Document:

Unassociated Document

    CUSTODIAN AGREEMENT

    

    THIS
CUSTODIAN AGREEMENT (this
“Agreement”), dated as of October 7, 2008, is entered into among UNITED STATES SHORT
OIL FUND, LP, a limited
partnership organized under the laws of the State of Delaware (the Fund), UNITED STATES
COMMODITY FUNDS LLC, a
Delaware limited liability company and General Partner of the Fund (the
General
Partner), and BROWN BROTHERS
HARRIMAN & CO., a
limited partnership formed under the laws of the State of New York (BBH&Co. or the Custodian),

    

    WITNESSETH:

    

    WHEREAS, the General Partner has exclusive
responsibility for the management and control of the business and affairs of the
Fund; and

    

    WHEREAS, the General Partner wishes to employ
BBH&Co. to act as custodian for the Fund’s Investments (as defined in
Section 13.15) and to provide related services, all as provided herein, and
BBH&Co. is willing to accept such employment, subject to the terms and
conditions herein set forth;

    

    NOW,
THEREFORE, in consideration
of the mutual covenants and agreements herein contained, the Fund and
BBH&Co. hereby agree, as follows:

    

    1. Appointment
of Custodian.   The Fund and the
General Partner hereby appoint BBH&Co. as the Fund’s custodian for its
Investments, and BBH&Co. hereby accepts such appointment.  All
Investments of the Fund delivered to the Custodian or its agents or
Subcustodians (as defined in Section 13) shall be dealt with as provided in this
Agreement.  The duties of the Custodian with respect to the Fund’s
Investments shall be only as set forth expressly in this Agreement, which duties
are generally comprised of safekeeping and various administrative duties that
will be performed in accordance with Instructions and as reasonably required to
effect Instructions.

    

    2. Representations,
Warranties and Covenants of the Fund.   The Fund and the
General Partner each hereby represents, warrants and covenants each of the
following:

    

    2.1 This Agreement has been, and at the time
of delivery of each Instruction (as defined in Section 4) such Instruction will
have been, duly authorized, executed and delivered by the Fund and the General
Partner.  This Agreement does not violate any Applicable Law (as
defined in Section 13) or conflict with or constitute a default under the Fund’s
prospectus or other organic document, agreement, judgment, order or decree to
which the Fund or the General Partner is a party or by which it or its
Investments is bound.

    

    2.2 By providing an Instruction with respect
to the first acquisition of an Investment in a jurisdiction other than the
United States of America, the Fund and the General Partner shall be deemed to
have confirmed to the Custodian that the Fund has (a) made all determinations
required to be made by the Fund under Applicable Law, and (b) appropriately and
adequately disclosed to its unitholders and all persons who have rights in or to
such Investments, all material investment risks, including those relating to the
custody and settlement infrastructure or the servicing of securities in such
jurisdiction.

     

    
      
        
        

      

      
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    2.3 The Fund and the General Partner shall
safeguard and shall be solely responsible for the safekeeping of any testkeys,
identification codes, passwords, other security devices or statements of account
with which the Custodian provides them.  In furtherance and not
limitation of the foregoing, in the event the Fund and/or the General Partner
utilizes any on-line service offered by the Custodian, the Fund, the General
Partner and the Custodian shall be fully responsible for the security of each
party’s respective connecting terminal, access thereto and the proper and
authorized use thereof and the initiation and application of continuing
effective safeguards in respect thereof.  Additionally, if the Fund
and/or the General Partner uses any on-line or similar communications service
made available by the Custodian, the Fund and the General Partner shall be
solely responsible for ensuring the security of their access to the service and
for the use of the service, and shall only attempt to access the service and the
Custodian’s computer systems as directed by the Custodian.  If the
Custodian provides any computer software to the Fund and/or the General Partner
relating to the services described in this Agreement, the Fund and/or the
General Partner will only use the software for the purposes for which the
Custodian provided the software to the Fund and/or the General Partner, and will
abide by the license agreement accompanying the software and any other security
policies which the Custodian provides to the Fund and the General
Partner.

    

    3. Representations
and Warranties of BBH&Co.  BBH&Co. hereby
represents and warrants that this Agreement has been duly authorized, executed
and delivered by BBH&Co. and does not violate any Applicable Law or conflict
with or constitute a default under BBH&Co.’s limited partnership agreement
or any agreement, instrument, judgment, order or decree to which BBH&Co. is
a party or by which it is bound.

    

    4. Instructions.  Unless otherwise explicitly
indicated herein, the Custodian shall perform its duties pursuant to
Instructions.  As used herein, the term Instruction  shall mean a directive
initiated by the Fund and/or the General Partner, acting directly or through its
board of directors, officers or other Authorized Persons, which directive shall
conform to the requirements of this Section 4.

    

    4.1 Authorized
Persons.  For
purposes hereof, an Authorized
Person shall be a person or
entity authorized to give Instructions for or on behalf of the Fund and/or the
General Partner by written notices to the Custodian or otherwise
in  accordance with procedures delivered to and acknowledged by the
Custodian, including without limitation the Fund’s Investment Advisor (as
defined in Section 13).  The Custodian may treat any Authorized Person
as having full authority of the Fund and/or the General Partner to issue
Instructions hereunder unless the notice of authorization contains explicit
limitations as to said authority.  The Custodian shall be entitled to
rely upon the authority of Authorized Persons until it receives appropriate
written notice from the Fund to the contrary.

    

    The Fund hereby designates the Marketing
Agent (as such term is defined under an Authorized Purchaser Agreement entered
into by the General Partner on behalf of the Fund, as approved by the Custodian
(the Authorized Purchaser
Agreement)) as an
Authorized Person from whom the Custodian is hereby authorized to receive
Instructions to accept deposits of cash and securities in connection with the
purchase of Units (as such term is defined under the Authorized Purchaser
Agreement) and the distribution of cash and securities in connection with the
redemption of Units.

     

    
      
        
        

      

      
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    4.2 Form
of Instruction.  Each Instruction shall be
transmitted by such secured or authenticated electro-mechanical means as the
Custodian shall make available to the Fund from time to time unless the Fund
and/or the General Partner shall elect to transmit such Instruction in
accordance with Subsections 4.2.1 through 4.2.3 of this
Section.

    

    4.2.1 Fund
Designated Secured-Transmission Method. Instructions may be transmitted through
a secured or tested electro-mechanical means identified by the Fund, the General
Partner or by an Authorized Person entitled to give Instructions and
acknowledged and accepted by the Custodian; it being understood that such
acknowledgment shall authorize the Custodian to receive and process such means
of delivery but shall not represent a judgment by the Custodian as to the
reasonableness or security of the method determined by the Authorized
Person.

    

    4.2.2 Written
Instructions.  Instructions may be
transmitted in a writing that bears the manual signature of Authorized
Persons.

    

    4.2.3 Other
Forms of Instruction.  Instructions may also be
transmitted by another means determined by the Fund, the General Partner or
Authorized Persons and acknowledged and accepted by the Custodian (subject to
the same limits as to acknowledgements as is contained in Subsection 4.2.1,
above) including Instructions given orally or by SWIFT, telex or telefax
(whether tested or untested).

    

    When an Instruction is given by means
established under Subsections 4.2.1 through 4.2.3, it shall be the
responsibility of the Custodian to use reasonable care to adhere to any security
or other procedures established in writing between the Custodian and the
Authorized Person with respect to such means of Instruction, but such Authorized
Person shall be solely responsible for determining that the particular means
chosen is reasonable under the circumstances. Oral Instructions shall be binding
upon the Custodian only if and when the Custodian takes action with respect
thereto.  With respect to telefax instructions, the parties agree and
acknowledge that receipt of legible instructions cannot be assured, that the
Custodian cannot verify that authorized signatures on telefax instructions are
original or properly affixed, and that the Custodian shall not be liable for
losses or expenses incurred through actions taken in reliance on inaccurately
stated, illegible or unauthorized telefax instructions.  The
provisions of Section 4A of the Uniform Commercial Code as currently in effect
in the State of New York shall apply to the Fund’s transfers performed in
accordance with Instructions.  The Funds Transfer Services Schedule
(as defined in Section 13) and the Electronic and Online Services Schedule to
this Agreement shall each comprise a designation of form of a means of
delivering Instructions for purposes of this Section 4.2.

    

    4.3 Completeness
and Contents of Instructions. The Authorized Person shall be
responsible for assuring the adequacy and accuracy of
Instructions.  Particularly, upon any acquisition or disposition or
other dealing in the Fund’s Investments and upon any delivery and transfer of
any Investment or moneys, the person initiating such Instruction shall give the
Custodian an Instruction with appropriate detail, including, without
limitation:

     

    
      
        
        

      

      
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    4.3.1  The transaction date
and the date and location of settlement;

    

    4.3.2  The specification of
the type of transaction;

    

    4.3.3  A description of the
Investments or moneys in question, including, as appropriate, quantity, price
per unit, amount of money to be received or delivered and currency
information.  Where an Instruction is communicated by electronic
means, or otherwise where an Instruction contains an identifying number such as
a CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to rely on such
number as controlling notwithstanding any inconsistency contained in such
Instruction, particularly with respect to the Investment description;
and

    

    4.3.4 The name of the broker or similar
entity concerned with execution of the transaction.

    

    If the Custodian shall determine that an
Instruction is either unclear or incomplete, the Custodian may give prompt
notice of such determination to the Fund and/or the General Partner, and the
Fund and/or the General Partner shall thereupon amend or otherwise reform such
Instruction.  In such event, the Custodian shall have no obligation to
take any action in response to the Instruction initially delivered until the
redelivery of an amended or reformed Instruction.

    

    4.4 Timeliness
of Instructions.  In giving an Instruction,
the Fund and/or the General Partner shall take into consideration delays which
may occur due to the involvement of a Subcustodian or agent, differences in time
zones, and other factors particular to a given market, exchange or
issuer.  When the Custodian has established specific timing
requirements or deadlines with respect to particular classes of Instruction, or
when an Instruction is received by the Custodian at such a time that it could
not reasonably be expected to have acted on such Instruction due to time zone
differences or other factors beyond its reasonable control, the execution of any
Instruction received by the Custodian after such deadline or at such time
(including any modification or revocation of a previous Instruction) shall be at
the risk of the Fund.

    

    5. Safekeeping
of Fund Assets.  The Custodian shall hold Investments
delivered to it or Subcustodians for the Fund in accordance with the provisions
of this Section.   The Custodian shall not be responsible for (a)
the safekeeping of Investments not delivered or that are not caused to be issued
to it or its Subcustodians; (b) pre-existing faults or defects in Investments
that are delivered to the Custodian or its Subcustodians; or (c) the safekeeping
of Oil Interests and Oil Forward Contracts (each as defined in the Fund’s
prospectus).  The Custodian is hereby authorized to hold with itself
or a Subcustodian, and to record in one or more accounts, all Investments
delivered to and accepted by the Custodian, any Subcustodian or their respective
agents pursuant to an Instruction or in consequence of any corporate
action.  The Custodian shall hold Investments for the account of the
Fund and shall segregate Investments from assets belonging to the Custodian and
shall cause its Subcustodians to segregate Investments from assets belonging to
the Subcustodian in an account held for the Fund or in an account maintained by
the Subcustodian generally for non-proprietary assets of the
Custodian.

     

    
      
        
        

      

      
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    5.1 Use
of Securities Depositories. The Custodian may deposit and maintain
Investments in any Securities Depository (as defined in Section 13), either
directly or through one or more Subcustodians appointed by the
Custodian.  Investments held in a Securities Depository shall be held
(a) subject to the agreement, rules, statement of terms and conditions or other
document or conditions effective between the Securities Depository and the
Custodian or the Subcustodian, as the case may be, and (b) in an account for the
Fund or in bulk segregation in an account maintained for the non-proprietary
assets of the entity holding such Investments in the Securities
Depository.  If market practice or the rules and regulations of the
Securities Depository prevent the Custodian, the Subcustodian or any agent of
either from holding its client assets in such a separate account, the Custodian,
the Subcustodian or other agent shall as appropriate segregate such Investments
for benefit of the Fund or for the benefit of clients of the Custodian generally
on its own books.

    

    5.2 Certificated
Assets.  Investments which are
certificated may be held in registered or bearer form: (a) in the Custodian’s
vault; (b) in the vault of a Subcustodian or agent of the Custodian or a
Subcustodian; or (c) in an account maintained by the Custodian, Subcustodian or
agent at a Securities Depository; all in accordance with customary market
practice in the jurisdiction in which any Investments are
held.

    

    5.3 Registered
Assets.  Investments which are registered may be
registered in the name of the Custodian, a Subcustodian, or in the name of the
Fund or a nominee for any of the foregoing, and may be held in any manner set
forth in Section 5.2 above with or without any identification of fiduciary
capacity in such registration.

    

    5.4 Book
Entry Assets.  Investments which are
represented by book-entry may be so held in an account maintained by the
Book-entry Agent (as defined in Section 13) on behalf of the Custodian, a
Subcustodian or another agent of the Custodian, or a Securities
Depository.

    

    5.5 Replacement
of Lost Investments.  In the event of a loss of
Investments for which the Custodian is responsible under the terms of this
Agreement, the Custodian shall replace such Investment, or in the event that
such replacement cannot be effected, the Custodian shall pay to the Fund the
fair market value of such Investment based on the last available price as of the
close of business in the relevant market on the date that a claim was first made
to the Custodian with respect to such loss, or, if less, such other amount as
shall be agreed by the parties as the date for settlement.

    

    6. Administrative
Duties of the Custodian. The Custodian shall perform the
following administrative duties with respect to Investments of the
Fund.

    

    6.1 Purchase
of Investments. Pursuant to
Instructions, Investments purchased for the account of the Fund shall be paid
for (a) against delivery thereof to the Custodian or a Subcustodian, as the case
may be, either directly or through a Clearing Corporation (as defined in Section
13) or a Securities Depository (in accordance with the rules of such Securities
Depository or such Clearing Corporation), or (b) otherwise in accordance with an
Instruction, Applicable Law, generally accepted trade practices, or the terms of
the instrument representing such Investment.

     

    
      
        
        

      

      
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    6.2 Sale
of Investments.  Pursuant to Instructions,
Investments sold for the account of the Fund shall be delivered (a) against
payment therefor in cash, by check or by bank wire transfer, (b) by credit to
the account of the Custodian or the applicable Subcustodian, as the case may be,
with a Clearing Corporation or a Securities Depository (in accordance with the
rules of such Securities Depository or such Clearing Corporation), or (c)
otherwise in accordance with an Instruction, Applicable Law, generally accepted
trade practices, or the terms of the instrument representing
such  Investment.

    

    6.3 Delivery
and Receipt in Connection with Borrowings of the Fund or other Collateral and
Margin Requirements.  Pursuant to Instructions and
subject to the last sentence in Section 6.4 below, the Custodian may deliver or
receive Investments or cash of the Fund in connection with borrowings or loans
by the Fund and other collateral and margin requirements.

