EXHIBIT 4.1
FORM OF CLAYMORE MACROSHARES OIL UP
HOLDING TRUST AGREEMENT
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MACRO SECURITIES DEPOSITOR, LLC,
as Depositor,
INVESTORS BANK & TRUST COMPANY,
as Trustee,
CLAYMORE SECURITIES, INC.,
as the Administrative Agent and a Marketing Agent
and
MACRO FINANCIAL, LLC,
as a Marketing Agent
CLAYMORE MACROSHARES OIL UP HOLDING TRUST
TRUST AGREEMENT
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions.....................................................................................2
Section 1.2 Other Definitional Provisions..................................................................21
ARTICLE 2
CREATION AND DECLARATION OF THE TRUST;
THE INITIAL DEPOSIT; FORM OF THE CERTIFICATES;
DELIVERY and REGISTRATION OF TRANSFER
OF UP-MACRO HOLDING SHARES
Section 2.1 Initial Deposit................................................................................22
Section 2.2 Acceptance by Trustee..........................................................................22
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust..................................................22
Section 2.4 Representations and Warranties of the Depositor................................................23
Section 2.5 Form of Shares; Book-Entry System; Transferability of Up-MACRO Holding Shares..................25
ARTICLE 3
APPOINTMENT OF THE TRUSTEE,
ADMINISTRATIVE AGENT AND MARKETING AGENTS;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the Trustee..................................28
Section 3.2 Representations, Warranties and Covenants of the Trustee.......................................29
Section 3.3 Acceptance of Appointment and Matters Relating to the Administrative Agent
and the Marketing Agents.......................................................................31
Section 3.4 Representations, Warranties and Covenants of the Administrative Agent and the Marketing Agents.33
Section 3.5 Establishment of the Securities Account........................................................35
Section 3.6 Establishment of the Distribution Account......................................................36
Section 3.7 Establishment of the Netting Account...........................................................37
Section 3.8 Establishment of the Fee Payment Account.......................................................38
ARTICLE 4
CALCULATIONS
Section 4.1 Calculations on Price Determination Days.......................................................39
Section 4.2 Calculation of Intraday Indicative Values......................................................39
Section 4.3 Calculation of Income Distribution Payments and Settlement Payments............................40
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ARTICLE 5
DISTRIBUTIONS ON THE UP-MACRO HOLDING SHARES
Section 5.1 Rights of Holders of the Up-MACRO Holding Shares...............................................41
Section 5.2 Priority of Payments...........................................................................41
Section 5.3 Payment of Expenses............................................................................42
Section 5.4 Payment of Fees................................................................................43
Section 5.5 Payments under the Income Distribution Agreement...............................................44
Section 5.6 Payments under the Settlement Contracts........................................................45
ARTICLE 6
REDEMPTIONS AND ISSUANCES OF HOLDING SHARES;
THE ADMINISTRATION AND REINVESTMENT OF THE ELIGIBLE TREASURIES
Section 6.1 Paired Optional Redemptions....................................................................45
Section 6.2 Paired Issuances...............................................................................47
Section 6.3 Settlement of the Settlement Contracts; Adjustments to the Notional Amount
of the Income Distribution Agreement...........................................................49
Section 6.4 Settlement of Redemptions......................................................................50
Section 6.5 Settlement of Issuances........................................................................51
Section 6.6 Suspension or Delay of Settlement..............................................................51
Section 6.7 The Participants Agreement.....................................................................52
Section 6.8 Administration of Eligible Treasuries..........................................................52
ARTICLE 7
CAPITAL ACCOUNTS OF HOLDERS
AND OPERATION THEREOF; TAX ALLOCATIONS
Section 7.1 Capital Contributions..........................................................................54
Section 7.2 Capital Accounts; Allocations..................................................................54
Section 7.3 Regulatory and Related Allocations.............................................................55
Section 7.4 Transfer of or Change in Up-MACRO Holding Shares...............................................57
Section 7.5 Tax Allocations................................................................................57
Section 7.6 Determination of Certain Matters...............................................................59
Section 7.7 No Deficit Makeup..............................................................................59
Section 7.8 U.S. Partnership Tax Treatment.................................................................59
Section 7.9 Definitions....................................................................................60
ARTICLE 8
CALCULATIONS; REPORTING
Section 8.1 Reporting to Holders of the Up-MACRO Holding Shares............................................61
Section 8.2 Periodic Reports...............................................................................64
Section 8.3 Form 8-K Disclosure............................................................................64
Section 8.4 Disclosure Controls and Procedures.............................................................65
Section 8.5 Fund Accounting Agent Responsibilities.........................................................65
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ARTICLE 9
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor.....................................................................66
Section 9.2 Limitations on Liability of the Depositor and Claymore Securities, Inc.........................66
Section 9.3 Liabilities; Indemnification...................................................................66
ARTICLE 10
MATTERS RELATING TO THE
ADMINISTRATIVE AGENT AND THE MARKETING AGENTS
Section 10.1 Role of the Administrative Agent...............................................................67
Section 10.2 Liability of the Administrative Agent..........................................................67
Section 10.3 Limitation on Liability of the Administrative Agent............................................67
Section 10.4 Administrative Agent Indemnification of the Up-MACRO Holding Trust and the Trustee.............68
Section 10.5 Delegation of Duties by Administrative Agent; Assignment of Fees...............................68
Section 10.6 Resignation or Removal of Administrative Agent.................................................69
Section 10.7 Role of the Marketing Agents...................................................................69
Section 10.8 Liability of the Marketing Agents..............................................................70
Section 10.9 Limitation on Liability of the Marketing Agents................................................70
Section 10.10 Marketing Agent Indemnification of the Up-MACRO Holding Trust and the Trustee..................70
Section 10.11 Delegation of Duties by Marketing Agents; Assignment of Fees...................................71
ARTICLE 11
EARLY TERMINATION
Section 11.1 Termination Triggers...........................................................................71
ARTICLE 12
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events.....................................................................73
Section 12.2 Force Majeure..................................................................................74
Section 12.3 Notification to Holders of the Up-MACRO Holding Shares.........................................74
ARTICLE 13
THE TRUSTEE
Section 13.1 Duties of Trustee..............................................................................75
Section 13.2 Rights of the Trustee..........................................................................76
Section 13.3 Trustee Not Liable for Recitals in Up-MACRO Holding Shares.....................................77
Section 13.4 Holders May Direct Trustee.....................................................................77
Section 13.5 Compensation...................................................................................77
Section 13.6 Indemnification................................................................................77
Section 13.7 Eligibility Requirements.......................................................................78
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Section 13.8 Resignation or Removal of Trustee..............................................................78
Section 13.9 Successor Trustee..............................................................................79
Section 13.10 Merger or Consolidation........................................................................80
Section 13.11 Appointment of Co-Trustee or Separate Trustee..................................................80
Section 13.12 Books, Records; Taxes; Audit...................................................................81
Section 13.13 Trustee May Enforce Claims Without Possession of Up-MACRO Holding Shares.......................82
Section 13.14 Suits for Enforcement..........................................................................82
Section 13.15 Maintenance of Office or Agency................................................................83
ARTICLE 14
TERMINATION
Section 14.1 Termination of Trust...........................................................................83
ARTICLE 15
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination.............................................83
Section 15.2 Registration (Initial and Continuing) of Up-MACRO Holding Shares; Certain Securities Law Filings85
Section 15.3 Prospectus Delivery............................................................................85
Section 15.4 Protection of Right, Title and Interest to Trust Assets........................................85
Section 15.5 Limitation on Rights of Holders of the Up-MACRO Holding Shares.................................86
Section 15.6 Certain Rights of Holders of Up-MACRO Holding Shares; Voting...................................87
Section 15.7 MACRO Licensing Agreement......................................................................87
Section 15.8 Governing Law; Jurisdiction....................................................................88
Section 15.9 Notices........................................................................................88
Section 15.10 Severability of Provisions.....................................................................90
Section 15.11 Up-MACRO Holding Shares Nonassessable and Fully Paid...........................................90
Section 15.12 Further Assurances.............................................................................90
Section 15.13 Non-Petition Covenant; No Proceedings..........................................................90
Section 15.14 No Waiver; Cumulative Remedies.................................................................90
Section 15.15 Counterparts...................................................................................91
Section 15.16 Third-Party Beneficiaries......................................................................91
Section 15.17 Actions or Notices by Holders of the Up-MACRO Holding Shares...................................91
Section 15.18 Merger and Integration.........................................................................91
Section 15.19 Headings.......................................................................................91
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EXHIBITS
EXHIBIT A FORM OF UP-MACRO HOLDING SHARE
EXHIBIT B-1 FORM OF INCOME DISTRIBUTION AGREEMENT
EXHIBIT B-2 FORM OF NET PAR AMOUNT INCREASE OR DECREASE AMENDMENT
TO INCOME DISTRIBUTION AGREEMENT
EXHIBIT C FORM OF SETTLEMENT CONTRACT
EXHIBIT D FORM OF PARTICIPANTS AGREEMENT
EXHIBIT E FORM OF MACRO LICENSING AGREEMENT
EXHIBIT F FORM OF NYMEX SUBLICENSING AGREEMENT
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This TRUST AGREEMENT, dated as of November [ ], 2006 (this "Trust
Agreement"), is hereby entered into among MACRO SECURITIES DEPOSITOR, LLC, a
Delaware limited liability company, as depositor (the "Depositor"), INVESTORS
BANK & TRUST COMPANY, not in its individual capacity but solely as trustee
(the "Trustee"), CLAYMORE SECURITIES, INC., not in its individual capacity but
solely as administrative agent (in such capacity, the "Administrative Agent")
and as a marketing agent (in such capacity, a "Marketing Agent"), and MACRO
FINANCIAL, LLC, as an additional marketing agent (in such capacity, also a
"Marketing Agent").
WHEREAS, the parties hereto have entered into this Trust Agreement to
form a trust under the laws of the State of New York to be known as the
"Claymore MACROshares Oil Up Holding Trust" and referred to herein as the
"Up-MACRO Holding Trust;"
WHEREAS, concurrently with the formation of the Up-MACRO Holding
Trust, the Depositor, the Trustee, the Administrative Agent and the Marketing
Agents have also entered into a trust agreement, dated as of the date hereof,
to form a trust under the laws of the State of New York that shall be known as
the "Claymore MACROshares Oil Down Holding Trust" and is referred to herein as
the "Down-MACRO Holding Trust;"
WHEREAS, (i) the Up-MACRO Holding Trust shall issue shares to be
known as the "Claymore MACROshares Oil Up Holding Shares" (referred to herein
as the "Up-MACRO Holding Shares") and (ii) the Down-MACRO Holding Trust shall
issue shares to be known as the "Claymore MACROshares Oil Down Holding Shares"
(referred to herein as the "Down-MACRO Holding Shares" and, together with the
Up-MACRO Holding Shares, the "Paired Holding Shares");
WHEREAS, the Depositor has assigned, transferred, conveyed and
otherwise set over to the Trustee the Initial Deposit (as defined herein) in
consideration for the issuance of founders' shares which shall constitute
permanent capital of the Up-MACRO Holding Trust, and the Trustee hereby
acknowledges receipt of such Initial Deposit in the Up-MACRO Holding Trust;
and
WHEREAS, the parties hereto wish to set forth the terms of the
Up-MACRO Holding Trust and the Up-MACRO Holding Shares and the respective
powers and duties of the Trustee, the Administrative Agent, the Marketing
Agents and the Depositor.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties intending to be legally bound hereby agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Trust Agreement,
the following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.
"Account" or "Accounts" shall mean any or all of the Securities
Account, the Distribution Account, the Netting Account and/or the Fee Payment
Account, as applicable.
"Acquisition Guidelines" shall have the meaning set forth in Section
6.8(a).
"Administrative Agent" shall mean Claymore Securities, Inc., in its
capacity as administrative agent hereunder, and its successors and assigns.
"Administrative Agent Indemnified Party" shall have the meaning set
forth in Section 10.4.
"Affiliate" shall mean with respect to any specified Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing. A company is assumed to be an
Affiliate if the parent corporation owns 20 percent or more of the outstanding
shares.
"Affiliated Person" shall have the meaning assigned to such term in
Section 2(a)(3) of the Investment Company Act.
"Aggregate Par Amount" shall mean, (i) with respect to any Up-MACRO
Holding Shares, an amount equal to the number of such Up-MACRO Holding Shares
multiplied by the Up-MACRO Stated Par Amount, (ii) with respect to any
Down-MACRO Holding Shares, an amount equal to the number of such Down-MACRO
Holding Shares multiplied by the Down-MACRO Stated Par Amount, (iii) with
respect to any Up-MACRO Tradeable Shares, an amount equal to the number of such
Up-MACRO Tradeable Shares multiplied by the Up-MACRO Stated Par Amount, and (iv)
with respect to any Down-MACRO Tradeable Shares, an amount equal to the number
of such Down-MACRO Tradeable Shares multiplied by the Down-MACRO Stated Par
Amount.
"AMEX" shall mean the American Stock Exchange, LLC.
"Applicable Reference Price of Crude Oil" shall mean, the settlement
price of the Light Sweet Crude Oil Futures Contract, as established and reported
by NYMEX on a per barrel basis in U.S. dollars at the end of each Price
Determination Day based upon the trading that has occurred in that contract by
open outcry and that has been published to the consolidated tape or publicly
disseminated; provided, that if NYMEX abandons its open outcry format for the
Light Sweet Crude Oil Futures Contract, the Applicable Reference Price of Crude
Oil shall be based on trading of the Light Sweet Crude Oil Futures Contract on
the substitute electronic trading platform established by NYMEX, and, in the
event that the NYMEX License has been terminated by NYMEX and MacroMarkets LLC
and the Depositor have successfully negotiated a license
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with a Substitute Oil Price Provider, the settlement price for the Substitute
Reference Oil Price that is established for each Price Determination Day, as
provided in such license.
"Applicable Reference Price Provider" shall mean NYMEX or the
applicable Substitute Oil Price Provider.
"Asset Allocation Percentage" shall have the meaning set forth in
Section 6.8 of this Trust Agreement.
"Authorized Participant" shall mean any entity that (i) is a registered
broker-dealer and a member in good standing with the NASD, or a participant in
the securities markets such as a bank or other financial institution that is not
required to register as a broker-dealer or be a member of the NASD in order to
engage in securities transactions, (ii) is a participant in DTC or has indirect
access to the clearing facilities of DTC by virtue of a custodial relationship
with a DTC Participant, (iii) is not a Benefit Plan Investor and (iv) has
entered into a Participants Agreement.
"Available Income" shall mean the Up-MACRO Available Income or the
Down-MACRO Available Income, as applicable.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
amended from time to time, and at codified as 11 U.S.C. Section 101 et seq.
"Beneficial Owner" shall mean, with respect to a beneficial interest in
a Global Certificate, ownership and transfers of which shall be maintained and
made through book entries by the Depository as set forth in Section 2.5 of this
Trust Agreement, a Person who is the beneficial owner of such interest in a
Global Certificate, as reflected on the books of the Depository, or on the books
of a Person maintaining an account with the Depository (directly as a DTC
Participant or as an Indirect Participant, or in each case in accordance with
the rules of the Depository).
"Benefit Plan Investor" shall mean any (i) "employee benefit plan" (as
defined in Section 3(3) of ERISA), subject to Title I of ERISA, (ii) "plan" (as
defined in Section 4975(e)(1) of the Code), subject to Section 4975 of the Code,
including without limitation individual retirement accounts and Xxxxx plans, or
(iii) entity whose underlying assets include plan assets by reason of such an
employee benefit plan's or plan's investment in such entity, including without
limitation, as applicable, an insurance company general account.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
day on which banking institutions and stock exchanges in New York, New York are
authorized or required by law, regulation or executive order to close.
"Business Office" shall mean the offices of the Administrative Agent,
which shall be located at 0000 Xxxxxxxxx Xxxx Xxxxx, Xxxxx, XX 00000.
"Calculation Agency Agreement" shall mean the Calculation Agency
Agreement, dated as of the date hereof, by and among the Trustee, the Down-MACRO
Holding Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO Tradeable
Trustee, the NYMEX and the AMEX, pursuant to which the AMEX shall render the
calculations set forth therein and post such calculations on its website.
"Calculation Agent" shall mean the AMEX in its role as calculation
agent under the Calculation Agency Agreement.
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"Calculation Period" shall mean with respect to any Distribution Date,
the period from and including the last Distribution Date (or, in the case of the
first Distribution Date, from and including the Closing Date) to but excluding
the current Distribution Date (or, in the case of the last Distribution Date, to
and including the Final Scheduled Termination Date or Early Termination Date).
The Calculation Period that precedes a particular Distribution Date is referred
to herein as being "related" to such Distribution Date.
"Cash Netting Subaccount" shall have the meaning set forth in Section
3.7(c) of this Trust Agreement.
"CEAct" shall mean the Commodity Exchange Act, as amended.
"Closing Date" shall mean November [ ], 2006.
"Code" shall mean U.S. Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall have the meaning set forth under Section
13.15.
"Creation Order" shall have the meaning set forth in Section 3(b) of
the Participants Agreement.
"Custodian" shall mean Investors Bank & Trust Company, in its capacity
as custodian of the Trust Assets hereunder on behalf of the Up-MACRO Holding
Trust.
"Daily Fee Accrual Rate" shall mean, with respect to any date of
determination until the second anniversary of the Closing Date, a rate equal to
1.60% per annum, and with respect to any date of determination during any
succeeding year, 1.50% per annum, divided by, in each case, the actual number of
days in the current calendar year (as calculated to the tenth decimal place).
"Daily Yield Rate" shall mean, with respect to any date of
determination and each Eligible Treasury on deposit in the Up-MACRO Holding
Trust or the Down-MACRO Holding Trust, as applicable, the applicable per annum
Yield Rate for that Eligible Treasury divided by the actual number of days in
the current calendar year (as calculated to the tenth decimal place).
"Depositor" shall mean MACRO Securities Depositor, LLC and its
successors and assigns.
"Depositor Indemnified Party" shall have the meaning set forth in
Section 9.3(c).
"Depository" shall mean The Depository Trust Company, its nominees, and
its successors and assigns.
"Depository Agreement" shall mean the Letter of Representations, dated
as of [ ], 2006, delivered by the Trustee and the Depositor to the Depository,
as it may be amended and restated from time to time.
"Designated Maturity" shall mean, with respect to any date of
determination and the Light Sweet Crude Oil Futures Contract, the contract that
matures during (i) the next succeeding calendar month if such date of
determination occurs during the period from the first day of the current
calendar month through and including the tenth Business Day of the current
calendar month and (ii) the second calendar month succeeding the current
calendar month if such date of determination occurs during the period from the
eleventh Business Day of the current calendar month through the last day of the
current calendar month.
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"Distribution Account" shall have the meaning set forth in Section
3.6(a).
"Distribution Date" shall mean the second Business Day preceding each
Record Date.
"Distribution Payment Date" means the third Business Day of the month
immediately following the month in which the related Distribution Date occurred.
"Down-MACRO Aggregate Par Amount" shall mean, with respect to any date
of determination, the product of (i) the aggregate number of Down-MACRO Holding
Shares that are Outstanding on such date and (ii) the Down-MACRO Stated Par
Amount.
"Down-MACRO Asset Amount" shall mean, (i) with respect to any
Distribution Date, the aggregate amount of funds on deposit in the Down-MACRO
Holding Trust on such Distribution Date, including, without limitation, all of
the maturity proceeds of the Eligible Treasuries held by the Down-MACRO Holding
Trust during the preceding Calculation Period, and (ii) with respect to any
other date of determination occurring during a Calculation Period, an amount
equal to: (A) the Down-MACRO Investment Amount plus (B) the Down-MACRO Available
Income Accrual for each day that has elapsed during such Calculation Period (not
including the date of determination) minus (C) the portion of that Down-MACRO
Available Income Accrual which was distributed in connection with all Paired
Optional Redemptions that have occurred during such Calculation Period prior to
the date of determination plus (D) the Income Component of each Down-MACRO
Holding Share that was issued during such Calculation Period prior to the date
of determination, representing the aggregate available income that would have
accrued on the Aggregate Par Amount of the Down-MACRO Holding Shares that were
created in such Paired Issuances if cash equal to that amount had been invested
on the preceding Distribution Date.
"Down-MACRO Available Income" shall mean with respect to any
Distribution Date and the related Calculation Period, the funds remaining on
deposit in the Down-MACRO Distribution Account after payment priorities first
through fourth of Section 5.2(a) of the Down-MACRO Holding Trust Agreement have
been satisfied in full.
"Down-MACRO Available Income Accrual" shall mean, on any date of
determination occurring during any Calculation Period, (i) the sum of, for each
Eligible Treasury on deposit in the Down-MACRO Holding Trust on such date, the
product of (x) the purchase price at which the Down-MACRO Holding Trust acquired
that Eligible Treasury multiplied by (y) the Daily Yield Rate applicable to that
Eligible Treasury minus (ii) the Down-MACRO Daily Fee Accrual. If the result of
the foregoing calculation is a negative number then the Down-MACRO Available
Income Accrual shall be equal to zero.
"Down-MACRO Daily Fee Accrual" shall mean, for any date of
determination occurring during any Calculation Period, the product of the Daily
Fee Accrual Rate and the Down-MACRO Asset Amount on such day.
"Down-MACRO Distribution Account" shall mean the distribution account
for the Down-MACRO Holding Trust established pursuant to the Down-MACRO Holding
Trust Agreement.
"Down-MACRO Earned Income Accrual" shall mean, with respect to any date
of determination occurring during any Calculation Period:
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o if on such date the Ending Level is below the Starting
Level, the Down-MACRO Available Income Accrual plus the
product of (i) the Up-MACRO Available Income Accrual on that
date and (ii) the Price Level Percentage Change on that
date;
o if on such date the Ending Level is above the Starting
Level, the Down-MACRO Available Income Accrual minus the
product of (i) the Down-MACRO Available Income Accrual and
(ii) the Price Level Percentage Change on that date; and
o if on such date the Ending Level is equal to the Starting
Level, the Down-MACRO Available Income Accrual;
plus, if the date of determination is also an Issuance Date on
which a Net Par Amount Increase occurred, the product of the
number of Down-MACRO Holding Shares created on such date that are
part of such Net Par Amount Increase and the Income Component of
each such share,
minus, if the date of determination is also a Redemption Date on
which a Net Par Amount Decrease occurred, the product of the
number of Down-MACRO Holding Shares redeemed on such date that are
part of such Net Par Amount Decrease and the Income Component of
each such share.
The Down-MACRO Earned Income Accrual for each date of determination that is not
a Price Determination Day shall be determined by reference to the Price Level
Percentage Change on the last preceding Price Determination Day.
The Down-MACRO Earned Income Accrual for each Calculation Period shall be equal
to the sum of the Down-MACRO Earned Income Accruals for each day of that
Calculation Period up to but not including the related Distribution Date.
"Down-MACRO Expenses" shall have the meaning specified in Section 5.3
of the Down-MACRO Holding Trust Agreement.
"Down-MACRO Fee Deduction Amount" shall mean, with respect to any
Calculation Period, an amount equal to the sum of, for each day during that
Calculation Period, the Down-MACRO Asset Amount as of that day multiplied by a
rate equal to 1.60% per annum for the first two years following the Closing
Date and a rate of 1.50% per annum thereafter, divided by, in each case, the
actual number of days in the current calendar year.
"Down-MACRO Fees" shall have the meaning specified in Section 5.4 of
the Down-MACRO Holding Trust Agreement.
"Down-MACRO Holding Shares" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust Agreement" shall mean the Down-MACRO Holding
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agents and the Down-MACRO Holding Trustee,
as such agreement may be amended from time to time.
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"Down-MACRO Holding Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Down-MACRO Holding
Trust.
"Down-MACRO Income Distribution Payment" shall mean, with respect to
any Distribution Date:
(i) if the Down-MACRO Earned Income Accrual for the preceding
Calculation Period exceeds the Down-MACRO Available Income with respect to
such Distribution Date, a payment equal to zero; and
(ii) if the Down-MACRO Available Income with respect to such
Distribution Date is greater than the Down-MACRO Earned Income Accrual for the
preceding Calculation Period, a payment equal to the difference between such
Down-MACRO Available Income and such Down-MACRO Earned Income Accrual.
"Down-MACRO Investment Amount" shall mean, (i) with respect to any
Distribution Date, an amount equal to the amount reinvested in Eligible
Treasuries pursuant to Section 5.2(a)(iv) of the Down-MACRO Holding Trust
Agreement and (ii) with respect to any other date of determination occurring
during any Calculation Period, an amount equal to the amount in clause (i)
divided by the number of Down-MACRO Holding Shares Outstanding on that
Distribution Date multiplied by the number of Down-MACRO Holding Shares
Outstanding on that date of determination.
"Down-MACRO Redemption Percentage" shall mean (i) with respect to any
Redemption Date, a fraction, expressed as a percentage, the numerator of which
is the aggregate number of Down-MACRO Holding Shares that are being redeemed on
such date and the denominator of which is the aggregate number of Down-MACRO
Holding Shares that are Outstanding on such date prior to giving effect to the
Redemption Order placed on such Redemption Date and prior to giving effect to
any Creation Orders that may also have been placed on such date and (ii) with
respect to an Early Termination Date or the Final Scheduled Termination Date,
100%.
"Down-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if on such Redemption Date, the last Price Determination Day
preceding such Early Termination Date, or the last Price Determination Day
preceding the Final Scheduled Termination Date, the Down-MACRO Underlying Value
is greater than or equal to the Down-MACRO Investment Amount on such date, zero;
and
(b) if on such Redemption Date, the last Price Determination Day
preceding such Early Termination Date or the last Price Determination Day
preceding the Final Scheduled Termination Date, the Down-MACRO Underlying Value
is less than the Down-MACRO Investment Amount on such date, an amount equal to
(i) the excess of such Down-MACRO Investment Amount over such Down-MACRO
Underlying Value multiplied by (ii) the Down-MACRO Redemption Percentage for
such Redemption Date, Early Termination Date or Final Scheduled Termination
Date.
"Down-MACRO Stated Par Amount" shall mean the stated par amount of
$[60] per Down-MACRO Holding Share or per Down-MACRO Tradeable Share.
"Down-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Down-MACRO Tradeable Trust pursuant to the Down-MACRO Tradeable
Trust Agreement.
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"Down-MACRO Tradeable Trust" shall mean the Claymore MACROshares Oil
Down Tradeable Trust formed under the Down-MACRO Tradeable Trust Agreement.
"Down-MACRO Tradeable Trust Agreement" shall mean the Down-MACRO
Tradeable Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agents and the Down-MACRO Tradeable Trustee.
"Down-MACRO Tradeable Trustee" shall mean Investors Bank & Trust
Company, not in its individual capacity but solely as trustee of the Down-MACRO
Tradeable Trust.
"Down-MACRO Underlying Value" shall mean, with respect to any Price
Determination Day occurring during any Calculation Period:
(a) if the Ending Level is below the Starting Level, an amount
equal to (i) the sum of the Down-MACRO Earned Income Accruals for each day that
has elapsed during such Calculation Period, up to and including the relevant
date of determination plus (ii) the Down-MACRO Investment Amount on such date
plus (iii) (x) the Up-MACRO Investment Amount on such date multiplied by (y) the
Price Level Percentage Change for the Down-MACRO Holding Trust on such date;
(b) if the Ending Level is above the Starting Level, an amount
equal to (i) the sum of the Down-MACRO Earned Income Accruals for each day that
has elapsed during such Calculation Period, up to and including the relevant
date of determination plus (ii) the Down-MACRO Investment Amount on such date
minus (iii) (x) the Down-MACRO Investment Amount on such date multiplied by (y)
the Price Level Percentage Change for the Up-MACRO Holding Trust on such date;
and
(c) if the Ending Level is equal to the Starting Level, an amount
equal to the sum of the Down-MACRO Earned Income Accruals for each day that has
elapsed during such Calculation Period, up to and including the relevant date of
determination plus the Down-MACRO Investment Amount on such date.
The Down-MACRO Underlying Value for any Price Determination Day that is
followed by one or more days that are not Price Determination Days will include
the Down-MACRO Earned Income Accruals for each of these days, calculated on the
basis of the Applicable Reference Price of Crude Oil on the current Price
Determination Day. The Down-MACRO Underlying Value for each day that is not a
Price Determination Day will be equal to the Down-MACRO Underlying Value on the
last preceding Price Determination Day.
"DTC" shall mean The Depository Trust Company.
"DTC Participant" shall mean a participant of the Depository.
"Early Termination Date" shall mean with respect to any date of
determination, the next Distribution Date that follows the occurrence of a
Termination Trigger.
"Eligible Deposit Account" shall mean either (a) a segregated
non-interest bearing trust account with an Eligible Institution or (b) a
segregated non-interest bearing trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of
8
the securities of such depository institution shall have a credit rating from
a nationally recognized rating agency in one of its generic credit rating
categories which signifies investment grade.
"Eligible Institution" shall mean a depository institution (which may
be the Trustee or an Affiliate thereof) organized under the laws of the United
States or any one of the states thereof which at all times (i) has either (x) a
long-term unsecured debt rating of "A2" or better by Xxxxx'x Investors Service,
Inc. or (y) a certificate of deposit rating of "P-1" by Xxxxx'x Investors
Service, Inc., (ii) has either (x) a long-term unsecured debt rating of "AAA" by
Standard & Poor's Rating Service or (y) a certificate of deposit rating of
"A-l+" by Standard & Poor's Rating Service and (iii) is a member of the Federal
Deposit Insurance Corporation.
"Eligible Treasury" shall mean (i) any Eligible Treasury Security or
(ii) any Eligible Treasury Repurchase Agreement.
"Eligible Treasury Repurchase Agreement" shall mean any repurchase
agreement (i) referencing Eligible Treasury Securities and under which the
obligation of the seller thereof to repurchase such Eligible Treasury Securities
is "fully collateralized" (as defined in Rule 5b-3 under the Investment Company
Act) by such Eligible Treasury Securities, (ii) terminating within 24 hours
following its execution, (iii) denominated in U.S. dollars, and (iv) entered
into with a counterparty that is (x) a bank with at least 1 billion U.S. dollars
in assets or (y) a registered securities dealer that is deemed creditworthy by
the Administrative Agent.
"Eligible Treasury Security" shall mean any xxxx, note or bond issued
and guaranteed by the United States Department of the Treasury that matures
prior to the next scheduled Distribution Date. "Eligible Treasury Security"
shall not include any treasury inflation-protected securities, I bonds, EE/E
bonds, HH/H bonds or any other financial product of the United States Department
of the Treasury that is issued as a physical certificate.
"Ending Level" shall mean, with respect to any Price Determination Day,
the Applicable Reference Price of Crude Oil on such Price Determination Day.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Bankruptcy" shall occur with respect to any specified Person,
if:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or any substantial part of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for such Person or for any substantial part of its property, or shall
make any general assignment for the benefit of creditors; or
9
(c) the board of directors (or similar body) of such Person or the
trustee for such Person (in the case of a business or statutory trust) shall
vote to implement any of the actions set forth in clause (b) above.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Order" shall have the meaning set forth in Section 5(b) of
the Participants Agreement.
"Fee Payment Account" shall have the meaning specified in Section
3.8(a) of this Trust Agreement.
"Final Distribution" shall mean any distribution made in redemption of
all or a portion of the Up-MACRO Holding Shares pursuant to Section 5.2(a) or
5.2(c) on the Final Scheduled Termination Date, an Early Termination Date or a
Redemption Date.
"Final Scheduled Termination Date" shall mean the Distribution Date
scheduled to occur in December of 2026.
"Form 8-K" shall mean a report on Form 8-K required to be filed
pursuant to Section 13 or Section 15(d) of the Exchange Act.
