Document:

DATED [—], 2009

    

    CHINA
CORD BLOOD CORPORATION

    

    and

    

    XIN
XU

    

    
      
        

      

    

    

    SERVICE
AGREEMENT

    

    
      
 

    JONES
DAY

    Solicitors
and International Lawyers

    29th Floor,
Edinburgh Tower

    The
Landmark

    15
Queen’s Road Central

    Hong
Kong

    Telephone:
(852) 2526-6895

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INDEX

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Clause 

                              	 
      	
                                Subject

                              	 
      	
                                Page No

                              
	 
      	 
      	 
      	 
      	 
      
	
                                1.

                              	 
      	
                                DEFINITIONS AND
    INTERPRETATION

                              	 
      	
                                1

                              
	
                                2.

                              	 
      	
                                APPOINTMENT

                              	 
      	
                                4

                              
	
                                3.

                              	 
      	
                                TERM OF APPOINTMENT AND CONDITION
      PRECEDENT

                              	 
      	
                                4

                              
	
                                4.

                              	 
      	
                                POWERS, DUTIES AND WORKING
      HOURS

                              	 
      	
                                4

                              
	
                                5.

                              	 
      	
                                REPORTING

                              	 
      	
                                5

                              
	
                                6.

                              	 
      	
                                OUTSIDE INTERESTS

                              	 
      	
                                5

                              
	
                                7.

                              	 
      	
                                MEMBERS OF THE GROUP

                              	 
      	
                                6

                              
	
                                8.

                              	 
      	
                                REMUNERATION

                              	 
      	
                                6

                              
	
                                9.

                              	 
      	
                                LEAVE AND PAYMENTS DURING ABSENCE ON MEDICAL
      GROUNDS

                              	 
      	
                                7

                              
	
                                10.

                              	 
      	
                                OTHER
      BENEFITS

                              	 
      	
                                8

                              
	
                                11.

                              	 
      	
                                OBLIGATION TO PROVIDE WORK

                              	 
      	
                                9

                              
	
                                12.

                              	 
      	
                                TERMINATION

                              	 
      	
                                9

                              
	
                                13.

                              	 
      	
                                RECEIPT OF PAYMENTS AND BENEFITS FROM THIRD
      PARTIES

                              	 
      	
                                15

                              
	
                                14.

                              	 
      	
                                CONFIDENTIALITY

                              	 
      	
                                15

                              
	
                                15.

                              	 
      	
                                INVENTIONS, PATENTS AND OTHER
      INDUSTRIAL OR INTELLECTUAL
      PROPERTY

                              	 
      	
                                16

                              
	
                                16.

                              	 
      	
                                RESTRICTIVE COVENANTS

                              	 
      	
                                17

                              
	
                                17.

                              	 
      	
                                SEVERABILITY

                              	 
      	
                                20

                              
	
                                18.

                              	 
      	
                                ASSIGNMENT

                              	 
      	
                                20

                              
	
                                19.

                              	 
      	
                                ENTIRE AGREEMENT

                              	 
      	
                                20

                              
	
                                20.

                              	 
      	
                                PRIOR OBLIGATIONS

                              	 
      	
                                21

                              
	
                                21.

                              	 
      	
                                NOTICES

                              	 
      	
                                21

                              
	
                                22.

                              	 
      	
                                GENERAL

                              	 
      	
                                22

                              
	
                                23.

                              	
                                  

                              	
                                GOVERNING LAW AND
    JURISDICTION

                              	
                                  

                              	
                                22

                              

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THIS AGREEMENT is made on
[—],
2009.

    

    BETWEEN:

    

    
      	
              (1)

            	
              CHINA CORD BLOOD CORPORATION,
      a company incorporated under the laws of Cayman Islands with its
      registered office at Codan Trust Company (Cayman) Limited, Cricket Square,
      Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands and
      in Hong Kong at 48/F, Bank of China Tower, 1 Garden Road, Central, Hong
      Kong (the “Company”); and

            

    

    

    
      	
              (2)

            	
              XIN XU of 48/F, Bank of
      China Tower, 1 Garden Road, Central, Hong Kong
    (“Executive”).

            

    

    

    RECITALS:

    

    
      	
              (A)

            	
              The
      Company is engaged in the provision of cord blood stem cells storage
      services (“Business”) and wishes to retain the full-time services of the
      Executive.

            

    

    

    
      	
              (B)

            	
              The
      Executive has agreed to serve the Company as Chief Technology Officer
      of the Company on the terms and conditions set out
  herein.

            

    

    

    IT
IS AGREED as follows:

    

    
      	
              1.

            	
              DEFINITIONS
      AND INTERPRETATION

            

    

    

    
      	
              1.1

            	
              In
      this Agreement, unless the context otherwise requires, the following words
      and expressions shall have the following
  meanings:

            

    

     

    
      
        
          
            	
                    “Accrued
      Obligations”

                  	
                    has
      the meaning set forth in clause 12.4(a) of this
  Agreement;

                  
	 
      	 
      
	
                    “Affiliates”

                  	
                    has
      the meaning as defined in Rule 405 under the Securities
    Act;

                  
	 
      	 
      
	
                    “Appointment”

                  	
                    the
      appointment by the Company of the Executive pursuant to this
      Agreement;

                  
	 
      	 
      
	
                    “Board”

                  	
                    the
      board of directors from time to time of the Company;

                  
	 
      	 
      
	
                    “Business
      Combination”

                  	
                    has
      the meaning set forth in clause 12.4(b)(iii);

                  
	 
      	 
      
	
                    “Business
      Day”

                  	
                    a
      day on which banks are open for business in Hong Kong;

                  
	 
      	 
      
	
                    “Change
      of Control Termination”

                  	
                    has
      the meaning set forth in clause 12.4(c) of the
  Agreement;

                  

          

        

        

        
          
            
               

            

            
              - 1
-

              
                

              

            

            
               

            

          

        

         

        
          
            
              
                
                  	
                          “Confidential
      Information”

                        	
                          the
      business plans, financial information, operational methods, technical
      processes, inventions, customer and supplier lists and other trade
      secrets, know-how or confidential information of the Company and any
      member of the Group whether relating to the Business or which the Company
      and any member of the group has obtained from any third party on terms
      that restrict its disclosure or use, other confidential technical
      information, any of the trade secrets, clients’ list, accounts, financial
      or trading information or other confidential or personal information which
      the Executive may receive or obtain in relation to the business, finances,
      dealings or affairs of the Group or any principal, joint venture partner,
      contracting party or client of the Group including any information
      regarding the products, services, research program, projects or other
      technical data, knowhow or specifications, whether in human or machine
      readable form and whether stored electronically or otherwise, or the
      finances, proposals, contractual arrangements, principals, joint venture
      partners, contracting parties, clients, employees or agents of the
      Group;

                        
	 	 
	
                          “Constructive
      Termination”

                        	
                          has
      the meaning set forth in clause 12.4(d) of this
  Agreement;

                        
	 
      	 
	
                          “Designated
      Stock Exchange”

                        	
                          the
      exchange on which shares of the Company are traded;

                        
	 
      	 
      
	
                          “Group”

                        	
                          the
      Company and its Subsidiaries;

                        
	 
      	 
      
	
                          “Hong
      Kong”

                        	
                          the
      Hong Kong Special Administrative Region of the PRC;

                        
	 
      	 
      
	
                          “Independent
      Shareholders”

                        	
                          holders
      of ordinary shares in the Company other than the Executive and his
      Affiliates;

                        
	 
      	 
      
	
                          “Intellectual
      Property”

                        	
                          includes
      (collectively with all Inventions) all discoveries, concepts, formats,
      suggestions, developments, arrangements, packages, programs, trade marks,
      trade names, copyrights, designs, know how, goodwill, reputation, get-up,
      logos, plans, models and other industrial or intellectual
      properties;

                        
	 
      	 
      
	
                          “Inventions”

                        	
                          includes
      all processes, inventions and improvements;

                        
	
                           
      

                        	 
      
	
                          “Involuntary
      Termination”

                        	
                          has
      the meaning set forth in clause 12.4(e) of the
  Agreement;

                        
	 
      	 
      
	
                          “Person”

                        	
                          has
      the meaning set forth in clause 12.4(b)(ii) of this
    Agreement;

                        

                

              

            

          

        

        
          
            
               

            

            
              - 2
-

              
                

              

            

            
               

            

          

        

         

      

    

    
      
        
          	
                  “PRC”

                	
                  the
      People’s Republic of China;

                
	 
      	 
      
	
                  “Relevant
      Intellectual Property”

                	
                  all
      Intellectual Property produced, invented or discovered by the Executive
      either alone or with any other person at any time now or hereafter during
      the continuance in force of this Agreement (whether or not in the course
      of his employment hereunder) which is Intellectual Property of the kind
      produced at any such time by the Company or any member of the Group and
      not copied from others, or relates directly or indirectly to the business
      of the Company or any member of the Group or which may in the opinion of
      the Company be capable of being used or adapted for use therein or in
      connection therewith;

                
	 
      	 
      
	
                  “Severance
      Benefit”

                	
                  has
      the meaning set forth in clause 12.3(a)(ii) of this
    Agreement;

                
	
                   
      

                	 
      
	
                  “Subsidiary”

                   

                	
                  in
      relation to a Person, a corporation or other entity a majority of whose
      outstanding voting stock or voting power is beneficially owned directly or
      indirectly by the Person;

                
	 
      	 
      
	
                  “Term”

                	
                  the
      term of the Executive’s appointment under this Agreement until its expiry
      or termination pursuant to clause 3 or 12;

                
	 
      	 
      
	
                  “U.S.”

