<PAGE>   1

                                                                   EXHIBIT 10.14

                   SECOND AMENDED AND RESTATED LOAN AGREEMENT

                                     AMONG

                    THE CIT GROUP/EQUIPMENT FINANCING, INC.

                                      AND

                           FLEET CAPITAL CORPORATION

                                        AS LENDERS,

                                      AND

                      BAYARD DRILLING TECHNOLOGIES, INC.,

                                        AS BORROWER.


                           DATED AS OF JUNE 18, 1998
<PAGE>   2
                               TABLE OF CONTENTS


<TABLE>
<S>                                                                                                                    <C>
ARTICLE I. - THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
         Section 1.1      Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
         Section 1.2      Pro-Rata Treatment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
         Section 1.3      Interest  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
         Section 1.4      Payments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
         Section 1.5      Prepayment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                 (a)      Mandatory Prepayment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                          (i)     Total Loss or Sale  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
                          (ii)    "Total Loss"  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
                          (iii)   Collateral Value  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
                          (iv)    Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
                 (b)      Voluntary Prepayment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
         Section 1.6      Security  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         Section 1.7      Amendment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         Section 1.8      Agency Fee  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         Section 1.9      Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
         Section 1.10     Release of Trend  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13

ARTICLE II. - CONDITIONS PRECEDENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         Section 2.1      Conditions Precedent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
         Section 2.2      Waiver of Conditions Precedent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15

ARTICLE III. - REPRESENTATIONS, WARRANTIES AND COVENANTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         Section 3.1      Representations of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
         Section 3.2      Covenants of the Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18

ARTICLE IV. - EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  30

ARTICLE V. - THE AGENT  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         Section 5.1      Appointment and Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         Section 5.2      Discretion and Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  32
         Section 5.3      Event of Default  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 5.4      Consultation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 5.5      Communications to and from Agent  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  33
         Section 5.6      Limitations of Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 5.7      No Representations or Warranty  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 5.8      Lender Credit Decision  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 5.9      Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 5.10     Resignation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
         Section 5.11     Distribution  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         Section 5.12     Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
</TABLE>
<PAGE>   3
<TABLE>
<S>                                                                                                                    <C>
         Section 5.13     Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35

ARTICLE VI. - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         Section 6.1      Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
         Section 6.2      No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
         Section 6.3      Applicable Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  37
         Section 6.4      Severability  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 6.5      Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 6.6      Assignment and Participation  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  38
         Section 6.7      Costs, Expenses and Taxes   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
         Section 6.8      Counterparts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
         Section 6.9      Section Headings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
         Section 6.10     Merger  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  39
</TABLE>

Exhibit A-1      - CIT Note
Exhibit A-2      - Fleet Note
<PAGE>   4
                   SECOND AMENDED AND RESTATED LOAN AGREEMENT

         THIS SECOND AMENDED AND RESTATED LOAN AGREEMENT dated as of June 18,
1998, among BAYARD DRILLING TECHNOLOGIES, INC., a Delaware corporation (the
"Borrower"), THE CIT GROUP/EQUIPMENT FINANCING, INC., a New York corporation
("CIT"), and FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet";
collectively with CIT, the "Lenders") and CIT as Agent for the Lenders (the
"Agent").  Capitalized terms used herein and not otherwise defined herein are
used with the meanings ascribed thereto in the Definitions Section of this
Agreement.

                                R E C I T A L S:

         1.      The Borrower and its subsidiaries are in the business of
owning and operating land drilling rigs.

         2.      Pursuant to the Amended and Restated Loan Agreement dated as
of May 1, 1997 among the Lenders, the Agent, the Borrower and Trend Drilling
Co. ("Trend") (the "Restated Loan Agreement"), the Lenders agreed to make a
loan to the Borrower and Trend in the principal amount of USD 30,577,131.15
(the "Restated Loan") in order to (i) facilitate the purchase of additional
drilling rigs by the Borrower and Trend, (ii) upgrade existing and new drilling
rigs, and (iii) provide working capital for the Borrower and Trend.

         3.      The Restated Loan was evidenced by the secured promissory
notes made by the Borrower and Trend to CIT and Fleet.

         4.      The principal amount outstanding as of the date hereof under
the Restated Loan is USD 18,219,458.32 (the "Loan").

         5.      The Borrower and the Lenders wish to restate the Restated Loan
Agreement in order to release Trend as a Borrower, add newly created
subsidiaries of the Borrower as guarantors and amend certain other terms and
covenants of the Restated Loan Agreement.

         NOW, THEREFORE, in consideration of the above recitals, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to amend and restate the Restated Loan
Agreement as follows:

                                  DEFINITIONS:

         The following terms shall have the following meanings for all purposes
of this Agreement and shall be equally applicable to both the singular and the
plural forms of the terms herein defined.
<PAGE>   5
        "Agreement", "this Agreement", "herein", "hereunder"' or other like
words mean this Loan Agreement as originally executed or as modified, amended
or supplemented from time to time pursuant to the provisions hereof.

        "Amendment Date" means the date on which the conditions precedent
contained in Section 2.1 of this Agreement are fulfilled or waived and the
modifications to the Restated Loan Agreement contemplated by this Agreement
become effective.

        "Borrower" means Bayard Drilling Technologies, Inc. and its successors
and permitted assigns.

        "Business Day" means a day other than a Saturday or a Sunday or a day
on which commercial banks are authorized to be closed in the State of New York
or the State of Texas.

        "Cash Flow" means, for any period, the sum of the Borrower's
consolidated net income plus depreciation, depletion and amortization, less
dividends paid and extraordinary items of income or loss (as determined in
accordance with generally accepted United States accounting principles) in the
prior four quarters.

        "Cash Flow Coverage Ratio" means the ratio of Cash Flow to Projected
Debt Service.

        "Collateral Value" has the meaning set forth in Section 1.5(a)(iii) 
hereof.

        "Dollars" or "USD" means lawful currency of the United States of 
America.

        "Event of Default" has the meaning set forth in Article IV hereof.

        "Excluded Income Taxes" has the meaning set forth in Section 1.5(a) 
hereof.

        "Fair Market Value" has the meaning set forth in Section 1.5(a)(iv) 
hereof.

        "Governmental Agencies" means any government or any state, department
or other political subdivision thereof or governmental body, agency, authority,
department or commission having jurisdiction over either Borrower or their
properties (including without limitation any court or tribunal) exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other entity
directly or indirectly owned by the foregoing.

        "Guaranties" means the guaranties of the Guarantors in favor of the
Agent, in form and substance reasonably acceptable to the Lenders.





                                       2
<PAGE>   6
         "Guarantors" means Bayard Drilling, L.P. a Delaware limited
partnership, Bayard Drilling, LLC, a Delaware limited liability company, Bonray
Drilling Corporation, a Delaware corporation, and Trend.

         "Hazardous Substances" means petroleum and used oil, or any other
pollutant or contaminant, hazardous, dangerous or toxic waste, substance or
material as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
(hereinafter called "CERCLA"); the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901, et seq. (hereinafter called "RCRA"); the
Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601, et seq.
(hereinafter called "TSCA"); the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Section 1801, et seq. (hereinafter called "HMTA"); the Oil
Pollution Act of 1990, Pub.L. No. 101-380, 104 Stat. 484 (1990) (hereinafter
called "OPA"); or any other statute, law, ordinance, code or regulation of any
Governmental Agency relating to or imposing liability or standards of conduct
concerning the use, production, generation, treatment, storage, recycling,
handling, transportation, release, threatened release or disposal of any
hazardous, dangerous or toxic waste, substance or material, currently in effect
or at any time hereafter adopted.

         "Intercreditor Agreement" means the Amended and Restated Intercreditor
Agreement dated as of June 18, 1998 among the Lenders and the Agent in form and
substance satisfactory to the Lenders, as amended, from time to time.

         "Interest Period" has the meaning set forth in Section 1.3(d) hereof.

         "Interest Rate" has the meaning set forth in Section 1.3(b) hereof.

         "LIBOR Rate" means the one-month rate of interest per annum at which
deposits in Dollars are offered to major banks in the London interbank market
at approximately 11:00 a.m. (London time), as reported and published in the
Wall Street Journal for the 15th day of each month, or, if the 15th day of the
month is not a day for which the Wall Street Journal reports LIBOR, then on the
first preceding day on which the Wall Street Journal reports the LIBOR and
shall become effective as of the first day of the succeeding calendar month and
shall continue in effect to, and including, the last day of such Month.

         "Loan" means the current principal amount and unpaid interest
outstanding under the Restated Loan Agreement as amended and restated by this
Agreement.

         "Loan Documents" means the Notes, this Agreement, the Security
Agreement and the Amendment No. 1 to Intercreditor Agreement.

         "Material adverse effect" means having a material adverse effect on
the business, properties or condition (financial or otherwise) of the Borrower
and its subsidiaries taken as a whole.

         "Maturity Date" means March 31, 2002.





                                       3
<PAGE>   7
         "Notes" means the amended and restated promissory notes of the
Borrower in favor of the Lenders, substantially in the form of Exhibits A-1 and
A-2 attached hereto and made a part hereof.

         "Orderly Liquidation Value" has the meaning set forth in Section
1.5(a)(iv) hereof.

         "Payment Date" has the meaning set forth in Section 1.3(a) hereof.

         "Prepayment Premium" means the prepayment premiums required by Section
1.5 hereof.

