Loan And Security Agreement Dated As Of 5/1/97

LOAN AND SECURITY AGREEMENT


BY AND BETWEEN


FLEET CAPITAL CORPORATION


AND


BAYARD DRILLING TECHNOLOGY, INC.


AND


TREND DRILLING CO.


DATED: MAY 1, 1997


$10,000,000


2
TABLE OF CONTENTS


Page
----

SECTION 1. CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Revolving Credit Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Letters of Credit; LC Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 All Loans to Constitute One Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Joint and Several Liability; Rights of Contribution . . . . . . . . . . . . . . . . . . . 2
1.5 Structure of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3


SECTION 2. INTEREST, FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Closing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4 Letter of Credit and LC Guaranty Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Commitment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Servicing Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7 Audit and Appraisal Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.8 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.9 Bank Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6


SECTION 3. LOAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 Manner of Borrowing Revolving Credit Loans . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.3 Application of Payments and Collections . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Statements of Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


SECTION 4. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.1 Term of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


SECTION 5. SECURITY INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Security Interest in Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.2 Cross-Collateralization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Lien Perfection; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.4 Lien on Realty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


SECTION 6. COLLATERAL ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.2 Administration of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Intentionally Omitted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Administration of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15


i 3

6.5 Payment of Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16


SECTION 7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 General Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2. Continuous Nature of Representations and Warranties . . . . . . . . . . . . . . . . . . . 22
7.3. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . 22


SECTION 8. COVENANTS AND CONTINUING AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Specific Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28


SECTION 9. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.1 Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.2 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.3 Other Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.4 Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.5 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.6 Articles of Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.7 Good Standing Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.8 Opinion Letters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.9 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.10 Disbursement Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.11 Dominion Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.12 Landlord Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.13 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.14 Evidence of Perfection and Priority of Liens in Collateral . . . . . . . . . . . . . . . . 30
9.15 Subordination of Chesapeake Debt and Energy Spectrum Debt . . . . . . . . . . . . . . . . 30
9.16 CIT Intercreditor Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.17 Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.18 CIT Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.19 Sale/Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.20 Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.21 Purchase of Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.22 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.23 Trend Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.24 No-Offset Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.25 Trend Financial Statements . . . . . . . . . . . . . . . . . . . .ERROR! BOOKMARK NOT DEFINED.
9.26 Lender shall have received the Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . 30


SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT . . . . . . . . . . . . . . . . . . . . 30
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.2 Acceleration of the Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.3 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Remedies Cumulative; No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34


ii 4


SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.3 Modification of Agreement; Sale of Interest . . . . . . . . . . . . . . . . . . . . . . . 36
11.4 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.6 Cumulative Effect; Conflict of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.7 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.8 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
11.9 Lender's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.10 Credit Inquiries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.11 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11.12 Entire Agreement; Appendix A and Exhibits and Schedules . . . . . . . . . . . . . . . . . 39
11.13 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.14 GOVERNING LAW; CONSENT TO FORUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.15 WAIVERS BY BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.16 ORAL AGREEMENTS INEFFECTIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.17 Nonapplicability of Article 5069-15.01 et seq. . . . . . . . . . . . . . . . . . . . . . . 41
11.18 Certain Matters of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41


iii 5


LOAN AND SECURITY AGREEMENT


THIS LOAN AND SECURITY AGREEMENT is made this 1st day of May, 1997, by and between FLEET CAPITAL CORPORATION ("Lender"), a Rhode Island corporation with an office at 2711 North Haskell Avenue, Suite 2100, LB 21, Dallas, Texas 75204; and Bayard Drilling Technologies, Inc., a Delaware corporation ("Bayard"), and Trend Drilling Co., an Oklahoma corporation ("Trend") (Bayard and Trend being referred to individually, collectively, and jointly and severally, as "Borrower"), each Borrower having its chief executive office and principal place of business at 4005 N.W. Expressway, Oklahoma City, Oklahoma 73116. Capitalized terms used in this Agreement have the meanings assigned to them in Appendix A, General Definitions. Accounting terms not otherwise specifically defined herein shall be construed in accordance with GAAP consistently applied.


