Common use of Security Interest and Collateral Clause in Contracts

Security Interest and Collateral. (a) All property of Customer held by or for CGM or any affiliate of CGM or due from any exchange or clearing broker in respect of any Contract bought or sold for the Account (collectively, “Collateral”) is hereby pledged to CGM and shall be subject to a security interest in CGM’s favor to secure any amounts at any time owing from Customer to CGM. The parties agree that to the extent permitted by Applicable Law, the Account and the Collateral are “financial assets” as defined in Revised Article 8 of the Uniform Commercial Code as in effect in the State of New York (“UCC”) and that during the term of this Agreement CGM shall have absolute control over the Collateral, provided, however, that with CGM’s approval any excess Collateral may be withdrawn at any time upon Customer’s request. (b) CGM is authorized, to the extent permitted by Applicable Law, from time to time and without notice to Customer, to invest, lend, pledge, repledge, enter into repurchase agreements with or for, hypothecate, or rehypothecate to itself or to others, for CGM’s account and benefit, Collateral (including but not limited to metals, warehouse receipts, or other negotiable instruments) held by CGM for Customer, and may fulfill any obligations to Customer by delivery of nonidentical property of like kind and amount.