Exhibit 4.1
FORM OF
MACROSHARES UP OIL BENCHMARK
HOLDING TRUST AGREEMENT
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MACRO SECURITIES DEPOSITOR, LLC,
as Depositor,
[ ],
not in its individual capacity but solely as
Trustee
and
[ ],
not in its individual capacity but solely as
Administrative Agent and Marketing Agent
MACROSHARES UP OIL BENCHMARK HOLDING TRUST
TRUST AGREEMENT
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions.....................................................................................2
Section 1.2 Other Definitional Provisions..................................................................18
ARTICLE II
CREATION AND DECLARATION OF THE TRUST;
FORM OF THE CERTIFICATES; THE INITIAL DEPOSIT;
DELIVERY, REGISTRATION OF TRANSFER AND
SURRENDER OF UP-MACRO HOLDING SHARES
Section 2.1 Initial Deposit................................................................................19
Section 2.2 Acceptance by Trustee..........................................................................19
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust..................................................19
Section 2.4 Representations and Warranties of the Depositor................................................19
Section 2.5 Form of Certificates; Book-Entry System; Transferability of Up-MACRO Holding Shares............21
Section 2.6 Paired Subsequent Issuances....................................................................25
Section 2.7 Up-MACRO Recapitalization Issuance Following a Recapitalization Event..........................26
Section 2.8 Up-MACRO Recapitalization Condition............................................................27
ARTICLE III
APPOINTMENT OF THE TRUSTEE, ADMINISTRATIVE AND MARKETING AGENT;
THE ADMINISTRATION AND REINVESTMENT OF THE TREASURIES;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the Trustee..................................28
Section 3.2 Representations, Warranties and Covenants of the Trustee.......................................29
Section 3.3 Acceptance of Appointment and Matters Relating to the Administrative and Marketing Agent.......30
Section 3.4 Representations, Warranties and Covenants of the Administrative Agent and Marketing Agent......31
Section 3.5 Establishment of the Securities Account........................................................33
Section 3.6 Establishment of the Distribution Account......................................................34
Section 3.7 Administration of Treasuries...................................................................35
Section 3.8 Establishment of the Fee Payment Account.......................................................36
ARTICLE IV
CALCULATIONS
Section 4.1 Calculations on Price Determination Days.......................................................37
Section 4.2 Calculation of Intraday Indicative Values......................................................38
Section 4.3 Calculation of Income Distribution Payments and Settlement Payments............................39
Section 4.4 Calculations Relating to Paired Subsequent Issuances...........................................39
ARTICLE V
RIGHTS OF HOLDERS OF THE UP-MACRO HOLDING SHARES
Section 5.1 Rights of Holders of the Up-MACRO Holding Shares...............................................39
Section 5.2 Priority of Payments...........................................................................40
Section 5.3 Payment of Expenses............................................................................41
Section 5.4 Payment of Fees................................................................................42
Section 5.5 Payments under the Income Distribution Agreement...............................................42
Section 5.6 Payments under the Settlement Contracts........................................................42
ARTICLE VI
REDEMPTIONS OF THE UP-MACRO HOLDING SHARES
Section 6.1 Paired Optional Redemptions....................................................................43
Section 6.2 Mandatory Redemptions..........................................................................45
Section 6.3 Redemptions on Early Termination Date and Final Scheduled Termination Date.....................45
Section 6.4 Settlement of the Settlement Contracts.........................................................45
Section 6.5 Settlement.....................................................................................45
ARTICLE VII
CAPITAL ACCOUNTS OF HOLDERS
AND OPERATION THEREOF; TAX ALLOCATIONS
Section 7.1 Capital Contributions..........................................................................46
Section 7.2 Capital Accounts; Allocations..................................................................47
Section 7.3 Regulatory and Related Allocations.............................................................48
Section 7.4 Transfer of or Change in Up-MACRO Holding Shares...............................................50
Section 7.5 Tax Allocations................................................................................50
Section 7.6 Determination of Certain Matters...............................................................52
Section 7.7 No Deficit Makeup..............................................................................52
Section 7.8 U.S. Partnership Tax Treatment.................................................................52
Section 7.9 Definitions....................................................................................52
ARTICLE VIII
REPORTS TO HOLDERS OF THE UP-MACRO HOLDING SHARES
Section 8.1 Reports to Holders of the Up-MACRO Holding Shares..............................................54
Section 8.2 Form 8-K Disclosure............................................................................56
ARTICLE IX
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor.....................................................................57
Section 9.2 Limitations on Liability of the Depositor......................................................57
Section 9.3 Liabilities; Indemnification...................................................................57
ARTICLE X
MATTERS RELATING TO THE ADMINISTRATIVE AGENT
Section 10.1 Role of the Administrative Agent...............................................................58
Section 10.2 Liability of the Administrative Agent..........................................................58
Section 10.3 Limitation on Liability of the Administrative Agent and Others.................................59
Section 10.4 Administrative Agent Indemnification of the Up-MACRO Holding Trust and the Trustee.............59
Section 10.5 Delegation of Duties...........................................................................60
ARTICLE XI
EARLY TERMINATION AND RECAPITALIZATION
Section 11.1 Recapitalization Events........................................................................60
Section 11.2 Termination Triggers...........................................................................61
ARTICLE XII
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events.....................................................................62
Section 12.2 Force Majeure..................................................................................63
Section 12.3 Notification to Holders of the Up-MACRO Holding Shares.........................................63
ARTICLE XIII
THE TRUSTEE
Section 13.1 Duties of Trustee..............................................................................63
Section 13.2 Rights of the Trustee..........................................................................65
Section 13.3 Trustee Not Liable for Recitals in Up-MACRO Holding Shares.....................................66
Section 13.4 Individual Rights of the Trustee...............................................................66
Section 13.5 Compensation...................................................................................66
Section 13.6 Indemnification................................................................................66
Section 13.7 Eligibility Requirements.......................................................................67
Section 13.8 Resignation or Removal of Trustee..............................................................67
Section 13.9 Successor Trustee..............................................................................68
Section 13.10 Merger or Consolidation........................................................................68
Section 13.11 Appointment of Co-Trustee or Separate Trustee..................................................69
Section 13.12 Books, Records; Taxes; Audit...................................................................70
Section 13.13 Trustee May Enforce Claims Without Possession of Up-MACRO Holding Shares.......................71
Section 13.14 Suits for Enforcement..........................................................................71
Section 13.15 Maintenance of Office or Agency................................................................71
ARTICLE XIV
TERMINATION
Section 14.1 Termination of Trust...........................................................................71
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination.............................................72
Section 15.2 Registration (Initial and Continuing) of Up-MACRO Holding Shares; Certain Securities Law Filings73
Section 15.3 Prospectus Delivery............................................................................73
Section 15.4 Protection of Right, Title and Interest to Trust Assets........................................74
Section 15.5 Limitation on Rights of Holders of the Up-MACRO Holding Shares.................................74
Section 15.6 Certain Rights of Holders of Up-MACRO Holding Shares; Voting.....................................
Section 15.7 MACRO Licensing Agreement with MacroMarkets....................................................75
Section 15.8 Governing Law; Jurisdiction....................................................................76
Section 15.9 Notices........................................................................................76
Section 15.10 Severability of Provisions.....................................................................77
Section 15.11 Up-MACRO Holding Shares Nonassessable and Fully Paid...........................................77
Section 15.12 Further Assurances.............................................................................77
Section 15.13 Non-Petition Covenant; No Proceedings..........................................................78
Section 15.14 No Waiver; Cumulative Remedies.................................................................78
Section 15.15 Counterparts...................................................................................78
Section 15.16 Third-Party Beneficiaries......................................................................78
Section 15.17 Actions or Notices by Holders of the Up-MACRO Holding Shares...................................79
Section 15.18 Merger and Integration.........................................................................79
Section 15.19 Headings.......................................................................................79
EXHIBITS
EXHIBIT A.........FORM OF UP-MACRO HOLDING SHARE
EXHIBIT B.........FORM OF INCOME DISTRIBUTION AGREEMENT
EXHIBIT C.........FORM OF SETTLEMENT CONTRACT
EXHIBIT D.........FORM OF PARTICIPANTS AGREEMENT
EXHIBIT E.........FORM OF MACRO LICENSING AGREEMENT
EXHIBIT F.........FORM OF NYMEX SUBLICENSING AGREEMENT
EXHIBIT G.........FORM OF QUARTERLY SHAREHOLDER STATEMENT
This TRUST AGREEMENT, dated as of June [ ], 2006 (this "Trust
Agreement"), is hereby entered into among MACRO SECURITIES DEPOSITOR, LLC, a
Delaware limited liability company, as Depositor (the "Depositor"), [ ], not in
its individual capacity but solely as Trustee (the "Trustee"), and [ ], not in
its individual capacity but solely as Administrative Agent (in such capacity,
the "Administrative Agent") and as Marketing Agent (in such capacity, the
"Marketing Agent").
WHEREAS, the parties hereto have entered into this Trust
Agreement to form a New York trust known as the "MACROShares Up Oil Benchmark
Holding Trust" and referred to herein as the "Up-MACRO Holding Trust;"
WHEREAS, concurrently with the formation of the Up-MACRO
Holding Trust, the Depositor, the Trustee, the Administrative Agent and the
Marketing Agent have also entered into a trust agreement, dated as of the date
hereof, to form a New York trust that shall be known as the "MACROShares Down
Oil Benchmark Holding Trust" and is referred to herein as the "Down-MACRO
Holding Trust;"
WHEREAS, (i) the Up-MACRO Holding Trust shall issue shares to
be known as the "MACROShares Up Oil $[ ] Holding Shares" (referred to herein as
the "Up-MACRO Holding Shares") and (ii) the Down-MACRO Holding Trust shall issue
shares to be known as the "MACROShares Down Oil $[ ] Holding Shares" (referred
to herein as the "Down-MACRO Holding Shares" and, together with the Up-MACRO
Holding Shares, the "Paired Holding Shares");
WHEREAS, the Depositor has assigned, transferred, conveyed and
otherwise set over to the Trustee the Initial Deposit (as defined herein) in
consideration for the initial issuance of Up-MACRO Holding Shares, and the
Trustee hereby acknowledges receipt of such Initial Deposit in the Up-MACRO
Holding Trust, which deposit shall constitute the initial trust estate; and
WHEREAS, the parties hereto wish to set forth the terms of the
Up-MACRO Holding Trust and the Up-MACRO Holding Shares and the respective powers
and duties of the Trustee, the Administrative Agent, the Marketing Agent and the
Depositor.
NOW, THEREFORE, in consideration of the mutual promises,
covenants, representations and warranties hereinafter set forth and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties intending to be legally bound hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. Whenever used in this Trust Agreement, the
following words and phrases shall have the following meanings, and the
definitions of such terms are applicable to the singular as well as the plural
forms of such terms and to the masculine as well as to the feminine and neuter
genders of such terms.
"Account" or "Accounts" shall mean any or all of the Securities
Account, the Distribution Account or the Fee Payment Account, as applicable.
"Acquisition Guidelines" shall have the meaning set forth in Section
3.7(a).
"Administrative Agent" shall mean [ ], in its capacity as
administrative agent hereunder, and its successors and assigns.
"Administrative Agent Indemnified Party" shall have the meaning set
forth in Section 10.4.
"Affiliate" shall mean with respect to any specified Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing. A company is assumed to be an
Affiliate if the parent corporation owns 20 percent or more of the outstanding
shares.
"Aggregate Par Amount" shall mean, with respect to any Up-MACRO Holding
Shares, any Down-MACRO Holding Shares [or any Paired Holding Shares], an amount
equal to the number of such shares multiplied by the Up-MACRO Stated Par Amount
or the Down-MACRO Stated Par Amount, as applicable.
"AMEX" shall mean the American Stock Exchange, LLC.
"Applicable Reference Price of Crude Oil" shall mean, initially, the
Light Sweet Crude Oil Price and, in the event that the NYMEX Sublicensing
Agreement is terminated by NYMEX, a Substitute Crude Oil Price.
"Authorized Participant" shall mean any entity that (1) is a registered
broker-dealer or a participant in the securities markets such as a bank or other
financial institution that is not required to register as a broker-dealer in
order to engage in securities transactions, (2) is a participant in DTC or has
indirect access to the clearing facilities of DTC by virtue of a custodial
relationship with a DTC Participant, (3) is not a Benefit Plan Investor and (4)
is a party to the Participants Agreement.
"Available Income" shall mean with respect to any Calculation Period,
the Up-MACRO Available Income or the Down-MACRO Available Income, as applicable.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
amended from time to time, and as codified as 11 U.S.C. Section 101 et seq.
"Beneficial Owners" shall have the meaning set forth in Section 2.5(b).
"Benefit Plan Investor" shall mean any (i) "employee benefit plan" (as
defined in Section 3(3) of ERISA), whether or not subject to Title I of ERISA,
including without limitation governmental plans, foreign pension plans and
church plans, (ii) "plan" (as defined in Section 4975(e)(1) of the Code),
whether or not subject to Section 4975 of the Code, including without limitation
individual retirement accounts and ▇▇▇▇▇ plans, or (iii) entity whose underlying
assets include plan assets by reason of such an employee benefit plan's or
plan's investment in such entity, including without limitation, as applicable,
an insurance company general account.
"Business Day" shall mean any day except Saturday, Sunday or any day on
which banks and stock exchanges are generally not open for business in New York,
New York.
"Calculation Agency Agreement" shall mean the Calculation Agency
Agreement, dated as of the date hereof, by and among the Trustee, the Down-MACRO
Holding Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO Tradeable
Trustee, the NYMEX and the AMEX, pursuant to which the AMEX shall render the
calculations set forth therein and in Article IV hereof.
"Calculation Agent" shall mean the AMEX in its role as calculation
agent under the Calculation Agency Agreement.
"Calculation Period" shall mean with respect to any Distribution Date,
the period from and including the last Distribution Date (or, in the case of the
first Distribution Date, from and including the Closing Date) to but excluding
the current Distribution Date. The Calculation Period that precedes a particular
Distribution Date is referred to herein as being "related" to such Distribution
Date.
"Certificate" shall mean a global certificate registered in the name of
Cede & Co. or another designee of the Depository that is executed and delivered
by the Trustee under this Trust Agreement evidencing the Up-MACRO Holding
Shares.
"Closing Date" shall mean June [ ], 2006.
"Code" shall mean U.S. Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall have the meaning set forth under Section
13.15.
"Daily Fee Accrual Rate" shall mean, with respect to any date of
determination during the first two years following the Closing Date, an amount
equal to 1.70% per annum, and with respect to any date of determination during
any year thereafter, 1.50% per annum, divided by, in each case, the actual
number of days in the current calendar year (as calculated to the tenth decimal
place).
"Daily Yield Rate" shall mean, with respect to any date of
determination and each Type of Treasury on deposit in the Up-MACRO Holding Trust
or the Down-MACRO Holding Trust, as applicable, the applicable per annum Yield
Rate for that Type of Treasury divided by the actual number of days in the
current calendar year (as calculated to the tenth decimal place).
"Depositor" shall mean MACRO Securities Depositor, LLC and its
successors and assigns.
"Depositor Indemnified Party" shall have the meaning set forth in
Section 9.3(c).
"Depository" shall mean The Depository Trust Company and its successors
and assigns.
"Depository Agreement" shall mean the Letter of Representations, dated
as of [ ], 2006, delivered by the Trustee and the Depositor to the Depository,
as it may be amended and restated from time to time.
"Designated Maturity" shall mean, with respect to any date of
determination, up to and including the tenth day of the calendar month in which
such date of determination occurs, the next succeeding calendar month and, from
the eleventh day of the calendar month in which such date of determination
occurs until the last day thereof, the second calendar month succeeding the
calendar month in which such date of determination occurs.
"Distribution Account" shall have the meaning set forth in Section
3.6(a).
"Distribution Date" shall mean the 25th day of each March, June,
September and December, or if any such day is not a Business Day, the following
Business Day.
"Distribution Payment Date" shall mean the tenth day following each
Distribution Date.
"Distribution Record Date" shall mean the second Business Day following
each Distribution Date.
"Down-MACRO Aggregate Par Amount" shall mean, with respect to any date
of determination, the product of (a) the aggregate number of Down-MACRO Holding
Shares that are Outstanding on such date and (b) the Down-MACRO Stated Par
Amount on such date of determination.
"Down-MACRO Asset Amount" shall mean, (i) with respect any Distribution
Date, the aggregate amount of funds on deposit in the Down-MACRO Distribution
Account on such Distribution Date, and (ii) with respect to any other date of
determination that is not a Distribution Date, an amount equal to: (A) the
Down-MACRO Investment Amount plus (B) the Down-MACRO Earned Income Accrual
Amount minus (C) the Down-MACRO Daily Fee Accrual Amount.
"Down-MACRO Available Income" shall mean with respect to any
Distribution Date and the related Calculation Period, the funds remaining on
deposit in the Down-MACRO Distribution Account after payment priorities first
through fourth of Section 5.2(a) of the Down-MACRO Holding Trust Agreement have
been satisfied in full.
"Down-MACRO Available Income Accrual Amount" shall mean, on any day of
a Calculation Period, the sum of, for each Treasury on deposit in the Down-MACRO
Holding Trust on such date, the product of (i) the purchase price of that
Treasury multiplied by (ii) the Daily Yield Rate applicable to that Treasury.
"Down-MACRO Distribution Account" shall mean the distribution account
for the Down-MACRO Holding Trust established pursuant to the Down-MACRO Holding
Trust Agreement.
"Down-MACRO Daily Fee Accrual Amount" shall mean for any Calculation
Period and any date of determination occurring during such Calculation Period,
the sum of, for each day that has elapsed during such Calculation Period up to
but not including the date of determination, the product of the Daily Fee
Accrual Rate and the Down-MACRO Asset Amount on each day of such Calculation
Period.
"Down-MACRO Earned Income Accrual Amount" shall mean, with respect to
any date of determination, the sum of, for each day that has elapsed during the
related Calculation Period up to but not including the date of determination,
the Down-MACRO Available Income Accrual Amount for each such day.
"Down-MACRO Fees" shall have the meaning specified in Section 5.4 of
the Down-MACRO Holding Trust Agreement.
"Down-MACRO Holding Shares" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust Agreement" shall mean the Down-MACRO Holding
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Down-MACRO Holding Trustee, as
such agreement may be amended from time to time.
"Down-MACRO Holding Trustee" shall mean [ ], not in its individual
capacity but solely as trustee of the Down-MACRO Holding Trust.
"Down-MACRO Income Distribution Payment" shall mean with respect to any
Distribution Date an amount equal to:
(a) if the Down-MACRO Underlying Value on the last Price Determination
Day preceding such Distribution Date is greater than or equal to the Down-MACRO
Asset Amount on such date, zero; and
(b) if the Down-MACRO Asset Amount on the last Price Determination Day
preceding such Distribution Date is greater than the Down-MACRO Underlying Value
on such date, an amount equal to (i) the Down-MACRO Available Income for such
Distribution Date multiplied by (ii) a fraction the numerator of which is the
difference between the Down-MACRO Asset Amount and the Down-MACRO Underlying
Value and the denominator of which is the Down-MACRO Asset Amount.
"Down-MACRO Income Make-Whole Amount" shall have the meaning set forth
in the Down-MACRO Holding Trust Agreement.
"Down-MACRO Increase Amount" shall mean, with respect to any Subsequent
Issuance Date, an amount equal to (a) the number of Down-MACRO Holding Shares
requested by an Authorized Participant and created on that Subsequent Issuance
Date multiplied by (b) the Down-MACRO Stated Par Amount.
"Down-MACRO Investment Amount" shall mean, with respect to any
Calculation Period and any date of determination occurring during such
Calculation Period, the amount of cash and Treasuries (that have not yet
matured) on deposit in the securities account of the Down-MACRO Holding Trust
(not including cash in the Down-MACRO Distribution Account) on such date. All
Treasuries on deposit in the Down-MACRO Holding Trust shall be counted for
purposes of this definition at their aggregate purchase price.
"Down-MACRO Price Range" shall have the meaning set forth in the
Down-MACRO Holding Trust Agreement.
"Down-MACRO Recapitalization Condition" shall have the meaning
specified in Section 2.8 of the Down-MACRO Holding Trust Agreement.
"Down-MACRO Recapitalization Event" shall have the meaning specified in
Section 11.1(a).
"Down-MACRO Recapitalization Issuance" shall mean an issuance of
Down-MACRO Holding Shares made following a Down-MACRO Recapitalization Event
pursuant to Section [2.7(b)] of the Down-MACRO Holding Trust Agreement.
"Down-MACRO Recapitalization Redemption" shall mean a redemption of all
Outstanding Down-MACRO Holding Shares following the occurrence of a Down-MACRO
Recapitalization Event.
"Down-MACRO Redemption Percentage" shall mean (i) with respect to any
Redemption Date, a fraction, expressed as a percentage, the numerator of which
is the Aggregate Par Amount of Down-MACRO Holding Shares that are being redeemed
on such date and the denominator of which is the Down-MACRO Aggregate Par Amount
on such Redemption Date prior to giving effect to the Paired Optional Redemption
order placed on such Redemption Date and prior to giving effect to any Paired
Subsequent Issuance orders that may also have been placed on such date, and (ii)
with respect to any Recapitalization Date, an Early Termination Date or the
Final Scheduled Termination Date, 100%.
"Down-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if the Down-MACRO Underlying Value on such Redemption Date, the
Termination Trigger Date preceding such Early Termination Date, or the last
Price Determination Day preceding the Final Scheduled Termination Date is
greater than or equal to the Down-MACRO Asset Amount on such date, zero; and
(b) if the Down-MACRO Underlying Value on such Redemption Date, the
Termination Trigger Date preceding such Early Termination Date or preceding the
Final Scheduled Termination Date is less than the Down-MACRO Asset Amount on
such date, an amount equal to (i) the excess of such Down-MACRO Asset Amount
over such Down-MACRO Underlying Value multiplied by (ii) the Down-MACRO
Redemption Percentage for such Redemption Date, Early Termination Date or Final
Scheduled Termination Date.
"Down-MACRO Stated Par Amount" shall mean (i) prior to the events
described in clause (ii) of this definition, the stated par amount of $[ ] per
Down-MACRO Holding Share and (ii) following any Down-MACRO Recapitalization
Event and a related Down-MACRO Recapitalization Issuance, the stated par amount
per Down-MACRO Holding Share set forth in the Down-MACRO Holding Trust
Agreement, as amended in connection with such Down-MACRO Recapitalization Event
and Down-MACRO Recapitalization Issuance.
"Down-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Down-MACRO Tradeable Trust pursuant to the Down-MACRO Tradeable
Trust Agreement.
"Down-MACRO Tradeable Trust" shall mean the Light Sweet Crude Oil
Benchmark Down-MACRO Tradeable Trust formed under the Down-MACRO Tradeable Trust
Agreement.
"Down-MACRO Tradeable Trust Agreement" shall mean the Down-MACRO
Tradeable Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Down-MACRO Tradeable Trustee.
"Down-MACRO Tradeable Trustee" shall mean [ ] not in its individual
capacity but solely as trustee of the Down-MACRO Tradeable Trust.
"Down-MACRO Underlying Value" shall mean with respect to any date of
determination:
(a if the Ending Level is below the Starting Level, an amount equal to
(i) the Down-MACRO Asset Amount on such date of determination plus (ii) (x) the
Up-MACRO Asset Amount on such date of determination multiplied by (y) the Price
Level Percentage Change on such date of determination or, if such date is not a
Price Determination Day, on the last preceding Price Determination Day;
(b) if the Ending Level is above the Starting Level, an amount equal to
(i) the Down-MACRO Asset Amount on such date of determination, minus (ii) (x)
such Down-MACRO Asset Amount multiplied by (y) the Price Level Percentage Change
on such date of determination or, if such date is not a Price Determination Day,
on the last preceding Price Determination Day; and
(c) if the Ending Level is equal to the Starting Level, the Down-MACRO
Asset Amount.
"DTC Participant" shall mean a participant of the Depository.
"Early Termination Date" shall mean with respect to any date of
determination, the Distribution Date following a Termination Trigger Date.
"Eligible Deposit Account" shall mean either (a) a segregated
non-interest bearing trust account with an Eligible Institution or (b) a
segregated non-interest bearing trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of the securities of such depository
institution shall have a credit rating from a nationally recognized rating
agency in one of its generic credit rating categories which signifies investment
grade.
"Eligible Institution" shall mean a depository institution (which may
be the Trustee or an Affiliate thereof) organized under the laws of the United
States or any one of the states thereof which at all times (i) has either (x) a
long-term unsecured debt rating of "A2" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. or (y) a certificate of deposit rating of "P-1" by ▇▇▇▇▇'▇ Investors
Service, Inc., (ii) has either (x) a long-term unsecured debt rating of "AAA" by
Standard & Poor's Rating Service or (y) a certificate of deposit rating of
"A-l+" by Standard & Poor's Rating Service and (iii) is a member of the Federal
Deposit Insurance Corporation.
"Eligible Treasury" shall mean, on any day on which the Trustee
acquires Treasuries on behalf of the Up-MACRO Holding Trust, any United States
treasury ▇▇▇▇, note or bond, issued by the United States Department of the
Treasury in the coin and currency of the United States of America, that matures
prior the next scheduled Distribution Date; provided, however, that "Eligible
Treasury" shall not include any treasury inflation-protected securities, I
bonds, EE/E bonds, HH/H bonds or any other financial product of the United
States Department of the Treasury that is issued as a physical certificate.
"Ending Level" shall mean, with respect to any Price Determination Day,
the Applicable Reference Price of Crude Oil on such Price Determination Day.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Event of Bankruptcy" shall occur with respect to any specified Person,
if:
(a) a case or other proceeding shall be commenced, without the
application or consent of such Person, in any court, seeking the liquidation,
reorganization, debt arrangement, dissolution, winding up, or composition or
readjustment of debts of such Person, the appointment of a trustee, receiver,
custodian, liquidator, assignee, sequestrator or the like for such Person or all
or any substantial part of its assets, or any similar action with respect to
such Person under any law relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of sixty
(60) consecutive days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or other
similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other proceeding
under any applicable bankruptcy, insolvency, reorganization, debt arrangement,
dissolution or other similar law now or hereafter in effect, or shall consent to
the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general assignment
for the benefit of creditors; or
(c) the board of directors (or similar body) of such Person or the
trustee for such Person (in the case of a business or statutory trust) shall
vote to implement any of the actions set forth in clause (b) above.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Fee Payment Account" shall have the meaning specified in Section
3.8(a) of this Trust Agreement.
"Final Distribution" shall mean any distribution made in redemption of
all or a portion of the Up-MACRO Holding Shares pursuant to Section 5.2(a) or
5.2(b) on the Final Scheduled Termination Date, an Early Termination Date or a
Redemption Date.