"Form 10-Q" shall mean the current quarterly report on Form 10-Q
required to be filed pursuant to Section 13 or Section 15(d) of the Exchange
Act.
"Form 10-K" shall mean the current annual report on Form 10-K required
to be filed pursuant to Section 13 or Section 15(d) of the Exchange Act.
"Founders' Shares" shall mean 1,000 shares with a par value of $1 per
share, issued to MACRO Securities Depositor, LLC and Claymore Securities, Inc.,
which constitute the permanent capital of the Up-MACRO Holding Trust.
"Fund Accounting Agent" shall mean Investors Bank & Trust Company, in
its capacity as a calculation and accounting agent pursuant to Sections 4.1 and
8.1 of this Trust Agreement.
"Global Certificate" shall have the meaning set forth in Section 2.5(a)
of this Trust Agreement.
"Governmental Authority" shall mean any federal, state, local or
foreign court or arbitrator or governmental department, commission, board,
bureau, agency, authority, instrumentality or regulatory body.
"Holder" shall mean any Beneficial Owner of an Up-MACRO Holding Share
or a Down-MACRO Holding Share, as the context requires.
"Holding Share" shall mean either an Up-MACRO Holding Share or a
Down-MACRO Holding Share.
"Income Component" shall mean, for any Issuance Order Date or any
Redemption Order Date occurring during any Calculation Period, the portion of
the Per Share Underlying Value of each Up-MACRO or Down-MACRO Holding Share to
be issued on the related Issuance Date or redeemed on the related Redemption
Date that represents the Up-MACRO or Down-MACRO
10
Earned Income Accrual allocable to such share during the period from the last
preceding Distribution Date to such Issuance Order Date or Redemption Order
Date, as applicable.
"Income Distribution Agreement" shall mean the confirmation to the
Master Agreement, substantially in the form attached hereto as Exhibit B-1, and
each amendment thereto in the form of Exhibit B-2, to be dated as of the date
hereof [in the case of Exhibit B-1 and the applicable Issuance Date or
Redemption Date in the case of Exhibit B-2], pursuant to which the Paired
Holding Trusts will be obligated to make payments to each other on each
Distribution Date based on the Up-MACRO Underlying Value and the Down-MACRO
Underlying Value, respectively, and the Up-MACRO Available Income and the
Down-MACRO Available Income, respectively.
"Income Distribution Payment" shall mean, with respect to any
Distribution Date, (i) if a payment is required to be made by the Up-MACRO
Holding Trust to the Down-MACRO Holding Trust under the Income Distribution
Agreement, an Up-MACRO Income Distribution Payment or (ii) if a payment is
required to be made by the Down-MACRO Holding Trust to the Up-MACRO Holding
Trust under the Income Distribution Agreement, a Down-MACRO Income Distribution
Payment.
"Independent" shall mean, as to any Person, any other Person (including
a firm of accountants or lawyers and any member thereof) who (i) does not have
and is not committed to acquire any material direct or any material indirect
financial interest in such Person or in any Affiliate of such Person, (ii) is
not connected with such Person as an officer, employee, promoter, underwriter,
voting trustee, partner, director or Person performing similar functions and
(iii) is not Affiliated with a Person who fails to satisfy the criteria set
forth in clauses (i) and (ii). "Independent" when used with respect to any
accountant may include an accountant who audits the books of any Person if in
addition to satisfying the criteria set forth above the accountant is
independent with respect to such Person within the meaning of Rule 101 of the
Code of Ethics of the American Institute of Certified Public Accountants.
Whenever any Independent Person's opinion, certificate or report is to
be furnished hereunder, such document shall state that the signer has read this
definition and that the signer is Independent within the meaning hereof.
"Indirect Participant" shall mean a Person who is not a participant of
the Depository but who is a Beneficial Owner through a DTC Participant, either
directly or indirectly.
"Initial Deposit" shall have the meaning set forth in Section 2.1
hereof.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Issuance Date" shall have the meaning set forth in Section 6.5(a)
hereof.
"Issuance Order Date" shall have the meaning set forth in Section
6.2(b) hereof.
"Light Sweet Crude Oil Futures Contract" shall mean the NYMEX Division
Light Sweet Crude Oil Futures Contract of the Designated Maturity.
"Loss" shall have the meaning set forth in Section 9.3(b).
"MACRO Licensing Agreement" shall mean the licensing agreement, dated
as of the date hereof, substantially in the form attached hereto as Exhibit E,
among MacroMarkets LLC, the
11
Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the Up-MACRO
Tradeable Trust and the Down-MACRO Tradeable Trust, pursuant to which
MacroMarkets LLC shall license its patented MACROs technology to each of the
MACRO Trusts.
"MACRO Shares" shall mean any or all of the Up-MACRO Holding Shares,
the Down-MACRO Holding Shares, the Up-MACRO Tradeable Shares or the Down-MACRO
Tradeable Shares, as applicable.
"MACRO Trusts" shall mean any or all of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO
Tradeable Trust, as applicable.
"MACRO Trustee" shall mean any or all of the Up-MACRO Holding Trustee,
the Down-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee or the Down-MACRO
Tradeable Trustee, as applicable.
"MACRO Unit" shall mean 50,000 Up-MACRO Holding Shares and 50,000
Down-MACRO Holding Shares.
"MACROshares Website" shall mean the website maintained by the
Administrative Agent at xxxx://xxx.xxxxxxxxxxxxxxxxxxx.xxx.
"Marketing Agent Indemnified Party" shall have the meaning set forth in
Section 10.10.
"Marketing Agents" shall mean Claymore Securities, Inc., in its
capacity as marketing agent hereunder, and its successors and assigns, and MACRO
Financial, LLC, in its capacity as marketing agent hereunder, and its successors
and assigns.
"Master Agreement" shall mean the ISDA Master Agreement, dated as of
the Closing Date, between the Trustee, acting on behalf of the Up-MACRO Holding
Trust and the Down-MACRO Holding Trustee, acting on behalf of the Down-MACRO
Holding Trust, as amended and supplemented by the schedule relating thereto.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Netting Account" shall have the meaning specified in Section 3.7(a) of
this Trust Agreement.
"Net Par Amount Decrease" shall mean, with respect to any Business Day,
the net decrease in the Up-MACRO Aggregate Par Amount, after giving effect to
any Paired Issuances or Paired Optional Redemptions occurring on that Business
Day.
"Net Par Amount Increase" shall mean, with respect to any Business Day,
the net increase in the Up-MACRO Aggregate Par Amount, after giving effect to
any Paired Issuances or Paired Optional Redemptions occurring on that Business
Day.
"New York City Time" shall mean the current local time in New York, New
York.
"Notices" shall have the meaning set forth in Section 15.9(a) hereof.
"NYMEX" shall mean New York Mercantile Exchange, Inc. and its
successors and assigns.
12
"NYMEX License" shall mean the licensing agreement, dated as of
November [ ], 2006, between MacroMarkets LLC and NYMEX, pursuant to which NYMEX
will license to MacroMarkets LLC the right to use and sublicense the settlement
price of the Light Sweet Crude Oil Futures Contract.
"NYMEX Sublicensing Agreement" shall mean the sublicensing agreement,
dated as of November [ ], 2006, in substantially the form attached hereto as
Exhibit F, between MacroMarkets LLC and the Depositor and acknowledged by the
NYMEX, pursuant to which MacroMarkets LLC will sublicense to the MACRO Trusts
the right to use the settlement price of the Light Sweet Crude Oil Futures
Contract in connection with calculating and making distributions on the MACRO
Shares.
"Officer's Certificate" shall mean a certificate signed by an officer
of the Depositor that is authorized to make such certification.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and which
opinion shall be reasonably acceptable to the Trustee.
"Outstanding" shall mean, with respect to the Up-MACRO Holding Shares
or the Down-MACRO Holding Shares, as applicable, and any date of determination,
an amount equal to the aggregate number of Up-MACRO Holding Shares or Down-MACRO
Holding Shares, as applicable, issued by the Up-MACRO Holding Trust or the
Down-MACRO Holding Trust, as applicable, either on the Closing Date or in Paired
Issuances occurring prior to such date of determination minus any such Paired
Holding Shares redeemed prior to such date of determination in a Paired Optional
Redemption.
"Paired Holding Shares" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Paired Holding Trusts" shall mean the Up-MACRO Holding Trust together
with the Down-MACRO Holding Trust.
"Paired Optional Redemption" shall have the meaning set forth in
Section 6.1(a) hereof.
"Paired Issuance" shall have the meaning set forth in Section 6.2(a)
hereof.
"Participant Custodian Account" shall have the meaning set forth in the
Participants Agreement.
"Participants Agreement" shall mean the participants agreement, dated
as of the date hereof, substantially in the form attached hereto as Exhibit D,
entered into among the Depositor, the Trustee, the Down-MACRO Holding Trustee,
each of the trustees of the Tradeable Trusts, the Administrative Agent and the
Authorized Participants who may be party thereto from time to time, which
specifies certain procedures for the Paired Issuance and Paired Optional
Redemption of Paired Holding Shares and procedures for the creation and exchange
of Tradeable Shares for Holding Shares and Holding Shares for Tradeable Shares.
"Per Share Underlying Value" means, with respect to any date of
determination occurring during any Calculation Period and (i) each Up-MACRO
Holding Share, an amount calculated by dividing the Up-MACRO Underlying Value by
the number of Up-MACRO Holding Shares Outstanding on that date, (ii) each
Down-MACRO Holding Share, an amount calculated by
13
dividing the Down-MACRO Underlying Value by the number of Down-MACRO Holding
Shares Outstanding on that date, (iii) each Up-MACRO Tradeable Share, an
amount equal to the Per Share Underlying Value of one Up-MACRO Holding Share
on that date, and (iv) each Down-MACRO Tradeable Share, an amount equal to the
Per Share Underlying Value of one Down-MACRO Holding Share on that date.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, limited liability company,
limited liability partnership, joint stock company, trust, unincorporated
organization or Governmental Authority or other entity.
"Price Determination Day" shall mean each day on which the Applicable
Reference Price of Crude Oil is established.
"Price Level Percentage Change" shall mean, with respect to each Price
Determination Day, the absolute value of (x) the Ending Level on such Price
Determination Day minus the Starting Level divided by (y) the Starting Level.
"Prospectus" shall mean the prospectus, in the form filed by the
Depositor on behalf of the Up-MACRO Holding Trust and the Up-MACRO Tradeable
Trust with the SEC on or before the second Business Day after the date hereof
(or such earlier time as may be required under the Securities Act) or, if no
such filing is required, the form of final prospectus included in the
Registration Statement on and after the date on which such Registration
Statement becomes effective.
"Qualified Institutional Buyer" shall have the meaning assigned thereto
in the definition thereof contained in Rule 144A under the Securities Act, and
shall generally include any of the entities listed in such definition, acting
for its own account or the accounts of other qualified institutional buyers,
that in the aggregate owns and invests on a discretionary basis at least $100
million in securities of issuers that are not affiliated with such entity, as
calculated in accordance with Rule 144A.
"Quarterly Distribution" shall mean with respect to each Distribution
Date, the distribution to be made to the Holders of the Up-MACRO Holding Shares
that are Outstanding on the Distribution Date pursuant to priority sixth of
Section 5.2(a), which shall consist of the cash on deposit in the Up-MACRO
Holding Trust after it makes or receives a payment under the Income Distribution
Agreement and makes all other payments or investments in Eligible Treasuries
that it is required to make pursuant to such Section 5.2(a).
"Record Date" shall mean the last Business Day of each March, June,
September and December of each year, commencing in December of 2006.
"Redemption Cash Component" shall have the meaning set forth in Section
6.1(d)(ii) hereof.
"Redemption Date" shall have the meaning set forth in Section 6.4 of
this Trust Agreement.
"Redemption Order" shall have the meaning set forth in Section 4(b) of
the Participants Agreement.
"Redemption Order Date" shall have the meaning set forth in Section
6.1(b) of this Trust Agreement.
14
"Registered Owner" shall mean the Depository or a nominee thereof in
whose name the Up-MACRO Holding Shares are registered in the Share Register.
"Registration Statement" means the registration statement, file no.
333-116566, dated and filed with the SEC on November [ ], 2006, relating to the
Up-MACRO Holding Shares and Up-MACRO Tradeable Shares, as amended, supplemented
or otherwise modified from time to time.
"Requirements of Law" shall mean with respect to any Person, the
certificate of incorporation, articles of incorporation or articles of
association and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or other Governmental Authority, in each case applicable to or
binding upon such Person or to which such Person is subject, whether federal,
state or local.
"SEC" shall mean the United States Securities and Exchange Commission.
"Securities Account" shall have the meaning set forth in Section 3.5(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Settlement Contract" shall mean each confirmation, substantially in
the form attached hereto as Exhibit C, designated as a "Settlement Contract,"
referencing the Master Agreement, relating to one MACRO Unit of Paired Holding
Shares, dated as of the date on which such MACRO Unit was issued by the Paired
Holding Trusts and providing for payments between the Paired Holding Trusts on
the Final Scheduled Termination Date, an Early Termination Date or a Redemption
Date, which payments are calculated by reference to the Up-MACRO Underlying
Value and the Down-MACRO Underlying Value on the last Price Determination Day
preceding the Final Scheduled Termination Date, on the last Price Determination
Day preceding an Early Termination Date or on the relevant Redemption Date, as
applicable.
"Settlement Payment" shall mean an Up-MACRO Settlement Payment or a
Down-MACRO Settlement Payment, as applicable.
"Share Netting Subaccount" shall have the meaning set forth in Section
3.7(d) of this Trust Agreement.
"Share Register" shall have the meaning set forth in Section 2.5(e)
hereof.
"SNIR Service Agreement" shall mean the Street Name Investors Report
Service Agreement, dated as of November [ ], among the Trustee, acting on behalf
of the Up-MACRO Holding Trust, the Down-MACRO Holding Trustee, acting on behalf
of the Down-MACRO Holding Trust and Wall Street Concepts, Inc., as amended and
restated from time to time.
"SNIR Service Agent" shall mean Wall Street Concepts, Inc. in its role
as the service agent under the SNIR Service Agreement.
"Starting Level" shall mean $[60], which represents the Applicable
Reference Price of Crude Oil, rounded to the nearest ten cents, on November [ ],
2006, the last Price Determination Day prior to the Closing Date.
"Substitute Oil Price Provider" means the Dow Xxxxx Energy Service or
any other price provider selected by the Holders pursuant to Section 15.1(c) of
this Trust Agreement and Section 15.1(c) of the Down-MACRO Holding Trust
Agreement.
15
"Substitute Reference Oil Price" shall mean, with respect to any Price
Determination Day, the spot price for West Texas Intermediate Oil generated by
the Dow Xxxxx Energy Service or, if the Depositor is unable to obtain a license
for the spot price for West Texas Intermediate Oil, the Light Louisiana Sweet
Crude Oil also generated by the Dow Xxxxx Energy Service. In the event that the
Depositor is unable to obtain a license from the Dow Xxxxx Energy Service, the
crude oil price generated or determined by another Substitute Oil Price
Provider.
"Substitute Reference Price Licensing Agreement" shall mean any
licensing arrangement pursuant to which the Up-MACRO Holding Trust acquires the
right to use a Substitute Reference Oil Price for the purposes of calculating
the Up-MACRO Underlying Value under this Trust Agreement.
"Successor Administrative Agent" shall have the meaning set forth in
Section 10.6(b) hereof.
"Successor Trustee" shall have the meaning set forth in Section 13.8(b)
hereof.
"Termination Trigger" shall have the meaning set forth in Section
11.1(a) hereof.
"Tradeable Shares" shall mean the Up-MACRO Tradeable Shares and the
Down-MACRO Tradeable Shares.
"Tradeable Trusts" shall mean the Up-MACRO Tradeable Trust and the
Down-MACRO Tradeable Trust.
"Transaction Documents" shall mean this Trust Agreement, the Down-MACRO
Holding Trust Agreement, the Master Agreement, the Income Distribution
Agreement, the Settlement Contracts, the Participants Agreement, the MACRO
Licensing Agreement, the NYMEX Sublicensing Agreement, the SNIR Service
Agreement and the Calculation Agency Agreement.
"Transfer Agent and Registrar" shall have the meaning set forth in
Section 2.5(e) hereof.
"Trust Assets" shall have the meaning set forth in Section 2.1 hereof.
"Trust Officer" shall mean any officer or employee of the Trustee, in
each case having responsibility for the administration of this Trust Agreement
or authority to execute any documents on behalf of the Trustee, in its capacity
as Trustee hereunder.
"Trustee" shall mean Investors Bank & Trust Company, not in its
individual capacity but solely as Trustee under this Trust Agreement, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Trustee Indemnified Party" shall have the meaning set forth in Section
13.6 hereof.
"Trustee Termination Event" shall have the meaning set forth in Section
12.1 hereof.
"Trustees" shall mean, collectively, the Trustee and the Down-MACRO
Holding Trustee.
"UCC" shall mean the Uniform Commercial Code as amended and in effect
from time to time in the State of New York.
"Up-MACRO Administration and Marketing Fee" shall mean, with respect to
any Distribution Date, the sum of, for each day during the related Calculation
Period, an amount equal
16
to a per annum rate of 0.35% multiplied by the Up-MACRO Asset Amount on such
day, which shall be the combined fee payable to Claymore Securities, Inc., for
services rendered to the Up-MACRO Holding Trust and the Up-MACRO Tradeable
Trust.
"Up-MACRO Aggregate Par Amount" shall mean, with respect to any date of
determination, the product of (i) the aggregate number of Up-MACRO Holding
Shares that are Outstanding on such date and (ii) the Up-MACRO Stated Par
Amount.
"Up-MACRO Asset Amount" shall mean, (i) with respect to any
Distribution Date, the aggregate amount of funds on deposit in the Up-MACRO
Holding Trust on such Distribution Date, including, without limitation, all of
the maturity proceeds of the Eligible Treasuries held by the Up-MACRO Holding
Trust during the preceding Calculation Period, and (ii) with respect to any
other date of determination occurring during a Calculation Period, an amount
equal to: (A) the Up-MACRO Investment Amount plus (B) the Up-MACRO Available
Income Accrual for each day that has elapsed during such Calculation Period (not
including the date of determination) minus (C) the portion of that Up-MACRO
Available Income Accrual which was distributed in connection with all Paired
Optional Redemptions that have occurred during such Calculation Period prior to
the date of determination, plus (D) the Income Component of each Up-MACRO
Holding Share that was issued during such Calculation Period prior to the date
of determination, representing the aggregate available income that would have
accrued on the Aggregate Par Amount of the Up-MACRO Holding Shares that were
created in such Paired Issuances if cash equal to that amount had been invested
on the preceding Distribution Date.
"Up-MACRO Available Income" shall mean with respect to any Distribution
Date and the related Calculation Period, the funds remaining on deposit in the
Distribution Account after payment priorities first through fourth of Section
5.2(a) hereof have been satisfied in full.
"Up-MACRO Available Income Accrual" shall mean, on any date of
determination occurring during any Calculation Period, (i) the sum of, for each
Eligible Treasury on deposit in the Up-MACRO Holding Trust on such date, the
product of (x) the purchase price at which the Up-MACRO Holding Trust acquired
that Eligible Treasury multiplied by (y) the Daily Yield Rate applicable to that
Eligible Treasury minus (ii) the Up-MACRO Daily Fee Accrual. If the result of
the foregoing calculation is a negative number then the Up-MACRO Available
Income Accrual shall be equal to zero.
"Up-MACRO Calculation Agent Fee" shall mean, with respect to any
Distribution Date, the fee specified in the Calculation Agency Agreement, which
shall be payable to the Calculation Agent for services rendered under the
Calculation Agency Agreement to the Up-MACRO Holding Trust and the Up-MACRO
Tradeable Trust.
"Up-MACRO Daily Fee Accrual" shall mean, for any date of determination
occurring during any Calculation Period, the product of the Daily Fee Accrual
Rate and the Up-MACRO Asset Amount on such day.
"Up-MACRO Earned Income Accrual" shall mean, with respect to any date
of determination occurring during any Calculation Period:
o if on such date the Ending Level is above the Starting Level,
the Up-MACRO Available Income Accrual plus the product of (i)
the Down-MACRO Available Income Accrual on that date and (ii)
the Price Level Percentage Change on that date;
17
o if on such date the Ending Level is below the Starting Level,
the Up-MACRO Available Income Accrual minus the product of (i)
the Up-MACRO Available Income Accrual and (ii) the Price Level
Percentage Change on that date; and
o if on such date the Ending Level is equal to the Starting
Level, the Up-MACRO Available Income Accrual;
plus, if the date of determination is also an Issuance Date on
which a Net Par Amount Increase occurred, the product of the
number of Up-MACRO Holding Shares created on such date that are
part of such Net Par Amount Increase and the Income Component of
each such share,
minus, if the date of determination is also a Redemption Date on
which a Net Par Amount Decrease occurred, the product of the
number of Up-MACRO Holding Shares redeemed on such date that are
part of such Net Par Amount Decrease and the Income Component of
each such share.
The Up-MACRO Earned Income Accrual for each date of determination that is not a
Price Determination Day shall be determined by reference to the Price Level
Percentage Change on the last preceding Price Determination Day.
The Up-MACRO Earned Income Accrual for each Calculation Period shall be equal
to the sum of the Up-MACRO Earned Income Accruals for each day of that
Calculation Period up to but not including the related Distribution Date.
"Up-MACRO Expenses" shall have the meaning specified in Section 5.3 of
this Trust Agreement.
"Up-MACRO Fee Deduction Amount" shall mean, with respect to any
Calculation Period, an amount equal to the sum of, for each day during that
Calculation Period, the Up-MACRO Asset Amount as of that day multiplied by a
rate equal to 1.60% per annum for the first two years following the Closing Date
and a rate of 1.50% per annum thereafter, divided by, in each case, the actual
number of days in the current calendar year.
"Up-MACRO Fees" shall have the meaning specified in Section 5.4 of this
Trust Agreement.
"Up-MACRO Holding Shares" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Holding Trust" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Income Distribution Payment" shall mean, with respect to any
Distribution Date:
(i) if the Up-MACRO Earned Income Accrual for the preceding
Calculation Period exceeds the Up Available Income with respect to such
Distribution Date, a payment equal to zero; and
(ii) if the Up-MACRO Available Income with respect to such
Distribution Date is greater than the Up-MACRO Earned Income Accrual for the
preceding Calculation Period, a
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payment equal to the difference between such Up-MACRO Available Income and
such Up-MACRO Earned Income Accrual.
"Up-MACRO Investment Amount" shall mean, (i) with respect to any
Distribution Date, an amount equal to the amount reinvested in Eligible
Treasuries pursuant to Section 5.2(a)(iv) and (ii) with respect to any other
date of determination occurring during any Calculation Period, an amount equal
to the amount in clause (i) divided by the number of Up-MACRO Holding Shares
Outstanding on that Distribution Date multiplied by the number of Up-MACRO
Holding Shares Outstanding on that date of determination.
"Up-MACRO Licensing Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to a per annum rate of 0.10% multiplied by the Up-MACRO Asset Amount on
such day, which shall be payable to MacroMarkets LLC pursuant to the MACRO
Licensing Agreement.
"Up-MACRO Marketing Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to a per annum rate of 0.10% multiplied by the Up-MACRO Asset Amount on
such day, which shall be payable to MACRO Financial, LLC for services rendered
by it to the Up-MACRO Holding Trust and the Up-MACRO Tradeable Trust in its
capacity as Marketing Agent hereunder and under the Up-MACRO Tradeable Trust
Agreement.
"Up-MACRO Redemption Percentage" shall mean (i) with respect to any
Redemption Date, a fraction, expressed as a percentage, the numerator of which
is the aggregate number of Up-MACRO Holding Shares that are being redeemed on
such date and the denominator of which is the aggregate number of Up-MACRO
Holding Shares that are Outstanding on such date prior to giving effect to the
Redemption Order placed on such Redemption Date and prior to giving effect to
any Creation Orders that may also have been placed on such date and (ii) with
respect to an Early Termination Date or the Final Scheduled Termination Date,
100%.
"Up-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if on such Redemption Date, the last Price Determination Day
preceding such Early Termination Date, or the last Price Determination Day
preceding the Final Scheduled Termination Date, the Up-MACRO Underlying Value is
greater than or equal to the Up-MACRO Investment Amount on such date, zero; and
(b) if on such Redemption Date, the last Price Determination Day
preceding such Early Termination Date or the last Price Determination Day
preceding the Final Scheduled Termination Date, the Up-MACRO Underlying Value is
less than the Up-MACRO Investment Amount on such date, an amount equal to (i)
the excess of such Up-MACRO Investment Amount over such Up-MACRO Underlying
Value multiplied by (ii) the Up-MACRO Redemption Percentage for such Redemption
Date, Early Termination Date or Final Scheduled Termination Date.
"Up-MACRO SNIR Service Agent Fee" shall mean, with respect to any
Distribution Date, the fee specified in the SNIR Service Agreement, which shall
be payable to the SNIR Service Agent for services rendered under the SNIR
Service Agreement to the Up-MACRO Holding Trust and the Up-MACRO Tradeable
Trust.
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"Up-MACRO Stated Par Amount" shall mean the stated par amount of
$[60] per Up-MACRO Holding Share or per Up-MACRO Tradeable Share.
"Up-MACRO Structuring Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to the product of a per annum rate of 0.20% and the Up-MACRO Asset Amount
on such day, which shall be payable to MacroMarkets LLC for services rendered by
it to the Up-MACRO Holding Trust and the Up-MACRO Tradeable Trust.
"Up-MACRO Sublicensing Fee" shall mean, with respect to any
Distribution Date, the sum of, for each day during the related Calculation
Period, an amount equal to the product of a per annum rate of 0.06% and the
Up-MACRO Asset Amount on such day, which shall be payable to MacroMarkets LLC
pursuant to the NYMEX Sublicensing Agreement.
"Up-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Up-MACRO Tradeable Trust pursuant to the Up-MACRO Tradeable Trust
Agreement.
"Up-MACRO Tradeable Trust" shall mean the Claymore MACROshares Oil Up
Tradeable Trust created under the Up-MACRO Tradeable Trust Agreement.
"Up-MACRO Tradeable Trust Agreement" shall mean the Up-MACRO Tradeable
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agents and the Up-MACRO Tradeable Trustee.
"Up-MACRO Tradeable Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Up-MACRO Tradeable
Trust.
"Up-MACRO Trustee Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to the product of a per annum rate of 0.08% and the Up-MACRO Asset Amount
on such day, which shall be payable to the Trustee pursuant to this Trust
Agreement.
"Up-MACRO Underlying Value" shall mean, with respect to any date of
determination occurring during any Calculation Period:
(a) if the Ending Level is above the Starting Level, an amount
equal to (i) the sum of the Up-MACRO Earned Income Accruals for each day that
has elapsed during such Calculation Period, up to and including the relevant
date of determination plus (ii) the Up-MACRO Investment Amount for such date
plus (iii) (x) the Down-MACRO Investment Amount for such date multiplied by (y)
the Price Level Percentage Change for the Up-MACRO Holding Trust on the relevant
date of determination;
(b) if the Ending Level is below the Starting Level, an amount
equal to (i) the sum of the Up-MACRO Earned Income Accruals for each day that
has elapsed during such Calculation Period, up to and including the relevant
date of determination plus (ii) the Up-MACRO Investment Amount for such date
minus (iii) (x) the Up-MACRO Investment Amount for such date multiplied by (y)
the Price Level Percentage Change for the Down-MACRO Holding Trust on the
relevant date of determination; and
(c) if the Ending Level is equal to the Starting Level, an amount
equal to the sum of the Up-MACRO Earned Income Accruals for each day that has
elapsed during such Calculation
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Period, up to and including the relevant date of determination plus the
Up-MACRO Investment Amount on such date.
The Up-MACRO Underlying Value for any Price Determination Day that is
followed by one or more days that are not Price Determination Days will include
the Up-MACRO Earned Income Accruals for each of these days, calculated on the
basis of the Applicable Reference Price of Crude Oil on the current Price
Determination Day. The Up-MACRO Underlying Value for each day that is not a
Price Determination Day will be equal to the Up-MACRO Underlying Value on the
last preceding Price Determination Day.
"Value" shall mean, with respect to any Eligible Treasury Security on
deposit at any time in either of the Paired Holding Trusts, the purchase price
at which the applicable Paired Holding Trust acquired that Eligible Treasury
Security plus all interest and/or discount accrued on that Eligible Treasury
Security since its acquisition date.
"Yield Rate" shall mean, with respect to any Eligible Treasury on
deposit at any time in either of the Paired Holding Trusts, the stated interest
rate of such Eligible Treasury, if any, or any discount rate applicable to such
Eligible Treasury, based on the purchase date and purchase price at which the
applicable Paired Holding Trust acquired that Eligible Treasury.
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the
defined meanings when used in any share, certificate or other document made or
delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any share,
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Trust Agreement or in any such share,
certificate or other document, and accounting terms partly defined in this
Trust Agreement or in any such share, certificate or other document to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions
of accounting terms in this Trust Agreement or in any such share, certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Trust Agreement or in any such share, certificate or other document shall
control.
(c) The agreements, representations and warranties of MACRO
Securities Depositor, LLC in this Trust Agreement in its capacity as Depositor
shall be deemed to be the agreements, representations and warranties of MACRO
Securities Depositor, LLC solely in such capacity for so long as MACRO
Securities Depositor, LLC acts in such capacity under this Trust Agreement.
(d) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
(e) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Trust Agreement shall refer to this Trust
Agreement as a whole and not to any particular provision of this Trust
Agreement; references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or
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to this Trust Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
ARTICLE 2
CREATION AND DECLARATION OF THE TRUST;
THE INITIAL DEPOSIT; FORM OF THE CERTIFICATES;
DELIVERY AND REGISTRATION OF TRANSFER
OF UP-MACRO HOLDING SHARES
Section 2.1 Initial Deposit. Concurrently with the execution of
this Trust Agreement, each of the Depositor and the Administrative Agent shall
transfer to the Up-MACRO Holding Trust, immediately available funds in the
amount of $500 (for a total initial deposit of $1,000 (the "Initial Deposit"))
in exchange for 1,000 Founders' Shares, of which 500 shall be issued to the
Depositor and 500 shall be issued to the Administrative Agent, which is a
wholly-owned subsidiary of Claymore Group, Inc., one of the members of the
Depositor. The Initial Deposit shall be held in trust for the Depositor and
the Administrative Agent and, upon the first Paired Issuance of Paired Holding
Shares, such Initial Deposit shall be transferred back to the Depositor and
the Administrative Agent and the Founders' Shares shall be cancelled. At no
time shall the Initial Deposit be included in the calculation of the Up-MACRO
Asset Amount or any other calculation performed at any time pursuant to
Article 4 or Article 8 of this Trust Agreement. The Securities Account and the
Eligible Treasuries on deposit therein, from time to time, the Distribution
Account, the Fee Payment Account and the Netting Account and all monies and
any other assets on deposit from time to time therein, the Up-MACRO Holding
Trust's rights under the Master Agreement, the SNIR Service Agreement, the
Income Distribution Agreement, the Settlement Contracts (whether executed on
the Closing Date or on any Issuance Date), the MACRO Licensing Agreement, the
NYMEX Sublicensing Agreement and any Substitute Reference Price Licensing
Agreement, shall collectively constitute the assets of the Up-MACRO Holding
Trust (the "Trust Assets").
Section 2.2 Acceptance by Trustee. The Trustee hereby (i)
acknowledges its acceptance on behalf of the Up-MACRO Holding Trust of all
right and title to and interest in the Trust Assets, both now existing and
hereafter created, and (ii) declares that it shall maintain such right, title
and interest, upon the Up-MACRO Holding Trust herein set forth, for the
benefit of all Holders of the Up-MACRO Holding Shares.
