EXHIBIT 99.2
FORM OF CLAYMORE MACROSHARES OIL UP
HOLDING TRUST AGREEMENT
================================================================================
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor,
INVESTORS BANK & TRUST COMPANY,
as Trustee
and
CLAYMORE SECURITIES, INC.,
as Administrative Agent and Marketing Agent
CLAYMORE MACROSHARES OIL UP HOLDING TRUST
TRUST AGREEMENT
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Definitions..................................................2
Section 1.2 Other Definitional Provisions...............................19
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.......................................20
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust...............20
Section 2.4 Representations and Warranties of the Depositor.............20
Section 2.5 Form of Certificates; Book-Entry System; Transferability
of Up-MACRO Holding Shares..................................22
Section 2.6 Paired Subsequent Issuances.................................25
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
i
Section 4.2 Calculation of Intraday Indicative Values...................38
Section 4.3 Calculation of Income Distribution Payments and
Settlement Payments.........................................38
Section 4.4 Calculations Relating to Paired Subsequent Issuances and
Paired Optional Redemptions.................................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........................................39
Section 5.3 Payment of Expenses.........................................40
Section 5.4 Payment of Fees.............................................41
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 Cancellation of a Redemption Order..........................44
Section 6.3 Redemptions on Early Termination Date and Final Scheduled
Termination Date............................................44
Section 6.4 Settlement of the Settlement Contracts and Adjustment to
the Aggregate Amount of the Income Distribution Agreement...44
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...............................46
Section 7.3 Regulatory and Related Allocations..........................48
Section 7.4 Transfer of or Change in Up-MACRO Holding Shares............49
Section 7.5 Tax Allocations.............................................49
Section 7.6 Determination of Certain Matters............................51
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...........53
Section 8.2 Form 8-K Disclosure.........................................55
Section 8.3 Listing and De-Listing of the Up-MACRO Holding Shares.......56
ii
ARTICLE IX
OTHER MATTERS RELATING TO THE DEPOSITOR
Section 9.1 Liability of the Depositor..................................56
Section 9.2 Limitations on Liability of the Depositor and Claymore
Securities, Inc.............................................56
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..................................................58
Section 10.4 Administrative Agent Indemnification of the Up-MACRO
Holding Trust and the Trustee...............................58
Section 10.5 Delegation of Duties........................................59
ARTICLE XI
EARLY TERMINATION
Section 11.1 Termination Triggers........................................59
ARTICLE XII
TRUSTEE TERMINATION EVENTS
Section 12.1 Trustee Termination Events..................................61
Section 12.2 Force Majeure...............................................62
Section 12.3 Notification to Holders of the Up-MACRO Holding Shares......62
ARTICLE XIII
THE TRUSTEE
Section 13.1 Duties of Trustee...........................................62
Section 13.2 Rights of the Trustee.......................................64
Section 13.3 Trustee Not Liable for Recitals in Up-MACRO Holding Shares..64
Section 13.4 Individual Rights of the Trustee............................65
Section 13.5 Compensation................................................65
Section 13.6 Indemnification.............................................65
Section 13.7 Eligibility Requirements....................................65
Section 13.8 Resignation or Removal of Trustee...........................66
Section 13.9 Successor Trustee...........................................66
Section 13.10 Merger or Consolidation.....................................67
Section 13.11 Appointment of Co-Trustee or Separate Trustee...............67
Section 13.12 Books, Records; Taxes; Audit................................68
Section 13.13 Trustee May Enforce Claims Without Possession of Up-MACRO
Holding Shares..............................................69
Section 13.14 Suits for Enforcement.......................................69
iii
Section 13.15 Maintenance of Office or Agency.............................70
ARTICLE XIV
TERMINATION
Section 14.1 Termination of Trust........................................70
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Amendment; Waiver of Past Defaults and Termination..........70
Section 15.2 Registration (Initial and Continuing) of Up-MACRO
Holding Shares; Certain Securities Law Filings..............71
Section 15.3 Prospectus Delivery.........................................72
Section 15.4 Protection of Right, Title and Interest to Trust Assets.....72
Section 15.5 Limitation on Rights of Holders of the Up-MACRO Holding
Shares......................................................73
Section 15.6 Certain Rights of Holders of Up-MACRO Holding Shares;
Voting......................................................73
Section 15.7 MACRO Licensing Agreement with MacroMarkets.................74
Section 15.8 Governing Law; Jurisdiction.................................74
Section 15.9 Notices.....................................................74
Section 15.10 Severability of Provisions..................................76
Section 15.11 Up-MACRO Holding Shares Nonassessable and Fully Paid........76
Section 15.12 Further Assurances..........................................76
Section 15.13 Non-Petition Covenant; No Proceedings.......................76
Section 15.14 No Waiver; Cumulative Remedies..............................76
Section 15.15 Counterparts................................................77
Section 15.16 Third-Party Beneficiaries...................................77
Section 15.17 Actions or Notices by Holders of the Up-MACRO Holding
Shares......................................................77
Section 15.18 Merger and Integration......................................77
Section 15.19 Headings....................................................77
iv
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
v
This TRUST AGREEMENT, dated as of August [ ], 2006 (this
"Trust Agreement"), is hereby entered into among MACRO SECURITIES DEPOSITOR,
LLC, a Delaware limited liability company, as Depositor (the "Depositor"),
INVESTORS BANK & TRUST COMPANY, not in its individual capacity but solely as
Trustee (the "Trustee"), and CLAYMORE SECURITIES, INC., 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 trust under the laws of the State of New York to be known as
the "Claymore MACROshares Oil Up Holding Trust" and referred to herein as the
"Up-MACRO Holding Trust;"
WHEREAS, concurrently with the formation of the Up-MACRO
Holding Trust, the Depositor, the Trustee, the Administrative Agent and the
Marketing Agent have also entered into a trust agreement, dated as of the date
hereof, to form a trust under the laws of the State of New York that shall be
known as the "Claymore MACROshares Oil Down Holding Trust" and is referred to
herein as the "Down-MACRO Holding Trust;"
WHEREAS, (i) the Up-MACRO Holding Trust shall issue shares to
be known as the "Claymore MACROshares Oil Up Holding Shares" (referred to herein
as the "Up-MACRO Holding Shares") and (ii) the Down-MACRO Holding Trust shall
issue shares to be known as the "Claymore MACROshares Oil Down Holding Shares"
(referred to herein as the "Down-MACRO Holding Shares" and, together with the
Up-MACRO Holding Shares, the "Paired Holding Shares");
WHEREAS, the Depositor has assigned, transferred, conveyed and
otherwise set over to the Trustee the Initial Deposit (as defined herein) in
consideration for the issuance of founder's shares which shall constitute
permanent capital of the Up-MACRO Holding Trust, and the Trustee hereby
acknowledges receipt of such Initial Deposit in the Up-MACRO Holding Trust; and
WHEREAS, the parties hereto wish to set forth the terms of the
Up-MACRO Holding Trust and the Up-MACRO Holding Shares and the respective powers
and duties of the Trustee, the Administrative Agent, the Marketing 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 and/or the Fee Payment Account, as applicable.
"Acquisition Guidelines" shall have the meaning set forth in Section
3.7(a).
"Administrative Agent" shall mean Claymore Securities, Inc., in its
capacity as administrative agent hereunder, and its successors and assigns.
"Administrative Agent Indemnified Party" shall have the meaning set
forth in Section 10.4.
"Affiliate" shall mean with respect to any specified Person, another
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by or is under common control with the Person specified. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise; and "controlled" and "controlling"
have meanings correlative to the foregoing. A company is assumed to be an
Affiliate if the parent corporation owns 20 percent or more of the outstanding
shares.
"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, with respect to
any Price Determination Day, the settlement price of the Light Sweet Crude Oil
Futures Contract, as established and reported by NYMEX on a per barrel basis in
U.S. dollars at the end of each such day based upon the trading that has
occurred in that contract by open outcry and published to the consolidated tape,
provided, that if NYMEX abandons its open outcry format for the Light Sweet
Crude Oil Futures Contract, the Applicable Reference Price of Crude Oil shall be
based on trading of the Light Sweet Crude Oil Futures Contract on the substitute
electronic trading platform established by NYMEX, and, in the event that the
NYMEX License has been terminated by NYMEX and MacroMarkets LLC and the
Depositor have successfully negotiated a license with a Substitute Oil Price
Provider, the settlement price for the Substitute Reference Oil Price that is
established for each such Price Determination Day.
"Authorized Participant" shall mean any entity that (1) is a registered
broker-dealer and a member in good standing with the National Association of
Securities Dealers, Inc., or a participant in the securities markets such as a
bank or other financial institution that is not
2
required to register as a broker-dealer or be a member of the National
Association of Securities Dealers, Inc. 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) has entered into a Participants
Agreement.
"Available Income" shall mean the Up-MACRO Available Income or the
Down-MACRO Available Income, as applicable.
"Bankruptcy Code" shall mean The Bankruptcy Reform Act of 1978, as
amended from time to time, and 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 other than a Saturday, a Sunday or a
day on which banking institutions and stock exchanges in New York, New York are
authorized or required by law, regulation or executive order to close.
"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 September [ ], 2006.
"Code" shall mean U.S. Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall have the meaning set forth under Section
13.15.
"Creation Order" shall have the meaning set forth in Section 3(b) of
the Participants Agreement.
3
"Daily Fee Accrual Rate" shall mean, with respect to any date of
determination until the second anniversary of the Closing Date, a rate equal to
1.60% per annum, and with respect to any date of determination during any
succeeding year, 1.50% per annum, divided by, in each case, the actual number of
days in the current calendar year (as calculated to the tenth decimal place).
"Daily Yield Rate" shall mean, with respect to any date of
determination and each 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 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, (i) the next succeeding calendar month if such date of
determination occurs during the period from the first day of the current
calendar month through and including the tenth Business Day of the current
calendar month and (ii) the second calendar month succeeding the calendar month
in which such date of determination occurs if such date of determination occurs
during the period from the eleventh Business Day through the last day of the
current calendar month.
