Common use of Variable Rate Option Clause in Contracts

Variable Rate Option. As to the portion of the unpaid principal balance of the Loan selected by the Borrowers (such portion, and each portion selected pursuant to Section 5(A)(2) and Section 5(A)(3) below, is hereinafter referred to as a "Portion" of the Loan), interest shall accrue pursuant to this variable rate option at a variable annual interest rate (the "Variable Rate") equal at all times to the rate established by CoBank on the first Business Day of each week. The rate of interest so established by CoBank may not exceed CoBank's National Variable Rate (as hereinafter defined) in effect on the date so established and shall be effective from and including the first Business Day of each week to and excluding the first Business Day of the next week. Any change in the National Variable Rate shall be effective on the date established by CoBank, and CoBank shall notify the Borrowers promptly after any such change. The term "National Variable Rate" shall mean the rate of interest established by CoBank from time to time as its National Variable Rate. The National Variable Rate is intended by CoBank to be a reference rate, and CoBank may charge other borrowers rates at, above, or below that rate.