    

    6.4 Futures
and Over-the-Counter (OTC) Contracts.  If, pursuant to an
Instruction, the Custodian shall become a party to an agreement with the Fund
and a futures commission merchant regarding margin or a counterparty to an OTC
contract (Tri-Party
Agreement), the Custodian
shall (a) receive and retain, to the extent the same is provided to the
Custodian, confirmations or other documents evidencing the purchase or sale by
the Fund of exchange-traded futures contracts or the entering into of an option,
forward or other derivatives transaction by the Fund; (b) when required by such
Tri-Party Agreement, deposit and maintain in an account opened pursuant to such
Agreement (Margin
Account) segregated either
physically or by book-entry in a Securities Depository for the benefit of any
futures commission merchant, such Investments as the Fund shall have designated
as initial, maintenance or variation “margin” deposits or other collateral
intended to secure the Fund’s performance of its obligations under the terms of
any exchange-traded futures contracts and commodity options; and (c) thereafter
pay, release or transfer Investments into or out of the Margin Account in
accordance with the provisions of such Tri-Party Agreement. Alternatively, the
Custodian may deliver Investments, in accordance with an Instruction, to a
futures commission merchant for margin purposes or to the counterparty or its
custodian.  The Custodian shall in no event be responsible for the
acts and omissions of any futures commission merchant or the counterparty or its
custodian, to whom Investments are delivered pursuant to this Section; for the
sufficiency of Investments held in any Margin Account; for funding margin
deposits or otherwise providing Advances (as defined in Section 13) for the
purpose of margin or other collateral in any Margin Account; or, for the
performance of any terms of any exchange-traded futures contracts, commodity
options, forward contracts and other derivative transactions.  In
addition, the Custodian shall not be required to transfer margin or any other
assets of the Fund to a Margin Account if at the time of such request, such
transfer would reduce the aggregate market value of all unencumbered securities,
cash, cash equivalents and other unencumbered liquid assets of the Fund in the
custody of the Custodian to less than ten (10) percent of the then current net
asset value of the Fund.

    

    6.5 Contractual
Obligations and Similar Investments.  From time to time, the
Fund’s Investments may include Investments that are not ownership interests as
may be represented by certificate (whether registered or bearer), by entry in a
Securities Depository or by book entry agent, registrar or similar agent for
recording ownership interests in the relevant Investment.  If the Fund
shall at any time acquire such Investments, including without limitation deposit
obligations, loan participations, repurchase agreements and derivative
arrangements, the Custodian shall (a) receive and retain, to the extent the same
are provided to the Custodian, confirmations or other documents evidencing the
arrangement; and (b) perform on the Fund’s account in accordance with the terms
of the applicable arrangement, but only to the extent directed to do so by an
Instruction.   The Custodian shall have no responsibility for
agreements running to the Fund as to which it is not a party other than to
retain, to the extent the same are provided to the Custodian, documents or
copies of documents evidencing the arrangement and, in accordance with an
Instruction, to include such arrangements in reports made to the
Fund.

     

    
      
        
        

      

      
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    6.6 Exchange
of Securities.  Unless otherwise directed by
an Instruction, the Custodian shall:  (a) exchange securities held for
the account of the Fund for other securities in connection with any
reorganization, recapitalization, conversion, split-up, change of par value of
shares or similar event, and (b) deposit any such securities in accordance with
the terms of any reorganization or protective plan.

    

    6.7 Surrender
of Securities.  Unless otherwise directed by
an Instruction, the Custodian may surrender securities: (a) in temporary form
for definitive securities; (b) for transfer into the name of an entity allowable
under Section 5.3; and (c) for a different number of certificates or instruments
representing the same number of shares or the same principal amount of
indebtedness.

    

    6.8 Rights,
Warrants, Etc.  Pursuant to an Instruction,
the Custodian shall (a) deliver warrants, puts, calls, rights or similar
securities to the issuer or trustee thereof, or to any agent of such issuer or
trustee, for purposes of exercising such rights or selling such securities, and
(b) deposit securities in response to any invitation for the tender
thereof.

    

    6.9 Mandatory
Corporate Actions.  Unless otherwise directed by
an Instruction, the Custodian shall: (a) comply with the terms of all mandatory
or compulsory exchanges, calls, tenders, redemptions or similar rights of
securities ownership affecting securities held on the Fund’s account and
promptly notify the Fund of such action, and (b) collect all stock dividends,
rights and other items of like nature with respect to such
securities.

    

    6.10 Income
Collection.  Unless otherwise directed by
an Instruction, the Custodian shall collect any amount due and payable to the
Fund with respect to Investments and promptly credit the amount collected to a
Principal Account or an Agency Account (each defined in Section 13); provided,
however, that the Custodian shall not be responsible for: (a) the collection of
amounts due and payable with respect to Investments that are in default, or (b)
the collection of cash or share entitlements with respect to Investments that
are not  registered in the name of the Custodian or its
Subcustodians.  The Custodian is hereby authorized to endorse and
deliver any instrument required to be so endorsed and delivered to effect
collection of any amount due and payable to the Fund with respect to
Investments.

    

    6.11 Ownership
Certificates and Disclosure of the Fund’s Interest.  The Custodian is hereby
authorized to execute on behalf of the Fund ownership certificates, affidavits
or other disclosure required under Applicable Law or established market practice
in connection with the receipt of income, capital gains or other payments by the
Fund with respect to Investments, or in connection with the sale, purchase or
ownership of Investments.

     

    
      
        
        

      

      
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    With respect to securities issued in the
United States of America, the Custodian [   ] may [
X  ] may not release the identity of the Fund to an issuer which
requests such information pursuant to the Shareholder Communications Act of 1985
for the specific purpose of direct communications between such issuer and the
Fund.  IF NO BOX IS CHECKED, THE CUSTODIAN SHALL
RELEASE SUCH INFORMATION
UNTIL IT RECEIVES CONTRARY INSTRUCTIONS FROM THE FUND.  With respect
to securities issued outside of the United States of America, information shall
be released in accordance with law or custom of the particular country in which
such security is located.

    

    6.12 Proxy
Materials. The Custodian
shall deliver, or cause to be delivered, to the Fund proxy forms, notices of
meeting, and any other notices or announcements materially affecting or relating
to Investments received by the Custodian or any nominee.

    

    6.13 Taxes.
The Custodian shall, where
applicable, assist the Fund in the reclamation of taxes withheld on dividends
and interest payments received by the Fund.  In the performance of its
duties with respect to tax withholding and reclamation, the Custodian shall be
entitled to rely on the advice of counsel and upon information and advice
regarding the Fund ’s tax status that is received from or on behalf of the Fund
without duty of separate inquiry.

    

    6.14 Other
Dealings.  The
Custodian shall otherwise act as directed by Instructions, including without
limitation effecting the free payments of moneys or the free delivery of
securities, provided that such Instruction shall indicate the purpose of such
payment or delivery and that the Custodian shall record the party to whom such
payment or delivery is made.

    

    The Custodian shall attend to all
nondiscretionary details in connection with the sale or purchase or other
administration of Investments, except as otherwise directed by an Instruction,
and may make payments to itself or others for minor expenses of administering
Investments under this Agreement; provided that the Fund shall have the right to
request an accounting with respect to such expenses.

    

    In fulfilling the duties set forth in
Sections 6.6 through 6.10 above, the Custodian shall provide to the Fund all
material information pertaining to a corporate action which the Custodian
actually receives; provided that the Custodian shall not be responsible for the
completeness or accuracy of such information. Information relative to any
pending corporate action made available to the Fund via any of the services
described in the Electronic and Online Services Schedule shall constitute the
delivery of such information by the Custodian hereunder.  Any advance
credit of cash or shares expected to be received as a result of any corporate
action shall be subject to actual collection and may, when the Custodian deems
collection unlikely, be reversed by the Custodian.

    

    The Custodian may at any time or times
in its discretion appoint (and may at any time remove) agents (other than
Subcustodians) to carry out some or all of the administrative provisions of this
Agreement (Agents), provided, however, that the
appointment of such agent shall not relieve the Custodian of its administrative
obligations under this Agreement.

     

    
      
        
        

      

      
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    7. Cash
Accounts, Deposits and Money Movements.  Subject to the terms and conditions set
forth in this Section 7, the Fund and the General Partner each hereby authorizes
the Custodian to open and maintain, with itself or with Subcustodians, cash
accounts in United States Dollars, in such other currencies as are the
currencies of the countries in which the Fund maintains Investments or in such
other currencies as the Fund shall from time to time request by
Instruction.

    

    7.1 Types
of Cash Accounts.  Cash accounts opened on the
books of the Custodian (Principal
Accounts) shall be opened
in the name of the Fund.  Such accounts collectively shall be a
deposit obligation of the Custodian and shall be subject to the terms of this
Section 7 and the general liability provisions contained in Section
9.  Cash accounts opened on the books of a Subcustodian may be opened
in the name of the Fund or the Custodian or in the name of the Custodian for its
customers generally (Agency
Accounts). Such deposits
shall be obligations of the Subcustodian and shall be treated as an Investment
of the Fund.  Accordingly, the Custodian shall be responsible for
exercising reasonable care in the administration of such accounts but shall not
be liable for their repayment in the event such Subcustodian, by reason of its
bankruptcy, insolvency or otherwise, fails to make
repayment.

    

    7.2 Payments
and Credits with Respect to the Cash Accounts.  The Custodian shall make
payments from or deposits to any of said accounts in the course of carrying out
its administrative duties, including but not limited to income collection with
respect to the Fund’s Investments, and otherwise in accordance with
Instructions.  The Custodian and its Subcustodians shall be required
to credit amounts to the cash accounts only when moneys are actually received in
cleared funds in accordance with banking practice in the country and currency of
deposit.  Any credit made to any Principal or Agency Account before
actual receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.

    

    7.3 Currency
and Related Risks.   The Fund and the
General Partner each bears risks of holding or transacting in any currency,
including any mark to market exposure associated with a foreign exchange
transaction undertaken with the Custodian.   The Custodian shall
not be liable for any loss or damage arising from the applicability of any law
or regulation now or hereafter in effect, or from the occurrence of any event,
which may delay or affect the transferability, convertibility or availability of
any currency in the country (a) in which such Principal or Agency Accounts are
maintained or (b) in which such currency is issued, and in no event shall the
Custodian be obligated to make payment of a deposit denominated in a currency
during the period during which its transferability, convertibility or
availability has been affected by any such law, regulation or
event.  Without limiting the generality of the foregoing, neither the
Custodian nor any Subcustodian shall be required to repay any deposit made at a
foreign branch of either the Custodian or Subcustodian if such branch cannot
repay the deposit due to a cause for which the Custodian would not be
responsible in accordance with the terms of Section 9 of this Agreement unless
the Custodian or such Subcustodian expressly agrees in writing to repay the
deposit under such circumstances.  All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Fund shall be for
the account of the Fund.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    7.4 Foreign
Exchange Transactions. The Custodian shall, subject to the
terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Fund with such currency brokers or banking institutions,
including Subcustodians, as the Fund may direct pursuant to
Instructions.  The Custodian may act as principal in  any
foreign exchange transaction with the Fund in accordance with Section 7.4.2 of
this Agreement.   The obligations of the Custodian in respect of
all foreign exchange transactions (whether or not the Custodian shall act as
principal in such transaction) shall be contingent on the free, unencumbered
transferability of the currency transacted on the actual settlement date of the
transaction.

    

    7.4.1 Third
Party Foreign Exchange Transactions.  The Custodian shall process
foreign exchange transactions (including without limitation contracts, futures,
options, and options on futures), where any third party acts as principal
counterparty to the Fund on the same basis it performs duties as agent for the
Fund with respect to any other of the Fund’s Investments. Accordingly, the
Custodian shall only be responsible for delivering or receiving currency on
behalf of the Fund in respect of such contracts pursuant to Instructions. The
Custodian shall not be responsible for the failure of any counterparty
(including any Subcustodian) in such agency transaction to perform its
obligations thereunder. The Custodian (a) shall transmit cash and Instructions
to and from the currency broker or banking institution with which a foreign
exchange contract or option has been executed pursuant hereto, (b) may make free
outgoing payments of cash in the form of United States Dollars or foreign
currency without receiving confirmation of a foreign exchange contract or option
or confirmation that the countervalue currency completing the foreign exchange
contract has been delivered or received or that the option has been delivered or
received, and (c) shall hold all confirmations, certificates and other documents
and agreements received by the Custodian and evidencing or relating to such
foreign exchange transactions in safekeeping.  The Fund accepts full
responsibility for its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and understands that
the Fund shall be responsible for any and all costs and interest charges which
may be incurred by the Fund or the Custodian as a result of the failure or delay
of third parties to deliver foreign exchange.

    

    7.4.2 Foreign
Exchange with the Custodian as Principal. The Custodian may as principal undertake
foreign exchange transactions with the Fund as the Custodian and the Fund may
agree from time to time.  In such event, the foreign exchange
transaction will be performed in accordance with the particular agreement of the
parties, or in the event a principal foreign exchange transaction is initiated
by an Instruction in the absence of specific agreement, such transaction will be
performed in accordance with the usual commercial terms of the Custodian.
 In the event that the Fund defaults on
the settlement of any such foreign exchange transaction with the Custodian, the
Fund shall be liable for contracted currency of the transaction together with
any mark to market exposure associated with the replacement purchase of the
contracted currency undertaken with the Custodian.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    7.5 Delays.  If no event of Force Majeure
shall have occurred and be continuing and in the event that a delay shall have
been caused by the negligence or willful misconduct of the Custodian in carrying
out an Instruction to credit or transfer cash, the Custodian shall be liable to
the Fund:  (a) with respect to Principal Accounts, for interest to be
calculated at the rate customarily paid on such deposit and currency by the
Custodian on overnight deposits at the time the delay occurs for the period from
the day when the transfer should have been effected until the day it is in fact
effected; and, (b) with respect to Agency Accounts, for interest to be
calculated at the rate customarily paid on such deposit and currency by the
Subcustodian on overnight deposits at the time the delay occurs for the period
from the day when the transfer should have been effected until the day it is in
fact effected. The Custodian shall not be liable for delays in carrying out such
Instructions to transfer cash which are not due to the Custodian’s own
negligence or willful misconduct.

    

    7.6 Advances. If, for any reason in connection with
this Agreement the Custodian or any Subcustodian makes an Advance to facilitate
settlement or otherwise for the benefit of the Fund (whether or not any
Principal or Agency Account shall be overdrawn either during, or at the end of,
any Business Day (defined as any day other than a day on which the New York
Mercantile Exchange or the NYSE Arca, Inc. is closed for regular trading)), the
Fund and the General Partner each hereby does:

    

    7.6.1  acknowledge that the
Fund shall have no right, title or interest in or to any Investments purchased
with such Advance or proceeds of such Investments, and that any credit to an
account of Fund shall be provisional, until: (a) the debit of the Principal or
Agency Account by Custodian for an amount equal to Advance Costs; and/or (b) if
such debit produces an overdraft in such account, reimbursement to the Custodian
or  Subcustodian for the amount of such overdraft;

    

    7.6.2  acknowledge that the
Custodian has an automatically perfected statutory security interest in Inv
estments purchased with any such Advance (as defined in Section 13) pursuant to
Section 9-206 of the Uniform Commercial Code as in effect in the State of
New York from time to time;

    

    7.6.3  in addition, in order
to secure the obligations of the Fund to pay or perform any and all obligations
of the Fund pursuant to this Agreement, including without limitation to repay
any Advance made pursuant to this Agreement, grant to the Custodian a security
interest in all Investments and proceeds thereof (as defined in the Uniform
Commercial Code as currently in effect in the State of New York); and agree to
take, and agree that the Custodian may take, in respect of the security interest
referenced above, any further actions that the Custodian may reasonably
require.