Upon the execution of this Trust Agreement, the Trustee is hereby
directed to cause the Up-MACRO Holding Trust to enter with the Down-MACRO
Holding Trust into the Master Agreement, the SNIR Service Agreement, the
Income Distribution Agreement and, at the direction of the Administrative
Agent, one Settlement Contract for each MACRO Unit of Paired Holding Shares
created on the Closing Date and, at the direction of the Administrative Agent,
additional Settlement Contracts on each day on which there is a Net Par Amount
Increase in Paired Holding Shares as a result of Paired Issuances.
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust. The
Up-MACRO Holding Trust shall not engage in any business or activity other than
those specified in this Section 2.3 or any activity that is incidental and
necessary to carrying out the business or activities enumerated by this
Section 2.3 The exclusive purposes and functions of the Up-MACRO Holding Trust
consist of:
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(i) issuing the Founders' Shares on the Closing Date and
cancelling such shares concurrently with the first issuance of
Up-MACRO Holding Shares;
(ii) issuing Up-MACRO Holding Shares in Paired Issuances
and redeeming Up-MACRO Holding Shares in Paired Optional Redemptions
on a continuous basis in accordance with the provisions and subject
to the conditions set forth in this Trust Agreement;
(iii) entering into the Income Distribution Agreement and
the Settlement Contracts with the Down-MACRO Holding Trust;
(iv) entering into the other Transaction Documents with
the other parties thereto; and
(v) investing cash available from time to time in the
Distribution Account in Eligible Treasuries.
Section 2.4 Representations and Warranties of the Depositor. The
Depositor hereby makes the following representations and warranties to the
Up-MACRO Holding Trust (and agrees that the Trustee may rely on each such
representation and warranty in accepting the Initial Deposit in the Up-MACRO
Holding Trust and in authenticating the Up-MACRO Holding Shares) as of the
Closing Date and each Issuance Date:
(a) Organization and Good Standing. The Depositor is a limited
liability company validly existing and in good standing under the laws of the
State of Delaware and has full power, authority and legal right to own its
properties and conduct its business as such properties are presently owned and
such business is presently conducted, and to execute, deliver and perform its
obligations under this Trust Agreement.
(b) Due Qualification. The Depositor is duly qualified to do
business and is in good standing as a foreign company (or is exempt from such
requirements) and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would result in the transfer of the Initial Deposit to the Up-MACRO
Holding Trust by the Depositor or the performance by the Depositor of its
obligations under this Trust Agreement to violate any applicable law and would
have a material adverse effect on the interests of the Holders of the Up-MACRO
Holding Shares hereunder.
(c) Due Authorization. The execution, delivery and performance
of this Trust Agreement by the Depositor, the execution and delivery to the
Trustee of the Up-MACRO Holding Shares by the Depositor and the consummation
by the Depositor of the transactions provided for in this Trust Agreement and
the performance of its obligations hereunder have been duly authorized by the
Depositor by all necessary action on the part of the Depositor and this Trust
Agreement will remain, from the time of its execution, an official record of
the Depositor.
(d) No Conflict. The execution and delivery by the Depositor of
this Trust Agreement and the Up-MACRO Holding Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement and the
fulfillment by the Depositor of the terms hereof will not conflict with,
result in any breach of any of the material terms and provisions of, or
constitute (with or without notice or lapse of time or both) a material
default
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under, any indenture, contract, agreement, mortgage, deed of trust, or other
instrument to which the Depositor is a party or by which it or any of its
properties are bound.
(e) No Violation. The execution and delivery by the Depositor
of this Trust Agreement and the Up-MACRO Holding Shares, the performance by
the Depositor of the transactions contemplated by this Trust Agreement and its
obligations hereunder and the fulfillment by the Depositor of the terms hereof
will not conflict with or violate any Requirements of Law applicable to the
Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Depositor, threatened against the
Depositor before any Governmental Authority (i) asserting the invalidity of
this Trust Agreement or the Up-MACRO Holding Shares, (ii) seeking to prevent
the issuance of the Up-MACRO Holding Shares or the consummation of any of the
transactions contemplated by this Trust Agreement or the Up-MACRO Holding
Shares, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Depositor, would materially and adversely affect the
performance by the Depositor of its obligations under this Trust Agreement,
(iv) seeking any determination or ruling that would materially and adversely
affect the validity or enforceability of this Trust Agreement or the Up-MACRO
Holding Shares or (v) seeking to affect adversely the income tax attributes of
the Up-MACRO Holding Trust under the federal or applicable state income or
franchise tax systems.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by the
Depositor of this Trust Agreement and the Up-MACRO Holding Shares, the
performance by the Depositor of the transactions contemplated by this Trust
Agreement and its obligations hereunder and the Up-MACRO Holding Shares and
the fulfillment by the Depositor of the terms hereof and thereof have been
obtained.
(h) Bankruptcy; Insolvency. No Event of Bankruptcy with respect
to the Depositor has occurred which would materially and adversely affect the
validity or enforceability of this Trust Agreement or the Up-MACRO Holding
Shares, and the transfer of the Initial Deposit by the Depositor to the
Up-MACRO Holding Trust has not been made in contemplation of the occurrence
thereof.
(i) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect which affect the enforcement of
creditors' rights in general, and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity).
(j) No Conflicting Claim. Neither the Depositor nor any Person
claiming through or under the Depositor has any claim to or interest in the
Securities Account, the Distribution Account or the Netting Account.
The representations and warranties of the Depositor set forth in
this Section 2.4 shall survive the transfer and deposit by the Depositor of
the Initial Deposit to the Up-MACRO Holding Trust and shall be deemed to be
made on each Issuance Date. Upon discovery by the Depositor, the Trustee or
the Administrative Agent of a breach of any of the representations and
warranties by the Depositor set forth in this Section 2.4, the party
discovering such breach shall
24
give prompt written notice to the other parties hereto. The Depositor agrees
to cooperate with the Trustee and the Administrative Agent in attempting to
cure any such breach.
Section 2.5 Form of Shares; Book-Entry System; Transferability of
Up-MACRO Holding Shares.
(a) Form of Shares. The Up-MACRO Holding Shares shall be
evidenced by one or more global certificates substantially in the form set
forth in Exhibit A attached hereto, with appropriate insertions, modifications
and omissions as hereinafter provided (each such certificate, a "Global
Certificate"). No Up-MACRO Holding Shares shall be entitled to any benefits
under this Trust Agreement or be valid or obligatory for any purpose unless a
Global Certificate evidencing those Up-MACRO Holding Shares has been executed
by the Trustee by the manual or facsimile signature of a duly authorized
signatory of the Trustee and countersigned by the manual or facsimile
signature of a duly authorized officer of the Depositor. The Trustee shall
maintain books on which the registered ownership of each Global Certificate
and transfers, if any, of such registered ownership shall be recorded. Global
Certificates evidencing the Up-MACRO Holding Shares bearing the manual or
facsimile signature of a duly authorized signatory of the Trustee and the
manual or facsimile signature of a duly authorized officer of the Depositor,
if applicable, who was, at the time such Global Certificates were executed, a
proper signatory of the Trustee or the Depositor, as applicable, shall bind
the Trustee, notwithstanding that such signatory has ceased to hold such
office prior to the delivery of such Global Certificates. The Global
Certificates may be endorsed with or have incorporated in the text thereof
such legends or recitals or modifications not inconsistent with the provisions
of this Trust Agreement as may be required by the Trustee or required to
comply with any applicable law or regulations promulgated thereunder or with
the rules and regulations of any securities exchange upon which the Up-MACRO
Holding Shares may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which the
Up-MACRO Holding Shares are subject.
The Founders' Shares and the beneficial ownership thereof by the
Depositor and the Administrative Agent shall be recorded on the books and
records maintained by the Trustee on behalf of the Up-MACRO Holding Trust and
no physical certificates shall be issued in respect of such Founders' Shares.
Concurrently with the first Paired Issuance of Paired Holding Shares, the
Founders' Shares shall be cancelled and shall not thereafter be reissued.
(b) Book-Entry Settlement. The Depositor and the Trustee shall
apply to the Depository for acceptance of the Global Certificates in its
book-entry settlement system. The Global Certificates shall be deposited with
the Trustee, as the custodian for the Depository, shall be registered in the
name of Cede & Co., as nominee for the Depository, and shall bear the
following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE
"DEPOSITORY"), TO THE AGENT AUTHORIZED BY THE DEPOSITOR FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
25
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
So long as the Up-MACRO Holding Shares are eligible for book-entry
settlement with the Depository, (i) no Beneficial Owner of Up-MACRO Holding
Shares will be entitled to receive a physical certificate evidencing those
shares, (ii) the interest of a Beneficial Owner in the Up-MACRO Holding Shares
will be shown only on, and transfer of that interest will be effected only
through, records maintained by the Depository or a DTC Participant or Indirect
Participant through which the Beneficial Owner holds that interest and (iii)
the rights of a Beneficial Owner of Up-MACRO Holding Shares will be exercised
only to the extent allowed by, and in compliance with, the arrangements in
effect between such Beneficial Owner and the Depository or the DTC Participant
or Indirect Participant through which that Beneficial Owner holds an interest
in the Up-MACRO Holding Shares.
As provided in the Depository Agreement, upon the settlement date
for any creation, transfer or redemption of the Up-MACRO Holding Shares, the
Depository will credit or debit, on its book-entry registration and transfer
system, the amount of Up-MACRO Holding Shares so created, transferred or
redeemed to the accounts of the appropriate DTC Participants. The accounts to
be credited and charged shall be designated by the Trustee, as instructed by
the Administrative Agent and the applicable Holder of Up-MACRO Holding Shares.
The Beneficial Owners of the Up-MACRO Holding Shares will be shown on, and the
transfer of beneficial ownership by Beneficial Owners will be effected only
through, in the case of DTC Participants, records maintained by the Depository
and, in the case of Indirect Participants and Beneficial Owners holding
through a DTC Participant or an Indirect Participant, through those records or
the records of the relevant DTC Participants. Beneficial Owners are expected
to receive from or through the broker or bank that maintains the account
through which the Beneficial Owner has purchased Up-MACRO Holding Shares a
written confirmation relating to their purchase of Up-MACRO Holding Shares.
Upon the settlement date for any creation, transfer, redemption or
exchange of Up-MACRO Holding Shares, the Trustee shall make a notation on
Schedule A attached to the Global Certificate indicating the resulting Net Par
Amount Increase or Net Par Amount Decrease in the Aggregate Par Amount of
Outstanding Up-MACRO Holding Shares represented by such Global Certificate.
Upon the settlement date for a transfer of a Global Certificate to a new
Registered Owner as described in clause (e)(ii) of this Section 2.5, the
Trustee shall cancel such Global Certificate and issue a new Global
Certificate in the name of such transferee Registered Owner.
The Depository may discontinue providing its services with respect
to the Up-MACRO Holding Shares by giving notice to the Trustee, the
Administrative Agent and the Depositor pursuant to and in conformity with the
provisions of the Depository Agreement and discharging its responsibilities
with respect thereto under applicable law. In such event, the Trustee, the
Administrative Agent and the Depositor shall seek to find a replacement for
the Depository to perform the functions thereof on terms acceptable to the
Administrative Agent and the Depositor. If no such replacement can be found or
is willing to assume the duties of the Depository, then a Termination Trigger
will occur pursuant to Section 11.1 of this Trust Agreement.
(c) Notices to Beneficial Owners. As described above, the
Trustee will recognize the Depository or its nominee as the owner of all
Up-MACRO Holding Shares for all purposes except as expressly set forth in this
Trust Agreement. Conveyance of all
26
notices, statements and other communications required to be delivered to
Beneficial Owners will be effected as follows: The Administrative Agent shall
inquire of each such DTC Participant as to the number of Beneficial Owners
holding Up-MACRO Holding Shares, directly or indirectly, through such DTC
Participant. The Administrative Agent shall provide each such DTC Participant
with sufficient copies of such notice, statement or other communication, in
such form, number and at such place as such DTC Participant may reasonably
request, in order that such notice, statement or communication may be
transmitted by such DTC Participant, directly or indirectly, to such
Beneficial Owners. In addition, the Up-MACRO Holding Trust shall reimburse
each such DTC Participant for the expenses attendant to such transmittal,
subject to applicable statutory and regulatory requirements.
(d) Distributions on Book-Entry Certificates. All distributions
on the Up-MACRO Holding Shares shall be made to the Depository or its nominee,
Cede & Co., as the registered owner of all Up-MACRO Holding Shares. The
Trustee and the Depositor expect that the Depository or its nominee, upon
receipt of any distributions made in respect of the Up-MACRO Holding Shares,
shall credit immediately the DTC Participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the Up-MACRO
Holding Shares as shown on the records of the Depository or its nominee. The
Trustee and the Depositor also expect that payments by DTC Participants to
Indirect Participants and Beneficial Owners held through such DTC Participants
and Indirect Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts
of customers in bearer form or registered in a "street name," and shall be the
responsibility of such DTC Participants and Indirect Participants. None of the
Trustee, the Depositor or the Administrative Agent shall have any
responsibility or liability for any aspects of the records relating to or
notices to Beneficial Owners, or payments made on account of beneficial
ownership interests in the Up-MACRO Holding Shares, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests or for any other aspect of the relationship between the Depository
and the DTC Participants or the relationship between such DTC Participants and
the Indirect Participants and Beneficial Owners owning through such DTC
Participants or Indirect Participants or between or among the Depository, any
Beneficial Owner and any Person by or through which such Beneficial Owner is
considered to own Up-MACRO Holding Shares.
(e) Registration of Transfer; Restrictions on Transfer.
(i) The Trustee shall cause to be kept at its Corporate
Trust Office a register (the "Share Register") in which, subject to
such reasonable regulations as it may prescribe, a transfer agent and
registrar (the "Transfer Agent and Registrar") shall provide for the
registration of the Up-MACRO Holding Shares and of transfers and
exchanges of such shares as herein provided. The Transfer Agent and
Registrar shall initially be the Trustee. The Depositor may revoke
such appointment and remove any Transfer Agent and Registrar if the
Depositor determines in its sole discretion that such Transfer Agent
and Registrar failed to perform the responsibilities of the Transfer
Agent and Registrar set forth in this Trust Agreement in any material
respect. Any Transfer Agent and Registrar shall be permitted to
resign as Transfer Agent and Registrar upon thirty (30) days' notice
to the Depositor and the Trustee; provided, however, that such
resignation shall not be effective and such Transfer Agent and
Registrar shall continue to perform its duties as Transfer Agent and
Registrar until the Trustee has appointed a successor Transfer Agent
and Registrar reasonably acceptable to the Depositor.
27
(ii) Transfers of the Global Certificates shall be limited
to transfers of such Global Certificates in whole, but not in part,
to nominees of the Depository or to a successor of the Depository or
such successor's nominee. When a Global Certificate is presented for
registration of transfer, the Depositor shall execute, the Trustee
shall authenticate and the Transfer Agent and Registrar shall
register one or more new Global Certificates in the name of the
designated transferee or transferees. Each Global Certificate
presented for registration of transfer shall be accompanied by a
written instrument of transfer in a form satisfactory to the Trustee
or the Transfer Agent and Registrar duly executed by the Registered
Owner or the attorney-in-fact thereof duly authorized in writing. No
service charge shall be made for any registration of transfer or
exchange of Up-MACRO Holding Shares, but the Transfer Agent and
Registrar may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
such transfer or exchange.
No sale or transfer of beneficial interests in the Up-MACRO
Holding Shares may be made to (i) any Beneficial Owner who is not
either a Qualified Institutional Buyer or an Authorized Participant
or (ii) any Person who is a Benefit Plan Investor. Each Beneficial
Owner of an Up-MACRO Holding Share shall be deemed to represent and
warrant, by virtue of acquiring an interest in the Up-MACRO Holding
Shares, that it is either (i) an Authorized Participant or (ii) a
Qualified Institutional Buyer and that it is not a Benefit Plan
Investor.
(f) Mutilated, Destroyed, Lost or Stolen Shares. If (a) any
mutilated Global Certificate is surrendered to the Transfer Agent and
Registrar, or the Transfer Agent and Registrar receives evidence to
its satisfaction of the destruction, loss or theft of any Global
Certificate and (b) there is delivered to the Transfer Agent and
Registrar and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then in the absence
of notice to the Trustee that such Global Certificate has been
acquired by a bona fide purchaser, the Depositor shall execute, the
Trustee shall authenticate and the Transfer Agent and Registrar shall
deliver, in exchange for or in lieu of any such mutilated, destroyed,
lost or stolen Global Certificate, a new Global Certificate of like
tenor and aggregate beneficial interest. In connection with the
issuance of any new Global Certificate under this Section 2.5(f), the
Trustee or the Transfer Agent and Registrar may require the payment
by the Registered Owner of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and
the Transfer Agent and Registrar) connected therewith. Any duplicate
Global Certificate issued pursuant to this Section 2.5(f) shall
constitute complete and indefeasible evidence of ownership in the
Up-MACRO Holding Trust, as if originally issued, whether or not the
lost, stolen or destroyed Global Certificate shall be found at any
time.
ARTICLE 3
APPOINTMENT OF THE TRUSTEE,
ADMINISTRATIVE AGENT AND MARKETING AGENTS;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the
Trustee.
(a) Investors Bank & Trust Company agrees to act as Trustee,
Fund Accounting Agent, Custodian, Transfer Agent and Registrar under this
Trust Agreement and has concurrently agreed to act as the Down-MACRO Holding
Trustee under the Down-MACRO Holding Trust Agreement, the Up-MACRO Tradeable
Trustee under the Up-
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MACRO Tradeable Trust Agreement and the Down-MACRO Tradeable Trustee under the
Down-MACRO Tradeable Trust Agreement. The Holders of the Up-MACRO Holding
Shares, by their acceptance of their shares, consent to Investors Bank & Trust
Company acting as Trustee under this Trust Agreement and as trustee for the
Down-MACRO Holding Trust under the Down-MACRO Holding Trust Agreement, as
trustee for the Up-MACRO Tradeable Trust under the Up-MACRO Tradeable Trust
Agreement and as trustee for the Down-MACRO Tradeable Trust under the
Down-MACRO Tradeable Trust Agreement.
(b) Subject to the limited purposes and functions of the
Up-MACRO Holding Trust specified in Section 2.3 hereof, the Trustee is hereby
authorized, instructed and empowered (i) to make withdrawals and payments or
to instruct any paying agent or custodian appointed by the Trustee to make
withdrawals and payments from the Securities Account, the Distribution
Account, the Fee Payment Account and the Netting Account as set forth in this
Trust Agreement, (ii) to enter into the Income Distribution Agreement, the
Settlement Contracts, the Participants Agreement, the MACRO Licensing
Agreement, the NYMEX Sublicensing Agreement and any other agreement relating
to the powers and purposes of the Up-MACRO Holding Trust, (iii) to purchase
Eligible Treasuries (including entering into Eligible Treasury Repurchase
Agreements) on behalf of the Up-MACRO Holding Trust at the direction of the
Administrative Agent, (iv) to make daily, quarterly and annual calculations on
behalf of the Up-MACRO Holding Trust, and (v) to take any action required or
permitted under the Income Distribution Agreement, the Settlement Contracts,
the Participants Agreement, the MACRO Licensing Agreement and the NYMEX
Sublicensing Agreement, and any action needed for the daily operation of the
Up-MACRO Holding Trust. Without limiting the generality of the foregoing and
with the prior written consent of the Depositor, the Trustee is hereby
authorized and empowered to make any filings, reports, notices, applications
and registrations with, and to seek any consents or authorizations from, the
SEC and any state securities authority on behalf of the Up-MACRO Holding Trust
as may be necessary or advisable to comply with any federal or state
securities laws or reporting requirements; provided, however, that, the
Depositor shall make all filings with the SEC and under state securities laws
on behalf of the Up-MACRO Holding Trust to the extent required to do so
hereby.
(c) The Trustee shall be entitled to be reimbursed for any
expenses incurred by it, with the prior approval of the Depositor or the
Administrative Agent, in connection with the performance of its duties under
this Trust Agreement, including, without limitation, the fees and
disbursements of any custodian, Transfer Agent and Registrar, the reasonable
fees and expenses of its legal counsel, the fees and disbursements of
Independent accountants, and the expenses associated with failed Creation
Orders or Redemption Orders under the Participants Agreement. If so requested
by the Depositor or the Administrative Agent, the Trustee may expend its own
funds on behalf of the Up-MACRO Holding Trust and shall be reimbursed therefor
on the next scheduled Distribution Payment Date.
Section 3.2 Representations, Warranties and Covenants of the
Trustee. Investors Bank & Trust Company, in its capacity as initial Trustee
under this Trust Agreement, hereby makes, and any successor Trustee by its
appointment hereunder shall make, on the Closing Date (or on the applicable
date of appointment), the following representations, warranties and covenants
to the Up-MACRO Holding Trust (and agrees that the Depositor, the
Administrative Agent and the Holders of the Up-MACRO Holding Shares may rely
on each such representation, warranty and covenant):
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(a) Organization and Good Standing. The Trustee is a
Massachusetts trust company and a wholly-owned subsidiary of a bank holding
company (or with respect to any successor Trustee, such other corporate entity
as may be applicable), duly organized, validly existing and in good standing
under the laws of the Commonwealth of Massachusetts (or with respect to any
successor Trustee, under the laws of the applicable jurisdiction of
organization), and has full trust power, authority and legal right to execute,
deliver and perform its obligations under this Trust Agreement and, in all
material respects, to own its properties and conduct its business as such
properties are presently owned and as such business is presently conducted.
(b) Due Qualification. The Trustee is duly qualified to do
business and is in good standing as a foreign trust company (or is exempt from
such requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such licenses
and approvals would have a material adverse effect on the interests of the
Holders of the Up-MACRO Holding Shares hereunder.
(c) Due Authorization. The execution, delivery, and performance
of this Trust Agreement has been duly authorized by the Trustee by all
necessary trust action on the part of the Trustee.
(d) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Trustee, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect, affecting the enforcement of creditors' rights in
general and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust
Agreement by the Trustee, the performance of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof applicable to the
Trustee, will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any Requirement of Law
applicable to the Trustee or any indenture, contract, agreement, mortgage,
deed of trust or other instrument to which the Trustee is a party or by which
it or any of its properties are bound.
(f) No Proceedings. There are no proceedings or investigations
pending or threatened against the Trustee before any Governmental Authority
seeking to prevent the issuance of the Up-MACRO Holding Shares or the
consummation of any of the transactions contemplated by this Trust Agreement,
seeking any determination or ruling that, in the reasonable judgment of the
Trustee, would materially and adversely affect the performance by the Trustee
of its obligations under this Trust Agreement, or seeking any determination or
ruling that would materially and adversely affect the validity or
enforceability of this Trust Agreement.
(g) Compliance with Requirements of Law. The Trustee shall duly
satisfy all of its obligations and duties under this Trust Agreement and shall
maintain in effect all qualifications and will comply in all material respects
with all of the Requirements of Law in connection with its duties hereunder,
inasmuch as a failure to comply with such requirements would have a material
adverse effect on the interests of the Holders of the Up-MACRO Holding Shares.
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(h) Protection of the Rights of Holders of the Up-MACRO Holding
Shares. The Trustee shall take no action which, nor omit to take any action
the omission of which, would materially impair the rights of Holders of the
Up-MACRO Holding Shares, nor shall it revise amounts to be distributed on the
Up-MACRO Holding Shares.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any Governmental
Authority required in connection with the execution and delivery by the
Trustee of this Trust Agreement, the performance by the Trustee of the
transactions contemplated by this Trust Agreement and the fulfillment by the
Trustee of the terms hereof, have been obtained; provided, however, that the
Trustee makes no representation or warranty regarding state securities or
"blue sky" laws in connection with the distribution of the Up-MACRO Holding
Shares.
(j) No Affiliation. The Trustee is not an Affiliated Person
with respect to the Depositor, either of the Paired Holding Trusts, either of
the Tradeable Trusts, the Administrative Agent, either Marketing Agent or any
Authorized Participant, and it is not an Affiliated Person with respect to any
Person who is an Affiliated Person with respect to any of the foregoing
entities; further, the Trustee does not, and will not for so long as it acts
as Trustee hereunder, offer or provide credit or credit enhancement to any of
the MACRO Trusts.
(k) Eligibility Requirements. The Trustee meets, and shall at
all times during which it acts as Trustee hereunder meet, the eligibility
requirements set forth in Section 13.7 hereof.
(l) No Holding of MACRO Shares. The Trustee shall not, for so
long as it acts as Trustee hereunder, acquire any Up-MACRO Holding Shares,
Down-MACRO Holding Shares, Up-MACRO Tradeable Shares or Down-MACRO Tradeable
Shares for its own account.
(m) Maintenance of Records and Books of Account. The Trustee
shall maintain and implement administrative and operating procedures
(including the ability to recreate records evidencing any transaction entered
into by the Up-MACRO Holding Trust in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, computer
records and other information, reasonably necessary or advisable. Such
documents, books and computer records shall reflect all facts giving rise to
such transactions, all payments and credits with respect thereto, and, to the
extent required, such documents, books and computer records shall indicate the
interests of the Up-MACRO Holding Trust in such transactions.
Section 3.3 Acceptance of Appointment and Matters Relating to the
Administrative Agent and the Marketing Agents.
(a) Claymore Securities, Inc. agrees to act as Administrative
Agent under this Agreement and the Holders of the Up-MACRO Holding Shares by
their acceptance of their shares consent to Claymore Securities, Inc. acting
as Administrative Agent under this Trust Agreement and as administrative agent
for the Down-MACRO Holding Trust under the Down-MACRO Holding Trust Agreement,
for the Up-MACRO Tradeable Trust under the Up-MACRO Tradeable Trust Agreement,
and for the Down-MACRO Tradeable Trust under the Down-MACRO Tradeable Trust
Agreement. Claymore Securities, Inc. and MACRO Financial, LLC each agree to
act as a Marketing Agent under this Trust Agreement and the Holders of the
Up-MACRO Holding Shares by their acceptance of their shares consent to each of
Claymore Securities, Inc. and MACRO Financial, LLC acting as a Marketing Agent
under
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this Trust Agreement and as a marketing agent for the Down-MACRO Holding
Trust under the Down-MACRO Holding Trust Agreement, for the Up-MACRO Tradeable
Trust under the Up-MACRO Tradeable Trust Agreement and for the Down-MACRO
Tradeable Trust under the Down-MACRO Tradeable Trust Agreement.
(b) The Administrative Agent shall direct the Trustee (i) in
investing all cash on deposit from time to time in the Distribution Account
and cash received from Authorized Participants in connection with Paired
Issuances in Eligible Treasuries, (ii) in investing the proceeds from such
Eligible Treasuries and (iii) in selecting Eligible Treasuries for delivery to
the Down-MACRO Holding Trust to make settlement payments under the Settlement
Contracts and to Holders to make a Final Distribution in accordance with the
terms set forth in this Trust Agreement and its customary and established
procedures relating to administering Eligible Treasuries and other comparable
investments. The Administrative Agent shall also direct the Trustee (i) in
amending the Income Distribution Agreement pursuant to Section 6.3(c) and (d),
and (ii) in settling and terminating settlement contracts in connection with
Paired Optional Redemptions and entering into new settlement contracts in
connection with Paired Issuances, in each case, on a net basis, as determined
pursuant to Section 6.3(c). The Administrative Agent shall also at all times
maintain the MACROshares Website. The Administrative Agent shall have full
power and authority, acting alone or through any party properly designated by
it hereunder, to do any and all things in connection with instructing the
Trustee in the administration, reinvestment, and delivery of the Eligible
Treasuries which it may deem necessary or desirable. The Administrative Agent
shall not be obligated to use separate offices, employees or accounts for
directing the administration of the Eligible Treasuries. The Depositor and the
Trustee shall furnish to the Administrative Agent any powers of attorney or
other documents necessary or appropriate to enable the Administrative Agent to
carry out its administrative duties hereunder.
(c) The Administrative Agent shall comply with and perform its
administrative obligations (i) with respect to the Eligible Treasuries in
accordance with Section 6.1 and Section 6.8 and (ii) set forth in the Up-MACRO
Tradeable Trust Agreement and the Down-MACRO Holding Trust Agreement in
accordance with the terms of each such agreement and the Holders of the
Up-MACRO Holding Shares shall be third party beneficiaries of the
Administrative Agent's covenants to perform its obligations under such
agreements.
(d) Each Marketing Agent shall comply with and perform its
obligations with respect to the Up-MACRO Holding Shares in accordance with the
terms of a separate letter agreement entered into between the Depositor and
each such Marketing Agent.
(e) As compensation for acting as the Administrative Agent and
a Marketing Agent, Claymore Securities, Inc. will be entitled to receive the
Up-MACRO Administration and Marketing Fee, which shall be payable to it in
arrears on each Distribution Payment Date. The Administrative Agent shall not
be liable for the transaction costs incurred in connection with the
acquisition of the Eligible Treasuries, but shall be liable for its overhead
expenses related to its selection and administration of the Eligible
Treasuries that are required to be undertaken by it pursuant to this Trust
Agreement.
(f) As compensation for acting as a Marketing Agent, MACRO
Financial, LLC will be entitled to receive the Up-MACRO Marketing Fee, which
shall be payable to it in arrears on each Distribution Payment Date.
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Section 3.4 Representations, Warranties and Covenants of the
Administrative Agent and the Marketing Agents(a).
(a) Claymore Securities, Inc., in its capacity as the
Administrative Agent, hereby makes, and any successor Administrative Agent by
its appointment hereunder shall make, on the Closing Date (or on the date of
any such appointment), the following representations, warranties and covenants
to the Up-MACRO Holding Trust (and agrees that the Depositor and the Trustee
may rely on each such representation, warranty and covenant in fulfilling
their respective duties hereunder):
(i) Organization and Good Standing. The Administrative
Agent is a Kansas corporation (or with respect to any successor
Administrative Agent, such other corporate entity as may be
applicable) duly organized, validly existing and in good standing
under the laws of the State of Kansas (or with respect to any
successor Administrative Agent, the applicable jurisdiction of its
organization), and has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this
Trust Agreement and, in all material respects, to own its properties
and conduct its business as such properties are presently owned and
as such business is presently conducted.
(ii) Due Qualification. The Administrative Agent is duly
qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has obtained
all necessary licenses and approvals in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would
have a material adverse effect on the interests of the Holders of the
Up-MACRO Holding Shares hereunder.
(iii) Due Authorization. The execution, delivery and
performance of this Trust Agreement has been duly authorized by the
Administrative Agent by all necessary corporate action on the part of
the Administrative Agent.
(iv) Binding Obligation. This Trust Agreement constitutes
a legal, valid and binding obligation of the Administrative Agent,
enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(v) No Violation. The execution and delivery of this Trust
Agreement by the Administrative Agent, the performance of the
transactions contemplated by this Trust Agreement and the fulfillment
of the terms hereof applicable to the Administrative Agent will not
conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any Requirement of
Law applicable to the Administrative Agent or any indenture,
contract, agreement, mortgage, deed of trust or other instrument to
which the Administrative Agent is a party or by which it or any of
its properties are bound.
(vi) No Proceedings. There are no proceedings or
investigations pending or threatened against the Administrative Agent
before any Governmental Authority seeking to prevent the consummation
of any of the transactions
33
contemplated by this Trust Agreement, seeking any determination or
ruling that, in the reasonable judgment of the Administrative Agent,
would materially and adversely affect the performance by the
Administrative Agent of its obligations under this Trust Agreement,
or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Trust
Agreement.
