EXHIBIT 4.2
FORM OF
MACROSHARES DOWN OIL BENCHMARK
TRADEABLE TRUST AGREEMENT
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MACRO SECURITIES DEPOSITOR, LLC,
as Depositor
[ ]
not in its individual capacity, but solely as
Trustee,
and
[ ]
not in its individual capacity, but solely as Administrative Agent
MACROSHARES DOWN OIL BENCHMARK TRADEABLE TRUST
TRUST AGREEMENT
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TABLE OF CONTENTS
Page
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions...................................................................1
ARTICLE 2
CERTAIN RIGHTS OF HOLDERS
SECTION 2.1 Trust Indenture Act; Application.............................................10
SECTION 2.2 Lists of Holders of Down-MACRO Tradeable Shares..............................10
SECTION 2.3 Reports and Filings by the Trustee...........................................10
SECTION 2.4 Registration (Initial and Continuing) of the Down-MACRO
Tradeable Shares.............................................................11
ARTICLE 3
ORGANIZATION
SECTION 3.1 Name.........................................................................12
SECTION 3.2 Office.......................................................................12
SECTION 3.3 Nature and Purpose of the Trust..............................................12
SECTION 3.4 Authority....................................................................13
SECTION 3.5 Powers and Duties of the Trustee.............................................13
SECTION 3.6 Certain Responsibilities of the Trustee......................................15
SECTION 3.7 Certain Rights of the Trustee................................................15
SECTION 3.8 Prohibition of Actions by the Trust and the Trustee..........................17
SECTION 3.9 Execution of Documents.......................................................18
SECTION 3.10 No Representations of the Trustee............................................18
SECTION 3.11 Duration of Trust............................................................18
SECTION 3.12 Mergers......................................................................18
SECTION 3.13 Limitation on Directions to Trustee..........................................19
ARTICLE 4
THE DEPOSITOR
SECTION 4.1 Responsibilities of the Depositor............................................19
SECTION 4.2 Certain Matters Regarding a Successor Depositor..............................19
SECTION 4.3 Compensation of the Depositor................................................19
SECTION 4.4 Counsel......................................................................20
ARTICLE 5
THE TRUSTEE AND THE ADMINISTRATIVE AGENT
SECTION 5.1 Trustee; Eligibility.........................................................20
SECTION 5.2 Appointment, Removal and Resignation of Trustee..............................21
SECTION 5.3 Trustee's Delegation of Power................................................21
SECTION 5.4 The Trustee's Merger, Conversion, Consolidation or Succession to Business....22
SECTION 5.3 Books and Records, Taxes and Audits..........................................22
SECTION 5.4 Appointment, Removal and Resignation of the Administrative Agent.............22
SECTION 5.5 Administrative Agent's Delegation of Power...................................24
SECTION 5.6 Administrative Agent's Merger, Conversion, Consolidation or Succession to
Business of the Trustee......................................................24
ARTICLE 6
TERMS OF THE DOWN-MACRO TRADEABLE SHARES
SECTION 6.1 Authorization and Designation of Down-MACRO Tradeable Shares.................24
SECTION 6.2 Subsequent Issuances and Issuance of Creation Units..........................25
SECTION 6.3 Status of Down-MACRO Tradeable Shares........................................27
SECTION 6.4 CUSIP Numbers................................................................27
SECTION 6.5 Distributions................................................................27
SECTION 6.6 Exchange of Down-MACRO Tradeable Shares for Down-MACRO Holding Shares........28
ARTICLE 7
ACCOUNTING AND RECORDS
SECTION 7.1 Annual Tax Information.......................................................29
SECTION 7.2 Outside Advisors.............................................................30
SECTION 7.3 Certain Accounting Matters...................................................30
ARTICLE 8
DISSOLUTION AND TERMINATION;
LIQUIDATION; REDEMPTION; RECAPITALIZATION
SECTION 8.1 Dissolution and Termination of the Trust.....................................30
SECTION 8.2 Liquidation; Redemption......................................................30
SECTION 8.3 Recapitalization.............................................................31
ARTICLE 9
AUTHENTICATION AND TRANSFER OF DOWN-MACRO TRADEABLE SHARES
SECTION 9.1 Authentication and Transfer of Certificates..................................32
SECTION 9.2 Deemed Security Holders......................................................32
SECTION 9.3 Book Entry Interests.........................................................32
SECTION 9.4 Notices to Clearing Agency...................................................34
SECTION 9.5 Appointment of Authenticating Agent..........................................34
SECTION 9.6 Appointment of Successor Clearing Agency.....................................34
SECTION 9.7 Mutilated, Destroyed, Lost or Stolen Certificate.............................35
ARTICLE 10
LIMITATION OF LIABILITY OF HOLDERS,
THE DEPOSITOR, THE ADMINISTRATIVE AGENT, THE TRUSTEE OR OTHERS
SECTION 10.1 Liability....................................................................35
SECTION 10.2 Outside Businesses...........................................................36
ARTICLE 11
VOTING AND AMENDMENTS
SECTION 11.1 Voting.......................................................................36
SECTION 11.2 Amendments...................................................................37
SECTION 11.3 Other Matters................................................................38
ARTICLE 12
REPRESENTATIONS OF THE TRUSTEE AND THE
ADMINISTRATIVE AGENT
SECTION 12.1 Representations and Warranties of the Trustee................................39
SECTION 12.2 Representations and Warranties of the Administrative Agent...................41
ARTICLE 13
ESTABLISHMENT OF ACCOUNTS
SECTION 13.1 Securities Account.............................................................
SECTION 13.2 Distribution Account.........................................................43
ARTICLE 14
MISCELLANEOUS
SECTION 14.1 Notices......................................................................43
SECTION 14.2 Trust to be Administered as a Grantor Trust..................................45
SECTION 14.3 Non-Petition.................................................................45
SECTION 14.4 GOVERNING LAW................................................................45
SECTION 14.5 Change in Law................................................................45
SECTION 14.6 Headings.....................................................................46
SECTION 14.7 Successors and Assigns.......................................................46
SECTION 14.8 Partial Enforceability.......................................................46
SECTION 14.9 Counterparts.................................................................46
EXHIBIT A Form of Down-MACRO Tradeable Share
EXHIBIT B Form of Notice
SCHEDULE I Down-MACRO Tradeable Trust Accounts
MACROSHARES DOWN OIL BENCHMARK
TRADEABLE TRUST AGREEMENT
This Trust Agreement (as amended, modified or supplemented
from time to time, the "Trust Agreement") is dated as of [ ], 2006, among MACRO
SECURITIES DEPOSITOR, LLC, a Delaware limited liability company (the
"Depositor"), [ ], not in its individual capacity, but solely as trustee of the
trust created hereby (in its capacity as trustee, the "Trustee"), and [ ], not
in its individual capacity but solely as administrative agent (in such capacity,
the "Administrative Agent").
WHEREAS, the parties hereto desire to establish a trust for
the sole purpose of issuing and selling Down-MACRO Tradeable Shares (as defined
herein) representing undivided beneficial interests in the property of the Trust
(as defined herein) and investing the proceeds received from the sale of its
Down-MACRO Tradeable Shares in Down-MACRO Holding Shares (as defined herein);
and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a New York trust and that this Trust Agreement
constitute the governing instrument of such New York trust, the Trustee declares
that all assets contributed to the Trust will be held in trust for the benefit
of the Holders (as defined herein) of the Down-MACRO Tradeable Shares
representing undivided beneficial interests in the Trust Property (as defined
herein), subject to the provisions of this Trust Agreement.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions. Unless the context otherwise requires:
(a) capitalized terms used in this Trust Agreement have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Trust Agreement has the same
meaning throughout;
(c) all references to "the Trust Agreement" or "this Trust Agreement"
are to this Trust Agreement of the Trust as modified, supplemented or amended
from time to time, together with all Exhibits, each of which is incorporated
herein by reference;
(d) all references in this Trust Agreement to Articles, Sections,
Exhibits or Schedules are to Articles and Sections of, and Exhibits and
Schedules to, this Trust Agreement, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Trust Agreement unless otherwise defined in this Trust Agreement or
unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the following terms have the following meanings:
"Administrative Agent" means [ ], in its capacity as Administrative
Agent hereunder, and its successors and assigns.
"Affiliate" means, with respect to a specified Person, any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or otherwise; and the terms
"controlling", "controlled" and "under common control with" have meanings
correlative to the foregoing.
"Aggregate Par Amount" means, with respect to any Down-MACRO Tradeable
Share, Down-MACRO Holding Share or Up-MACRO Holding Share, an amount equal to
the number of such Down-MACRO Tradeable Shares, Up-MACRO Holding Shares or
Up-MACRO Holding Shares multiplied by the Stated Par Amount.
"AMEX" means the American Stock Exchange LLC and its successors and
assigns.
"Authenticating Agent" has the meaning set forth in Section 9.5 of this
Trust Agreement.
"Authorized Participant" mean the parties listed on Schedule I to the
Participants Agreement, as may be amended from time to time.
"Beneficial Owner" means, with respect to a Book Entry Interest, a
Person who is the beneficial owner of such Book Entry Interest, as reflected on
the books of the Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency Participant or
as an indirect participant, or in each case in accordance with the rules of such
Clearing Agency).
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as set forth in Section 9.3 of this
Trust Agreement.
"Business Day" means a day on which the AMEX is open for trading and
which is not a Saturday, Sunday or any other day on which banks in New York, New
York are authorized or obligated by law to close or are closed for business due
to an act of God, natural disaster, act of war, civil or military disturbance,
act of terrorism, sabotage, riots or a loss or malfunction of utilities or
communications services or the distribution payable on such date may not be paid
for any such reason.
"Calculation Agent" shall have the meaning set forth in the Down-MACRO
Holding Trust Agreement.
"Certificate" means a certificate representing an Down-MACRO Tradeable
Share and in the form attached hereto as EXHIBIT A.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depository
for the Down-MACRO Tradeable Shares and in whose name or in whose nominee's name
shall be registered a Global Certificate and which shall undertake to effect
book entry transfers and pledges of beneficial interests in the Down-MACRO
Tradeable Shares and initially is DTC.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of interests in securities
deposited with the Clearing Agency.
"Closing Date" shall have the meaning set forth in the Down-MACRO
Holding Trust Agreement.
"Code" means the U.S. Internal Revenue Code of 1986, as amended, or any
successor legislation, and the rules and regulations promulgated thereunder.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee located in [ ].
"Creation Unit" means the minimum number of Down-MACRO Tradeable Shares
that may be created at one time, which is 100,000.
"Creation Order" has the meaning set forth in Section 6.2(b) of this
Trust Agreement.
"Creation Order Date" has the meaning set forth in Section 6.2(b) of
this Trust Agreement.
"Default" means the failure of the Down-MACRO Holding Trust to pay
distributions on the Down-MACRO Holding Shares when such distributions are due
pursuant to the Down-MACRO Holding Trust Agreement or to any agreements to which
the Down-MACRO Holding Trust is a party.
"Depositor" has the meaning set forth in the preamble hereto, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
Depositor of the Down-MACRO Tradeable Shares.
"Distribution" means a payment made by the Trust to a Holder.
"Distribution Account" has the meaning set forth in Section 13.2(a) of
this Trust Agreement.
"Distribution Date" means, the 25th day of each March, June,
September and December in each year, or if such day is not a Business Day,
the following Business Day.
"Distribution Payment Date" means the 10th day of each [ ], [ ], [ ]
and [ ] in each year, or if such day is not a Business Day, the following
Business Day.
"Down-MACRO Holding Shares" means the MACROShares Down Oil $[ ]
Holding Shares issued by, and each representing an undivided beneficial interest
in the property of the Down-MACRO Holding Trust.
"Down-MACRO Holding Trust" means the MACROShares Down Oil Benchmark
Holding Trust, a New York trust, formed pursuant to the Down-MACRO Holding Trust
Agreement, or any successor entity in a merger, consolidation or amalgamation.
"Down-MACRO Holding Trust Agreement" means the Trust Agreement, dated
as of the date hereof, among the Down-MACRO Holding Trustee, the Depositor, the
Administrative Agent and the Marketing Agent named therein, as may be amended,
restated, supplemented or otherwise modified from time to time.
"Down-MACRO Holding Trustee" means [ ],
not in its individual capacity but solely as trustee of the Down-MACRO Holding
Trust, or any successor entity in a merger, consolidation or amalgamation.
"Down-MACRO Proportional Mandatory Redemption" has the meaning set
forth in the Down-MACRO Holding Trust Agreement.
"Down-MACRO Tradeable Trustee" means [ ],
not in its individual capacity but solely as trustee of the Down-MACRO Tradeable
Trust, or any successor entity in a merger, consolidation or amalgamation.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"DTC Letter" means the Letter of Representations delivered by the
Depositor and the Trustee to DTC, dated as of [ ], 2006, as it may be amended,
restated, supplemented or modified from time to time.