"Distribution Account" shall have the meaning set forth in Section
3.6(a).
"Distribution Date" shall mean the 25th day of March, June, September
and December of each year or, if any such day is not a Business Day, the
following Business Day, commencing in September of 2006.
"Distribution Payment Date" means the first Business Day of the month
immediately following the month in which the related Distribution Date occurred.
"Down-MACRO Aggregate Par Amount" shall mean, with respect to any date
of determination, the product of (a) the aggregate number of Down-MACRO Holding
Shares that are Outstanding on such date and (b) the Down-MACRO Stated Par
Amount.
"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 occurring during a Calculation Period that is not a Distribution
Date, an amount equal to: (A) the Down-MACRO Investment Amount plus (B) the
Down-MACRO Available Income Accrual for each day that has elapsed during such
Calculation Period (not including the date of determination) minus (C) any
portion of that Down-Macro Available Income Accrual which was distributed in
connection with all Paired Optional Redemptions that have occurred during such
Calculation Period prior to the date of determination plus (D) funds deposited
into the Down-MACRO Holding Trust in connection with all Paired Subsequent
Issuances that have occurred during such Calculation Period prior to the date of
determination that represent the aggregate available income that would
4
have accrued on the Aggregate Par Amount of the Down-MACRO Holding Shares if
cash equal to that amount had been invested on the preceding Distribution Date.
"Down-MACRO Available Income" shall mean with respect to any
Distribution Date and the related Calculation Period, the funds remaining on
deposit in the Down-MACRO Distribution Account after payment priorities first
through fourth of Section 5.2(a) of the Down-MACRO Holding Trust Agreement have
been satisfied in full.
"Down-MACRO Available Income Accrual" shall mean, on any day of a
Calculation Period, (i) the sum of, for each Treasury on deposit in the
Down-MACRO Holding Trust on such day, the product of (x) the purchase price at
which the Down-MACRO Holding Trust acquired that Treasury multiplied by (y) the
Daily Yield Rate applicable to that Treasury minus (ii) the Down-MACRO Daily Fee
Accrual. If the result of the foregoing calculation is a negative number, then
the Down-MACRO Available Income Accrual shall be equal to zero.
"Down-MACRO Daily Fee Accrual" shall mean for any Calculation Period
and any date of determination occurring during such Calculation Period, the
product of the Daily Fee Accrual Rate and the Down-MACRO Asset Amount on such
day.
"Down-MACRO Distribution Account" shall mean the distribution account
for the Down-MACRO Holding Trust established pursuant to the Down-MACRO Holding
Trust Agreement.
"Down-MACRO Earned Income Accrual" shall mean, with respect to any
Price Determination Day:
o if on such day the Ending Level is below the Starting Level,
the Down-MACRO Available Income Accrual plus the Up-MACRO
Available Income Accrual on that Price Determination Day
multiplied by the Price Level Percentage Change on that day;
o if on such day the Ending Level is above the Starting Level,
the Down-MACRO Available Income Accrual minus the Down-MACRO
Available Income Accrual multiplied by the Price Level
Percentage Change on that day; and
o if on such day the Ending Level is equal to the Starting
Level, the Down-MACRO Available Income Accrual.
The Down-MACRO Earned Income Accrual for each day that is not a Price
Determination Day shall be determined by reference to the Price Level Percentage
Change on the last preceding Price Determination Day.
The Down-MACRO Earned Income Accrual for each Calculation Period shall be equal
to the sum of the Down-MACRO Earned Income Accruals for each day of that
Calculation Period up to but not including the related Distribution Date, as
reduced by any portion of that accrual which was distributed in connection with
one or more Paired Optional Redemptions effected during that Calculation Period
and increased in connection with Paired Subsequent Issuances by the portion of
the Underlying Value at which shares were created that represents Down-MACRO
Earned Income Accruals.
"Down-MACRO Fee Deduction Amount" shall mean, with respect to any
Calculation Period, an amount equal to the sum of, for each day during that
Calculation Period, the Down-
5
MACRO Asset Amount as of that day multiplied by a rate equal to 1.60% per annum
for the first two years following the Closing Date and a rate of 1.50% per annum
thereafter, divided by, in each case, the actual number of days in the current
calendar year.
"Down-MACRO Fees" shall have the meaning specified in Section 5.4 of
the Down-MACRO Holding Trust Agreement.
"Down-MACRO Holding Shares" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust" shall have the meaning set forth in the
Recitals to this Trust Agreement.
"Down-MACRO Holding Trust Agreement" shall mean the Down-MACRO Holding
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Down-MACRO Holding Trustee, as
such agreement may be amended from time to time.
"Down-MACRO Holding Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Down-MACRO Holding
Trust.
"Down-MACRO Income Distribution Payment" shall mean with respect to any
Distribution Date 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 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, (i) with respect to any
Distribution Date, an amount equal to the amount reinvested in Treasuries
pursuant to Section 5.2(a)(iv) of the Down-MACRO Holding Trust Agreement and
(ii) with respect to any day other than a Distribution Date, an amount equal to
the amount in clause (i) divided by the number of Down-MACRO Holding Shares
Outstanding on that Distribution Date multiplied by the number of Down-MACRO
Holding Shares Outstanding on the date of determination.
"Down-MACRO Per Share Underlying Value" means, with respect to each
Price Determination Day and each Down-MACRO Holding Share or Down-MACRO
Tradeable Share, an amount calculated by dividing the Down-MACRO Underlying
Value by the number of Down-MACRO Holding Shares Outstanding on that day.
6
"Down-MACRO Redemption Percentage" shall mean (i) with respect to any
Redemption Date, a fraction, expressed as a percentage, the numerator of which
is the aggregate number of Down-MACRO Holding Shares that are being redeemed on
such date and the denominator of which is the aggregate number of Down-MACRO
Holding Shares that are Outstanding on such date prior to giving effect to the
Redemption Order placed on such Redemption Date and prior to giving effect to
any Purchase Orders that may also have been placed on such date and (ii) with
respect to an Early Termination Date or the Final Scheduled Termination Date,
100%.
"Down-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if the Down-MACRO Underlying Value on such Redemption Date,
the last Price Determination Day preceding such Early Termination Date, or the
last Price Determination Day preceding the Final Scheduled Termination Date is
greater than or equal to the Down-MACRO Investment Amount on such date, zero;
and
(b) if the Down-MACRO Underlying Value on such Redemption Date,
the last Price Determination Day preceding such Early Termination Date or the
last Price Determination Day preceding the Final Scheduled Termination Date is
less than the Down-MACRO Investment Amount on such date, an amount equal to (i)
the excess of such Down-MACRO Investment Amount over such Down-MACRO Underlying
Value multiplied by (ii) the Down-MACRO Redemption Percentage for such
Redemption Date, Early Termination Date or Final Scheduled Termination Date.
"Down-MACRO Stated Par Amount" shall mean the stated par amount of $[ ]
per Down-MACRO Holding Share.
"Down-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Down-MACRO Tradeable Trust pursuant to the Down-MACRO Tradeable
Trust Agreement.
"Down-MACRO Tradeable Trust" shall mean the Claymore MACROshares Oil
Down Tradeable Trust formed under the Down-MACRO Tradeable Trust Agreement.
"Down-MACRO Tradeable Trust Agreement" shall mean the Down-MACRO
Tradeable Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Down-MACRO Tradeable Trustee.
"Down-MACRO Tradeable Trustee" shall mean Investors Bank & Trust
Company, not in its individual capacity but solely as trustee of the Down-MACRO
Tradeable Trust.
"Down-MACRO Underlying Value" shall mean, with respect to any Price
Determination Day:
(a) if the Ending Level is below the Starting Level, an amount
equal to (i) the sum of the Down-MACRO Earned Income Accruals for each day that
has elapsed during the current Calculation Period, up to and including the
current Price Determination Day plus (ii) the Down-MACRO Investment Amount for
that Calculation Period plus (iii) (x) the Up-MACRO Investment Amount for that
Calculation Period multiplied by (y) the Price Level Percentage Change for the
Down-MACRO Holding Trust on such Price Determination Day;
(b) if the Ending Level is above the Starting Level, an amount
equal to (i) the sum of the Down-MACRO Earned Income Accruals for each day that
has elapsed during the current
7
Calculation Period, up to and including the current Price Determination Day plus
(ii) the Down-MACRO Investment Amount for that Calculation Period minus (iii)
(x) the Down-MACRO Investment Amount for that Calculation Period multiplied by
(y) the Price Level Percentage Change for the Up-MACRO Holding Trust on such
Price Determination Day; and
(c) if the Ending Level is equal to the Starting Level, an amount
equal to the sum of the Down-MACRO Earned Income Accruals for each day that has
elapsed during the current Calculation Period, up to and including the current
Price Determination Day plus the Down-MACRO Investment Amount.
"DTC" shall mean The Depository Trust Company.
"DTC Participant" shall mean a participant of the Depository.
"Early Termination Date" shall mean with respect to any date of
determination, the next Distribution Date that follows the occurrence of a
Termination Trigger.
"Eligible Deposit Account" shall mean either (a) a segregated
non-interest bearing trust account with an Eligible Institution or (b) a
segregated non-interest bearing trust account with the corporate trust
department of a depository institution organized under the laws of the United
States or any one of the states thereof, including the District of Columbia (or
any domestic branch of a foreign bank), and acting as a trustee for funds
deposited in such account, so long as any of 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 (i) any United States Treasury ▇▇▇▇,
note or bond, issued and guaranteed by the United States Department of the
Treasury, and (ii) any repurchase agreement collateralized by United States
Treasury bills, notes or bonds held by the Trustee, in each case 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
8
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.
"Exchange Order" shall have the meaning set forth in Section 5(b) of
the Participants Agreement.
"Fee Payment Account" shall have the meaning specified in Section
3.8(a) of this Trust Agreement.
"Final Distribution" shall mean any distribution made in redemption of
all or a portion of the Up-MACRO Holding Shares pursuant to Section 5.2(a) or
5.2(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 September 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.
"Founders' Equity Account" shall mean an Eligible Deposit Account
established and maintained by the Trustee, into which the Initial Deposit shall
be deposited.
