Common use of Termination; Financial Warranty Acceleration Clause in Contracts

Termination; Financial Warranty Acceleration. (a) Unless this Agreement and the Financial Warranty are sooner terminated pursuant to Section 10.1(b), this Agreement and the Financial Warranty shall terminate (i) effective as of the earlier of (A) the Early Termination Date and (B) the Maturity Date, if no amounts are payable under the Financial Warranty, or (ii) thereafter, upon payment by the Warranty Provider of all amounts due by the Warranty Provider under the Financial Warranty to the Fund (any such date of termination pursuant to this Article X, including a termination in accordance with Section 10.1(c), is referred to in this Agreement as the “Termination Date”). (b) This Agreement and, if issued, the Financial Warranty may be terminated by the Fund and the Adviser by written notice to the Warranty Provider at any time upon the occurrence of (A) an Act of Insolvency with respect to the Warranty Provider; (B) in the event that the Warranty Provider ceases to be “well capitalized” (based on its most recent Call Report filed with its primary Federal banking regulator) within the meaning of the capital maintenance regulations of the FDIC, 12 C.F.R. Part 325 (or any successor provision); or (C) a failure by the Warranty Provider to maintain a long term financial strength and claims paying ability rating of at least _____ by Xxxxx’x or ____ by S&P or ___ by Fitch; provided, that the Warranty Provider shall be required to be rated by no more than one of such three ratings agencies and provided further that if the Warranty Provider continues to perform its obligations under this Agreement, and within 30 calendar days of its failure to maintain the relevant ratings delivers to the Fund an unconditional written guarantee of its obligations under this Agreement and the Financial Warranty from ML & Co., or an Affiliate thereof, that in either case is rated at least ____ by Xxxxx’x or ____ by S&P or Fitch (one such rating being sufficient) and in the reasonable discretion of the Fund such affiliate guarantee would not have an Adverse Effect on the registration of the Fund under the Acts, neither the Fund nor the Adviser shall have a right to terminate this Agreement under this subsection (b)(i)(C) of Section 10.1. (i) This Agreement and the Financial Warranty may be terminated by the Warranty Provider in its sole discretion by written notice to the Fund and the Adviser prior to the Maturity Date if (1) (a) the Adviser resigns, (b) the Fund elects to terminate the Investment Management Agreement with the Adviser, (c) the Fund appoints a successor adviser (including a subadviser) without the prior written consent of the Warranty Provider in its sole discretion, (d) the Investment Management Agreement terminates in accordance with its terms or (e) the Adviser becomes unable to serve as an investment adviser to the Fund pursuant to Section 9 of the Investment Company Act and in each case any successor adviser (including the Adviser) that agrees to be bound by the terms of this Agreement is appointed by the Board of the Trust or the Shareholders, in each case without the prior written consent of the Warranty Provider in its sole discretion, and the successor adviser (A) fails to agree to all of the terms of the Transaction Documents to which the Adviser is a party, (B) fails to meet the credit approval procedures then in place for business transactions with the Warranty Provider, (C) is subject to any litigation, regulatory action or other proceeding that may affect its ability to perform any of the Transaction Documents; or (D) is not reasonably believed by the Warranty Provider to be capable of managing the Fund; (2) the Fund terminates the Custodian Agreement with State Street Bank and Trust Company and fails to engage a successor custodian or engages a successor custodian that does not agree to be bound by the Custodian Instruction Agreement and to provide the Warranty Provider with the substantial equivalent (in the Warranty Provider’s reasonable discretion) of the State Street System, or the Fund amends the Custodian Agreement so that the Custodian is no longer bound by such provisions, or the successor custodian is not a nationally recognized custodian holding in custody at least $________ of assets of U.S. registered investment companies; (3) the Fund’s assets are not, for any reason, within a reasonable time (such time not to exceed one Exchange Business Day) invested in compliance with the Warranty Provider’s instructions after the Warranty Provider exercises its rights under Section 4.1(c)(i); (4) the Adviser does not pay, in full, the amounts payable under Section 4.1(d) within ten Business Days; (5) a determination of negligence, recklessness, bad faith, willful misconduct or fraud on the part of the Adviser or the Fund under any of the Transaction Documents by any (a) court of competent jurisdiction or (b) board of arbitration; (6) the Adviser does not deliver to the Warranty Provider the information required by Sections 7.1 (m) and (n) within two Exchange Business Days of the Warranty Provider’s request for such information; (7) the Adviser fails to manage the assets of the Fund in accordance with the investment objective, policies and strategies as set forth in the Prospectus and the Registration Statement if such failure would have an Adverse Effect on the Warranty Provider; (8) the Adviser fails to comply with Section 7.1(p); (9) the Fund is no longer registered, or permitted to be registered, as an investment company; or (10) the Fund becomes subject to registration as a commodity pool under the Commodity Exchange Act; provided that the Warranty Provider shall not have the authority to terminate this Agreement under this Section 10(b)(ii)(10) if (i) by meeting the criteria of an asset coverage test the Fund could avoid becoming subject to registration under the Commodity Exchange Act, and the Adviser immediately takes action such that the Fund meets the requirements of such asset coverage test without creating any Floor Shortfall, or (ii) the Adviser voluntarily invests the Fund’s assets in the Defeasance Portfolio. (ii) If this Agreement is terminated in accordance with Section 10.1(b), the Fund shall notify its Shareholders of such termination and such notice shall state that the Fund has released the Warranty Provider from all liability under the Financial Warranty. The Fund shall provide a copy of such notice to the Warranty Provider. From and after the effective date of such termination, the Fund shall have no obligation to pay the Financial Warranty Fee or Reduced Financial Warranty Fee (except as to amounts thereof accrued on a daily interpolated basis prior to such termination), and the Warranty Provider shall have no liability under the Financial Warranty.

