Common use of OTC Derivatives Clause in Contracts

OTC Derivatives. In connection with interbank foreign exchange transactions and other over-the-counter derivative transactions (“OTC Derivatives”) which the undersigned is transacting or which the undersigned may hereinafter transact through you, the undersigned acknowledges and confirms that: (i) such transactions are not cleared on futures exchanges, but rather are transacted through various domestic and foreign banks, brokers, dealers, and other institutions (the “Correspondents”); (ii) in the event of the failure on the part of any Correspondent with which an OTC Derivative has been placed, there could be a default by the Correspondent in the settlement of the OTC Derivative which may not be rectified even though the Correspondent may receive government support in respect of its deposits; and (iii) in the event that a default occurs in the settlement of any OTC Derivative by reason of a default on the part of any Correspondent involved in the transaction, and which occurs without fault on your part, then the undersigned expressly releases and absolves you of any risk or liability whatever for or in respect of any loss, loss of profit, cost, charge or expense which the undersigned may incur as a result of such default.