EXHIBIT 4.3
CLAYMORE MACROSHARES OIL
PARTICIPANTS AGREEMENT
This Claymore MACROshares Oil Participants Agreement (the "Participants
Agreement"), dated as of November 24, 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 Amended and Restated Claymore MACROshares Oil Up Holding
Trust Agreement, dated as of November 24, 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 Amended and Restated Claymore
MACROshares Oil Down Holding Trust Agreement, dated as of November 24, 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
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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 Amended and Restated Claymore MACROshares Oil Up
Tradeable Trust Agreement, dated as of November 24, 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
Amended and Restated Claymore MACROshares Oil Down Tradeable Trust Agreement,
dated as of November 24, 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 November 27, 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 November 27, 2006 (as the same may be amended from time to time
thereafter, the "Up-MACRO Registration Statement") and (ii) a Prospectus,
dated as of November 27, 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 November 27, 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
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through the facilities of DTC or a successor depository. In exchange for a
deposit of cash with an aggregate purchase price set forth herein and in the
applicable Holding Trust Agreement, an Authorized Participant may create MACRO
Units. In exchange for a deposit of Paired Holding Shares constituting one or
more MACRO Units, an Authorized Participant may redeem one or 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).
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To give effect to the foregoing premises and in consideration of the
mutual covenants and agreements set forth below, the parties hereto agree as
follows:
Section 1. Order Placement.
(a) To create one or more MACRO Units 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
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or Tradeable Shares in any state or other jurisdiction where they may not
lawfully be offered and/or sold.
(c) If it is offering or selling Holding Shares or Tradeable Shares in
jurisdictions outside the several states, territories and possessions of the
United States and is not otherwise required to be registered, qualified or a
member of the NASD as set forth in Section 2(b) above, such Authorized
Participant shall (i) observe the applicable laws of the jurisdiction in which
such offer and/or sale is made, (ii) comply with the full disclosure
requirements of the 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.
(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
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related to the Creation Procedures, and each Authorized Participant shall
comply with such procedures.
(b) Each Authorized Participant acknowledges and agrees on behalf of
itself and any party for which it is acting (whether such party is a customer
or otherwise) that each order to create a MACRO Unit 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 Creation 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, based upon an
opinion of counsel, 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) 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
creation (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.
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Section 4. Redemption Order.
(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 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, based upon
an opinion of counsel, 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
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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 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.
(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 Exchange Order is not in the
required form, (ii) if the Administrative Agent
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determines that the Authorized Participant or Authorized Participants have
deposited an insufficient number of shares with the Trustee, (iii) if the
Depositor determines, based upon an opinion of counsel, 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 or (v) if circumstances outside the
control of the Trustee, the Depositor or the Administrative Agent make it
impractical or not feasible to cause the 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 (ii) if such Exchange Order will cause
one of the Tradeable Trusts to hold fifty percent or less of the outstanding
related Holding Shares 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 suspension.
Section 6. Transfers.
(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 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 Trustee, 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.
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Section 7. Fees.
(a) In connection with each Creation Order, the Authorized Participant
shall pay to the Trustee a fee (such fee, the "Creation Transaction Fee") for
such creation. The initial Creation Transaction Fee shall be 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 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
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authority of any Authorized Person by the Authorized Participant, the
Authorized Participant shall give immediate written notice of such fact to the
Administrative Agent and such notice shall be effective upon receipt by the
Administrative Agent. The Administrative Agent shall issue to each Authorized
Person a unique personal identification number (the "PIN Number") by which
such Authorized Person shall be identified and which shall be used as
authentication for Orders placed by that Authorized Person. The Administrative
Agent shall provide to the Depositor and the Trustee, if so requested, a list
of the Authorized Persons and their corresponding PIN Numbers and shall
promptly update such list upon any changes to such list. The PIN Number shall
be kept confidential by the Authorized Participant and shall only be provided
to the Authorized Person. If, after issuance, the Authorized Person's PIN
Number is changed, the new PIN Number shall become effective 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.
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Section 11. Indemnification.
