized Participant shall confirm such capability
to the satisfaction of the Trustee and the Administrative Agent by the end of
the Business Day before placing its first Order (as defined in Section 4) with
the Trustee and the Administrative Agent.
(f) Each Authorized Participant, by its acquisition or holding of
any Paired Holding Share, is deemed to have represented and warranted that it is
not, and is not using assets of, any (i) "employee benefit plan" (as defined in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
"ERISA"), whether or not subject to Title I of ERISA, including without
limitation governmental plans, foreign pension plans and church plans, (ii)
"plan" (as defined in section 4975(e)(1) of the Internal Revenue Code of 1986,
as amended, the "Code"), whether or not subject to section 4975 of the Code),
including without limitation individual retirement accounts and Xxxxx plans, or
(iii) entity whose underlying assets include plan assets by reason of such an
employee benefit plan's or plan's investment in such entity, including without
limitation, as applicable, an insurance company general account, (each of (i),
(ii) and (iii) a "benefit plan investor"). Any purported purchase or transfer of
an up-macro holding share to a benefit plan investor shall be null and void ab
initio.
Section 3. MACRO Unit Orders.
(a) All orders to create or redeem MACRO Units shall be made in
accordance with the terms of the Holding Trust Agreements, this Participants
Agreement and the MACRO Unit Procedures. Each party will comply with such
foregoing terms and procedures to the extent applicable. Each Authorized
Participant hereby consents to the use of recorded telephone lines whether or
not such use is reflected in the MACRO Unit Procedures. The Trustee, the
Administrative Agent and the Depositor may issue additional or other procedures
from time to time relating to the manner of creating or redeeming MACRO Units
which are not related to the MACRO Unit Procedures, and each Authorized
Participant shall comply with such procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf of
itself and any party for which it is acting (whether such party is a customer or
otherwise) that each order to create a MACRO Unit (a "Purchase Order") and each
order to redeem a MACRO Unit (a "Redemption Order" and, together with the
Purchase Order, a "Holding Share Order") may not be revoked by such Authorized
Participant after the placement of such Order with the Administrative Agent and
the Trustee. Such orders shall be a binding obligation of the Authorized
Participant that placed such order. A form of Purchase Order is attached hereto
as EXHIBIT B (the "Purchase Order Form"), and a form of Redemption Order is
attached hereto as EXHIBIT C (the "Redemption Order Form"). The Purchase Order
Form and Redemption Order Form shall not be required if such Purchase Order or
Redemption Order is conducted through the electronic facilities of the
Administrative Agent; provided, however, that the Administrative Agent, in its
sole discretion, may require the use of the Purchase Order Form or Redemption
Form for any reason as an alternative for its electronic facilities. The
information required by such electronic facilities shall be substantially
similar to the information on the Purchase Order Form and the Redemption Order
Form attached hereto.
(c) The Administrative Agent and the Depositor shall each have the
absolute right, but shall have no obligation, to reject any Purchase Order (i)
if the Administrative Agent determines that the Authorized Participant or
Authorized Participants have deposited an insufficient amount of money with the
Trustee, (ii) if the Depositor determines that such Purchase Order would have
adverse tax or securities law consequences for either of the Paired Holding
Trusts or the holders of any of the Paired Holding Shares, (iii) the acceptance
or fulfillment of which would, in the opinion of counsel to the Depositor
acceptable to the Trustee, be unlawful, or (iv) if circumstances outside the
control of the Trustee, the Depositor or the Administrative Agent make it
impractical or not feasible to cause the Paired Holding Trusts to issue
additional Paired Holding Shares. None of the Trustee, the Depositor or the
Administrative Agent shall be liable to any Person by reason of the rejection of
any Purchase Order.
(d) The Administrative Agent and the Depositor shall each have the
absolute right but shall have no obligation to reject any Redemption Order, (i)
if the Administrative Agent determines that the Authorized Participant or
Authorized Participants have deposited an insufficient number of Paired Holding
Shares with the Trustee, (ii) if the Depositor determines that such Redemption
Order would have adverse tax or securities law consequences for either of the
Paired Holding Trusts or the holders of any of the Paired Holding Shares, (iii)
the acceptance or fulfillment of which would, in the opinion of counsel to the
Depositor acceptable to the Trustee, be unlawful or (iv) if circumstances
outside the control of the Trustee, the Depositor or the Administrative Agent
make it impractical or not feasible to cause the Paired Holding Trusts to issue
additional Paired Holding Shares. None of the Trustee, the Depositor or the
Administrative Agent shall be liable to any Person by reason of the rejection of
any Redemption Order.
(e) The Administrative Agent may, each in its sole discretion, and
will when so directed by the Depositor, suspend the right of creation or
redemption, or postpone the applicable settlement date, (i) for any period
during which the American Stock Exchange, LLC is closed other than for customary
weekend or holiday closings, or trading is suspended or restricted, (ii) for any
period during which an emergency exists as a result of which delivery, disposal
or evaluation of the Treasuries is not reasonably practicable, or (iii) for such
other period as the Depositor determines to be necessary for the protection of
the holders of the Paired Holding Shares. None of the Trustee, the Depositor or
the Administrative Agent shall be liable to any Person or in any way for any
loss or damage that may result from any such suspension or postponement.
Section 4. Tradeable Share Related Orders.
(a) Except as otherwise provided for herein, all orders to
exchange Tradeable Shares for Holding Shares or to create Tradeable Shares upon
a deposit of Holding Shares shall be made in accordance with the terms of the
Tradeable Trust Agreements, this Participants Agreement and the Tradeable Share
Procedures. Each party will comply with such foregoing terms and procedures to
the extent applicable. Each Authorized Participant hereby consents to the use of
recorded telephone lines whether or not such use is reflected in the Tradeable
Share Procedures. The Administrative Agent and the Depositor may issue
additional or other procedures from time to time relating to the manner of
exchanging or creating Tradeable Shares which are not related to the Tradeable
Share Procedures, and each Authorized Participant shall comply with such
procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf of
itself and any party for which it is acting (whether such party is a customer or
otherwise) that each order to create Tradeable Shares upon a deposit of the
related Holding Shares (a "Creation Order") and each order to exchange Tradeable
Shares for the related Holding Shares (an "Exchange Order," and together with a
Creation Order, a "Tradeable Share Order" and collectively, with Holding Share
Orders, each an "Order") may not be revoked by such Authorized Participant after
the placement of such order with the Administrative Agent and the Trustee. Such
Orders shall be a binding obligation of the Authorized Participant that placed
such Order. A form of Creation Order is attached hereto as EXHIBIT D (the
"Creation Order Form") and a form of Exchange Order is attached hereto as
EXHIBIT E (the "Exchange Order Form" and, together with the Purchase Order Form,
the Redemption Order Form and the Creation Order Form, each an "Order Form").
The Creation Order Form and Exchange Order Form shall not be required if such
Creation Order or Exchange Order is conducted through the electronic facilities
of the Administrative Agent; provided, however, that the Administrative Agent,
in its sole discretion, may require the use of the Creation Order Form or
Exchange Form for any reason as an alternative for its electronic facilities.
The information required by such electronic facilities shall be substantially
similar to the information on the Creation Order Form and the Exchange Order
Form attached hereto.
(c) The Administrative Agent and the Depositor shall each have the
absolute right but shall have no obligation to reject any Creation Order or
Holding Share Deposit (i) if the Administrative Agent determines that the
Authorized Participant or Authorized Participants have not deposited an
insufficient number of Paired Holding Shares with the Trustee, (ii) if the
Depositor has determined and advised the Trustee and the Administrative Agent
that such Creation Order would have adverse tax consequences to the Tradeable
Trust receiving the deposit or the holders of that Tradeable Trust's Tradeable
Shares, (iii) if the acceptance of which would, in the opinion of counsel to the
Depositor, be unlawful, or (iv) if circumstances outside the control of the
Trustee, the Depositor or the Administrative Agent make it impractical or not
feasible to process a creation of Tradeable Shares. None of the Trustee, the
Depositor or the Administrative Agent shall be liable to any Person by reason of
the rejection of any Creation Order or Holding Share Deposit.
(d) The Administrative Agent and the Depositor shall each have the
absolute right but shall have no obligation to reject any Exchange Order or
Tradeable Share Deposit (i) if the Administrative Agent determines that the
Authorized Participant or Authorized Participants have deposited an insufficient
number of Tradeable Shares with the Trustee, (ii) if the Depositor has
determined and advised the Trustee and the Administrative Agent that such
Exchange Order would have adverse tax consequences to the Tradeable Trust or the
holders of the that Tradeable Trust's Tradeable Shares, (iii) the acceptance of
which would, in the opinion of counsel to the Depositor, be unlawful, or (iv) if
circumstances outside the control of the Trustee, the Depositor or the
Administrative Agent make it impractical or not feasible to process an exchange
of Tradeable Shares for the applicable type of Paired Holding Shares. None of
the Trustee, the Depositor or the Administrative Agent shall be liable to any
Person by reason of the rejection of any Exchange Order or Tradeable Share
Deposit.
(e) The Administrative Agent may, in its sole and absolute
discretion, and will when so directed by the Depositor suspend the right of
creation or exchange, or postpone the applicable settlement date, (i) for any
period during which the American Stock Exchange is closed other than for
customary weekend or holiday closings, or trading is suspended or restricted,
(ii) for any period during which an emergency exists as a result of which
delivery of Paired Holding Shares or the creation of new Tradeable Shares are
not reasonably practicable or (iii) for such other period as the Depositor
determines to be necessary for the protection of the holders of Tradeable
Shares. Neither the Depositor, the Administrative Agent nor the Trustee shall be
liable to any Person or in any way for any loss or damages that may result from
any such suspension or postponement.
Section 5. Transfers.
(a) Any MACRO Share or Treasuries to be transferred in connection
with any Order shall be transferred between that Authorized Participant's
designated account at DTC and the Securities Account of the applicable MACRO
Trust in accordance with the Procedures. The Authorized Participant shall be
responsible for all costs and expenses relating to or connected with any
transfer of MACRO Shares or Treasuries between its designated account and the
Securities Account of the applicable MACRO Trust. Any transfer of cash (in the
form of the Up-MACRO Income Make-Whole Amount or the Down-MACRO Income
Make-Whole Amount or as any other type of cash distribution or payment) in
connection with any Holding Share Order shall be transferred between a bank
account designated by that Authorized Participant and the Distribution Account
of the applicable Paired Holding Trust in accordance with the MACRO Unit
Procedures. Any transfers of cash shall be conducted through the Federal Wire
Electronic Transfer System. The Authorized Participant shall be responsible for
all costs and expenses relating to or in connection with any transfers of cash
between its designated bank account and the Distribution Account.
(b) Each of the MACRO Trusts, the Depositor, the Trustee and the
Administrative Agent shall have no liability for loss or damages suffered by an
Authorized Participant in respect of the Authorized Participant's Participant
Custodian Account. The Authorized Participant acknowledges that it is an
unsecured creditor of the Trustee with respect to any MACRO Shares, Treasuries
and/or cash held in each Authorized Participant's Participant Custodian Account
and that such Treasuries and/or cash are at risk in the event that a Trustee
becomes insolvent.
Section 6. Fees.
(a) In connection with each Holding Share Order, the Authorized
Participant shall pay to the Trustee a fee (such fee, the "Holding Share
Transaction Fee") for such creation or redemption. The initial Holding Share
Transaction Fee shall be two thousand dollars ($2,000) (such fee, the
"Transaction Fee"). The Holding Share Transaction Fee may be adjusted from time
to time in accordance with this Participants Agreement. A single Holding Share
Transaction Fee shall be due for each Purchase Order or Redemption Order from a
Single Authorized Participant that relates to multiple MACRO Units, and no
additional Transaction Fee shall be charged, if at the time of the creation or
redemption of Paired Holding Shares, the Authorized Participant concurrently
conducts a creation or exchange of Tradeable Shares.
(b) In connection with each Tradeable Share Order that is conducted
separately from a Holding Share Order, the Authorized Participant shall pay to
the Trustee a fee (such fee, the "Tradeable Share Transaction Fee"; and together
with the Holding Share Transaction Fee, the "Transaction Fee") for such creation
or exchange of Tradeable Shares. The initial Tradeable Share Transaction Fee
shall be two thousand dollars ($2,000). The Tradeable Share Transaction Fee
may be adjusted from time to time in accordance with Section 6(c) of this
Participants Agreement. A single Tradeable Share Transaction Fee shall be due
for each Tradeable Share Order from a single Authorized Participant that is
conducted separately from a Holding Share Order regardless of the aggregate
amount of creations or exchanges on such date, and no additional Transaction Fee
shall be charged, if at the time of the creation or redemption of Paired Holding
Shares, the Authorized Participant concurrently conducts a creation or exchange
of Tradeable Shares.
(c) The Transaction Fee may subsequently be waived, modified,
reduced, increased or otherwise changed by the Trustee, with the prior written
consent of the Depositor, but will not in any event exceed (a) in the case of a
Paired Subsequent Issuance or a Paired Optional Redemption, [0.10]% of the value
of a MACRO Unit at the time of creation or redemption, as the case may be (in
each case determined at the proportionate underlying value of a MACRO Unit on
the date of either the Purchase Order or the Redemption Order), or (b) in the
case of a creation of or exchange for Tradeable Shares, [0.10]% of the aggregate
proportional underlying value of the Holding Shares on the date of either a
Creation Order or an Exchange Order. Promptly after agreeing to and prior to
implementing such change, the Depositor shall cause the current Registration
Statements to be amended to reflect any such changes in the Transaction Fee. The
Administrative Agent shall notify the Depository and each Authorized Participant
of any agreement to waive, modify, reduce, increase or otherwise change the
Transaction Fee and shall not implement any increase for redemptions of
outstanding Paired Holding Shares or Tradeable Shares until thirty (30) days
after the date of that notice. The amount of the Transaction Fee in effect at
any given time shall be made available by the Administrative Agent upon request.
Section 7. Authorized Persons. Concurrently with the execution of this
Participants Agreement and from time to time thereafter, each Authorized
Participant shall deliver to the Administrative Agent, with copies to the
Trustee, notarized and duly certified as appropriate by its secretary or other
duly authorized official, a certificate in the form of EXHIBIT A setting forth
the names and signatures of all persons authorized to give instructions relating
to activity contemplated hereby or by any other notice, request or instruction
given on behalf of the Authorized Participant (each, an "Authorized Person").
The Administrative Agent may accept and rely upon such certificate as conclusive
evidence of the facts set forth therein and shall consider such certificate to
be in full force and effect until the Administrative Agent each receives a
superseding certificate bearing a subsequent date. Upon the termination or
revocation of authority of any Authorized Person by the Authorized Participant,
the Authorized Participant shall give immediate written notice of such fact to
the Administrative Agent and such notice shall be effective upon receipt by the
Administrative Agent. The Administrative Agent shall issue to each Authorized
Person a unique personal identification number (the "PIN Number") by which such
Authorized Person shall be identified and which shall be used as authentication
for Orders placed by that Authorized Person. The Administrative Agent shall
provide to the Depositor and the Trustee, if so requested, a list of the
Authorized Persons and their corresponding PIN Numbers and shall promptly update
such list upon any changes to such list. The PIN Number shall be kept
confidential by the Authorized Participant and shall only be provided to the
Authorized Person. If, after issuance, the Authorized Person's PIN Number is
changed, the new PIN Number shall become effective on a date mutually agreed
upon by the Authorized Participant and the Administrative Agent.
