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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

 

 

FORM 10-K/A

Amendment No. 1

 

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 31, 2010

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number 001-32910

 

 

CurrencyShares ® Canadian Dollar Trust

Sponsored by Rydex Specialized Products LLC,

d/b/a Rydex Investments

(Exact name of registrant as specified in its charter)

 

 

 

New York   No. 06-6551776

(State or other jurisdiction of

incorporation or organization)

  (IRS Employer Identification No.)

 

   

805 King Farm Boulevard, Suite 600

Rockville, Maryland

      20850  
    (Address of principal executive offices)     (Zip Code)  

(301) 296-5100

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes   ¨     No   x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes   ¨     No   x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x     No   ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ¨     No   ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):    Large accelerated filer     ¨   Accelerated filer   x     Non-accelerated filer   ¨     Smaller reporting company   ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ¨     No   x

Aggregate market value of 6,100,000 shares of the registrant’s common stock held by non-affiliates of the registrant, based on the closing price of a share of the registrant’s common stock on April 30, 2010 as reported by NYSE Arca on that date: $597,800,000.

 

 

 


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EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A to the Annual Report on Form 10-K for the year ended October 31, 2010 of CurrencyShares ® Canadian Dollar Trust, which Form 10-K was originally filed with the Securities and Exchange Commission on January 14, 2011, is being filed for the purpose of amending Item 15 in order to (i) include the report and consent of our prior independent registered public accounting firm, (ii) amend the Exhibit Index and (iii) file certain exhibits as indicated in the Exhibit Index. Other than providing updates to the cover page, amending Item 15 and filing updated exhibits and certifications, no other changes have been made to the original Form 10-K. This Amendment No. 1 does not reflect any subsequent events occurring after the filing of the original Form 10-K or modify or update in any way disclosures made in the original filing.


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PART IV

 

Item 15. Exhibits and Financial Statement Schedules

Financial Statements

See Index to Financial Statements on Page F-1 for a list of the financial statements being filed as a part of this report. Schedules have been omitted since they are either not required, not applicable or the information has otherwise been included.

Exhibits

 

Exhibit No.

  

Description

  3.1    Certificate of Formation of Rydex Specialized Products LLC, incorporated herein by reference to Exhibit 3.1 filed with Amendment No. 1 to Form S-1 Registration Statement (File number 333-132363) filed on June 9, 2006.
  3.2    Limited Liability Company Agreement of Rydex Specialized Products, LLC, incorporated herein by reference to Exhibit 3.2 filed with Amendment No. 1 to Form S-1 Registration Statement (File number 333-132363) filed on June 9, 2006.
  4.1    Depositary Trust Agreement dated as of June 8, 2006 among Rydex Specialized Products LLC, The Bank of New York, all registered owners and beneficial owners of Canadian Dollar Shares issued thereunder and all depositors.
  4.2    Amendment to Depositary Trust Agreement dated as of November 13, 2008 between Rydex Specialized Products LLC and The Bank of New York Mellon, incorporated herein by reference to Exhibit 4.1 filed with Form 10-Q on September 9, 2010.
  4.3    Participant Agreement dated as of March 25, 2010 among Knight Clearing Services, LLC, The Bank of New York, and Rydex Specialized Products LLC (together with Schedule pursuant to Instruction 2 to Item 601 of Regulation S-K).
  4.4    Amendment to Participant Agreements dated as of December 9, 2010 between The Bank of New York Mellon, the trusts set forth on Schedule A thereto and Rydex Specialized Products LLC.
  4.5    Amendment to Participant Agreements dated as of January 15, 2011 between The Bank of New York Mellon, the trusts set forth on Schedule A thereto and Rydex Specialized Products LLC.
10.1    Deposit Account Agreement dated as of June 8, 2006 between The Bank of New York and the London Branch of JPMorgan Chase Bank, N.A.
10.2    Amendment to Deposit Account Agreement dated as of November 13, 2008 between The Bank of New York Mellon and the London Branch of JPMorgan Chase Bank, N.A., incorporated herein by reference to Exhibit 10.1 filed with Form 10-Q on September 9, 2010.
10.3    Sublicense Agreement dated as of June 9, 2006 between PADCO Advisors II, Inc. and Rydex Specialized Products LLC.
23.1    Consent of PricewaterhouseCoopers LLP.
23.2    Consent of Ernst & Young LLP.

 


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31.1    Certification by Principal Executive Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2    Certification by Principal Financial Officer pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1    Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification by Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 


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CurrencyShares ® Canadian Dollar Trust

Financial Statements as of October 31, 2010

Index

 

     Page  

Independent Registered Public Accounting Firm Reports

     F-2   

Statements of Financial Condition at October 31, 2010 and October 31, 2009

     F-5   

Statements of Income and Comprehensive Income for the year ended October  31, 2010, the year ended October 31, 2009 and the year ended October 31, 2008

     F-6   

Statements of Changes in Shareholders’ Equity for the year ended October  31, 2010, the year ended October 31, 2009 and the year ended October 31, 2008

     F-7   

Statements of Cash Flows for the year ended October 31, 2010, the year ended October  31, 2009 and the year ended October 31, 2008

     F-8   

Notes to the Financial Statements

     F-9   

 

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Report of Independent Registered Public Accounting Firm

To the Shareholders of CurrencyShares ® Canadian Dollar Trust:

In our opinion, the balance sheet as of October 31, 2009 and the related statements of income and comprehensive income, of changes in shareholders’ equity and of cash flows for each of two years in the period ended October 31, 2009 present fairly, in all material respects, the financial position of CurrencyShares ® Canadian Dollar Trust (the “Trust”) at October 31, 2009, and the results of its operations and its cash flows for each of the two years in the period ended October 31, 2009, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland

January 14, 2010

 

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Report of Independent Registered Public Accounting Firm

To the Shareholders of CurrencyShares ® Canadian Dollar Trust:

We have audited the accompanying statement of financial condition of CurrencyShares ® Canadian Dollar Trust (the “Trust”) at October 31, 2010 and the related statements of income and comprehensive income, changes in shareholders’ equity, and cash flows for the year then ended. These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CurrencyShares ® Canadian Dollar Trust at October 31, 2010 and the results of its operations and its cash flows for the year then ended, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of CurrencyShares ® Canadian Dollar Trust’s internal control over financial reporting as of October 31, 2010, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated January 14, 2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

McLean, VA

January 14, 2011

 

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Report of Independent Registered Public Accounting Firm

To the Shareholders of CurrencyShares ® Canadian Dollar Trust:

We have audited CurrencyShares ® Canadian Dollar Trust’s (the “Trust”) internal control over financial reporting as of October 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). CurrencyShares ® Canadian Dollar Trust’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting appearing under Item 9A. Our responsibility is to express an opinion on the Trust’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, CurrencyShares ® Canadian Dollar Trust maintained, in all material respects, effective internal control over financial reporting as of October 31, 2010 based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the statement of financial condition as of October 31, 2010 and the related statements of income and comprehensive income, changes in shareholder’ equity and cash flows for the year ended October 31, 2010 of CurrencyShares ® Canadian Dollar Trust and our report dated January 14, 2011 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

McLean, Virginia

January 14, 2011

 

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CurrencyShares ® Canadian Dollar Trust

Statements of Financial Condition

 

     October 31, 2010      October 31, 2009  

Assets

     

Current Assets:

     

Canadian Dollar deposits, interest bearing

   $ 571,643,155       $ 560,327,680   

Canadian Dollar deposits, non-interest bearing

     —           —     

Receivable from accrued interest

     242,867         —     
                 

Total Current Assets

   $ 571,886,022       $ 560,327,680   
                 

Liabilities, Redeemable Capital Shares and Shareholders’ Equity

     

Current Liabilities:

     

Canadian Dollar deposits, non-interest bearing, overdrawn

   $ 831       $ —     

Redemptions payable

     —           4,629,451   

Accrued Sponsor’s fee

     197,746         176,225   
                 

Total Current Liabilities

     198,577         4,805,676   

Commitments and Contingent Liabilities (note 9)

     —           —     

Redeemable Capital Shares, at redemption value, no par value, 16,500,000 and 11,500,000 authorized, respectively – 5,850,000 and 6,000,000 issued and outstanding, respectively

     571,687,445         555,522,004   

Shareholders’ Equity:

     

Retained Earnings

     —           —     

Cumulative Translation Adjustment

     —           —     
                 

Total Liabilities, Redeemable Capital Shares and Shareholders’ Equity

   $ 571,886,022       $ 560,327,680   
                 

See Notes to Financial Statements.

 

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CurrencyShares ® Canadian Dollar Trust

Statements of Income and Comprehensive Income

 

     Year ended
October 31, 2010
    Year ended
October 31, 2009
    Year ended
October 31, 2008
 

Income

      

Interest Income

   $ 647,347      $ 612,517      $ 5,899,178   
                        

Total Income

     647,347        612,517        5,899,178   

Expenses

      

Sponsor’s fee

     (2,366,977     (1,397,842     (797,034
                        

Total Expenses

     (2,366,977     (1,397,842     (797,034

Net (Loss)/Income

   $ (1,719,630   $ (785,325   $ 5,102,144   
                        

Other Comprehensive Loss:

      

Currency translation adjustment

     (7,589     (33,499     (129,171
                        

Total Comprehensive (Loss)/Income

   $ (1,727,219   $ (818,824   $ 4,972,973   
                        

Basic and Diluted Earnings per share

   $ (0.28   $ (0.19   $ 2.51   

Weighted-average Shares Outstanding

     6,171,233        4,050,685        2,035,792   

Cash Dividends per Share

   $ —     $ 0.15      $ 2.64   

 

* Less than $0.01 per share

See Notes to Financial Statements.

 

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CurrencyShares ® Canadian Dollar Trust

Statements of Changes in Shareholders’ Equity

 

     Year ended
October 31, 2010
    Year ended
October 31, 2009
    Year ended
October 31, 2008
 

Retained Earnings, Beginning of Year

   $ —        $ —        $ —     

Net (Loss)/Income

     (1,719,630     (785,325     5,102,144   

Distributions Paid

     (15,997     (628,316     (5,336,937

Adjustment of redeemable capital shares to redemption value

     1,735,627        1,413,641        234,793   
                        

Retained Earnings, End of Year

   $ —        $ —        $ —     
                        

Cumulative Translation Adjustment, Beginning of Year

   $ —        $ —        $ —     

Currency translation adjustment

     (7,589     (33,499     (129,171

Adjustment of redeemable capital shares to redemption value

     7,589        33,499        129,171   
                        

Cumulative Translation Adjustment, End of Year

   $ —        $ —        $ —     
                        

See Notes to Financial Statements.

 

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CurrencyShares ® Canadian Dollar Trust

Statements of Cash Flows

 

     Year ended
October 31, 2010
    Year ended
October 31, 2009
    Year ended
October 31, 2008
 

Cash flows from operating activities

      

Cash received for accrued income

   $ 405,529      $ 909,406      $ 6,047,029   

Cash paid for expenses

     (2,355,834     (1,260,709     (777,144
                        

Net cash (used in)/provided by operating activities

     (1,950,305     (351,303     5,269,885   

Cash flows from financing activities

      

Cash received to purchase redeemable shares

     249,212,202        464,050,396        180,498,505   

Cash paid to redeem redeemable shares

     (268,320,490     (106,403,278     (151,251,883

Cash paid for distributions

     (15,997     (628,316     (5,336,937
                        

Net cash (used in)/provided by financing activities

     (19,124,285     357,018,802        23,909,685   

Adjustment to period cash flows due to currency movement

     32,389,234        51,496,996        (40,295,756
                        

Increase/(Decrease) in cash

     11,314,644        408,164,495        (11,116,186

Cash at beginning of year

     560,327,680        152,163,185        163,279,371   
                        

Cash at end of year

   $ 571,642,324      $ 560,327,680      $ 152,163,185   
                        

Reconciliation of net (loss)/income to net cash (used in)/provided by operating activities

      

Net (loss)/income

   $ (1,719,630   $ (785,325   $ 5,102,144   

Adjustments to reconcile net (loss)/income to net cash (used in)/provided by operating activities:

      

Receivable from accrued interest

     (242,867     —          (257,325

Prior period receivable from accrued interest

     —          257,325        532,338   

Currency translation adjustment

     (9,329     55,400        (112,080

Accrued sponsor fee

     197,746        176,225        54,928   

Prior period accrued sponsor fee

     (176,225     (54,928     (50,120
                        

Net cash (used in)/provided by operating activities

   $ (1,950,305   $ (351,303   $ 5,269,885   
                        

See Notes to Financial Statements.

 

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CurrencyShares ® Canadian Dollar Trust

Notes to Financial Statements

 

1. Organization and Description of the Trust

The CurrencyShares ® Canadian Dollar Trust (the “Trust”) was formed under the laws of the State of New York on June 8, 2006 when Rydex Specialized Products LLC d/b/a “Rydex Investments” (the “Sponsor”) deposited 100 Canadian Dollars in the Trust’s primary deposit account held by JPMorgan Chase Bank, N.A., London Branch (the “Depository”). The Sponsor is a Delaware limited liability company whose sole member is Rydex Advisors II, LLC (also d/b/a “Rydex Investments”). The Sponsor is responsible for, among other things, overseeing the performance of The Bank of New York Mellon (the “Trustee”) and the Trust’s principal service providers, including the preparation of financial statements. The Trustee is responsible for the day-to-day administration of the Trust.

The investment objective of the Trust is for the Trust’s shares (the “Shares”) to reflect the price of the Canadian Dollar plus accrued interest less the Trust’s expenses and liabilities. The Shares are intended to provide investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Canadian Dollars. The Trust’s assets primarily consist of Canadian Dollars on demand deposit in two deposit accounts maintained by the Depository: a primary deposit account which may earn interest and a secondary deposit account which does not earn interest. The secondary deposit account is used to account for any interest that may be received and paid out on creations and redemptions of blocks of 50,000 Shares (“Baskets”). The secondary account is also used to account for interest earned, if any, on the primary deposit account, pay Trust expenses and distribute any excess interest to holders of Shares (“Shareholders”) on a monthly basis.

The accompanying audited financial statements were prepared in accordance with accounting principles generally accepted in the United States of America.

 

2. Significant Accounting Policies

 

  A. Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of the assets, liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period and the evaluation of subsequent events through the issuance of the financial statements. Actual results could differ from those estimates.

 

  B. Foreign Currency Translation

The Trustee calculates the Trust’s net asset value (“NAV”) each business day, as described in Note 4. Prior to November 13, 2008, Canadian Dollar deposits (cash) were translated for NAV calculation purposes at the Noon Buying Rate, which was the U.S. Dollar (“USD”)/Canadian Dollar exchange rate as determined and published by the Federal Reserve Bank of New York. As of November 13, 2008, Canadian Dollar deposits (cash) are translated for NAV calculation purposes at the Closing Spot Rate, which is the USD/Canadian Dollar exchange rate as determined by WM/Reuters at 4:00 PM (London time) on each day that NYSE Arca is open for regular trading.

The functional currency of the Trust is the Canadian Dollar in accordance with generally accepted accounting standards. For financial statement reporting purposes, the U.S. Dollar is the reporting currency. As a result, the financial records of the Trust are translated from Canadian Dollars to USD. The Closing Spot Rate on the last day of the period is used for translation in the statements of financial condition. The average Closing Spot Rate for the period is used for translation in the statement of income and comprehensive income and the statement of cash flows. Any currency translation adjustment is included in comprehensive income.

 

  C. Federal Income Taxes

The Trust is treated as a “grantor trust” for federal income tax purposes and, therefore, no provision for federal income taxes is required. Interest, gains and losses are passed through to the Shareholders.

 

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Shareholders generally will be treated, for U.S. federal income tax purposes, as if they directly owned a pro-rata share of the assets held in the Trust. Shareholders also will be treated as if they directly received their respective pro-rata protion of the Trust’s income, if any, and as if they directly incurred their respective pro-rata portion of the Trust’s expenses. The acquisition of Shares by a U.S. Shareholder as part of a creation of a Basket will not be a taxable event to the Shareholder.

The Sponsor’s fee accrues daily and is payable monthly. For U.S. federal income tax purposes, an accrual-basis U.S. Shareholder generally will be required to take into account as an expense its allocable portion of the USD-equivalent of the amount of the Sponsor’s fee that is accrued on each day, with such USD-equivalent being determined by the currency exchange rate that is in effect on the respective day. To the extent that the currency exchange rate on the date of payment of the accrued amount of the Sponsor’s fee differs from the currency exchange rate in effect on the day of accrual, the U.S. Shareholder will recognize a currency gain or loss for U.S. federal income tax purposes.

The Trust does not expect to generate taxable income except for interest income (if any) and gain (if any) upon the sale of Canadian Dollars. A non-U.S. Shareholder generally will not be subject to U.S. federal income tax with respect to gain recognized upon the sale or other disposition of Shares, or upon the sale of Canadian Dollars by the Trust, unless: (1) the non-U.S. Shareholder is an individual and is present in the United States for 183 days or more during the taxable year of the sale or other disposition, and the gain is treated as being from United States sources; or (2) the gain is effectively connected with the conduct by the non-U.S. Shareholder of a trade or business in the United States.

A non-U.S. Shareholder’s portion of any interest income earned by the Trust generally will not be subject to U.S. federal income tax unless the Shares owned by such non-U.S. Shareholder are effectively connected with the conduct by the non-U.S. Shareholder of a trade or business in the United States.

 

  D. Revenue Recognition

Interest on the primary deposit account, if any, accrues daily as earned and is received on a monthly basis.

 

  E. Dividends

To the extent that the interest earned by the Trust exceeds the sum of the Sponsor’s fee for the prior month plus other Trust expenses, if any, the Trust will distribute, as a dividend (herein referred to as dividends or distributions), the excess interest earned in Canadian Dollars effective on the first business day of the subsequent month. The Trustee will direct that the excess Canadian Dollars be converted into USD at a prevailing market rate and the Trustee will distribute the USD as promptly as practicable to Shareholders on a pro-rata basis (in accordance with the number of Shares that they own). An income distribution of $0.00755 per share with an ex-dividend date of November 1, 2010 was paid on November 8, 2010.

 

3. Canadian Dollar Deposits

Canadian Dollar principal deposits are held in a Canadian Dollar-denominated, interest-bearing demand account. For the year ended October 31, 2010, there were Canadian Dollar principal deposits of 258,756,507, Canadian Dollar principal redemptions of 273,609,094 and Canadian Dollar withdrawals (to pay expenses) of 2,041,470 resulting in an ending Canadian Dollar principal balance of 581,704,075. This equates to 571,643,155 USD. For the year ending October 31, 2009, there were Canadian Dollar principal deposits of 544,589,735, Canadian Dollar principal redemptions of 129,857,128 and Canadian Dollar withdrawals (to pay expenses) of 1,134,475 resulting in an ending Canadian Dollar principal balance of 598,598,132. This equates to 555,698,229 USD (which is net of USD redemptions payable). For the year ending October 31, 2008, there were Canadian Dollar principal deposits of 185,000,000 and Canadian Dollar principal redemptions of 155,000,000 resulting in an ending Canadian Dollar principal balance of 185,000,000. This equates to 152,163,185 USD.

Net interest, if any, associated with creation and redemption activity is held in a Canadian Dollar-denominated non-interest bearing account, and any balance is distributed in full as part of the monthly income distributions.

 

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4. Redeemable Capital Shares

Shares are classified as “redeemable” for financial statement purposes, since they are subject to redemption. Shares are issued and redeemed continuously in Baskets in exchange for Canadian Dollars. Individual investors cannot purchase or redeem Shares in direct transactions with the Trust. Only Authorized Participants (as defined below) may place orders to create and redeem Baskets. An Authorized Participant is a Depository Trust Company (“DTC”) participant that is a broker-dealer or other institution eligible to settle securities transactions through the book-entry facilities of DTC and which has entered into a contractual arrangement with the Trust and the Sponsor governing, among other matters, the creation and redemption process. Authorized Participants may redeem their Shares at any time in Baskets.

Due to expected continuing creations and redemptions of Baskets and the three-day period for settlement of each creation or redemption, the Trust reflects Shares created as a receivable. Shares redeemed are reflected as a liability on the trade date. Outstanding Shares are reflected at a redemption value, which is the NAV per Share at the period end date. Adjustments to redeemable capital shares at redemption value are recorded against retained earnings, or, in the absence of retained earnings, by charges against the cumulative translation adjustment.

Activity in redeemable capital Shares is as follows:

 

     Year ended
October 31, 2010
    Year ended
October 31, 2009
    Year ended
October 31, 2008
 
     Shares     U.S. Dollar
Amount
    Shares     U.S. Dollar
Amount
    Shares     U.S. Dollar
Amount
 

Opening balance

     6,000,000      $ 555,522,004        1,850,000      $ 152,365,582        1,550,000      $ 163,761,589   

Shares issued

     2,600,000        249,212,202        5,450,000        464,050,396        1,850,000        180,498,505   

Shares redeemed

     (2,750,000     (263,517,597     (1,300,000     (110,652,465     (1,550,00     (151,251,883

Adjustment to period Shares due to currency movement and other

     —          30,470,836        —          49,758,491        —          (40,642,629
                                                

Ending balance

     5,850,000      $ 571,687,445        6,000,000      $ 555,522,004        1,850,000      $ 152,365,582   
                                                

The Trustee calculates the Trust’s NAV each business day. To calculate the NAV, the Trustee subtracts the Sponsor’s accrued fee through the previous day from the Canadian Dollars held by the Trust (including all unpaid interest accrued, if any, through the preceding day) and calculates the value of the Canadian Dollars in USD based upon the Closing Spot Rate. If, on a particular evaluation day, the Closing Spot Rate has not been determined and announced by 6:00 PM (London time), then the most recent Closing Spot Rate will be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the basis for the valuation. If the Trustee and the Sponsor determine that the most recent Closing Spot Rate is not an appropriate basis for valuation of the Trust’s Canadian Dollars, they will determine an alternative basis for the valuation. The Trustee also determines the NAV per Share, which equals the NAV of the Trust divided by the number of outstanding Shares. Shares deliverable under a purchase order are considered outstanding for purposes of determining NAV per Share; Shares deliverable under a redemption order are not considered outstanding for this purpose.

 

F-11


Table of Contents
5. Selected Financial Information (Unaudited)

Fiscal Period Ended October 31, 2010:

 

       Three  months
ended

October 31, 2010
    Three months
ended

July 31, 2010
    Three  months
ended

April 30, 2010
    Three  months
ended

January 31, 2010
 

Income

        

Interest income

   $ 578,053      $ 69,294      $ —        $ —     
                                

Total Income

     578,053        69,294        —          —     

Expenses

        

Sponsor’s fee

     (584,886     (606,964     (588,425     (586,702
                                

Total Expenses

     (584,886     (606,964     (588,425     (586,702

Net Loss

   $ (6,833   $ (537,670   $ (588,425   $ (586,702

Other Comprehensive (Loss)/Income:

        

Currency translation adjustment

     (91     (6,029     (8,627     7,158   
                                

Total Comprehensive Loss

   $ (6,924   $ (543,699   $ (597,052   $ (579,544
                                

Basic and Diluted Earnings per Share

   $ —        $ (0.09   $ (0.09   $ (0.10

Weighted-average Shares Outstanding

     6,010,870        6,305,435        6,226,404        6,144,022   

Cash Dividends per Share

   $ —     $ —        $ —        $ —     

 

* Less than $0.01 per share.

Fiscal Period Ended October 31, 2009:

 

       Three  months
ended

October 31, 2009
    Three months
ended

July 31, 2009
    Three  months
ended

April 30, 2009
    Three  months
ended

January 31, 2009
 

Income

        

Interest income

   $ —        $ —        $ 78,718      $ 533,799   
                                

Total Income

     —          —          78,718        533,799   

Expenses

        

Sponsor’s fee

     (498,116     (453,033     (277,097     (169,596
                                

Total Expenses

     (498,116     (453,033     (277,097     (169,596

Net (Loss)/Income

   $ (498,116   $ (453,033   $ (198,379   $ 364,203   

Other Comprehensive Income/(Loss):

        

Currency translation adjustment

     1,294        (22,293     (9,518     (2,982
                                

Total Comprehensive (Loss)/Income

   $ (496,822   $ (475,326   $ (207,897   $ 361,221   
                                

Basic and Diluted Earnings per Share

   $ (0.09   $ (0.09   $ (0.05   $ 0.17   

Weighted-average Shares Outstanding

     5,326,087        5,110,870        3,614,607        2,136,957   

Cash Dividends per Share

   $ —        $ —        $ 0.02      $ 0.25   

 

F-12


Table of Contents
6. Sponsor’s Fee

The Sponsor’s fee accrues daily at an annual nominal rate of 0.40% of the Canadian Dollars in the Trust (including all unpaid interest but excluding unpaid fees, each as accrued through the immediately preceding day) and is paid monthly.

The Sponsor assumes and pays the following administrative and marketing expenses incurred by the Trust: the Trustee’s monthly fee, NYSE Arca listing fees, SEC registration fees, typical maintenance and transaction fees of the Depository, printing and mailing costs, audit fees and expenses, up to $100,000 per year in legal fees and expenses, and applicable license fees.

In certain exceptional cases the Trust will pay for some expenses in addition to the Sponsor’s fee. These exceptions include expenses not assumed by the Sponsor (i.e., expenses other than those identified in the preceding paragraph), taxes and governmental charges, expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or the interests of Shareholders, indemnification of the Sponsor under the Depositary Trust Agreement, and legal expenses in excess of $100,000 per year.

 

7. Related Parties

The Sponsor is a related party of the Trust. The Sponsor oversees the performance of the Trustee and the Trust’s principal service providers, including the preparation of financial statements, but does not exercise day-to-day oversight over the Trustee or the Trust’s service providers.

 

8. Concentration Risk

All of the Trust’s assets are Canadian Dollars, which creates a concentration risk associated with fluctuations in the price of the Canadian Dollar. Accordingly, a decline in the Canadian Dollar to USD exchange rate will have an adverse effect on the value of the Shares. Factors that may have the effect of causing a decline in the price of the Canadian Dollar include national debt levels and trade deficits, domestic and foreign inflation rates, domestic and foreign interest rates, investment and trading activities of institutions and global or regional political, economic or financial events and situations. Substantial sales of Canadian Dollars by the official sector (central banks, other governmental agencies and related institutions that buy, sell and hold Canadian Dollars as part of their reserve assets) could adversely affect an investment in the Shares.

All of the Trust’s Canadian Dollars are held by the Depository. Accordingly, a risk associated with the concentration of the Trust’s assets in accounts held by a single financial institution exists and increases the potential for loss by the Trust and the Trust’s beneficiaries in the event that the Depository becomes insolvent.

 

9. Commitments and Contingencies

Under the Trust’s organizational documents, the Sponsor is indemnified against any liability or expense it incurs without negligence, bad faith or willful misconduct on its part. The Trust’s maximum exposure under this arrangement is unknown, as this would involve future claims that may be made against the Trust that have not yet occurred.

 

F-13


Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Rockville, State of Maryland, on March 10, 2011.

 

CURRENCYSHARES ® CANADIAN DOLLAR TRUST
By  

Rydex Specialized Products LLC

Sponsor of the CurrencyShares ® Canadian Dollar Trust

  By:   /s/ N ICK B ONOS
   

Nick Bonos

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities* and on the dates indicated.

 

Signature

  

Capacity

 

Date

/s/ N ICK B ONOS

Nick Bonos

   Director and Chief Executive Officer (principal executive officer)   March 10, 2011

/s/ J OSEPH A RRUDA

Joseph Arruda

  

Director and Chief Financial Officer

(principal financial officer and principal accounting officer)

  March 10, 2011

/s/ M ICHAEL B YRUM

Michael Byrum

   Director   March 10, 2011

 

* The registrant is a trust and the persons are signing in their capacities as officers or directors of Rydex Specialized Products LLC, the Sponsor of the registrant.

Exhibit 4.1

RYDEX SPECIALIZED PRODUCTS LLC, d/b/a “RYDEX INVESTMENTS”,

as Sponsor,

THE BANK OF NEW YORK,

as Trustee,

ALL REGISTERED OWNERS AND BENEFICIAL OWNERS OF CANADIAN

DOLLAR SHARES ISSUED HEREUNDER

and

ALL DEPOSITORS

 

 

Depositary Trust Agreement

CurrencyShares SM Canadian Dollar Trust

 

 

Dated as of June 8, 2006


TABLE OF CONTENTS

 

     Page  

ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION

     6   

Section 1.1 Definitions

     6   

Section 1.2 Rules of Construction

     12   

ARTICLE 2 STATEMENT OF PURPOSE; CREATION AND DECLARATION OF TRUST; FORM OF CERTIFICATES; DEPOSIT OF CANADIAN DOLLARS; DELIVERY, REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

     13   

Section 2.1 Statement of Purpose; Duties and Powers of the Trust

     13   

Section 2.2 Creation and Declaration of Trust; Business of the Trust

     13   

Section 2.3 Form of Certificates; Book-Entry System; Transferability of Shares

     14   

Section 2.4 Deposit of Canadian Dollars

     16   

Section 2.5 Delivery of Shares

     18   

Section 2.6 Registration and Registration of Transfer of Shares; Combination and Split-up of Certificates

     18   

Section 2.7 Surrender of Shares and Withdrawal of Trust Property

     19   

Section 2.8 Limitations on Delivery, Registration of Transfer and Surrender of Shares

     20   

Section 2.9 Lost Certificates, Etc.