(vii) Compliance with Requirements of Law. The
Administrative Agent shall duly satisfy all obligations on its part
to be fulfilled under or in connection with the Eligible Treasuries
and the Securities Account, will maintain in effect all
qualifications required under Requirements of Law in order to
properly service the Eligible Treasuries and the Securities Account
and will comply in all material respects with all other Requirements
of Law in connection with servicing the Eligible Treasuries and the
Securities Account, inasmuch as the failure to comply with such
requirements would have a material adverse effect on the interests of
the Holders of the Up-MACRO Holding Shares.
(viii) Protection of the Rights of the Holders of the
Up-MACRO Holding Shares. The Administrative Agent shall take no
action which, nor omit to take any action the omission of which,
would substantially impair the rights of the Holders of the Up-MACRO
Holding Shares in any Eligible Treasury.
(ix) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any
Governmental Authority required in connection with the execution and
delivery by the Administrative Agent of this Trust Agreement, the
performance by the Administrative Agent of the transactions
contemplated by this Trust Agreement and the fulfillment by the
Administrative Agent of the terms hereof, have been obtained;
provided, however, that the Administrative Agent makes no
representation or warranty regarding state securities or "blue sky"
laws in connection with the distribution of the Up-MACRO Holding
Shares.
(b) Claymore Securities, Inc. and MACRO Financial, LLC, each in
its capacity as a Marketing Agent hereunder, hereby make, and any successor
Marketing Agent by its appointment hereunder shall make, on the Closing Date
(or on the date of any such appointment), the following representations,
warranties and covenants to the Up-MACRO Holding Trust (and agrees that the
Depositor and the Trustee may rely on each such representation, warranty and
covenant in fulfilling their respective duties hereunder):
(i) Organization and Good Standing. Claymore Securities,
Inc. is a Kansas corporation and MACRO Financial, LLC is a Delaware
limited liability company (or with respect to any successor Marketing
Agent, such other corporate entity as may be applicable) duly
organized, validly existing and in good standing under the laws of
the State of Kansas and Delaware, as applicable (or with respect to
any successor Marketing Agent, the applicable jurisdiction of its
organization), and each of them has full corporate or other power,
authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and, in all material respects,
to own its properties and conduct its business as such properties are
presently owned and as such business is presently conducted.
(ii) Due Qualification. Each Marketing Agent is duly
qualified to do business and is in good standing as a foreign
corporation (or is exempt from such requirements), and has obtained
all necessary licenses and approvals in each jurisdiction in which
failure to so qualify or to obtain such licenses and approvals would
34
have a material adverse effect on the interests of the Holders of the
Up-MACRO Holding Shares hereunder.
(iii) Due Authorization. The execution, delivery and
performance of this Trust Agreement has been duly authorized by each
Marketing Agent by all necessary corporate or other action.
(iv) Binding Obligation. This Trust Agreement constitutes
a legal, valid and binding obligation of each of the Marketing
Agents, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect, affecting the enforcement of creditors' rights in general and
except as such enforceability may be limited by general principles of
equity (whether considered in a suit at law or in equity).
(v) No Violation. The execution and delivery of this Trust
Agreement by each of the Marketing Agents, the performance of the
transactions contemplated by this Trust Agreement and the fulfillment
of the terms hereof applicable to each Marketing Agent, will not
conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or
lapse of time or both) a material default under, any Requirement of
Law applicable to either Marketing Agent or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which
either Marketing Agent is a party or by which it or any of its
properties are bound.
(vi) No Proceedings. There are no proceedings or
investigations pending or threatened against either Marketing Agent
before any Governmental Authority seeking to prevent the consummation
of any of the transactions contemplated by this Trust Agreement,
seeking any determination or ruling that, in the reasonable judgment
of such Marketing Agent, would materially and adversely affect the
performance by it of its obligations under this Trust Agreement, or
seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Trust
Agreement.
(vii) All Consents Required. All approvals,
authorizations, consents, orders or other actions of any Person or of
any Governmental Authority required in connection with the execution
and delivery by each Marketing Agent of this Trust Agreement, the
performance by each Marketing Agent of the transactions contemplated
by this Trust Agreement and the fulfillment by each Marketing Agent
of the terms hereof, have been obtained; provided, however, that
neither Marketing Agent makes any representation or warranty
regarding state securities or "blue sky" laws in connection with the
distribution of the Up-MACRO Holding Shares.
Section 3.5 Establishment of the Securities Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust and for the benefit of the
Holders of the Up-MACRO Holding Shares, an Eligible Deposit Account bearing a
designation clearly indicating that the Eligible Treasuries deposited therein
are held for the benefit of the Holders of the Up-MACRO Holding Shares (the
"Securities Account").
35
(b) The Securities Account shall initially be established with
the Trustee. The Trustee shall possess all right, title and interest in and to
all of the Eligible Treasuries on deposit from time to time in the Securities
Account and in all proceeds thereof for the benefit of the Holders of the
Up-MACRO Holding Shares.
(c) The Securities Account shall be under the sole dominion and
control of the Trustee for the benefit of the Holders of the Up-MACRO Holding
Shares. Except as expressly provided in this Trust Agreement, each of the
Depositor, the Administrative Agent and the Trustee agree that it shall have
no right of set-off or banker's lien against, and no right to otherwise deduct
from, any funds or assets held in the Securities Account for any amount owed
to it by the Up-MACRO Holding Trust or any Holder of Up-MACRO Holding Shares.
If at any time the Securities Account ceases to be an Eligible Deposit
Account, the Trustee shall within twenty (20) Business Days establish a new
account, transfer any cash or any investments to such new account, and from
the date such new account is established it shall be the "Securities Account"
for purposes of this Trust Agreement.
(d) The Trustee shall, in accordance with instructions received
from the Administrative Agent, invest the funds of the Up-MACRO Holding Trust
in Eligible Treasuries and deposit such Eligible Treasuries into the
Securities Account, (i) on each Distribution Date, using the maturity proceeds
of the Eligible Treasuries on deposit in the Distribution Account on such
Distribution Date in the amount specified in Section 5.2(a)(iv), (ii) on each
Issuance Date, using the funds delivered to the Trustee by Authorized
Participants in connection with the Paired Issuance that is being effected on
such Issuance Date, but excluding funds that are required to remain in the
Netting Account pursuant to Section 3.7 hereof to be used for effecting Paired
Optional Redemptions and (iii) on any other day during the course of any
Calculation Period, using any proceeds of the Eligible Treasuries received on
or prior to that day.
(e) On each Distribution Date, the Trustee shall transfer to
the Distribution Account all of the maturity proceeds of the Eligible
Treasuries that were on deposit in the Securities Account during the preceding
Calculation Period.
(f) On any Redemption Date occurring on a date that is not a
Distribution Date, the Trustee shall, if so instructed by the Administrative
Agent, withdraw the portion of the Eligible Treasuries on deposit in the
Securities Account that is specified by the Administrative Agent with respect
to such Redemption Date, as determined by the Administrative Agent pursuant to
Section 6.4 hereof, and shall deliver such assets in the amounts and to the
parties entitled thereto, as specified in Section 5.2(c).
Section 3.6 Establishment of the Distribution Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust and for the benefit of the
Holders of the Up-MACRO Holding Shares, an Eligible Deposit Account bearing a
designation clearly indicating that the funds deposited therein are held for
the benefit of the Holders of the Up-MACRO Holding Shares (the "Distribution
Account").
(b) The Distribution Account shall initially be established
with the Trustee. The Trustee shall possess all right, title and interest in
and to all funds on deposit from time to time in the Distribution Account and
in all proceeds thereof. The Distribution Account shall be under the sole
dominion and control of the Trustee for the benefit of the Holders of the
Up-MACRO Holding Shares.
36
(c) Except as expressly provided in this Trust Agreement, each
of the Depositor, the Administrative Agent and the Trustee agree that it shall
have no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Distribution Account for any amount owed to
it by the Up-MACRO Holding Trust or any Holder of Up-MACRO Holding Shares. If,
at any time, the Distribution Account ceases to be an Eligible Deposit
Account, the Trustee shall within twenty (20) Business Days establish a new
account, transfer any cash or any investments to such new account, and from
the date such new account is established, it shall be the "Distribution
Account" for purposes of this Trust Agreement.
(d) The Trustee shall deposit into the Distribution Account on
or prior to each Distribution Date, on each Redemption Date and on each
Issuance Date, (i) all maturity proceeds, interest and other income received
on the Eligible Treasuries held in the Securities Account during any
Calculation Period, (ii) all payments received by the Up-MACRO Holding Trust
under the Income Distribution Agreement, (iii) all payments received by the
Up-MACRO Holding Trust under the Settlement Contracts, and (iv) funds
delivered by Authorized Participants in connection with Paired Issuances or
Redemption Cash Components delivered in connection with Paired Optional
Redemptions, which are not immediately used to acquire Eligible Treasuries.
(e) Not later than the Distribution Payment Date that follows
each Distribution Date, including any Distribution Date that is also the Final
Scheduled Termination Date or an Early Termination Date, the Trustee shall
withdraw all funds on deposit in the Distribution Account and shall apply such
funds for the purposes and in accordance with the priorities specified in
Section 5.2(a). On each Redemption Date, the Trustee shall withdraw cash on
deposit in the Distribution Account and deliver it to the Authorized
Participant or Authorized Participants who directed the Paired Optional
Redemption to the extent directed to do so by the Administrative Agent and in
the amount that is determined by the Administrative Agent pursuant to Section
6.4 hereof.
Section 3.7 Establishment of the Netting Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust and for the benefit of the
Holders of the Up-MACRO Holding Shares, an Eligible Deposit Account bearing a
designation that the funds deposited therein are held for the benefit of the
Holders of the Up-MACRO Holding Shares (the "Netting Account"), which shall
consist of the Cash Netting Subaccount and the Share Netting Subaccount.
(b) The Netting Account shall initially be established with the
Trustee. The Trustee shall possess all right, title and interest in and to all
funds on deposit from time to time in the Netting Account and in all proceeds
thereof. The Netting Account shall be under the sole dominion and control of
the Trustee for the benefit of the Holders of the Up-MACRO Holding Shares.
(c) On any Issuance Date that is also a Redemption Date, the
Trustee shall deposit all cash received from the Authorized Participants who
directed the Paired Issuance into a subaccount of the Netting Account (the
"Cash Netting Subaccount") and shall distribute such funds as follows:
(i) On any Issuance Date that was also a Redemption Date,
in the event of a Net Par
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Amount Decrease, all cash deposited and, in the event of a Net Par
Amount Increase, the difference between the aggregate funds delivered
by Authorized Participants in connection with such Paired Issuances
and the Net Par Amount Increase that will result after giving effect
thereto will be delivered by the Trustee, at the direction of the
Administrative Agent pursuant to Section 6.4 of this Trust Agreement,
to the Authorized Participants who directed Paired Optional
Redemptions as part of the Final Distribution on the Up-MACRO Holding
Shares that is required to be made on such Redemption Date.
(ii) On any Issuance Date that was also a Redemption Date,
the Trustee shall withdraw funds from the Cash Netting Subaccount in
an amount equal to the Net Par Amount Increase that occurred on such
Issuance Date and it shall invest such funds in Eligible Treasuries,
on behalf of the Up-MACRO Holding Trust and at the direction of the
Administrative Agent. Pending such investment, such funds will be
deposited into the Distribution Account.
(d) On any Issuance Date that is also a Redemption Date, the Trustee shall
credit all Up-MACRO Holding Shares to be redeemed to a subaccount of
the Netting Account (the "Share Netting Subaccount") and shall net such
Up-MACRO Holding Shares against the Up-MACRO Holding Shares to be
issued as follows:
(i) if there is a positive difference between the number
of shares to be redeemed and the number of shares to be issued, the
Trustee shall cancel the number of Up-MACRO Holding Shares equal to
such positive difference and deliver all remaining Up-MACRO Holding
Shares credited to the Share Netting Account to the Authorized
Participants who directed the issuance of such shares; or
(ii) if there is a positive difference between the number
of shares to be issued and the number of shares to be redeemed, the
Trustee shall cause the Up-MACRO Holding Trust to issue new Up-MACRO
Holding Shares in the amount of such positive difference and deliver
such newly-issued Up-MACRO Holding Shares and all Up-MACRO Holding
Shares credited to the Share Netting Account to the Authorized
Participants who directed the issuance of such shares.
(e) No cash and no Up-MACRO Holding Shares shall remain on
deposit in the Netting Account at the end of each Business Day.
Section 3.8 Establishment of the Fee Payment Account.
(a) The Trustee shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust, an Eligible Deposit Account
bearing a designation that the funds deposited therein are held for the
benefit of the Depositor (the "Fee Payment Account").
(b) The Fee Payment Account shall initially be established with
the Trustee. The Trustee shall possess all right, title and interest in and to
all funds on deposit from time to time in the Fee Payment Account and in all
proceeds thereof. The Fee Payment Account shall be under the sole dominion and
control of the Trustee for the benefit of the Depositor.
(c) On each Distribution Date, the Trustee shall deposit an
amount equal to the Up-MACRO Fee Deduction Amount into the Fee Payment Account
and shall use such funds, based on standing instructions from the Depositor,
to pay all Up-MACRO
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Expenses and all Up-MACRO Fees pursuant to priorities first and second of
Section 5.2(a) on the related Distribution Payment Date.
(d) On each Distribution Payment Date, all funds remaining on
deposit in the Fee Payment Account after the Up-MACRO Expenses and Up-MACRO
Fees have been paid in full shall be delivered by the Trustee to the
Depositor.
ARTICLE 4
CALCULATIONS
Section 4.1 Calculations on Price Determination Days.
(a) With respect to each Price Determination Day, the Trustee
shall calculate and provide to the Administrative Agent and the Calculation
Agent, within four (4) hours of the time when the Applicable Reference Price
Provider has publicly disseminated the Applicable Reference Price of Oil on
its website or by means of another applicable medium, the following data:
(i) the Per Share Underlying Value of the Up-MACRO Holding
Shares on that Price Determination Day;
(ii) the Income Component of the Per Share Underlying
Value calculated in clause (i);
(iii) the estimated Up-MACRO Available Income Accrual for
the next succeeding Business Day.
(b) On each Price Determination Day, the Trustee shall
calculate and provide to the Administrative Agent for posting on the
MACROshares Website, within four (4) hours of the time when the Applicable
Reference Price Provider has published the Applicable Reference Price of Crude
Oil on its website or by means of another applicable medium, the Per Share
Underlying Value of an Up-MACRO Holding Share and an Up-MACRO Tradeable Share
and each other calculation required pursuant to Section 8.1 hereof, subject to
the availability of, and based upon (i) the Applicable Reference Price of
Crude Oil for such Price Determination Day, and (ii) the calculations of the
Down-MACRO Holding Trustee pursuant to Section 8.1 of the Down-MACRO Holding
Trust Agreement.
For purposes of calculating the foregoing amounts on any Price
Determination Day, any Paired Optional Redemptions or Paired Issuances
scheduled to settle on such Price Determination Day shall be taken into
account.
(c) The Trustee's calculations, pursuant to clauses (a) and (b)
of this Section 4.1 shall be conclusive and binding upon the Holders of the
Up-MACRO Holding Shares, the Holders of the Down-MACRO Holding Shares, the
holders of the Up-MACRO Tradeable Shares, the holders of the Down-MACRO
Tradeable Shares and all other Persons.
Section 4.2 Calculation of Intraday Indicative Values.
Intraday indicative values for the Up-MACRO Underlying Value of
the Up-MACRO Holding Trust and the Per Share Underlying Value for the Up-MACRO
Holding Shares
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and the Up-MACRO Tradeable Shares based on the intraday trading
prices of the Applicable Reference Price of Crude Oil will be calculated by
the Calculation Agent under the Calculation Agency Agreement based upon the
Applicable Reference Price of Crude Oil and the data provided to the
Calculation Agent by the Trustee pursuant to Section 4.1 hereof and by the
Down-MACRO Holding Trustee pursuant to Section 4.1 of the Down-MACRO Holding
Trust Agreement.
Section 4.3 Calculation of Income Distribution Payments and
Settlement Payments.
(a) Within four (4) hours of the time when the Applicable
Reference Price Provider has published the Applicable Reference Price of Crude
Oil on its website or by means of another applicable medium (i) on the last
Price Determination Day preceding each Distribution Date, the Trustee shall
calculate the Up-MACRO Income Distribution Payment, if any, that the Up-MACRO
Holding Trust is required to make to the Down-MACRO Holding Trust on the
related Distribution Payment Date or the Down-MACRO Income Distribution
Payment, if any, that the Down-MACRO Holding Trust is required to make to the
Up-MACRO Holding Trust on the related Distribution Payment Date pursuant to
the Income Distribution Agreement. The Trustee shall perform the calculations
described in this Section 4.3(a) (including, without limitation, with respect
to an Early Termination Date) by assuming that the Applicable Reference Price
of Crude Oil for any Price Determination Day on which such price was not
available or on which the Up-MACRO Holding Trust was no longer permitted to
use such price was the same as the Applicable Reference Price of Crude Oil on
the last preceding Price Determination Day on which such price was available
or permitted to be used by the Up-MACRO Holding Trust.
(b) Within four (4) hours of the time when the Applicable
Reference Price Provider has published the Applicable Reference Price of Crude
Oil on its website or by means of another applicable medium (i) on the last
Price Determination Day preceding the Final Scheduled Termination Date or any
Early Termination Date or (ii) on the Price Determination Day on which a
Paired Optional Redemption settles, the Trustee shall calculate and provide to
the Administrative Agent (i) the Up-MACRO Settlement Payment, if any, required
to be made by the Up-MACRO Holding Trust to the Down-MACRO Holding Trust under
the Settlement Contracts that are being settled in connection with such Final
Scheduled Termination Date, Early Termination Date or Redemption Date or (ii)
the Down-MACRO Settlement Payment, if any, required to be made by the
Down-MACRO Holding Trust to the Up-MACRO Holding Trust under the Settlement
Contracts that are being settled in connection with such Final Scheduled
Termination Date, Early Termination Date or Redemption Date. The Trustee shall
perform the calculations described in this Section 4.3(b) (including, without
limitation, with respect to an Early Termination Date) by assuming that the
Applicable Reference Price of Crude Oil for any Price Determination Day on
which such price was not available or on which the Up-MACRO Holding Trust was
no longer permitted to use such price was the same as the Applicable Reference
Price of Crude Oil on the last preceding Price Determination Day on which such
price was available or permitted to be used by the Up-MACRO Holding Trust.
(c) The Trustee shall confirm the Administrative Agent's
determination of the Redemption Cash Component, if any, that must be delivered
by the redeeming Authorized Participants in connection with a Paired Optional
Redemption not later than the Redemption Order Date for such Paired Optional
Redemption.
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ARTICLE 5
DISTRIBUTIONS ON THE UP-MACRO HOLDING SHARES
Section 5.1 Rights of Holders of the Up-MACRO Holding Shares. Each
Up-MACRO Holding Share represents an undivided beneficial interest in the
Up-MACRO Holding Trust and the Beneficial Owner thereof is entitled to receive
distributions on such Up-MACRO Holding Share on the dates and in the amounts
specified in Section 5.2 from assets on deposit in the Up-MACRO Holding Trust.
Section 5.2 Priority of Payments.
(a) Allocations on each Distribution Date. On each Distribution
Date, the Trustee, on behalf of the Up-MACRO Holding Trust, shall allocate the
amounts on deposit in the Distribution Account, including without limitation
amounts deposited therein pursuant to Section 5.5(b) and Section 5.6(b), in
accordance with the following priority of payments:
(i) first, for deposit of an amount equal to the Up-MACRO
Fee Deduction Amount into the Fee Payment Account for application to
the payment of Up-MACRO Expenses incurred during the preceding
Calculation Period in accordance with Section 5.3 hereunder;
(ii) second, the amount remaining in the Fee Payment
Account after the payment of Up-MACRO Expenses, for the payment of
the Up-MACRO Fees incurred during the preceding Calculation Period in
accordance with Section 5.4 hereunder;
(iii) third, if such Distribution Date is an Early
Termination Date, the Final Scheduled Termination Date or a
Redemption Order Date for all or a portion of the Up-MACRO Holding
Shares, to segregate funds in an amount equal to the product of (A)
all funds remaining after satisfying priorities first and second of
this Section 5.2(a) and (B) the applicable Up-MACRO Redemption
Percentage, for application of such funds (A) to make the Up-MACRO
Settlement Payment to the Down-MACRO Holding Trust if any such
payment is owed under the Settlement Contracts being settled on such
date and then (B) to make a Final Distribution to the Holders of the
Up-MACRO Holding Shares being redeemed on such date;
(iv) fourth, for reinvestment in Eligible Treasuries of an
amount equal to the lesser of (x) the Up-MACRO Aggregate Par Amount
on such Distribution Date (after deducting an amount equal to the
Aggregate Par Amount of the Up-MACRO Holding Shares being redeemed on
such Distribution Date), and (y) all funds remaining after satisfying
priorities first through third of this Section 5.2(a);
(v) fifth, for making the Up-MACRO Income Distribution
Payment to the Down-MACRO Holding Trust, if such a payment is due
under the Income Distribution Agreement; and
(vi) sixth, for distribution as the Quarterly Distribution
on the Distribution Payment Date that follows such Distribution Date
all funds that are remaining after satisfying priorities first
through fifth of this Section 5.2(a) to those
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Holders of the Up-MACRO Holding Shares who are listed on the books
and records of the Depository as Beneficial Owners on the related
Record Date.
(b) Quarterly Distributions. On the Distribution Payment Date
that follows each Distribution Date, the Trustee shall distribute to each
Person who was a Registered Owner of the Up-MACRO Holding Shares as of the
Record Date that preceded such Distribution Payment Date the Quarterly
Distribution provided for under priority sixth of clause (a) above in cash,
for delivery thereof by the Depository to each Person who was a Beneficial
Owner of Up-MACRO Holding Shares on such Record Date.
(c) Final Distributions.
(i) On the Distribution Payment Date that follows the
Final Scheduled Termination Date or an Early Termination Date, the
Trustee shall distribute to each Person who was a Registered Owner of
the Up-MACRO Holding Shares as of the Record Date that preceded such
Distribution Payment Date the Final Distribution provided for under
priority third of clause (a) above in cash, for delivery thereof by
the Depository to each Person who was a Beneficial Owner of Up-MACRO
Holding Shares on such Record Date.
(ii) On the Redemption Date for a Paired Optional
Redemption directed on a Distribution Date, the Trustee shall
distribute to each Authorized Participant who directed such Paired
Optional Redemption the Final Distribution provided for under
priority third of clause (a) above in cash.
(iii) On the settlement date for any Paired Optional
Redemption directed on any Redemption Order Date that was not a
Distribution Date the Trustee shall distribute the Final Distribution
for such Redemption Order Date to each Authorized Participant who
directed such Paired Optional Redemption using cash and/or Eligible
Treasuries, as directed by the Administrative Agent. In the event
that insufficient cash is on deposit in the Netting Account and the
Distribution Account to effect any Paired Optional Redemption, the
Trustee, as instructed by the Administrative Agent, will identify a
portion of the Eligible Treasuries on deposit in the Securities
Account such that the Value of the Eligible Treasuries so identified
is equal to the product of the applicable Up-MACRO Redemption
Percentage for such Paired Optional Redemption and the Up-MACRO Asset
Amount on the Redemption Order Date or the portion thereof that is
not available to be delivered in cash. The Trustee, as instructed by
the Administrative Agent, will then deliver Eligible Treasuries and
cash with a Value equal to the Up-MACRO Settlement Payment that is
owed, if any, under each Settlement Contract that is being settled in
connection with such Paired Optional Redemption to the Down-MACRO
Holding Trustee and deliver the remaining Eligible Treasuries that
were segregated, together with the Down-MACRO Settlement Payment, if
any, that was received from the Down-MACRO Holding Trust, to the
Authorized Participants who delivered the Redemption Order on such
Redemption Order Date in accordance with the procedures specified in
Section 6.1(d).
Section 5.3 Payment of Expenses. On each Distribution Payment Date,
the Trustee, on behalf of the Up-MACRO Holding Trust, shall apply funds on
deposit in the Fee Payment Account to pay the following expenses (such
expenses, the "Up-MACRO Expenses"):
(i) taxes, and any other governmental charges;
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(ii) to the Administrative Agent, the expenses of
negotiating the purchase of Eligible Treasuries pursuant to Section
6.8 (exclusive of any expenses required to be borne by the Depositor
or Authorized Participants, as provided herein or in the Participants
Agreement in connection with Paired Optional Redemptions and Paired
Issuances);
(iii) any taxes, fees and charges relating to each Paired
Issuance or Paired Optional Redemption of Paired Holding Shares
and/or Up-MACRO and Down-MACRO Tradeable Shares (exclusive of fees
and expenses required to be borne by Authorized Participants
directing the Paired Optional Redemptions or Paired Issuances);
(iv) legal expenses and auditing expenses of the Up-MACRO
Holding Trust and the Up-MACRO Tradeable Trust;
(v) registration fees incurred in complying with the
public registration requirements for the Up-MACRO Holding Shares and
the Up-MACRO Tradeable Shares;
(vi) expenses incurred in connection with complying with
the reporting obligations of the Up-MACRO Holding Trust and the
Up-MACRO Tradeable Trust under the federal securities laws;
(vii) ongoing reporting obligations;
(viii) expenses relating to the distribution of offering
and marketing materials relating to the initial issuance and to any
Paired Issuances; and
(ix) any other expenses of the Up-MACRO Holding Trust or
the Up-MACRO Tradeable Trust not otherwise described above which are
incurred by either trust, or on behalf of either trust by the
Depositor, the Trustee, the Up-MACRO Tradeable Trustee, and the
Administrative Agent pursuant to actions permitted or required under
this Trust Agreement, the Up-MACRO Tradeable Trust Agreement or the
service provider fee letters, as applicable.
The Trustee shall be responsible for recording all expenses
incurred by it on behalf of, or in the course of, administering the Up-MACRO
Holding Trust.
To the extent that funds on deposit in the Fee Payment Account are
insufficient to pay all of the foregoing expenses, each of Claymore
Securities, Inc., MacroMarkets LLC and MACRO Financial, LLC shall waive their
respective fees, as provided in Section 5.4 hereof. In the event that any
expenses remain unpaid after Claymore Securities, Inc., MacroMarkets LLC and
MACRO Financial, LLC have each waived their respective fees in full, the
Depositor shall pay the unpaid portion of such Up-MACRO Expenses on behalf of
the Up-MACRO Holding Trust and the Up-MACRO Tradeable Trust.
Section 5.4 Payment of Fees. On each Distribution Payment Date,
after all Up-MACRO Expenses have been paid, the Trustee, on behalf of the
Up-MACRO Holding Trust, shall apply the remaining funds on deposit in the Fee
Payment Account to pay the following fees (collectively, the "Up-MACRO Fees"):
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(i) to the Trustee, the Up-MACRO Trustee Fee that has
accrued during the preceding Calculation Period [(which will include
the expenses associated with settling the purchase of Eligible
Treasuries)];
(ii) to Claymore Securities, Inc., for acting as the
Administrative Agent and a Marketing Agent, the Up-MACRO
Administration and Marketing Fee that has accrued during the
preceding Calculation Period;
(iii) to MacroMarkets LLC, the Up-MACRO Licensing Fee for
the preceding Calculation Period;
(iv) to MacroMarkets LLC, the Up-MACRO Structuring Fee
that has accrued during the preceding Calculation Period;
(v) to MACRO Financial, LLC, the Up-MACRO Marketing Fee
that has accrued during the preceding Calculation Period;
(vi) to the Calculation Agent, the Up-MACRO Calculation
Agent Fee that has accrued during the preceding Calculation Period;
(vii) to the SNIR Service Agent, the Up-MACRO SNIR Service
Agent Fee that has accrued during the preceding Calculation Period;
(viii) to MacroMarkets LLC, the Up-MACRO Sublicensing Fee
for the preceding Calculation Period; and
(ix) fees payable to any other entities which have
provided services to the Up-MACRO Holding Trust or the Up-MACRO
Tradeable Trust during the preceding Calculation Period.
To the extent that funds on deposit in the Fee Payment Account are
insufficient to pay all of the foregoing fees, each of Claymore Securities,
Inc., MacroMarkets LLC and MACRO Financial, LLC shall waive their respective
fees, ratably based upon the amount of the fees due to each of them (provided,
that MacroMarkets LLC shall not waive the Up-MACRO Sublicensing Fee). In the
event that any fees remain unpaid after Claymore Securities, Inc.,
MacroMarkets LLC and MACRO Financial, LLC have each waived their respective
fees in full, the Depositor shall be required to pay such unpaid fees on
behalf of the Up-MACRO Holding Trust and the Up-MACRO Tradeable Trust.
Any funds that remain on deposit in the Fee Payment Account after
payment of all Up-MACRO Expenses and Up-MACRO Fees on any Distribution Payment
Date shall be delivered by the Trustee to the Depositor.
Section 5.5 Payments under the Income Distribution Agreement.
(a) On each Distribution Payment Date, in accordance with
priority fifth of Section 5.2(a) and the terms of the Income Distribution
Agreement, the Trustee shall cause the Up-MACRO Holding Trust to pay to the
Down-MACRO Holding Trust the Up-MACRO Income Distribution Payment, from
amounts on deposit in the Distribution Account, if any such payment is owed by
the Up-MACRO Holding Trust with respect to the related Distribution Date, as
calculated pursuant to Section 4.3(a) hereof. If the Up-MACRO Holding Trust
has no Up-MACRO Available Income on such Distribution Date, then the Up-MACRO
44
Holding Trust shall not be required to make any payment under the Income
Distribution Agreement on such Distribution Date or on any subsequent date and
no interest shall accrue on any such unpaid amounts.
(b) On each Distribution Payment Date, Trustee shall deposit
any Down-MACRO Income Distribution Payment received from the Down-MACRO
Holding Trust under the Income Distribution Agreement into the Distribution
Account for application in accordance with Section 5.2(a) on such Distribution
Date.
Section 5.6 Payments under the Settlement Contracts.
(a) On the Final Scheduled Termination Date or an Early
Termination Date, in accordance with priority third of Section 5.2(a) and the
terms of the Settlement Contracts, the Trustee shall, on the related
Distribution Payment Date, cause the Up-MACRO Holding Trust to make the
Up-MACRO Settlement Payment to the Down-MACRO Holding Trust from amounts on
deposit in the Distribution Account if any such payment is owed by the
Up-MACRO Holding Trust with respect to the related Distribution Date, as
calculated pursuant to Section 4.3(b) hereof. On each Redemption Date, the
Trustee, as instructed by the Administrative Agent, shall cause the Up-MACRO
Holding Trust to make an Up-MACRO Settlement Payment, if any such payment is
due under the Settlement Contracts being settled on such Redemption Date.
(b) In connection with the Final Scheduled Termination Date, an
Early Termination Date or any Redemption Order Date, any Down-MACRO Settlement
Payment received from the Down-MACRO Holding Trust under the Settlement
Contracts on the Distribution Payment Date that follows such Final Scheduled
Termination Date or an Early Termination Date or on the related Redemption
Date shall be deposited into the Distribution Account (i) for application in
accordance with Section 5.2(a) on the applicable Distribution Payment Date or
(ii) to be used to effect the Paired Optional Redemption on the Redemption
Date related to such Redemption Order Date.
ARTICLE 6
REDEMPTIONS AND ISSUANCES OF HOLDING SHARES;
THE ADMINISTRATION AND REINVESTMENT OF THE ELIGIBLE TREASURIES
Section 6.1 Paired Optional Redemptions.