"Early Termination Date" has the meaning set forth in the Down-MACRO
Holding Trust Agreement.
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
amended, or any successor legislation, and the rules and regulations promulgated
thereunder.
"Exchange Order" has the meaning set forth in Section 6.6(a) of this
Trust Agreement.
"Exchange Order Date" has the meaning set forth in Section 6.6(a) of
this Trust Agreement.
"Final Distribution" means, with respect to Down-MACRO Holding Shares
or Down-MACRO Tradeable Shares, any distribution made in redemption of all or a
portion of such shares on a Final Scheduled Termination Date, an Early
Termination Date or a Redemption Date.
"Final Scheduled Termination Date" has the meaning set forth in the
Down-MACRO Holding Trust Agreement.
"Fiscal Year" means the fiscal year of the Down-MACRO Tradeable Trust,
which ends on [ ] [31]st.
"Global Certificate" has the meaning set forth in Section 9.3 of this
Trust Agreement.
"Holder" means a Person in whose name a Down-MACRO Tradeable Share is
registered on the books and records of the Trust.
"Holding Share Deposit" means a deposit of Down-MACRO Holding Shares in
integral multiples of the Holding Share Deposit Amount.
"Holding Share Deposit Amount" means the number of Down-MACRO Holding
Shares required to create one (1) Creation Unit, which is 100,000.
"Holding Trust Agreements" means the Up-MACRO Holding Trust Agreement
and the Down-MACRO Holding Trust Agreement.
"Initial Deposit" means [ ] Holding Share Deposits, which
is equal to [ ] Creation Units.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, or any successor legislation, and the rules and regulations promulgated
thereunder.
"Legal Action" has the meaning set forth in Section 3.5(a)(v) of this
Trust Agreement.
"List of Holders" has the meaning set forth in Section 2.2 of this
Trust Agreement.
"MacroMarkets" means MacroMarkets LLC, or any successor entity in a
merger, consolidation or amalgamation.
"Officer's Certificate" means, with respect to any Person (that is not
an individual), a certificate signed by the Chairman of the Board, the
President, a Vice President, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of such Person and, if such Person is a
trust, any trustee of the trust. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement that each officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officer's Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
reasonably necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, to the best knowledge of each
such officer, such condition or covenant has been complied with.
"Order Cut-Off Time" has the meaning set forth in Attachment B to the
Participants Agreement.
"Outstanding" has the meaning set forth in the Down-MACRO Holding Trust
Agreement.
"Participants Agreement" means the participants agreement, dated as of
the date hereof, among the Depositor, the Down-MACRO Holding Trustee, the
Up-MACRO Holding Trustee, the Trustee, the Up-MACRO Tradeable Trustee, the
Administrative Agent and the Authorized Participants who may be party thereto
from time to time, which specifies certain procedures regarding the exchange of
tradeable shares for holding shares and the creation of tradeable shares upon a
deposit of holding shares.
"Paying Agent" has the meaning set forth in Section 3.5(d) of this
Trust Agreement.
"Person" means a legal person, including any individual, corporation,
association, partnership (general or limited), joint venture, trust, estate,
limited liability company, or other legal entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"Pro Rata" means, unless the context otherwise requires, with respect
to Distributions on the Down-MACRO Tradeable Shares, pro rata to each Holder in
accordance with the Aggregate Par Amount of Down-MACRO Tradeable Shares held by
such Holder in relation to the Aggregate Par Amount of all Down-MACRO Tradeable
Shares outstanding at the relevant time.
"Proportional Mandatory Redemption" has the meaning set forth in
Section 8.3(a) of this Trust Agreement.
"Proportional Mandatory Redemption Percentage" means, with respect to
any Redemption Date on which a Up-MACRO Subsequent Issuance and the related
Down-MACRO Proportional Mandatory Redemption are scheduled to occur, a fraction,
expressed as a percentage, the numerator of which is the Aggregate Par Amount of
Up-MACRO Holding Shares issued in such Up-MACRO Subsequent Issuance and the
denominator of which is the Up-MACRO Aggregate Par Amount immediately prior to
the occurrence of the Up-MACRO Recapitalization Event which preceded such
Up-MACRO Subsequent Issuance.
"Prospectus" means the prospectus, dated as of [ ], 2006, relating to
the Down-MACRO Holding Shares and the Down-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.
"Quarter" means the three month period ending [ ],
[ ], [ ] and [ ], beginning with
[ ] [ ], 2006.
"Record Date" has the meaning set forth in Section 6.5(d) of this Trust
Agreement.
"Redemption Date" has the meaning set forth in the Down-MACRO Holding
Trust Agreement.
"Registration Statement" means the Registration Statement, dated as of
[ ], 2006, relating to the Down-MACRO Holding Shares and Down-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.
"Requirements of Law" has the meaning set forth in the Down-MACRO
Holding Trust Agreement.
"Responsible Officer" means, with respect to the Trustee, any vice
president (whether or not designated by a number or a word or words added before
or after the title "vice president"), the secretary, any assistant secretary,
the treasurer, any assistant treasurer, the cashier, any assistant cashier, any
trust officer or assistant trust officer, or any other officer of the Trustee,
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Trust Agreement.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Account" has the meaning set forth in Section 13.1(a) of
this Trust Agreement.
"Securities Act" means the U.S. Securities Act of 1933, as amended, or
any successor legislation, and the rules and regulations promulgated thereunder.
"Stated Par Amount" means, (i) with respect to each Down-MACRO
Tradeable Share and Down-MACRO Holding Shares, a par amount equal to the
Down-MACRO Stated Par Amount as set forth in the Down-MACRO Holding Trust
Agreement and (ii) with respect to each Up-MACRO Tradeable Share and Up-MACRO
Holding Shares, a par amount equal to the Up-MACRO Stated Par Amount as set
forth in the Up-MACRO Holding Trust Agreement.
"Successor Administrative Agent" has the meaning set forth in Section
5.6(3) of this Trust Agreement.
"Successor Trustee" has the meaning set forth in Section 5.2(a) of this
Trust Agreement.
"Tradeable Share Deposit" means a deposit of Down-MACRO Tradeable
Shares in integral multiples of the Tradeable Share Deposit Amount.
"Tradeable Share Deposit Amount" means the number of Down-MACRO
Tradeable Shares that equal one (1) Creation Unit, which is 100,000.
"Transaction Fee" has the meaning set forth in Section 6 of the
Participants Agreement.
"Transfer Agent" has the meaning set forth in Section 3.5(a)(vii) of
this Trust Agreement.
"Trust" means the Down-MACRO Tradeable Trust, a New York trust, formed
pursuant to this Trust Agreement, or any successor entity in a merger,
consolidation or amalgamation.
"Trust Officer" means 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.
"Trust Agreement" has the meaning set forth in the preamble hereto.
"Trust Documents" means, collectively, the Trust Agreement and the
Participants Agreement.
"Trustee" means, initially, [Investors Bank and Trust], not in its
individual capacity but solely as trustee of the Trust and also means any
successor thereto that meets the eligibility requirements set forth in Section
5.1 of this Trust Agreement.
"Trustee Termination Event" means, the occurrence of one of the
following:
(a) a failure to pass through to Holders any Distribution received by
the Trust, which failure continues unremedied for a period of two (2) or more
Business Days;
(b) a failure by the Trustee to observe or perform in any material
respect any of its covenants or obligations under this Trust Agreement, which
failure continues unremedied for thirty (30) days after giving of written notice
of such failure to the Trustee by the Depositor or by not less than 25% of the
Holders based on the Aggregate Par Amount of all Down-MACRO Tradeable Shares
outstanding at such time;
(c) the bankruptcy of the Trustee or the institution of voluntary or
involuntary insolvency proceedings against the Trustee;
(d) the Trustee becoming ineligible or incapable of acting as Trustee
as set forth in this Trust Agreement;
(e) if the Trustee is the Up-MACRO Holding Trustee, the occurrence of a
"Trustee Termination Event" as defined in the Up-MACRO Holding Trust Agreement;
and
(f) if the Trustee is the Down-MACRO Holding Trustee, the occurrence of
a "Trustee Termination Event" as defined in the Down-MACRO Holding Trust
Agreement.
"Trust Indenture Act" means the U.S. Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation, and any rules or
regulations promulgated thereunder.
"Trust Property" means, as of any particular time, any and all property
which shall have been transferred, conveyed or paid to the Trust or the Trustee
(in its capacity as such) on behalf thereof, and all interest thereon, and which
at such time are owned or held by, or for the account of, the Trust or the
Trustee on behalf thereof.
"Up-MACRO Aggregate Par Amount" has the meaning set forth in the
Up-MACRO Holding Trust Agreement.
"Up-MACRO Holding Shares" means the MACROShares Up Oil $[ ] Holding
Shares issued by, and each representing an undivided beneficial interest in the
property of, the Up-MACRO Holding Trust.
"Up-MACRO Holding Trust" means the MACROShares Up Oil Benchmark Holding
Trust, a New York trust, formed pursuant to the Up-MACRO Holding Trust
Agreement, or any successor entity in a merger, consolidation or amalgamation.
"Up-MACRO Holding Trust Agreement" means the Trust Agreement, dated as
of the date hereof, among the Up-MACRO Holding Trustee, the Depositor, the
Administrative Agent and the Marketing Agent named therein, as may be amended,
restated, supplemented or otherwise modified from time to time.
"Up-MACRO Holding Trustee" means the trustee under the Up-MACRO Holding
Trust Agreement, which initially is [ ], not in its individual capacity but
solely as trustee of the Up-MACRO Holding Trust, or any successor entity in a
merger, consolidation or amalgamation.
"Up-MACRO Recapitalization Event" shall have the meaning set forth in
Section 11(a) of the Up-MACRO Holding Trust Agreement.
"Up-MACRO Subsequent Issuance" shall have the meaning set forth in
Section 2.7(b) of the Up-MACRO Holding Trust Agreement.
"Up-MACRO Tradeable Shares" means the MACROShares Up Oil $[ ] Tradeable
Shares issued by, and each representing an undivided beneficial interest in the
Trust Property. The parties to this Trust Agreement intend that the Up-MACRO
Tradeable Shares be treated as equity securities for all purposes under New York
law.
ARTICLE 2
CERTAIN RIGHTS OF HOLDERS
SECTION 2.1 Trust Indenture Act; Application. This Trust Agreement is
not subject to the provisions of the Trust Indenture Act. References herein to
the Trust Indenture Act are solely for the contractual benefit of the parties
hereto.
SECTION 2.2 Lists of Holders of Down-MACRO Tradeable Shares(a) . DTC
(until such time a Transfer Agent is appointed) shall provide the Trustee (i)
within two Business Days after each Distribution Date a list for the purpose of
making distributions on the Down-MACRO Tradeable Shares in such form as the
Trustee may reasonably require of the names and addresses of the registered
Holders of such Down-MACRO Tradeable Shares ("List of Holders") as of the
relevant Record Date. The Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in any List of Holders given
to it or which it receives in its capacity as Paying Agent (if acting in such
capacity); provided, however, that the Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
SECTION 2.3 Reports and Filings by the Trustee.
(a) After the end of each Fiscal Year, the Trustee shall cause to be
prepared an annual report for the Trust containing financial statements prepared
by the Trustee and audited by independent accountants designated by the
Depositor. The annual report shall be in such form and contain such information
as shall be required by applicable laws, rules and regulations and may contain
such additional information as the Depositor or the Trustee determines shall be
included. The Trustee shall deliver a copy of such annual report to the
Down-MACRO Holding Trust and shall file such annual report with the SEC and such
other regulatory agencies, and distributed to such persons and in such manner,
as shall be required by applicable laws, rules and regulations. The cost of the
preparation and distribution of the annual report shall be at the expense of the
Down-MACRO Holding Trust as set forth in the Down-MACRO Holding Trust Agreement.
(b) After the end of each Quarter, the Trustee shall cause to be
prepared a quarterly report for the Trust containing unaudited financial
statements prepared by the Trustee. The quarterly report shall be in such form
and contain such information as shall be required by applicable laws, rules and
regulations and may contain such information as the Depositor or the Trustee
determines shall be included. The quarterly report shall be filed with the SEC
and such other regulatory agencies, and distributed to such persons and in such
manner, as shall be required by applicable laws, rules and regulations. The cost
of the preparation and distribution of the quarterly report shall be at the
expense of the Down-MACRO Holding Trust as set forth in the Down-MACRO Holding
Trust Agreement.
(c) On or before the fifth Business Day following each Distribution
Date, the Trustee will forward to DTC, as long as the Shares are held by DTC,
and to the Holders, if not held by DTC (as of such Distribution Date), a
statement prepared by the Trustee reporting the following information as of such
Distribution Date:
(i) the Aggregate Par Amount of the outstanding Down-MACRO
Tradeable Shares;
(ii) the Down-MACRO Underlying Value (as defined in the
Down-MACRO Holding Trust Agreement) allocable to each Down-MACRO
Tradeable Share, based on the number of Down-MACRO Holding Shares on
deposit in the Trust and prior to any Distribution on such Distribution
Date; and
(iii) the Pro Rata, net Distribution, to each Holder for each
Down-MACRO Tradeable Share.