     21   

Section 2.10 Cancellation and Destruction of Surrendered Certificates

     22   

Section 2.11 Splits and Reverse Splits of Shares

     22   

ARTICLE 3 CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES

     22   

Section 3.1 Liability of Registered Owner for Taxes and Other Governmental Charges

     22   

Section 3.2 Warranties on Deposit of Canadian Dollars

     23   

ARTICLE 4 ADMINISTRATION OF THE TRUST

     23   

Section 4.1 Evaluation of Canadian Dollars; Calculation of Net Asset Value

     23   

Section 4.2 Responsibility of the Trustee for Evaluations

     25   

Section 4.3 Interest Account and Non-Interest Account

     25   

Section 4.4 Cash Distributions

     25   

Section 4.5 Distributions of Surplus Property

     26   

Section 4.6 Fixing of Record Date

     26   

Section 4.7 Payment of Trust Expenses

     26   

Section 4.8 Statements and Reports

     28   

 

i


Section 4.9 Further Provisions for Sales of Trust Property; Currency Conversion

     28   

Section 4.10 Counsel

     30   

Section 4.11 Grantor Trust

     30   

ARTICLE 5 THE SPONSOR

     31   

Section 5.1 Duties of the Sponsor

     31   

Section 5.2 Obligations of the Sponsor

     31   

Section 5.3 Prevention or Delay in Performance by the Sponsor

     32   

Section 5.4 Certain Matters Regarding Successor Sponsor

     33   

Section 5.5 Resignation of Sponsor; Successors

     33   

Section 5.6 Compensation of the Sponsor

     34   

Section 5.7 Federal Securities Law Filings

     35   

Section 5.8 Discretionary Actions by Sponsor; Consultation

     36   

ARTICLE 6 THE TRUSTEE

     36   

Section 6.1 Maintenance of Office and Transfer Books by the Trustee

     36   

Section 6.2 Obligations of the Trustee

     37   

Section 6.3 Prevention or Delay in Performance by the Trustee

     38   

Section 6.4 Resignation or Removal of the Trustee; Appointment of Successor Trustee

     38   

Section 6.5 Transfers Between Interest Account and Non-Interest Account

     40   

Section 6.6 The Depository

     41   

Section 6.7 Compensation of the Depository

     41   

Section 6.8 Retention of Trust Documents

     42   

Section 6.9 Prospectus Delivery

     42   

Section 6.10 Discretionary Actions by Trustee; Consultation

     42   

ARTICLE 7 INDEMNIFICATION

     43   

Section 7.1 Indemnification of the Sponsor and Trustee

     43   

ARTICLE 8 AMENDMENT AND TERMINATION

     46   

Section 8.1 Amendment

     46   

Section 8.2 Termination

     47   

ARTICLE 9 MISCELLANEOUS

     50   

Section 9.1 Counterparts

     50   

Section 9.2 Third-Party Beneficiaries

     50   

Section 9.3 Severability

     51   

Section 9.4 Registered Owners, Beneficial Owners and Depositors as Parties; Binding Effect

     51   

Section 9.5 Notices

     51   

Section 9.6 Agent for Service; Submission to Jurisdiction

     52   

Section 9.7 Governing Law

     53   

 

ii


EXHIBIT A –DEPOSIT ACCOUNT AGREEMENT

EXHIBIT B –FORM OF CERTIFICATES

 

iii


DEPOSITARY TRUST AGREEMENT

THIS DEPOSITARY TRUST AGREEMENT dated as of June 8, 2006, between Rydex Specialized Products LLC, a Delaware limited liability company d/b/a “RYDEX INVESTMENTS”, as sponsor, THE BANK OF NEW YORK, a New York banking corporation, as trustee, all Registered Owners and Beneficial Owners from time to time of Canadian Dollar Shares issued hereunder and all Depositors.

W I T N E S S E T H :

WHEREAS the Sponsor desires to establish a trust, to be known as the “CurrencyShares SM Canadian Dollar Trust”, pursuant to the laws of the State of New York;

WHEREAS the Sponsor desires to establish the terms on which Canadian Dollars (as herein defined) may be deposited in the trust and provide for the creation of Canadian Dollar Shares in Baskets (as herein defined) representing fractional undivided interests in the net assets of the trust and the execution and delivery of Certificates (as herein defined) evidencing the Canadian Dollar Shares; and

WHEREAS the Sponsor desires to provide for other terms and conditions upon which the trust shall be established and administered, as hereinafter provided.

NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the Sponsor and the Trustee hereby agree as follows:


ARTICLE 1

DEFINITIONS AND RULES OF CONSTRUCTION

Section 1.1 Definitions.

Except as otherwise specified in this Trust Agreement or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Depositary Trust Agreement.

“Agreement” means this Depositary Trust Agreement, as amended or supplemented in accordance with its terms.

“Authorized Participant” means a Person that, at the time of submitting a Purchase Order or a Redemption Order, (i) is a registered broker-dealer or other securities market participant, (ii) is a DTC Participant or an Indirect Participant and (iii) has in effect a valid Authorized Participant Agreement.

“Authorized Participant Agreement” means an agreement among the Trustee, the Sponsor and an Authorized Participant that authorizes the Authorized Participant to submit Purchase Orders and Redemption Orders under this Agreement.

“Basket” means 50,000 Shares, except that the Trustee, in consultation with the Sponsor, may from time to time increase or decrease the number of Shares comprising a Basket.

“Basket Canadian Dollar Amount” is the amount of Canadian Dollars that must be deposited for issuance of one Basket or that, subject to the exception stated in Section 2.7, is deliverable upon Surrender of one Basket. The Basket Canadian Dollar Amount will be determined as provided in Section 2.4(b).

“Beneficial Owner” means any Person owning, through DTC, a DTC Participant, or an Indirect Participant, a Share.

 

6


“Canadian Dollar” means the official currency of Canada.

“Certificate” means a certificate that may be executed and delivered by the Trustee under this Agreement evidencing Shares.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commission” means the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.

“Corporate Trust Office” means the office of the Trustee at which its depositary receipt business is administered which, at the date of this Agreement, is located at 101 Barclay Street, New York, New York 10286.

“Deliver” means (a) when used with respect to Canadian Dollars, either (i) a wire transfer of immediately available Canadian Dollars to the account specified by the Person entitled to the Delivery or (ii) if requested by the Person entitled to the Delivery, delivery of a certified or official bank check for Canadian Dollars payable as requested by the person entitled to the Delivery and (b) when used with respect to Shares, either (i) one or more book-entry transfers of those Shares to an account or accounts at DTC designated by the Person entitled to such delivery for further credit as specified by that Person or (ii) in the circumstances specified in Section 2.3(e), execution and delivery at the Corporate Trust Office of the Trustee of one or more Certificates evidencing those Shares.

“Deposit Account Agreement” means the Deposit Account Agreement entered into between the Trustee and the Depository, substantially in the form annexed hereto as Exhibit A, as it may be amended or supplemented in accordance with this Agreement.

 

7


“Depositor” means any Authorized Participant that deposits Canadian Dollars into the Trust, either for its own account or on behalf of another Person that is the owner or beneficial owner of those Canadian Dollars.

“Depository” means JPMorgan Chase Bank, N.A., London Branch.

“Dollars” or “$” means the official currency of the United States of America.

“DTC” means The Depository Trust Company, its nominees and their respective successors.

“DTC Participant” means a Person that, pursuant to DTC’s governing documents, is entitled to deposit securities with DTC in its capacity as a “participant.”

“Exchange” means the exchange on which the Shares are principally traded, as specified by the Sponsor, initially the New York Stock Exchange.

“Fiscal Year” means the annual accounting periods of the Trust which will end on October 31 of each year.

“Indemnified Amounts” is defined in Section 7.1.

“Indemnitee” is defined in Section 7.1.

“Indemnitor” is defined in Section 7.1.

“Indirect Participant” means a Person that, by clearing securities through, or maintaining a custodial relationship with, a DTC Participant, has access to the DTC clearing system.

“Interest Account” means the interest-bearing account for the Trust’s assets maintained with the Depository pursuant to the Deposit Account Agreement.

 

8


“London Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day which has been designated a bank holiday in England.

“NAV” means the net asset value of the Trust determined under Section 4.1.

“NAV per Basket” means the value of a Basket determined under Section 2.4.

“NAV per Share” means the value of a Share determined under Section 4.1.

“New York Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which the Exchange is not open for regular trading at noon, New York time.

“Non-Interest Account” means the non-interest-bearing account maintained with the Depository pursuant to the Deposit Account Agreement.

“Noon Buying Rate” means the Canadian Dollar/Dollar exchange rate, as determined and published by the Federal Reserve Bank of New York each New York Business Day at approximately 12:00 PM (New York time).

“Order Cutoff Time” means (i) 4:00 PM (New York time) or (ii) another time agreed to by the Sponsor and the Trustee and of which Registered Owners and all existing Authorized Participants have been notified by the Trustee.

“Order Date” means, with respect to a Purchase Order, the date specified in Section 2.4(a) and, with respect to a Redemption Order, the date specified in Section 2.7.

“Person” means any natural person or any limited liability company, corporation, partnership, joint venture, association, joint stock company, trust,

 

9


unincorporated organization or government or any agency or political subdivision thereof.

“Proceeding” is defined in Section 7.1.

“Purchase Order” is defined in Section 2.4.

“Qualified Bank” means a bank, trust company, corporation or national banking association organized and doing business under the laws of the United States or any State of the United States that is authorized under those laws to exercise corporate trust powers and that (i) is a DTC Participant or a participant in such other securities depository as is then acting with respect to the Shares, (ii) unless counsel to the Sponsor determines that the following requirement is not necessary for the exception under Section 408(m) of the Code to apply, is a banking institution as defined in Section 408(n) of the Code and (iii) had, as of the date of its most recent annual financial statements, an aggregate capital, surplus and undivided profits of at least $500,000,000.

“Redemption Order” is defined in Section 2.7.

“Registered Owner” means the Person in whose name Shares are registered on the books of the Trustee maintained for that purpose.

“Registrar” means any bank or trust company that is appointed to register Shares and transfers of Shares as herein provided.

“Relevant Price” means the quotient obtained by dividing one (1) by the Noon Buying Rate, except as provided below. If, on a particular evaluation day, the Federal Reserve Bank of New York does not announce a Noon Buying Rate by 2:00 PM (New York time), then the quotient obtained by dividing one (1) by the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate will be the “Relevant Price” and be used to determine the NAV of the Trust unless the Trustee, in consultation with the Sponsor, determines that such price is inappropriate to use as the

 

10


basis for such valuation. In the event that the Trustee and the Sponsor determine that the most recent Federal Reserve Bank of New York determination of the Noon Buying Rate is not an appropriate basis for valuation of the Trust’s Canadian Dollars, they shall determine an alternative basis for such evaluation to be employed by the Trustee, which will be the “Relevant Price.”

“Settlement Date” means, with respect to a Purchase Order, the date specified in Section 2.4(a) and, with respect to a Redemption Order, the date specified in Section 2.7.

“Shares” means Canadian Dollar Shares created under this Agreement, each representing a fractional undivided ownership interest in the net assets of the Trust, which interest shall equal a fraction, the numerator of which is 1 and the denominator of which is the total number of Shares outstanding.

“Sponsor” means Rydex Specialized Products LLC, a Delaware limited liability company, d/b/a “Rydex Investments”.

“Sponsor’s Fee” means the fee to be paid to the Sponsor, which for each day shall be equal to (.004/365 or 366, depending on the number of days in the year) multiplied by (the Canadian Dollars in the Trust as of the close of business on the preceding London Business Day, which shall include all unpaid interest but exclude unpaid fees, each as accrued through the immediately preceding day).

“Sponsor Indemnified Persons” is defined in Section 7.1.

“Surplus Property” means any Trust Property other than (i) Canadian Dollars deposited by or on behalf of Authorized Participants pursuant to Section 2.4, in the Interest Account or the Non-Interest Account, (ii) Canadian Dollars received as interest on Canadian Dollars in the Interest Account, (iii) amounts withdrawn from the Interest Account in order to make a redemption described in Section 2.7, or (iv) amounts being held for the payment of estimated Trust expenses.

 

11


“Surrender” means, when used with respect to Shares, (a) one or more book-entry transfers of Shares to the DTC account of the Trustee or (b) surrender to the Trustee at its Corporate Trust Office of one or more Certificates evidencing Shares.

“Trust” means the CurrencyShares Canadian Dollar Trust, the trust entity created by this Agreement.

“Trust Property” means the Canadian Dollars that are deposited under this Agreement and any other money or other property that is received by the Trustee in respect of Trust Property and that is being held under this Agreement. Trust Property shall not include any property subject to distribution for which the record date for determining Registered Owners entitled to such distribution has passed.

“Trustee” means The Bank of New York, a New York banking corporation, in its capacity as trustee under this Agreement, or any successor as trustee under this Agreement.

“Trustee Indemnified Persons” is defined in Section 7.1.

Section 1.2 Rules of Construction .

Unless the context otherwise requires:

(i) a term has the meaning assigned to it;

(ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect in the United States;

(iii) “or” is not exclusive;

(iv) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

 

12


(v) “including” means including without limitation; and

(vi) words in the singular include the plural and words in the plural include the singular.

ARTICLE 2

STATEMENT OF PURPOSE;

CREATION AND DECLARATION OF TRUST;

FORM OF CERTIFICATES; DEPOSIT OF CANADIAN DOLLARS; DELIVERY,

REGISTRATION OF TRANSFER AND SURRENDER OF SHARES

Section 2.1 Statement of Purpose; Duties and Powers of the Trust .

(a) The Trust is a passive investment vehicle that is not actively managed. The sole purpose of the Trust is to hold Canadian Dollars on behalf of the Registered Owners. The Trust shall have no directors or persons acting in similar capacity and no officers or employees, and shall act only through the Trustee and the Sponsor.

(b) The Trust shall have the power to receive and hold deposits of Canadian Dollars, issue Baskets representing those deposits, distribute Canadian Dollars upon surrenders of Baskets, and perform acts incidental to the foregoing as provided in this Agreement, but the Trust shall not have the power to engage in any other business activities.

Section 2.2 Creation and Declaration of Trust; Business of the Trust .

(a) The Trustee acknowledges that an initial deposit of 100 Canadian Dollars under and in accordance with this Agreement has been made in the Interest Account by the Sponsor on the date hereof in exchange for one Share. The Sponsor is purchasing the initial Share solely for the purpose of forming the Trust. The Sponsor will redeem the initial Share for 100 Canadian Dollars as promptly as practicable after the Form S-1 registration statement filed with the Commission with respect to the Shares is

 

13


declared effective by the Commission and the Initial Purchaser, as defined in the registration statement, deposits Canadian Dollars in accordance with the registration statement.

(b) The Trustee declares that it will hold that initial deposit and all other Trust Property as trustee for the benefit of the Registered Owners for the purposes of, and subject to and limited by the terms and conditions set forth in, this Agreement. The trust created by this Agreement shall be known as the “CurrencyShares SM Canadian Dollar Trust”.

Section 2.3 Form of Certificates; Book-Entry System; Transferability of Shares .

(a) The Certificates evidencing Shares shall be substantially in the form set forth in Exhibit B annexed to this Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. No Shares shall be entitled to any benefits under this Agreement or be valid or obligatory for any purpose unless a Certificate evidencing those Shares has been executed by the Trustee by the manual or facsimile signature of a duly authorized signatory of the Trustee and, if a Registrar (other than the Trustee) for the Shares shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar. The Trustee shall maintain books on which the registered ownership of each Share and transfers, if any, of such registered ownership shall be recorded. Certificates evidencing Shares bearing the manual or facsimile signature of a duly authorized signatory of the Trustee and the manual signature of a duly authorized officer of the Registrar, if applicable, who was, at the time such Certificates were executed, a proper signatory of the Trustee or Registrar, if applicable, shall bind the Trustee, notwithstanding that such signatory has ceased to hold such office prior to the delivery of such Certificates.

(b) The Certificates may be endorsed with or have incorporated in the text thereof such legends or recitals or modifications not inconsistent with the provisions of

 

14


this Agreement as may be required by the Trustee or required to comply with any applicable law or regulations thereunder or with the rules and regulations of the Exchange or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which the Shares evidenced by a particular Certificate are subject.

(c) The Sponsor and the Trustee will apply to DTC for acceptance of the Shares in its book-entry settlement system. Shares deposited with DTC shall be evidenced by one or more global Certificates which shall be registered in the name of Cede & Co., as nominee for DTC, and 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 AGENT AUTHORIZED BY THE ISSUER 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 REQUESTED 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.

(d) So long as the Shares are eligible for book-entry settlement with DTC and such settlement is available, unless otherwise required by law, notwithstanding the provisions of Section 2.3(a) and Section 2.3(b), all Shares shall be evidenced by one or more global Certificates the Registered Owner of which is DTC or a nominee of DTC and (i) no Beneficial Owner of Shares will be entitled to receive a separate Certificate evidencing those Shares, (ii) the interest of a Beneficial Owner in Shares represented by a global Certificate will be shown only on, and transfer of that interest will be effected only through, records maintained by DTC or a DTC Participant or Indirect Participant through which the Beneficial Owner holds that interest and (iii) the rights of a Beneficial Owner

 

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with respect to Shares represented by a global Certificate will be exercised only to the extent allowed by, and in compliance with, the arrangements in effect between such Beneficial Owner and DTC or the DTC Participant or Indirect Participant through which that Beneficial Owner holds an interest in Shares.

(e) If, at any time when Shares are evidenced by a global Certificate, DTC ceases to make its book-entry settlement system available for such Shares, the Trustee shall execute and deliver separate Certificates evidencing Shares to the DTC Participants entitled thereto, with such additions, deletions and modifications to this Agreement and to the form of Certificate evidencing Shares as the Sponsor and the Trustee may agree.

(f) Title to a Certificate evidencing Shares (and to the Shares evidenced thereby), when properly endorsed or accompanied by proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of New York; provided , however , that the Trustee, notwithstanding any notice to the contrary, may treat the Registered Owner of Shares as the absolute owner thereof for the purpose of determining the person entitled to any distribution or to any notice provided for in this Agreement and for all other purposes.

Section 2.4 Deposit of Canadian Dollars .

(a) After the deposit of Canadian Dollars in the Trust by the Initial Purchaser, as defined in the registration statement, the issuance and Delivery of Shares will take place only in integral numbers of Baskets and in compliance with the provisions of this Agreement, as supplemented by any procedures attached to an applicable Authorized Participant Agreement, to the extent those procedures are consistent with this Agreement. Authorized Participants wishing to acquire from the Trustee one or more Baskets must place an order with the Trustee (a “ Purchase Order ”). Purchase Orders received by the Trustee prior to the Order Cutoff Time on a New York Business Day will have that day as the Order Date. Purchase Orders received on a day that is not a New York Business Day or received after the Order Cutoff Time on a New York Business Day

 

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will have the next following New York Business Day as the Order Date. The “ Settlement Date ” for a Purchase Order shall be the third New York Business Day following the Order Date unless that day is not a London Business Day, in which case the Settlement Date shall be the next following day that is both a New York Business Day and a London Business Day. As consideration for each Basket acquired, Authorized Participants must deposit with the Depository the Basket Canadian Dollar Amount determined by the Trustee on the Business Day prior to the Settlement Date for the corresponding Purchase Order. The Basket Canadian Dollar Amount shall be deposited in the Non-Interest Account. Pursuant to Section 6.5, the Trustee shall contemporaneously instruct the Depository to transfer the portion of the Basket Canadian Dollar Amount representing principal from the Non-Interest Account to the Interest Account. The portion of the Basket Canadian Dollar Amount representing a pro rata portion of accrued but unpaid interest will remain in the Non-Interest Account.

(b) The Trustee shall determine the Basket Canadian Dollar Amount for each New York Business Day. The initial “ Basket Canadian Dollar Amount ” is 5,000,000 Canadian Dollars. After the initial deposit, the “ Basket Canadian Dollar Amount ” shall be an amount of Canadian Dollars equal to the quotient obtained by dividing the NAV per Basket on the date on which the determination is being made by the Relevant Price on such date. For purposes of this computation, “ NAV per Basket ” is the product obtained by multiplying (x) the NAV per Share determined in compliance with Section 4.1, by (y) the number of Shares which constitute a Basket on the date on which the determination is being made. Fractions of a Canadian Dollar smaller than .001 shall be disregarded. The Sponsor intends to publish, or may designate other persons to publish, for each New York Business Day, the Basket Canadian Dollar Amount.

(c) If the Trust Property includes Surplus Property, no deposits of Canadian Dollars will be accepted until after a record date for distribution of that money or property, or proceeds from that property, has passed.

 

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(d) All deposited Canadian Dollars shall be owned by the Trust and held for the Trust by the Depository in the Interest Account or the Non-Interest Account. Any assets of the Trust other than Canadian Dollars shall be held by the Trustee or the Depository at such place and in such manner as the Trustee shall determine.

Section 2.5 Delivery of Shares .

Upon receipt by the Trustee of any deposit in accordance with Section 2.4, together with a Purchase Order and the other documents required under this Agreement, if any, and a confirmation from the Depository that the Basket Canadian Dollar Amount has been Delivered to the Depository for each Basket of Shares and the Depository is holding those Canadian Dollars for the account of the Trust, the Trustee, subject to the terms and conditions of this Agreement, shall Deliver to the Depositor the number of Baskets of Shares issuable in respect of such deposit as requested in the corresponding Purchase Order, but only upon payment to the Trustee of the fees and expenses of the Trustee as provided in Section 6.7 and of all taxes and governmental charges and fees payable in connection with such deposit, the transfer of the Canadian Dollars and the issuance and Delivery of the Shares.

Section 2.6 Registration and Registration of Transfer of Shares; Combination and Split-up of Certificates .

(a) The Trustee shall keep or cause to be kept a register of Registered Owners of Shares and shall provide for the registration of Shares and the registration of transfers of Shares.

(b) The Trustee, subject to the terms and conditions of this Agreement, shall register transfers of ownership of Shares on its transfer books from time to time, upon any Surrender of a Certificate evidencing such Shares, by the Registered Owner in person or by a duly authorized attorney, properly endorsed or accompanied by proper instruments of transfer, and duly stamped as may be required by the laws of the State of New York and of the United States of America. Thereupon the Trustee shall execute a

 

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new Certificate or Certificates evidencing such Shares, and deliver the same to or upon the order of the Person entitled thereto.

(c) The Trustee, subject to the terms and conditions of this Agreement, shall, upon Surrender of a Certificate or Certificates evidencing Shares for the purposes of effecting a split-up or combination of that certificate or certificates, execute and deliver one or more new Certificates evidencing those Shares.

(d) The Trustee may, with the written approval of the Sponsor (which approval shall not be unreasonably withheld), appoint one or more co-transfer agents for the purpose of effecting registration of transfers of Shares and combinations and split-ups of Certificates at designated transfer offices on behalf of the Trustee at the Trustee’s expense. In carrying out its functions, a co-transfer agent may require evidence of authority and compliance with applicable laws and other requirements by Registered Owners or Persons entitled to Shares and will be entitled to protection and indemnity to the same extent as the Trustee.

Section 2.7 Surrender of Shares and Withdrawal of Trust Property .

Upon Surrender of any integral number of Baskets for the purpose of withdrawal of the amount of Trust Property represented thereby, and upon payment of the fee of the Trustee in connection with the Surrender of Shares as provided in Section 6.7 and payment of all taxes and charges payable in connection with such Surrender and withdrawal of Trust Property, and subject to the terms and conditions of this Agreement, an Authorized Participant acting on authority of the Registered Owner of those Shares will be entitled to Delivery, in accordance with the provisions of this Agreement, as supplemented by any procedures attached to an applicable Authorized Participant Agreement, to the extent those procedures are consistent with this Agreement, of the amount of Trust Property at the time represented by such Baskets, including the Basket Canadian Dollar Amounts corresponding to such Baskets for the New York Business Day prior to the Settlement Date (as defined below), but excluding from those Basket

 

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Canadian Dollar Amounts any portion that represents the value of Trust Property that is not held as Canadian Dollars. Authorized Participants wishing to redeem one or more Baskets must place an order with the Trustee (a “ Redemption Order ”). Redemption Orders received by the Trustee prior to the Order Cutoff Time on a New York Business Day will have that day as the Order Date. Redemption Orders received by the Trustee after the Order Cutoff Time on a New York Business Day or on a day that is not a New York Business Day will have the next New York Business Day as the Order Date. The “ Settlement Date ” for a Redemption Order shall be the third New York Business Day following the Order Date unless that day is not a London Business Day, in which case the Settlement Date shall be the next following day that is both a New York Business Day and a London Business Day. Any Trust Property other than Canadian Dollars will be delivered by the Trustee.

The Trustee may require that a Certificate evidencing Shares Surrendered for the purpose of withdrawal is properly endorsed in blank or accompanied by proper instruments of transfer in blank. Upon a Surrender of an integral number of Baskets of Shares and satisfaction of all the conditions for withdrawal of Trust Property, the Trustee shall instruct the Depository to Deliver, to or to the order of the Surrendering Authorized Participant, the amount of Canadian Dollars represented by the Surrendered Baskets of Shares and the Depository or the Trustee shall pay or deliver to or to the order of the Surrendering Authorized Participant the amount of any other Trust Property represented by the Surrendered Baskets of Shares. Any Delivery of Canadian Dollars other than by wire transfer or at the office of the Depository will be at the expense and risk of the Authorized Participant.

Section 2.8 Limitations on Delivery, Registration of Transfer and Surrender of Shares .

(a) As a condition precedent to the Delivery, registration of transfer, split-up, combination or Surrender of any Shares or withdrawal of any Trust Property, the Trustee or Registrar may require payment from the Depositor or the Authorized

 

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Participant Surrendering the Shares of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to any securities being withdrawn) and payment of any applicable fees as herein provided, may require the production of proof satisfactory to it as to the identity and genuineness of any signature and may also require compliance with any regulations the Trustee may establish consistent with the provisions of this Agreement, including this Section 2.8.

(b) The Delivery of Shares against deposits of Canadian Dollars or the registration of transfer of Shares may be suspended generally, or refused with respect to particular requested Deliveries or transfers, during any period when the transfer books of the Trustee are closed or if any such action is deemed necessary or advisable by the Trustee or the Sponsor for any reason at any time or from time to time.

(c) The Surrender of Shares for purposes of withdrawing Trust Property may be suspended by the Trustee only if (i) the Trust holds Surplus Property that has not been distributed in accordance with Section 4.5 or (ii) the Trustee determines, in its sole discretion, that a suspension is necessary or desirable. In either case, the Trustee and the Depository shall consult with each other and use good faith efforts to resume accepting and honoring Redemption Orders as soon as possible.

Section 2.9 Lost Certificates, Etc .

The Trustee shall execute and deliver a new Certificate of like tenor in exchange and substitution for a mutilated Certificate upon cancellation thereof, or in lieu of and in substitution for a destroyed, lost or stolen Certificate if the Registered Owner thereof has (a) filed with the Trustee (i) a request for such execution and delivery before the Trustee has notice that the Shares evidenced by the Certificate have been acquired by a protected purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other reasonable requirements imposed by the Trustee.

 

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Section 2.10 Cancellation and Destruction of Surrendered Certificates .

All Certificates Surrendered to the Trustee shall be canceled by the Trustee. The Trustee is authorized to destroy Certificates so canceled.

Section 2.11 Splits and Reverse Splits of Shares .

If requested in writing by the Sponsor, the Trustee shall effect a split or reverse split of the Shares as of a record date set by the Trustee in accordance with procedures determined by the Trustee.

The Trustee is not required to distribute any fraction of a Share in connection with a split or reverse split of the Shares. The Trustee may sell the aggregated fractions of Shares that would otherwise be distributed in a split or reverse split of the Shares or the amount of Trust Property that would be represented by those Shares and distribute the net proceeds of those Shares or that Trust Property to the Registered Owners entitled to them.

The amount of Trust Property represented by each Share and the Basket Canadian Dollar Amount shall be adjusted as appropriate as of the open of business on the New York Business Day following the record date for a split or reverse split of the Shares.

ARTICLE 3

CERTAIN OBLIGATIONS OF REGISTERED OWNERS OF SHARES

Section 3.1 Liability of Registered Owner for Taxes and Other Governmental Charges .

If any tax or other governmental charge shall become payable by the Trustee with respect to any transfer or redemption of Shares, such tax or other governmental charge shall be payable by the Registered Owner of such Shares to the Trustee. The Trustee shall refuse to effect any registration of transfer of such Shares or

 

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any withdrawal of Trust Property represented by such Shares until such payment is made, and may withhold any distributions, or may sell for the account of the Registered Owner thereof Trust Property or Shares, and may apply such distributions or the proceeds of any such sale in payment of such tax or other governmental charge, and the Registered Owner of such Shares shall remain liable for any deficiency. The Trustee shall distribute any net proceeds of a sale made under the preceding sentence that remain, after payment of the tax or other governmental charge, to the Registered Owners entitled thereto as in the case of a distribution in cash.