(a) On any Price Determination Day occurring after the Closing
Date but prior to the Final Scheduled Termination Date or an Early Termination
Date, any Authorized Participant may direct the redemption of Paired Holding
Shares by delivering a Redemption Order to the Administrative Agent and
satisfying the conditions set forth in this Section 6.1 (such redemption, a
"Paired Optional Redemption"). The Authorized Participant directing the Paired
Optional Redemption must be the Beneficial Owner of the Paired Holding Shares
or the Up-MACRO and Down-MACRO Tradeable Shares which are being tendered for
redemption, as shown on the records of the Depository. Only Authorized
Participants may direct Paired Optional Redemptions. Up-MACRO Holding Shares
will be redeemed at their Per Share Underlying Value, as calculated on the
Redemption Order Date on which the related Redemption Order was delivered;
provided, that, in the case of any Redemption Order placed on a Distribution
Date or on the Business Day succeeding a Distribution Date, such Final
Distribution will also include Up-MACRO and Down-MACRO Earned Income Accruals
for
45
each intervening day between the Redemption Order Date and the Redemption
Date calculated on the basis of the Applicable Reference Price of Crude Oil on
the Redemption Order Date.
(b) Subject to the procedures and requirements specified in the
Participants Agreement, the redeeming Authorized Participants may effect a
Paired Optional Redemption by delivering a Redemption Order to the
Administrative Agent on any day that is a Price Determination Day (such date,
a "Redemption Order Date") not later than the earlier of (i) 2:00 p.m. New
York City Time, (ii) half an hour prior to the end of trading in the Light
Sweet Crude Oil Futures Contracts or prior to the time as of which any
Substitute Reference Oil Price is determined by the Applicable Reference Price
Provider or (iii) the unanticipated close of trading of the Light Sweet Crude
Oil Futures Contracts or of the Substitute Reference Oil Price. Following the
Redemption Order Date, the redeeming Authorized Participant must transfer to
the Trustee, not later than the date and time specified in the Participants
Agreement, (i) the requisite number of Paired Holding Shares constituting at
least one MACRO Unit or integral multiples thereof or the requisite number of
Tradeable Shares which upon their exchange for their underlying Holding
Shares, will constitute at least one MACRO Unit or integral multiples thereof,
(ii) the applicable Redemption Cash Component, if any, and (iii) the
transaction fee described in clause (e) of this Section 6.1, and provide
written or electronic evidence of the required transfer of shares and the
required deposit of immediately available funds to the Administrative Agent in
accordance with the Participants Agreement.
(c) The Administrative Agent shall reject any Redemption Order
(i) if the Administrative Agent determines that the Redemption Order is not in
the required form, (ii) if Paired Holding Shares or Up-MACRO and Down-MACRO
Tradeable Shares constituting at least one or more whole MACRO Units are not
tendered to the Trustee for redemption, (iii) if the Depositor has determined,
based upon an opinion of counsel, and advised the Trustee, that such
Redemption Order would have adverse tax or securities laws consequences for
either of the Paired Holding Trust, the Up-MACRO Tradeable Trust or Down-MACRO
Tradeable Trust, the Holders of the Paired Holding Shares or the Holders of
the Up-MACRO Tradeable Shares or Down-MACRO Tradeable Shares, (iv) if the
acceptance or receipt of the Redemption Order would, in the opinion of counsel
to the Depositor acceptable to the Trustee, be unlawful, (v) if any such
redemption would cause the Up-MACRO Tradeable Trust to hold fifty percent or
less of the Outstanding Up-MACRO Holding Shares, (vi) if circumstances outside
the control of the Trustee, the Depositor or the Administrative Agent make it
impractical or not feasible to process the Redemption Order on the Redemption
Order Date or the Redemption Date, or (vii) if the Down-MACRO Holding Trustee
has notified the Trustee that it has rejected the related Redemption Order or
the related Exchange Order delivered under the Down-MACRO Holding Trust
Agreement for one of the reasons described in Section 6.1(c) of the Down-MACRO
Holding Trust Agreement. None of the Trustee, the Depositor or the
Administrative Agent shall be liable to any Person for rejecting a Redemption
Order pursuant to this Section 6.1(c).
(d) If the Redemption Order Date on which a Paired Optional
Redemption was directed is not a Distribution Date and there are insufficient
funds on deposit in the Cash Netting Subaccount delivered in connection with
Paired Issuances directed on the same date as such Paired Optional Redemption
and in the Distribution Account from maturing Eligible Treasury Repurchase
Agreements, as determined in accordance with Section 6.4, the Administrative
Agent shall deliver instructions to the Trustee with respect to the Eligible
Treasuries then on deposit in the Up-MACRO Holding Trust, in which the
Administrative Agent, employing "last in, first out" methodology, shall:
46
(i) identify the Eligible Treasuries on deposit in the
Up-MACRO Holding Trust that are the most recently-acquired Eligible
Treasuries with a Value equal to the product of the Up-MACRO
Redemption Percentage and the Up-MACRO Asset Amount (or the portion
thereof that is not available to be delivered in cash);
(ii) (A) select Eligible Treasuries with a Value equal to
the Up-MACRO Settlement Payment, if any such payment is required to
be made by the Up-MACRO Holding Trust, (B) allocate the remaining
Eligible Treasuries to be delivered as a Final Distribution to the
Authorized Participants directing the Paired Optional Redemption and
(C) in the event that the remaining Eligible Treasuries to be
delivered as a Final Distribution exceed the amount due to the
Authorized Participants directing the Paired Optional Redemption,
calculate the amount to be paid by the Authorized Participants to the
Up-MACRO Holding Trust to compensate the trust for the excess Value
of the Eligible Treasuries being delivered to the Authorized
Participants as a Final Distribution (such amount, the "Redemption
Cash Component"); and
(iii) instruct the Trustee as to which Eligible Treasuries
the Trustee is to use to effect the Paired Optional Redemption and,
of those, the Eligible Treasuries to be used to make the Up-MACRO
Settlement Payment, if any, the Eligible Treasuries to be used to
make the Final Distribution to the redeeming Authorized Participants
and the Redemption Cash Component to be collected from the Authorized
Participants, if any.
The Eligible Treasuries selected by the Administrative Agent to be delivered as
the Final Distribution in a Paired Optional Redemption shall be distributed
ratably, by type, to each redeeming Authorized Participant. A "type" of Eligible
Treasury will include all Eligible Treasuries on deposit in the Up-MACRO Holding
Trust with the same acquisition date, the same purchase price, the same maturity
and the same implied discount or stated interest.
(e) A non-refundable transaction fee will be payable to the
Trustee for its own account in connection with each Redemption Order in the
amount specified in Section 7 of the Participants Agreement. In the event that
a Redemption Order fails and the Trustee or the Administrative Agent has
incurred expenses on behalf of the Up-MACRO Holding Trust in connection with
taking steps to effect a Paired Optional Redemption pursuant thereto, and any
reimbursement of such expenses cannot be obtained from the Authorized
Participant who delivered the Redemption Order, then such expenses shall be
reimbursed to the Trustee and the Administrative Agent on the next
Distribution Payment Date out of funds available in the Fee Payment Account
or, if such funds are insufficient, by the Depositor.
(f) On any Distribution Date that is an Early Termination Date
or on the Final Scheduled Termination Date, the Trustee shall redeem all of
the Up-MACRO Holding Shares that are Outstanding on such Distribution Date at
their Per Share Underlying Value, as calculated on the immediately preceding
Price Determination Day, using the funds that are on deposit in the
Distribution Account after all of the Settlement Contracts have been settled,
as specified in priority third of Section 5.2(a).
Section 6.2 Paired Issuances.
(a) On any Price Determination Day that occurs after the
Closing Date but prior to the Final Scheduled Termination Date or an Early
Termination Date, the Up-MACRO Holding Trust shall issue additional Up-MACRO
Holding Shares
47
contemporaneously with the issuance of additional Down-MACRO Holding Shares in
the form of MACRO Units (such an issuance, a "Paired Issuance") and, if
applicable, concurrently exchange such MACRO Units to their related Tradeable
Shares following the receipt of, and in accordance with, a Creation Order
delivered by an Authorized Participant and forwarded to the Trustee by the
Administrative Agent. Only Authorized Participants may direct Paired
Issuances. Up-MACRO Holding Shares will be issued at the Per Share Underlying
Value of the existing Up-MACRO Holding Shares on the Issuance Order Date on
which the related Creation Order was delivered; provided that in the case of
any Creation Order placed on a Distribution Date or on the Business Day
succeeding a Distribution Date, the Up-MACRO and Down-MACRO Earned Income
Accruals for each intervening day between the Issuance Order Date and the
Issuance Date, calculated on the basis of the Applicable Reference Price of
Crude Oil on the Issuance Order Date.
(b) Subject to the procedures and requirements specified in the
Participants Agreement, a Paired Issuance may be made only upon the direction
of one or more Authorized Participants delivered in the form of a Creation
Order to the Administrative Agent on any day that is a Price Determination Day
(such date, the "Issuance Order Date"), prior to the earlier of (i) 2:00 p.m.
New York City Time, (ii) half an hour before the end of trading in the Light
Sweet Crude Oil Futures Contracts on NYMEX or half an hour before the end of
trading in the futures contracts from which any Substitute Reference Oil Price
is derived or at such time as may be specified for any other applicable
Substitute Reference Oil Price or (iii) the unanticipated close of trading of
the Light Sweet Crude Oil Futures Contracts or of the Substitute Reference Oil
Price. Subject to the requirements and limitations set forth herein and in the
Participants Agreement, the number of Up-MACRO Holding Shares that the
Up-MACRO Holding Trust may issue as part of a Paired Issuance is unlimited.
(c) The Administrative Agent shall reject any Creation Order
(i) if the Administrative Agent determines that the Creation Order is not in
the required form, (ii) if the Trustee notifies the Administrative Agent that
the Authorized Participant directing the Paired Issuance has not deposited
sufficient funds with the Trustee, (iii) if the Depositor determines, based
upon an opinion of counsel, that such Creation Order would have adverse tax or
securities law consequences for either of the Paired Holding Trusts, the
Up-MACRO Tradeable Trust or Down-MACRO Tradeable Trust, the Holders of the
Paired Holding Shares or the Holders of the Up-MACRO Tradeable Shares or Down
MACRO Tradeable Shares, (iv) the acceptance or fulfillment of which would, in
the opinion of counsel to the Depositor acceptable to the Trustee, be
unlawful, (v) if any such creation would cause the Up-MACRO Tradeable Trust to
hold fifty percent or less of the Outstanding Up-MACRO Holding Shares (vi) if
the Down-MACRO Holding Trustee notifies the Trustee that the Creation Order
for additional Down-MACRO Holding Shares has been or will be rejected by it,
by the Administrative Agent on behalf of the Down-MACRO Holding Trust, or
(vii) if circumstances outside the control of the Trustee, the Depositor or
the Administrative Agent make it impractical or not feasible to process the
Creation Order on the Issuance Order Date or on the Issuance Date. None of the
Trustee, the Depositor or the Administrative Agent shall be liable to any
Person by reason of the rejection of any Creation Order.
(d) A non-refundable transaction fee will be payable to the
Trustee for its own account in connection with each Creation Order in the
amount specified in Section 7 of the Participants Agreement. In the event that
a Creation Order fails and the Trustee or the Administrative Agent has
incurred expenses on behalf of the Up-MACRO Holding Trust in connection with
taking steps to effect a Paired Issuance pursuant thereto, and any
reimbursement of such expenses cannot be obtained from the Authorized
Participant who
48
delivered the Creation Order, then such expenses shall be reimbursed to the
Trustee and the Administrative Agent on the next Distribution Payment Date out
of funds available in the Fee Payment Account or, if such funds are
insufficient, by the Depositor.
Section 6.3 Settlement of the Settlement Contracts; Adjustments to
the Notional Amount of the Income Distribution Agreement.
(a) In connection with a Paired Optional Redemption directed on
a Redemption Date that is not also an Issuance Date, the Trustee, acting
together with the Down-MACRO Holding Trustee, each on behalf of its respective
Paired Holding Trust and at the direction of the Administrative Agent, will
settle one Settlement Contract for each MACRO Unit that is redeemed and amend
the Income Distribution Agreement to reduce the notional amount thereof to
reflect the decrease in the Aggregate Par Amount of Up-MACRO and Down-MACRO
Holding Shares that are Outstanding.
(b) In connection with a Paired Issuance directed on an
Issuance Date that is not also a Redemption Date, the Trustee, acting together
with the Down-MACRO Holding Trustee, each on behalf of its respective Paired
Holding Trust and at the direction of the Administrative Agent, will enter
into one Settlement Contract for each MACRO Unit that is created and amend the
Income Distribution Agreement to increase the notional amount thereof to
reflect the increase in the Aggregate Par Amount of Up-MACRO and Down-MACRO
Holding Shares that are Outstanding.
(c) In connection with any Paired Optional Redemptions and
Paired Issuances for which Redemption Orders and Creation Orders, as
applicable, are received on the same Business Day, the Trustee, acting
together with the Down-MACRO Holding Trustee, each on behalf of its respective
Paired Holding Trust and at the direction of the Administrative Agent, shall
(i) amend the Income Distribution Agreement to increase or decrease the
notional amount thereof based on the Net Par Amount Increase or Net Par Amount
Decrease that was directed on such Business Day, and (ii) enter into
additional Settlement Contracts, based on the Net Par Amount Increase that was
directed on such Business Day or settle existing Settlement Contracts, based
on the Net Par Amount Decrease that was directed on such Business Day.
(d) Each amendment to the Income Distribution Agreement shall
be in the form of Exhibit B-2 hereto, and each Settlement Contract shall be in
the form of Exhibit C hereto and shall constitute an additional confirmation
to the Master Agreement. The original, executed Income Distribution Agreement,
each amendment thereto and each original, executed Settlement Contract shall
be maintained by the Trustee among the books and records it keeps on behalf of
the Up-MACRO Holding Trust.
(e) In connection with each Paired Optional Redemption, each
Paired Issuance and each Exchange Order, Schedule A of one or more of the
Global Certificates will be adjusted (and, if necessary, additional Global
Certificates wil l be issued) to reflect the Net Par Amount Decrease or the Net
Par Amount Increase, as applicable, in the Aggregate Par Amount of the
Up-MACRO Holding Shares that are Outstanding after giving effect to such
Paired Optional Redemption. Paired Issuance and/or Exchange Orders. On the
Final Scheduled Termination Date or an Early Termination Date, after a Final
Distribution has been made on the Up-MACRO Holding Shares, all of such
Up-MACRO Holding Shares shall be cancelled by the Trustee, on behalf of the
Up-MACRO Holding Trust, in accordance with the procedures of the Depository.
On any Redemption Date on which a Net Par Amount Decrease occurred, Up-MACRO
Holding Shares in an amount equal to such Net Par Amount
49
Decrease shall be cancelled by the Trustee, on behalf of the Up-MACRO Holding
Trust, in accordance with the procedures of the Depository.
Section 6.4 Settlement of Redemptions. On the Business Day after
the applicable Redemption Order Date or, in the event that the Redemption
Order Date is a Distribution Date or the Business Day following the
Distribution Date, on the third Business Day after the Redemption Order Date
(such date, the "Redemption Date"), not later than 10:00 a.m. New York City
Time, the Authorized Participant directing the Paired Optional Redemption must
deliver (i) to the Trustee's account at the Depository the Paired Holding
Shares or the Tradeable Shares being tendered for redemption which together
form at least one MACRO Unit or integral multiples thereof, (ii) to the
Trustee in immediately available funds, the applicable Redemption Cash
Component, if the Authorized Participant has been notified that a Redemption
Cash Component is required, and (iii) to the Trustee in immediately available
funds, the non-refundable transaction fee described in Section 6.1(e).
Following receipt by the Administrative Agent of electronic confirmation of
the requisite tender of shares and receipt by the Trustee of the applicable
Redemption Cash Component, if any, and the transaction fee, and satisfaction
of the procedures and conditions for a Paired Optional Redemption that are
specified in the Participants Agreement, and no later than the day and time
specified in the Participants Agreement, the Trustee, acting together with the
Down-MACRO Holding Trustee, each on behalf of its respective Paired Holding
Trust and as directed by the Administrative Agent, shall cause each of the
Paired Holding Trusts to deliver a Final Distribution in an amount equal to
the Per Share Underlying Value, as of the relevant Redemption Order Date, of
each Up-MACRO Holding Share and each Down-MACRO Holding Share tendered for
redemption, which will include, in the event that the Redemption Order Date
and the Redemption Date occur on non consecutive days, a sum equal to the
Up-MACRO Earned Income Accruals and the Down-MACRO Earned Income Accruals
(each calculated on the basis of the Applicable Reference Price of Oil on the
Redemption Order Date) for the intervening non-Business Days between the
Redemption Order Date and the Redemption Date; provided, that, in the case of
any Redemption Order placed on a Distribution Date or on the Business Day
succeeding a Distribution Date, such Final Distribution will also include
Up-MACRO and Down-MACRO Earned Income Accruals for each intervening day
between the Redemption Order Date and the Redemption Date calculated on the
basis of the Applicable Reference Price of Crude Oil on the Redemption Order
Date. Such Final Distribution will be delivered:
(i) if the relevant Redemption Order Date was not a
Distribution Date a Final Distribution of cash or a combination of
cash and/or Eligible Treasuries to the Participant Custodian Account
of the redeeming Authorized Participant; provided, that such cash
and/or Eligible Treasuries shall be selected in the following
priority:
(1) first, from funds on deposit in the Cash Netting
Subaccount on that day;
(2) second, from cash on deposit in the Distribution
Account from the proceeds of maturing Eligible
Treasury Repurchase Agreements; and
(3) third, Eligible Treasuries on deposit in the
Securities Account selected in accordance with
the provisions of Section 6.1(d); or
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(ii) in the case of the Final Scheduled Termination Date,
an Early Termination Date or a Redemption Order Date that is
scheduled to occur on a Distribution Date, a Final Distribution of
cash to the Participant Custodian Account of the redeeming Authorized
Participant not later than the related Distribution Payment Date (in
the case of the Final Scheduled Termination Date or an Early
Termination Date) or on the applicable Redemption Date.
Section 6.5 Settlement of Issuances.
(a) On the next Business Day after the applicable Issuance
Order Date or, in the event that the Issuance Order Date is a Distribution
Date or the Business Day following the Distribution Date, on the third
Business Day after the Issuance Order Date (such date, the "Issuance Date"),
not later than 10:00 a.m. New York City Time, the Authorized Participant
directing the Paired Issuance must deliver immediately available funds to the
Trustee in an amount equal to (i) the Per Share Underlying Value of Up-MACRO
Holding Shares on the Issuance Order Date multiplied by the number of Up-MACRO
Holding Shares being created by that Authorized Participant, plus (ii) the Per
Share Underlying Value of Down-MACRO Holding Shares on the Issuance Order Date
multiplied by the number of Down-MACRO Holding Shares being created by that
Authorized Participant, plus (iii) plus the non-refundable transaction fee
described in Section 6.2(d), plus (iv) in the case of any Creation Order
placed on a Distribution Date or on the Business Day succeeding a Distribution
Date, the Up-MACRO and Down-MACRO Earned Income Accruals for each intervening
day between the Issuance Order Date and the Issuance Date, calculated on the
basis of the Applicable Reference Price of Crude Oil on the Issuance Order
Date. Following the delivery of requisite funds and satisfaction of the
procedures and conditions for a Paired Issuance that are specified in the
Participants Agreement and no later than the day and time specified in the
Participants Agreement, the Trustee, acting together with the Down-MACRO
Holding Trustee, each on behalf of its respective Paired Holding Trust and as
directed by the Administrative Agent, shall deliver from the applicable Shares
Netting Subaccount or, in the event of a Net Par Amount Increase, cause each
of the Paired Holding Trusts to issue Paired Holding Shares in the Aggregate
Par Amount of such Net Par Amount Increase and to credit the Depository
account of the Up-MACRO Tradeable Trust and the Down-MACRO Tradeable Trust or
to the Depository account of the Authorized Participant who directed such
Paired Issuance, as applicable, with such Paired Holding Shares in the
Aggregate Par Amount that was specified in the Creation Order.
(b) Upon receipt of the funds delivered by one or more
Authorized Participants in connection with a Paired Issuance, 50% of such
funds shall be deposited into the Up-MACRO Holding Trust and 50% of such funds
shall be deposited into the Down-MACRO Holding Trust.
Section 6.6 Suspension or Delay of Settlement.
(a) The Administrative Agent shall suspend the right of
redemption, or postpone the date of settlement for any Paired Optional
Redemption or any Paired Issuance of Paired Holding Shares,
(i) for any period during which the AMEX or NYMEX is
closed, or trading is suspended or restricted;
51
(ii) for any period during which an emergency exists as a
result of which delivery or acquisition of Eligible Treasuries by the
Paired Holding Trusts is not reasonably practicable;
(iii) if any such redemption would cause the Up-MACRO or
Down-MACRO Investment Amount to equal less than 10 million dollars;
and
(iv) for such other period as the Depositor, the Trustee
or the Administrative Agent determines to be necessary for the
protection of the Beneficial Owners of any of the Paired Holding
Shares, the Up-MACRO Tradeable Shares or the Down-MACRO Tradeable
Shares.
None of the Depositor, the Trustee or the Administrative Agent
will be liable to any Person for any loss or damages that may result from any
such suspension or postponement.
Section 6.7 The Participants Agreement.
(a) Each Paired Optional Redemption and each Paired Issuance
shall be effected in accordance with the procedures set forth in Attachment
A-II and Attachment A-I, respectively, to the Participants Agreement, which
may be amended from time to time with the written consent of the Trustee, the
Up-MACRO Tradeable Trustee, the Down-MACRO Holding Trustee, the Down-MACRO
Tradeable Trustee and the Administrative Agent in accordance with the
provisions thereof.
(b) The Trustee and the Administrative Agent shall only process
Redemption Orders and Creation Orders from Authorized Participants who have
executed a Participants Agreement that is in full force and effect at the time
when the Redemption Order or Creation Order is placed. The Administrative
Agent will maintain and make available at its Business Office during normal
business hours a current list of the Authorized Participants eligible to
participate in a Paired Issuance.
(c) In the event that the provisions of this Trust Agreement
and the Participants Agreement conflict in any way, the provisions of the
Participants Agreement will prevail insofar as they relate to the requirements
and procedures for directing and effecting Paired Optional Redemptions and
Paired Issuances.
Section 6.8 Administration of Eligible Treasuries.
(a) The Trustee, acting on behalf of the Up-MACRO Holding Trust
and at the direction of the Administrative Agent, shall apply funds in the
amount specified in Section 5.2(a)(iv) on each Distribution Date and all funds
received in connection with each Paired Issuance, to the extent such funds are
not required to remain on deposit in the Netting Account, to acquire Eligible
Treasuries. The Administrative Agent shall direct the Trustee to acquire
Eligible Treasuries in accordance with the following "Acquisition Guidelines":
(i) Eligible Treasury Securities shall be selected based
on the most favorable combination, in the judgment of the
Administrative Agent, of yield, availability and best execution;
(ii) Eligible Treasury Repurchase Agreements shall be
selected based on the most favorable combination, in the judgment of
the Administrative Agent, of yield, counterparty risk, counterparty
concentration and best execution;
52
(iii) no Eligible Treasury Repurchase Agreement may be
entered into with, and no Eligible Treasury Security may be purchased
from, any person who is an Affiliated Person with respect to any of
the Depositor, either of the Paired Holding Trusts, the Trustee, the
Administrative Agent, or the Marketing Agents, or any other Person
who is an Affiliated Person with respect to any Affiliated Person
with respect to any of the foregoing entities;
(iv) Eligible Treasuries shall be allocated as between the
Up-MACRO Holding Trust and the Down-MACRO Holding Trust in such a
manner that each of the Paired Holding Trusts shall hold an identical
portfolio of Eligible Treasuries or as close to an identical
portfolio as is commercially feasible; and
(v) the allocation of funds among Eligible Treasury
Securities and Eligible Treasury Repurchase Agreements during any
Calculation Period (the "Asset Allocation Percentage") shall be 75%
in Eligible Treasury Securities and 25% in Eligible Treasury
Repurchase Agreements; provided, that, the Administrative Agent shall
use commercially reasonable efforts to adjust such Asset Allocation
Percentage on behalf of the Up-MACRO Holding Trust on each
Distribution Date such that the amount invested in Eligible Treasury
Repurchase Agreements is equal to 10% plus the percentage of all
Outstanding Up-MACRO Holding Shares which were redeemed during the
preceding twelve-month period (net of any Paired Optional Redemptions
that were effected using funds delivered in connection with Paired
Issuances ordered on the same Price Determination Day.
(b) On each Distribution Date and on each Issuance Order Date,
the Administrative Agent shall, subject to, and in accordance with, the
Acquisition Guidelines and the Asset Allocation Percentage, solicit offers for
Eligible Treasuries and, taking into account which offer or offers contains
the best execution terms, shall place a purchase order for the selected
Eligible Treasuries with one or more securities dealers and shall direct the
Trustee to settle such acquisition. The Administrative Agent shall direct the
Trustee and the Down-MACRO Holding Trustee in allocating all Eligible Treasury
Securities acquired as described above equally between the Up-MACRO Holding
Trust and the Down-MACRO Holding Trust. Eligible Treasury Securities allocated
to the Up-MACRO Holding Trust on each Distribution Date, Issuance Date or any
other date shall be credited by the Trustee to the Securities Account.
(c) On each Distribution Date and on each Issuance Order Date,
the Administrative Agent shall, subject to, and in accordance with, the
Acquisition Guidelines and the Asset Allocation Percentage solicit offers for
Eligible Treasury Repurchase Agreements and shall direct the Trustee to enter
into such Eligible Treasury Repurchase Agreements and shall place a purchase
order for such Eligible Treasury Repurchase Agreements with one or more
counterparties. The Trustee shall allocate all Eligible Treasury Repurchase
Agreements as described above equally between the Up-MACRO Holding Trust and
the Down-MACRO Holding Trust, as directed by the Administrative Agent.
Eligible Treasury Repurchase Agreements entered into on each Distribution
Date, Issuance Date or any other date shall be credited by the Trustee to the
Securities Account.
(d) On any Business Day during any Calculation Period (other
than the last Business Day prior to a Distribution Date), if cash is available
in the Distribution Account for reinvestment in Eligible Treasuries, the
Administrative Agent shall provide
53
instructions to the Trustee to apply such cash to purchase Eligible Treasuries
in accordance with the Acquisition Guidelines and the Asset Allocation
Percentage.
(e) Without limiting the generality of Section 13.1 and Section
13.2, the Trustee shall not under any circumstances be held liable under this
Trust Agreement for any action it takes in accordance with directions provided
to it by the Administrative Agent under this Section 6.8 or for any omission
on the part of the Trustee to take any action in the absence of receiving such
instructions from the Administrative Agent.
ARTICLE 7
CAPITAL ACCOUNTS OF HOLDERS
AND OPERATION THEREOF; TAX ALLOCATIONS
Section 7.1 Capital Contributions.
(a) Each Holder has made an initial Capital Contribution (as
defined below) to the Up-MACRO Holding Trust in cash equal to the amount paid
for its Up-MACRO Holding Shares. Except as provided for herein, a Holder shall
not be required to make any further Capital Contributions to the Up-MACRO
Holding Trust.
(b) Except as expressly set forth herein, no Holder shall be
entitled to any return of capital, interest or compensation by reason of its
Capital Contributions.
Section 7.2 Capital Accounts; Allocations. There shall be
established in respect of each Holder a separate capital account in the books
and records of the Up-MACRO Holding Trust in respect of the Holder's Capital
Contributions to the Up-MACRO Holding Trust (each, a "Capital Account"), to
which the following provisions shall apply:
(a) The Capital Account of each Holder initially shall be equal
to the cash contributed in exchange for its Up-MACRO Holding Shares (each, a
"Capital Contribution") and, at the end of each day shall be:
(i) increased by (A) an amount equal to any amounts paid
with respect to Up-MACRO Holding Shares issued as part of a Paired
Issuance by such Holder during such day; and (B) such Holder's
interest in the Net Profit (and items thereof) of the Up-MACRO
Holding Trust during such day as allocated under Section 7.2(b); and
(ii) decreased by (A) any distributions made in cash by
the Up-MACRO Holding Trust to such Holder on such day; (B) the fair
market value of any property other than cash distributed by the
Up-MACRO Holding Trust to such Holder on such day; and (C) such
Holder's interest in the Net Loss (and items thereof) of the Up-MACRO
Holding Trust for such day as allocated under Section 7.2(b).
(b) Except pursuant to the Regulatory Allocations set forth in
Section 7.3, or as otherwise provided in this Trust Agreement, Net Profit and
Net Loss (and items of each) of the Up-MACRO Holding Trust shall be
provisionally allocated as of the end of each day among the Holders in a
manner such that the Capital Account of each Holder immediately after giving
effect to such allocation, is, as nearly as possible, equal (proportionately)
to the amount equal to the distributions that would be made to such Holder
54
during such fiscal year pursuant to Article 5 if (i) the Up-MACRO Holding
Trust were dissolved and terminated; (ii) its affairs were wound up and each
Trust Asset was sold for cash equal to its book value; (iii) all Up-MACRO
Holding Trust liabilities were satisfied (limited with respect to each
nonrecourse liability to the book value of the assets securing such
liability); and (iv) the net assets of the Up-MACRO Holding Trust were
distributed in accordance with Article 5 to the Holders immediately after
giving effect to such allocation. The Depositor may, in its discretion, make
such other assumptions (whether or not consistent with the above assumptions)
as it deems necessary or appropriate in order to effectuate the intended
economic arrangement of the Holders. Except as otherwise provided elsewhere in
this Trust Agreement, if upon the dissolution and termination of the Up-MACRO
Holding Trust pursuant to Section 14.1 and after all other allocations
provided for in this Section 7.2 have been tentatively made as if this Section
7.2(b) were not in this Trust Agreement, a distribution to the Holders under
Section 14.1 would be different from a distribution to the Holders under
Article 5 then Net Profit (and items thereof) and Net Loss (and items thereof)
for the fiscal year in which the Up-MACRO Holding Trust dissolves and
terminates pursuant to Section 14.1 shall be allocated among the Holders in a
manner such that the Capital Account of each Holder, immediately after giving
effect to such allocation, is, as nearly as possible, equal (proportionately)
to the amount of the distribution that would be made to such Holder during
such last fiscal year pursuant to Article 5. The Depositor may, in its
discretion, apply the principles of this Section 7.2(b) to any fiscal year
preceding the fiscal year in which the Up-MACRO Holding Trust dissolves and
terminates (including through application of Section 761(e) of the Code) if
delaying application of the principles of this Section 7.2(b) would likely
result in distributions under Section 14.1 that are materially different from
distributions under Article 5 in the fiscal year in which the Up-MACRO Holding
Trust dissolves and terminates.
(c) Before any distribution of property (other than cash) from
the Up-MACRO Holding Trust to a Holder (including without limitation, any
non-cash asset which shall be deemed distributed immediately prior to the
dissolution and winding up of the Up-MACRO Holding Trust), the Capital
Accounts of all Holders of the Up-MACRO Holding Trust shall be adjusted and,
upon the occurrence of one or more of the other events described in Section
1.704-1(b)(2)(iv)(f) of the Regulations, may be adjusted to reflect the manner
in which any unrealized income, gain, loss or deduction inherent in such
property (that has not been previously reflected in the Holders' Capital
Accounts) would be allocated among the Holders if there were a taxable
disposition of such property by the Up-MACRO Holding Trust on the date of
distribution, in accordance with Sections 1.704-1(b)(2)(iv)(f) and (g) of the
Regulations.
(d) In determining the amount of any liability for purposes of
this Section 7.2, there shall be taken into account Section 752 of the Code
and any other applicable provisions of the Code and any Regulations
promulgated thereunder.