    

    7.7 Custodian’s
Rights  Neither
the Custodian nor any Subcustodian shall be obligated to make any Advance or to
allow an Advance to occur to the Fund, and in the event that the Custodian or
any Subcustodian does make or allow an Advance, any such Advance and any
transaction giving rise to such Advance shall be for the account and risk of the
Fund and shall not be deemed to be a transaction undertaken by the Custodian for
its own account and risk.  If such Advance shall have been made or
allowed by a Subcustodian or any other person, the Custodian may assign all or
part of its security interest referenced above and any other rights granted to
the Custodian hereunder to such Subcustodian or other person.  If the
Fund shall fail to repay the Advance Costs when due, the Custodian or its
assignee, as the case may be, shall be entitled to a portion of the available
cash balance in any Agency or Principal Account equal to such Advance Costs, and
the Fund authorizes the Custodian, on behalf of the Fund, to pay an amount equal
to such Advance Costs irrevocably to such Subcustodian or other person, and to
dispose of any property in such Account to the extent necessary to make such
payment.  Any Investments and funds credited to accounts subject to
this Agreement created pursuant hereto shall be treated as financial assets
credited to securities accounts under Articles 8 and 9 of the Uniform Commercial
Code as in effect in the State of New York from time to
time.  Accordingly, the Custodian and any Subcustodian shall have the
rights and benefits of a secured creditor that is a securities intermediary
under such Articles 8 and 9.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    7.8 Integrated
Account.  For purposes hereof,
deposits maintained in all Principal Accounts (whether or not denominated in
United States Dollars) shall collectively constitute a single and indivisible
current account with respect to the Fund’s obligations to the Custodian or its
assignee, and balances in the Principal Accounts shall be available for
satisfaction of the Fund’s obligations under this Section 7.  The
Custodian shall further have a right of offset against the balances in any
Agency Account maintained hereunder to the extent that the aggregate of all
Principal Accounts is overdrawn.

    

    8. Subcustodians
and Securities Depositories.  Subject to the provisions
hereinafter set forth in this Section 8, the Fund and the General Partner each
hereby authorizes the Custodian to utilize Securities Depositories to act on
behalf of the Fund and to appoint from time to time and to utilize
Subcustodians. With respect to securities and funds held by a Subcustodian,
either directly or indirectly (including by a Securities Depository or Clearing
Corporation), notwithstanding any provisions of this Agreement to the contrary,
payment for securities purchased and delivery of securities sold may be made
prior to receipt of securities or payment, respectively, and securities or
payment may be received in a form, in accordance with (a) governmental
regulations, (b) rules of Securities Depositories and the Clearing Corporations,
(c) generally accepted trade practice in the applicable local market, (d) the
terms and characteristics of the particular Investment, or (e) the terms of the
Instructions.

    

    8.1 Domestic
Subcustodians and Securities Depositories.  The Custodian may deposit
and/or maintain, either directly or through one or more agents appointed by the
Custodian, Investments of the Fund in any Securities Depository in the United
States of America, including The Depository Trust Company, provided such
Securities Depository meets applicable requirements of the Federal Reserve Bank
or of the Securities and Exchange Commission. The Custodian may, at any time and
from time to time, appoint any bank meeting the requirements of a custodian and
the rules and regulations thereunder, to act on behalf of the Fund as a
Subcustodian for purposes of holding Investments of the Fund in the United
States.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    8.2 Responsibility
for Subcustodians.  The Custodian shall be liable to the
Fund for any loss or damage to the Fund caused by or resulting from the acts or
omissions of any domestic Subcustodian to the extent that such acts or omissions
would be deemed to be negligence, gross negligence or willful misconduct in
accordance with the terms of the relevant subcustodian agreement under the laws,
circumstances and practices prevailing in the place where the act or omission
occurred.

    

    9. Responsibility
of the Custodian.  In performing its duties and
obligations hereunder, the Custodian shall use reasonable care under the facts
and circumstances prevailing in the market where performance is
effected.  Subject to the specific provisions of this Section, the
Custodian shall be liable for any direct damage incurred by the Fund in
consequence of the Custodian’s negligence, bad faith or willful
misconduct.  In no event shall the Custodian be liable hereunder for
any special, indirect, punitive or consequential damages arising out of,
pursuant to or in connection with this Agreement even if the Custodian has been
advised of the possibility of such damages.  It is agreed that the
Custodian shall have no duty to assess the risks inherent in the Fund’s
Investments or to provide investment advice with respect to such Investments and
that the Fund as principal shall bear any risks attendant to particular
Investments such as failure of a counterparty or issuer.

    

    9.1 Limitations
of Performance.  The Custodian shall not be
responsible under this Agreement for any failure to perform its duties, and
shall not be liable hereunder for any loss or damage in association with such
failure to perform, for or in consequence of the following
causes:

    

    9.1.1 Force
Majeure. Force
Majeure shall mean any
circumstance or event which is beyond the reasonable control of the Custodian, a
Subcustodian or any agent of the Custodian or a Subcustodian and which adversely
affects the performance by the Custodian of its obligations hereunder, by the
Subcustodian of its obligations under its Subcustody Agreement or by any other
agent of the Custodian or the Subcustodian, including any event caused by,
arising out of or involving (a) an act of God, (b) accident, fire, water damage
or explosion, (c) any computer, system or other equipment failure or malfunction
caused by any computer virus or the malfunction or failure of any communications
medium, (d) any interruption of the power supply or other utility service, (e)
any strike or other work stoppage, whether partial or total, (f) any delay or
disruption resulting from or reflecting the occurrence of any Sovereign Risk,
(g) any disruption of, or suspension of trading in, the securities, commodities
or foreign exchange markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the transferability of
a currency or a currency position on the actual settlement date of a foreign
exchange transaction, whether or not resulting from or reflecting the occurrence
of any Sovereign Risk, or (i) any other cause similarly beyond the reasonable
control of the Custodian.

    

    9.1.2  Sovereign
Risk. Sovereign
Risk shall mean, in respect
of any jurisdiction, including the United States of America, where Investments
are acquired or held hereunder or under a subcustody agreement, (a) any act of
war, terrorism, riot, insurrection or civil commotion, (b) the imposition of any
investment, repatriation or exchange control restrictions by any Governmental
Authority, (c) the confiscation, expropriation or nationalization of any
Investments by any Governmental Authority, whether de facto or de jure, (d) any
devaluation or revaluation of the currency, (e) the imposition of taxes, levies
or other charges affecting Investments, (f) any change in the Applicable Law, or
(g) any other economic or political risk incurred or
experienced.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    9.2 Limitations on
Liability.  The
Custodian shall not be liable for any loss, claim, damage or other liability
arising from the following causes:

    

    9.2.1 Failure
of Third Parties.  The failure of any third
party including:  (a) the General Partner; (b) any futures commission
merchant(s); (c) any issuer of Investments or book-entry or other agent of and
issuer; (d) any counterparty with respect to any Investment, including any
issuer of exchange-traded or other futures, option, derivative or commodities
contract; (e) failure of an Investment Advisor or other agent of the Fund; or
(f) failure of other third parties similarly beyond the control or choice of the
Custodian.

    

    9.2.2  Information
Sources.  The
Custodian may rely upon information received from issuers of Investments or
agents of such issuers, information received from Subcustodians and from other
commercially reasonable sources such as commercial data bases and the like, but
shall not be responsible for specific inaccuracies in
such  information, provided that the Custodian has relied upon such
information in good faith, or for the failure of any commercially reasonable
information provider.

    

    9.2.3 Reliance
on Instruction.  Action by the Custodian or
the Subcustodian in accordance with an Instruction, even when such action
conflicts with, or is contrary to any provision of, the Fund’s or the General
Partner’s limited partnership agreement, certificate of incorporation or
by-laws, Applicable Law, or actions by the directors or unitholders of the Fund
or the General Partner.

    

    9.2.4  Restricted
Securities.   The limitations
inherent in the rights, transferability or similar investment characteristics of
a given Investment of the Fund.

    

    10. Indemnification.

    

    10.1 The Fund and the General Partner each
hereby indemnifies the Custodian and each Subcustodian, and their respective
agents, nominees and the partners, employees, officers and directors, and agrees
to hold each of them harmless from and against all claims and liabilities,
including counsel fees and taxes, reasonably incurred or assessed against any of
them in connection with the performance of this Agreement and any
Instruction.

    

    10.2 The Custodian hereby indemnifies the
Fund and the General Partner, and their respective agents, nominees and the
partners, employees, officers and directors, and agrees to hold each of them
harmless from and against all claims and liabilities, including counsel fees and
taxes, reasonably incurred or assessed against any of them as a direct result of
the Custodian’s negligence, willful misconduct or bad faith in its performance
of this Agreement and any Instruction.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    11. Reports
and Records.  The
Custodian shall:

    

    11.1 create and maintain records relating to
the performance of its obligations under this Agreement;

    

    11.2 make available to the Fund and/or the
General Partner, its auditors, agents and employees, upon reasonable request and
during normal business hours of the Custodian, all records maintained by the
Custodian pursuant to Section 11.1 above, subject, however, to all reasonable
security requirements of the Custodian then applicable to the records of its
custody customers generally; and

    

    11.3 make available to the Fund all
Electronic Reports (as defined in Section 13); it being understood that the
Custodian shall not be liable hereunder for the inaccuracy or incompleteness
thereof or for errors in any information included therein.

    

    The Fund and the General Partner shall
examine all records, howsoever produced or transmitted, promptly upon receipt
thereof and notify the Custodian promptly of any discrepancy or error
therein.  Unless the Fund or the General Partner delivers written
notice of any such discrepancy or error within a reasonable time after its
receipt thereof, such records shall be deemed to be true and
accurate.   It is understood that the Custodian now obtains and
will in the future obtain information on the value of assets from outside
sources which may be utilized in certain reports made available to the Fund and
the General Partner. The Custodian deems such sources to be reliable but it is
acknowledged and agreed that the Custodian does not verify nor represent nor
warrant as to the accuracy or completeness of such information and accordingly
shall be without liability in selecting and using such sources and furnishing
such information.

    

    12. Miscellaneous.

    

    12.1 Proxies,
etc.  The Fund
and/or the General Partner will promptly execute and deliver, upon request, such
proxies, powers of attorney or other instruments as may be necessary or
desirable for the Custodian to provide, or to cause any Subcustodian to provide,
custody services.

    

    12.2 Entire
Agreement.  This
Agreement (including any schedules and exhibits attached hereto and thereto)
contains all of the agreements among the parties hereto and thereto with respect
to the transactions contemplated hereby and thereby and supersedes all prior
agreements or understandings, whether written or oral, among the parties with
respect thereto.

    

    12.3 Amendment
and Modification. This
Agreement may be amended, modified or supplemented only by a written instrument
executed by all parties hereto.

    

    12.4 Successors
and Assigns; Assignment.
All the terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. This Agreement shall not be assigned by any party without the prior
written consent of the other parties and any assignment without such consent
shall be null and void.

     

    
      
        
        

      

      
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    12.5 Waiver
of Compliance. Except as
otherwise provided in this Agreement, 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 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 or breach.

    

    12.6 Severability. The parties hereto desire that the
provisions of this Agreement be enforced to the fullest extent permissible under
the law and public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, in the event that any provision of this Agreement would be
held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of such provision in any other jurisdiction.
Notwithstanding the foregoing, if such provision could be more narrowly drawn so
as not to be invalid, prohibited or unenforceable in such jurisdiction, it
shall, as to such jurisdiction, be so narrowly drawn, without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

    

    12.7 Notices. All notices, waivers, or other
communications pursuant to this Agreement shall be in writing and shall be
deemed to be sufficient if delivered personally, by facsimile (and, if sent by
facsimile, followed by delivery by nationally-recognized express courier), sent
by nationally-recognized express courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):

    

    
      	
            	
              (1)

            	
              if to General Partner,
      to:

            

    

    United States Commodity Funds
LLC

    c/o Nicholas D.
Gerber

    P.O. Box 6919

    Moraga,
CA  94570

    

    
      	
            	
              (2)

            	
              if to the Custodian,
      to:

            

    

    Brown Brothers Harriman &
Co.

    40 Water Street

    Boston, Massachusetts
02109

    Attn:  Manager, Securities
Department

    
      	
            	
              Telephone:

            	
              (617)
    772-1818

            

    

    
      	
            	
              Facsimile:

            	
              (617)
    772-2263,

            

    

    

    or such other address as the Fund or the
Custodian may have designated in writing to the other.

    

    All such notices and other
communications shall be deemed to have been delivered and received (i) in the
case of personal delivery or delivery by a nationally-recognized express
courier, on the date of such delivery if delivered during business hours on a
Business Day or, if not delivered during business hours on a Business Day, the
first Business Day thereafter, and (ii) in the case of mailing or delivery by
facsimile, upon receipt by the intended party.

     

    
      
        
        

      

      
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    12.8 Governing
Law; Jurisdiction.

    

    12.8.1 All questions concerning the
construction, interpretation and validity of this Agreement shall be governed by
and construed and enforced in accordance with the domestic laws of the State of
New York, without giving effect to any choice or conflict of law provision or
rule (whether in the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York. In furtherance of the foregoing, the internal law of the State of New
York will control the interpretation and construction of this Agreement, even if
under such jurisdiction’s choice of law or conflict of law analysis, the
substantive law of some other jurisdiction would ordinarily or necessarily
apply.

    

    12.8.2 Each party irrevocably consents and
agrees, for the benefit of the other parties, that any legal action, suit or
proceeding against it with respect to its obligations, liabilities or any other
matter arising out of or in connection with this Agreement or any related
agreement may be brought in the courts of the State of New York and hereby
irrevocably consents and submits to the non-exclusive jurisdiction of each such
court in personam, generally and unconditionally with respect to any action,
suit or proceeding for itself and in respect of its properties, assets and
revenues. Each party irrevocably waives any immunity to jurisdiction to which it
may otherwise be entitled or become entitled (including sovereign immunity,
immunity to pre-judgment attachment and execution) in any legal suit, action or
proceeding against it arising out of or based on this Agreement or any related
agreement or the transactions contemplated hereby or thereby which is instituted
in any court of the State of New York.

    

    The provisions of this Section 12.8
shall survive any termination of this Agreement, in whole or in
part.

    

    12.9 No
Partnership.  The
Custodian acts as an independent contractor with respect to the services
provided under this Agreement.  The terms and conditions of this
Agreement do not create a partnership relationship between the Custodian and the
General Partner or between the Custodian and the Fund.  Each of the
General Partner and the Fund acknowledges that the Custodian may enter into
similar agreements with others without the consent of the General Partner or the
Fund.

    

    12.10 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.

    

    12.11 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.

    

    12.12 Counterparts;
Facsimile Signatures. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.  Facsimile counterpart signatures to this Agreement shall
be acceptable and binding.

     

    
      
        
        

      

      
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    12.13 Other
Usages. The following
usages shall apply in interpreting this Agreement: (i) references to a
governmental or quasi-governmental 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.”

    

    12.14 Confidentiality.  The parties hereto agree
that each shall treat confidentially the terms and conditions of this Agreement
and all information provided by each party to the other regarding its business
and operations.  All confidential information provided by a party
hereto shall be used by the other party hereto solely for the purpose of
rendering or obtaining services pursuant to this Agreement and, except as may be
required in carrying out this Agreement, shall not be disclosed to any third
party without the prior consent of such providing party.  The
foregoing shall not apply to any information that is publicly available when
provided or thereafter becomes publicly available other than through a breach of
this Agreement, or that is required to be disclosed by or to any bank examiner
of the Custodian or any Subcustodian, any Regulatory Authority, any auditor of
the parties hereto, or by judicial or administrative process or otherwise by
Applicable Law.

    

    12.15 Counsel.  In fulfilling its duties
hereunder, the Custodian shall be entitled to receive and act upon the advice of
(i) counsel regularly retained by the Custodian in respect of such matters, (ii)
counsel for the Fund or (iii) such counsel as the Fund, the General Partner and
the Custodian may agree upon, with respect to all matters.  The
Custodian shall not be considered to have engaged in any misconduct or to have
acted negligently when soliciting and following such advice.

    

    12.16 Conflict.  Nothing contained in this
Agreement shall prevent the Custodian and its associates from (i) dealing as a
principal or an intermediary in the sale, purchase or loan of the Fund’s
Investments to, or from the Custodian or its associates; (ii) acting as a
custodian, a subcustodian, a trustee, an agent, securities dealer, an investment
manager or in any other capacity for any other client; or (iii) buying, holding,
lending, and dealing in any way in any assets for the benefit of its own
account, for the account of any other client, or for the account of the
Fund.

