Section 5-28-3 Recommended Benchmark Replacement for Certain Contracts, Securities, or Instruments; Fallback Provisions.

(a) On the LIBOR replacement date, the recommended benchmark replacement, by operation of law, shall be the benchmark replacement for any contract, security, or instrument that uses LIBOR as a benchmark and meets one of the following requirements: (1) Contains no fallback provisions. (2) 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. (b) 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 the contract, security, or instrument and shall be deemed void and without any force or effect. (c)(1) This subsection 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 either of the following: a. Based in any way on any LIBOR value. b. The substantive equivalent of subdivision (a)(1), (a)(2), or (a)(3) of Section 5-28-4. (2) A determining person shall have the authority under this chapter, 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. The selection of the recommended benchmark replacement shall be all of the following: a. Irrevocable. b. Made by the earlier of either the LIBOR replacement date, or the latest date for selecting a benchmark replacement according to the contract, security, or instrument. c. Used in any determinations of the benchmark under or with respect to the contract, security, or instrument occurring on and after the LIBOR replacement date. (d) If a recommended benchmark replacement becomes the benchmark replacement for any contract, security, or instrument pursuant to this section, then all benchmark replacement conforming changes that are applicable to the recommended benchmark replacement shall become an integral part of the contract, security, or instrument by operation of law. (e) This chapter shall not alter or impair any of the following: (1) Any written agreement by all requisite parties that, retrospectively or prospectively, a contract, security, or instrument shall not be subject to this chapter without necessarily referring specifically to this chapter. For purposes of this subsection, “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 chapter. (2) 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 the contract, security, or instrument shall be subject to subsection (b). (3) Any contract, security, or instrument subject to subsection (c) as to which a determining person does not elect to use a recommended benchmark replacement 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 the contract, security, or instrument shall be subject to subsection (b). (4) 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. (f) Notwithstanding the uniform commercial code or any other law of this state, this chapter 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.