Election for Conversion/Continuation Clause Samples
The Election for Conversion/Continuation clause allows a party to choose whether to convert an existing agreement or obligation into a different form, or to continue it under its current terms. Typically, this clause is found in loan agreements, where a borrower may elect to convert a loan from a variable to a fixed interest rate, or to continue with the current rate for another period. Its core practical function is to provide flexibility and control to the parties, enabling them to adapt the terms of their agreement to changing circumstances or preferences.
Election for Conversion/Continuation. The Borrower may upon irrevocable written notice (or telephonic notice immediately confirmed in writing) to the Administrative Agent in accordance with Section 2.04(b): (i) elect to convert on any Business Day, any Base Rate Loans (or any part thereof in an amount of not less than $1,000,000 or an integral multiple of $500,000 in excess thereof) into Eurodollar Loans; (ii) elect to convert on the last day of the Interest Period with respect thereto, any Eurodollar Loans (or any part thereof in an amount of not less than $1,000,000 or an integral multiple of $500,000 in excess thereof) into Base Rate Loans; or (iii) elect to continue on the last day of the Interest Period with respect thereto, any Eurodollar Loans (or any part thereof in an amount not less than $1,000,000 or an integral multiple of $500,000 in excess thereof); provided, however that if the aggregate amount of a Borrowing comprised of Eurodollar Loans shall have been reduced, by payment, prepayment, or conversion of part thereof to be less than $500,000, the Eurodollar Loans comprising such Borrowing shall automatically convert into Base Rate Loans on the last day of the then-current Interest Period therefor, and on and after such date the right of the Borrower to continue such Loans as, and convert such Loans into, Eurodollar Loans shall terminate.