    

    12.17 Privacy.  In the course of carrying
out its obligations under this Agreement, each party shall maintain physical,
procedural and/or electronic safeguards reasonably designed to protect
information regarding the Fund and its investors that such party has obtained or
to which such party has gained access.

    

    13. Definitions.  The following defined terms
will have the respective meanings set forth below.

    

    13.1 Advance(s) shall mean any extension of credit by
or through the Custodian or by or through any Subcustodian and shall include,
without limitation, amounts due to the Custodian as the principal counterparty
to any foreign exchange transaction with the Fund as described in Section 7.4.2
hereof, or paid to third parties for account of the Fund or in discharge of any
expense, tax or other item payable by the Fund.

     

    
      
        
        

      

      
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    13.2 Advance
Costs shall mean any
Advance, interest on the Advance and any related expenses, including without
limitation any mark to market loss of the Custodian or Subcustodian on any
Investment to which Section 7.6.1 applies.

    

    13.3 Agency
Account(s) shall mean any
deposit account opened on the books of a Subcustodian or other banking
institution in accordance with Section 7.1.

    

    13.4 Agent(s) shall have the meaning set forth in the
last sentence of Section 6.

    

    13.5 Applicable
Law shall mean with respect
to each jurisdiction, all (a) laws, statutes, treaties, regulations, guidelines
(or their equivalents); (b) orders, interpretations, licenses and permits; and
(c) judgments, decrees, injunctions, writs, orders and similar actions by a
court of competent jurisdiction; compliance with which is required or
customarily observed in such jurisdiction.

    

    13.6 Authorized
Person(s) shall mean any
person or entity authorized to give Instructions on behalf of the Fund and/or
the General Partner in accordance with Section 4.1.

    

    13.7 Book-entry
Agent shall mean an entity
acting as agent for the issuer of Investments for purposes of recording
ownership or similar entitlement to Investments, including without limitation a
transfer agent or registrar.

    

    13.8 Business
Day shall have the meaning
set forth in Section 7.6 hereof.

    

    13.9 Clearing
Corporation shall mean any
entity or system established for purposes of providing securities settlement and
movement and associated  functions for a given
market.

    

    13.10 Electronic
and Online Services Schedule shall mean any separate agreement
entered into among the Custodian, the General Partner and the Fund or its
authorized representative with respect to certain matters concerning certain
electronic and online services as described therein and as may be made available
from time to time by the Custodian to the Fund.

    

    13.11 Electronic
Reports shall mean any
reports prepared by the Custodian and remitted to the Fund, the General Partner
or its authorized representative via the internet or electronic
mail.

    

    13.12 Funds
Transfer Services Schedule
shall mean any separate agreement entered into among the Custodian, the General
Partner and the Fund or its authorized representative with respect to certain
matters concerning the processing of payment orders from Principal Accounts of
the Fund.

    

    13.13 Instruction(s) shall have the meaning assigned in
Section 4.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    13.14 Investment
Advisor shall mean any
person or entity who is an Authorized Person to give Instructions with respect
to the investment and reinvestment of the Fund’s
Investments.

    

    13.15 Investment(s) shall mean any investment asset of the
Fund issued in the United States of America, including without limitation:
securities, bonds, notes, and debentures as well as receivables, derivatives,
contractual rights or entitlements and other intangible assets, but excluding
Oil Forward Contracts and Oil Interests (each as defined in the Fund’s
prospectus).

    

    13.16 Margin
Account shall have the
meaning set forth in Section 6.4 hereof.

    

    13.17 Principal
Account(s)  shall
mean deposit accounts of the Fund carried on the books of BBH&Co. as
principal in accordance with Section 7.

    

    13.18 Safekeeping
Account shall mean an
account established on the books of the Custodian or any Subcustodian for
purposes of segregating the interests of the Fund (or clients of the Custodian
or Subcustodian) from the assets of the Custodian or any
Subcustodian.

    

    13.19 Securities
Depository shall mean a
central or book entry system or agency established under Applicable Law for
purposes of recording the ownership and/or entitlement to investment securities
for a given market.

    

    13.20 Subcustodian(s) shall mean each bank appointed by the
Custodian pursuant to Section 8 hereof, but shall not include Securities
Depositories.

    

    13.21 Tri-Party
Agreement shall have the
meaning set forth in Section 6.4 hereof.

    

    14. Compensation.  The Fund and the General
Partner agree to pay to the Custodian (a) a fee in an amount set forth in the
fee letter among the Fund, the General Partner and the Custodian in effect on
the date hereof or as amended from time to time, and (b) all reasonable
out-of-pocket expenses incurred by the Custodian, including the fees and
expenses of all Subcustodians, and payable from time to time.  Amounts
payable by the Fund under and pursuant to this Section 14 shall be payable by
wire transfer to the Custodian at BBH&Co. in New York, New
York.

    

    15. Termination.  This Agreement may be
terminated by either party in accordance with the provisions of this
Section.  The provisions of this Agreement and any other rights or
obligations incurred or accrued by any party hereto prior to termination of this
Agreement shall survive any termination of this Agreement.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    15.1 Term,
Notice and Effect.  This Agreement shall have an
initial term of two (2) years from the date hereof. Thereafter, this Agreement
shall automatically renew for successive one (1) year periods unless any party
terminates this Agreement by providing written notice no later than seventy-five
(75) days prior to the expiration of the applicable term to the other parties at
their address set forth herein.  Upon the completion of the initial
term, either the Custodian, on the one hand, or the General Partner, on the
other hand, may elect to terminate this Agreement at any time by delivering 90
days notice thereof to the other party.  

    

    15.2 Successor
Custodian.  In the event of the
appointment of a successor custodian, it is agreed that the Investments of the
Fund held by the Custodian or any Subcustodian shall be delivered to the
successor Custodian in accordance with reasonable Instructions.  The
Custodian agrees to cooperate with the Fund in the execution of documents and
performance of other actions necessary or desirable in order to facilitate the
succession of the new custodian.  If no successor custodian shall be
appointed, the Custodian shall in like manner transfer the Fund’s Investments in
accordance with Instructions.

    

    15.3 Delayed
Succession.  If
no Instruction has been given as of the effective date of termination, the
Custodian may at any time on or after such termination date and upon ten (10)
consecutive calendar days written notice to the Fund and the General Partner
either (a) deliver the Investments of the Fund held hereunder to the Fund at the
address designated for receipt of notices hereunder; or (b) deliver any
Investments held hereunder to a bank or trust company having a capitalization of
$50,000,000 equivalent and operating under the Applicable Law of the
jurisdiction where such Investments are located, such delivery to be at the risk
of the Fund.  In the event that Investments or moneys of the Fund
remain in the custody of the Custodian or its Subcustodians after the date of
termination owing to the failure of the Fund to issue Instructions with respect
to their disposition or owing to the fact that such disposition could not be
accomplished in accordance with such Instructions despite diligent efforts of
the Custodian, the Custodian shall be entitled to compensation for its services
with respect to such Investments and moneys during such period as the Custodian
or its Subcustodians retain possession of such items  and the
provisions of this Agreement shall remain in full force and effect until
disposition in accordance with this Section is accomplished.

    

    The undersigned acknowledges that (I/we)
have received a copy of this document.

     

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, each of the parties
hereto has caused this Agreement to be duly executed as of the date first above
written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  BROWN BROTHERS HARRIMAN &
      CO.

                                
	 
      	  
      	 
      
	
                                  By:

                                	                 
      	
                                   

                                
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  UNITED STATES SHORT OIL FUND,
      LP

                                
	
                                       By:

                                	
                                  United States Commodity Funds
      LLC

                                	 
      
	 
      	 
      	 
      
	
                                  By:

                                	          
      	
                                   

                                
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  UNITED STATES COMMODITY FUNDS
      LLC

                                
	 
      	 
      	 
      
	
                                  By:

                                	               
      	
                                   

                                
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    

    FUNDS TRANSFER SERVICES
SCHEDULE

    

    Execution of
Payment Orders.  Brown Brothers Harriman
& Co. (the Custodian) is hereby instructed by United States Short Oil Fund,
LP (the Fund) and United States Commodity Funds LLC (the General Partner) to
execute each payment order, whether denominated in United States Dollars or
other applicable currencies, received by the Custodian in the Fund’s name as
sender and authorized and confirmed by an Authorized Person as defined in a
Custodian Agreement dated as of ___________ by and among the Custodian, the
General Partner and the Fund, as amended or restated from time thereafter (the
Agreement), provided that the Fund has sufficient available funds on deposit in
a Principal Account as defined in the Agreement and provided that the order (i)
is received by the Custodian in the manner specified in this Funds Transfer
Services Schedule or any amendment hereafter; (ii) complies with any written
instructions and restrictions of the Fund as set forth in this Funds Transfer
Services Schedule or any amendment hereafter; (iii) is authorized by the Fund or
is verified by the Custodian in compliance with a security procedure set forth
in Paragraph 2 below for verifying the authenticity of a funds transfer
communication sent to the Custodian in the name of the Fund or for the detection
of errors set forth in any such communication; and (iv) contains sufficient data
to enable the Custodian to process such transfer.

    

    Security
Procedure.  The
Fund and the General Partner hereby elect to use the procedure selected below as
its security procedure (the Security Procedure). The Security Procedure will be
used by the Custodian to verify the authenticity of a payment order or a
communication amending or canceling a payment order. The Custodian will act on
instructions received provided the instruction is authenticated by the Security
Procedure. The Fund and the General Partner agree and acknowledge in connection
with (i) the size, type and frequency of payment orders normally issued or
expected to be issued by the Fund to the Custodian, (ii) all of the security
procedures offered to the Fund and the General Partner by the Custodian, and
(iii) the usual security procedures used by customers and receiving banks
similarly situated, that authentication through the Security Procedure shall be
deemed commercially reasonable for the authentication of all payment orders
submitted to the Custodian.   The Fund and the General Partner
hereby elect (please choose
one) the following Security
Procedure as described below:

    

    o   
BIDS and
BIDS Worldview Payment Products.  BIDS and BIDS Worldview
Payment Products, are on-line payment order authorization facilities with
built-in authentication procedures. The Custodian, the General Partner and the
Fund shall each be responsible for maintaining the confidentiality of passwords
or other codes to be used by them in connection with BIDS. The Custodian will
act on instructions received through BIDS without duty of further confirmation
unless the Fund and/or the General Partner notifies the Custodian that its
password is not secure.

    

    x   
SWIFT. The Custodian, the General Partner and
the Fund shall comply with SWIFT’s authentication procedures. The Custodian will
act on instructions received via SWIFT provided the instruction is authenticated
by the SWIFT system.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    o     
Tested
Telex.  The
Custodian will accept payment orders sent by tested telex, provided the test key
matches the algorithmic key the Custodian, the General Partner and Fund have
agreed to use.

     

    o Computer Transmission.  The Custodian is able to
accept transmissions sent from the Fund’s and/or the General Partner’s computer
facilities to the Custodian’s computer facilities provided such transmissions
are encrypted and digitally certified or are otherwise authenticated in a
reasonable manner based on available technology.  Such procedures
shall be established in an operating protocol among the Custodian, the General
Partner and the Fund.

    

    o     
Telefax
Instructions. A payment
order transmitted to the Custodian by telefax transmission shall be transmitted
by the Fund and/or the General Partner to a telephone number specified from time
to time by the Custodian for such purposes.  If it detects no
discrepancies, the Custodian will then either:

    

    if the telefax requests a repetitive
payment order, the Custodian may call the Fund and/or the General Partner at its
last known telephone number, request to speak to the Fund, the General Partner
or Authorized Person, and confirm the authorization and details of the payment
order (a Callback); or

    

    if the telefax requests a non-repetitive
order, the Custodian will perform a Callback.

    

    All faxes must be accompanied by a fax
cover sheet which indicates the sender’s name, Fund name, telephone number, fax
number, number of pages, and number of transactions or instructions
attached.

    

    o    
Telephonic. A telephonic payment order shall be
called into the Custodian at the telephone number designated from time to time
by the Custodian for that purpose. The caller shall identify herself/himself as
an Authorized Person.  The Custodian shall obtain the payment order
data from the caller.  The Custodian shall then:

    

    1. if a telephonic repetitive payment
order, the Custodian may perform a Callback; or

    

    2. if a telephonic non-repetitive payment
order, the Custodian will perform a Callback.

    

    In the event the Fund and the General
Partner choose a procedure which is not a Security Procedure as described above,
the Fund and the General Partner agree to be bound by any payment order (whether
or not authorized) issued in their name and accepted by the Custodian in
compliance with the procedure selected by the Fund and the General
Partner.

    

    3. Rejection of
Payment Orders.  The Custodian shall give
the Fund and the General Partner timely notice of the Custodian’s rejection of a
payment order. Such notice may be given in writing or orally by telephone, each
of which is hereby deemed commercially reasonable.  In the event the
Custodian fails to execute a properly executable payment order and fails to give
the Fund and/or the General Partner notice of the Custodian’s non-execution, the
Custodian shall be liable only for the Fund’s actual damages and only to the
extent that such damages are recoverable under UCC 4A (as defined in Paragraph 7
below).  Notwithstanding anything in this Funds Transfer Services
Schedule and the Agreement to the contrary, the Custodian shall in no event be
liable for any consequential or special damages under this Funds Transfer
Services Schedule, whether or not such damages relate to services covered by UCC
4A, even if the Custodian has been advised of the possibility of such damages.
Whenever compensation in the form of interest is payable by the Custodian to the
Fund pursuant to this Funds Transfer Services Schedule, such compensation will
be payable in accordance with UCC 4A.

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    4. Cancellation
of Payment Orders.  The Fund or the General
Partner may cancel a payment order but the Custodian shall have no liability for
the Custodian’s failure to act on a cancellation instruction unless the
Custodian has received such cancellation instruction at a time and in a manner
affording the Custodian reasonable opportunity to act prior to the Custodian’s
execution of the order.  Any cancellation shall be sent and confirmed
in the manner set forth in Paragraph 2 above.

    

    5. Responsibility
for the Detection of Errors and Unauthorized Payment Orders.  Except as may be provided
in the Agreement, the Custodian is not responsible for detecting any Fund or
General Partner error contained in any payment order sent by the Fund or the
General Partner to the Custodian. In the event that the Fund’s or the General
Partner’s payment order to the Custodian either (i) identifies the beneficiary
by both a name and an identifying or bank account number and the name and number
identify different persons or entities, or (ii) identifies any bank by both a
name and an identifying number and the number identifies a person or entity
different from the bank identified by name, execution of the payment order,
payment to the beneficiary, cancellation of the payment order or actions taken
by any bank in respect of such payment order may be made solely on the basis of
the number. The Custodian shall not be liable for interest on the amount of any
payment order that was not authorized or was erroneously executed unless the
Fund and/or the General Partner so notifies the Custodian within thirty (30)
Business Days following the Fund’s and/or the General Partner’s receipt of
notice that such payment order had been processed.  If a payment order
in the name of the Fund and accepted by the Custodian was not authorized by the
Fund or the General Partner, the liability of the parties will be governed by
the applicable provisions of UCC 4A.

    

    6. Laws and
Regulations.   The rights and
obligations of the Custodian, the General Partner and the Fund with respect to
any payment order executed pursuant to this Funds Transfer Services Schedule
will be governed by any applicable laws, regulations, circulars and funds
transfer system rules, the laws and regulations of the United States of America
and of other relevant countries including exchange control regulations and
limitations on dealings or other sanctions, and including without limitation
those sanctions imposed under the law of the United States of America by the
Office of Foreign Assets Control.  Any taxes, fines, costs, charges or
fees imposed by relevant authorities on such transactions shall be for the
account of the Fund.

