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<br />conferred on Liberty h~reby, aU rights and remedies of a secured party under the California Commercial Co
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<br />y.may me this Agreement and such other documents as Liberty may request, which
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<br />9 Mark-to-Market Calls and Performance DeDosits.
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<br />The Customer shall, whenever requested by Liberty, deliver to Liberty, by the close of business on the day following the request, such col-
<br />lateral, rights, and property as Liberty in its sole discretion may deem necessary to secure properly the payment of any and all liabilities of what-
<br />soever kind. Liberty will request collaJ;eral on the following basis:
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<br />a. A mark-to-market review as explained below. will be established for the account(s) of the Customer by Liberty.
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<br />From time to time; the Customer and. Liberty may enter into forward. or when issued, or when, as, and if issued transactions. For
<br />the purposes of this Agreement such transactions shall include all contractual commitments, whether purchases or sales, entered into be-
<br />tween the undersigned and Liberty as principal, which by their tenna require the payment of funds or delivery of securities, currencies or
<br />other property to effect settlement thereof on a deferred date, and includes all contractual commitments which are generally understood to
<br />be Forward Transactions within the custom and usage of either the investment banking or commercial banking trade or business. Such
<br />forward and when issued, or when, as and if issued transactions are hereinafter referred to as "Forward Transactions." This provision sets
<br />forth Liberty's mark-to-market policy in connection with forward transactions.
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<br />Significant price fluctuations in the fIXed income securities market have underscored the need for a mark-to-market system to
<br />secure the completion of Forward Transactions. A mark-to-market system calls for the periodic recalculation of transactions in customer
<br />accounts to determine the difference between the current market value of the securities involved and the contract or commitment value.
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<br />A mark-to-market call for additional collateral will be issued to Customer if the net positions in Customer's account are calcu-
<br />lated to be in a deficit. If a mark-to-market call is issued, the Customer is required to cover the entire deficit by depositing cash, deliver-
<br />ing government or agency securities to Liberty's depository, or providing Liberty with an irrevocable letter of credit issued by a commercial
<br />bank acceptable to Liberty.
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<br />b. Liberty may establish Performance Deposit requirements and deficit and/or risk limits with respect to transactions entered into or
<br />assumed by Liberty with the Customer pursuant to this agreement. Liberty may require a Performance Deposit prior to or upon entering
<br />into a transaction with or on behalf of the Customer. Pursuant to Liberty's mark-to-market policy in connection with such transactions,
<br />additional deposits may be required thereafter.
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<br />The Customer will promptly provide Liberty with any financial information, including financial reports and statements, pertain-
<br />ing to Customer as Liberty may reasonably require.
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<br />Liberty shall be under no obligation hereunder to enter into any transaction on behalf of the Customer.
<br />c. Liberty reserves the right to close out open positions, liquidate any existing collateral, and demand immediate payment for any
<br />account not meeting the call for additional collateral within one business day of the call.
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<br />Liberty's failure to initiate a mark-to-market call or to require a Performance Deposit will not constitute a waiver of Liberty's
<br />right to do so at a later date.
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<br />On twenty-four (24) hour prior notice and provided all other terms and conditions hereto are met, customer shall have the right,
<br />from time to time, to substitute collateral that is acceptable to Liberty. All substitute collateral must be in the possession of Liberty prior
<br />to any release of existing collateral.
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<br />Liberty shall have free and unrestricted use of all deposits which it holds hereunder. Liberty will not pledge, repledge, hypothe-
<br />cate, rehypothecate, lend, relend or commingle with deposits of its other customers or with its own assets, deposits which it holds
<br />hereunder, to the extent such deposits consist of other than cash.
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<br />All payments required to be made by Customer to Liberty under this provision shall be made in accordance with Paragraph 4.4 of
<br />this Agreement
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<br />10 Acceleration Uoon Default.
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<br />Upon default by Customer, Liberty may, at its election, declare any or all of Customer's obligations immediately due and payable.
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<br />Any repudiation, breach, or default by the Customer under this Agreement may at Liberty's election, constitute a repudiation, breach, or
<br />default by the Customer of all other agreements which the Customer may then have with Liberty, whether entered into before or after this Agree-
<br />ment, for the purchase from or sale to Liberty of securities. Similarly, any repudiation, breach, or other default by the Customer under any other
<br />such agreement shall, at Liberty's election, constitute a repudiation, breach, or default by the Customer of or under this Agreement. A default shall
<br />include, but not be limited to, the following:
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<br />(i)
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<br />Failure by the Customer to make punctual payment of any sum payable with respect to, or in the observance or performance of
<br />any of the terms or conditions of this Agreement;
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<br />(ii)
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<br />The issuance of or notice of any levy on, seizure, attachment or garnishment of any of the monies, securities, commodities or other
<br />properties which may at any time be carried for the Customer or which may at any time be in Liberty's possession for any pur-
<br />pose including safekeeping;
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<br />(iii)
<br />(iv)
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<br />If the Customer shall become insolvent, commit an act of bankruptcy, or make an assignment for the benefit of creditors;
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<br />If there shall be filed by or against the Customer any petition for any relief under the bankruptcy laws of the United States now
<br />or hereinafter in effect, or under any insolvency, readjustment of debt, or dissolution or liquidation law or statute of any jurisdic-
<br />tion now or hereafter in effect;
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<br />(v)
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<br />If the normal and usual business of the Customer shall be terminated or suspended.
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