"Final Scheduled Termination Date" shall mean the Distribution Date
scheduled to occur in June of 2026.
"Form 8-K" shall mean a report on Form 8-K filed pursuant to Section 13
or Section 15(d) of the Exchange Act.
"Form 10-Q" shall mean the current quarterly report on Form 10-Q filed
pursuant to Section 13 or Section 15(d) of the Exchange Act.
"Form 10-K" shall mean the current annual report on Form 10-K filed
pursuant to Section 13 or Section 15(d) of the Exchange Act.
"Governmental Authority" shall mean any federal, state, local or
foreign court or arbitrator or governmental department, commission, board,
bureau, agency, authority, instrumentality or regulatory body.
"Holder" shall mean a registered holder of an Up-MACRO Holding Share or
Down-MACRO Holding Share, as applicable.
"Holding Share" shall mean either an Up-MACRO Holding Share or a
Down-MACRO Holding Share.
"Income Distribution Agreement" shall mean the confirmation to the
Master Agreement, substantially in the form attached hereto as Exhibit B, to be
dated as of the date hereof, pursuant to which the Paired Holding Trusts will be
obligated to make payments to each other on each Distribution Date based on the
Up-MACRO Underlying Value and the Down-MACRO Underlying Value, respectively.
"Income Distribution Payment" shall mean, with respect to any
Distribution Date, (i) if a payment is required to be made by the Up-MACRO
Holding Trust to the Down-MACRO Holding Trust under the Income Distribution
Agreement, an Up-MACRO Income Distribution Payment or (ii) if a payment is
required to be made by the Down-MACRO Holding Trust to the Up-MACRO Holding
Trust and to the extent Down-MACRO Available Income exists, a Down-MACRO Income
Distribution Payment.
"Indirect Participant" shall mean a Person who is not a participant of
the Depository but who is a Beneficial Owner through a DTC Participant, either
directly or indirectly.
"Initial Deposit" shall mean the proceeds of the Up-MACRO Holding
Shares issued and sold and the proceeds of the Up-MACRO Tradeable Shares issued
with respect to the Up-MACRO Holding Shares deposited into the Up-MACRO
Tradeable Trust and sold on the Closing Date.
"Light Sweet Crude Oil Futures Contracts" shall mean NYMEX Division
light sweet crude oil futures contracts of the Designated Maturity.
"Light Sweet Crude Oil Price" shall mean, with respect to any Price
Determination Day, the settlement price of the Light Sweet Crude Oil Futures
Contracts established by the NYMEX based upon the trading that has occurred in
such contracts by open outcry on such Price Determination Day and published to
the consolidated tape; provided, that if the NYMEX abandons its open outcry
format for the Light Sweet Crude Oil Futures Contract, then the Light Sweet
Crude Oil Price shall be based on trading of the Light Sweet Crude Oil Futures
Contracts on the substitute electronic trading platform established by the
NYMEX.
"Loss" shall have the meaning set forth in Section 9.3(b).
"MACRO Licensing Agreement" shall mean the licensing agreement, dated
as of the date hereof, substantially in the form attached hereto as Exhibit E,
among MacroMarkets, the Up-MACRO Holding Trust, the Down-MACRO Holding Trust,
the Up-MACRO Tradeable Trust and the Down-MACRO Tradeable Trust pursuant to
which MacroMarkets shall license its patented MACROs technology to each of the
MACRO Trusts.
"MacroMarkets" shall mean MacroMarkets LLC, and its successors and
assigns.
"MACRO Shares" shall mean any or all of the Up-MACRO Holding Shares,
the Down-MACRO Holding Shares, the Up-MACRO Tradeable Shares or the Down-MACRO
Tradeable Shares, as applicable.
"MACRO Trust" shall mean any or all of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO
Tradeable Trust, as applicable.
"MACRO Trustee" shall mean any or all of the Up-MACRO Holding Trustee,
the Down-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee or the Down-MACRO
Tradeable Trustee, as applicable.
"MACRO Unit" shall consist of, 100,000 Up-MACRO Holding Shares and
100,000 Down-MACRO Holding Shares.
"Marketing Agent" shall mean [ ], in its capacity as marketing agent
hereunder, and its successors and assigns.
"Master Agreement" shall mean the ISDA Master Agreement, dated as of
the Closing Date, between the Trustee, on behalf of the Up-MACRO Holding Trust
and the Down-MACRO Holding Trustee, acting on behalf of the Down-MACRO Holding
Trust, as amended and supplemented by the schedule relating thereto.
"Net Par Amount Change" shall mean, with respect to any Business Day,
the net increase or decrease in the Up-MACRO Aggregate Par Amount, after giving
effect to any Paired Subsequent Issuances, any Up-MACRO Recapitalization
Issuance, Paired Optional Redemption or Up-MACRO Proportional Mandatory
Redemption occurring on that Business Day.
"New York City Time" shall mean the current local time in New York, New
York.
"Notices" shall have the meaning set forth in Section 15.9(a) hereof.
"NYMEX" shall mean the New York Mercantile Exchange, Inc. and its
successors and assigns.
"NYMEX Sublicensing Agreement" shall mean the sublicensing agreement,
dated as of June [ ], 2006, in substantially the form attached hereto as Exhibit
F, between MacroMarkets and the Depositor and acknowledged by the NYMEX,
pursuant to which MacroMarkets will sublicense to the MACRO Trusts the right to
use the Light Sweet Crude Oil Price in connection with calculating and making
distributions on the MACRO Shares.
"NYMEX Sublicensing Fee" shall mean the fee payable to MacroMarkets
under the NYMEX Sublicensing Agreement.
"Officer's Certificate" shall mean a certificate signed by an officer
of the Depositor that is authorized to make such certification.
"Opinion of Counsel" shall mean a written opinion of counsel, who may
be counsel for, or an employee of, the Person providing the opinion and which
opinion shall be reasonably acceptable to the Trustee.
"Outstanding" shall mean, with respect to the Up-MACRO Holding Shares
or the Down-MACRO Holding Shares, as applicable, and any date of determination,
an amount equal to the aggregate number of Up-MACRO Holding Shares or Down-MACRO
Holding Shares, as applicable, issued by the Up-MACRO Holding Trust or the
Down-MACRO Holding Trust, as applicable, either on the Closing Date or in Paired
Subsequent Issuances or in Up-MACRO or Down-MACRO Recapitalization Issuances
occurring prior to such date of determination minus any shares redeemed prior to
such date of determination.
"Paired Holding Shares" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Paired Holding Trusts" shall mean the Up-MACRO Holding Trust together
with the Down-MACRO Holding Trust.
"Paired Optional Redemption" shall have the meaning set forth in
Section 6.1(a) hereof.
"Paired Subsequent Issuance" shall have the meaning set forth in
Section 2.6(a) hereof.
"Participant Custodian Account" shall have the meaning set forth in the
Participants Agreement.
"Participants Agreement" shall mean the participants agreement, dated
as of the date hereof, substantially in the form attached hereto as Exhibit D,
entered into among the Depositor, the Trustee, the Down-MACRO Holding Trustee,
each of the trustees of the Tradeable Trusts, the Administrative Agent and the
Authorized Participants who may be party thereto from time to time, which
specifies certain procedures for the creation and redemption of the Paired
Holding Shares and the exchange of Tradeable Shares for Holding Shares and vice
versa.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, limited liability company,
limited liability partnership, joint stock company, trust, unincorporated
organization or Governmental Authority or other entity.
"Price Determination Day" shall mean (i) for so long as the Light Sweet
Crude Oil Price is the Applicable Reference Price of Crude Oil, each day on
which trading of the Light Sweet Crude Oil Futures Contracts occurs on the NYMEX
by open outcry and a settlement price is established by the NYMEX for such
contracts not later than the end of trading in the Light Sweet Crude Oil Futures
Contracts on such day, and (ii) if a Substitute Crude Oil Price is the
Applicable Reference Price of Crude Oil, each day on which a settlement price
for the substitute crude oil price is established.
"Price Level Percentage Change" shall mean with respect to each Price
Determination Day, the absolute value of (a)(i) the Ending Level on such Price
Determination Day minus (ii) the Starting Level divided by (b)(i) if the Ending
Level on such Price Determination Day exceeds the Starting Level, the Down-MACRO
Price Range, and (ii) if the Ending Level on such Price Determination Day is
less than the Starting Level, the Up-MACRO Price Range.
"Prospectus" shall mean the prospectus, in the form filed by the
Depositor on behalf of the Up-MACRO Holding Trust with the SEC on or before the
second business day after the date hereof (or such earlier time as may be
required under the Securities Act) or, if no such filing is required, the form
of final prospectus included in the registration statement, file no. 333-116566,
dated as of [ ], 2006, on and after the date on which such registration
statement becomes effective.
"Purchase Order" shall have the meaning set forth in Section 3(b) of
the Participants Agreement.
"Quarterly Distribution" shall mean with respect to each Distribution
Date, an allocation for distribution to be made to the Holders of the Up-MACRO
Holding Shares that are Outstanding on the Distribution Date pursuant to
priority sixth of Section 5.2(a), which shall consist of the cash on deposit in
the Up-MACRO Holding Trust after it makes or receives a payment under the Income
Distribution Agreement and makes all other payments or investments in Treasuries
that it is required to make pursuant to such Section 5.2(a).
"Recapitalization Date" shall mean any Business Day on which an order
is placed with the Trustee for an Up-MACRO Recapitalization Issuance or a
Down-MACRO Recapitalization Issuance.
"Recapitalization Event" shall mean either an Up-MACRO Recapitalization
Event or a Down-MACRO Recapitalization Event, as applicable.
"Redemption Cash Component" shall have the meaning set forth in Section
6.1(d)(iii)
"Redemption Date" shall mean any Business Day on which a Redemption
Order for a Paired Optional Redemption is submitted or an Up-MACRO
Recapitalization Redemption or an Up-MACRO Proportional Mandatory Redemption
occurs.
"Redemption Order" shall have the meaning set forth in Section 3(b) of
the Participants Agreement.
"Redemption Percentage Value" shall have the meaning set forth in
Section 6.1(d)(ii).
"Registered Owner" shall mean the Person in whose name the Up-MACRO
Holding Shares are registered on the books of the Trustee maintained for that
purpose.
"Requirements of Law" shall mean with respect to any Person, the
certificate of incorporation, articles of incorporation or articles of
association and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or other Governmental Authority, in each case applicable to or
binding upon such Person or to which such Person is subject, whether federal,
state or local.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Account" shall have the meaning set forth in Section 3.5(a)
hereof.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Settlement Contract" shall mean each confirmation, substantially in
the form attached hereto as Exhibit C, designated as a "Settlement Contract,"
referencing the Master Agreement, relating to one MACRO Unit of Paired Holding
Shares, dated as of the date on which such MACRO Unit was issued by the Paired
Holding Trusts and providing for payments between the Paired Holding Trusts on
the Final Scheduled Termination Date, an Early Termination Date or a Redemption
Date, which payments are calculated by reference to the Up-MACRO Underlying
Value and the Down-MACRO Underlying Value on the Price Determination Day
preceding the Final Scheduled Termination Date, on the Termination Trigger Date
preceding an Early Termination Date or on the relevant Redemption Date, as
applicable.
"Settlement Payment" shall mean an Up-MACRO Settlement Payment or a
Down-MACRO Settlement Payment, as applicable.
"Share Register" shall have the meaning set forth in Section 2.5(e)
hereof.
"Starting Level" shall mean $[ ], which was the Applicable Reference
Price of Crude Oil on June [ ], 2006.
"Subsequent Issuance" shall mean an Up-MACRO Recapitalization Issuance
or a Down-MACRO Recapitalization Issuance, as applicable.
"Subsequent Issuance Date" shall have the meaning set forth in Section
2.6(a) hereof.
"Substitute Crude Oil Index" shall mean any one of the following [ ].
"Substitute Crude Oil Price" shall mean, with respect to any Price
Determination Day, [ ].
"Substitute Index Licensing Agreement" shall mean any licensing
arrangement pursuant to which the Up-MACRO Holding Trust acquires the right to
use a Substitute Crude Oil Price for the purposes of calculating the Up-MACRO
Underlying Value under this Trust Agreement in accordance with Section [ ] of
this Trust Agreement.
"Successor Trustee" shall have the meaning set forth in Section 13.8(c)
hereof.
"Termination Trigger" shall have the meaning set forth in Section
11.2(a) hereof.
"Termination Trigger Date" shall mean the date on which a Termination
Trigger occurs.
"Tradeable Trusts" shall mean the Up-MACRO Tradeable Trust and the
Down-MACRO Tradeable Trust.
"Transaction Documents" shall mean this Trust Agreement, the Down-MACRO
Holding Trust Agreement, the Master Agreement, the Income Distribution
Agreement, the Settlement Contracts, the Participants Agreement, the MACRO
Licensing Agreement, the NYMEX Sublicensing Agreement and the Calculation Agency
Agreement.
"Transfer Agent and Registrar" shall have the meaning set forth in
Section 2.5(e) hereof.
"Treasury" shall mean with respect to any Distribution Date, an
Eligible Treasury that matures prior to the next Distribution Date.
"Trust Assets" shall have the meaning set forth in Section 2.1 hereof.
"Trust Officer" shall mean any officer within the corporate trust
department of the Trustee, including any Vice President, Assistant Vice
President or Assistant Treasurer of the Corporate Trust Office, or any trust
officer, or any officer customarily performing functions similar to those
performed by the person who at the time shall be such officers, in each case
having responsibility for the administration of this Trust Agreement.
"Trustee" shall mean [ ], not in its individual capacity but solely as
Trustee under this Trust Agreement, or its successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"Trustee Indemnified Party" shall have the meaning set forth in Section
13.6 hereof.
"Trustee Termination Event" shall have the meaning set forth in Section
12.1 hereof.
"Trustees" shall mean, collectively, the Trustee and the Down-MACRO
Holding Trustee.
"Type" shall mean, with respect to any Treasury, all Treasuries in the
applicable Paired Holding Trust with the same maturity, the same purchase price,
the same stated interest rate, if any, the same applicable discount, if any, and
the same purchase date.
"UCC" shall mean the Uniform Commercial Code as amended and in effect
from time to time in the State of New York.
"Up-MACRO Administration and Marketing Fee" shall mean, with respect to
any Distribution Date, the sum of, for each day during the related Calculation
Period, an amount equal to a per annum rate of [ ]% multiplied by the Up-MACRO
Asset Amount on such day, which shall be the combined fee payable to the
Administrative Agent and Marketing Agent for services rendered to the Up-MACRO
Holding Trust.
"Up-MACRO Aggregate Par Amount" shall mean with respect to any date of
determination, an amount equal to the product of (a) the aggregate Outstanding
number of Up-MACRO Holding Shares and (b) the Up-MACRO Stated Par Amount on such
date of determination.
"Up-MACRO Asset Amount" shall mean, (i) with respect any Distribution
Date, the aggregate amount of funds transferred to the Distribution Account on
such Distribution Date, and (ii) with respect to any other date of determination
that is not a Distribution Date, an amount equal to: (A) the Up-MACRO Investment
Amount plus (B) the Up-MACRO Earned Income Accrual Amount.
"Up-MACRO Available Income" shall mean with respect to any Distribution
Date, the funds remaining on deposit in the Distribution Account after payment
priorities first through fourth of Section 5.2(a) hereof have been satisfied in
full.
"Up-MACRO Available Income Accrual Amount" shall mean, on any day of a
Calculation Period, the sum of, for each Treasury on deposit in the Up-MACRO
Holding Trust on such date, the product of (i) the purchase price of that
Treasury multiplied by (ii) the Daily Yield Rate applicable to that Treasury.
"Up-MACRO Calculation Agent Fee" shall mean, with respect to any
Distribution Date, the sum of, for each day during the related Calculation
Period, an amount equal to a per annum rate of [ ]% multiplied by the Up-MACRO
Asset Amount on such day, which shall be payable to the Calculation Agent for
services rendered under the Calculation Agency Agreement to the Up-MACRO Holding
Trust and the Up-MACRO Tradeable Trust.
"Up-MACRO Earned Income Accrual Amount" shall mean, with respect to any
date of determination, the sum of the Up-MACRO Available Income Accrual Amount
for each day that has elapsed during the current Calculation Period up to but
not including such date of determination.
"Up-MACRO Expenses" shall have the meaning specified in Section 5.3 of
this Trust Agreement.
"Up-MACRO Daily Fee Accrual Amount" shall mean for any Calculation
Period and any date of determination occurring during such Calculation Period,
the sum of the following products obtained for each day that has elapsed during
such Calculation Period (up to but not including the date of determination): the
Daily Fee Accrual Rate multiplied by the Up-MACRO Asset Amount on each such day.
"Up-MACRO Fee Deposit" shall mean, with respect to any Distribution
Date and the related Calculation Period, the aggregate Up-MACRO Daily Fee
Accrual Amount that has accrued during such Calculation Period.
"Up-MACRO Fees" shall have the meaning specified in Section 5.4 of this
Trust Agreement.
"Up-MACRO Holding Shares" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Holding Trust" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Income Distribution Payment" shall mean, with respect to any
Distribution Date, an amount equal to:
(a) if the Up-MACRO Underlying Value on the last Price Determination
Day preceding such Distribution Date is greater than or equal to the Up-MACRO
Asset Amount on such date, zero; and
(b) if the Up-MACRO Asset Amount on the last Price Determination Day
preceding such Distribution Date is greater than the Up-MACRO Underlying Value
on such date, an amount equal to (i) the Up-MACRO Available Income for such
Distribution Date multiplied by (ii) a fraction the numerator of which is the
difference between the Up-MACRO Asset Amount and the Up-MACRO Underlying Value
and the denominator of which is the Up-MACRO Asset Amount.
"Up-MACRO Income Make-Whole Amount" shall mean, with respect to any
Paired Subsequent Issuance and the Calculation Period during which such Paired
Subsequent Issuance is being made, an amount equal to the product of (a) the
difference between (i) the average Daily Yield Rate of the Treasuries on deposit
in the Up-MACRO Holding Trust prior to such Paired Subsequent Issuance and (ii)
the average Daily Yield Rate of the Treasuries available to be acquired by the
Up-MACRO Holding Trust with the proceeds of the Paired Subsequent Issuance, and
(b) the Aggregate Par Amount of the Up-MACRO Holding Shares being created in
such Paired Subsequent Issuance.
"Up-MACRO Investment Deposit Amount" shall mean, with respect to any
Calculation Period and any date of determination occurring during such
Calculation Period, the amount of cash and Treasuries (that have not yet
matured) on deposit in the Up-MACRO Holding Trust on such date. All Treasuries
on deposit in the Up-MACRO Holding Trust shall be counted for purposes of this
definition at their aggregate purchase price.
"Up-MACRO Licensing Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to a per annum rate of 0.04% multiplied by the Up-MACRO Asset Amount on
such day, which shall be payable to MacroMarkets pursuant to the MACRO Licensing
Agreement.
"Up-MACRO Proportional Mandatory Redemption" shall have the meaning
specified in Section 6.2(a) hereof.
"Up-MACRO Price Range" shall mean the difference between (i) the Ending
Level of the Applicable Reference Price of Crude Oil at which the Up-MACRO
Underlying Value is equal to zero and (ii) the Starting Level, as such range may
be changed in connection with a Down-MACRO Recapitalization Event and the
related Down-MACRO Recapitalization Issuance.
"Up-MACRO Proportionate Mandatory Redemption Percentage" shall mean,
with respect to any Redemption Date on which a Down-MACRO Recapitalization
Issuance and the related Up-MACRO Proportional Mandatory Redemption are
scheduled to occur, a fraction, expressed as a percentage, the numerator of
which is the Aggregate Par Amount of Down-MACRO Holding Shares issued in such
Down-MACRO Recapitalization Issuance and the denominator of which is twice the
Down-MACRO Aggregate Par Amount immediately prior to the occurrence of the
Down-MACRO Recapitalization Event which preceded such Down-MACRO
Recapitalization Issuance.
"Up-MACRO Recapitalization Condition" shall have the meaning specified
in Section 2.8 of this Trust Agreement.
"Up-MACRO Recapitalization Event" shall have the meaning specified in
Section 11.1(c) hereof.
"Up-MACRO Recapitalization Issuance" shall have the meaning specified
in Section 2.7(a) or (b) hereof.
"Up-MACRO Recapitalization Redemption" shall have the meaning set forth
in Section 6.2(b) of this Trust Agreement.
"Up-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if the Up-MACRO Underlying Value on such Redemption Date, the
Termination Trigger Date preceding such Early Termination Date, or the last
Price Determination Day preceding the Final Scheduled Termination Date is
greater than or equal to the Up-MACRO Asset Amount on such date, zero; and
(b) if the Up-MACRO Underlying Value on such Redemption Date, the
Termination Trigger Date preceding such Early Termination Date or preceding the
Final Scheduled Termination Date is less than the Up-MACRO Asset Amount on such
date, an amount equal to (i) the excess of such Up-MACRO Asset Amount over such
Up-MACRO Underlying Value multiplied by (ii) the Up-MACRO Redemption Percentage
for such Redemption Date, Early Termination Date or Final Scheduled Termination
Date.
"Up-MACRO Stated Par Amount" shall mean the stated par amount of $[ ]
per Up-MACRO Holding Share.
"Up-MACRO Sublicensing Fee" shall mean, with respect to any
Distribution Date, the sum of, for each day during the related Calculation
Period, an amount equal to a per annum rate of 0.06% multiplied by the Up-MACRO
Asset Amount on such day, which shall be payable to MacroMarkets pursuant to the
NYMEX Sublicensing Agreement.
"Up-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Up-MACRO Tradeable Trust pursuant to the Up-MACRO Tradeable Trust
Agreement.
"Up-MACRO Tradeable Trust" shall mean the Light Sweet Crude Oil
Up-MACRO Tradeable Trust created under the Up-MACRO Tradeable Trust Agreement.
"Up-MACRO Tradeable Trust Agreement" shall mean the Up-MACRO Tradeable
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Up-MACRO Tradeable Trustee.
"Up-MACRO Tradeable Trustee" shall mean [ ], not in its individual
capacity but solely as trustee of the Up-MACRO Tradeable Trust.
"Up-MACRO Trustee Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to a per annum rate of 0.08% multiplied by the Up-MACRO Aggregate Par
Amount on such day, which shall be payable to the Trustee pursuant to this Trust
Agreement.
"Up-MACRO Underlying Value" shall mean with respect to any Price
Determination Day:
(a) if the Ending Level is above the Starting Level, an amount equal to
(i) the Up-MACRO Asset Amount on such date of determination plus (ii) (x) the
Down-MACRO Asset Amount on such date of determination multiplied by (y) the
Price Level Percentage Change on such date of determination or, if such date is
not a Price Determination Day, on the last preceding Price Determination Day;
(b) if the Ending Level is below the Starting Level, an amount equal to
(i) the Up-MACRO Asset Amount on such date of determination minus (ii) (x) such
Up-MACRO Asset Amount multiplied by (y) the Price Level Percentage Change on
such date of determination or, if such date is not a Price Determination Day, on
the last preceding Price Determination Day; and
(c) if the Ending Level is equal to the Starting Level, the Up-MACRO
Asset Amount.
"Value" shall mean, with respect to any Treasury on deposit at any time
in either of the Paired Holding Trusts, the par amount of such Treasury that
will be repaid upon the maturity thereof.
"Yield Rate" shall mean, with respect to any Treasury on deposit at any
time in either of the Paired Holding Trusts, the stated interest rate of such
Treasury, if any, plus any discount rate applicable to such Treasury, based on
the purchase date and purchase price at which the applicable Paired Holding
Trust acquired that Treasury (which discount rate may be negative for any
Treasury that was purchased at a premium).
Section 1.2 Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the
defined meanings when used in any share, certificate or other document made or
delivered pursuant hereto or thereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any share,
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Trust Agreement or in any such share,
certificate or other document, and accounting terms partly defined in this Trust
Agreement or in any such share, certificate or other document to the extent not
defined, shall have the respective meanings given to them under generally
accepted accounting principles. To the extent that the definitions of accounting
terms in this Trust Agreement or in any such share, certificate or other
document are inconsistent with the meanings of such terms under generally
accepted accounting principles, the definitions contained in this Trust
Agreement or in any such share, certificate or other document shall control.
(c) The agreements, representations and warranties of MACRO
Securities Depositor, LLC in this Trust Agreement in its capacity as Depositor
shall be deemed to be the separate agreements, representations and warranties of
MACRO Securities Depositor, LLC solely in such capacity for so long as MACRO
Securities Depositor, LLC acts in such capacity under this Trust Agreement.
(d) Unless otherwise specified, references to any amount as on
deposit or outstanding on any particular date shall mean such amount at the
close of business on such day.
(e) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Trust Agreement shall refer to this Trust
Agreement as a whole and not to any particular provision of this Trust
Agreement; references to any Article, Section, Schedule or Exhibit are
references to Articles, Sections, Schedules and Exhibits in or to this Trust
Agreement unless otherwise specified; and the term "including" means "including
without limitation."
ARTICLE II
CREATION AND DECLARATION OF THE TRUST;
FORM OF THE CERTIFICATES; THE INITIAL DEPOSIT;
DELIVERY, REGISTRATION OF TRANSFER AND
SURRENDER OF UP-MACRO HOLDING SHARES
Section 2.1 Initial Deposit. By execution of this Trust Agreement, the
Depositor does hereby transfer, assign, set over and otherwise convey to the
Up-MACRO Holding Trust, for the benefit of the Holders of the Up-MACRO Holding
Shares, all right, title and interest of the Depositor in and to the Initial
Deposit deposited into the Distribution Account and used to acquire Treasuries
in accordance with the provisions of Section 3.5 and Section 3.7 hereof. Such
property, together with all monies on deposit in the Distribution Account and
the Fee Payment Account from time to time and the Up-MACRO Holding Trust's
rights under the Master Agreement, the Income Distribution Agreement, the
Settlement Contracts (whether executed on the Closing Date or on any Subsequent
Issuance Date), the MACRO Licensing Agreement, the NYMEX Sublicensing Agreement
and any Substitute Index Licensing Agreement, shall constitute the assets of the
Up-MACRO Holding Trust (the "Trust Assets").
Section 2.2 Acceptance by Trustee. The Trustee hereby (i) acknowledges
its acceptance on behalf of the Up-MACRO Holding Trust of all right and title to
and interest in the property, now existing and hereafter created, conveyed to
the Up-MACRO Holding Trust pursuant to Section 2.1 and (ii) declares that it
shall maintain such right, title and interest, upon the Up-MACRO Holding Trust
herein set forth, for the benefit of all Holders of the Up-MACRO Holding Shares.