Section 3.2 Warranties on Deposit of Canadian Dollars .

Every Person depositing Canadian Dollars under this Agreement shall be deemed thereby to represent and warrant that the Person making such deposit is duly authorized to do so and that at the time of delivery, the Canadian Dollars are free and clear of any lien, pledge, encumbrance, right, charge or claim (other than the rights created by this Agreement). All representations and warranties deemed made under this Section 3.2 shall survive the deposit of Canadian Dollars, Delivery or Surrender of Shares or termination of this Agreement.

ARTICLE 4

ADMINISTRATION OF THE TRUST

Section 4.1 Evaluation of Canadian Dollars; Calculation of Net Asset Value .

As promptly as practicable after the determination of the Relevant Price on each New York Business Day, ordinarily no later than 2:00 PM (New York time), the Trustee will calculate, and the Sponsor or a person designated by the Sponsor will publish, the Trust’s net asset value (“ NAV ”). To calculate the NAV, the Trustee will:

 

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(a) take the sum of Canadian Dollars in the Interest Account and Non-Interest Account as of the close of business on the preceding London Business Day, as reported by the Depository;

(b) add interest accrued but unpaid on the Interest Account through the preceding day;

(c) subtract the accrued but unpaid Sponsor’s Fee through the preceding day;

(d) add Canadian Dollars receivable by the Trust under Purchase Orders having Order Dates on or before the preceding New York Business Day;

(e) subtract Canadian Dollars payable by the Trust under Redemption Orders having Order Dates on or before the preceding New York Business Day;

(f) convert the result after step (e) into Dollars using the Relevant Price;

(g) add the Dollar value of any other assets included in the Trust Property as of the close of business on the preceding New York Business Day; and

(h) subtract the Dollar value of any other expenses and liabilities of the Trust as of the close of business on the preceding New York Business Day.

The result is the NAV of the Trust for that New York Business Day. The Trustee shall also divide the NAV of the Trust by the number of Shares outstanding for the date of the evaluation then being made, which figure is the “ NAV per Share .” For purposes of the preceding sentence, the number of Shares deemed outstanding shall include Shares to be Delivered under Purchase Orders having Order Dates on or before the preceding New York Business Day and shall exclude Shares to be Surrendered under Redemption Orders having Order Dates on or before the preceding New York Business Day.

 

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Section 4.2 Responsibility of the Trustee for Evaluations .

The Sponsor, Depositors, Registered Owners and Beneficial Owners may rely on any evaluation or determination of any amount made by the Trustee, and the Sponsor shall have no responsibility for the accuracy thereof. The determinations made by the Trustee under this Agreement shall be made in good faith upon the basis of, and the Trustee shall not be liable for any errors contained in, information reasonably available to it. The Trustee shall be under no liability to the Sponsor, or to Depositors, Registered Owners or Beneficial Owners, for errors in judgment; provided , however , that this provision shall not protect the Trustee against any liability to which it would otherwise be subject by reason of negligence or bad faith in the performance of its duties.

Section 4.3 Interest Account and Non-Interest Account .

The Trustee will deposit all Canadian Dollars into the Interest Account or the Non-Interest Account in accordance with Section 6.5. The Interest Account will accrue interest in accordance with the terms of the Deposit Account Agreement. The Non-Interest Account will not accrue interest.

Section 4.4 Cash Distributions .

On the first London Business Day of each month, the Depository will deposit into the Non-Interest Account the accrued but unpaid interest for the previous month. On the first day of each month that is both a London Business Day and a New York Business Day, the Trustee will make withdrawals from the Non-Interest Account to pay the accrued Sponsor’s Fee for the previous month plus any other Trust expenses. In the event that the interest deposited exceeds the sum of the Sponsor’s Fee for the previous month plus other Trust expenses, if any, then the Trustee shall convert the excess into Dollars in accordance with Section 4.9, and, as promptly as practicable declare a record date and distribute the net proceeds to Registered Owners on a pro rata basis (in accordance with the number of Shares that they own); provided , however , that in the event that the Trustee shall be required to withhold and does withhold from such cash

 

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an amount on account of taxes, the amount distributed to the Registered Owners shall be reduced accordingly; and provided, further, that the Trustee shall round the amount paid to each Registered Owner to the nearest whole cent.

Section 4.5 Distributions of Surplus Property .

At any time that the Trust Property includes Surplus Property, the Trustee shall, as promptly as practicable, (a) distribute all Surplus Property consisting of Dollars to the Registered Owners in proportion to the number of Shares held by them, and (b) convert into Dollars or sell for Dollars all other Surplus Property and distribute the Dollar proceeds, net of the fees and expenses of the Trustee, to the Registered Owners in proportion to the number of Shares held by them. If the Trust Property includes any Surplus Property that is not Canadian Dollars, the Trustee shall suspend deposits of Canadian Dollars for the purpose of issuance of Shares until after a record date for distribution of that Surplus Property, or proceeds of that Surplus Property, has passed.

Section 4.6 Fixing of Record Date .

Whenever any distribution will be made, or whenever the Trustee receives notice of any solicitation of proxies or consents from Registered Owners, or whenever for any reason there is a split, reverse split or other change in the outstanding Shares, or whenever the Trustee shall find it necessary or convenient in respect of any matter, the Trustee, in consultation with the Sponsor, shall fix a record date for the determination of the Registered Owners who shall be (i) entitled to receive such distribution or the net proceeds of the sale thereof, (ii) entitled to give such proxies or consents in respect of any such solicitation or (iii) entitled to act in respect of any other matter for which the record date was set.

Section 4.7 Payment of Trust Expenses .

(a) The following expenses are or may be accrued and paid by the Trust:

 

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(1) the Sponsor’s Fee and other fees and expenses of the Sponsor set forth in Section 5.6;

(2) expenses of the Trust not assumed by the Sponsor pursuant to Section 5.1(b);

(3) taxes and other governmental charges;

(4) expenses and costs of any extraordinary services performed by the Trustee or the Sponsor on behalf of the Trust or action taken by the Trustee or the Sponsor to protect the Trust or the interests of Registered Owners; and

(5) indemnification of the Sponsor as provided in Section 7.1(d).

(b) On first day of each month that is both a London Business Day and a New York Business Day, the Trustee shall withdraw from the Non-Interest Account amounts necessary to pay the Trust expenses provided for in Section 4.7(a) and any otherwise unpaid expenses hereunder. In the event that the expenses exceed the balance of the Non-Interest Account, such excess shall be withdrawn from the Interest Account. The Trustee will withdraw and sell sufficient Canadian Dollars to purchase an amount of currency other than Canadian Dollars sufficient to pay any Trust expenses payable other than in Canadian Dollars and the costs of currency conversion.

(c) Notwithstanding the foregoing, if requested by the Sponsor and agreed to by the Trustee, the Trustee will advance amounts out of its own funds for the payment of Trust expenses, provided that the amount advanced at any time shall not exceed $20,000. The amount of such advances, together with interest thereon at a percentage rate equal to then-current overnight federal funds rate, shall be expenses of the Trust. The Trustee shall have a lien on the balances on hand in the Interest Account and Non-Interest Account to the extent of all amounts advanced by it pursuant to this Section 4.7(c), which lien shall be superior to the interest of the Registered Owners.

 

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(d) The Trustee is conclusively authorized to sell Canadian Dollars in the smallest amounts required to permit payment of Trust expenses, it being the intention to minimize the Trust’s holdings of assets other than Canadian Dollars. Neither the Trustee nor the Sponsor shall have any liability for loss or depreciation resulting from sales of Canadian Dollars so made. The Trustee shall not be liable or responsible in any way for depreciation or loss incurred by reason of any sale made in accordance with this Section 4.7(d).

Section 4.8 Statements and Reports .

After the end of each Fiscal Year and within the time period required by applicable laws, rules and regulations, at the Sponsor’s expense, the Trustee shall send to the Registered Owners as of the end of such Fiscal Year, an annual report of the Trust containing financial statements audited by independent accountants designated by the Sponsor and such other information as may be required by such laws, rules and regulations or otherwise, or which the Sponsor determines shall be included. The Trustee may distribute the annual report by any means acceptable to the Registered Owners and that complies with applicable laws, rules and regulations.

Section 4.9 Further Provisions for Sales of Trust Property; Currency Conversion .

In addition to selling Canadian Dollars in accordance with Section 4.7, the Trustee shall sell Canadian Dollars whenever any one or more of the following conditions exist:

(i) the Sponsor has notified the Trustee that such sale is required by applicable law or regulation; or

(ii) the Trust is to be terminated and its assets liquidated in accordance with Section 8.2.

 

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When the Trustee is required or permitted to sell Trust Property, it may sell that Trust Property by public or private sale in any manner and on any terms that are (i) commercially reasonable in the circumstances and (ii) reasonably calculated to maximize the value of the Trust Property while taking into account any duty of the Trustee under this Agreement to sell that Trust Property as promptly as practicable.

However, whenever the Trustee is required or permitted to sell Trust Property that is currency, if at the time the currency can, in the judgment of the Trustee, be converted on a reasonable basis into the required currency that, if applicable, is transferable to the United States, the Trustee shall place orders with dealers (which may include the Depository or the Trustee or any of their affiliates) through which it may reasonably expect to obtain a commercially reasonable rate of exchange (net of commission) and good execution of orders.

If such conversion can be effected only with the approval or license of any government or agency thereof, the Trustee shall file such application for approval or license, if any, as it may deem desirable.

If at any time the Trustee shall determine that in its judgment the currency is not convertible on a reasonable basis into the required currency or that, if applicable, is transferable to the United States, or if any approval or license of any government or agency thereof which is required for such conversion is denied or in the opinion of the Trustee is not obtainable, or if any such approval or license is not obtained within a reasonable period as determined by the Trustee, the Trustee may distribute the currency without conversion (or an appropriate document evidencing the right to receive such currency) to, or in its discretion may hold such currency for the respective accounts of, the persons entitled to receive it. Any interest earned or investment gains attributable to amounts withheld from distribution shall be held by the Trustee for distribution to the Registered Owners entitled to the amount to which the interest or gain is attributable.

 

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If any such conversion of currency, in whole or in part, cannot be effected for distribution to some of the persons entitled to it, the Trustee may, in its discretion, make such conversion and distribution to the extent permissible to the persons entitled to it and may distribute the balance of the currency without conversion to, or in its discretion may hold such currency for the respective accounts of, the persons entitled to receive it. Any interest earned or investment gains attributable to amounts withheld from distribution shall be held by the Trustee for distribution to the Registered Owners entitled to the amount to which the interest or gain is attributable.

The Trustee and the Sponsor shall not be liable or responsible in any way for depreciation or loss incurred by reason of any sale made pursuant to this Section 4.9.

Section 4.10 Counsel .

The Sponsor may from time to time employ counsel to act on behalf of the Trust and perform any legal services in connection with the Canadian Dollars and the Trust, including any legal matters relating to the possible disposition or acquisition of any Canadian Dollars. The reasonable fees and expenses of such counsel shall be paid by the Sponsor up to an aggregate maximum of $100,000 per year, with any excess amount to be paid by the Trust.

Section 4.11 Grantor Trust .

Nothing in this Agreement, any agreement with a Depository, or otherwise, shall be construed to give the Trustee or Sponsor the power to vary the investment of the Beneficial Owners within the meaning of Section 301.7701-4(c) of the regulations under the Code or any similar or successor provision of the regulations under the Code, nor shall the Sponsor give the Trustee any direction that would vary the investment of the Beneficial Owners. However, the Trustee shall not be liable to any Person for any failure of the Trust to qualify as a grantor trust under the Code or any comparable provision of the laws of any State or other jurisdiction where that treatment is sought, except that this sentence shall not limit the Trustee’s responsibility for the

 

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administration of the Trust in accordance with this Agreement. Neither the Trustee nor the Sponsor will agree to any amendment of the Deposit Account Agreement unless the Sponsor obtains and delivers to the Trustee a prior written opinion of counsel to the effect that such amendment will have no adverse effect on the classification of the Trust as a “grantor trust” under the Code.

ARTICLE 5

THE SPONSOR

Section 5.1 Duties of the Sponsor.

(a) The Sponsor shall select the Depository and shall be solely responsible for that selection. The Sponsor is responsible for establishing the Trust and for the registration of the Shares. The Sponsor will generally oversee the performance of the Trustee and the Trust’s principal service providers, but will not exercise day-to-day oversight over the Trustee or such service providers. The Sponsor will regularly communicate with the Trustee to monitor the overall performance of the Trust. The Sponsor will also designate the independent certified public accountants of the Trust and may from time to time employ legal counsel for the Trust.

(b) The Sponsor shall be responsible for all organizational expenses of the Trust, and for the following administrative and marketing expenses of the Trust: the Trustee’s monthly fee, routine transaction and maintenance fees charged by the Depository, listing fees of the Exchange, registration fees charged by the Commission, printing and mailing costs, audit fees, legal expenses not in excess of $100,000 per year and any applicable license fees.

(c) The Sponsor will monitor the interest rate paid by the Depository and has the right and duty to instruct the Trustee to terminate the Deposit Account Agreement if the Sponsor considers the interest rate to be noncompetitive.

Section 5.2 Obligations of the Sponsor.

 

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(a) The Sponsor does not assume any obligation nor shall it be subject to any liability under this Agreement to any Registered Owner or Beneficial Owner or Depositor (including liability with respect to the worth of the Trust Property), except that the Sponsor agrees to perform its obligations specifically set forth in this Agreement without negligence or bad faith.

(b) The Sponsor shall not be under any obligation to prosecute any action, suit or other proceeding in respect of any Trust Property or in respect of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or other Person.

(c) The Sponsor shall not be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any Depositor, any Registered Owner or any other person believed by it in good faith to be competent to give such advice or information.

(d) The Sponsor shall not be liable for any acts or omissions made by a successor sponsor whether in connection with a previous act or omission of the Sponsor or in connection with any matter arising wholly after the resignation of the Sponsor, provided that in connection with the issue out of which such potential liability arises the Sponsor performed its obligations without negligence or bad faith while it acted as sponsor.

(e) The Sponsor shall have no obligation to comply with any direction or instruction from any Registered Owner or Beneficial Owner or Depositor regarding Shares except to the extent specifically provided in this Agreement.

Section 5.3 Prevention or Delay in Performance by the Sponsor .

The Sponsor and its directors, employees, agents and affiliates shall not incur any liability to any Registered Owner, Beneficial Owner or Depositor if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by

 

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reason of any act of God or war or terrorism or other circumstances beyond its control, the Sponsor is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or is delayed in, doing or performing any act or thing which by the terms of this Agreement it is provided shall be done or performed and accordingly the Sponsor does not do that act or thing or does that act or thing at a later time than would otherwise be required. The Sponsor will not incur any liability to any Registered Owner or Beneficial Owner or Depositor by reason of any non-performance or delay in the performance of any act or thing which by the terms of this Agreement it is provided may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Agreement.

Section 5.4 Certain Matters Regarding Successor Sponsor .

The covenants, provisions and agreements herein contained shall in every case be binding upon any successor to the business of the Sponsor. The Sponsor may transfer all or substantially all of its assets to an entity which carries on the business of the Sponsor, if at the time of such transfer such successor duly assumes all the obligations of the Sponsor under this Agreement, and in such event, the Sponsor shall be relieved of all further liability under this Agreement.

Section 5.5 Resignation of Sponsor; Successors .

If at any time the Sponsor desires to resign its position as Sponsor hereunder, it may resign by delivering to the Trustee an instrument of resignation executed by the Sponsor. Such resignation shall become effective upon the earliest of the following: (i) the effective date of the appointment by the Trustee of a successor sponsor and the acceptance by the successor sponsor of that appointment, with such compensation from the Trust as the Trustee may deem reasonable under the circumstances, by an instrument of appointment and assumption executed by the Trustee and the successor sponsor; or (ii) an agreement by the Trustee to act as sponsor hereunder succeeding to all the rights and duties of the resigning Sponsor without appointing a successor sponsor and without terminating this Agreement; or (iii) termination of this Agreement in accordance

 

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with its terms and completion of distribution of all remaining assets to Registered Owners. The Trustee shall have no obligation to appoint a successor sponsor or to assume the duties of the Sponsor and shall have no liability to any person because the Trust is terminated by reason of the Sponsor’s resignation.

If the Sponsor shall fail to undertake or perform or become incapable of undertaking or performing its duties hereunder or shall become bankrupt or its affairs shall be taken over by public authorities, the effect of that event shall be the same as if the Sponsor had given a notice of resignation as provided in the preceding paragraph.

Upon its resignation becoming effective, the resigning Sponsor shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring before its resignation became effective, and the successor sponsor shall thereupon undertake and perform all duties and be entitled to all rights and compensation as sponsor under this Agreement. The successor sponsor shall not be under any liability hereunder for acts or omissions occurring prior to the effective date stated in the instrument appointing it successor sponsor. The Trustee shall notify Registered Owners of the appointment of a successor sponsor.

Section 5.6 Compensation of the Sponsor.

(a) The Sponsor is entitled to receive from the Trust, as an expense of the Trust, the Sponsor’s Fee. The Sponsor’s Fee shall be accrued daily but paid monthly in arrears.

(b) In addition to the Sponsor’s Fee, the Sponsor is entitled to receive reimbursement from the Trust for all expenses and disbursements incurred by it. Such reimbursement shall be made promptly after such expenses are incurred by the Sponsor. Notwithstanding the foregoing, the Sponsor is not entitled to charge the Trust for (i) expenses and disbursements incurred by it prior to the commencement of trading of Shares on the Exchange and (ii) expenses for performing, or fees of agents for performing, services the Sponsor is required to perform under this Agreement.

 

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(c) Within 30 days following the end of each Fiscal Year, the Sponsor shall certify to the Trustee the amount of its actual expenses and disbursements incurred by it during the preceding Fiscal Year by it in connection with action taken by it pursuant to Section 5.8 and shall reimburse the Trust any amounts received by it from the Trust that exceed the amount so certified.

(d) The Trustee shall have no liability or responsibility for amounts paid to the Sponsor pursuant to this Section 5.6.

Section 5.7 Federal Securities Law Filings .

The Sponsor shall (i) prepare and file a registration statement with the Commission and take such action as is necessary from time to time to qualify the Shares for offering and sale under the federal securities laws of the United States, including the preparation and filing of amendments and supplements to such registration statement, (ii) promptly notify the Trustee of any amendment or supplement to the registration statement or prospectus, of any order preventing or suspending the use of any prospectus, of any request for the amending or supplementing of the registration statement or prospectus or if any event or circumstance occurs that is known to the Sponsor as a result of which the registration statement or prospectus, as then amended or supplemented, would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (iii) provide the Trustee from time to time with copies, including copies in electronic form, of the prospectus, as amended and supplemented, in such quantities as the Trustee may reasonably request and (iv) prepare and file any periodic reports or updates that may be required under the Securities Exchange Act of 1934, as amended. The Trustee shall furnish to the Sponsor any information from the records of the Trust that the Sponsor reasonably requests in writing that is needed to prepare any filing or submission that the Sponsor or the Trust is required to make under the federal securities laws of the United States.

 

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Section 5.8 Discretionary Actions by Sponsor; Consultation .

(a) The Sponsor may, in its discretion, undertake any action which it may deem necessary or desirable to protect the rights of the Registered Owners. The expenses incurred by the Sponsor in connection with taking any action under the preceding sentence (including the fees and disbursements of legal counsel) shall be expenses of the Trust, and the Sponsor shall be entitled to be promptly reimbursed for those expenses by the Trust.

(b) The Sponsor shall promptly notify the Trustee (i) regarding any action it takes pursuant to Section 5.8(a) or (ii) if the Sponsor becomes aware of any development or event that affects the administration of the Trust but is not contemplated or provided for in this Agreement.

ARTICLE 6

THE TRUSTEE

Section 6.1 Maintenance of Office and Transfer Books by the Trustee .

(a) Until termination of this Agreement in accordance with its terms, the Trustee shall maintain facilities for the Delivery, registration, registration of transfers and Surrender of Shares in accordance with the provisions of this Agreement.

(b) The Trustee shall keep books for the registration of Shares and registration of transfers of Shares which at all reasonable times shall be open for inspection by the Registered Owners.

(c) Subject to the limitations set forth in Section 2.8(b), the Trustee may, and at the reasonable written request of the Sponsor shall, close the transfer books at any time or from time to time if such action is deemed necessary or advisable in the reasonable judgment of the Trustee or the Sponsor.

 

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(d) Pursuant to Section 2.8(c), the Trustee may, at its sole discretion, suspend withdrawals of Trust Property if the Trustee, at its sole discretion, determines that such a suspension is necessary or desirable.

(e) If any Shares are listed on one or more stock exchanges in the United States, the Trustee shall act as Registrar or, with the written approval of the Sponsor (which approval shall not be unreasonably withheld), appoint a registrar or one or more co-registrars for registry of such Shares in accordance with any requirements of such exchange or exchanges.

Section 6.2 Obligations of the Trustee .

(a) The Trustee assumes no obligation nor shall it be subject to any liability under this Agreement to any Registered Owner or Beneficial Owner or Depositor (including liability with respect to the worth of the Trust Property), except that the Trustee agrees to perform its obligations specifically set forth in this Agreement without negligence or bad faith.

(b) The Trustee shall not be under any obligation to prosecute any action, suit or other proceeding in respect of any Trust Property or in respect of the Shares on behalf of a Registered Owner, Beneficial Owner, Depositor or other Person.

(c) The Trustee shall not be liable for any action or non-action by it in reliance upon the advice of or information from legal counsel, accountants, any Depositor, any Registered Owner or any other person believed by it in good faith to be competent to give such advice or information.

(d) The Trustee shall not be liable for any acts or omissions made by a successor trustee whether in connection with a previous act or omission of the Trustee or in connection with any matter arising wholly after the resignation of the Trustee, provided that in connection with the issue out of which such potential liability arises the

 

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Trustee performed its obligations without negligence or bad faith while it acted as Trustee.

(e) The Trustee shall have no obligation to comply with any direction or instruction from any Registered Owner or Beneficial Owner or Depositor regarding Shares except to the extent specifically provided in this Agreement.

Section 6.3 Prevention or Delay in Performance by the Trustee .

The Trustee and its directors, employees, agents and affiliates shall not incur any liability to any Registered Owner, Beneficial Owner or Depositor if, by reason of any provision of any present or future law or regulation of the United States or any other country, or of any governmental or regulatory authority or stock exchange, or by reason of any act of God or war or terrorism or other circumstances beyond its control, the Trustee is prevented or forbidden from, or would be subject to any civil or criminal penalty on account of, or is delayed in, doing or performing any act or thing which by the terms of this Agreement it is provided shall be done or performed and accordingly the Trustee does not do that act or thing or does that act or thing at a later time than would otherwise be required. The Trustee will not incur any liability to any Registered Owner or Beneficial Owner or Depositor by reason of any non-performance or delay in the performance of any act or thing which by the terms of this Agreement it is provided may be done or performed, or by reason of any exercise of, or failure to exercise, any discretion provided for in this Agreement.

Section 6.4 Resignation or Removal of the Trustee; Appointment of Successor Trustee .

(a) Resignation . The Trustee may at any time resign as Trustee hereunder by notice of its election so to do, delivered to the Sponsor, and such resignation shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

 

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(b) Removal by the Sponsor. In case at any time the Trustee shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or a trustee or liquidator or any public officer shall take charge or control of the Trustee or of its property or affairs for the purposes of rehabilitation, conservation or liquidation, then in any such case the Sponsor shall, subject to the requirements of Section 6.4(e), remove the Trustee by notice to the Trustee, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

(c) Removal by Registered Owners. Registered Owners of at least two-thirds (66-2/3 %) of the Shares then outstanding may at any time remove the Trustee by a notice delivered to the Trustee and Sponsor, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment.

(d) Removal for Material Breach. If at any time the Trustee ceases to be a Qualified Bank or is in material breach of its obligations under this Agreement and the Trustee fails to cure such breach within 30 days after receipt by the Trustee of notice from the Sponsor or Registered Owners acting on behalf of at least 25% of the outstanding Shares specifying such default and requiring the Trustee to cure such default, the Sponsor may remove the Trustee by notice delivered to the Trustee, and such removal shall take effect upon the appointment of a successor trustee and its acceptance of such appointment as hereinafter provided.

(e) Appointing Successor Trustees . If the Trustee acting hereunder resigns or is removed, the Sponsor, acting on behalf of the Registered Owners, shall use its reasonable efforts to appoint a successor trustee, which shall be a Qualified Bank. Every successor trustee shall execute and deliver to its predecessor and to the Sponsor, acting on behalf of the Registered Owners, an instrument in writing accepting its appointment hereunder, and thereupon such successor trustee, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor; but such predecessor, nevertheless, upon payment of all sums due it and on

 

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the written request of the Sponsor, acting on behalf of the Registered Owners, shall execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in the Trust Property to such successor, and shall deliver to such successor a list of the Registered Owners of all outstanding Shares. The Sponsor or any such successor trustee shall promptly notify the Registered Owners of the appointment of such successor trustee.

(f) Liability of Trustee. Upon effective resignation hereunder, the resigning or removed Trustee shall be discharged and shall no longer be liable in any manner hereunder except as to acts or omissions occurring prior to such resignation or removal, and the new trustee shall thereupon undertake and perform all duties and be entitled to all rights and compensation as trustee under this Agreement. The successor trustee shall not be under any liability hereunder for acts or omissions occurring prior to execution of an instrument accepting its appointment as trustee.

(g) Effect of Merger of the Trustee. Any corporation into which the Trustee may be merged, consolidated or converted in a transaction in which the Trustee is not the surviving corporation shall be the successor of the Trustee without the execution or filing of any document or any further act.

Section 6.5 Transfers Between Interest Account and Non-Interest Account.

(a) Proceeds from creation of Baskets shall be deposited into the Non-Interest Account. The Trustee shall contemporaneously instruct the Depository to transfer the portion of the Basket Canadian Dollar Amount representing principal from the Non-Interest Account to the Interest Account. The portion of the Basket Canadian Dollar Amount representing a pro rata portion of accrued but unpaid interest will remain in the Non-Interest Account.

(b) Amounts payable upon Surrender of Shares in whole Baskets shall be paid from the Non-Interest Account. The Trustee shall contemporaneously instruct the

 

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Depository to transfer the portion of the Basket Canadian Dollar Amount representing principal from the Interest Account to the Non-Interest Account.

Section 6.6 The Depository .

The parties acknowledge that the Depository was selected solely by the Sponsor. The Trustee will have no duty or liability to any Person on account of that selection or the terms of the Deposit Account Agreement. The Depository will be subject at all times and in all respects to the directions of the Trustee and will be responsible solely to it. The rights and duties of the Depository with reference to the Trust will be determined by the Deposit Account Agreement and applicable law. The Trustee shall not amend or terminate the Deposit Account Agreement without the written consent of the Sponsor. The Trustee shall terminate the Deposit Account Agreement if the Sponsor directs it in writing to do so.

Section 6.7 Compensation of the Trustee .

(a) Each Depositor, and each person surrendering Shares for the purpose of withdrawing Trust Property, shall pay to the Trustee a fee of $500.00 per Purchase Order pursuant to Section 2.5 or Redemption Order pursuant to Section 2.7 or surrender of Shares after termination of this Agreement pursuant to Section 8.2(e).

(b) The Trustee is entitled to receive from the Sponsor fees for its services and reimbursement for its out-of-pocket expenses in accordance with written agreements between the Sponsor and the Trustee.

(c) The Trustee is entitled to charge the Trust for all expenses and disbursements incurred by it in connection with action taken by it under Section 6.10(a) (including the reasonable fees and disbursements of its legal counsel), except that the Trustee is not entitled to charge the Trust for (i) expenses and disbursements incurred by it prior to the commencement of trading of Shares on the Exchange and (ii) fees of agents for performing services the Trustee is required to perform under this Agreement.

 

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Section 6.8 Retention of Trust Documents .

The Trustee is authorized to destroy those documents, records, bills and other data compiled during the term of this Agreement at the times permitted by the laws or regulations governing the Trustee, unless the Sponsor reasonably requests the Trustee in writing to retain those items for a longer period.

Section 6.9 Prospectus Delivery .

The Trustee shall, if required by the federal securities laws of the United States, in any manner permitted by such laws, deliver, at the time of issuance of Shares, a copy of the relevant prospectus, as most recently furnished to the Trustee by the Sponsor, to each Depositor.

Section 6.10 Discretionary Actions by Trustee; Consultation .

(a) The Trustee may, in its discretion, undertake any action which it may deem necessary or desirable to protect the rights of the Registered Owners. The expenses incurred by the Trustee in connection with taking any action under the preceding sentence (including the fees and disbursements of legal counsel) shall be expenses of the Trust, and the Trustee shall be entitled to be promptly reimbursed for those expenses by the Trust.

(b) The Trustee shall notify and consult with the Sponsor before undertaking any action under subsection (a) above or if the Trustee becomes aware of any development or event that affects the administration of the Trust but is not contemplated or provided for in this Agreement.