(e) Notwithstanding any other provision of this Trust Agreement
to the contrary, the provisions of this Section 7.2 regarding the maintenance
of Capital Accounts shall be construed so as to comply with the provisions of
the Code and any Regulations thereunder. The Depositor in its sole and
absolute discretion and whose determination shall be binding on the Holders is
hereby authorized to interpret and to modify the foregoing provisions to the
extent necessary to comply with the Code and Regulations.
Section 7.3 Regulatory and Related Allocations. Notwithstanding
any other provision in this Article 7 to the contrary, the following special
allocations shall be made to the Capital Accounts of the Holder in the
following order:
55
(a) Minimum Gain Chargeback. If there is a net decrease in
Partnership Minimum Gain during any taxable year, each Holder shall be
specially allocated items of Up-MACRO Holding Trust income and gain for such
taxable year (and, if necessary, subsequent taxable years) in an amount equal
to the greater of (A) the portion of such Holder's share of the net decrease
in such Partnership Minimum Gain, determined in accordance with Regulations
Section 1.704-2(d)(1), or (B) if such Holder would otherwise have an Adjusted
Capital Account Deficit attributable solely to such Holder's Capital Account
at the end of such taxable year, an amount sufficient to eliminate such
Adjusted Capital Account Deficit. Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to the Holders pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2. This Section
7.3(a) is intended to comply with the minimum gain chargeback requirement in
Section 1.704-2(f) of the Regulations and shall be interpreted consistently
therewith. To the extent permitted by such section of the Regulations and for
purposes of this Section 7.3(a) only, each Holder's Adjusted Capital Account
Deficit shall be determined prior to any other allocations with respect to
such taxable year.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to Partner Nonrecourse Debt during
any taxable year, each Holder shall be specially allocated items of Up-MACRO
Holding Trust income and gain for such taxable year (and, if necessary,
subsequent taxable years) in an amount equal to such Holder's share, if any,
of the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to
such Holder's Partner Nonrecourse Debt, as determined in accordance with
Regulations Section 1.704-2. Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated
to each Holder pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2. This Section 7.3(b)
is intended to comply with the minimum gain chargeback requirements in such
Regulations and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Holder
unexpectedly receives any adjustments, allocations, or distributions described
in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) with respect to
such Holder's Capital Account, items of Up-MACRO Holding Trust income and gain
shall be specially allocated to each such Holder in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Holder as quickly as possible;
provided that an allocation pursuant to this Section 7.3(c) shall be made only
if and to the extent that such Holder's Capital Account would have an Adjusted
Capital Account Deficit after all other allocations provided for in this Trust
Agreement have been tentatively made as if this Section 7.3(c) were not in
this Trust Agreement. This Section 7.3(c) is intended to constitute a
"qualified income offset" within the meaning of Regulations Section 1.704-1
and shall be interpreted consistently therewith.
(d) Nonrecourse Deductions. Any Nonrecourse Deductions for any
taxable year or other period shall be allocated to the Capital Accounts of the
Holders in accordance with their respective Capital Accounts.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any taxable year (or portion thereof) of the Up-MACRO Holding
Trust shall be allocated to the Holder who bears the economic risk of loss
with respect to the Partner
56
Nonrecourse Debt to which such Partner Nonrecourse Deductions are
attributable, in accordance with Regulations Section 1.704-2.
(f) Gross Income Allocation. In the event any Holder has an
Adjusted Capital Account Deficit, items of Up-MACRO Holding Trust income and
gain shall be specially allocated to the Capital Account of such Holder in an
amount and manner sufficient to eliminate such Holder's Adjusted Capital
Account Deficit as quickly as possible; provided that an allocation pursuant
to this Section 7.3(f) shall be made only if and to the extent that such
Holder's Capital Account would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Article 7 (other than this Section
7.3(f)) have been tentatively made as if this Section 7.3(f) were not in this
Trust Agreement.
(g) Loss Allocation Limitation. No allocation of Net Loss (or
items thereof) shall be made to any Holder to the extent that such allocation
would create or increase an Adjusted Capital Account Deficit with respect to
such Holder.
(h) Curative Allocations. The allocations set forth in this
Section 7.3 (the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations under Section 704 of the Code. Notwithstanding
any other provision of this Trust Agreement (other than the Regulatory
Allocations), the Regulatory Allocations shall be taken into account in
allocating other Up-MACRO Holding Trust items of income, gain, loss, deduction
and expense among the Holders so that, to the extent possible, the net amount
of such allocations of other Up-MACRO Holding Trust items and the Regulatory
Allocations shall be equal to the net amount that would have been allocated to
the Holders pursuant to this Trust Agreement if the Regulatory Allocations had
not been made.
Section 7.4 Transfer of or Change in Up-MACRO Holding Shares. The
Depositor may use any convention or combination of conventions that it
believes is reasonable for U.S. federal income tax purposes regarding the
allocation of items of income, gain, loss, deduction and expense with respect
to transferred Up-MACRO Holding Shares and redeemed Up-MACRO Holding Shares. A
transferee who takes all or part of a Holder's Up-MACRO Holding Shares shall
succeed to the Capital Account maintained in respect of the transferor Holder
to the extent of such transfer.
Section 7.5 Tax Allocations. As of the end of each day, income,
expense, deduction, gain or loss of the Up-MACRO Holding Trust, all as
determined for U.S. federal income tax purposes, shall be allocated among the
Holders pursuant to the following subsections solely for U.S. federal and
other applicable tax purposes (both U.S. and non-U.S. taxes) as provided
below. Such allocations shall be pro rata from short-term capital gain or loss
and long-term capital gain or loss and operating income or loss recognized by
the Up-MACRO Holding Trust. Such allocations shall be made, to the extent
required, in a manner consistent with the principles of Section 7.2(b).
(a) Except as provided in the second and third sentences of
Section 7.5(b)(ii), items of ordinary income (such as interest income),
deduction and expense (such as advisory fees and brokerage fees) shall be
allocated in a manner consistent with the economic allocations described in
Section 7.2.
(b) Items of recognized capital gain or loss from the Up-MACRO
Holding Trust's trading activities shall be allocated as follows:
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(i) There shall be established a tax basis account with
respect to each Holder's shares in the Up-MACRO Holding Trust. The
initial balance of each tax basis account shall be the amount
contributed to the capital of the Up-MACRO Holding Trust for such
shares.
(1) Each tax basis account shall be increased by the
amount of (I) any additional contributions made
with respect to such Holder's shares in the
Up-MACRO Holding Trust and (II) any taxable
income or gain allocated to such Holder pursuant
to Section 7.5(a) above and this Section 7.5(b);
(2) Each tax basis account shall be decreased by the
amount of (I) taxable expense, deduction or loss
allocated to such Holder pursuant to Section
7.5(a) above and this Section 7.5(b) and (II)
any distribution received by such Holder with
respect to its Up-MACRO Holding Shares other
than as a consequence of a partial redemption of
Up-MACRO Holding Shares; and
(3) When any Up-MACRO Holding Share is redeemed, the
tax basis account attributable to such redeemed
Up-MACRO Holding Share shall be eliminated.
(ii) Items of recognized capital gain shall be allocated
first to each Holder who has fully or partially redeemed its Up-MACRO
Holding Shares on such day up to any excess of (A) the amount
received upon such redemption over (B) the tax basis account
attributable to the redeemed Up-MACRO Holding Shares in the Up-MACRO
Holding Trust. If the aggregate amount of recognized capital gain to
be so allocated to all Holders who have redeemed Up-MACRO Holding
Shares on such day is less than the excess of all such amounts
received upon redemption over all such tax basis accounts, then items
of ordinary income shall be allocated first to all such Holders up to
any excess of all such amounts. If the aggregate amount of recognized
capital gain and ordinary income to be so allocated to all Holders
who have redeemed Up-MACRO Holding Shares on such day is less than
the excess of all such amounts received upon redemption over all such
tax basis accounts, the entire amount of capital gain and ordinary
income for such day shall be allocated among all such Holders in the
ratio that each such Holder's allocable share of such excess bears to
the aggregate excess of all such Holders who redeemed any of their
Up-MACRO Holding Shares on such day.
(iii) Items of recognized capital gain remaining after the
allocations in subsection (ii) above shall be allocated among all
Holders whose Capital Accounts are in excess of their tax basis
accounts (after the adjustments in subsection (ii)) in the ratio that
each such Holder's allocable share of such excess bears to all such
Holders' excesses. If the aggregate amount of recognized capital gain
to be so allocated is greater than the aggregate excess of all such
Holders' Capital Accounts over all such tax basis accounts, the
excess amount of gain shall be allocated among all Holders in the
ratio that each Holder's Capital Account bears to all Holders'
Capital Accounts.
(iv) Items of recognized capital loss shall be allocated
first to each Holder who has redeemed any of its Up-MACRO Holding
Shares on such day up to any excess of (A) the tax basis account
attributable to the redeemed Up-MACRO Holding Share over (B) the
amount received upon such redemption. If the aggregate amount of
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recognized capital loss to be so allocated to all Holders who have
redeemed any Up-MACRO Holding Shares on such day is less than the
aggregate excess of all such tax basis accounts over all such amounts
received upon redemption, the entire amount of loss for such day
shall be allocated among all such Holders in the ratio that each such
Holder's excess bears to the aggregate excess of all such Holders who
redeemed any of their Up-MACRO Holding Shares on such day.
(v) Items of recognized capital loss remaining after the
allocations in subsection (iv) above shall be allocated among the
Holders whose tax basis accounts are in excess of their Capital
Accounts (after the adjustments in subsection (iv)) in the ratio that
each such Holder's allocable share of such excess bears to all such
Holders' excesses. If the aggregate amount of loss to be so allocated
is greater than the aggregate excess of all such tax basis accounts
over all such Holders' Capital Accounts, the excess amount of
recognized capital loss shall be allocated among all Holders in the
ratio that each Holder's Capital Account bears to all Holders'
Capital Accounts.
(vi) The allocations of profit and loss to the tax basis
accounts of Holders in respect of the Up-MACRO Holding Shares shall
not exceed the allocations permitted under Subchapter K of the Code
as determined by the Depositor in its sole and absolute discretion,
whose determination shall be binding on the Holders.
(c) The allocation of income, gain, loss, deduction and expense
for U.S. federal income tax purposes set forth herein is intended to allocate
such items so as to eliminate, to the extent possible, any disparity between a
Holder's Capital Account and its tax basis account, consistent with principles
set forth in Section 704(c) of the Code.
Section 7.6 Determination of Certain Matters. Notwithstanding
anything express or implied to the contrary in this Trust Agreement, all
matters concerning the computation of Capital Accounts and tax basis accounts,
the allocation of Net Profit (and items thereof) and Net Loss (and items
thereof), the allocation of items of income, gain, loss, deduction and expense
for tax purposes, the adoption or modification of any accounting procedures,
any adjustments to the books and records of the Up-MACRO Holding Trust and all
matters related to liquidation and dissolution of the Up-MACRO Holding Trust
shall be determined by the Depositor, in its sole and absolute discretion.
Such determination shall be final and conclusive as to all Holders and be in
accordance with the Code and Regulations. Notwithstanding anything expressed
or implied in this Trust Agreement, in the event the Depositor, shall
determine, in its sole and absolute discretion, that it is prudent to modify
the manner in which the Capital Accounts and tax basis accounts, or any debits
or credits thereto, are computed in order to effectuate the intended economic
sharing arrangement of the Holders, the Depositor may make such modification.
Allocations of Net Profit and Net Loss to a Holder's Capital Account shall be
made for each day as soon as practicable thereafter.
Section 7.7 No Deficit Makeup. Notwithstanding anything herein to
the contrary, upon the liquidation of the Up-MACRO Holding Trust, no Holder
shall be required to make any contribution to the Up-MACRO Holding Trust in
respect of any deficit in such Holder's Capital Account.
Section 7.8 U.S. Partnership Tax Treatment. It is the intent of
the Holders and the Depositor that the Up-MACRO Holding Trust be governed by
the applicable provisions of Subchapter K, of Chapter 1, of the Code. The
Depositor may file such forms and make such elections as the Depositor deems
appropriate to effect such intent.
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Section 7.9 Definitions. For the purposes of this Trust Agreement,
unless the context otherwise requires:
(a) "Adjusted Capital Account Deficit" shall mean, with respect
to any Holder, the deficit balance, if any, in such Holder's Capital Account
as of the end of the relevant taxable year, after giving effect to the
following adjustments:
(i) credit to such Capital Account any amounts which such
Holder is obligated to restore or is deemed to be obligated to
restore pursuant to Regulations Sections 1.704-1(b)(2)(ii)(c),
1.704-2(g) and 1.704-2(i)(5); and
(ii) debit to such Capital Account the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
(b) "Capital Account" shall have the meaning specified in
Section 7.2.
(c) "Capital Contribution" shall have the meaning set forth in
Section 7.2(a).
(d) "Code" shall mean the U.S. Internal Revenue Code of 1986,
as amended.
(e) "Net Loss" shall mean the net decrease in the Up-MACRO
Asset Amount on a day, excluding from such calculation the increase due to any
contributions with respect to a Paired Issuance made with respect to the
Up-MACRO Holding Trust for such day and any decrease due to any redemptions
made on such day.
(f) "Net Profit" shall mean the net increase in the Up-MACRO
Asset Amount on a day, excluding from such calculation the increase due to any
contributions with respect to a Paired Issuance made on such day and any
decrease due to any distributions or redemptions made on such day.
(g) "Nonrecourse Deductions" shall have the meaning set forth
in Regulations Section 1.704-2(b)(1).
(h) "Nonrecourse Liability" shall have the meaning set forth in
Regulations Section 1.752-1(a)(2).
(i) "Partner Nonrecourse Debt" shall have the meaning set forth
in Regulations Section 1.704-2(b)(4).
(j) "Partner Nonrecourse Debt Minimum Gain" shall have the
meaning set forth in Regulations Section 1.704-2(i)(3).
(k) "Partner Nonrecourse Deductions" shall have the meaning set
forth in Regulations Section 1.704-2(i)(2).
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(l) "Partnership Minimum Gain" shall have the meaning set forth
in Regulations Section 1.704-2(b)(2).
(m) "Regulations" shall mean United States Treasury
Regulations.
(n) "Regulatory Allocations" shall have the meaning set forth
in Section 7.3(h).
ARTICLE 8
CALCULATIONS; REPORTING
Section 8.1 Reporting to Holders of the Up-MACRO Holding Shares.
(a) On each Price Determination Day, the Trustee shall
calculate not later than four hours after the Applicable Reference Price of
Crude Oil is published to the consolidated tape on such Price Determination
Day, the following data:
(i) the Up-MACRO Aggregate Par Amount and the Down-MACRO
Aggregate Par Amount on that day;
(ii) the Up-MACRO Asset Amount and the Down-MACRO Asset
Amount on that day;
(iii) the Price Level Percentage Change;
(iv) the Up-MACRO Underlying Value and the Down-MACRO
Underlying Value on that day, and the Per Share Underlying Value of
an Up-MACRO Holding Share, a Down-MACRO Holding Share, an Up-MACRO
Tradeable Share and a Down-MACRO Tradeable Share on that day;
(v) the Up-MACRO Daily Fee Accrual and the Down-MACRO
Daily Fee Accrual for that day and the cumulative amount of the
Up-MACRO Daily Fee Accruals and the Down-MACRO Daily Fee Accruals for
each day since the preceding Distribution Date;
(vi) the Up-MACRO Investment Amount and the Down-MACRO
Investment Amount on the preceding Distribution Date and the Up-MACRO
Investment Amount and the Down-MACRO Investment Amount on that day;
(vii) the Up-MACRO Available Income Accrual and the
Down-MACRO Available Income Accrual for that day and the cumulative
amount of the Up-MACRO Available Income Accruals and the Down-MACRO
Available Income Accruals for each day since the preceding
Distribution Date;
(viii) the amount of the Up-MACRO Available Income in the
Up-MACRO Holding Trust and the amount of the Down-MACRO Available
Income in the Down-MACRO Holding Trust and the amount of the Up-MACRO
Available Income and the amount of the Down-MACRO Available Income
allocable to each Up-MACRO Holding Share and Down-MACRO Holding
Share, respectively;
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(ix) the Up-MACRO Earned Income Accrual and the Down-MACRO
Earned Income Accrual for that day and the cumulative amount of the
Up-MACRO Earned Income Accruals and the Down-MACRO Earned Income
Accruals for each day since the preceding Distribution Date;
(x) the Daily Yield Rate on each type of Eligible
Treasury;
(xi) the Designated Maturity;
(xii) the Income Component of the Per Share Underlying
Value of the Up-MACRO Holding Shares and the Down-MACRO Holding
Shares;
(xiii) the number of Up-MACRO Holding Shares and
Down-MACRO Holding Shares issued in Paired Issuances during the
current Calculation Period;
(xiv) the number of Up-MACRO Holding Shares and Down-MACRO
Holding Shares redeemed in a Paired Optional Redemption during the
current Calculation Period, as well as the amount of cash or Eligible
Treasuries delivered in such Paired Optional Redemption;
(xv) the Net Par Amount Increase or Net Par Amount
Decrease, if any, that occurred on that day;
(xvi) the number of Up-MACRO Holding Shares and Down-MACRO
Holding Shares Outstanding on that day; and
(xvii) the premium or discount of the market price of each
Up-MACRO Tradeable Share and each Down-MACRO Tradeable Share for that
trading day to the Per Share Underlying Value of the Up-MACRO
Tradeable Shares and the Down-MACRO Tradeable Shares, respectively,
for that day.
(b) On each Price Determination Day, the Trustee shall provide
to the Administrative Agent for posting on the MACROshares Website, not later
than one hour prior to the open of trading on the AMEX or the applicable stock
exchange on which the Up-MACRO tradeable shares are listed, the data contained
in clauses (iii) and (iv) of clause (a) of this Section 8.1. The
Administrative Agent shall post all of the information calculated and provided
to it by the Trustee pursuant to this Section 8.1(b) on the MACROshares
Website on each Price Determination Day, within [thirty] minutes of receipt
thereof from the Trustee.
(c) Not later than [ ] on each Redemption Order Date and the
Final Scheduled Termination Date or an Early Termination Date, the Trustee
shall calculate the following data and provide such data to the Administrative
Agent and to the Depositor:
(i) the Up-MACRO Underlying Value, the Down-MACRO
Underlying Value and the Per Share Underlying Value of an Up-MACRO
Holding Share, a Down-MACRO Holding Share, an Up-MACRO Tradeable
Share and a Down-MACRO Tradeable Share, on the Redemption Order Date
(or, in the case of the Final Scheduled Termination Date or an Early
Termination Date, the last preceding Price Determination Day), as
calculated in accordance with the method specified in this Trust
Agreement and the Down-MACRO Holding Trust Agreement;
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(ii) the Up-MACRO Redemption Percentage and the Down-MACRO
Redemption Percentage and the number of MACRO Units being redeemed;
(iii) the Net Par Amount Decrease or Net Par Amount
Increase, as applicable, which will occur on the related Redemption
Date or Distribution Payment Date;
(iv) the Up-MACRO Settlement Payment, if any, to be paid
by the Up-MACRO Holding Trust to the Down-MACRO Holding Trust and the
Down-MACRO Settlement Payment, if any, to be paid by the Down-MACRO
Holding Trust to the Up-MACRO Holding Trust under the Settlement
Contracts on such Redemption Date;
(v) the Redemption Cash Component, if any; and
(vi) the Final Distribution and the portion thereof that
is allocable to each Up-MACRO Holding Share and each Down-MACRO
Holding Share.
(d) Not later than [ ] on each Issuance Order Date, the Trustee
shall calculate the following data and provide such data to the Administrative
Agent and the Depositor:
(i) the Up-MACRO Underlying Value, the Down-MACRO
Underlying Value, and the Per Share Underlying Value of an Up-MACRO
Holding Share, a Down-MACRO Holding Share, an Up-MACRO Tradeable
Share and a Down-MACRO Tradeable Share on such Issuance Order Date;
and
(ii) the Net Par Amount Increase or Net Par Amount
Decrease, as applicable, which occur on the related Issuance Date.
(e) Not later than the [ ] Business Day preceding each calendar
quarter, the Trustee shall calculate and provide to the Depositor for
inclusion in the quarterly report on Form 10-Q that the Depositor will prepare
and file with the SEC on behalf of the Up-MACRO Holding Trust the following
information:
(i) the Up-MACRO Fee Deduction Amount and the Down-MACRO
Fee Deduction Amount for each of the three preceding Calculation
Periods;
(ii) the aggregate amount of all Up-MACRO Expenses, all
Up-MACRO Fees, all Down-MACRO Expenses and all Down-MACRO Fees
presented to the Trustee for payment during each of the three
preceding Calculation Periods;
(iii) the Up-MACRO Income Distribution Payment, if any,
paid by the Up-MACRO Holding Trust to the Down-MACRO Holding Trust
and the Down-MACRO Income Distribution Payment, if any, paid by the
Down-MACRO Holding Trust to the Up-MACRO Holding Trust under the
Income Distribution Agreement on each of the three preceding
Distribution Dates;
(iv) the Quarterly Distribution to be made by the Up-MACRO
Holding Trust on the Distribution Payment Date and the portion of the
Quarterly Distribution allocable to each Up-MACRO Holding Share and
one Up-MACRO Tradeable Share;
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(v) the Up-MACRO Earned Income Accrual and the Down-MACRO
Earned Income Accrual for each of the three preceding Calculation
Periods;
(vi) the Up-MACRO Available Income and the Down-MACRO
Available Income for the preceding three Calculation Periods;
(vii) each Quarterly Distribution and each Final
Distribution made by each of the Paired Holding Trusts and passed
through by the Up-MACRO Tradeable Trust and Down-MACRO Tradeable
Trust;
(viii) the premium or discount to the Per Share Underlying
Value of the Up-MACRO Holding Shares at which the Up-MACRO Holding
Shares traded on the AMEX on each Business Day of the three preceding
Calculation Periods; and
(ix) the number of Up-MACRO Holding Shares and Down-MACRO
Holding Shares redeemed during the preceding calendar quarter and the
number of Up-MACRO Holding Shares and the Down-MACRO Holding Shares
issued during the preceding calendar quarter.
Section 8.2 Periodic Reports.
(a) After the end of each fiscal year, the Depositor shall
cause to be prepared an annual report on Form 10-K for the Up-MACRO Holding
Trust containing financial statements prepared by the Depositor and audited by
Independent accountants engaged by the Depositor. The annual report shall
contain such information as shall be required by applicable laws, rules and
regulations and may contain such additional information as the Depositor or
the Administrative Agent determines shall be included. The Depositor shall
file such annual report with the SEC in such manner as shall be required by
applicable laws, rules and regulations.
(b) Immediately prior to each Distribution Date, the Depositor
shall cause to be prepared a quarterly report on Form 10-Q for the Up-MACRO
Holding Trust containing unaudited financial statements prepared by the
Depositor. The quarterly report shall be in such form and contain such
information as shall be required by applicable laws, rules and regulations and
may contain such information as the Depositor or the Administrative Agent
determines shall be included. The Depositor shall file such quarterly report
with the SEC in such manner as shall be required by applicable laws, rules and
regulations.
(c) Reports on Form 10-Q and Form 10-K pursuant to this Section
8.2 shall be made in accordance with [the accounting policies specified in the
financial statements included in the Registration Statement] [the instructions
set forth in such Form 10-Q or Form 10-K, as applicable].
Section 8.3 Form 8-K Disclosure. Within four Business Days (or such
shorter period as required under the general instructions to Form 8-K), the
Depositor shall file a Form 8-K with the SEC disclosing:
(i) the occurrence of a Trustee Termination Event;
(ii) the occurrence of a trading halt on any stock
exchange on which the Up-MACRO Holding Shares are listed and the
reason for such trading halt;
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(iii) the appointment of a Successor Trustee;
(iv) the resignation of the Trustee, the Up-MACRO
Tradeable Trustee, the Down-MACRO Holding Trustee, the Administrative
Agent, either Marketing Agent or the Calculation Agent under the
Calculation Agency Agreement;
(v) the appointment of a successor trustee for the
Down-MACRO Holding Trust and/or the Up-MACRO Tradeable Trust, a
successor Administrative Agent, any successor Marketing Agent or a
successor Calculation Agent under the Calculation Agency Agreement;
(vi) the occurrence of a Termination Trigger;
(vii) an amendment to this Trust Agreement, the Up-MACRO
Tradeable Trust Agreement, the Down-MACRO Holding Trust Agreement,
the Participants Agreement or any other Transaction Document;
(viii) at the sole discretion of the Depositor, a change
to the list of Authorized Participants set forth on Schedule I to the
Participants Agreement; and
(ix) any other event that would be material to the Holders
of the Up-MACRO Holding Shares and which would, accordingly, required
to be disclosed by means of the filing of a Form 8-K.
Section 8.4 Disclosure Controls and Procedures. The Depositor
shall establish and maintain disclosure controls and procedures (as defined in
Rule 13a-14 and 15d-14 under the Exchange Act, giving effect to the rules and
regulations and SEC interpretations (whether or not public) thereunder) that
shall be designed to ensure that (i) material information relating to the
Up-MACRO Holding Trust is made known to the Depositor, (ii) such disclosure
controls and procedures are effective to perform the functions for which they
were established; (iii) the Depositor will be advised, on behalf of the
Up-MACRO Holding Trust, of: (A) any significant deficiencies in the design or
operation of such controls which could adversely affect the Fund Accounting
Agent's or the Depositor's ability to record, process, summarize, and report
financial data; and (B) any fraud, whether or not material, that involves
management or other employees who have a role in the Fund Accounting Agent's
or the Depositor's internal controls; and (iv) any material weaknesses in such
controls are able to be identified for the Up-MACRO Holding Trust's auditors.
Section 8.5 Fund Accounting Agent Responsibilities. The Trustee,
in its capacity as the Fund Accounting Agent, shall maintain a system of
internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with this Trust Agreement and the
Administrative Agent's and Trustee's duties hereunder; (ii) transactions with
respect to the Up-MACRO Holding Trust are recorded as necessary to permit
preparation of financial statements and to maintain accountability for the
Trust Assets; and (iii) the Trust Assets are held for the Up-MACRO Holding
Trust by the Trustee in accordance with this Trust Agreement.
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ARTICLE 9
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor. The Depositor shall be
liable in all respects for the obligations, covenants, representations and
warranties of the Depositor arising under or related to this Trust Agreement.
The Depositor shall be liable only to the extent of the obligations
specifically undertaken by it in its capacity as Depositor.
Section 9.2 Limitations on Liability of the Depositor and Claymore
Securities, Inc.None of the Depositor, Claymore Securities, Inc. or any of
their respective directors, officers, employees or agents acting in such
capacities shall be under any liability to the Up-MACRO Holding Trust, the
Trustee, the Holders of the Up-MACRO Holding Shares, the Down-MACRO Holding
Trust, the Down-MACRO Holding Trustee, the Holders of the Down-MACRO Holding
Shares or any other Person for taking any action or for refraining from taking
any action in good faith in their capacities as Depositor, Administrative
Agent or Marketing Agent, as applicable, pursuant to this Trust Agreement;
provided, however, that this provision shall not protect the Depositor,
Claymore Securities, Inc. or any of their respective directors, officers,
employees or agents against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its
obligations and duties hereunder. The Depositor, Claymore Securities, Inc. and
each of their respective directors, officers, employees and agents may rely in
good faith on any document of any kind prima facie properly executed and
submitted by any Person (other than, in the case of the Depositor, the
Depositor and, in the case of Claymore Securities, Inc., Claymore Securities,
Inc.) respecting any matters arising hereunder.
Section 9.3 Liabilities; Indemnification.
(a) Notwithstanding the other provisions of this Trust
Agreement, the Depositor, by entering into this Trust Agreement, agrees to be
liable, directly to the injured party, for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a Holder as a
result of the performance of the Eligible Treasuries, market fluctuations or
other similar market or investment risks associated with ownership of the
Up-MACRO Holding Shares) arising out of or based on the arrangement created by
this Trust Agreement or the actions of the Depositor taken pursuant hereto or
arising from any allegation of infringement of the intellectual property
rights of third parties (to the extent that, if the Trust Assets at the time
the claim is made were not used to pay in full all Outstanding Up-MACRO
Holding Shares, the Trust Assets would be used to pay any such losses, claims,
damages or liabilities).
(b) The Depositor shall indemnify and hold harmless the Trustee
and its officers, directors, employees and agents from and against any loss,
liability, expense, damage or injury (collectively, a "Loss") suffered or
sustained by reason of the acts performed or omitted by the Trustee pursuant
to this Trust Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim including, without limitation, any
action, proceeding or claim relating to or arising from any alleged
infringement of intellectual property rights of third parties; provided,
however, that the Depositor's duty to indemnify under this Section 9.3(b)
shall not extend to any Losses (i) for which the Trustee has a right to
indemnification under any other provision of this Trust Agreement, or (ii)
that are caused by or
66
result from the breach of contract by, or the fraud, negligence or willful
misconduct of, the Trustee or its officers, directors, employees or agents.
(c) The Depositor and its members, managers, officers,
employees, affiliates (as such term is defined in Regulation S-X of the
Securities Act) and subsidiaries (each, a "Depositor Indemnified Party") shall
be indemnified by the Up-MACRO Holding Trust and held harmless against any
loss, liability or expense incurred hereunder without (1) gross negligence,
bad faith, willful misconduct or willful malfeasance on the part of such
Depositor Indemnified Party arising out of or in connection with the
performance of its obligations hereunder or any actions taken in accordance
with the provisions of this Trust Agreement or (2) reckless disregard on the
part of such Depositor Indemnified Party of its obligations and duties under
this Trust Agreement. Each Depositor Indemnified Party shall also be
indemnified by the Up-MACRO Holding Trust and held harmless against any loss,
liability or expense arising under the Income Distribution Agreement, the
Settlement Contracts or any Participants Agreement insofar as such loss,
liability or expense arises from any untrue statement or alleged untrue
statement of a material fact contained in any written statement provided to
the Depositor by any of the Calculation Agent, the Administrative Agent and
the Trustee. Such indemnity shall include payment from the Up-MACRO Holding
Trust of the costs and expenses incurred by such Depositor Indemnified Party
in defending itself against any such indemnified claim or liability.
ARTICLE 10
MATTERS RELATING TO THE
ADMINISTRATIVE AGENT AND THE MARKETING AGENTS
Section 10.1 Role of the Administrative Agent. The Administrative
Agent hereby acknowledges and accepts its role pursuant to its duties set
forth in this Trust Agreement.
Section 10.2 Liability of the Administrative Agent. The
Administrative Agent shall be liable under this Trust Agreement only to the
extent of the obligations specifically undertaken hereunder by the
Administrative Agent in its capacity as Administrative Agent.
Section 10.3 Limitation on Liability of the Administrative Agent.
Neither the Administrative Agent nor any of the directors, officers, employees
or agents of the Administrative Agent shall be under any liability to the
Up-MACRO Holding Trust, the Trustee, the Holders of the Up-MACRO Holding
Shares, the Down-MACRO Holding Trust, the Down-MACRO Holding Trustee, the
Holders of the Down-MACRO Holding Shares or any other Person for any action
taken or for refraining from taking any action in good faith in its capacity
as Administrative Agent pursuant to this Trust Agreement; provided, however,
that this provision shall not protect the Administrative Agent or any
director, officer, employee or agent of the Administrative Agent against any
liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties hereunder. The Administrative
Agent and any director, officer, employee or agent of the Administrative Agent
may rely in good faith on any document properly executed and delivered under
this Trust Agreement by the Depositor, the Trustee, the Down-MACRO Holding
Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO Tradeable Trustee or
any Authorized Participant respecting any matters arising hereunder. The
Administrative Agent shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties as
Administrative Agent in
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accordance with this Trust Agreement and which in its reasonable judgment may
involve it in any expense or liability unless the Administrative Agent has
obtained an indemnity from the Holders of the Up-MACRO Holding Shares
sufficient to hold it harmless from such liability. The Administrative Agent
may, in its sole discretion, undertake any such legal action which it may deem
necessary or desirable for the benefit and interests of the Holders of the
Up-MACRO Holding Shares and the rights and duties of the parties hereto.
