Interest Rates, Payment and Calculation. All Obligations shall bear interest, on the average Daily Balance, at a rate equal to the Reference Rate Plus Three Percent (3%) per annum, it being understood that the Reference Rate is variable in nature and shall be adjusted on the first day of each calendar quarter during that period of time when the Obligations are outstanding all as more fully described in the Line of Credit Note. Interest shall begin to accrue on the date of any and all advances hereunder. All Obligations shall bear interest, from and after the occurrence and during the continuance of an Event of Default, at a rate of interest equal to eight hundred (800) basis points above the otherwise applicable Reference Rate. Interest shall be calculated based upon a 365 day calendar year, Interest hereunder shall be due and payable on the first (1st) day of each month during the term hereof. Lender may charge such interest, all Lender Expenses (as and when incurred), and all installments or other payments due hereunder or under the Credit Agreement to Borrower's loan account, which amounts shall thereafter accrue interest at the then applicable rate of interest. Any interest not paid when due shall be compounded by becoming a part of the Obligations, and such interest shall thereafter accrue interest at the rate then applicable hereunder. In no event shall the interest rate or rates payable under the Credit Agreement and the Line of Credit Note, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrower and Lender, in executing the Credit Agreement and the Line of Credit Note, intend to legally agree upon the rate or rates of interest and manner of payment stated within it; provided, however, that, anything contained herein or in the Line of Credit Note to the contrary notwithstanding, if said rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto as of the date of the Credit Agreement and the Line of Credit Note, Borrower is and shall be liable only for the payment of such maximum rate of interest as allowed by law, and payment received from Borrower in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.