 

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ARTICLE 7

INDEMNIFICATION

Section 7.1 Indemnification of the Sponsor and Trustee .

(a) The Sponsor shall indemnify the Trustee, its directors, employees and agents (the “ Trustee Indemnified Persons ”) against, and hold each of them harmless from, any loss, liability, cost, expense or judgment (including, but not limited to, the reasonable fees and expenses of counsel) (collectively “ Indemnified Amounts ”) that is incurred by any of them and that arises out of or is related to (i) any offer or sale by the Trust of Baskets of Shares under this Agreement, (ii) acts performed or omitted pursuant to the provisions of this Agreement, as the same may be amended, modified or supplemented from time to time, by (A) a Trustee Indemnified Person or (B) the Sponsor or (iii) any filings with or submissions to the Commission in connection with or with respect to the Shares (which, by way of illustration and not by way of limitation, include any registration statement and any amendments or supplements thereto filed with the Commission or any periodic reports or updates that may be filed under the Securities Exchange Act of 1934, as amended, or any failure to make any filings with or submissions to the Commission which are required to be made in connection with or with respect to the Shares), except that the Sponsor shall not have any obligations under this Section 7.1(a) to pay Indemnified Amounts incurred as a result of and attributable to (x) the negligence or bad faith of, or material breach of the terms of this Agreement by, the Trustee, (y) written information furnished in writing by the Trustee to the Sponsor expressly for use in the registration statement, or any amendment thereto, filed with the Commission relating to the Shares that is not materially altered by the Sponsor or (z) any misrepresentations or omissions made by a Depositor (other than Sponsor) in connection with such Depositor’s offer and sale of Shares.

(b) The Trustee shall indemnify the Sponsor, its members, officers, employees and agents against, and hold each of them harmless from, any Indemnified Amounts (i) caused by the negligence or bad faith of the Trustee or (ii) arising out of any

 

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information furnished in writing to the Sponsor by the Trustee expressly for use in an registration statement, or any amendment thereto, a prospectus pursuant to the Securities Act of 1933 Section 10(a) or Section 10(b), or a prospectus supplement thereto with the Commission relating to the Shares that is not materially altered by the Sponsor.

(c) If the indemnification provided for in Section 7.1(a) or Section 7.1(b) is unavailable or insufficient to hold harmless the indemnified party under subsection (a) or (b) above, then the indemnifying party shall contribute to the Indemnified Amounts referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Sponsor on the one hand and the Trustee on the other hand from the fees each receives that are attributable to the Shares which are the subject of the action or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Sponsor on the one hand and the Trustee on the other hand in connection with the action, statement or omission which resulted in such Indemnified Amount as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact from which the action arises relates to information supplied by the Sponsor or the Trustee and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission or the act or omission from which the action arises. The amount of Indemnified Amounts referred to in the first sentence of this subsection (c) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (c).

(d) The Sponsor and its shareholders, directors, officers, employees, affiliates (as such term is defined under the Securities Act of 1933, as amended) and subsidiaries (each, a “ Sponsor Indemnified Party ”) shall be indemnified from the Trust

 

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and held harmless against any loss, liability or expense incurred without (i) negligence, bad faith, willful misconduct or willful malfeasance on the part of the Sponsor arising out of or in connection with the performance of its obligations under this Agreement or any actions taken in accordance with the provisions of this Agreement or (ii) reckless disregard by the Sponsor of its obligations and duties under this Agreement. Such indemnity shall include payment from the Trust of the costs and expenses incurred by such Sponsor Indemnified Party in defending itself against any claim or liability in its capacity as Sponsor. Any amounts payable to a Sponsor Indemnified Party under this Section 7.1(d) may be payable in advance or shall be secured by a lien on the Trust.

(e) If an action, proceeding (including, but not limited to, any governmental investigation), claim or dispute (each, a “ Proceeding ”) in respect of which indemnity may be sought by either party is brought or asserted against the other party, the party seeking indemnification (the “ Indemnitee ”) shall promptly (and in no event more than seven (7) days after receipt of notice of such Proceeding) notify the party obligated to provide such indemnification (the “ Indemnitor ”) of such Proceeding. The failure of the Indemnitee to so notify the Indemnitor shall not impair the Indemnitee’s ability to seek indemnification from the Indemnitor (but only for costs, expenses and liabilities incurred after such notice) unless such failure adversely affects the Indemnitor’s ability to adequately oppose or defend such Proceeding. Upon receipt of such notice from the Indemnitee, the Indemnitor shall be entitled to participate in such Proceeding and, to the extent that it shall so desire and provided no conflict of interest exists as specified in clause (i) below and there are no other defenses available to Indemnitee as specified in clause (iii) below, to assume the defense thereof with counsel reasonably satisfactory to the Indemnitee (in which case all attorney’s fees and expenses shall be borne by the Indemnitor and the Indemnitor shall in good faith defend the Indemnitee). The Indemnitee shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but, in such case, no fees and expenses of such counsel shall be borne by the Indemnitor unless such fees and expenses are otherwise required to be indemnified under Section 7.1(a), Section 7.1(b) or Section 7.1(d), as applicable, and

 

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(i) there is such a conflict of interest between the Indemnitor and the Indemnitee as would preclude, in compliance with the ethical rules in effect in the jurisdiction in which the Proceeding was brought, one lawyer from representing both parties simultaneously, (ii) the Indemnitor fails, within the earlier of (x) twenty (20) days following receipt of notice of the Proceeding from the Indemnitee or (y) seven (7) days prior to the date the first response or appearance is required to be made in such Proceeding, to assume the defense of such Proceeding with counsel reasonably satisfactory to the Indemnitee or (iii) there are legal defenses available to Indemnitee that are different from or are in addition to those available to the Indemnitor. No compromise or settlement of such Proceeding may be effected by either party without the other party’s consent unless (m) there is no finding or admission of any violation of law and no effect on any other claims that may be made against such other party and (n) the sole relief provided is monetary damages that are paid in full by the party seeking the settlement. Neither party shall have any liability with respect to any compromise or settlement effected without its consent, which shall not be unreasonably withheld. The Indemnitor shall have no obligation to indemnify and hold harmless the Indemnitee from any loss, expense or liability incurred by the Indemnitee as a result of a default judgment entered against the Indemnitee unless such judgment was entered after the Indemnitor agreed, in writing, to assume the defense of such Proceeding.

ARTICLE 8

AMENDMENT AND TERMINATION

Section 8.1 Amendment .

The Trustee and the Sponsor may amend any provisions of this Agreement without the consent of any Registered Owner; provided, however, that the provisions of Section 2.6, Section 2.7, Section 2.10, Section 4.2 through Section 4.7, this Section 8.1 and Section 8.2 may not be amended unless (i) the provision relates solely to procedural or logistical matters (as distinguished from core economic rights), or (ii) prior to the amendment, (a) the Sponsor obtains and delivers to the Trustee a written opinion of counsel to the effect that after such amendment the Trust will continue to be classified as

 

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a “grantor trust” under the Code, and (b) in the event that such opinion of counsel assumes that certain actions are taken by the Sponsor or the Trustee in connection with such amendment, such actions shall be taken by the Sponsor or the Trustee, as the case may be. Any amendment that imposes or increases any fees or charges (other than taxes and other governmental charges, registration fees or other such expenses), or that otherwise prejudices any substantial existing right of the Registered Owners, will not become effective as to outstanding Shares until 30 days after notice of such amendment is given to the Registered Owners. Every Registered Owner and Beneficial Owner, at the time any amendment so becomes effective, shall be deemed, by continuing to hold any Shares or an interest therein, to consent and agree to such amendment and to be bound by this Agreement as amended thereby. In no event shall any amendment impair the right of the Registered Owner of Shares to Surrender Baskets of Shares and receive therefor the amount of Trust Property represented thereby, except in order to comply with mandatory provisions of applicable law.

Section 8.2 Termination .

(a) The Trustee shall set a date on which this Agreement will terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination, which date shall be no later than 90 days from the mailing of termination notice, if any of the following occurs:

(i) the Sponsor has given notice of resignation or is unable to perform its duties or becomes bankrupt or insolvent and the Trustee will not appoint a successor sponsor or agree to act as Sponsor;

(ii) Registered Owners holding at least 75% of the outstanding Shares notify the Trustee that they elect to terminate the Trust;

(iii) the Depository resigns or is removed; or

 

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(iv) the Trust receives notice from the Internal Revenue Service or counsel for the Trust or the Sponsor that the Trust fails to qualify for treatment, or will not be treated, as a grantor trust under the Code.

(b) The Trustee shall set a date on which this Agreement will terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination, which date shall be no later than 90 days from the mailing of termination notice, if any of the following occurs and the Sponsor has notified the Trustee that it elects to terminate this Agreement:

(i) The Trustee is notified that the Shares are delisted from a national securities exchange and are not approved for listing on another national securities exchange within five New York Business Days of their delisting;

(ii) the Commission determines that the Trust is an investment company under the Investment Company Act of 1940, as amended;

(iii) the NAV of the Trust remains less than $100 million for 30 consecutive New York Business Days at any time after the first 90 days of the Shares being traded on the Exchange;

(iv) all of the Trust’s assets are sold;

(v) the aggregate market capitalization of the Trust, based on the closing price for the Shares remains less than $300 million at any time for five consecutive trading days beginning after the first anniversary of this Agreement; or

(vi) DTC ceases providing book-entry settlement services for the Shares.

(c) If 60 days have elapsed since the Trustee gave the Sponsor notice of its election to resign and no successor trustee appointed by the Sponsor has accepted appointment as Trustee, the Trustee may set a date on which this Agreement will

 

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terminate and mail notice of that termination to the Registered Owners at least 30 days prior to the date set for termination.

(d) If not terminated sooner, this Agreement shall terminate forty years from the date of this Agreement, and the Trustee shall mail a notice of that termination to the Registered Owners and the Sponsor at least 30 days before the termination date.

(e) On and after the date of termination of this Agreement, the Registered Owner of Shares will, upon (i) Surrender of those Shares, (ii) payment of the fee of the Trustee for the Surrender of Shares provided in Section 6.7, and (iii) payment of any applicable taxes or other governmental charges, be entitled to Delivery, to the Registered Owner or upon the Registered Owner’s order, of the amount of Trust Property represented by those Shares. The Trustee shall not accept any deposits of Canadian Dollars after the date of termination of this Agreement. If any Shares remain outstanding after the date of termination of this Agreement, the Trustee thereafter shall discontinue the registration of transfers of Shares, shall not make any distributions to Registered Owners, and shall not give any further notices or perform any further acts under this Agreement, except that the Trustee shall continue to collect distributions pertaining to Trust Property and hold the same uninvested and without liability for interest, pay the Trust’s expenses and sell Canadian Dollars as necessary to meet those expenses and shall continue to deliver Trust Property, together with any distributions received with respect thereto and the net proceeds of the sale of any other property, in exchange for Shares Surrendered to the Trustee (after deducting or upon payment of, in each case, the fee of the Trustee set forth in 5.7 for the Surrender of Shares, any expenses for the account of the Registered Owner of such Shares in accordance with the terms and conditions of this Agreement, and any applicable taxes or other governmental charges). At any time after the expiration of 90 days following the date of termination of this Agreement, the Trustee may sell for Dollars the Trust Property for then held under this Agreement and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it under this Agreement, unsegregated and without liability for interest, for

 

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the pro rata benefit of the Registered Owners of Shares that have not theretofore been Surrendered, such Registered Owners thereupon becoming general creditors of the Trustee with respect to such net proceeds. After making such sale, the Trustee shall be discharged from all obligations under this Agreement, except to account for such net proceeds and other cash (after deducting, in each case, any fees, expenses, taxes or other governmental charges payable by the Trust, the fee of the Trustee for the Surrender of Shares and any expenses for the account of the Registered Owner of such Shares in accordance with the terms and conditions of this Agreement, and any applicable taxes or other governmental charges), and the trust created by this Agreement shall terminate. Upon the termination of this Agreement, the Sponsor shall be discharged from all obligations under this Agreement except for its obligations to the Trustee under Section 6.7 and Section 7.1, each of which shall survive termination of this Agreement. Section 5.6 and this Section 8.1(e) shall also survive termination of this Agreement.

ARTICLE 9

MISCELLANEOUS

Section 9.1 Counterparts .

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of such counterparts shall constitute one and the same instrument. Copies of this Agreement shall be filed with the Trustee and shall be open to inspection by any Registered Owner during the Trustee’s business hours.

Section 9.2 Third-Party Beneficiaries .

This Agreement is for the exclusive benefit of the parties hereto, and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person.

 

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Section 9.3 Severability .

In case any one or more of the provisions contained in this Agreement should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall in no way be affected, prejudiced or disturbed thereby.

Section 9.4 Registered Owners, Beneficial Owners and Depositors as Parties; Binding Effect .

The Registered Owners, Beneficial Owners and Depositors from time to time shall be parties to this Agreement and shall be bound by all of the terms and conditions hereof by their acceptance of Shares or any interest therein or by their depositing Canadian Dollars, as the case may be.

Section 9.5 Notices .

(a) All notices given under this Agreement must be in writing.

(b) Any and all notices to be given to the Trustee or the Sponsor shall be deemed to have been duly given (i) when it is actually delivered by a messenger or recognized courier service, (ii) five days after it is mailed by registered or certified mail, postage paid or (iii) when receipt of a facsimile transmission is acknowledged via a return receipt or receipt confirmation as requested by the original transmission, in each case to or at the address set forth below:

To the Trustee:

The Bank of New York

101 Barclay Street, 22-W

New York, New York 10286

Attention: ADR Administration

Facsimile: 212-571-3050

or any other place to which the Trustee may have transferred its Corporate Trust Office

 

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with notice to the Sponsor.

To the Sponsor:

Rydex Specialized Products LLC

c/o Rydex Investments

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Carl G. Verboncoeur, President

Facsimile: 301-296-5112

or any other place to which the Sponsor may have transferred its principal office with notice to the Trustee.

(c) Any and all notices to be given to a Registered Owner shall be deemed to have been duly given (i) when actually delivered by messenger or a recognized courier service, (ii) when mailed, postage prepaid or (iii) when sent by facsimile transmission confirmed by letter, in each case at or to the address of such Registered Owner as it appears on the transfer books of the Trustee, or, if such Registered Owner shall have filed with the Trustee a written request that any notice or communication intended for such Registered Owner be delivered to some other address, at the address designated in such request.

Section 9.6 Agent for Service; Submission to Jurisdiction .

The Sponsor hereby (i) irrevocably designates and appoints CT Corporation, in the State of New York, as the Sponsor’s authorized agent upon which process may be served in any suit or proceeding arising out of or relating to the Shares, the Trust Property or this Agreement, (ii) consents and submits to the jurisdiction of any state or federal court in The City of New York, State of New York, in which any such suit or proceeding may be instituted, and (iii) agrees that service of process upon said authorized agent shall be deemed in every respect effective service of process upon the Sponsor in any such suit or proceeding. The Sponsor agrees to deliver, upon the execution and delivery of this Agreement, a written acceptance by such agent of its

 

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appointment as such agent. The Sponsor further agrees to take any and all action, including the filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment in full force and effect for so long as any Shares remain outstanding or this Agreement remains in force. In the event the Sponsor fails to continue such designation and appointment in full force and effect, the Sponsor hereby waives personal service of process upon it and consents that any such service of process may be made by certified or registered mail, return receipt requested, directed to the Sponsor at its address last specified for notices hereunder, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

Section 9.7 Governing Law .

This Agreement shall be interpreted under, and all rights and duties under this Agreement shall be governed by, the laws of the State of New York.

 

53


IN WITNESS WHEREOF, RYDEX SPECIALIZED PRODUCTS LLC and THE BANK OF NEW YORK have duly executed this Agreement as of the day and year first set forth above.

 

RYDEX SPECIALIZED PRODUCTS LLC,

as Sponsor

By:   /s/ Carl G Verboncoeur
 

Name: Carl G. Verboncoeur

Title:   Chief Executive Officer and Treasurer

 

THE BANK OF NEW YORK,

as Trustee

By:   /s/ Bruce Baumann
 

Name: Bruce Baumann

Title:   Vice President

 

54


EXHIBIT A

Form of Deposit Account Agreement

 

1


EXHIBIT B

Form of Certificate

THE SHARES EVIDENCED HEREBY REPRESENT RIGHTS WITH RESPECT TO UNDERLYING TRUST PROPERTY (AS DEFINED IN THE TRUST AGREEMENT REFERRED TO HEREIN) HELD BY THE TRUST AND DO NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND ARE NOT GUARANTEED BY THE SPONSOR OR THE TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES. NEITHER THE SHARES NOR THE UNDERLYING TRUST PROPERTY ARE INSURED UNDER ANY AGREEMENT THAT DIRECTLY BENEFITS THE TRUST OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE AGENT AUTHORIZED BY THE ISSUER 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 REQUESTED 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.

 

2


CANADIAN DOLLAR SHARES

ISSUED BY

CURRENCYSHARES CANADIAN DOLLAR TRUST

REPRESENTING

FRACTIONAL INTERESTS IN DEPOSITED CANADIAN DOLLARS AND ANY

OTHER TRUST PROPERTY

THE BANK OF NEW YORK, as Trustee

 

No.____

     * Shares   

CUSIP:                 

THE BANK OF NEW YORK, as Trustee (hereinafter called the Trustee), hereby certifies that CEDE & CO., as nominee of the Depository Trust Company, or registered assigns, IS THE OWNER OF * Shares issued by CurrencyShares Canadian Dollar Trust, each representing a fractional undivided interest in the net assets of the Trust, as provided in the Agreement referred to below. At the time of delivery of the Agreement, each 50,000 Shares represented an interest in 5,000,000 Canadian Dollars that are deposited under the Agreement and held by the Depository referred to in the Agreement. The amount of Canadian Dollars in which each 50,000 Shares represents an interest may change from time to time as provided in the Agreement. The Trustee’s Corporate Trust Office is located at a different address than its principal executive office. Its Corporate Trust Office is located at 101 Barclay Street, New York, New York 10286, and its principal executive office is located at One Wall Street, New York, New York 10286.

This Certificate is issued upon the terms and conditions set forth in the Trust Agreement dated as of                      , 2006 (the “Agreement”) among Rydex Specialized Products LLC d/b/a “Rydex Investments” (herein called the Sponsor), the Trustee, all Registered Owners and Beneficial Owners from time to time of Shares issued thereunder and all Depositors. By becoming a Registered Owner or Beneficial Owner, or by depositing Canadian Dollars, a Person becomes a party to the Agreement and is bound by all the terms and conditions of the Agreement. The Agreement sets forth the rights of Depositors and Registered Owners and the rights and duties of the Trustee and the Sponsor. Copies of the Agreement are on file at the Trustee’s Corporate Trust Office in New York City.

 

* That number of Shares held at The Depository Trust Company at any given point in time.

 

3


The Agreement is hereby incorporated by reference into and made a part of this Certificate as if set forth in full in this place. Capitalized terms not defined herein shall have the meanings set forth in the Agreement.

This Certificate shall not be entitled to any benefits under the Agreement or be valid or obligatory for any purpose unless it is executed by the Trustee by the manual or facsimile signature of a duly authorized signatory of the Trustee and, if a Registrar (other than the Trustee) for the Shares shall have been appointed, countersigned by the manual signature of a duly authorized officer of the Registrar.

 

Dated: June 13, 2006     THE BANK OF NEW YORK,
      as Trustee
        /s/ Bruce Baumann
      By:   Bruce Baumann
      Its:   Vice President

THE TRUSTEE’S CORPORATE TRUST OFFICE ADDRESS IS

101 BARCLAY STREET, NEW YORK, NEW YORK 10286

 

4

Exhibit 4.3

CURRENCYSHARES SM CANADIAN DOLLAR TRUST

PARTICIPANT AGREEMENT

This Participant Agreement (this “ Agreement ”), dated as of March 25, 2010, is entered into by and between Knight Clearing Services, LLC (with respect to this Agreement, the “ Authorized Participant ”, and with respect to the Trust Agreement referred to below, an “ Authorized Participant ”), The Bank of New York, a New York banking corporation, not in its individual capacity but solely as trustee (the “ Trustee ”) of the CurrencyShares Canadian Dollar Trust (the “ Trust ”), and Rydex Specialized Products LLC, d/b/a Rydex Investments, as sponsor (the “ Sponsor ”) of the Trust.

SUMMARY

The Trustee serves as the trustee of the Trust pursuant to the Depositary Trust Agreement dated as of June 8, 2006, among the Sponsor, the Trustee, the registered owners and beneficial owners from time to time of Canadian Dollar Shares issued thereunder and all depositors (the “ Trust Agreement ”). As provided in the Trust Agreement and described in the Prospectus (defined below), units of fractional undivided beneficial interests in and ownership of the Trust (the “ Shares ”) may be created or redeemed by the Trustee for an Authorized Participant in aggregations of fifty thousand (50,000) Shares (each aggregation, a “ Basket ”). Baskets are offered only pursuant to the registration statement of the Trust on Form S-1, as amended (Registration No: 333-132363), as declared effective by the Securities and Exchange Commission (“ SEC ”) and as the same may be amended from time to time thereafter (collectively, the “ Registration Statement ”) together with the prospectus of the Trust in the form first filed with the SEC pursuant to Rule 424 (the “ Prospectus ”) adopted under the Securities Act of 1933, as amended (the “ 1933 Act ”). Under the Trust Agreement, the Trustee is authorized to issue Baskets to, and redeem Baskets from, Authorized Participants under the Trust Agreement, only through the facilities of The Depository Trust Company (“ DTC ”) or a successor depository, and only in exchange for an amount of Canadian Dollars that is transferred between such Authorized Participant and the Trust. Under the Trust Agreement, the Trustee issues Baskets in exchange for Canadian Dollars which are transferred by an Authorized Participant to the London Branch of JPMorgan Chase Bank, N.A. (the “ Depository ”), and when the Trustee redeems Baskets tendered for redemption by an Authorized Participant in exchange for Canadian Dollars, the Canadian Dollars held in the Trust Account are transferred to the Authorized Participant by the Depository. The foregoing Canadian Dollar transfers are also governed by the Deposit Account Agreement the Trust has entered into with the Depository (the “ Deposit Account Agreement ”). This Agreement sets forth the specific procedures by which an Authorized Participant may create or redeem Baskets.

Because new Shares can be created and issued on an ongoing basis, at any point during the life of the Trust, a “distribution,” as such term is used in the 1933 Act, may be occurring. The Authorized Participant is cautioned that some of its activities may result in its being deemed a participant in a distribution in a manner that would render it a statutory underwriter and subject it to the prospectus-delivery and liability provisions of the 1933 Act. The Authorized Participant should review the “Plan of Distribution” portion of the Prospectus and consult with its own counsel in connection with entering into this Agreement and placing an Order (defined below).

Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in the Trust Agreement. To the extent there is a conflict between any provision of this Agreement and the provisions of the Trust Agreement, the provisions of the Trust Agreement shall control.

To give effect to the foregoing premises and in consideration of the mutual covenants and agreements set forth below, the parties hereto agree as follows:

Section 1. Order Placement. To place orders for the Trustee to create or redeem one or more Baskets, Authorized Participants must follow the procedures for creation and redemption referred to in Section 3 of this Agreement and the procedures described in Attachment A hereto (the “ Procedures ”), as each may be amended, modified or supplemented from time to time.


Section 2. Status, Representations and Warranties of the Parties.

(a) The Authorized Participant represents and warrants and covenants the following on the date hereof and at each time of purchase by the Authorized Participant of a Basket from the Trust (each such time, the “Time of Purchase”), that:

(i) The Authorized Participant is a participant of DTC (as such a participant, a “ DTC Participant ”). If the Authorized Participant ceases to be a DTC Participant, the Authorized Participant shall give immediate notice to the Trustee of such event, and this Agreement shall terminate immediately as of the date the Authorized Participant ceased to be a DTC Participant.

(ii) Unless Section 2(a)(iii) applies, the Authorized Participant either (A) is registered as a broker-dealer under the Securities Exchange Act of 1934, as amended (“ 1934 Act ”), and is a member in good standing of the National Association of Securities Dealers, Inc. (the “ NASD ”), or (B) is exempt from being, or otherwise is not required to be, licensed as a broker-dealer or a member of the NASD, and in either case is qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. In connection with the purchase or redemption of Baskets and any related offers or sales of Shares, the Authorized Participant will maintain any such registrations, qualifications and membership in good standing and in full force and effect throughout the term of this Agreement. The Authorized Participant will comply with all applicable federal laws, the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder, and with the Constitution, By-Laws and Conduct Rules of the NASD (if it is a NASD member), and will not offer or sell Shares in any state or jurisdiction where they may not lawfully be offered and/or sold.

(iii) If the Authorized Participant is offering or selling Shares in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise required to be registered, qualified or a member of the NASD as set forth in Section 2(a)(ii) above, the Authorized Participant will, in connection with such offers and sales, (A) observe the applicable laws of the jurisdiction in which such offer and/or sale is made, (B) comply with the prospectus delivery and other requirements of the 1933 Act, and the regulations promulgated thereunder, and (C) conduct its business in accordance with the NASD Conduct Rules.

(iv) The Authorized Participant is in compliance with the money laundering and related provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, and the regulations promulgated thereunder, if the Authorized Participant is subject to the requirements of the USA PATRIOT Act.

(v) The Authorized Participant has the capability to send and receive communications via authenticated telecommunication facility to and from the Trustee. The Authorized Participant shall confirm such capability to the satisfaction of the Trustee by the end of the Business Day before placing its first order with the Trustee (whether such order is to create or to redeem Baskets).


(b) The Sponsor represents and warrants that:

(i) on the effective date of the Registration Statement and at each Time of Purchase, the Trust’s Registration Statement shall be effective and no stop order of the SEC with respect thereto shall have been issued and no proceedings for such purpose shall have been instituted or, to the Sponsor’s knowledge, will then be contemplated by the SEC; the Registration Statement complies in all material respects with the requirements of the 1933 Act, and the Prospectus complied as of its date, and complies at the Time of Purchase, in all material respects with the requirements of the 1933 Act; and the conditions to the use of Form S-1 have been satisfied; the Registration Statement does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, the Prospectus will not, as of its date and at the Time of Purchase, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, as of              a.m./p.m. on the date of this Agreement (the “ Time of Sale ”), the documents comprising the Disclosure Package (as defined below) did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Sponsor makes no warranty or representation with respect to any statement contained in the Registration Statement, the Prospectus or the Disclosure Package in reliance upon and in conformity with information concerning the Authorized Participant and furnished in writing by or on behalf of the Authorized Participant to the Sponsor expressly for use therein. The “ Disclosure Package ” is the Prospectus and any amendments and supplements thereto at the Time of Sale and any free writing prospectus as defined in Rule 405 of the 1933 Act (a “ FWP ”) prepared by, for or on behalf of the Sponsor before the Time of Sale and intended for general distribution;

(ii) the Shares, when issued and delivered against payment of consideration therefor, as provided in this Agreement, will be duly and validly authorized, issued, fully paid and non-assessable and free of statutory and contractual preemptive rights, rights of first refusal and similar rights;

(iii) the Sponsor has been duly organized and, on the effective date of the Registration Statement and at each Time of Purchase, will be validly existing as a limited liability company in good standing under the laws of the State of Delaware, with full power and authority to act as the sponsor of the Trust as described in the Registration Statement and the Prospectus, and has all requisite power and authority to execute and deliver this Agreement; and

(iv) at the time the Sponsor makes an offer of Shares following the filing of the Registration Statement, neither the Trust nor the Sponsor will be an “ineligible issuer” as defined in Rule 405 of the 1933 Act.

Section 3. Orders.

(a) All orders to create or redeem Baskets shall be made in accordance with the terms of the Trust Agreement, the Deposit Account Agreement, this Agreement and the Procedures. Each party will comply with such foregoing terms and procedures to the extent applicable to it. The Authorized Participant hereby consents to the use of recorded telephone lines whether or not


such use is reflected in the Procedures. The Trustee and Sponsor may issue additional or other procedures from time to time relating to the manner of creating or redeeming Baskets which are not related to the Procedures, and the Authorized Participant will comply with such procedures of which it has received notice in accordance with Section 18(c).

(b) The Authorized Participant acknowledges and agrees that each order to create a Basket (a “ Purchase Order ”) and each order to redeem a Basket (a “ Redemption Order ”, and each Purchase Order and Redemption Order, an “ Order ”) may not be revoked by the Authorized Participant upon its delivery to the Trustee. A form of Purchase Order is attached hereto as Exhibit B and a form of Redemption Order is attached hereto as Exhibit C.

(c) The delivery of the Shares against deposits of Canadian Dollars may be suspended generally, or refused with respect to particular requested deliveries, during any period when the transfer books of the Trustee are closed or if any such action is deemed necessary or advisable by the Trustee or the Sponsor for any reason at any time or from time to time. Except as otherwise provided in the Trust Agreement, the surrender of Shares for purposes of withdrawing Canadian Dollars may not be suspended.

