Sec. 5. Continuity of contract and safe harbor

508 words·~2 min read·/bill/117/hr/4616/ih/section-5

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

A Board-Selected Benchmark Replacement and the selection or use of a Board-Selected Benchmark Replacement as a Benchmark Replacement under or in respect of a LIBOR Contract, as well as any Benchmark Replacement Conforming Changes, by operation of section 4 shall constitute— a commercially reasonable replacement for and a commercially substantial equivalent to LIBOR; a reasonable, comparable, or analogous rate, index, or term for LIBOR; a replacement that is based on a methodology or information that is similar or comparable to LIBOR; substantial performance by any person of any right or obligation relating to or based on LIBOR; and a replacement that has historical fluctuations that are substantially similar to those of LIBOR for purposes of the Truth in Lending Act and its implementing regulations.

Neither of

(1)the selection or use of a Board-Selected Benchmark Replacement as a Benchmark Replacement or

(2)the determination, implementation, or performance of Benchmark Replacement Conforming Changes, in each case by operation of section 4, shall

(A)be deemed to impair or affect the right of any person to receive a payment, or to affect the amount or timing of such payment, under any LIBOR Contract or

(B)have the effect of

(i)discharging or excusing performance under any LIBOR Contract for any reason, claim, or defense (including, but not limited to, any force majeure or other provision in any LIBOR Contract),

(ii)giving any person the right to unilaterally terminate or suspend performance under any LIBOR Contract,

(iii)constituting a breach of any LIBOR Contract, or

(iv)voiding or nullifying any LIBOR Contract. No person shall be subject to any claim or cause of action in law or equity or request for equitable relief, or have liability for damages, arising out of or related to the selection or use of a Board-Selected Benchmark Replacement or the determination, implementation, or performance of Benchmark Replacement Conforming Changes, in each case by operation of section 4; provided, however, that any person (including a Calculating Person) shall remain subject to any existing legal, regulatory, or contractual obligations to correct servicing or other ministerial errors under or in respect of a LIBOR Contract. The selection or use of a Board-Selected Benchmark Replacement or the determination, implementation, or performance of Benchmark Replacement Conforming Changes, in each case by operation of section 4, shall not be deemed to— be an amendment or modification of any LIBOR Contract; or prejudice, impair, or affect any person’s rights, interests, or obligations under or in respect of any LIBOR Contract. Except as provided in either subsections (a), (b), or

(c)of section 4, the provisions of this Act shall not be interpreted as creating any negative inference or negative presumption regarding the validity or enforceability of— any Benchmark Replacement (including any method for calculating, determining, or implementing an adjustment to the Benchmark Replacement to account for any historical differences between LIBOR and the Benchmark Replacement) that is not a Board-Selected Benchmark Replacement; or any changes, alterations, or modifications to or in respect of a LIBOR Contract that are not Benchmark Replacement Conforming Changes.