Upon the execution of this Trust Agreement, the Trustee is hereby
directed to cause the Up-MACRO Holding Trust to enter with the Down-MACRO
Holding Trust into the Master Agreement, the Income Distribution Agreement and
one Settlement Contract for each MACRO Unit of Paired Holding Shares created on
the Closing Date.
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust. The Up-MACRO
Holding Trust shall not engage in any business or activity other than those
authorized by this Trust Agreement or incidental and necessary to carry out the
duties and responsibilities set forth in this Trust Agreement. Other than the
issuance of the Up-MACRO Holding Shares on the Closing Date or on any Subsequent
Issuance Date, the Up-MACRO Holding Trust shall not issue or sell any shares,
certificates or other obligations or, except in accordance with this Trust
Agreement, otherwise incur, assume or guarantee any indebtedness for money
borrowed.
Section 2.4 Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Up-MACRO Holding Trust (and
agrees that the Trustee may rely on each such representation and warranty in
accepting the Initial Deposit in the Up-MACRO Holding Trust and in
authenticating the Up-MACRO Holding Shares) as of the Closing Date that:
(a) Organization and Good Standing. The Depositor is a limited
liability company validly existing and in good standing under the laws of the
State of Delaware and has full corporate power, authority and legal right to own
its properties and conduct its business as such properties are presently owned
and such business is presently conducted, and to execute, deliver and perform
its obligations under this Trust Agreement.
(b) Due Qualification. The Depositor is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt from
such requirements) and has obtained all necessary licenses and approvals in each
jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would render any transfer of the Initial Deposit to the Up-MACRO
Holding Trust by the Depositor unenforceable and would have a material adverse
effect on the interests of the Holders of the Up-MACRO Holding Shares hereunder.
(c) Due Authorization. The execution, delivery and performance
of this Trust Agreement by the Depositor, the execution and delivery to the
Trustee of the Up-MACRO Holding Shares by the Depositor and the consummation by
the Depositor of the transactions provided for in this Trust Agreement have been
duly authorized by the Depositor by all necessary corporate action on the part
of the Depositor and this Trust Agreement will remain, from the time of its
execution, an official record of the Depositor.
(d) No Conflict. The execution and delivery by the Depositor
of this Trust Agreement and the Up-MACRO Holding Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement and the
fulfillment by the Depositor of the terms hereof will not conflict with, result
in any breach of any of the material terms and provisions of, or constitute
(with or without notice or lapse of time or both) a material default under, any
indenture, contract, agreement, mortgage, deed of trust, or other instrument to
which the Depositor is a party or by which it or any of its properties are
bound.
(e) No Violation. The execution and delivery by the Depositor
of this Trust Agreement and the Up-MACRO Holding Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement and the
fulfillment by the Depositor of the terms hereof will not conflict with or
violate any Requirements of Law applicable to the Depositor.
(f) No Proceedings. There are no proceedings or investigations
pending or, to the best knowledge of the Depositor, threatened against the
Depositor before any court, regulatory body, administrative agency, or other
tribunal or governmental instrumentality (i) asserting the invalidity of this
Trust Agreement or the Up-MACRO Holding Shares, (ii) seeking to prevent the
issuance of the Up-MACRO Holding Shares or the consummation of any of the
transactions contemplated by this Trust Agreement or the Up-MACRO Holding
Shares, (iii) seeking any determination or ruling that, in the reasonable
judgment of the Depositor, would materially and adversely affect the performance
by the Depositor of its obligations under this Trust Agreement, (iv) seeking any
determination or ruling that would materially and adversely affect the validity
or enforceability of this Trust Agreement or the Up-MACRO Holding Shares or (v)
seeking to affect adversely the income tax attributes of the Up-MACRO Holding
Trust under the federal or applicable state income or franchise tax systems.
(g) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by the Depositor
of this Trust Agreement and the Up-MACRO Holding Shares, the performance by the
Depositor of the transactions contemplated by this Trust Agreement or the
Up-MACRO Holding Shares and the fulfillment by the Depositor of the terms hereof
and thereof have been obtained.
(h) Bankruptcy; Insolvency. No Event of Bankruptcy with
respect to the Depositor has occurred and the transfer of the Initial Deposit by
the Depositor to the Up-MACRO Holding Trust has not been made in contemplation
of the occurrence thereof.
(i) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Depositor, enforceable against the
Depositor in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws now or hereafter in effect which affect the enforcement of
creditors' rights in general, and except as such enforceability may be limited
by general principles of equity (whether considered in a suit at law or in
equity).
(j) Unencumbered Title to Initial Deposit. The Depositor is
the legal and beneficial owner of all right, title and interest in and to the
Initial Deposit and the Depositor has the full right to transfer the Initial
Deposit to the Up-MACRO Holding Trust, and the Initial Deposit conveyed to the
Up-MACRO Holding Trust by the Depositor has been conveyed to the Up-MACRO
Holding Trust free and clear of any lien of any Person claiming through or under
the Depositor or any of its Affiliates and in compliance, in all material
respects, with all Requirements of Law applicable to the Depositor.
(k) Governmental Authorization. All authorizations, consents,
orders or approvals of or registrations or declarations with any Governmental
Authority required to be obtained, effected or given by the Depositor in
connection with the conveyance by the Depositor of the Initial Deposit to the
Up-MACRO Holding Trust have been duly obtained, effected or given and are in
full force and effect.
(l) Valid Transfer. This Trust Agreement constitutes a valid
transfer and assignment to the Up-MACRO Holding Trust of all right, title and
interest of the Depositor in and to the Initial Deposit and other Trust Assets
conveyed to the Up-MACRO Holding Trust by the Depositor and all monies due or to
become due with respect thereto and the proceeds thereof and constitutes a grant
of a "security interest" (as defined in the UCC) in such property to the
Up-MACRO Holding Trust, which, in the case of the Initial Deposit and the
proceeds thereof, is enforceable upon execution and delivery of this Trust
Agreement.
(m) No Conflicting Claim. Neither the Depositor nor any Person
claiming through or under the Depositor has any claim to or interest in the
Securities Account or the Distribution Account.
The representations and warranties of the Depositor set forth in this
Section 2.4 shall survive the transfer and deposit by the Depositor of the
Initial Deposit to the Up-MACRO Holding Trust. Upon discovery by the Depositor,
the Trustee or the Administrative Agent of a breach of any of the
representations and warranties by the Depositor set forth in this Section 2.4,
the party discovering such breach shall give prompt written notice to the other
parties hereto. The Depositor agrees to cooperate with the Trustee and the
Administrative Agent in attempting to cure any such breach.
Section 2.5 Form of Certificates; Book-Entry System; Transferability of
Up-MACRO Holding Shares.
(a) Form of Certificates. The Certificates evidencing the
Up-MACRO Holding Shares shall be substantially in the form set forth in Exhibit
A attached hereto, with appropriate insertions, modifications and omissions as
hereinafter provided. No Up-MACRO Holding Shares shall be entitled to any
benefits under this Trust Agreement or be valid or obligatory for any purpose
unless a Certificate evidencing those Up-MACRO Holding Shares has been executed
by the Trustee by the manual or facsimile signature of a duly authorized
signatory of the Trustee and countersigned by the manual signature of a duly
authorized officer of the Depositor. The Trustee shall maintain books on which
the registered ownership of each Up-MACRO Holding Share and transfers, if any,
of such registered ownership shall be recorded. Certificates evidencing the
Up-MACRO Holding Shares bearing the manual signature of a duly authorized
signatory of the Trustee and the manual or facsimile signature of a duly
authorized officer of the Depositor, if applicable, who was, at the time such
Certificates were executed, a proper signatory of the Trustee or the Depositor,
as applicable, shall bind the Trustee, notwithstanding that such signatory has
ceased to hold such office prior to the delivery of such Certificates.
The Certificates may be endorsed with or have incorporated in the text
thereof such legends or recitals or modifications not inconsistent with the
provisions of this Trust Agreement as may be required by the Trustee or required
to comply with any applicable law or regulations thereunder or with the rules
and regulations of any securities exchange upon which the Up-MACRO Holding
Shares may be listed or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which the Up-MACRO Holding
Shares evidenced by a particular Certificate are subject.
(b) Book-Entry Settlement. The Depositor and the Trustee shall
apply to the Depository for acceptance of the Up-MACRO Holding Shares in its
book-entry settlement system. The Up-MACRO Holding Shares deposited with the
Depository shall be evidenced by one or more global Certificates which shall be
registered in the name of Cede & Co., as nominee for the Depository, and shall
bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE "DEPOSITORY"), TO THE
AGENT AUTHORIZED BY THE DEPOSITOR FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
So long as the Up-MACRO Holding Shares are eligible for book-entry
settlement with the Depository and such settlement is available, unless
otherwise required by law, all Up-MACRO Holding Shares shall be evidenced by one
or more global Certificates the Registered Owner of which is the Depository or a
nominee of the Depository and (i) no Beneficial Owner of Up-MACRO Holding Shares
will be entitled to receive a separate Certificate evidencing those shares, (ii)
the interest of a Beneficial Owner in the Up-MACRO Holding Shares represented by
a global Certificate will be shown only on, and transfer of that interest will
be effected only through, records maintained by the Depository or a DTC
Participant or Indirect Participant through which the Beneficial Owner holds
that interest and (iii) the rights of a Beneficial Owner with respect to
Up-MACRO Holding Shares represented by a global Certificate will be exercised
only to the extent allowed by, and in compliance with, the arrangements in
effect between such Beneficial Owner and the Depository or the DTC Participant
or Indirect Participant through which that Beneficial Owner holds an interest in
Up-MACRO Holding Shares.
As provided in the Depository Agreement, upon the settlement date of
any creation, transfer or redemption of the Up-MACRO Holding Shares, the
Depository will credit or debit, on its book-entry registration and transfer
system, the amount of Up-MACRO Holding Shares so created, transferred or
redeemed to the accounts of the appropriate DTC Participants. The accounts to be
credited and charged shall be designated by the Trustee and each Authorized
Participant, in the case of a Paired Subsequent Issuance or Paired Optional
Redemption of MACRO Units. Except as otherwise described in Section 2.5([ ]),
ownership of beneficial interests in Up-MACRO Holding Shares will be limited to
DTC Participants, Indirect Participants and persons holding interests through
DTC Participants and Indirect Participants. Owners of beneficial interests in
Up-MACRO Holding Shares ("Beneficial Owners") will be shown on, and the transfer
of beneficial ownership by Beneficial Owners will be effected only through, in
the case of DTC Participants, records maintained by the Depository and, in the
case of Indirect Participants and Beneficial Owners holding through a DTC
Participant or an Indirect Participant, through those records or the records of
the relevant DTC Participants. Beneficial Owners are expected to receive from or
through the broker or bank that maintains the account through which the
Beneficial Owner has purchased Up-MACRO Holding Shares a written confirmation
relating to their purchase of Up-MACRO Holding Shares.
(c) Notices to Beneficial Owners. As described above, the
Trustee will recognize the Depository or its nominee as the owner of all
Up-MACRO Holding Shares for all purposes except as expressly set forth in this
Trust Agreement. Conveyance of all notices, statements and other communications
to Beneficial Owners will be effected as follows. The Trustee shall inquire of
each such DTC Participant as to the number of Beneficial Owners holding Up-MACRO
Holding Shares, directly or indirectly, through such DTC Participant. The
Trustee shall provide each such DTC Participant with sufficient copies of such
notice, statement or other communication, in such form, number and at such place
as such DTC Participant may reasonably request, in order that such notice,
statement or communication may be transmitted by such DTC Participant, directly
or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to
each such DTC Participant an amount as reimbursement for the expenses attendant
to such transmittal, all subject to applicable statutory and regulatory
requirements.
(d) Distributions on Book-Entry Certificates. Distributions on
Up-MACRO Holding Shares pursuant to Section 5.2 and Section 6.1 shall be made to
the Depository or its nominee, Cede & Co., as the registered owner of all
Up-MACRO Holding Shares. The Trustee and the Depositor expect that the
Depository or its nominee, upon receipt of any payment of distributions in
respect of Up-MACRO Holding Shares, shall credit immediately the DTC
Participant's accounts with payments in amounts proportionate to their
respective beneficial interests in Up-MACRO Holding Shares as shown on the
records of the Depository or its nominee. The Trustee and the Depositor also
expect that payments by DTC Participants to Indirect Participants and Beneficial
Owners held through such DTC Participants and Indirect Participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in a "street name," and shall be the responsibility of such DTC Participants and
Indirect Participants. Neither the Trustee nor the Depositor will have any
responsibility or liability for any aspects of the records relating to or
notices to Beneficial Owners, or payments made on account of beneficial
ownership interests in Up-MACRO Holding Shares, or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests or for
any other aspect of the relationship between the Depository and the DTC
Participants or the relationship between such DTC Participants and the Indirect
Participants and Beneficial Owners owning through such DTC Participants or
Indirect Participants or between or among the Depository, any Beneficial Owner
and any person by or through which such Beneficial Owner is considered to own
Up-MACRO Holding Shares.
(e) Registration of Transfer, Exchange and Surrender of the
Up-MACRO Holding Shares. The Trustee shall cause to be kept at the office or
agency to be maintained in accordance with the provisions of Section 13.15 a
register (the "Share Register") in which, subject to such reasonable regulations
as it may prescribe, a transfer agent and registrar (the "Transfer Agent and
Registrar") shall provide for the registration of the Up-MACRO Holding Shares
and of transfers and exchanges of such shares as herein provided. The Transfer
Agent and Registrar shall initially be the Trustee.
The Depositor may revoke such appointment and remove any Transfer Agent
and Registrar if the Depositor determines in its sole discretion that such
Transfer Agent and Registrar failed to perform its obligations under this Trust
Agreement in any material respect. Any Transfer Agent and Registrar shall be
permitted to resign as Transfer Agent and Registrar upon thirty (30) days'
notice to the Depositor and the Trustee; provided, however, that such
resignation shall not be effective and such Transfer Agent and Registrar shall
continue to perform its duties as Transfer Agent and Registrar until the Trustee
has appointed a successor Transfer Agent and Registrar reasonably acceptable to
the Depositor.
At the option of a Holder, Up-MACRO Holding Shares may be registered
for transfer at any office or agency of the Transfer Agent and Registrar
maintained for such purpose, upon presentation of an ownership Certificate of an
Up-MACRO Holding Share by the Holder to be registered for transfer or exchanged.
When an ownership Certificate of Up-MACRO Holding Share is presented for
registration of transfer, the Depositor shall execute, the Trustee shall
authenticate and the Transfer Agent and Registrar shall register one or more new
Up-MACRO Holding Shares in the Up-MACRO Holding Trust in the name of the
designated transferee or transferees.
Every Certificate of Up-MACRO Holding Share presented for registration
of transfer shall be accompanied by a written instrument of transfer in a form
satisfactory to the Trustee or the Transfer Agent and Registrar duly executed by
the Holder or the attorney-in-fact thereof duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Up-MACRO Holding Shares, but the Transfer Agent and Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such transfer or exchange.
All Certificates surrendered for registration of transfer or exchange
or for payment shall be cancelled and disposed of in a manner satisfactory to
the Trustee.
(f) Mutilated, Destroyed, Lost or Stolen Shares. If (a) any
mutilated Certificate is surrendered to the Transfer Agent and Registrar, or the
Transfer Agent and Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Transfer Agent and Registrar and the Trustee such security or indemnity as may
be required by them to save each of them harmless, then in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Depositor shall execute, the Trustee shall authenticate and the Transfer
Agent and Registrar shall deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
tenor and aggregate beneficial interest. In connection with the issuance of any
new Certificate under this Section 2.5(f), the Trustee or the Transfer Agent and
Registrar may require the payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee and the Transfer
Agent and Registrar) connected therewith. Any duplicate Certificate issued
pursuant to this Section 2.5(f) shall constitute complete and indefeasible
evidence of ownership in the Up-MACRO Holding Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 2.6 Paired Subsequent Issuances.
(a) At any time following the Closing Date, but prior to the
Final Scheduled Termination Date or any Early Termination Date, the Trustee may
issue and deliver additional Up-MACRO Holding Shares contemporaneously with the
issuance of additional Down-MACRO Holding Shares in the form of MACRO Units
(such an issuance, a "Paired Subsequent Issuance") upon instruction from any
Authorized Participant. As provided in the Participants Agreement, a Paired
Subsequent Issuance may be directed solely by one or more Authorized
Participants on any Business Day by delivering a Purchase Order to the Trustee
and the Administrative Agent on such Business Day (such date, the "Subsequent
Issuance Date"), prior to the earlier of (i) 2:00 p.m., New York City Time, or
(ii) half an hour before the end of trading in the futures contracts from which
the Applicable Reference Price of Crude Oil is derived, designating, inter alia,
(i) the name of the Authorized Participant, (ii) the Submission Number (as
defined in the Participants Agreement), (iii) the PIN Number (as defined in the
Participants Agreement), (iv) the CUSIP Numbers for the Paired Holding Shares to
be created, and (v) the number of Paired Holding Shares to be issued in the form
of MACRO Units. On the next Business Day after the Subsequent Issuance Date, not
later than 10:00 a.m., New York City Time, the Authorized Participant directing
the Paired Subsequent Issuance shall deliver available funds to the Trustee in
an amount equal to (i) the Aggregate Par Amount of the Up-MACRO Holding Shares
requested by that Authorized Participant, plus (ii) the Aggregate Par Amount of
the Down-MACRO Holding Shares requested by that Authorized Participant, plus
(iii) the Up-MACRO Income Make-Whole Amount, plus (iv) the Down-MACRO Income
Make-Whole Amount. On the same Business Day, upon the satisfaction of the
procedures and conditions for a Paired Subsequent Issuance that are specified in
the Participants Agreement and no later than [3:00] p.m., New York City Time,
the Trustee, acting together with the Down-MACRO Holding Trustee, each on behalf
of their respective Paired Holding Trust, shall issue and deliver to the
Depository account of the Authorized Participant who directed such Paired
Subsequent Issuance, Paired Holding Shares constituting the number of MACRO
Units ordered by such Authorized Participant.
(b) Subject to the requirements and limitations set forth
herein and in the Participants Agreement, the number of Up-MACRO Holding Shares
that the Up-MACRO Holding Trust may issue as part of a Paired Subsequent
Issuance is unlimited. The Trustee and the Administrative Agent shall only
process Purchase Orders from Authorized Participants that have executed a
Participants Agreement that is in full force and effect at the time when a
Purchase Order is placed. The Administrative Agent will maintain and make
available at its offices specified in Section [ ] during normal business hours a
current list of the Authorized Participants eligible to participate in a Paired
Subsequent Issuance. Each Paired Subsequent Issuance shall be effected in
accordance with the procedures set forth in Attachment A to the Participants
Agreement, which may be amended from time to time in accordance with the
provisions of the Participants Agreement; provided, however that any such
amendment shall not constitute an amendment of this Trust Agreement. In the
event of any conflict between the Participants Agreement and this Trust
Agreement, the provisions of the Participants Agreement shall govern.
(c) Concurrently with any Paired Subsequent Issuance, the
Trustee, as directed by the Administrative Agent, acting together with the
Down-MACRO Holding Trustee, each on behalf of their respective Paired Holding
Trust, shall adjust the aggregate amount of the Income Distribution Agreement
and enter into additional Settlement Contracts based on the Net Par Amount
Change to the Up-MACRO Aggregate Par Amount and the Down-MACRO Aggregate Par
Amount, after giving effect to any Paired Subsequent Issuances or Paired
Optional Redemptions occurring on that Business Day.
(d) The Trustee shall have the absolute right, but shall have
no obligation, to reject any Purchase Order (i) if the Administrative Agent
determines that the Authorized Participant directing the Paired Subsequent
Issuance has not deposited sufficient funds with the Trustee, (ii) if the
Depositor determines that such Purchase Order would have adverse tax or
securities law consequences for either of the Paired Holding Trusts or the
holders of the Paired Holding Shares, (iii) the acceptance or fulfillment of
which would, in the opinion of counsel to the Depositor acceptable to the
Trustee, be unlawful, (iv) in the case of a Paired Subsequent Issuance, if the
Down-MACRO Holding Trustee notifies the Trustee that it has rejected or shall
reject the Purchase Order for additional Down-MACRO Holding Shares made in
connection with such issuance 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 Up-MACRO Holding Trust to issue additional Up-MACRO
Holding Shares. None of the Trustee, the Depositor or the Administrative Agent
shall be liable to any Person by reason of the rejection of any Purchase Order.
(e) A non-refundable transaction fee will be payable to the
Trustee for its own account in connection with each Purchase Order pursuant to
this Section 2.6 in the amount specified in Section 6 of the Participants
Agreement.
(f) Only global Certificates will be issued to the Depository
upon the Paired Subsequent Issuance of additional Up-MACRO Holding Shares. So
long as the Depository Agreement is in effect, the Up-MACRO Holding Shares will
be transferable solely through the book-entry systems of the Depository, and DTC
Participants and their Indirect Participants, as more fully described in Section
2.5 hereof. The Depository may discontinue providing its services with respect
to the Up-MACRO Holding Shares by giving notice to the Trustee, the
Administrative Agent and the Depositor pursuant to and in conformity with the
provisions of the Depository Agreement and discharging its responsibilities with
respect thereto under applicable law. Under such circumstances, the Trustee, the
Administrative Agent and the Depositor shall find a replacement for the
Depository to perform its functions at a comparable cost and on terms acceptable
to the Trustee and the Depositor.
Section 2.7 Up-MACRO Recapitalization Issuance Following a
Recapitalization Event.
(a) If, on any Price Determination Day, the Applicable
Reference Price of Crude Oil decreases to an Ending Level at which the Up-MACRO
Underlying Value is less than or equal to zero, then the Administrative Agent
shall promptly, but not later than the close of business on such Price
Determination Day, send both an electronic notice and a written notice thereof
(via overnight courier) to the Depositor, the Trustee, the Down-MACRO Holding
Trustee, the Up-MACRO Tradeable Trustee and the Down-MACRO Tradeable Trustee.
The Administrative Agent shall also immediately commence soliciting orders from
each of the Authorized Participants and any other Persons meeting the
requirements for an Authorized Participant but not otherwise a party to the
Participants Agreement to participate in an issuance of additional Up-MACRO
Holding Shares if an Up-MACRO Recapitalization Event occurs (such issuance, an
"Up-MACRO Subsequent Issuance").
(b) If the Applicable Reference Price of Crude Oil remains at
or below an Ending Level at which the Up-MACRO Underlying Value is less than or
equal to zero for 10 consecutive Price Determination Days and an Up-MACRO
Recapitalization Event occurs pursuant to Section 11.1, and (ii) the
Administrative Agent has received sufficient orders from Authorized Participants
or any other similarly situated Person described in paragraph (a) of this
Section 2.7 to issue Up-MACRO Holding Shares in an Aggregate Par Amount equal to
at least [ ]% of the Aggregate Par Amount of the currently Outstanding Up-MACRO
Holding Shares, then the Administrative Agent shall communicate such orders to
the Trustee. Concurrently, the Depositor, the Trustee, acting together with the
Down-MACRO Holding Trustee, each on behalf of their respective Paired Holding
Trust, the Administrative Agent, and any Person who wishes to purchase newly
issued Up-MACRO Holding Shares shall enter into a purchase agreement, mutually
acceptable to the parties thereto, under which additional Up-MACRO Holding
Shares shall be issued following the occurrence of an Up-MACRO Recapitalization
Event (such additional issuance, an "Up-MACRO Recapitalization Issuance"). Such
Up-MACRO Subsequent Issuance shall be conditioned upon (i) the effectiveness of
a new registration statement containing an updated prospectus relating to the
Up-MACRO Holding Shares, (ii) the delivery by the Depositor of such new
prospectus relating to the new Up-MACRO Holding Shares and (iii) satisfaction of
the Up-MACRO Recapitalization Condition.
(c) Upon the closing date of the Up-MACRO Subsequent Issuance
(as set forth in the purchase agreement described in paragraph (b) of this
Section 2.7), the parties hereto shall enter into an amendment to this Trust
Agreement and the Down-MACRO Holding Trust Agreement in order to reflect a new
Starting Level.
(d) Concurrently with the creation of additional Up-MACRO
Holding Shares in an Up-MACRO Subsequent Issuance pursuant to paragraph (b) of
this Section 2.7, or the creation of additional Down-MACRO Holding Shares
pursuant to Section [2.7(b)] of the Down-MACRO Holding Trust Agreement, the
Trustee, acting together with the Down-MACRO Holding Trustee, each on behalf of
their respective Paired Holding Trust and as instructed by the Administrative
Agent, shall adjust, on the Up-MACRO Subsequent Issuance date, the aggregate
amount of the Income Distribution Agreement and the notional amount of the
Settlement Contracts based on the Net Par Amount Change to the Up-MACRO
Aggregate Par Amount and the Down-MACRO Aggregate Par Amount, if any, occurring
due to the Up-MACRO Recapitalization Issuance.
(e) Subject to the requirements and limitations set forth
herein and in the Participants Agreement, the number of Up-MACRO Holding Shares
that the Up-MACRO Holding Trust may issue as part of an Up-MACRO
Recapitalization Issuance is unlimited.
Section 2.8 Up-MACRO Recapitalization Condition. An Up-MACRO
Recapitalization Issuance may be effected in connection with an Up-MACRO
Recapitalization Event only if, following such Up-MACRO Recapitalization
Issuance, the Up-MACRO Settlement Payment and the Down-MACRO Settlement Payment,
as applicable, that would be due in connection with a movement in the Applicable
Reference Price of Crude Oil of any specified magnitude measured from any one
point to any other point within the applicable Up-MACRO or Down-MACRO Price
Range would be equal to the Up-MACRO or Down-MACRO Settlement Payment that was
payable prior to such Up-MACRO Recapitalization Issuance in connection with a
movement in the Applicable Reference Price of Crude Oil of the same magnitude.
The foregoing limitation on the ability of the Trustee, acting on behalf of the
Up-MACRO Holding Trust, to effect an Up-MACRO Recapitalization Issuance is
referred to herein as the "Up-MACRO Recapitalization Condition."
ARTICLE III
APPOINTMENT OF THE TRUSTEE, ADMINISTRATIVE AND MARKETING AGENT;
THE ADMINISTRATION AND REINVESTMENT OF THE TREASURIES;
ESTABLISHMENT OF ACCOUNTS
Section 3.1 Acceptance of Appointment and Matters Relating to the
Trustee.
(a) [ ] agrees to act as Trustee, Transfer Agent and Registrar
under this Trust Agreement and has concurrently agreed to act as the Down-MACRO
Holding Trustee under the Down-MACRO Holding Trust Agreement. The Holders of the
Up-MACRO Holding Shares by their acceptance of their shares consent to [ ]
acting as Trustee under this Trust Agreement and as trustee for the Down-MACRO
Holding Trust under the Down-MACRO Holding Trust Agreement.