Section 8. Representation regarding Securities Delivered. Each
redeeming Authorized Participant represents and warrants that it will not obtain
a Submission Number (as described in the Procedures) from the Administrative
Agent for each Order unless such Authorized Participant first ascertains that
(i) it or its customer or any other person on whose behalf it is acting, as the
case may be, owns outright or has full legal authority and legal and beneficial
right to tender the Paired Holding Shares, Tradeable Shares or Treasuries, as
applicable, and (ii) such Paired Holding Shares, Tradeable Shares or Treasuries,
as applicable, have not been loaned or pledged to another party and are not the
subject of a repurchase agreement, securities lending agreement or any other
arrangement which would preclude the delivery of such securities to the Trustee
on the second Business Day following the applicable order date.
Section 9. Role of Authorized Participant.
(a) Each Authorized Participant acknowledges that, for all purposes
of this Participants Agreement and the Trust Agreements, it is and shall be
deemed to be an independent contractor and has and shall have no authority to
act as agent for the Paired Holding Trusts, the Tradeable Trusts, the Depositor,
the Administrative Agent or the Trustee in any matter or in any respect.
(b) Each Authorized Participant will make itself and its employees
available, upon request, during normal business hours to consult with the
Trustee and the Administrative Agent concerning the performance of such
Authorized Participant's responsibilities under this Participants Agreement.
(c) With respect to (i) any Paired Subsequent Issuance and Paired
Optional Redemption of Paired Holding Shares or (ii) any creation or exchange of
Tradeable Shares made by an Authorized Participant pursuant to this Participants
Agreement for the benefit of any customer or any other DTC Participant or
Indirect Participant, or any other beneficial owner, such Authorized Participant
shall extend to any such party all of the rights, and shall be bound by all of
the obligations, of a DTC Participant in addition to any obligations that it
undertakes hereunder or in accordance with the Trust Agreements.
(d) Each Authorized Participant will maintain records of all sales
of Paired Holding Shares or Tradeable Shares made by or through it and will
furnish copies of such records to the Depositor upon the reasonable request of
the Depositor.
Section 10. Indemnification.
(a) Each Authorized Participant, individually and severally, hereby
indemnifies and holds harmless the Paired Holding Trusts, the Tradeable Trusts,
the Trustee, the Administrative Agent, the Depositor, their respective direct or
indirect affiliates (as defined below) and their respective directors, officers,
managers, members, employees and agents, and each person, if any, who controls
such persons within the meaning of Section 15 of the Securities Act (each, an
"AP Indemnified Party") from and against any losses, liabilities, damages, costs
and expenses (including attorney's fees and the reasonable cost of
investigation) incurred by such AP Indemnified Party as a result of or in
connection with: (i) any breach by such Authorized Participant of any provisions
of this Participants Agreement, including its representations, warranties and
covenants, (ii) any failure on the part of such Authorized Participant to
perform any of its obligations set forth in this Participants Agreement, (iii)
any failure by such Authorized Participant to comply with applicable laws and
the rules and regulations of self-regulatory organizations, (iv) any actions of
such AP Indemnified Party in reliance upon any instructions issued in accordance
with the Procedures believed by the AP Indemnified Party to be genuine and to
have been given by such Authorized Participant, or (v) (A) any representation by
such Authorized Participant, its employees or its agents or other
representatives about any type of MACRO Shares or any AP Indemnified Party that
is not consistent with the then-current Prospectuses made in connection with the
offer or the solicitation of an offer to buy or sell any type of MACRO Shares
and (B) any untrue statement or alleged untrue statement of a material fact
contained in any Participant Free Writing Prospectus described in Section 14(b)
or any alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading to the extent
that such statement or omission relates to the MACRO Shares or any AP
Indemnified Party, unless, in either case, such representation, statement or
omission was made or included by the Authorized Participant at the written
direction of the Depositor or is based upon any omission or alleged omission by
the Depositor to state a material fact in connection with such representation,
statement or omission necessary to make such representation, statement or
omission not misleading.
(b) The Paired Holding Trusts, on behalf of themselves and the
Tradeable Trusts, hereby agree to indemnify and hold harmless, severally and not
jointly, each Authorized Participant, its respective subsidiaries, affiliates,
directors, officers, employees and agents, and each person, if any, who controls
such persons within the meaning of Section 15 of the Securities Act (each, a
"Trust Indemnified Party") from and against any losses, liabilities, damages,
costs and expenses (including reasonable attorneys' fees) incurred by such Trust
Indemnified Party as a result of (i) any breach by a MACRO Trust of any
provision of this Participants Agreement that relates to a MACRO Trust, (ii) any
failure on the part of a MACRO Trust to perform any of its obligation set forth
in this Participants Agreement or (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Prospectuses as originally filed
with the SEC or in any amendment thereof, or in any amendment thereof or
supplement thereto, or arising out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except those statements
in the Prospectuses based on information furnished in writing by or on behalf of
the Authorized Participant expressly for use in the Prospectuses.
(c) This Section 10 shall not apply to the extent any such losses,
liabilities, damages, costs and expenses are incurred as a result or in
connection with any gross negligence, bad faith or willful misconduct on the
part of the AP Indemnified Party or the Trust Indemnified Party, as the case may
be. The term "affiliate" in this Section 9 shall include, with respect to any
person, entity or organization, any other person, entity or organization which
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person, entity or
organization.
(d) If the indemnification provided for in this Section 10 is
unavailable to an AP Indemnified Party under Section 10(a) or a Trust
Indemnified Party under Section 10(b) or insufficient to hold an indemnified
party harmless in respect of any losses, liabilities, damages, costs and
expenses referred to therein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, liabilities, damages, costs and expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by a Paired Holding
Trust, on the one hand, and by the Authorized Participant, on the other hand,
from the services provided hereunder or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of a Paired Holding Trust, on the one hand,
and of the Authorized Participant, on the other hand, in connection with, to the
extent applicable, the statements or omissions which resulted in such losses,
liabilities, damages, costs and expenses, as well as any other relevant
equitable considerations. The relative benefit of a Paired Holding Trust shall
be deemed to be in the same proportion as the total net proceeds from the
offering (after deducting expenses) received by that Paired Holding Trust. To
the extent applicable, the relative fault of a Paired Holding Trust, on the one
hand, and of the Authorized Participant, on the other hand, shall be determined
by reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates to
information supplied by that trust or by the Authorized Participant and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, liabilities, damages, costs and expenses
referred to in this Section 10(d) shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any action, suit or proceeding
(each, a "Proceeding") related to such losses, liabilities, damages, costs and
expenses.
(e) Each Paired Holding Trust and each Authorized Participant agree
that it would not be just and equitable if contribution pursuant to this Section
10 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
Section 10(d) above. Each Authorized Participant shall not be required to
contribute any amount in excess of the amount by which the total price at which
the Paired Holding Shares or Tradeable Shares, as applicable, created by the
Authorized Participant and distributed to the public exceeds the amount of any
damage which the Authorized Participant has otherwise been required to pay by
reason of such untrue statement or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) The indemnity and contribution provisions contained in this
Section 10 shall remain in full force and effect regardless of any investigation
made by or on behalf of an Authorized Participant, its partners, stockholders,
members, directors, officers, employees and or any person (including each
partner, stockholder, member, director, officer or employee of such person) who
controls an Authorized Participant within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of each of
the Paired Holding Trusts, its managers, members, officers, employees or any
person who controls the Paired Holding Trusts within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, and shall survive any
termination of this Participants Agreement. Each Paired Holding Trust and each
Authorized Participant agree promptly to notify each other of the commencement
of any Proceeding against it and, in the case of a Paired Holding Trust, against
the Trustee or the Depositor, in connection with the issuance and sale of the
Paired Holding Shares or Tradeable Shares or in connection with the Registration
Statement or the Prospectuses.
(g) Pursuant to the Holding Trust Agreements, each Paired Holding
Trust hereby agrees jointly and severally to pay any Trust Indemnified Party
such amounts when due under this Section 10 (including any amount in
contribution thereof that may be owed to such Trust Indemnified Party pursuant
to this Section 10), and to pay any and all expenses (including reasonable and
documented counsel fees and expenses) incurred by the Trust Indemnified Party in
enforcing its rights under this Section 10(g).
Section 11. Limitation of Liability.
(a) None of the Depositor, the Trustee or the Authorized Participant
shall be liable to each other or to any other Person, including any AP
Indemnified Party or any other person claiming by, through or on behalf of an
Authorized Participant, for any losses, liabilities, damages, costs or expenses
arising out of any mistake or error in data or other information provided to any
of them by any of the others or any other person or out of any interruption or
delay in the electronic means of communications used by them.
(b) Tax Liability. Each Authorized Participant shall be responsible
for the payment of any transfer tax, sales or use tax, stamp tax, recording tax,
value added tax and any other similar tax or government charge applicable to (i)
the creation or redemption of any MACRO Unit or (ii) the creation or exchange of
Tradeable Shares made pursuant to this Participants Agreement, regardless of
whether or not such tax or charge is imposed directly on each Authorized
Participant. To the extent the Trustee, the Administrative Agent, the Depositor,
the Paired Holding Trusts or the Tradeable Trusts are required by law to pay any
such tax or charge, the Authorized Participant agrees to promptly indemnify such
party for any such payment, together with any applicable penalties, additions to
tax or interest thereon.
Section 12. Acknowledgment. Each Authorized Participant acknowledges
receipt of a copy of (i) the Trust Agreements, (ii) the current Up-MACRO
Prospectus and (iii) the current Down-MACRO Prospectus and represents that it
has reviewed and understands such documents.
Section 13. Effectiveness and Termination. Upon the execution of this
Participants Agreement by the parties hereto, this Participants Agreement shall
become effective in this form as of the date first set forth above, and may be
terminated at any time by any party upon thirty (30) days' prior written notice
to the other parties unless earlier terminated: (i) in accordance with Section
2(a), (ii) upon notice to the Authorized Participant by the Trustee in the event
of a breach by the Authorized Participant of this Participants Agreement or the
procedures described or incorporated herein, (iii) immediately in the
circumstances described in Section 20(j), or (iv) at such time as the Paired
Holding Trusts are terminated pursuant to the Holding Trust Agreements.
Section 14. Marketing Materials; Representations Regarding Paired
Holding Shares; Identification in Registration Statement.
(a) Each Authorized Participant represents, warrants and covenants
that, (i) without the prior written consent of the Depositor, such Authorized
Participant will not make, or permit any of its representatives to make, any
representations concerning the Paired Holding Shares, the Tradeable Shares or
any AP Indemnified Party other than representations contained (A) in the
then-current Prospectuses, (B) in printed information approved by the Depositor
as information supplemental to such Prospectuses or (C) in any promotional
materials or sales literature furnished to such Authorized Participant by the
Depositor, and (ii) such Authorized Participant will not furnish or cause to be
furnished to any person or display or publish any information or material
relating to the Paired Holding Shares, the Tradeable Shares, any AP Indemnified
Person, the Paired Holding Trusts or the Tradeable Trusts that is not consistent
with the Prospectuses. Copies of the then current Prospectuses and any such
printed supplemental information will be supplied by the Depositor to the
Authorized Participant in reasonable quantities upon request.
(b) Notwithstanding the foregoing, each Authorized Participant may
without the written approval of the Depositor prepare and circulate to one or
more of its potential investors one or more "written communications" (as defined
in Rule 405 under the Securities Act) containing no more than the following:
information contemplated by Rule 134 under the Securities Act and information
included in the Prospectuses (each such written communication, a "Participant
Free Writing Prospectus").
(c) Each Authorized Participant severally represents, warrants and
agrees with the Trustee, the Administrative Agent and the Depositor that:
(i) each Participant Free Writing Prospectus prepared by it will
not, as of the date such Participant Free Writing Prospectus was conveyed
or delivered to any prospective purchaser of MACRO Shares, include any
untrue statement of a material fact or omit any material fact necessary to
make the statements contained therein, in light of the circumstances under
which they were made, not misleading; provided, however, that no Authorized
Participant makes such representation, warranty or agreement to the extent
such misstatements or omissions were the result of any inaccurate
information which was included in the Prospectuses or any written
information furnished to the related Authorized Participant by the Trustee,
the Administrative Agent and the Depositor expressly for use therein, which
information was not corrected by information subsequently provided by the
Trustee, the Administrative Agent and the Depositor to the related
Authorized Participant prior to the time of use of such Participant Free
Writing Prospectus;
(ii) each Participant Free Writing Prospectus prepared by it
shall contain a legend substantially in the form of and in compliance with
Rule 433(c)(2)(i) of the Securities Act, and shall otherwise conform to any
requirements for "free writing prospectuses" under the Securities Act; and
(iii) each Participant Free Writing Prospectus prepared by it
shall be delivered to the Trustee, the Administrative Agent and the
Depositor no later than the time of first use and, unless otherwise agreed
to by the Trustee, the Administrative Agent, the Depositor and the
Authorized Participant, such delivery shall occur no later than the close
of business for the Depositor (New York City time) on the date of first
use; provided, however, if the date of first use is not a Business Day,
such delivery shall occur no later than the close of business for the
Depositor (New York City time) on the first Business Day preceding such
date of first use.
(d) Each Authorized Participant severally represents and agrees (i)
that it did not enter into any contract of sale for any MACRO Share prior to the
time of first contract with that buyer and (ii) that it will, at any time that
such Authorized Participant is acting as an "underwriter" (as defined in Section
2(a)(11) of the Securities Act) with respect to any type of MACRO Share, deliver
to each investor to whom the MACRO Shares are offered a copy of the then-current
Prospectuses.
(e) Each Authorized Participant and its affiliates may prepare and
circulate in the regular course of their businesses, without having to refer to
the then-current Prospectuses, data and information relating to the Applicable
Reference Price of Crude Oil and the price and/or interest rate (including any
discount rate) on the Treasuries.
(f) Each Authorized Participant hereby agrees that, for the term of
this Participants Agreement, the Depositor may deliver the then-current
Prospectuses, and any supplements or amendments thereto or recirculation
thereof, to such Authorized Participant in Portable Document Format ("PDF") via
electronic mail in lieu of delivering the Prospectuses in paper form. Each
Authorized Participant may revoke the foregoing agreement at any time by
delivering written notice to the Depositor and, whether or not such agreement is
in effect, each Authorized Participant may, at any time, request reasonable
quantities of the Prospectuses, and any supplements or amendments thereto or
recirculation thereof, in paper form from the Depositor. Each Authorized
Participant acknowledges that it has the capability to access, view, save and
print material provided to it in PDF and that it will incur no appreciable extra
costs by receiving the Prospectuses in PDF instead of in paper form.