                	
                  United
      States of America; and

                
	 
      	 
      
	
                  “US$”

                	
                  United
      States dollars.

                

        

      

       

    

    
      	
              1.2

            	
              Reference
      to any statute or statutory provision includes a reference to that statute
      or statutory provision as from time to time amended, consolidated,
      extended and re-enacted, or as its operation is modified by any other
      statute or statutory provision (whether with or without modification), and
      shall include any subsidiary legislation enacted under the relevant
      statute.

            

    

    

    
      	
              1.3

            	
              References
      to the singular include the plural; references to any one gender shall
      include every gender; references to persons shall include bodies corporate
      and unincorporate; and (in each case) vice
  versa.

            

    

    

    
      	
              1.4

            	
              References
      to parties and clauses are respectively to the parties and clauses to this
      Agreement.

            

    

    

    
      	
              1.5

            	
              Headings
      used in this Agreement are for convenience only and shall not affect its
      interpretation.

            

    

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

    

    
      	
              2.

            	
              APPOINTMENT

            

    

    

    
      	
              2.1

            	
              The
      Company hereby engages the Executive and the Executive agrees to serve the
      Company as Chief Technology Officer and in such capacity to perform
      the duties and exercise the powers from time to time assigned to or vested
      in him by the Board or in such other capacity of like status as the Board
      may require.

            

    

    

    
      	
              3.

            	
              TERM
      OF APPOINTMENT AND CONDITION
PRECEDENT

            

    

    

    Subject
to clause 12 and the terms and conditions of this Agreement, the term of this
Agreement shall be three years commencing from the date of this Agreement and
will be automatically renewed.

    

    
      	
              4.

            	
              POWERS,
      DUTIES AND WORKING HOURS

            

    

    

    
      	
              4.1

            	
              During
      the Term the Executive shall:

            

    

    

    
      	
               
      

            	
              (a)

            	
              serve
      the Company in the capacity of Chief Technology Officer of the
      Company and shall serve any other member of the Group as required by the
      Board and shall in such capacity contribute to the overall policy making,
      management and business development of the Group as the Board may
      reasonably direct;

            

    

    

    
      	
               
      

            	
              (b)

            	
              unless
      prevented by ill health or accident devote the whole of his time,
      attention and abilities exclusively and diligently to carrying out his
      duties hereunder;

            

    

    

    
      	
               
      

            	
              (c)

            	
              carry
      out his duties in a proper and efficient manner and use his best endeavors
      to promote and maintain the interests and reputation of the
      Group;

            

    

    

    
      	
               
      

            	
              (d)

            	
              exercise
      such powers and perform such duties in relation to the business and
      operations of the Group as may from time to time be vested in or assigned
      to him by the Board; such powers and duties may from time to time fall
      outside the normal ambit of the Executive’s position but will not be
      duties inappropriate to the Executive’s
status;

            

    

    

    
      	
               
      

            	
              (e)

            	
              comply
      with all reasonable directions from time to time given to him by the Board
      and with all rules and regulations from time to time laid down by the
      Company concerning its employees which are consistent with this
      Agreement;

            

    

    

    
      	
               
      

            	
              (f)

            	
              work
      at such location in the territory of Hong Kong and/or the PRC and/or any
      part of the world as the Company shall require from time to time and, if
      the Company shall so require for this purpose, move to and reside at such
      location;

            

    

    

    
      	
               
      

            	
              (g)

            	
              travel
      to such places (whether within or outside the territory of Hong Kong or
      the PRC) in such manner and on such occasions as the Group may from time
      to time reasonably require;

            

    

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (h)

            	
              ensure
      that the requirements of the United States Securities Act of 1933, as
      amended (the “Securities Act”), the United States Securities Exchange Act
      of 1934, as amended (the “Exchange Act”), and all other U.S. securities
      laws, rules and regulations, including rules of the Designated Stock
      Exchange, from time to time in force are duly complied with by the
      Company; and

            

    

    

    
      	
               
      

            	
              (i)

            	
              at
      all times keep the Board promptly and fully informed of all matters
      relating to or in connection with the performance of his duties in
      relation to the Company.

            

    

    

    
      	
              4.2

            	
              The
      Executive’s normal working hours shall be from 9:00 a.m. to 5:30 p.m.
      Monday to Friday (inclusive) together with such additional hours outside
      those hours or on Saturdays or Sundays or during holidays as in the
      opinion of the Company are reasonably necessary for the proper performance
      of the Executive’s duties.

            

    

    

    
      	
              4.3

            	
              The
      Company may from time to time and at any time assign any title to the
      Executive and any other duties to the Executive in addition to or in
      substitution of any title then held by the Executive and the duties (if
      any) then assigned to him.

            

    

    

    
      	
              4.4

            	
              The
      Executive shall be required to devote his full time, attention and
      abilities to his duties under this Agreement and to act in the best
      interests of all members of the Group at all
  times.

            

    

    

    
      	
              5.

            	
              REPORTING

            

    

    

    The
Executive shall report to the Board and shall at all times keep the Board fully
informed of his activities and shall promptly provide such information and
explanations as may be requested from time to time by the Board.

    

    
      	
              6.

            	
              OUTSIDE
      INTERESTS

            

    

    

    
      	
              6.1

            	
              The
      Executive shall not at any time during the Term without the prior
      notification to and sanction by the Board be or become a director of any
      company (other than any members of the Group) or be directly or indirectly
      engaged or concerned or interested in any other companies which carries on
      business of a similar nature to the
Business.

            

    

    

    
      	
              6.2

            	
              Nothing
      in this Agreement shall prevent the Executive
  from:

            

    

    

    
      	
               
      

            	
              (a)

            	
              being
      engaged, concerned, interested in any other business, trade or occupation
      with the prior notification to and sanction by the Board;
    or

            

    

    

    
      	
               
      

            	
              (b)

            	
              holding
      or being beneficially interested in less than 5% in any class of
      securities in any company if such class of securities is listed on a stock
      exchange or the relevant company does not carry on any business which
      competes with the Business of the
Group.

            

    

    

    
      	
              6.3

            	
              The
      following provisions shall apply in relation to any application for
      consent under clause 6.2(a):

            

    

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (a)

            	
              the
      Executive shall furnish to the Board a description of the nature of the
      business, trade or occupation in which he intends to engage, the nature of
      the duties required and information as the Board may require from time to
      time; and

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      Executive shall (as a condition precedent to such consent) furnish to the
      Board an undertaking that the matter represented in the statement referred
      to in clause 6.3(a) will at all times during the Term remain correct and
      accurate and that he will not during the Term act in variance
      thereof.

            

    

    

    
      	
              7.

            	
              MEMBERS
      OF THE GROUP

            

    

    

    Without
prejudice to the Executive’s rights under this Agreement the Company shall be
entitled to second the Executive’s services on a full or part time basis to any
member of the Group and the Executive shall hold such offices with the relevant
member of the Group for such periods as the Company may require.

    

    
      	
              8.

            	
              REMUNERATION

            

    

    

    
      	
              8.1

            	
              During
      the continuance of the Term the remuneration of the Executive shall
      be:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Salary

            

    

    

    
      	
               
      

            	
              (i)

            	
              A
      salary of HK$35,000 per month.

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Such
      salary shall be payable in arrears at the end of each calendar month
      during the Term or, if the date of payment is not a Business Day, on the
      immediately preceding Business Day.  Such payment date may be
      varied by the Board from time to time but so that the salary of the
      Executive for a particular calendar month shall not be paid later than the
      last day of that calendar month.