         "Prime Rate" means with respect to any Interest Period, the rate
publicly announced in New York, New York from time to time as the prime rate of
The Chase Manhattan Bank (or any successor thereof) ("Chase").  The Prime Rate
shall be determined by the Lender at the close of business two (2) Business
Days before a Payment Date, and shall be effective to but not including the
next applicable Payment Date.  The Prime Rate is not intended to be the lowest
rate of interest charged by Chase or the Lenders in connection with extensions
of credit to debtors.

         "Projected Debt Service" means the sum of the current portion of the
Borrower's long term debt and capitalized lease obligations coming due in the
following four quarters, including any maturities associated with the Fleet
Credit Facility.  Both Cash Flow and Projected Debt Service shall exclude the
Cash Flow and Projected Debt Service attributable to any Unrestricted
Subsidiary.

         "Responsible Officer" means the Borrower's chief executive officer,
the Borrower's chief financial officer or any other officer having principal
responsibility for the financial affairs of the Borrower.

         "Rigs" means the twelve (12) land drilling rigs owned by Bayard
Drilling, L.P. and described on Schedule 1 attached hereto, and all metal
products, machinery, equipment, materials or other goods of any description
whatsoever, used or acquired for use by Bayard Drilling, L.P. and all pumps,
drilling equipment, drill pipe, machinery, equipment, supplies, parts and other
goods of any description whatsoever installed in or affixed to or to be used in
connection with any Rig, or acquired for installation on, affixation to, or use
in connection with any Rig, other than the top drives referred to in Section
3.2(k)(i) below.

         "Security Agreement" means the amended and restated security agreement
between CIT and Bayard Drilling, L.P.  dated as of the date hereof in form and
substance satisfactory to the Agent.

         "Tangible Net Worth" means, at a particular date, the sum of the
Borrower's capital stock (excluding treasury stock), warrants, surplus
(including earned surplus, capital surplus and the balance of the current
profit and loss account not transferred to surplus), and debt that is
specifically subordinated to the Loan on the terms reasonably acceptable to the
Lenders accounted on a consolidated basis appearing on a consolidated balance
sheet prepared in accordance with generally accepted United States accounting
principles as of the date of determination after deducting therefrom the net
book value of all assets (after deducting any reserves applicable thereto)
which





                                       4
<PAGE>   8
would be treated as intangibles under generally accepted United States
accounting principles (including, without limitation, such items as goodwill,
trademarks, trade names, patents and licenses, franchises and operating rights)
and excluding the amount of the Borrower's equity investment in any
Unrestricted Subsidiary.

         "Taxes" has the meaning set forth in Section 1.4(a) of this Agreement.

         "Term Loan" has the meaning set forth in Section 1.1 of this
Agreement.

         "Total Liabilities" means indebtedness of the Borrower on a
consolidated basis which would in accordance with generally accepted United
States accounting principles be classified as current and long term liabilities
of a corporation conducting a business the same as or similar to the Borrower,
but excluding other debt that is specifically subordinated to the Loan on terms
reasonably acceptable to the Agent and total liabilities of any Unrestricted
Subsidiary.

         "Total Loss" has the meaning set forth in Section 1.5(a) of this
Agreement.

         "Unrestricted Subsidiary" means any subsidiary of the Borrower that
the Borrower has classified as an Unrestricted Subsidiary under the Indenture
and that has not been reclassified as a Subsidiary pursuant to the terms of the
Indenture.

         Capitalized terms used in this Agreement but not otherwise defined
herein shall have the meaning given them in the Indenture, among the Borrower,
the Guarantors and U.S. Trust Company of Texas, N.A., as Trustee (the
"Indenture").

                                   ARTICLE I.
                                    THE LOAN

         Section 1.1      Repayment.  Pursuant to the Restated Loan Agreement,
the Lenders have made the Loan available to the Borrower and Trend.  Pursuant
to Section 1.10, below, Trend is released from all obligations as a Borrower
under the Restated Loan Agreement to repay the Loan.  The Borrower shall repay
the principal amount of the Loan in 46 equal consecutive monthly installments,
each such installment to be paid by the Borrower to the Lenders on a Payment
Date with the first Payment Date being June 30, 1998 and ending on the Maturity
Date.  The amount of principal to be repaid on each Payment Date shall be USD
341,311.20 to CIT and USD 55,980.95 to Fleet; provided, however, that the final
installment shall be in an amount sufficient to discharge all outstanding
amounts due hereunder.  No amount of the Loan, once repaid or prepaid, may be
reborrowed hereunder.

         Section 1.2      Pro-Rata Treatment.  Except to the extent otherwise
provided herein: (a) each payment of fees other than those referred to in
Sections 1.7 and 1.8 below shall be made and applied for the account of the
Lenders pro rata, according to each Lender's portion of the Loan as of the date
of payment; and (b) each payment or prepayment by the Borrower of principal of
or interest on the





                                       5
<PAGE>   9
Loan shall be made for the account of the Lenders pro rata in accordance with
such Lender's portion of the Commitment as of the date of such payment or
prepayment.

         Section 1.3      Interest.

                 (a)      The Borrower shall pay interest, in arrears, on the
         unpaid principal amount of the Loan from the Amendment Date until the
         principal amount of the Loan is paid in full on the last day of each
         calendar month, commencing June 30, 1998 up to and including the
         Maturity Date (each such date a "Payment Date") at a rate of interest
         per annum (computed on the basis of a 365-day year and actual days
         elapsed) equal to the applicable Interest Rate; provided, however,
         that all interest accrued on the Loan and unpaid on the Maturity Date
         shall be paid on the Maturity Date.

                 (b)      The term "Interest Rate" shall mean, for an Interest
         Period (as hereinafter defined), an interest rate per annum at either
         the rate certified by the Lender to be (i) the LIBOR Rate, plus four
         and one quarter percent (4.25%) or (ii) the Prime Rate plus two
         percent (2%) per annum, at the Borrower's option.

                 (c)      (i)     The Borrower may elect to pay interest on
                 that portion of the Loan made by CIT hereunder at either the
                 LIBOR Rate or the Prime Rate on the following terms:

                                  A.       If no election is received by Agent,
                          the Borrower shall pay interest on that portion of
                          the Loan made by CIT at the LIBOR Rate.

                                  B.       Any interest rate election of the
                          Borrower must be made by written notice three (3)
                          Business days in advance of a Payment Date and may be
                          made once in any twelve (12) month period.

                                  C.       Each interest rate election made by
                          the Borrower shall be effective as to all amounts
                          outstanding under this Agreement for a twelve (12)
                          month period.

                          (ii)    The Borrower may elect to pay interest on
                 that portion of the Loan made by Fleet hereunder at either the
                 LIBOR Rate or the Prime Rate in accordance with the terms of
                 the promissory note of the Borrower issued in favor of Fleet,
                 the form of which is attached to this Agreement as Exhibit
                 A-2.

                 (d)      If at any time that the Borrower has elected the
         LIBOR Rate, the Agent shall determine that by reason of circumstances
         affecting the London interbank market adequate and reasonable means do
         not exist for ascertaining the Interest Rate based on the LIBOR Rate
         for the succeeding Interest Period or the making or continuance of the
         Loan at an Interest Rate based on the LIBOR Rate has become
         impracticable as a result of a contingency





                                       6
<PAGE>   10
         occurring after the date of this Agreement which materially and
         adversely affects the London interbank market, the Agent shall notify
         the Borrower that the Interest Rate shall be the Prime Rate, plus two
         percent (2%) per annum.  As used in this Agreement, "Interest Period"
         shall mean each respective and successive calendar month commencing on
         the last day of the month in which the Amendment Date occurs;
         provided, however, that no Interest Period shall commence or extend
         past the Maturity Date.

                 (e)      Any amount of principal or any other amount due
         hereunder which is not paid when due, whether at stated maturity, by
         acceleration or otherwise, shall bear interest from the date when due
         until such amount is paid in full, payable on demand, at a rate per
         annum equal at all times to two percent (2%) per annum above the
         Interest Rate.

                 (f)      In no event shall any interest rate provided for in
         this Agreement or the Notes exceed the maximum rate permitted by the
         then applicable law.  It is the intention of the parties hereto to
         strictly comply with applicable usury laws; accordingly, it is agreed
         that, notwithstanding any provision to the contrary in this Agreement,
         in the Notes, or in the other Loan Documents, in no event shall this
         Agreement, the Notes, or the other Loan Documents be construed to
         charge, contract for or require the payment or permit the collection
         of interest in excess of the maximum amount permitted by applicable
         law.  If any such excess interest is contracted for, charged or
         received under this Agreement, the Notes or the other Loan Documents,
         or in the event that all of the principal balance shall be prepaid, so
         that under any of such circumstances the amount of interest contracted
         for, charged or received on the principal balance shall exceed the
         maximum amount of interest permitted by applicable law, then in such
         event (i) the provisions of this Section 1.3(f) shall govern and
         control, (ii) neither the Borrower nor any other person or entity now
         or hereafter liable for the payment thereof shall be obligated to pay
         the amount of such interest to the extent that it is in excess of the
         maximum amount of interest permitted by applicable law, (iii) any such
         excess which may have been collected shall be either applied as a
         credit against the then unpaid principal balance or refunded to the
         Borrower, at the option of the Lenders, and (iv) the effective rate of
         interest shall be automatically reduced to the maximum lawful contract
         rate allowed under applicable law as now or hereafter construed by the
         courts having jurisdiction thereof.  It is further agreed that without
         limitation of the foregoing, all calculations of the rate of interest
         contracted for, charged or received under this Agreement, the Notes
         and the other Loan Documents which are made for the purpose of
         determining whether such rate exceeds the maximum lawful contract
         rate, shall be made, to the extent permitted by applicable law, by
         amortizing, prorating, allocating and spreading in equal parts during
         the period of the full stated term of the indebtedness evidenced
         hereby, all interest at any time contracted for, charged or received
         from the Borrower or otherwise by the Lenders in connection with such
         indebtedness; provided, however, that if any applicable state law is
         amended or the law of the United States of America preempts any
         applicable state law, so that it becomes lawful for the Lenders to
         receive a greater simple interest per annum rate than is presently
         allowed, the Borrower agrees that, on the effective date of such
         amendment or preemption as the case may be, the lawful maximum
         hereunder shall be increased to the maximum simple interest





                                       7
<PAGE>   11
         per annum rate allowed by the higher of the amended state law or the 
         law of the United States of America.