(g) For as long as this Participants Agreement is effective, each
Authorized Participant agrees to be identified as an authorized participant of
the Paired Holding Trusts and the Tradeable Trusts (i) in the section of the
Prospectuses included within the Registration Statements entitled "Plan of
Distribution" and in any other section as may be required by the SEC and (ii) on
any website relating to the Paired Holding Trusts or the Tradeable Trusts.
Section 15. Certain Covenants of the Depositor. The Depositor covenants
and agrees:
(a) to advise the Authorized Participant promptly of the happening
of any event during the term of this Participants Agreement which could require
the making of any change in the Prospectuses then being used so that the
Prospectuses would not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the expense of the Paired Holding Trusts, to
each Authorized Participant promptly such amendments or supplements to such
Prospectuses as may be necessary to reflect any such change;
(b) upon (i) amending any of the Registration Statements or (ii) the
filing and effectiveness of a new Registration Statement to register additional
Paired Holding Shares or Tradeable Shares in reliance on Rule 429 of the
Securities Act, to furnish to each Authorized Participant, an opinion of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the Depositor, addressed
to each Authorized Participant and dated such dates in form and substance
satisfactory to each Authorized Participant and including the customary
assumptions, exceptions and qualifications, stating (to the extent applicable to
such amendment or new filing) that:
(i) the Depositor has been duly formed and is validly existing
and in good standing as a limited liability company under the applicable
laws of the State of Delaware;
(ii) the Depositor has the limited liability company power and
authority to execute and deliver each of the transaction documents to which
the Depositor is a party and to consummate the transactions contemplated
thereby under the applicable laws of the State of Delaware;
(iii) each of the MACRO Trusts has been duly formed and is
validly existing and in good standing as a statutory trust under the laws
of the State of Delaware;
(iv) each of the MACRO Trusts has the trust power and authority
to execute and deliver each of the transaction documents to which it is a
party and to consummate the transaction contemplated thereby under the
applicable laws of the State of Delaware;
(v) this Participants Agreement has been duly authorized,
executed and delivered by each of the Paired Holding Trusts, the Tradeable
Trusts and the Depositor (collectively, the "MACRO Entities");
(vi) each of the Transaction Documents (as defined in the
Holding Trust Agreements) (other than the Participants Agreement, which is
addressed in paragraph (v) above) has been duly authorized, executed and
delivered to the extent such execution and delivery are governed by the
laws of the State of New York or the State of Delaware by each of the MACRO
Entities and is a valid and binding agreement of each of the MACRO
Entities, enforceable against each of the MACRO Entities in accordance with
its terms;
(vii) the execution and delivery by the MACRO Entities of each
of the transaction documents to which it is a party and the consummation by
the MACRO Entities of the transactions contemplated thereby, including the
issuance and sale of the Paired Holding Shares and the Tradeable Shares, do
not conflict with, result in a breach or violation of, or constitute a
default under the Depositor's certificate of formation or operating
agreement, any MACRO Trust's certificate of trust or any Trust Agreement;
(viii) neither the execution or delivery by the MACRO Entities
of the transaction documents to which they are a party nor the compliance
by the MACRO Entities with the terms and provisions thereof will contravene
any provision of any applicable law of the State of Delaware, the State of
New York or the United States of America;
(ix) no governmental approval, which has been obtained or taken
is not in full force and effect, is required to authorize, or is required
in connection with, the execution or delivery of any of the transaction
documents by the MACRO Entities party thereto or the enforceability of any
of the transaction documents against the MACRO Entities party thereto;
(x) each of the Paired Holding Shares and the Tradeable Shares
has been duly authorized by the respective MACRO Trusts and, when delivered
to and paid for by an Authorized Participant in accordance with the terms
of this Participants Agreement, will be validly issued, fully paid and
nonassessable and free and clear of any preemptive rights or any similar
rights arising under the applicable law of the State of Delaware;
(xi) Each of the MACRO Trusts is not and, solely after giving
effect to the offering and sale of the Paired Holding Shares and Tradeable
Shares, will not be an "investment company," as such terms are defined in
the Investment Company Act of 1940, as amended;
(xii) each of the Registration Statements, at the time it became
effective, and each of the Prospectuses, as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and regulations thereof,
except that in each case we do not express any opinion as to the financial
statements and schedules and other financial data included therein or
excluded therefrom, or the exhibits thereto, and we do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus; and
(xiii) the information in the Registration Statements and the
Prospectuses under the headings "Description of the Up-MACRO Holding and
Tradeable Shares," "Description of the Down-MACRO Holding and Tradeable
Shares," "Material United States Federal Income Tax Consequences" and
"Description of the Trust Agreements" insofar as such statements constitute
a summary of documents or matters of law are accurate in all material
respects and present fairly the information required to be shown.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Depositor, representatives of the independent public accountants of the MACRO
Trusts and representatives of each Authorized Participant at which the contents
of the Registration Statements and the Prospectuses were discussed and, although
such counsel is not passing upon and does not assume responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statements or the Prospectuses (except as and to the extent stated
in subparagraph (xiii) above), on the basis of the foregoing, no facts have come
to such counsel's attention that have caused such counsel to believe that the
Registration Statements, at a time mutually agreed upon by the Depositor and an
Authorized Participant to be the time of first contract and sale, contained an
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading or that the Prospectuses, as of the date hereof, contain an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading (except that in each case it does not express any
view as to the financial statements, schedules and other financial data and
financial projections included or incorporated by reference therein or excluded
therefrom or the exhibits to the Registration Statements, including the Form
T-1);
(c) to deliver letters from the MACRO Trust's accountants, dated as
of the date of such events below, that are addressed to each Authorized
Participant, certified independent public accountants and stating in effect that
they have performed certain specified procedures as a result of which they have
determined that certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or statistical information
derived from the general accounting records of the MACRO Trusts) set forth in
the Prospectuses, agrees with the accounting records of the MACRO Trusts,
excluding any questions of legal interpretation, upon the occurrence of (i) an
amendment to any of the Registration Statements or the Prospectuses by the
filing of a post-effective amendment, or (ii) incorporated by reference of new
financial information into the Registration Statements or the Prospectuses;
(d) to deliver a certification by a duly authorized officer of the
Depositor in the form attached hereto as EXHIBIT F to each Authorized
Participant, upon the occurrence of (i) an amendment to any of the Registration
Statements or the Prospectuses by the filing of a post-effective amendment, (ii)
the filing of a new Registration Statement to register additional Paired Holding
Shares in reliance on Rule 429 of the Securities Act, or (iii) incorporated by
reference of new financial information into the Registration Statements or the
Prospectuses;
(e) In addition, any certificate signed by any officer of the
Depositor and delivered to each Authorized Participant or counsel for each
Authorized Participant pursuant hereto shall be deemed to be a representation
and warranty by the Depositor as to matters covered thereby to each Authorized
Participant; and
(f) to cause each of the MACRO Trusts to file a post-effective
amendment to their respective Registration Statements no less frequently than
once per calendar quarter on or about the same time that such MACRO Trusts file
a quarterly or annual report pursuant to Section 13 or 15(d) of the Exchange Act
(including the information contained in such report), until such time as the
MACRO Trusts' reports filed pursuant to Section 13 or 15(d) of the Exchange Act
are incorporated by reference in the Registration Statement.
Section 16. Addition and Removal of Authorized Participants.
(a) On any Business Day, any Person who satisfied the requirements
set forth in Section 2 of this Participants Agreement may notify the
Administrative Agent, the Trustee and the Depositor of its desire to be added to
Schedule I of this Participants Agreement. The Administrative Agent shall review
such Person's request, and if such Person is acceptable to the Depositor, the
Administrative Agent shall prepare, or cause to be prepared, a supplement to
this Participants Agreement under which such Person will be added to Schedule I
attached hereto and pursuant to which such Person shall assume the role,
responsibilities and privileges of an Authorized Participant as set forth in
this Participants Agreement. Upon instruction for the Depositor, each of the
Administrative Agent and Trustee hereby acknowledge and agree that it will
execute and deliver such supplement to the extent permitted by law. Furthermore,
each Authorized Participant acknowledges and agrees that its execution and
delivery of such supplement shall not be required to bind any future Authorized
Participant to the terms and conditions set forth herein. The Trustee shall use
commercially reasonable efforts to submit on behalf of such Person an
application to create an account at DTC pursuant to which it can effectuate
creations, redemptions and/or exchanges in accordance with Attachment A and
Attachment B attached hereto. Upon an approvals from DTC and the execution and
delivery of such supplement by such Person, the Administrative Agent, the
Trustee and the Depositor, such Person shall be deemed to be an Authorized
Participant under this Participants Agreement. To the extent required under the
Securities Exchange Act of 1934, as amended, the Trustee shall file within four
(4) Business Days of executing a supplement a Form 8-K disclosing the addition
of an Authorized Participant.
(b) Upon five (5) Business Days' written notice, an Authorized
Participant may terminate its role with respect to this Participant Agreement.
The Administrative Agent shall prepare, or cause to be prepared, an amendment to
Schedule I under which such Authorized Participant shall be removed from such
schedule. The Administrative Agent, the Depositor, the Trustee and such
Administrative Agent shall execute such amendment upon its preparation and
delivery. Each Authorized Participant acknowledge and agrees that the execution
and delivery by it of such amendment is not required for the removal of an
Authorized Participant from the Schedule. To the extent required under the
Securities Exchange Act of 1934, as amended, the Trustee shall file within four
(4) Business Days of executing an amendment a Form 8-K disclosing the removal of
such Authorized Participant.
Section 17. Third Party Beneficiaries. Each AP Indemnified Party, to
the extent it is not a party to this Participants Agreement, is a third-party
beneficiary of this Participants Agreement (each, a "Third Party Beneficiary")
and may proceed directly against each Authorized Participant (including by
bringing proceedings against each Authorized Participant in its own name) to
enforce any obligation of each Authorized Participant under this Participants
Agreement which directly or indirectly benefits such Third Party Beneficiary.
Section 18. Force Majeure. No party to this Participants Agreement
shall incur any liability for any delay in performance, or for the
non-performance, of any of its obligations under this Participants Agreement by
reason of any cause beyond its reasonable control. This includes any act of God
or war or terrorism, any breakdown, malfunction or failure of transmission in
connection with or other unavailability of any wire, communication or computer
facilities, any transport, port, or airport disruption, industrial action, acts
and regulations and rules of any governmental or supra-national bodies or
authorities or regulatory or self-regulatory organization or failure of any such
body, authority or organization for any reason, to perform its obligations.
Section 19. Ambiguous Instructions. If an Order Form otherwise in good
form contains order terms that differ from the information provided in the
telephone call at the time of issuance of the applicable order number, the
Administrative Agent will attempt to contact one of the Authorized Persons of
the Authorized Participant to request confirmation of the terms of the Order. If
an Authorized Person confirms the terms as they appear in the Order, then the
Order will be accepted and processed. If an Authorized Person contradicts the
Order terms, the Order will be deemed invalid, and a corrected Order must be
received by the Administrative Agent, as the case may be, not later than within
fifteen (15) minutes of such contact with the Authorized Person. If the
Administrative Agent is not able to contact an Authorized Person, then the Order
shall be accepted and processed in accordance with its terms notwithstanding any
inconsistency from the terms of the telephone information. In the event that an
Order contains terms that are illegible, the Order will be deemed invalid and
the Administrative Agent will attempt to contact one of the Authorized Persons
of each Authorized Participant to request retransmission of the Order. A
corrected Order must be received by the Administrative Agent not later than
within fifteen (15) minutes of such contact with the Authorized Person.
Section 20. Miscellaneous.
(a) Amendment and Modification. This Participants Agreement, the
Procedures attached hereto and the Exhibits hereto may be amended, modified or
supplemented by the Trustee, the Administrative Agent and the Depositor, without
consent of any holder of the MACRO Shares or the Authorized Participants
provided, however, that the Trustee will not be required to enter into any
amendment or modification of this Participation Agreement that would (i) alter
the status of any Paired Holding Trust as a grantor trust for federal income tax
purposes or (ii) cause any Trust to be required to register as an investment
company under the Investment Company Act of 1940, as amended, or (iii) cause or
potentially cause the Assets of any Trust to constitute "plan assets" within the
meaning of ERISA unless (in each case) it has obtained a favorable opinion of
counsel at the expense of the applicable trust to the effect that such amendment
would not have effect. After the amendment, modification or supplement has been
agreed to, the Trustee shall mail a copy of the proposed amendment, modification
or supplement to each Authorized Participant. The Trustee may also deliver such
amendment, modification or supplement thereto by electronic mail; provided,
however, that physical delivery via the United States postal system or similar
system shall be required. For the purposes of this Participants Agreement, mail
will be deemed received by the recipient thereof on the third (3rd) day
following the deposit of such mail into the United States postal system or
similar system. Within ten (10) calendar days after its deemed receipt, the
amendment, modification or supplement will become part of this Participants
Agreement, the Attachments or the Exhibits, as the case may be, in accordance
with its terms. If at any time there is any material amendment, modification or
supplement of any Participants Agreement (other than this Participants
Agreement), the Trustee will promptly mail a copy of such amendment,
modification or supplement to each Authorized Participant.
Notwithstanding the foregoing, any amendment, modification or
supplement to any creation or redemption procedural item in the Procedures shall
be made in accordance with the terms of such agreements. After the amendment,
modification or supplement has been agreed to, the Trustee will mail a copy of
the amendment, modification or supplement to each Authorized Participant.
(b) Waiver of Compliance. Any failure of any of the parties to
comply with any obligation, covenant, agreement or condition herein may be
waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but any such written
waiver, or the failure to insist upon strict compliance with any obligation,
covenant, agreement or condition herein, shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure.
(c) Notices. Except as otherwise specifically provided in this
Participants Agreement, all notices required or permitted to be given pursuant
to this Participants Agreement shall be given in writing and delivered by
personal delivery, by postage prepaid registered or certified United States
first class mail, return receipt requested, by nationally recognized overnight
courier (delivery confirmation received) or by telex, telegram, telephonic
facsimile, electronic mail or similar means of same day delivery (transmission
confirmation received), with a confirming copy regular mail, postage prepaid.
Unless otherwise notified in writing, all notices to any MACRO Trusts shall be
given or sent to the Administrative Agent, with copies to the Trustee. All
notices shall be directed as follows:
If to the Trustee:
[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
If to the Depositor:
MACRO Securities Depositor, LLC
c/o MacroMarkets LLC
00 Xxxx Xxxxxx Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Telephone: (000) 000-0000
Facsimile: ( )
If to the Administrative Agent:
[ ]
Attention: [ ]
Telephone: ( )
Facsimile: ( )
If to each Authorized Participant:
The information listed on Schedule I attached hereto; or to such
other address as any of the parties hereto shall have communicated in writing to
the remaining parties in compliance with the provisions hereof.
(d) Successors and Assigns. This Participants Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties and their respective successors and permitted assigns.
