SOFR Transition Clause Samples
The SOFR Transition clause outlines the process for replacing LIBOR or other benchmark interest rates with the Secured Overnight Financing Rate (SOFR) in financial agreements. It typically details the circumstances under which the transition occurs, the method for determining the replacement rate, and any necessary adjustments to maintain economic equivalence, such as spread adjustments or fallback procedures. This clause ensures that contracts remain effective and fair if the original benchmark rate becomes unavailable or is discontinued, thereby reducing uncertainty and operational risk for the parties involved.
SOFR Transition. If a Term SOFR Transition Event occurs:
(A) Buyer will provide notice to Seller in writing (which may be by electronic mail) of the Term SOFR Transition Date before the first Remittance Date following the Term SOFR Transition Date.
(B) Beginning on the first day of the Pricing Rate Period immediately following the Term SOFR Transition Date and during each Pricing Rate Period thereafter, interest will accrue at the Pricing Rate calculated using SOFR Average as specified in such notice, without the necessity of any amendment or other modification of this Agreement or any other Program Document.
SOFR Transition. (a) Each party hereto agrees that the Tranche B-4 SOFR Transition shall become effective without any further action of any Lender or any other Person so long as the Term Administrative Agent shall not have received, within five (5) Business Days of November 14, 2022, a written notice from Lenders constituting the Required Lenders stating that such Lenders object to the Tranche B-4 SOFR Transition, as more fully set forth in this Amendment, which, for the avoidance of doubt but subject to sub-clause (b) below, shall remove any option for any Tranche B-4 Term Loan to accrue interest at a rate based upon the LIBOR Rate and, in place thereof, to add the option for interest on such Tranche B-4 Term Loans to accrue at a rate based upon Term SOFR in a manner consistent with the provisions under which the Revolving Credit Facility accrues interest at a rate based upon Term SOFR under the Existing Credit Agreement; provided that Term SOFR with respect to the Tranche B-4 Term Loans shall not include a SOFR Adjustment.
(b) It is understood and agreed that Tranche B-4 Term Loans outstanding prior to the Amendment No. 10 Effective Date shall continue as LIBOR Loans (as defined in the Existing Credit Agreement) until the last day of the then-current Interest Period at which time such Tranche B-4 Term Loans shall be converted into Term SOFR Term Loans (as defined in the Credit Agreement).
SOFR Transition. If a Term SOFR Transition Event occurs:
(1) Lender will provide notice to Borrower in writing of the Term SOFR Transition Date before the first Payment Date following the Term SOFR Transition Date.
(2) Beginning on the first day of the Interest Period immediately following the Term SOFR Transition Date and during each Interest Period thereafter, interest will accrue at the Interest Rate calculated using SOFR Average as specified in such notice, without the necessity of any amendment or other modification of this Agreement, the Note or any other Loan Document.
SOFR Transition. Notwithstanding anything in this Agreement or any other Loan Document to the contrary, interest on all “LIBOR Loans” (as defined in this Agreement immediately prior to the First Amendment Effective Date) denominated in Dollars outstanding under this Agreement immediately prior to the First Amendment Effective Date (such Loans, the “Existing LIBOR Loans”) shall continue to accrue and be paid based upon “LIBOR” (as defined in this Agreement immediately prior to the First Amendment Effective Date) applicable pursuant to the terms of this Agreement immediately prior to the First Amendment Effective Date solely until the expiration of the current “Interest Period” (as defined in this Agreement immediately prior to the First Amendment Effective Date) applicable thereto (at which time such Loans may be reborrowed as or converted to Base Rate Loans or SOFR Loans, as applicable, in accordance with this Agreement); provided that no Loan whose Interest Period ends on or after June 30, 2023, shall constitute an Existing LIBOR Loan.