         Section 1.4      Payments.

                 (a)      The payment obligations of the Borrower under the
         Notes and all other amounts payable under this Agreement shall be paid
         to the Lenders in proportion to their percentage of the Loan at the
         time of such payment at such address as the Lenders may designate (not
         less than one (1) Business Day prior to the due date therefor), not
         later than the close of business on the due date thereof, in lawful
         money of the United States.  All payments shall be made (i) without
         set-off, counterclaim or condition and (ii) free and clear of, and
         without deduction for or on account of, any present or future taxes,
         levies, duties, imposts, charges, fees, deductions or withholdings of
         any nature ("Taxes"), unless the Borrower is required by law or
         regulation to make payment subject to any Taxes.  In the event that
         the Borrower is required by law or regulation to make any deduction or
         withholding on account of any Taxes from any payment due under this
         Agreement, then: (a) the Borrower shall notify the Lenders promptly as
         soon as it becomes aware of such requirement and shall remit promptly
         the amount of such Taxes to the appropriate taxation authority, and in
         any event prior to the date on which penalties attach thereto; and (b)
         such payment shall be increased by such amount as may be necessary to
         ensure that the Lenders receive a net amount, free and clear of all
         Taxes, equal to the full amount which the Lenders would have received
         had such payment not been subject to such Taxes (other than Excluded
         Income Taxes as such term is defined below).  Notwithstanding the
         foregoing, the Borrower shall not be liable for, or required to pay,
         any Taxes which are overall income or franchise taxes imposed at any
         time on either Lender in the United States of America or any
         Governmental Agency ("Excluded Income Taxes").  Each such payment or
         reimbursement by the Borrower shall be net of any credit or the value
         of any deduction received by the Lenders thereon to the extent that
         the same can be determined by the Lenders (as certified by the Agent
         to the Borrower, such certificate to be conclusive absent manifest
         error).  The Borrower shall indemnify the Lenders against any
         liability of the Lenders in respect of such Taxes (other than Excluded
         Income Taxes) and shall supply copies of applicable tax receipts.

                 (b)      If any payment to be made by the Borrower shall
         become due on a day which is not a Business Day, such payment shall be
         made on the next succeeding Business Day.

                 (c)      Each payment to be made on a Payment Date and all
         prepayments, Prepayment Premiums, and other payments (other than the
         fees referred to in Sections 1.7 and 1.8 below) shall be allocated to
         the Lenders in proportion to their percentage of the Loan at the time
         of payment and shall be applied first to the payment of accrued and
         unpaid interest on the Loan, then to the payment of all other amounts
         due under this Agreement and the other Loan Documents, and the balance
         shall be applied to the payment of principal due under the Notes.





                                       8
<PAGE>   12
                 (d)      The Borrower shall indemnify the Lenders and the
         Agent on demand against all costs, expenses, liabilities and losses
         (including funding losses) actually incurred by the Lenders and the
         Agent sustained or incurred by the Lenders and the Agent as a result
         of or in connection with: (a) the occurrence and/or continuance of any
         Event of Default (or event which, with the giving of notice and/or
         lapse of time or other applicable condition might constitute an Event
         of Default); and/or (b) any judgment or order which relates to any sum
         due hereunder being expressed in a currency other than the currency
         expressed to be due hereunder and as a result of a variation in rates
         of exchange between the rate at which such amount is converted into
         such other currency for the purposes of such judgment or order and the
         rate prevailing on the date of actual payment of such amount pursuant
         thereto; and/or (c) any postponement of the Amendment Date occurring
         because of one or more of the conditions precedent set forth in
         Article II shall not have been satisfied or waived; and/or (d) any
         payment of principal of or interest on the Notes made on a date which
         is not a Payment Date.  The above indemnities are separate and
         independent obligations of the Borrower and apply irrespective of any
         indulgence granted by the Lenders or the Agent.

         Section 1.5      Prepayment.

                 (a)      Mandatory Prepayment.

                          (i)     Total Loss or Sale.  If there shall have
                 occurred a Total Loss as herein defined or the sale of a Rig,
                 the value of which is included in the calculation of
                 Collateral Value set forth in Section 1.5(a)(iii), on the
                 earlier of (x) the date insurance or sale proceeds are
                 received or (y) seventy five (75) days after the date of
                 occurrence of the Total Loss or sale, the Borrower shall
                 either insure that Bayard Drilling, L.P. provides as
                 collateral a replacement rig, or other drilling equipment
                 acceptable to the Agent which is, as determined by the
                 appraiser referred to in Section 1.5(a)(iii) below, of
                 comparable or greater value to the lost or sold Rig, which
                 replacement rig will be added to the lien of the Security
                 Agreement or, if after giving effect to the release of such
                 lost or sold Rig from the lien of the Security Agreement, as
                 applicable, the amount outstanding under the Loan is greater
                 than the Collateral Value, (A) prepay the outstanding
                 principal balance under the Notes in an amount equal to the
                 amount by which the outstanding principal amount of the Loan
                 on the date of prepayment exceeds the Collateral Value on such
                 date, and (B) pay accrued interest thereon to the date of such
                 prepayment together with any other amount due hereunder or
                 under any Loan Document.  The Lenders shall apply payments
                 received pursuant to this Section 1.5(a)(i) in accordance with
                 Section 1.4(c) hereof, provided, however, that the principal
                 repayments shall be applied so that the remaining installments
                 of principal of the Loan are reduced on a pro rata basis, such
                 reduction to be confirmed by the Agent in a certificate
                 delivered to the Borrower which certificate shall be
                 conclusive absent manifest error.  Mandatory Prepayments made
                 by the Borrower pursuant to this Section 1.5(a) shall include
                 a Prepayment Premium as follows:





                                       9
<PAGE>   13
                                  (1)      If made on or before December 31,
                          1998 - two percent (2%) of the aggregate principal
                          amount prepaid;

                                  (2)      If made between January 1, 1999 and
                          December 31, 1999 - one percent (1%) of the aggregate
                          principal amount prepaid; or

                                  (3)      If made after December 31, 1999 - no
                          Prepayment Premium.

                          (ii)    "Total Loss" means in respect of a Rig (i)
                 the actual or constructive or compromised or arranged total
                 loss of such Rig; or (ii) the requisition for title or other
                 compulsory acquisition of such Rig otherwise than by
                 requisition for rental; or (iii) the seizure, attachment,
                 detention or confiscation of such Rig by any government or by
                 persons acting or purporting to act on behalf of any
                 government unless such Rig is released from such seizure,
                 attachment, detention or confiscation within thirty (30) days
                 of the occurrence thereof.  A Total Loss shall be deemed to
                 have occurred (a) in the event of an actual total loss of a
                 Rig, on the date of such loss, (b) in the event of damage to a
                 Rig which results in a constructive or compromised or arranged
                 total loss of such Rig, on the date of the occurrence of the
                 event giving rise to such damage, or (c) in the case of any
                 event referred to in clauses (ii) or (iii) above, on the date
                 of the occurrence of such event.  In the event of any Total
                 Loss of a Rig, the Borrower shall give written or telegraphic
                 notice to the Agent not later than ten (10) days after a
                 Responsible Officer of the Borrower has actual knowledge of
                 such occurrence.

                          (iii)   Collateral Value.  On dates as may be
                 requested by either Lender, but not more than once in any
                 twelve (12) month period, the Agent shall arrange to have the
                 Fair Market Value and the Orderly Liquidation Value of each of
                 the Rigs determined at the Borrower's expense by an
                 independent appraisal firm chosen by the Agent and reasonably
                 acceptable to the Borrower.  Each such valuation shall be
                 based on the Fair Market Value of each Rig and the oil field
                 tubular or drill pipe attributable to such Rig.  The most
                 recent determination of the lesser of (A) 50% of the aggregate
                 Fair Market Values of all of the Rigs that are working or
                 available for work (a "Working Rig") or (B)75% of the
                 aggregate Orderly Liquidation Values of all of the Working
                 Rigs is hereinafter referred to as the "Collateral Value".  If
                 the outstanding principal amount of the Loan shall exceed the
                 Collateral Value, then the Borrower shall either prepay within
                 five days of the Agent's demand the amount of the Loan
                 necessary to restore the ratio referred to herein together
                 with payment of accrued interest thereon or provide additional
                 security for the Loan which shall be acceptable in the sole
                 opinion of the Lenders for these purposes. The Lenders shall
                 apply payments received under this Section 1.5(a)(iii) in
                 accordance with Section 1.4(c) hereof, provided, however, that
                 the principal repayments shall be applied so that the
                 remaining installments of principal of the Loan shall be
                 reduced on a pro rata basis, such reduction to be confirmed by
                 the Agent in a certificate delivered to the





                                       10
<PAGE>   14
                 Borrower which certificate shall be conclusive absent manifest
                 error.  No Prepayment Premium shall bepayable with respect to
                 any prepayment required by this Section 1.5(a)(iii).