(e) Assignment. Neither this Participants Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
without the prior written consent of the other parties, except that any entity
into which a party hereto may be merged or converted or with which it may be
consolidated or any entity resulting from any merger, conversion or
consolidation to which such party hereunder shall be a party, or any entity
succeeding to all or substantially all of the business of the party, shall be
the successor of the party under this Participants Agreement. The party
resulting from any such merger, conversion, consolidation or succession shall
notify the other parties hereto of the change. Any purported assignment in
violation of the provisions hereof shall be null and void. Notwithstanding the
foregoing, this Participants Agreement shall be automatically assigned to any
successor Trustee, Administrative Agent or Depositor at such time such successor
qualifies as a successor Trustee, Administrative Agent or Depositor under the
terms of the Trust Agreements.
(f) Governing Law; Consent to Jurisdiction. This Participants
Agreement shall be governed by and construed in accordance with the laws of the
State of New York (regardless of the laws that might otherwise govern under
applicable New York conflict of laws principles other than Section 5.1401 et
seq. of the General Obligation Law of the State of New York) as to all matters,
including matters of validity, construction, effect, performance and remedies.
Each party hereto irrevocably consents to the jurisdiction of the courts of the
State of New York and of any federal court located in the Borough of Manhattan
in such state in connection with any action, suit or other proceeding arising
out of or relating to this Participants Agreement or any action taken or omitted
hereunder, and waives any claim of forum non conveniens and any objections as to
laying of venue. Each party further waives personal service of any summons,
complaint or other process and agrees that service thereof may be made by
certified or registered mail directed to such party at such party's address for
purposes of notices hereunder.
(g) Counterparts. This Participants Agreement may be executed in one
or more counterparts, each of which will be deemed to be an original copy of
this Participants Agreement and all of which, when taken together, will be
deemed to constitute one and the same agreement, and it shall not be necessary
in making proof of this Participants Agreement as to any party hereto to produce
or account for more than one such counterpart executed and delivered by such
party.
(h) Interpretation. The article and section headings contained in
this Participants Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Participants Agreement.
(i) Entire Agreement. This Participants Agreement and the Trust
Agreements, along with any other agreement or instrument delivered pursuant to
this Participants Agreement and the Trust Agreements, supersede all prior
agreements and understandings between the parties with respect to the subject
matter hereof, provided, however, that each Authorized Participant shall not be
deemed by this provision to be a party to the Trust Agreements.
(j) Severance. If any provision of this Participants Agreement is
held by any court or any act, regulation, rule or decision of any other
governmental or supra-national body or authority or regulatory or
self-regulatory organization to be invalid, illegal or unenforceable for any
reason, it shall be invalid, illegal or unenforceable only to the extent so held
and shall not affect the validity, legality or enforceability of the other
provisions of this Participants Agreement and this Participants Agreement will
be construed as if such invalid, illegal, or unenforceable provision had never
been contained herein, unless the Depositor determines in its discretion, after
consulting with the Trustee and the Administrative Agent, that the provision of
this Participants Agreement that was held invalid, illegal or unenforceable does
affect the validity, legality or enforceability of one or more other provisions
of this Participants Agreement, and that this Participants Agreement should not
be continued without the provision that was held invalid, illegal or
unenforceable, and in that case, upon the Depositor's notification of the
Trustee and the Administrative Agent of such a determination, this Participants
Agreement shall immediately terminate and the Administrative Agent will so
notify each Authorized Participant immediately.
(k) No Strict Construction. The language used in this Participants
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rule of strict construction will be applied against
any party.
(l) Survival. Section 10 (Indemnification) and Section 17 (Third
Party Beneficiaries) hereof shall survive the termination of this Participants
Agreement.
(m) Other Usages. The following usages shall apply in interpreting
this Participants Agreement: (i) references to a governmental or
quasi-governmental agency, authority or instrumentality shall also refer to a
regulatory body that succeeds to the functions of such agency, authority or
instrumentality; and (ii) "including" means "including, but not limited to."
[Signature Page Follows]
WHEREOF, each Authorized Participant, the Depositor, the Administrative
Agent and the Trustee have caused this Participants Agreement to be executed by
their duly authorized representatives as of the date first set forth above.
[ ],
not in its individual capacity, but solely as
the Trustee for the Paired Holding Trusts and
the Tradeable Trusts
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: [ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
[ ],
not in its individual capacity, but solely as
Administrative Agent of the Paired Holding
Trusts and the Tradeable Trusts
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: _______________________________
Telephone: _______________________________
Facsimile: _______________________________
MACRO SECURITIES DEPOSITOR, LLC
Depositor of the Paired Holding Trusts and
the Tradeable Trusts
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: 00 Xxxx Xxxxxx Xxxxx 000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: [ ]
[Name of Authorized Participant]
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
[Name of Authorized Participant]
By: _______________________________
Name: _______________________________
Title: _______________________________
Address: [ ]
Telephone: [ ]
Facsimile: [ ]
SCHEDULE I
[LIST OF AUTHORIZED PARTICIPANTS]
EXHIBIT A
MACROSHARES UP OIL BENCHMARK HOLDING TRUST
MACROSHARES DOWN OIL BENCHMARK HOLDING TRUST
MACROSHARES UP OIL BENCHMARK TRADEABLE TRUST
MACROSHARES DOWN OIL BENCHMARK TRADEABLE TRUST
FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT
The following are the names, titles and signatures of all persons
(each, an "Authorized Person") authorized to give instructions relating to any
activity contemplated by the Participants Agreement or any other notice, request
or instruction on behalf of the Authorized Participant pursuant to the
Participants Agreement.
Authorized Participant: _______________________ (the "Authorized Participant")
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
Signature:_______________________ Signature:_______________________
Name:____________________________ Name:____________________________
Title: __________________________ Title: __________________________
Signature: ______________________ Signature: ______________________
The undersigned, [name], [title] of [company], does hereby certify that
the persons listed above have been duly elected to the offices set forth beneath
their names, that they presently hold such offices, that they have been duly
authorized to act as Authorized Persons pursuant to the Participants Agreement,
dated as of [date], by and among the Authorized Participant, the Trustee, the
Administrative Agent and the Depositor, dated [date], and that their signatures
set forth above are their own true and genuine signatures.
A-1
IN WITNESS WHEREOF, I, the undersigned, a duly authorized officer of
the Authorized Participant hereby execute this certificate as of the date first
set forth above.
______________________________
NAME OF AUTHORIZED PARTICIPANT
By:________________________
Name:
Title:
Subscribed and sworn to before me this day of
_______, 20___
By:___________________________
Name:_________________________
Title:________________________
Date:_________________________
Notary Public:________________
A-2
EXHIBIT B
FORM OF
MACROSHARES OIL
PURCHASE ORDER
Authorized Participant: _________________________ (the "Authorized Participant")
Date: __________________
Submission Number: ____________________
PIN Number: __________________
Number of MACRO Units to be Issued: ______________________
Number of Up-MACRO Holding Shares to be Issued: ___________________*
Number of Down-MACRO Holding Shares to be Issued: ___________________*
* For illustrative purposes only since Up-MACRO Holding Shares and
Down-MACRO Holding Shares may be only created as MACRO Units.
Does the Authorized Participant want its Up-MACRO Holding Shares to be exchanged
into Up-MACRO Tradeable Shares?
_______ _______
Yes No
Does the Authorized Participant want its Down-MACRO Holding Shares to be
exchanged into Down-MACRO Tradeable Shares?
_______ _______
Yes No
[Additional Information Required for Purchase Order]
All Purchase Orders are subject to the terms and conditions of the
Holding Trust Agreements as currently in effect and the Participants Agreement,
dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
The Authorized Participant by executing this Purchase Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Purchase Order.
B-1
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Purchase Order Form to the Administrative Agent
and the Trustee on behalf of the Authorized Participant.
The Authorized Participant, by placing this order, acknowledges that a
"distribution" as such term is used in the Securities Act of 1933, as amended
(the "Securities Act"), may be occurring. The Authorized Participant is
cautioned that some of its activities may result in its being deemed a
participant in a distribution which would render it a statutory underwriter and
subject it to the prospectus-delivery requirements and the liability provisions
of the Securities Act. The Authorized Participant should review the "Plan of
Distribution" portion of the Prospectuses and consult with its own counsel prior
to placing this Purchase Order.
B-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Purchase Order as of the date set
forth below.
_______________________________
NAME OF AUTHORIZED PARTICIPANT
By: ___________________________
Name:
Title:
Date: _________________________
B-3
EXHIBIT C
FORM OF
MACROSHARES OIL REDEMPTION ORDER
Authorized Participant:__________________________ (the "Authorized Participant")
Date: _____________________
Submission Number: ________________________
PIN Number: ______________________
Number of MACRO Units to be Redeemed: ______________________
CUSIP Numbers:
________________________ __________________________
Up-MACRO Holding Shares Down-MACRO Holding Shares
Number of Up-MACRO Holding Shares to be Redeemed: _____________________*
Number of Down-MACRO Holding Shares to be Redeemed: _____________________*
* For illustrative purposes only since Up-MACRO Holding Shares and
Down-MACRO Holding Shares may be only created as MACRO Units.
The following information shall be completed by the Authorized Participant if it
is delivering Tradeable Shares:
Up-MACRO Tradeable Shares to be Exchanged into Up-MACRO Holding Shares?
_______ _______
Yes No
Down-MACRO Tradeable Shares to be Exchanged into Down-MACRO Holding Shares?
_______ _______
Yes No
CUSIP Numbers:
__________________________ ___________________________
Up-MACRO Tradeable Shares Down-MACRO Tradeable Shares
[Additional Information Required for Redemption Order]
All Redemption Orders are subject to the terms and conditions of the
Holding Trust Agreements as currently in effect and the Participants Agreement,
dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
The Authorized Participant by executing this Redemption Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Redemption Order.
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Redemption Order Form to the Trustee on behalf of
the Authorized Participant.
C-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Redemption Order as of the date set
forth below.
_______________________________
NAME OF AUTHORIZED PARTICIPANT
By: ___________________________
Name:
Title:
Date: _________________________
C-3
EXHIBIT D
FORM OF
MACROSHARES OIL CREATION ORDER
Authorized Participant: ________________________ (the "Authorized Participant")
Date: ________________
Submission Number: _____________________
PIN Number: _____________________
The Authorized Participant desires to create additional
Up-MACRO Tradeable Shares _______Yes _______No
Down-MACRO Tradeable Shares _______Yes _______No
Number of Up-MACRO Holding Shares to be Exchanged for Up-MACRO Tradeable Shares:
______________(Number) ________(check if not applicable)
Number of Down-MACRO Holding Shares to be Exchanged for Down-MACRO Tradeable
Shares:
______________(Number) ________(check if not applicable)
CUSIP Number(s) for Holding Shares Being Delivered by Authorized Participant:
__________________________ (CUSIP Number) _____(check if not applicable)
Up-MACRO Holding Shares
__________________________ (CUSIP Number) _____(check if not applicable)
Down-MACRO Holding Shares
[Additional Information Required for Creation Order]
All Creation Orders are subject to the terms and conditions of the
Tradeable Trust Agreements as currently in effect and the Participants
Agreement, dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
The Authorized Participant by executing this Creation Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Creation Order.
D-1
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Creation Order Form to the Trustee on behalf of
the Authorized Participant.
The Authorized Participant, by placing this order, acknowledges that a
"distribution" as such term is used in the Securities Act of 1933, as amended
(the "Securities Act"), may be occurring. The Authorized Participant is
cautioned that some of its activities may result in its being deemed a
participant in a distribution which would render it a statutory underwriter and
subject it to the prospectus-delivery requirements and the liability provisions
of the Securities Act. The Authorized Participant should review the "Plan of
Distribution" portion of the Prospectuses and consult with its own counsel prior
to placing this Creation Order.
D-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Creation Order as of the date set
forth below.
_______________________________
NAME OF AUTHORIZED PARTICIPANT
By: ___________________________
Name:
Title:
Date: _________________________
D-3
EXHIBIT E
FORM OF
MACROSHARES OIL EXCHANGE ORDER
Authorized Participant: ________________________ (the "Authorized Participant")
Date: ________________
Submission Number: _____________________
PIN Number: _____________________
The Authorized Participant desires to exchange the following:
Up-MACRO Holding Shares _______Yes _______No
Down-MACRO Holding Shares _______Yes _______No
Number of Up-MACRO Tradeable Shares to be Exchanged for Up-MACRO Holding Shares:
______________(Number) ________(check if not applicable)
Number of Down-MACRO Tradeable Shares to be Exchanged for Down-MACRO Holding
Shares:
______________(Number) ________(check if not applicable)
CUSIP Number(s) for Holding Shares Being Delivered by Authorized Participant:
__________________________ (CUSIP Number) _____(check if not applicable)
Up-MACRO Tradeable Shares
__________________________ (CUSIP Number) _____(check if not applicable)
Down-MACRO Tradeable Shares
[Additional Information Required for Creation Order]
All Exchange Orders are subject to the terms and conditions of the
Tradeable Trust Agreements as currently in effect and the Participants
Agreement, dated as of [ ] (the "Participants Agreement"), among the Authorized
Participant, the Trustee, the Administrative Agent and the Depositor named
therein.
The Authorized Participant by executing this Exchange Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Exchange Order.
E-1
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that he/she
is authorized to deliver this Exchange Order Form to the Trustee on behalf of
the Authorized Participant.
E-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Exchange Order as of the date set
forth below.