(b) Without limiting the generality of the foregoing, the
Trustee is hereby authorized and empowered (i) to make withdrawals and payments
or to instruct any paying agent or custodian appointed by the Trustee to make
withdrawals and payments from the Securities Account and the Distribution
Account, as set forth in this Trust Agreement, (ii) to enter into the Income
Distribution Agreement, the Settlement Contracts, the Participants Agreement,
the MACRO Licensing Agreement, the NYMEX Sublicensing Agreement and any other
agreement related to the powers and purposes of the Up-MACRO Holding Trust,
(iii) to settle the purchase of Treasuries at the direction of the
Administrative Agent and (iv) to take any action required or permitted under the
Income Distribution Agreement, the Settlement Contracts, the Participants
Agreement, the MACRO Licensing Agreement and the NYMEX Sublicensing Agreement,
as set forth in this Trust Agreement and any such action needed for the daily
operation of the Trust. Without limiting the generality of the foregoing and
with the prior written consent of the Depositor, the Trustee is hereby
authorized and empowered to make any filings, reports, notices, applications and
registrations with, and to seek any consents or authorizations from, the SEC and
any state securities authority on behalf of the Up-MACRO Holding Trust as may be
necessary or advisable to comply with any federal or state securities laws or
reporting requirements; provided, however, that at all times on and prior to the
Closing Date, the Depositor shall make all filings with the SEC and under state
securities laws on behalf of the Up-MACRO Holding Trust.
(c) The Trustee agrees that upon a request by the Depositor it
will use its best efforts to obtain and maintain the listing of the Up-MACRO
Holding Shares on any specified stock exchange as directed by the Depositor. If
any such request is made, the Trustee shall give notice to the Depositor and the
Administrative Agent of the date on which such Up-MACRO Holding Shares are
approved for such listing promptly, but in no event longer than two (2) Business
Days, after such listing has been obtained. Within three (3) Business Days
following receipt of notice from the Administrative Agent to the Trustee of any
actual, proposed or contemplated de-listing of such Up-MACRO Holding Shares by
any such stock exchange, the Trustee, upon direction from the Depositor, will
terminate any listing on any such stock exchange.
(d) The Trustee shall be responsible for the accrual of the
Trust expenses and for payment of any expenses incurred by it in connection with
the performance of its duties under this Trust Agreement, including, without
limitation, the fees and disbursements of any Transfer Agent and Registrar, the
fees and expenses of its legal counsel, the fees and disbursements of
independent accountants and all other fees and expenses, including the costs of
any filing and the costs and expenses relating to obtaining and maintaining the
listing of the Up-MACRO Holding Shares on any stock exchange.
Section 3.2 Representations, Warranties and Covenants of the Trustee.
[ ], in its capacity as initial Trustee under this Trust Agreement, hereby
makes, and any successor Trustee by its appointment hereunder shall make, on the
Closing Date (and on the date of any such appointment), the following
representations, warranties and covenants to the Up-MACRO Holding Trust in
accepting the Treasuries in trust and executing this Trust Agreement (and agrees
that the Depositor, the Administrative Agent and the Holders, as applicable, may
rely on each such representation, warranty and covenant):
(a) Organization and Good Standing. The Trustee is a
Massachusetts trust company and a wholly-owned subsidiary of a bank holding
company (or with respect to any successor Trustee, such other corporate entity
as may be applicable), duly organized, validly existing and in good standing
under the laws of the State of Massachusetts (or with respect to any successor
Trustee, under the laws of the applicable jurisdiction of organization), and has
full trust power, authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned and
as such business is presently conducted.
(b) Due Qualification. The Trustee is duly qualified to do
business and is in good standing as a foreign trust company (or is exempt from
such requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the interests of the Holders
of the Up-MACRO Holding Shares hereunder.
(c) Due Authorization. The execution, delivery, and
performance of this Trust Agreement has been duly authorized by the Trustee by
all necessary trust action on the part of the Trustee.
(d) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Trustee, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect, affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust
Agreement by the Trustee, the performance of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof applicable to the
Trustee, will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a material default under, any Requirement of Law applicable to
the Trustee or any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Trustee is a party or by which it or any of its
properties are bound.
(f) No Proceedings. There are no proceedings or investigations
pending or threatened against the Trustee before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality seeking
to prevent the issuance of the Up-MACRO Holding Shares or the consummation of
any of the transactions contemplated by this Trust Agreement, seeking any
determination or ruling that, in the reasonable judgment of the Trustee, would
materially and adversely affect the performance by the Trustee of its
obligations under this Trust Agreement, or seeking any determination or ruling
that would materially and adversely affect the validity or enforceability of
this Trust Agreement.
(g) Compliance with Requirements of Law. The Trustee shall
duly satisfy all of its obligations and duties under this Trust Agreement and
shall maintain in effect all qualifications and will comply in all material
respects with all of the Requirements of Law in connection with its duties
hereunder, inasmuch as a failure to comply with such requirements would have a
material adverse effect on the interests of the Holders of the Up-MACRO Holding
Shares.
(h) Protection of the Rights of Holders of the Up-MACRO
Holding Shares. The Trustee shall take no action which, nor omit to take any
action the omission of which, would substantially impair the rights of Holders
of the Up-MACRO Holding Shares nor shall it, [except in the case where it is
instructed to do so by the Administrative Agent in connection with a revised
calculation pursuant to Section 4.1(e) hereof], revise amounts to be distributed
on the Up-MACRO Holding Shares.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by the Trustee
of this Trust Agreement, the performance by the Trustee of the transactions
contemplated by this Trust Agreement and the fulfillment by the Trustee of the
terms hereof, have been obtained; provided, however, that the Trustee makes no
representation or warranty regarding state securities or "blue sky" laws in
connection with the distribution of the Up-MACRO Holding Shares.
(j) Maintenance of Records and Books of Account. The Trustee
shall maintain and implement administrative and operating procedures (including
the ability to recreate records evidencing any transaction entered into by the
Up-MACRO Holding Trust in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, computer records and other
information, reasonably necessary or advisable. Such documents, books and
computer records shall reflect all facts giving rise to such transactions, all
payments and credits with respect thereto, and, to the extent required, such
documents, books and computer records shall indicate the interests of the
Up-MACRO Holding Trust in such transactions.
Section 3.3 Acceptance of Appointment and Matters Relating to the
Administrative and Marketing Agent.
(a) [ ] agrees to act as Administrative Agent under this
Agreement and the Holders of the Up-MACRO Holding Shares by their acceptance of
their shares consent to [ ] acting as Administrative Agent under this Trust
Agreement and as administrative agent for the Down-MACRO Holding Trust under the
Down-MACRO Holding Trust Agreement.
(b) The Administrative Agent shall administer the Treasuries
and direct the Trustee (i) to invest the proceeds from such Treasuries and from
creations of new Up-MACRO Holding Shares and (ii) to settle payments of
Treasuries or cash or the combination of the two in redemptions of Up-MACRO
Holding Shares as provided herein, in accordance with the terms set forth in
this Trust Agreement and its customary and established procedures relating to
administering Treasuries and other comparable investments. The Administrative
Agent shall have full power and authority, acting alone or through any party
properly designated by it hereunder, to do any and all things in connection with
such administration, reinvestment, payment and management of the Treasuries
which it may deem necessary or desirable. The Administrative Agent shall not be
obligated to use separate offices, employees or accounts for administering the
Treasuries in connection with the administration and reinvestment of the
proceeds from the Treasuries in new Treasuries in accordance with Section 3.7
hereof. The Depositor and the Trustee shall furnish to the Administrative Agent
any powers of attorney or other documents necessary or appropriate to enable the
Administrative Agent to carry out its administrative and investment duties
hereunder.
(c) The Administrative Agent shall comply with and perform its
administrative and investment obligations with respect to the Treasuries in
accordance with Section 3.5, Section 3.6, Section 3.7, and Section 6.1.
(d) The Administrative Agent shall not be liable for the
payment of expenses incurred in connection with the Up-MACRO Holding Trust but
shall be liable for its administrative and investment activities undertaken
pursuant to this Trust Agreement including any expenses related to its
administration of the Treasuries, disbursements or any other fees and expenses
related thereto.
(e) The Administrative Agent shall maintain and implement
administrative and operating procedures (including the ability to recreate
records evidencing the Treasuries in the event of the destruction of the
originals thereof), and keep and maintain all documents, books, computer records
and other information, reasonably necessary or advisable which is related to the
purchase, holding and sale of Treasuries. Such documents, books and computer
records shall reflect all facts giving rise to the Treasuries, all payments and
credits with respect thereto, and, to the extent required pursuant to Section
3.4(j), such documents, books and computer records shall indicate the interests
of the Up-MACRO Holding Trust in the Treasuries.
(f) [ ] agrees to act as Marketing Agent under this Trust
Agreement and the Holders of the Up-MACRO Holding Shares by their acceptance of
their shares consent to [ ] acting as Marketing Agent under this Trust Agreement
and as marketing agent for the Down-MACRO Holding Trust under the Down-MACRO
Holding Trust Agreement.
(g) The Marketing Agent shall comply and perform its
obligations with respect to the Holding Shares as set forth in a separate letter
agreement between the Depositor and the Marketing Agent.
Section 3.4 Representations, Warranties and Covenants of the
Administrative Agent and Marketing Agent. [ ], in its capacity as initial
Administrative Agent and Marketing Agent, hereby makes, and any successor
Administrative Agent and Marketing Agent by its appointment hereunder shall
make, on the Closing Date (and on the date of any such appointment), the
following representations, warranties and covenants to the Up-MACRO Holding
Trust (and agrees that the Trustee may rely on each such representation,
warranty and covenant in accepting the Treasuries in trust and in authenticating
the Up-MACRO Holding Shares):
(a) Organization and Good Standing. Each of the Administrative
Agent and the Marketing Agent is (or with respect to any successor
Administrative Agent or Marketing Agent, such other corporate entity as may be
applicable) duly organized, validly existing and in good standing under the laws
of the State of [ ] (or with respect to any successor Administrative Agent or
Marketing Agent, the applicable jurisdiction of its organization), and has full
corporate power, authority and legal right to execute, deliver and perform its
obligations under this Trust Agreement and, in all material respects, to own its
properties and conduct its business as such properties are presently owned and
as such business is presently conducted.
(b) Due Qualification. Each of the Administrative Agent and
the Marketing Agent is duly qualified to do business and is in good standing as
a foreign corporation (or is exempt from such requirements), and has obtained
all necessary licenses and approvals in each jurisdiction in which failure to so
qualify or to obtain such licenses and approvals would have a material adverse
effect on the interests of the Holders of the Up-MACRO Holding Shares hereunder.
(c) Due Authorization. The execution, delivery and performance
of this Trust Agreement has been duly authorized by the Administrative Agent and
the Marketing Agent by all necessary corporate action on the part of the
Administrative Agent and the Marketing Agent.
(d) Binding Obligation. This Trust Agreement constitutes a
legal, valid and binding obligation of the Administrative Agent and the
Marketing Agent, enforceable in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust
Agreement by the Administrative Agent and the Marketing Agent, the performance
of the transactions contemplated by this Trust Agreement and the fulfillment of
the terms hereof applicable to the Administrative Agent and the Marketing Agent,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any Requirement of Law applicable to the
Administrative Agent and the Marketing Agent or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which each of the
Administrative Agent and the Marketing Agent is a party or by which it or any of
its properties are bound.
(f) No Proceedings. There are no proceedings or investigations
pending or threatened against the Administrative Agent or the Marketing Agent
before any court, regulatory body, administrative agency or other tribunal or
governmental instrumentality seeking to prevent the consummation of any of the
transactions contemplated by this Trust Agreement, seeking any determination or
ruling that, in the reasonable judgment of the Administrative Agent or the
Marketing Agent, would materially and adversely affect the performance by the
Administrative Agent or the Marketing Agent of its obligations under this Trust
Agreement, or seeking any determination or ruling that would materially and
adversely affect the validity or enforceability of this Trust Agreement.
(g) Compliance with Requirements of Law. The Administrative
Agent shall duly satisfy all obligations on its part to be fulfilled under or in
connection with the Treasuries and the Securities Account, will maintain in
effect all qualifications required under Requirements of Law in order to
properly service the Treasuries and the Securities Account and will comply in
all material respects with all other Requirements of Law in connection with
servicing the Treasuries and the Securities Account, inasmuch as the failure to
comply with such requirements would have a material adverse effect on the
interests of the Holders of the Up-MACRO Holding Shares.
(h) Protection of the Rights of the Holders of the Up-MACRO
Holding Shares. The Administrative Agent shall take no action which, nor omit to
take any action the omission of which, would substantially impair the rights of
Holders of the Up-MACRO Holding Shares in any Treasury or in the Securities
Account.
(i) All Consents Required. All approvals, authorizations,
consents, orders or other actions of any Person or of any governmental body or
official required in connection with the execution and delivery by the
Administrative Agent and the Marketing Agent of this Trust Agreement, the
performance by the Administrative Agent and the Marketing Agent of the
transactions contemplated by this Trust Agreement and the fulfillment by the
Administrative Agent and the Marketing Agent of the terms hereof, have been
obtained; provided, however, that each of the Administrative Agent and the
Marketing Agent makes no representation or warranty regarding state securities
or "blue sky" laws in connection with the distribution of the Up-MACRO Holding
Shares.
(j) Maintenance of Records and Books of Account. The
Administrative Agent shall maintain and implement administrative and operating
procedures (including the ability to recreate records evidencing the Up-MACRO
Holding Trust's ownership interest in the Treasuries in the event of the
destruction of the original records relating thereto), and keep and maintain all
documents, books, computer records and other information, reasonably necessary
or advisable for the collection of all amounts due on the Treasuries. Such
documents, books and computer records shall reflect all facts giving rise to the
Treasuries, all payments and credits with respect thereto, and, to the extent
required pursuant to Section 3.3(e), such documents, books and computer records
shall indicate the interests of the Up-MACRO Holding Trust in the Treasuries.
Section 3.5 Establishment of the Securities Account.
(a) The Trustee, for the benefit of the Holders of the
Up-MACRO Holding Shares, shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust, an Eligible Deposit Account
bearing a designation clearly indicating that the Treasuries deposited therein
are held for the benefit of the Holders of the Up-MACRO Holding Shares (the
"Securities Account").
(b) The Securities Account shall initially be established with
the Trustee. The Trustee shall possess all right, title and interest in and to
all of the Treasuries on deposit from time to time in the Securities Account and
in all proceeds thereof for the benefit of the Holders of the Up-MACRO Holding
Shares.
(c) The Securities Account shall be under the sole dominion
and control of the Trustee for the benefit of the Holders of the Up-MACRO
Holding Shares. Except as expressly provided in this Trust Agreement, each of
the Depositor, the Administrative Agent and the Trustee agree that it shall have
no right of set-off or banker's lien against, and no right to otherwise deduct
from, any funds or assets held in the Securities Account for any amount owed to
it by the Up-MACRO Holding Trust or any Holder of Up-MACRO Holding Shares. If at
any time the Securities Account ceases to be an Eligible Deposit Account, the
Trustee shall within twenty (20) Business Days establish a new account, transfer
any cash or any investments to such new account, and from the date such new
account is established it shall be the "Securities Account" for purposes of this
Trust Agreement.
(d) The Trustee shall, in accordance with the trade
instructions received from the Administrative Agent, invest the funds of the
Up-MACRO Holding Trust in Treasuries and deposit such Treasuries into the
Securities Account, (i) on the Closing Date, using the Initial Deposit, (ii) on
each Distribution Date, using the maturity proceeds of the Treasuries on deposit
in the Distribution Account on such Distribution Date and required to be
reinvested in the amount specified under Section 5.2(a), (iii) on each
Subsequent Issuance Date, other than a Subsequent Issuance Date which occurs
prior to a Distribution Date, using the funds delivered to the Trustee by
Authorized Participants in connection with the Paired Subsequent Issuance or the
Up-MACRO Recapitalization Issuance, as applicable, that is being effected on
such Subsequent Issuance Date and (iv) on any day during a Calculation Period,
using any proceeds of the Treasuries received on or prior to that day.
(e) On each Distribution Date, the Trustee shall transfer to
the Distribution Account all of the maturity proceeds of the Treasuries that
were on deposit in the Securities Account during the preceding Calculation
Period, to the extent that such proceeds remain on deposit in the Securities
Account on such date.
(f) On any Redemption Date occurring on a date that is not a
Distribution Date, the Trustee shall withdraw the portion of the Treasuries and
cash on deposit in the Securities Account that is specified by the
Administrative Agent with respect to such Redemption Date pursuant to Section
5.2(b) and shall deliver such assets in the amounts and to the parties entitled
thereto, as specified in such Section 5.2(b).
Section 3.6 Establishment of the Distribution Account.
(a) The Trustee, for the benefit of the Holders of the
Up-MACRO Holding Shares, shall establish and maintain in the name of the
Trustee, on behalf of the Up-MACRO Holding Trust, an Eligible Deposit Account
bearing a designation clearly indicating that the funds deposited therein are
held for the benefit of the Holders of the Up-MACRO Holding Shares (the
"Distribution Account").
(b) The Distribution Account shall initially be established
with the Trustee. The Trustee shall possess all right, title and interest in and
to all funds on deposit from time to time in the Distribution Account and in all
proceeds thereof. The Distribution Account shall be under the sole dominion and
control of the Trustee for the benefit of the Holders of the Up-MACRO Holding
Shares.
(c) Except as expressly provided in this Trust Agreement, each
of the Depositor, the Administrative Agent and the Trustee agree that it shall
have no right of set-off or banker's lien against, and no right to otherwise
deduct from, any funds held in the Distribution Account for any amount owed to
it by the Up-MACRO Holding Trust or any Holder of Up-MACRO Holding Shares. If,
at any time, the Distribution Account ceases to be an Eligible Deposit Account,
the Trustee shall within twenty (20) Business Days establish a new account,
transfer any cash or any investments to such new account, and from the date such
new account is established, it shall be the "Distribution Account" for purposes
of this Trust Agreement.
(d) The Trustee shall deposit into the Distribution Account on
or prior to each Distribution Date, (i) all interest and other income on the
Treasuries held in the Securities Account that is received within one Business
Day preceding any Distribution Date, (ii) all payments received by the Up-MACRO
Holding Trust under the Income Distribution Agreement and the Settlement
Contracts, and, (iii) pursuant to Section 3.5(e), all proceeds of the Treasuries
remaining on deposit in the Securities Account on any Distribution Date.
(e) Not later than the Distribution Payment Date that follows
each Distribution Date, including any Distribution Date that is also the Final
Scheduled Termination Date, an Early Termination Date or a Redemption Date, the
Trustee shall withdraw all funds on deposit in the Distribution Account and
shall apply such funds for the purposes and in accordance with the priorities
specified in Section 5.2(a).
Section 3.7 Administration of Treasuries.
(a) On each Distribution Date, the Administrative Agent, on
behalf of the Up-MACRO Holding Trust, shall direct the Trustee to reinvest the
funds available pursuant to Section 5.2(a)(iv) in Treasuries in accordance with
the following "Acquisition Guidelines":
(i) all Treasuries must mature on or prior to the
next scheduled Distribution Date; and
(ii) subject to the foregoing clause (i), all funds
shall be invested in:
(A) Treasuries with the most recent date of
issuance that mature on the twenty fifth day of the month in
which the next scheduled Distribution Date occurs;
(B) to the extent that Treasuries satisfying
the foregoing subclause (A) are not available in sufficient
amounts to allow investment of all funds that are required to
be invested pursuant to Section 5.2(a)(iv), Treasuries with
the most recent date of issuance that mature on the fifteenth
day of the month in which the next scheduled Distribution Date
occurs;
(C) to the extent that Treasuries satisfying
the foregoing subclauses (A) and (B) are not available in
sufficient amounts to allow investment of all funds that are
required to be invested pursuant to Section 5.2(a)(iv),
Treasuries with the most recent date of issuance that mature
on the first day of the month in which the next scheduled
Distribution Date occurs; and
(D) thereafter, to the extent that
Treasuries satisfying the foregoing subclauses (A), (B) and
(C) are not available in sufficient amounts to allow
investment of all funds that are required to be invested
pursuant to Section 5.2(a)(iv), Treasuries with the most
recent date of issuance that mature closest to the next
scheduled Distribution Date.
(b) On each Distribution Date, the Administrative Agent shall,
subject to, and in accordance with, the Acquisition Guidelines, solicit offers
from the three (3) largest nationally recognized dealer markets in Treasuries.
Upon the receipt of such offers, the Administrative Agent shall determine the
offer price and execution terms that will yield the greatest expected Up-MACRO
Available Income Accrual Amount and Down-MACRO Available Income Accrual Amount
for the next Calculation Period and shall direct the Trustee to purchase
Treasuries, subject to, and in accordance with, the Acquisition Guidelines, from
the dealer or dealers who submitted such offers. All such Treasuries shall be
allocated pro rata by type between the Up-MACRO Holding Trust and the Down-MACRO
Holding Trust. Treasuries purchased on each Distribution Date, Subsequent
Issuance Date or any other date shall be deposited by the Trustee into the
Securities Account.
(c) On any other Business Day during any Calculation Period,
other than the last Business Day prior to a Distribution Date, when cash is
available in the Securities Account or the Distribution Account for reinvestment
in Treasuries, the Administrative Agent shall provide instructions to the
Trustee to purchase only Eligible Treasuries maturing prior to the next
scheduled Distribution Date, if possible, in accordance to the Acquisition
Guidelines provided in paragraph (a) of this Section 3.7.
Section 3.8 Establishment of the Fee Payment Account.
(a) The Trustee shall establish and maintain in the name of
the Trustee, on behalf of the Up-MACRO holding trust, an Eligible Deposit
Account bearing a designation that the funds deposited therein are held for the
benefit of the Depositor (the "Fee Payment Account").
(b) The Fee Payment Account shall initially be established
with the Trustee. The Trustee shall possess all right, title and interest in and
to all funds on deposit from time to time in the Fee Payment Account and in all
proceeds thereof. The Fee Payment Account shall be under the sole dominion and
control of the Trustee for the benefit of the Depositor.
(c) On each Distribution Date, the Trustee shall deposit an
amount equal to the Up-MACRO Fee Deposit into the Fee Payment Account and shall
use such funds, based on standing instructions from the Depositor, to pay all
Up-MACRO Expenses and all Up-MACRO Fees pursuant to priority first and second of
Section 5.2(a) on the related Distribution Payment Date.
(d) On each Distribution Payment Date, all funds remaining on
deposit in the Fee Payment Account after the Up-MACRO Expenses and Up-MACRO Fees
have been paid in full shall be delivered by the Trustee to the Depositor.
ARTICLE IV
CALCULATIONS
Section 4.1 Calculations on Price Determination Days.
(a) On each Price Determination Day, the Administrative Agent
shall calculate and provide to the Trustee not later than 5:00 p.m. New York
City Time on such Price Determination Day:
(i) the Up-MACRO Investment Amount;
(ii) the Up-MACRO Earned Income Accrual Amount;
(iii) the Up-MACRO Daily Fee Accrual Amount;
(iv) the Up-MACRO Asset Amount; and
(v) the Up-MACRO Underlying Value and the portion
thereof that is allocable to (A) one Up-MACRO Holding Share, calculated
by dividing the Up-MACRO Underlying Value by the number of Up-MACRO
Holding Shares that are Outstanding on such Price Determination Day,
and (B) one Up-MACRO Tradeable Share calculated by multiplying the sum
reached in the foregoing subclause (A) by the number of Up-MACRO
Holding Shares held by the Up-MACRO Tradeable Trust on such Price
Determination Day and dividing this amount by the number of Up-MACRO
Tradeable Shares that are Outstanding on such Price Determination Day.
The calculation of the Up-MACRO Underlying Value shall be based upon
the Price Level Percentage Change as calculated by the Administrative
Agent.
(b) The Administrative Agent shall calculate the Up-MACRO
Underlying Value as provided in clause (a)(v) of this Section 4.1, subject to
receipt of, and based upon (i) the Applicable Reference Price of Crude Oil as of
the close of trading on such Price Determination Day, (ii) the Price Level
Percentage Change as calculated by the Administrative Agent based on the
Applicable Reference Price of Crude Oil and (iii) its own calculations, relating
to the Down-MACRO Asset Amount, as it is required to calculate in accordance
with Section 4.1 of the Down-MACRO Holding Trust Agreement.
For purposes of calculating the foregoing amounts, any Paired Optional
Redemptions, Up-MACRO Recapitalization Redemptions, Up-MACRO Proportional
Mandatory Redemptions, Paired Subsequent Issuances or Up-MACRO or Down-MACRO
Recapitalization Issuances scheduled to occur on the relevant Price
Determination Day shall be disregarded.
(c) Not later than 7:15 p.m. New York City Time on the
Business Day preceding each Distribution Date, assuming that the Applicable
Reference Price of Crude Oil has been established by the NYMEX or the applicable
substitute price provider, the Administrative Agent shall calculate and provide
to the Trustee (i) the Up-MACRO Income Distribution Payment, if any, that is
payable under the Income Distribution Agreement by the Up-MACRO Holding Trust to
the Down-MACRO Holding Trust and (ii) the Down-MACRO Income Distribution
Payment, if any, that is payable under the Income Distribution Agreement by the
Down-MACRO Holding Trust to the Up-MACRO Holding Trust.
(d) Not later than 7:15 p.m. New York City Time on the
Business Day preceding the Final Scheduled Termination Date, any Early
Termination Date and each Redemption Date assuming that the Applicable Reference
Price of Crude Oil has been established by the NYMEX or the applicable
substitute price provider, the Administrative Agent shall calculate and provide
to the Trustee (i) the Up-MACRO Settlement Payment, if any, required to be made
by the Up-MACRO Holding Trust to the Down-MACRO Holding Trust under the
Settlement Contracts that are being settled on such Final Scheduled Termination
Date, Early Termination Date or Redemption Date and (ii) the Down-MACRO
Settlement Payment, if any, required to be made by the Down-MACRO Holding Trust
to the Up-MACRO Holding Trust under the Settlement Contracts that are being
settled on such Final Scheduled Termination Date, Early Termination Date or
Redemption Date.
(e) The Administrative Agent's calculations, pursuant to
clauses (a) through (d) of this Section 4.1, of the Up-MACRO Investment Amount,
the Up-MACRO Earned Income Accrual Amount, the Up-MACRO Daily Fee Accrual
Amount, the Up-MACRO Asset Amount, the Up-MACRO Income Distribution Payment and
the Up-MACRO Settlement Payment shall be conclusive and binding upon the Holders
of the Up-MACRO Holding Shares and all other Persons.
