Common use of Market Disruptions Clause in Contracts

Market Disruptions. The global financial markets have seen pervasive and fundamental disruptions. The Option Securities may incur major losses in disrupted markets. In disrupted markets, many Option Securities may become less liquid, making it difficult or impossible to close out such positions against which the markets are moving (particularly in certain futures markets, in which no trades may be executed after prices have moved a pre-determined amount during a day). • At the same time, in disrupted markets historical price relationships may be distorted, causing the Option Securities to incur major losses. The financing available to the Holder from its banks, dealers and other counterparties can be expected to be materially reduced in disrupted markets. Such a reduction may result in substantial losses. Market disruptions caused by unexpected events, such as political, military and terrorist activities or natural disasters, may from time to time cause dramatic losses for the Option Securities, and such events can result in otherwise historically low-risk strategies performing with unprecedented volatility and risk.