Section 10.4 Administrative Agent Indemnification of the Up-MACRO
Holding Trust and the Trustee. The Administrative Agent shall indemnify and
hold harmless the Up-MACRO Holding Trust, the Depositor and the Trustee and
their respective officers, directors, employees and agents (each, an
"Administrative Agent Indemnified Party") from and against any loss,
liability, expense, damage or injury suffered or sustained by reason of any
acts or omissions of the Administrative Agent under this Trust Agreement,
including any judgment, award, settlement, reasonable attorneys' fees and
other costs or expenses incurred in connection with the defense of any action,
proceeding or claim; provided, however, that the Administrative Agent shall
not indemnify the Trustee if such acts or omissions, or alleged acts or
omissions, constitute or are caused by fraud, negligence, or willful
misconduct of the Trustee; provided, further, that the Administrative Agent
shall not indemnify the Depositor if such acts or omissions, or alleged acts
or omissions, constitute or are caused by fraud, gross negligence, or willful
misconduct of the Depositor; provided, further, that the Administrative Agent
shall not indemnify the Up-MACRO Holding Trust or the Holders of the Up-MACRO
Holding Shares for any liabilities, costs or expenses of the Up-MACRO Holding
Trust with respect to any action taken by the Trustee at the request of the
Holders of the Up-MACRO Holding Shares; provided, further, that the
Administrative Agent shall not indemnify the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares as to any losses, claims or damages
incurred by any of them in their capacities as investors, including, without
limitation, losses with respect to market or investment risks associated with
ownership of the Up-MACRO Holding Shares or losses incurred as a result of a
default on any Eligible Treasuries; and provided, further, that the
Administrative Agent shall not indemnify the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares for any liabilities, costs or expenses
of the Up-MACRO Holding Trust or the Holders of the Up-MACRO Holding Shares
arising under any tax law, including any federal, state, local or foreign
income or franchise taxes or any other tax imposed on or measured by income
(or any interest or penalties with respect thereto or arising from a failure
to comply therewith) required to be paid by the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares in connection herewith to any taxing
authority. Indemnification pursuant to this Section 10.4 shall not be payable
from the Trust Assets. The provisions of this indemnity shall run directly to
and be enforceable by an Administrative Agent Indemnified Party, subject to
the limitations hereof. The obligations of the Administrative Agent under this
Section 10.4 shall survive the termination of the Up-MACRO Holding Trust and
the resignation or removal of the Administrative Agent or the resignation or
removal of any of the entities which constitute Administrative Agent
Indemnified Parties at the time of the execution of this Trust Agreement and
the appointment of successors thereto.
Section 10.5 Delegation of Duties by Administrative Agent;
Assignment of Fees. In the ordinary course of business, the Administrative
Agent may at any time delegate any duties hereunder to any Person who agrees
to conduct such duties in accordance with this Trust Agreement. Any such
delegations shall not relieve the Administrative Agent of its liability and
responsibility with respect to such duties and shall not constitute a
resignation, and the Administrative Agent will remain jointly and severally
liable with such Person for any amounts which would otherwise be payable
pursuant to this Article 10 as if the Administrative Agent had performed such
duty; provided, however, that in the case of any significant delegation to a
Person
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other than an Affiliate of the Administrative Agent, (1) at least thirty (30)
days' prior written notice shall be given to the Trustee and the Depositor of
such delegation to any entity that is not an Affiliate of the Administrative
Agent and (2) the prior written consent of the Depositor must be obtained.
Furthermore, any delegation of duties by the Administrative Agent with respect
to the Up-MACRO Holding Trust shall be accompanied by the delegation of such
similar duties to the same entity with respect to the Down-MACRO Holding
Trust, unless the prior written consent of the Depositor is obtained.
Notwithstanding anything herein to the contrary, the Administrative Agent
shall not assign any of its duties and responsibilities hereunder, provided,
that the Administrative Agent shall be entitled to assign or pledge its right
to receive the Up-MACRO Administration and Marketing Fee hereunder to any
third party.
Section 10.6 Resignation or Removal of Administrative Agent.
(a) The Administrative Agent shall hold office until its
successor shall have been appointed by the Holders in accordance with this
Trust Agreement following its removal or resignation.
(b) Subject to the provisions of this Section 10.6, the
Administrative Agent may be appointed, removed or replaced with or without
cause at any time by the Depositor, upon written notice; provided, however,
that the Administrative Agent shall not be removed in accordance with this
Section 10.6 until a successor administrative agent possessing the
qualifications to act as Administrative Agent and willing and able to make the
representations contained in Section 3.4 (a "Successor Administrative Agent")
has been appointed by the Depositor and has accepted such appointment by
written instrument executed by such Successor Administrative Agent and
delivered to the Depositor.
(c) Any Administrative Agent may resign hereunder by an
instrument in writing signed by the Administrative Agent and delivered to the
Depositor and the Trustee, which shall become effective on the date specified
in such instrument; provided, however, that no such resignation of a
Administrative Agent shall become effective:
(i) until a Successor Administrative Agent has been
appointed and has accepted such appointment by instrument executed by
such Successor Administrative Agent and delivered to the Up-MACRO
Holding Trust, the Depositor and the resigning Administrative Agent;
or
(ii) until the assets of the Up-MACRO Holding Trust have
been completely liquidated and the proceeds thereof distributed to
the Holders.
If no Successor Administrative Agent shall have been appointed and accepted such
appointment within thirty (30) days after delivery to the Depositor and the
Up-MACRO Holding Trust of an instrument of resignation, the resigning
Administrative Agent may petition at the expense of the Up-MACRO Holding Trust
any court of competent jurisdiction for appointment of a Successor
Administrative Agent. Such court may thereupon, after prescribing such notice,
if any, as it may deem proper, appoint a Successor Administrative Agent.
(d) No Administrative Agent shall be liable for anything that
occurs after it has ceased to act in such capacity, including, without
limitation, the acts or omissions to act of any Successor Administrative
Agent.
Section 10.7 Role of the Marketing Agents. Each Marketing Agent
hereby acknowledges and accepts its role pursuant to its duties set forth in
this Trust Agreement.
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Section 10.8 Liability of the Marketing Agents. The Marketing
Agents shall be liable under this Trust Agreement only to the extent of the
obligations specifically undertaken hereunder by each of them in their
capacity as a Marketing Agent.
Section 10.9 Limitation on Liability of the Marketing Agents. None
of the Marketing Agents or any of their respective directors, officers,
employees or agents shall be under any liability to the Up-MACRO Holding
Trust, the Trustee, the Administrative Agent, the Holders of the Up-MACRO
Holding Shares, the Down-MACRO Holding Trust, the Down-MACRO Holding Trustee,
the Holders of the Down-MACRO Holding Shares or any other Person for any
action taken or for refraining from taking any action in good faith in its
capacity as Marketing Agent pursuant to this Trust Agreement; provided,
however, that this provision shall not protect either Marketing Agent or their
respective directors, officers, employees or agents against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith
or gross negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties hereunder. Each Marketing Agent and
their respective directors, officers, employees or agents may rely in good
faith on any document properly executed and delivered under this Trust
Agreement by the Depositor, the Trustee, the Administrative Agent, the
Down-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO
Tradeable Trustee or any Authorized Participant respecting any matters arising
hereunder. Neither Marketing Agent shall be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to its duties as
Marketing Agent in accordance with this Trust Agreement and which in its
reasonable judgment may involve it in any expense or liability unless such
Marketing Agent has obtained an indemnity from the Holders of the Up-MACRO
Holding Shares sufficient to hold it harmless from such liability.
Section 10.10 Marketing Agent Indemnification of the Up-MACRO
Holding Trust and the Trustee. Each Marketing Agent shall indemnify and hold
harmless the Up-MACRO Holding Trust, the Depositor and the Trustee and their
respective officers, directors, employees and agents (each, a "Marketing Agent
Indemnified Party") from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions of such
Marketing Agent under this Trust Agreement, including any judgment, award,
settlement, reasonable attorneys' fees and other costs or expenses incurred in
connection with the defense of any action, proceeding or claim; provided,
however, that neither Marketing Agent shall indemnify the Trustee if such acts
or omissions, or alleged acts or omissions, constitute or are caused by fraud,
negligence, or willful misconduct of the Trustee; provided, further, that
neither Marketing Agent shall indemnify the Depositor if such acts or
omissions, or alleged acts or omissions, constitute or are caused by fraud,
gross negligence, or willful misconduct of the Depositor; provided, further,
that neither Marketing Agent shall indemnify the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares for any liabilities, costs or expenses
of the Up-MACRO Holding Trust with respect to any action taken by the Trustee
at the request of the Holders of the Up-MACRO Holding Shares; provided,
further, that neither Marketing Agent shall indemnify the Up-MACRO Holding
Trust or the Holders of the Up-MACRO Holding Shares as to any losses, claims
or damages incurred by any of them in their capacities as investors,
including, without limitation, losses with respect to market or investment
risks associated with ownership of the Up-MACRO Holding Shares or losses
incurred as a result of a default on any Eligible Treasuries; and provided,
further, that neither Marketing Agent shall indemnify the Up-MACRO Holding
Trust or the Holders of the Up-MACRO Holding Shares for any liabilities, costs
or expenses of the Up-MACRO Holding Trust or the Holders of the Up-MACRO
Holding Shares arising under any tax law, including any federal, state, local
or foreign income or franchise taxes or any other tax imposed on or measured
by income (or any interest or penalties with respect thereto or arising from a
failure to comply therewith) required to be paid by
70
the Up-MACRO Holding Trust or the Holders of the Up-MACRO Holding Shares in
connection herewith to any taxing authority. Indemnification pursuant to this
Section 10.10 shall not be payable from the Trust Assets. The provisions of
this indemnity shall run directly to and be enforceable by a Marketing Agent
Indemnified Party, subject to the limitations hereof. The obligations of each
Marketing Agent under this Section 10.10 shall survive the termination of the
Up-MACRO Holding Trust and the resignation or removal of such Marketing Agent
or the resignation or removal of any of the entities which constitute
Marketing Agent Indemnified Parties at the time of the execution of this Trust
Agreement and the appointment of successors thereto.
Section 10.11 Delegation of Duties by Marketing Agents; Assignment
of Fees. In the ordinary course of business, each Marketing Agent may at any
time delegate any duties hereunder to any Person who agrees to conduct such
duties in accordance with this Trust Agreement. Any such delegations shall not
relieve such Marketing Agent of its liability and responsibility with respect
to such duties and shall not constitute a resignation, and such Marketing
Agent will remain jointly and severally liable with such Person for any
amounts which would otherwise be payable pursuant to this Article 10 as if
such Marketing Agent had performed such duty; provided, however, that in the
case of any significant delegation to a Person other than an Affiliate of such
Marketing Agent, (1) at least thirty (30) days' prior written notice shall be
given to the Trustee and the Depositor of such delegation to any entity that
is not an Affiliate of such Marketing Agent and (2) the prior written consent
of the Depositor must be obtained. Furthermore, any delegation of duties by
either Marketing Agent with respect to the Up-MACRO Holding Trust shall be
accompanied by the delegation of such similar duties to the same entity with
respect to the Down-MACRO Holding Trust, unless the prior written consent of
the Depositor is obtained. Notwithstanding anything herein to the contrary,
neither Marketing Agent shall assign any of its duties and responsibilities as
a Marketing Agent; provided, that, each Marketing Agent shall be entitled to
assign or pledge its right to receive its fee hereunder to any third party.
ARTICLE 11
EARLY TERMINATION
Section 11.1 Termination Triggers.
(a) The Up-MACRO Holding Trust shall terminate if any one of
the following events (each, a "Termination Trigger") occurs:
(i) any of the following circumstances persists for five
(5) consecutive Business Days: (i) the Applicable Reference Price of
Crude Oil is not established by NYMEX or the Substitute Oil Price
Provider; (ii) NYMEX or such Substitute Oil Price Provider refuses to
make that price available to the Administrative Agent for the purpose
of calculating the Up-MACRO Underlying Value; or (iii)(a) NYMEX
terminates the NYMEX License or does not agree to a renewal thereof
after the expiration of its initial 5-year term and the Depositor and
MacroMarkets LLC are unable to enter into a Substitute Reference
Price Licensing Agreement with the Dow Xxxxx Energy Service or (b) in
the event that the Depositor and MacroMarkets LLC have already
entered into a Substitute Reference Price Licensing Agreement, the
Substitute Oil Price Provider which is party to such agreement
terminates that license and, in the case of either (a) or (b), the
Holders do not select a Substitute Oil Price Provider or the
Depositor
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and MacroMarkets LLC are unable to enter into a Substitute
Reference Price Licensing Agreement with the Substitute Oil Price
Provider that was selected by the Holders;
(ii) the Applicable Reference Price of Crude Oil rises to
or above $[ ], at which level the Underlying Value of the Down-MACRO
Holding Trust will be equal to 15% or less of assets it holds on
deposit, or the Applicable Reference Price of Crude Oil falls to or
below $[ ], at which level the Underlying Value of the Up-MACRO
Holding Trust will be equal to 15% or less of the assets it holds on
deposit and, in either case, the Applicable Reference Price of Crude
Oil remains at that level for three (3) consecutive Price
Determination Days;
(iii) any of the Up-MACRO Holding Trust, the Down-MACRO
Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO
Tradeable Trust becomes required to register as an "investment
company" under the Investment Company Act;
(iv) any of the Up-MACRO Holding Trust, the Down-MACRO
Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO
Tradeable Trust becomes a commodities pool that is regulated under
the CEAct;
(v) DTC becomes unwilling or unable to act as Depository
under this Trust Agreement and no suitable replacement is willing and
able to assume the duties of the Depository hereunder;
(vi) the Administrative Agent resigns or is unable to
perform its duties hereunder or becomes bankrupt or insolvent, and no
suitable replacement is willing and able to assume the duties of the
Administrative Agent hereunder;
(vii) the Depositor elects to terminate the Up-MACRO
Holding Trust and 66 and 2/3% of the Holders of the Up-MACRO Holding
Trust and the Down-MACRO Holding Trust, each voting as a separate
class (with each Holder of Tradeable Shares being entitled to vote
the underlying Holding Shares on deposit in its Tradeable Trust),
consent to such termination;
(viii) a decree or order is entered by a court having
competent jurisdiction adjudging any of the Up-MACRO Holding Trust,
the Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the
Down-MACRO Tradeable Trust to be bankrupt or insolvent or granting an
order for relief or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of any of the Up-MACRO Holding Trust, the Down-MACRO Holding
Trust, the Up-MACRO Tradeable Trust or the Down-MACRO Tradeable Trust
under the Bankruptcy Code or any other applicable law, or appointing
a receiver, liquidator, assignee or sequestrator (or other similar
official) of any of the Up-MACRO Holding Trust, the Down-MACRO
Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO
Tradeable Trust or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, or, in a court
having jurisdiction, any of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the
Down-MACRO Tradeable Trust commences a voluntary case or proceeding
under the Bankruptcy Code or any other applicable law, or an
involuntary case or proceeding is commenced against any of the
Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the Up-MACRO
Tradeable Trust or the Down-MACRO Tradeable Trust, seeking
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any of the foregoing and such case or proceeding continues
undismissed or unstayed and in effect for a period of 90 consecutive
days;
(ix) the amount of cash and Eligible Treasuries on deposit
in the Up-MACRO Holding Trust or the Down-MACRO Holding Trust is
reduced to less than ten (10) million dollars; and
(x) the amount of cash and Eligible Treasuries on deposit
in the Up-MACRO Holding Trust or the Down-MACRO Holding Trust is
reduced to fifty (50) million dollars or less after previously
reaching an amount equal to two hundred (200) million dollars or
more, or the failure on the part of the Paired Holding Trusts to each
hold cash and Eligible Treasuries in an amount equal to at least two
hundred (200) million dollars after six (6) months or more have
elapsed since the Closing Date and the Depositor elects to terminate
the Paired Holding Trusts.
(b) The Administrative Agent will be responsible for notifying
the Depositor and the Trustee of the occurrence of the Termination Trigger
that results from a specified increase or decrease in the Applicable Reference
Price of Crude Oil or the failure by NYMEX or the applicable Substitute Oil
Price Provider to establish the Applicable Reference Price of Crude Oil or its
refusal to make it available to the Administrative Agent. Upon obtaining
knowledge of the occurrence of any of the other Termination Triggers described
above, the Trustee will be responsible for notifying the Depositor and the
Administrative Agent of such occurrence. In addition, the Trustee will give
prompt notice of that event to the Calculation Agent, the Down-MACRO Holding
Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO Tradeable Trustee and
the Registered Owners of the Up-MACRO Holding Shares.
(c) On the next Distribution Date following the occurrence of a
Termination Trigger (an "Early Termination Date"), the Trustee and the
Down-MACRO Holding Trustee shall terminate the Income Distribution Agreement
and settle all of the Settlement Contracts on behalf of the Paired Holding
Trusts. The Trustee shall then make a Final Distribution on all Outstanding
Up-MACRO Holding Shares, as set forth in Section 5.2. Upon receipt of this
Final Distribution, all Outstanding Up-MACRO Holding Shares shall be deemed to
be redeemed in full.
(d) The Depositor, upon receiving or otherwise obtaining actual
knowledge of the occurrence of any Termination Trigger, shall file a Form 8-K
with the SEC disclosing such occurrence.
ARTICLE 12
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events. Any one of the following
events shall constitute a Trustee Termination Event (a "Trustee Termination
Event"):
(a) to the extent that funds are available in the Up-MACRO
Holding Trust to make any Quarterly Distribution, any failure by the Trustee
to make such Quarterly Distribution in the amount determined in accordance
with the calculations required to be made pursuant to Article 4 hereof, which
failure continues unremedied for a period of five (5) or more Business Days;
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(b) any failure by the Trustee to distribute the proceeds of
all of the Trust Assets on the Final Scheduled Termination Date, which failure
continues unremedied for a period of five (5) or more Business Days;
(c) to the extent that funds are available in the Up-MACRO
Holding Trust, any failure by the Trustee to make any payment required to be
made under the Income Distribution Agreement or the Settlement Contracts,
which failure continues unremedied for a period of five (5) or more Business
Days;
(d) any failure by the Trustee to observe or perform in any
material respect any of its other covenants or obligations hereunder, which
failure continues unremedied for thirty (30) days after the giving of written
notice of such failure to the Trustee by the Depositor or by not less than 25%
of the Holders, voting by par amount;
(e) the Trustee becomes ineligible or incapable of acting as
Trustee hereunder;
(f) the occurrence of a Trustee Termination Event under the
Down-MACRO Holding Trust Agreement, pursuant to the terms of the Down-MACRO
Holding Trust Agreement;
(g) the occurrence of a Trustee Termination Event under the
Up-MACRO Tradeable Trust Agreement, pursuant to the terms of the Up-MACRO
Tradeable Trust Agreement; or
(h) the occurrence of a Trustee Termination Event under the
Down-MACRO Tradeable Trust Agreement, pursuant to the terms of the Down-MACRO
Tradeable Trust Agreement.
Section 12.2 Force Majeure. Notwithstanding the foregoing, any delay
in or failure of performance under Section 12.1 shall not constitute a Trustee
Termination Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Trustee and such delay or failure was
caused by an act of God or the public enemy, terrorism, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Trustee from the obligation to use
its best efforts to perform its obligations in a timely manner in accordance
with the terms of this Trust Agreement and the Trustee shall provide the
Depositor with immediate notice of such failure or delay by it, together with
a description of its efforts to so perform its obligations.
Section 12.3 Notification to Holders of the Up-MACRO Holding Shares.
Within two (2) Business Days after the Administrative Agent or the Trustee is
notified or obtains actual knowledge of any Trustee Termination Event, the
Administrative Agent or the Trustee, as applicable, shall give notice thereof
to the Depositor and the Administrative Agent or the Trustee, as applicable,
and notification of such Trustee Termination Event shall be filed by the
Depositor on Form 8-K with the SEC.
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ARTICLE 13
THE TRUSTEE
Section 13.1 Duties of Trustee.
(a) The Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Trust Agreement, including:
(i) causing the Up-MACRO Holding Trust to make its
required payments under the Income Distribution Agreement and the
Settlement Contracts;
(ii) making distributions on the Up-MACRO Holding Shares
in accordance with Section 5.2 and Section 6.1 hereof;
(iii) administering the Up-MACRO Holding Trust;
(iv) at the direction of the Administrative Agent,
acquiring Eligible Treasuries on behalf of the Up-MACRO Holding
Trust;
(v) paying the fees and expenses of the Up-MACRO Holding
Trust, as specified in Section 5.3 and Section 5.4 of this Trust
Agreement;
(vi) effecting Paired Optional Redemptions in accordance
with the provisions of Section 6.1 hereof;
(vii) effecting Paired Issuances in accordance with the
provisions of Section 6.2 hereof;
(viii) performing the calculations required under Section
4.1 and Section 8.1 and providing such calculations to the
Calculation Agent and the Administrative Agent, as applicable;
(ix) preparing and delivering any notices required to be
delivered to the Registered Owners of the Up-MACRO Holding Shares
hereunder; and
(x) performing all of the other obligations required of it
under this Trust Agreement and the other Transaction Documents.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments that are
specifically required to be furnished to the Trustee pursuant to any provision
hereof, shall examine them to determine whether they conform on their face to
the requirements of this Trust Agreement. The Trustee shall give prompt
written notice to the Depositor and the Administrative Agent of any material
lack of conformity of any such instrument to the applicable provisions of this
Trust Agreement. The Trustee shall also give prompt written notice to the
Registered Owners of the Up-MACRO Holding Shares of any material lack of
conformity of any such instrument to the applicable requirements of this Trust
Agreement.
(c) No provision of this Trust Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act,
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its own bad faith, its own reckless disregard of its duties hereunder or its
own willful misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was grossly negligent in ascertaining the
pertinent facts; and
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted by it in good faith
and in accordance with the direction of the Administrative Agent, the
Depositor, the Calculation Agent or any Holder.
(d) The Trustee shall not be required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers
hereunder, if it has reasonable grounds for believing that repayment of such
funds or adequate indemnity against any related risk or liability is not
reasonably assured to it.
(e) The Trustee shall have no power to vary the corpus of the
Up-MACRO Holding Trust, except as expressly directed by the Administrative
Agent in accordance with the provisions of this Trust Agreement.
(f) In the event that the Transfer Agent and Registrar (if not
also the Trustee) fails to perform any obligation, duty or agreement in the
manner or on the day required under this Trust Agreement, the Trustee shall be
obligated, as soon as possible upon knowledge of a Trust Officer of such
failure and receipt of appropriate records, if any, to perform such
obligation, duty or agreement in the manner required hereunder.
Section 13.2 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting,
or in refraining from acting, in accord with any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented to it pursuant to this Trust
Agreement by the proper party or parties.
(b) The Trustee may consult with counsel, and any advice of
such counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted hereunder
by the Trustee in good faith and in accordance with such advice or Opinion of
Counsel.
(c) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement or to institute,
conduct or defend any litigation in relation to this Trust Agreement at the
request, order or direction of any of the Holders of the Up-MACRO Holding
Shares pursuant to the provisions of this Trust Agreement unless such Holders
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby.
(d) Subject to Section 13.1(c) hereof, the Trustee shall not be
personally liable for any action taken, suffered or omitted by it in good
faith and reasonably
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believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Trust Agreement.
(e) The Trustee shall not be bound to make any investigation
into the accuracy of any assertions of facts made in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond or other paper or document, unless the
Trustee has actual knowledge that any such assertion is incorrect or unless
requested in writing to do so by Holders evidencing more than 25% of the
Up-MACRO Aggregate Par Amount.
(f) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder that are customarily executed or
performed by agents, custodians, nominees or attorneys under like
circumstances, either directly or by or through agents, custodians, nominees
or attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney selected by it in good faith
and with due care (other than an agent or attorney that is an Affiliate of the
Trustee); furthermore, the Trustee shall be under no obligation to monitor,
and shall assume no personal liability for, the actions of the Depositor or
any other Person in connection with their duties under this Trust Agreement or
in connection with the Up-MACRO Holding Trust generally.
(g) Except as may be required by Section 13.1(b) and Section
13.12, the Trustee shall not be required to make any initial or periodic
examination of any documents or records for the purpose of establishing the
presence or absence of defects, the compliance by the Depositor, the
Administrative Agent or the Marketing Agents with their respective
representations and warranties or for any other purpose.
Section 13.3 Trustee Not Liable for Recitals in Up-MACRO Holding
Shares. The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Up-MACRO Holding Shares (other than the
certificate of authentication on the Up-MACRO Holding Shares). Except as set
forth in Section 3.2, the Trustee makes no representations as to the validity
or sufficiency of this Trust Agreement or of the Up-MACRO Holding Shares
(other than the certificate of authentication on the Up-MACRO Holding Shares).
Section 13.4 Holders May Direct Trustee. Holders of Up-MACRO
Holding Shares who are the Beneficial Owners of an Aggregate Par Amount
representing at least 66 and 2/3% of all such shares that are Outstanding at
any time may direct the Trustee with respect to actions that the Trustee is
required, permitted or empowered to take under this Trust Agreement, subject
to the limitations set forth in Section 2.3, Section 3.1(b) and Section 15.6
hereof.
Section 13.5 Compensation. The Depositor shall cause to be paid in
the manner provided for in Section 5.4, and the Trustee shall be entitled to
receive, on each Distribution Payment Date, the Up-MACRO Trustee Fee for all
services rendered by it under this Trust Agreement and in the exercise and
performance of any of the powers and duties hereunder of the Trustee. The
entitlement of the Trustee under this Section 13.5 for past services rendered
shall survive the termination of the Up-MACRO Holding Trust.
Section 13.6 Indemnification. The Trustee and its directors,
shareholders, officers, employees, agents, affiliates (as such term is defined
in Regulation S-X of the Securities Act) and subsidiaries (each, a "Trustee
Indemnified Party") shall be indemnified from the Trust Assets and held
harmless against any loss, liability or expense (a) arising out of or in
connection with the acceptance or administration of the Up-MACRO Holding Trust
and any actions taken in
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accordance with the provisions of this Trust Agreement or that arises out of
or is related to any offer or sale of Up-MACRO Holding Shares incurred without
(i) negligence, bad faith, and willful misconduct on the part of such Trustee
Indemnified Party and (ii) reckless disregard on the part of such Trustee
Indemnified Party of its obligations and duties under this Trust Agreement, or
(b) that arises out of or is related to any filings with or submissions to the
SEC in connection with or with respect to the Up-MACRO Holding Shares (which,
by way of illustration and not by way of limitation, include the Registration
Statement and any amendments thereof or supplements thereto filed with the SEC
or any periodic reports or updates that may be filed under the Exchange Act),
but not including any information provided in writing by the Trustee to the
Depositor for use in the Registration Statement or any other filing with the
SEC. Such indemnity shall include payment from the Up-MACRO Holding Trust of
the costs and expenses incurred by such Trustee Indemnified Party in
investigating or defending itself against any claim or liability relating to
this Trust Agreement or the Up-MACRO Holding Trust, including any loss,
liability or expense incurred in acting pursuant to written directions or
instructions given by the Depositor or counsel to the Up-MACRO Holding Trust
to the Trustee from time to time in accordance with the provisions of this
Trust Agreement or in undertaking actions from time to time which the Trustee
deems necessary in its discretion, subject to the limitations imposed by
Section 2.3 and Section 3.1(b) to protect the Up-MACRO Holding Trust and the
rights of all Beneficial Owners pursuant to the terms of this Trust Agreement.
Any amounts payable to a Trustee Indemnified Party under this Section 13.6 may
be payable in advance or shall be secured by a lien on the Trust Assets.
Section 13.7 Eligibility Requirements. The Trustee hereunder shall
at all times: (i) be a bank or trust company organized and doing business
under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authority, (ii) have a combined
capital and surplus of at least $100,000,000, (iii) maintain any credit or
deposit rating required by nationally recognized rating organizations (as of
the date hereof "A-1" for Standard & Poor's Rating Service or "P-1" for
Xxxxx'x Investors Service, Inc.) and (iv) accept and act in the capacity of
both the Trustee hereunder and as trustee of the Down-MACRO Holding Trust, the
Up-MACRO Tradeable Trust and the Down-MACRO Tradeable Trust. If such bank
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 13.7, the combined capital and surplus of such bank or
trust company shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee ceases to be eligible in accordance with the provisions of this
Section 13.7, the Trustee shall resign immediately in the manner and with the
effect specified in Section 13.8.
Section 13.8 Resignation or Removal of Trustee.
(a) A Trustee appointed to office shall hold office until its
successor shall have been appointed by the Holders in accordance with this
Trust Agreement or until its termination, removal or resignation.
(b) Subject to the provisions of this Section 13.8, the Trustee
may be appointed, removed or replaced without cause at any time by the
Depositor, upon written notice, or with cause upon the occurrence of a Trustee
Termination Event; provided, however, that the Trustee shall not be removed in
accordance with this Section 13.8 until a successor Trustee possessing the
qualifications to act as Trustee and willing and able to make the
representations contained in Section 3.2 (a "Successor Trustee") has been
appointed by the Depositor and has accepted such appointment by written
instrument executed by such Successor Trustee and delivered to the Depositor.
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(c) Any Trustee may resign hereunder by an instrument in
writing signed by the Trustee and delivered to the Depositor, the
Administrative Agent and each Registered Owner, which shall become effective
on the date specified in such instrument; provided, however, that no such
resignation of a Trustee shall become effective:
(i) until a Successor Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Trustee and delivered to the Up-MACRO Holding Trust, the Depositor,
the Administrative Agent and the resigning Trustee; or
(ii) until the assets of the Up-MACRO Holding Trust have
been completely liquidated and the proceeds thereof distributed to
the Holders.
If no Successor Trustee shall have been appointed and accepted such appointment
within thirty (30) days after delivery to the Depositor, the Administrative
Agent and the Up-MACRO Holding Trust of an instrument of resignation, the
resigning Trustee may petition at the expense of the Up-MACRO Holding Trust any
court of competent jurisdiction for appointment of a Successor Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trustee.
(d) No Trustee shall be liable for anything that occurs after
it has ceased to act in such capacity, including, without limitation, the acts
or omissions to act of any Successor Trustee; provided, that such resigning or
terminated Trustee shall remain liable for any actions taken by it prior to
its termination or resignation as a result of which it would be liable to the
Up-MACRO Holding Trust pursuant to Section 13.1(c).
Section 13.9 Successor Trustee.
(a) Any Successor Trustee appointed as provided in Section 13.8
shall execute, acknowledge and deliver to the Depositor and to its predecessor
Trustee an instrument in a form acceptable to the Depositor accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor Trustee shall become effective and such Successor Trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as Trustee herein. The predecessor Trustee
shall deliver to the Successor Trustee all documents and statements held by it
hereunder, and the Depositor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be
required for fully and certainly vesting and confirming in the Successor
Trustee all such rights, powers, duties and obligations within thirty days of
execution of such instrument.
(b) No Successor Trustee shall accept appointment as provided
in this Section 13.9 unless at the time of such acceptance such Successor
Trustee is eligible under the provisions of Section 13.7 and makes in the
instrument of acceptance delivered pursuant to clause (a) of this Section 13.9
the representations and warranties contained in Section 3.2 hereof.
(c) Upon acceptance of appointment by a Successor Trustee as
provided in this Section 13.9, such Successor Trustee shall provide prompt
notice of its succession hereunder to the Depositor, and the Depositor shall
file a Form 8-K with the SEC disclosing such succession.