Section 4.2 Calculation of Intraday Indicative Values.
(a) Not later than 4:30 p.m. New York City Time on each Price
Determination Day, the Calculation Agent shall calculate and publish an
unofficial Up-MACRO Underlying Value, for informational purposes only, in
accordance with the definition thereof, subject to receipt of, and based upon,
the following information from the relevant parties:
(i) the Applicable Reference Price of Crude Oil from
the NYMEX or from the provider of any Substitute Crude Oil Price;
(ii) the Up-MACRO Asset Amount from the
Administrative Agent pursuant to Section 4.1 of this Trust Agreement;
and
(iii) the Down-MACRO Asset Amount from the
Administrative Agent pursuant to Section 4.1 of the Down-MACRO Holding
Trust Agreement.
(b) Not later than 4:30 p.m. New York City Time on each Price
Determination Day, the Calculation Agent shall calculate and publish, for
informational purposes only, the portion of the Up-MACRO Underlying Value that
is represented by each Up-MACRO Holding Share and each Up-MACRO Tradeable Share.
Such calculation will be performed by dividing such Up-MACRO Underlying Value by
the number of Up-MACRO Holding Shares that are Outstanding on the relevant Price
Determination Day. For purposes of this calculation, the number of Up-MACRO
Holding Shares that are Outstanding on such Price Determination Day shall
include all Up-MACRO Holding Shares issued by the Up-MACRO Holding Trust and not
redeemed prior to such date, without giving effect to any Paired Optional
Redemptions or Paired Subsequent Issuances that are scheduled to occur on such
date.
(c) During each Price Determination Day, the Calculation Agent
shall collect intraday settlement prices from the NYMEX or the applicable
substitute price provider and, on the basis thereof, calculate and publish on
its website every fifteen (15) seconds the per share indicative intraday value
of one Up-MACRO Holding Share, (i) beginning at the earlier of (A) 10:00 a.m.
New York City Time or (B) the open of trading in futures contracts from which
the Applicable Reference Price of Crude Oil is derived and (ii) ending at the
earlier of (A) 2:30 p.m. New York City Time or (B) the close of trading in the
futures contracts from which the Applicable Reference Price of Crude Oil is
derived, the Up-MACRO Underlying Value and the portion thereof that is
represented by one Up-MACRO Holding Share, disregarding any Paired Optional
Redemptions and Paired Subsequent Issuances which may be scheduled to occur on
the date of calculation.
(d) The calculations made by the Calculation Agent hereunder
shall be made in good faith upon the basis of information reasonably available
to it, and the Calculation Agent shall not be liable for any calculation errors
contained in the data that is furnished to it by the NYMEX or the Administrative
Agent and used by it to make such calculations.
Section 4.3 Calculation of Income Distribution Payments and Settlement
Payments.
(a) Prior to each Distribution Date (i) the Administrative
Agent shall use the Price Level Percentage Change for the last Price
Determination Day preceding such Distribution Date to calculate the Up-MACRO
Income Distribution Payment, if any, that the Up-MACRO Holding Trust is required
to make to the Down-MACRO Holding Trust on such Distribution Date or the
Down-MACRO Income Distribution Payment, if any, that the Down-MACRO Holding
Trust is required to make to the Up-MACRO Holding Trust on such Distribution
Date pursuant to the Income Distribution Agreement.
(b) On the Final Scheduled Termination Date, an Early
Termination Date or any Redemption Date, the Administrative Agent shall use the
Price Level Percentage Change to determine the Up-MACRO Settlement Payment, if
any, that is payable by the Up-MACRO Holding Trust to the Down-MACRO Holding
Trust or the Down-MACRO Settlement Payment, if any, that is payable to the
Up-MACRO Holding Trust by the Down-MACRO Holding Trust pursuant to the
Settlement Contracts that are being settled on such Final Scheduled Termination
Date, Early Termination Date or Redemption Date.
Section 4.4 Calculations Relating to Paired Subsequent Issuances. The
Administrative Agent shall determine the Up-MACRO Income Make-Whole Amount and
the Down-MACRO Income Make-Whole Amount for each MACRO Unit in accordance with
the definitions set forth in Section 1.1. The Administrative Agent's
determination of the Up-MACRO Income Make-Whole Amount and the Down-MACRO Income
Make-Whole Amount, if any, required for each MACRO Unit shall be final and
binding upon all interested Persons.
ARTICLE V
RIGHTS OF HOLDERS OF THE UP-MACRO HOLDING SHARES
Section 5.1 Rights of Holders of the Up-MACRO Holding Shares. The
Up-MACRO Holding Shares represent beneficial interests in the Up-MACRO Holding
Trust and are entitled to receive distributions on the dates and in the amounts
specified in Section 5.2 from assets on deposit in the Distribution Account and
the Securities Account.
Section 5.2 Priority of Payments.
(a) Allocations on each Distribution Date. On each
Distribution Date, the Trustee, on behalf of the Up-MACRO Holding Trust, shall
apply the amounts on deposit in the Distribution Account, including without
limitation amounts deposited therein pursuant to Section 5.5(b) and Section
5.6(b), in accordance with the following priority of payments:
(i) first, to deposit an amount equal to the Up-MACRO
Fee Deposit into the Fee Payment Account to apply it for the payment of
Up-MACRO Expenses incurred during the preceding Calculation Period;
(ii) second, to apply the amount remaining in the Fee
Payment Account to the payment of the Up-MACRO Fees incurred during the
preceding Calculation Period pursuant to Section 5.4 hereunder;
(iii) third, if such Distribution Date is an Early
Termination Date, the Final Scheduled Termination Date or a Redemption
Date for all or a portion of the Up-MACRO Holding Shares in connection
with a Paired Optional Redemption or an Up-MACRO Proportional Mandatory
Redemption, to segregate funds in an amount equal to the product of (A)
all funds remaining after satisfying priorities first and second of
this Section 5.2(a) and (B) the applicable Up-MACRO Redemption
Percentage or Up-MACRO Proportionate Mandatory Redemption Percentage,
as applicable, for such Redemption Date, and to apply such funds (A) in
the case of a Paired Optional Redemption only, to make the Up-MACRO
Settlement Payment to the Down-MACRO Holding Trust if any such payment
is owed under the Settlement Contracts being settled on such Redemption
Date and then (B) to make a Final Distribution to the Holders of the
Up-MACRO Holding Shares being redeemed on such Redemption Date;
(iv) fourth, to reinvest in Treasuries an amount
equal to the lesser of (x) the Up-MACRO Aggregate Par Amount on such
Distribution Date (after deducting an amount equal to the Aggregate Par
Amount of the Up-MACRO Holding Shares being redeemed on such
Distribution Date), and (y) all funds remaining after satisfying
priorities first through third of this Section 5.2(a);
(v) fifth, to make the Up-MACRO Income Distribution
Payment to the Down-MACRO Holding Trust, if such a payment is due under
the Income Distribution Agreement; and
(vi) sixth, to allocate for distribution as the
Quarterly Distribution on the Distribution Payment Date that follows
such Distribution Date all funds that are remaining after satisfying
priorities first through fifth of this Section 5.2(a) to those
shareholders who are registered Holders of the Up-MACRO Holding Shares
on the related Distribution Record Date.
(b) Distributions on Redemption Dates that are not
Distribution Dates. With respect to each Redemption Date that is scheduled to
occur on a date that is not a Distribution Date, the Trustee, as instructed by
the Administrative Agent, will segregate a portion of the Treasuries on deposit
in the Securities Account in accordance with the procedures specified in Section
6.1(d), such that the Value of the Treasuries so segregated is equal to the
product of the applicable Up-MACRO Redemption Percentage for such Redemption
Date and the Up-MACRO Asset Amount on that Redemption Date. The Trustee, as
instructed by the Administrative Agent, will then deliver Treasuries and cash
with a Value equal to the Up-MACRO Settlement Payment that is owed, if any,
under each Settlement Contract that is being [settled] on that Redemption Date
to the Down-MACRO Holding Trustee and deliver the remaining Treasuries that were
segregated to the holders of the Up-MACRO Holding Shares that are being redeemed
on that Redemption Date in accordance with the procedures specified in such
Section 6.1(d).
Section 5.3 Payment of Expenses. On each Distribution Date, the
Trustee, on behalf of the Up-MACRO Holding Trust, shall apply funds on deposit
in the Fee Payment Account to pay the following expenses (such expenses, the
"Up-MACRO Expenses"):
(i) to the Administrative Agent, the expenses of
negotiating and settling the purchase of Treasuries pursuant to Section
3.7 (exclusive of any expenses required to be borne by the Depositor or
redeeming Authorized Participant as provided herein or in the
Participants Agreement in connection with Paired Optional Redemptions,
Paired Subsequent Issuances and Up-MACRO Recapitalization Issuances);
(ii) taxes, and any other governmental charges;
(iii) any taxes, fees and charges relating to a
Paired Subsequent Issuance or Paired Optional Redemption of MACRO Units
(exclusive of fees and expenses required to be borne by the Authorized
Participants directing the creating or redemption of MACRO Units);
(iv) extraordinary legal expenses of the Trustee and
auditing expenses of the Up-MACRO Holding Trust or the Up-MACRO
Tradeable Trust;
(v) federal and state registration fees incurred to
comply with the public registration requirements and reporting
obligations thereunder for the Up-MACRO Holding Trust and the Up-MACRO
Tradeable Trust as required by Section 15.2;
(vi) expenses of the Depositor relating to the
printing and distribution of offering and marketing materials relating
to the initial issuance and any Paired Subsequent Issuances or Up-MACRO
Recapitalization Issuances of Up-MACRO Holding Shares or Up-MACRO
Tradeable Shares (including but not limited to, associated legal,
auditing, underwriting and rating agency costs); and
(vii) any other third-party expenses of the Up-MACRO
Holding Trust or the Up-MACRO Tradeable Trust not otherwise stated
above incurred by either trust, the Depositor, the Trustee, the
Up-MACRO Tradeable Trustee, the Calculation Agent under the Calculation
Agency Agreement and the Administrative Agent pursuant to actions
permitted or required under this Trust Agreement, the Up-MACRO
Tradeable Trust Agreement or the Calculation Agency Agreement, as
applicable.
The Trustee shall be responsible for all other expenses incurred by it
on behalf of, or in the course of, administering the Up-MACRO Holding Trust.
Section 5.4 Payment of Fees. On each Distribution Date, after all
Up-MACRO Expenses have been paid, the Trustee, on behalf of the Up-MACRO Holding
Trust, shall apply funds on deposit in the Fee Payment Account to pay the
following fees (collectively, the "Up-MACRO Fees"):
(i) to the Trustee, the Up-MACRO Trustee Fee for the
preceding Calculation Period;
(ii) to the Administrative Agent and the Marketing
Agent, the Up-MACRO Administration and Marketing Fee for the preceding
Calculation Period;
(iii) to MacroMarkets, the Up-MACRO Licensing Fee for
the preceding Calculation Period; and
(iv) to MacroMarkets, the Up-MACRO Sublicensing Fee
for the preceding Calculation Period;
(v) to the Calculation Agent, the Up-MACRO
Calculation Agent Fee for the preceding Calculation Period.
To the extent that the funds on deposit in the Fee Payment
Account are insufficient to pay in full all of the Up-MACRO Fees, such funds
will be applied ratably for the payment of each Person listed above in (i),
(ii), (iv) and (v) and the remaining amount, if any, will be paid to
MacroMarkets.
Section 5.5 Payments under the Income Distribution Agreement.
(a) On each Distribution Date, in accordance with priority
fifth of Section 5.2(a) and the terms of the Income Distribution Agreement, the
Up-MACRO Holding Trust shall pay to the Down-MACRO Holding Trust the Up-MACRO
Income Distribution Payment from amounts on deposit in the Distribution Account.
If the Up-MACRO Holding Trust has no Up-MACRO Available Income on such
Distribution Date, then the Up-MACRO Holding Trust shall not be required to make
any payment under the Income Distribution Agreement on such Distribution Date or
on any subsequent date and no interest shall accrue on any such unpaid amounts.
(b) On each Distribution Date, any Down-MACRO Income
Distribution Payment received from the Down-MACRO Holding Trust under the Income
Distribution Agreement shall be deposited into the Distribution Account for
application in accordance with Section 5.2(a) on such Distribution Date.
Section 5.6 Payments under the Settlement Contracts.
(a) On the Final Scheduled Termination Date, an Early
Termination Date or any Redemption Date occurring on a Distribution Date, in
accordance with priority third of Section 5.2(a) and the terms of the Settlement
Contracts, the Trustee shall cause the Up-MACRO Holding Trust to make to the
Down-MACRO Holding Trust, the Up-MACRO Settlement Payment, if any, from amounts
on deposit in the Distribution Account. On any Redemption Date occurring on any
day other than a Distribution Date, the Trustee shall cause the Up-MACRO Holding
Trust to deliver Treasuries in accordance with Section 5.2(b) and the terms of
the Settlement Contracts to make an Up-MACRO Settlement Payment, if any, due
under the Settlement Contracts being settled on such Redemption Date.
(b) On the Final Scheduled Termination Date, an Early
Termination Date or a Redemption Date, any Down-MACRO Settlement Payment
received from the Down-MACRO Holding Trust under one or more Settlement
Contracts shall be deposited into the Distribution Account for application in
accordance with Section 5.2(a) on such date.
ARTICLE VI
REDEMPTIONS OF THE UP-MACRO HOLDING SHARES
Section 6.1 Paired Optional Redemptions.
(a) On any Business Day, one or more Authorized Participants
may direct the redemption of Paired Holding Shares by delivering a Redemption
Order to the Trustee and the Administrative Agent (such redemption, a "Paired
Optional Redemption") and satisfying the conditions set forth in this Section
6.1. The Authorized Participants directing the Paired Optional Redemption must
be the registered holders of the Paired Holding Shares which are being tendered
for redemption on the records of the Depository. Alternatively, the Authorized
Participants directing the Paired Optional Redemption may be holders of Up-MACRO
and/or Down-MACRO Tradeable Shares and may deliver such shares to the Up-MACRO
Tradeable Trust and/or the Down MACRO Tradeable Trust to be exchanged for
Up-MACRO and/or Down-MACRO Holding Shares and redeemed in a Paired Optional
Redemption in accordance with the terms of the Participants Agreement.
(b) To effectuate a Paired Optional Redemption, the redeeming
Authorized Participants which are registered holders of Paired Holding Shares,
must place a Redemption Order on the applicable Redemption Date not later than
the earlier of (i) 2:00 p.m., New York City Time, and (ii) half an hour before
the end of trading in the futures contracts from which the Applicable Reference
Price of Crude Oil is derived.
On the next Business Day that follows the Redemption Date, the
redeeming Authorized Participant must transfer to the Trustee by 10:00 a.m., New
York City Time, the requisite number of Paired Holding Shares constituting at
least one MACRO Unit or integral multiples thereof, plus any applicable
Redemption Cash Component, and provide written or electronic evidence of such
deposit to the Administrative Agent in accordance with the Participants
Agreement.
In the event that the redeeming Authorized Participants wish to present
Tradeable Shares for redemption, such Authorized Participants must transfer the
requisite number of Up-MACRO and Down-MACRO Tradeable Shares equivalent to one
or more MACRO Units of Paired Holding Shares plus any applicable Redemption Cash
Component, to the Trustee by 10:00 a.m. New York City Time, on the third
Business Day following the Redemption Date.
(c) The Trustee or the Administrative Agent may reject any
Redemption Order (i) if the Trustee or the Administrative Agent determines that
the Redemption Order is not in proper form, (ii) Paired Holding Shares in a
sufficient number to constitute one or more whole MACRO Units are not presented
for redemption, (iii) if the Depositor has determined and advised the Trustee
that such Redemption Order would have adverse tax consequences to the Up-MACRO
Holding Trust or the Holders of the Up-MACRO Holding Shares, (iv) the acceptance
or receipt of which would, in the opinion of counsel to the Depositor acceptable
to the Trustee, be unlawful, (v) if circumstances outside the control of the
Trustee, the Depositor or the Administrative Agent make it impractical or not
feasible to process a Paired Optional Redemption on the Redemption Date
designated in such Redemption Order or (vi) if the Down-MACRO Holding Trustee
has notified the Trustee that it has rejected the related Redemption Order
delivered under the Down-MACRO Holding Trust Agreement for one of the reasons
described in Section 6.1(c) of the Down-MACRO Holding Trust Agreement. None of
the Trustee, the Depositor or the Administrative Agent shall be liable to any
Person for rejecting a Redemption Order pursuant to this Section 6.1(c).
(d) If the date on which a Paired Optional Redemption that is
scheduled to occur is not a Distribution Date, the Administrative Agent shall
perform the following calculations and take the following actions with respect
to the Treasuries:
(i) identify each Type of Treasury on deposit in the
Up-MACRO Holding Trust on such Redemption Date;
(ii) calculate the Value of each Treasury and the
aggregate Value of the Treasuries representing each Type and, with
respect to each such Type, the product of the applicable Up-MACRO
Redemption Percentage and such aggregate Value (for each Type, the
"Redemption Percentage Value");
(iii) with respect to each Type, identify and
segregate Treasuries with an aggregate Value equal to the applicable
Redemption Percentage Value of the Treasuries of that Type and, of the
Treasuries so segregated, (A) select Treasuries with a Value equal to
the Up-MACRO Settlement Payment, if any such payment is required to be
made by the Up-MACRO Holding Trust on the Redemption Date pursuant to
priority third of Section 5.2(a), (B) allocate the remaining Treasuries
to be delivered as a Final Distribution to the Authorized Participants
directing the Paired Optional Redemption pursuant to priority third of
Section 5.2(a) and (C) in the event that the remaining Treasuries to be
delivered as a Final Distribution exceed the amount due to the
Authorized Participants directing the Paired Optional Redemption,
calculate the amount to be paid by the Authorized Participants to the
Up-MACRO Holding Trust to compensate the trust for the excess Value of
the Treasuries being delivered to the Authorized Participants as a
Final Distribution (such amount, the "Redemption Cash Component"); and
(iv) deliver written instructions to the Trustee
identifying the Treasuries to be used to effect the Paired Optional
Redemption and, of those, the Treasuries to be used for the making of
the Up-MACRO Settlement Payment, if any, the Treasuries to be used to
make the Final Distribution to the redeeming Holders of the Up-MACRO
Holding Shares and the Redemption Cash Component to be paid by the
Authorized Participants, if any.
Section 6.2 Mandatory Redemptions.
(a) On any Distribution Date following the occurrence of a
Down-MACRO Recapitalization Event and a related Down-MACRO Recapitalization
Issuance, the Trustee, upon receipt of a notice from the Depositor pursuant to
Section [ ] of the Down-MACRO Trust Agreement, shall redeem the applicable
Up-MACRO Proportionate Mandatory Redemption Percentage of the Up-MACRO Holding
Shares by making a Final Distribution to the Holders of such Up-MACRO Holding
Shares pursuant to priority third of Section 5.2(a) (such redemption, an
"Up-MACRO Proportional Mandatory Redemption").
(b) On the next Distribution Date following the occurrence of
an Up-MACRO Recapitalization Event followed by an Up-MACRO Recapitalization
Issuance, the Trustee shall redeem all Up-MACRO Holding Shares that are
Outstanding on such Distribution Date (other than the Up-MACRO Holding Shares
that are being issued as part of the Up-MACRO Recapitalization Issuance) for a
redemption price equal to $0 (such redemption, an "Up-MACRO Recapitalization
Redemption"). The Up-MACRO Holding Trust shall have no further obligations with
respect to the redeemed Up-MACRO Holding Shares which shall cease to be
Outstanding.
Section 6.3 Redemptions on Early Termination Date and Final Scheduled
Termination Date. On any Distribution Date that is an Early Termination Date, as
determined pursuant to Section 11.2, or the Final Scheduled Termination Date,
the Trustee shall redeem all of the Up-MACRO Holding Shares that are Outstanding
on such Distribution Date using the funds that are on deposit in the
Distribution Account, as specified in priority third of Section 5.2(a).
Section 6.4 Settlement of the Settlement Contracts. On any Redemption
Date on which a Paired Optional Redemption occurs, the Trustee, acting together
with the Down-MACRO Holding Trustee on behalf of their respective Paired Holding
Trusts, shall settle one Settlement Contract for each MACRO Unit of Paired
Holding Shares being redeemed. On any Redemption Date on which an Up-MACRO
Proportional Mandatory Redemption occurs, the Trustee shall settle Settlement
Contracts with an aggregate amount equal to twice the Aggregate Par Amount of
Up-MACRO Holding Shares being redeemed in such redemption. No Settlement
Contracts will be settled in connection with an Up-MACRO Recapitalization
Redemption.
Section 6.5 Settlement.
(a) By 5:00 p.m. New York City Time on the Final Scheduled
Termination Date, Early Termination Date or applicable Redemption Date, if the
Trustee's account at the Depository has been credited with the Paired Holding
Shares being tendered for redemption, the Administrative Agent has received the
electronic notice of such tender and the Trustee has received the transaction
fee and the Redemption Cash Component, if applicable, payable by the redeeming
Authorized Participants in accordance with Section 2.6(e), the Trustee shall
deliver:
(i) if the relevant Redemption Date is not a
Distribution Date, a Final Distribution consisting of the Treasuries
and/or cash in accordance with the instructions from the Administrative
Agent and in the manner specified in Section 6.1(d) by effecting the
necessary transfers of Treasuries and/or cash to the Participant
Custodian Account of the redeeming Authorized Participant; or
(ii) if the relevant date of redemption is the Final
Scheduled Termination Date, an Early Termination Date or a Redemption
Date that is scheduled to occur on a Distribution Date, a Final
Distribution of cash in the amount specified in priority third of
Section 5.2(a) by effecting the necessary transfers of cash to the
Participant Custodian Account of the redeeming Authorized Participant
not later than the related Distribution Payment Date.
(b) The Trustee or the Administrative Agent may, in its
discretion, and will when so directed by the Depositor, suspend the right of
redemption, or postpone a scheduled Redemption Date:
(i) for any period during which the AMEX is closed
other than customary weekend or holiday closings, or trading is
suspended or restricted;
(ii) for any period during which an emergency exists
as a result of which delivery, disposal or evaluation of the Treasuries
is not reasonably practicable;
(iii) if 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 Beneficial Owners.
None of the Depositor, the Trustee or the Administrative Agent will be
liable to any Person for any loss or damages that may result from any such
suspension or postponement.
(c) The Up-MACRO Holding Shares redeemed on the Final
Scheduled Termination Date, an Early Termination Date or any Redemption Date
shall be cancelled by the Trustee, on behalf of the Up-MACRO Holding Trust, in
accordance with the Depository's procedures.
(d) In the event that, with regard to the redemption
procedures as set forth in this Article VI, the provisions of this Trust
Agreement and the Participants Agreement contradict in any way, the provisions
of the Participants Agreement will prevail.
ARTICLE VII
CAPITAL ACCOUNTS OF HOLDERS
AND OPERATION THEREOF; TAX ALLOCATIONS
Section 7.1 Capital Contributions.
(a) Each Holder has made an initial Capital Contribution (as
defined below) to the Up-MACRO Holding Trust in cash equal to the amount paid
for its Up-MACRO Holding Shares. Except as provided for herein, a Holder shall
not be required to make any further Capital Contributions to the Up-MACRO
Holding Trust.
(b) Except as expressly set forth herein, no Holder shall be
entitled to any return of capital, interest or compensation by reason of its
Capital Contributions.
Section 7.2 Capital Accounts; Allocations. There shall be established
in respect of each Holder a separate capital account in the books and records of
the Up-MACRO Holding Trust in respect of the Holder's Capital Contributions to
the Up-MACRO Holding Trust (each, a "Capital Account"), to which the following
provisions shall apply:
(a) The Capital Account of each Holder initially shall be
equal to the cash contributed in exchange for its Up-MACRO Holding Shares (each,
a "Capital Contribution") and, at the end of each day shall be:
(i) increased by (A) an amount equal to any amounts
paid with respect to Up-MACRO Holding Shares issued as part of a Paired
Subsequent Issuance or an Up-MACRO Recapitalization Issuance by such
Holder during such day; and (B) such Holder's interest in the Net
Profit (and items thereof) of the Up-MACRO Holding Trust during such
day as allocated under Section 7.2(b); and
(ii) decreased by (A) any distributions made in cash
by the Up-MACRO Holding Trust to such Holder on such day; (B) the fair
market value of any property other than cash distributed by the
Up-MACRO Holding Trust to such Holder on such day; and (C) such
Holder's interest in the Net Loss (and items thereof) of the Up-MACRO
Holding Trust for such day as allocated under Section 7.2(b).
(b) Except pursuant to the Regulatory Allocations set forth in
Section 4.3, or as otherwise provided in this Trust Agreement, Net Profit and
Net Loss (and items of each) of the Up-MACRO Holding Trust shall be
provisionally allocated as of the end of each day among the Holders in a manner
such that the Capital Account of each Holder immediately after giving effect to
such allocation, is, as nearly as possible, equal (proportionately) to the
amount equal to the distributions that would be made to such Holder during such
fiscal year pursuant to Article V if (i) the Up-MACRO Holding Trust were
dissolved and terminated; (ii) its affairs were wound up and each Trust Asset
was sold for cash equal to its book value; (iii) all Up-MACRO Holding Trust
liabilities were satisfied (limited with respect to each nonrecourse liability
to the book value of the assets securing such liability); and (iv) the net
assets of the Up-MACRO Holding Trust were distributed in accordance with Article
V to the Holders immediately after giving effect to such allocation. The
Depositor may, in its discretion, make such other assumptions (whether or not
consistent with the above assumptions) as it deems necessary or appropriate in
order to effectuate the intended economic arrangement of the Holders. Except as
otherwise provided elsewhere in this Trust Agreement, if upon the dissolution
and termination of the Up-MACRO Holding Trust pursuant to Section 14.1 and after
all other allocations provided for in this Section 7.2 have been tentatively
made as if this Section 7.2(b) were not in this Trust Agreement, a distribution
to the Holders under Section 14.1 would be different from a distribution to the
Holders under Article V then Net Profit (and items thereof) and Net Loss (and
items thereof) for the fiscal year in which the Up-MACRO Holding Trust dissolves
and terminates pursuant to Section 14.1 shall be allocated among the Holders in
a manner such that the Capital Account of each Holder, immediately after giving
effect to such allocation, is, as nearly as possible, equal (proportionately) to
the amount of the distribution that would be made to such Holder during such
last fiscal year pursuant to Article V. The Depositor may, in its discretion,
apply the principles of this Section 7.2(b) to any fiscal year preceding the
fiscal year in which the Up-MACRO Holding Trust dissolves and terminates
(including through application of Section 761(e) of the Code) if delaying
application of the principles of this Section 7.2(b) would likely result in
distributions under Section 14.1 that are materially different from
distributions under Article V in the fiscal year in which the Up-MACRO Holding
Trust dissolves and terminates.