            

    

    

    
      	
               
      

            	
              (iii)

            	
              During
      the continuance of the Term, on the completion of each 12 months of
      service, the Executive shall be entitled to an additional payment in an
      amount equal to the then current monthly salary. Such additional salary
      shall be payable at the same time when salary for the twelfth month shall
      be paid in accordance with sub-clause
  8.1(a)(ii).

            

    

    

    
      	
               
      

            	
              (iv)

            	
              The
      salary of the Executive shall be subject to review by the Board on an
      annual basis and may be increased as the Board may determine in its
      absolute discretion. Without the express prior written consent of the
      Executive, the Company shall not reduce the salary of the
      Executive.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Bonus

            

    

    

    A bonus
in such sum and payable at such time or times as the Board may in its absolute
discretion determine.

     

    
      
        
        

      

      
        - 6
-

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (c)

            	
              Share
      Options

            

    

    

    The
Company may offer share options, restricted shares, performance shares, etc to
the Executive pursuant to the executive / employee share option scheme adopted
or to be adopted by the Company; provided always that the amount of the options
offered, the option price and the date of grant shall be determined by the Board
after all necessary regulatory and other consents, approvals and authorizations
have been obtained.

    

    
      	
              8.2

            	
              Notwithstanding
      anything to the contrary contained in the articles of association of the
      Company or of any member of the Group the Executive shall not be entitled
      to any remuneration or any payment whatsoever as an officer or employee of
      the Company or of any member of the Group in addition to that specified in
      this Agreement.

            

    

    

    
      	
              8.3

            	
              The
      Company shall reimburse the Executive all out-of-pocket expenses
      reasonably incurred by the Executive in carrying out his duties in
      connection with the business of the Company or of any member of the Group
      upon production of the relevant invoices and
  receipts.

            

    

    

    
      	
              8.4

            	
              The
      Company shall be entitled to deduct from the Executive’s salary under
      sub-clause 8.1(a) and/or bonus under sub-clause 8.1(b) all sums from time
      to time owing from the Executive to the Company or to any member of the
      Group.

            

    

    

    
      	
              8.5

            	
              The
      Executive shall not vote (nor be counted in the quorum) on any resolution
      of the Board regarding the determination of the annual revision, if any,
      to the Executive’s annual salary and/or bonus under sub-clauses 8.1(a) and
      (b).

            

    

    

    
      	
              9.

            	
              LEAVE
      AND PAYMENTS DURING ABSENCE ON MEDICAL
GROUNDS

            

    

    

    
      	
              9.1

            	
              Leave

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Executive shall (in addition to statutory and bank holidays in Hong
      Kong)  be entitled after completion of each year of the
      Appointment to 14 working days’ paid leave, which shall be taken at such
      time or times as may be approved by the Board.  Accrued paid
      leave may be carried forward up to a maximum of 15 working days for each
      completed year or, at the option of the Board, a payment in lieu thereof
      to be agreed in writing between the Board and the Executive shall be made
      to the Executive.

            

    

    

    
      	
               
      

            	
              (b)

            	
              If
      the Appointment of the Executive is to
  terminate:

            

    

    

    
      	
               
      

            	
              (i)

            	
              on
      the completion of any year of service, the Executive shall be entitled to
      take his leave immediately prior to the end of such year of service
      notwithstanding that at that time the year of service shall not have been
      completed; or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              during
      any year of service (for any reason other than termination pursuant to
      sub-clauses 12.1(b)(i), (ii) and (iii)) the Executive shall be entitled to
      an amount of leave proportionate to the part of the year during which he
      has been employed by the Company, such leave to be taken immediately prior
      to the termination of the
Appointment.

            

    

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (c)

            	
              If
      for any reason the Executive shall not have taken his full entitlement of
      leave in any one year he shall not have any claim against the Company in
      respect thereof nor, unless the reason is the exigency of the Company’s
      business (of which the Company shall be the sole judge), shall he be
      entitled to additional leave in any year in respect of leave not taken in
      previous years.

            

    

    

    
      	
              9.2

            	
              Payments during
      absence on medical grounds

            

    

    

    
      	
               
      

            	
              (a)

            	
              The
      Company shall continue to pay the Executive his full remuneration during
      any period of absence by the Executive on medical grounds up to a maximum
      of 30 working days in any period of 12 months; provided that the Executive
      shall, if required, supply the Company with medical certificates covering
      his period or periods of absence.

            

    

    

    
      	
               
      

            	
              (b)

            	
              If
      the absence of the Executive was or appeared to be occasioned by
      actionable negligence of a third party in respect of which damages are or
      may be recoverable, the Executive shall forthwith notify the Company of
      the relevant circumstances and of any claim, compromise, settlement or
      judgment made or awarded in connection therewith and shall give to the
      Company all such particulars of such matter as the Company may
      require.  If the Company shall so require, the Executive shall
      pay over to the Company such sum as he may recover in respect of such
      claim, compromise, settlement or judgment less any fees, expenses and
      other outgoings paid or incurred or to be paid or incurred by the
      Executive in connection therewith, provided that the maximum amount so
      payable by the Executive to the Company hereunder shall be that paid by
      the Company to the Executive under sub-clause 9.2(a) in respect of his
      period or periods of absence.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Company may at its expense at any time, whether or not the Executive is
      then absent on medical grounds, require the Executive to submit to such
      medical examinations and tests by doctors nominated by the
      Company.

            

    

    

    
      	
              10.

            	
              OTHER
      BENEFITS

            

    

    

    
      	
              10.1

            	
              The
      Executive shall also be entitled to the following benefits, subject to
      determination by the Board as to the appropriate level of cost for each
      item.

            

    

    

    
      	
               
      

            	
              (a)

            	
              Business and Related
      Expenses

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      following arrangements shall apply whenever the Executive is required to
      travel outside the location where he is based in the performance of his
      duties under this Agreement:

            

    

    

    
      	
               
      

            	
              (1)

            	
              full
      reimbursement shall be made to the Executive for meal expenses properly
      and reasonably incurred by him;

            

    

    

    
      	
               
      

            	
              (2)

            	
              full
      reimbursement shall be made to the Executive for all travel expenses
      properly and reasonably incurred by
him.

            

    

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (ii)

            	
              All
      reasonable traveling, entertainment and other expenses reasonably incurred
      by the Executive in the proper performance of his duties under this
      Agreement, a monthly account of which accompanied by supporting vouchers,
      shall be rendered by the Executive to the Company and the Company shall be
      entitled to withhold or reclaim payment of any such expenses which in the
      opinion of the Board have not been reasonably or properly
      incurred.  The Board shall consider the relevant accounts within
      a reasonable time after they have been rendered and indicate its approval
      or disapproval.  The expenses shall be paid or reimbursed not
      more than 21 Business Days after the approval by the Board of the relevant
      accounts.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Medical and Dental
      Expenses

            

    

    

    The
Executive is entitled to such medical and dental coverage (if any) as provided
for under the insurance taken out by the Company.

    

    
      	
               
      

            	
              (c)

            	
              Directors’ and
      Officers’ Liability
Insurance

            

    

    

    The
Company shall during the continuance of the Term provide to the Executive
insurance cover under directors’ and officers’ liability insurance policy
subscribed to by the Company, on such terms and conditions as the Board may
prescribe and subject further to the terms of the policy issued by its
underwriter.  The Company shall punctually pay all premiums payable on
such policy.

    

    
      	
              11.

            	
              OBLIGATION
      TO PROVIDE WORK

            

    

    

    
      	
              11.1

            	
              There
      shall be no obligation on the Company to provide work for the Executive
      and if during the continuance of the Appointment the Company or any member
      of the Group does not provide the Executive with any work for a certain
      period then during such period, the
Executive:

            

    

    

    
      	
               
      

            	
              (a)

            	
              shall
      not be entitled to access to any premises or offices of the Company or any
      member of the Group; and

            

    

    

    
      	
               
      

            	
              (b)

            	
              shall
      continue to receive his full remuneration and other benefits for or in
      respect of such period payable
hereunder.

            

    

    

    
      	
              12.

            	
              TERMINATION

            

    

    

    
      	
              12.1

            	
              Termination by the
      Company

            

    

    

    
      	
               
      

            	
              (a)

            	
              This
      Agreement may be terminated by the Board at any time (i) in the event of
      the Executive’s death; or (ii) if the Executive shall at any time during
      the Term become physically or mentally disabled whether totally or
      partially so that he is substantially unable to perform his services
      hereunder for a period of or periods aggregating 90 days in the
      immediately preceding twelve (12) months (and in this case the Company may
      at any time after the accrual of 90 days in the period or periods
      aforesaid by written notice to the Executive terminate the Appointment
      whether forthwith or at a date specified in the notice of
      termination).