                          (iv)    Fair Market Value.  The "Fair Market Value"
                 of any Rig shall be the value determined by an independent
                 appraisal firm chosen by the Agent in accordance with clause
                 (ii) above on the basis of an arms-length purchase by a
                 willing buyer from a willing seller and without consideration
                 of any selling expenses, drilling contract, or other rig
                 employment contract.  The "Orderly Liquidation Value" of any
                 Rig shall have the meaning customarily attributed to it in the
                 equipment appraisal industry at the time of the valuation,
                 less the estimated marshalling, stacking, reconditioning and
                 sale expenses designed to maximize the resale value of such
                 Rig (as determined by the appraisal firm referred to above).
                 The appraisal firm's valuation shall be made with or without
                 physical inspection at the Agent's discretion; provided
                 however, that no more than one physical inspection shall be
                 permitted in any one twelve (12) month period.

                 (b)      Voluntary Prepayment.

                          (i)     Subject to Section 3.2(z) below, after
                 December 31, 1999, the Borrower may prepay from the proceeds
                 of a loan, made without the participation of CIT, in full or
                 in part in amounts of not less than USD 500,000.00, its
                 indebtedness under the Notes on the next Payment Date after
                 giving at least thirty (30) Business Days prior notice of such
                 prepayment.  Prepayments made between January 1, 2000 and
                 December 31, 2000 shall include a premium (the "Prepayment
                 Premium") in an amount equal to three percent (3%) of the
                 aggregate principal amount prepaid.   Prepayments made between
                 January 1, 2001 and the Maturity Date shall include a
                 Prepayment Premium in an amount equal to two percent (2%) of
                 the aggregate principal amount prepaid.  If following a
                 prepayment under this Section 1.5(b)(i), the amount
                 outstanding under the Loan is less than Collateral Value, the
                 Agent agrees to release from the lien of the Restated Security
                 Agreement, as applicable, such Rig or Rigs as will result in
                 Collateral Value equalling the amount outstanding under the
                 Loan.

                          (ii)    Subject to 3.2(m) below, at any time during
                 the term of this Agreement if all or substantially all of the
                 stock or assets of the Borrower are sold to another entity or
                 the Borrower merges with another entity and is not the
                 surviving entity, the Borrower may prepay in full or in part
                 in amounts of not less than USD 500,000.00, its indebtedness
                 under the Notes on the next Payment Date after giving at least
                 thirty (30) days prior notice of such prepayment.  Prepayments
                 made under this Section 1.5(b)(ii) shall include a Prepayment
                 Premium as follows:





                                       11
<PAGE>   15
                                  A.       If made on or before December 31,
                          1998 - four percent (4%) of the aggregate principal
                          amount prepaid;

                                  B.       If made between January 1, 1999 and
                          December 31, 1999 - three percent (3%) of the
                          aggregate principal amount prepaid;

                                  C.       If made between January 1, 2000 and
                          December 31, 2000 - two percent (2%) of the aggregate
                          principal amount prepaid; or

                                  D.       If made after January 1, 2001 - one
                          percent (1%) of the aggregate principal amount
                          prepaid.

                          (iii)   The Lenders shall apply payments received
                 pursuant to this Section 1.5(b) in accordance with Section
                 1.4(c) hereof, provided, however, that the principal
                 repayments shall be applied so that the remaining installments
                 of principal of the Loan shall be reduced on a pro rata basis,
                 such reduction to be confirmed by the Agent in a certificate
                 delivered to the Borrower which certificate shall be
                 conclusive absent manifest error.

         Section 1.6      Security.  All amounts due hereunder and under the
Notes shall be secured by the Guaranties and the Security Agreement.  As
further security for the repayment of all amounts due under this Agreement and
the Notes, the Lenders and the Agent will execute and deliver the Intercreditor
Agreement and the Borrower will consent to its terms.

         Section 1.7      Amendment Fee.  The Borrower shall pay to CIT an
amendment fee in an amount of USD 30,000.00 to be paid on the Amendment Date.

         Section 1.8      Agency Fee.  The Borrower agrees to pay the Agent an
annual agency fee of USD 25,000.00 for each of the two (2) years commencing
January 1, 1999, payable in advance on the first Business Day in each such
year.

         Section 1.9      Sharing of Payments, Etc.  The Borrower agrees that,
in addition to (and without limitation of) any right of set-off, bankers' lien
or counterclaim a Lender may otherwise have, each Lender shall be entitled, at
its option after an Event of Default has occurred and is continuing to offset
balances held by it for the account of Borrower at any of its offices against
any principal of or interest on any portion of Loan attributable to such Lender
hereunder or any other obligation of the Borrower hereunder which is not paid
(regardless of whether such balances are then due to the Borrower), in which
case it shall promptly notify the Borrower and the Agent thereof, provided that
such Lender's failure to give such notice shall not affect the validity
thereof.  If a Lender shall obtain payment of any principal of or interest on
any portion of the Loan attributable to it under this Agreement or other
obligation then due to such Lender hereunder, through the exercise of any right
of set-off or lien granted under Section 5.13 below), bankers' lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the





                                       12
<PAGE>   16
 
Loan attributable to it, or the other obligations of the Borrower hereunder of,
the other Lenders in such amounts, and make such other  adjustments from time
to time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro-rata in accordance with
their respective portions of the Loan.  To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.  The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any Lender so purchasing a participation in the Loan may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights   
with respect to such participation as fully as if such Lender were a direct
holder of the Loan or other obligations in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or
obligations of the Borrower to such Lender.

         Section 1.10     Release of Trend.  Trend is hereby released from its
obligations as a Borrower under the Restated Loan Agreement and the Notes.
Such release shall not affect Trend's obligations as a Guarantor.

                                  ARTICLE II.
                              CONDITIONS PRECEDENT

         Section 2.1      Conditions Precedent.  The effectiveness of the
modifications to the Restated Loan Agreement contemplated by this Agreement are
subject to the following conditions having been satisfied in the reasonable
opinion of the Lenders on or prior to the Amendment Date:

                 (a)      Each of this Agreement and the other Loan Documents
         shall have been duly authorized and executed with original
         counterparts thereof delivered to the Lenders.

                 (b)      The Borrower and the Guarantors shall have delivered
         to the Lenders evidence of good standing, certificates of incumbency
         and duly certified resolutions of their Boards of Directors and all
         such other corporate documentation authorizing them to enter into the
         transactions contemplated by this Agreement and the other Loan
         Documents.

                 (c)      The Lenders shall have received opinions from Baker &
         Botts, L.L.P., counsel to the Borrower and the Guarantors and an
         opinion of CIT's counsel, Gardere Wynne Sewell & Riggs, L.L.P., each
         in form and substance satisfactory to the Lenders.

                 (d)      The representations and warranties contained in
         Article III of this Agreement and in each other Loan Document shall be
         true on the Amendment Date with the same effect as though such
         representations and warranties had been made on and as of such date,
         and no Event of Default specified in Article IV hereof and no event
         which, with the lapse of time or the notice and lapse of time
         specified in Article IV hereof, would become such an Event of Default,
         shall have occurred and be continuing or shall have occurred at the
         completion





                                       13
<PAGE>   17
         of the making of the Loan, and the Lenders shall have received
         satisfactory certificates signed by Responsible Officers of the
         Borrower and the Guarantors, as to all questions of fact involved in
         this condition.

                 (e)      There shall have been no material adverse change in
         the business, financial condition or operations of the Borrower and of
         its subsidiaries taken as a whole since March 31, 1998.

                 (f)      The Lenders shall have received evidence that the
         person specified to act as agent for service of process for the
         Borrower, pursuant to Section 6.3 has agreed to so act.

                 (g)      The Lenders shall have received certificates of the
         Borrower and the Guarantors signed by an officer in charge of
         environmental affairs and safety as to compliance by the Borrower and
         Guarantors with all environmental, safety and public health laws and
         regulations applicable to the Borrower and Guarantors, without
         limitation of the foregoing, all other laws and regulations affecting
         or relating to the Rigs, in each case the non-compliance with which
         would have a material adverse effect.

                 (h)      The Borrower shall have provided evidence of
         insurance maintained by the Borrower or Bayard Drilling, L.P. and
         approved by Agent on the Rigs as required by Article 5 of the Security
         Agreement.

                 (i)      The Security Agreement shall have been duly executed
         and delivered and shall create a valid and perfected lien on the
         collateral described therein.

                 (j)      Financing statements or other documents necessary to
         continue the perfection of the Security Agreement or to perfect the
         Agent's security interests shall have been filed.

                 (k)      The Rigs shall not have been the subject of a Total
         Loss and shall not have sustained any material damage to their
         condition since the date of the appraisal reports therefor delivered
         to CIT pursuant to Section 2.1(m) of the Restated Loan Agreement, or
         materially decreased in value from the value attributed thereto as set
         forth in the appraisal report therefor delivered to CIT pursuant to
         Section 2.1(m) of the Restated Loan Agreement.

                 (l)      The Agent shall have received evidence of the 
         amendment to the Fleet Credit Facility.

                 (m)      The Lenders shall have received such other documents
         and instruments it may reasonably request necessary to consummate the
         transactions described in this Agreement, in each case in form and
         substance reasonably satisfactory to it.





                                       14
<PAGE>   18
         Section 2.2      Waiver of Conditions Precedent.  All of the conditions
precedent contained in this Article II are for the sole benefit of the Lenders
and the Lenders may waive any or all of them in their absolute discretion.