"Founders' Shares" shall mean 1,000 shares with a par value of $1 per
share, issued to MacroMarkets LLC and Claymore Securities, Inc., which
constitute the permanent capital of the Up-MACRO Holding Trust.
"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.
9
"Holder" shall mean a registered holder of an Up-MACRO Holding Share or
a 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 under the Income Distribution Agreement, 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 have the meaning set forth in Section 2.1
hereof.
"Light Sweet Crude Oil Futures Contract" shall mean the NYMEX Division
Light Sweet Crude Oil Futures Contract of the Designated Maturity.
"Loss" shall have the meaning set forth in Section 9.3(b).
"MACRO Licensing Agreement" shall mean the licensing agreement, dated
as of the date hereof, substantially in the form attached hereto as Exhibit E,
among MacroMarkets, 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.
"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 mean 50,000 Up-MACRO Holding Shares and 50,000
Down-MACRO Holding Shares.
"MacroMarkets" shall mean MacroMarkets LLC, and its successors and
assigns.
10
"Marketing Agent" shall mean Claymore Securities, Inc., 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 Decrease" shall mean, with respect to any Business Day,
the net decrease in the Up-MACRO Aggregate Par Amount, after giving effect to
any Paired Subsequent Issuances or Paired Optional Redemptions occurring on that
Business Day.
"Net Par Amount Increase" shall mean, with respect to any Business Day,
the net increase in the Up-MACRO Aggregate Par Amount, after giving effect to
any Paired Subsequent Issuances or Paired Optional Redemptions occurring on that
Business Day.
"New York City Time" shall mean the current local time in New York, New
York.
"Notices" shall have the meaning set forth in Section 15.9(a) hereof.
"NYMEX" shall mean New York Mercantile Exchange, Inc. and its
successors and assigns.
"NYMEX License" shall mean the licensing agreement, dated as of
September [ ], 2006, between MacroMarkets and NYMEX, pursuant to which NYMEX
will license to MacroMarkets the right to use and sublicense the settlement
price of the Light Sweet Crude Oil Futures Contract.
"NYMEX Sublicensing Agreement" shall mean the sublicensing agreement,
dated as of September [ ], 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 settlement price of the Light Sweet Crude Oil Futures Contract 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 occurring prior to such date of determination minus any
shares redeemed prior to such date of determination.
11
"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 subsequent issuance and redemption of
Paired Holding Shares and procedures for the creation and exchange of Tradeable
Shares for Holding Shares and Holding Shares for Tradeable Shares.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership, limited liability company,
limited liability partnership, joint stock company, trust, unincorporated
organization or Governmental Authority or other entity.
"Price Determination Day" shall mean each day on which the Applicable
Reference Price of Crude Oil is established.
"Price Level Percentage Change" shall mean, with respect to each Price
Determination Day, the absolute value of (x) the Ending Level on such Price
Determination Day minus the Starting Level divided by (y) the Starting Level.
"Prospectus" shall mean the prospectus, in the form filed by the
Depositor on behalf of the Up-MACRO Holding Trust and the Up-MACRO Tradeable
Trust with the SEC on or before the second Business Day after the date hereof
(or such earlier time as may be required under the Securities Act) or, if no
such filing is required, the form of final prospectus included in the
Registration Statement on and after the date on which such Registration
Statement becomes effective.
"Quarterly Distribution" shall mean with respect to each Distribution
Date, the distribution to be made to the Holders of the Up-MACRO Holding Shares
that are Outstanding on the Distribution Date pursuant to priority sixth of
Section 5.2(a), which shall consist of the cash on deposit in the Up-MACRO
Holding Trust after it makes or receives a payment under the Income Distribution
Agreement and makes all other payments or investments in Treasuries that it is
required to make pursuant to such Section 5.2(a).
"Record Date" shall mean the second Business Day following each
Distribution Date.
"Redemption Cash Component" shall have the meaning set forth in Section
6.1(d)(iii) hereof.
12
"Redemption Date" shall mean any Business Day on which a Redemption
Order for a Paired Optional Redemption is submitted.
"Redemption Order" shall have the meaning set forth in Section 4(b) of
the Participants Agreement.
"Redemption Percentage Value" shall have the meaning set forth in
Section 6.1(d)(ii) hereof.
"Registration Statement" means the registration statement, file no.
333-116566, dated as of [ ], 2006, relating to the Up-MACRO Holding Shares and
Up-MACRO Tradeable Shares, as filed with the SEC and effective as of [ ], 2006,
as may be amended, supplemented or otherwise modified from time to time.
"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 United States Securities Act of 1933,
as amended.
"Settlement Contract" shall mean each confirmation, substantially in
the form attached hereto as Exhibit C, designated as a "Settlement Contract,"
referencing the Master Agreement, relating to one MACRO Unit of Paired Holding
Shares, dated as of the date on which such MACRO Unit was issued by the Paired
Holding Trusts and providing for payments between the Paired Holding Trusts on
the Final Scheduled Termination Date, an Early Termination Date or a Redemption
Date, which payments are calculated by reference to the Up-MACRO Underlying
Value and the Down-MACRO Underlying Value on the last Price Determination Day
preceding the Final Scheduled Termination Date, on the last Price Determination
Day preceding an Early Termination Date or on the relevant Redemption Date, as
applicable.
"Settlement Payment" shall mean an Up-MACRO Settlement Payment or a
Down-MACRO Settlement Payment, as applicable.
"Share Register" shall have the meaning set forth in Section 2.5(e)
hereof.
"Starting Level" shall mean $[ ], which represents the Applicable
Reference Price of Crude Oil, rounded to the nearest dollar, on August [ ],
2006, the last Price Determination Day prior to the Closing Day.
"Subsequent Issuance Date" shall have the meaning set forth in Section
2.6(a) hereof.
"Substitute Index Licensing Agreement" shall mean any licensing
arrangement pursuant to which the Up-MACRO Holding Trust acquires the right to
use a Substitute Reference Oil Price
13
for the purposes of calculating the Up-MACRO Underlying Value under this Trust
Agreement in accordance with Article IV of this Trust Agreement.
"Substitute Oil Price Provider" means the Dow ▇▇▇▇▇ Energy Service or
any other price provider selected by the Holders.
"Substitute Reference Oil Price" shall mean, with respect to any Price
Determination Day, the spot price for West Texas Intermediate Oil generated by
the Dow ▇▇▇▇▇ Energy Service, or if the Depositor is unable to obtain a license
from the Dow ▇▇▇▇▇ Energy Service, the crude oil price generated or determined
by another Substitute Oil Price Provider.
"Successor Trustee" shall have the meaning set forth in Section 13.8(a)
hereof.
"Termination Trigger" shall have the meaning set forth in Section
11.1(a) hereof.
"Tradeable Shares" shall mean the Up-MACRO Tradeable Shares and the
Down-MACRO Tradeable Shares.
"Tradeable Trusts" shall mean the Up-MACRO Tradeable Trust and the
Down-MACRO Tradeable Trust.
"Transaction Documents" shall mean this Trust Agreement, the Down-MACRO
Holding Trust Agreement, the Master Agreement, the Income Distribution
Agreement, the Settlement Contracts, the Participants Agreement, the MACRO
Licensing Agreement, the NYMEX Sublicensing Agreement 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.
"Treasury Stock Account" shall mean an Eligible Deposit Account
established and maintained by the Trustee, in which previously issued and
redeemed authorized shares of the Up-MACRO Holding Trust shall be held.
"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 Investors Bank & Trust Company, not in its
individual capacity but solely as Trustee under this Trust Agreement, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Trustee Indemnified Party" shall have the meaning set forth in Section
13.6 hereof.
"Trustee Termination Event" shall have the meaning set forth in Section
12.1 hereof.
"Trustees" shall mean, collectively, the Trustee and the Down-MACRO
Holding Trustee.
14
"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 0.35% 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, the product of (a) the aggregate number of Up-MACRO Holding
Shares that are Outstanding on such date and (b) the Up-MACRO Stated Par Amount.
"Up-MACRO Asset Amount" shall mean, (i) with respect any Distribution
Date, the aggregate amount of funds on deposit in the Distribution Account on
such Distribution Date, and (ii) with respect to any other date of determination
occurring during a Calculation Period that is not a Distribution Date, an amount
equal to: (A) the Up-MACRO Investment Amount plus (B) the Up-MACRO Available
Income Accrual for each day that has elapsed during such Calculation Period (not
including the date of determination) minus (C) any portion of that Up-Macro
Available Income Accrual which was distributed in connection with all Paired
Optional Redemptions that have occurred during such Calculation Period prior to
the date of determination, plus (D) the funds deposited into the Up-MACRO
Holding Trust in connection with all Paired Subsequent Issuances that have
occurred during such Calculation Period prior to the date of determination that
represent the aggregate available income that would have accrued on the
Aggregate Par Amount of the Up-MACRO Holding Shares if cash equal to that amount
had been invested on the preceding Distribution Date.
"Up-MACRO Available Income" shall mean with respect to any Distribution
Date and the related Calculation Period, the funds remaining on deposit in the
Distribution Account after payment priorities first through fourth of Section
5.2(a) hereof have been satisfied in full.
"Up-MACRO Available Income Accrual" shall mean, on any day of a
Calculation Period, (i) the sum of, for each Treasury on deposit in the Up-MACRO
Holding Trust on such day, the product of (x) the purchase price at which the
Up-MACRO Holding Trust acquired that Treasury multiplied by (y) the Daily Yield
Rate applicable to that Treasury minus (ii) the Up-MACRO Daily Fee Accrual. If
the result of the foregoing calculation is a negative number, then the Up-MACRO
Available Income Accrual shall be equal to zero.
"Up-MACRO Calculation Agent Fee" shall mean, with respect to any
Distribution Date, the fee specified in the Calculation Agency Agreement, which
shall be payable to the Calculation Agent for services rendered under the
Calculation Agency Agreement to the Up-MACRO Holding Trust and the Up-MACRO
Tradeable Trust.