Section 4. Canadian Dollars Transfers. Any Canadian Dollars to be transferred in connection with any Order shall be transferred between the Authorized Participant’s account and the Trust’s deposit accounts established for such transfers pursuant to the Deposit Account Agreement (the “ Deposit Accounts ”) in accordance with the Procedures. The Authorized Participant shall be responsible for all costs and expenses relating to or connected with any transfer of Canadian Dollars between its account and the Deposit Accounts, including any late fees and other charges, if any, for which the Trustee becomes responsible in the event that Canadian Dollars are not transferred from the Authorized Participant’s account in accordance with the Procedures.

Section 5. Fees. In connection with each Order by an Authorized Participant to create or redeem one or more Baskets, the Trustee shall charge, and the Authorized Participant shall pay to the Trustee, the transaction fee prescribed in the Trust Agreement applicable to such creation or redemption. The initial transaction fee shall be five hundred dollars ($500). The transaction fee may be waived or otherwise adjusted from time to time as set forth in the Prospectus.

Section 6. Authorized Persons. Concurrently with the execution of this Agreement and from time to time thereafter, the Authorized Participant shall deliver to the Trustee notarized and duly certified as appropriate by its secretary or other duly authorized official, a certificate in the form of Exhibit A setting forth the names and signatures of all persons authorized to give instructions relating to activity contemplated hereby or by any other notice, request or instruction given on behalf of the Authorized Participant (each, an “ Authorized Person ”). The Trustee may accept and rely upon such certificate as conclusive evidence of the facts set forth therein and shall consider such certificate to be in full force and effect until the Trustee receives a superseding certificate bearing a subsequent date. Upon the termination or revocation of authority of any Authorized Person by the Authorized Participant, the Authorized Participant shall give immediate written notice of such fact to the Trustee and such notice shall be effective upon receipt by the Trustee. The Trustee shall issue to each Authorized Person a unique personal identification number (the “ PIN ”) by which such Authorized Person shall be identified and by which instructions issued by the Authorized Participant hereunder shall be authenticated. The PIN shall be kept confidential by the Authorized Participant and shall only be provided to the Authorized Person. If, after issuance, the Authorized Person’s PIN is changed, the new PIN shall become effective on a date mutually agreed upon by the Authorized Participant and the Trustee.

Section 7. Redemption. The Authorized Participant represents and warrants that it will not obtain an Order Number (as described in the Procedures) from the Trustee for the purpose of redeeming a Basket unless it first ascertains that (i) it owns outright or has full legal authority and legal and beneficial right to tender for redemption the Baskets to be redeemed and to receive the entire proceeds of the redemption, and (ii) such Baskets have not been loaned or pledged to another party and are not the subject of a repurchase agreement, securities lending agreement or any other arrangement which would preclude the delivery of such Baskets to the Trustee on the third Business Day following the date of the Redemption Order.


Section 8. Role of Authorized Participant.

(a) The Authorized Participant acknowledges that, for all purposes of this Agreement and the Trust Agreement, the Authorized Participant is and shall be deemed to be an independent contractor and has and shall have no authority to act as agent for the Trust, the Sponsor, the Trustee or the Depository, in any matter or in any respect.

(b) The Authorized Participant will make itself and its employees available, upon request, during normal business hours to consult with the Trustee, the Depository or their designees concerning the performance of the Authorized Participant’s responsibilities under this Agreement.

(c) The Authorized Participant will maintain records of all sales of Shares made by or through it as required by law and will furnish copies of such records to the Sponsor upon the reasonable request of the Sponsor, subject to any privacy or confidentiality obligations it may have to its customers arising under federal or state securities laws or the applicable rules of any self regulatory organization. The Sponsor will not use any information provided by the Authorized Participant pursuant to this paragraph or disclose such information to others except in connection with the performance of its duties and responsibilities hereunder, including making servicing and informational mailings related to the Trust, or except as may be required by applicable law.

Section 9. Indemnification.

(a) The Authorized Participant hereby indemnifies and holds harmless the Trustee, the Depository, the Trust, the Sponsor, their respective direct or indirect affiliates (as defined below) and their respective directors, officers, employees and agents (each, an “ AP Indemnified Party ”) from and against any losses, liabilities, damages, costs and expenses (including attorney’s fees and the reasonable cost of investigation) incurred by such AP Indemnified Party as a result of or in connection with: (i) any breach by the Authorized Participant of any provision of this Agreement, including any of its representations, warranties or covenants; (ii) any failure on the part of the Authorized Participant to perform any of its other obligations set forth in this Agreement; (iii) any failure by the Authorized Participant to comply with applicable laws and the rules and regulations of any governmental entity or any self-regulatory organization; (iv) any actions of such AP Indemnified Party in reliance upon any instructions issued in accordance with the Procedures reasonably believed by the AP Indemnified Party to be genuine and to have been given by the Authorized Participant; or (v) (A) any representation by the Authorized Participant, its employees or its agents or other representatives about the Shares, any AP Indemnified Party or the Trust that is not consistent with the Trust’s Prospectus as then-supplemented made in connection with the offer or the solicitation of an offer to buy or sell Shares and (B) any untrue statement or alleged untrue statement of a material fact (1) contained in any research report, marketing material or sales literature described in Section 13(b) or in any FWP prepared by the Authorized Participant or (2) furnished by the Authorized Participant for use in a FWP prepared by, for or on behalf of the Sponsor, or any alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading to the extent that such statement or omission relates to the Shares, any AP Indemnified Party or the Trust, unless, in either case, such representation, statement or omission was made or included by the Authorized Participant at the written direction of the Sponsor or is based upon any omission or alleged omission by the Sponsor to state a material fact in connection with such representation, statement or omission necessary in order to make such representation, statement or omission not misleading.

(b) The Sponsor hereby agrees to indemnify and hold harmless the Authorized Participant, its respective subsidiaries, affiliates, directors, officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each, a “ Sponsor Indemnified Party ”) from and against any losses, liabilities, damages, costs and expenses


(including attorneys’ fees and the reasonable cost of investigation) incurred by such Sponsor Indemnified Party as a result of (i) any breach by the Sponsor of any provision of this Agreement that relates to the Sponsor, including its representations, warranties and covenants; (ii) any failure on the part of the Sponsor to perform any other obligation of the Sponsor set forth in this Agreement; (iii) any failure by the Sponsor to comply with applicable laws; or (iv) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or in any amendment thereof, or in the Prospectus, or in any amendment thereof or supplement thereto, or in the Disclosure Package, or in any FWP prepared by, for or on behalf of the Sponsor, or arising out of or based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, except those statements based on information furnished in writing by or on behalf of the Authorized Participant expressly for use in the Registration Statement, amendment thereof, Prospectus, amendment thereof or supplement thereto, Disclosure Package, or FWP.

(c) (i) This Section 9 shall not apply to any AP Indemnified Party or any Sponsor Indemnified Party (each, an “ Indemnified Party ”) to the extent any such losses, liabilities, damages, costs and expenses are incurred as a result of, or in connection with, any action or failure to act that constitutes gross negligence, bad faith or willful misconduct on the part of the such Indemnified Party. (ii) The term “affiliate” in this Section 9 shall include, with respect to any person, entity or organization, any other person, entity or organization which directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such person, entity or organization.

(d) If the indemnification provided for in this Section 9 is unavailable to an indemnified party under Sections 9(a) or 9(b) or insufficient to hold an indemnified party harmless in respect of any losses, liabilities, damages, costs and expenses referred to therein, then each applicable indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilities, damages, costs and expenses (i) in such proportion as is appropriate to reflect the relative benefits received by the Sponsor and the Trust, on the one hand, and by the Authorized Participant, on the other hand, from the services provided hereunder or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Sponsor and the Trust, on the one hand, and of the Authorized Participant, on the other hand, in connection with, to the extent applicable, the statements or omissions which resulted in such losses, liabilities, damages, costs and expenses, as well as any other relevant equitable considerations. The relative benefits received by the Sponsor and the Trust, on the one hand, and the Authorized Participant, on the other hand, shall be deemed to be in the same respective proportions as the amount of Canadian Dollars transferred to the Trust under this Agreement on the one hand (expressed in dollars) bears to the amount of economic benefit received by the Authorized Participant in connection with this Agreement on the other hand. To the extent applicable, the relative fault of the Sponsor on the one hand and of the Authorized Participant on the other shall be determined by reference to, among other things, whether the untrue statement or alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Sponsor or by the Authorized Participant and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, liabilities, damages, costs and expenses referred to in this Section 9(d) shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any action, suit or proceeding (each a “ Proceeding ”) related to such losses, liabilities, damages, costs and expenses.

(e) The Sponsor and the Authorized Participant agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(d) above. The Authorized Participant shall not be required to contribute any amount in excess of the amount by which the total price at which the Shares created by the Authorized


Participant and distributed to the public were offered to the public exceeds the amount of any damage which the Authorized Participant has otherwise been required to pay by reason of such untrue statement or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(f) The indemnity and contribution agreements contained in this Section 9 shall remain in full force and effect regardless of any investigation made by or on behalf of the Authorized Participant, its partners, stockholders, members, directors, officers, employees and or any person (including each partner, stockholder, member, director, officer or employee of such person) who controls the Authorized Participant within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, or by or on behalf of the Sponsor, its partners, stockholders, members, directors, officers, employees or any person who controls the Sponsor within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and shall survive any termination of this Agreement. The Sponsor and the Authorized Participant agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Sponsor, against any of the Sponsor’s officers or directors, in connection with the issuance and sale of the Shares or in connection with the Registration Statement or the Prospectus.

Section 10. Liability.

(a) Limitation of Liability. None of the Sponsor, the Trustee, the Authorized Participant, and the Depository shall be liable to each other or to any other person, including any party claiming by, through or on behalf of the Authorized Participant, for any losses, liabilities, damages, costs or expenses arising out of any mistake or error in data or other information provided to any of them by each other or any other person or out of any interruption or delay in the electronic means of communications used by them.

(b) Tax Liability. The Authorized Participant shall be responsible for the payment of any transfer tax, sales or use tax, stamp tax, recording tax, value added tax and any other similar tax or government charge applicable to the creation or redemption of any Basket made pursuant to this Agreement, regardless of whether or not such tax or charge is imposed directly on the Authorized Participant. To the extent the Trustee, the Sponsor or the Trust is required by law to pay any such tax or charge, the Authorized Participant agrees to promptly indemnify such party for any such payment, together with any applicable penalties, additions to tax or interest thereon.

Section 11. Acknowledgment. The Authorized Participant acknowledges receipt of a (i) copy of the Trust Agreement and (ii) the current Prospectus of the Trust, and represents that it has reviewed and understands such documents.

Section 12. Effectiveness and Termination. Upon the execution of this Agreement by the parties hereto, this Agreement shall become effective in this form as of the Time of Sale, and may be terminated at any time by any party upon thirty (30) days prior written notice to the other parties unless earlier terminated: (i) in accordance with Section 2(a)(i); (ii) upon notice to the Authorized Participant by the Trustee in the event of a breach by the Authorized Participant of this Agreement or the procedures described or incorporated herein; (iii) immediately in the circumstances described in Section 18(j); or (iv) at such time as the Trust is terminated pursuant to the Trust Agreement.

Section 13. Marketing Materials; Representations Regarding Shares; Identification in Registration Statement.

(a) The Authorized Participant represents, warrants and covenants that (i), without the written consent of the Sponsor, the Authorized Participant will not (A) make, or permit any of its representatives to make, any representations concerning the Shares or any AP Indemnified Party other than representations contained (1) in the Prospectus of the Trust, as then amended and supplemented, (2) in printed information approved by the Sponsor as information supplemental to


such Prospectus or (3) in any promotional materials or sales literature furnished to the Authorized Participant by the Sponsor, or (B) issue any FWP pursuant to Rules 164 and 433 of the 1933 Act and (ii) the Authorized Participant will not furnish or cause to be furnished to any person or display or publish any information or material relating to the Shares, any AP Indemnified Person or the Trust that are not consistent with the Prospectus, as then amended and supplemented. Copies of the Prospectus of the Trust, as then amended and supplemented, and any such printed supplemental information will be supplied by the Sponsor to the Authorized Participant in reasonable quantities upon request.

(b) Notwithstanding the foregoing, the Authorized Participant may without the written approval of the Sponsor prepare and circulate in the regular course of its business research reports, marketing material and sales literature, but in no event FWPs, that include information, opinions or recommendations relating to the Shares (i) for public dissemination, provided that such research reports, marketing material or sales literature is prepared in accordance with applicable rules and regulations of the 1933 Act, any applicable state securities laws and NASD rules; or (ii) for internal use by the Authorized Participant. The Authorized Participant will file all such research reports, marketing material and sales literature related to the Shares with the NASD to the extent required by the NASD Conduct Rules.

(c) The Authorized Participant and its affiliates may prepare and circulate in the regular course of their businesses, without having to refer to the Shares or the Prospectus, as then amended and supplemented, data and information relating to the price of Canadian Dollars.

(d) The Authorized Participant hereby agrees that for the term of this Agreement the Sponsor may deliver the Prospectus, and any supplements or amendments thereto or recirculation thereof, to the Authorized Participant in Portable Document Format (“ PDF ”) via electronic mail in lieu of delivering the Prospectus in paper form. The Authorized Participant may revoke the foregoing agreement at any time by delivering written notice to the Sponsor and, whether or not such agreement is in effect, the Authorized Participant may, at any time, request reasonable quantities of the Prospectus, and any supplements or amendments thereto or recirculation thereof, in paper form from the Sponsor. The Authorized Participant acknowledges that it has the capability to access, view, save and print material provided to it in PDF and that it will incur no appreciable extra costs by receiving the Prospectus in PDF instead of in paper form. The Sponsor will, when requested by the Authorized Participant, make available at no cost the software and technical assistance necessary to allow the Authorized Participant to access, view and print the PDF version of the Prospectus.

(e) For as long as this Agreement is effective, the Authorized Participant agrees to be identified as an authorized participant of the Trust (i) in the section of the Prospectus included within the Registration Statement entitled “Creation and Redemption of Shares” (including identifying the Authorized Participant in such section by a supplement to the Prospectus) and in any other section as may be required by the SEC and (ii) on the Trust’s website. Upon the termination of this Agreement, (i) during the period prior to when the Sponsor qualifies and elects to file on Form S-3, the Sponsor will remove such identification from the Prospectus in the amendment of the Registration Statement next occurring after the date of the termination of this Agreement and, during the period after when the Sponsor qualifies and elects to file on Form S-3, the Sponsor will promptly file a current report on Form 8-K indicating the withdrawal of the Authorized Participant as an authorized participant of the Trust and (ii) the Sponsor will promptly update the Trust’s website to remove any identification of the Authorized Participant as an authorized participant of the Trust.

Section 14. Title To Canadian Dollars. The Authorized Participant represents and warrants that upon delivery of the Basket Canadian Dollar Amount (as defined in the Trust Agreement) to the Trustee in accordance with the terms of the Trust Agreement and this Agreement, the Trust will acquire good and unencumbered title to the Canadian Dollars which are the subject of such Basket Canadian Dollar Amount, free and clear of all pledges, security interests, liens, charges, taxes, assessments, encumbrances, equities,


claims, options or limitations of any kind or nature, fixed or contingent, and not subject to any adverse claims, including any restriction upon the sale or transfer of all or any part of such Canadian Dollars which is imposed by any agreement or arrangement entered into by the Authorized Participant or any party for which it is acting in connection with a Purchase Order.

Section 15. Third Party Beneficiaries. Each AP Indemnified Party, to the extent it is not a party to this Agreement, is a third-party beneficiary of this Agreement (each, a “ Third Party Beneficiary ”) and may proceed directly against the Authorized Participant (including by bringing proceedings against the Authorized Participant in its own name) to enforce any obligation of the Authorized Participant under this Agreement which directly or indirectly benefits such Third Party Beneficiary.

Section 16. Force Majeure. No party to this Agreement shall incur any liability for any delay in performance, or for the non-performance, of any of its obligations under this Agreement by reason of any act of God or war or terrorism, acts and regulations and rules of any governmental or supra national bodies or authorities or regulatory or self-regulatory organization or failure of any such body, authority or organization for any reason, to perform its obligations, or any cause beyond its reasonable control, including, without limitation, any breakdown, malfunction or failure of transmission in connection with or other unavailability of any wire, communication or computer facilities, any transport, port or airport disruption, or any industrial action.

Section 17. Ambiguous Instructions. If a Purchase Order Form or a Redemption Order Form otherwise in good form contains order terms that differ from the information provided in the telephone call at the time of issuance of the applicable order number, the Trustee will attempt to contact one of the Authorized Persons of the Authorized Participant to request confirmation of the terms of the Order. If an Authorized Person confirms the terms as they appear in the Order, then the Order will be accepted and processed. If an Authorized Person contradicts the Order terms, the Order will be deemed invalid, and a corrected Order must be received by the Trustee. If the Trustee is not able to contact an Authorized Person, then the Order shall be accepted and processed in accordance with its terms notwithstanding any inconsistency from the terms of the telephone information. In the event that an Order contains terms that are not complete or are illegible, the Order will be deemed invalid and the Trustee will attempt to contact one of the Authorized Persons of the Authorized Participant to request retransmission of the Order.

Section 18. Miscellaneous.

(a) Amendment and Modification. This Agreement, the Procedures attached as Attachment A and the Exhibits hereto may be amended, modified or supplemented by the Trustee and the Sponsor, without consent of any Authorized Participant from time to time by the following procedure. After the amendment, modification or supplement has been agreed to, the Trustee will mail a copy of the proposed amendment, modification or supplement to the Authorized Participant. For the purposes of this Agreement, mail will be deemed received by the recipient thereof on the third (3rd) day following the deposit of such mail into the United States postal system. Within ten (10) calendar days after its deemed receipt, the amendment, modification or supplement will become part of this Agreement, the Attachments or the Exhibits, as the case may be, in accordance with its terms. If at any time there is any material amendment, modification or supplement of any Participant Agreement (other than this Agreement), the Trustee will promptly mail a copy of such amendment, modification or supplement to the Authorized Participant.

(b) Waiver of Compliance. Any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefits thereof only by a written instrument signed by the party granting such waiver, but any such written waiver, or the failure to insist upon strict compliance with any obligation, covenant, agreement or condition herein, shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

(c) Notices. Except as otherwise specifically provided in this Agreement, all notices required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by


personal delivery, by postage prepaid registered or certified United States first class mail, return receipt requested, by nationally recognized overnight courier (delivery confirmation received) or by telex, telegram or telephonic facsimile or similar means of same day delivery (transmission confirmation received), with a confirming copy regular mailed, postage prepaid. For avoidance of doubt, notices may not be given or transmitted by electronic mail. Unless otherwise notified in writing, all notices to the Trust shall be given or sent to the Trustee. All notices shall be directed to the address or telephone or facsimile numbers indicated below the signature line of the parties on the signature page hereof.

(d) Successors and Assigns. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

(e) Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any party without the prior written consent of the other parties, except that any entity into which a party hereto may be merged or converted or with which it may be consolidated or any entity resulting from any merger, conversion, or consolidation to which such party hereunder shall be a party, or any entity succeeding to all or substantially all of the business of the party, shall be the successor of the party under this Agreement. The party resulting from any such merger, conversion, consolidation or succession shall notify the other parties hereto of the change. Any purported assignment in violation of the provisions hereof shall be null and void. Notwithstanding the foregoing, this Agreement shall be automatically assigned to any successor Trustee or Sponsor at such time such successor qualifies as a successor Trustee or Sponsor under the terms of the Trust Agreement.

(f) Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York (regardless of the laws that might otherwise govern under applicable New York conflict of laws principles) as to all matters, including matters of validity, construction, effect, performance and remedies. Each party hereto irrevocably consents to the jurisdiction of the courts of the State of New York and of any federal court located in the Borough of Manhattan in such State in connection with any action, suit or other proceeding arising out of or relating to this Agreement or any action taken or omitted hereunder, and waives any claim of forum non convenient and any objections as to laying of venue. Each party further waives personal service of any summons, complaint or other process and agrees that service thereof may be made by certified or registered mail directed to such party at such party’s address for purposes of notices hereunder. Each party hereby waives its right to a trial by jury of any claim arising under or in connection with this Agreement.

(g) Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement, and it shall not be necessary in making proof of this Agreement as to any party hereto to produce or account for more than one such counterpart executed and delivered by such party.

(h) Interpretation. The article and section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.

(i) Entire Agreement. This Agreement and the Trust Agreement, along with any other agreement or instrument delivered pursuant to this Agreement and the Trust Agreement, supersede all prior agreements and understandings between the parties with respect to the subject matter hereof, provided, however, that the Authorized Participant shall not be deemed by this provision to be a party to the Trust Agreement.

(j) Severance. If any provision of this Agreement is held by any court or any act, regulation, rule or decision of any other governmental or supra national body or authority or regulatory or self-regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid,


illegal or unenforceable only to the extent so held and shall not affect the validity, legality or enforceability of the other provisions of this Agreement and this Agreement will be construed as if such invalid, illegal, or unenforceable provision had never been contained herein, unless the Sponsor determines in its discretion, after consulting with the Trustee, that the provision of this Agreement that was held invalid, illegal or unenforceable does affect the validity, legality or enforceability of one or more other provisions of this Agreement, and that this Agreement should not be continued without the provision that was held invalid, illegal or unenforceable, and in that case, upon the Sponsor’s notification of the Trustee of such a determination, this Agreement shall immediately terminate and the Trustee will so notify the Authorized Participant immediately.

(k) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction will be applied against any party.

(l) Survival. Sections 9 (Indemnification) and 15 (Third Party Beneficiaries) hereof shall survive the termination of this Agreement.

(m) Other Usages. The following usages shall apply in interpreting this Agreement: (i) references to a governmental or quasigovernmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of such agency, authority or instrumentality; and (ii) “including” means “including, but not limited to.”

* * * * * * *


IN WITNESS WHEREOF, the Authorized Participant, the Sponsor and the Trustee, on behalf of the Trust, have caused this Agreement to be executed by their duly authorized representatives as of the date first set forth above.

 

THE BANK OF NEW YORK,

not in its individual capacity,

but solely as Trustee of the CurrencyShares

Canadian Dollar Trust

  KNIGHT CLEARING SERVICES, LLC
By:  

/s/ Andrew Pfeifer

    By:          

/s/ Christopher Pento

          Name:         Name:   Christopher Pento
          Title  Vice President       Title   President

 

Address:  

        One Wall Street

        New York, NY 10286

   

Address: 545 Washington Blvd., 2 nd Fl.

 Jersey City, NJ 07310

Telephone:           (212) 635-6314     Telephone:           201-356-4232
Facsimile:       Facsimile:           201-356-4297

 

RYDEX SPECIALIZED PRODUCTS LLC,
Sponsor of the CurrencyShares Canadian Dollar Trust

/s/ Nick Bonos

 
Name:   Nick Bonos
Title:   CEO

 

Address:   9601 Blackwell Rd., Ste 500
  Rockville, MD 20850

 

Telephone:   301-296-5125

 

Facsimile:   301-296-5104


LOGO

Exhibit A

CURRENCYSHARES SM CANADIAN DOLLAR TRUST

FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT

The following are the names, titles and signatures of all persons (each an “ Authorized Person ”) authorized to give instructions relating to any activity contemplated by the Participant Agreement or any other notice, request or instruction on behalf of the Authorized Participant pursuant to the CurrencyShares Canadian Dollar Trust Participant Agreement.

 

Authorized Participant: Knight Clearing Services LLC.
Name:   Stacey Boss      Name:   Robert Moseman III
Title:   Authorized Person      Title:   Authorized Person

 

Signature:  

/s/ Stacey Boss

     Signature:  

/s/ Robert Moseman III

 

Name:   Eric Malpica      Name:   Sean Siri
Title:   Authorized Person      Title:   Authorized Person

 

Signature:  

/s/ Eric Malpica

     Signature:  

/s/ Sean Siri

 

Name:   Erma McClain      Name:   Wayne Solano
Title:   Authorized Person      Title:   Authorized Person

 

Signature:  

/s/ Erma McClain

     Signature:  

/s/ Wayne Solano

The undersigned, Andrew M. Greenstein, Managing Director, Deputy General Counsel and Secretary of Knight Clearing Services LLC does hereby certify that the persons listed above have been duly elected to the offices set forth beneath their names, that they presently hold such offices, that they have been duly authorized to act as Authorized Persons pursuant to the CurrencyShares Canadian Dollar Trust Participant Agreement by and between Knight Clearing Services LLC and the Trustee and the Sponsor of the CurrencyShares Canadian Dollar Trust, dated March 25, 2010, and that their signatures set forth above are their own true and genuine signatures.

In Witness Whereof, the undersigned has hereby set his hand and the seal of Knight Clearing Services LLC on the date set forth below.

 

      Knight Clearing Services LLC
      By:   

/s/ Andrew M. Greenstein

      Name:    Andrew M. Greenstein
      Title:    Managing Director, Deputy General
Subscribed and sworn to before me       Counsel & Secretary
This 15 th day of April, 2010       Date:    April 15, 2010

/s/ Maria Corona S. Bugarin

        

Maria Corona S. Bugarin

Notary Public of New Jersey

        
My Comm. Expires Sept. 26, 2013         


EXHIBIT B

CURRENCYSHARES SM CANADIAN DOLLAR TRUST

PURCHASE ORDER FORM

THE BANK OF NEW YORK, TRUSTEE

 

 

CONTACT INFORMATION FOR ORDER EXECUTION:

Telephone order number:    (718) 315-4970 or 4967
Fax order number:    (718) 315-4881
Depository Instructions    (000-000-0000)/SWIFT [              ]

 

 

Participant must complete all items in Part I. The Trustee, in its discretion may reject any order not submitted in complete form.

 

I. TO BE COMPLETED BY PARTICIPANT :
Date:  

 

Broker Name:  

 

DTC Participant Number:  

 

Telephone Number:  

 

  Time:  

 

  Firm Name:  

 

  Fax Number:  

 

  (One Basket = 50,000 FXC Shares)
Number of Baskets Transacted:  

 

 

 

Order #  

 

  Number written out:  

 

 

 

This Purchase Order is subject to the terms and conditions of the Depositary Trust Agreement of the CurrencyShares Canadian Dollar Trust as currently in effect and the Participant Agreement between the Authorized Participant, the Trustee and the Sponsor named therein. All representations and warranties of the Authorized Participant set forth in such Depositary Trust Agreement and such Participant Agreement are incorporated herein by reference and are true and accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the Participant Agreement and that he/she is authorized to deliver this Purchase Order to the Trustee on behalf of the Authorized Participant. The Authorized Participant enters into this agreement based on an estimated Basket Canadian Dollar Amount disseminated the previous business day and recognizes the final Basket Canadian Dollar Amount represented will be decreased based on the Trust’s daily accrual. At the conclusion of the trading day a final NAV will be disseminated to all Authorized Participants, and the Basket Canadian Dollar Amount required for the Purchase Order entered into on this day will be finalized and this Purchase Order will serve as a legally binding contract for settlement in 3 business days.

 

 

    

 

Date

     Authorized Person’s Signature        

 

II. TO BE COMPLETED BY TRUSTEE :

This certifies that the above order has been:

 

 

  Accepted by the Trustee   

 

  Declined-Reason:  

 

  

 

Final # of Canadian Dollars  

 

    Final # of FXC Shares  

 

 

 

   

 

    

 

Date     Time      Authorized Signature of Trustee


EXHIBIT C

CURRENCYSHARES CANADIAN DOLLAR TRUST

REDEMPTION ORDER FORM

THE BANK OF NEW YORK, TRUSTEE

 

 

CONTACT INFORMATION FOR ORDER EXECUTION:

Telephone order number:    (718) 315-4970 or 4967
Fax order number:    (718) 315-4881
Depository Instructions    (000-000-0000)/SWIFT [              ]

 

 

Participant must complete all items in Part I. The Trustee, in its discretion may reject any order not submitted in complete form.

 

I. TO BE COMPLETED BY PARTICIPANT :
Date:  

 

Broker Name:  

 

DTC Participant Number:  

 

Telephone Number:  

 

  Time:  

 

  Firm Name:  

 

  Fax Number:  

 

  (One Basket = 50,000 FXC Shares)
Number of Baskets Surrendered:  

 

 

 

Order #   

 

  Number written out:   

 

 

 

This Redemption Order is subject to the terms and conditions of the Depositary Trust Agreement of the CurrencyShares Canadian Dollar Trust as currently in effect and the Participant Agreement between the Authorized Participant, the Trustee and the Sponsor named therein. All representations and warranties of the Authorized Participant set forth in such Depositary Trust Agreement and such Participant Agreement are incorporated herein by reference and are true and accurate as of the date hereof.

The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the Participant Agreement and that he/she is authorized to deliver this Redemption Order to the Trustee on behalf of the Authorized Participant. The Authorized Participant enters into this agreement based on an estimated Basket Canadian Dollar Amount disseminated the previous business day and recognizes the final Basket Canadian Dollar Amount represented will be decreased based on the Trust’s daily accrual. At the conclusion of the trading day a final NAV will be disseminated to all Authorized Participants, and the Basket Canadian Dollar Amount required for the Redemption Order entered into on this day will be finalized and this Redemption Order will serve as a legally binding contract for settlement in 3 business days.