SECTION 1. CREDIT FACILITY


Subject to the terms and conditions of, and in reliance upon the representations and warranties made in, this Agreement and the other Loan Documents, Lender agrees to make a total credit facility of up to $10,000,000 available upon Borrower's request therefor, as follows:


1.1 Revolving Credit Loans.


1.1.1 Loans and Reserves. Lender agrees, during the term of this Agreement and for so long as no Default or Event of Default exists, to make Revolving Credit Loans to Borrower from time to time, as requested by Borrower in the manner set forth in Section 3.1.1 hereof, up to a maximum principal amount at any time outstanding equal to the Borrowing Base. Lender shall have the right to establish reserves in such amounts, and with respect to such matters, as Lender shall deem necessary or appropriate, against the amount of Revolving Credit Loans which Borrower may otherwise request under this Section 1.1.1, including, without limitation, with respect to (i) any sums chargeable against Borrower's Loan Account as Revolving Credit Loans under any section of this Agreement; (ii) amounts owing by Borrower to any Person to the extent secured by a Lien on, or trust over, any Property of Borrower other than the CIT Debt and the CIT Sale/Leaseback; (iii) all amounts of past due rent or other charges owing at such time by Borrower to any landlord of any premises where any of the Collateral is located; and (iv) such other matters, events, conditions or contingencies as to which Lender, in its reasonable judgment, determines reserves should be established from time to time hereunder.


1.1.2 Use of Proceeds. The Revolving Credit Loans shall be used solely for Borrower's general corporate purposes capital needs in a manner consistent with the provisions of this Agreement and Applicable Law. In no event shall any proceeds of any Revolving Credit Loans be used to purchase or to carry, reduce, retire or refinance any Indebtedness incurred to purchase or carry any margin stock (within the meaning of Regulations G or U of the Federal Reserve Board).


1 6


1.2 Letters of Credit; LC Guaranties. Lender agrees, for so long as no Default or Event of Default exists and if requested by Borrower, to (i) issue its, or cause to be issued by its Affiliates, standby Letters of Credit for the account of Borrower or (ii) execute LC Guaranties by which Lender or its Affiliates shall guaranty the payment or performance by each Borrower of its reimbursement obligations with respect to standby Letters of Credit, provided that the LC Amount at any time shall not exceed $2,000,000. No Letter of Credit or LC Guaranty may have an expiration date that is after the last day of the Original Term. Any amounts paid by Lender under any LC Guaranty or in connection with any Letter of Credit shall be treated as Revolving Credit Loans, shall be secured by all of the Collateral and shall bear interest and be payable at the same rate and in the same manner as Revolving Credit Loans.


1.3 All Loans to Constitute One Obligation. All Loans shall constitute one general joint and several obligation of Borrowers, and shall be secured by Lender's security interest in and Lien upon all of the Collateral, and by all other security interests and Liens heretofore, now or at any time or times hereafter granted by any Borrower to Lender.


1.4 Joint and Several Liability; Rights of Contribution.


(A) Each Borrower states and acknowledges that: (i) pursuant to this Agreement, Borrowers desire to utilize their borrowing potential on a consolidated basis to the same extent possible if they were merged into a single corporate entity and that this Agreement reflects the establishment of credit facilities which would not otherwise be available to such Borrower if each Borrower were not jointly and severally liable for payment of all of the Obligations; (ii) it has determined that it will benefit specifically and materially from the advances of credit contemplated by this Agreement; (iii) it is both a condition precedent to the obligations of Lender hereunder and a desire of the Borrowers that each Borrower execute and deliver to Lender this Agreement; and (iv) Borrowers have requested and bargained for the structure and terms of and security for the advances contemplated by this Agreement.


(B) Each Borrower hereby irrevocably and unconditionally: (i) agrees that it is jointly and severally liable to Lender for the full and prompt payment of the Obligations and the performance by each Borrower of its obligations hereunder in accordance with the terms hereof; (ii) agrees to fully and promptly perform all of its obligations hereunder with respect to each advance of credit hereunder as if such advance had been made directly to it; and (iii) agrees as a primary obligation to indemnify Lender on demand for and against any loss incurred by Lender as a result of any of the obligations of any one or more of the Borrowers being or becoming void, voidable, unenforceable or ineffective for any reason whatsoever (subject to the Lender's obligations under the terms of this Agreement and the Loan Documents), whether or not known to Lender or any Person, the amount of such loss being the amount which Lender would otherwise have been entitled to recover from any one or both of the Borrowers.