"Up-MACRO Daily Fee Accrual" shall mean for any Calculation Period and
any date of determination occurring during such Calculation Period, the product
of the Daily Fee Accrual Rate and the Up-MACRO Asset Amount on such day.
"Up-MACRO Earned Income Accrual" shall mean, with respect to any Price
Determination Day:
o if on such day the Ending Level is above the Starting Level,
the Up-MACRO Available Income Accrual plus the Down-MACRO
Available Income Accrual on
15
that Price Determination Day multiplied by the Price Level
Percentage Change on that day;
o if on such day the Ending Level is below the Starting Level,
the Up-MACRO Available Income Accrual minus the Up-MACRO
Available Income Accrual multiplied by the Price Level
Percentage Change on that day; and
o if on such day the Ending Level is equal to the Starting
Level, the Up-MACRO Available Income Accrual.
The Up-MACRO Earned Income Accrual for each day that is not a Price
Determination Day shall be determined by reference to the Price Level Percentage
Change on the last preceding Price Determination Day.
The Up-MACRO Earned Income Accrual for each Calculation Period shall be equal to
the sum of the Up-MACRO Earned Income Accruals for each day of that Calculation
Period up to but not including the related Distribution Date, as reduced by any
portion of that accrual which was distributed in connection with one or more
Paired Optional Redemptions effected during that Calculation Period and
increased in connection with Paired Subsequent Issuances by the portion of the
Underlying Value at which shares were created that represents Up-MACRO Earned
Income Accruals.
"Up-MACRO Expenses" shall have the meaning specified in Section 5.3 of
this Trust Agreement.
"Up-MACRO Fee Deduction Amount" shall mean, with respect to any
Calculation Period, an amount equal to the sum of, for each day during that
Calculation Period, the Up-MACRO Asset Amount as of that day multiplied by a
rate equal to 1.60% per annum for the first two years following the Closing Date
and a rate of 1.50% per annum thereafter, divided by, in each case, the actual
number of days in the current calendar year.
"Up-MACRO Fees" shall have the meaning specified in Section 5.4 of this
Trust Agreement.
"Up-MACRO Holding Shares" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Holding Trust" shall have the meaning specified in the
Recitals to this Trust Agreement.
"Up-MACRO Income Distribution Payment" shall mean, with respect to any
Distribution Date, 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
16
and the Up-MACRO Underlying Value and the denominator of which is the Up-MACRO
Asset Amount.
"Up-MACRO Investment Amount" shall mean, (i) with respect to any
Distribution Date, an amount equal to the amount reinvested in Treasuries
pursuant to Section 5.2(a)(iv) and (ii) with respect to any day other than a
Distribution Date, an amount equal to the amount in clause (i) divided by the
number of Up-MACRO Holding Shares Outstanding on that Distribution Date
multiplied by the number of Up-MACRO Holding Shares Outstanding on the date of
determination.
"Up-MACRO Licensing Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to a per annum rate of 0.04% multiplied by the Up-MACRO Asset Amount on
such day, which shall be payable to MacroMarkets pursuant to the MACRO Licensing
Agreement.
"Up-MACRO Per Share Underlying Value" means, with respect to each Price
Determination Day and each Up-MACRO Holding Share or Up-MACRO Tradeable Share,
an amount calculated by dividing the Up-MACRO Underlying Value by the number of
Up-MACRO Holding Shares Outstanding on that day.
"Up-MACRO Redemption Percentage" shall mean (i) with respect to any
Redemption Date, a fraction, expressed as a percentage, the numerator of which
is the aggregate number of Up-MACRO Holding Shares that are being redeemed on
such date and the denominator of which is the aggregate number of Up-MACRO
Holding Shares that are Outstanding on such date prior to giving effect to the
Redemption Order placed on such Redemption Date and prior to giving effect to
any Purchase Orders that may also have been placed on such date and (ii) with
respect to an Early Termination Date or the Final Scheduled Termination Date,
100%.
"Up-MACRO Settlement Payment" shall mean, with respect to any
Redemption Date, an Early Termination Date or the Final Scheduled Termination
Date, an amount equal to:
(a) if the Up-MACRO Underlying Value on such Redemption Date, the
last Price Determination Day preceding such Early Termination Date, or the last
Price Determination Day preceding the Final Scheduled Termination Date is
greater than or equal to the Up-MACRO Investment Amount on such date, zero; and
(b) if the Up-MACRO Underlying Value on such Redemption Date, the
last Price Determination Day preceding such Early Termination Date or the last
Price Determination Day preceding the Final Scheduled Termination Date is less
than the Up-MACRO Investment Amount on such date, an amount equal to (i) the
excess of such Up-MACRO Investment Amount over such Up-MACRO Underlying Value
multiplied by (ii) the Up-MACRO Redemption Percentage for such Redemption Date,
Early Termination Date or Final Scheduled Termination Date.
"Up-MACRO 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.
17
"Up-MACRO Tradeable Shares" shall mean the pass-through securities
issued by the Up-MACRO Tradeable Trust pursuant to the Up-MACRO Tradeable Trust
Agreement.
"Up-MACRO Tradeable Trust" shall mean the Claymore MACROshares Oil Up
Tradeable Trust created under the Up-MACRO Tradeable Trust Agreement.
"Up-MACRO Tradeable Trust Agreement" shall mean the Up-MACRO Tradeable
Trust Agreement, dated as of the date hereof, among the Depositor, the
Administrative Agent, the Marketing Agent and the Up-MACRO Tradeable Trustee.
"Up-MACRO Tradeable Trustee" shall mean Investors Bank & Trust Company,
not in its individual capacity but solely as trustee of the Up-MACRO Tradeable
Trust.
"Up-MACRO Trustee Fee" shall mean, with respect to any Distribution
Date, the sum of, for each day during the related Calculation Period, an amount
equal to 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 sum of the Up-MACRO Earned Income Accruals for each day that
has elapsed during the current Calculation Period, up to and including the
current Price Determination Day plus (ii) the Up-MACRO Investment Amount for
that Calculation Period plus (iii) (x) the Down-MACRO Investment Amount for that
Calculation Period multiplied by (y) the Price Level Percentage Change for the
Up-MACRO Holding Trust on such Price Determination Day;
(b) if the Ending Level is below the Starting Level, an amount
equal to (i) the sum of the Up-MACRO Earned Income Accruals for each day that
has elapsed during the current Calculation Period, up to and including the
current Price Determination Day plus (ii) the Up-MACRO Investment Amount for
that Calculation Period minus (iii) (x) the Up-MACRO Investment Amount for that
Calculation Period multiplied by (y) the Price Level Percentage Change for the
Down-MACRO Holding Trust on such Price Determination Day; and
(c) if the Ending Level is equal to the Starting Level, an amount
equal to the sum of the Up-MACRO Earned Income Accruals for each day that has
elapsed during the current Calculation Period, up to and including the current
Price Determination Day plus the Up-MACRO Investment Amount.
"Value" shall mean, with respect to any Treasury on deposit at any time
in either of the Paired Holding Trusts, the purchase price at which the
applicable trust acquired that Treasury plus all interest and/or discount
accrued on that Treasury since its acquisition date.
"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).
18
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, each of the Depositor and the Administrative Agent hereby transfers,
assigns, sets over and otherwise conveys to the Up-MACRO Holding Trust, cash in
an amount of $500 for a total initial deposit of $1,000 (the "Initial Deposit")
in exchange for 1,000 Founders' Shares, of which 500 are being issued to the
Depositor and 500 are being issued to the Administrative Agent. The Initial
Deposit will be deposited into the Founders' Equity Account and shall not be
included in the calculation of the Up-MACRO Asset Amount at any time. The
Initial Deposit, together with all Treasuries on deposit from time to time in
the Securities Account, all monies on deposit from time to time in the
Distribution Account and the Fee Payment Account 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
19
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, both 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 and additional Settlement Contracts on each day on which a Net
Par Amount Increase in Paired Holding Shares is created as a result of Paired
Subsequent Issuances.
Section 2.3 Limited Purpose of the Up-MACRO Holding Trust. The
Up-MACRO Holding Trust shall not engage in any business or activity other than
those 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.
20
(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.
21
(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,
22
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, as instructed by the
Administrative Agent, and each Authorized Participant, in the case of a Paired
Subsequent Issuance or Paired Optional Redemption of MACRO Units. 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.
23
(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 Administrative Agent shall
inquire of each such DTC Participant as to the number of Beneficial Owners
holding Up-MACRO Holding Shares, directly or indirectly, through such DTC
Participant. The Administrative Agent shall provide each such DTC Participant
with sufficient copies of such notice, statement or other communication, in such
form, number and at such place as such DTC Participant may reasonably request,
in order that such notice, statement or communication may be transmitted by such
DTC Participant, directly or indirectly, to such Beneficial Owners. In addition,
the Up-MACRO Holding Trust shall 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
24
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 an 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.
Each Certificate of an 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 held by the Up-MACRO Holding Trust as treasury
stock in the Treasury Stock Account.
(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, the Trustee shall issue and deliver
additional Up-MACRO Holding Shares (using, first, any treasury stock it has on
deposit in the Treasury Stock Account) contemporaneously with the issuance of
additional Down-MACRO Holding Shares in the form of MACRO Units (such an
issuance, a "Paired Subsequent Issuance") following the receipt of, and in
accordance with, a Creation Order delivered by an Authorized Participant and
forwarded to the Trustee by the Administrative Agent. As provided in the
Participants Agreement, a Paired
25
Subsequent Issuance may be made only upon the direction of one or more
Authorized Participants delivered in the form of a Creation Order to the
Administrative Agent on any 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 number of MACRO Units composed of Paired
Holding Shares to be issued and (v) the number and type of Holding Shares to be,
concurrently, exchanged to their related tradeable shares. 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 Up-MACRO
Per Share Underlying Value of the Up-MACRO Holding Shares being created by that
Authorized Participant, plus (ii) the Down-MACRO Per Share Underlying Value of
the Down-MACRO Holding Shares being created by that Authorized Participant, plus
(iii) non-refundable transaction fee as provided below. 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,
or if so requested, not later than 3:00 p.m. New York City Time on the third
Business Day after the Subsequent Issuance Date, the applicable Tradeable
Shares, in lieu of all, or part, of the Paired Holding Shares issued.