Termination; Financial Warranty Acceleration. (a) Unless this Agreement and the Financial Warranty are sooner terminated pursuant to Section 10.1(b), this Agreement and the Financial Warranty shall terminate (i) effective as of the earlier of (A) the Early Termination Date and (B) the Maturity Date, if no amounts are payable under the Financial Warranty, or (ii) thereafter, upon payment by the Warranty Provider of all amounts due by the Warranty Provider under the Financial Warranty to the Fund (any such date of termination pursuant to this Article X, including a termination in accordance with Section 10.1(c), is referred to in this Agreement as the “Termination Date”). (bi) This Agreement and, if issued, the Financial Warranty may be terminated by the Fund and the Adviser by written notice to the Warranty Provider at any time upon the occurrence of (A) an Act of Insolvency with respect to the Warranty Provider; (B) in the event that the Warranty Provider ceases to be “well capitalized” (based on its most recent Call Report filed with its primary Federal banking regulator) within the meaning of the capital maintenance regulations of the FDIC, 12 C.F.R. Part 325 (or any successor provision); or (C) a failure by the Warranty Provider to maintain a long term financial strength and claims paying ability rating of at least _____ by Xxxxx’x or ____ by S&P or ___ by Fitch; provided, that the Warranty Provider shall be required to be rated by no more than one of such three ratings agencies and provided further that if the Warranty Provider continues to perform its obligations under this Agreement, and within 30 calendar days of its failure to maintain the relevant ratings delivers to the Fund an unconditional written guarantee of its obligations under this Agreement and the Financial Warranty from ML & Co., or an Affiliate thereof, that in either case is rated at least ____ by Xxxxx’x or ____ by S&P or Fitch (one such rating being sufficient) and in the reasonable discretion of the Fund such affiliate guarantee would not have an Adverse Effect on the registration of the Fund under the Acts, neither the Fund nor the Adviser shall have a right to terminate this Agreement under this subsection (b)(i)(C) of Section 10.1. (iii) This Agreement and the Financial Warranty may be terminated by the Warranty Provider in its sole discretion by written notice to the Fund and the Adviser prior to the Maturity Date if (1) (a) the Adviser resigns, (b) the Fund elects to terminate the Investment Management Agreement with the Adviser, (c) the Fund appoints a successor adviser (including a subadviser) without the prior written consent of the Warranty Provider in its sole discretion, (d) the Investment Management Agreement terminates in accordance with its terms or (e) the Adviser becomes unable to serve as an investment adviser to the Fund pursuant to Section 9 of the Investment Company Act and in each case any successor adviser (including the Adviser) that agrees to be bound by the terms of this Agreement is appointed by the Board of the Trust or the Shareholders, in each case without the prior written consent of the Warranty Provider in its sole discretion, and the successor adviser (A) fails to agree to all of the terms of the Transaction Documents to which the Adviser is a party, (B) fails to meet the credit approval procedures then in place for business transactions with the Warranty Provider, (C) is subject to any litigation, regulatory action or other proceeding that may affect its ability to perform any of the Transaction Documents; or (D) is not reasonably believed by the Warranty Provider to be capable of managing the Fund; (2) the Fund terminates the Custodian Agreement with State Street Bank and Trust Company and fails to engage a successor custodian or engages a successor custodian that does not agree to be bound by the Custodian Instruction Agreement and to provide the Warranty Provider with the substantial equivalent (in the Warranty Provider’s reasonable discretion) of the State Street System, or the Fund amends the Custodian Agreement so that the Custodian is no longer bound by such provisions, or the successor custodian is not a nationally recognized custodian holding in custody at least $________ billion of assets of U.S. registered investment companies; (3) the Fund’s assets are not, for any reason, within a reasonable time (such time not to exceed one Exchange Business Day) invested in compliance with the Warranty Provider’s instructions after the Warranty Provider exercises its rights under Section 4.1(c)(i); (4) the Adviser does not pay, in full, the amounts payable under Section 4.1(d) within ten Business Days; (5) a determination of negligence, recklessness, bad faith, willful misconduct or fraud on the part of the Adviser or the Fund under any of the Transaction Documents by any (a) court of competent jurisdiction or (b) board of arbitration; (6) the Adviser does not deliver to the Warranty Provider the information required by Sections 7.1 (m) and (n) within two Exchange Business Days of the Warranty Provider’s request for such information; (7) the Adviser fails to manage the assets of the Fund in accordance with the investment