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(d) Without the consent of a majority of the Holders of the
Up-MACRO Holding Shares, voting by Up-MACRO Aggregate Par Amount, the
compensation to be paid to the Successor Trustee may not be greater than the
compensation paid to the terminated Trustee hereunder.
Section 13.10 Merger or Consolidation. Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Trustee shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Trustee shall be the
successor of the Trustee hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto; provided,
however, that such corporation shall be otherwise qualified and eligible under
this Article 13, including without limitation, Section 13.7 hereof. The
Trustee shall promptly furnish to the Depositor and the Administrative Agent a
notice of any merger or consolidation to which the Trustee is a party.
Section 13.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Trust
Agreement, the Trustee shall have the power and may execute and deliver all
instruments to appoint, at any time, one or more Persons to act as a
co-trustee or co-trustees, or a separate trustee or separate trustees, of all
or any part of the Trust Assets, and to vest in such Person or Persons, in
such capacity and for the benefit of the Holders of the Up-MACRO Holding
Shares, such title to the Trust Assets or any part thereof and, subject to the
other provisions of this Section 13.11, such powers, duties, obligations,
rights and trusts as the Trustee may consider necessary or desirable, for the
purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Assets may at the time be located; provided, that such
co-trustee or co-trustees, or separate trustee or separate trustees, shall
also assume the rights, duties and obligations of the Trustee under each of
the Down-MACRO Holding Trust Agreement, the Up-MACRO Tradeable Trust Agreement
and the Down-MACRO Tradeable Trust Agreement; provided, further, that the
Trustee shall exercise due care in the appointment of any co-trustee or
separate trustee. Each co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility for a successor trustee under
Section 13.8 and Section 13.9. No notice to Holders of the Up-MACRO Holding
Shares of the appointment of any co-trustee or separate trustee shall be
required under this Section 13.11; provided, that the Trustee shall provide
notice of each such appointment to the Depositor and the Administrative Agent.
(b) Every co-trustee and separate trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee and such co-trustee or separate
trustee jointly (it being understood that such co-trustee or separate
trustee shall not be authorized to act unless the Trustee joins in
such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
the Trustee is incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Assets or any portion
thereof in any such jurisdiction) shall be exercised or performed
singly by such co-trustee or separate trustee, but solely at the
direction of the Trustee;
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(ii) no co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of any other
trustee hereunder; and
(iii) the Trustee may at any time accept the resignation
of or remove any co-trustee or separate trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then co-trustees and
separate trustees as effectively as if given to each of them. Every instrument
appointing any co-trustee or separate trustee shall refer to this Trust
Agreement and the conditions of this Article 13. Upon its acceptance of the
trusts conferred by its instrument of appointment, each co-trustee and
separate trustee shall be vested with the estates or property specified in
such instrument, either jointly with the Trustee or separately, as may be
provided therein, subject to all of the provisions of this Trust Agreement,
specifically including every provision of this Trust Agreement relating to the
conduct of, affecting the liability of, or affording protection to the
Trustee. Every such instrument shall be filed with the Trustee.
(d) Any co-trustee or separate trustee may at any time appoint
the Trustee its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect to
this Trust Agreement on its behalf and in its name. If any co-trustee or
separate trustee shall become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts under or in respect to
this Trust Agreement shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or successor
trustee.
Section 13.12 Books, Records; Taxes; Audit.
(a) The Trustee shall keep proper books of record and account
of all the transactions under this Trust Agreement at its Corporate Trust
Office or such office as it may subsequently designate upon notice to the
other parties hereto. The books and records of the Trustee shall be open to
inspection by any Person who establishes to the Trustee's reasonable
satisfaction that it is a Beneficial Owner upon reasonable advance notice at
all reasonable times during the usual business hours of the Trustee. The
Administrative Agent shall keep proper records of all Paired Optional
Redemptions and Paired Issuances effected at any time at its Business Office.
Such records shall be open to inspection by any Person who establishes to the
Administrative Agent's reasonable satisfaction that it is a Beneficial Owner
upon reasonable advance notice at all reasonable times during the usual
business hours of the Administrative Agent. Such records shall be preserved by
the Trustee or the Administrative Agent, as applicable, for so long as the
Depositor may direct.
(b) The Trustee shall provide the Depositor such financial and
other information regarding the operation of the Up-MACRO Holding Trust as may
be required for the Depositor to prepare such reports and filings required
under the federal securities laws as required under Section 8.2. Unless
otherwise required by applicable law or regulation, the Depositor shall be
responsible for any certification of any such reports or the contents thereof;
provided, that the Trustee shall make such representations to the Depositor
with respect to information within the Trustee's control as shall be required
for the Depositor to make such certification.
(c) The Depositor shall prepare or cause to be prepared, and
the Trustee shall sign (if it is determined that the Trustee's signature is
required thereon) and file any tax returns required to be filed by the
Up-MACRO Holding Trust. The Depositor shall
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also prepare or cause to be prepared all tax information required by law to be
distributed to Holders of the Up-MACRO Holding Shares. The Trustee, the
Calculation Agent and the Administrative Agent, upon request, shall each
furnish the Depositor with any information known to it that may be reasonably
required in connection with the preparation of such duties set forth in the
preceding two sentences.
(d) In no event shall the Trustee, the Depositor or the
Administrative Agent be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Up-MACRO Holding Shares under any
present or future law of the United States of America or imposed by any taxing
authority having jurisdiction over the Up-MACRO Holding Trust. For all such
taxes and charges and for any expenses, including counsel's fees, which the
Trustee or the Administrative Agent may sustain or incur with respect to such
taxes or charges, the Trustee or the Administrative Agent shall be reimbursed
and indemnified out of the assets of the Up-MACRO Holding Trust and the
payment of such amounts shall be secured by a lien on the Up-MACRO Holding
Trust. Any payments by the Trustee or the Administrative Agent shall be
subject to withholding regulations then in force. This paragraph shall survive
notwithstanding any termination of this Trust Agreement and the Up-MACRO
Holding Trust or the resignation or removal of the Trustee or the
Administrative Agent. If sufficient funds are not on deposit in the Fee
Payment Account to reimburse the Trustee or the Administrative Agent for any
taxes paid by either of them on behalf of the Up-MACRO Holding Trust, the
Depositor shall reimburse the Trustee and the Administrative Agent therefor.
(e) The accounts of the Up-MACRO Holding Trust shall be
audited, as required by law and as may be directed by the Depositor, by
Independent certified public accountants designated from time to time by the
Depositor and the cost of such audit shall be borne by the Up-MACRO Holding
Trust pursuant to Section 5.3 hereof. The report of such accountants shall be
furnished by the Administrative Agent to any Beneficial Owner upon request.
Section 13.13 Trustee May Enforce Claims Without Possession of
Up-MACRO Holding Shares. All rights of action and claims under this Trust
Agreement or the Up-MACRO Holding Shares may be prosecuted and enforced by the
Trustee without the possession of any of the Up-MACRO Holding Shares or the
production thereof in any proceeding relating thereto, and any such proceeding
instituted by the Trustee shall be brought in its own name as trustee. Any
recovery of judgment shall, after provision for payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Up-MACRO Holding
Shares in respect of which such judgment has been obtained.
Section 13.14 Suits for Enforcement. If a Termination Trigger or a
Trustee Termination Event occurs and is continuing, the Trustee (or the
Depositor, in the case of a Trustee Termination Event) in its discretion may
proceed to protect and enforce its rights and the rights of the Holders of the
Up-MACRO Holding Shares under this Trust Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Trust Agreement, in
aid of the execution of any power granted in this Trust Agreement or for the
enforcement of any other legal, equitable or other remedy as the Trustee (or
the Depositor, in the case of a Trustee Termination Event), being advised by
counsel, shall deem most effectual to protect and enforce any of the rights of
the Holders of the Up-MACRO Holding Shares.
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Section 13.15 Maintenance of Office or Agency. The Trustee will
maintain at its expense an office or agency (the "Corporate Trust Office")
where notices and demands to or upon the Trustee in respect of the Up-MACRO
Holding Shares and this Trust Agreement may be served. The Corporate Trust
Office shall initially be located at 000 Xxxxxxxxx Xxxxxx, Xxxxxx
Xxxxxxxxxxxxx 00000. The Trustee will give prompt notice to the Depositor and
to Registered Owners of the Up-MACRO Holding Shares of any change in the
location of the Corporate Trust Office.
ARTICLE 14
TERMINATION
Section 14.1 Termination of Trust. The Up-MACRO Holding Trust and
the respective obligations and responsibilities of the Depositor, the
Administrative Agent, the Marketing Agents and the Trustee created hereby
shall terminate on the earlier of an Early Termination Date and the Final
Scheduled Termination Date. The Up-MACRO Holding Trust shall not terminate in
the event that the Depositor is adjudged to be insolvent or is liquidated or
dissolved for any reason.
Upon the termination of the Up-MACRO Holding Trust, the Trustee,
after making the Final Distribution provided for in Section 5.2 and
distributing ratably to each Holder of any other Trust Assets, shall wind up
the activities and affairs of the Up-MACRO Holding Trust and shall cause its
certificate of designation to be cancelled by filing a certificate of
cancellation with the New York Secretary of State, terminating the Up-MACRO
Holding Trust.
ARTICLE 15
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination.
(a) This Trust Agreement shall not in any circumstances be
amended (i) to modify the definition of "Up-MACRO Underlying Value,"
"Down-MACRO Underlying Value," "Up-MACRO Income Distribution Payment,"
"Down-MACRO Income Distribution Payment," "Up-MACRO Settlement Payment,"
"Down-MACRO Settlement Payment" or any constituent defined terms that are a
part of the foregoing defined terms; or (ii) to modify the number of Paired
Holding Shares that constitute a MACRO Unit.
(b) Subject to clause (a) of this Section 15.1, this Trust
Agreement may be amended from time to time with the written consent of the
Depositor, the Administrative Agent and the Trustee, but without the consent
of any Holder of Up-MACRO Holding Shares (i) to cure any ambiguity or to
correct or supplement any provision which may be defective or inconsistent
with any other provision of this Trust Agreement, the Down-MACRO Holding Trust
Agreement, the Up-MACRO Tradeable Trust Agreement or the Down-MACRO Tradeable
Trust Agreement, (ii) to modify any provision of or add a provision to this
Trust Agreement to conform it to the description of the terms of the Up-MACRO
Holding Shares contained in the Prospectus, (iii) to add to the covenants,
restrictions or obligations of any entity under this Trust Agreement for the
benefit of the Holders of the Up-MACRO Holding Shares or to modify any
provisions of this Trust Agreement in any manner that does not adversely
affect any Holder of Paired Holding Shares in any material respect, (iv)
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to evidence and provide for the acceptance of appointment hereunder of a
Successor Trustee, a successor Administrative Agent or any successor Marketing
Agent, (v) to modify the procedures for effecting Paired Issuances and Paired
Optional Redemptions set forth herein in connection with an amendment of the
Participants Agreement entered into among the Trustee, the Down-MACRO Holding
Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO Tradeable Trustee, the
Administrative Agent and one or more Authorized Participants, and (vi) to
comply with any requirements imposed by the Code, or any federal or state
securities laws; provided, that an opinion in form and substance satisfactory
to the Depositor that such amendment will not cause the Up-MACRO Holding Trust
to be treated as an association taxable as a corporation must be delivered in
connection with any amendment referenced in the foregoing clause (iii) and
clause (vi); provided, further, that no amendment of this Trust Agreement may
be made if it would have the effect of causing the Up-MACRO Holding Trust to
be required to register as an investment company under the Investment Company
Act or to be regulated as a commodity pool under the CEAct. The Trustee may,
but shall not be obligated to, enter into any amendment which affects the
Trustee's rights, duties or immunities under this Trust Agreement or
otherwise.
(c) Subject to clause (a) of this Section 15.1, this Trust
Agreement may also be amended from time to time with the written consent of
the Depositor, the Administrative Agent and the Trustee and the written
consent of the Holders of Up-MACRO Holding Shares evidencing not less than a
majority of the Up-MACRO Aggregate Par Amount, for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Trust Agreement or of modifying in any manner the rights of the
Holders of the Up-MACRO Holding Shares; provided, that the Down-MACRO Holding
Trust Agreement shall be amended in an identical manner in accordance with the
amendment provisions thereof; provided further still, that, without the
written consent of each Holder of the Up-MACRO Holding Shares and the
Down-MACRO Holding Shares that would be adversely affected thereby, no
amendment may (i) modify the amount or timing of any distributions that are
required to be made on the Up-MACRO Holding Shares; or (ii) reduce the
percentage of Holders that are required to consent to any of the foregoing
amendments; provided, further still, that the use of the spot price of West
Texas Intermediate Crude Oil generated by the Dow Xxxxx Energy Service as the
Substitute Reference Oil Price shall not require the consent of any of the
Holders, and the selection of any other Substitute Reference Oil Price after
the NYMEX Sublicensing Agreement has been terminated may be made at the
direction, or with the consent, of a Majority of the Holders; and provided
further still, if such amendment is adopted and approved by each Holder of the
Up-MACRO Holding Shares, such amendment shall not be effective unless and
until an identical amendment has been made to the Down-MACRO Holding Trust
Agreement in accordance with the amendment provisions thereof.
(d) The Trustee and the Depositor may amend the Income
Distribution Agreement or the Settlement Contracts in any manner that is
otherwise not prohibited by the terms of clause (a) of this Section 15.1.
(e) Promptly after the execution of any amendment or consent
pursuant to this Section 15.1, the Depositor shall prepare and file a Form 8-K
with the SEC setting forth the provisions of such amendment.
(f) Where the consent of Holders is required under this Section
15.1 in order to amend this Trust Agreement, it shall be sufficient if such
consent approves the substance of the proposed amendment; the particular form
of such amendment need not be
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approved. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Holders of the Up-MACRO Holding
Shares shall be subject to such reasonable requirements as the Trustee may
prescribe.
(g) Holders evidencing not less than a majority of the Up-MACRO
Aggregate Par Amount may waive any default by the Depositor, the Trustee, or
the Administrative Agent in the performance of their obligations hereunder and
its consequences, except the failure to make any distributions required to be
made to Holders of the Up-MACRO Holding Shares or to make any Up-MACRO Income
Distribution Payment or any Up-MACRO Settlement Payment. Upon any such waiver
of a past default, such default shall cease to exist, and any default arising
therefrom shall be deemed to have been remedied for every purpose of this
Trust Agreement. No such waiver shall extend to any subsequent or other
default or impair any right consequent thereon except to the extent expressly
so waived.
Section 15.2 Registration (Initial and Continuing) of Up-MACRO
Holding Shares; Certain Securities Law Filings. The Depositor agrees to (i)
prepare and file the Registration Statement with the SEC under the Securities
Act, and take such action as is necessary from time to time to qualify the
Up-MACRO Holding Shares for offering and sale under the federal securities
laws of the United States, including the preparation and filing of amendments
of and supplements to such Registration Statement, (ii) promptly notify the
Trustee and the Administrative Agent of any such amendment of or supplement to
the Registration Statement and of any order preventing or suspending the use
of the Prospectus included therein, (iii) provide the Trustee and the
Administrative Agent from time to time with copies, including copies in
electronic form, of the Prospectus, in such quantities as the Trustee and the
Administrative Agent may reasonably request, (iv) prepare and file any
periodic reports or updates that may be required under the Exchange Act, as
specified in Section 8.2 hereof, and (v) take such action as is necessary from
time to time to register or qualify the Up-MACRO Holding Shares for offering
and sale under the securities or blue sky laws of those states of the United
States or other jurisdictions as the Depositor may select or as may be
necessary to continue that registration or qualification in effect for so long
as the Depositor determines that the Up-MACRO Holding Trust shall continue to
offer or sell Up-MACRO Holding Shares in that jurisdiction. Registration
charges, blue sky fees, printing costs, mailing costs, attorney's fees, and
other miscellaneous out-of-pocket expenses shall be borne by the Up-MACRO
Holding Trust in the manner provided for in Section 5.3.
Section 15.3 Prospectus Delivery. The Administrative Agent shall,
if required to do so under the federal securities laws of the United States,
deliver at the time of issuance of any Up-MACRO Holding Shares in any manner
permitted by such laws, a copy of the Prospectus, as most recently furnished
to the Administrative Agent by the Depositor, to each person submitting a
Creation Order. The Administrative Agent shall also, if required to do so
under the federal securities laws of the United States, deliver in conjunction
with any marketing or computational materials, in any manner permitted by such
laws, a copy of the Prospectus, as most recently furnished to the
Administrative Agent by the Depositor.
Section 15.4 Protection of Right, Title and Interest to Trust
Assets.
(a) The Depositor shall cause this Trust Agreement, all
amendments hereof and supplements hereto and all financing statements,
continuation statements and any other necessary documents covering the right,
title and interest of the Holders of the Up-MACRO Holding Shares and of the
Trustee in and to the Trust Assets to be promptly recorded, registered and
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filed, and at all times to be kept recorded, registered and filed, all in such
manner and in such places as may be required by law fully to preserve and
protect the right, title and interest of the Holders of the Up-MACRO Holding
Shares and the Trustee hereunder in and to all property comprising the Trust
Assets. Not later than the Closing Date, the Depositor shall file a financing
statement covering the interest of the Down-MACRO Holding Trustee, on behalf
of the Down-MACRO Holding Trust, in the Trust Assets which shall secure the
obligations of the Up-MACRO Holding Trust to the Down-MACRO Holding Trust
under the Income Distribution Agreement and the Settlement Contracts. The
Depositor shall deliver to the Trustee file-stamped copies of, or filing
receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing.
(b) Within 30 days after the Depositor makes any change in its
name, identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) (or any comparable
provision) of the UCC, the Depositor shall give the Trustee notice of such
change and shall file such financing statements or amendments as may be
necessary to continue the perfection of the Up-MACRO Holding Trust's security
interest in the Trust Assets and the proceeds thereof.
(c) The Depositor shall give the Trustee prompt notice of any
relocation of its principal executive offices or of any office from which it
performs its duties hereunder or keeps records concerning this transaction.
If, as a result of any such relocation, the applicable provisions of the UCC
require the filing of any new financing statement or of any amendment to any
previously filed financing or continuation statement, the Depositor shall file
such financing statements or amendments as may be necessary to perfect or to
continue the perfection of the Up-MACRO Holding Trust's security interest in
the Trust Assets and the proceeds thereof. The Depositor shall at all times
maintain its principal executive offices and each office from which it
performs its duties hereunder within the United States.
Section 15.5 Limitation on Rights of Holders of the Up-MACRO
Holding Shares.
(a) The death or incapacity of any Holder of the Up-MACRO
Holding Shares shall not operate to terminate this Trust Agreement or the
Up-MACRO Holding Trust, nor shall such death or incapacity entitle the legal
representatives or heirs of such Holder to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding-up
of the Up-MACRO Holding Trust, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Holder of the Up-MACRO Holding Shares shall have any
right to vote (except as expressly provided in this Trust Agreement) or in any
manner otherwise control the operation and management of the Up-MACRO Holding
Trust, or the obligations of the parties hereto, nor shall any Holder of the
Up-MACRO Holding Shares be under any liability to any third person by reason
of any action by the parties to this Trust Agreement pursuant to any provision
hereof.
(c) No Holder of the Up-MACRO Holding Shares shall have any
right by virtue of any provisions of this Trust Agreement to institute any
suit, action or proceeding in equity or at law upon, under or with respect to
this Trust Agreement unless such Holder previously has made, and unless the
Holders of Up-MACRO Holding Shares representing the beneficial ownership of at
least 25% of all Outstanding Up-MACRO Holding
86
Shares have made, written request to the Trustee to institute such suit,
action or proceeding in its own name as Trustee hereunder and have offered to
the Trustee such reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby and the Trustee,
for sixty (60) days after its receipt of such request and offer of indemnity,
has neglected or refused to institute any such action, suit or proceeding; it
being understood and intended, and expressly agreed to by each Holder with
every other Holder and the Trustee, that no one or more Holders of the
Up-MACRO Holding Shares shall have any right in any manner whatsoever by
virtue of or by availing itself or themselves of any provisions of this Trust
Agreement to affect, disturb or prejudice the rights of any other Holder of
the Up-MACRO Holding Shares, to obtain or seek to obtain priority over or
preference to any other Holder of the Up-MACRO Holding Shares or to enforce
any right under this Trust Agreement except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of the Up-MACRO
Holding Shares. For the protection and enforcement of the provisions of this
Section 15.5, each and every Holder and the Trustee shall be entitled to such
relief as can be obtained either at law or in equity.
Section 15.6 Certain Rights of Holders of Up-MACRO Holding Shares;
Voting. Each Holder of Up-MACRO Holding Shares shall be able to vote on all
matters on which shareholders may or are required to vote under this Trust
Agreement for the Up-MACRO Holding Shares. Holders of Up-MACRO Holding Shares
evidencing not less than 66 and 2/3% of the Up-MACRO Aggregate Par Amount
shall have the right to direct the time, place and method of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee relating to such proceeding; provided, however,
that, subject to Section 15.1, the Trustee shall have the right to decline to
follow any such direction if the Trustee, being advised by counsel, determines
that the action so directed may not lawfully be taken, or if a Trust Officer
in good faith determines that the proceedings so directed would be illegal or
involve the Trustee in personal liability or be unduly prejudicial to the
rights of Holders of the Up-MACRO Holding Shares not party to such direction;
provided further that nothing in this Trust Agreement shall impair the right
of the Trustee to take any action deemed proper by the Trustee and not
inconsistent with such direction or with the limitations imposed by Section
2.3 and Section 3.1(b) hereof.
In accordance with Section 15.6 of the Up-MACRO Tradeable Trust
Agreement, the holders of the Up-MACRO Tradeable Shares shall be able to
direct the Trustee in the exercise of the voting rights associated with the
Up-MACRO Holding Shares held on deposit in the Up-MACRO Tradeable Trust. Each
holder of Up-MACRO Tradeable Shares shall be entitled to vote on (i) any
amendments to this Trust Agreement that require the prior written consent of
the shareholders as described in Section 15.1, (ii) any amendment to the
Income Distribution Agreement and the Settlement Contracts, (iii) the
termination of the Trustee, (iv) the appointment of a Successor Trustee, (v)
the termination of the Calculation Agent, (vi) the appointment of a successor
Calculation Agent, and (vii) any amendments to the certificate of trust filed
with the New York Secretary of State.
Section 15.7 MACRO Licensing Agreement. On the Closing Date, the
Up-MACRO Holding Trust shall enter into the MACRO Licensing Agreement with
MacroMarkets LLC, the Administrative Agent, the Up-MACRO Tradeable Trust, the
Down-MACRO Holding Trust and the Down-MACRO Tradeable Trust. Under such
licensing agreement, MacroMarkets LLC shall be entitled to the receipt of the
Up-MACRO Licensing Fee, which shall be payable to MacroMarkets LLC in arrears
on each Distribution Date in accordance with Section 5.4 hereof.
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Section 15.8 Governing Law; Jurisdiction. THIS TRUST AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of the parties hereto hereby
irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the State of New York and of the federal courts
sitting in the State of New York for any litigation arising out of or relating
to this Trust Agreement and the transactions contemplated hereby (and agrees
not to commence any litigation relating thereto except in such courts) and
further agrees that service of any process, summons, notice or document by
prepaid certified mail with proof of mailing receipt validated by the United
States Postal Service to the address of such party as set forth in Section
15.9 (or to the agent of such party appointed and maintained in the State of
New York as such party's agent for acceptance of legal process) shall be
effective service of process for any litigation brought against it in any such
court. Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any litigation arising out of
this Trust Agreement or the transactions contemplated hereby in the courts of
the State of New York or of the federal courts sitting in the State of New
York and hereby further irrevocably and unconditionally waives its right to,
and agrees not to, plead or claim in any such court that any such litigation
brought in any such court has been brought in an inconvenient forum.
Section 15.9 Notices.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Trust Agreement shall be
in writing and shall be deemed to have been duly given if personally
delivered, mailed by registered mail, return receipt requested, or sent by
facsimile transmission to the following addresses:
If to the Depositor, to: MACRO Securities Depositor, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Facsimile: (000) 000-0000
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to the Trustee, to: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx XxXxxxx
Facsimile: (000) 000-0000
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With a copy to: Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
If to the Administrative Agent, to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention:
Facsimile:
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
If to the Marketing Agents, to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention:
Facsimile:
With a copy to: Claymore Securities, Inc.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000
Or, to: MACRO Securities Depositor, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Facsimile: (000) 000-0000
With a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) Any Notice required or permitted to be given to a
Registered Owner of the Up-MACRO Holding Shares shall be given by first-class
mail, postage prepaid, at the address of such Registered Owner as shown in the
Share Register. Any Notice so mailed within the time prescribed in this Trust
Agreement shall be conclusively presumed to have been duly given, whether or
not the Registered Owner receives such Notice. [Any notice to be given to a
Beneficial Owner shall be duly given if mailed or delivered to Authorized
Participants designated by the Depository for delivery to Beneficial Owners.]
89
Section 15.10 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Trust Agreement is held
invalid for any reason whatsoever, then such provision shall be deemed
severable from the remaining provisions of this Trust Agreement and shall in
no way affect the validity or enforceability of the remaining provisions or of
the Up-MACRO Holding Shares or the rights of the Holders of the Up-MACRO
Holding Shares.
Section 15.11 Up-MACRO Holding Shares Nonassessable and Fully
Paid. It is the intention of the parties to this Trust Agreement that the
Holders of the Up-MACRO Holding Shares shall not be personally liable for
obligations of the Up-MACRO Holding Trust, that the interests in the Up-MACRO
Holding Trust represented by the Up-MACRO Holding Shares shall be
nonassessable for any losses or expenses of the Up-MACRO Holding Trust or for
any reason whatsoever and that the Up-MACRO Holding Shares upon authentication
thereof by the Trustee pursuant to Section 2.5 are and shall be deemed fully
paid.
Section 15.12 Further Assurances. The Depositor agrees to do and
perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Trustee more fully
to effect the purposes of this Trust Agreement, including the execution of any
financing statements or continuation statements relating to the Trust Assets
for filing under the provisions of the UCC of any applicable jurisdiction.
Section 15.13 Non-Petition Covenant; No Proceedings.
(a) Notwithstanding any prior termination of this Trust
Agreement, the Trustee, the Administrative Agent, the Marketing Agents and the
Depositor shall not, prior to the date which is one year and one day after the
termination of this Trust Agreement with respect to the Up-MACRO Holding
Trust, acquiesce in, petition for or otherwise invoke or cause the Up-MACRO
Holding Trust or the Depositor to invoke the process of any Governmental
Authority for the purpose of (x) commencing or sustaining a case against the
Up-MACRO Holding Trust or the Depositor under any federal or state bankruptcy,
insolvency or similar law, (y) appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of the Up-MACRO
Holding Trust or the Depositor or any substantial part of their respective
property or (z) ordering the winding-up or liquidation of the affairs of the
Up-MACRO Holding Trust or the Depositor.
(b) Each of the Trustee, the Depositor, the Administrative
Agent and each Marketing Agent and each Holder, by acceptance of its Up-MACRO
Holding Shares, hereby agrees that it will not institute against a Holder, or
join any other Person in instituting against a Holder, on account of its
ownership of an Up-MACRO Holding Share or its obligations hereunder, any
bankruptcy, insolvency, liquidation, readjustment of debt, marshalling of
assets or any similar proceeding so long as there has not elapsed one year
plus one day since the last day on which any Up-MACRO Holding Shares shall
have been Outstanding.
Section 15.14 No Waiver; Cumulative Remedies. No failure by the
Trustee or the Holders of the Up-MACRO Holding Shares to exercise any right,
remedy, power or privilege under this Trust Agreement, and no delay in such
exercise, shall operate as a waiver of such right, remedy, power or privilege;
nor shall any single or partial exercise of any right, remedy, power or
privilege under this Trust Agreement preclude any other or further exercise
thereof or the exercise of any other right, remedy, power or privilege. The
rights, remedies, powers and privileges provided under this Trust Agreement
are cumulative and not exhaustive of any rights, remedies, powers and
privileges provided by law.
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Section 15.15 Counterparts. This Trust Agreement may be executed
in two or more counterparts (and by different parties on separate
counterparts), each of which shall be an original, but all of which together
shall constitute one and the same instrument.
Section 15.16 Third-Party Beneficiaries. This Trust Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders of
the Up-MACRO Holding Shares, the Holders of the Down-MACRO Holding Shares, the
holders of the Up-MACRO Tradeable Shares, the holders of the Down-MACRO
Tradeable Shares and their respective successors and permitted assigns. Except
as otherwise expressly provided in this Trust Agreement, no other Person will
have any right or obligation hereunder.
Section 15.17 Actions or Notices by Holders of the Up-MACRO
Holding Shares.
(a) Wherever a provision in this Trust Agreement states that an
action may be taken or a Notice given by Holders of the Up-MACRO Holding
Shares, such action or Notice may be taken or given by any Holder, unless such
provision requires a specific percentage of Holders of the Up-MACRO Holding
Shares.
(b) Any Notice, request, authorization, direction, consent,
waiver or other act by the Holder of an Up-MACRO Holding Share shall bind such
Holder and every subsequent Holder of such share and of any share issued upon
the registration of transfer thereof, in exchange therefor or in lieu thereof
in respect of anything done or omitted to be done by the Trustee in reliance
thereon, whether or not notation of such action is made upon such share.
Section 15.18 Merger and Integration. Except as specifically
stated otherwise herein, this Trust Agreement sets forth the entire
understanding of the parties relating to the subject matter hereof, and all
prior understandings, written or oral, are superseded by this Trust Agreement.
This Trust Agreement may not be modified, amended, waived or supplemented
except as provided herein.
Section 15.19 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
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IN WITNESS WHEREOF, the Depositor, the Trustee, the Administrative
Agent and the Marketing Agents have caused this Trust Agreement to be duly
executed by their respective officers as of the day and year first above
written.
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor
By:
---------------------------------------
Name:
Title:
INVESTORS BANK & TRUST COMPANY,
as Trustee
By:
---------------------------------------
Name:
Title:
CLAYMORE SECURITIES, INC.,
as Administrative Agent
By:
---------------------------------------
Name:
Title:
CLAYMORE SECURITIES, INC.,
as a Marketing Agent
By:
---------------------------------------
Name:
Title:
MACRO FINANCIAL, LLC,
as a Marketing Agent
By:
---------------------------------------
Name:
Title:
Acknowledged and Accepted By:
INVESTORS BANK & TRUST COMPANY,
as Down-MACRO Holding Trustee
By:
---------------------------------------
Name:
Title:
EXHIBIT A
FORM OF UP-MACRO HOLDING SHARE
[TO COME]
X-0
XXXXXXX X-0
FORM OF INCOME DISTRIBUTION AGREEMENT
Filed as Exhibit 4.5 to this Registration Statement
B-1-1
EXHIBIT B-2
FORM OF NET PAR AMOUNT INCREASE OR DECREASE AMENDMENT TO INCOME
DISTRIBUTION AGREEMENT
Filed as Exhibit [ ] to this Registration Statement
B-2-1
EXHIBIT C
FORM OF SETTLEMENT CONTRACT
Filed as Exhibit 4.6 to this Registration Statement
C-1
EXHIBIT D
FORM OF PARTICIPANTS AGREEMENT
Filed as Exhibit 4.3 to this Registration Statement
D-1
EXHIBIT E
FORM OF MACRO LICENSING AGREEMENT
Filed as Exhibit 4.7 to this Registration Statement
E-1
EXHIBIT F
NYMEX SUBLICENSING AGREEMENT
Filed as Exhibit 4.8 to this Registration Statement
F-1