(a) Each Authorized Participant, individually and severally, hereby
indemnifies and holds harmless the Paired Holding Trusts, the Tradeable
Trusts, the Trustee, the Administrative Agent, the Depositor, their respective
direct or indirect affiliates (as defined below) and their respective
directors, officers, managers, members, employees and agents, and each person,
if any, who controls such persons within the meaning of Section 15 of the
Securities Act (each, an "AP Indemnified Party") from and against any losses,
liabilities, damages, costs and expenses (including attorney's fees and the
reasonable cost of investigation) incurred by such AP Indemnified Party as a
result of or in connection with: (i) any breach by such Authorized Participant
of any provisions of this Participants Agreement, including its
representations, warranties and covenants, (ii) any failure on the part of
such Authorized Participant to perform any of its obligations set forth in
this Participants Agreement, (iii) any failure by such Authorized Participant
to comply with applicable laws and the rules and regulations of
self-regulatory organizations, (iv) any actions of such AP Indemnified Party
in reliance upon any instructions issued in accordance with the Procedures
believed by the AP Indemnified Party to be genuine and to have been given by
such Authorized Participant, or (v) (A) any representation by such Authorized
Participant, its employees or its agents or other representatives about any
type of MACRO Shares or any AP Indemnified Party that is not consistent with
the then-current Prospectuses made in connection with the offer or the
solicitation of an offer to buy or sell any type of MACRO Shares and (B) any
untrue statement or alleged untrue statement of a material fact contained in
any Participant Written Communication described in Section 15(b) herein or any
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent that such statement or omission relates to the MACRO Shares or any AP
Indemnified Party, unless, in either case, such representation, statement or
omission was made or included by the Authorized Participant at the written
direction of the Depositor or is based upon any omission or alleged omission
by the Depositor to state a material fact in connection with such
representation, statement or omission necessary to make such representation,
statement or omission not misleading.
(b) The Paired Holding Trusts, on behalf of themselves and their related
Tradeable Trusts, hereby agree to indemnify and hold harmless, severally and
not jointly, each Authorized Participant, its respective subsidiaries,
affiliates, directors, officers, employees and agents, and each person, if
any, who controls such persons within the meaning of Section 15 of the
Securities Act (each, a "Trust Indemnified Party") from and against any
losses, liabilities, damages, costs and expenses (including reasonable
attorneys' fees) incurred by such Trust Indemnified Party as a result of (i)
any breach by a MACRO Trust of any provision of this Participants Agreement
that relates to a MACRO Trust, (ii) any failure on the part of a MACRO Trust
to perform any of its 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.
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(c) This Section 11 shall not apply to the extent any such losses,
liabilities, damages, costs and expenses are incurred as a result of or in
connection with any gross negligence, bad faith or willful misconduct on the
part of the AP Indemnified Party or the Trust Indemnified Party, as the case
may be. The term "affiliate" in this Section 11 shall include, with respect to
any person, entity or organization, any other person, entity or organization
which directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such person, entity or
organization.
(d) If the indemnification provided for in this Section 11 is unavailable
to an AP Indemnified Party under Section 11(a) or a Trust Indemnified Party
under Section 11(b) or insufficient to hold an indemnified party harmless in
respect of any losses, liabilities, damages, costs and expenses referred to
therein, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
liabilities, damages, costs and expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by a Paired Holding
Trust, on the one hand, and by the Authorized Participant, on the other hand,
from the services provided hereunder or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of a Paired Holding Trust, on the one
hand, and of the Authorized Participant, on the other hand, in connection
with, to the extent applicable, the statements or omissions which resulted in
such losses, liabilities, damages, costs and expenses, as well as any other
relevant equitable considerations. The relative benefit of a Paired Holding
Trust shall be deemed to be in the same proportion as the total net proceeds
from the offering (after deducting expenses) received by that Paired Holding
Trust. To the extent applicable, the relative fault of a Paired Holding Trust
and 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.
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(f) The indemnity and contribution provisions contained in this Section
11 shall remain in full force and effect regardless of any investigation made
by or on behalf of an Authorized Participant, its partners, stockholders,
members, directors, officers, employees and or any person (including each
partner, stockholder, member, director, officer or employee of such person)
who controls an Authorized Participant within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, or by or on behalf of each
of the Paired Holding Trusts, its managers, members, officers, employees or
any person who controls the Paired Holding Trusts within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall
survive any termination of this Participants Agreement. Each Paired Holding
Trust and each Authorized Participant agree promptly to notify each other of
the commencement of any Proceeding against it and, in the case of a Paired
Holding Trust, against the Trustee or the Depositor, in connection with the
issuance and sale of the Paired Holding Shares or Tradeable Shares or in
connection with the Registration Statement or the Prospectuses.