Furthermore, the Trustee shall promptly forward to DTC, as
long as the Down-MACRO Tradeable Shares are held by DTC, and to the Holders, if
not held by DTC (as of such Distribution Date), any reports to holders of the
Down-MACRO Holding Shares that it has received pursuant to Article VIII of the
Down-MACRO Holding Trust Agreement.
(d) Upon the occurrence of an Up-MACRO Price Event or a Down-MACRO
Price Event (each as defined in the applicable Holding Trust Agreement), the
Trustee, upon written instructions from the Depositor, shall notify the AMEX and
any other stock exchange on which the Down-MACRO Tradeable Shares are listed to
halt trading for the Shares.
SECTION 2.4 Registration (Initial and Continuing) of the Down-MACRO
Tradeable Shares.
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
Down-MACRO Tradeable 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 amendments or supplements 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 either the Trustee or the Administrative Agent
may reasonably request, (iv) prepare and file any periodic reports or updates
that may be required under the Exchange Act (to the extent such action is not
taken by the Trustee), and (v) take such action as is necessary from time to
time to register or qualify the Down-MACRO Tradeable 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 Down-MACRO Tradeable Trust shall continue to offer
or sell Down-MACRO Tradeable 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 Down-MACRO Holding
Trust in accordance with the Down-MACRO Holding Trust Agreement.
ARTICLE 3
ORGANIZATION
SECTION 3.1 Name. The Trust is named "MACROShares Down Oil Benchmark
Tradeable Trust" as such name may be modified from time to time by the Trustee
following written notice to the Holders. The Trust's activities may be conducted
under the name of the Trust, or any other name deemed advisable by the Trustee.
SECTION 3.2 Office. The address of the principal office of the Trust is
c/o [ ], [address], [City], [ ] [zip code]. On ten (10)
Business Days' prior written notice to the Holders, the Trustee may designate
another [principal][registered] office.
SECTION 3.3 Nature and Purpose of the Trust. (i) The Trust shall be a
"New York trust." Except as provided herein, the Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for U.S. federal income tax purposes
as a grantor trust.
(a) The exclusive purposes and functions of the Trust are to:
(i) issue and sell the Down-MACRO Tradeable Shares;
(ii) use any proceeds received from the issuance and sale of the
Down-MACRO Tradeable Shares to purchase Down-MACRO Holding Shares from
the Down-MACRO Holding Trust;
(iii) distribute to the Holders of the Down-MACRO Tradeable Shares
all amounts received by the Down-MACRO Tradeable Trust from the
Down-MACRO Holding Trust on the Down-MACRO Holding Shares;
(iv) conduct creations in accordance with Section 6.2 of this Trust
Agreement;
(v) conduct exchanges of Down-MACRO Tradeable Shares for Down-MACRO
Holding Shares in accordance with Section 6.6 of this Trust Agreement;
(vi) except as otherwise set forth herein, engage in only those
other activities necessary or incidental thereto to conduct its
business as described herein; and
(vii) to enter into and perform its obligations under the Trust
Documents and any other documents or agreements to which the Trust is a
party.
SECTION 3.4 Authority. Subject to the limitations provided in this
Trust Agreement, the Trustee shall have authority to take all actions reasonably
required to carry out the purposes of the Trust as set forth in Section 3.3. An
action taken by the Trustee in accordance with its powers shall constitute the
act of and serve to bind the Trust. In dealing with the Trustee acting on behalf
of the Trust, no Person shall be required to inquire into the authority of the
Trustee to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustee as set forth in this
Trust Agreement.
SECTION 3.5 Powers and Duties of the Trustee.
(a) In furtherance of and not in limitation of the purposes of the
Trust as provided for in Section 3.3(b), the Trustee shall have the power and
authority to cause the Trust to engage in the following activities:
(i) to issue and sell the Down-MACRO Tradeable Shares in accordance
with this Trust Agreement; provided, however, that the Trust may issue
no more than one class of Down-MACRO Tradeable Shares; and, provided
further, that there shall be no interests in the Trust other than the
Down-MACRO Tradeable Shares;
(ii) to use the proceeds received from any issuance and sale of the
Down-MACRO Tradeable Shares to purchase Down-MACRO Holding Shares from
the Down-MACRO Holding Trust;
(iii) to establish a Record Date with respect to all actions to be
taken hereunder that require a Record Date to be established, including
with respect to Distributions, voting rights, exchanges and
distributions in connection with any liquidation of the Trust, and to
issue relevant notices to Holders as to such actions and applicable
Record Dates;
(iv) to give prompt written notice to Holders of any Default, upon
a Responsible Officer receiving actual or written notice of such
Default;
(v) at the written instruction of the Depositor or Holders
evidencing not less than a Majority of the Aggregate Par Amount, to
bring or defend, pay from the Trust Property, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action");
(vi) to establish and maintain trust accounts in the name of and
under the exclusive control of the Trustee on behalf of the Trust and
the Holders to hold payments and distributions received in respect of
the Trust Property which may not be immediately distributed and to
distribute such amounts to the Holders as soon as practicable
thereafter and to invest any amounts on deposit in any such accounts in
accordance with the terms of this Trust Agreement;
(vii) to act as, or appoint another Person to act as, registrar and
transfer agent (the "Transfer Agent") for the Trust. Any Transfer Agent
may be removed by the Trustee at any time and a successor Transfer
Agent or additional Transfer Agents may be appointed at any time by the
Trustee;
(viii) to execute and deliver the Trust Documents, and to perform
its obligations and exercise and enforce its rights thereunder;
(ix) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing, as the Depositor may
direct in writing;
(x) to take any action and have any authority that may be necessary
or appropriate for the preservation and the continuation of the Trust's
valid existence, rights, franchises and privileges under the laws of
the [ ];
(xi) to take any action or refrain from any action so long as such
action or inaction is not in violation of this Trust Agreement or with
applicable law, and as instructed in writing by the Depositor, in
carrying out the activities of the Trust as set out in this Section
3.5; and
(xii) to take any action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with
respect to the Trust to be duly prepared and filed on behalf of the
Trust.
(b) Legal title to all Trust Property shall be vested at all times in
the Trust, except where applicable law in any jurisdiction requires title to any
part of the assets to be vested in a trustee, in which case legal title shall be
deemed to be vested in the Trustee appointed hereunder for such purpose. None of
the Holders shall have legal title to any part of the Trust Property, but shall
have an undivided beneficial interest in the Trust Property.
(c) The Trustee shall take all actions and perform such duties as may
be required of the Trustee as it may be directed from time to time in writing by
the Depositor, the Administrative Agent (but only pursuant to Section 13.1(a)),
an Authorized Participant (but only pursuant to Section 13.1(c)), and Holders
evidencing not less than 66 and 2/3% of the Aggregate Par Amount (except for
actions that require a different threshold in accordance with the terms of this
Trust Agreement, in which case such threshold), where appropriate, to protect
the interests of the Trust and the Holders.
(d) The Trustee may authorize one or more Persons (each, a "Paying
Agent" and, initially, the Trustee) to pay Distributions with respect to the
Down-MACRO Tradeable Shares. Any Paying Agent may be removed by the Trustee, the
Depositor or Holders evidencing not less than 66 and 2/3% of the Aggregate Par
Amount at any time, and a successor Paying Agent or additional Paying Agents may
be appointed at any time by the Trustee.
(e) The Trustee shall continue to serve as a trustee until either:
(i) the Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders pursuant to the terms of the
Down-MACRO Tradeable Shares; or
(ii) a Successor Trustee has been appointed and has accepted that
appointment in accordance with Section 5.2.
The Trustee shall exercise the powers set forth in this Section 3.5 in
a manner that is consistent with the purposes and intentions of the Trust set
forth in Section 3.3, and the Trustee shall not take, nor shall the Holders or
the Depositor instruct the Trustee to take, any action that is inconsistent with
the purposes and intentions of the Trust set forth in Section 3.3. Any action
inconsistent with the purposes and intentions of the Trust set forth in Section
3.3 shall be of no effect and shall not bind the Trust.
SECTION 3.6 Certain Responsibilities of the Trustee(a) . (a) 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:
(b) the Trustee shall not be personally liable for an error of judgment
made in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted by it in good faith and in accordance with the
direction of Holders relating to the time, place or method of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred upon the Trustee, under this Trust Agreement; provided that such
direction is delivered by Holders evidencing not less than 66 and 2/3% of the
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.
SECTION 3.7 Certain Rights of the Trustee. (a) Subject to the
provisions of Section 3.6:
(i) the Trustee may conclusively rely on and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document whether in its original or
facsimile form reasonably believed by it to be genuine and to have been
signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Depositor acting on behalf of or
in connection with the Trust as contemplated by this Trust Agreement
shall be sufficiently evidenced by an Officer's Certificate of the
Depositor;
(iii) whenever in the administration of this Trust Agreement, the
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting to take any action hereunder, the
Trustee (unless other evidence is herein specifically prescribed) may
request and in the absence of bad faith on its part conclusively rely
upon an Officer's Certificate;
(iv) the Trustee may consult with counsel or other experts of its
own selection, and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' areas of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion; such counsel may be, but shall not be limited to, counsel to
the Depositor or any of its Affiliates, and may include any of its
employees. The Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from
any court of competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Trust Agreement or at the request
or direction of any Holder or the Depositor, unless (a) such Holder or
the Depositor shall have provided to the Trustee security and
indemnity, reasonably satisfactory to the Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the
reasonable expenses of the Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Trustee and (b) the Trustee has been provided with the
legal opinions, if any, required by this Trust Agreement;
(vi) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Trustee, in its reasonable discretion, may
make such further inquiry or investigation into such facts or matters
as it may deem necessary at the expense of the Trust and shall incur no
liability of any kind by reason of such inquiry or investigation;
(vii) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys, and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney selected in good faith and with due care (other than an
agent or attorney that is an Affiliate of the Trustee); furthermore,
the Trustee shall be under no obligation to monitor, and shall assume
no personal liability for, the actions of the Depositor or any other
Person in connection with their duties under this Trust Agreement or in
connection with the Trust generally;
(viii) any action taken by the Trustee or its agents hereunder
shall bind the Trust and the Holders, and the signature of the Trustee
or its agents alone shall be sufficient and effective to perform any
such action, and no third party shall be required to inquire as to the
authority of the Trustee to so act or as to its compliance with any of
the terms and provisions of this Trust Agreement, both of which shall
be conclusively evidenced by the Trustee's or its agent's taking such
action;
(ix) whenever in the administration of this Trust Agreement the
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Trustee may request instructions from the Depositor;
(x) except as otherwise expressly provided by this Trust Agreement,
the Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement;
(xi) the Trustee shall not be required to take any action if the
Trustee shall reasonably determine, or shall be advised by counsel,
that such action is likely to result in personal liability for the
Trustee or is contrary to applicable law or the terms of this Trust
Agreement;
(xii) under no circumstances shall the Trustee be personally liable
for indebtedness evidenced by or arising under any of the documents to
which the Trust or the Trustee is a party; and
(xiii) the Trustee shall not be liable for the default or
misconduct of any agent, appointed by the Trustee in good faith and
with due care, under any of the documents to which the Trust or the
Trustee is a party or otherwise (provided that such agent is not an
Affiliate of the Trustee), and the Trustee shall have no obligation or
liability to perform the obligations of the Trust under this Trust
Agreement or the other documents to which the Trust or the Trustee is a
party that are required to be performed by other Persons, including,
without limitation, the Administrative Agent and the Depositor.
(b) No provision of this Trust Agreement shall be deemed to impose any
duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which (i) it shall be illegal, or (ii) the Trustee shall be determined to
be unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation.
Notwithstanding the above, no permissive power or authority available to the
Trustee under applicable law shall be construed to be a duty under this Trust
Agreement.