(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 Creation Orders from Authorized Participants that have executed a
Participants Agreement that is in full force and effect at the time when a
Creation Order is placed. The Administrative Agent will maintain and make
available at its Corporate Trust Office 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.I 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 insofar as
they relate to the procedures for effecting Paired Optional Redemptions and
Paired Subsequent Issuances.
(c) Concurrently with Paired Subsequent Issuances,
the Trustee, acting together with the Down-MACRO Holding Trustee, each on behalf
of their respective Paired Holding Trust, shall adjust, on a Net Daily Basis (as
defined in the Participants Agreement) the aggregate amount of the Income
Distribution Agreement and enter into additional Settlement Contracts, if a Net
Par Amount Increase occurred on that day, calculated based upon the number of
MACRO Units specified in the Creation Orders and the number of MACRO Units
specified in any Redemption Order, if applicable, delivered on the same day.
Each amendment to the Income Distribution Agreement shall be
in the form of Exhibit B hereto and each Settlement Contract shall be in the
form of Exhibit C hereto and shall constitute an additional confirmation to the
Master Agreement. The original, executed Income
26
Distribution Agreement, each amendment thereto and each original, executed
Settlement Contract shall be maintained by the Trustee among the books and
records of the Up-MACRO Holding Trust.
(d) The Administrative Agent shall have the absolute
right, but shall have no obligation, to reject any Creation Order (i) if the
Trustee determines that the Authorized Participant directing the Paired
Subsequent Issuance has not deposited sufficient funds with the Trustee, (ii) if
the Depositor determines, based upon an opinion of counsel, that such Creation
Order would have adverse tax or securities law consequences for either of the
Paired Holding Trusts 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
the Creation Order for additional Down-MACRO Holding Shares made in connection
with such issuance has been or will be rejected by it, by the Depositor or by
the Administrative Agent for the Down-MACRO Holding Trust, 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 Creation Order.
(e) The Administrative Agent may, in its discretion,
and will when so directed by the Depositor, suspend the right of creation of any
Up-MACRO Holding Shares:
(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 cash and/or the Treasuries is not reasonably practicable;
(iii) for any period during which, such
creation will cause the Up-MACRO Tradeable Trust to hold fifty percent
or less of the outstanding Up-MACRO Holding Shares; and
(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.
(f) A non-refundable transaction fee will be payable
to the Trustee for its own account in connection with each Creation Order in the
amount specified in Section 7 of the Participants Agreement.
(g) Only global Certificates will be issued to the
Depository, and retained by the Trustee, as custodian for 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
27
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.
(h) In the event that a Creation Order has been
cancelled, in connection with which the Up-MACRO Holding Trust incurred expenses
not payable by an Authorized Participant, the Trustee will incur such expenses
and will be reimbursed by the Up-MACRO Holding Trust pursuant to Section 3.1(c)
herein.
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) Investors Bank & Trust Company 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 Investors Bank & Trust Company
acting as Trustee under this Trust Agreement and as trustee for the Down-MACRO
Holding Trust under the Down-MACRO Holding Trust Agreement.
(b) Without limiting the generality of the foregoing,
the Trustee is hereby authorized, instructed and empowered (i) to make
withdrawals and payments or to instruct any paying agent or custodian appointed
by the Trustee to make withdrawals and payments from the Securities Account 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, the
Depositor shall make all filings with the SEC and under state securities laws on
behalf of the Up-MACRO Holding Trust to the extent required to do so hereby.
(c) The Trustee shall be entitled to be reimbursed
for any expenses incurred by it, with the prior approval of the Depositor or the
Administrative Agent, in connection with the performance of its duties under
this Trust Agreement, including, without limitation, the
28
fees and disbursements of any custodian, Transfer Agent and Registrar, the fees
and expenses of its legal counsel, the fees and disbursements of independent
accountants, the expenses associated with the cancellation of an order under the
Participants Agreement 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 and/or the Up-MACRO Tradeable Shares on
any stock exchange. If so instructed by the Depositor or the Administrative
Agent, the Trustee shall expend its own funds on behalf of the Up-MACRO Holding
Trust and shall be reimbursed therefor on the next scheduled Distribution
Payment Date.
Section 3.2 Representations, Warranties and Covenants of the
Trustee. Investors Bank & Trust Company, in its capacity as initial Trustee
under this Trust Agreement, hereby makes, and any successor Trustee by its
appointment hereunder shall make, on the Closing Date (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 Commonwealth of Massachusetts (or with respect to any
successor Trustee, under the laws of the applicable jurisdiction of
organization), and has full trust power, authority and legal right to execute,
deliver and perform its obligations under this Trust Agreement and, in all
material respects, to own its properties and conduct its business as such
properties are presently owned and as such business is presently conducted.
(b) Due Qualification. The Trustee is duly qualified
to do business and is in good standing as a foreign trust company (or is exempt
from such requirements), and has obtained all necessary licenses and approvals
in each jurisdiction in which failure to so qualify or to obtain such licenses
and approvals would have a material adverse effect on the interests of the
Holders of the Up-MACRO Holding Shares hereunder.
(c) Due Authorization. The execution, delivery, and
performance of this Trust Agreement has been duly authorized by the Trustee by
all necessary trust action on the part of the Trustee.
(d) Binding Obligation. This Trust Agreement
constitutes a legal, valid and binding obligation of the Trustee, enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect, affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this
Trust Agreement by the Trustee, the performance of the transactions contemplated
by this Trust Agreement and the fulfillment of the terms hereof applicable to
the Trustee, will not conflict with, violate, result in any breach of any of the
material terms and provisions of, or constitute (with or without notice or lapse
of time or both) a material default under, any Requirement of Law applicable to
the Trustee or any indenture, contract, agreement, mortgage, deed of trust or
other instrument to which the Trustee is a party or by which it or any of its
properties are bound.
29
(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 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) Claymore Securities, Inc. agrees to act as
Administrative Agent under this Agreement and the Holders of the Up-MACRO
Holding Shares by their acceptance of their shares consent to Claymore
Securities, Inc. acting as Administrative Agent under this Trust Agreement and
as administrative agent for the Down-MACRO Holding Trust under the Down-MACRO
Holding Trust Agreement.
(b) The Administrative Agent shall administer the
Treasuries and direct the Trustee (i) in investing the proceeds from such
Treasuries and the proceeds of the creation of new Up-MACRO Holding Shares in
Paired Subsequent Issuances and (ii) in selecting Treasuries and/or cash for
delivery to the Down-MACRO Holding Trust as settlement payments under the
Settlement Contracts and to shareholders as a Final Distribution in accordance
with the
30
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 Up-MACRO Holding Trust's ownership interest in
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) Claymore Securities, Inc. 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 Claymore
Securities, Inc. 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. Claymore Securities, Inc., 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):
31
(a) Organization and Good Standing. Each of the
Administrative Agent and the Marketing Agent is a Kansas corporation (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 Kansas (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
32
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
33
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 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)(iv), and (ii) 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 that is being effected on such Subsequent Issuance
Date and (iii) 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(c) and shall deliver such assets in the amounts and to the parties
entitled thereto, as specified in such Section 5.2(c).
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
34
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 and on each Business
Day on which funds are received by the Trustee in connection with a Paired
Subsequent Issuance, 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 U.S. Treasury obligations or in repurchase agreements in
U.S. Treasury obligations in accordance with the following "Acquisition
Guidelines":
(i) all Treasuries must mature on or prior
to the next scheduled Distribution Date;
(ii) no Treasury may be purchased at a
premium to its stated par amount; and
(iii) subject to the foregoing clauses (i)
and (ii), all funds shall be invested in:
(1) in the case that they are being
invested in U.S. Treasury obligations:
(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) or (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) or (C) are
35
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.
(2) in the case that they are being
invested in repurchase agreements in U.S. Treasury obligations,
repurchase agreements issued by [ ], and, to the extent that such
counterparty no longer has capacity, [ ], and, to the extent that
such counterparty no longer has capacity, [ ], and, to the extent
that such counterparty no longer has capacity, [ ], and, to the
extent that such counterparty no longer has capacity, [ ], and, to
the extent that such counterparty no longer has capacity, [ ];
provided, that the Administrative Agent may direct the acquisition of
repurchase agreements from each of the foregoing entities only to the
extent that such entities are, at the time of acquisition, either (x)
banks with at least $1 billion in capital or (y) registered securities
dealers deemed to be credit-worthy by the Administrative Agent.
(b) On each Distribution Date, the Administrative
Agent may, subject to, and in accordance with, the Acquisition Guidelines,
solicit offers from the three (3) largest nationally recognized dealer markets
in U.S. Treasury obligations. 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 and
Down-MACRO Available Income Accrual 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. Instead of or in addition to the foregoing acquisition of U.S. Treasury
obligations, the Administrative Agent may, on each Distribution Date, solicit
offers, in accordance with the Acquisition Guidelines, from the counterparties
designated in Section 3.7(a)(2) for U.S. Treasury repurchase arrangements and,
based upon the Administrative Agent's determination of the best offer price and
execution terms yielding the greatest Up-MACRO and Down-MACRO Available Income
Accrual, shall direct the Trustee to enter into repurchase arrangements with the
counterparty or counterparties who submitted such offers. All Treasuries
acquired as described above shall be allocated ratably 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 Business Day during any Calculation Period
when cash is available in the Securities Account or the Distribution Account for
reinvestment in Treasuries, (other than the last Business Day prior to a
Distribution Date), the Administrative Agent shall provide instructions to the
Trustee to purchase Eligible Treasuries maturing prior to the next scheduled
Distribution Date, in accordance with the Acquisition Guidelines set forth in
paragraph (a) of this Section 3.7.
(d) Without limiting the generality of Section 13.1
and Section 13.2, the Trustee shall not under any circumstances be held liable
under this Trust Agreement for any action it takes in accordance with directions
provided to it by the Administrative Agent under this Section 3.7 or for any
omission on the part of the Trustee to take any action in the absence of
receiving instructions from the Administrative Agent pursuant to 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
36
designation that the funds deposited therein are held for the benefit of the
Depositor (the "Fee Payment Account").
