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INDEMNIFICATION AGREEMENT

Indemnification Agreement

INDEMNIFICATION AGREEMENT | Document Parties: UNITED STATES SHORT OIL FUND, LP | IMC-Chicago, LLC You are currently viewing:
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UNITED STATES SHORT OIL FUND, LP | IMC-Chicago, LLC

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Title: INDEMNIFICATION AGREEMENT
Governing Law: Delaware     Date: 11/16/2009

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Exhibit 10.5

 

Execution Copy

UNITED STATES SHORT OIL FUND, LP

 

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement (this “ Agreement ”), dated as of April 13, 2009, is entered into by and among United States Short Oil Fund, LP (the “ Partnership ”), United States Commodity Funds LLC, a Delaware limited liability company (the “ General Partner ”), on behalf of itself and as General Partner of United States Short Oil Fund, LP, and IMC-Chicago, LLC, an Illinois   limited liability company (the “ Limited Partner ”), and a limited partner of the Partnership pursuant to the First Amended and Restated Agreement of Limited Partnership dated as of the date hereof, as amended or supplemented from time to time (the “ Limited Partnership Agreement ”).  Capitalized terms that are used but not defined herein shall have the meaning given to such defined terms in the Limited Partnership Agreement.

 

Article 1

 

INDEMNIFICATION; LIMITATION OF LIABILITY

 

1.1            Indemnification of Limited Partner .  The General Partner agrees to indemnify, defend and hold harmless the Limited Partner, its partners, stockholders, members, directors, managers, officers, employees, affiliates, agents and any person who controls such persons within the meaning of Section 15 of the Securities Act of 1933 (the “ 1933 Act ”) or Section 20 of the Securities Exchange Act of 1934 (the “ 1934 Act ”), and the successors and assigns of all of the foregoing persons (each an “ LP Indemnified   Person ”), from and against any loss, damage, expense, liability or claim (including reasonable attorney fees and the reasonable cost of investigation) which any such LP Indemnified Person may incur under the 1933 Act, the 1934 Act, the Commodities Exchange Act (the “ CEA ”), the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon:

 

(a)           any untrue statement or alleged untrue statement of a material fact contained in the most recent registration statement of the Partnership, as declared effective by the Securities and Exchange Commission (the “SEC”) and as the same may be amended or supplemented from time to time (the “Registration Statement”), the Prospectus, or any other registration statement, prospectus, preliminary prospectus or other document used by the Partnership in connection with the offer and sale of Baskets or Units or any amendment or supplement to any of the foregoing, or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements made therein not misleading, except, in each case, to the extent, but only to the extent, that any such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact, or any omission or alleged omission to state a material fact, made therein in reliance upon and in conformity with information concerning the Limited Partner furnished in writing by or on behalf of the Limited Partner to the General Partner expressly for use therein;

 

 

 


 

 

(b)           the failure by the General Partner, the Partnership or their respective agents to comply with applicable laws and the rules and regulations of any governmental entity or any self-regulatory organization;

 

(c)           the Limited Partner being or having been a limited partner of the Partnership (including, but not limited to, any act or omission or alleged act or omission of the Limited Partner in its capacity as such) or the Limited Partner’s performance of its duties under the Limited Partnership Agreement except in the case of this clause (c), for any loss, damage, expense, liability or claim resulting from the willful misconduct, bad faith or gross negligence of the Limited Partner in performing its duties under the Limited Partnership Agreement.

 

In no case is the indemnity of the General Partner in favor of each LP Indemnified Person to be deemed to protect any LP Indemnified Person against any liability to the General Partner or the Partnership to which the LP Indemnified Person would otherwise be subject by reason of such LP Indemnified Person’s willful misconduct, bad faith or gross negligence in the performance of its duties and obligations under the Limited Partnership Agreement.

 

If any action, suit or proceeding (each, a “ Proceeding ”) is brought against an LP Indemnified Person in respect of which indemnity may be sought against the General Partner pursuant to this Section 1.1, such LP Indemnified Person shall promptly notify the General Partner in writing of the institution of such Proceeding, provided, however, that the omission to so notify the General Partner shall not relieve the General Partner or the Partnership from any liability which it may have to the LP Indemnified Person except to the extent that it has been materially prejudiced by such failure and has not otherwise learned of such Proceeding. The LP Indemnified Person shall have the right to employ its own counsel in any such case and the reasonable fees and expenses of such counsel shall be borne by the General Partner and paid as incurred (it being understood, however, that the General Partner shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the LP Indemnified Persons who are parties to such Proceeding) or for the expenses and fees incurred with respect to matters that are not indemnifiable in accordance with this Section 1.1.  An LP Indemnified Person shall give the General Partner reasonable prior notice of settlement of any Proceeding in respect of which indemnity may be sought against the General Partner pursuant to this Section 1.1, provided, however, that the omission to so notify the General Partner shall not relieve the General Partner or the Partnership from any liability which it may have to the LP Indemnified Person.

 

1.2            Indemnification of the Partnership and the General Partner.   The Limited Partner agrees to indemnify, defend and hold harmless each of the Partnership, the General Partner and its partners, stockholders, members, directors, officers, employees and any person who controls the General Partner within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and the successors and assigns of all of the foregoing persons (each, a “ GP Indemnified Person ”), from and against any loss, damage, expense, liability or claim (including reasonable attorney fees and the reasonable cost of investigation) which any such GP Indemnified Person may incur under the 1933 Act, the 1934 Act, the CEA, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon:

 

2


 

(a)           any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the Prospectus, or any other registration statement, prospectus, preliminary prospectus, free writing prospectus or other document used by the Partnership in connection with the offer and sale of Baskets or Units or any amendment or supplement to any of the foregoing, or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements made therein not misleading, in each case, to the extent, but only to the extent, that such untrue statement or alleged untrue statement of a material fact or


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