            

    

    
      
         

      

      
        - 9
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              In
      addition to the circumstances set forth in clause 12.1(a), this Agreement
      may be terminated by the Company at any time without prior notice, if the
      Executive shall at any time during the
Term:

            

    

    

    
      	
               
      

            	
              (i)

            	
              be
      convicted of any offence (other than a traffic offence) involving the
      property of the Company or any member of the Group, or any other criminal
      offence (other than an offence which in the reasonable opinion of the
      Board does not affect his position in the
  Company);

            

    

    

    
      	
               
      

            	
              (ii)

            	
              have
      committed, repeated or continued (after warning) any irredeemable,
      persistent or material breach of his obligations or any of the provisions
      of this Agreement;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              be
      guilty of willful neglect, fraud or dishonesty in the discharge of his
      duties under this Agreement, or any grave misconduct which in the absolute
      opinion of the Board tends to bring himself or the Company or any member
      of the Group into disrepute;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              have
      committed an act of bankruptcy or compounded with his creditors generally
      or be guilty of conduct which would make his continued Appointment
      prejudicial to the best interests of the Company or any member of the
      Group;

            

    

    

    
      	
               
      

            	
              (v)

            	
              be
      disqualified to act as a director of the Company under any applicable law,
      rules or regulations;

            

    

    

    
      	
               
      

            	
              (vi)

            	
              be
      absent (other than in accordance with clause 9) for an aggregate period of
      14 working days without prior notice to the
  Board;

            

    

    

    
      	
               
      

            	
              (vii)

            	
              be
      in any material or persistent deviation from any matter or circumstances
      represented by him in the statement referred to in clause
      6.3(a);

            

    

    

    
      	
               
      

            	
              (viii)

            	
              be
      in material breach of any of the terms of the undertaking referred to in
      clause 6.3(b);

            

    

    

    
      	
               
      

            	
              (ix)

            	
              be
      in material breach of any terms or conditions of this Agreement;
      or

            

    

    

    
      	
               
      

            	
              (x)

            	
              have
      committed or failed to commit any other act, which commission or failure
      would entitle the Company to terminate this Agreement without notice at
      common law.

            

    

    

    
      	
               
      

            	
              (c)

            	
              Notwithstanding
      anything herein to the contrary, this Agreement may be terminated by the
      Company at any time, without cause, with no less than thirty (30) days’
      advance notice to the Executive.

            

    

     

    
      
        
        

      

      
        - 10
-

        
          

        

      

      
        
        

      

    

     

    
      	
              12.2

            	
              Termination by the
      Executive

            

    

     

    
      	
               
      

            	
              (a)

            	
              This
      Agreement may be terminated by the Executive in the event of a
      Constructive Termination.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Notwithstanding
      anything herein to the contrary, this Agreement may be terminated by the
      Executive at any time, without cause, with no less than ninety (90) days’
      advance notice to the Company.

            

    

     

    
      	
              12.3

            	
              Benefits upon
      Termination

            

    

     

    

    
      	
               
      

            	
              (a)

            	
              If
      this Agreement is terminated for any reason by the Company or by the
      Executive (in such a case, the date on which the Executive’s employment by
      the Company terminates is referred to as the “Severance Date”), the
      Company shall have no further obligation to make or provide to the
      Executive, and the Executive shall have no further right to receive or
      obtain from the Company, any payments or benefits or compensation or
      damages except as follows:

            

    

    

    
      	
               
      

            	
              (i)

            	
              The
      Company shall pay the Executive (or, in the event of his death, the
      Executive’s estate) his Accrued
Obligations;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              In
      the event of an Involuntary Termination, each outstanding option,
      restricted stock award or other stock-based award granted by the Company
      to the Executive shall be automatically accelerated so that such award
      shall be vested in full as of the Severance Date;
  and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              In
      the event of a Change of Control Termination, the Company shall pay the
      Executive in one lump sum, subject to tax withholding and other authorized
      deductions, an amount equal to US$5 million (the “Severance Benefit”),
      subject to the Executive’s execution of the documents in accordance with
      clause 12.5(b).

            

    

    

    
      	
               
      

            	
              (b)

            	
              Notwithstanding
      the foregoing provisions of this clause 12.3, if any of the events set
      forth in clause 12.1(b), which give rise to the Company’s option to
      terminate this Agreement, shall have occurred prior to the Severance Date
      or if the Executive shall be in breach of clauses 14, 15 or 16 (whether
      prior to or after the Severance Date) (x) the Executive shall not be
      entitled to claim any compensation or damages for or in respect of or by
      reason of such termination and (y) the Executive shall no longer be
      entitled to the additional benefits prescribed by clause
      12.3(a)(ii).

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Executive agrees that the payments contemplated by this clause 12.3 (and
      any applicable acceleration of vesting of an equity-based award in
      accordance with the terms of such award in connection with the termination
      of the Executive’s Appointment) shall constitute the exclusive and sole
      remedy for the Executive and the Executive covenants not to assert or
      pursue any other remedies, at law or in equity, with respect to any
      termination of the Appointment. The Company and the Executive acknowledge
      and agree that there is no duty of the Executive to mitigate damages under
      this Agreement. All amounts paid to the Executive pursuant to clause 12.3
      shall be paid without regard to whether the Executive has taken or takes
      actions to  mitigate
damages.

            

    

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

    
 

    
      	
              12.4

            	
              Certain Defined
      Terms

            

    

    

    For
purposes of this clause 12:

    

    
      	
               
      

            	
              (a)

            	
              “Accrued
      Obligations” means:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Any
      salary under clause 8.1(a) for or in respect of the then current year of
      service that had actually accrued but had not been paid (including accrued
      and unpaid vacation time) on or before the Severance
  Date;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              Any
      bonus payable pursuant to clause 8.1(b) to the extent earned by but not
      previously paid to the Executive;
and

            

    

    

    
      	
               
      

            	
              (iii)

            	
              Any
      reimbursement due to the Executive pursuant to clause 10.1(a) for expenses
      incurred by the Executive on or before the Severance
  Date.

            

    

    

    
      	
               
      

            	
              (b)

            	
              “Change
      of Control” shall mean the first to occur of any of the following events
      after the commencement of the Term:

            

    

    

    
      	
               
      

            	
              (i)

            	
              Approval
      by shareholders of the Company (or, if no shareholder approval is
      required, by the Board alone) of the complete dissolution or liquidation
      of the Company, other than in the context of a Business Combination that
      does not constitute a Change in Control under paragraph (iii)
      below;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              The
      acquisition by any individual, entity or group (within the meaning of
      Section 13(d)(3) or 14(d)(2) of the Exchange Act, referred to herein as a
      “Person”) of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 50% or more of either (1) the
      then-outstanding ordinary shares of the Company (the “Outstanding Company
      Common Shares”) or (2) the combined voting power of the then-outstanding
      voting securities of the Company entitled to vote generally in the
      election of directors (the “Outstanding Company Voting Securities”);
      provided, however, that, for purposes of this paragraph (ii), the
      following acquisitions shall not constitute a Change in Control: (A) any
      acquisition directly from the Company, including, without limitation, a
      public offering of securities, (B) any acquisition by the Company, (C) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or its Affiliates or a successor, (D) any
      acquisition by any entity pursuant to a Business Combination, (E) any
      acquisition by a Person described in and satisfying the conditions of Rule
      13d-1(b) promulgated under the Exchange Act, or (F) any acquisition by a
      Person who is the beneficial owner (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 40% or more of the Outstanding
      Company Common Shares and/or the Outstanding Company Voting Securities on
      the date of this Agreement (or an Affiliate, heir, descendant, or related
      party of or to such Person); or

            

    

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (iii)

            	
              Consummation
      of a reorganization, merger, statutory share exchange or consolidation or
      similar corporate transaction involving the Company or any Subsidiary of
      the Company, a sale or other disposition of all or substantially all of
      the assets of the Company, or the acquisition of assets or stock of
      another entity by the Company or any of its Subsidiaries (each, a
      “Business Combination”), in each case unless, following such Business
      Combination, all or substantially all of the individuals and entities that
      were the beneficial owners of the Outstanding Company Common Shares and
      the Outstanding Company Voting Securities immediately prior to such
      Business Combination beneficially own, directly or indirectly, more than
      50% of the then-outstanding shares of common stock and the combined voting
      power of the then-outstanding voting securities entitled to vote generally
      in the election of directors, as the case may be, of the entity resulting
      from such Business Combination (including, without limitation, an entity
      that, as a result of such transaction, owns the Company or all or
      substantially all of the Company’s assets directly or through one or more
      subsidiaries), and no Person (excluding any individual or entity described
      in clauses (C), (E) or (F) of paragraph (ii) above) beneficially owns
      (within the meaning of Rule 13d-3 promulgated under the Exchange Act),
      directly or indirectly, more than 50% of, respectively, the
      then-outstanding shares of common stock of the entity resulting from such
      Business Combination or the combined voting power of the then-outstanding
      voting securities of such entity, except to the extent that the ownership
      in excess of 50% existed prior to the Business Combination and the Company
      is not the surviving entity; or

            

    

    

    provided,
however, that a transaction shall not constitute a Change of Control if it is in
connection with the underwritten public offering of the securities of the
Company.