(g) Pursuant to the Holding Trust Agreements, each Paired Holding Trust
hereby agrees jointly and severally to pay any Trust Indemnified Party such
amounts when due under this Section 11 (including any amount in contribution
thereof that may be owed to such Trust Indemnified Party pursuant to this
Section 11), and to pay any and all expenses (including reasonable and
documented counsel fees and expenses) incurred by the Trust Indemnified Party
in enforcing its rights under this Section 11(g).
Section 12. Limitation of Liability.
(a) None of the Depositor, the Trustee, the Administrative Agent or the
Authorized Participant shall be liable to each other or to any other Person,
including any AP Indemnified Party or any other person claiming by, through or
on behalf of an Authorized Participant, for any losses, liabilities, damages,
costs or expenses arising out of any mistake or error in data or other
information provided to any of them by any of the others or any other person
or out of any interruption or delay in the electronic means of communications
used by them.
(b) Tax Liability. Each Authorized Participant shall be responsible for
the payment of any transfer tax, sales or use tax, stamp tax, recording tax,
value added tax and any other similar tax or government charge applicable to
(i) the creation or redemption of any MACRO Unit or (ii) the creation or
redemption of Tradeable Shares made pursuant to this Participants Agreement,
regardless of whether or not such tax or charge is imposed directly on each
Authorized Participant. To the extent the Trustee, the Administrative Agent,
the Depositor, the Paired Holding Trusts or the Tradeable Trusts are required
by law to pay any such tax or charge, the Authorized Participant agrees to
promptly indemnify such party for any such payment, together with any
applicable penalties, additions to tax or interest thereon.
Section 13. Acknowledgment. Each Authorized Participant acknowledges
receipt of a copy of (i) the Trust Agreements, (ii) the current Up-MACRO
Prospectus and (iii) the current Down-MACRO Prospectus and represents that it
has reviewed and understands such documents.
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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.
Section 15. Marketing Materials; Representations Regarding Paired Holding
Shares; Identification in Registration Statement.
(a) Each Authorized Participant represents, warrants and covenants that,
without the prior written consent of the Depositor, (i) 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
prepare, make, use, authorize, approve, disseminate or refer to any "written
communication" (as defined in Rule 405 under the Act) that constitutes an
offer to sell or solicitation of an offer to buy any of the MACRO Shares other
than the then-current 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") which is consistent with the then-current
prospectuses and information included in the then-current 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
15
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 all of
the requirements of Rule 134 under the Securities Act;
(iii) each Participant Free Writing Prospectus prepared by it shall
contain a legend substantially in the form of and in compliance with Rule
433(c)(2)(i) of the Securities Act, and shall otherwise conform to all of
the requirements for "Free Writing Prospectus" (as defined under Rule 405
under the Securities Act) under the Securities Act; and
(iv) each Participant Free Writing Prospectus prepared by it shall
be delivered to the Trustee, the Administrative Agent and the Depositor
no later than the time of first use and, unless otherwise agreed to by
the Trustee, the Administrative Agent and the Depositor and the related
Authorized Participant, such delivery shall occur no later than the close
of business for the applicable MACRO Trust (Eastern Time) on the date of
first use; provided, however, if the date of first use is not a Business
Day, such delivery shall occur no later than the close of business for
the applicable MACRO Trust (Eastern Time) on the first Business Day
preceding such date of first use.
(d) Each Authorized Participant severally represents and agrees (i) that
it did not enter into any contract of sale for any MACRO Share prior to the
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.
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(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, (ii) in
any SEC filing as may be required under the Securities Act or the Exchange Act
and (iii) on any website relating to the Paired Holding Trusts or the
Tradeable Trusts.