    

    7. Miscellaneous.   All accounts opened
by the Fund, the General Partner or its authorized agents at the Custodian
subsequent to the date hereof shall be governed by this Funds Transfer
Schedule.  All terms used in this Funds Transfer Services Schedule
shall have the meaning set forth in Article 4A of the Uniform Commercial Code as
currently in effect in the State of New York (UCC 4A) unless otherwise set forth
herein. The terms and conditions of this Funds Transfer Services Schedule are in
addition to, and do not modify or otherwise affect, the terms and conditions of
the Agreement and any other agreement or arrangement between the parties
hereto.

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    8. Indemnification.  The Custodian does not
recommend the sending of instructions by telefax or telephonic means as provided
in Paragraph 2.  BY ELECTING TO SEND
INSTRUCTIONS BY TELEFAX OR TELEPHONIC MEANS, THE FUND AND THE GENERAL PARTNER
AGREE TO INDEMNIFY THE CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR
LOSSES THEREFROM.

    _____________________________________________

    

    OPTIONAL:  The Custodian will perform
a Callback if instructions are sent by telefax or telephonic means as provided
in Paragraph 2. THE FUND AND/OR THE
GENERAL PARTNER MAY, AT ITS OWN RISK AND BY HEREBY AGREEING TO INDEMNIFY THE
CUSTODIAN AND ITS PARTNERS, OFFICERS AND EMPLOYEES FOR ALL LOSSES
THEREFROM, ELECT TO WAIVE A
CALLBACK BY THE CUSTODIAN BY INITIALING HERE: ____

    _____________________________________________

    

    The undersigned acknowledges that (I/we)
have received a copy of this document.

    

    Accepted and
agreed:                                                      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  BROWN BROTHERS HARRIMAN &
      CO.

                                
	 
      	 
      	 
      
	
                                  By:

                                	        
      	 
      
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                  UNITED STATES SHORT OIL FUND,
      LP

                                
	
                                       By:

                                	
                                  United States Commodity Funds LLC,
      as General Partner

                                	 
      
	 
      	 
      	 
      
	
                                  By:

                                	          
      	
                                   

                                
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      
	 
      	 
      	 
      
	
                                  UNITED STATES COMMODITY FUNDS
      LLC

                                
	 
      	 
      	 
      
	
                                  By:

                                	              
        	
                                   

                                
	
                                  Name:

                                	 
      	 
      
	
                                  Title:

                                	 
      	 
      
	
                                  Date:

                                	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    ELECTRONIC AND ON-LINE SERVICES
SCHEDULE

     

    This Electronic and On-Line Services
Schedule (this Schedule) to a Custodian Agreement dated as of
October 7, 2008 (as amended from time to time hereafter, the Agreement) by and among Brown Brothers Harriman
& Co. (we, us
our), United States
Commodity Funds LLC (the General
Partner)  and
United States Short Oil Fund, LP (the Fund) (the General Partner and the Fund
collectively, you, your), provides general provisions governing
your use of and access to the Services (as hereinafter defined) provided to you
by us via the Internet (at www.bbhco.com
or such
other URL as we may instruct you to use to access our products) and via a direct dial-up connection
between your computer and our computers, as of __________________ (the
Effective
Date).  Use of
the Services constitutes acceptance of the terms and conditions of this
Schedule, any Appendices hereto, the Terms and Conditions posted on our web
site, and any terms and conditions specifically governing a particular Service
or our other products, which may be set forth in the Agreement or in a separate
related agreement (collectively, the Related
Agreements).

    

    1. General
Terms.

    You will be granted access to our suite
of online products, which may include, but shall not be limited to the following
services via the Internet or dial-up connection (each separate service is a
Service; collectively referred to as the
Services):

    BIDS® and BIDS WorldView, a system for
effectuating securities and fund trade instruction and execution, processing and
handling instructions, and for the input and retrieval of other
information;

    F/X WorldView, a system for executing
foreign exchange trades;

    Fund WorldView, a system for receiving
fund and prospectus information;

    BBHCOnnect, a system for placing
securities trade instructions and following the status and detail of
trades;

    ActionViewSM, a system for receiving certain
corporate action information;

    Risk View, an interactive portfolio risk
analysis tool; and

    Such other services as we shall from
time to time offer.

    

    Security /
Passwords.

    A digital certificate and/or an
encryption key may be required to access certain Services.  You may
apply for a digital certificate and/or an encryption key by following the
procedures set forth at http://www.bbh.com/certs/.  You also will need an identification
code (ID) and password(s) (Password) to access the
Services.

    

    You agree to safeguard your digital
certificate and/or encryption key, ID, and Password and not to give or make
available, intentionally or otherwise, your digital certificate, ID, and/or
Password to any unauthorized person.  You must immediately notify us
in writing if you believe that your digital certificate and/or encryption key,
Password, or ID has been compromised or if you suspect unauthorized access to
your account by means of the Services or otherwise, or when a person to whom a
digital certificate and/or an encryption key, Password, or ID has been assigned
leaves or is no longer permitted to access the Services.

    We will not be responsible for any
breach of security, or for any unauthorized trading or theft by any third party,
caused by your failure (be it intentional, unintentional, or negligent) to
maintain the confidentiality of your ID and/or Password and/or the security of
your digital certificate and/or encryption key.

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    Instructions.

    Proper instructions under this Schedule
shall be provided as designated in the Related
Agreements  (Instructions).

    The following additional provisions
apply to Instructions provided via the Services:

    Instructions sent by electronic mail
will not be accepted or acted upon.

    You authorize us to act upon
Instructions received through the Services utilizing your digital certificate,
ID, and/or Password as though they were duly authorized written instructions,
without any duty of verification or inquiry on our part, and agree to hold us
harmless for any losses you experience as a result.

    From time to time, the temporary
unavailability of third party telecommunications or computer systems required by
the Services may result in a delay in processing Instructions.  In
such an event, we shall not be liable to you or any third party for any
liabilities, losses, claims, costs, damages, penalties, fines, obligations, or
expenses of any kind (including without limitation, reasonable attorneys’,
accountants’, consultants’, or experts’ fees and disbursements) that you
experience due to such a delay.

    

    Electronic
Documents.

    We may make periodic statements,
disclosures, notices, and other documents available to you electronically, and,
subject to any delivery and receipt verification procedures required by law, you
agree to receive such documents electronically and to check the statements for
accuracy.  If you believe any such statement contains incorrect
information, you must follow the procedures set forth in the Related
Agreement(s).

    

    Malicious
Code.

    You understand and agree that you will
be responsible for the introduction (by you, your employees, agents, or
representatives) into the Services, whether intentional or unintentional, of (i)
any virus or other code, program, or sub-program that damages or interferes with
the operation of the computer system containing the code, program or
sub-program, or halts, disables, or interferes with the operation of the
Services themselves; or (ii) any device, method, or token whose knowing or
intended purpose is to permit any person to circumvent the normal security of
the Services or the system containing the software code for the Services
(Malicious
Code).  You agree
to take all necessary actions and precautions to prevent the introduction and
proliferation of any Malicious Code into those systems that interact with the
Services.

    

    Indemnification.

    For avoidance of doubt, you hereby agree
that the provisions in the Related Agreement(s) related to your indemnification
of us and any limitations on our liability and responsibilities to you shall be
applicable to this Agreement, and are hereby expressly incorporated herein. You
agree that the Services are comprised of telecommunications and computer
systems, and that it is possible that Instructions, information, transactions,
or account reports might be added to, changed, or omitted by electronic or
programming malfunction, unauthorized access, or other failure of the systems
which comprise the Services, despite the security features that have been
designed into the Services. You agree that we will not be liable for any action
taken or not taken in complying with the terms of this Schedule, except for our
willful misconduct or gross negligence.  The provisions of this
paragraph shall survive the termination of this Schedule and the Related
Agreements.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    Payment.

    You may be charged for services
hereunder as set forth in a fee schedule from time to time agreed by
us.

    

    Term/Termination.

    This Schedule is effective as of the
date you sign it or first use the Services, whichever is first, and continues in
effect until such time as either you or we terminate the Schedule in accordance
with this Section 8 and/or until your off-line use of the Services is
terminated.

    We may terminate your access to the
Services at any time, for any reason, with five (5) Business Days’ (as defined
in the Agreement) prior notice; provided that we may terminate your access to
the Services with no prior notice if (i) your account with us is closed, (ii)
you fail to comply with any of the terms of this Agreement, (iii) we believe
that your continued access to the Services poses a security risk, or (iv) we
believe that you are violating or have violated Applicable Laws (as defined in
the Agreement), and we will not be liable for any loss you may experience as a
result of such termination.  You may terminate your access to the
Services at any time by giving us ten (10) Business Days notice.  Upon
termination, we will cancel all your Passwords and IDs and any in-process or
pending Instructions will be carried out or cancelled, at our sole
discretion.

    

    Miscellaneous.

    

    Notices.  All notices, requests, and
demands (other than routine operational communications, such as Instructions)
shall be in such form and effect as provided in the Related
Agreement(s).

    

    Inconsistent
Provisions.  Each
Service may be governed by separate terms and conditions in addition to this
Schedule and the Related Agreement(s).  Except where specifically
provided to the contrary in this Schedule, in the event that such separate terms
and conditions conflict with this Schedule and the Related Agreement(s), the
provisions of this Schedule shall prevail to the extent this Schedule applies to
the transaction in question.

    

    Binding Effect;
Assignment; Severability.  This Schedule shall be
binding on you, your employees, officers and agents.  We may assign or
delegate our rights and duties under this Schedule at any time without notice to
you.  Your rights under this Schedule may not be assigned without our
prior written consent. In the event that any provision of this Schedule
conflicts with the law under which this Schedule is to be construed or if any
such provision is held invalid or unenforceable by a court with jurisdiction
over you and us, such provision shall be deemed to be restated to effectuate as
nearly as possible the purposes of the Schedule in accordance with applicable
law.  The remaining provisions of this Schedule and the application of
the challenged provision to persons or circumstances other than those as to
which it is invalid or unenforceable shall not be affected thereby, and each
such provision shall be valid and enforceable to the full extent permitted by
law.

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    Choice of Law; Jury
Trial. This Schedule shall
be governed by and construed, and the legal relations between the parties shall
be determined, in accordance with the laws of the State of New York, without
giving effect to the principles of conflicts of laws. Each party agrees to waive
its right to trial by jury in any action or proceeding based upon or related to
this Schedule.  The parties agree that all actions and proceedings
based upon or relating to this Schedule shall be litigated exclusively in the
federal and state courts located within New York City, New
York.

    

    Confidentiality.
The parties hereto agree
that each shall treat confidentially the terms and conditions of this Schedule
and all information provided by each party to the other regarding its business
and operations.  All confidential information provided by a party
hereto shall be used by any other party hereto solely for the purpose of
rendering or obtaining services pursuant to this Schedule and, except as may be
required in carrying out this Schedule, shall not be disclosed to any third
party without the prior consent of such providing party.  The
foregoing shall not be applicable to any information that is publicly available
when provided or thereafter becomes publicly available other than through a
breach of this Schedule, or that is required to be disclosed by or to any bank
examiner of the Custodian or any Subcustodian, any Regulatory Authority, any
auditor of the parties hereto, or by judicial or administrative process or
otherwise by Applicable Law.

    

    The undersigned acknowledges that (I/we)
have received a copy of this document.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    BROWN BROTHERS HARRIMAN &
      CO.

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	             
      	 
      
	
                                    Name:

                                  	 
      	 
      
	
                                    Title:

                                  	 
      	 
      
	
                                    Date:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    UNITED STATES SHORT OIL FUND,
      LP

                                  
	
                                         By:

                                  	
                                    United States Commodity Funds LLC,
      as General Partner

                                  	 
      
	 
      	 
      	 
      
	
                                    By:

                                  	           
        	
                                     

                                  
	
                                    Name:

                                  	
                                     Nicholas D.
      Gerber

                                  	 
      
	
                                    Title:

                                  	
                                     President and Management
      Director

                                  	 
      
	
                                    Date:

                                  	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                    UNITED STATES COMMODITY FUNDS
      LLC

                                  
	 
      	 
      	 
      
	
                                    By:

                                  	             
      	
                                     

                                  
	
                                    Name:

                                  	
                                    Nicholas D.
      Gerber

                                  	 
      
	
                                    Title:

                                  	
                                    President and Management
      Director

                                  	 
      
	
                                    Date:

                                  	 
      	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
        

      

      
        30EXHIBIT
10.4

     

     

     

    ADMINISTRATIVE
AGENCY AGREEMENT

    

    THIS ADMINISTRATIVE AGENCY AGREEMENT
(the “Agreement”)
is made as of October 7, 2008 by and among BROWN BROTHERS HARRIMAN &
CO., a limited partnership organized under the laws of the State of New
York (the “Administrator”), UNITED STATES COMMODITY FUNDS
LLC, a Delaware limited liability company (the “General Partner”) and UNITED STATES SHORT OIL FUND,
LP, a limited partnership organized under the laws of the State of
Delaware (the “Fund”).

    

    WITNESSETH:

    

    WHEREAS,
the Fund is a limited partnership that is registered as a commodity
pool;

     

    WHEREAS,
the General Partner has exclusive responsibility for the management and control
of the business and affairs of the Fund; and

     

    WHEREAS,
the Fund and the General Partner desire to retain the Administrator to render
certain services to the Fund and/or the General Partner, as the case may be, and
the Administrator is willing to render such services.

     

    NOW,
THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereto agree as follows:

    

    1.           Appointment of
Administrator.  The Fund and the General Partner hereby employ
and appoint the Administrator to act as administrative agent on the terms set
forth in this Agreement, and the Administrator accepts such
appointment.

    

    2.           Delivery of
Documents.  The Fund and the General Partner will on a
continuing basis provide the Administrator with:

     

    2.1           properly
certified or authenticated copies of resolutions of the General Partner’s Board
of Directors (including Mr. Nicholas D. Gerber) authorizing the appointment of
the Administrator as administrative agent of the Fund and approving this
Agreement;

     

    2.2           a
copy of the Fund’s most recent registration statement under the Securities Act
of 1933, as amended;

     

    2.3           copies
of all agreements between the Fund and its service providers, including without
limitation, advisory, distribution and administration agreements and
distribution and/or unitholder agreements;

     

    2.4           a
copy of the Fund’s valuation procedures;

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    2.5           a
copy of the Fund’s Limited Partnership Agreement, as may be amended from time to
time;

     

    2.6           a
copy of the General Partner’s Fourth Amended and Restated Limited Liability
Company Agreement, as may be amended from time to time;

     

    2.7           any
other documents or resolutions (including, but not limited to directions or
resolutions of the General Partner’s Board of Directors, Management Directors,
and/or Audit Committee) which relate to or affect the Administrator’s
performance of its duties hereunder or which the Administrator may at any time
reasonably request; and

     

    2.8           copies
of any and all amendments or supplements to the foregoing.

    

    3.           Duties as
Administrator.  Subject to the supervision and direction of the
General Partner’s Board of Directors, Management Directors and Audit Committee,
the Administrator will perform the administrative services described in Appendix
A hereto.  Additional services may be provided by the Administrator
upon the request of the Fund as mutually agreed from time to time.  In
performing its duties and obligations hereunder, the Administrator will act in
accordance with the General Partner’s instructions as defined in Section 5
(“Instructions”).  It is agreed and understood that the Administrator
shall not be responsible for the Fund’s or the General Partner’s compliance with
any applicable documents, laws or regulations, or for losses, costs or expenses
arising out of the Fund’s or the General Partner’s failure to comply with said
documents, laws or regulations or the Fund’s or the General Partner’s failure or
inability to correct any non-compliance therewith.  The Administrator
shall in no event be required to take any action, which is in contravention of
any applicable law, rule or regulation or any order or judgment of any court of
competent jurisdiction.