    

    
      	
               
      

            	
              (c)

            	
              “Change
      of Control Termination” shall mean (i) a resignation by the Executive
      within thirty (30) days after a Change of Control or (ii) a termination of
      the Executive by the Company for reasons other than those set out in
      clauses 12.1(a) and 12.1(b) following a Change of Control or within two
      (2) years thereafter.

            

    

    

    
      	
               
      

            	
              (d)

            	
              “Constructive
      Termination” shall mean the occurrence of any of the following: (1)
      without the Executive’s express written consent, a material reduction of
      the Executive’s duties, position or responsibilities relative to the
      Executive’s duties, position or responsibilities in effect immediately
      prior to such reduction, or the removal of the Executive from such duties,
      position and responsibilities, unless the Executive is provided with
      substantially comparable duties, position and responsibilities; (2)
      without the Executive’s express written consent, a material reduction of
      the facilities and perquisites (including without limitation office space,
      location and administrative support) available to the Executive
      immediately prior to such reduction; (3) without the Executive’s express
      written consent, a reduction by the Company of the Executive’s salary or
      bonus opportunity as in effect immediately prior to such reduction; (4) a
      material reduction by the Company in the kind or level of employee
      benefits to which the Executive is entitled immediately prior to such
      reduction with the result that the Executive’s overall benefits package is
      materially reduced; or (5) the Company materially breaches any term or
      condition of this Agreement which has not been cured within a reasonable
      time after the Executive has given to the Company written notice of such
      breach.

            

    

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (e)

            	
              “Involuntary
      Termination” shall mean a Constructive Termination, a Change of Control
      Termination or a termination of the Executive by the Company for reasons
      other than those set out in clauses 12.1(a) and
  12.1(b).

            

    

    

    
      	
              12.5

            	
              Upon
      expiry or termination of the Term pursuant to clause 3 or
    12:

            

    

    

    
      	
               
      

            	
              (a)

            	
              all
      documents, records, correspondence, client lists, accounts, statistics,
      equipment or other property relating to the businesses or affairs of any
      member of the Group (including all those items referred to in clause 13)
      kept in the possession or under the control of the Executive and all
      copies thereof or extracts therefrom made by or on behalf of the Executive
      shall be and remain the property of the Company and shall be delivered up
      to the Company;

            

    

    

    
      	
               
      

            	
              (b)

            	
              if
      the Executive is at any time appointed a director of the Company or any
      member of the Group, he shall resign in writing from any office held by
      him as such director and from all other offices held by him with the Group
      and to execute an acknowledgment under seal to the effect that he has no
      claims against the Company or any member of the Group for compensation for
      loss of office, remuneration, severance benefits or otherwise;
      and

            

    

    

    
      	
               
      

            	
              (c)

            	
              in
      the event of the Executive failing to take any of the actions as required
      by the Company, the Company is hereby irrevocably and by way of security
      appointed the attorney of the Executive to appoint such person in the name
      of and on behalf of the Executive to sign, seal and deliver resignations
      to the Company and to file such returns or take such other action as may
      be necessary or desirable under applicable laws, rules and
      regulations.  The Executive agrees to confirm and ratify such
      documents and acts.

            

    

    

    
      	
              12.6

            	
              After
      the expiry or termination of the Term the Executive shall not at any time
      thereafter represent himself as being in any way connected with or
      interested in the business of or employed by the Company or any member of
      the Group; or use for trade or other purposes the name of the Company or
      any member of the Group or any name capable of confusion
      therewith.

            

    

    

    
      	
              12.7

            	
              Expiry
      or termination of the Term shall be without prejudice to clauses 14, 15
      and 16 (all of which shall remain in full force and effect notwithstanding
      such expiry or termination).

            

    

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

    

    
      	
              13.

            	
              RECEIPT
      OF PAYMENTS AND BENEFITS FROM THIRD
PARTIES

            

    

    

    Subject
to any written regulations issued by the Company which may be applicable,
neither the Executive nor any member of his family nor any company nor any
business entity in which the Executive or any of them has an interest, shall be
entitled to receive or obtain directly or indirectly any payment, discount,
rebate, commission or other benefit from third parties in respect of any
business transacted (whether or not by the Executive) by or on behalf of any
member of the Group.  If the Executive, any member of his family or
any company or any business entity in which the Executive or any of them has an
interest shall directly or indirectly obtain any such payment, discount, rebate,
commission or other benefit, the Executive shall forthwith disclose this to the
Company and, unless the Company agrees otherwise, account to the Company or the
relevant member of the Group for the amount received or the value of the benefit
so obtained.

    

    
      	
              14.

            	
              CONFIDENTIALITY

            

    

    

    
      	
              14.1

            	
              The
      Executive recognises and acknowledges that in the performance of his
      duties under this Agreement the Executive may come into contact with
      Confidential Information, all of which is of a confidential nature, is
      valuable and is the exclusive property of the Company or the relevant
      member of the Group (as the case may be).  Without prejudice to
      the general duty of confidence of the Executive towards the Company and
      any member of the Group, the Executive shall not either during or at any
      time after the expiry or termination of the Term (as the case may
      be):

            

    

    

    
      	
               
      

            	
              (a)

            	
              divulge
      or communicate to or cause or enable any third party to become aware of or
      use, take away, conceal, destroy or retain for his own use or some other
      person’s advantage or to the detriment of the Company or any member of the
      Group any Confidential Information, except to those officers or employees
      of the Company and any member of the Group whose duties require that such
      Confidential Information be disclosed to
them;

            

    

    

    
      	
               
      

            	
              (b)

            	
              use
      any Confidential Information for his own purposes or for any purpose other
      than those of the Company or any member of the Group;
  or

            

    

    

    
      	
               
      

            	
              (c)

            	
              through
      any failure to exercise due care and diligence cause any unauthorized
      disclosure of any Confidential Information or other information in respect
      of which the Company or any member of the Group is bound by an obligation
      of confidence to any third party which obligation is within the actual or
      constructive knowledge of the
Executive.

            

    

    

    
      	
              14.2

            	
              The
      Executive shall promptly deliver to the Company upon expiry or termination
      of the Term or at any time as the Company may request all such memorandum,
      notes, records, papers, reports, manuals, drawings, blueprints and other
      documents (and all copies thereof) relating to the business of the Company
      or any member of the Group and all property associated therewith as he may
      possess or have under his control at the time.  For the
      avoidance of doubt it is hereby declared that the property in all such
      documents shall at all times be vested in the Company or the relevant
      member of the Group, as the case may
be.

            

    

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

    

    
      	
              14.3

            	
              If
      the Executive commits or threatens to commit a breach of sub-clauses 14.1
      or 14.2 the Company shall be
entitled:

            

    

    

    
      	
               
      

            	
              (a)

            	
              to
      seek an injunction (against a breach of sub-clause 14.1) or specific
      performance (for a breach of sub-clause 14.2) against him, it being
      acknowledged that any such breach or threatened breach shall cause
      irreparable injury to the Company and that monetary damages shall not
      provide an adequate remedy to the Company;
and

            

    

    

    
      	
               
      

            	
              (b)

            	
              to
      require him to account for and pay over to the Company (which the
      Executive hereby agrees to do) all compensation, profits, monies,
      accruals, increments or any other transactions constituting a breach of
      any of the provisions of sub-clauses 14.l and
  14.2.

            

    

    

    
      	
              15.