objective, policies and strategies as set forth in the Prospectus and the Registration Statement if such failure would have an Adverse Effect on the Warranty Provider; (8) the Adviser fails to comply with Section 7.1(p); (9) the Fund is no longer registered, or permitted to be registered, as an investment company; or (10) the Fund becomes subject to registration as a commodity pool under the Commodity Exchange Act; provided that the Warranty Provider shall not have the authority to terminate this Agreement under this Section 10(b)(ii)(10) if (i) by meeting the criteria of an asset coverage test the Fund could avoid becoming subject to registration under the Commodity Exchange Act, and the Adviser immediately takes action such that the Fund meets the requirements of such asset coverage test without creating any Floor Shortfall, or (ii) the Adviser voluntarily invests the Fund’s assets in the Defeasance Portfolio. (iiiii) If this Agreement is terminated in accordance with Section 10.1(b), the Fund shall notify its Shareholders of such termination and such notice shall state that the Fund has released the Warranty Provider from all liability under the Financial Warranty. The Fund shall provide a copy of such notice to the Warranty Provider. From and after the effective date of such termination, the Fund shall have no obligation to pay the Financial Warranty Fee or Reduced Financial Warranty Fee (except as to amounts thereof accrued on a daily interpolated basis prior to such termination), and the Warranty Provider shall have no liability under the Financial Warranty. (c) The Trust’s Board may determine to liquidate the Fund for one of the following reasons (each, an “Early Termination Event”): (i) the Fund’s asset size is not economically viable, (ii) the Fund’s assets become irreversibly allocated to the Fixed Income Portfolio, (iii) the Adviser resigns or is terminated and the Board determines that a replacement investment adviser will not be appointed, or (iv) the Board determines that it is otherwise in the best interest of the Shareholders to terminate the Fund. Within 10 days of the Board’s determination that an Early Termination Event has occurred, the Board shall set the Early Termination Date. Following the earlier of (A) the payment of any Accelerated Aggregate Shortfall Amount and (B) the expiration of the Financial Warranty in accordance with its terms, this Agreement shall terminate. For the avoidance of doubt, it is acknowledged and agreed that nothing in this Section 10.1(c) shall be understood to relieve the Fund of its obligation to pay the Accelerated Financial Warranty Fee (or any other Financial Warranty Fee accrued and unpaid) following an Early Termination Event.

Termination; Financial Warranty Acceleration. (a) Unless this Agreement and the Financial Warranty are sooner terminated pursuant to Section 10.1(b), this Agreement and the Financial Warranty shall terminate (i) effective as of the earlier of (A) the Early Termination Date and (B) the Maturity Date, if no amounts are payable under the Financial Warranty, or (ii) thereafter, upon payment by the Warranty Provider (or the Guarantor under the Guarantee in accordance with the terms thereof) of all amounts due by the Warranty Provider under the Financial Warranty to the Fund (any such date of termination pursuant to this Article X, including a termination in accordance with Section 10.1(c), is referred to in this Agreement as the “Termination Date”). (bi) This Agreement and, if issued, the Financial Warranty may be terminated by the Fund and the Adviser by written notice to the Warranty Provider at any time upon the occurrence of (A) an Act of Insolvency with respect to the Warranty Provider, BANA or the Guarantor; (B) in the event that BANA or the Warranty Provider ceases Guarantor ceased to be “well capitalized” (based on its most recent Call Report call report filed with its primary Federal banking regulator) within the meaning of the capital maintenance regulations of the FDICOffice of the Comptroller of the Currency, 12 C.F.R. Part 325 (or any successor provision)6 and of the Board of Governors of the Federal Reserve System 12 C.F.R. Part 225, respectively; or (C) a failure by BANA or the Warranty Provider Guarantor to maintain a long term financial strength and claims paying ability unsecured senior debt obligation rating of at least _____ by Xxxxx’x Moody’s or ____ by S&P or ____ by Fitch; provided, that each of BANA and the Warranty Provider Guarantor shall be required to be rated by no more than one of such three ratings agencies and provided further that if the Warranty Provider continues to perform its obligations under this Agreement, and within 30 calendar days of its BANA’s or the Guarantor’s failure to maintain the relevant ratings delivers to the Fund an unconditional written guarantee of its obligations under this Agreement and the Financial Warranty from ML & Co.the Guarantor, or an Affiliate thereof, that in either case is rated at least ____ by Xxxxx’x Moody’s or ____ by S&P or Fitch (one such rating being sufficient) and in the reasonable discretion of the Fund such affiliate guarantee would not have an Adverse Effect on the registration of the Fund under