    

    3.1           Records.  The
Administrator will maintain and retain such records as required by the
Securities Exchange Act of 1934, as amended, the Rules of the NYSE Arca, Inc.
(“NYSE Arca”), 17 C.F.R 4.23 (specifically, the records specified in 17 C.F.R.
4.23(a)(1) through (8), (10) through (12) and (b)(1)), and other applicable
federal securities laws and created pursuant to the performance of the
Administrator’s obligations under this Agreement.  The Administrator
will maintain such other records as requested by the Fund or the General Partner
and received by the Administrator.  The Administrator shall not be
responsible for the accuracy and completeness of any records not created by the
Administrator.  The Administrator acknowledges that the records
maintained and preserved by the Administrator pursuant to this Agreement are the
property of the Fund and will be, at the Fund’s expense, surrendered promptly
upon reasonable request.  In performing its obligations under this
Section, the Administrator may utilize micrographic and electronic storage media
as well as independent third party storage facilities.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    4.           
Duties of
the Fund and the General Partner.  The Fund and the General
Partner shall notify the Administrator promptly of any matter affecting the
performance by the Administrator of its services under this
Agreement.  Where the Administrator is providing fund accounting
services pursuant to this Agreement, the Fund and the General Partner shall
promptly notify the Administrator as to the accrual of liabilities of the Fund
and of liabilities of the Fund not appearing on the books of account kept by the
Administrator, as well as to the existence, status and proper treatment of
reserves, if any, authorized by the Fund or the General Partner.  The
Fund and the General Partner agree to provide such information to the
Administrator as may be requested under the banking and securities laws of the
United States or other jurisdictions relating to “Know Your Customer” and money
laundering prevention rules and regulations (collectively, the “KYC
Requirements”).  For purposes of this subsection, and in connection
with all applicable KYC Requirements, the Fund is the “client” or
“customer” of the Administrator. The Fund and the General
Partner further represent that each will perform all obligations required under
applicable KYC Requirements with respect to the Fund’s “customers” (as defined
in the KYC Requirements) and that, because these customers do not constitute
“customers” or “clients” of the Administrator under such applicable rules and
regulations, the Administrator is under no such similar
obligations.

    

    
      	
              5.

            	
              Instructions.

            

    

    

    5.1           The
Administrator shall not be liable for, and shall be indemnified by the Fund
against any and all losses, costs, damages or expenses arising from or as a
result of, any action taken or omitted in reliance upon Instructions or upon any
other written notice, request, direction, instruction, certificate or other
instrument believed by it to be genuine and signed or authorized by the proper
party or parties.  A list of persons so authorized by the General
Partner (“Authorized Persons”) is attached hereto as Appendix B and upon which
the Administrator may rely until its receipt of notification to the contrary by
the General Partner.

     

    5.2           Instructions
shall include a written request, direction, instruction or certification signed
or initialed on behalf of the Fund by one or more Authorized
Persons.

     

    5.3           Telephonic
or other oral instructions or instructions given by telefax transmission may be
given by any one of the above Authorized Persons and will also be considered
Instructions if the Administrator believes them to have been given by a person
authorized to give such Instructions with respect to the transaction
involved.

     

    5.4           With
respect to telefax transmissions, the Fund and the General Partner hereby
acknowledge that (i) receipt of legible instructions cannot be assured, (ii) the
Administrator cannot verify that authorized signatures on telefax instructions
are original, and (iii) the Administrator shall not be responsible for losses or
expenses incurred through actions taken in reliance on such telefax
instructions.  The Fund and the General Partner agree that such
telefax instructions shall be conclusive evidence of the Fund’s/General
Partner’s Instruction to the Administrator to act or to omit to
act.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    5.5           Instructions
given orally will not be confirmed in writing and the lack of such confirmation
shall in no way affect any action taken by the Administrator in reliance upon
such oral Instructions.  The Fund and the General Partner authorize
the Administrator to tape record any and all telephonic or other oral
Instructions given to the Administrator by or on behalf of the Fund (including
any of the Fund’s or the General Partner’s officers, directors, trustees,
employees or agents or any investment manager or adviser or person or entity
with similar responsibilities which is authorized to give Instructions on behalf
of the Fund to the Administrator.)

    

    6.           Expenses and
Compensation.  For the services to be rendered and the
facilities to be furnished by the Administrator as provided for in this
Agreement, the Fund shall pay the Administrator rendered pursuant to this
Agreement a fee based on such fee schedule as may from time to time be agreed
upon in writing among the General Partner, Fund and the
Administrator.  Additional services performed by the Administrator as
requested by the Fund shall be subject to additional fees as mutually agreed
from time to time.  In addition to any such fees, the Administrator
shall bill the Fund separately for any out-of-pocket disbursements of the
Administrator based on an out-of-pocket disbursement schedule as may from time
to time be agreed upon in writing among the General Partner, the Fund and the
Administrator.  The foregoing fees and disbursements shall be billed
to the Fund by the Administrator and shall be paid promptly by wire transfer or
other appropriate means to the Administrator.

    

    7.           Standard of
Care.  The Administrator
shall be held to the exercise of reasonable care and diligence in carrying out
the provisions of this Agreement, provided that the Administrator shall not
thereby be required to take any action which is in contravention of any
applicable law, rule or regulation or any order or judgment of any court of
competent jurisdiction.

    

    8.           General
Limitations on Liability.  The Administrator shall incur no
liability with respect to any telecommunications, equipment or power failures,
or any failures to perform or delays in performance by postal or courier
services or third-party information providers (including, without limitation
those listed on Appendix C).

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    8.1           The
Administrator shall also incur no liability under this Agreement if the
Administrator or any agent or entity utilized by the Administrator shall be
prevented, forbidden or delayed from performing, or omits to perform, any act or
thing which this Agreement provides shall be performed or omitted to be
performed, by reason of causes or events beyond its control, including but not
limited to:

     

    8.1.1         any
Sovereign Event.  A “Sovereign Event” shall mean any nationalization;
expropriation; devaluation; revaluation; confiscation; seizure; cancellation;
destruction; strike; act of war, terrorism, insurrection or revolution; or any
other act or event beyond the Administrator’s control;

     

    8.1.2         any
provision of any present or future law, regulation or order of the United States
or any state thereof, or of any foreign country or political subdivision
thereof, or of any securities depository or clearing agency; and

     

    8.1.3         any
provision of any order or judgment of any court of competent
jurisdiction.

    

    
       8.2          The
Administrator shall not be held accountable or liable for any losses, damages or
expenses the General Partner, the Fund, the Fund’s commodity broker, the Fund’s
commodity trading advisor (if any), any unitholder or former unitholder of the
Fund or any other person may suffer or incur arising from acts, omissions,
errors or delays of the Administrator in the performance of its obligations and
duties as provided in Section 3 hereof, including without limitation any error
of judgment or mistake of law, except a loss, damage or expense directly
resulting from the Administrator’s willful malfeasance, bad faith or negligence
in the performance of such Administrator’s obligations and
duties.

    

    

    
      	
              9.

            	
              Specific
      Limitations on Liability. In addition to,
      and without limiting the application of the general limitations on
      liability contained in Section 8, above, the following specific
      limitations on the Administrator’s liability shall apply to the particular
      administrative services set forth on Appendix A
  hereto.

            

    

    

    9.1           Liability for
Fund Accounting Services.   Without limiting the provisions in
Section 8 hereof, the Administrator’s liability for acts, omissions, errors or
delays relating to its fund accounting obligations and duties shall be limited
to the amount of any expenses associated with a required recalculation of net
asset value per unit (“NAV”) or any direct damages suffered by unitholders in
connection with such recalculation.  The Administrator’s liability or
accountability for such acts, omissions, errors or delays shall be further
subject to clauses 9.1.1 through 9.1.4 below.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      9.1.1       
The
parties hereto acknowledge that the Administrator’s causing an error or delay in
the determination of NAV may, but does not in and of itself, constitute
negligence or reckless or willful misconduct.  The parties further
acknowledge that in accordance with industry practice the liability of the
Administrator for fund accounting services shall accrue and the recalculation of
NAV shall be performed in accordance with this Section 9.1 only with regard to
errors in the calculation of the NAV that are (i) greater than or equal to $.01
per unit of the Fund and (ii) greater than or equal to 1⁄2% of the total net
assets of the Fund. 

       

      9.1.2        In
no event shall the Administrator be liable or responsible to the General
Partner, the Fund, the Fund’s commodity broker, the Fund’s commodity trading
advisor (if any), any present or former unitholder of the Fund, or any other
person for any error or delay that continued or was undetected after the date of
an audit performed by the certified public accountants employed by or on behalf
of the Fund if, in the exercise of reasonable care in accordance with generally
accepted accounting standards, such accountants should have become aware of such
error or delay in the course of performing such audit.

       

       9.1.3       The
Administrator shall not be held accountable or liable to the General Partner,
the Fund, the Fund’s commodity broker, the Fund’s commodity trading advisor (if
any), any unitholder or former unitholder of the Fund or any other person for
any delays or losses, damages or expenses any of them may suffer or incur
resulting from (i) the Administrator’s usage of a third party service provider
for the purpose of storing records delivered to the Administrator by or on
behalf of the Fund and which the Administrator did not create in the performance
of its obligations hereunder; (ii) the Administrator’s failure to receive timely
and suitable notification concerning quotations or corporate actions relating to
or affecting portfolio securities of the Fund; or (iii) any errors in the
computation of NAV based upon or arising out of quotations or information as to
corporate actions if received by the Administrator either (a) from a source
which the Administrator was authorized to rely upon (including those sources
listed on Appendix C), or (b) from a source which in the Administrator’s
reasonable judgment was as reliable a source for such quotations or information
as such authorized sources; or (iv) any errors in the computation of NAV as a
result of relevant information known to the General Partner, the Fund, a futures
commission merchant, securities brokers or dealers, or any of the Fund’s other
service providers including futures commission merchants in contract with the
Fund, which would impact the calculation of NAV, but was not communicated to the
Administrator.  To the extent that Fund assets are not in the custody
of the Administrator, the Administrator may conclusively rely on any reporting
in connection with such assets provided to the Administrator by a third party on
behalf of the Fund, including, without limitation any futures commission
merchant.

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    9.1.4       
In the event of any error or delay in the determination of such NAV for which
the Administrator may be liable, the General Partner, the Fund and the
Administrator will consult and make good faith efforts to reach agreement on
what actions should be taken in order to mitigate any loss suffered by the Fund
or its present or former unitholders, in order that the Administrator’s exposure
to liability shall be reduced to the extent possible after taking into account
all relevant factors and alternatives.  It is understood that in
attempting to reach agreement on the actions to be taken or the amount of the
loss which should appropriately be borne by the Administrator, the General
Partner, the Fund and the Administrator will consider such relevant factors as
the amount of the loss involved, the Fund’s/General Partner’s desire to avoid
loss of unitholder goodwill, the fact that other
persons or entities could have been reasonably expected to have detected the
error sooner than the time it was actually discovered, the appropriateness of
limiting or eliminating the benefit which unitholders or former unitholders
might have obtained by reason of the error, and the possibility that other
parties providing services to the Fund might be induced to absorb a portion of
the loss incurred.

     

     

    
      	
              10.

            	
              Indemnification.

            

    

     

    10.1        The
General Partner and the Fund hereby agree to indemnify and hold harmless the
Administrator, its partners, stockholders, members, directors, officers and
employees and any subsidiary or affiliate of the foregoing (“Affiliate”), and
the successors and assigns of all of the foregoing persons, against any and all
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) resulting from any act, omission, error or delay or any
claim, demand, action or suit, in connection with or arising out of performance
of its obligations and duties under this Agreement, not resulting from the
willful malfeasance, bad faith or negligence of the Administrator in the
performance of such obligations and duties.  The provisions of this
Section 10 shall survive the termination of this Agreement.

     

    10.1.1      If
any action, suit or proceeding (each, a “Proceeding”) is brought against the
Administrator or any such person in respect of which indemnity may be sought
against the General Partner pursuant to the foregoing subsection, the
Administrator or such person shall promptly notify the General Partner in
writing of the institution of such Proceeding and the General Partner shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the General Partner
shall not release the General Partner from any liability which it may have to
the Administrator or any such person except to the extent that it has been
materially prejudiced by such failure and has not otherwise learned of such
Proceeding. The Administrator or such person shall have the right to employ its
own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of the Administrator or of such person unless the employment of
such counsel shall have been authorized in writing by the General Partner in
connection with the defense of such Proceeding or the General Partner shall not
have, within a reasonable period of time in light of the circumstances, employed
counsel to have charge of the defense of such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from, additional to or in conflict
with those available to the General Partner (in which case the General Partner
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties), in any of which events such fees and expenses
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 indemnified parties who are parties to such
Proceeding).

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    10.1.2     The
General Partner shall not be liable for any settlement of any Proceeding
effected without the General Partner’s written consent but if settled with the
General Partner’s written consent, the General Partner agrees to indemnify and
hold harmless the Administrator and any such person from and against any loss or
liability by reason of such settlement.  Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this subsection, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 Business Days (defined as any day other than a day on
which the New York Stock Exchange, NYSE Arca or the New York Mercantile Exchange
(“NYMEX”) is closed for regular trading (each a “Business Day”)), after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 Business Days’ prior
notice of its intention to settle. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.

     

    10.2            Subject
to Sections 7, 8 and 9 of this Agreement, the Administrator agrees to indemnify
and hold harmless the General Partner and the Fund, its partners, stockholders,
members, directors, officers and employees and any Affiliate of the foregoing,
and the successors and assigns of all of the foregoing persons, against any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any act, omission, error or delay or
any claim, demand, action or suit, in connection with or arising out of
performance of its obligations and duties under this Agreement, resulting from
the willful malfeasance, bad faith or negligence of the Administrator in the
performance of such obligations and duties.  The provisions of this
Section 10 shall survive the termination of this Agreement.

     

    10.2.1          If
any Proceeding is brought against the General Partner or any such person in
respect of which indemnity may be sought against the Administrator pursuant to
the foregoing subsection, the General Partner or such person shall promptly
notify the Administrator in writing of the institution of such Proceeding and
the Administrator shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses; provided, however, that the omission to so
notify the Administrator shall not relieve the Administrator from any liability
which it may have to the General Partner or any such person except to the extent
that it has been materially prejudiced by such failure and has not otherwise
learned of such Proceeding. The General Partner or such person shall have the
right to employ its own counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of the General Partner or of such person
unless the employment of such counsel shall have been authorized in writing by
the Administrator in connection with the defense of such Proceeding or the
Administrator shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Administrator (in which case the
General Partner shall not have the right to direct the defense of such
Proceeding on behalf of the indemnified party or parties), in any of which
events such fees and expenses shall be borne by the Administrator and paid as
incurred (it being understood, however, that the Administrator 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 indemnified parties who are parties to such
Proceeding).

     

    10.2.2         The
Administrator shall not be liable for any settlement of any Proceeding effected
without the Administrator’s written consent but if settled with the
Administrator’s written consent, the Administrator agrees to indemnify and hold
harmless the General Partner and any such person from and against any loss or
liability by reason of such settlement.  Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this subsection, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 Business Days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have fully
reimbursed the indemnified party in accordance with such request prior to the
date of such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 Business Days’ prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    11.           Reliance by the
Administrator on Opinions of Counsel and Opinions of Certified Public
Accountants.