            	
              INVENTIONS,
      PATENTS AND OTHER INDUSTRIAL OR INTELLECTUAL
  PROPERTY

            

    

    

    
      	
              15.1

            	
              The
      Executive agrees that all Relevant Intellectual Property (whether
      patentable or not) shall be the absolute property of the
      Company.  The Executive shall
further:

            

    

    

    
      	
               
      

            	
              (a)

            	
              notify
      and disclose to the Company in writing full details of all Relevant
      Intellectual Property forthwith upon the production of the same, and
      promptly whenever requested by the Company and in any event upon the
      expiry or termination of the Term deliver up to the Company all
      correspondence and other documents, papers and records, and all copies
      thereof in his possession, custody and power relating to any Relevant
      Intellectual Property;

            

    

    

    
      	
               
      

            	
              (b)

            	
              assign
      to the Company or any member of the Group as the Company may designate in
      its absolute discretion, without additional compensation all rights
      (including patent, registered design and trade mark rights and copyrights)
      to such Relevant Intellectual Property
  worldwide;

            

    

    

    
      	
               
      

            	
              (c)

            	
              if
      required by the Company, apply or join with the Company or any member of
      the Group as the Company may direct in applying for letters, patents,
      registered design, trade mark, copyright and other protection or
      registration for such Relevant Intellectual Property in the relevant
      jurisdiction at the expense of the Company or any member of the Group
      nominated by the Company;

            

    

    

    
      	
               
      

            	
              (d)

            	
              sign
      and execute all documents and do all things as may in the opinion of the
      Board be necessary or desirable to carry out the foregoing and otherwise
      to protect and maintain all Relevant Intellectual
  Property;

            

    

    

    
      	
               
      

            	
              (e)

            	
              give
      testimony in support of his inventorship if required;
  and

            

    

    

    
      	
               
      

            	
              (f)

            	
              hold
      upon trust for the benefit of the Company any Relevant Intellectual
      Property to the extent the same may not be and until the same is vested
      absolutely in the Company and/or a member of the Group, as the case may
      be.

            

    

    
      
         

      

      
        - 16
-

        
          

        

      

      
         

      

    

    
      	
              15.2

            	
              If
      any Invention is described in a patent application, or is disclosed to
      third parties directly or indirectly by the Executive within two (2) years
      after the expiry or termination of the Term there shall be a prima facie
      presumption that the Invention was conceived or made during the Term and
      it shall be incumbent upon the Executive to prove on a balance of
      probabilities that the Invention was not conceived or made during the
      Term.

            

    

    

    
      	
              15.3

            	
              The
      Executive agrees that he will not assert any and will relinquish all
      rights to any Intellectual Property as having been made or acquired by him
      prior to the date of this Agreement except for those Intellectual Property
      (if any) disclosed to the Company in writing prior to the date
      hereof.

            

    

    

    
      	
              16.

            	
              RESTRICTIVE
      COVENANTS

            

    

    

    
      	
              16.1

            	
              The
      Executive covenants with and undertakes to the Company that he shall
      not:

            

    

    

    
      	
               
      

            	
              (a)

            	
              at
      any time during the Term or within three (3) years from the date of the
      expiry or termination of the Term in Hong Kong or in the PRC or any other
      jurisdiction in which the Group operates either alone or jointly with or
      as manager, agent or employee for any person, firm or company directly or
      indirectly and whether or not for
gain:

            

    

    

    
      	
               
      

            	
              (i)

            	
              engage
      or be engaged or interested in or concerned with the Business carried on
      from time to time by the Group or any other business competing or likely
      to compete (directly or indirectly) with the businesses operated by the
      Group from time to time (“Restricted
Business”);

            

    

    

    
      	
               
      

            	
              (ii)

            	
              take
      employment with any person, firm, company or organization engaged in the
      PRC or any other jurisdiction in which the Group operates whether directly
      or indirectly in any of the Restricted Business (but this restriction
      shall not operate so as to prohibit an employment none of the duties of
      which relate to such businesses) nor assist any such person, firm, company
      or organization with technical, commercial or professional advice in
      relation to the Restricted
Business;

            

    

    

    
      	
               
      

            	
              (iii)

            	
              be
      interested in any project or proposal on behalf or for the benefit of any
      person who within one (1) year prior to the expiry or termination of the
      Term is a principal, joint venture partner, contracting party or client of
      the Group or an Affiliate of any of the
  foregoing;

            

    

    

    
      	
               
      

            	
              (iv)

            	
              be
      interested in any project or proposal for the acquisition, turning to
      account, development of or investment in any asset of the Company or any
      member of the Group, unless such asset is offered by the Company or any
      member of the Group for sale to, turning to account or development by
      third parties; or

            

    

    

    
      	
               
      

            	
              (b)

            	
              at
      any time after the expiry of termination of the Term use for any purpose
      whatsoever the name or trading style of the Company in Hong Kong or in the
      PRC or any other part of the world or represent himself or themselves as
      carrying on or continuing or being connected with the Company or any
      member of the Group or (where applicable) any of its shareholders or their
      respective business;

            

    

    
      
         

      

      
        - 17
-

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (c)

            	
              within
      three (3) years from the date of the expiry or termination of the Term,
      solicit or entice away from the Company or any member of the Group any
      director, manager or employee who has, at any time, during the period of
      one (1) year immediately preceding such expiry or termination been
      employed or engaged by the Company or any member of the
    Group;

            

    

    

    
      	
               
      

            	
              (d)

            	
              within
      three (3) years from the date of the expiry or termination of the Term,
      employ or otherwise engage any person who has during the period of one (1)
      year immediately preceding such expiry or termination been a director,
      manager, employee of or consultant to the Company or any member of the
      Group and who by reason of such employment is or may be likely to be in
      possession of any confidential information or trade secrets relating to
      the business of the Company or any member of the Group or the business of
      the customers of the Company;

            

    

    

    
      	
               
      

            	
              (e)

            	
              within
      three (3) years from the date of the expiry or termination of the Term,
      solicit business in competition with the Company or any member of the
      Group from any person, firm, company or organization which at any time
      during the period of one (1) year immediately preceding such expiry or
      termination has dealt with the Company or which on such expiry or
      termination is in the process of negotiating with the Company or any
      member of the Group in relation to any of the Restricted Business, and
      with whom or which during such period the Executive has had personal
      dealings in the course of his Term;
and

            

    

    

    
      	
               
      

            	
              (f)

            	
              within
      three (3) years from the date of the expiry or termination of the Term,
      solicit or entice away from the Company or any member of the Group any
      customer or supplier who has, at any time, during the period of one (1)
      year immediately preceding such expiry or termination been a customer or
      supplier of the Company or any member of the
  Group.

            

    

    

    
      	
              16.2

            	
              While
      the restrictions contained in this clause are considered by the parties to
      be reasonable in all the circumstances it is recognised that restrictions
      of the nature in question may fail for technical reasons unforeseen and
      accordingly it is hereby agreed and declared that if any such restrictions
      shall be adjudged to be void as going beyond what is reasonable in all the
      circumstances for the protection of the interests of the Company but would
      be valid if part of the wording thereof were deleted or amended or the
      periods (if any) thereof were reduced or the range of businesses or area
      dealt with thereby were reduced in scope the said restriction or
      restrictions shall apply with such modifications as may be necessary to
      make it or them valid, effective and
  enforceable.

            

    

    

    
      	
              16.3

            	
              Since
      the Executive may also obtain in the course of his Term hereunder by
      reason of services rendered for or offices held in any other company
      knowledge of the trade secrets or other confidential information of such
      company, the Executive hereby agrees that he will at the request and cost
      of the Company enter into a direct agreement or undertaking with such
      company whereby he will accept restrictions corresponding to the
      restrictions herein contained (or such of them as may be appropriate in
      the circumstances) in relation to such products and services and such area
      and for such period the Company may reasonably require for the protection
      of its legitimate interests.

            

    

    
      
         

      

      
        - 18
-

        
          

        

      

      
         

      

    

     

    
      	
              16.4

            	
              The
      Company hereby covenants with and undertakes in favor of the Executive
      that neither it nor any of its subsidiaries will after the expiry or
      termination of the Term use the Executive’s name or represent that the
      Executive is carrying on or continuing to be or being connected with the
      Company or any member of the Group or their respective businesses whether
      in Hong Kong or the PRC or
elsewhere.

            

    

    

    
      	
              16.5

            	
              For
      the purposes of clause 16.1:

            

    

    

    
      	
               
      

            	
              (a)

            	
              “employee”
      includes any staff of the Company or any member of the Group or any
      successors thereof; and

            

    

    

    
      	
               
      

            	
              (b)

            	
              “assets”
      include intellectual property rights and know-how of all forms and
      descriptions that are related to any of the principal businesses carried
      on from time to time by the Company or any member of the Group during the
      Term and all licenses and rights to use or apply any such rights or
      know-how.