                                  ARTICLE III.
                   REPRESENTATIONS, WARRANTIES AND COVENANTS

         Section 3.1      Representations of the Borrower.  The Borrower
represents and warrants that:

                 (a)      The Borrower and each Guarantor is a corporation,
         limited partnership or a limited liability company, as the case may
         be, duly organized and validly existing, in good standing under the
         laws of the state of its incorporation and has the requisite power and
         authority (i) to carry on its business as presently conducted, (ii) to
         enter into and perform its obligations under each Loan Document to
         which it is a party, and (iii) to borrow moneys and guarantee the
         debts of others.

                 (b)      The execution, delivery and performance by the
         Borrower and each Guarantor of each Loan Document to which it is a
         party, and any other instrument or agreement provided for by this
         Agreement, have been duly authorized by all necessary corporate or
         partnership action, do not require stockholder, partner or member
         approval other than such as has been duly obtained or given, do not or
         will not contravene any of the terms of its articles of incorporation
         or by-laws, partnership agreement, certificate of formation, operating
         agreement or similar such document, and will not violate any provision
         of law or of any order of any court or governmental agency if such
         violation would result in a material adverse effect, or constitute
         (with or without notice or lapse of time or both) a default under, or
         result (except as contemplated by this Agreement) in the creation of
         any security interest, lien, charge or encumbrance upon any of its
         properties or assets pursuant to, any agreement, indenture or other
         instrument to which it is a party or by which it may be bound; this
         Agreement and each Loan Document to which it is a party has been duly
         executed and delivered by the Borrower and each Guarantor and
         constitutes its legal, valid and binding agreement or instrument,
         enforceable in accordance with the respective terms thereof.

                 (c)      Other than class action suits previously disclosed to
         the Lenders, there are no suits or proceedings pending or to its
         knowledge threatened against or affecting the Borrower or any
         Guarantor which if adversely determined would have a material adverse
         effect.

                 (d)      The principal place of business of the Borrower and
         the Guarantors and the place where all records relating to the
         transactions contemplated hereby, including records relating to the
         operations of the Rigs are kept is 4005 Northwest Expressway, Suite
         400E, Oklahoma City, Oklahoma 73116.

                 (e)      Other than such as have been obtained, no license,
         consent, approval of or filing or registration with any Governmental
         Agency or other regulatory authority is required





                                       15
<PAGE>   19
         for the execution, delivery and performance of this Agreement or any
         Loan Document or any instrument contemplated herein or therein.  The
         Borrower and each Guarantor is the holder of all certificates and
         authorizations of governmental authorities required by law to enable
         it to engage in the business transacted by it.

                 (f)      No part of the proceeds of the Loan will be used for
         any purpose that violates the provisions of any of Regulation T, U or
         X of the Board of Governors of the Federal Reserve System or any other
         regulation of such Board of Governors.  The Borrower is not engaged in
         the business of extending credit to others for the purpose of
         purchasing or carrying margin stock within the meaning of Regulations
         T, U and X of the Board of Governors of the Federal Reserve System.
         If requested by the Agent, the Borrower will furnish to the Lenders in
         connection with the Loan hereunder a statement in conformity with the
         requirements of Federal Reserve Form U-1 referred to in said
         Regulation U.  The Borrower is not an "investment company" or a
         company "controlled" by an "investment company" (as each of such terms
         is defined or used in the Investment Company Act of 1940, as amended).
         No proceeds of the Loan will be used to acquire any security in any
         transaction which is subject to Sections 13 and 14 of the Securities
         Exchange Act of 1934, as amended.
                 (g)      The Rigs are and will be on the Amendment Date owned
         by Bayard Drilling, L.P., free and clear of all liens, charges and
         rights of others except as provided in the Security Agreement or as
         permitted by Section 3.2(k) below.  All of the Rigs are mobile
         equipment which are not designed to be permanently used in any one
         location and none of the Rigs are certificated as motor vehicles under
         the laws of any jurisdiction.

                 (h)      Each of the Borrower and the Guarantors has filed or
         caused to be filed all tax returns required by the United States of
         America, the state of its principal place of business and the states
         where its business or operations require such filings which are
         required to be filed and has paid or caused to be paid all taxes as
         shown on such returns or on any assessment received by it to the
         extent that such taxes have become due and except as to such taxes
         being contested in good faith by appropriate proceedings for which
         adequate reserves are being maintained.  Each of the Borrower and the
         Guarantors has established reserves to the extent believed by it to be
         adequate for the payment of additional taxes for years which have not
         been audited by the respective tax authorities.

                 (i)      The Borrower is the sole shareholder, is the sole
         general partner, or is a member of each of the Guarantors, as the case
         may be.

                 (j)      (i)     Each of the Borrower and the Guarantors has
                 duly complied with, and the Rigs and its other properties and
                 operations are in compliance with, the provisions of all
                 applicable environmental, health and safety laws, codes and
                 ordinances and all rules and regulations promulgated
                 thereunder of all Governmental Agencies, the non-compliance
                 with which would have a material adverse effect,





                                       16
<PAGE>   20
                 unless such compliance would violate the laws or regulations 
                 of the jurisdiction in which the Rigs are operating.

                          (ii)    As of the date of this Agreement, neither the
                 Borrower nor any Guarantor has received notice from any
                 Governmental Agency, and has no knowledge, of any fact(s)
                 which constitute a violation of any applicable environmental,
                 health or safety laws, codes or ordinances, and any rules or
                 regulations promulgated thereunder of all Governmental
                 Agencies, which relate to the use or ownership of the Rigs or
                 properties owned or operated by the Borrower or any Guarantor.

                          (iii)   Each of the Borrower and the Guarantors has
                 been issued all required permits, licenses, certificates and
                 approvals of all Governmental Agencies the failure to have
                 issued which would result in a material adverse effect
                 relating to (a) air emissions, (b) discharges to surface water
                 or ground water, (c) noise emissions, (d) solid or liquid
                 waste disposal, (e) the use, generation, storage,
                 transportation, treatment, recycling or disposal of Hazardous
                 Substances or (f) other environmental, health or safety
                 matters which are material and necessary for the ownership or
                 operation of the Rigs or other properties owned or operated by
                 the Borrower or any Guarantor and such permits, licenses,
                 certificates and approvals are in full force and effect on the
                 date of this Agreement.

                          (iv)    Except as disclosed to the Agent in writing,
                 to the best of the Borrower's knowledge, except in accordance
                 with a valid governmental permit, license, certificate or
                 approval, there has been no spill or unauthorized discharge or
                 release of any Hazardous Substance to the environment at,
                 from, or as a result of any operations on the Rigs or other
                 properties and operations owned or operated by the Borrower or
                 any Guarantor required to be reported to any Governmental
                 Agency by the Borrower or any Guarantor.

                          (v)     Except as disclosed to the Agent in writing,
                 there has been no material complaint, compliance order,
                 compliance schedule, notice letter, notice of citation or
                 other similar notice from any applicable environmental agency
                 delivered to the Borrower or any Guarantor which concerns the
                 operations of the Rigs or other properties owned or operated
                 by the Borrower or any Guarantor and which would result in a
                 material adverse effect.

                 (k)      All representations and warranties made by the
         Borrower herein or by the Borrower or any Guarantor pursuant to any
         Loan Document or made in any certificate or written statement
         delivered pursuant hereto or thereto (i) do not contain any untrue
         statement of or omit to state a material fact necessary to make the
         statements contained herein or therein not misleading and (ii) shall
         survive the making of the Loan hereunder and the execution and
         delivery to the Lenders of the Notes and any other Loan Document.





                                       17
<PAGE>   21
         Section 3.2      Covenants of the Borrower.  After the date of
execution of this Agreement and until payment in full of the Notes and the
termination of this Agreement and the other Loan Documents, the Borrower agrees
that it will:

                 (a)      promptly inform the Lenders of any event which
         constitutes or will constitute, by giving of notice or lapse of time,
         or both, an Event of Default or materially  and adversely affect its
         ability to fully perform its obligations under this Agreement and the
         Loan Documents to which it is a party;

                 (b)      pay and discharge, or cause to be paid and
         discharged, any taxes, assessments and governmental charges or levies
         that may be imposed upon the Borrower or upon its income or profits or
         upon any of its properties prior to the date on which penalties attach
         thereto and all lawful claims which, if unpaid, when due, might become
         a lien or charge upon its properties; provided, however, that this
         provision shall not be deemed to require payment of any taxes,
         assessments, governmental charges, levies or claims while the Borrower
         contests the validity thereof by appropriate proceedings in good faith
         and so long as it shall have set aside on its books adequate reserves
         with respect thereto;

                 (c)      preserve and maintain, or cause to be preserved or
         maintained, its existence in good standing in the state of its
         incorporation and in all other jurisdictions where it is currently
         conducting business and is required to be authorized to so conduct its
         business.