SECTION 3.8 Prohibition of Actions by the Trust and the Trustee. The
Trust shall not, and the Trustee shall not cause the Trust to, nor shall the
Depositor direct the Trustee to, engage in any activity other than as required
or authorized by this Trust Agreement. In particular, the Trust shall not and
the Trustee shall not cause the Trust to:
(a) invest any interest or other distributions paid in respect of the
Trust Property, but shall distribute all such proceeds to the Holders pursuant
to the terms of this Trust Agreement and of the Down-MACRO Tradeable Shares;
(b) acquire any assets other than as expressly provided herein;
(c) possess Trust Property for a purpose other than those described in
Section 3.3;
(d) sell, pledge, hypothecate or transfer the Down-MACRO Holding Shares
(except in accordance with Section 6.1 and Section 6.6);
(e) make any loans or incur any indebtedness or acquire any securities
other than Down-MACRO Holding Shares (except in accordance with Section 6.1 and
Section 6.6);
(f) except as expressly set forth herein, act in such a way as to vary
the terms of the Down-MACRO Tradeable Shares in any way whatsoever;
(g) issue any securities or other evidences of beneficial ownership of,
or beneficial interest in, the Trust, other than the Down-MACRO Tradeable
Shares;
(h) (i) direct the time, method and place of conducting any proceeding
for any remedy available to the Trust as the holder of Trust Property or
exercising any power conferred upon holders of Trust Property, (ii) waive any
past default or violation that is waivable under the terms of any Trust Property
or (iii) consent to any amendment or modification of the terms of any Trust
Property where such consent shall be required, except in each case if permitted
hereby or after receiving instructions from the Holders pursuant to Article 11
hereof;
(i) file a certificate of cancellation of the Trust or take any other
action to terminate the Trust, except in connection with a liquidation of the
Trust pursuant to Article 8 hereof;
(j) take any action that would cause the Trust to be classified other
than as a grantor trust for U.S. federal income tax purposes; or
(k) take any action that would cause the Trust to be deemed or
classified as an Investment Company.
SECTION 3.9 Execution of Documents. Except as otherwise required by the
laws of the [ ], the Trustee is authorized to execute on behalf of
the Trust any documents that the Trustee has the power and authority to cause
the Trust to execute pursuant to Section 3.5.
SECTION 3.10 No Representations of the Trustee. The Trustee makes no
representations as to the value or condition of the Trust Property or any part
thereof. Except as expressly set forth in Article 12, the Trustee makes no
representations as to the validity or sufficiency of this Trust Agreement or the
Down-MACRO Tradeable Shares.
SECTION 3.11 Duration of Trust. The Trust, unless terminated pursuant
to the provisions of Article 8 hereof, shall have perpetual existence.
SECTION 3.12 Mergers. (ii) The Trust may not consolidate, amalgamate,
merge or convert with or into, or be replaced by, or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to any
Person, except as described in Section 3.12(b), and except that the Trust may
distribute its assets to the Holders or to such persons as the Holders may
direct upon liquidation of the Trust in accordance herewith.
(a) The Trust may, with the unanimous consent of the Holders,
consolidate, amalgamate, merge or convert with or into, or be replaced by, or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to a trust organized as such under the laws of any
state of the United States.
SECTION 3.13 Limitation on Directions to Trustee. The Holders and the
Depositor shall not direct the Trustee to take or refrain from taking any action
if such action or inaction would be contrary to any obligation of the Trust or
the Trustee under this Trust Agreement or any of the documents to which the
Trust is a party or would be contrary to Section 3.3 hereof, nor shall the
Trustee be obligated to follow any such direction, if given.
ARTICLE 4
THE DEPOSITOR
SECTION 4.1 Responsibilities of the Depositor. In connection with the
issue and sale of the Down-MACRO Tradeable Shares, the Depositor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to determine the jurisdictions in which to take appropriate action
to qualify or register for sale all or part of the Down-MACRO Tradeable Shares
and to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust, the Trustee and their Affiliates or agents of
actions they must take, and prepare for execution and filing any documents to be
executed and filed by the Trust as the Depositor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(b) to advise the Trust, the Trustee and their Affiliates or agents, of
actions they must take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Depositor deems necessary or advisable
in order to comply with any applicable rules and regulations of the SEC
promulgated under the Securities Act, the Exchange Act, the Trust Indenture Act
and the Investment Company Act and to obtain or maintain exemptions therefrom or
other forms of relief thereunder or to make any filings or take any actions
required thereby or deemed necessary or advisable with respect to the Down-MACRO
Tradeable Shares or any Trust Property; and
(c) to undertake any other duties or obligations set forth herein.
SECTION 4.2 Certain Matters Regarding a Successor Depositor. The
covenants, provisions and agreements herein contained shall in every case be
binding upon any successor to the business of the Depositor. The Depositor may
transfer all or substantially all of its assets to any entity which carries on
the business of the Depositor, if at the time of such transfer such successor
duly assumes all of obligations of the Depositor under this Trust Agreement, and
in such event, the Depositor shall be relieved of all further liability under
this Trust Agreement.
SECTION 4.3 Compensation of the Depositor. The Depositor shall not
receive any compensation, reimbursements, disbursements and repayment of
expenses for its efforts and services incurred hereunder. The Depositor
acknowledges that it has received good and valuable consideration for its
services pursuant to and in connection with the Down-MACRO Holding Trust
Agreement and that its services hereunder are integral and connected to its
services performed under the Down-MACRO Holding Trust Agreement.
SECTION 4.4 Counsel. The Depositor may from time to time employ counsel
to act on behalf of the Trust and perform any legal services in connection with
the Trust. The fees and expenses of such counsel shall be paid by the Down-MACRO
Holding Trust pursuant to the terms of the Down-MACRO Holding Trust Agreement.
ARTICLE 5
THE TRUSTEE AND THE ADMINISTRATIVE AGENT
SECTION 5.1 Trustee; Eligibility. 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 and (iii) maintain any credit or
deposit rating required by nationally recognized rating organizations (as of the
date hereof "A-1" for Standard & Poor's Rating Service or "P-1" for Xxxxx'x
Investors Service, Inc.). 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 5.1, 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.
(a) If at any time the Trustee ceases to be eligible to so act under
Section 5.1(a), the Trustee shall immediately resign in the manner and with the
effect set forth in Section 5.2(b).
(b) If the Trustee has or shall acquire any "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, the Trustee and
the Depositor shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act.
(c) The initial Trustee shall be [ ]. Such Trustee shall not be
entitled to receive a fee for serving as Trustee under this Trust Agreement and
acknowledges that it has received good and valuable consideration for its
services pursuant to and in connection with the Down-MACRO Holding Trust
Agreement and that its services hereunder are integral and connected to its
services performed under the Down-MACRO Holding Trust Agreement.
(d) In accepting the trust hereby created, the Trustee agrees to act
solely as trustee hereunder and not in its individual capacity, except as
expressly provided herein and in the other documents to which the Trust is a
party.
(e) All Persons having any claim against the Trustee in its capacity as
such by reason of the transactions contemplated by the documents to which the
Trust is a party shall look only to the Trust Property (or a part thereof, as
the case may be) and not to the Trustee in its individual capacity. Without
limiting the generality of the foregoing, the Trustee in its capacity as such or
individually shall not be responsible or liable for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution hereof
by the Depositor, or for the form, character, genuineness, sufficiency, value,
or validity of the Trust Property.
SECTION 5.2 Appointment, Removal and Resignation of Trustee.
(a) Subject to the provisions of this Section 5.2, 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 5.2(a) until a successor Trustee possessing the qualifications
to act as Trustee under Section 5.1 (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 Depositor 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 Trust Property has 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 5.2 within thirty (30) days after
delivery to the Depositor and the Trust of an instrument of resignation, the
resigning Trustee may petition at the expense of the Trust any court of
competent jurisdiction for appointment of a Successor Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Trustee.
(d) No Trustee shall be liable for the acts or omissions to act of any
Successor Trustee.
SECTION 5.3 Trustee's Delegation of Power. The rights, duties and
powers of the Trustee as set forth in this Trust Agreement may be delegated to
one or more Affiliates of the Trustee; provided, however, that each such
delegatee meets the eligibility requirements set forth in Section 5.1; and,
provided further, that as a condition to any such delegation, the delegatee
shall expressly agree to be jointly and severally liable with the Trustee for
any liability arising out of or in connection with such delegation; provided,
however, that such delegation shall in no manner relieve the Trustee from its
duties or obligations under this Trust Agreement or any other Trust Document nor
relieve the Trustee of its liabilities, if any, for such actions. The Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 its power for the purpose of executing any
documents contemplated in Section 3.5; provided, however, that such delegation
shall in no manner relieve the Trustee from its duties or obligations arising
under this Trust Agreement or any other Trust Document nor relieve the Trustee
of its liability for such actions.
SECTION 5.4 The Trustee's Merger, Conversion, Consolidation or
Succession to Business . 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 5.5 Books and Records, Taxes and Audits.
(a) The Trustee shall keep proper books of record and account of all
the transactions under this Trust Agreement at its office located in [
] or such office as it may subsequently designate upon notice to
the other parties hereto. The books and records of the Trustee maintained by the
Trustee shall be open to inspection by any person establishing to the Trustee's
reasonable satisfaction that such person is a Beneficial Owner upon reasonable
advance notice at all reasonable times during the usual business hours of the
Trustee. The Trustee shall keep proper record of the creation of the Down-MACRO
Tradeable Shares and redemption of Down-MACRO Tradeable Shares at its offices
located in [ ]. Such records shall be open to inspection
upon reasonable advance notice at all reasonable times during the usual business
hours of the Trustee. Such records shall be preserved for such times as the
Depositor may direct.
(b) The Trustee shall provide the Depositor and the Administrative
Agent such financial and other information regarding the operation of the
Down-MACRO Tradeable 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 and shall receive from the Trustee such representations with
respect to information within the Trustee's control as shall be required for the
Depositor to make such certification.
(c) The accounts of the Down-MACRO Holding Trust shall be audited, as
required by law and as may be directed by the Depositor, by independent
certified public accountants designated from time to time by the Depositor and
the cost of such audit shall be borne by the Trustee. The report of such
accountants shall be furnished by the Trustee to the Beneficial Owners upon
request.
SECTION 5.6 Appointment, Removal and Resignation of the Administrative
Agent.
(a) [ ] agrees to act as Administrative Agent under this Trust
Agreement and the Holders of the Down-MACRO Tradeable Shares by their acceptance
of their shares consent to [ ], acting as Administrative Agent under this Trust
Agreement.
(b) The Administrative Agent shall administer the Trust Property,
direct the Trustee in the creation and exchange processes described in Section
6.2 and 6.6 of this Trust Agreement and otherwise comply with its duties as set
forth in this Trust Agreement. The Depositor and the Trustee shall furnish to
the Administrative Agent any powers of attorney or other documents necessary or
appropriate to enable the Administrative Agent to carry out its administrative
duties hereunder.
(c) The Administrative Agent shall not be liable for the payment of
expenses incurred in connection with the Down-MACRO Tradeable Trust but shall be
liable for its administrative activities undertaken pursuant to this Trust
Agreement including any expenses relating to its administration of the Trust
Property, disbursements and any other fees and expenses related thereto.
(d) The Administrative Agent shall maintain and implement
administrative and operating procedures (including the ability to recreate
records evidencing its instructions relating to the Trust Property 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 its administration of the Trust Property. Such
documents, books and computer records shall reflect all facts related to the
administration of the Trust Property by the Administrative Agent, and such
documents, books and computer records shall indicate the interests of the
Down-MACRO Tradeable Trust in the Down-MACRO Holding Shares and any other Trust
Property (if any).
(e) Subject to the provisions of this Section 5.6, the Administrative
Agent may be appointed, removed or replaced with or without cause at any time by
the Depositor, upon written notice from the Depositor; provided, however, that
the Administrative Agent shall not be removed in accordance with this Section
5.6(e) until a successor administrative agent (a "Successor Administrative
Agent") has been appointed by the Depositor and has accepted such appointment by
written instrument executed by such Successor Administrative Agent and delivered
to the Depositor.
(f) An administrative agent appointed to office shall hold office until
its successor shall have been appointed by the Depositor in accordance with this
Trust Agreement or until its termination, removal or resignation. Any
administrative agent may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the administrative
agent and delivered to the Depositor, the Trustee 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 an
administrative agent shall be effective:
(i) until a Successor Administrative Agent has been appointed and
has accepted such appointment by instrument executed by such Successor
Administrative Agent and delivered to the Trust, the Depositor and the
resigning administrative agent; or
(ii) until the Trust Property has been completely liquidated and
the proceeds thereof distributed to the Holders.
(g) If no Successor Administrative Agent shall have been appointed and
accepted appointment as provided in this Section 5.6 within thirty (30) days
after delivery to the Depositor and the Trust of an instrument of resignation,
the resigning administrative agent may petition at the expense of the
Administrative Agent any court of competent jurisdiction for appointment of a
Successor Administrative Agent. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Administrative Agent.
(h) No Trustee shall be liable for the acts or omissions to act of any
Successor Administrative Agent.
SECTION 5.7 Administrative Agent's Delegation of Power. The rights,
duties and powers of the Administrative Agent as set forth in this Trust
Agreement may be delegated to one or more Affiliates of the Administrative
Agent; provided, however, that as a condition to any such delegation, the
delegatee shall expressly agree to be jointly and severally liable with the
Administrative Agent for any liability arising out of or in connection with such
delegation; provided, however, that such delegation shall in no manner relieve
the Administrative Agent from its duties or obligations under this Trust
Agreement or any other Trust Document nor relieve the Administrative Agent of
its liabilities, if any, for such actions. The Administrative Agent may, by
power of attorney consistent with applicable law, delegate to any other natural
person over the age of 21 its power for the purpose of executing any documents
in accordance with its duties set forth herein; provided, however, that such
delegation shall in no manner relieve the Trustee from its duties or obligations
arising under this Trust Agreement or any other Trust Document nor relieve the
Administrative Agent of its liability for such actions.
