Common use of Procedure for Obtaining Letters of Credit Clause in Contracts

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the Banks' commitment above in Section 2(d) shall be designated by Borrowers' written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers shall execute and deliver to the Agent an application and agreement with respect to the Letters of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters of Credit if (A) the amount thereon when added to the face amount of the outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten Million Dollars ($10,000,000.00) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers agree to pay the Agent for the benefit of the Banks commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one percent (1%) per annum on the maximum face amount of the Letter of Credit or (ii) $500.00. Borrower further agrees to pay Agent an additional fronting fee equal to one-eighth of one percent (.125%) per annum on the maximum face amount of each Letter of Credit. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each anniversary date of such issuance while such Letter of Credit is outstanding.

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the BanksLenders' commitment commitments above in Section 2(d2(c) shall be designated by Borrowers' written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers shall execute and deliver to the Agent an application and agreement with respect to the Letters of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters of Credit if (A) the amount thereon when added to the face amount of the outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten Five Million Dollars ($10,000,000.005,000,000) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers agree to pay the Agent for the benefit of the Banks Lenders commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one percent (1%) a per annum on rate equal to the maximum LIBOR Margin then in effect applied to the face amount of the Letter of Credit or (ii) $500.00150.00. Borrower Provided, however, at any time while an Event of Default has occurred and is continuing, the commission on the Letters of Credit shall be increased to two percent (2%) per annum on the face amount of each outstanding Letter of Credit. Borrowers further agrees agree to pay Agent an additional fronting fee equal to the lesser of (i) one-eighth of one percent (.1250.125%) per annum on the maximum face amount of each Letter of Credit, or (ii) $150, plus documentary and processing charges in accordance with Agent's standard schedule of charges with respect to the issuance, amendment, cancellation, negotiation or transfer of each Letter of Credit and drawing made thereunder. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each annual anniversary date of such issuance while such Letter of Credit is outstanding.

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the BanksLenders' commitment commitments above in Section 2(d) shall be designated by Borrowers' either Borrower's written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers the Borrower making such request shall execute and deliver to the Agent an application and agreement with respect to the Letters Letter of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters Letter of Credit if (A) the amount thereon when added to the face amount of the outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten One Million and No/100 Dollars ($10,000,000.001,000,000.00) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers Borrowers, jointly and severally, agree to pay the Agent for the benefit of the Banks Lenders commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one percent (1%) the LIBOR Margin in effect per annum on at the time of issuance times the maximum face amount of the Letter of Credit (calculated on the basis of actual days elapsed or a year consisting of 360 days) or (ii) $500.00. Borrower further agrees In addition, Borrowers, jointly and severally, agree to pay to the Agent for its own account an additional fronting fee equal to commission of one-eighth quarter of one percent (.125.25%) per annum on times the maximum face amount of such Letter of Credit for issuing each such Letter of Credit. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each anniversary date of such issuance while such Letter of Credit is outstanding.

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the Banks' commitment above in Section 2(d2(e) shall be designated by Borrowers' written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers shall execute and deliver to the Agent an application and agreement with respect to the Letters of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters of Credit if (A) the amount thereon when added to the face amount of the outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten Million Dollars ($10,000,000.00) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers agree to pay the Agent for the benefit of the Banks a commission for issuing the Letter of Credit to Applied Drilling Technology, Inc. dated March 7, 1997 in the amount of $5,272,000 equal to $52,720 (one percent (1%) of the face amount of such Letter of Credit). For all other Letters of Credit, Borrowers agree to pay the Agent for the benefit of the Banks commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one and three-quarters percent (1-3/4%) per annum on the maximum face amount of the Letter of Credit or (ii) $500.00. Borrower further agrees to pay Agent an additional fronting fee equal to one-eighth of one percent (.125%) per annum on the maximum face amount of each Letter of Credit. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each anniversary date of such issuance while such Letter of Credit is outstanding. Borrowers further agree to pay to the Agent an amendment fee for any amendment to any Letter of Credit issued hereunder, said fee to be in the amount of $50 per amendment and shall be due and payable upon the issuance of any such amendment." 3. Except to the extent its provisions are specifically amended, modified or superseded by this Agreement, the representations, warranties and affirmative and negative covenants of the Borrower contained in the Loan Agreement are incorporated herein by reference for all purposes as if copied herein in full. The Borrower hereby restates and reaffirms each and every term and provision of the Loan Agreement, as amended, including, without limitation, all representations, warranties and affirmative and negative covenants. Except to the extent its provisions are specifically amended, modified or superseded by this Agreement, the Loan Agreement, as amended, and all terms and provisions thereof shall remain in full force and effect, and the same in all respects are confirmed and approved by the Borrower and the Banks. 4. The obligations of Banks under this Agreement shall be subject to the following conditions precedent:

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the Banks' commitment above in Section 2(d2(c) shall be designated by Canaan's, on behalf of all Borrowers' , written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers Canaan, on behalf of all Borrowers, shall execute and deliver to the Agent an application and agreement with respect to the Letters of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters of Credit if (A) the amount thereon when added to the face amount of the all outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten Two Million Five Hundred Thousand Dollars ($10,000,000.002,500,000.00) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers agree to pay the Agent for the benefit of the Banks commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one percent (1%) per annum the otherwise applicable LIBOR Margin on the maximum face amount of the Letter of Credit Credit, or (ii) $500.00. Borrower further agrees Agent shall keep all amounts up to $500.00 of any letter of credit fee for its own account. Amounts in excess of $500.00 shall be shared on a pro rata basis with the Banks. In addition, Borrowers shall also pay Agent an additional to the Agent, as the Letter of Credit issuer, a fronting fee equal to one-eighth of one percent fifteen (.125%15) per annum Basis Points on the maximum face amount of each Letter of CreditCredit issued hereunder. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each anniversary date of such issuance while such Letter of Credit is outstanding.

Procedure for Obtaining Letters of Credit. The amount and date of ----------------------------------------- issuance, renewal, extension or reissuance of a Letter of Credit pursuant to the BanksLenders' commitment commitments above in Section 2(d) shall be designated by Borrowers' Borrower's written request delivered to Agent at least three (3) Business Days prior to the date of such issuance, renewal, extension or reissuance. Concurrently with or promptly following the delivery of the request for a Letter of Credit, Borrowers Borrower shall execute and deliver to the Agent an application and agreement with respect to the Letters of Credit, said application and agreement to be in the form used by the Agent. The Agent shall not be obligated to issue, renew, extend or reissue such Letters of Credit if (A) the amount thereon when added to the face amount of the outstanding Letters of Credit plus any Reimbursement Obligations exceeds Ten Five Million Dollars ($10,000,000.005,000,000) or (B) the amount thereof when added to the Total Outstandings would exceed the Revolving Commitment. Borrowers agree Borrower agrees to pay the Agent for the benefit of the Banks Lenders commissions for issuing the Letters of Credit (calculated separately for each Letter of Credit) in an amount equal to the greater of (i) one percent (1%) a per annum on rate equal to the maximum LIBOR Margin then in effect applied to the face amount of the Letter of Credit or (ii) $500.00150.00. Provided, however, at any time while an Event of Default has occurred and is continuing, the commission on the Letters of Credit shall be increased to two percent (2%) per annum on the face amount of each outstanding Letter of Credit. Borrower further agrees to pay Agent an additional fronting fee equal to the lesser of (i) one-eighth of one percent (.1250.125%) per annum on the maximum face amount of each Letter of Credit, or (ii) $150, plus documentary and processing charges in accordance with Agent's standard schedule of charges with respect to the issuance, amendment, cancellation, negotiation or transfer of each Letter of Credit and drawing made thereunder. Such commissions shall be payable prior to the issuance of each Letter of Credit and thereafter on each annual anniversary date of such issuance while such Letter of Credit is outstanding.