Underlying Collateral Calls Clause Samples
The Underlying Collateral Calls clause establishes the procedures and obligations related to requests for additional collateral in a secured transaction. It typically outlines when and how a party may demand more collateral, the types of assets that qualify, and the timeframe for meeting such demands. For example, if the value of posted collateral falls below a required threshold due to market fluctuations, the secured party can issue a collateral call to restore the required coverage. This clause ensures that the secured party maintains adequate protection against credit risk throughout the life of the agreement.
Underlying Collateral Calls. After the initial underlying collateral for an extension of nonpurpose credit has been received, subsequent underlying collateral calls may be made by Pershing at its discretion. Pershing shall calculate the maintenance requirement and notify Broker of any amounts due. Broker shall be responsible for issuing the underlying collateral call to its customer and obtaining the amount due directly from Broker’s customer. If Broker fails to take the appropriate action, Pershing reserves the right to collect the amount due directly from Broker’s customer. Broker agrees to cooperate with Pershing in complying with and obtaining underlying collateral in response to such calls.
Underlying Collateral Calls. After the initial underlying collateral for an extension of nonpurpose credit has been received, subsequent underlying collateral calls may be made by Clearing Agent at its discretion. Clearing Agent shall calculate the maintenance requirement and notify Introducing Firm of any amounts due. Introducing Firm shall be responsible for issuing the underlying collateral call to its customer and obtaining the amount due directly from Introducing Firm’s customer. If Introducing Firm fails to take the appropriate action, Clearing Agent reserves the right to collect the amount due directly from Introducing Firm’s customer. Introducing Firm agrees to cooperate with Clearing Agent in complying with and obtaining underlying collateral in response to such calls.