 

 

    

 

Date

     Authorized Person’s Signature        

 

II. TO BE COMPLETED BY TRUSTEE :

This certifies that the above order has been:

                     Accepted by the Trustee

                     Declined-Reason:                                                                                                                           

 

Final # of Canadian Dollars  

 

    Final # of FXC Shares  

 

 

 

   

 

   

 

Date     Time     Authorized Signature of Trustee


ATTACHMENT A

CREATION AND REDEMPTION OF CANADIAN DOLLAR SHARES AND

RELATED CANADIAN DOLLARS TRANSACTIONS

Scope of Procedures and Overview

These procedures (the “ Procedures ”) describe the processes by which one or more Baskets of Canadian Dollar Trust shares (the “ Shares ”) issuable by The Bank of New York, as trustee (the “ Trustee ”) of the CurrencyShares Canadian Dollar Trust (the “ Trust ”), may be purchased or, once Shares have been issued, redeemed by an Authorized Participant. Shares may be created or redeemed only in blocks of 50,000 Shares (each such block, a “ Basket ”). Because the issuance and redemption of Baskets also involve the transfer of Canadian Dollars between the Authorized Participant and the Trust, certain processes relating to the underlying transfers of Canadian Dollars also are described.

Under these Procedures, Baskets may be issued only in consideration for Canadian Dollars transferred to and held in the Trust’s accounts maintained in London, England by London Branch of JPMorgan Chase Bank, N.A., as depository (the “ Depository ”). Capitalized terms used in these Procedures without further definition have the meanings assigned to them in the Depositary Trust Agreement, dated as of June 8, 2006, between Rydex Specialized Products LLC (the “ Sponsor ”), the Trustee, the registered owners and beneficial owners from time to time of Shares issued thereunder and all depositors (the “ Trust Agreement ”), or the Participant Agreement entered into by each Authorized Participant with the Sponsor and the Trustee.

For purposes of these Procedures, a “ Business Day ” is defined as any day other than (i) a Saturday or Sunday or (ii) a day on which the New York Stock Exchange (the “ NYSE ”) is not open for regular trading at noon New York City time.

The Prospectus describes the creation and redemption process and the Trust; it will be delivered by the Sponsor to each Authorized Participant prior to its execution of the Participant Agreement. Baskets are issued and redeemed in accordance with the Trust Agreement and the Participant Agreement. Baskets may be issued and redeemed on any Business Day by the Trustee in exchange for Canadian Dollars, which the Trustee receives from Authorized Participants or transfers to Authorized Participants, in each case on behalf of the Trust. Authorized Participants will be required to pay a nonrefundable per order transaction fee of $500 to the Trustee (the “ Transaction Fee ”).

Authorized Participants and the Trust Transfer Canadian Dollars and Baskets of Shares

Upon acceptance of the Participant Agreement by the Sponsor and the Trustee, the Trustee will assign a personal identification number (a “ PIN ”) to each person authorized to act for the Authorized Participant (and “Authorized Person”). This will allow the Authorized Participant through its Authorized Person(s) to place Purchase Order(s) or Redemption Order(s) (together, “ Orders ”) for Baskets.

Important Notes:

 

 

Any Purchase Order is subject to rejection by the Trustee for the reasons set forth in the Trust Agreement.

 

 

All Orders are subject to the provisions of the Participant Agreement relating to unclear or ambiguous instructions.


CREATION PROCESS

OVERVIEW

The following describes the process by which Baskets are created. In summary, an order to purchase one or more Baskets of Shares is placed by an Authorized Participant with the Trustee by 4:00 p.m. New York City (“ NYC ”) time on the Business Day that is the Order Date under the Trust Agreement (“ CREATION T ”), and a Basket is created by 9:30 a.m. NYC time (usually 3:30 p.m. Central European Time (“ CET ”)) on the third Business Day following CREATION T (“CREATION T+3”). In order for the creation of a Basket to occur, the Authorized Participant must transfer to the Trust Canadian Dollars and the Trustee will transfer to the Authorized Participant’s account at The Depository Trust Company (“ DTC ”) Shares corresponding to the Canadian Dollars the Participant has transferred to the Trust.

 

C1 CREATION T (PURCHASE ORDER TRADE DATE)

C1.1 By the 4:00 p.m. NYC time (the “ Order Cut-Off Time ”) or by 12:00 p.m. NYC time on the monthly dividend declaration date (the “Early Order Cut-Off Time”), the Authorized Participant submits to the Trustee the Authorized Participant’s order to create one or more Baskets of Shares (a “ Purchase Order ”) in accordance with the following process.

C1.1.1 By the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable, an Authorized Person of the Authorized Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee that the Authorized Participant wishes to place a Purchase Order for the Trustee to create an identified number of Baskets of Shares and requesting that the Trustee provide an order number. The Authorized Person provides a PIN as identification to the Trustee.

C1.1.2 Incoming telephone calls are queued and will be handled in the sequence received. The Trustee will process Purchase Orders if the phone call initiated by the Authorized Person is placed before the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable, even though the remainder of the order process is not completed until after the Order Cut-Off Time or the Early Order Cut-Off Time. Accordingly, do not hang up and redial.

C1.1.3 Purchase Orders initiated after the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable will be rejected.

C1.1.4 During the phone call from the Authorized Person of the Authorized Participant to initiate a Purchase Order, the Trustee will give an order number for the Authorized Participant’s Purchase Order.

C1.1.5 Within 15 minutes after receiving the order number from the Trustee, the Authorized Participant will fax the Purchase Order to the Trustee using the Purchase Order Form included as part of the Participant Agreement.

C1.1.6 The Purchase Order Form provides, among other things, for the number of Baskets that the Authorized Participant is ordering and the condition that the Purchase Order is subject to the Trustee’s receipt of the Transaction Fee (by DTC SPO Charge) prior to delivery of the Baskets on CREATION T+3.

C1.1.7 If the Trustee has not received the Purchase Order Form from the Authorized Participant within 15 minutes after the Authorized Person placed the phone call to the Trustee, the Trustee places a phone call to the Authorized Participant to inquire about the status of the order. If the Authorized Participant does not fax the Purchase Order Form to the Trustee within 15 minutes after the Trustee’s phone call, the Authorized Participant’s order is cancelled, but the Authorized Participant will remain liable to the Trustee for the Transaction Fee.

 

A-2


C1.2 If the Trustee has received the Authorized Participant’s Purchase Order Form on time in accordance with the preceding timing rules, then by 5:00 p.m. NYC time on CREATION T, the Trustee will return to the Participant a copy of the Purchase Order Form submitted, marking it “Affirmed subject to receipt of the Transaction Fee prior to delivery of Baskets on CREATION T+3” and indicating, on a preliminary basis subject to confirmation, the number of Canadian Dollars the Participant must transfer in exchange for the Basket(s).

C1.3 The Participant ensures that by 3:30 p.m. CET (usually 9:30 a.m. NYC time) on CREATION T+3 that sufficient Canadian Dollars are wire transferred to the Depository.

C1.4 NOTES FOR AUTHORIZED PARTICIPANT (CREATION T)

C1.4.1 The Authorized Participant must be a participating member of DTC.

C1.4.2 The Authorized Participant must be able to transfer Canadian Dollars via (RTGSplus, EBA EURO1 or TARGET). SWIFT BIC – CHASGB2L.

C1.4.3 The Authorized Participant must have signed and delivered the Participant Agreement to the Trustee. The Trustee will accept an Authorized Participant based on the representations made by the Authorized Participant in the Participant Agreement. The Trustee will not perform other due diligence or investigation of Authorized Participants.

C1.4.4 The Authorized Participant must have in place, before a Purchase Order can be processed, account instructions for Canadian Dollars transfers with its sending financial institution.

C1.4.5 By 3:30 p.m. CET on CREATION T+3, Canadian Dollars in the amount needed to acquire the Shares must be standing to the credit of the Deposit Account in order for the Authorized Participant to receive Shares on CREATION T+3.

C1.4.6 An Authorized Participant may only deliver Canadian Dollars for credit to the Depository in the following ways (RTGSplus, EBA EURO1 or TARGET). SWIFT BIC – CHASGB2L.

C1.4.7 Prior to the delivery of the Baskets by the Trustee on CREATION T+3, the Authorized Participant must accept a DTC SPO Charge for the applicable Transaction Fee from the Trustee. Purchase Orders for which the Trustee has not received the Transaction Fee will be cancelled subject to handling pursuant to supplemental procedures to be issued, but in any event the Authorized Participant will remain obligated to the Trustee for the Transaction Fee.

C1.5 NOTES FOR TRUSTEE (CREATION T)

C1.5.1 Based on the Purchase Orders placed with it on CREATION T, the Trustee sends an authenticated electronic message (SWIFT MT210) to the Depository (by T+1) indicating the approximate total amount of Canadian Dollars that the Depository will receive from the Authorized Participant on CREATION T+3.

 

C2 CREATION T+1

C2.1 The Purchase Orders and instructions given on CREATION T are all pending with the Trustee.

C2.2 The Depository receives the Trustee’s message (SWIFT MT210) about the approximate total amount of Canadian Dollars the Authorized Participant is required to transfer not later than 3:30 p.m. CET on CREATION T+3.

 

A-3


C3 CREATION T+2

On CREATION T+2 the Trustee notifies the Authorized Participant of the final amount of Canadian Dollars that must be deposited in the Deposit Account (the “Basket Canadian Dollar Amount”) not later than 1:00 p.m. Toronto time on CREATION T+3.

 

C4 CREATION T+3

C4.1 By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Depository has received each Authorized Participant’s wire transfer of the Basket Canadian Dollars Amount in the Deposit Account.

C4.2 As of 3:30 p.m. CET time, the Depository notifies the Trustee that the Basket Canadian Dollars Amount has been transferred into the Deposit Account by an authenticated electronic message (SWIFT MT910).

C4.3 Prior to the delivery of the Baskets on CREATION T+3, the Trustee must have received the Transaction Fee from the Authorized Participant (SPO/DTC Charge).

C4.4 At 11:00 a.m. NYC time, following receipt of the notice from the Depository confirming the transfer of the Basket Canadian Dollars Amount to the Deposit Account, the Trustee authorizes the creation and issuance of the Baskets ordered by each Authorized Participant on CREATION T for which the Trustee has received confirmation from the Depository of receipt of the Basket Canadian Dollars Amount.

C4.5 By 11:00 a.m. NYC time, following receipt of the notice from the Depository confirming the transfer of the Basket Canadian Dollars Amount to the Deposit Account, the Trustee notifies its transfer agent service desk that it has authorized the creation and issuance of Baskets in the number specified, and to increase the number of Shares outstanding accordingly. By 1:00 p.m. NYC time, following receipt of the notice from the Trustee that it has authorized the creation and issuance of Shares in the number specified, the Trustee’s transfer agent service desk increases the number of Shares outstanding, and notifies the Trustee and the Trustee’s DTC operations desk that an increased number of Shares is now outstanding and available for release in accordance with the Trustee’s instructions.

C4.6 By 11:00 a.m. NYC time, following receipt of notice from the Trustee’s transfer agent service desk that the number of Shares now outstanding has been increased, the Trustee notifies its DTC operations desk to release the increased number of Shares through DTC to the DTC participant accounts of the Authorized Participants scheduled to receive Baskets on CREATION T+3 for whom the Trustee has received confirmation from the Depository that the Basket Canadian Dollars Amount has been received into the Deposit Account.

C4.7 Following the close of business (usually 3:30 p.m. CET time) on CREATION T+3, the Depository makes appropriate entries in its books and records to reflect the creation of Baskets.

C4.8 Following the close of business (usually 3:30 p.m. CET time) on CREATION T+3, the Depository Canadian Dollars system updates account records, recording the movements of Canadian Dollars in the Deposit Account and providing updated balances in the affected accounts as of the close of business (usually 3:30 p.m. CET time) on CREATION T+3.

C4.9 Following the close of business (usually 3:30 p.m. CET time) on CREATION T+3, the Depository Canadian Dollars system automatically generates authenticated electronic messages constituting a statement of the activity affecting the Deposit Account (SWIFT MT940 or SWIFT MT950), (received only by the Trustee).

C4.10 If the Authorized Participant fails to deliver Canadian Dollars by 3:30 p.m. CET on CREATION T+3, (a) the Trustee will apply a late fee equal to four (4) times the creation charge; and (b) the Depository may, in its reasonable discretion, apply a late fee calculated in accordance with standard industry practices pursuant to The European Interbank Compensation Guidelines, as follows:

(Principal Amount) x (              +25bps) x (# calendar days that the funds are late) divided by 360 x 100.

 

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In the event any such late fees are assessed, the Trustee will coordinate with the Authorized Participant to arrange payment of such fees.

REDEMPTION PROCESS

OVERVIEW

The following describes the process by which Baskets are redeemed. In summary, an order to redeem one or more Baskets of Shares is placed by an Authorized Participant with the Trustee by 4:00 p.m. NYC time on the Business Day that is the Order Date under the Trust Agreement (“ REDEMPTION T ”), and a Basket is redeemed by 3:30 p.m. CET (usually 9:30 a.m. NYC time) on the third Business Day following REDEMPTION T (“ REDEMPTION T+3 ”). In order for the redemption of a Basket to occur, the Authorized Participant must pay a transaction fee and the Trustee will instruct the Depository to transfer to the Authorized Participant Canadian Dollars corresponding to the Shares delivered for redemption.

 

R1 REDEMPTION T (REDEMPTION ORDER TRADE DATE)

R1.1 By the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable, the Authorized Participant submits to the Trustee the Authorized Participant’s order to redeem one or more Baskets of Shares (a “ Redemption Order ”) in accordance with the following process.

R1.1.1 By the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable, an Authorized Person of the Authorized Participant calls the Trustee at 718-315-4970 or 4967, notifying the Trustee that the Authorized Participant wishes to place a Redemption Order for the Trustee to redeem an identified number of Baskets of Shares and requesting that the Trustee provide an order number. The Authorized Person provides a PIN as identification to the Trustee.

R1.1.2 Incoming telephone calls are queued and will be handled in the sequence received. The Trustee will process the Redemption Order(s) if the phone call initiated by the Authorized Person is placed before the Order Cut-Off Time or the Early Order Cut-Off Time, as applicable, even though the remainder of the order process is not completed until after the Order Cut-Off Time or the Early Order Cut-Off Time. Accordingly, do not hang up and redial.

R1.1.3 Redemption Orders initiated after the Order Cut-Off Tim or the Early Order Cut-Off Time are rejected.

R1.1.4 During the phone call from the Authorized Person of the Authorized Participant to initiate a Redemption Order, the Trustee will give an order number for the Authorized Participant’s Redemption Order.

R1.1.5 Within 15 minutes after the phone call initiating the Redemption Order, the Authorized Participant will fax the Redemption Order to the Trustee using the Redemption Order Form included as part of the Participant Agreement.

R1.1.6 The Redemption Order Form provides, among other things, for the number of Baskets that the Authorized Participant is redeeming and the condition that the Redemption Order is subject to Trustee’s receipt of the Transaction Fee by SPO/DTC Charge prior to the delivery of the Canadian Dollars to the Authorized Participant on REDEMPTION T+3.

R1.1.7 If the Trustee has not received the Redemption Order Form from the Authorized Participant within 15 minutes after the Authorized Person placed the phone call to the Trustee, the Trustee

 

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places a phone call to the Authorized Participant to inquire about the status of the order. If the Authorized Participant does not fax the Redemption Order Form to the Trustee within 15 minutes after the Trustee’s phone call, the Authorized Participant’s order is cancelled, but the Authorized Participant will remain liable to the Trustee for the Transaction Fee.

R1.2 If the Trustee has received the Authorized Participant’s Redemption Order Form on time in accordance with the preceding timing rules, then by 5:00 p.m. NYC time on REDEMPTION T, the Trustee will return to the Authorized Participant a copy of the Redemption Order Form submitted, marking it “Affirmed subject to receipt of Transaction Fee on prior to delivery of the Canadian Dollars” on REDEMPTION T+3 and indicating, on a preliminary basis subject to confirmation, the number of Canadian Dollars the Participant will receive upon redemption of the indicated Basket(s) of Shares.

R1.3 For each Redemption Order, the Trustee sends an authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository indicating the amount of Canadian Dollars to transfer from the Deposit Account by wire (RTGSplus, EBA EURO1 or TARGET) to the Authorized Participant’s designated account by 3:30 p.m. CET (usually 9:30 a.m. NYC time) on REDEMPTION T+3.

R1.4 NOTES FOR TRUSTEE AND DEPOSITORY (REDEMPTION T)

R1.4.1 The Trustee will prepare an authenticated electronic message (SWIFT MT202 or MT103plus) containing instructions on REDEMPTION T specifying REDEMPTION T+3 as the date on which the instructions will be executed.

R1.4.2 The Trustee will only deliver the authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository on T+3 after confirming the Trustee’s receipt of Shares from the Authorized Participant through DTC.

 

R2 REDEMPTION T+1

R2.1 Redemption Orders and related instructions are in process.

R2.2 The Depository receives the authenticated electronic message (SWIFT) or e-mail from the Trustee notifying the Depository of the approximate amount of Canadian Dollars needed to be remitted to each Authorized Participant that has placed a Redemption Order on REDEMPTION T+3.

 

R3 REDEMPTION T+2

On REDEMPTION T+2 the Trustee notifies the Authorized Participant of the final amount of Canadian Dollars the Authorized Participant will receive upon redemption of the Basket(s) on Redemption T+3 (the “Basket Canadian Dollars Amount”).

 

R4 REDEMPTION T+3

R4.1 Prior to the delivery of the Basket Canadian Dollars Amount on REDEMPTION T+3, the Trustee must have received the Transaction Fee from the Authorized Participant (SPO/DTC Charge).

R4.2 By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Authorized Participant delivers free to the Trustee’s participant account at DTC (#                      ) the Shares to be redeemed. The Authorized Participant telephones the Trustee’s DTC operations desk ((718) 315-4970 or 4967) to expect the Authorized Participant’s Shares through DTC.

R4.2.1 By 3:30 p.m. CET (usually 9:30 a.m. NYC time), the Trustee’s DTC operations desk notifies the Trustee whether the Shares being redeemed by the Authorized Participant have been received into the Trustee’s participant account at DTC.

 

A-6


R4.2.2 By 3:30 p.m. CET (usually 9:30 a.m. NYC time), if the Shares being redeemed by the Authorized Participant have been received into the Trustee’s participant account at DTC, the Trustee’s DTC operations desk accepts the Shares to be redeemed, notifies the Trustee that the Trustee has received the Authorized Participant’s Shares and identifies the Authorized Participant from whom the Shares have been received.

R4.2.3 By 3:30 p.m. CET (usually 9:30 a.m. NYC time), if the Shares of a redeeming Authorized Participant have not been received into the Trustee’s participant account at DTC, the Trustee’s operations desk notifies the Trustee that the Trustee has not received the Shares from the Authorized Participant, and identifies the Authorized Participant from whom Shares have not been received.

R4.3 By 3:30 p.m. CET time (usually 9:30 a.m. NYC time), the Trustee sends an authenticated electronic message (SWIFT MT202 or MT103plus) to the Depository directing the Depository to transfer the Basket Canadian Dollars Amount to the accounts of those Authorized Participants from whom the Trustee has received Shares. The Canadian Dollars will be sent to the designated accounts by wire (RTGSplus, EBA EURO1 or TARGET).

R4.4 As of 3:30 p.m. CET time (usually 9:30 a.m. NYC time), following the receipt of the authenticated confirmatory electronic message from the Trustee, the Depository executes the instructions from the Trustee to wire the Basket Canadian Dollars Amount from the Trust Account and to transfer the Basket Canadian Dollars Amount to the Authorized Participant’s designated account.

R4.4.1 By DTC free delivery cut-off time (usually 2:00 p.m. NYC time), the Trustee’s DTC operations desk instructs the Trustee’s transfer agent services desk to cancel Shares received for redemption.

R4.4.2 By DTC free delivery cut-off time (usually 2:00 p.m. NYC time), the Trustee’s transfer agent services desk cancels the Authorized Participant’s Shares received for redemption and reduces the number of Trust Shares outstanding.

R4.5 Following the close of business (usually 3:30 p.m. CET) on REDEMPTION T+3, the Depository makes the appropriate entries in its books and records to reflect the redemptions.

R4.6 Following the close of business (usually 3:30 p.m. CET) on REDEMPTION T+3, the Depository Canadian Dollars system updates its account records, recording the movements of Canadian Dollars in the Deposit Account and providing updated balances in the affected accounts as of the close of business (usually 3:30 p.m. CET) on REDEMPTION T+3.

R4.7 Following the close of business (usually 3:30 p.m. CET) on REDEMPTION T+3, the Depository Canadian Dollars system automatically generates an authenticated electronic message (SWIFT MT140 or Swift MT950) constituting a statement of the activity affecting the Deposit Account (received only by the Trustee).

 

A-7


Schedule to Exhibit 4.3

The following parties have each executed a separate Participation Agreement with The Bank of New York, as trustee, and Rydex Specialized Products LLC, as sponsor, which is substantially identical in all material respects to the Participation Agreement filed herewith as Exhibit 4.3 and is dated as of the date listed opposite its name below.

 

Name of Party

  

Date of Agreement

Goldman Sachs Execution & Clearing LP    June 19, 2006
Goldman Sachs & Co.    June 22, 2006
Merrill Lynch Professional Clearing Corp.    June 26, 2006
Credit Suisse Securities (USA) LLC    January 19, 2007
Timber Hill LLC    May 21, 2007
JPMorgan Securities, Inc. (as assigned by Bear, Stearns & Co. Inc.)    December 12, 2007
EWT, LLC    July 14, 2008
Newedge USA, LLC    August 26, 2008
ABN AMRO Clearing Chicago LLC (f/k/a Fortis Clearing Americas LLC, f/k/a O’Connor & Co. LLC)    November 3, 2008
Citadel Securities LLC (f/k/a Citadel Derivatives Group, LLC and Citadel Trading Group, LLC)    November 13, 2008
Nomura Securities International Inc.    June 14, 2010
Morgan Stanley & Co. Inc.    August 26, 2010
Virtu Financial BD LLC    December 3, 2010

Except as noted above, there are no material details in which the above Participation Agreements differ from the Participation Agreement filed herewith as Exhibit 4.3.

Exhibit 4.4

AMENDMENT TO PARTICIPANT AGREEMENTS

THIS AMENDMENT TO PARTICIPANT AGREEMENTS (this “ Amendment ”) is made as of the 9th day of December, 2010 by and between The Bank of New York Mellon, a New York banking corporation, not in its individual capacity but solely as trustee (the “ Trustee ”) of the CurrencyShares Trusts set forth on Schedule A hereto (the “ Trusts ”) and Rydex Specialized Products LLC, a Delaware limited liability company d/b/a “Rydex Investments” (the “ Sponsor ”) as sponsor of the Trusts.

W I T N E S S E T H

WHEREAS , various authorized participants (the “ Authorized Participants ”), the Trustee and the Sponsor are parties to those certain Participant Agreements set forth on Schedule B hereto, as the same may have previously been amended (collectively the “ Agreements ” and individually, an “ Agreement ”); and

WHEREAS , the Trustee and the Sponsor desire to amend each of the Agreements on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and in accordance with Section 18(a) of each Agreement, each of the Agreements is hereby amended as follows:

1. Definitions . All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreements.

2. Amendments .

a. Section 5 of each Agreement is hereby revised in its entirety to read as follows:

Section 5. Fees.

(a) In connection with each Order by an Authorized Participant to create or redeem one or more Baskets, the Trustee shall charge, and the Authorized Participant shall pay to the Trustee, the transaction fee prescribed in the Trust Agreement applicable to such creation or redemption. The initial transaction fee shall be five hundred dollars ($500). The transaction fee may be waived or otherwise adjusted from time to time as set forth in the Prospectus or the Procedures.

(b) In addition to the fee described in Section 5(a), in connection with each Order by an Authorized Participant to create or redeem two or more Baskets, the Sponsor shall charge, and the Authorized Participant shall pay to the Sponsor, an additional transaction fee applicable to such creation or redemption. The additional transaction fee shall range from five hundred dollars ($500) to two thousand dollars ($2,000), based on the number of Baskets created or redeemed


per Order. The additional transaction fee may be waived or otherwise adjusted from time to time as set forth in the Prospectus or the Procedures.

(c) Remittance of payment for the transaction fees set forth in Sections 5(a) and 5(b) shall be made in accordance with the Procedures.”

b. The fourth paragraph of Attachment A to each Agreement under the heading “CREATION AND REDEMPTION OF EURO CURRENCY SHARES AND RELATED EURO TRANSACTIONS - Scope of Procedures and Overview” is hereby revised in its entirety to read as follows:

“Baskets are issued pursuant to the Prospectus, which will be delivered by the Sponsor to each Authorized Participant prior to its execution of the Participant Agreement, and are issued and redeemed in accordance with the Trust Agreement and the Participant Agreement. Baskets may be issued and redeemed on any Business Day by the Trustee in exchange for euro, which the Trustee receives from Authorized Participants or transfers to Authorized Participants, in each case on behalf of the Trust. Authorized Participants will be required to pay a nonrefundable per order transaction fee of $500 to the Trustee. Also, in connection with each Purchase Order and Redemption Order (each as defined below) for two or more Baskets, the Authorized Participant shall pay an additional transaction fee, as follows:

 

Baskets Created or Redeemed

Per Order

   Additional Transaction Fee
2    $500
3    $1,000
4    $1,500
5 or more    $2,000

The additional transaction fee described above shall be remitted to the Authorized Participant to the Trustee in accordance with these Procedures. The Trustee shall then remit payment of the additional transaction fee to the Sponsor. The fees described above shall collectively be referred to herein as “Transaction Fees”.

c. All references to “Transaction Fee” contained in Attachment A to each Agreement are hereby revised to read “Transaction Fees”.

3. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.

4. Other . In the event of any conflict between the terms of this Amendment and the terms of the Agreements, the terms of this Amendment shall control. All other terms and conditions of the Agreements shall remain in full force and effect.

[Signature Page Follows]

 

2


IN WITNESS WHEREOF, the undersigned have signed and delivered this Amendment as of the date first written above.

