N.Y. General Obligations Law § 18-401: Effect of LIBOR discontinuance on agreements

§ 18-401. Effect of LIBOR discontinuance on agreements. 1. On the

LIBOR replacement date, the recommended benchmark replacement shall, by

operation of law, be the benchmark replacement for any contract,

security or instrument that uses LIBOR as a benchmark and:

a. contains no fallback provisions; or

b. contains fallback provisions that result in a benchmark

replacement, other than a recommended benchmark replacement, that is

based in any way on any LIBOR value.

2. Following the occurrence of a LIBOR discontinuance event, any

fallback provisions in a contract, security, or instrument that provide

for a benchmark replacement based on or otherwise involving a poll,

survey or inquiries for quotes or information concerning interbank

lending rates or any interest rate or dividend rate based on LIBOR shall

be disregarded as if not included in such contract, security or

instrument and shall be deemed null and void and without any force or

effect.

3. This subdivision shall apply to any contract, security, or

instrument that uses LIBOR as a benchmark and contains fallback

provisions that permit or require the selection of a benchmark

replacement that is:

a. based in any way on any LIBOR value; or

b. the substantive equivalent of paragraph a, b or c of subdivision

one of section 18-402 of this article.

A determining person shall have the authority under this article, but

shall not be required, to select on or after the occurrence of a LIBOR

discontinuance event the recommended benchmark replacement as the

benchmark replacement. Such selection of the recommended benchmark

replacement shall be:

(i) irrevocable;

(ii) made by the earlier of either the LIBOR replacement date, or the

latest date for selecting a benchmark replacement according to such

contract, security, or instrument; and

(iii) used in any determinations of the benchmark under or with

respect to such contract, security or instrument occurring on and after

the LIBOR replacement date.

4. If a recommended benchmark replacement becomes the benchmark

replacement for any contract, security, or instrument pursuant to

subdivision one or subdivision three of this section, then all benchmark

replacement conforming changes that are applicable (in accordance with

the definition of benchmark replacement conforming changes) to such

recommended benchmark replacement shall become an integral part of such

contract, security, or instrument by operation of law.

5. The provisions of this article shall not alter or impair:

a. any written agreement by all requisite parties that,

retrospectively or prospectively, a contract, security, or instrument

shall not be subject to this article without necessarily referring

specifically to this article. For purposes of this subdivision,

"requisite parties" means all parties required to amend the terms and

provisions of a contract, security, or instrument that would otherwise

be altered or affected by this article;

b. any contract, security or instrument that contains fallback

provisions that would result in a benchmark replacement that is not

based on LIBOR, including, but not limited to, the prime rate or the

federal funds rate, except that such contract, security or instrument

shall be subject to subdivision two of this section;

c. any contract, security, or instrument subject to subdivision three

of this section as to which a determining person does not elect to use a

recommended benchmark replacement pursuant to subdivision three of this

section or as to which a determining person elects to use a recommended

benchmark replacement prior to the occurrence of a LIBOR discontinuance

event, except that such contract, security, or instrument shall be

subject to subdivision two of this section; or

d. the application to a recommended benchmark replacement of any cap,

floor, modifier, or spread adjustment to which LIBOR had been subject

pursuant to the terms of a contract, security, or instrument.

6. Notwithstanding the uniform commercial code or any other law of

this state, this title shall apply to all contracts, securities and

instruments, including contracts, with respect to commercial

transactions, and shall not be deemed to be displaced by any other law

of this state.