(b) The Fee Payment Account shall initially be
established with the Trustee. The Trustee shall possess all right, title and
interest in and to all funds on deposit from time to time in the Fee Payment
Account and in all proceeds thereof. The Fee Payment Account shall be under the
sole dominion and control of the Trustee for the benefit of the Depositor.
(c) On each Distribution Date, the Trustee shall
deposit an amount equal to the Up-MACRO Fee Deduction Amount into the Fee
Payment Account and shall use such funds, based on standing instructions from
the Depositor, to pay all Up-MACRO Expenses and all Up-MACRO Fees pursuant to
priorities first and second of Section 5.2(a) on the related Distribution
Payment Date.
(d) On each Distribution Payment Date, all funds
remaining on deposit in the Fee Payment Account after the Up-MACRO Expenses and
Up-MACRO Fees have been paid in full shall be delivered by the Trustee to the
Depositor.
ARTICLE IV
CALCULATIONS
------------
Section 4.1 Calculations on Price Determination Days.
(a) With respect to each Price Determination Day, the
Trustee shall calculate and provide to the Administrative Agent and the
Calculation Agent not later than 5:00 p.m. New York City Time on the preceding
day:
(i) the Up-MACRO Investment Amount for that
Price Determination Date;
(ii) the Up-MACRO Available Income Accrual
for the previous day;
(iii) the Up-MACRO Earned Income Accrual for
the previous day;
(iv) the Up-MACRO Daily Fee Accrual for that
Price Determination Date;
(v) the Up-MACRO Asset Amount for that Price
Determination Date; and
(vi) the Price Level Percentage Change for
the preceding day and the Up-MACRO Underlying Value for the preceding
day 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 day,
and (B) one Up-MACRO Tradeable Share, calculated by dividing (1) the
product of (x) the number of Up-MACRO Holding Shares held by the
Up-MACRO Tradeable Trust on such day and (y) the quotient calculated in
the foregoing subclause (A)
37
by (2) the number of Up-MACRO Tradeable Shares that are outstanding on
such day. The calculations in clauses (ii) and (v) for any day that was
not a Price Determination Day shall be made using the Applicable
Reference Price of Crude Oil on the last preceding Price Determination
Day.
(b) The Trustee 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, and (ii) its own
calculations of the Down-MACRO Asset Amount pursuant to Section 4.1 of the
Down-MACRO Holding Trust Agreement.
For purposes of calculating the foregoing amounts, any Paired
Optional Redemptions or Paired Subsequent Issuances scheduled to settle on the
relevant Price Determination Day shall be taken into account.
(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 Oil Price Provider, the Trustee shall calculate and provide to the
Administrative Agent (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) The Trustee's calculations, pursuant to clauses
(a) through (c) of this Section 4.1 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.
Intraday indicative values for the Underlying Value of the
Up-MACRO Holding Trust based on the intraday trading prices of the Applicable
Reference Price of Crude Oil will be calculated by the Calculation Agent under
the Calculation Agency Agreement.
Section 4.3 Calculation of Income Distribution Payments and
Settlement Payments.
(a) Prior to each Distribution Date, the Trustee
shall calculate the Up-MACRO Income Distribution Payment, if any, that the
Up-MACRO Holding Trust is required to make to the Down-MACRO Holding Trust on
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 Business Day preceding the Final Scheduled
Termination Date, any Early Termination Date and the New York Business Day on
which a Paired Optional Redemption settles, assuming that the Applicable
Reference Price of Crude Oil has been established by the NYMEX or the applicable
Substitute Oil Price Provider on the last Price Determination Day preceding such
Final Scheduled Termination Date or Early Termination Date or on the applicable
Redemption Date, the Trustee shall calculate and provide to the Administrative
Agent (i) the Up-MACRO Settlement Payment, if any, required to be made by the
Up-MACRO Holding Trust to the Down-MACRO Holding Trust under the Settlement
Contracts
38
that are being settled in connection with 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 in
connection with such Final Scheduled Termination Date, Early Termination Date or
Redemption Date.
Section 4.4 Calculations Relating to Paired Subsequent
Issuances and Paired Optional Redemptions. The Trustee shall confirm the
Administrative Agent's determination of the Redemption Cash Component, if any,
that must be delivered by the redeeming Authorized Participants in connection
with each Paired Optional Redemption. The Trustee's determination of the
Redemption Cash Component, if any, required for each Paired Optional Redemption
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
allocate the amounts on deposit in the Distribution Account, including without
limitation amounts deposited therein pursuant to Section 5.5(b) and Section
5.6(b), in accordance with the following priority of payments:
(i) first, for deposit of an amount equal to
the Up-MACRO Fee Deposit into the Fee Payment Account for application
to the payment of Up-MACRO Expenses incurred during the preceding
Calculation Period;
(ii) second, the amount remaining in the Fee
Payment Account after the payment of Up-MACRO Expenses, for the payment
of the Up-MACRO Fees incurred during the preceding Calculation Period
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, to
segregate funds in an amount equal to the product of (A) all funds
remaining after satisfying priorities first and second of this Section
5.2(a) and (B) the applicable Up-MACRO Redemption Percentage for such
Redemption Date, for application of such funds (A) to make the Up-MACRO
Settlement Payment to the Down-MACRO Holding Trust if any such payment
is owed under the Settlement Contracts being settled on such date and
then (B) to make a Final Distribution to the Holders of the Up-MACRO
Holding Shares being redeemed on such date;
39
(iv) fourth, for reinvestment in Treasuries
of an amount equal to the lesser of (x) the Up-MACRO Aggregate Par
Amount on such Distribution Date (after deducting an amount equal to
the Aggregate Par Amount of the Up-MACRO Holding Shares being redeemed
on such Distribution Date), and (y) all funds remaining after
satisfying priorities first through third of this Section 5.2(a);
(v) fifth, for making the Up-MACRO Income
Distribution Payment to the Down-MACRO Holding Trust, if such a payment
is due under the Income Distribution Agreement; and
(vi) sixth, for distribution as the
Quarterly Distribution on the Distribution Payment Date that follows
such Distribution Date all funds that are remaining after satisfying
priorities first through fifth of this Section 5.2(a) to those
shareholders who are registered Holders of the Up-MACRO Holding Shares
on the related Record Date.
(b) Distributions on Distribution Payment Dates. On
the settlement date for a Paired Optional Redemption directed on a Distribution
Date, the Trustee shall distribute to the Holders of the Up-MACRO Holding Shares
the Final Distribution provided for under priority third of clause (a) above in
cash and, on the Distribution Payment Date that follows each Distribution Date,
the Trustee shall distribute to the Holders of the Up-MACRO Holding Shares who
were registered holders on the related Record Date the Quarterly Distribution
provided for under priority sixth of clause (a) above in cash.
(c) Distributions on Redemption Dates that are not
Distribution Dates. With respect to each Redemption 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 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 Payment
Date, the Trustee, on behalf of the Up-MACRO Holding Trust, shall apply funds on
deposit in the Fee Payment Account to pay the following expenses (such expenses,
the "Up-MACRO Expenses"):
(i) taxes, and any other governmental
charges;
(ii) to the Administrative Agent, the
expenses of negotiating the purchase of Treasuries and, to the Trustee,
the expenses of settling the purchase of the Treasuries in each case,
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 and Paired Subsequent Issuances);
40
(iii) any taxes, fees and charges relating
to each 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 creation 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 pursuant to Section 15.2 hereof
and Section 2.4 of the Up-MACRO Tradeable Trust Agreement;
(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
(including but not limited to, associated legal, auditing, underwriting
and rating agency costs); and
(vii) any other expenses of the Up-MACRO
Holding Trust or the Up-MACRO Tradeable Trust not otherwise described
above which are incurred by either trust, or on behalf of either trust
by the Depositor, the Trustee, the Up-MACRO Tradeable Trustee, 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 recording all expenses
incurred by it on behalf of, or in the course of, administering the Up-MACRO
Holding Trust.
To the extent that the funds on deposit in the Fee Payment
Account are insufficient to pay in full all of the Up-MACRO Expenses, such funds
shall be applied first, to pay all taxes payable by the Up-MACRO Holding and
Tradeable Trusts and, thereafter, shall be applied ratably to pay all other
expenses. The Depositor shall pay the unpaid portion of any of the Up-MACRO
Expenses on behalf of the Up-MACRO Holding and Tradeable Trusts.
Section 5.4 Payment of Fees. On each Distribution Payment
Date, after all Up-MACRO Expenses have been paid, the Trustee, on behalf of the
Up-MACRO Holding Trust, shall apply 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 MACRO Licensing
Fee for the preceding Calculation Period;
41
(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; and
(vi) fees payable to any other entities
which provide services to the Up-MACRO Holding Trust or the Up-MACRO
Tradeable Trust.
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 on behalf of
the Up-MACRO Holding Trust by the Depositor.
To the extent any funds remain on deposit in the Fee Payment
Account after payment of all Up-MACRO Expenses and Up-MACRO Fees on any
Distribution Payment Date, such funds will be delivered on such date to the
Depositor.
Section 5.5 Payments under the Income Distribution Agreement.
(a) On each Distribution Payment Date, in accordance
with priority fifth of Section 5.2(a) and the terms of the Income Distribution
Agreement, the Up-MACRO Holding Trust shall pay to the Down-MACRO Holding Trust
the Up-MACRO Income Distribution Payment, if any, 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 Payment 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, on the related Distribution Payment Date, cause
the Up-MACRO Holding Trust to make the Up-MACRO Settlement Payment, if any, to
the Down-MACRO Holding Trust from amounts on deposit in the Distribution
Account. On any Redemption Date occurring on any day other than a Distribution
Date, the Trustee, as instructed by the Administrative Agent, shall cause the
Up-MACRO Holding Trust to deliver Treasuries in accordance with Section 5.2(c)
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.