_______________________________
NAME OF AUTHORIZED PARTICIPANT
By: ___________________________
Name:
Title:
Date: _________________________
E-3
EXHIBIT F
MACRO SECURITIES DEPOSITOR, LLC
[month][date], [year]
OFFICER'S CERTIFICATE
The undersigned, a duly authorized officer of MACRO Securities
Depositor, LLC, a Delaware limited liability company (the "Depositor"), and
pursuant to [Section 15(d)] of the Participants Agreement (the "Agreement"),
dated as of __________, 2006 by and among the parties listed on Schedule I
attached hereto (individually, an "Authorized Participant" and collectively, the
"Authorized Participants"), the Depositor, [ ], not in its individual capacity
but solely as administrative agent of the Paired Holding Trusts (the
"Administrative Agent") and [ ], not in its
individual capacity but solely (i) as trustee of the MACROShares Up Oil
Benchmark Holding Trust (the "Up-MACRO Holding Trust"), (ii) as trustee of the
MACROShares Down Oil Benchmark Holding Trust (the "Down-MACRO Holding Trust" and
together with the Up-MACRO Holding Trust, the "Paired Holding Trusts"), (iii) as
trustee of the MACROShares Up Oil Benchmark Tradeable Trust (the "Up-MACRO
Tradeable Trust"), and (iv) as trustee of the MACROShares Down Oil Benchmark
Tradeable Trust (the "Down-MACRO Tradeable Trust" and together with the Up-MACRO
Tradeable Trust, the "Tradeable Trusts"), hereby certifies, based on his/her
actual knowledge and acting solely in his/her capacity as a duly authorized
officer of the Depositor, that:
1. Each of the following representations and warranties of the
Depositor is true and correct in all material respects as of the
date hereof:
(a) the Prospectuses do not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading; each Registration Statement complies in all
material respects with the requirements of the Securities Act
and each Prospectus complies in all material respects with
the requirements of the Securities Act and any statutes,
regulations, contracts or other documents that are required
to be described in the applicable Prospectus or to be filed
as exhibits to the applicable Registration Statement have
been so described or filed; the conditions to the use of Form
S-1 or S-3, if applicable, have been satisfied; each
Prospectus does not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light
of the circumstances under which they were made, not
misleading; provided, however, that the Depositor makes no
warranty or representation with respect to any statement
contained in any Registration Statement or any Prospectus in
reliance upon and in conformity with information concerning
any Authorized Participant and furnished in writing by or on
behalf of any Authorized Participant to the Depositor
expressly for use in such
F-1
Registration Statement or such Prospectus; and neither the
Depositor nor any person known to the Depositor acting on
behalf of the MACRO Trusts has distributed nor will
distribute any offering material other than a a Prospectus;
(b) each Paired Holding Trust has been duly formed and is
validly existing as a trust under the laws of the State of
New York, as described in the applicable Prospectus relating
to such Paired Holding Trust, and the Holding Trust
Agreements authorize the Trustee to issue and deliver the
Paired Holding Shares to each Authorized Participant
pursuant to the Holding Trust Agreements and the related
Participants Agreement as contemplated in each such
Registration Statement and Prospectus;
(c) each Tradeable Trust has been duly formed and is validly
existing as a trust under the laws of the State of New York,
as described in the applicable Prospectus relating to such
Tradeable Trust, and the Tradeable Trust Agreements
authorize the Trustee to issue and deliver the applicable
Tradeable Shares to each Authorized Participant pursuant to
the Tradeable Trust Agreements and the related Participants
Agreement as contemplated in each such Registration
Statement and Prospectus;
(d) the Depositor has been duly formed and is validly existing as
a limited liability company in good standing under the laws
of the State of Delaware, with full power and authority to
conduct its business as described in the applicable
Prospectus, and has all requisite power and authority to
execute and deliver the Participants Agreement;
(e) the Depositor is duly qualified and is in good standing in
each jurisdiction where the conduct of its business requires
such qualification; and each of the MACRO Trusts is not
required to so qualify in any jurisdiction;
(f) complete and correct copies of the Trust Agreements, and any
and all amendments, modifications and supplements thereto,
have been delivered to each Authorized Participant, and no
changes thereto have been made;
(g) the outstanding Paired Holding Shares have been duly and
validly issued and are fully paid and non-assessable and free
of statutory and contractual preemptive rights, rights of
first refusal and similar rights;
(h) the outstanding Tradeable Shares have been duly and validly
issued and are fully paid and non-assessable and free of
statutory and contractual preemptive rights, rights of first
refusal and similar rights;
F-2
(i) the Paired Holding Shares conform in all material respects to
the description thereof contained in the applicable
Registration Statement and Prospectus, and the holders of the
Paired Holding Shares will not be subject to personal
liability by reason of being such holders;
(j) the Tradeable Shares conform in all material respects to the
description thereof contained in the applicable Registration
Statement and Prospectus, and the holders of the Tradeable
Shares will not be subject to personal liability by reason of
being such holders;
(k) the Participants Agreement has been duly authorized, executed
and delivered by the Depositor and constitutes the valid and
binding obligations of the Depositor, enforceable against the
Depositor in accordance with its terms;
(l) the Depositor is not in breach or violation of or in default
under any of its respective constitutive documents, or any
agreement, mortgage, deed of trust, loan or credit agreement
or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the
Depositor is a party or by which any of its properties may be
bound or affected, and the execution, delivery and
performance of the Participants Agreement, the issuance and
sale of Paired Holding Shares and Tradeable Shares to each
Authorized Participant party to the Trust Agreements and the
consummation of the transactions contemplated thereto does
not conflict with, result in any breach or violation of or
constitute a default under any of its respective constitutive
documents, the Trust Agreements, or any agreement, mortgage,
deed of trust, loan or credit agreement or other evidence of
indebtedness, or any license, lease, contract or other
agreement or instrument to which the Depositor is a party or
by which the Depositor or any of its properties may be bound
or affected, or any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order
applicable to the Depositor;
(m) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency is
required in connection with the issuance and sale of Paired
Holding Shares or Tradeable Shares to any Authorized
Participant under the Trust Agreements and the related
Participants Agreement or the consummation by the Depositor
of the transactions contemplated hereunder other than
registration of the Paired Holding Shares and the Tradeable
Shares under the Securities Act, which has been effected, and
any necessary qualification under the securities or blue sky
laws of the various jurisdictions in which the Paired Holding
Shares and Tradeable Shares are being offered or under the
rules and regulations of the National Association of
Securities Dealers (the "NASD");
(n) the Depositor has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings
required under any federal, state, local or foreign law,
regulation or rule, and has obtained all
F-3
necessary authorizations, consents and approvals from other
persons, in order to conduct its respective business; the
Depositor is not in violation of, or in default under, or has
received notice of any proceedings relating to revocation or
modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law,
regulation or rule or any decree, order or judgment
applicable to the Depositor;
(o) except as set forth in the applicable Registration Statement
and Prospectus, there are no actions, suits, claims,
investigations or proceedings pending or threatened or
contemplated to which the Depositor is or would be a party or
of which any of their respective properties are or would be
subject at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission,
board, body, authority or agency;
(p) [ ], whose report on the audited financial
statements of the MACRO Trusts are filed with the SEC as part
of each Registration Statement and each Prospectus, are
independent public accountants as required by the Securities
Act;
(q) the audited financial statement(s) included in each
Prospectus, together with the related notes and schedules,
presents fairly the financial position of each MACRO Trust as
of the date indicated and has been prepared in compliance
with the requirements of the Securities Act and in conformity
with generally accepted accounting principles; there are no
financial statements (historical or pro forma) that are
required to be included in each Registration Statement and
each Prospectus that are not included as required, and the
MACRO Trusts do not have any material liabilities or
obligations, direct or contingent (including any off-balance
sheet obligations), not disclosed in the applicable
Prospectus;
(r) subsequent to the respective dates of each Prospectus, there
has not been (i) any material adverse change, or any
development involving a prospective material adverse change
affecting the Depositor or the MACRO Trusts, (ii) any
transaction which is material to the Depositor or the MACRO
Trusts taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations),
incurred by the Depositor or the MACRO Trusts, which is
material to the MACRO Trusts (other than any action taken by
a MACRO Trust relating to a subsequent issuance, paired
optional redemption or exchange or creation of Tradeable
Shares, and (iv) any change in the Paired Holding Shares or
Tradeable Shares purchased by each Authorized Participant;
(s) each of the MACRO Trusts is not and, after giving effect to
the offering and sale of the Paired Holding Shares, will not
be an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act of 1940, as amended;
F-4
(t) all tax returns required to be filed by the MACRO Trusts have
been filed, and all taxes and other assessments of a similar
nature (whether imposed directly or through withholding)
including any interest, additions to tax or penalties
applicable thereto due or claimed to be due from such
entities have been paid;
(u) any statistical and market-related data included in the
Prospectuses are based on or derived from sources that the
Depositor believes to be reliable and accurate, and the
Depositor has obtained the written consent (if such consent
is required) to the use of such data from such sources to the
extent required; and
(v) neither the Depositor, nor any of the Depositor's managers,
members, officers, affiliates or controlling persons has
taken, directly or indirectly, any action designed, or which
has constituted or might reasonably be expected to cause or
result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security or
asset of a MACRO Trust to facilitate the sale or resale of
the Paired Holding Shares or Tradeable Shares; and there are
no affiliations or associations between any member of the
NASD and any of the Depositor's officers, managers or 5% or
greater security holders, except as set forth in the
Prospectuses.
2. Each of the obligations of the Depositor to be performed by it on
or before the date hereof pursuant to the terms of the Trust
Agreement, and each of the provisions thereof to be complied with
by the Depositor on or before the date hereof, has been duly
performed and complied with in all material respects.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the applicable Trust Agreement, and if such defined
term is not set forth therein, then such defined terms shall have the meanings
assigned to such terms in the Participants Agreement.
[SIGNATURE PAGE TO FOLLOW]
F-5
IN WITNESS WHEREOF, I, a duly authorized officer of the Depositor, on
behalf of the Depositor, have caused this Officer's Certificate to be executed
as of the date first written above.
By: ______________________________
Name:
Title:
I, _______________, in my capacity as [Vice President], hereby certify
that _______________ is the duly elected [President] of the Depositor, and that
the signature set forth immediately above is [his/her] genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first
set forth above.
By: ______________________________
Name:
Title:
F-6
ATTACHMENT A
PAIRED HOLDING TRUST PROCEDURES FOR THE
MACROSHARES UP OIL BENCHMARK HOLDING TRUST AND THE
MACROSHARES DOWN OIL BENCHMARK HOLDING TRUST
CREATION AND REDEMPTION OF PAIRED HOLDING SHARES
Scope of Procedures and Overview
These procedures (the "Procedures") describe the processes by which an
Authorized Participant (as defined below) may create or redeem one or more MACRO
Units, consisting of MACROShares Up Oil $[ ] Holding Shares (the "Up-MACRO
Holding Shares") and MACROShares Down Oil $[ ] Holding Shares (the
"Down-MACRO Holding Shares" and together with the Up-MACRO Holding Shares, the
"Paired Holding Shares"). The Paired Holding Shares constituting a MACRO Unit
shall only be issued in connection with the instructions set forth herein and in
coordination with [ ], not in its individual
capacity but solely (i) as trustee (the "Up-MACRO Holding Trustee") of the
MACROShares Up Oil Benchmark Holding Trust (the "Up-MACRO Holding Trust") and
(ii) as trustee (the "Down-MACRO Holding Trustee" and, in its various capacities
under the applicable Trust Agreements, the "Trustee") of the MACROShares Down
Oil Benchmark Holding Trust (the "Down-MACRO Holding Trust" and together with
the Up-MACRO Holding Trust, the "Paired Holding Trusts") and [ ], not in its
individual capacity but solely as administrative agent of the Paired Holding
Trusts (the "Administrative Agent").
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in either (i) the MACROShares Up Oil Benchmark Holding
Trust Agreement, dated as of [ ], 2006 (the "Up-MACRO Holding Trust
Agreement"), among the Up-MACRO Holding Trustee, the Administrative Agent, the
Marketing Agent and MACRO Securities Depositor, LLC (the "Depositor") or (ii)
the MACROShares Down Oil Benchmark Holding Trust Agreement, dated as of [ ],
2006 (the "Down-MACRO Holding Trust Agreement" and, together with the Up-MACRO
Holding Trust Agreement, the "Holding Trust Agreements"), among the Down-MACRO
Holding Trustee, the Administrative Agent, the Marketing Agent and the
Depositor, and if such defined term is not set forth therein, then such defined
term shall have the meaning assigned to such term in the Participants Agreement.
The Paired Holding Shares may be purchased or redeemed by the parties
listed on Schedule I attached to the Participants Agreement (each, an
"Authorized Participant"). Paired Holding Shares may be created or redeemed only
in pairs of [ ] Up-MACRO Holding Shares and [ ] Down-MACRO Holding Shares
(each such pair, a "MACRO Unit"). Because the creation and redemption of MACRO
Units also involve the transfer of Treasuries between the Authorized Participant
and each of the Paired Holding Trusts, certain processes relating to the
transfer of the underlying Treasuries also are described herein.
Attachment A-1
When Treasuries are to be transferred to the Paired Holding Trusts from
an Authorized Participant (in exchange for the issuance of MACRO Units), the
Administrative Agent shall transfer such Treasuries from that Authorized
Participant's Participant Custodian Account to the Securities Account of the
applicable Paired Holding Trust. If available, each Treasury delivered by the
Authorized Participant shall be in amounts and denominations divisible by the
aggregate number of Paired Holding Shares constituting a MACRO Unit. If not
available, the Authorized Participant shall deliver Treasuries and the
applicable amount of cash constituting the Up-MACRO Income Make-Whole Amount and
Down-MACRO Income Make-Whole Amount (each as defined in the applicable Holding
Trust Agreement) to the respective Paired Holding Trust. Each Authorized
Participant is responsible for ensuring that the Treasuries it intends to
transfer to the Paired Holding Trusts in exchange for MACRO Units are available
for transfer to the Paired Holding Trusts in the manner and at the times
described in these Procedures. In meeting this responsibility, the Authorized
Participant may make such independent arrangements as it sees fit, including the
borrowing of Treasuries, to ensure that the relevant amount(s) of Treasuries are
credited in time; provided, however, that the Authorized Participant
acknowledges that it must make the representations and warranties applicable to
the securities delivered as set forth in Section 16 of the Participants
Agreement.
Upon acceptance of the Participants Agreement by the Authorized
Participant, the Administrative Agent will assign a personal identification
number (a "PIN number") to each Authorized Person authorized to act for an
Authorized Participant. This will allow an Authorized Participant through its
Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) for MACRO
Units.
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Holding
Trust Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Holding Trust
Agreements and the Participants Agreement relating to unclear or
ambiguous instructions.
Attachment A-2
CREATION PROCESS
On any Business Day, an Authorized Participant may submit a Purchase
Order, substantially in the form of EXHIBIT B to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Trustee and the Administrative
Agent to purchase one or more MACRO Units by the Order Cut-Off Time on such
Business Day (such Business Day, "CREATION T" and any number added to Creation T
shall refer to such day plus the number of Business Days following such day). In
connection with the Purchase Order, the Authorized Participant shall have wired
to the Trustee by 10:00 a.m. New York City time on CREATION T + 1 the following:
o a Transaction Fee for [each][the] MACRO Unit[s] being created;
o cash equal to the Aggregate Par Amount of the Up-MACRO Holding
Shares to be created on CREATION T + 1 plus the Up-MACRO Income
Make-Whole Amount, if any; and
o cash equal to the Aggregate Par Amount of the Down-MACRO Holding
Shares to be created on CREATION T + 1 plus the Down-MACRO Income
Make-Whole Amount, if any(such deposits for each MACRO Unit, the
"MACRO Unit Deposit").
Upon the satisfaction of the conditions set forth below, the Paired
Holding Trusts shall issue and deliver MACRO Units to the creating Authorized
Participant to fill the Purchase Order prior to 3:00 p.m. New York City time on
the Business Day following the Order Date. The Trustee shall transfer to the
Authorized Participant's account at The Depository Trust Company ("DTC") a
number of Paired Holding Shares constituting the MACRO Units ordered and paid
for by the Authorized Participant. The Trustee, upon written instruction from
the Administrative Agent, shall adjust the notional amount of the Income
Distribution Agreement and enter into additional Settlement Contracts associated
with the MACRO Units being created.
If an Authorized Participant desires to convert its newly created
Up-MACRO Holding Shares and Down-MACRO Holding Shares into the Up-MACRO
Tradeable Shares and Down-MACRO Tradeable Shares, the parties hereto shall
execute such conversion in accordance with the procedures set forth herein.