     

    The
Administrator may consult with its counsel or the Fund/General Partner’s counsel
in any case where so doing appears to the Administrator to be necessary or
desirable.  The Administrator shall not be considered to have engaged
in any misconduct or to have acted negligently and shall be without liability in
acting upon the advice of its counsel or of the Fund’s/General Partner’s
counsel.

     

    The
Administrator may consult with a certified public accountant or the Fund’s
Treasurer (or persons performing such function) in any case where so doing
appears to the Administrator to be necessary or desirable.  The
Administrator shall not be considered to have engaged in any misconduct or to
have acted negligently and shall be without liability in acting upon the advice
of such certified public accountant or of the Fund’s Treasurer or persons
performing such function.

    

    12.           Termination of
Agreement. This Agreement may be
terminated by any of the parties in accordance with the provisions of this
Section 12.

    

    

    12.1         This
Agreement shall have an initial term of two (2) years from the date hereof.
Thereafter, this Agreement shall automatically renew for successive one (1) year
periods unless any party terminates this Agreement by providing written notice
no later than seventy-five (75) days prior to the expiration of the applicable
term to the other parties at their address set forth herein.  Upon the
completion of the initial term, either the Administrator, on the one hand, or
the General Partner, on the other hand, may elect to terminate this Agreement at
any time by delivering ninety (90) days notice thereof to the other party. 
Notwithstanding the foregoing provisions, any party may terminate this Agreement
at any time (a) for cause, which is a material breach of the Agreement not cured
within sixty (60) days of written notice of such breach, in which case
termination shall be effective upon receipt of written notice by the
non-terminating parties, or (b) upon thirty (30) days’ written notice to
the other parties in the event that a party is adjudged bankrupt or insolvent,
or there shall be commenced against such party a case under any applicable
bankruptcy, insolvency, or other similar law now or hereafter in effect. In the
event a termination notice is given by a party hereto, all expenses associated
with the movement of records and materials and the conversion thereof shall be
paid by the Fund for which services shall cease to be performed
hereunder.  The Administrator shall be responsible for completing all
actions in progress when such termination notice is given unless otherwise
agreed.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    12.2.        Upon
termination of this Agreement in accordance with this Section 12, the Fund may
request the Administrator to promptly deliver to the Fund or to any designated
third party all records created and maintained by the Administrator pursuant to
Section 3.1 of this Agreement, as well as any Fund records maintained but not
created by the Administrator.  If such request is provided in writing
by the Fund to the Administrator within seventy-five (75) days of the date of
termination of the Agreement, the Administrator shall provide to the Fund a
certification that all records created by the Administrator pursuant to its
obligations under Section 3.1 of this Agreement are accurate and
complete.  After seventy-five (75) days of the date of termination of
this Agreement, no such certification will be provided to the Fund by the
Administrator and the Administrator is under no further obligation to ensure
that records created by the Administrator pursuant to Section 3.1 of this
Agreement are maintained in a form that is accurate or complete.

    

    13.           Confidentiality
and Privacy.

     

    13.1         The
parties hereto agree that each shall treat confidentially the terms and
conditions of this Agreement and all information provided by each party to the
other regarding its business and operations.  All confidential
information provided by a party hereto shall be used by any other party hereto
solely for the purpose of rendering or obtaining services pursuant to this
Agreement and, except as may be required in carrying out this Agreement, shall
not be disclosed to any third party without the prior consent of such providing
party.  The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any regulatory authority, any auditor of the parties hereto,
or by judicial or administrative process or otherwise by applicable
law.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    13.2           In
the course of carrying out its obligations under this Agreement, Administrator
shall maintain physical, procedural and electronic safeguards to protect
information regarding the Fund and its investors that Administrator has obtained
or to which the Administrator has gained access.

    

    14.           Tape-recording.   The parties
consent to recording of any and all telephonic or other oral
instructions.  This authorization will remain in effect until and
unless revoked by the Fund, the General Partner or the Administrator in
writing.  Each party further agrees to solicit valid written or other
consent from any of its employees, officers, directors or agents with respect to
telephone communications to the extent such consent is required by applicable
law.

     

    15.           Procedures. Procedures
applicable to the Administrator’s services to be performed hereunder may be
established from time to time by agreement among the Fund, the General Partner
and the Administrator.  The Administrator shall have the right to
utilize any unitholder accounting and record­keeping systems that, in its
opinion, enables it to perform any services to be performed
hereunder.

    

    16.           Entire
Agreement; Amendment.  This
Agreement constitutes the entire understanding and agreement of the parties
hereto and supersedes any other oral or written agreements heretofore in effect
between the parties with respect to the subject matter hereof.  No
provision of this Agreement may be amended or terminated except by a statement
in writing signed by the party against which enforcement of the amendment or
termination is sought.

    

    17.           Severability.  In
the event any provision of this Agreement is determined to be void or
unenforceable, such determination shall not affect the remainder of this
Agreement, which shall continue to be in force.

    

    18.           Headings.  The
section headings in this Agreement are for the convenience of reference only and
shall not modify, define, expand or limit any of the terms or provisions
thereof.

    

    19.           Governing
Law.  This Agreement
shall be governed by and construed according to the laws of the State of New
York without giving effect to conflicts of law provisions thereof and each of
the parties hereto irrevocably consents to the exclusive jurisdiction of the
United States District Court for the Southern District of New York or if that
court lacks or declines to exercise subject matter jurisdiction, the Supreme
Court of the State of New York, New York County.  The General Partner
and the Fund irrevocably waive any objection each may now or hereafter have to
the laying of venue of any action or proceeding in any of the aforesaid courts
and any claim that any such action or proceeding has been brought in an
inconvenient forum.  Furthermore, each party hereto irrevocably waives
any right that it may have to trial by jury in any action, proceeding or
counterclaim arising out of or related to this Agreement or the services
contemplated hereby.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    20.           Notices.  Notices
and other writings delivered or mailed postage prepaid to the General Partner
and Fund shall be addressed to the Fund/General Partner at United States
Commodity Funds LLC, c/o Nicholas D. Gerber, P.O. Box 6919, Moraga,
CA  94570, or such other address as the General Partner or the Fund
may have designated to the Administrator in writing, or to the Administrator at
40 Water Street, Boston, MA  02109, Attention: Manager, Fund
Administration Department, or to such other address as the Administrator may
have designated to the General Partner and the Fund in writing, shall be deemed
to have been properly delivered or given hereunder to the respective
addressee.

    

    21.           Binding
Effect; Assignment.  This
Agreement shall be binding upon and inure to the benefit of the General Partner,
the Fund and the Administrator and their respective successors and assigns,
provided that no party hereto may assign this Agreement or any of its rights or
obligations hereunder without the written consent of the other
parties.  Each party agrees that only the parties to this Agreement
and/or their successors in interest shall have a right to enforce the terms of
this Agreement.  Accordingly, no client of the General Partner,
unitholder of the Fund or other third party shall have any rights under this
Agreement and such rights are explicitly disclaimed by the parties.

    

    22.           Counterparts.  This Agreement
may be executed in any number of counterparts each of which shall be deemed to
be an original. This Agreement shall become effective when one or more
counterparts have been signed and delivered by each of the parties.  A
photocopy or telefax of this Agreement shall be acceptable evidence of the
existence of this Agreement and the Administrator shall be protected in relying
on the photocopy or telefax until the Administrator has received the original of
this Agreement.

    

    23.           Exclusivity.  The services
furnished by the Administrator hereunder are not to be deemed exclusive, and the
Administrator shall be free to furnish similar services to others.

    

    24.           Authorization.  The
General Partner hereby represents and warrants that the Management Directors of
its Board of Directors including Mr. Nicholas D. Gerber have authorized the
execution and delivery of this Agreement and that Authorized Persons of the
General Partner and the Fund have signed this Agreement, Appendices A, B and C
and the fee schedule hereto.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed and delivered by their duly
authorized officers as of the date first written above.

     

    The
undersigned acknowledges that (I/we) have received a copy of this
document.

     

    
      
        	BROWN BROTHERS HARRIMAN &
      CO.	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By: 	
                 

              	 	 	
              	 
	 	
                Name:

              	 	 	
                 

              	 
	 	
                Title:

              	 	 	
                 

              	 
	 	Date: 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	UNITED STATES SHORT OIL FUND,
      LP	 	 	 	 
	
                By:  United
      States Commodity Funds LLC, as General Partner

              	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	
                By:  

              	 	 	 	 	 
	 	Name:
      Nicholas D. Gerber 	 	 	 	 
	 	Title:
      President and Management Director 	 	 	 	 
	 	Date: 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	UNITED STATES COMMODITY FUNDS
      LLC	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	By:  	 	 	 	 	 
	 	Name:
      Nicholas D. Gerber 	 	 	 	 
	 	Title:
      President and Management Director 	 	 	 	 
	 	Date: 	 	 	 	 

      

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    APPENDIX
A

    TO
ADMINISTRATIVE AGENCY AGREEMENT

    

    ADMINISTRATIVE
SERVICES OF THE ADMINISTRATIVE AGENT

    

    Dated as
of October 7, 2008

    

    Fund
Accounting Services

    The
Administrator will provide the following fund accounting services to the Fund on
any Business Day: transaction processing and review, custodial reconciliation,
securities pricing and investment accounting.

    

    Transaction Processing and
Review. The Administrator shall input and reconcile the Fund’s investment
activity including with respect to:

    
      	
               
      

            	
              ·

            	
              Investment
      taxlots

            

    

    
      	
               
      

            	
              ·

            	
              Income

            

    

    
      	
               
      

            	
              ·

            	
              Dividends

            

    

    
      	
               
      

            	
              ·

            	
              Principal
      paydowns

            

    

    
      	
               
      

            	
              ·

            	
              Capital
      activity

            

    

    
      	
               
      

            	
              ·

            	
              Expense
      accruals

            

    

    
      	
               
      

            	
              ·

            	
              Cash
      activity

            

    

    
      	
               
      

            	
              ·

            	
              Corporate
      Reorganizations

            

    

    

    Custodial
Reconciliation. The Administrator shall reconcile the following positions
of the Fund against the records of the Custodian:

    
      	
               
      

            	
              ·

            	
              Securities,
      Futures and Over-the-Counter Contract (“OTC”)
  holdings

            

    

    
      	
               
      

            	
              ·

            	
              Cash
      including cash transfers, fees assessed and other investment related cash
      transactions

            

    

    
      	
               
      

            	
              ·

            	
              Trade
      settlements

            

    

    

    Securities, Futures and OTC
Valuation. Using the Valuation Procedures set forth in Appendix D, the
Administrator shall update each security, Futures and OTC position of the Fund
as to the following:

    
      	
               
      

            	
              ·

            	
              Market
      prices obtained from approved sources including those listed on Appendix C
      or Fair Valuations obtained from an Authorized Person of the
      Fund

            

    

    
      	
               
      

            	
              ·

            	
              Mark
      to market of non-base receivables/payables utilizing approved foreign
      exchange quotations as quoted in Appendix
C

            

    

    
      	
               
      

            	
              ·

            	
              Mark
      to market of non-base currency positions utilizing the approved sources
      quoted in Appendix C or Fair Valuations obtained from an Authorized Person
      of the Fund

            

    

    

    Investment
Accounting. The Administrator shall provide the following investment
accounting services to each Portfolio:

    
      	
               
      

            	
              ·

            	
              Amortization/accretion
      at the individual tax lot level

            

    

    
      	
               
      

            	
              ·

            	
              General
      ledger entries

            

    

    
      	
               
      

            	
              ·

            	
              Book
      value calculations

            

    

    
      	
               
      

            	
              ·

            	
              Trade
      Date + 1 accounting

            

    

    
      	
               
      

            	
              ·

            	
              Calculation
      of Net Asset Value Per Unit (“NAV”) as of the earlier of 4:00 p.m. New
      York time or the close of trading on the NYSE Arca, and published shortly
      after the close of trading on the NYSE
Arca

            

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    Financial
Reporting Services

    
      	
               
      

            	
              ·

            	
              The
      Administrator shall accumulate information for and
  prepare

            

    

    
      	
               
      

            	
              o

            	
              Within
      a 30 day period following the end of the Fund’s required monthly reporting
      period, an Account Statement in compliance with the requirements of CFTC
      Rule §4.22(a), including a Statement of Income (Loss) and a Statement of
      Changes in Net Asset Value; such preparation includes the coordination and
      review of all printer and author edits. The Fund and/or General Partner
      shall make arrangements for the printing and mailing of the Account
      Statements.

            

    

    
      	
               
      

            	
              ·

            	
              Upon
      review and approval of each above-mentioned report by the General
      Partner’s Treasurer and/or Chief Financial Officer (or such person
      performing such functions), the Administrator shall file such reports with
      the CFTC and/or NFA as required, including any applicable executive
      officer certifications or other exhibits to such
  reports.

            

    

    
      	
               
      

            	
              ·

            	
              In
      connection with the preparation of each Annual Report on Form 10-K, the
      Administrator shall coordinate the audit of the Fund by its independent
      public accountant (e.g., manage open items lists, host weekly audit
      meeting, etc.).

            

    

    

    The
Administrator shall assist the Fund and/or the General Partner in preparing Fund
press releases with respect to interim statements and quarterly results and
transmitting such press releases to the NYSE Arca and such other entities as
requested by the Fund or the General Partner.

    

    Assistant
Treasurer Services

    The
Administrator shall perform the following services as requested by the General
Partner’s Treasurer (or person performing such function):

    
      	
               
      

            	
              ·

            	
              Prepare
      and obtain authorization of Fund expense invoices on a bi-monthly
      basis

            

    

    
      	
               
      

            	
              ·

            	
              Prepare
      the Fund’s quarterly budget and make recommendations for adjustments as
      appropriate

            

    

    
      	
               
      

            	
              ·

            	
              Prepare
      a monthly expense pro forma for the
Fund

            

    

    
      	
               
      

            	
              ·

            	
              Provide
      consultative services with respect to financial matters of the Fund as may
      be requested and agreed to among the Fund, the General Partner and the
      Administrator from time to time

            

    

    

    Corporate Secretarial
Services

    The
Administrator shall perform the following secretarial services:

    
      	
               
      

            	
              ·

            	
              Provide
      an “Assistant Secretary” who may be approved as an officer of the Fund by
      the Board of Directors

            

    

    
      	
               
      

            	
              ·

            	
              Maintain
      a calendar for Board and Audit Committee matters/approvals in a form to be
      agreed upon by the parties from time to
time

            

    

    
      	
               
      

            	
              ·

            	
              Prepare
      quarterly Board and Audit Committee meeting materials, including notices,
      scripts, agendas, resolutions, memoranda, minutes, and mail the materials
      to the Board and such other persons as instructed by the General
      Partner

            

    

    
      	
               
      

            	
              ·

            	
              Attend
      quarterly Board and Audit Committee meetings, take minutes of the
      meetings, make presentations as required and follow up on matters raised
      at the meetings.  In the event that the Administrator is asked
      to perform secretarial services for more than four quarterly Board or
      Audit Committee meetings per calendar year, the Fund will be assessed
      special meeting fees. Fees may range between $2,500 and $10,000 per
      meeting, depending upon the complexity of the meeting materials and
      discussion and the location of the meeting.  Out-of-pocket
      expenses associated with the production and mailing of all Board and
      committee meeting materials, as well as travel expenses associated with
      in-person attendance at meetings, will be charged to the
    Fund

            

    

    
      	
               
      

            	
              ·

            	
              Prepare
      the annual directors and officers questionnaires and distribute the
      questionnaires to the directors and officers of the General
      Partner

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    Regulatory
Support Services

    The
Administrator shall perform the following regulatory services for the
Fund:

    
      	
               
      

            	
              ·

            	
              Maintain
      a calendar for all SEC, CFTC, NFA and NYSE Arca regulatory matters in the
      form of Exhibit
      B; provided that the Fund and/or General Partner shall notify the
      Administrator of additional regulatory matters to be added to such
      calendar as soon as practicable.