(c) Before any distribution of property (other than cash) from
the Up-MACRO Holding Trust to a Holder (including without limitation, any
non-cash asset which shall be deemed distributed immediately prior to the
dissolution and winding up of the Up-MACRO Holding Trust), the Capital Accounts
of all Holders of the Up-MACRO Holding Trust shall be adjusted and, upon the
occurrence of one or more of the other events described in Section
1.704-1(b)(2)(iv)(f) of the Regulations, may be adjusted to reflect the manner
in which any unrealized income, gain, loss or deduction inherent in such
property (that has not been previously reflected in the Holders' Capital
Accounts) would be allocated among the Holders if there were a taxable
disposition of such property by the Up-MACRO Holding Trust on the date of
distribution, in accordance with Section 1.704-1(b)(2)(iv)(f) and (g) of the
Regulations.
(d) In determining the amount of any liability for purposes of
this Section 7.2, there shall be taken into account Section 752 of the Code and
any other applicable provisions of the Code and any Regulations promulgated
thereunder.
(e) Notwithstanding any other provision of this Trust
Agreement to the contrary, the provisions of this Section 7.2 regarding the
maintenance of Capital Accounts shall be construed so as to comply with the
provisions of the Code and any Regulations thereunder. The Depositor in its sole
and absolute discretion and whose determination shall be binding on the Holders
is hereby authorized to interpret and to modify the foregoing provisions to the
extent necessary to comply with the Code and Regulations.
Section 7.3 Regulatory and Related Allocations. Notwithstanding any
other provision in this Article VII to the contrary, the following special
allocations shall be made to the Capital Accounts of the Holder in the following
order:
(a) Minimum Gain Chargeback. If there is a net decrease in
Partnership Minimum Gain during any taxable year, each Holder shall be specially
allocated items of Up-MACRO Holding Trust income and gain for such taxable year
(and, if necessary, subsequent taxable years) in an amount equal to the greater
of (A) the portion of such Holder's share of the net decrease in such
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(d)(1), or (B) if such Holder would otherwise have an Adjusted Capital
Account Deficit attributable solely to such Holder's Capital Account at the end
of such taxable year, an amount sufficient to eliminate such Adjusted Capital
Account Deficit. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to the Holders
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2. This Section 7.3(a) is intended to comply with
the minimum gain chargeback requirement in Section 1.704-2(f) of the Regulations
and shall be interpreted consistently therewith. To the extent permitted by such
section of the Regulations and for purposes of this Section 7.3(a) only, each
Holder's Adjusted Capital Account Deficit shall be determined prior to any other
allocations with respect to such taxable year.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2, if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain attributable to Partner Nonrecourse Debt during
any taxable year, each Holder shall be specially allocated items of Up-MACRO
Holding Trust income and gain for such taxable year (and, if necessary,
subsequent taxable years) in an amount equal to such Holder's share, if any, of
the net decrease in Partner Nonrecourse Debt Minimum Gain attributable to such
Holder's Partner Nonrecourse Debt, as determined in accordance with Regulations
Section 1.704-2. Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Holder
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2. This Section 7.3(b) is intended to comply with
the minimum gain chargeback requirements in such Regulations and shall be
interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Holder
unexpectedly receives any adjustments, allocations, or distributions described
in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) with respect to such
Holder's Capital Account, items of Up-MACRO Holding Trust income and gain shall
be specially allocated to each such Holder in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Holder as quickly as possible; provided that an
allocation pursuant to this Section 7.3(c) shall be made only if and to the
extent that such Holder would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Trust Agreement have been tentatively
made as if this Section 7.3(c) were not in this Trust Agreement. This Section
7.3(c) is intended to constitute a "qualified income offset" within the meaning
of Regulations Section 1.704-1 and shall be interpreted consistently therewith.
(d) Nonrecourse Deductions. Any Nonrecourse Deductions for any
taxable year or other period shall be allocated to the Capital Accounts of the
Holders in accordance with their respective Capital Accounts.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any taxable year (or portion thereof) of the Up-MACRO Holding
Trust shall be allocated to the Holder who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable, in accordance with Regulations Section 1.704-2.
(f) Gross Income Allocation. In the event any Holder has an
Adjusted Capital Account Deficit, items of Up-MACRO Holding Trust income and
gain shall be specially allocated to the Capital Account of such Holder in an
amount and manner sufficient to eliminate such Holder's Adjusted Capital Account
Deficit as quickly as possible; provided that an allocation pursuant to this
Section 7.3(f) shall be made only if and to the extent that such Holder's
Capital Account would have an Adjusted Capital Account Deficit after all other
allocations provided for in this Article VII (other than this Section 7.3(f))
have been tentatively made as if this Section 7.3(f) were not in this Trust
Agreement.
(g) Loss Allocation Limitation. No allocation of Net Loss (or
items thereof) shall be made to any Holder to the extent that such allocation
would create or increase an Adjusted Capital Account Deficit with respect to
such Holder.
(h) Curative Allocations. The allocations set forth in this
Section 7.3 (the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations under Section 704 of the Code. Notwithstanding
any other provision of this Trust Agreement (other than the Regulatory
Allocations), the Regulatory Allocations shall be taken into account in
allocating other Up-MACRO Holding Trust items of income, gain, loss, deduction
and expense among the Holders so that, to the extent possible, the net amount of
such allocations of other Up-MACRO Holding Trust items and the Regulatory
Allocations shall be equal to the net amount that would have been allocated to
the Holders pursuant to this Trust Agreement if the Regulatory Allocations had
not been made.
Section 7.4 Transfer of or Change in Up-MACRO Holding Shares. The
Depositor may use any convention or combination of conventions that it believes
is reasonable for U.S. federal income tax purposes regarding the allocation of
items of income, gain, loss, deduction and expense with respect to transferred
Up-MACRO Holding Shares and redeemed Up-MACRO Holding Shares. A transferee who
takes all or part of a Holder's Up-MACRO Holding Shares shall succeed to the
Capital Account maintained in respect of the transferor Holder to the extent of
such transfer.
Section 7.5 Tax Allocations. As of the end of each day, income,
expense, deduction, gain or loss of the Up-MACRO Holding Trust, all as
determined for U.S. federal income tax purposes, shall be allocated among the
Holders pursuant to the following subsections solely for U.S. federal and other
applicable tax purposes (both U.S. and non-U.S. taxes) as provided below. Such
allocations shall be pro rata from short-term capital gain or loss and long-term
capital gain or loss and operating income or loss recognized by the Up-MACRO
Holding Trust. Such allocations shall be made, to the extent required, in a
manner consistent with the principles of Section 7.2(b).
(a) Except as provided in the second and third sentences of
Section 7.5(b)(ii), items of ordinary income (such as interest income),
deduction and expense (such as advisory fees and brokerage fees) shall be
allocated in a manner consistent with the economic allocations described in
Section 7.2.
(b) Items of recognized capital gain or loss from the Up-MACRO
Holding Trust's trading activities shall be allocated as follows:
(i) There shall be established a tax basis account
with respect to each Holder's shares in the Up-MACRO Holding Trust. The
initial balance of each tax basis account shall be the amount
contributed to the capital of the Up-MACRO Holding Trust for such
shares.
(1) Each tax basis account shall be
increased by the amount of (I) any additional contributions
made with respect to such Holder's shares in the Up-MACRO
Holding Trust and (II) any taxable income or gain allocated to
such Holder pursuant to Section 7.5(a) above and this Section
7.5(b);
(2) Each tax basis account shall be
decreased by the amount of (I) taxable expense, deduction or
loss allocated to such Holder pursuant to Section 7.5(a) above
and this Section 7.5(b) and (II) any distribution received by
such Holder with respect to its Up-MACRO Holding Shares other
than as a consequence of a partial redemption of Up-MACRO
Holding Shares; and
(3) When any Up-MACRO Holding Trust Share is
redeemed, the tax basis account attributable to such redeemed
Up-MACRO Holding Share shall be eliminated.
(ii) Items of recognized capital gain shall be
allocated first to each Holder who has fully or partially redeemed its
Up-MACRO Holding Shares on such day up to any excess of (A) the amount
received upon such redemption over (B) the tax basis account
attributable to the redeemed Up-MACRO Holding Shares in the Up-MACRO
Holding Trust. If the aggregate amount of recognized capital gain to be
so allocated to all Holders who have redeemed Up-MACRO Holding Shares
on such day is less than the excess of all such amounts received upon
redemption over all such tax basis accounts, then items of ordinary
income shall be allocated first to all such Holders up to any excess of
all such amounts. If the aggregate amount of recognized capital gain
and ordinary income to be so allocated to all Holders who have redeemed
Up-MACRO Holding Shares on such day is less than the excess of all such
amounts received upon redemption over all such tax basis accounts, the
entire amount of capital gain and ordinary income for such day shall be
allocated among all such Holders in the ratio that each such Holder's
allocable share of such excess bears to the aggregate excess of all
such Holders who redeemed any of their Up-MACRO Holding Shares on such
day.
(iii) Items of recognized capital gain remaining
after the allocations in subsection (ii) above shall be allocated among
all Holders whose Capital Accounts are in excess of their tax basis
accounts (after the adjustments in subsection (ii)) in the ratio that
each such Holder's allocable share of such excess bears to all such
Holders' excesses. If the aggregate amount of recognized capital gain
to be so allocated is greater than the aggregate excess of all such
Holders' Capital Accounts over all such tax basis accounts, the excess
amount of gain shall be allocated among all Holders in the ratio that
each Holder's Capital Account bears to all Holders' Capital Accounts.
(iv) Items of recognized capital loss shall be
allocated first to each Holder who has redeemed any of its Up-MACRO
Holding Shares on such day up to any excess of (A) the tax basis
account attributable to the redeemed Up-MACRO Holding Share over (B)
the amount received upon such redemption. If the aggregate amount of
recognized capital loss to be so allocated to all Holders who have
redeemed any Up-MACRO Holding Shares on such day is less than the
aggregate excess of all such tax basis accounts over all such amounts
received upon redemption, the entire amount of loss for such day shall
be allocated among all such Holders in the ratio that each such
Holder's excess bears to the aggregate excess of all such Holders who
redeemed any of their Up-MACRO Holding Shares on such day.
(v) Items of recognized capital loss remaining after
the allocations in subsection (iv) above shall be allocated among the
Holders whose tax basis accounts are in excess of their Capital
Accounts (after the adjustments in subsection (iv)) in the ratio that
each such Holder's allocable share of such excess bears to all such
Holders' excesses. If the aggregate amount of loss to be so allocated
is greater than the aggregate excess of all such tax basis accounts
over all such Holders' Capital Accounts, the excess amount of
recognized capital loss shall be allocated among all Holders in the
ratio that each Holder's Capital Account bears to all Holders' Capital
Accounts.
(vi) The allocations of profit and loss to the tax
basis accounts of Holders in respect of the Up-MACRO Holding Shares
shall not exceed the allocations permitted under Subchapter K of the
Code as determined by the Depositor in its sole and absolute
discretion, whose determination shall be binding on the Holders.
(c) The allocation of income, gain, loss, deduction and
expense for U.S. federal income tax purposes set forth herein is intended to
allocate such items so as to eliminate, to the extent possible, any disparity
between a Holder's Capital Account and its tax basis account, consistent with
principles set forth in Section 704(c) of the Code.
Section 7.6 Determination of Certain Matters. Notwithstanding anything
express or implied to the contrary in this Trust Agreement, all matters
concerning the computation of Capital Accounts and tax basis accounts, the
allocation of Net Profit (and items thereof) and Net Loss (and items thereof),
the allocation of items of income, gain, loss, deduction and expense for tax
purposes, the adoption or modification of any accounting procedures, any
adjustments to the books and records of the Up-MACRO Holding Trust and all
matters related to liquidation and dissolution of the Up-MACRO Holding Trust
shall be determined by the Depositor, in its sole and absolute discretion. Such
determination shall be final and conclusive as to all Holders and be in
accordance with the Code and Regulations. Notwithstanding anything expressed or
implied in this Trust Agreement, in the event the Depositor, shall determine, in
its sole and absolute discretion, that it is prudent to modify the manner in
which the Capital Accounts and tax basis accounts, or any debits or credits
thereto, are computed in order to effectuate the intended economic sharing
arrangement of the Holders, the Depositor may make such modification.
Allocations of Net Profit and Net Loss to a Holder's Capital Account shall be
made for each day as soon as practicable thereafter.
Section 7.7 No Deficit Makeup. Notwithstanding anything herein to the
contrary, upon the liquidation of the Up-MACRO Holding Trust, no Holder shall be
required to make any contribution to the Up-MACRO Holding Trust in respect of
any deficit in such Holder's Capital Account.
Section 7.8 U.S. Partnership Tax Treatment. It is the intent of the
Holders and the Depositor that the Up-MACRO Holding Trust be governed by the
applicable provisions of Subchapter K, of Chapter 1, of the Code. The Depositor
may file such forms and make such elections as the Depositor deems appropriate
to effect such intent.
Section 7.9 Definitions. For the purposes of this Trust Agreement,
unless the context otherwise requires:
(a) "Adjusted Capital Account Deficit" shall mean, with
respect to any Holder, the deficit balance, if any, in such Holder's Capital
Account as of the end of the relevant taxable year, after giving effect to the
following adjustments:
(i) credit to such Capital Account any amounts which
such Holder is obligated to restore or is deemed to be obligated to
restore pursuant to Regulations Sections 1.704-1(b)(2)(ii)(c),
1.704-2(g) and 1.704-2(i)(5); and
(ii) debit to such Capital Account the items
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704-l(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
(b) "Capital Account" shall have the meaning specified in
Section 7.2.
(c) "Capital Contribution" shall have the meaning set forth in
Section 7.2(a).
(d) "Code" shall mean the U.S. Internal Revenue Code of 1986,
as amended.
(e) "Net Loss" shall mean the net decrease in the Up-MACRO
Asset Amount on a day, excluding from such calculation the increase due to any
contributions with respect to a Paired Subsequent Issuance or an Up-MACRO
Recapitalization Issuance made with respect to the Up-MACRO Holding Trust for
such day and any decrease due to any redemptions made on such day.
(f) "Net Profit" shall mean the net increase in the Up-MACRO
Asset Amount on a day, excluding from such calculation the increase due to any
contributions with respect to a Paired Subsequent Issuance or an Up-MACRO
Recapitalization Issuance made on such day and any decrease due to any
distributions or redemptions made on such day.
(g) "Nonrecourse Deductions" shall have the meaning set forth
in Regulations Section 1.704-2(b)(1).
(h) "Nonrecourse Liability" shall have the meaning set forth
in Regulations Section 1.752-1(a)(2).
(i) "Partner Nonrecourse Debt" shall have the meaning set
forth in Regulations Section 1.704-2(b)(4).
(j) "Partner Nonrecourse Debt Minimum Gain" shall have the
meaning set forth in Regulations Section 1.704-2(i)(3).
(k) "Partner Nonrecourse Deductions" shall have the meaning
set forth in Regulations Section 1.704-2(i)(2).
(l) "Partnership Minimum Gain" shall have the meaning set
forth in Regulations Section 1.704-2(b)(2).
(m) "Regulations" shall mean United States Treasury
Regulations.
(n) "Regulatory Allocations" shall have the meaning set forth
in Section 7.3(h).
ARTICLE VIII
REPORTS TO HOLDERS OF THE UP-MACRO HOLDING SHARES
Section 8.1 Reports to Holders of the Up-MACRO Holding Shares.
(a) On each Price Determination Day the Calculation Agent
shall publish, prior to the open of the next trading day, the Up-MACRO
Underlying Value, the Down-MACRO Underlying Value, the Light Sweet Crude Oil
Price, the Up-MACRO Asset Amount and the Down-MACRO Asset Amount, each as
determined pursuant to Section 4.1 and Section 4.2 herein and Section 4.1 and
Section 4.2 of the Down-MACRO Holding Trust Agreement.
(b) On the Business Day preceding each Distribution Date, the
Trustee, together with the Administrative Agent and the Calculation Agent, will
prepare and forward to the Depository, the Depositor and the Holders of Up-MACRO
Holding Shares, a statement as of that Distribution Date setting forth:
(i) the Up-MACRO Aggregate Par Amount of the Up-MACRO
Holding Trust and the Down-MACRO Aggregate Par Amount of the Down-MACRO
Holding Trust on such Distribution Date;
(ii) the Up-MACRO Asset Amount and the Down-MACRO
Asset Amount on such Distribution Date;
(iii) the Up-MACRO Underlying Value and the
Down-MACRO Underlying Value for that Distribution Date and the Up-MACRO
Underlying Value allocable to each Up-MACRO Holding Share and the
Down-MACRO Underlying Value allocable to each Up-MACRO Holding Share,
prior to any distribution being made on such Distribution Date;
(iv) the Up-MACRO Fees and the Down-MACRO Fees on
that Distribution Date;
(v) the Up-MACRO Daily Fee Accrual Amount and the
Down-MACRO Daily Fee Accrual Amount on that Distribution Date;
(vi) the Up-MACRO Earned Income Accrual Amount and
the Down-MACRO Earned Income Accrual Amount on that Distribution Date;
(vii) the amount of the Up-MACRO Available Income in
the Up-MACRO Holding Trust and the amount of the Down-MACRO Available
Income in the Down-MACRO Holding Trust and the amount of the Up-MACRO
Available Income and the amount of the Down-MACRO Available Income
allocable to each Up-MACRO Holding Share and Down-MACRO Holding Share,
respectively;
(viii) the Up-MACRO Income Distribution Payment, if
any, paid by the Up-MACRO Holding Trust to the Down-MACRO Holding Trust
and the Down-MACRO Income Distribution Payment, if any, paid by the
Down-MACRO Holding Trust to the Up-MACRO Holding Trust under the Income
Distribution Agreement on such Distribution Date;
(ix) the Up-MACRO Settlement Payment, if any, paid by
the Up-MACRO Holding Trust to the Down-MACRO Holding Trust and the
Down-MACRO Settlement Payment, if any, paid by the Down-MACRO Holding
Trust to the Up-MACRO Holding Trust under the Settlement Contracts on
such Distribution Date;
(x) the number of Up-MACRO Holding Shares and
Down-MACRO Holding Shares issued in Paired Subsequent Issuances during
the preceding Calculation Period;
(xi) the aggregate Up-MACRO Income Make-Whole Amount
associated with any MACRO Unit created during such period and the
Down-MACRO Income Make-Whole Amount associated with any MACRO Unit
created during such period and the aggregate amount of the transaction
fee payable to the Trustee;
(xii) the number of Up-MACRO Holding Shares and
Down-MACRO Holding Shares redeemed in a Paired Optional Redemption
during the preceding Calculation Period, as well as the amount of cash
or Treasuries delivered in such Paired Optional Redemption;
(xiii) the net increase or decrease in the Up-MACRO
Aggregate Par Amount and the Down-MACRO Aggregate Par Amount;
(xiv) the number of Up-MACRO Holding Shares redeemed
in any mandatory redemptions during the preceding Calculation Period,
as well as the amount of cash or Treasuries delivered in such
redemptions and the number of Down-MACRO Holding Shares redeemed in any
mandatory redemptions during the preceding Calculation Period, as well
as the amount of cash and Treasuries delivered in such redemptions;
(xv) the Quarterly Distribution to be made by the
Up-MACRO Holding Trust on the Distribution Payment Date and the portion
of the Quarterly Distribution allocable to each Up-MACRO Holding Share;
and
(xvi) if such Distribution Date is a Redemption Date,
the Up-MACRO Redemption Percentage and the Down-MACRO Redemption
Percentage.
On or before the fifth Business Day after each Distribution Date, the
Trustee will furnish to each Person who was a Holder at any time during the
current calendar year a statement containing the information set forth above.
The Trustee will also furnish to each Holder, within the time periods specified
herein, a notice of any merger or consolidation to which the Trustee is a party,
or in the case of the Trustee's resignation, the name of the successor Trustee.
Any notice required to be given to a Holder of a registered certificate
representing Up-MACRO Holding Shares will be mailed to the last address of the
Holder set forth in the applicable Share Register.
(c) On the Final Scheduled Termination Date, the Trustee,
together with the Administrative Agent and the Calculation Agent, will prepare
and forward to the Depository, the Depositor and the Holders of Up-MACRO Holding
Shares, a statement setting forth:
(i) the Up-MACRO Underlying Value and the Down-MACRO
Underlying Value on the Final Scheduled Termination Date, as calculated
by the Administrative Agent in accordance with the method specified in
this Trust Agreement and the Down-MACRO Holding Trust Agreement;
(ii) the Up-MACRO Underlying Value allocable to each
Up-MACRO Holding Share and Down-MACRO Underlying Value allocable to
each Up-MACRO Holding Share on the Final Scheduled Termination Date;
(iii) the payments to be made by either the Up-MACRO
Holding Trust or the Down-MACRO Holding Trust under any Settlement
Contracts that are being settled on that Final Scheduled Termination
Date and the portion of such payments that are allocable to each
Up-MACRO Holding Share and Down-MACRO Holding Share, respectively; and
(iv) the Final Distribution and the portion thereof
that is allocable to each Up-MACRO Holding Share.
(d) Reports pursuant to the Securities Act or the Exchange Act
will be prepared by the Depositor as provided in Section 15.2 herein, and
distributed by the Trustee pursuant to Section 13.1(x).
(e) Reports to Holders pursuant to this Section 8.1 (except
for Section 8.1(a)) shall be made in accordance with accounting principles
generally accepted in the United States. Such report shall be prepared
separately from any other reports prepared by the Trustee for the Down-MACRO
Holding Trust, the Up-MACRO Tradeable Trust or the Down-MACRO Tradeable Trust.
Section 8.2 Form 8-K Disclosure. Within four Business Days (or such
shorter period as required under the general instructions to Form 8-K), the
Trustee shall file a Form 8-K with the SEC disclosing the occurrence of:
(i) a Trustee Termination Event;
(ii) the occurrence of a trading halt on any stock
exchange on which the Up-MACRO Holding Shares are listed and the reason
for such trading halt;
(iii) the appointment of a Successor Trustee;
(iv) the resignation of the Trustee, the Up-MACRO
Tradeable Trustee, the Down-MACRO Holding Trustee, the Administrative
Agent, the Marketing Agent or the Calculation Agent;
(v) the appointment of a successor Administrative
Agent, a successor Trustee or Down-MACRO Holding Trustee;
(vi) the occurrence of an Up-MACRO or Down-MACRO
Recapitalization Event;
(vii) the occurrence of a Termination Trigger;
(viii) an amendment to this Trust Agreement, the
Up-MACRO Tradeable Trust Agreement, the Down-MACRO Holding Trust
Agreement or the Participants Agreement, which amendment would have a
material adverse effect on the rights of the Holders;
(ix) at the sole discretion of the Depositor, a
change to the list of Authorized Participants set forth on Schedule I
to the Participants Agreement; and
(x) any other event that would be material to the
Holders of the Up-MACRO Holding Shares or notices that the Trustee must
deliver in accordance with the provisions of this Trust Agreement.
ARTICLE IX
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor. The Depositor shall be liable
in all respects for the obligations, covenants, representations and warranties
of the Depositor arising under or related to this Trust Agreement. The Depositor
shall be liable only to the extent of the obligations specifically undertaken by
it in its capacity as Depositor.
Section 9.2 Limitations on Liability of the Depositor. Neither the
Depositor nor any of the directors, officers, employees or agents of the
Depositor acting in such capacities shall be under any liability to the Up-MACRO
Holding Trust, the Trustee, the Holders of the Up-MACRO Holding Shares, the
Down-MACRO Holding Trust, the Down-MACRO Holding Trustee, the holders of the
Down-MACRO Holding Shares or any other Person for taking any action or for
refraining from taking any action in good faith in their capacities as Depositor
pursuant to this Trust Agreement; provided, however, that this provision shall
not protect the Depositor or any of the directors, officers, employees or agents
of the Depositor against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
hereunder. The Depositor and any director, officer, employee or agent of the
Depositor may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person (other than the Depositor)
respecting any matters arising hereunder.
Section 9.3 Liabilities; Indemnification.
(a) Notwithstanding the other provisions of this Trust
Agreement, the Depositor, by entering into this Trust Agreement, agrees to be
liable, directly to the injured party, for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a Holder as a
result of the performance of the Treasuries, market fluctuations or other
similar market or investment risks associated with ownership of the Up-MACRO
Holding Shares) arising out of or based on the arrangement created by this Trust
Agreement or the actions of the Depositor taken pursuant hereto (to the extent
that, if the Trust Assets at the time the claim is made were not used to pay in
full all outstanding Up-MACRO Holding Shares, the Trust Assets would be used to
pay any such losses, claims, damages or liabilities). To the extent provided in
Section 10.4, the Administrative Agent will (from its own assets and not from
the assets of the Up-MACRO Holding Trust) indemnify and hold harmless the
Depositor against and from certain losses, claims, damages and liabilities of
the Depositor as described in this Section 9.3 arising from the actions or
omissions of the Administrative Agent.
(b) The Depositor shall indemnify and hold harmless the
Trustee and its officers, directors, employees and agents from and against any
loss, liability, expense, damage or injury (collectively, a "Loss") suffered or
sustained by reason of the acts performed or omitted by the Trustee pursuant to
this Trust Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim; provided, however, that the
Depositor's duty to indemnify under this Section 9.3(b) shall not extend to any
Losses (i) for which the Trustee has a right to indemnification under any other
provision of this Trust Agreement, or (ii) that are caused by or result from the
breach of contract by, or the fraud, negligence or willful misconduct of, the
Trustee or its officers, directors, employees or agents.
(c) The Depositor and its members, managers, officers,
employees, affiliates (as such term is defined in Regulation S-X of the
Securities Act) and subsidiaries (each, a "Depositor Indemnified Party") shall
be indemnified by the Up-MACRO Holding Trust and held harmless against any loss,
liability or expense incurred hereunder without (1) gross negligence, bad faith,
willful misconduct or willful malfeasance on the part of such Depositor
Indemnified Party arising out of or in connection with the performance of its
obligations hereunder or any actions taken in accordance with the provisions of
this Trust Agreement or (2) reckless disregard on the part of such Depositor
Indemnified Party of its obligations and duties under this Trust Agreement. Each
Depositor Indemnified Party shall also be indemnified by the Up-MACRO Holding
Trust and held harmless against any loss, liability or expense arising under the
Income Distribution Agreement, the Settlement Contracts or any Participants
Agreement insofar as such loss, liability or expense arises from any untrue
statement or alleged untrue statement of a material fact contained in any
written statement provided to the Depositor by any of the Calculation Agent, the
Administrative Agent and the Trustee. Such indemnity shall include payment from
the Up-MACRO Holding Trust of the costs and expenses incurred by such Depositor
Indemnified Party in defending itself against any such indemnified claim or
liability.