CREATION PROCEDURES
CREATION T (ORDER DATE)
1. By the earlier of (i) 2:00 p.m. New York City time or (ii) if the
close of trading of the Light Sweet Crude Oil Futures Contract on
the New York Mercantile Exchange (the "NYMEX") is earlier than
2:30 p.m. New York City time, thirty (30) minutes prior to the
close of trading of the Light Sweet Crude Oil Futures Contract on
the NYMEX (such time, the "Order Cut-Off Time"), an Authorized
Person of the Authorized Participant shall notify the
Administrative Agent through the Administrative Agent's electronic
facilities that the Authorized Participant wishes to place a
Purchase Order. The Authorized Person shall
Attachment A-3
provide its PIN number as identification to the Administrative
Agent. The Authorized Participant shall indicate through the
Administrative Agent's electronic facilities the following
information:
(a) the Authorized Participant's name;
(b) its PIN Number;
(c) the number of MACRO Units requested (including the number of
Up-MACRO Holding Shares and Down-MACRO Holding Shares to be
received); and
(d) whether the Authorized Participant want to exchange its newly
created Up-MACRO Holding Shares for Up-MACRO Tradeable Shares
and whether it wants to exchange its newly created Down-MACRO
Holding Shares for Down-MACRO Tradeable Shares.
Any deposit of cash with the intention of creating Tradeable
Shares (after the interim step of creating Paired Holding Shares)
shall occur in accordance with the procedures set forth herein.
Notwithstanding anything to the contrary, the Trustee shall, upon
the completion of the Paired Subsequent Issuance described in this
Attachment A, deliver the Paired Holding Shares to the creating
Authorized Participant. Such Authorized Participant shall be
required to tender such Paired Holding Shares to the Trustee in
accordance with the procedures set forth herein, and the resulting
issuance of Tradeable Shares shall be delivered on Creation T + 3.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Purchase Order through its electronic facilities
(and no later than 2:15 New York City time), the Administrative
Agent's automated electronic system shall send a notice to the
Authorized Participant confirming electronically the receipt of
such Purchase Order and generate a submission number (a
"Submission Number") relating to such Purchase Order and
communicate that number to the Authorized Participant.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Purchaser
Orders received from Authorized Participants on Creation T prior
to the Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
efforts basis. The Administrative Agent shall promptly contact the
Trustee at 3:00 p.m. New York City time if there is any delay the
Order File's transmission.
4. Within fifteen (15) minutes of the transmission of the Order File,
the Trustee shall send an electronic confirmation to the
Administrative Agent that it has received the Order File. If the
Administrative Agent has received the Authorized Participant's
Purchase Order form on time and in accordance with the preceding
rules, then by 4:00 p.m. New York City time the Administrative
Agent shall return to the Authorized Participant via fax (or
electronic mail) a copy of the Purchase Order Form submitted,
marking it "Affirmed." If the Administrative Agent has not
received the Authorized Participant's Purchase Order Form on time
and in accordance with the preceding rules, then by 4:00 p.m. New
York City time the Administrative Agent shall return to the
Authorized Participant and Trustee via fax (or electronic mail) a
copy of the Purchase Order Form, submitted, marking it
"Cancelled."
5. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee and
the Authorized Participant.
Attachment A-4
6. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Order File including any corrections sent to
it by the Administrative Agent.
7. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee, and
(b) the MACRO Unit Deposit for each MACRO Unit (by estimating the
current aggregate price and yield on the Treasuries in order
to calculate the current Up-MACRO Income Make-Whole Amount
and Down-MACRO Income Make-Whole Amount).
CREATION T + 1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Purchase Order shall deposit the amounts specified by
the Administrative Agent into an account designated by the Trustee
using the Federal Wire Electronic Transfer System and provide to
the Administrative Agent and the Trustee the appropriate Federal
Reference Number for such transaction.
2. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Trustee,
indicating:
(a) the aggregate amount of funds that will be wired on Creation
T + 1 by Authorized Participants to the Trustee;
(b) the Type of Treasury (including any other applicable
information to such Treasuries such as the date of maturity,
the purchase price, stated interest rate and discount rate,
if any) that the Trustee shall purchase on Creation T + 1;
(c) the amount of each Type of Treasury that shall be deposited
into the Up-MACRO Holding Trust and the amount of each Type
of Treasury that shall be deposited into the Down-MACRO
Holding Trust;
(d) for each MACRO Unit being created, the Up-MACRO Income
Make-Whole Amount, if any, that will constitute a portion of
the MACRO Unit Deposit wire to the Trustee by an Authorized
Participant on Creation T + 1, which the Trustee shall
deposit into the Distribution Account of the Up-MACRO Holding
Trust;
(e) for each MACRO Unit being created, the Down-MACRO Income
Make-Whole Amount, if any, that will constitute a portion of
the MACRO Unit Deposit wire to the Trustee by an Authorized
Participant on Creation T + 1, which the Trustee shall
deposit into the Distribution Account of the Down-MACRO
Holding Trust;
Attachment A-5
(f) the number of additional Settlement Contracts entered into by
the Trustee, on behalf of each of the Paired Holding Trusts,
in connection with any Paired Subsequent Issuances; and
(g) the net change in the notional amount of the Income
Distribution Agreement, which the Trustee shall adjust on
Creation T +1 (such information, the "Holding Share Creation
Trade File").
3. For the avoidance of doubt, such electronic message shall
constitute written instructions of the Administrative Agent to the
Trustee, and within fifteen (15) minutes of receipt of such
instructions, the Trustee shall confirm that it has received such
instructions from the Administrative Agent.
4. By 10:30 a.m. New York City time, if the Trustee has not received
the full amount of funds owed to the Paired Holding Trust for the
MACRO Units, the Trustee shall contact the Authorized Participant
to inquire about any missing amounts. If the Trustee does not
receive the full amount of the MACRO Unit Deposits, the Trustee
shall not be obligated to make any settlement.
5. By 12:00 p.m. New York City time, if the Trustee has not received
the full amount of funds and a Federal Reference Number (or other
form of authenticated confirmation) for such transfer, then the
Administrative Agent shall notify the Authorized Participant of
the amount owed to the Paired Holding Trusts. The deficient
Authorized Participant shall immediately wire such amount through
the Federal Wire Electronic Transfer System and provide to the
Administrative Agent and the Trustee the appropriate Federal
Reference Number for such transaction or its order shall be
cancelled.
6. By 3:00 p.m. New York City time on Creation T + 1, the Trustee
shall:
(a) settled the purchase of Treasuries of the Type indicated in
the Administrative Agent's instructions;
(b) deposit those Treasuries into the respective Paired Holding
Trust in the amounts specified by the Administrative Agent;
(c) entered into additional Settlement Contracts to reflect the
Paired Subsequent Issuance; and
(d) adjust the notional amount of the Income Distribution
Agreement between the Paired Holding Trusts.
7. By 3:00 p.m. New York City time, the Trustee shall release the
Up-MACRO Holding Shares and Down-MACRO Holding Shares constituting
the MACRO Units ordered to the Authorized Participant. The
creation and issuance of MACRO Units will occur through the DTC
system through the Continuous Net Settlement System.
Attachment A-6
CREATION T + 2
1. By 10:00 a.m. New York City time, the Administrative Agent shall
notify the Authorized Participant of any additional net amounts
owed by such Authorized Participant in connection with the
transactions settled on Creation T +1. The Authorized Participant
shall wire such amounts to the Trustee for deposit into the
applicable Paired Holding Trust by the close of business on
Creation T + 2.
2. By 3:00 p.m. New York City time, if the Authorized Participant on
Creation T indicated in its original Purchase Order that it will
be creating Tradeable Shares, the Administrative Agent shall send
to the Trustee an electronic file indicating the Purchase Order
for Tradeable Shares (such file, the "Tradeable Share Order
File"). The transmission of the Tradeable Share Order File shall
be conducted on a best efforts basis. The Administrative Agent
shall promptly contact the Trustee at 3:00 p.m. New York City time
if there is any delay the Tradeable Share Order File's
transmission.
3. Within fifteen (15) minutes of the transmission of the Order File,
the Trustee shall send an electronic confirmation to the
Administrative Agent that it has received the Tradeable Share
Order File.
4. If the administrative Agent has received the Authorized
Participant's Tradeable Share Order Form on time and in accordance
with the preceding rules, then by 4:00 p.m. New York City time the
Administrative Agent shall return to the Authorized Participant
and Trustee via fax (or electronic mail) a copy of the Tradeable
Share Order Form, marking it "Affirmed." If the Administrative
Agent has not received the Authorized Participant's Tradeable
Share Order Form on time and in accordance with the preceding
rules, then by 4:00 p.m. New York City time the Administrative
Agent shall return to the Authorized Participant and the trustee
via fax (or electronic mail) a copy of the Tradeable Share Order
Form submitted, marking it "Cancelled."
5. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Tradeable Share Order File including any
corrections sent to it by the Administrative Agent.
6. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the number of Up-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any; and
(b) the number of Down-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any.
For the avoidance of doubt, the number of Up-MACRO Holding
Shares that the Authorized Participant may deliver shall equal
in the number and have identical CUSIPs to the Up-MACRO
Holding Shares or Down-MACRO Holding Shares created on
Creation T + 1.
7. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Trustee,
indicating:
Attachment A-7
(a) the number of Up-MACRO Tradeable Shares that the Trustee will
deliver to the Authorized Participant on Creation T + 3,
which number shall be in integral multiples of 100,000, if
any; and
(b) the number of Down-MACRO Tradeable Shares that the Trustee
will deliver to the Authorized Participant on Creation T + 3,
which number shall be in integral multiples of 100,000, if
any.
CREATION T + 3
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Purchase Order in which it elected to create
Tradeable Shares shall deposit the requisite number of Up-MACRO
Holding Shares and/or Down-MACRO Holding Shares into an account
designated by the Trustee.
2. By 3:00 p.m. New York City time, the Trustee, upon written
instruction from the Administrative Agent, shall withdraw the
requisite number of Up-MACRO Holding Shares and/or Down-MACRO
Holding Shares from its designated account and deposit such
Holding Shares into the Securities Account of the applicable
Tradeable Trust. Concurrently, the Trustee shall cause the
Tradeable Trust to issue the requisite number of Tradeable Shares
created by the Authorized Participant and credit the Authorized
Participant's account at DTC through the Continuous Net Settlement
System.
[Redemption Process Follows on Next Page]
Attachment A-8
REDEMPTION PROCESS
On any Business Day, an Authorized Participant may submit a Redemption
Order, substantially in the form of EXHIBIT C to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Trustee and the Administrative
Agent to redeem one or more MACRO Units by the Order Cut-Off Time on such
Business Day (such Business Day, "Redemption T" and any number added to
Redemption T shall refer to such day plus the number of Business Days following
such day). In connection with this Redemption Order, the Authorized Participant
shall deliver to the Trustee by 10:00 a.m. New York City time on Redemption
T + 1 the following:
o a Transaction Fee for each MACRO Unit being redeemed; and
o Up-MACRO Holding Shares and Down-MACRO Holding Shares in an
integral multiple that constitutes one or more MACRO Units.
Upon the satisfaction of the conditions set forth below, the Paired
Holding Trusts shall deliver either cash and/or Treasuries to the redeeming
Authorized Participant to fill the Redemption Order prior to 3:00 p.m. New York
City time on Redemption T + 1. The Trustee shall transfer to an account
designated by the Authorized Participant cash and/or Treasuries in settlement of
the Redemption Order on REDEMPTION T + 1 and cancel the Up-MACRO Holding Shares
and Down-MACRO Holding Shares constituting the MACRO Units tendered by the
redeeming Authorized Participant. The Trustee shall also adjust the notional
amount of the Income Distribution Agreement and cancel the Settlement Contracts
associated with the MACRO Units being redeemed.
REDEMPTION PROCEDURES
REDEMPTION T (REDEMPTION ORDER DATE)
1. By the Order Cut-Off Time, an Authorized Person of the
Authorized Participant shall notify the Administrative Agent
through the Administrative Agent's electronic facilities that
the Authorized Participant wishes to place a Redemption Order.
The Authorized Person shall provide its PIN number as
identification to the Administrative Agent. The Authorized
Participant shall indicate through the Administrative Agent's
electronic facilities the following information:
(a) the Authorized Participant's name;
(b) its PIN Number;
(c) the number of MACRO Units being redeemed (including the
number of Up-MACRO Holding Shares and Down-MACRO Holding
Shares to be delivered); and
(d) the CUSIP numbers of the Paired Holding Shares being
tendered.
Attachment A-9
Notwithstanding anything to the contrary and for the purposes of
clarification, if an Authorized Participant desires to exchange
its Tradeable Shares for the underlying Holding Shares, and
subsequently exchange its Holding Shares for cash and/or
Treasuries, it shall follow the procedures under "Exchange Orders"
set forth in Attachment B.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Redemption Order through the Administrative Agent's
automated electronic system shall send a notice to the Authorized
Participant confirming the receipt of such Redemption Order and
generate a submission number (a "Submission Number") relating to
such Redemption Order and communicate that number to the
Authorized Participant.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Redemption
Orders received from Authorized Participants on Redemption T prior
to the Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
efforts basis. The Administrative Agent shall promptly contact the
Trustee at 3:00 p.m. New York City time if there is any delay the
Order File's transmission.
4. Within fifteen (15) minutes of the transmission of the Order File,
the Trustee shall send an electronic confirmation to the
Administrative Agent that it has received the Order File.
5. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee.
6. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Order File including any corrections sent to
it by the Administrative Agent.
7. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee;
(b) the MACRO Units to be tendered (for the avoidance of doubt,
such instruction shall include the number of Up-MACRO Holding
Shares to be delivered and the number of Down-MACRO Holding
Shares to be delivered and the CUSIP numbers for those
shares);
(c) the Up-MACRO Excess Delivery Amount (such amount, the
"Up-MACRO Excess Delivery Amount"), which is an amount equal
to the excess of the fair market value of the Treasuries to
be delivered because of the minimum denomination requirements
over the amount owed by the Up-MACRO Holding Trust to the
Authorized Participant (the Administrative Agent will
indicate this amount if the Up-MACRO Holding Trust is
required to deliver Treasuries in amount greater than the
Attachment A-10
amount owed to such Authorized Participant because of the
minimum denominations on the Treasuries on deposit in the
Up-MACRO Holding Trust);
(d) the Down-MACRO Excess Delivery Amount (such amount, the
"Down-MACRO Excess Delivery Amount"), which is an amount
equal to the excess of the fair market value of the
Treasuries to be delivered because of the minimum
denomination requirements over the amount owed by the
Down-MACRO Holding Trust to the Authorized Participant (the
Administrative Agent will indicate this amount if the
Down-MACRO Holding Trust is required to deliver Treasuries in
amount greater than the amount owed to such Authorized
Participant because of the minimum denominations on the
Treasuries on deposit in the Down-MACRO Holding Trust);.
8. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Trustee,
indicating:
(a) if Redemption T is a Distribution Date:
(i) the Up-MACRO Settlement Payment, if any;
(ii) the Down-MACRO Settlement Payment, if any,
(iii) the amount of funds that shall be delivered to the
redeeming Authorized Participant from the amounts on
deposit in Up-MACRO Holding Trust; and
(iv) the amount of funds that shall be delivered to the
redeeming Authorized Participant from the amounts on
deposit in Down-MACRO Holding Trust;
Notwithstanding anything to the contrary, such amount
shall be determined in accordance with the applicable
Holding Trust Agreement.
