Common use of Swap Option Clause in Contracts

Swap Option. The Borrower may elect to enter into a Hedging Obligation whereby the Borrower shall swap the floating interest rate on the $5,250,000 Loan for a fixed interest rate on the full or a portion of the amount of the $5,250,000 Loan for a portion or all of the term of the $5,250,000 Loan. Prior to entering into any Hedging Obligation, the Borrower shall execute and deliver to Bank one or more Hedging Contracts in form and substance reasonably satisfactory to Bank. As used in this Section 2.5, the term "Bank" shall include Bank and any affiliate of Bank in its capacity as a party to a Hedging Obligation. All obligations of the Borrower in connection with Hedging Obligations including, without limitation, all amounts payable for termination of the Hedging Contracts and settlement of all swap transactions, shall be deemed Obligations of the Borrower. Without limiting the generality of the foregoing, all such amounts owing by the Borrower from time to time under the Hedging Contracts shall be added to the principal of the $5,250,000 Loan and shall be secured by the Loan Documents and the Collateral securing the Obligations of the Borrower. In no event shall the Collateral securing the Obligations of the Borrower be released for so long as the Hedging Contracts have not been terminated according to their terms, unless Bank has received substitute collateral sufficient in its sole discretion and expressly agreed to in writing by Bank which shall not be unreasonably conditioned, withheld or delayed. The Borrower acknowledges and agrees that: (a) certain fees and charges may be due and payable under the Hedging Contract in the event that a Hedging Obligation is terminated; (b) such Hedging Contract may have an effect on the Borrower's payment obligations and amounts due under the $5,250,000 Loan; and (c) the obligations contained in such Hedging Contract may not be separately stated in the Loan Documents. The Borrower shall indemnify and hold harmless Bank from any and all claims, demands, losses, liabilities, expenses, and obligations now or hereafter incurred by Bank arising from (i) any claim by any Person alleging that Bank is responsible for any act or omission of the Borrower or any third party in connection with the Hedging Obligations; (ii) the Borrower's breach of any Hedging Contract; (iii) the Borrower's violation of any law applicable to the Hedging Obligations; and (iv) any fraudulent, wrongful, or negligent act or omission of the Borrower, or any of its employees, agents, independent contractors or customers, in connection with any Hedging Obligation. The Borrower further agrees that the foregoing indemnity shall survive termination and expiration of the $5,250,000 Loan and any Hedging Contract. Bank is expressly authorized to disclose confidential information concerning the Borrower to its Hedging Obligation service provider and/or facilitator, as the case may be, as well as prospective counterparties (and/or their respective professional advisors) in connection with any existing or proposed Hedging Obligation.