Purchase and Maintenance of Interest Rate Cap. The Borrower hereby covenants and agrees to hedge the variable interest expense of the Loan at all times during the term of the Loan by the purchase and maintenance of (i) an Interest Rate Cap (hereinafter referred to as the “Initial Interest Rate Cap”) (a) with a strike price of six percent (6.00%) or such other strike price as may be agreed to in writing by the Administrative Agent, in its sole and absolute discretion,, (b) with a term that runs through December 1, 2026, and (c) which otherwise satisfies the other Minimum Rate Cap Requirements and (ii) an Interest Rate Cap (hereinafter referred to as the “Subsequent Interest Rate Cap”) which satisfies the following requirements: (a) the strike price is commensurate to the then current interest rate and the Lenders’ required protections with respect thereto; (b) term runs from the date immediately following the last day of the term of the Initial Interest Rate Cap and continues through the last day of the term of the Loan; and (c) satisfies the other Minimum Rate Cap Requirements. The Borrower hereby represents and warrants to the Administrative Agent that the Initial Interest Rate Cap has been purchased as of the Closing Date. The Borrower hereby covenants and agrees with the Administrative Agent that the Subsequent Interest Rate Cap shall be purchased by the Borrower no later than December 1, 2026. In addition to the foregoing, the Borrower hereby confirms and agrees that the rights and interests of the Borrower in and to the Initial Interest Rate Cap have been assigned to the Administrative Agent, for the benefit of the Lenders, pursuant to the terms, conditions, and provisions of the Assignment of Interest Rate Cap Agreement, and that the rights and interests of the Borrower in and to the Subsequent Interest Rate Cap shall be assigned to the Administrative Agent, for the benefit of the Lenders, as additional collateral security for the Loan, pursuant to the terms, conditions, and provisions of the Assignment of Interest Rate Cap Agreement.
Purchase and Maintenance of Interest Rate Cap. Within sixty (60) days after the date hereof, Borrower will deliver to Lender a fully executed interest rate cap agreement, in form and substance and with such financial institution having a claims paying ability by the Rating Agencies of "A" or higher and shall be otherwise acceptable to Lender in its reasonable discretion, in a notational amount equal to the Loan Amount, insuring against the risk that LIBOR shall at any time during the term of the Loan exceed a per annum rate of eight and one half percent (8.50%) (the "Interest Rate Cap Agreement"). Borrower shall maintain the Interest Rate Cap Agreement, or such supplement or replacement thereto as is approved by Lender in its reasonable discretion, throughout the entire term of the Loan, and Borrower shall not materially amend, modify or terminate the Interest Rate Cap Agreement without the prior written consent of Lender.
