Common use of Model Validation Clause in Contracts

Model Validation. The Manager shall cooperate with the Company and the FRBNY in the manner set forth below to validate the conceptual soundness and implementation of models used by the Manager in its performance of services under this Agreement if such model is used in such a way that an error related to the model’s formulation or implementation is likely to have a material adverse effect on the Company, including a significant financial loss, a significant error of analytical outputs including cash flows, discount rates, valuations, or statistics relating to those outputs (such as expected values, variances, percentiles, or stress estimates), or a violation of applicable law or (each, a “Material Model”). For purposes of this Section 8.5, as of the Effective Date, the Manager has identified as “Material Models” those models used in the performance of services that are based on BlackRock Solutions Aladdin interest rate modeling and yield curve construction techniques utilized for the generation of cash flows, projection of floating rate coupons, and discounting, in support of the regular reporting and analytics to be delivered pursuant to Section 9.1, as agreed upon with FRBNY, including the Manager’s Shifted Lognormal