                 (d)      file or cause to be filed in such offices as shall be
         required or appropriate under any applicable Uniform Commercial Code
         of any State or any other statute of any other jurisdiction, and in
         such manner and form as the Agent may require or as may be reasonably
         necessary or appropriate under applicable law, any financing statement
         or statements or other instruments that may be reasonably necessary or
         desirable or that the Agent may request in order to create, perfect,
         preserve, continue, validate or satisfy the Agent's liens on and
         security interests and rights in collateral arising out of or related
         to this Agreement and any Loan Document;

                 (e)      promptly notify the Agent of any proposed change in
         its name or its assumed name, location of its registered place of
         business or the office where its records are kept or any principal
         place of business stated in Section 3.1(d) hereof;

                 (f)      promptly obtain and upon the reasonable request,
         deliver to the Agent all authorizations, approvals, consents and
         licenses and renewals thereof required under any applicable law or
         regulation with respect to this Agreement, the Loan Documents, and the
         ownership or operation of the Rigs which are the responsibility of the
         Borrower and it shall comply with the terms of the same except where
         non-compliance would not result in a material adverse effect;





                                       18
<PAGE>   22
                (g)     promptly notify the Lenders of any suit or proceedings
         brought against the Borrower or any Guarantor or, to the knowledge of
         the  Borrower, threatened against or affecting it or any Guarantor
         which,  if adversely determined, would reasonably be expected to have
         a material adverse effect;

                 (h)      upon the request of the Agent give the Lenders or the
         Agent or any representative of the Lenders or the Agent access during
         normal business hours to, and permit the Lenders or the Agent or such
         representative to inspect, all properties belonging to the Borrower or
         any Guarantor (including, but not limited to, the Rigs) and permit
         such representative to examine, copy and make extracts from such
         books, records and documents in the possession of the Borrower,
         relating to the affairs of the Borrower, as such representative may
         reasonably request.  If requested by the Borrower, the Lenders and the
         Agent will enter into their standard confidentiality agreement
         respecting the affairs of the Borrower;

                 (i)      comply with and use its best efforts to cause its
         Subsidiaries, and its and their agents, contractors and
         sub-contractors (while such persons are acting within the scope of
         their contractual relationship with the Borrower or any Subsidiary) to
         so comply with all material, applicable environmental, health and
         safety laws, codes and ordinances, and all rules and regulations
         promulgated thereunder of all Governmental Agencies the non-compliance
         with which would result in a material adverse effect; and with the
         terms and conditions of all applicable permits, licenses, certificates
         and approvals of all Governmental Agencies now or hereafter granted or
         obtained with respect to the Rigs or other properties owned or
         operated by the Borrower or any Guarantor the non-compliance with
         which would result in a material adverse effect; unless such
         compliance would violate the laws or regulations of the jurisdictions
         in which the Rigs are operating.

                          (i)     The Borrower will use its best efforts and
                 safety practices to prevent the unauthorized release,
                 discharge, disposal, escape or spill of Hazardous Substances
                 on or about the Rigs or other properties owned or operated by
                 the Borrower or any Guarantor.

                          (ii)    The Borrower shall notify the Lenders in
                 writing, within five (5) Business Days of any of the following
                 events occurring after the date of this Agreement:

                                  A.       Any written notification made by the
                          Borrower or any Guarantor to any federal, state or
                          local environmental agency required under any
                          federal, state or local environmental statute,
                          regulation or ordinance relating to a spill or
                          unauthorized discharge or release of any Hazardous
                          Substance to the environment at, from, or as a result
                          of any operations on, the Rigs or other properties
                          and operations owned or operated by the Borrower





                                       19
<PAGE>   23
                         or any Guarantor if such spill, discharge or release 
                         would result in a material adverse effect.


                                  B.       Knowledge by a Responsible Officer
                          of the Borrower or any Guarantor of receipt of
                          service by the Borrower or any Guarantor of any
                          complaint, compliance order, compliance schedule,
                          notice letter, notice of violation, citation or other
                          similar notice or any judicial demand by any court,
                          federal, state or local environmental agency,
                          alleging (i) any spill, unauthorized discharge or
                          release of any Hazardous Substance to the environment
                          from, or as a result of the operations on, the Rigs
                          or other properties owned or operated by the Borrower
                          or any Guarantor or (ii) violations of applicable
                          laws, regulations or permits regarding the
                          generation, storage, handling, treatment,
                          transportation, recycling, release or disposal of
                          Hazardous Substances on or as a result of operations
                          on the Rigs or other properties and operations owned
                          or operated by the Borrower or any Guarantor if such
                          violation would result in a material adverse effect.

                                  C.       It is understood by the parties
                          hereto that the aforementioned notices are solely for
                          the Agent's and the Lenders' information, may not
                          otherwise be required by any federal, state or local
                          environmental laws, regulations or ordinances, and
                          are to be considered confidential information by the
                          Agent and the Lenders.

                                  D.       The term "environmental agency" as
                          used herein shall include, but not be limited to, the
                          United States Environmental Protection Agency, the
                          Texas Railroad Commission, the United States Minerals
                          Management Service, the United States Department of
                          Transportation (in its administration of the
                          Hazardous Materials Transportation Act, 49 U.S.C.
                          Section  1801, et seq.) and other analogous or
                          similar Governmental Agencies regulating or
                          administering statutes, regulations or ordinances
                          relating to or imposing liability or standards of
                          conduct concerning the generation, storage, use,
                          production, transportation, handling, treatment,
                          recycling, release or disposal of any Hazardous
                          Substance.

                          (iii)   The Borrower hereby agrees to indemnify and
                 hold the Agent and the Lenders harmless from and against any
                 and all claims, losses, liability, damages and injuries of any
                 kind whatsoever asserted against the Agent and the Lenders
                 with respect to or as a direct result of the presence, escape,
                 seepage, spillage, release, leaking, discharge or migration
                 from any Rig or other properties owned or operated by the
                 Borrower or any Guarantor of any Hazardous Substance,
                 including without limitation, any claims asserted or arising
                 under any applicable environmental, health and safety laws,
                 codes and ordinances, and all rules and regulations
                 promulgated





                                       20
<PAGE>   24
                 thereunder of all Governmental Agencies, regardless of whether
                 or not caused by or within the control of the Borrower or any
                 Guarantor subject to the following:

                                  A.       It is the parties' understanding
                          that the Agent and the Lenders do not now, have never
                          and do not intend in the future to exercise any
                          operational control or maintenance over the Rigs or
                          any other properties and operations owned or operated
                          by the Borrower or any Guarantor, nor have they in
                          the past, presently, or intend in the future to,
                          maintain an ownership interest in the Rigs or any
                          other properties owned or operated by either Borrower
                          except as may arise upon enforcement of the Agent's
                          rights under the Security Agreements and except as
                          arising under the Lease.

                                  B.       Should, however, the Agent or the
                          Lenders hereafter exercise any ownership interest in
                          or operational control over the Rigs or any other
                          properties owned or operated by the Borrower or any
                          Guarantor, other than pursuant to the Lease, but
                          including but not limited to, through foreclosure,
                          then the above stated indemnity and hold harmless
                          shall be limited with respect to any actions or
                          failures to act by the Agent or the Lenders
                          subsequent to exercising such interest or operational
                          control, to the extent such action or inaction by the
                          Agent or the Lenders is found by a court or
                          Governmental Agency with competent jurisdiction to
                          have caused or made worse any condition for which
                          liability is asserted, including but not limited to,
                          the presence, escape, seepage, spillage, leaking,
                          discharge or migration on or from the Rigs or other
                          properties owned or operated by the Borrower or any
                          Guarantor of any Hazardous Substance.

                                  C.       The indemnity and hold harmless
                          contained in this Subsection (i) shall not extend to
                          the Agent or CIT in their capacity as an equity
                          investor in the Borrower or as an owner of any
                          property or interest as to which the Borrower is also
                          owner but only to their capacity as a lender, a
                          financial lessor, a holder of security interests, or
                          a beneficiary of security interests.

                 (j)      not, without the prior written consent of the
         Lenders, (1) permit Bayard Drilling, L.P. to sell, transfer, lend,
         lease for a period longer than one hundred eighty (180) days or
         otherwise dispose of any of the Rigs, or (2) sell, transfer or
         otherwise dispose, or permit any Guarantor to sell, transfer or
         otherwise dispose, the whole or, in the reasonable opinion of the
         Lenders any substantial part of the business, property or other assets
         of the Borrower and the Guarantors, taken as a whole, whether by a
         single transaction or by a series of transactions, (related or not);
         provided, however, that the sale of any Rig with a Fair Market Value
         or for a price (whichever is less) of up to USD 1,000,000.00 in
         aggregate in any fiscal year shall not require the consent of the
         Lenders and the Agent agrees to release such assets from the lien of
         the Security Agreement; and provided further that the restriction
         contained in this Section 3.2(j) shall not apply to an Asset Sale
         other than a Rig if (a) such





                                       21
<PAGE>   25
         Asset Sale results from the requisition of title to, seizure or
         forfeiture of any Property or assets or any actual or constructive
         total loss or an agreed or compromised total loss the Borrower or such
         Guarantor, as the case may be, receives consideration at the time of
         such Asset Sale at least equal to the Fair Market Value of the
         Property; (b) at least 75% of such consideration consists of Cash
         Proceeds (or the assumption of Indebtedness of the Borrower or such
         Guarantor relating to the Capital Stock or Property or asset that was
         the subject of such Asset Sale and the unconditional release of the
         Borrower or such Guarantor from such Indebtedness); and the Borrower
         delivers to the Agent an Officers' Certificate certifying that such
         Asset Sale complies with clauses (a) and (b); provided, however that
         any Asset Sale pursuant to a condemnation, appropriation or other
         similar taking, including by deed in lieu of condemnation, or pursuant
         to the foreclosure or other enforcement of a Permitted Lien or
         exercise by the related lienholder of rights with respect thereto,
         including by deed or assignment in lieu of foreclosure shall not be
         required to satisfy the conditions and set forth in clauses (a) and
         (b) of this sentence.

