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