Section 16. Certain Covenants of the Depositor. The Depositor covenants
and agrees:
(a) to advise the Authorized Participant promptly of the happening of any
event during the term of this Participants Agreement which could require the
making of any change in the Prospectuses then being used so that the
Prospectuses would not include an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they are made, not misleading, and,
during such time, to prepare and furnish, at the expense of the Paired Holding
Trusts, to each Authorized Participant promptly such amendments or supplements
to such Prospectuses as may be necessary to reflect any such change;
(b) to deliver a certification by a duly authorized officer of the
Depositor in the form attached hereto as EXHIBIT E to each Authorized
Participant, upon the occurrence of (i) an amendment to any of the
Registration Statements or the Prospectuses by the filing of a post-effective
amendment, (ii) the filing of a new Registration Statement to register
additional Paired Holding Shares in reliance on Rule 429 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 agreed
upon opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Depositor, addressed to each Authorized Participant and dated such dates;
(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
17
(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 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
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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 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
19
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.
(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, XX 00000
Attention: MACROshares Transfer Agent
Copy to: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
20
If to the Depositor:
MACRO Securities Depositor, LLC
00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx, III
Telephone: (888) MACROS1
Facsimile: (000) 000-0000
If to the Administrative Agent:
CLAYMORE SECURITIES, INC.
0000 Xxxxxxxxx Xxxx Xxxxx
Xxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to each Authorized Participant:
KV EXECUTION SERVICES LLC
Attention: Xxxx Xxxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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
21
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.
(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,
22
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."
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: /S/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 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: /S/ Xxxxxx X. Xxxx
------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Managing Director
Address: 0000 Xxxxxxxxx Xxxx Xxxxx
00
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: /S/ Xxxxxx Xxxxxxx, III
------------------------------
Name: Xxxxxx Xxxxxxx, III
Title: President
Address: 00 Xxxxx Xxxx Xxxxx #0
Xxxxx, XX 00000
Telephone: (800) MACROS1
Facsimile: (000) 000-0000
24
KV EXECUTION SERVICES LLC
By: /S/ Xxxx Xxxxxxxxxxx
--------------------
Name: Xxxx Xxxxxxxxxxx
Title: Chief Operating Officer
Address: 0000 Xx. 00, Xxxxx 000
Xxxxxxxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
DTC Number: 0407
25
SCHEDULE I
LIST OF AUTHORIZED PARTICIPANTS
1. KV EXECUTION SERVICES LLC
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
B-1
requirements and the liability provisions of the Securities Act. The
Authorized Participant should review the "Plan of Distribution" portion of the
Prospectuses and consult with its own counsel prior to placing this Creation
Order.
B-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Creation Order as of the date set
forth below.
NAME OF AUTHORIZED PARTICIPANT
By:
----------------------------
Name:
Title:
Date:
--------------------------
B-3
EXHIBIT C
FORM OF
CLAYMORE MACROSHARES OIL 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
Administrative Agent and the Depositor named therein.
The Authorized Participant by executing this Redemption Order hereby
makes each of the representations and warranties set forth in the Participants
Agreement as of the date hereof and as of the settlement date related to this
Redemption Order.
The undersigned does hereby certify as of the date set forth below that
he/she is an Authorized Person under the Participants Agreement and that
he/she is authorized to deliver this Redemption Order Form to the Trustee on
behalf of the Authorized Participant.
C-2
IN WITNESS WHEREOF, I, the undersigned, an Authorized Person of the
Authorized Participant, hereby execute this Redemption Order as of the date
set forth below.