SECTION 5.8 Administrative Agent's Merger, Conversion, Consolidation or
Succession to Business of the Trustee(a) . Any corporation into which the
Administrative Agent 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 Administrative Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Administrative Agent shall be the successor of the Administrative Agent
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.
ARTICLE 6
TERMS OF THE DOWN-MACRO TRADEABLE SHARES
SECTION 6.1 Authorization and Designation of Down-MACRO Tradeable
Shares.
(a) The Trust is authorized to issue undivided beneficial interests in
the Trust Property, which shall be designated the "MACROShares Down Oil
$[ ] Tradeable Shares."
(b) The Trust shall issue only one class of Down-MACRO Tradeable Shares
and is not authorized to issue any other securities.
(c) On the Closing Date, the Depositor has delivered the Initial
Deposit to the Trustee, and the Trustee acknowledges that it has received the
Initial Deposit and credited such deposit to the Securities Account of the
Trust. The Trustee hereby declares that, subject to the terms and conditions of
this Trust Agreement, (i) the Initial Deposit and (ii) all other assets owned by
the Trust from time to time shall be owned by the Trust for the use and benefit
of all present and future Holders in accordance with their respective beneficial
interests as the same may be constituted from time to time. The Trustee hereby
confirms that, in exchange for the Initial Deposit, the Trustee has issued
Down-MACRO Tradeable Shares constituting the Creation Units ordered to DTC and
that, upon the registration statement for the sale of the Down-MACRO Tradeable
Shares being declared effective, the Trustee will direct DTC to credit to the
account of the Depositor its shares constituting the Creation Unit(s) ordered.
(d) The Depositor hereby instructs the Trustee to execute the
Down-MACRO Tradeable Shares, the Certificates and any certificate of
authentication on such Certificates relating to the Down-MACRO Tradeable Shares
required to be executed pursuant to Section 9.1 and any other certificate
required to be executed pursuant to Section 9.5, to execute each of the Trust
Documents on behalf of the Trust, and to cause the Trust to perform its
obligations thereunder.
(e) Each Down-MACRO Tradeable Share shall represent an undivided
beneficial interest in the Trust Property. The specific rights, terms and
preferences of the Down-MACRO Tradeable Shares are as set forth herein and in
accordance with the terms of this Trust Agreement (including the requirements of
Section 11.2 and Section 11.3 of this Trust Agreement). Any amendment to the
Certificates shall have the status of an amendment to this Trust Agreement.
(f) The authorization of the Down-MACRO Tradeable Shares shall be
effective upon the execution by the Trustee of the Certificates. The Down-MACRO
Tradeable Shares are deemed to be equity securities for all purposes under New
York law.
(g) Down-MACRO Tradeable Shares issued and sold in accordance with this
Trust Agreement and as contemplated in the Participants Agreement shall be
deemed to be duly issued, fully paid and non-assessable; provided, however, that
Down-MACRO Tradeable Shares will be issued only in minimum numbers equal to one
or more Creation Units.
(h) All Down-MACRO Tradeable Shares shall represent equal proportionate
beneficial interests in the Trust Property (subject to the liabilities of the
Trust), and each Down-MACRO Tradeable Share shall rank equal with each other
Down-MACRO Tradeable Share.
SECTION 6.2 Subsequent Issuances and Issuance of Creation Units.
(a) After the Initial Deposit, the following procedures, as
supplemented by the more detailed procedures specified in Attachment B to the
Participants Agreement, which may be amended from time to time in accordance
with the provisions of the Participants Agreement (and any such amendment will
not constitute an amendment of this Trust Agreement), will govern the Trustee
and the Administrative Agent in the creation and issuance of additional Creation
Units. Subject to the requirements for the issuance of Creation Units stated
herein and in such procedures, the number of Creation Units which may be issued
by the Trust is unlimited.
(b) On any Business Day, an Authorized Participant may submit a request
to the Administrative Agent to create one or more Creation Units (such request,
a "Creation Order"), and the Administrative Agent, upon processing such Creation
Order, shall provide to the Trustee with the requisite information needed in
order to effectuate such order. The Administrative Agent shall provide such
information at the times set forth in Attachment B to the Participants
Agreement.
(c) Creation Orders must be received by the Order Cut-Off Time on a
Business Day (the "Creation Order Date"). The Administrative Agent will process
the Creation Order only from Authorized Participants with respect to which the
Participants Agreement is in full force and effect. The Trustee and the
Administrative Agent will each maintain and make available at their respective
offices during normal business hours a current list of Authorized Participants
with respect to which the Participants Agreement is in full force and effect.
The Trustee shall deliver a copy of the Prospectus to each of the Authorized
Participants prior to its execution and delivery of the Participants Agreement.
(d) Any Creation Order is subject to rejection by the Trustee pursuant
to Section 6.2(e).
(e) After accepting an Authorized Participant's Creation Order, the
Trustee will issue and deliver Creation Units to fill an Authorized
Participant's Creation Order upon the satisfaction by the Authorized Participant
of the terms and conditions set forth in the Participants Agreement.
(f) The Trustee shall have the absolute right, but shall have no
obligation, to reject any Creation Order or Holding Share Deposit (i) if the
Administrative Agent determines that the Authorized Participant directing the
Creation Order has not deposited sufficient Down-MACRO Holding Shares with the
Trustee, (ii) if it determines that such Creation Order is not in the proper
form, (iii) if the Depositor has determined and advised the Trustee that such
deposit would result in adverse tax consequences to the Trust or to the Holders
of Down-MACRO Tradeable Shares, (iv) the acceptance or receipt of which would,
in the opinion of counsel to the Trustee, the Administrative Agent or the
Depositor, be unlawful or (v) if circumstances outside the control of the
Trustee or the Depositor make it for all practical purposes not feasible to
process the creation of Creation Units. None of the Trustee, the Administrative
Agent and the Depositor shall be liable to any Person by reason of the rejection
of any Creation Order or Holding Share Deposit.
(g) Certificates for Creation Units will not be issued, other than the
Global Certificate issued to DTC. So long as the DTC Letter is in effect,
Creation Units will be issued and exchanged, and Down-MACRO Tradeable Shares
will be transferred solely through the book-entry systems of DTC and the
Clearing Agency Participants as set forth in Section 9.3. DTC may determine to
discontinue providing its services with respect to Creation Units and Down-MACRO
Tradeable Shares by giving notice to the Trustee, the Administrative Agent and
the Depositor pursuant to and in conformity with the provisions of the DTC
Letter and discharge its responsibilities with respect thereto under the
applicable law. Under such circumstances, the Trustee, the Administrative Agent
and the Depositor shall take action either to find a replacement for DTC to
perform its functions at a comparable cost and on terms acceptable to the
Trustee, the Administrative Agent and the Depositor or, if such a replacement is
unavailable, to terminate the Trust.
(h) Holding Share Deposits may be delivered for deposit to the Trust
only by a transfer from an Authorized Participant to the Securities Account of
the Trust. In accordance with the Participants Agreement, the expense of such
delivery shall be solely borne by the Authorized Participant.
SECTION 6.3 Status of Down-MACRO Tradeable Shares. Every Holder, by
virtue of having become a Holder, shall be deemed to have expressly assented and
agreed to the terms hereof. Down-MACRO Tradeable Shares shall be deemed to be
personal property, giving only the rights provided herein. Ownership of
Down-MACRO Tradeable Shares shall not entitle the Holder to any title in, or to
the whole or any part of, the Trust Property or right to call for a partition or
division of the same or for an accounting. The bankruptcy of a Holder during the
continuance of the Trust shall not operate to terminate the Trust nor entitle
the representative of any bankrupt Holder to an accounting or to take any action
in court or elsewhere against the Trust or the Trustee.
SECTION 6.4 CUSIP Numbers. The Trust, in issuing the Down-MACRO
Tradeable Shares, may use "CUSIP" numbers (if then generally in use), and, if
so, the Trustee shall use "CUSIP" numbers in notices of liquidation as a
convenience to Holders; provided, however, that any such notice may state that
no representation is made as to the correctness of such numbers either as
printed on the Down-MACRO Tradeable Shares or as contained in any notice of a
liquidation and that reliance may be placed only on the other identification
numbers printed on the Down-MACRO Tradeable Shares, and any such liquidation
shall not be affected by any defect in or omission of such numbers.
SECTION 6.5 Distributions.
(a) Distributions received on a quarterly basis shall be paid to the
Holders on each Distribution Payment Date from time to time out of the payments
received from the Down-MACRO Holding Trust on the Down-MACRO Holding Shares held
by the Trust. Distributions on Down-MACRO Tradeable Shares shall be distributed
Pro Rata to the Holders.
(b) Any amounts received by the Trust upon a distribution by the
Down-MACRO Holding Trust on Down-MACRO Holding Shares that does not occur on a
quarterly basis shall, upon receipt by the Trustee or the Paying Agent, as the
case may be distributed Pro Rata to the Holders on the same day that the Trust
receives such distribution, to the extent practicable.
(c) The Trustee shall not be entitled to deduct any amounts on deposit
in the Distribution Account prior to any Distribution to any Holder, and any
fees, expenses, actual and/or accrued liabilities shall be paid by the
Down-MACRO Holding Trust in accordance with the Down-MACRO Holding Trust
Agreement.
(d) The Record Date ("Record Date") for the determination of Holders
entitled to receive payment of a Distribution referred to in Section 6.5(a) will
be the open of business on the second Business Day immediately following the
scheduled Distribution Date on the Down-MACRO Holding Shares.
(e) Distributions on Down-MACRO Tradeable Shares in connection with a
liquidation or dissolution of the Trust shall be made as required by Section 8.2
hereof.
(f) All Distributions shall be made in cash.
SECTION 6.6 Exchange of Down-MACRO Tradeable Shares for Down-MACRO
Holding Shares.
(a) On any Business Day, an Authorized Participant may submit a request
to the Trustee to exchange one or more Creation Units for Down-MACRO Holding
Shares (such request, an "Exchange Order"), and the Administrative Agent, upon
processing such Exchange Order, shall provide the Trustee with the requisite
information needed in order to effectuate such order. The Administrative Agent
shall provide such information at the times set forth in Attachment B to the
Participants Agreement. The Trustee and the Administrative Agent, in
effectuating each Exchange Order, shall follow the procedures set forth herein
and in Attachment B to the Participants Agreement
(b) Exchange Orders must be received by the Order Cut-Off Time on a
Business Day (the "Exchange Order Date"). The Trustee will process the Exchange
Order only from Authorized Participants with respect to which the Participants
Agreement is in full force and effect.
(c) Any Exchange Order is subject to rejection by the Trustee pursuant
to Section 6.6(d).
(d) After accepting an Authorized Participant's Exchange Order, the
Trustee will withdraw Down-MACRO Holding Shares (in equal number to the
Down-MACRO Tradeable Shares delivered by the Authorized Participant) from the
Securities Account of the Trust and deliver those Down-MACRO Holding Shares to
fill the Authorized Participant's Exchange Order in accordance with, and subject
to the satisfaction by the Authorized Participant of, the terms and conditions
set forth in the Participants Agreement. Notwithstanding anything to the
contrary, if the Authorized Participant specifies in its Exchange Order that it
desires to deliver Down-MACRO Holding Shares to the Down-MACRO Holding Trust
(and p-MACRO Holding Shares to the Up-MACRO Holding Trust, in an aggregate
number that constitutes a MACRO Unit), then the Trustee shall comply with the
procedures set forth in the Participants Agreement to effectuate such paired
optional redemption.
(e) The Trustee shall have the absolute right, but shall have no
obligation, to reject any Exchange Order or Tradeable Share Deposit if (i) if
the Administrative Agent determines that the Authorized Participant directing
the Exchange Order has not deposited sufficient funds with the Trustee, (ii) if
it determines that such Exchange Order is not in the proper form, (iii) if the
Depositor has determined and advised the Trustee that such deposit would result
in adverse tax consequences to the Trust or to the Holders of Down-MACRO
Tradeable Shares, (iv) the acceptance or receipt of which would, in the opinion
of counsel to the Depositor, Administrative Agent or Trustee, be unlawful or (v)
if circumstances outside the control of the Trustee or the Depositor make it for
all practical purposes not feasible to process the exchange of Down-MACRO
Tradeable Shares for Down-MACRO Holding Shares. None of the Trustee, the
Administrative Agent and the Depositor shall be liable to any Person by reason
of the rejection of any Exchange Order or Tradeable Share Deposit.
(f) A non-refundable transaction fee (the "Transaction Fee") will be
payable to the Trustee for its own account in connection with each Exchange
Order pursuant to this Section 6.6. The Transaction Fee charged in connection
with each Exchange Order shall be initially $[1,000], but may be changed in
accordance with Section 6.6(f). Even though a single Exchange Order may be
related to multiple Creation Units, only a single Transaction Fee will be due
for each Exchange Order.