(b) if Redemption T is not a Distribution Date:
(i) the Up-MACRO Settlement Payment, if any;
(ii) the Down-MACRO Settlement Payment, if any,
(iii) the amount of Treasuries and the Type of Treasuries
that shall be delivered to the redeeming Authorized
Participant from the amounts on deposit in Up-MACRO
Holding Trust; and
Attachment A-11
(iv) the amount of Treasuries and the Type of Treasuries
that shall be delivered to the redeeming Authorized
Participant from the amounts on deposit in
Down-MACRO Holding Trust;
Notwithstanding anything to the contrary, the amount of
and the Type of Treasuries to be delivered shall be
determined in accordance with the applicable Holding Trust
Agreement.
(c) the number of additional Settlement Contracts to be entered
into by the Trustee, on behalf of each of the Paired Holding
Trusts, in connection with any Paired Subsequent Issuances;
(d) the net change in the notional amount of the Income
Distribution Agreement, which the Trustee shall adjust on
Redemption T +1; and
(e) the Up-MACRO Excess Delivery Amount and the Down-MACRO Excess
Delivery Amount, if any (such information, the "Holding Share
Redemption Trade File").
For the avoidance of doubt, such electronic message shall
constitute written instructions of the Administrative Agent to
the Trustee, and within fifteen (15) minutes of receipt of
such instructions, the Trustee shall confirm that it has
received such instructions from the Administrative Agent.
REDEMPTION T + 1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Redemption Order shall have (a) deposited the
Up-MACRO Excess Delivery Amount and the Down-MACRO Excess Delivery
Amount, if any, into an account designated by the Trustee using
the Federal Wire Electronic Transfer System and (b) delivered to
the Trustee the Up-MACRO Holding Shares and Down-MACRO Holding
Shares constituting the MACRO Units being redeemed.
2. By 10:30 a.m. New York City time, if the Trustee has not received
either (a) the Up-MACRO Excess Delivery Amount and the Down-MACRO
Excess Delivery Amount, if any or (b) the Up-MACRO Holding Shares
and Down-MACRO Holding Shares constituting the MACRO Units being
redeemed, the Trustee shall contact the Authorized Participant to
inquire about any missing funds or securities.
3. By 12:00 p.m. New York City time, if the Trustee has still not
received (a) the Up-MACRO Excess Delivery Amount and the
Down-MACRO Excess Delivery Amount, if any, or (b) the Up-MACRO
Holding Shares and Down-MACRO Holding Shares constituting the
MACRO Units being redeemed, then the Administrative Agent shall
notify the Authorized Participant of the amount or securities owed
to the Paired Holding Trusts. The deficient Authorized Participant
must immediately wire such amount through the Federal Wire
Attachment A-12
Electronic Transfer System or transfer such shares to the Trustee
or its order shall be cancelled.
4. By 3:00 p.m. New York City time on Redemption T + 1, the Trustee
shall, in accordance with the instructions of the Administrative
Agent:
(a) cancel the Up-MACRO Holding Shares and Down-MACRO Holding
Shares tendered by the Authorized Participant;
(b) make settlement payments on the Settlement Contracts in
accordance with the applicable Holding Trust Agreements;
(c) if Redemption T was a Distribution Date, distribute funds
from each of the Paired Holding Trusts to the Authorized
Participants;
(d) if Redemption T was not a Distribution Date, distribute
Treasuries of the Type specified by the Administrative Agent
from each of the Paired Holding Trusts;
(e) adjust the notional amount of the Income Distribution
Agreement; and
(f) allocate the Up-MACRO Excess Delivery Amount and the
Down-MACRO Excess Delivery Amount, if applicable, to the
Distribution Accounts of the applicable Paired Holding
Trusts.
* * * *
Attachment A-13
ATTACHMENT B
TRADEABLE TRUST PROCEDURES FOR THE
MACROSHARES UP OIL BENCHMARK TRADEABLE TRUST AND THE
MACROSHARES DOWN OIL BENCHMARK TRADEABLE TRUST
CREATION AND EXCHANGE OF TRADEABLE SHARES
Scope of Procedures and Overview
These procedures (the "Procedures") describe the processes by which an
Authorized Participant (as defined below) may (i) create MACROShares Up Oil
$[ ] Tradeable Shares (the "Up-MACRO Tradeable Shares") or MACROShares Down
Oil $[ ] Tradeable Shares (the "Down-MACRO Tradeable Shares" and together
with the Up-MACRO Tradeable Shares, the "Tradeable Shares") or (ii) exchange its
existing Tradeable Shares for either MACROShares Up Oil Benchmark Holding Shares
(the "Up-MACRO Holding Shares") and MACROShares Down Oil Benchmark Holding
Shares (the "Down-MACRO Holding Shares" and together with the Up-MACRO Holding
Shares, the "Paired Holding Shares" or individually, a "Holding Share"). The
Tradeable Shares shall only be issued in connection with the instructions set
forth herein and in coordination with [ ], not in
its individual capacity but solely (i) as trustee (the "Up-MACRO Tradeable
Trustee") of the MACROShares Up Oil Benchmark Tradeable Trust (the "Up-MACRO
Tradeable Trust") and (ii) as trustee (the "Down-MACRO Tradeable Trustee" and,
in its various capacities under the applicable Tradeable Trust Agreements, the
"Trustee") of the MACROShares Down Oil Benchmark Tradeable Trust (the
"Down-MACRO Tradeable Trust" and together with the Up-MACRO Tradeable Trust, the
"Tradeable Trusts") and [ ], not in its individual capacity but solely as
administrative agent of the Tradeable Trusts (the "Administrative Agent").
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in either (i) the MACROShares Up Oil Benchmark
Tradeable Trust Agreement, dated as of [ ], 2006 (the "Up-MACRO Tradeable
Trust Agreement"), among the Up-MACRO Tradeable Trustee, the Administrative
Agent and MACRO Securities Depositor, LLC (the "Depositor") or (ii) the
MACROShares Down Oil Benchmark Tradeable Trust Agreement, dated as of [ ],
2006 (the "Down-MACRO Tradeable Trust Agreement" and, together with the
Up-MACRO Tradeable Trust Agreement, the "Tradeable Trust Agreements"), among
the Down-MACRO Tradeable Trustee, the Administrative Agent and the Depositor,
and if such defined term is not set forth therein, then such defined term
shall have the meaning assigned to such term in the Participants Agreement.
The Tradeable Shares may be created or exchanged for the applicable
type of Holding Shares by the parties listed on Schedule I attached to the
Participants Agreement (each, an "Authorized Participant"). Tradeable Shares
may be only created through a deposit of 100,000 Holding Shares (of the
same type as the Tradeable Shares being created) or an integral multiple
thereof, and Tradeable Shares may only be exchanged for Holding Shares (of
the same type as the Tradeable Shares being redeemed) by a delivery of
100,000 Tradeable Shares or an integral
Attachment B-1
multiple thereof. Up-MACRO Tradeable Shares may only be created or exchanged
for Up-MACRO Holding Shares, and Down-MACRO Tradeable Shares may only be
created or exchanged for Down-MACRO Holding Shares.
In order to effectuate a creation or exchange of Tradeable Shares, an
Authorized Participant must deposit the applicable type of MACRO Shares into
an account designated by the Trustee prior to the settlement of the
transaction. Upon the consummation of the transaction, (i) in the case of a
creation of Tradeable Shares, the Trustee, on behalf of the applicable
Tradeable Trust and upon written instruction from the Administrative Agent,
shall transfer the deposited Holding Shares of the applicable type from that
Authorized Participant's account at DTC to the Securities Account of the
applicable Tradeable Trust, or (ii) in the case of an exchange of Tradeable
Shares, the Trustee, on behalf of the applicable Tradeable Trust and upon
written instruction from the Administrative Agent, shall cancel the Tradeable
Shares deposited by the Authorized Participant and deposit Holding Shares into
the Authorized Participant's account at DTC from the Securities Account of the
applicable Tradeable Trust.
Upon acceptance of the Participants Agreement by the Depositor and
the Administrative Agent, the Administrative Agent will assign a personal
identification number (a "PIN number") to each Authorized Person authorized to
act for an Authorized Participant. This will allow an Authorized Participant
through its Authorized Person(s) to place Creation Order(s) or Exchange
Order(s) for Tradeable Shares.
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Tradeable
Trust Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Tradeable Trust
Agreements and the Participants Agreement relating to unclear or
ambiguous instructions.
Attachment B-2
CREATION PROCESS
On any Business Day, an Authorized Participant may submit a Creation
Order, substantially in the form of EXHIBIT D to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent, with a copy
to the Trustee, to purchase [number] new Tradeable Shares or an integral
multiple thereof by the Order Cut-Off Time (as defined herein) on such Business
Day (such Business Day, "CREATION T" and any number added to Creation T shall
refer to such day plus the number of Business Days following such day). In
connection with the Creation Order, the Authorized Participant shall have on
deposit in its Participant Custodian Account and available to the Trustee by
10:00 a.m. New York City time on CREATION T + 1 the following:
o the Transaction Fee as communicated by the Administrative Agent
in accordance with these Procedures;
o [number] or an integral multiple thereof of either Up-MACRO
Holding Shares or Down-MACRO Holding Shares, which shall be
deposited into the Securities Account of the applicable
Tradeable Trust (such deposit, the "Holding Share Deposit").
Upon the satisfaction of the conditions set forth below, the Tradeable
Shares shall be delivered to the creating Authorized Participant to fill the
Creation Order prior to 3:00 p.m. New York City time on the Business Day
following the Order Date. The Trustee shall transfer to the Authorized
Participant's account at The Depository Trust Company ("DTC") a number of
Tradeable Shares ordered and paid for by the Authorized Participant.
If an Authorized Participant desires to create both Up-MACRO Tradeable
Shares and Down-MACRO Tradeable Shares on the same date, then such Authorized
Participant must submit two separate Creation Order Forms to effectuate such
transactions.
CREATION PROCEDURES
CREATION T (ORDER DATE)
1. By the earlier of (i) 2:00 p.m. New York City time or (ii) if
the close of trading of the Light Sweet Crude Oil Futures
Contract on the New York Mercantile Exchange (the "NYMEX") is
earlier than 2:30 p.m. New York City time, thirty (30) minutes
prior to the close of trading of the Light Sweet Crude Oil
Futures Contract on the NYMEX (such time, the "Order Cut-Off
Time"), an Authorized Person of the Authorized Participant shall
notify the Administrative Agent through the Administrative
Agent's electronic facilities that the Authorized Participant
wishes to place a Creation Order. The Authorized Participant
shall indicate through the Administrative Agent's electronic
facilities the following information:
(a) the Authorized Participant's name;
(b) its PIN Number;
Attachment B-3
(c) the number of Up-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any;
(d) the number of Down-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any;
(e) the CUSIP Number (and/or processing symbols) of the
Up-MACRO Holding Shares being delivered, if any;
(f) the CUSIP Number (and/or processing symbols) of the
Down-MACRO Holding Shares being delivered, if any;
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Creation Order through its electronic facilities
(and no later than 2:15 New York City time), the Administrative
Agent's automated electronic system shall send a notice to the
Authorized Participant confirming electronically the receipt of
such Creation Order and generate a submission number (a
"Submission Number") relating to such Creation Order and
communicate that number to the Authorized Participant.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Creation
Orders received from Authorized Participants on Creation T prior
to the Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
efforts basis. The Administrative Agent shall promptly contact
the Trustee at 3:00 p.m. New York City time if there is any
delay the Order File's transmission.
4. Within fifteen (15) minutes of the transmission of the Order
File, the Trustee shall send an electronic confirmation to the
Administrative Agent that it has received the Order File.
5. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee.
6. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Order File including any corrections sent
to it by the Administrative Agent.
7. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee, and
(b) the number of Up-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any; and
Attachment B-4
(c) the number of Down-MACRO Holding Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any.
8. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Trustee,
indicating:
(a) the number of Up-MACRO Tradeable Shares that the Trustee
will deliver to the Authorized Participant on Creation T +
1, which number shall be in integral multiples of
100,000, if any; and
(b) the number of Down-MACRO Tradeable Shares that the Trustee
will deliver to the Authorized Participant on Creation T +
1, which number shall be in integral multiples of
100,000, if any.
CREATION T + 3
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Creation Order shall deposit the requisite number
of Up-MACRO Holding Shares and/or Down-MACRO Holding Shares into
an account designated by the Trustee.
2. By 10:30 a.m. New York City time, if the Trustee has not
received the requisite number of Up-MACRO Holding Shares and/or
Down-MACRO Holding Shares, the Trustee shall contact the
Authorized Participant to inquire about any missing shares. If
the Trustee does not receive the requisite number of Up-MACRO
Holding Shares and/or Down-MACRO Holding Shares, the Trustee
shall not be obligated to make any settlement.
3. By 12:00 p.m. New York City time, if the Trustee has not
received the requisite number of Up-MACRO Holding Shares and/or
Down-MACRO Holding Shares, then the Administrative Agent shall
notify the Authorized Participant of the shares owed to the
Paired Holding Trusts. The deficient Authorized Participant
shall immediately transfer such shares to the Trustee or its
order shall be cancelled.
4. By 3:00 p.m. New York City time, the Trustee, upon written
instruction from the Administrative Agent, shall withdraw the
requisite number of Up-MACRO Holding Shares and/or Down-MACRO
Holding Shares from its designated account and deposit such
Holding Shares into the Securities Account of the applicable
Tradeable Trust. Concurrently, the Trustee shall cause the
Tradeable Trust to issue the requisite number of Tradeable
Shares created by the Authorized Participant and credit the
Authorized Participant's account at DTC through the Continuous
Net Settlement System.
[Exchange Process Follows on Next Page]
Attachment B-5
EXCHANGE PROCESS
On any Business Day, an Authorized Participant may submit an Exchange
Order, substantially in the form of EXHIBIT E to the Participants Agreement (or
to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent, with a copy
to the Trustee, by the Order Cut-Off Time (as defined herein) on such Business
Day (such Business Day, "EXCHANGE T" and any number added to Exchange T shall
refer to such day plus the number of Business Days following such day) to
exchange [number] existing Tradeable Shares or an integral multiple thereof for
Holding Shares of the same type. In connection with the Exchange Order, the
Authorized Participant shall have on deposit in its Participant Custodian
Account and available to the Trustee by 10:00 a.m. New York City time on
EXCHANGE T + 1 the following:
o the Transaction Fee as communicated by the Administrative Agent
in accordance with these Procedures;
o [number] or an integral multiple thereof of either Up-MACRO
Tradeable Shares or Down-MACRO Tradeable Shares, which shall be
deposited into the Securities Account of the Up-MACRO Tradeable
Trust and cancelled by the Trust of that Tradeable Trust (the
"Tradeable Share Deposit").
Upon the satisfaction of the conditions set forth below, the Holding
Shares requested by the Authorized Participant shall be delivered to the
Authorized Participant to fill the Exchange Order prior to 3:00 p.m. New York
City time on the Business Day following the Order Date. The Trustee, on behalf
of the applicable Tradeable Trust and written instruction from the Authorized
Participant, shall transfer to the Authorized Participant's account at DTC the
number of Holding Shares ordered in connection with the Authorized Participant's
Exchange Order.