(C) It is the intent of each Borrower that the indebtedness, obligations and liability hereunder of no one of them be subject to challenge on any basis, including, without limitation, pursuant to any applicable fraudulent conveyance or fraudulent transfer laws. Accordingly, as of the date hereof, the liability of each Borrower under this Section 1.4, together


2 7


with all of its other liabilities to all Persons as of the date hereof and as of any other date on which a transfer or conveyance is deemed to occur by virtue of this Agreement, calculated in amount sufficient to pay its probable net liabilities on its existing Indebtedness as the same become absolute and matured ("Dated Liabilities") is, and is to be, less than the amount of the aggregate of a fair valuation of its property as of such corresponding date ("Dated Assets"). To this end, each Borrower under this Section 1.4, (i) grants to and recognizes in each other Borrower, ratably, rights of subrogation and contribution in the amount, if any, by which the Dated Assets of such Borrower, but for the aggregate of subrogation and contribution in its favor recognized herein, would exceed the Dated Liabilities of such Borrower or, as the case may be, (ii) acknowledges receipt of and recognizes its right to subrogation and contribution ratably from each of the other Borrowers in the amount, if any, by which the Dated Liabilities of such Borrower, but for the aggregate of subrogation and contribution in its favor recognized herein, would exceed the Dated Assets of such Borrower under this Section 1.4. In recognizing the value of the Dated Assets and the Dated Liabilities, it is understood that Borrowers will recognize, to at least the same extent of their aggregate recognition of liabilities hereunder, their rights to subrogation and contribution hereunder. It is a material objective of this Section 1.4 that each Borrower recognizes rights to subrogation and contribution rather than be deemed to be insolvent (or in contemplation thereof) by reason of an arbitrary interpretation of its joint and several obligations hereunder. In addition to and not in limitation of the foregoing provisions of this Section 1.4, the Borrowers and Lender hereby agree and acknowledge that it is the intent of each Borrower and of Lender that the obligations of each Borrower hereunder be in all respects in compliance with, and not be voidable pursuant to, applicable fraudulent conveyance and fraudulent transfer laws.


1.5 Structure of Credit Facility. Each Borrower agrees and acknowledges that the present structure of the credit facilities detailed in this Agreement is based in part upon the financial and other information presently known to Lender regarding each Borrower, the corporate structure of Borrowers, and the present financial condition of each Borrower. Each Borrower hereby agrees that Lender shall have the right, in its sole credit judgment, to require that any or all of the following changes be made to these credit facilities: (i) restrict loans and advances between Borrowers, (ii) establish separate lockbox and dominion accounts for each Borrower, and (iii) establish such other procedures as shall be reasonably deemed by Lender to be useful in tracking where Loans are made under this Agreement and the source of payments received by Lender on such Loans.


SECTION 2. INTEREST, FEES AND CHARGES


2.1 Interest.


2.1.1 Rates of Interest. The outstanding principal amount of the Loans shall bear interest at a fluctuating rate per annum equal to the lesser of (a) one and one-half percent (1.5 %) above the Base Rate (the "Applicable Annual Rate") and (b) the Maximum Legal Rate. The rate of interest applicable to all Loans shall increase or decrease by an amount equal to any increase or decrease in the Base Rate, effective as of the opening of business on the day that any such change in the Base Rate occurs.


3 8


2.1.2 Default Rate of Interest. Upon and after the occurrence of an Event of Default, and during the continuation thereof, the principal amount of all Loans shall bear interest at a rate per annum equal to the lesser of (a) two percent (2.00%) above the Applicable Annual Rate and (b) the Maximum Legal Rate.


2.1.3 Maximum Interest. (A) Notwithstanding anything to the contrary in this Agreement or otherwise, (i) if at any time the amount of interest computed on the basis of an Applicable Annual Rate or a Default Rate would exceed the amount of such interest computed upon the basis of the maximum rate of interest permitted by applicable state or federal law in effect from time to time hereafter (the "Maximum Legal Rate"), the interest payable under this Agreement shall be computed upon the basis of the Maximum Legal Rate, but any subsequent reduction in such Applicable Annual Rate or Default Rate, as applicable, shall not reduce such interest thereafter payable hereunder below the amount computed on the basis of the Maximum Legal Rate until the aggregate amount of such interest accrued and payable under this Agreement equals the total amount of interest which would have accrued if such interest had been at all times computed solely on the basis of an Applicable Annual Rate or Default Rate, as applicable; and (ii) unless preempted by federal law, an Applicable Annual Rate or Default Rate, as applicable, from time to time in effect hereunder may not exceed the "indicated ceiling rate" from time to time in effect under Tex. Rev. Civ. Stat. Ann. art 5069-1.04(c) (Vernon 1987). If the applicable state or federal law is amended in the future to allow a greater rate of interest to be charged under this Agreement than is presently allowed by applicable state or federal law, then the limitation of interest hereunder shall be increased to the maximum rate of interest allowed by applicable state or federal law as amended, which increase shall be effective hereunder on the effective date of such amendment, and all interest charges owing to Lender by reason thereof shall be payable in accordance with Section 3.2.2 hereof.