42
ARTICLE VI
REDEMPTIONS OF THE UP-MACRO HOLDING SHARES
------------------------------------------
Section 6.1 Paired Optional Redemptions.
(a) On any Business Day, up to the last Business Day
preceding the Final Scheduled Termination Date, one or more Authorized
Participants may direct the redemption of Paired Holding Shares by delivering a
Redemption Order to 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 and/or the Up-MACRO
and/or Down-MACRO Tradeable Shares which are being tendered for redemption, as
shown on the records of the Depository.
(b) To effectuate a Paired Optional Redemption, the
redeeming Authorized Participants 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,
which shall be the Light Sweet Crude Oil Futures Contract unless and until a
Substitute Reference Oil Price is selected by the Depositor and the
Administrative Agent or the shareholders.
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 or the requisite number of
Tradeable Shares and Holding Shares which together, upon the exchange of the
Tradeable Shares to their related Holding Shares will constitute 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.
(c) The Trustee or the Administrative Agent may
reject any Redemption Order (i) if the Administrative Agent determines that the
Redemption Order is not in proper form, (ii) if Paired Holding Shares and/or
Up-MACRO and/or Down-MACRO Tradeable Shares in a sufficient number to constitute
one or more whole MACRO Units are not tendered to the Trustee for redemption,
(iii) if the Depositor has determined, based upon an opinion of counsel, and
advised the Trustee that such Redemption Order would have adverse tax
consequences to the Up-MACRO Holding Trust, (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) the Down-MACRO Holding Trustee has notified the Trustee
that it has rejected the related Redemption Order or the related Exchange Order
delivered under the Down-MACRO Holding Trust Agreement for one of the reasons
described in Section 6.1(c) of the Down-MACRO Holding Trust Agreement. None of
the Trustee, the Depositor or the Administrative Agent shall be liable to any
Person for rejecting a Redemption Order or an Exchange Order pursuant to this
Section 6.1(c).
(d) If the Redemption Date on which a Paired Optional
Redemption was directed is not a Distribution Date, the Administrative Agent
shall perform the following
43
calculations deliver the following instructions with respect to the Treasuries,
employing "last in, first out" methodology:
(i) identify the Treasuries on deposit in
the Up-MACRO Holding Trust that are the most recently-acquired
Treasuries with a Value equal to the product of the Up-MACRO Redemption
Percentage and the Up-MACRO Asset Amount;
(ii) (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 with respect to 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
(iii) 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.
The Treasuries selected by the Administrative Agent to be delivered as the Final
Distribution in a Paired Optional Redemption shall be distributed ratably, by
type, to each redeeming Authorized Participant.
(e) A non-refundable transaction fee will be payable
to the Trustee for its own account in connection with each Redemption Order and
Exchange Order in the amount specified in Section 7 of the Participants
Agreement.
Section 6.2 Cancellation of a Redemption Order. In the event
that a Redemption Order has been cancelled, in connection with which the
Up-MACRO Holding Trust incurred expenses not payable by an Authorized
Participant, the Trustee will incur such expenses and will be reimbursed by the
Up-MACRO Holding Trust as provided in Section 3.1(c) herein.
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 11.1, or the Final Scheduled
Termination Date, the Trustee shall redeem all of the Up-MACRO Holding Shares
that are Outstanding on such Distribution Date at their Up-MACRO Per Share
Underlying Value, 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 and
Adjustment to the Aggregate Amount of the Income Distribution Agreement.
Concurrently with Paired Optional Redemptions, the Trustee, acting together with
the Down-MACRO Holding Trustee, each on
44
behalf of their respective Paired Holding Trust, shall adjust, on a Net Daily
Basis (as defined in the Participants Agreement) the aggregate amount of the
Income Distribution Agreement and enter into additional Settlement Contracts, if
a Net Par Decrease occurred on that day, calculated based upon the number of
MACRO Units specified in the related Redemption Orders and the number of MACRO
Units specified in any Creation Orders delivered on the same day.
Section 6.5 Settlement.
(a) By 10:00 a.m. New York City Time on the Business
Day following the Final Scheduled Termination Date or applicable Redemption
Date, if the Trustee's account at the Depository has been credited with the
Paired Holding Shares, the Tradeable Shares or both, as applicable, being
tendered for redemption, the Administrative Agent has received the electronic
confirmation of such tender, and the Trustee has received the transaction fee as
provided in Section 7 of the Authorized Participants Agreement and the
Redemption Cash Component, if applicable, payable by the redeeming Authorized
Participants in accordance with Section 2.6(e) and Section 6.1(d)(ii),
respectively, the Trustee shall deliver:
(i) if the relevant Redemption Date was 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) in the case of the Final Scheduled
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 Administrative Agent may, in its discretion,
and will when so directed by the Depositor, suspend the right of redemption, or
postpone the date of settlement for any redemption of Up-MACRO Holding Shares:
(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 any period during which, such
redemption will cause the Up-MACRO Tradeable Trust to hold fifty
percent or less of the outstanding Up-MACRO Holding Shares; and
45
(v) 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 shall be cancelled by the Trustee, on behalf of the
Up-MACRO Holding Trust, in accordance with the procedures of the Depository.
(d) In the event that the provisions of this Trust
Agreement and the Participants Agreement conflict in any way, the provisions of
the Participants Agreement will prevail insofar as they relate to a Paired
Optional Redemption or a Paired Subsequent Issuances.
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 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).
46
(b) Except pursuant to the Regulatory Allocations set
forth in Section 7.3, or as otherwise provided in this Trust Agreement, Net
Profit and Net Loss (and items of each) of the Up-MACRO Holding Trust shall be
provisionally allocated as of the end of each day among the Holders in a manner
such that the Capital Account of each Holder immediately after giving effect to
such allocation, is, as nearly as possible, equal (proportionately) to the
amount equal to the distributions that would be made to such Holder 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 Sections 1.704-1(b)(2)(iv)(f) and (g) of the
Regulations.
(d) In determining the amount of any liability for
purposes of this Section 7.2, there shall be taken into account Section 752 of
the Code and any other applicable provisions of the Code and any Regulations
promulgated thereunder.
(e) Notwithstanding any other provision of this Trust
Agreement to the contrary, the provisions of this Section 7.2 regarding the
maintenance of Capital Accounts shall be construed so as to comply with the
provisions of the Code and any Regulations thereunder. The Depositor in its sole
and absolute discretion and whose determination shall be
47
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's Capital Account would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Trust Agreement have
been tentatively made as if this Section 7.3(c) were not in this Trust
Agreement. This Section 7.3(c) is intended to constitute a "qualified income
offset" within the meaning of Regulations Section 1.704-1 and shall be
interpreted consistently therewith.
48
(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
49
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 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
50
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
51
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 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 made on such
day and any decrease due to any distributions or redemptions made on such day.
52
(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 Applicable Reference
Price of Crude Oil, 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, [NASD] 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-
53
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 and the
Down-MACRO Daily Fee Accrual on that Distribution Date;
(vi) the Up-MACRO Earned Income Accrual and
the Down-MACRO Earned Income Accrual 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 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;
(xii) the net increase or decrease in the
Up-MACRO Aggregate Par Amount and the Down-MACRO Aggregate Par Amount;
(xiii) 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
(xiv) if such Distribution Date is a
Redemption Date, the Up-MACRO Redemption Percentage and the Down-MACRO
Redemption Percentage.
54
On or before the fifth Business Day after each Distribution
Date, the Trustee will furnish to each Person who was a registered Holder at any
time during the current calendar year a statement containing the information set
forth above. The Trustee will also furnish to each registered 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 [Administrative Agent] pursuant to Section
13.1(ix).
(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 reports shall be
prepared separately from any other reports prepared by the [Depositor] 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
Depositor shall file a Form 8-K with the SEC disclosing the occurrence of:
(i) a Trustee Termination Event;
55
(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 or a successor Down-MACRO Holding Trustee;
(vi) the occurrence of a Termination
Trigger;
(vii) an amendment to this Trust Agreement,
the Up-MACRO Tradeable Trust Agreement, the Down-MACRO Holding Trust
Agreement or the Participants Agreement, which amendment would have a
material adverse effect on the rights of the Holders;
(viii) at the sole discretion of the
Depositor, a change to the list of Authorized Participants set forth on
Schedule I to the Participants Agreement; and
(ix) any other event that would be material
to the Holders of the Up-MACRO Holding Shares or notices that the
Trustee must deliver in accordance with the provisions of this Trust
Agreement.
Section 8.3 Listing and De-Listing of the Up-MACRO Holding
Shares. The Depositor shall use its best efforts to obtain and maintain the
listing of the Up-MACRO Holding Shares and the Up-MACRO Tradeable Shares on a
national stock exchange. Within three (3) Business Days following receipt of
notice of any actual, proposed or contemplated de-listing of such Up-MACRO
Holding Shares by any such stock exchange, the Depositor shall terminate any
listing on any such stock exchange.
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 and
Claymore Securities, Inc.. None of the Depositor, Claymore Securities, Inc. or
any of their respective directors, officers, employees or agents acting in such
capacities shall be under any liability to the Up-MACRO Holding Trust, the
Trustee, the Holders of the Up-MACRO Holding Shares, the Down-MACRO Holding
Trust, the Down-MACRO Holding Trustee, the Holders of the Down-MACRO Holding
Shares or any other Person for taking any action or for refraining from taking
any action in good faith in their capacities as Depositor, Administrative Agent
or Marketing Agent, as applicable, pursuant to this Trust Agreement; provided,
however, that this provision shall not protect the Depositor, Claymore
Securities, Inc. or any of their respective directors,
56
officers, employees or agents against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder. The Depositor, Claymore Securities, Inc. and each of their
respective directors, officers, employees and agents may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person (other than, in the case of the Depositor, the Depositor and, in the case
of Claymore Securities, Inc., Claymore Securities, Inc.) respecting any matters
arising hereunder.
Section 9.3 Liabilities; Indemnification.