the Acts, neither the Fund nor the Adviser shall have a right to terminate this Agreement under this subsection (b)(i)(C) of Section 10.1; or (D) an event by which the Warranty Provider ceases to be a wholly-owned subsidiary of BANA or an indirect wholly-owned subsidiary of the Guarantor. (iii) This Agreement and the Financial Warranty may be terminated by the Warranty Provider (and, if so terminated, the Guarantor may terminate the Guarantee, provided that all amounts, if any, presently due and payable by the Warranty Provider under the Financial Warranty at the time of such termination have been paid in full by the Warranty Provider) in its sole discretion by written notice to the Fund and the Adviser prior to the Maturity Date if (1) (a) the Adviser resigns, (b) the Fund elects to terminate the Investment Management Agreement with the Adviser, (c) the Fund appoints a successor adviser (including a subadviser) without the prior written consent of the Warranty Provider in its sole discretion, (d) the Investment Management Agreement terminates in accordance with its terms or (e) the Adviser becomes unable to serve as an investment adviser to the Fund pursuant to Section 9 of the Investment Company Act and in each case any successor adviser (including the Adviser) that agrees to be bound by the terms of this Agreement is appointed by the Board of the Trust or the Shareholders, in each case without the prior written consent of the Warranty Provider in its sole discretion, and the successor adviser (A) fails to agree to all of the terms of the Transaction Documents to which the Adviser is a party, (B) fails to meet the credit approval procedures then in place for business transactions with the Warranty Provider, (C) is subject to any litigation, regulatory action or other proceeding that may affect its ability to perform any of the Transaction Documents; or (D) is not reasonably believed by the Warranty Provider to be capable of managing the Fund; (2) the Fund terminates the Custodian Agreement with State Street Bank and Trust Company and fails to engage a successor custodian or engages a successor custodian that does not agree to be bound by the Custodian Instruction Agreement and to provide the Warranty Provider with the substantial equivalent (in the Warranty Provider’s reasonable discretion) of the State Street System, or the Fund amends the Custodian Agreement so that the Custodian is no longer bound by such provisions, or the successor custodian is not a nationally recognized custodian holding in custody at least $________ billion of assets of U.S. registered investment companies; (3) the Fund’s assets are not, for any reason, within a reasonable time (such time not to exceed one Exchange Business Day) invested in compliance with the Warranty Provider’s instructions after the Warranty Provider exercises its rights under Section 4.1(c)(i); (4) the Adviser does not pay, in full, the amounts payable under Section 4.1(d) within ten Business Days; (5) a determination of negligence, recklessness, bad faith, willful misconduct or fraud on the part of the Adviser or the Fund under any of the Transaction Documents by any (a) court of competent jurisdiction or (b) board of arbitration; (6) the Adviser does not deliver to the Warranty Provider the information required by Sections 7.1 (m) and (n) within two Exchange Business Days of the Warranty Provider’s request for such information; (7) the Adviser fails to manage the assets of the Fund in accordance with the investment objective, policies and strategies as set forth in the Prospectus and the Registration Statement if such failure would have an Adverse Effect on the Warranty Provider; (8) the Adviser fails to comply with Section 7.1(p); (9) the Fund is no longer registered, or permitted to be registered, as an investment company; or (10) the Fund becomes subject to registration as a commodity pool under the Commodity Exchange Act; provided that the Warranty Provider shall not have the authority to terminate this Agreement under this Section 10(b)(ii)(10) if (i) by meeting the criteria of an asset coverage test the Fund could avoid becoming subject to registration under the Commodity Exchange Act, and the Adviser immediately takes action such that the Fund meets the requirements of such asset coverage test without creating any Floor Shortfall, or (ii) the Adviser voluntarily invests the Fund’s assets in the Defeasance Portfolio. (iiiii) If this Agreement is terminated in accordance with Section 10.1(b), the Fund shall notify its Shareholders of such termination and such notice shall state that the Fund has released the Warranty Provider and the Guarantor from all liability under the Financial WarrantyWarranty and the Guarantee, respectively. The Fund shall provide a copy of such notice to the Warranty Provider. From and after the effective date of such termination, the Fund shall have no obligation to pay the Financial Warranty Fee or Reduced Financial Warranty Fee (except as to amounts thereof accrued on a daily interpolated basis prior to such termination), and the Warranty Provider and the Guarantor shall have no liability under the Financial WarrantyWarranty and the Guarantee, respectively.