(g) The Transaction Fee may subsequently be waived, modified, reduced,
increased or otherwise changed by the Trustee, with the prior written consent of
the Depositor, but will not in any event exceed the amount limits as set forth
in the Participants Agreement. Promptly after agreeing to and prior to
implementing such change, the Depositor shall cause the current Registration
Statement to be amended to reflect any such changes in the Transaction Fee. The
Trustee shall notify DTC and each Authorized Participant of any agreement to
change the Transaction Fee and shall not implement any increase for exchanges of
outstanding Down-MACRO Tradeable Shares until thirty (30) days after the date of
that notice. The amount of the Transaction Fee in effect at any given time shall
be made available by the Trustee upon request.
(h) Tradeable Share Deposits may be delivered for deposit to the Trust
only by a transfer from an Authorized Participant to the Securities Account of
the Trust. In accordance with the Participants Agreement, the expense of such
deposit shall be solely borne by the Authorized Participant.
ARTICLE 7
ACCOUNTING AND RECORDS
SECTION 7.1 Annual Tax Information.
(a) The Trustee shall file or cause to be filed, within the time limits
established by law, federal and state income tax returns and information
statements as a grantor trust for each of the Trust's taxable years. The Trust's
taxable year shall be the calendar year unless otherwise required by law.
Notwithstanding any other provision of the Trust Agreement to the contrary, the
Trustee shall comply with all federal withholding requirements respecting
distributions to, or receipts of amounts on behalf of, Holders that the Trustee
reasonably believes are applicable under the Code. The consent of the Holders
shall not be required for such withholding. The Trustee shall in no event cause
the Trust, and each Holder of Down-MACRO Tradeable Shares by its purchase
thereof shall be deemed to have agreed not to make any election to cause the
Trust, to be treated as a corporation for federal income tax purposes. The
Administrative Agent and the Depositor, upon request, shall each furnish the
Trustee with any information known to it that may be reasonably required in
connection with its duties set forth in this Section 7.1.
(b) In no event shall the Trustee be personally liable for any taxes or
other governmental charges imposed upon or in respect of the Down-MACRO
Tradeable 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 Down-MACRO Holding Trust in accordance with
the Down-MACRO Holding Trust Agreement. 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 Down-MACRO Holding Trust or the resignation or
removal of the Trustee.
SECTION 7.2 Outside Advisors. With regard to the matters covered by
this Article 7, the Trustee may consult with counsel or other experts of its own
selection, and the advice or opinion of such counsel and experts with respect to
legal matters or advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion; such counsel may be, but shall not be limited to,
counsel to the Depositor or any of its Affiliates, and may include any of its
employees. Any expenses or fees incurred as a result of the Trustee consulting
with such experts shall be borne by the Down-MACRO Holding Trust as provided for
in the Down-MACRO Holding Trust Agreement.
SECTION 7.3 Certain Accounting Matters. At all times during the
existence of the Trust, the Trustee shall keep record of any action it takes
with respect to the Trust.
ARTICLE 8
DISSOLUTION AND TERMINATION;
LIQUIDATION; REDEMPTION; RECAPITALIZATION
SECTION 8.1 Dissolution and Termination of the Trust. The Trust shall
dissolve upon, and only upon, the distribution to the Holders of all liquidating
distributions received by the Trust on the Down-MACRO Holding Shares in
connection with (a) the occurrence of a Down-MACRO Recapitalization Event
pursuant to Section 11.1 of the Down-MACRO Holding Trust Agreement or (b) a
termination of the Down-MACRO Holding Trust pursuant to Section 11.2 of the
Down-MACRO Holding Trust Agreement.
SECTION 8.2 Liquidation; Redemption.
(a) Following the termination of the Down-MACRO Holding Trust pursuant
to Section 11.1 or 11.2 of the Down-MACRO Holding Trust Agreement, the Trust
shall distribute to the Holders the Final Distribution on all Outstanding
Down-MACRO Holding Shares being redeemed and received by the Trust on the
Down-MACRO Holding Shares, and subsequently liquidate as soon as practicable
after the Down-MACRO Holding Trust has made its Final Distribution.
(b) Distributions made upon a liquidation of the Trust pursuant to
Section 8.2(a) shall be applied directly to the Holders, Pro Rata.
(c) Upon completion of the winding up of the Trust and the distribution
of the Trust's assets following a liquidation, the Trustee shall use its best
efforts to liquidate the Trust within 30 days of the dissolution of the Trust in
accordance with Section 8.1.
(d) The provisions of Section 3.5, Section 3.6 and Article 10 and
Section 14.3 shall survive the termination of the Trust.
SECTION 8.3 Recapitalization.
(a) On any Distribution Payment Date following the occurrence of an
Up-MACRO Recapitalization Event, if the Aggregate Par Amount of the Up-MACRO
Holding Shares issued in the related Up-MACRO Subsequent Issuance is less than
the Aggregate Par Amount of the Outstanding Down-MACRO Holding Shares, the
Trustee, upon the receipt of written notice from the Administrative Agent on or
before the preceding Record Date, shall redeem the applicable Proportional
Mandatory Redemption Percentage of Down-MACRO Tradeable Shares by making a Final
Distribution to the holders of such Down-MACRO Holding Shares (such redemption,
a "Proportional Mandatory Redemption"). Such Final Distribution shall be a pass
through distribution by the Trust from amounts received from the Down-MACRO
Holding Trust in connection with the Down-MACRO Proportional Mandatory
Redemption, in which the Trust, as holder of Down-MACRO Holding Shares, shall
received a distribution in redemption of a proportionate number of Down-MACRO
Holding Shares.
(b) Pursuant to Section 304 of the AMEX Listing Rules, the Trustee,
upon written instruction from the Administrative Agent, shall complete a
Reconciliation Sheet (as defined in the AMEX Listing Rules) on or prior to the
Record Date and deliver such Reconciliation Sheet to the AMEX. For the avoidance
of doubt, such Record Date shall be at least ten (10) Business Days prior to the
Distribution Payment Date on which such Final Distribution shall occur.
(c) The Trustee, upon written instruction from the Administrative
Agent, shall provide and/or file with the SEC, as applicable, the following:
(i) a notice to the AMEX including the following information (A)
the Proportional Mandatory Redemption Percentage, (B) the Record Date,
(C) the applicable Distribution Payment Date, and (D) the method of
settling fractional share interests;
(ii) a notice to the Holders stating the information set forth in
Section 8.3(c)(i) with a description of the Up-MACRO Recapitalization
Event; and
(iii) a filing on a Form 8-K that will be filed with the SEC
disclosing the information set forth in Section 8.3(c)(i).
(d) On or before the Record Date, the Trustee shall, its capacity as
Transfer Agent, notify any Clearing Agency Participants of such Final
Distribution and the resulting reduction in the number of Outstanding Down-MACRO
Tradeable Shares. The Trustee, together with the Administrative Agent, shall
communicate the manner of settling fractional share interests to those Clearing
Agency Participants as of the Record Date in order to assure that each Holder
receives either a Final Distribution and/or a Proportional Mandatory Redemption
of its shares.
ARTICLE 9
AUTHENTICATION AND TRANSFER OF DOWN-MACRO TRADEABLE SHARES
SECTION 9.1 Authentication and Transfer of Certificates. The Trustee
shall provide for the registration of Certificates and of transfers of
Certificates, which will be effected without charge but only upon payment (with
such indemnity as the Trustee may reasonably require) in respect of any tax or
other government charges that may be imposed in relation to such transfer. Upon
surrender for registration or transfer of any Certificate representing the
Down-MACRO Tradeable Shares, the Trustee shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every such Certificate surrendered for registration or transfer
shall be accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the Holder or such Holder's attorney duly
authorized in writing representing that such Holder has complied with the
restrictions set forth in this Article 9. Each Certificate surrendered for
registration or transfer shall be canceled by the Trustee. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Trust Agreement.
SECTION 9.2 Deemed Security Holders. The Trustee may treat the Person
in whose name any Certificate shall be registered on the books and records of
the Trust as the sole Holder of such Certificate and of the Down-MACRO Tradeable
Shares represented by such Certificate for purposes of receiving Distributions
and for all other purposes whatsoever (other than Section 9.3(b) hereof) and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Down-MACRO Tradeable Shares represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.3 Book Entry Interests. (iv) Certificates for Down-MACRO
Tradeable Shares will be issued only in the form of one or more fully
registered, global Certificates (each, a "Global Certificate"), to be held by
the Trustee, as custodian for DTC (the initial Clearing Agency) and shall be
authenticated and executed by the Trustee. Such Global Certificates shall
initially be registered on the books and records of the Trust in the name of
Cede & Co., the nominee of DTC, and no Beneficial Owner will receive a
definitive certificate representing such Beneficial Owner's interests in such
Global Certificates. Such Certificate shall bear the following legend:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR
ITS AGENT 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 DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), 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.
(a) So long as the Certificates are in global form, the Trust and the
Trustee shall be entitled to deal with the Clearing Agency for all purposes of
this Trust Agreement (including the payment of Distributions on the Global
Certificates and receiving approvals, votes, instructions or consents hereunder)
as the Holder of the Down-MACRO Tradeable Shares and the sole Holder of the
Global Certificates and shall have no obligation to the Beneficial Owners.
(b) To the extent that the provisions of this Section 9.3 conflict with
any other provisions of this Trust Agreement, the provisions of this Section 9.3
shall control.
(c) The rights of the Beneficial Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law and
agreements between such Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants, and the Clearing Agency shall receive and transmit
payments of Distributions on the Global Certificates to such Clearing Agency
Participants. The Clearing Agency will make book entry transfers among the
Clearing Agency Participants; provided, however, that solely for the purposes of
determining whether the Beneficial Owners of the requisite amount of Down-MACRO
Tradeable Shares have voted on any matter provided for in this Trust Agreement,
the Trustee may conclusively rely on, and shall be fully protected in relying
on, any written instrument (including a proxy) delivered to the Trustee by the
Clearing Agency setting forth the Beneficial Owners' votes or instructions or
assigning the right to vote or instruct on any matter to any other Persons
either in whole or in part.
(d) A Global Certificate will be exchangeable for Down-MACRO Tradeable
Shares registered in the names of persons other than DTC or its nominee or a
successor Clearing Agency or its nominee only if (i) DTC or such successor
Clearing Agency, as applicable, notifies the Trust that it is unwilling or
unable to continue as a Clearing Agency for such Global Certificate and no
successor Clearing Agency will have been appointed by the Trust within 90 days
of such notice, (ii) DTC or such successor Clearing Agency, as applicable, at
any time, ceases to be a clearing agency registered under the Exchange Act at
which time DTC or such successor Clearing Agency, as applicable, is required to
be so registered to act as such clearing agency and no successor Clearing Agency
shall have been appointed, (iii) subject to obtaining an opinion of a nationally
recognized tax counsel with experience in such matters that there will be no
adverse income or franchise tax consequences under the laws of New York or
general corporation or unincorporated business tax consequences under the laws
of the City of New York upon the issuance of the Down-MACRO Tradeable Shares in
certificated form, the Trust determines that such Global Certificate will be so
exchangeable by the Trust within 90 days, or (iv) the Depositor voluntarily
elects to discontinue the use of the book-entry transfer system. Any Global
Certificate that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Down-MACRO Tradeable Shares registered in such names as DTC or
any successor Clearing Agency or the Trust, as applicable, shall direct.
(e) If the Global Certificates are exchanged pursuant to Section
9.3(e), Distributions may, at the Trust's option, be paid by check mailed to the
persons entitled thereto as shown on the register maintained by the Transfer
Agent; provided, however, a Holder of $5,000,000 or more in Aggregate Par Amount
of Down-MACRO Tradeable Shares shall be entitled to received Distributions, if
any, on any Distribution Payment Date by wire transfer of immediately available
funds if appropriate wire transfer instructions have been received in writing by
the Trust not less than 15 days prior to such Distribution Payment Date. Any
such wire transfer instructions received by the Trust will remain in effect
until revoked by such Holder.
SECTION 9.4 Notices to Clearing Agency. Whenever a notice or other
communication to the Holders is required under this Trust Agreement, the Trustee
shall give all such notices and communications specified herein to be given to
the Holders to the Clearing Agency and shall have no notice obligations to the
Beneficial Owners.
SECTION 9.5 Appointment of Authenticating Agent. At any time when any
Certificates remain outstanding, the Trustee may appoint an authenticating agent
or agents (each, an "Authenticating Agent") with respect to the Certificates
which shall be authorized to act on behalf of the Trustee to authenticate
Certificates issued upon original issuance, exchange or registration of
transfer. The Trustee may revoke such power and remove any Authenticating Agent
at any time.