(a) Notwithstanding the other provisions of this
Trust Agreement, the Depositor, by entering into this Trust Agreement, agrees to
be liable, directly to the injured party, for the entire amount of any losses,
claims, damages or liabilities (other than those incurred by a Holder as a
result of the performance of the Treasuries, market fluctuations or other
similar market or investment risks associated with ownership of the Up-MACRO
Holding Shares) arising out of or based on the arrangement created by this Trust
Agreement or the actions of the Depositor taken pursuant hereto or arising from
any allegation of infringement of the intellectual property rights of third
parties (to the extent that, if the Trust Assets at the time the claim is made
were not used to pay in full all Outstanding Up-MACRO Holding Shares, the Trust
Assets would be used to pay any such losses, claims, damages or liabilities). 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 including, without limitation, any
action, proceeding or claim relating to or arising from any alleged infringement
of intellectual property rights of third parties; provided, however, that the
Depositor's duty to indemnify under this Section 9.3(b) shall not extend to any
Losses (i) for which the Trustee has a right to indemnification under any other
provision of this Trust Agreement, or (ii) that are caused by or 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
57
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, 3.5, 3.6, 3.7, 4.1, 4.2, 4.3, 4.4, 5.2, 6.1,
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-
58
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
-----------------
Section 11.1 Termination Triggers.
(a) The Up-MACRO Holding Trust shall terminate if any
one of the following events (each, a "Termination Trigger") occurs:
(i) any of the following circumstances
persists for five (5) consecutive Business Days: (i) the Applicable
Reference Price of Crude Oil is not established by NYMEX or the
Substitute Oil Price Provider; (ii) NYMEX or such Substitute Oil Price
Provider refuses to make that price available to the Administrative
Agent for the purpose of calculating the Up-
59
MACRO Underlying Value; or (iii)(a) NYMEX terminates the NYMEX License
and the Depositor and MacroMarkets LLC are unable to enter into a
Substitute Index Licensing Agreement with the Dow ▇▇▇▇▇ Energy Service
or (b) in the event that the Depositor and MacroMarkets LLC have
already entered into a Substitute Index Licensing Agreement, the
Substitute Oil Price Provider which is a party to such agreement
terminates that license and, in the case of either (a) or (b), the
shareholders do not select a Substitute Oil Price Provider or the
Depositor and MacroMarkets LLC are unable to enter into a Substitute
Index Licensing Agreement with the Substitute Oil Price Provider that
was selected by the shareholders;
(ii) the Applicable Reference Price of Crude
Oil rises to or above $[ ] or falls to or below $[ ] and, in either
case, remains at that level for three consecutive Price Determination
Days;
(iii) any of the Up-MACRO Holding Trust, the
Down-MACRO Holding Trust, the Up-MACRO Tradeable Trust or the
Down-MACRO Tradeable Trust becomes 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) 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 shall make a Final Distribution on all
Outstanding Up-MACRO Holding Shares being redeemed, as set forth in Section 5.2.
Upon
60
receipt of this Final Distribution, all Outstanding Up-MACRO Holding Shares
shall be deemed to be redeemed in full.
(c) The Trustee, upon obtaining knowledge or
receiving notice of the occurrence of a Termination Trigger described in
subclause (a)(iii), (iv) or (v) of this Section 11.1, or the Administrative
Agent, upon obtaining knowledge or receiving notice of the occurrence of a
Termination Trigger described in subclause (a)(i) or (ii) of this Section 11.1,
will give prompt notice of that event to the Depositor, the Administrative Agent
or the Trustee, as applicable, to 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 five (5) 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 five (5) or more Business
Days;
(c) to the extent that funds are available in the
Up-MACRO Holding Trust, any failure by the Trustee to make any payment required
to be made under the Income Distribution Agreement or the Settlement Contracts;
(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.
61
Section 12.2 Force Majeure. Notwithstanding the foregoing, any
delay in or failure of performance under Section 12.1 shall not constitute a
Trustee Termination Event if such delay or failure could not be prevented by the
exercise of reasonable diligence by the Trustee and such delay or failure was
caused by an act of God or the public enemy, terrorism, acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Trustee from the obligation to use its
best efforts to perform its obligations in a timely manner in accordance with
the terms of this Trust Agreement and the Trustee shall provide the Depositor
with immediate notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
Section 12.3 Notification to Holders of the Up-MACRO Holding
Shares. Within two (2) Business Days after the Administrative Agent becoming
aware of any Trustee Termination Event, the Administrative Agent or the Trustee
obtaining actual knowledge of any Trustee Termination Event, shall give notice
thereof to the Depositor, or the Trustee obtaining actual knowledge of any
Trustee Termination Event, the Administrative Agent or the Trustee, as
applicable, 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) preparing and delivering any notices
required hereunder;
62
(ix) preparing and distributing reports to
the Holders of the Up-MACRO Holding Shares; and
(x) performing all of the other obligations
required of it under this Trust Agreement and the other Transaction
Documents.
(b) The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments that are specifically required to be furnished to the Trustee
pursuant to any provision hereof, shall examine them to determine whether they
conform on their face to the requirements of this Trust Agreement. The Trustee
shall give prompt written notice to the 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 grossly negligent in
ascertaining the pertinent facts; and
(ii) the Trustee shall not be personally
liable with respect to any action taken, suffered or omitted by it in
good faith and in accordance with the direction of the Administrative
Agent, the Depositor, the Calculation Agent or 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, with
respect to Holders, 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 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
63
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
64
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, and willful misconduct on the part of such Trustee
Indemnified Party and (ii) reckless disregard on the part of such Trustee
Indemnified Party of its obligations and duties under this Trust Agreement, or
(b) that arises out of or is related to any filings with or submissions to the
SEC in connection with or with respect to the Up-MACRO Holding Shares (which, by
way of illustration and not by way of limitation, include 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 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.
65
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 anything that
occurs after it has ceased to act in such capacity, including, without
limitation, the acts or omissions to act of any Successor Trustee.
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.
66
(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
67
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 Corporate
Trust Office or such office as it may subsequently designate upon notice to the
other parties hereto. The books and records of the Administrative Agent
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 Administrative Agent shall keep proper record of the
creation of the MACRO Units and redemption of MACRO Units at its Corporate Trust
Office. Such records shall be open to inspection upon reasonable advance notice
at all reasonable times during the usual business hours of the Administrative
Agent. 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.
68
(c) The [Depositor] shall prepare or cause to be
prepared, and the Trustee shall sign (if it is determined that the Trustee's
signature is required thereon) and file any tax returns required to be filed by
the Up-MACRO Holding Trust. The [Depositor] shall also prepare or cause to be
prepared all tax information required by law to be distributed to Holders of the
Up-MACRO Holding Shares. The Trustee, the Calculation Agent and the Depositor,
upon request, shall each furnish the [Depositor] with any information known to
it that may be reasonably required in connection with the preparation of such
duties set forth in the preceding two sentences.
(d) In no event shall the Trustee, the Depositor or
the Administrative Agent be personally liable for any taxes or other
governmental charges imposed upon or in respect of the Up-MACRO Holding Shares,
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 Trust. The report of
such accountants shall be furnished by the [Administrative Agent] 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 designation 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.
(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
70
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 the Depositor
shall 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 (or amend the existing 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 and the Administrative Agent 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 and the Administrative Agent from time to time with copies, including
copies in electronic form, of the Prospectus, in such quantities as the Trustee
and the Administrative Agent may reasonably request, (iv) prepare and file any
periodic reports or updates that may be required under the Exchange Act, and (v)
take such action as is necessary
71
from time to time to register or qualify the Up-MACRO Holding Shares for
offering and sale under the securities or blue sky laws of those states of the
United States or other jurisdictions as the Depositor may select or as may be
necessary to continue that registration or qualification in effect for so long
as the Depositor determines that the Up-MACRO Holding Trust shall continue to
offer or sell Up-MACRO Holding Shares in that jurisdiction. Registration
charges, blue sky fees, printing costs, mailing costs, attorney's fees, and
other miscellaneous out-of-pocket expenses shall be borne by the Up-MACRO
Holding Trust in the manner provided for in Section 5.3.
Section 15.3 Prospectus Delivery. The Administrative Agent
shall, if required 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 Administrative Agent 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
72
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
73
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 Trust 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 in accordance with Section 5.4 hereof.
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: ( ) [ ]
74
If to the Trustee, to: Investors Bank & Trust Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: [ ]
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
If to the Administrative Agent, to: Claymore Securities, Inc.
[ADDRESS]
Attention: [ ]
Facsimile: ( ) [ ]
With a copy to: [ ]
Attention: [ ]
Facsimile: ( ) [ ]
If to the Marketing Agent, to: Claymore Securities, Inc.
[ADDRESS]
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
75
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.
76
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.
77
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:
INVESTORS BANK & TRUST COMPANY,
not in its individual capacity but solely as
Trustee
By
-----------------------------------------
Name:
Title:
CLAYMORE SECURITIES, INC.,
not in its individual capacity but solely as
Administrative Agent
By
-----------------------------------------
Name:
Title:
CLAYMORE SECURITIES, INC.,
not in its individual capacity but solely as
Marketing Agent
By
-----------------------------------------
Name:
Title:
Acknowledged and Accepted By:
INVESTORS BANK & TRUST COMPANY,
as Down-MACRO Holding Trustee
By
-----------------------------------------
Name:
Title:
EXHIBIT A
FORM OF UP-MACRO HOLDING SHARE
[TO COME]
EXHIBIT B
FORM OF INCOME DISTRIBUTION AGREEMENT
Filed as Exhibit 4.5 to this Registration Statement
EXHIBIT C
FORM OF SETTLEMENT CONTRACT
Filed as Exhibit 4.6 to this Registration Statement
EXHIBIT D
FORM OF PARTICIPANTS AGREEMENT
Filed as Exhibit 4.3 to this Registration Statement
EXHIBIT E
FORM OF MACRO LICENSING AGREEMENT
Filed as Exhibit 4.7 to this Registration Statement
EXHIBIT F
NYMEX SUBLICENSING AGREEMENT
Filed as Exhibit 4.8 to this Registration Statement
EXHIBIT G
FORM OF QUARTERLY SHAREHOLDER STATEMENT
[TO COME]