 

THE BANK OF NEW YORK MELLON

not in its individual capacity but solely as Trustee of the CurrencyShares Trusts set forth on Schedule A

By:  
/s/   Andrew Pfeifer

 

Name:           Andrew Pfeifer
Title:   Vice President

RYDEX SPECIALIZED PRODUCTS LLC

Sponsor of the CurrencyShares Trusts set forth on Schedule A

By:  
/s/   Joseph Arruda

 

Name:   Joseph Arruda
Title:   CFO


SCHEDULE A

THE TRUSTS

CurrencyShares Australian Dollar Trust

CurrencyShares British Pound Sterling Trust

CurrencyShares Canadian Dollar Trust

CurrencyShares Euro Trust

CurrencyShares Japanese Yen Trust

CurrencyShares Mexican Peso Trust

CurrencyShares Russian Ruble Trust

CurrencyShares Swedish Krona Trust

CurrencyShares Swiss Franc Trust

 

4


SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Australian Dollar    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    10/30/2007
Currency Shares British Pound Sterling    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Canadian Dollars    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Euro Trust    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    4/16/2008
Currency Shares Swiss Franc    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    10/30/2007
Currency Shares Mexican Peso    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Japanese Yen    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    4/21/2008
Currency Shares Australian Dollar    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares British Pound Sterling    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Canadian Dollars    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Euro Trust    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Swiss Franc    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Mexican Peso    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Swedish Krona    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Japanese Yen    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares British Pound Sterling    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Canadian Dollars    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Euro Trust    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Euro Trust    Deutsche Bank Securities Inc.    3/12/2007
Currency Shares Japanese Yen    Deutsche Bank Securities Inc.    3/12/2007
Currency Shares Australian Dollar    EWT, LLC    7/14/2008
Currency Shares British Pound Sterling    EWT, LLC    7/14/2008
Currency Shares Canadian Dollars    EWT, LLC    7/14/2008

 

5


SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Euro Trust    EWT, LLC    4/24/2008
Currency Shares Swiss Franc    EWT, LLC    7/14/2008
Currency Shares Mexican Peso    EWT, LLC    7/14/2008
Currency Shares Swedish Krona    EWT, LLC    7/14/2008
Currency Shares Japanese Yen    EWT, LLC    7/14/2008
Currency Shares Australian Dollar    Goldman Sachs & Co.    6/22/2006
Currency Shares British Pound Sterling    Goldman Sachs & Co.    6/22/2006
Currency Shares Canadian Dollars    Goldman Sachs & Co.    6/22/2006
Currency Shares Euro Trust    Goldman Sachs & Co.    1/13/2006
Currency Shares Swiss Franc    Goldman Sachs & Co.    6/22/2006
Currency Shares Mexican Peso    Goldman Sachs & Co.    6/22/2006
Currency Shares Swedish Krona    Goldman Sachs & Co.    6/22/2006
Currency Shares Japanese Yen    Goldman Sachs & Co.    2/12/2007
Currency Shares Russian Ruble    Goldman Sachs & Co.    8/7/2008
Currency Shares Australian Dollar    Goldman Sachs Execution & Clearing LP    10/24/2008
Currency Shares British Pound Sterling    Goldman Sachs Execution & Clearing LP    6/19/2006
Currency Shares Canadian Dollars    Goldman Sachs Execution & Clearing LP    6/19/2006
Currency Shares Euro Trust    Goldman Sachs Execution & Clearing LP    5/5/2006
Currency Shares Swiss Franc    Goldman Sachs Execution & Clearing LP    10/24/2008
Currency Shares Mexican Peso    Goldman Sachs Execution & Clearing LP    2/15/2007
Currency Shares Swedish Krona    Goldman Sachs Execution & Clearing LP    1/29/2008
Currency Shares Japanese Yen    Goldman Sachs Execution & Clearing LP    2/9/2007
Currency Shares Russian Ruble    Goldman Sachs Execution & Clearing LP    2/27/2011
Currency Shares Australian Dollar    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    11/7/2007
Currency Shares British Pound Sterling    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Canadian Dollars    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Euro Trust    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    2/11/2008
Currency Shares Swiss Franc    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Mexican Peso    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Swedish Krona    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    11/7/2007
Currency Shares Japanese Yen    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    5/11/2007

 

6


SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Russian Ruble    JP Morgan Securities, Inc.    8/16/2010
Currency Shares Australian Dollar    Knight Clearing Services, LLC    3/25/2010
Currency Shares British Pound Sterling    Knight Clearing Services, LLC    3/25/2010
Currency Shares Canadian Dollars    Knight Clearing Services, LLC    3/25/2010
Currency Shares Euro Trust    Knight Clearing Services, LLC    3/25/2010
Currency Shares Swiss Franc    Knight Clearing Services, LLC    3/25/2010
Currency Shares Mexican Peso    Knight Clearing Services, LLC    3/25/2010
Currency Shares Swedish Krona    Knight Clearing Services, LLC    3/25/2010
Currency Shares Japanese Yen    Knight Clearing Services, LLC    3/25/2010
Currency Shares Russian Ruble    Knight Clearing Services, LLC    3/25/2010
Currency Shares Australian Dollar    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares British Pound Sterling    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Canadian Dollars    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Euro Trust    Merrill Lynch Professional Clearing Corp    5/9/2006
Currency Shares Swiss Franc    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Mexican Peso    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Swedish Krona    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Japanese Yen    Merrill Lynch Professional Clearing Corp    5/5/2007
Currency Shares Australian Dollar    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares British Pound Sterling    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Canadian Dollars    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Euro Trust    Morgan Stanley & Co. Inc.    8/24/2010
Currency Shares Swiss Franc    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Mexican Peso    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Swedish Krona    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Japanese Yen    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Australian Dollar    Newedge USA, LLC    8/26/2008
Currency Shares British Pound Sterling    Newedge USA, LLC    8/26/2008
Currency Shares Canadian Dollars    Newedge USA, LLC    8/26/2008
Currency Shares Euro Trust    Newedge USA, LLC    5/22/2008
Currency Shares Swiss Franc    Newedge USA, LLC    8/26/2008
Currency Shares Mexican Peso    Newedge USA, LLC    8/26/2008
Currency Shares Swedish Krona    Newedge USA, LLC    8/26/2008
Currency Shares Japanese Yen    Newedge USA, LLC    8/26/2008

 

7


SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Australian Dollar    Nomura Securities International Inc.    6/14/2010
Currency Shares British Pound Sterling    Nomura Securities International Inc.    6/14/2010
Currency Shares Canadian Dollars    Nomura Securities International Inc.    6/14/2010
Currency Shares Euro Trust    Nomura Securities International Inc.    6/14/2010
Currency Shares Swiss Franc    Nomura Securities International Inc.    6/14/2010
Currency Shares Mexican Peso    Nomura Securities International Inc.    6/14/2010
Currency Shares Swedish Krona    Nomura Securities International Inc.    6/14/2010
Currency Shares Japanese Yen    Nomura Securities International Inc.    6/14/2010
Currency Shares Russian Ruble    Nomura Securities International Inc.    6/14/2010
Currency Shares Australian Dollar    Timber Hill LLC    5/21/2007
Currency Shares British Pound Sterling    Timber Hill LLC    5/21/2007
Currency Shares Canadian Dollars    Timber Hill LLC    5/21/2007
Currency Shares Euro Trust    Timber Hill LLC    5/21/2007
Currency Shares Swiss Franc    Timber Hill LLC    5/21/2007
Currency Shares Mexican Peso    Timber Hill LLC    5/21/2007
Currency Shares Swedish Krona    Timber Hill LLC    5/21/2007
Currency Shares Japanese Yen    Timber Hill LLC    5/21/2007

 

8

Exhibit 4.5

AMENDMENT TO PARTICIPANT AGREEMENTS

THIS AMENDMENT TO PARTICIPANT AGREEMENTS (this “ Amendment ”) is made as of the 15 day of January, 2011 by and between The Bank of New York Mellon, a New York banking corporation, not in its individual capacity but solely as trustee (the “ Trustee ”) of the CurrencyShares Trusts set forth on Schedule A hereto (the “ Trusts ”) and Rydex Specialized Products LLC, a Delaware limited liability company d/b/a “Rydex Investments” (the “ Sponsor ”) as sponsor of the Trusts.

W I T N E S S E T H

WHEREAS , various authorized participants (the “ Authorized Participants ”), the Trustee and the Sponsor are parties to those certain Participant Agreements set forth on Schedule B hereto, as the same may have previously been amended (collectively the “ Agreements ” and individually, an “ Agreement ”); and

WHEREAS , the Trustee and the Sponsor desire to amend each of the Agreements on the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and in accordance with Section 18(a) of each Agreement, each of the Agreements is hereby amended as follows:

1. Definitions . All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreements.

2. Amendments . Section 7 of each Agreement is hereby revised in its entirety to read as follows:

Section 7. Redemption.

The Authorized Participant represents and warrants that it will not obtain an Order Number (as described in the Procedures) from the Trustee for the purpose of redeeming a Basket unless it first ascertains that (i) it or its customer, as the case may be, owns outright or has full legal authority and legal and beneficial right to tender for redemption the Baskets to be redeemed and to receive the entire proceeds of the redemption, and (ii) such Baskets have not been loaned or pledged to another party, borrowed or temporarily obtained from another party and are not the subject of any repurchase agreement, reverse repurchase agreement or securities lending agreement, or any other arrangement which would preclude the delivery of such Baskets to the Trustee on the third Business Day following the date of the Redemption Order.”

3. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute one and the same instrument.


4. Other . In the event of any conflict between the terms of this Amendment and the terms of the Agreements, the terms of this Amendment shall control. All other terms and conditions of the Agreements shall remain in full force and effect.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have signed and delivered this Amendment as of the date first written above.

 

THE BANK OF NEW YORK MELLON
not in its individual capacity but solely as Trustee of the CurrencyShares Trusts set forth on Schedule A
By:  
/s/   Andrew Pfeifer

 

Name:           Andrew Pfeifer
Title:   Vice President
RYDEX SPECIALIZED PRODUCTS LLC
Sponsor of the CurrencyShares Trusts set forth on Schedule A
By:  
/s/   Joseph Arruda

 

Name:   Joseph Arruda
Title:   CFO


SCHEDULE A

THE TRUSTS

CurrencyShares Australian Dollar Trust

CurrencyShares British Pound Sterling Trust

CurrencyShares Canadian Dollar Trust

CurrencyShares Euro Trust

CurrencyShares Japanese Yen Trust

CurrencyShares Mexican Peso Trust

CurrencyShares Russian Ruble Trust

CurrencyShares Swedish Krona Trust

CurrencyShares Swiss Franc Trust

 

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SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Australian Dollar    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    10/30/2007
Currency Shares British Pound Sterling    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Canadian Dollars    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Euro Trust    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    4/16/2008
Currency Shares Swiss Franc    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    10/30/2007
Currency Shares Mexican Peso    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    11/3/2008
Currency Shares Japanese Yen    ABN AMRO Clearing Chicago LLC ( FKA/Fortis Clearing Americas LLC/FKA/O’Connor & Co. LLC)    4/21/2008
Currency Shares Australian Dollar    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares British Pound Sterling    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Canadian Dollars    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Euro Trust    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Swiss Franc    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Mexican Peso    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Swedish Krona    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares Japanese Yen    Citadel Securities LLC (formerly Citadel Derivatives Group, LLC and Citadel Trading Group, LLC #775)    11/13/2008
Currency Shares British Pound Sterling    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Canadian Dollars    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Euro Trust    Credit Suisse Securities (USA) LLC    1/19/2007
Currency Shares Euro Trust    Deutsche Bank Securities Inc.    3/12/2007
Currency Shares Japanese Yen    Deutsche Bank Securities Inc.    3/12/2007
Currency Shares Australian Dollar    EWT, LLC    7/14/2008
Currency Shares British Pound Sterling    EWT, LLC    7/14/2008
Currency Shares Canadian Dollars    EWT, LLC    7/14/2008

 

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SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Euro Trust    EWT, LLC    4/24/2008
Currency Shares Swiss Franc    EWT, LLC    7/14/2008
Currency Shares Mexican Peso    EWT, LLC    7/14/2008
Currency Shares Swedish Krona    EWT, LLC    7/14/2008
Currency Shares Japanese Yen    EWT, LLC    7/14/2008
Currency Shares Australian Dollar    Goldman Sachs & Co.    6/22/2006
Currency Shares British Pound Sterling    Goldman Sachs & Co.    6/22/2006
Currency Shares Canadian Dollars    Goldman Sachs & Co.    6/22/2006
Currency Shares Euro Trust    Goldman Sachs & Co.    1/13/2006
Currency Shares Swiss Franc    Goldman Sachs & Co.    6/22/2006
Currency Shares Mexican Peso    Goldman Sachs & Co.    6/22/2006
Currency Shares Swedish Krona    Goldman Sachs & Co.    6/22/2006
Currency Shares Japanese Yen    Goldman Sachs & Co.    2/12/2007
Currency Shares Russian Ruble    Goldman Sachs & Co.    8/7/2008
Currency Shares Australian Dollar    Goldman Sachs Execution & Clearing LP    10/24/2008
Currency Shares British Pound Sterling    Goldman Sachs Execution & Clearing LP    6/19/2006
Currency Shares Canadian Dollars    Goldman Sachs Execution & Clearing LP    6/19/2006
Currency Shares Euro Trust    Goldman Sachs Execution & Clearing LP    5/5/2006
Currency Shares Swiss Franc    Goldman Sachs Execution & Clearing LP    10/24/2008
Currency Shares Mexican Peso    Goldman Sachs Execution & Clearing LP    2/15/2007
Currency Shares Swedish Krona    Goldman Sachs Execution & Clearing LP    1/29/2008
Currency Shares Japanese Yen    Goldman Sachs Execution & Clearing LP    2/9/2007
Currency Shares Russian Ruble    Goldman Sachs Execution & Clearing LP    2/27/2010
Currency Shares Australian Dollar    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    11/7/2007
Currency Shares British Pound Sterling    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Canadian Dollars    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Euro Trust    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    2/11/2008
Currency Shares Swiss Franc    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Mexican Peso    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    12/12/2007
Currency Shares Swedish Krona    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    11/7/2007
Currency Shares Japanese Yen    JP Morgan Securities, Inc. 060 & 0352 (Agreement assigned to JPMS by Bear, Stearns & Co. Inc.)    5/11/2007

 

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SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Russian Ruble    JP Morgan Securities, Inc.    8/16/2010
Currency Shares Australian Dollar    Knight Clearing Services, LLC    3/25/2010
Currency Shares British Pound Sterling    Knight Clearing Services, LLC    3/25/2010
Currency Shares Canadian Dollars    Knight Clearing Services, LLC    3/25/2010
Currency Shares Euro Trust    Knight Clearing Services, LLC    3/25/2010
Currency Shares Swiss Franc    Knight Clearing Services, LLC    3/25/2010
Currency Shares Mexican Peso    Knight Clearing Services, LLC    3/25/2010
Currency Shares Swedish Krona    Knight Clearing Services, LLC    3/25/2010
Currency Shares Japanese Yen    Knight Clearing Services, LLC    3/25/2010
Currency Shares Russian Ruble    Knight Clearing Services, LLC    3/25/2010
Currency Shares Australian Dollar    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares British Pound Sterling    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Canadian Dollars    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Euro Trust    Merrill Lynch Professional Clearing Corp    5/9/2006
Currency Shares Swiss Franc    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Mexican Peso    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Swedish Krona    Merrill Lynch Professional Clearing Corp    6/26/2006
Currency Shares Japanese Yen    Merrill Lynch Professional Clearing Corp    5/5/2007
Currency Shares Australian Dollar    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares British Pound Sterling    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Canadian Dollars    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Euro Trust    Morgan Stanley & Co. Inc.    8/24/2010
Currency Shares Swiss Franc    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Mexican Peso    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Swedish Krona    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Japanese Yen    Morgan Stanley & Co. Inc.    8/26/2010
Currency Shares Australian Dollar    Newedge USA, LLC    8/26/2008
Currency Shares British Pound Sterling    Newedge USA, LLC    8/26/2008
Currency Shares Canadian Dollars    Newedge USA, LLC    8/26/2008
Currency Shares Euro Trust    Newedge USA, LLC    5/22/2008
Currency Shares Swiss Franc    Newedge USA, LLC    8/26/2008
Currency Shares Mexican Peso    Newedge USA, LLC    8/26/2008
Currency Shares Swedish Krona    Newedge USA, LLC    8/26/2008
Currency Shares Japanese Yen    Newedge USA, LLC    8/26/2008

 

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SCHEDULE B

THE PARTICIPANT AGREEMENTS

 

Name of Trust

  

Name of Authorized Participant

  

Agreement

Date

Currency Shares Australian Dollar    Nomura Securities International Inc.    6/14/2010
Currency Shares British Pound Sterling    Nomura Securities International Inc.    6/14/2010
Currency Shares Canadian Dollars    Nomura Securities International Inc.    6/14/2010
Currency Shares Euro Trust    Nomura Securities International Inc.    6/14/2010
Currency Shares Swiss Franc    Nomura Securities International Inc.    6/14/2010
Currency Shares Mexican Peso    Nomura Securities International Inc.    6/14/2010
Currency Shares Swedish Krona    Nomura Securities International Inc.    6/14/2010
Currency Shares Japanese Yen    Nomura Securities International Inc.    6/14/2010
Currency Shares Russian Ruble    Nomura Securities International Inc.    6/14/2010
Currency Shares Australian Dollar    Timber Hill LLC    5/21/2007
Currency Shares British Pound Sterling    Timber Hill LLC    5/21/2007
Currency Shares Canadian Dollars    Timber Hill LLC    5/21/2007
Currency Shares Euro Trust    Timber Hill LLC    5/21/2007
Currency Shares Swiss Franc    Timber Hill LLC    5/21/2007
Currency Shares Mexican Peso    Timber Hill LLC    5/21/2007
Currency Shares Swedish Krona    Timber Hill LLC    5/21/2007
Currency Shares Japanese Yen    Timber Hill LLC    5/21/2007
Currency Shares Australian Dollar    Virtu Financial BD LLC    12/3/2010
Currency Shares British Pound Sterling    Virtu Financial BD LLC    12/3/2010
Currency Shares Canadian Dollars    Virtu Financial BD LLC    12/3/2010
Currency Shares Euro Trust    Virtu Financial BD LLC    12/3/2010
Currency Shares Swiss Franc    Virtu Financial BD LLC    12/3/2010
Currency Shares Mexican Peso    Virtu Financial BD LLC    12/3/2010
Currency Shares Swedish Krona    Virtu Financial BD LLC    12/3/2010
Currency Shares Japanese Yen    Virtu Financial BD LLC    12/3/2010

 

8

Exhibit 10.1

GLOBAL ACCOUNT TERMS

DEPOSIT ACCOUNT AGREEMENT

The Bank of New York, in its capacity as trustee of the CurrencyShares Canadian Dollar Trust, a trust formed under New York law (the “ Customer ” or “ Trust ”) and the London Branch of JPMorgan Chase Bank, N.A. (the “ Bank ”) undertake to comply with and be bound by the following Global Account Terms of this Deposit Account Agreement (the “ Agreement ”).

ESTABLISHING ACCOUNTS

 

1.1 The Customer’s Canadian Dollar-denominated, (i) interest-bearing account (the “ Interest Account ”) and (ii) non interest–bearing account ( the “ Non-Interest Account ”) (each individually the “ Account ” and collectively the “ Accounts ”) maintained with the Bank shall be subject to these Global Account Terms (the “ Account Terms ”) and the Account Application and the Signature List executed by the Customer regarding the Accounts attached hereto (together, the “ Account Applications ”); and, by continuing to use the Accounts, the Customer acknowledges its acceptance of these Account Terms and the relevant Account Applications.

 

1.2 Unless otherwise specified, the Customer will establish the Accounts as principal. The Customer shall not transfer any of its rights and interests in the Accounts nor create any form of security interest over such rights and interests without the prior written consent of the Bank.

 

1.3 The Customer represents and warrants that it has power and capacity to open and operate the Accounts, that the Account Terms and the relevant Account Applications constitute valid and binding obligations of the Customer and that the Customer has taken all necessary actions to duly authorize the execution and delivery of the same.

SIGNATORIES

 

2.1 Signatory ” means a person named in the relevant Account Application (or other analogous document under which the Customer authorises persons to communicate with the Bank in relation to the Accounts) who is authorised to act on behalf of the Customer at the time of the relevant Instruction (as defined in Section 4.1) and in respect of the matters set out in clause 3 below.

 

2.2 The Bank may treat any Signatory as duly authorised to issue Instructions until the Bank receives written notice from the Customer, after which the Bank shall act promptly, that the Signatory no longer has the authority to issue Instructions.

 

2.3 The Customer will provide specimen signatures (including specimens of facsimile signatures and/or personal seals) to the Bank (in the Account Application or otherwise) in the number and form required and will verify the identity of each Signatory in a manner required by the Bank.


AUTHORITY OF SIGNATORIES

 

3.1 Each Signatory, subject to any written limitation received by the Bank from the Customer, is authorised on behalf of the Customer to:

 

  (a) open, operate and close the Accounts;

 

  (b) appoint and remove Signatories;

 

  (c) execute the Account Application(s) and any form of agreement relating to communications, whether by telephone, telex, electronic or other means;

 

  (d) execute any agreements relating to overdrafts, borrowings or cash management;

 

  (e) draw, accept, endorse or discount cheques, drafts, bills of exchange, notes and other instruments;

 

  (f) overdraw the Accounts as may be permitted by the Bank;

 

  (g) make arrangements with the Bank concerning periodic payments into or out of the Accounts;

 

  (h) advise the Bank of credits destined for the Customer’s Account;

 

  (i) place money on interest-bearing or term deposit with the Bank and withdraw that money and accrued interest either on or before any applicable maturity date;

 

  (j) authorize and request the Bank to effect foreign exchange transactions and purchase and/or sell treasury products for the account of the Customer;

 

  (k) deposit any property of the Customer with the Bank for safe keeping, have access to and reclaim any property so deposited or give the Bank Instructions in relation to it;

 

  (l) execute guarantees, indemnities or other undertakings to the Bank in relation to:

 

  (i) missing documents;

 

  (ii) guarantees, letters of credit or other undertakings given or to be given by the Bank to or at the request of the Customer; or

 

  (iii) anything else done or to be done by the Bank at the request of the Customer;

 

  (m) give the Bank any form of security over, or make any other arrangements with the Bank concerning, any property of the Customer including without limitation bills of exchange, bills of lading, warehouse certificates, insurance policies and share and debenture certificates;

 

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  (n) countermand, revoke or amend Instructions; and

 

  (o) give the Bank Instructions relating to any of the above.

INSTRUCTIONS

 

4.1 Instruction ” means a communication, including without limitation a cheque or demand for payment, which (i) contains the information required by the Bank to enable the Bank to give effect to the communication; (ii) is received by the Bank in writing, by facsimile, tested or untested telex, SWIFT, telephone, or via the Bank’s electronic instruction system or such other means as are for the time being agreed by the Customer and the Bank; and (iii) the Bank believes in good faith to have been given by the Customer.

 

4.2 The Customer is responsible for keeping and completing cheques and other forms and documents and for issuing Instructions in a manner so as to prevent unauthorised completion, alterations or additions. The Customer shall not issue cheques which are post- dated and shall immediately notify the Bank if it becomes aware that any of its cheques (whether completed or blank) are lost or stolen.

 

4.3 If the Bank and the Customer at any time agree on a security procedure to be used in relation to any category of communications (including encryption), the Customer shall safeguard any test keys, passwords, identification codes or other security or authentication devices, make them available only to properly authorised persons and be fully responsible for any use of such security procedure (whether authorised or unauthorised)

 

4.4 Nothing in this Clause 4 obligates the Bank to confirm Instructions which appear to the Bank acting in good faith to have been given by the Customer.

AUTHORITY AND OBLIGATIONS OF THE BANK

 

5.1. The Bank is authorised and agrees to accept, honour and execute without inquiry each Instruction which the Bank believes in good faith to have been given by a Signatory and any other Instruction communicated by other means which the Bank receives in strict accordance with any agreed security procedure. Provided the Bank believes in good faith that an Instruction has been given by a Signatory, where such an Instruction has been effected by means of a facsimile signature, personal seal or chop, the Bank is authorised to act on such Instruction, regardless of by whom the facsimile signature, personal seal or chop was actually affixed. The Bank need not inquire into the circumstances of any transaction.

 

5.2 The Bank may at its option use any means to confirm or clarify Instructions, even if any agreed security procedure appears to have been followed. If the Bank is not satisfied with any confirmation or clarification, it may decline to honour the Instruction.

 

5.3 The Bank has established cut-off times for some categories of communications, details of which are attached hereto as Addendum A . If an Instruction is received by the Bank after its cut-off times, the Bank may process the Instruction on the next day on which it is open for such business. The Bank may process any Instruction through any of the payments systems identified in Addendum A.

 

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5.4 Execution of Instructions will be subject to applicable law and the rules of the payment system used, including those laws or rules concerning a misdescribed or missing beneficiary, beneficiary’s bank or intermediary bank. The Bank may rely on the identifying number of any account, intermediary or beneficiary’s bank which appears in an Instruction as the proper identification of the beneficiary, intermediary or beneficiary’s bank notwithstanding that the Instruction identifies an entity different from the entity identified by name in the Instruction. The Bank may complete or correct incomplete or inaccurate intermediary or beneficiary bank details.

 

5.5 Due to the operations of the Trust, mid-month redemptions of shares of the Trust could result in an Instruction that would require a withdrawal from the Non-Interest Account in excess of the balance in such account. The Bank shall honour such an Instruction without assessing an overdraft fee. They Bank may charge customary interest, fees and other expenses for all other overdrafts of the Non-Interest Account or the Interest Account.

 

5.6 Where execution of an Instruction requires the Bank to purchase or sell a currency other than the currency of the Account on which the Instruction is given, the Bank is authorised to purchase or sell the currency at a commercially reasonable rate at the relevant time for the purchase or sale of such currency taking into account the size and tenor of the transaction.

 

5.7 If the Customer chooses to confirm any Instruction, any confirmation must be clearly marked as such and, if there is any discrepancy between an Instruction and any confirmation, the terms of the Instruction shall prevail .

DEPOSITS, AVAILABILITY OF FUNDS

 

6.1 The Customer undertakes that it will have good title to all items presented to the Bank for deposit or for any other purpose. Money deposited or paid into an Account will not be regarded as available until collected and irrevocably received in cleared funds. The Customer requests that the Bank accept without inquiry all cheques and other instruments presented for deposit into the Account without checking whether they are valid, properly endorsed or owned by the Customer.

 

6.2 As collecting bank, the Bank as agent for the Customer will deal with and present the cheques and instruments in accordance with the custom and practice of the country in which the cheques are collected.

 

6.3 If the Bank credits the Account in contemplation of receiving funds for the Customer’s credit and those funds are not actually received by the Bank, or on the faith of a transaction which is subsequently set aside or revoked, or if the Bank does not receive funds for the Customer’s credit for value on the date advised by or on behalf of the Customer, the Bank shall be entitled to debit the Account of the Customer with the amount previously credited and/or with any other charges incurred. If the Account becomes overdrawn or further overdrawn as a result of such debit, the Customer will pay on demand the overdrawn amount and interest on the overdrawn amount.

 

6.4

Bank reserves the right not to accept, and to return without interest to the remitter of funds, the amounts received for deposit to the Interest Account on any Bank business day, if the

 

4


 

aggregate deposit liability of the Bank to the Trust following the deposit of such amounts would exceed the Canadian Dollar equivalent of $1.5 billion U.S. dollars calculated at the Federal Reserve Bank of New York Noon Buying Rate (the “ Noon Buying Rate ”) for the Canadian Dollar or another recognized market rate for the Canadian Dollar if the Noon Buying Rate is not available on the banking day such deposits are received by the Bank.

 

6.5 The Bank shall notify the Customer and the Customer’s sponsor if there are extraordinary circumstances causing the Bank to reasonably expect that it will be unable to accept Instructions for the withdrawal of money held in the Accounts. Upon such notification, the Customer may determine, in its sole discretion, to suspend generally or refuse orders to redeem shares of the Trust. In such case, the Customer and the Bank shall consult with each other and use good faith efforts to resume withdrawals as soon as possible.

 

6.6 Each day that orders are placed with and accepted by the Trust for the purchase or redemption of shares in the Trust, the Trust shall notify the Bank of the anticipated amounts in Canadian Dollars that will be deposited to, or withdrawn from, the Interest Account on the settlement date for those orders.

INTEREST

 

7.1 Interest will accrue daily, in Canadian Dollars, on all Canadian Dollar balances in the Interest Account only and will be credited monthly, in Canadian Dollars, to the Non-Interest Account. No interest will be earning on balances in the Non-Interest Account. The Bank agrees that it will endeavour at all times to pay a competitive interest rate on all Canadian Dollar balances in the Interest Account. As of the date of this Agreement, the Bank has agreed to pay interest at an annual nominal rate equal to 3.71%. The Bank may change the rate based upon changes in the British Bankers Association LIBOR Overnight rate for the Canadian Dollar, other market conditions or the Bank’s liquidity needs. The Bank will notify the Customer of the interest rate applied each Bank business day after the close of the Bank business day. The Bank will endeavour to provide to the Customer and Customer’s sponsor advance notice whenever the Bank intends to change the interest rate on the Interest Account, except where there are unforeseen changes in conditions or significant changes in the Trust’s balances in the Interest Account. If the Bank at any time pays an unsatisfactory interest rate on the Interest Account, the Customer’s sole recourse will to be to withdraw the Canadian Dollar balance from the Interest Account, terminate the Deposit Account Agreement and close the Accounts.

ACCOUNT INFORMATION

 

8.1 The Bank will issue, on a daily basis, balance and transactions reports for the Accounts for the previous banking day. Bank will also send a periodic statement of account for the Accounts as agreed with the Customer.

 

8.2

The Customer will ensure that the statements, confirmations and advices it receives from the Bank are examined by a responsible person on behalf of the Customer within a reasonable time of receipt and, thereupon, Customer shall promptly notify the Bank of any mistake or discrepancy of which the Customer becomes aware from such statements, confirmations and

 

5


 

advices. The Bank shall not be responsible for the Customer’s reliance on balance, transaction or related information which is subsequently updated or corrected or for the accuracy or timeliness of information supplied by any third party to the Bank.

OTHER DOCUMENTATION

 

9.1. These Account Terms and the Account Applications replace any existing agreements relating to the subject matter hereof or thereof, with effect from the date the Bank receives the relevant Account Application or analogous document in form and substance satisfactory to the Bank.

 

9.2 These Account Terms are in addition to any future agreement between the Bank and the Customer (including without limitation any agreement relating to the provision of electronic banking services, specific payment or cheque services or custody services) and if there is an inconsistency between these Account Terms and any such other agreement, any such other agreement will prevail for the purposes of the particular account or service which is the subject of such other agreement. If there is an inconsistency between these Account Terms and any terms of the relevant Account Application(s), the terms of the Account Application(s) shall prevail for the purposes of the Account(s) which are subject to such Account Application(s).

REVERSALS

 

10.1 Unless otherwise expressly provided, all Instructions shall continue in full force and effect until cancelled or superseded. Instructions may be reversed, amended, cancelled or revoked by the Customer only with the consent of the Bank. That consent shall not be withheld unless the Bank reasonably determines that it would not be possible to give effect to any reversal, amendment or revocation, or the Bank has entered into other transactions or otherwise materially changed its position as a result of receiving such Instructions.

 

10.2 The Customer may stop payment of a cheque at any time provided the Bank branch on which the cheque is drawn receives an Instruction to that effect from the Customer prior to the Bank honouring or arranging to honour the cheque concerned.

 

10.3 If the Bank erroneously posts or fails to post an entry to the Account the Bank may reverse or make a correcting entry and the provisions of clause 6.3 shall apply to any resulting overdraft.