ARTICLE X
MATTERS RELATING TO THE ADMINISTRATIVE AGENT
Section 10.1 Role of the Administrative Agent. The Administrative Agent
hereby acknowledges and accepts its role pursuant to its duties set forth in
Sections 2.6, 2.7, 3.5, 3.6, 3.7, 4.1, 4.2, 4.3, 4.4, 5.2, 6.1, 6.2, 6.5 and 8.1
of this Trust Agreement.
Section 10.2 Liability of the Administrative Agent. The Administrative
Agent shall be liable under this Trust Agreement only to the extent of the
obligations specifically undertaken by the Administrative Agent in its capacity
as Administrative Agent.
Section 10.3 Limitation on Liability of the Administrative Agent and
Others. Neither the Administrative Agent nor any of the directors, officers,
employees or agents of the Administrative Agent in its capacity as
Administrative Agent shall be under any liability to the Up-MACRO Holding Trust,
the Trustee, the Holders of the Up-MACRO Holding Shares, the Down-MACRO Holding
Trust, the Down-MACRO Holding Trustee, the holders of the Down-MACRO Holding
Shares or any other Person for any action taken or for refraining from taking
any action in good faith in its capacity as Administrative Agent pursuant to
this Trust Agreement; provided, however, that this provision shall not protect
the Administrative Agent or any director, officer, employee or agent of the
Administrative Agent against any liability which would otherwise be imposed by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of reckless disregard of its obligations and duties
hereunder. The Administrative Agent and any director, officer, employee or agent
of the Administrative Agent may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person (other than the
Administrative Agent) respecting any matters arising hereunder. The
Administrative Agent shall not be under any obligation to appear in, prosecute
or defend any legal action which is not incidental to its duties as
Administrative Agent in accordance with this Trust Agreement and which in its
reasonable judgment may involve it in any expense or liability. The
Administrative Agent may, in its sole discretion, undertake any such legal
action which it may deem necessary or desirable for the benefit of the Holders
of the Up-MACRO Holding Shares with respect to this Trust Agreement and the
rights and duties of the parties hereto and the interests of the Holders of the
Up-MACRO Holding Shares hereunder.
Section 10.4 Administrative Agent Indemnification of the Up-MACRO
Holding Trust and the Trustee. The Administrative Agent shall indemnify and hold
harmless the Up-MACRO Holding Trust, the Depositor and the Trustee and its
officers, directors, employees and agents (each, an "Administrative Agent
Indemnified Party") from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of any acts or omissions of the
Administrative Agent with respect to the Up-MACRO Holding Trust pursuant to this
Trust Agreement, including any judgment, award, settlement, reasonable
attorneys' fees and other costs or expenses incurred in connection with the
defense of any action, proceeding or claim; provided, however, that the
Administrative Agent shall not indemnify the Trustee if such acts or omissions,
or alleged acts or omissions, constitute or are caused by fraud, negligence, or
willful misconduct of the Trustee; provided, further, that the Administrative
Agent shall not indemnify the Up-MACRO Holding Trust or the Holders of the
Up-MACRO Holding Shares for any liabilities, costs or expenses of the Up-MACRO
Holding Trust with respect to any action taken by the Trustee at the request of
the Holders of the Up-MACRO Holding Shares; provided, further, that the
Administrative Agent shall not indemnify the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares as to any losses, claims or damages
incurred by any of them in their capacities as investors, including, without
limitation, losses with respect to market or investment risks associated with
ownership of the Up-MACRO Holding Shares or losses incurred as a result of a
default in the underlying Treasuries; and provided, further, that the
Administrative Agent shall not indemnify the Up-MACRO Holding Trust or the
Holders of the Up-MACRO Holding Shares for any liabilities, costs or expenses of
the Up-MACRO Holding Trust or the Holders of the Up-MACRO Holding Shares arising
under any tax law, including any federal, state, local or foreign income or
franchise taxes or any other tax imposed on or measured by income (or any
interest or penalties with respect thereto or arising from a failure to comply
therewith) required to be paid by the Up-MACRO Holding Trust or the Holders of
the Up-MACRO Holding Shares in connection herewith to any taxing authority.
Indemnification pursuant to this Section 10.4 shall not be payable from the
Trust Assets. The provisions of this indemnity shall run directly to and be
enforceable by an Administrative Agent Indemnified Party subject to the
limitations hereof. The obligations of the Administrative Agent under this
Section 10.4 shall survive the termination of the Up-MACRO Holding Trust and the
resignation or removal of the Trustee.
Section 10.5 Delegation of Duties. In the ordinary course of business,
the Administrative Agent may at any time delegate any duties hereunder to any
Person who agrees to conduct such duties in accordance with this Trust
Agreement. Any such delegations shall not relieve the Administrative Agent of
its liability and responsibility with respect to such duties and shall not
constitute a resignation, and the Administrative Agent will remain jointly and
severally liable with such Person for any amounts which would otherwise be
payable pursuant to this Article X as if the Administrative Agent had performed
such duty; provided, however, that in the case of any significant delegation to
a Person other than an Affiliate of the Administrative Agent, (1) at least
thirty (30) days' prior written notice shall be given to the Trustee and the
Depositor of such delegation to any entity that is not an Affiliate of the
Administrative Agent and (2) the prior written consent of the Depositor must be
obtained. Furthermore, any delegation of duties by the Administrative Agent with
respect to the Up-MACRO Holding Trust shall be accompanied by the delegation of
such similar duties with respect to the Down-MACRO Holding Trust, unless the
prior written consent of the Depositor is obtained.
ARTICLE XI
EARLY TERMINATION AND RECAPITALIZATION
Section 11.1 Recapitalization Events.
(a) If on any Price Determination Day, the Applicable
Reference Price of Crude Oil (i) increases to an Ending Level at which the
Down-MACRO Underlying Value is less than or equal to zero and (ii) remains at
such level for a period of ten (10) consecutive Price Determination Days, a
recapitalization event with respect to the Down-MACRO Holding Shares shall be
deemed to have occurred (such event, a "Down-MACRO Recapitalization Event").
(b) Upon the occurrence of a Down-MACRO Recapitalization
Event, all of the Outstanding Down-MACRO Holding Shares shall be redeemed
pursuant to Section 6.2 of the Down-MACRO Holding Trust Agreement and a
Down-MACRO Recapitalization Issuance may be made pursuant to Section 2.7 of
the Down-MACRO Holding Trust Agreement. If a Down-MACRO Recapitalization
Issuance is effected and if the Aggregate Par Amount of the Down-MACRO Holding
Shares issued in such Down-MACRO Recapitalization Issuance is less than twice
the Aggregate Par Amount of the Outstanding Up-MACRO Holding Shares, the Trustee
shall effect an Up-MACRO Proportional Mandatory Redemption pursuant to Section
6.2 hereof.
(c) If on any Price Determination Day, the Applicable
Reference Price of Crude Oil (i) decreases to an Ending Level at which the
Up-MACRO Underlying Value is less than or equal to zero and (ii) remains at such
level for a period of ten (10) consecutive Price Determination Days, a
recapitalization event with respect to the Up-MACRO Holding Shares shall be
deemed to have occurred (such event, an "Up-MACRO Recapitalization Event").
(d) Upon the occurrence of an Up-MACRO Recapitalization Event,
all of the Outstanding Up-MACRO Holding Shares shall be redeemed pursuant to
Section 6.2 of this Trust Agreement in an Up-MACRO Recapitalization Redemption
and an Up-MACRO Recapitalization Issuance may be made pursuant to Section 2.7
hereof. If the Aggregate Par Amount of the Up-MACRO Holding Shares issued in
such Up-MACRO Recapitalization Issuance is less than the Aggregate Par Amount of
the Outstanding Down-MACRO Holding Shares, the Trustee shall effect a Down-MACRO
Proportional Mandatory Redemption pursuant to [Section 6.2] of the Down-MACRO
Holding Trust Agreement.
(e) In connection with an Up-MACRO Recapitalization Issuance
made following an Up-MACRO Recapitalization Event and an Up-MACRO
Recapitalization Redemption, this Trust Agreement shall be amended by the
parties hereto to set forth the terms of the new Up-MACRO Holding Shares,
provided that no such amendment may be made in violation of the Up-MACRO
Recapitalization Condition.
Section 11.2 Termination Triggers.
(a) The Up-MACRO Holding Trust shall terminate if any one of
the following events (each, a "Termination Trigger") occurs:
(i) the Light Sweet Crude Oil Price is not
established by the NYMEX or the NYMEX refuses to make that price
available to the Administrative Agent for the purposes of calculating
the Up-MACRO Underlying Value for five consecutive Business Days, or
the NYMEX Sublicensing Agreement is terminated by the NYMEX and no
Substitute Crude Oil Price is available;
(ii) (A) an Up-MACRO Recapitalization Event occurs
and no Up-MACRO Recapitalization Issuance is made within 30 Business
Days of the Up-MACRO Recapitalization Event or (B) a Down-MACRO
Recapitalization Event occurs and no Down-MACRO Recapitalization
Issuance is made within 30 Business Days of the Down-MACRO
Recapitalization Event;
(iii) any of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the
Down-MACRO Tradeable Trust becomes an "investment company" within the
meaning of the Investment Company Act of 1940, as amended;
(iv) a decree or order is entered by a court having
competent jurisdiction adjudging any of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the
Down-MACRO Tradeable Trust to be bankrupt or insolvent or granting an
order for relief or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of any of the Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the
Up-MACRO Tradeable Trust or the Down-MACRO Tradeable Trust under the
Bankruptcy Code or any other applicable law, or appointing a receiver,
liquidator, assignee or sequestrator (or other similar official) of any
of the Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the
Up-MACRO Tradeable Trust or the Down-MACRO Tradeable Trust or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, or, in a court having jurisdiction, any of
the Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the Up-MACRO
Tradeable Trust or the Down-MACRO Tradeable Trust commences a voluntary
case or proceeding under the Bankruptcy Code or any other applicable
law, or an involuntary case or proceeding is commenced against any of
the Up-MACRO Holding Trust, the Down-MACRO Holding Trust, the Up-MACRO
Tradeable Trust or the Down-MACRO Tradeable Trust, seeking any of the
foregoing and such case or proceeding continues undismissed or unstayed
and in effect for a period of 90 consecutive days; or
(v) if the Up-MACRO or Down-MACRO Investment Amount
is reduced to less than ten (10) million dollars.
(b) On the next Distribution Date following the occurrence of
the Termination Trigger (the "Early Termination Date"), the Trustee and the
Down-MACRO Holding Trustee shall terminate the Income Distribution Agreement and
settle all of the Settlement Contracts on behalf of the Paired Holding Trusts.
The Trustee will make a Final Distribution on all Outstanding Up-MACRO Holding
Shares being redeemed, as set forth in Section 5.2. Upon receipt of this Final
Distribution, all Outstanding Up-MACRO Holding Shares shall be deemed to be
redeemed in full.
(c) Upon obtaining knowledge or receiving notice of the
occurrence of any Termination Trigger, the Trustee will give prompt notice of
that event to the Depositor, the Administrative Agent, the Calculation Agent,
the Down-MACRO Holding Trustee, the Up-MACRO Tradeable Trustee, the Down-MACRO
Tradeable Trustee and each Holder of the Up-MACRO Holding Shares.
ARTICLE XII
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events. Any one of the following
events shall constitute a Trustee Termination Event (a "Trustee Termination
Event"):
(a) to the extent that funds are available in the Up-MACRO
Holding Trust to make any Quarterly Distribution, any failure by the Trustee to
make such Quarterly Distribution in the amount determined in accordance with the
calculations required to be made hereunder, which failure continues unremedied
for a period of two (2) or more Business Days;
(b) any failure by the Trustee to distribute the proceeds of
all of the Trust Assets on the Final Scheduled Termination Date, which failure
continues unremedied for a period of two (2) or more Business Days;
(c) to the extent that funds are available in the Up-MACRO
Holding Trust, any failure by the Trustee to make any payment required to be
made under the Income Distribution Agreement or the Settlement Contracts;
(d) any failure by the Trustee to observe or perform in any
material respect any of its other covenants or obligations hereunder, which
failure continues unremedied for thirty (30) days after the giving of written
notice of such failure to the Trustee by the Depositor or by not less than 25%
of the Holders, voting by par amount;
(e) the Trustee becomes ineligible or incapable of acting as
Trustee hereunder;
(f) the occurrence of a Trustee Termination Event under the
Down-MACRO Holding Trust Agreement, as set forth in the Down-MACRO Holding Trust
Agreement;
(g) the occurrence of a Trustee Termination Event under the
Up-MACRO Tradeable Trust Agreement, as set forth in the Up-MACRO Tradeable Trust
Agreement; or
(h) the occurrence of a Trustee Termination Event under the
Down-MACRO Tradeable Trust Agreement, as set forth in the Down-MACRO Tradeable
Trust Agreement.
Section 12.2 Force Majeure. Notwithstanding the foregoing, any delay in
or failure of performance under Section 12.1 shall not constitute a Trustee
Termination Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Trustee and such delay or failure was
caused by an act of God or the public enemy, terrorism, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Trustee from the obligation to use its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Trust Agreement and the Trustee shall provide the Depositor
with immediate notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
Section 12.3 Notification to Holders of the Up-MACRO Holding Shares.
Within two (2) Business Days after the Trustee becomes aware of any Trustee
Termination Event, the Trustee shall give notice thereof to the Depositor and
the Holders of the Up-MACRO Holding Shares.
ARTICLE XIII
THE TRUSTEE
Section 13.1 Duties of Trustee.
(a) The Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Trust Agreement, including:
(i) causing the Up-MACRO Holding Trust to make its
required payments under the Income Distribution Agreement and the
Settlement Contracts;
(ii) making distributions on the Up-MACRO Holding
Shares in accordance with Section 5.2 hereof;
(iii) administering the Up-MACRO Holding Trust;
(iv) at the direction of the Administrative Agent,
purchasing, and reinvesting in, Treasuries;
(v) paying the fees and expenses of the Up-MACRO
Holding Trust, including but not limited to the payment of the Up-MACRO
Licensing Fee;
(vi) administering Paired Optional Redemptions in
accordance with the provisions of Section 6.1 hereof;
(vii) administering the creation of new MACRO Units
in accordance with the provisions of Section 2.6 hereof;
(viii) effecting mandatory redemptions and
recapitalizations in accordance with the provisions of Sections 6.2 and
11.1 hereof;
(ix) preparing and delivering any notices required
hereunder;
(x) preparing and distributing reports to the Holders
of the Up-MACRO Holding Shares as applicable; and
(xi) performing all of the other obligations required
of it under this Trust Agreement and the other Transaction Documents.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments that are specifically required to be furnished to the Trustee
pursuant to any provision hereof, shall examine them to determine whether they
conform on their face to the requirements of this Trust Agreement. The Trustee
shall give prompt written notice to the Holders of the Up-MACRO Holding Shares
of any material lack of conformity of any such instrument to the applicable
requirements of this Trust Agreement which would entitle a specified percentage
of the Holders of the Up-MACRO Holding Shares to take any action pursuant to
this Trust Agreement.
(c) No provision of this Trust Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, its own bad faith, its own reckless disregard of its
duties hereunder or its own willful misconduct; provided, however, that:
(i) the Trustee shall not be personally liable for an
error of judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(ii) the Trustee shall not be personally liable with
respect to any action taken, suffered or omitted by it in good faith
and in accordance with the direction of Holders relating to the time,
place or method of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Trust Agreement; provided that such direction is
delivered by Holders evidencing not less than 66 and 2/3% of the
Up-MACRO Aggregate Par Amount.
(d) The Trustee shall not be required to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder or in the exercise of any of its rights or powers
hereunder, if it has reasonable grounds for believing that repayment of such
funds or adequate indemnity against any related risk or liability is not
reasonably assured to it.
(e) The Trustee shall have no power to vary the corpus of the
Up-MACRO Holding Trust, except as expressly provided in this Trust Agreement.
(f) In the event that the Calculation Agent or the Transfer
Agent and Registrar (if not also the Trustee) fails to perform any obligation,
duty or agreement in the manner or on the day required under this Trust
Agreement, the Trustee shall be obligated, as soon as possible upon knowledge of
a Trust Officer of such failure and receipt of appropriate records, if any, to
perform such obligation, duty or agreement in the manner required hereunder.
Section 13.2 Rights of the Trustee.
(a) The Trustee may rely on and shall be protected in acting,
or in refraining from acting, in accord with any resolution, Officer's
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond or other paper or document reasonably believed by it to be
genuine and to have been signed or presented to it pursuant to this Trust
Agreement by the proper party or parties.
(b) The Trustee may consult with counsel, and any advice of
such counsel or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted hereunder by the
Trustee in good faith and in accordance with such advice or Opinion of Counsel.
(c) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement or to institute,
conduct or defend any litigation in relation to this Trust Agreement at the
request, order or direction of any of the Holders of the Up-MACRO Holding Shares
pursuant to the provisions of this Trust Agreement unless such Holders have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which may be incurred therein or thereby.
(d) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and reasonably believed by it to
be authorized or within the discretion, rights or powers conferred upon it by
this Trust Agreement.
(e) The Trustee shall not be bound to make any investigation
into the facts of matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
appraisal, bond or other paper or document, unless requested in writing to do so
by Holders evidencing more than 25% of the Up-MACRO Aggregate Par Amount.
(f) The Trustee may execute any of the trusts or powers
granted herein or perform any duties set forth herein either directly or by or
through agents or attorneys or a custodian. The Trustee shall not be responsible
for any willful misconduct or negligence on the part of any such agent, attorney
or custodian appointed by the Trustee.
(g) Except as may be required by Section 13.12, the Trustee
shall not be required to make any initial or periodic examination of any
documents or records for the purpose of establishing the presence or absence of
defects, the compliance by the Depositor with its representations and warranties
or for any other purpose.
Section 13.3 Trustee Not Liable for Recitals in Up-MACRO Holding
Shares. The Trustee assumes no responsibility for the correctness of the
recitals contained herein and in the Up-MACRO Holding Shares (other than the
certificate of authentication on the Up-MACRO Holding Shares). Except as set
forth in [Section 3.2], the Trustee makes no representations as to the validity
or sufficiency of this Trust Agreement or of the Up-MACRO Holding Shares (other
than the certificate of authentication on the Up-MACRO Holding Shares).
Section 13.4 Individual Rights of the Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Up-MACRO
Holding Shares with the same rights as it would have if it were not the Trustee.
Section 13.5 Compensation. The Up-MACRO Holding Trust shall cause to be
paid in the manner provided for in Section 5.4, and the Trustee shall be
entitled to receive, on each Distribution Date, the Up-MACRO Trustee Fee for all
services rendered by it in the execution of the Up-MACRO Holding Trust hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee. The obligations of the Up-MACRO Holding Trust under
this Section 13.5 shall survive the termination of the Up-MACRO Holding Trust.
Section 13.6 Indemnification. The Trustee and its directors,
shareholders, officers, employees, agents, affiliates (as such term is defined
in Regulation S-X of the Securities Act) and subsidiaries (each, a "Trustee
Indemnified Party") shall be indemnified from the assets of the Trust and held
harmless against any loss, liability or expense (a) arising out of or in
connection with the acceptance or administration of this Trust and any actions
taken in accordance with the provisions of this Trust Agreement or the
administration of any Section of this Trust Agreement or that arises out of or
is related to any offer or sale of Up-MACRO Holding Shares incurred without (i)
gross negligence, bad faith, willful misconduct and willful malfeasance on the
part of such Trustee Indemnified Party and (ii) reckless disregard on the part
of such Trustee Indemnified Party of its obligations and duties under this Trust
Agreement, or (b) that arises out of or is related to any filings with or
submissions to the SEC in connection with or with respect to the Up-MACRO
Holding Shares (which by way of illustration and not by way of limitation,
include any registration statement and any amendments thereof or supplements
thereto filed with the SEC or any periodic reports or updates that may be filed
under the Exchange Act) or out of any information provided in writing by the
Trustee to the Depositor for use in any registration statement or annual or
other periodic report filed on behalf of the Up-MACRO Holding Trust that is not
materially altered by the Depositor or omissions from that information, if
provided. Such indemnity shall include payment from the Up-MACRO Holding Trust
of the costs and expenses incurred by such Trustee Indemnified Party in
investigating or defending itself against any claim or liability relating to
this Trust Agreement or the Up-MACRO Holding Trust, including any loss,
liability or expense incurred in acting pursuant to written directions or
instructions given by the Depositor or counsel to the Up-MACRO Holding Trust to
the Trustee from time to time in accordance with the provisions of this Trust
Agreement or in undertaking actions from time to time which the Trustee deems
necessary in its discretion to protect the Up-MACRO Holding Trust and the rights
of all Beneficial Owners pursuant to the terms of this Trust Agreement. Any
amounts payable to a Trustee Indemnified Party under this Section 13.6 may be
payable in advance or shall be secured by a lien on the Trust Assets.
Section 13.7 Eligibility Requirements. The Trustee hereunder shall at
all times: (i) be a bank, a trust company or a corporation organized and doing
business under the laws of the United States of America or any state thereof,
authorized under such laws to exercise corporate trust powers and subject to
supervision or examination by federal or state authority, (ii) have a combined
capital and surplus of at least $15,000,000, (iii) maintain any credit or
deposit rating required by nationally recognized rating organizations (as of the
date hereof "A-1" for Standard & Poor's Rating Service or "P-1" for ▇▇▇▇▇'▇
Investors Service, Inc.) and (iv) hold the position of both the Trustee and the
Up-MACRO Tradeable Trust Trustee. If such bank, trust company or corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 13.7, the combined capital and surplus of such bank,
trust company or corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee ceases to be eligible in accordance with the provisions of
this Section 13.7, the Trustee shall resign immediately in the manner and with
the effect specified in Section 13.8.
Section 13.8 Resignation or Removal of Trustee.
(a) Subject to the provisions of this Section 13.8, the
Trustee may be appointed, removed or replaced without cause at any time by the
Depositor, upon written notice, or with cause upon the occurrence of a Trustee
Termination Event; provided, however, that the Trustee shall not be removed in
accordance with this Section 13.8 until a successor Trustee possessing the
qualifications to act as Trustee under Section 13.8 (a "Successor Trustee") has
been appointed by the Depositor and has accepted such appointment by written
instrument executed by such Successor Trustee and delivered to the Depositor.
(b) A trustee appointed to office shall hold office until its
successor shall have been appointed by the Holders in accordance with this Trust
Agreement or until its termination, removal or resignation. Any trustee may
resign from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the trustee and delivered to the Depositor, the
Trust and all of the Holders, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that no such resignation of a Trustee shall be effective:
(i) until a Successor Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Trustee and delivered to the Trust, the Depositor and the resigning
trustee; or
(ii) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the
Holders.
(c) If no Successor Trustee shall have been appointed and
accepted appointment as provided in this Section 13.8 within thirty (30) days
after delivery to the Depositor and the Trust of an instrument of resignation,
the resigning Trustee may petition at the expense of the Trust any court of
competent jurisdiction for appointment of a Successor Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Trustee.
(d) No Trustee shall be liable for the acts or omissions to
act of any Successor Trustee.
Section 13.9 Successor Trustee.
(a) Any Successor Trustee appointed as provided in Section
13.8 shall execute, acknowledge and deliver to the Depositor and to its
predecessor Trustee an instrument in a form acceptable to the Depositor
accepting such appointment hereunder, and thereupon the resignation or removal
of the predecessor Trustee shall become effective and such Successor Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as Trustee herein. The predecessor
Trustee shall deliver to the Successor Trustee all documents and statements held
by it hereunder, and the Depositor and the predecessor Trustee shall execute and
deliver such instruments and do such other things as may reasonably be required
for fully and certainly vesting and confirming in the Successor Trustee all such
rights, powers, duties and obligations within thirty days of execution of such
instrument.
(b) No Successor Trustee shall accept appointment as provided
in this Section 13.9 unless at the time of such acceptance such Successor
Trustee is eligible under the provisions of Section 13.7.
(c) Upon acceptance of appointment by a Successor Trustee as
provided in this Section 13.9, such Successor Trustee shall provide prompt
notice of its succession hereunder to the Depositor, and the Depositor shall
file a Form 8-K indicating such change.
(d) Without the consent of 66 and 2/3% of the Holders of the
Up-MACRO Holding Shares, voting by Up-MACRO Aggregate Par Amount, the
compensation to be paid to the Successor Trustee may not be greater than the
compensation paid to the terminated Trustee hereunder.
Section 13.10 Merger or Consolidation.Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Trustee shall be the successor of the
Trustee hereunder; provided, however, that such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
Section 13.11 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions of this Trust
Agreement, the Trustee shall have the power and may execute and deliver all
instruments to appoint, at any time, one or more Persons to act as a co-trustee
or co-trustees, or a separate trustee or separate trustees, of all or any part
of the Trust Assets, and to vest in such Person or Persons, in such capacity and
for the benefit of the Holders of the Up-MACRO Holding Shares, such title to the
Trust Assets or any part thereof and, subject to the other provisions of this
Section 13.11, such powers, duties, obligations, rights and trusts as the
Trustee may consider necessary or desirable, for the purpose of meeting any
legal requirements of any jurisdiction in which any part of the Trust Assets may
at the time be located; provided, however, that such co-trustee or co-trustees,
or separate trustee or separate trustees, shall also assume the rights, duties
and obligations of the Trustee under each of the Down-MACRO Holding Trust
Agreement, the Up-MACRO Tradeable Trust Agreement and the Down-MACRO Tradeable
Trust Agreement; further provided, however, that the Trustee shall exercise due
care in the appointment of any co-trustee or separate trustee. No co-trustee or
separate trustee hereunder shall be required to meet the terms of eligibility
for a successor trustee under Section 13.9 and no notice to Holders of the
Up-MACRO Holding Shares of the appointment of any co-trustee or separate trustee
shall be required under this Section 13.11.