            

    

    

    
      	
              16.6

            	
              For
      the purposes of clause 16.3:

            

    

    

    
      	
               
      

            	
              (a)

            	
              “trade
      secrets” means trade secrets including knowledge of and know-how in
      connection with the Company or any member of the Group or any of their
      respective businesses or proposed products or businesses and which are so
      confidential as to require protection as trade secrets;
  and

            

    

    

    
      	
               
      

            	
              (b)

            	
              “other
      confidential information” means:

            

    

    

    
      	
               
      

            	
              (i)

            	
              any
      information imparted to the Executive on the express basis that it is
      confidential; and

            

    

    

    
      	
               
      

            	
              (ii)

            	
              any
      other information or knowledge received or obtained by the Executive which
      if used, divulged or communicated to any person other than in accordance
      with clause 14 would have infringed the restriction in that
      clause.

            

    

    

    
      	
              16.7

            	
              Nothing
      in this clause 16 (other than clause 16.2) shall apply
  to:

            

    

    

    
      	
               
      

            	
              (a)

            	
              the
      direct or indirect holding of any securities listed on a stock exchange
      where the total voting rights exercisable at general meetings of the
      Company as represented by such holding do not exceed 5 per cent. of the
      total voting rights attaching to the securities of the same class as that
      held by the Executive and/or his Affiliates, provided that neither the
      Executive nor any of his Affiliates participates in or are otherwise
      involved in the management of the Company;
or

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      holding by the Executive or any of his Affiliates of any securities of the
      Company.

            

    

    
      
         

      

      
        - 19
-

        
          

        

      

      
         

      

    

     

    
      	
              16.8

            	
              The
      Executive warrants to and in favor of the Company that save through his
      interests and the interests of his Affiliates in the Company or any member
      of the Group or his employment by the Company pursuant to this Agreement,
      neither he nor any of his Affiliates on the date of this Agreement engages
      or is interested in or is concerned with the Business, whether in Hong
      Kong or the PRC or elsewhere.

            

    

    

    
      	
              16.9

            	
              In
      the event of and notwithstanding the expiry or termination of the Term,
      each of the parties covenants with and undertakes to the other that it or
      he will at all times and in all respects continue to observe and comply
      with the provisions of this clause 16 of this
  Agreement.

            

    

    

    
      	
              17.

            	
              SEVERABILITY

            

    

    

    
      	
              17.1

            	
              While
      the covenants contained in clauses 14, 15 and 16 are considered by the
      parties to be reasonable in all the circumstances, it is recognised that
      restrictions or undertakings of the nature in question may fail for
      technical reasons unforeseen and accordingly it is hereby agreed and
      declared that if any such restrictions or undertakings shall be adjudged
      to be void as going beyond what is reasonable in all the circumstances for
      the protection of the interests of the Company, but would be valid if part
      of the wording thereof were deleted or the duration or area (if any)
      thereof were reduced in scope, the restriction or undertaking shall apply
      with such modification as is considered necessary to make it valid and
      enforceable.

            

    

    

    
      	
              17.2

            	
              In
      the event that any court or tribunal of competent jurisdiction shall hold
      any such restriction or undertaking wholly unenforceable by reason of the
      breadth of such scope or otherwise, the parties agree that such
      determination shall not in any way prejudice the Company’s right to any
      remedies provided herein which may be granted by any other court or
      tribunal of competent jurisdiction in respect of breaches of such
      restriction or undertaking.

            

    

    

    
      	
              18.

            	
              ASSIGNMENT

            

    

    

    
      	
              18.1

            	
              The
      rights and obligations of the Executive under this Agreement shall not be
      assignable or transferable.

            

    

    

    
      	
              18.2

            	
              The
      Company may assign and transfer its rights or obligations hereunder in
      connection with any sale, transfer or other disposition of all or
      substantially all of its business or assets.  This Agreement
      shall be binding upon and shall enure for the benefit of the Company’s
      successors or assigns whether by merger, consolidation or acquisition of
      all or substantially all of its business or
  assets.

            

    

    

    
      	
              19.

            	
              ENTIRE
      AGREEMENT

            

    

    

    
      	
              19.1

            	
              This
      Agreement constitutes the entire agreement and understanding of the
      parties relating to the subject matter hereof and shall be in substitution
      for any previous agreement or arrangement (whether oral or written) made
      between the Company or any member of the Group and the
      Executive.  Any such previous agreement or arrangement shall be
      deemed to have been terminated by mutual consent as from the date of this
      Agreement.

            

    

    
      
         

      

      
        - 20
-

        
          

        

      

      
         

      

    

     

    
      	
              19.2

            	
              The
      Executive acknowledges and warrants to the Company that he is not entering
      into this Agreement in reliance on any representation, promise or
      inducement not expressly set out
herein.

            

    

    

    
      	
              20.

            	
              PRIOR
      OBLIGATIONS

            

    

    

    
      	
              20.1

            	
              The
      Executive warrants that by entering into this Agreement he will not be in
      breach of any agreements with or obligations owed to any third
      party.

            

    

    

    
      	
              21.

            	
              NOTICES

            

    

    

    
      	
              21.1

            	
              Delivery

            

    

    

    All
notices, demands or other communications which are to be given under this
Agreement shall be in writing and shall be addressed as shown
below:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    (a)

                                  	
                                    if
      to the Company

                                  
	 
      	 
      	 	 
      
	 
      	
                                    Address

                                  	 :	
                                    48/F,
      Bank of China Tower, 1 Garden Road, Central, Hong Kong

                                  
	 	 	 	 
	 
      	
                                    Facsimile

                                  	 :	
                                    (852)
      3605 8181

                                  
	 	 	 	 
	 
      	
                                    Attention

                                  	 :	
                                    The
      Board of Directors

                                  
	 	 	 	 
	
                                    (b)

                                  	
                                    if
      to the Executive

                                  
	 
      	 
      	 	 
      
	 
      	
                                    Address

                                  	 :	
                                    48/F,
      Bank of China Tower, 1 Garden Road, Central, Hong Kong

                                  
	 	 	 	 
	 
      	
                                    Facsimile

                                  	 :	
                                    (852)
      3605
8181

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    or to
such other address, telex number or facsimile number or marked for the attention
of such other person as the recipient may designate by notice given in
accordance with the provisions of this clause.

    

    
      	
              21.2

            	
              Receipt

            

    

    

    Any such
notice may be delivered personally or by prepaid post or sent by telex or
facsimile transmission and shall be deemed to have been effectively
served:

    

    
      	
               
      

            	
              (a)

            	
              if
      by delivery in person, when delivered to the
  addressee;

            

    

    

    
      	
               
      

            	
              (b)

            	
              if
      by telex upon receipt by the sender of the
  answerback;

            

    

    

    
      	
               
      

            	
              (c)

            	
              if
      by facsimile transmission when dispatched;
and

            

    

    

    
      	
               
      

            	
              (d)

            	
              if
      by post:

            

    

    
      
         

      

      
        - 21
-

        
          

        

      

      
         

      

    

    

    
      	
               
      

            	
              (i)

            	
              on
      the second Business Day following the day of posting if sent from the PRC
      to the address of a recipient in the PRC unless actually received sooner;
      or

            

    

    

    
      	
               
      

            	
              (ii)

            	
              on
      the seventh Business Day following the day of posting if sent from the PRC
      to an address outside the PRC (and vice versa) unless actually received
      sooner.

            

    

    

    
      	
              21.3

            	
              Language

            

    

    

    Each
notice, demand or other communication and any other documents required to be
delivered under this Agreement shall be either in English or accompanied by a
certified translation into the English language.

    

    
      	
              22.

            	
              GENERAL

            

    

    

    
      	
              22.1

            	
              The
      failure of the Company at any time or times to require performance of any
      provision of this Agreement shall in no manner affect the Company’s right
      at a later time to enforce the same.  No waiver by the Company
      of the breach of any term or covenant contained in this Agreement whether
      by conduct or otherwise in any one or more instances shall be deemed to be
      or construed as a further or continuing waiver of any such breach or a
      waiver of the breach of any other term or covenant contained in this
      Agreement.  Each of the rights and remedies provided herein
      shall be in addition to and not exclusive of any rights or remedies
      provided by law.

            

    

    

    
      	
              22.2

            	
              The
      Executive hereby irrevocably and by way of security appoints the Company
      and each member of the Group now or in the future existing to be his
      attorney and in his name and on his behalf and as his act and deed to
      sign, execute and do all acts, things and documents which he is obliged to
      execute and do under the provisions of this Agreement (and in particular,
      but without limitation, sub-clauses 12.5(c) and 15.1(d)) and the Executive
      hereby agrees forthwith on the request of the Company to ratify and
      confirm all such, things and documents signed, executed or done in
      pursuance of this power.

            

    

    

    
      	
              23.