                 (k)      not, other than pursuant to or permitted by the Loan
         Documents create, assume or permit to exist any encumbrance upon (i)
         the Rigs except:

                                  A.       security interests on top drives to
                          the extent that such security interests secure the
                          financing by third parties of at least 80% of the
                          purchase price of top drives; provided, however, that
                          the aggregate purchase price of top drives shall not
                          exceed USD 6,000,000.00; and provided further, that
                          the financings for the purchase of top drives shall
                          be repaid from the proceeds of contracts for the use
                          of the top drives of equal or longer duration to the
                          amortization schedules of such financings;

                                  B.       liens for taxes, assessments or
                          other governmental charges not yet due and payable
                          or, if due and payable, which are being contested in
                          good faith and for which adequate reserves have been
                          established in accordance with generally accepted
                          accounting principles in the U.S. but only if such
                          liens have not been filed or recorded;

                                  C.       statutory liens of landlords,
                          carriers, warehousemen, mechanics, materialmen and
                          other similar liens imposed by law, which are
                          incurred in the ordinary course of business for sums
                          not more than thirty (30) days delinquent or which
                          are being contested in good faith; provided that a
                          reserve or other appropriate provision, if any, as
                          shall be required by generally accepted accounting
                          principles in the U.S., shall have been made
                          therefor;

                                  D.       liens incurred or deposits made in
                          the ordinary course of business in connection with
                          workers' compensation, unemployment insurance and
                          other types of social security, or to secure the
                          performance of tenders,





                                       22
<PAGE>   26
                          statutory obligations, surety, stay, customs and
                          appeal bonds, bids, leases, government contracts,
                          trade contracts, performance and return-of-money
                          bonds and other similar obligations (exclusive of
                          obligations for the payment of borrowed money);

                                  E.       deposits or other advances made in
                          the ordinary course of business to secure liability
                          for (A) insurance premiums and other liability to
                          insurance carriers provided such deposits and other
                          advances do not, in an aggregate amount, exceed USD
                          250,000.00 in any calendar year, or (B) worker's
                          compensation claims or premiums or other liability to
                          worker's compensation insurance carriers or
                          administrators;

                                  F.       a security interest on the Rigs and
                          related drilling equipment in favor of Fleet to
                          secure the Fleet Credit Facility; and

                 or
      
                         (ii)    on Borrower's or any Guarantor's other assets 
                 except for Permitted Liens.

                 (l)      not, without the prior written consent of the Lenders
         (which consent shall not be unreasonably withheld) conduct or manage
         any business or activity other than a Related Business;

                 (m)      Borrower will not, in any transaction or series of
         transactions, consolidate with or merge into any other Person (other
         than a merger of a Subsidiary into Borrower in which Borrower is the
         continuing Person), or continue in a new jurisdiction or sell, convey,
         assign, transfer, lease or otherwise dispose of all or substantially
         all of the property and assets of Borrower and the Subsidiaries, taken
         as a whole, to any Person, unless

                          (i)     either (a) Borrower shall be the continuing
                 Person or (b) the Person (if other than Borrower) formed by
                 such consolidation or into which Borrower is merged, or the
                 Person which acquires, by sale, assignment, conveyance,
                 transfer, lease or disposition, all or substantially all of
                 the property and assets of Borrower and the Subsidiaries,
                 taken as a whole (such corporation or Person, the "Surviving
                 Entity"), shall be a Person organized and validly existing
                 under the laws of the United States of America, any political
                 subdivision thereof or any state thereof or the District of
                 Columbia, and shall expressly assume, the due and punctual
                 payment of the principal of (and premium, if any) and interest
                 on all the Notes and the performance of Borrower's covenants
                 and obligations under this Agreement;

                          (ii)    immediately after giving effect to such
                 transaction or series of transactions on a pro forma basis
                 (including, without limitation, any Indebtedness incurred or
                 anticipated to be incurred in connection with or in respect of
                 such





                                       23
<PAGE>   27
                 transaction or series of transactions), no Event of Default
                 shall have occurred and be continuing or would result
                 therefrom;

                          (iii)   immediately after giving effect to such
                 transaction or series of transactions on a pro forma basis
                 (including, without limitation, any Indebtedness incurred or
                 anticipated to be incurred in connection with or in respect of
                 such transaction or series of transactions), the Borrower (or
                 the Surviving Entity if the Borrower is not continuing) shall
                 have a Tangible Net Worth equal to or greater than the
                 Tangible Net Worth of Borrower immediately prior to such
                 transactions; and

                          (iv)    immediately after giving effect to any such
                 transaction or series of transactions on a pro forma basis as
                 if such transaction or series of transactions had occurred on
                 the first day of the Determination Period, the Borrower (or
                 the Surviving Entity if the Borrower is not continuing) would
                 be permitted to incur USD 1.00 of additional Indebtedness
                 pursuant to the test described in Section 3.2(aa) hereof.

                          (v)     The provision of clause (iv) above shall not
                 apply to any merger or consolidation into or with, or any such
                 transfer of all or substantially all of the property and
                 assets of the Borrower and the Subsidiaries taken as a whole
                 into, the Borrower.

                 (n)      The Borrower will not, and will not permit any
         Subsidiary to, make any Restricted Payment, unless at the time of and
         after giving effect to the proposed Restricted Payment, (a) no Event
         of Default shall have occurred and be continuing (or would result
         therefrom), (b) Borrower could incur at least USD 1.00 of additional
         Indebtedness under the tests described in Section 3.2(z) below,  and
         (c) the aggregate amount of all Restricted Payments declared or made
         on or after the Amendment Date by the Borrower or any Subsidiary shall
         not exceed the sum of (i) 50% (or if such Consolidated Net Income
         shall be a deficit, minus 100% of such deficit) of the aggregate
         Consolidated Net Income accrued during the period beginning on the
         first day of the fiscal quarter in which the Amendment Date falls and
         ending on the last day of the fiscal quarter ending immediately prior
         to the date of such proposed Restricted Payment, minus 100% of the
         amount of any write downs, write-offs and other negative extraordinary
         charges not otherwise reflected in Consolidated Net Income during such
         period, plus (ii) an amount equal to the aggregate net cash proceeds
         received by the Borrower, subsequent to the Amendment Date, from the
         issuance or sale (other than to a Subsidiary) of shares of its Capital
         Stock (excluding Redeemable Stock, but including Capital Stock issued
         upon the exercise of options, warrants or rights to purchase Capital
         Stock (other than Redeemable Stock) of the Borrower) and the liability
         (expressed as a positive number) as expressed on the face of a balance
         sheet in accordance with GAAP in respect of any Indebtedness of the
         Borrower or any of its Subsidiaries, or the carrying value of
         Redeemable Stock, which has been converted into, exchanged for or
         satisfied by the issuance of shares of Capital Stock (other than
         Redeemable Stock) of the Borrower, subsequent to the Amendment Date,
         plus (iii) 100% of the net reduction in Restricted





                                       24
<PAGE>   28
         Investments, subsequent to the Amendment Date, in any Person,
         resulting from payments of interest on Indebtedness, dividends,
         repayments of loans or advances, or other transfers of property (but
         only to the extent such interest, dividends, repayments or other
         transfers of Property are not included in the calculation of
         Consolidated Net Income), in each case to the Borrower or any
         Subsidiary from any Person (including, without limitation, from
         Unrestricted Subsidiaries) or from predesignations of Unrestricted
         Subsidiaries as Subsidiaries (valued in each case as provided in the
         definition of "Investments"), not to exceed in the case of any Person
         the amount of Restricted Investments previously made by the Borrower
         or any Subsidiary in such Person and in each such case which was
         treated as a Restricted Payment, plus (iv) USD 10,000,000.00.

         The foregoing provisions will not prevent (A) the payment of any
dividend on Capital Stock of any class within sixty (60) days after the date of
its declaration if at the date of declaration such payment would be permitted
by the Indenture; (B) any repurchase or redemption of Capital Stock or
Subordinated Indebtedness of the Borrower or a Subsidiary made by exchange for
Capital Stock of the Borrower (other than Redeemable Stock), or out of the net
cash proceeds from the substantially concurrent issuance or sale (other than to
a Subsidiary) of Capital Stock of the Borrower (other than Redeemable Stock),
provided that the next cash proceeds from such sale are excluded from
computations under clause (c) (ii) above to the extent that such proceeds are
applied to purchase or redeem such Capital Stock or Subordinated Indebtedness;
(C) so long as no Event of Default shall have occurred and be continuing or
should occur as a consequence thereof, any repurchase or redemption of
Subordinated Indebtedness of the Borrower or a Subsidiary solely in exchange
for, or out of the net cash proceeds from the substantially concurrent sale of,
new Subordinated Indebtedness of the Company or a Subsidiary, so long as such
Subordinated Indebtedness is permitted under Section 3.2(z) and (x) is
subordinated to the Notes at least to the same extent as the Subordinated
Indebtedness so exchanged, purchased or redeemed, (y) has a stated maturity
later than the stated maturity of the Subordinated Indebtedness so exchanged,
purchased or redeemed and (z) has an Average Life at the time incurred that is
greater than the remaining Average Life of the Subordinated Indebtedness so
exchanged, purchased or redeemed; (D) Investments in any Joint Ventures and
foreign Subsidiaries not constituting Guarantors in an aggregate amount not to
exceed USD 5,000,000.00; (E) the payment of any dividend or distribution by a
Subsidiary of the Borrower or any of its Wholly Owned Subsidiaries; (F) so long
as no Event of Default shall have occurred and be continuing  or should occur
as a consequence thereof, the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Borrower held by any employee
of the Borrower or any of its Subsidiaries, provided that the aggregate price
paid for all such repurchased, redeemed, acquired or retired Capital Stock
pursuant to the terms of an employee benefit plan or employment or similar
agreement shall not exceed USD 500,000.00 in any calendar year; and (G) the
acquisition of Capital Stock by the Borrower in connection with the exercise of
stock options or stock appreciation rights by way of cashless exercise or in
connection with the satisfaction of withholding tax obligations.
Notwithstanding the foregoing, the amount available for Investments in Joint
Ventures and foreign Subsidiaries pursuant to clause (D) of the preceding
sentence may be increased by the aggregate amount received by the Borrower and
its Subsidiaries from a Joint Venture or a foreign Subsidiary on or before such
date resulting