(B) Excess Interest. No agreements, conditions, provisions or stipulations contained in this Agreement or any other instrument, document or agreement between Borrower and Lender or default of Borrower, or the exercise by Lender of the right to accelerate the payment of the maturity of principal and interest, or to exercise any option whatsoever contained in this Agreement or any other Loan Document, or the arising of any contingency whatsoever, shall entitle Lender to contract for, charge, or receive, in any event, interest exceeding the Maximum Legal Rate. In no event shall Borrower be obligated to pay interest exceeding such Maximum Legal Rate and all agreements, conditions or stipulations, if any, which may in any event or contingency whatsoever operate to bind, obligate or compel Borrower to pay a rate of interest exceeding the Maximum Legal Rate, shall be without binding force or effect, at law or in equity, to the extent only of the excess of interest over such Maximum Legal Rate. In the event any interest is contracted for, charged or received in excess of the Maximum Legal Rate ("Excess Interest"), Borrower acknowledges and stipulates that any such contract, charge, or receipt shall be the result of an accident and bona fide error, and that any Excess received by Lender shall be applied, first, to reduce the principal then unpaid hereunder; second, to reduce the other Obligations; and third, returned to Borrower, it being the intention of the parties hereto not to enter at any time into a usurious or otherwise illegal relationship. Borrower recognizes that, with fluctuations in the Base Rate and the Maximum


4 9


Legal Rate, such a result could inadvertently occur. By the execution of this Agreement, Borrower covenants that (i) the credit or return of any Excess Interest shall constitute the acceptance by Borrower of such Excess Interest, and (ii) to the extent permitted by law, Borrower shall not seek or pursue any other remedy, legal or equitable, against Lender, based in whole or in part upon contracting for, charging or receiving of any interest in excess of the maximum authorized by applicable law. For the purpose of determining whether or not any Excess Interest has been contracted for, charged or received by Lender, all interest at any time contracted for, charged or received by Lender in connection with this Agreement shall be amortized, prorated, allocated and spread in equal parts during the entire term of this Agreement.


(C) Incorporation by this Reference. The provisions of Section 2.1.3(B) shall be deemed to be incorporated into every document or communication relating to the Obligations which sets forth or prescribes any account, right or claim or alleged account, right or claim of Lender with respect to Borrower (or any other obligor in respect of Obligations), whether or not any provision of Section 2.1.3(B) is referred to therein. All such documents and communications and all figures set forth therein shall, for the sole purpose of computing the extent of the Obligations of Borrower (or any other obligor) asserted by Lender thereunder, be automatically re-computed by Borrower or any such obligor, and by any court considering the same, to give effect to the adjustments or credits required by Section 2.1.3(B).


2.2 Computation of Interest and Fees. Interest, Letter of Credit and LC Guaranty fees and commitment fees hereunder shall be calculated daily and shall be computed on the actual number of days elapsed over a year of 360 days. For the purpose of computing interest hereunder, all items of payment received by Lender shall be deemed applied by Lender on account of the Obligations (subject to final payment of such items) one (1) Business Day after receipt by Lender of such items in Lender's account located in Atlanta, Georgia, and Lender shall be deemed to have received such items of payment on the date specified in Section 3.3 hereof.


2.3 Closing Fee. Borrower shall pay to Lender a closing fee of $175,000, which shall be fully earned and (except to the extent otherwise required by Applicable Law) nonrefundable on the Closing Date. This closing fee shall be paid as follows: (i) $75,000 shall be paid concurrently with the initial Loan hereunder, and (ii) the remaining $100,000 shall be paid on or before December 31, 1997.


2.4 Letter of Credit and LC Guaranty Fee ...