            	
              GOVERNING
      LAW AND JURISDICTION

            

    

    

    
      	
              23.1

            	
              This
      Agreement is governed by and is to be construed in accordance with the
      laws of Hong Kong Special Administrative Region without regard to the
      conflict of laws principles
thereof.

            

    

    

    
      	
              23.2

            	
              Nothing
      in this Agreement shall limit the right of either party to commence any
      legal action against the other party and/or its property in any other
      jurisdiction or to serve process in any manner permitted by law, and the
      taking of proceedings in any jurisdiction shall not preclude the taking of
      proceedings in any other jurisdiction whether concurrently or
      not.

            

    

    
      
         

      

      
        - 22
-

        
          

        

      

      
         

      

    

    IN WITNESS whereof the parties
have entered into this Agreement the day and year first above
written.

    

    
      
        	
                SIGNED
      by

              	
                )

              
	
                for
      and on behalf of

              	
                )

              
	
                CHINA
      CORD BLOOD

              	
                )

              
	
                CORPORATION

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

    

    

    
      
        	
                SIGNED
      AND DELIVERED

              	
                )

              
	
                by
      XIN
    XU

              	
                )

              
	
                in
      the presence of:

              	
                )

              

      

    

    
      
         

      

      
        - 23
-Unassociated Document

    Exhibit
10.5

     

    UNITED
STATES SHORT OIL FUND, LP

    

    FORM
OF INDEMNIFICATION AGREEMENT

    

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

    

    Article
1

     

    INDEMNIFICATION;
LIMITATION OF LIABILITY

    

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

     

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

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

     

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

    

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

    

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (a) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus, or any other registration statement,
prospectus, preliminary prospectus, free writing prospectus or other document
used by the Partnership in connection with the offer and sale of Baskets or
Units or any amendment or supplement to any of the foregoing, or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements made therein not misleading, in each case, to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement of a material fact or such omission or alleged omission to state a
material fact was made therein in reliance upon and in conformity with
information concerning the Limited Partner furnished in writing by or on behalf
of the Limited Partner to the General Partner expressly for use therein;
or

     

    (b) the
failure by the Limited Partner or its respective agents to comply with
applicable laws and the rules and regulations of any governmental entity or any
self-regulatory organization.

     

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

    

    If any Proceeding is brought against a
GP Indemnified Person in respect of which indemnity may be sought against the
Limited Partner pursuant to this Section 1.2, such GP Indemnified Person shall
promptly notify the Limited Partner in writing of the institution of such
Proceeding; provided, however, that the omission to so notify the Limited
Partner shall not relieve the Limited Partner from any liability which it may
have to such GP Indemnified Person except to the extent that it has been
materially prejudiced by such failure and has not otherwise learned of such
Proceeding.  The GP Indemnified Person shall have the right to employ
its own counsel and the reasonable fees and expenses of such counsel shall be
borne by the Limited Partner and paid as incurred (it being understood, however,
that the Limited 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 GP
Indemnified Persons who are parties to such Proceeding) or for the expenses and
fees incurred with respect to matters that are not indemnifiable in accordance
with this Section 1.2.  A GP Indemnified Person shall give the Limited
Partner reasonable prior notice of settlement of any Proceeding in respect of
which indemnity may be sought against the Limited Partner pursuant to this
Section 1.2, provided, however that the omission to so notify the General
Partner shall not relieve the General Partner or the Partnership from any
liability which it may have to the GP Indemnified Person.  Nothing in
this Agreement shall be construed to limit the rights of the General Partner to
indemnification under the Limited Partnership Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    1.3 Survival.  The
indemnity agreements contained in this Article I shall remain in full force and
effect regardless of any investigation made by or on behalf of the Limited
Partner, its partners, stockholders, members, directors, managers, officers,
employees and or any person (including each partner, stockholder, member,
director, manager, officer or employee of such person) who controls the Limited
Partner within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, or by or on behalf of each of the General Partner, the Partnership,
their partners, stockholders, members, directors, officers, employees or any
person who controls the General Partner or the Partnership within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and shall survive for
a period of five years following the termination of the Limited Partner’s status
as a limited partner of the Partnership.  The General Partner, on the
one hand, and the Limited Partner, on the other hand, agree promptly to notify
each other of the commencement of any Proceeding against the General Partner or
the Limited Partner, as the case may be, that relates to the Partnership and, in
the case of the General Partner, against any of the General Partner’s officers
or directors, in connection with the issuance and sale of the Units, or in
connection with the Registration Statement or the Prospectus.

     

    1.4 Contribution.  If
the indemnification provided for in Section 1.1 or 1.2 is unavailable to or
insufficient to hold harmless an indemnified party in respect of any loss,
damage, expense, liability or claim referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such loss, damage, expense, liability or claim in such proportion
as is appropriate to reflect the relative benefits received by the Limited
Partner, the General Partner and the Partnership.  If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law, then each indemnifying party shall contribute to such amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Limited Partner on the one hand and the General Partner on the other, as well as
any other relevant equitable considerations.  The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section
1.4 were determined by any method of allocation which does not take account of
the equitable considerations referred to above in this Section
1.4.  The amount paid or payable by an indemnified party as a result
of the loss, damage, expense, liability or claim referred to above shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.  No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.

     

    Article
2

     

    REPRESENTATIONS
AND COVENANTS OF THE LIMITED PARTNER.

    

    2.1 Compliance with
Prospectus.  The Limited Partner represents, warrants and
covenants that, for so long as it is a limited partner of the Partnership, (a)
without the written consent of the General Partner, the Limited Partner will not
make, or permit any of its representatives to make, in connection with any sale
or solicitation of a sale of Units any representations concerning the Units or
the General Partner, the Partnership or any GP Indemnified Person other than
representations consistent with (i) the then-current Prospectus of the
Partnership, (ii) printed information approved by the General Partner as
information supplemental to such Prospectus or (iii) any promotional materials
or sales literature furnished to the Limited Partner by the General Partner or
its agents, and (b) the Limited Partner will not furnish or cause to be
furnished to any person or display or publish any information or material
relating to the Units, any GP Indemnified Person or the Partnership other than
the Partnership’s then current Prospectus.  

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.2 Compliance with
Law.  The Limited Partner agrees, for so long as it is a
limited partner of the Partnership, to comply with applicable federal securities
laws, commodities laws and the rules of any self-regulatory organization or
national securities exchange in connection with the sale or solicitation of a
sale of the Units.

     

    Article
3

     

    GENERAL
PROVISIONS

    

    3.1 Governing Law;
Severability.  This Agreement shall be governed by the laws of
the State of Delaware, as such laws are applied by Delaware courts to agreements
entered into and to be performed in Delaware by and between residents of
Delaware, without giving effect to provisions thereof regarding conflict of
laws. If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable, (a) such provision will be fully severable, (b) this Agreement
will be construed and enforced as if such illegal, invalid or unenforceable
provision had never comprised a part hereof, (c) the remaining provisions of
this Agreement will remain in full force and effect and will not be affected by
the illegal, invalid or unenforceable provision or by its severance herefrom and
(d) in lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.

     

    3.2 Acknowledgement.  The
Limited Partner acknowledges receipt of a copy of the Prospectus and represents
that it has reviewed and understands such document.

     

    3.3 Relationship between this Agreement
and the Limited Partnership Agreement.  This Agreement shall
not be construed to amend or otherwise modify the Limited Partnership Agreement
except as to matters specifically set forth herein.

     

    3.4 Third Party Beneficiaries.
Each GP Indemnified Person, to the extent it is not a party to this
Agreement, is a third-party beneficiary of this Agreement and may proceed
directly against the Limited Partner (including by bringing proceedings against
the Limited Partner in its own name) to enforce any obligation of the Limited
Partner under this Agreement which directly or indirectly benefits such GP
Indemnified Person.  Each LP Indemnified Person, to the extent it is
not a party to this Agreement, is a third-party beneficiary of this Agreement
and may proceed directly against the General Partner, the Partnership or their
respective agents (including by bringing proceedings against the General
Partner, the Partnership or their respective agents in its own name) to enforce
any obligation of the General Partner, the Partnership or their agents under
this Agreement which directly or indirectly benefits such LP Indemnified
Person.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

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

     

    3.6 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.

     

    3.7 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.

     

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

     

    

    

    {Signature Page
Follows}

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

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

    

    

    UNITED
STATES SHORT OIL FUND, LP

         By:  United
States Commodity Funds LLC, as General Partner

    

    

    By:
________________________________

          Name:

                       Title:

    

    

    UNITED
STATES COMMODITY FUNDS LLC

    

    

    By:
________________________________

          Name:

          Title:

    

    

    [LIMITED
PARTNER]

    

    

    By:
________________________________

          Name:

          Title:

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