NAME OF AUTHORIZED PARTICIPANT
By:
----------------------------
Name:
Title:
Date:
--------------------------
C-3
EXHIBIT D
FORM OF
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
E-1
Participant to the Depositor expressly for use in such
Registration Statement or such Prospectus; and neither the
Depositor nor any person known to the Depositor acting on
behalf of the MACRO Trusts has distributed nor will distribute
any offering material other than a Prospectus;
(b) each Paired Holding Trust has been duly formed and is validly
existing as a trust under the laws of the State of New York, as
described in the applicable Prospectus relating to such Paired
Holding Trust, and the Holding Trust Agreements authorize the
Trustee to issue and deliver the Paired Holding Shares to each
Authorized Participant pursuant to the Holding Trust Agreements
and the related Participants Agreement as contemplated in each
such Registration Statement and Prospectus;
(c) each Tradeable Trust has been duly formed and is validly
existing as a trust under the laws of the State of New York, as
described in the applicable Prospectus relating to such
Tradeable Trust, and the Tradeable Trust Agreements authorize
the Trustee to issue and deliver the applicable Tradeable
Shares to each Authorized Participant pursuant to the Tradeable
Trust Agreements and the related Participants Agreement as
contemplated in each such Registration Statement and
Prospectus;
(d) the Depositor has been duly formed and is validly existing as a
limited liability company in good standing under the laws of
the State of Delaware, with full power and authority to conduct
its business as described in the applicable Prospectus, and has
all requisite power and authority to execute and deliver the
Participants Agreement;
(e) the Depositor is duly qualified and is in good standing in each
jurisdiction where the conduct of its business requires such
qualification; and each of the MACRO Trusts is not required to
so qualify in any jurisdiction;
(f) complete and correct copies of the Trust Agreements, and any
and all amendments, modifications and supplements thereto, have
been delivered to each Authorized Participant, and no changes
thereto have been made;
(g) the outstanding Paired Holding Shares have been duly and
validly issued and are fully paid and non-assessable and free
of statutory and contractual preemptive rights, rights of first
refusal and similar rights;
(h) the outstanding Tradeable Shares have been duly and validly
issued and are fully paid and non-assessable and free of
statutory and contractual preemptive rights, rights of first
refusal and similar rights;
(i) the Paired Holding Shares conform in all material respects to
the description thereof contained in the applicable
Registration Statement and
E-2
Prospectus, and the holders of the Paired Holding Shares will
not be subject to personal liability by reason of being such
holders;
(j) the Tradeable Shares conform in all material respects to the
description thereof contained in the applicable Registration
Statement and Prospectus, and the holders of the Tradeable
Shares will not be subject to personal liability by reason of
being such holders;
(k) the Participants Agreement has been duly authorized, executed
and delivered by the Depositor and constitutes the valid and
binding 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,
E-3
state, local or foreign law, regulation or rule, and has
obtained all necessary authorizations, consents and approvals
from other persons, in order to conduct its respective
business; the Depositor is not in violation of, or in default
under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization,
consent or approval or any federal, state, local or foreign
law, regulation or rule or any decree, order or judgment
applicable to the Depositor;
(o) except as set forth in the applicable Registration Statement
and Prospectus, there are no actions, suits, claims,
investigations or proceedings pending or, 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;
E-4
(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 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 genuine signature.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date first set
forth above.
By:
----------------------------
Name:
Title:
E-6
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
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 November 24, 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
Amended and Restated Claymore MACROshares Oil Down Holding Trust Agreement,
dated as of November 24, 2006 (the "Down-MACRO Holding
Attachment A-1
Trust Agreement" and, together with the Up-MACRO Holding Trust Agreement, the
"Holding Trust Agreements"), among the Down-MACRO Holding Trustee, the
Administrative Agent, the Marketing Agents and the Depositor, (iii) the
Amended and Restated Claymore MACROshares Oil Up Tradeable Trust Agreement,
dated as of November 24, 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 Amended and Restated Claymore MACROshares
Oil Down Tradeable Trust Agreement, dated as of November 24, 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.
Attachment A-3
CREATION PROCESS
On any Business Day, an Authorized Participant may submit a Creation
Order, substantially in the form of EXHIBIT B to the Participants Agreement
(or to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the Administrative Agent 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 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-4
CREATION PROCEDURES
ISSUANCE ORDER DATE (T)
1. By the earlier of (i) thirty (30) minutes prior to the close of
trading of the Light Sweet Crude Oil Futures Contracts on the New
York Mercantile Exchange (the "NYMEX") and (ii) 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-5
(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, whenever the Issuance Order
Date is a Friday, 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;
(c) the MACRO Unit Deposit Addition, if applicable; and
(d) 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-6
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-7
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-8
REDEMPTION PROCESS
On any Business Day, an Authorized Participant may submit a Redemption
Order, substantially in the form of EXHIBIT C to the Participants Agreement
(or to the extent that such order is electronic, such order shall include the
information set forth on such exhibit), to the 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-9
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-10
(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-11
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-12
Important Notes:
o Any Order is subject to rejection by the Depositor and the
Administrative Agent for the reasons set forth in the Trust
Agreements or the Participants Agreement.
o All Orders are subject to the provisions of the Trust Agreements and
the Participants Agreement relating to unclear or ambiguous
instructions.
Attachment A-13
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 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-14
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-15
(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-16