FEES AND CHARGES

 

11.1 The Bank may, at its option, invoice the Customer or debit the Account for services or for handling telecommunications or messages dispatched at the Customer’s request, and other out of pocket costs incurred by it for the Customer’s account in accordance with its fee arrangements in place from time to time. Attached hereto and marked “Fee Schedule” is a copy of the current fees. All payments to be made to the Bank shall be in full, without set-off or counterclaim and free of any deductions or withholdings on account of any tax or otherwise. The Bank will forward to the Customer a statement in respect of each Account detailing all interest (if applicable) and fees charged to that Account.

 

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11.2 The Customer agrees to pay or reimburse the Bank for any taxes, levies, imposts, deductions, charges, stamp, transaction and other duties and withholdings (together with any related interest, penalties, fines, and expenses in connection with them) in connection with the Accounts (including payments or receipts to the Accounts) except if imposed on the overall net income of the Bank.

REPAYMENT OF OVERDRAFTS

 

12.1 In the event that there is an overdraft of the Non-Interest Account (as provided for in Section 5.5 hereof), any monies paid into the Non-Interest Account will first be used to credit such overdraft.

INDEMNITY AND LIABILITY

 

13.1 The Customer shall fully indemnify the Bank and its employees, officers and directors and each of the affiliates and subsidiaries of JPMorgan Chase Bank, N.A. on demand, at all times against any losses, costs, claims, damages, liabilities and expenses (including without limitation legal fees) which it or they suffer or incur directly or indirectly as a result of (i) the Customer’s breach of these Account Terms, (ii) the Bank acting on what it believed in good faith to be the Customer’s communication or Instruction or because of anything done under or as contemplated by these Account Terms. This indemnity is in addition to and not in substitution for any other indemnity or right in favour of the Bank given by law or otherwise and shall not be affected or discharged by any thing.

 

13.2 (i) Subject to clause 13.2 (ii) below, the Bank shall be liable only for direct loss or damage which the Customer suffers or incurs arising from the Bank’s gross negligence or willful misconduct and shall not be liable for any other loss or damage of any nature.

(ii) The Bank shall not in any event be liable for loss of business or profits or goodwill or any indirect or consequential or punitive or special loss or damage, in each case whether or not reasonably foreseeable, even if the Bank has been advised of the likelihood of such loss or damage and whether arising from negligence, breach of contract or otherwise.

(iii) The provisions of clause (i) and (ii) above shall not apply to the extent that the loss or damage is caused by fraud on the part of the Bank.

 

13.3

The Bank of New York enters into this Agreement only in its capacity as trustee and in no other capacity, and in no circumstances shall The Bank of New York have any liability under or in connection with this Agreement other than as trustee of the Trust. Any liability of the Trustee arising under or in connection with this Agreement is limited to, and can be enforced against the Trustee only to the extent to which such liability can be satisfied out of, the assets of the Trust which are available under the terms of the trust agreement governing the Trust to meet such liability at the time the amount in respect of such liability is claimed against the Trustee. This limitation on the Trustee’s liability applies despite any other provision of this Agreement and extends to all liabilities and obligations of the Trustee in any way connected with any representation, warranty, conduct, omission, agreement or transaction related to this Agreement, except that the Trustee will be held

 

7


 

liable individually for its fraud or willful misconduct in connection with these Account Terms.

GOVERNING LAW AND JURISDICTION

 

14.1 These Account Terms, the relevant Account Application and the rights and obligations of the Customer and the Bank in respect of the Accounts shall be governed by, performed and construed in accordance with the laws of England.

 

14.2 If any of these Account Terms is unenforceable or illegal in any jurisdiction, that will not affect the rest of the Account Terms in that jurisdiction, or any of the Account Terms in any other jurisdiction.

 

14.3 In relation to the Accounts, the courts of England shall have non-exclusive jurisdiction to settle any disputes which arise out of or are connected with these Account Terms, the relevant Account Application and/or the relevant Account. This clause does not prevent the Bank or Customer from taking proceedings in the United States.

RECORDING

 

15.1 The Bank may record telephone conversations in connection with an Instruction. At the Customer’s request and cost the Bank will supply a copy or transcript of any such recording to the Customer. The recording or transcript may be used in resolving any dispute between the Bank and the Customer. Recordings and any transcript shall be the property of the Bank.

 

15.2 The Bank may microfilm or electronically record any document and subject to any law affecting the relevant Account may destroy the original of such documents. Subject to the provisions of applicable law the Bank and the Customer shall be entitled to rely on any such stored document in any legal proceeding or for any other purpose.

DISCLOSURE

 

16.1 The Customer authorises the Bank to retain an affiliated company and/or any other agents to perform data processing, collection and other services which the Bank considers necessary or desirable for the Bank. The Bank reserves the right to modify or terminate its arrangements with its agents at any time.

 

16.2 The Customer agrees that Instructions and information concerning the Accounts, the Customer and transactions to be disclosed in accordance with this clause 16 may be transmitted across national boundaries and through networks including those owned and operated by third parties.

 

16.3

The Customer authorises the Bank to disclose information concerning the Accounts, transaction or the Customer where, (i) in the Bank’s view, the disclosure is necessary or desirable for the purpose of allowing the Bank to perform its duties and exercise its powers and rights hereunder; (ii) the disclosure is to a proposed assignee of the rights of the Bank in respect of the Account; (iii) the disclosure is to a branch, affiliate, subsidiary, employee or agent of JPMorgan Chase & Co. or to its auditors or legal advisers; (iv) the disclosure is to

 

8


 

the auditors of the Customer; or (v) as may be otherwise required by law, irrespective of whether the disclosure is made in the jurisdiction in which the Customer is resident, the Account is kept, the transaction conducted or elsewhere.

FORCE MAJEURE

 

17.1 The Bank shall have no liability for any damage, loss, expense or liability of any nature which the Customer may suffer or incur, to the extent caused by an act of God, fire, flood, civil or labour disturbance, war or terrorism, act of any governmental authority or other act or threat of any authority (de jure or de facto), legal constraint (including attachments or other legal process), fraud or forgery (other than on the part of the Bank or any of its directors, officers or employees), malfunction of equipment (including, without limitation, any computer or related software) except where such malfunction is primarily attributable to the Bank’s gross negligence in maintaining the equipment or software, failure of or the effect of rules or operations of any funds transfer system, inability to obtain or interruption of communications facilities, or any cause beyond the reasonable control of the Bank (including, without limitation, the non-availability of appropriate foreign exchange);

 

17.2 Any amount standing to the credit of the Account with the Bank is payable exclusively at the branch at which the Account is held: however, payment may be suspended from time to time in order to comply with any law, regulation, governmental decree or similar order for the time being affecting the Bank, its officers, employees, affiliates, agents or correspondents.

NOTICES

 

18.1 Any communication, other than an Instruction, shall be in writing unless otherwise agreed and may be sent by personal delivery, facsimile, telex, SWIFT or post, addressed, in the case of communications from the Customer to the Bank, to the branch of the Bank where the Account is maintained, and, in the case of communications from the Bank to the Customer, to the address notified by the Customer to the Bank from time to time. Any communication will only be effective when actually received.

CLOSURE/TERMINATION

 

19.1 The Bank has the right to close an Account at any time by not less than ninety days notice in writing addressed to the Customer at its most recent address as advised by the Customer to the Bank. Before or on the expiry of such notice the Bank, will transfer any balance in the Account in accordance with the Customer’s Instructions. On the expiry of such notice, the Bank’s obligations in respect of the Account shall cease. However, any such closure or termination shall not affect the Customer’s liabilities to the Bank arising prior to or after such termination or closure, all of which shall continue in full force and effect. In the absence of such Instructions the Bank may transfer the balance to an unclaimed moneys account.

MISCELLANEOUS

 

20.1

The expressions “Bank” and “Customer” when used herein shall include any successor of the Bank or the Customer, as applicable, and “successor” means an assignee or successor of

 

9


 

JPMorgan Chase Bank, N.A., or of the CurrencyShares Canadian Dollar Trust, as applicable, or any person who, under the laws of its jurisdiction of incorporation or domicile, has assumed the rights and obligations of JPMorgan Chase Bank, N.A., or of the CurrencyShares Canadian Dollar Trust, as applicable, hereunder or to which under such laws the same have been transferred.

 

20.2 If these terms are translated into, or appear in a language other than English, the English language version shall govern and control.

 

20.3 Headings are for convenience only and shall not affect the interpretation of this document.

 

20.4 The Customer acknowledges that deposits held in a branch of the Bank located outside of the U.S. are not insured by the Federal Deposit Insurance Corporation, are subject to cross-border risks and may enjoy a lesser preference, as compared to deposits held in the U.S., in the event the Bank should be liquidated, insolvent or placed into receivership or other proceeding for the benefit of creditors.

 

20.5 These Account Terms may be enforced only by the Bank or the Customer or such party’s successors and permitted assigns. Notwithstanding the foregoing, but subject to the prior written consent of the Bank, each employee, officer and director of the Bank and each of the affiliates and subsidiaries of JPMorgan Chase Bank, N.A. may enforce the terms of clause 13. The Bank and the Customer may at any time, by agreement, rescind these Account Terms or vary them without the consent of such employees, officers, directors or the affiliates and subsidiaries of JPMorgan Chase Bank, N.A.

 

20.6 (i) The Bank will collect information about the Customer and the Customer’s employees and agents which may constitute personal data for the purposes of the Data Protection Act 1998 (the “ Act ”) and other relevant data protection legislation (such as, without limitation, authorised signatory details). Such personal data may be collected by or on behalf of the Bank in a number of ways (the “ Collection Methods ”), including via Account Applications or other analogous documents, via applications or documentation relating to the provision to or use by the Customer of electronic banking services, or specific payment or cheque services, via the Customer’s use of such electronic banking services, or specific payment or cheque services, and via other correspondence or communications between the Customer and the Bank.

(ii) The Bank will use personal data collected by it or on its behalf via the Collection Methods for the following purposes (the “ Purposes ”); namely, for the purpose of providing the services to the Customer in accordance with the Global Account Terms and Account Applications, for otherwise administering the Account(s), for providing the Customer with services such as electronic banking services, or specific payment or cheque services, for the Bank’s internal administrative purposes, for contacting the Customer about products and services which the Bank or other members of the Bank’s group offer which the Bank believes may be of interest to the Customer, and as may be otherwise required by law or applicable regulatory or governmental authorities, and such purposes may include transfer of such personal data outside of the United Kingdom to the Bank’s subsidiaries or other

 

10


connected companies or to other organisations as may be required by law or other applicable regulatory or governmental authorities.

(iii) The Customer shall ensure that any disclosure of personal data made by it or by its employees or agents via the Collection Methods which relate to the Customer’s employees or agents is only made following notification by the Customer to data subjects of the Purposes for which their personal data may be processed by or on behalf of the Bank, and is otherwise fair and lawful.

[Signatures on following page]

 

11


IN WITNESS WHEREOF , this Agreement has been duly executed as of June 8, 2006.

 

CURRENCYSHARES CANADIAN DOLLAR TRUST
By The Bank of New York, in its capacity as Trustee of the CurrencyShares Canadian Dollar Trust and not in its individual capacity
  By   

        /s/ Bruce Baumann

             Name:  

Bruce Baumann

             Title:  

Vice President

JPMORGAN CHASE BANK, N.A.,

LONDON BRANCH

By:  

             /s/ Phyllis A. Schroder

Name:  

        Phyllis A. Schroder

Title:  

          Vice President

 

12

Exhibit 10.3

SUBLICENSE AGREEMENT

This Sublicense Agreement (this “ Agreement ”) is entered into as of June 9, 2006 (the “ Effective Date ”), by and between PADCO Advisors II, Inc., a Maryland corporation (“ Licensor ”), and Rydex Specialized Products LLC, a Delaware limited liability company wholly-owned by Licensor (“ Licensee ”).

WHEREAS, Licensor and The Bank of New York (“ BONY ”) entered into a License Agreement, dated as of December 5, 2005 (the “ BONY License Agreement ”), whereby BONY granted Licensor a non-exclusive, non-transferable (except as provided in Section 12.1 of the BONY License Agreement) license (the “ BONY License ”) under the BONY Patent Rights (as defined herein) solely for the purposes of establishing, operating and marketing Licensed Products (as defined herein); the BONY License permits Licensor to grant sublicenses to its partners, co-sponsors, joint venturers, trustees, custodians and agents, in connection with their establishment, operation and marketing of Licensed Products;

WHEREAS, Licensor and Licensee entered into a Sublicense Agreement, dated as of December 5, 2005 (the “ Former Sublicense ”), whereby Licensor granted a sublicense to Licensee a non-exclusive, personal and non-transferable license to BONY Patent Rights in connection with the Euro Currency Trust; and Licensor and Licensee intend for this Agreement to supersede the Former Sublicense;

WHEREAS, the Euro Currency Trust was established pursuant to the Depositary Trust Agreement entered into by and between Licensee and BONY, dated as of December 5, 2005, pursuant to which the Trust issues Euro CurrencyShares which represent units of fractional undivided beneficial interest in and ownership of the Euro Currency Trust;

WHEREAS, each of the following CurrencyShares trusts (with the Euro Currency Trust, the “ Existing Trusts ”) was established pursuant to a Depositary Trust Agreement entered into by and between Licensee and BONY, each dated as of June 8, 2006, pursuant to which each trust will issue shares which represent units of fractional undivided beneficial interest in and ownership of the respective trust:

CurrencyShares Australian Dollar Trust

CurrencyShares British Pound Sterling Trust

CurrencyShares Canadian Dollar Trust

CurrencyShares Mexican Peso Trust

CurrencyShares Swedish Krona Trust

CurrencyShares Swiss Franc Trust

WHEREAS, additional CurrencyShares trusts (the “ Future Trusts ”) may be established from time to time, each pursuant to a trust agreement entered into by and between Licensee and BONY or a successor trustee. Each additional Future Trust may issue shares which will represent units of fractional undivided beneficial interest in and ownership of such Future Trust.

WHEREAS, Licensee is acting, or shall act, as the sponsor of the Existing Trusts and the Future Trusts (collectively, the “ Trusts ”; the associated agreements, the “ Trust Agreements ”; and the associated shares, the “ Shares ”) and is responsible for establishing the Trusts, registering the Shares and overseeing the performance of the trustee of the Trusts;

 

1


WHEREAS, pursuant to the terms and conditions of the BONY License Agreement, Licensor desires to grant a sublicense to Licensee under the BONY Patent Rights, with the right to grant sublicenses, solely for Licensee’s use as the sponsor of the Trusts;

WHEREAS, Licensor uses in commerce and owns in the United States all domain names, trade names and trademark rights and associated goodwill in the designations specified on Schedule 1 attached hereto (the “ Licensor Marks ”); and

WHEREAS, Licensor desires to grant a license to Licensee to the Licensor Marks, with the right to grant sublicenses, solely for Licensee’s use as the sponsor of the Trusts.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Licensor and Licensee agree as follows:

 

  1. DEFINITIONS.

For the purposes of this Agreement, the following terms have the following meanings:

(a.) “ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, or is Controlled by, or is under common Control with, such Person.

(b.) “ BONY Patent Rights ” means any patents and patent applications (and all related know-how and trade secrets) of BONY, anywhere in the world, that cover an investment product that is based solely on the securitization of a single non-U.S. currency and that exist as of the effective date of the BONY License Agreement or are filed or issued thereafter, including but not limited to U.S. Patent Application No. 10/680,589 filed on October 6, 2003 entitled “Systems and Methods for Securitizing a Commodity.”

(c.) “ Control ” means, with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

(d.) “ Licensed Products ” means any investment product that is based solely on the securitization of a single non-U.S. currency that is sold, sponsored or issued by Licensee or any Affiliate of Licensee. For the purposes of clarity, the Licensed Products do not include any products involving the securitization of any commodity other than non-U.S. currency.

(e.) “ Person ” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or another entity, including a governmental entity or any department, agency or political subdivision thereof.

 

2


  2. LICENSE.

(a.) BONY Patent Rights Sublicense . Pursuant to Section 2 of the BONY License Agreement and subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, personal and non-transferable (except as provided in Section 8(a) of this Agreement) license for the term of this Agreement to use the BONY Patent Rights solely in connection with Licensee’s performance of its services as sponsor of the Trusts pursuant to the Trust Agreements (the “ BONY Sublicense ”).

(b.) Licensor Marks License . Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee a non-exclusive, personal and non-transferable (except as provided in Section 8(a) of this Agreement) license for the term of this Agreement to use the Licensor Marks solely in connection with Licensee’s performance of its services as sponsor of the Trusts pursuant to the Trust Agreements (the “ Licensor Marks License ”).

(c.) Licensee’s Limited Right to Sublicense . Each of the BONY Sublicense and the Licensor Marks License granted herein shall include the limited right of Licensee to grant sublicenses to its Affiliates, partners, co-sponsors, joint venturers, trustees, distributors, custodians and agents (each a “ Sublicensee ”), subject to the restrictions of this Agreement, and solely in connection with such Sublicensee’s performance of services for Licensee related to the activities of Licensee permitted hereunder. In addition, Licensee shall include provisions in all such sublicenses that: (i) are identical in substance to Sections 3, 4 and 5 herein (with the references in such sublicenses to “Licensor” in Section 4(c) to continue to signify the Licensor defined herein); (ii) require Licensee to terminate such sublicenses, without penalty, if this Agreement is terminated for any reason; (iii) obligate Licensee to give the Sublicensee notice if this Agreement is terminated for any reason; and (iv) entitle Licensor herein to give such notice in the event that the Licensee fails to do so.

(d.) All rights not specifically and expressly granted to Licensee in this Section 2 are hereby reserved to Licensor.

 

  3. ENFORCEMENT.

Licensee shall promptly (a.) notify Licensor of any potential or actual infringement by a third party of the BONY Patent Rights or the Licensor Marks of which Licensee becomes aware, and (b.) provide to Licensor all evidence of such infringement in Licensee’s possession, custody or control. With respect to Licensor Marks, Licensor shall (y.) have the sole right, but not the obligation, to initiate any legal action at its own expense against such infringement and to recover damages and enforce any injunction granted as a result of any judgment in Licensor’s favor and (z.) Licensor shall have sole control over any such action, including, without limitation, the sole right to settle and compromise such action. In the event of a dispute between Licensor and any third party regarding the infringement, validity or enforceability of the BONY Patent Rights or the Licensor Marks, Licensee agrees, at Licensor’s expense, to do all things reasonably requested by BONY or Licensor to assist them in connection with such dispute.

 

3


  4. TERM AND TERMINATION.

(a.) The term of this Agreement shall commence as of the Effective Date and shall remain in full force and effect until the termination of the last of the Trust Agreements to terminate, unless earlier terminated pursuant to the terms of this Agreement (the “ Term ”).

(b.) Either party may terminate this Agreement by written notice to the other party at any time if the other party materially breaches this Agreement and fails to cure such breach with thirty (30) days following written notice thereof from the non-breaching party. Upon any termination or expiration of this Agreement, all rights and obligations under this Agreement (including Licensee’s rights under the BONY Sublicense and the Licensor Marks License granted pursuant to Section 2 of this Agreement) will immediately terminate; provided, however, that the provisions of Sections 5, 6, 7, and 8, and any other provision that survives by its express terms, shall survive any termination or expiration of this Agreement.

(c.) On expiration or termination of this Agreement, Licensee shall immediately cease and desist from all use of the BONY Patent Rights and the Licensor Marks, and any similar marks, and inventions or works based on or derivative thereof; and shall immediately deliver all products bearing or made in connection with the BONY Patent Rights or the Licensor Marks, including without limitation all inventions or works based on or derivative thereof, to Licensor at the address set forth in the notice section below, or destroy them, at the option of Licensor.

 

  5. ACKNOWLEDGMENT OF RIGHTS.

(a.) Licensee will not directly or indirectly: (i) challenge or contest the validity or enforceability of the BONY Patent Rights or the Licensor Marks; (ii) dispute the validity, enforceability, or BONY’s ownership of any patent within the BONY Patent Rights, any inventions or works based thereon or derivative thereof, or any of the claims therein (“ Patent Rights ”), or initiate or participate in any proceeding of any kind opposing the grant of any patent, or challenging any patent application in connection with the Patent Rights; (iii) dispute the validity, enforceability, or Licensor’s exclusive ownership of, any trademark, trade name or domain name application or registration owned by Licensor with respect to the Licensor Marks or initiate or participate in any proceeding of any kind opposing the grant to Licensor of any trademark, trade name, or domain name registration in the Licensor Marks or similar marks; (iv) fail to meet Licensor’s quality control with respect to the Licensor Marks or make any other use thereof other than as expressly permitted herein; (v) apply to register or otherwise obtain registration of the BONY Patent Rights or any inventions or works based thereon or derivative thereof, the Licensor Marks, or any marks similar thereto, in the patent and trademark or copyright office of any country or state, or with any business or domain name registrar; or (vi) assist any other Person to do any of the foregoing (except if required by court order or subpoena); provided, however, the foregoing shall in no way limit Licensee’s ability to defend against or to mitigate any claim brought by Licensor or BONY against Licensee.

(b.) Any violation of this Section 5 will constitute a material breach of this Agreement.

 

4


  6. REPRESENTATIONS AND WARRANTIES.

(a.) Each party hereby represents and warrants that (i) it has the power and authority to enter into this Agreement and perform its obligations hereunder; (ii) the execution and delivery of this Agreement have been duly authorized and all necessary actions have been taken to make this Agreement a legal, valid and binding obligation of such party enforceable in accordance with its terms; and (iii) the execution and delivery of this Agreement and the performance by such party of its obligations hereunder will not contravene or result in any breach of the certificate of incorporation, bylaws, certificate of formation, limited liability company agreement or any other organizational document of such party or of any agreement, contract, indenture, license, instrument or understanding or, to the best of its knowledge, result in any violation of law, rule, regulation, statute, order or decree to which such party is bound or by which they or any of their property is subject.

(b.) Licensor represents and warrants that it owns and/or has the right to sublicense to Licensee the BONY Patent Rights and to license to Licensee the Licensor Marks in the United States and that to its actual knowledge, the BONY Patent Rights and the Licensor Marks and Licensee’s use of the foregoing in accordance with this Agreement shall not infringe any copyright, trademark, trade secret or other intellectual property right of any third party.

(c.) EXCEPT AS EXPRESSLY SET FORTH IN THE FOREGOING, LICENSOR DOES NOT MAKE AND HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

  7. LIMITATION OF LIABILITY.

NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, EXEMPLARY OR OTHER INDIRECT DAMAGES, HOWSOEVER CAUSED, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE, EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

 

  8. MISCELLANEOUS PROVISIONS.

(a.) Assignment . Licensee may not assign or otherwise transfer (whether by operation of law or otherwise) any right or obligation under this Agreement without the prior written consent of Licensor; provided, however, that Licensee may grant sublicenses as provided herein. Such consent shall be deemed given with respect to an assignment or transfer (whether by operation of law or otherwise) of the entire Agreement, including all rights and obligations hereunder, to a successor in interest or assignee of substantially all of the assets of Licensee, provided that Licensee has given prompt written notice thereof to Licensor. This Agreement is binding on and inures to the benefit of the parties and their permitted successors and assigns. Any attempted assignment or other transfer of rights under this Agreement in violation of this Section 8(a) will be void.

 

5


(b.) Governing Law . This Agreement shall be interpreted, construed and enforced in accordance with the laws of the State of Maryland without reference to or inclusion of the principles of choice of law or conflicts of law of that jurisdiction (except that questions affecting the construction and effect of any patent will be determined by the law of the country in which the patent was granted). It is the intent of the parties that the substantive law of the State of Maryland govern this Agreement and not the law of any other jurisdiction incorporated through choice of law or conflicts of law principles.

(c.) Exclusive Jurisdiction and Venue . Each party agrees that any legal action, proceeding, controversy or claim between the parties arising out of or relating to this Agreement may be brought and prosecuted only in the United States District Court for the District of Maryland or, if that Court lacks or declines to exercise subject matter jurisdiction, in the courts of the State of Maryland, and by execution of this Agreement each party hereto submits to the exclusive jurisdiction of such court and waives any objection it might have based upon improper venue or inconvenient forum. Each party hereto waives any right it may have to a jury trial in connection with any legal action, proceeding, controversy or claim between the parties arising out of or relating to the Agreement.

(d.) Entire Agreement . This Agreement sets forth the entire agreement of the parties as to its subject matter and supercedes all prior agreements, negotiations, representations, and promises between them with respect to its subject matter.

(e.) Unenforceable Provisions . If any provision of this Agreement is held unenforceable by a court of competent jurisdiction, the other provisions will remain in full force and effect. If legally permitted, the unenforceable provision will be replaced with an enforceable provision that as nearly as possible gives effect to the parties’ intent.

(f.) Notices . A notice under this Agreement is not sufficient unless it is: (i) in writing; (ii) addressed using the contact information listed below for the party to which the notice is being given (or using updated contact information which that party has specified by written notice in accordance with this Section 8(f)); and (iii) sent by hand delivery, facsimile transmission, registered or certified mail (return receipt requested), or reputable express delivery service with tracking capabilities (such as Federal Express).

CONTACT INFORMATION FOR LICENSOR:

PADCO Advisors II, Inc.

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Carl G. Verboncoeur

Telephone: (301) 296-5100

Facsimile: 301-296-5112

CONTACT INFORMATION FOR LICENSEE:

Rydex Specialized Products LLC

9601 Blackwell Road, Suite 500

Rockville, Maryland 20850

Attention: Timothy Meyer

 

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Telephone: (301) 296-5129

Facsimile: (301) 296-5112

(g.) Amendments . This Agreement may not be amended unless the amendment is in writing and signed by authorized representatives of both parties.

(h.) Waivers . A waiver of rights under this Agreement will not be effective unless it is in writing and signed by an authorized representative of the party that is waiving the rights.

(i.) Counterparts . The parties may execute this Agreement by signing separate copies of the signature page. A facsimile copy of the signature page will have the same effect as the original.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

 

7


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives.

 

PADCO ADVISORS II, INC.
By:  

    /s/ Carl Verboncoeur

Name:  

    Carl Verboncoeur

Title:  

    CEO

 

RYDEX SPECIALIZED PRODUCTS LLC
By:  

    /s/ Carl Verboncoeur

Name:  

    Carl Verboncoeur

Title:  

    CEO

 

8


SCHEDULE 1

LICENSOR MARKS

Rydex

Rydex Investments

FXE

FXA

FXB

FXC

FXM

FXS

FXF

CurrencyShares

currencyshares.com

[Rydex to complete]

 

9

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Form S-3 (No. 333-168005) of CurrencyShares ® Canadian Dollar Trust of our report dated January 14, 2010 relating to the financial statements, which appears in this Form 10-K/A.

/s/ PricewaterhouseCoopers LLP

Baltimore, Maryland

March 10, 2011

EXHIBIT 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-168005) of CurrencyShares ® Canadian Dollar Trust of our reports dated January 14, 2011, with respect to the financial statements of CurrencyShares ® Canadian Dollar Trust, and the effectiveness of internal control over financial reporting of CurrencyShares ® Canadian Dollar Trust, included in this Annual Report (Form 10-K/A) for the year ended October 31, 2010.

 

/s/ Ernst & Young LLP
McLean, Virginia
March 10, 2011

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302(A)

OF THE SARBANES-OXLEY ACT OF 2002

I, Nick Bonos, certify that:

1. I have reviewed the Annual Report on Form 10-K for the fiscal year ended October 31, 2010 of CurrencyShares ® Canadian Dollar Trust, as amended;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves persons who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2011

 

/s/ N ICK B ONOS
Nick Bonos
Chief Executive Officer
(principal executive officer)

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302(A)

OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph Arruda, certify that:

1. I have reviewed the Annual Report on Form 10-K for the fiscal year ended October 31, 2010 of CurrencyShares ® Canadian Dollar Trust, as amended;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves persons who have a significant role in the registrant’s internal control over financial reporting.

Date: March 10, 2011

 

/s/ J OSEPH A RRUDA
Joseph Arruda
Chief Financial Officer
(principal financial officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of CurrencyShares ® Canadian Dollar Trust (the “Trust”) on Form 10-K for the fiscal year ended October 31, 2010, as amended, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nick Bonos, Chief Executive Officer of Rydex Specialized Products LLC, the Sponsor of the Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.

Date: March 10, 2011

 

/s/ N ICK B ONOS
Nick Bonos*
Chief Executive Officer
(principal executive officer)

 

* The Registrant is a trust and Nick Bonos is signing in his capacity as the principal executive officer of Rydex Specialized Products LLC, the Sponsor of the Registrant.

EXHIBIT 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of CurrencyShares ® Canadian Dollar Trust (the “Trust”) on Form 10-K for the fiscal year ended October 31, 2010, as amended, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph Arruda, Chief Financial Officer of Rydex Specialized Products LLC, the Sponsor of the Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Trust.

Date: March 10, 2011

 

/s/ J OSEPH A RRUDA
Joseph Arruda*
Chief Financial Officer
(principal financial officer)

 

* The Registrant is a trust and Joe Arruda is signing in his capacity as the principal financial officer of Rydex Specialized Products LLC, the Sponsor of the Registrant.