            

    

    
      	
               
      

            	
              ·

            	
              Within
      a 45 day production cycle, or shorter time
      period as required by the U.S.
      Securities and Exchange Commission (the “SEC”) and communicated to the Administrator by the
      Fund and/or the General Partner, one first fiscal quarter report of
      the Fund, one second fiscal quarter report of the Fund and one third
      fiscal quarter report of the Fund, each on Form
  10-Q.

            

    

    
      	
               
      

            	
              ·

            	
              Within
      a 90 day production cycle, or shorter time period as required by the
      SEC and communicated to the
      Administrator by the Fund and/or General Partner, one annual report of the
      Fund on Form 10-K per fiscal year.  The preparation of the Form
      10-K includes the coordination of all printer and author edits and the
      review of printer drafts.

            

    

    
      	
               
      

            	
              ·

            	
              Within
      90 days after the end of the Fund’s fiscal year, an Annual Report of the
      Fund in compliance with the requirements of the NFA and CFTC Rule
      §4.22(c); such preparation includes the coordination of all printer and
      author edits and the review of printer drafts.  The Fund and/or
      General Partner shall make arrangements for the printing and mailing of
      the Annual Report.

            

    

    

    Upon
review and approval of each above-mentioned report by the General Partner’s
Treasurer and/or Chief Financial Officer (or such person performing such
functions), the Administrator shall Edgarize and file, or cause to be Edgarized
and filed, such reports with the SEC, CFTC and/or NFA as required, including any
applicable executive officer certifications or other exhibits to such
reports.

    

    The
Administrator shall perform the following additional regulatory services for the
Fund:

    
      	
               
      

            	
              ·

            	
              Prepare
      the materials for and attend one unitholder meeting per calendar year
      (including preparation of the proxy statement, notice and other
      solicitation materials and filing such materials with the SEC and taking
      minutes of the meeting), at the Fund’s
request

            

    

    
      	
               
      

            	
              ·

            	
              Coordinate
      with the Fund’s transfer agent or solicitor in monitoring the unitholder
      vote solicitation and tabulation for one unitholder meeting per calendar
      year, at the Fund’s request

            

    

    
      	
               
      

            	
              ·

            	
              Prepare
      and file, or cause to be filed, the following regulatory
      notices/forms/reports:

            

    

    
      	
               
      

            	
              o

            	
              With
      the SEC, Forms 3, 4 and 5 and Schedules 13D and 13G for the officers and
      directors of the General Partner and such other persons as requested by
      the Fund

            

    

    
      	
               
      

            	
              o

            	
              With
      the SEC, Current Reports on Form 8-K as circumstances
    warrant.

            

    

    
      	
               
      

            	
              o

            	
              With
      the NYSE Arca, such notices/forms as agreed to among the Fund, the General
      Partner and the Administrator

            

    

    

    Transfer
Agency Services

    The
Administrator shall perform the following transfer agency services:

    

    I.           Issuance
and Redemption of Fund Units. It is agreed and understood that the Fund, and the
Administrator on the Fund’s behalf, shall issue and redeem Units of the Fund in
blocks of 100,000 Units (“Creation Baskets” and “Redemption Baskets,”
respectively) to and from such persons as are identified by the Fund as
“Authorized Purchasers” or “Authorized Participants.”

    

    
      	
               
      

            	
              A.

            	
              Pursuant
      to such purchase orders that the Administrator as the Index Receipt Agent
      shall receive from the ALPS Distributors, Inc. (“Marketing Agent”) and
      pursuant to the procedures set forth in the Authorized Purchaser Agreement
      entered into by the Fund, Administrator shall transfer appropriate trade
      instructions to the Fund’s custodian, Brown Brothers Harriman & Co.
      (“Custodian”) and pursuant to such orders register the appropriate number
      of book entry only Fund Units in the name of The Depository Trust Company
      (“DTC”) or its nominee as a unitholder (each a “Unitholder”) of the Fund
      and deliver the Units of the Fund on the
  business.

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    
 

    
      	
               
      

            	
              B.

            	
              Pursuant
      to such redemption orders that Index Receipt Agent shall receive from the
      Marketing Agent, pursuant to the procedures set forth in the Authorized
      Purchaser Agreement entered into by the Fund, Administrator shall transfer
      appropriate trade instructions to the Custodian and, pursuant to such
      orders, redeem the appropriate number of Fund Units that are delivered to
      the designated DTC Participant Account of the Custodian for redemption and
      debit such Units from the account of the Unitholder on the register of the
      Fund.

            

    

    

    
      	
               
      

            	
              C.

            	
              On
      behalf of the Fund, Administrator shall issue Fund Units in Creation
      Baskets for settlement with purchasers through DTC as the purchaser is
      authorized to receive. Beneficial ownership of Fund Units shall be shown
      on the records of DTC and DTC Participants and not on any records
      maintained by the Administrator.  In issuing Fund Units through
      DTC to a purchaser, Administrator shall be entitled to rely upon the
      latest Instructions that are received from the Marketing Agent by the
      Administrator as Index Receipt Agent concerning the issuance and delivery
      of such Units for settlement.

            

    

    

    
      	
               
      

            	
              D.

            	
              Administrator
      shall not issue on behalf of the Fund any Fund Units where it has received
      an Instruction from the Fund, the General Partner or the Marketing Agent
      or written notification from any federal or state authority that the sale
      of the Fund Units has been suspended or discontinued, and Administrator
      shall be entitled to rely upon such Instructions or written
      notification.

            

    

    

    
      
        	
                
                

              	
                E.

              	
                Upon
      the issuance of Fund Units as provided herein, Administrator shall not be
      responsible for the payment of any original issue or other taxes, if any,
      required to be paid by the Fund, the General Partner or the Marketing
      Agent in connection with such
issuance.

              

      

    

    

    
      	
               
      

            	
              F.

            	
              Fund
      Units may be redeemed in accordance with the procedures set forth in the
      relevant Authorized Purchaser Agreement and Administrator shall duly
      process all redemption requests.

            

    

    

    
      
        	
                
                

              	
                G. 

              	
                 Administrator
      will act only upon Instruction from the Fund and/or the General Partner in
      addressing any failure in the delivery of cash, treasuries and/or Shares
      in connection with the issuance and redemption of Fund
    Units.

              

      

    

    

    II.           Payment of Dividends and
Distributions on Fund Units.

    

    
      	
               
      

            	
              A.

            	
              As
      instructed by the Fund and/or the General Partner, the Administrator shall
      prepare and make payments for dividends and distributions declared by the
      Fund or the General Partner.

            

    

    

    
      	
               
      

            	
              B.

            	
              The
      Fund and/or the General Partner shall promptly notify the Administrator of
      the declaration of any dividend or distribution.  The Fund
      and/or the General Partner shall furnish to the Administrator a statement
      signed by an Authorized Person: (i) indicating that dividends have been
      declared on a specific periodic basis and Instructions specifying the date
      of the declaration of such dividend or distribution, the date of payment
      thereof, the record date as of which unitholders shall be entitled to
      payment, the total amount payable to the unitholders and the total amount
      payable to Administrator as transfer agent on the payment date; or (ii)
      setting forth the date of the declaration of any dividend or distribution,
      the date of payment thereof, the record date as of which the unitholders
      are entitled to payment, and the amount payable per unit to each
      unitholder as of that date and the total amount payable to Administrator
      as transfer agent on the payment
date.

            

    

     

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

     

    
      	
               
      

            	
              C.

            	
              Based
      upon the amount of Fund Units outstanding on its books and records, the
      Fund and/or the General Partner shall calculate the total dollar amount of
      the dividend or distribution and notify the Administrator of this
      amount.  The Fund and/or the General Partner shall then instruct
      the Administrator to direct the Custodian to place in a separate cash
      account maintained by the Administrator funds equal to the total cash
      amount of the dividend or distribution to be paid out.  Should
      the Custodian determine that it does not have sufficient cash in the
      Custody Account to pay the total amount of the dividend or distribution to
      the Administrator, the Administrator shall advise the Fund and/or the
      General Partner and the Fund and/or the General Partner shall either
      adjust the rate of the dividend or distribution or provide additional cash
      directly to the Custodian for credit to the separate cash account
      maintained by the Custodian.  When instructed by the Fund and/or
      the General Partner, the Administrator shall direct the Custodian to make
      payment of such dividend or distribution to the account of each
      unitholder.

            

    

    

    
      	
               
      

            	
              D.

            	
              Should
      the Administrator or the Custodian not receive from the Fund sufficient
      cash to make payment as provided in the immediately preceding Subsection,
      the Administrator shall notify the Fund and/or the General Partner, and
      the Administrator shall withhold payment to the unitholders until
      sufficient cash is provided to the Custodian and the Administrator shall
      not be liable for any claim arising out of such
    withholding.

            

    

    

    

    III.           Maintenance of Registry of
Limited Partners and Persons Applying to Become Limited
Partners.

    

    Pursuant
to the Limited Partnership Agreement for the Fund, all purchasers of Units who
wish to become limited partners or record holders and receive cash distributions
(if any) must deliver an executed transfer application in which the purchaser or
transferee must certify that, among other things, he/she agrees to be bound by
the Funds Limited Partnership Agreement and is eligible to purchase the Fund’s
securities.  Any transfer of Units will not be recorded by the
transfer agent unless a completed transfer application is delivered to the
General Partner or the Administrator.

    

    The
Administrator shall keep a record of all transfer applications received, with
each applicant deemed as a holder of record until the application is approved by
the Fund.  All applications will be forwarded by the Administrator to
the General Partner to obtain its consent.  Once such consent is
obtained, the holder shall become Limited Partners.  The Administrator
shall maintain a registry of all Limited Partners and holders of record of the
Fund.

    

    IV.           Recordkeeping.

    

    
      	
               
      

            	
              A.

            	
              The
      Administrator shall record the issuance of Fund Creation Baskets and
      maintain, pursuant to Rule 17Ad-6(b) under the Securities Exchange Act of
      1934, as amended, a record of the total number of Fund Creation Baskets
      that are authorized, issued and outstanding based upon data provided to
      Administrator by the Fund and/or the General Partner.  The
      Administrator shall also provide the Fund and/or the General Partner on a
      regular basis with the total number of Fund Units authorized, issued and
      outstanding; provided however that the Administrator shall not be
      responsible for monitoring the issuance of such Units or compliance with
      any laws relating to the validity of the issuance or the legality of the
      sale of such Units.

            

    

     

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    APPENDIX
B TO THE

    ADMINISTRATIVE
AGENCY AGREEMENT

    

    List
of Authorized Persons

    

    

    

     

     

     

    
 

    

    
      
        	UNITED STATES SHORT OIL FUND,
      LP	 	 	 	 
	
                By:  United
      States Commodity Funds LLC, as General Partner

              	 	 	 	 
	 	 	 	 	 	 
	
                By: 
       

              	                                                                                                            
    	 	 	
              	 
	 	
                Name:
      Nicholas D. Gerber

              	 	 	
              	 
	 	
                Title: 
      President and Management Director

              	 	 	
                 

              	 
	 	Date: 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	UNITED STATES COMMODITY FUNDS
      LLC	 	 	 	 
	 	 	 	 	 	 
	By: 	 	 	 	 	 
	 	Name:
      Nicholas D. Gerber 	 	 	 	 
	 	Title:
      President and Management Director 	 	 	 	 
	 	Date: 	 	 	 	 

      

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    APPENDIX
C TO THE

    ADMINISTRATIVE
AGENCY AGREEMENT

    

    AUTHORIZED
SOURCES

    

    The General Partner a The General Partner and the Fund hereby
acknowledge that the Administrator is authorized to use the following authorized
sources for financial reporting, pricing (including corporate actions,
dividends and rights offering), and foreign exchange quotations, to assist it in
fulfilling its obligations under the aforementioned Agreement.

    BLOOMBERG

    EXTEL
(LONDON)

    FUTURES
COMMISSION MERCHANTS

    FUND
MANAGERS

     INTERACTIVE
DATA CORPORATION

     BROKERS

     REUTERS

     SUBCUSTODIAN
BANKS

     TELEKURS

     VALORINFORM
(GENEVA)

     REPUTABLE
FINANCIAL PUBLICATIONS

     STOCK
EXCHANGES

     FINANCIAL
INFORMATION INC. CARD

     JJ
KENNY

     FRI
CORPORATION

    

    
      	UNITED STATES SHORT OIL FUND,
      LP	 	 	 	 
	
              By:  United
      States Commodity Funds LLC, as General Partner

            	 	 	 	 
	 	 	 	 	 	 
	
              By: 
       

            	                                                                                                            
    	 	 	
            	 
	 	
              Name:
      Nicholas D. Gerber

            	 	 	
            	 
	 	
              Title: 
      President and Management Director

            	 	 	
               

            	 
	 	Date: 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	UNITED STATES COMMODITY FUNDS
      LLC	 	 	 	 
	 	 	 	 	 	 
	By: 	 	 	 	 	 
	 	Name:
      Nicholas D. Gerber 	 	 	 	 
	 	Title:
      President and Management Director 	 	 	 	 
	 	Date: 	 	 	 	 

    

     

     

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    

     

     

    APPENDIX
D

     

    

    BBH
Pricing Policies

    Futures,
Forwards, Swaps, Options and Treasuries

    

    The
pricing policies stated below are used for all BBH clients, including Mutual
Fund Registered Investment Companies.  These policies have been
audited by numerous accounting firms during annual fund audits.

    

    Futures

    Futures traded on exchanges are valued
using the closing settlement prices quoted on the relevant exchange and obtained
from pricing sources, typically Bloomberg or Reuters.

    

    Forward
Currency Contracts

    BBH obtains the WM Reuters London Close
closing spot rates and the WM Reuters London Close forward point rates on a
daily basis.  The currency forward contract pricing model derives the
differential in point rates to the expiration date of the forward and calculates
its present value.  The forward is valued at the net of the present
value and the spot rate.

    

    Swaps

    Swaps and other similar derivative or
contractual type instruments are valued at a price provided by a single broker
or dealer, typically the counterparty. If no such price is available, the
contract is valued at a price at which the counterparty to such contract would
repurchase the instrument or terminate the contract.

    

    Options

    Option
contracts on securities, currencies, indices, futures contracts, commodities and
other instruments shall be valued at the last sale price on the exchange or
market that is the Primary Market.  If a contract did not trade on the
Primary Market, it shall be valued at the last sale price on another exchange or
market where it did trade.   If there is no such sale price, the
value shall be the most recent bid quotation.

    

    Sale
prices and bid quotations indicated above shall be supplied by a Pricing Service
(Reuters, Bloomberg, IDC, etc.). If a Pricing Service is not able to provide
such sale prices or bid quotations, the value shall be determined by taking the
mean between the bid and the asked quotations provided by a single broker or
dealer, unless the broker or dealer can only provide a bid quotation, in which
case the value shall be such bid quotation.

    

    Except as
provided below, OTC currency options are valued by uploading the applicable
implied volatility rates from Reuters or Bloomberg.  Other inputs are
either uploaded (interest rates, spots) or are specified when the ticker symbols
are set up (expiration date, strike).  OTC currency options are then
priced by using the Garman-Kohlhagen modified Black-Scholes formula, which
adjusts for a constant yield versus a fixed dividend.

    

    Except as
provided below, OTC equity/index options are priced according to the contract
specifications (days to expiration, current spot index level, interest rates,
dividends, strike price) using the Black-Scholes pricing model, modified for
dividends.  The volatility input assumption is interpolated from the
previous day’s price.

    

    US
Treasuries

    BBH uses
an evaluated bid supplied by IDC for treasury prices.

    

    
      
        
        

      

      
        21

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