If any Authenticating Agent is appointed hereunder, the
Certificates may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternate certificate of authentication in the following
form:
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
[Name of Trustee], not in its individual
capacity but solely as Trustee
By:_____________________________________
as Authenticating Agent
By:_____________________________________
Authorized Signatory
SECTION 9.6 Appointment of Successor Clearing Agency. If any Clearing
Agency elects to discontinue its services as securities depository with respect
to the Down-MACRO Tradeable Shares, the Trustee may appoint a successor Clearing
Agency with respect to such Down-MACRO Tradeable Shares.
SECTION 9.7 Mutilated, Destroyed, Lost or Stolen Certificate. If (a)
any mutilated Certificate is surrendered to the Trustee, or if the Trustee shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Certificate; and (b) there shall be delivered to the Trustee such security or
indemnity as may be required by it to keep it harmless, then, in the absence of
notice that such Certificate shall have been acquired by a protected purchaser,
the Trustee on behalf of the Trust shall execute and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.7, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Down-MACRO Tradeable Shares, as if originally issued, whether or not the lost,
stolen or destroyed Certificate shall be found at any time.
ARTICLE 10
LIMITATION OF LIABILITY OF HOLDERS,
THE DEPOSITOR, THE ADMINISTRATIVE AGENT, THE TRUSTEE OR OTHERS
SECTION 10.1 Liability. (v) Except as expressly set forth in this Trust
Agreement and the terms of the Down-MACRO Tradeable Shares, the Depositor, the
Administrative Agent and the Trustee shall not be:
(i) personally liable for the return of any portion of the
investment of Holders of Down-MACRO Tradeable Shares (or any return
thereon) which shall be made solely from Trust Property;
(ii) required to pay to the Trust, or to any Holder any deficit
upon dissolution of the Trust or otherwise; and
(iii) required to pay any fees or expenses relating to the
operation of the Trust.
(b) The Depositor, the Administrative Agent and the Trustee each
undertakes to perform such duties and only such duties as are specifically set
forth in this Trust Agreement, and no implied covenants or obligations, shall be
read into this Trust Agreement.
(c) In the absence of gross negligence or willful misconduct on the
part of the Depositor, the Administrative Agent, MacroMarkets or the Trustee,
the Depositor, the Administrative Agent, MacroMarkets and the Trustee shall not
be liable for any action taken, suffered or omitted or for any error in judgment
made by it in the performance of its duties under this Trust Agreement. The
Depositor, Administrative Agent, MacroMarkets and Trustee shall not be liable
for any error resulting from the use or reliance on a source of information used
in good faith and without gross negligence to make any determination under this
Trust Agreement. The Depositor, the Administrative Agent, MacroMarkets and the
Trustee shall not be liable for any error in judgment made in good faith unless
such party has been grossly negligent in ascertaining or failing to ascertain
the pertinent facts. In no event shall the Depositor, the Administrative Agent,
MacroMarkets or the Trustee be liable for special, consequential or punitive
damages or for any failure or delay in the performance of its obligations under
this Trust Agreement due to forces reasonably beyond the control of the
Depositor, the Administrative Agent, MacroMarkets or the Trustee including,
without limitation, strikes, work stoppages, acts of war or terrorism,
insurrection, revolution, nuclear or natural catastrophes or acts of God and
interruptions, loss or malfunctions of utilities, communications or computer
(software or hardware) services including, without limitation, Internet
services; it being understood that the Depositor, the Administrative Agent,
MacroMarkets and the Trustee shall each use commercially reasonable efforts
which are consistent with accepted practices in its industry to resume
performance as soon as practicable under the circumstances.
SECTION 10.2 Outside Businesses. Any of the Depositor, the
Administrative Agent, MacroMarkets, the Trustee, their respective officers,
directors, managers, shareholders, partners, members, representatives, employees
or Affiliates, and the Holders may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
Holders shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. None of the foregoing Persons shall be
obligated to present any particular investment or other opportunity to the
Trust, even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any such Person shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any of
the foregoing Persons may engage or be interested in any financial or other
transaction with the Depositor or any Affiliate of the Depositor, or may act as
depository for, trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Depositor or its Affiliates.
ARTICLE 11
VOTING AND AMENDMENTS
SECTION 11.1 Voting. Holders shall be entitled to vote as a single
class on all matters submitted to the vote of the Holders. Each Down-MACRO
Tradeable Share will have one vote on all matters submitted to the vote of the
Holders. In accordance with Section 15.6 of the Down-MACRO Holding Trust
Agreement, the Holders of the Down-MACRO Tradeable Shares shall be able to
direct the Trustee in the exercise of the voting rights associated with the
Down-MACRO Holding Shares held on deposit in the Down-MACRO Tradeable Trust.
Each Holder of Down-MACRO Tradeable Shares shall be entitled to vote on (i) any
amendments to the Down-MACRO Holding Trust Agreement that require the prior
written consent of the shareholders as described in Section 15.1 of the
Down-MACRO Holding Trust Agreement, (ii) any amendment to the Income
Distribution Agreement and the Settlement Contracts (each as defined in the
Down-MACRO Holding Trust Agreement), (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 other
matters specified in this Trust Agreement. The Down-MACRO Holding Shares held by
the Trust shall be voted by the Trustee in the same proportion as such Holders
of the Down-Macro Tradeable Trust Shares voted.
SECTION 11.2 Amendments.
(a) Except as provided in this Section 11.2, so long as any Down-MACRO
Tradeable Shares are outstanding, any amendment, restatement or revision of or
to this Trust Agreement that would materially and adversely alter the rights,
terms or preferences of the Down-MACRO Tradeable Shares may be effected only
with the approval of a majority of the Holders of Down-MACRO Tradeable Shares as
measured by the Aggregate Par Amount of Down-MACRO Tradeable Shares outstanding
voting on such matter.
(b) No amendment to this Trust Agreement shall be made, and any such
purported amendment shall be void and ineffective:
(i) unless, in the case of any purported amendment, the Trustee
shall have first received an Officer's Certificate of the Depositor
stating that such purported amendment could not reasonably be expected
to materially and adversely affect the rights, terms or preferences of
the Down-MACRO Tradeable Shares or impair the Trust's ability to fully
perform its obligations under each of its contractual arrangements,
unless each party affected thereby consents thereto;
(ii) unless, in the case of any purported amendment which affects
the rights or powers of the Trustee, the Trustee shall have consented
to such amendment; and
(iii) if the result of such amendment would be to:
(A) cause the Trust to be classified other than as a grantor
trust for U.S. federal income tax purposes; or
(B) cause the Trust to be deemed to be an investment company
required to be registered under the Investment Company Act.
(c) The unanimous consent of the Holders shall be required in order to
amend Section 6.5, 10.1, 11.2 or 11.3 of this Trust Agreement and with respect
to:
(i) any modification to the amount or timing of any distribution
that is required to be made on the Down-MACRO Holding Shares; and
(ii) any reductions to the percentage of shareholders that are
required to consent to any amendment herein.
(d) Notwithstanding the other provisions of this Section 11.2, this
Trust Agreement may not be amended without the direction of Holders evidencing
not less than 66 and 2/3% of the Aggregate Par Amount with respect to:
(i) the liability, and limitations thereon, of the Trustee and any
of its Affiliates;
(ii) the right of the Holders of the Down-MACRO Tradeable Shares to
vote on matters submitted to the vote of Holders of the Down-MACRO
Tradeable Shares;
(iii) the provisions of this Trust Agreement relating to amendments
to this Trust Agreement; and
(iv) the rights of the Holders of the Down-MACRO Tradeable Shares
to receive Distributions on the Down-MACRO Tradeable Shares in
accordance with their terms, including Distributions in connection with
a liquidation of the Trust.
(e) This Trust Agreement, may be amended without the consent of the
Holders to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Trust Agreement
that may be defective or inconsistent with any other provision of this
Trust Agreement;
(iii) to add to the covenants, restrictions or obligations of any
entity under this Trust Agreement for the benefit of the Holders or to
modify any provisions of this Trust Agreement so long as such
modification does not adversely affect the interest of the Holders in
any material respect;
(iv) to evidence and provide for the acceptance of appointment
under this Trust Agreement of a successor trustee;
(v) to conform the provisions of this Trust Agreement to the
Prospectus (notwithstanding anything in this Trust Agreement to the
contrary);
(vi) to comply with any requirements imposed by the Code or any
securities laws; and
(vii) conform to any change in the Investment Company Act or
written change in interpretation or application of the rules and
regulations promulgated thereunder by any legislative body, court,
government agency or regulatory authority;
provided, however, that any such amendment made pursuant to this Section 11.2(e)
shall be void if such amendment materially and adversely affects the Holders,
unless first approved by Holders evidencing not less than 66 and 2/3% of the
Aggregate Par Amount voting on such matter.
SECTION 11.3 Other Matters.
(a) If the consent of the holders of the Down-MACRO Holding Shares is
required with respect to any amendment, modification or waiver of the terms of
or rights or preferences under, or other matter in respect of the Down-MACRO
Holding Shares, the Down-MACRO Holding Trust or any agreement to which the
Down-MACRO Holding Trust is a party, the Trustee shall request the direction of
the Holders with respect to such matter and shall vote the Trust's interest in
the Down-MACRO Holding Shares with respect thereto in the same proportion as
such Holders of the Down-MACRO Tradeable Shares voted. At least Holders
evidencing not less than 66 and 2/3% of the Aggregate Par Amount entitled to
provide such direction shall be represented in any such direction of Holders
given pursuant to this Section 11.3(a).
(b) Prior to taking any Legal Action with respect to any Trust Property
that would materially and adversely affect the rights, terms or preferences of
the Down-MACRO Holding Shares, the Trustee, as the holder of the Trust Property
shall request the direction of the Holders with respect to such Legal Action and
shall act with respect to such Legal Action as directed by a majority of the
Aggregate Par Amount of outstanding Down-MACRO Tradeable Shares actually voting
on such matter.
ARTICLE 12
REPRESENTATIONS OF THE TRUSTEE AND THE ADMINISTRATIVE AGENT
SECTION 12.1 Representations and Warranties of the Trustee. [ ] in its
capacity as initial Trustee under this Trust Agreement, hereby makes, and any
successor Trustee by its appointment hereunder shall make, on the Closing Date
(and on the date of any such appointment), the following representations,
warranties and covenants to the Down-MACRO Tradeable Trust in executing this
Trust Agreement (and agrees that the Depositor, 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 [ ]
trust 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 [ ] (or with respect to
any successor Trustee, under the laws of the applicable jurisdiction of
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. The Trustee 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 Down-MACRO Tradeable Shares hereunder.
(c) Due Authorization. The execution, delivery, and performance of this
Trust Agreement has been duly authorized by the Trustee by all necessary
corporate action on the part of the Trustee.
(d) Binding Obligation. This Trust Agreement constitutes a legal, valid
and binding obligation of the Trustee, enforceable in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except as such
enforceability may be limited by general principles of equity (whether
considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust Agreement by
the Trustee, the performance of the transactions contemplated by this Trust
Agreement and the fulfillment of the terms hereof applicable to the Trustee,
will not conflict with, violate, result in any breach of any of the material
terms and provisions of, or constitute (with or without notice or lapse of time
or both) a material default under, any Requirement of Law applicable to the
Trustee or any indenture, contract, agreement, mortgage, deed of trust or other
instrument to which the Trustee is a party or by which it or any of its
properties are bound.
(f) No Proceedings. There are no proceedings or investigations pending
or threatened against the Trustee before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality seeking
to prevent the issuance of the Down-MACRO Tradeable 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 Down-MACRO Tradeable Shares.
(h) Protection of Holders of the Down-MACRO Holding Shares' Rights. 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 Down-MACRO
Tradeable Shares nor shall it revise amounts to be distributed on the Down-MACRO
Tradeable 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 Down-MACRO Tradeable 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 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 Trust in such transactions.
SECTION 12.2 Representations and Warranties of the Administrative
Agent. [ ], in its capacity as initial Administrative Agent, hereby makes, and
any successor Administrative 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 Trust (and agrees that the
Trustee, Depositor and the Holders, as applicable, may rely on each such
representation, warranty and covenant):
(a) Organization and Good Standing. The Administrative Agent is [ ] (or
with respect to any successor Administrative Agent, such other corporate entity
as may be applicable) duly organized, validly existing and in good standing
under the laws of the [ ] (or with respect to any successor Administrative
Agent, the applicable jurisdiction of its organization), and has full corporate
power, authority and legal right to execute, deliver and perform its obligations
under this Trust Agreement and, in all material respects, to own its properties
and conduct its business as such properties are presently owned and as such
business is presently conducted.
(b) Due Qualification. The Administrative Agent is duly qualified to do
business and is in good standing as a foreign corporation (or is exempt from
such requirements), and has obtained all necessary licenses and approvals in
each jurisdiction in which failure to so qualify or to obtain such licenses and
approvals would have a material adverse effect on the interests of the Holders
of the Down-MACRO Tradeable Shares hereunder.
