Common use of Special Custody Account Operation Clause in Contracts

Special Custody Account Operation. Client agrees to maintain Adequate Performance Assurance for Client’s Special Custody Account as agreed to by Pershing and Client, which may exceed that required by applicable rules and regulations. Client agrees to pay on demand and satisfy all margin and maintenance calls and pay in accordance with Article II interest charges which are imposed, in accordance with Pershing’s usual custom, with respect to Client’s Special Custody Account. For the purposes of this Section, on demand shall mean: if such demand is made on or prior to 12:00 noon New York time on a Business Day, by the close of business on such day; if such demand is made after 12:00 noon New York time on a Business Day, by 10:00 a.m. on the next Business Day. Pershing may, in its reasonable discretion, require Client to (a) deliver collateral to the Special Custody Account (i) to maintain margin as required by Pershing in accordance with Appendix A to this Agreement and (ii) secure Client’s performance of any obligations due to Pershing hereunder or (b) pay any amount that may become due hereunder in order to meet requests for additional deposits or “marks to market” for any transactions, including transactions involving foreign exchange and unissued securities that Client may purchase or sell. The parties acknowledge that the cash loans provided hereunder are each a “margin loan” as used in the definition of “securities contract” in the United States Bankruptcy Code (11 U.S.C. Section 741).