If an Authorized Participant desires to exchange both Up-MACRO
Tradeable Shares and Down-MACRO Tradeable Shares on the same date, then such
Authorized Participant must submit two separate Exchange Order Forms to
effectuate such transactions.
If an Authorized Participant desires to redeem its Up-MACRO Tradeable
Shares and Down-MACRO Tradeable Shares in integral multiples of the Up-MACRO
Holding Shares and Down-MACRO Holding Shares constituting a MACRO Unit for
either cash and/or Treasuries, the parties hereto shall execute such redemption
in accordance with the procedures set forth herein.
EXCHANGE PROCEDURES
EXCHANGE T (ORDER DATE)
1. By the Order Cut Off Time, an Authorized Person of the Authorized
Participant shall notify the Administrative Agent through the
Administrative Agent's electronic facilities that the Authorized
Participant wishes to place a Exchange Order. The Authorized
Person shall provide its PIN number as identification to
Attachment B-6
the Administrative Agent. The Authorized Participant shall
indicate through the Administrative Agent's electronic facilities
the following information:
(a) the Authorized Participant's name;
(b) its PIN Number;
(c) the number of Up-MACRO Tradeable Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any;
(d) the number of Down-MACRO Tradeable Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any;
(e) the CUSIP Number of the Up-MACRO Tradeable Shares being
delivered, if any;
(f) the CUSIP Number of the Down-MACRO Tradeable Shares being
delivered, if any; and
(g) whether or not such Authorized Participant will be delivering
Tradeable Shares in an integral multiple so as to receive
Paired Holding Shares constituting a MACRO Unit with the
intent to conduct a Paired Optional Redemption.
Any deposit of Tradeable Shares with the intention of redeeming
such shares for cash and/or Treasuries after the interim set of
exchanging Tradeable Shares for Paired Holding Shares shall occur
in accordance with the procedures set forth herein.
Notwithstanding anything to the contrary, the Trustee shall, upon
the completion of the exchange of Tradeable Shares in accordance
with this Attachment B, deliver the Paired Holding Shares to the
creating Authorized Participant. Such Authorized Participant shall
be required to tender such Paired Holding Shares to the Trustee in
accordance with the procedures set forth herein, and the cash
and/or Treasuries received from the Paired Optional Redemption
shall be delivered on Creation T + 3.
2. Within fifteen (15) minutes of receipt of the Authorized
Participant's Exchange Order through its electronic facilities
(and no later than 2:15 New York City time), the Administrative
Agent's automated electronic system shall send a notice to the
Authorized Participant confirming electronically the receipt of
such Exchange Order and generate a submission number (a
"Submission Number") relating to such Exchange Order and
communicate that number to the Authorized Participant.
3. By 3:00 p.m. New York City time, the Administrative Agent shall
send to the Trustee an electronic file indicating the Exchange
Orders received from Authorized Participants on Exchange T prior
to the Order Cut-Off Time (such file, the "Order File"). The
transmission of the Order File shall be conducted on a best
Attachment B-7
efforts basis. The Administrative Agent shall promptly contact
the Trustee at 3:00 p.m. New York City time if there is any
delay the Order File's transmission.
4. Within fifteen (15) minutes of the transmission of the Order
File, the Trustee shall send an electronic confirmation to the
Administrative Agent that it has received the Order File.
5. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Order File and send any corrections to the Trustee
or any Authorized Participant exchanging its Tradeable Shares.
6. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Order File including any corrections sent
to it by the Administrative Agent.
7. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee, and
(b) the number of Up-MACRO Tradeable Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any; and
(c) the number of Down-MACRO Tradeable Shares that the Authorized
Participant will deliver, which number shall be in integral
multiples of 100,000, if any.
8. By 7:00 p.m. New York City time, the Administrative Agent
shall send an authenticated electronic message to the Trustee,
indicating:
(a) the number of Up-MACRO Holding Shares that the Trustee will
deliver to the Authorized Participant on Exchange T + 1,
which number shall be in integral multiples of 100,000, if
any; and
(b) the number of Down-MACRO Holding Shares that the Trustee will
deliver to the Authorized Participant on Exchange T + 1,
which number shall be in integral multiples of 100,000, if
any;.
(THE FOLLOWING INSTRUCTIONS ONLY APPLY IF THE PAIRED HOLDING SHARES BEING
DELIVERED WILL NOT BE USED IN A PAIRED OPTIONAL REDEMPTION)
EXCHANGE T + 3
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Exchange Order shall deposit the requisite number
of Up-MACRO Tradeable Shares and/or Down-MACRO Tradeable Shares
into an account designated by the Trustee.
Attachment B-8
2. By 10:30 a.m. New York City time, if the Trustee has not
received the requisite number of Up-MACRO Tradeable Shares
and/or Down-MACRO Tradeable Shares, the Trustee shall contact
the Authorized Participant to inquire about any missing shares.
If the Trustee does not receive the requisite number of Up-MACRO
Tradeable Shares and/or Down-MACRO Tradeable Shares, the Trustee
shall not be obligated to make any settlement.
3. By 12:00 p.m. New York City time, if the Trustee has not received
the requisite number of Up-MACRO Tradeable Shares and/or
Down-MACRO Tradeable Shares, then the Administrative Agent shall
notify the Authorized Participant of the number of the Up-MACRO
Tradeable Shares and Down-MACRO Tradeable Shares that it needs to
deposit. The deficient Authorized Participant shall immediately
transfer such shares to the Trustee or its order shall be
cancelled.
4. By 3:00 p.m. New York City time, the Trustee, upon written
instruction from the Administrative Agent, shall withdraw the
requisite number of Up-MACRO Tradeable Shares and/or Down-MACRO
Tradeable Shares from its designated account and cancel such
Tradeable Shares. Concurrently, the Trustee shall withdraw from
the applicable Tradeable Trust the requisite number of Holding
Shares and delivered those Holding Shares to the Authorized
Participant and credit the Authorized Participant's account at DTC
through the Continuous Net Settlement System.
(THE FOLLOWING INSTRUCTIONS ONLY APPLY IF THE PAIRED HOLDING SHARES
BEING DELIVERED WILL BE USED IN A PAIRED OPTIONAL REDEMPTION)
EXCHANGE T + 1
1. By 10:00 a.m. New York City time, each Authorized Participant
submitting a Exchange Order shall deposit the requisite number
of Up-MACRO Tradeable Shares and/or Down-MACRO Tradeable Shares
into an account designated by the Trustee.
2. By 10:30 a.m. New York City time, if the Trustee has not
received the requisite number of Up-MACRO Tradeable Shares
and/or Down-MACRO Tradeable Shares, the Trustee shall contact
the Authorized Participant to inquire about any missing shares.
If the Trustee does not receive the requisite number of Up-MACRO
Tradeable Shares and/or Down-MACRO Tradeable Shares, the Trustee
shall not be obligated to make any settlement.
3. By 12:00 p.m. New York City time, if the Trustee has not
received the requisite number of Up-MACRO Tradeable Shares
and/or Down-MACRO Tradeable Shares, then the Administrative
Agent shall notify the Authorized Participant of the number of
the Up-MACRO Tradeable Shares and Down-MACRO Tradeable Shares
that it needs to deposit. The deficient Authorized Participant
shall immediately transfer such shares to the Trustee or its
order shall be cancelled.
Attachment B-9
4. By 3:00 p.m. New York City time, the Trustee, upon written
instruction from the Administrative Agent, shall withdraw the
requisite number of Up-MACRO Tradeable Shares and/or Down-MACRO
Tradeable Shares from its designated account and cancel such
Tradeable Shares. Concurrently, the Trustee shall withdraw from
the applicable Tradeable Trust the requisite number of Holding
Shares and delivered those Holding Shares to the Authorized
Participant and credit the Authorized Participant's account at
DTC through theContinuous Net Settlement System.
EXCHANGE T + 2
1. By 3:00 p.m. New York City time, if the Authorized Participant
on Exchange T indicated in its original Exchange Order that it
will be redeeming Paired Holding Shares, the Administrative
Agent shall send to the Trustee an electronic file indicating
the Exchange Order for Paired Optional Redemption of Paired
Holding Shares (such file, the "Holding Share Order File"). The
transmission of the Holding Share Order File shall be conducted
on a best efforts basis. The Administrative Agent shall promptly
contact the Trustee at 3:00 p.m. New York City time if there is
any delay the Holding Share Order File's transmission.
2. Within fifteen (15) minutes of the transmission of the Holding
Share Order File, the Trustee shall send an electronic
confirmation to the Administrative Agent that it has received
the Holding Share Order File.
3. By 4:00 p.m. New York City time, the Administrative Agent shall
confirm the Holding Share Order File and send any corrections to
the Trustee and the Authorized Participant.
4. By 5:00 p.m. New York City time, the Trustee shall confirm the
final version of the Holding Share Order File including any
corrections sent to it by the Administrative Agent.
5. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Authorized
Participant, with a copy to the Trustee, indicating:
(a) the Transaction Fee payable to the Trustee;
(b) the MACRO Units to be tendered (for the avoidance of doubt,
such instruction shall include the number of Up-MACRO Holding
Shares to be delivered and the number of Down-MACRO Holding
Shares to be delivered and the CUSIP numbers for those
shares);
(c) the Up-MACRO Excess Delivery Amount (such amount, the
"Up-MACRO Excess Delivery Amount"), which is an amount equal
to the excess of the fair market value of the Treasuries to
be delivered over the amount owed by the Up-MACRO Holding
Trust to the Authorized Participant (the Administrative Agent
will indicate this amount if the Up-MACRO
Attachment B-10
Holding Trust is required to deliver Treasuries in amount
greater than the amount owed to such Authorized Participant
because of the minimum denominations on the Treasuries on
deposit in the Up-MACRO Holding Trust);
(d) the Down-MACRO Excess Delivery Amount (such amount, the
"Down-MACRO Excess Delivery Amount"), which is an amount
equal to the excess of the fair market value of the
Treasuries to be delivered over the amount owed by the
Down-MACRO Holding Trust to the Authorized Participant (the
Administrative Agent will indicate this amount if the
Down-MACRO Holding Trust is required to deliver Treasuries in
amount greater than the amount owed to such Authorized
Participant because of the minimum denominations on the
Treasuries on deposit in the Down-MACRO Holding Trust).
For the avoidance of doubt, the number of Up-MACRO Holding Shares
that the Authorized Participant may deliver shall equal in the
number and have identical CUSIPs to the Up-MACRO Holding Shares or
Down-MACRO Holding Shares converted on Exchange T + 1.
6. By 7:00 p.m. New York City time, the Administrative Agent shall
send an authenticated electronic message to the Trustee,
indicating:
(a) if Exchange T is a Distribution Date:
(i) the Up-MACRO Settlement Payment, if any;
(ii) the Down-MACRO Settlement Payment, if any,
(iii) the amount of funds that shall be delivered to the
redeeming Authorized Participant from the amounts
on deposit in Up-MACRO Holding Trust; and
(iv) the amount of funds that shall be delivered to the
redeeming Authorized Participant from the amounts
on deposit in Down-MACRO Holding Trust;
Notwithstanding anything to the contrary, such amount
shall be determined in accordance with the applicable
Holding Trust Agreement.
(b) if Exchange T is not a Distribution Date:
(i) the Up-MACRO Settlement Payment, if any;
(ii) the Down-MACRO Settlement Payment, if any,
Attachment B-11
(iii) the amount of Treasuries and the Type of Treasuries
that shall be delivered to the redeeming Authorized
Participant from the amounts on deposit in Up-MACRO
Holding Trust; and
(iv) the amount of Treasuries and the Type of Treasuries
that shall be delivered to the redeeming Authorized
Participant from the amounts on deposit in
Down-MACRO Holding Trust;
Notwithstanding anything to the contrary, the amount of
and the Type of Treasuries to be delivered shall be
determined in accordance with the applicable Holding
Trust Agreement.
(c) the number of additional Settlement Contracts to be entered
into by the Trustee, on behalf of each of the Paired Holding
Trusts, in connection with any Paired Subsequent Issuances;
(d) the net change in the notional amount of the Income
Distribution Agreement, which the Trustee shall adjust on
Exchange T +1; and
(e) the Up-MACRO Excess Delivery Amount and the Down-MACRO Excess
Delivery Amount, if any (such information, the "Holding Share
Exchange Trade File").
For the avoidance of doubt, such electronic message shall
constitute written instructions of the Administrative Agent
to the Trustee, and within fifteen (15) minutes of receipt of
such instructions, the Trustee shall confirm that it has
received such instructions from the Administrative Agent.
EXCHANGE T + 3
1. By 10:00 a.m. New York City time, each Authorized Participant
that submitted an Exchange Order indicating its desire to
execute a Paired Optional Redemption shall have (a) deposited
the Up-MACRO Excess Delivery Amount and the Down-MACRO Excess
Delivery Amount, if any, into an account designated by the
Trustee using the Federal Wire Electronic Transfer System and
(b) delivered to the Trustee the Up-MACRO Holding Shares and
Down-MACRO Holding Shares constituting the MACRO Units being
redeemed.
2. By 10:30 a.m. New York City time, if the Trustee has not
received either (a) the Up-MACRO Excess Delivery Amount and the
Down-MACRO Excess Delivery Amount, if any or (b) the Up-MACRO
Holding Shares and Down-MACRO Holding Shares constituting the
MACRO Units being redeemed, the Trustee shall contact the
Authorized Participant to inquire about any missing funds or
securities.
Attachment B-12
3. By 12:00 p.m. New York City time, if the Trustee has still not
received (a) the Up-MACRO Excess Delivery Amount and the
Down-MACRO Excess Delivery Amount, if any, or (b) the Up-MACRO
Holding Shares and Down-MACRO Holding Shares constituting the
MACRO Units being redeemed, then the Administrative Agent shall
notify the Authorized Participant of the amount or securities
owed to the Paired Holding Trusts. The deficient Authorized
Participant must immediately wire such amount through the
Federal Wire Electronic Transfer System or transfer such shares
to the Trustee or its order shall be cancelled.
4. By 3:00 p.m. New York City time on Exchange T + 1, the Trustee
shall, in accordance with the instructions of the Administrative
Agent:
(a) cancel the Up-MACRO Holding Shares and Down-MACRO Holding
Shares tendered by the Authorized Participant;
(b) make settlement payments on the Settlement Contracts in
accordance with the applicable Holding Trust Agreements;
(c) if Exchange T was a Distribution Date, distribute funds from
each of the Paired Holding Trusts to the Authorized
Participants;
(d) if Exchange T was not a Distribution Date, distribute
Treasuries of the Type specified by the Administrative Agent
from each of the Paired Holding Trusts;
(e) adjust the notional amount of the Income Distribution
Agreement; and
(f) allocate the Up-MACRO Excess Delivery Amount and the
Down-MACRO Excess Delivery Amount, if applicable, to the
Distribution Accounts of the applicable Paired Holding
Trusts.
* * *
Attachment B-13