(b) Every co-trustee and separate trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed
upon and exercised or performed by the Trustee and such co-trustee or
separate trustee jointly (it being understood that such co-trustee or
separate trustee shall not be authorized to act unless the Trustee
joins in such act) except to the extent that under any laws of any
jurisdiction in which any particular act or acts are to be performed
the Trustee is incompetent or unqualified to perform such act or acts,
in which event such rights, powers, duties and obligations (including
the holding of title to the Trust Assets or any portion thereof in any
such jurisdiction) shall be exercised or performed singly by such
co-trustee or separate trustee, but solely at the direction of the
Trustee;
(ii) no co-trustee or separate trustee hereunder
shall be personally liable by reason of any act or omission of any
other trustee hereunder; and
(iii) the Trustee may at any time accept the
resignation of or remove any co-trustee or separate trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then co-trustees and separate
trustees as effectively as if given to each of them. Every instrument appointing
any co-trustee or separate trustee shall refer to this Trust Agreement and the
conditions of this Article XIII. Upon its acceptance of the trusts conferred by
its instrument of appointment, each co-trustee and separate trustee shall be
vested with the estates or property specified in such instrument, either jointly
with the Trustee or separately, as may be provided therein, subject to all of
the provisions of this Trust Agreement, specifically including every provision
of this Trust Agreement relating to the conduct of, affecting the liability of
or affording protection to the Trustee. Every such instrument shall be filed
with the Trustee.
(d) Any co-trustee or separate trustee may at any time
constitute the Trustee its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect to this Trust Agreement on its behalf and in its name. If any co-trustee
or separate trustee shall die, become incapable of acting, resign or be removed,
all of its estates, properties, rights, remedies and trusts under or in respect
to this Trust Agreement shall vest in and be exercised by the Trustee, to the
extent permitted by law, without the appointment of a new or successor trustee.
Section 13.12 Books, Records; Taxes; Audit.
(a) The Trustee shall keep proper books of record and account
of all the transactions under this Trust Agreement at its office located in [New
York] Boston or such office as it may subsequently designate upon notice to the
other parties hereto. The books and records of the Trustee maintained by the
Trustee shall be open to inspection by any person establishing to the Trustee's
reasonable satisfaction that such person is a Beneficial Owner upon reasonable
advance notice at all reasonable times during the usual business hours of the
Trustee. The Trustee shall keep proper record of the creation of the MACRO Units
and redemption of MACRO Units at its offices located in New York. Such records
shall be open to inspection upon reasonable advance notice at all reasonable
times during the usual business hours of the Trustee. Such records shall be
preserved for such times as the Depositor may direct.
(b) The Trustee shall provide the Depositor such financial and
other information regarding the operation of the Up-MACRO Holding Trust as may
be required for the Depositor to prepare such reports and filings required under
the federal securities laws as provided in Section 15.2. Unless otherwise
required by applicable law or regulation, the Depositor shall be responsible for
any certification of any such reports or the contents thereof, other than the
certification requirements pursuant to Section 8.2 herein, and shall receive
from the Trustee such representations with respect to information within the
Trustee's control as shall be required for the Depositor to make such
certification.
(c) The Trustee shall prepare or cause to be prepared, sign
(if it is determined that the Trustee's signature is required thereon) and file
any tax returns required to be filed by the Up-MACRO Holding Trust. The Trustee
shall also prepare or cause to be prepared all tax information required by law
to be distributed to Holders of the Up-MACRO Holding Shares. The Calculation
Agent and the Depositor, upon request, shall each furnish the Trustee with
any information known to it that may be reasonably required in connection with
the preparation of such duties set forth in the preceding two sentences.
(d) In no event shall the Trustee, the Depositor or the
Administrative Agent be personally liable for any taxes or other governmental
charges imposed upon or in respect of the Up-MACRO Holding Shares, which it may
be required to pay under any present or future law of the United States of
America or of any other taxing authority having jurisdiction in the premises.
For all such taxes and charges and for any expenses, including counsel's fees,
which the Trustee may sustain or incur with respect to such taxes or charges,
the Trustee shall be reimbursed and indemnified out of the assets of the
Up-MACRO Holding Trust and the payment of such amounts shall be secured by a
lien on the Up-MACRO Holding Trust. Any payments by the Trustee shall be subject
to withholding regulations then in force with respect to the Untied States
taxes. This paragraph shall survive notwithstanding any termination of this
Trust Agreement and the Up-MACRO Holding Trust or the resignation or removal of
the Trustee.
(e) The accounts of the Up-MACRO Holding Trust shall be
audited, as required by law and as may be directed by the Depositor, by
independent certified public accountants designated from time to time by the
Depositor and the cost of such audit shall be borne by the Trustee. The report
of such accountants shall be furnished by the Trustee to the Beneficial Owners
upon request.
Section 13.13 Trustee May Enforce Claims Without Possession of Up-MACRO
Holding Shares. All rights of action and claims under this Trust Agreement or
the Up-MACRO Holding Shares may be prosecuted and enforced by the Trustee
without the possession of any of the Up-MACRO Holding Shares or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee. Any recovery of
judgment shall, after provision for payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Up-MACRO Holding Shares in respect
of which such judgment has been obtained.
Section 13.14 Suits for Enforcement. If a Termination Trigger occurs
and is continuing, the Trustee (or the Depositor, in the case of a Trustee
Termination Event) in its discretion may proceed to protect and enforce its
rights and the rights of the Holders of the Up-MACRO Holding Shares under this
Trust Agreement by a suit, action or proceeding in equity or at law or
otherwise, whether for the specific performance of any covenant or agreement
contained in this Trust Agreement, in aid of the execution of any power granted
in this Trust Agreement or for the enforcement of any other legal, equitable or
other remedy as the Trustee (or the Depositor, in the case of a Trustee
Termination Event), being advised by counsel, shall deem most effectual to
protect and enforce any of the rights of the Holders of the Up-MACRO Holding
Shares.
Section 13.15 Maintenance of Office or Agency. The Trustee will
maintain at its expense an office or agency (the "Corporate Trust Office") where
notices and demands to or upon the Trustee in respect of the Up-MACRO Holding
Shares and this Trust Agreement may be served. The Corporate Trust Office shall
initially be located at [ ]. The Trustee will give prompt notice to the
Depositor and to Holders of the Up-MACRO Holding Shares of any change in the
location of the Corporate Trust Office.
ARTICLE XIV
TERMINATION
Section 14.1 Termination of Trust. The Up-MACRO Holding Trust and the
respective obligations and responsibilities of the Depositor, [the Calculation
Agent], the Administrative Agent, Marketing Agent and the Trustee created hereby
shall terminate on the Final Scheduled Termination Date. The Up-MACRO Holding
Trust shall not terminate in the event that the Depositor is adjudged to be
insolvent or is liquidated or dissolved for any reason.
Upon the termination of the Up-MACRO Holding Trust, the Trustee shall
wind up the activities and affairs of the Up-MACRO Holding Trust and shall cause
its certificate of trust to be cancelled by filing a certificate of cancellation
with the New York Secretary of State, terminating the Up-MACRO Holding Trust.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination.
(a) This Trust Agreement may be amended from time to time by
the Depositor and the Trustee without the consent of the Holders of Up-MACRO
Holding Shares (i) to cure any ambiguity or to correct or supplement any
provision which may be defective or inconsistent with any other provision of
this Trust Agreement, the Down-MACRO Holding Trust Agreement, the Up-MACRO
Tradeable Trust Agreement or the Down-MACRO Tradeable Trust Agreement, (ii) to
modify any provision or add a provision to this Trust Agreement to conform it to
the description of the terms of the Up-MACRO Holding Shares contained in the
Prospectus, (iii) to add to the covenants, restrictions or obligations of any
entity under this Trust Agreement for the benefit of the Holders of the Up-MACRO
Holding Shares or to modify any provisions of this Trust Agreement, (iv) to
evidence and provide for the acceptance of appointment hereunder of a Successor
Trustee, and (v) to comply with any requirements imposed by the Code, or any
securities laws; provided that an opinion in form and substance satisfactory to
the Depositor that such amendment will not cause the Up-MACRO Holding Trust to
be treated as an association taxable as a corporation is delivered in connection
with any amendment referenced in clause (iii) or clause (v) above. This Trust
Agreement may also be amended without the consent of the Holders of the Up-MACRO
Holding Shares in connection with (i) any Up-MACRO Recapitalization Issuance
following an Up-MACRO Recapitalization Event, subject to satisfaction of the
Up-MACRO Recapitalization Condition, and (ii) any Down-MACRO Recapitalization
Issuance following a Down-MACRO Recapitalization Event, subject to satisfaction
of the Down-MACRO Recapitalization Condition.
(b) This Trust Agreement may also be amended from time to time
by the Depositor and the Trustee, with the written consent of the Holders of
Up-MACRO Holding Shares evidencing not less than 66 and 2/3% of the Up-MACRO
Aggregate Par Amount, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Trust Agreement or of
modifying in any manner the rights of the Holders of the Up-MACRO Holding
Shares; provided, however, that the Down-MACRO Holding Trust Agreement shall
similarly be amended or modified; further provided, however, that, without the
written consent of each Holder of the Up-MACRO Holding Trust and the Down-MACRO
Holding Trust that would be adversely affected, no amendment may (i) modify
Sections 4.1, 4.2, 4.3, 4.4, 5.1, 5.2, 5.3 and 5.4 or the definitions set forth
therein; (ii) modify the amount or timing of any distributions that are required
to be made on the Up-MACRO Holding Shares; (iii) modify the minimum number of
Paired Holding Shares that constitute a MACRO Unit; or (iv) reduce the
percentage of Holders that are required to consent to any of the foregoing
amendments, and if such amendment is adopted and approved by each Holder of the
Up-MACRO Holding Trust, such amendment shall not be effective unless and until a
similar amendment has been made to the Down-MACRO Holding Trust Agreement. The
Trustee and the Depositor further agree not to amend the Income Distribution
Agreement or the Settlement Contracts if such amendment would have a material
adverse effect on the Holders of the Paired Holding Shares unless the Trustee
has received the prior written consent of not less than 66 and 2/3% of each of
the Holders of Up-MACRO Holding Shares based on the Up-MACRO Aggregate Par
Amount. The Trustee shall not enter into any amendment or modification which
would cause the Up-MACRO Holding Trust to be required to register as an
investment company under the Investment Company Act of 1940, as amended. The
Trustee may, but shall not be obligated to, enter into any amendment which
affects the Trustee's rights, duties or immunities under this Trust Agreement or
otherwise.
(c) Promptly after the execution of any amendment or consent
pursuant to this Section 15.1, the Trustee shall furnish notification of the
substance of such amendment or consent to each Holder and prepare and file a
Form 8-K regarding such amendment.
(d) Where the consent of Holders is required under this
Section 15.1 in order to amend this Trust Agreement, it shall be sufficient if
such consent approves the substance of the proposed amendment; the particular
form of such amendment need not be approved. The manner of obtaining such
consents and of evidencing the authorization of the execution thereof by Holders
of the Up-MACRO Holding Shares shall be subject to such reasonable requirements
as the Trustee may prescribe.
(e) Holders evidencing not less than 66 and 2/3% of the
Up-MACRO Aggregate Par Amount and the Down-MACRO Aggregate Par Amount (pursuant
to the Down-MACRO Holding Trust Agreement) may, on behalf of all holders, waive
any default by the Depositor, the Trustee, the Calculation Agent or the
Administrative Agent in the performance of their obligations hereunder and its
consequences, and the occurrence of any Termination Trigger and its
consequences, except the failure to make any distributions required to be made
to Holders of the Up-MACRO Holding Shares or to make any required deposits of
any amounts to be so distributed. Upon any such waiver of a past default, such
default shall cease to exist, and any default arising therefrom shall be deemed
to have been remedied for every purpose of this Trust Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived.
Section 15.2 Registration (Initial and Continuing) of Up-MACRO Holding
Shares; Certain Securities Law Filings. The Depositor agrees to (i) prepare and
file a registration statement with the SEC under the Securities Act, and take
such action as is necessary from time to time to qualify the Up-MACRO Holding
Shares for offering and sale under the federal securities laws of the United
States, including the preparation and filing of amendments and supplements to
such registration statement, (ii) promptly notify the Trustee of any such
amendment or supplement to the registration statement or prospectus and of any
order preventing or suspending the use of the prospectus, (iii) provide the
Trustee from time to time with copies, including copies in electronic form, of
the prospectus, in such quantities as the Trustee may reasonably request, (iv)
prepare and file any periodic reports or updates that may be required under the
Exchange Act, and (v) take such action as is necessary from time to time to
register or qualify the Up-MACRO Holding Shares for offering and sale under the
securities or blue sky laws of those states of the United States or other
jurisdictions as the Depositor may select or as may be necessary to continue
that registration or qualification in effect for so long as the Depositor
determines that the Up-MACRO Holding Trust shall continue to offer or sell
Up-MACRO Holding Shares in that jurisdiction. Registration charges, blue sky
fees, printing costs, mailing costs, attorney's fees, and other miscellaneous
out-of-pocket expenses shall be borne by the Up-MACRO Holding Trust in the
manner provided for in Section 13.1(a)(iii).
Section 15.3 Prospectus Delivery. The Trustee shall, if required by the
federal securities laws of the United States, in any manner permitted by such
laws, deliver at the time of issuance of Up-MACRO Holding Shares, a copy of the
relevant Prospectus, as most recently furnished to the Trustee by the Depositor,
to each person submitting a Purchase Order.
Section 15.4 Protection of Right, Title and Interest to Trust Assets.
(a) The Depositor shall cause this Trust Agreement, all
amendments and supplements hereto and all financing statements, continuation
statements and any other necessary documents covering the right, title and
interest of the Holders of the Up-MACRO Holding Shares and of the Trustee in and
to the Trust Assets to be promptly recorded, registered and filed, and at all
times to be kept recorded, registered and filed, all in such manner and in such
places as may be required by law fully to preserve and protect the right, title
and interest of the Holders of the Up-MACRO Holding Shares and the Trustee
hereunder in and to all property comprising the Trust Assets. The Depositor
shall deliver to the Trustee file-stamped copies of, or filing receipts for, any
document recorded, registered or filed as provided above, as soon as available
following such recording, registration or filing.
(b) Within 30 days after the Depositor makes any change in its
name, identity or corporate structure which would make any financing statement
or continuation statement filed in accordance with paragraph (a) above seriously
misleading within the meaning of Section 9-402(7) (or any comparable provision)
of the UCC, the Depositor shall give the Trustee notice of such change and shall
file such financing statements or amendments as may be necessary to continue the
perfection of the Up-MACRO Holding Trust's security interest in the Trust Assets
and the proceeds thereof.
(c) The Depositor shall give the Trustee prompt notice of any
relocation of its principal executive offices or of any office from which it
performs its duties hereunder or keeps records concerning this transaction. If,
as a result of any such relocation, the applicable provisions of the UCC require
the filing of any new financing statement or of any amendment to any previously
filed financing or continuation statement, the Depositor shall file such
financing statements or amendments as may be necessary to perfect or to continue
the perfection of the Up-MACRO Holding Trust's security interest in the Trust
Assets and the proceeds thereof. The Depositor shall at all times maintain its
principal executive offices and each office from which it performs its duties
hereunder within the United States.
Section 15.5 Limitation on Rights of Holders of the Up-MACRO Holding
Shares.
(a) The death or incapacity of any Holder of the Up-MACRO
Holding Shares shall not operate to terminate this Trust Agreement or the
Up-MACRO Holding Trust, nor shall such death or incapacity entitle the legal
representatives or heirs of such Holder to claim an accounting or to take any
action or commence any proceeding in any court for a partition or winding-up of
the Up-MACRO Holding Trust, or otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
(b) No Holder of the Up-MACRO Holding Shares shall have any
right to vote (except as expressly provided in this Trust Agreement) or in any
manner otherwise control the operation and management of the Up-MACRO Holding
Trust, or the obligations of the parties hereto, nor shall any Holder of the
Up-MACRO Holding Shares be under any liability to any third person by reason of
any action by the parties to this Trust Agreement pursuant to any provision
hereof.
(c) No Holder of the Up-MACRO Holding Shares shall have any
right by virtue of any provisions of this Trust Agreement to institute any suit,
action or proceeding in equity or at law upon, under or with respect to this
Trust Agreement unless such Holder previously has made, and unless the Holders
of Up-MACRO Holding Shares representing the beneficial ownership of at least 25%
of all Outstanding Up-MACRO Holding Shares have made, written request to the
Trustee to institute such suit, action or proceeding in its own name as Trustee
hereunder and have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby and the Trustee, for sixty (60) days after its receipt of such request
and offer of indemnity, has neglected or refused to institute any such action,
suit or proceeding; it being understood and intended, and expressly covenanted
by each Holder with every other Holder and the Trustee, that no one or more
Holders of the Up-MACRO Holding Shares shall have any right in any manner
whatsoever by virtue of or by availing itself or themselves of any provisions of
this Trust Agreement to affect, disturb or prejudice the rights of any other
Holder of the Up-MACRO Holding Shares, to obtain or seek to obtain priority over
or preference to any other Holder of the Up-MACRO Holding Shares or to enforce
any right under this Trust Agreement except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of the Up-MACRO Holding
Shares. For the protection and enforcement of the provisions of this Section
15.5, each and every Holder and the Trustee shall be entitled to such relief as
can be obtained either at law or in equity.
Section 15.6 Certain Rights of Holders of Up-MACRO Holding Shares;
Voting. Each Holder of Up-MACRO Holding Shares shall be able to vote on all
matters on which shareholders may or are required to vote under this Trust
Agreement for the Up-MACRO Holding Shares. Holders of Up-MACRO Holding Shares
evidencing not less than 66 and 2/3% of the Up-MACRO Aggregate Par Amount shall
have the right to direct the time, place and method of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee relating to such proceeding; provided, however, that,
subject to Section 15.1, the Trustee shall have the right to decline to follow
any such direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken, or if a Trust Officer in good
faith determines that the proceedings so directed would be illegal or involve
the Trustee in personal liability or be unduly prejudicial to the rights of
Holders of the Up-MACRO Holding Shares not party to such direction; and provided
further that nothing in this Trust Agreement shall impair the right of the
Trustee to take any action deemed proper by the Trustee and not inconsistent
with such direction.
In accordance with Section 11.1 of the Up-MACRO Tradeable Trust
Agreement, the holders of the Up-MACRO Tradeable Shares shall be able to direct
the Trustee in the exercise of the voting rights associated with the Up-MACRO
Holding Shares held on deposit in the Up-MACRO Tradeable Trust. Each holder of
Up-MACRO Tradeable Shares shall be entitled to vote on (i) any amendments to
this Trust Agreement that require the prior written consent of the shareholders
as described in Section 15.1, (ii) any amendment to the Income Distribution
Agreement and the Settlement Contracts, (iii) the termination of the Trustee,
(iv) the appointment of a Successor Trustee, (v) the termination of the
Calculation Agent, (vi) the appointment of a successor Calculation Agent, and
(vii) any amendments to the certificate of trust filed with the New York
Secretary of State.
Section 15.7 MACRO Licensing Agreement with MacroMarkets. On the
Closing Date, the Trustee shall enter into the MACRO Licensing Agreement with
MacroMarkets. Under such licensing agreement, MacroMarkets shall be entitled to
the receipt of the Up-MACRO Licensing Fee. The Trustee, on behalf of the
Up-MACRO Holding Trust, shall pay to MacroMarkets the Up-MACRO Licensing Fee in
arrears on each Distribution Date from the Up-MACRO Fees.
Section 15.8 Governing Law; Jurisdiction. THIS TRUST AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Each of
the parties hereto hereby irrevocably and unconditionally consents to submit to
the exclusive jurisdiction of the courts of the State of New York and of the
federal courts sitting in the State of New York for any litigation arising out
of or relating to this Trust Agreement and the transactions contemplated hereby
(and agrees not to commence any litigation relating thereto except in such
courts) and further agrees that service of any process, summons, notice or
document by prepaid certified mail with proof of mailing receipt validated by
the United States Postal Service to the address of such party as set forth in
Section 15.9 (or to the agent of such party appointed and maintained in the
State of New York as such party's agent for acceptance of legal process) shall
be effective service of process for any litigation brought against it in any
such court. Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any litigation arising out of
this Trust Agreement or the transactions contemplated hereby in the courts of
the State of New York or of the federal courts sitting in the State of New York
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such litigation brought in any such
court has been brought in an inconvenient forum.
Section 15.9 Notices.
(a) All demands, notices, instructions, directions and
communications (collectively, "Notices") under this Trust Agreement shall be in
writing and shall be deemed to have been duly given if personally delivered,
mailed by registered mail, return receipt requested, or sent by facsimile
transmission to the following addresses:
If to the Depositor, to: MACRO Securities Depositor, LLC
[
]
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, III
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
If to the Trustee, to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
If to the Administrative Agent, to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
If to the Marketing Agent, to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
Any notice to be given to a Beneficial Owner shall be duly given if
mailed or delivered to Authorized Participants designated by the Depository for
delivery to Beneficial Owners.
(b) Any Notice required or permitted to be given to a Holder
of the Up-MACRO Holding Shares shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Share Register. Any
Notice so mailed within the time prescribed in this Trust Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such Notice.
Section 15.10 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Trust Agreement is held
invalid for any reason whatsoever, then such provision shall be deemed severable
from the remaining provisions of this Trust Agreement and shall in no way affect
the validity or enforceability of the remaining provisions or of the Up-MACRO
Holding Shares or the rights of the Holders of the Up-MACRO Holding Shares.
Section 15.11 Up-MACRO Holding Shares Nonassessable and Fully Paid. It
is the intention of the parties to this Trust Agreement that the Holders of the
Up-MACRO Holding Shares shall not be personally liable for obligations of the
Up-MACRO Holding Trust, that the interests in the Up-MACRO Holding Trust
represented by the Up-MACRO Holding Shares shall be nonassessable for any losses
or expenses of the Up-MACRO Holding Trust or for any reason whatsoever and that
the Up-MACRO Holding Shares upon authentication thereof by the Trustee pursuant
to Section 2.5 are and shall be deemed fully paid.
Section 15.12 Further Assurances. The Depositor agrees to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by the Trustee more fully to effect
the purposes of this Trust Agreement, including the execution of any financing
statements or continuation statements relating to the Trust Assets for filing
under the provisions of the UCC of any applicable jurisdiction.
Section 15.13 Non-Petition Covenant; No Proceedings.
(a) Notwithstanding any prior termination of this Trust
Agreement, the Trustee, the Calculation Agent, the Administrative Agent,
Marketing Agent and the Depositor shall not, prior to the date which is one year
and one day after the termination of this Trust Agreement with respect to the
Up-MACRO Holding Trust or the Depositor acquiesce in, petition for or otherwise
invoke or cause the Up-MACRO Holding Trust or the Depositor to invoke the
process of any Governmental Authority for the purpose of (x) commencing or
sustaining a case against the Up-MACRO Holding Trust or the Depositor under any
federal or state bankruptcy, insolvency or similar law, (y) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Up-MACRO Holding Trust or the Depositor or any
substantial part of their respective property or (z) ordering the winding-up or
liquidation of the affairs of the Up-MACRO Holding Trust or the Depositor.
(b) Each of the Trustee, the Depositor, the Administrative
Agent and Marketing Agent and each Holder, by acceptance of its Up-MACRO Holding
Share, hereby agrees that it will not institute against a Holder, or join any
other Person in instituting against a Holder, on account of its ownership of an
Up-MACRO Holding Share or its obligations hereunder, any bankruptcy, insolvency,
liquidation, readjustment of debt, marshalling of assets or any similar
proceeding so long as there has not elapsed one year plus one day since the last
day on which any Up-MACRO Holding Shares shall have been Outstanding.
Section 15.14 No Waiver; Cumulative Remedies. No failure by the Trustee
or the Holders of the Up-MACRO Holding Shares to exercise any right, remedy,
power or privilege under this Trust Agreement, and no delay in such exercise,
shall operate as a waiver of such right, remedy, power or privilege; nor shall
any single or partial exercise of any right, remedy, power or privilege under
this Trust Agreement preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges provided under this Trust Agreement are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided by law.
Section 15.15 Counterparts. This Trust Agreement may be executed in two
or more counterparts (and by different parties on separate counterparts), each
of which shall be an original, but all of which together shall constitute one
and the same instrument.
Section 15.16 Third-Party Beneficiaries. This Trust Agreement will
inure to the benefit of and be binding upon the parties hereto, the Holders of
the Up-MACRO Holding Shares, the Holders of the Down-MACRO Holding Shares, the
Holders of the Up-MACRO Tradeable Shares, the Holders of the Down-MACRO
Tradeable Shares and their respective successors and permitted assigns. Except
as otherwise expressly provided in this Trust Agreement, no other Person will
have any right or obligation hereunder.
Section 15.17 Actions or Notices by Holders of the Up-MACRO Holding
Shares.
(a) Wherever a provision in this Trust Agreement states that
an action may be taken or a Notice given by Holders of the Up-MACRO Holding
Shares, such action or Notice may be taken or given by any Holder, unless such
provision requires a specific percentage of Holders of the Up-MACRO Holding
Shares.
(b) Any Notice, request, authorization, direction, consent,
waiver or other act by the Holder of an Up-MACRO Holding Share shall bind such
Holder and every subsequent Holder of such share and of any share issued upon
the registration of transfer thereof, in exchange therefor or in lieu thereof in
respect of anything done or omitted to be done by the Trustee in reliance
thereon, whether or not notation of such action is made upon such share.
Section 15.18 Merger and Integration. Except as specifically stated
otherwise herein, this Trust Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Trust Agreement. This Trust Agreement
may not be modified, amended, waived or supplemented except as provided herein.
Section 15.19 Headings. The headings herein are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
IN WITNESS WHEREOF, the Depositor, the Trustee, the Administrative
Agent and the Marketing Agent have caused this Trust Agreement to be duly
executed by their respective officers as of the day and year first above
written.
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor
By __________________________________________
Name:
Title:
[ ],
not in its individual capacity but solely as
Trustee
By __________________________________________
Name:
Title:
[ ]
not in its individual capacity but solely as
Administrative Agent
By __________________________________________
Name:
Title:
[ ]
not in its individual capacity but solely as
Marketing Agent
By __________________________________________
Name:
Title:
Acknowledged and Accepted By:
[ ],
as Down-MACRO Holding Trustee
By _______________________________________________
Name:
Title:
APPENDIX A
FORM OF UP-MACRO HOLDING SHARE
[TO COME]
APPENDIX B
FORM OF INCOME DISTRIBUTION AGREEMENT
[TO COME]
APPENDIX C
FORM OF SETTLEMENT CONTRACT
Filed as Exhibit 4.5 to this Registration Statement
APPENDIX D
FORM OF PARTICIPANTS AGREEMENT
Filed as Exhibit 4.3 to this Registration Statement
APPENDIX E
FORM OF MACRO LICENSING AGREEMENT
Filed as Exhibit 4.7 to this Registration Statement
APPENDIX F
NYMEX SUBLICENSING AGREEMENT
Filed as Exhibit 4.8 to this Registration Statement
APPENDIX G
FORM OF QUARTERLY SHAREHOLDER STATEMENT
[TO COME]