(c) Due Authorization. The execution, delivery and performance of this
Trust Agreement has been duly authorized by the Administrative Agent by all
necessary corporate action on the part of the Administrative Agent.
(d) Binding Obligation. This Trust Agreement constitutes a legal, valid
and binding obligation of the Administrative Agent, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect, affecting the enforcement of creditors' rights in general
and except as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity).
(e) No Violation. The execution and delivery of this Trust Agreement by
the Administrative Agent, the performance of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof applicable to the
Administrative Agent, will not conflict with, violate, result in any breach of
any of the material terms and provisions of, or constitute (with or without
notice or lapse of time or both) a material default under, any Requirement of
Law applicable to the Administrative Agent or any indenture, contract,
agreement, mortgage, deed of trust or other instrument to which the
Administrative Agent is a party or by which it or any of its properties are
bound.
(f) No Proceedings. There are no proceedings or investigations pending
or threatened against the Administrative 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, would materially and adversely
affect the performance by the Administrative Agent of its obligations under this
Trust Agreement, or seeking any determination or ruling that would materially
and adversely affect the validity or enforceability of this Trust Agreement.
(g) Compliance with Requirements of Law. The Administrative Agent shall
duly satisfy all obligations set forth herein, will maintain in effect all
qualifications required under Requirements of Law and will comply in all
material respects with all other Requirements of Law in connection with its
obligations set forth herein, inasmuch as the failure to comply with such
requirements would have a material adverse effect on the interests of the
Holders of the Down-MACRO Tradeable Shares.
(h) Protection of Holders of the Down-MACRO Tradeable Shares' Rights.
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
Down-MACRO Tradeable 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 of this Trust Agreement, the performance by the Administrative Agent of
the transactions contemplated by this Trust Agreement and the fulfillment by the
Administrative Agent of the terms hereof, have been obtained; provided, however,
that the Administrative Agent makes no representation or warranty regarding
state securities or "blue sky" laws in connection with the distribution of the
Down-MACRO Tradeable Shares.
ARTICLE 13
ESTABLISHMENT OF ACCOUNTS
SECTION 13.1 Securities Account.
(a) On or prior to the Closing Date, the Trustee will establish, in the
name of the Trustee for the benefit of the Down-MACRO Tradeable Trust at the
offices of the Trustee, a segregated interest bearing trust account, titled the
"MACROShares Down Oil Benchmark Tradeable Trust Securities Account," with the
account number listed on Schedule I attached hereto (such account, the
"Securities Account") into which the Trustee, at the instructions of the
Administrative Agent, will from time to time deposit and withdraw Down-MACRO
Holding Shares pursuant to Sections 6.2 and 6.6 of this Trust Agreement.
(b) The Securities Account will be subject to the exclusive dominion
and control of the Trustee and will be maintained as a segregated
special-purpose trust account with the Trustee. 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
Down-MACRO Tradeable Trust or any Holder of Down-MACRO Tradeable Shares.
(c) On the Closing Date, the Depositor shall make an Initial Deposit
into the Securities Account in accordance with Section 6.1(c). The Depositor
shall have no right to withdraw securities or any amounts on deposit in the
Securities Account. The Trustee is irrevocably authorized to make withdrawals
from the Securities Account pursuant to Sections 6.2 and 6.6 of this Trust
Agreement; provided, that it has received the proper instructions from an
Authorized Participant in accordance with the Participants Agreement. The
Depositor shall have no obligation to replenish any securities or amounts
withdrawn from the Securities Account.
SECTION 13.2 Distribution Account.
(a) On or prior to the Closing Date, the Trustee will establish, in the
name of the Trustee for the benefit of the Down-MACRO Tradeable Trust at the
offices of the Trustee, a segregated interest bearing trust account, titled the
"MACROShares Down Oil Benchmark Tradeable Trust Distribution Account," with the
account number listed on Schedule I attached hereto (such account, the
"Distribution Account") into which the Trustee will from time to time deposit
distributions on the Down-MACRO Holding Shares.
(b) The Distribution Account will be subject to the exclusive dominion
and control of the Trustee and will be maintained as a segregated
special-purpose trust account with the Trustee. 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 Distribution Account for any amount owed to it by
the Down-MACRO Tradeable Trust or any Holder of Down-MACRO Tradeable Shares.
(c) On any Business Day, the Trustee shall deposit any amount received
on the Down-MACRO Holding Shares held in the Trust into the Distribution
Account.
(d) On each Distribution Payment Date, any amounts on deposit in the
Distribution Account shall be distributed in accordance with Section 6.5 of this
Trust Agreement.
ARTICLE 14
MISCELLANEOUS
SECTION 14.1 Notices. All notices provided for in this Trust Agreement
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, by facsimile or mailed by first-class mail, unless otherwise
indicated below, as follows:
(a) if given to the Trust, in care of the Trustee at the Trust's
mailing address set forth below (or such other address as the Trust may give
notice of to the Holders):
[ ]
[ ]
[City], [State] [Zip]
Facsimile number: [ ]
Attention: [ ]
(b) if given to the Depositor, at its address set forth below (or such
other address as the Depositor may give notice of to the Holders):
MACRO Securities Depositor, LLC
00 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxxxx 00000
Facsimile number: (973) 453- 8212
Attn: Xxxxxx Xxxxxxx, III
(c) if given to the Administrative Agent, at its address set forth
below (or such other address as the Administrative Agent may give notice of to
the Holders):
[ ]
[ ]
[ ]
Facsimile number: ([ ]) [ ]- [ ]
Attn: [ ]
(d) A copy of any notice given pursuant to Section 14.1(a), (b) or (c)
shall be delivered to the following:
MacroMarkets LLC
00 Xxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Facsimile number: (000) 000-0000
Attention: Xxxxxx Xxxx
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Facsimile number: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
and
[ ]
[ ]
[ ]
Facsimile number: ([ ]) [ ]- [ ]
Attn: [ ]
(e) if given to any Holder by first-class mail (or by facsimile if
requested by such Holder), at the address set forth on the books and records of
the Trust.
All such notices shall be deemed to have been given when
received in person, by facsimile, email or similar form of electronic
communication or mailed by first-class mail, postage prepaid, except that if a
notice or other document is refused delivery or cannot be delivered because of a
changed address of which no notice was given, such notice or other document
shall be deemed to have been delivered on the date of such refusal or inability
to deliver.
SECTION 14.2 Trust to be Administered as a Grantor Trust. Nothing in
this Trust Agreement or any other agreement entered into by the Trust shall be
construed to give the Trustee the power to vary the investments of the
Beneficial Owners within the meaning of the Treasury Regulations Section
301.7701-4(c) or similar or successor provisions of the United States Treasury
Regulations under the Code, nor shall the Depositor give the Trustee any
direction that would vary the investment of the Beneficial Owners. The Trustee
shall not be liable to any Person for the failure of the Trust to qualify as a
grantor trust under the Code or any comparable provisions of the laws of any
state or any other jurisdiction where such treatment is sought, provided that
this sentence shall not limit the Trustee's responsibility for the
administration of the Trust in accordance with this Trust Agreement.
SECTION 14.3 Non-Petition. To the fullest extent permitted by
applicable law, notwithstanding any prior termination of this Trust Agreement,
none of the Depositor, the Administrative Agent, the Trustee, or any Paying
Agent or any Holder of Down-MACRO Tradeable Shares will acquiesce, petition or
otherwise invoke or cause the Trust to invoke the process of any court or
governmental authority for the purpose of commencing or sustaining a case
against the Trust under any federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Trust or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Trust until payment in full of the Down-MACRO Tradeable Shares and the
expiration of a period equal to the longest applicable "preference period"
prescribed by the federal Bankruptcy Court or other applicable law, plus ten
(10) days, following such payment.
SECTION 14.4 GOVERNING LAW. THIS TRUST AGREEMENT, THE DOWN-MACRO
TRADEABLE SHARES AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS OF THE STATE OF NEW YORK OR ANY OTHER
JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE LAW OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK.
SECTION 14.5 Change in Law. If, after the date of this Trust Agreement,
there is (i) a change in any law, rule or regulation, (ii) a judicial decision
or (iii) a pronouncement of any administrative or professional standards setting
body, in each case that would adversely affect any of the terms of this Trust
Agreement or the obligations of the parties hereto, the parties shall use their
reasonable efforts to determine by negotiation and discussion the manner in
which to address the impact of such change, decision or pronouncement, as the
case may be; provided, however, that no amendment may be made to this Trust
Agreement without first complying with Article 11 of this Trust Agreement.
SECTION 14.6 Headings. Headings contained in this Trust Agreement are
inserted for convenience of reference only and do not affect the interpretation
of this Trust Agreement or any provision hereof.
SECTION 14.7 Successors and Assigns. Whenever in this Trust Agreement
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Trust Agreement by the Depositor and the Trustee shall bind and inure to
the benefit of their respective successors and assigns, whether so expressed.
SECTION 14.8 Partial Enforceability. If any provision of this Trust
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or the application
of such provision to Persons or circumstances other than those to which it is
held invalid, shall not be affected thereby.
SECTION 14.9 Counterparts. This Trust Agreement may contain more than
one counterpart of the signature page and this Trust Agreement may be executed
by the affixing of the signatures of the Trustee and a duly authorized officer
of the Depositor to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
IN WITNESS WHEREOF, each of the undersigned has caused these
presents to be executed as of the day and year first above written.
[ ],
not in its individual capacity but solely as
Trustee
By:________________________________________
Name:
Title:
[ ],
not in its individual capacity but solely
as Administrative Agent
By: _______________________________________
Name:
Title:
MACRO SECURITIES DEPOSITOR, LLC,
as Depositor
By:________________________________________
Name:
Title:
EXHIBIT A
FORM OF
MACROSHARES DOWN OIL $[ ] TRADEABLE SHARE
Evidencing All Undivided Beneficial Interests in the
MACROShares Down Oil Benchmark Tradeable Trust
CERTIFICATE NO. R-1
[Date]
CUSIP No. [ ]
MACROSHARES DOWN OIL BENCHMARK TRADEABLE TRUST
MACROShares Down Oil $[ ] Tradeable Shares
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
TO THE TRUSTEE OR ITS AGENT 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 DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUIRED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), 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.
This certifies that CEDE & CO. is the owner and registered
holder of this Certificate evidencing all issued and outstanding MACROShares
Down Oil $[ ] Tradeable Shares (the "Shares"), with a Stated Par Amount as
set forth in the Down-MACRO Tradeable Trust Agreement, dated as of [ ],
2006 (as may be amended, supplemented or modified from time to time, the "Trust
Agreement"), among MACRO Securities Depositor, LLC, as Depositor (the
"Depositor"), [ ], not in its individual capacity,
but solely as Trustee (the "Trustee") and [ ], not in its individual capacity
but solely as Administrative Agent (the "Administrative Agent"). Distributions
on the Shares shall be made in accordance with the terms and conditions of the
Trust Agreement. The Trust Agreement provides for the deposit of additional
Down-MACRO Holding Shares (as defined in the Trust Agreement) with the Trustee
from time to time and the issuance by the Trustee of additional Shares in the
form of Creation Units representing the Down-MACRO Holding Shares so deposited.
At any given time this Certificate shall represent all undivided beneficial
interests in the Trust, which shall be the total number of Shares that are
outstanding at such time.
The holder of this Certificate, by virtue of the purchase and
acceptance hereof, assents to and shall be bound by the terms of the Trust
Agreement, copies of which are on file and available for inspection at
reasonable times during business hours at the New York office of the Trustee,
to which reference is made for all the terms, conditions and covenants thereof.
The Trustee may deem and treat the person in whose name this Certificate is
registered upon the books of the Trustee as the owner hereof for all purposes
and the Trustee shall not be affected by any notice to the contrary.
IN WITNESS WHEREOF, the Trust has caused this Certificate to
be signed as of the date first set forth above.
Certificate of Authentication:
This is one of the Certificates referred to
in the within aforementioned Trust Agreement.
[ ], MACROSHARES DOWN OIL BENCHMARK
not in its individual capacity but TRADEABLE TRUST
solely as Trustee
By: [ ], not in
its individual capacity but solely
as Trustee
By:____________________________________ By:_______________________________
Authorized Signatory Name:
Title:
FOR VALUE RECEIVED,____________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
Down-MACRO Tradeable Shares represented by this Certificate, and do hereby
irrevocably constitute and appoint ____________________________________________
attorney to transfer the said shares on the books kept for registration
thereof, with full power of substitution in the premises.
Dated _____________________, ________
In presence of
_____________________________________ ___________________________________
EXHIBIT B
Form of Notice
SCHEDULE I
Account Name Bank Account Number
__________________________________________ _________________________________ ____________________________
MACROShares Down Oil Benchmark Tradeable [Redacted] [Redacted]
Trust Securities Account
MACROShares Down Oil Benchmark Tradeable [Redacted] [Redacted]
Trust Distribution Account