                                       25
<PAGE>   29
from payments of interest on Indebtedness, dividends, repayments of loans or
advances or other transfers of Property made to such Joint Venture or foreign
Subsidiary (but only to the extent such interest, dividends, repayments or
other transfers of Property are not included in the calculation of Consolidated
Net Income); Restricted Payments permitted to be made as described in the first
sentence of this paragraph will be excluded in calculating the amount of
Restricted Payments thereafter, except that any such Restricted Payments
permitted to be made pursuant to clauses (A), (D), (E) (but only to the extent
paid to someone other than the Borrower or any of its Wholly Owned
Subsidiaries) and (F) will be included in calculating the amount of Restricted
Payments thereafter.

         For purposes of this covenant, if a particular Restricted Payment
involves a non-cash payment, including a distribution of assets, then such
Restricted Payment shall be deemed to be an amount equal to the cash portion of
such Restricted Payment, if any, plus an amount equal to the Fair Market Value
of the non-cash portion of such Restricted Payment.

                 (o)      forthwith upon demand by the Agent and at the
         Borrower's sole cost and expense, execute and provide all such
         assurances and do all acts and things as the Agent or any receiver may
         reasonably require for: (i) perfecting or protecting the security
         created (or intended to be created) by any of the Loan Documents,
         including, without limitation, granting in favor of the Agent a
         security interest covering the security created (or intended to be
         created) by any of the Loan Documents with respect to any obligations
         of the Borrower hereafter owing to the Lenders; or (ii) preserving or
         protecting any of the rights of the Agent under any of the Loan
         Documents; or (iii) facilitating the appropriation or realization of
         any of the collateral assigned or granted to the Agent under any of
         the Loan Documents and enforcing the security constituted by any of
         the Loan Documents on or at any time after the same shall have become
         enforceable; or (iv) the exercise of any power, authority or
         discretion vested in the Agent under any of the Loan Documents;

                 (p)      deliver to the Lenders such financial or other
         information relating to it, any of the transactions contemplated by
         this Agreement or any of the Loan Documents, as may be reasonably
         requested by the Lenders and if requested by the Borrower, the Lenders
         and the Agent will enter into their standard confidentiality agreement
         respecting the affairs of the Borrower;

                 (q)      upon the request of the Agent, give the Lenders or
         the Agent or any representative of the Lenders or the Agent at any
         reasonable time, access to the Rigs and permit the Lenders or the
         Agent or such representative to inspect the Rigs and any part thereof,
         as the Lenders or the Agent or such representative may reasonably
         request and if requested by the Borrower, the Lenders and the Agent
         will enter into their standard confidentiality agreement respecting
         the affairs of the Borrower;

                 (r)      maintain all permits and certificates which are
         material and necessary to the operation of the Borrower's and the
         Guarantors' business under all applicable environmental, safety and
         public health laws and regulations applicable to the Borrower, the
         Guarantors and





                                       26
<PAGE>   30
         the Rigs, and all other laws and regulations affecting or relating to
         the Rigs the failure to maintain which would have a material adverse
         effect;

                 (s)      deliver, or shall cause to be delivered, to each
         Lender at least two copies and as many additional copies as each
         Lender may reasonably require from time to time of, (i) the Borrower's
         audited annual consolidated financial statements (including the
         balance sheet and income statement of the Borrower) in a form
         consistent with generally accepted United States accounting principles
         and practices consistently applied, as soon as is practicable after
         the same have been issued but in any case within one hundred and
         twenty (120) days of the end of its fiscal year certified by Coopers &
         Lybrand or other auditors as may be acceptable to the Lenders that the
         consolidated financial statements present fairly, in all material
         respects, the financial position of the Borrower as of the date
         thereof, (ii) its quarterly consolidated and consolidating financial
         statements (including the balance sheet and income statement of the
         Borrower) in a form consistent with generally accepted United States
         accounting principles and practices consistently applied, as soon as
         is practicable after the end of each financial quarter but in any case
         within sixty (60) days of the end of its financial quarter certified
         by one of its Responsible Officers that the consolidated financial
         statements present fairly, in all material respects, the financial
         position of the Borrower as of the date thereof, (iii) such financial
         or other information relating to it, any of the transactions
         contemplated by this Agreement or any of the other Loan Documents, as
         may reasonably be requested by the Agent and generally made available
         to its other creditors, its shareholders and to any governmental
         authorities;

                 (t)      maintain, on a quarterly basis, a Cash Flow Coverage
         Ratio of at least 1.50:1.0 in 1998 and 1.75:1.0 thereafter;

                 (u)      maintain Total Available Liquidity of USD
         3,000,000.00 in 1998; "Total Available Liquidity" shall be the sum of
         the Borrower's and Guarantor's (i) cash and cash equivalents
         (excluding cash or cash equivalents pledged to secure letters of
         credit, but only to the extent of accrued liabilities for workers
         compensation claims) and (ii) unused capacity available under the
         Fleet Credit Facility.

                 (v)      maintain, on a consolidated basis, a ratio of Total
         Liabilities to Tangible Net Worth not greater than 1.0:1.0 in 1998 and
         thereafter (excluding for purposes of this test the Total Liabilities
         and Tangible Net Worth of any Unrestricted Subsidiary);

                 (w)      maintain all permits and certificates which are
         material and necessary to the operation of the Borrower's and any
         Guarantor's business under all applicable environmental, safety and
         public health laws and regulations applicable to the Borrower, the
         Guarantors and the Rigs, and all other laws and regulations affecting
         or relating to the Rigs the failure to maintain which would have a
         material adverse effect; and





                                       27
<PAGE>   31
                 (x)      deliver to each Lender, contemporaneously with the
         delivery to each Lender of the annual and quarterly financial
         statements specified in Section 3.3(g) above, its certificate (in form
         and substance satisfactory to the Lenders), signed by one of its
         Responsible Officers, (i) stating that such officer has reviewed the
         relevant terms of this Agreement, the other Loan Documents and all
         other agreements of the Borrower which evidence indebtedness for
         borrowed money and leases (the "Financial Obligation Agreements") and
         has made or caused to be made under his supervision, a review of the
         transactions and condition of the Borrower during the relevant fiscal
         quarter or year, as the case may be, and that such review has not
         disclosed the existence during such period, nor does such Responsible
         Officer have knowledge of the existence as at the date of such
         certificate, of any condition or event which constitutes an event of
         default under any of the Loan Documents or Financial Obligation
         Agreements, or which, after notice or lapse of time or both would
         constitute an event of default under any of the Loan Documents or
         Financial Obligation Agreements, or if any such condition or event
         existed or exists, specifying the nature and period of existence
         thereof and what action the Borrower has taken or proposes to take
         with respect thereto, (ii) setting forth in form and detail
         satisfactory to the Lenders, the calculations respecting compliance
         with the financial covenants of this Agreement and (iii) for purposes
         of the annual certificate only, attaching and certifying as true and
         correct a certificate evidencing the insurance in place with respect
         to the Rigs and their operation.

                 (y)      deliver to each Lender on each anniversary of the
         Amendment Date a certification from a Responsible Officer that the
         Rigs and their related equipment are being maintained according to
         customary oil and gas drilling industry practice confirmed, if
         reasonably requested by the Lenders by an appraiser selected in
         accordance with Section 1.5(a)(iii) above.

                 (z)      not and will not permit any Guarantor to directly or
         indirectly, incur any Indebtedness (including Acquired Indebtedness),
         unless after giving pro forma effect to the incurrence of such
         Indebtedness, the Consolidated Interest Coverage Ratio for the
         Determination Period preceding the Transaction Date is at least 2.25
         to 1.0.  Notwithstanding the foregoing, the Borrower or any Guarantor
         (subject to the following paragraph) may incur Permitted Indebtedness.
         Any Indebtedness of a Person existing at time at which such Person
         becomes a Subsidiary (whether by merger, consolidation, acquisition or
         otherwise) shall be deemed to be incurred by such Subsidiary at the
         time at which it becomes a Subsidiary.

                 (aa)     subject to Section 3.2(z) above, the Borrower will
         not permit any Guarantor to, directly or indirectly, incur any
         Indebtedness or issue any Preferred Stock except:

                          (i)     Indebtedness or Preferred Stock issued to and
                 held by the Borrower so long as any transfer of such
                 Indebtedness or Preferred Stock to a Person other than the
                 Borrower will be deemed to constitute an incurrence of such
                 Indebtedness or Preferred Stock by the issuer thereof as of
                 the date of such transfer;





                                       28
<PAGE>   32
                          (ii)    Acquired Indebtedness or Preferred Stock of a
                 Subsidiary issued and outstanding prior to the date on which
                 such Subsidiary was acquired by the Borrower (other than
                 Indebtedness or Preferred Stock issued in connection with or
                 in anticipation of such acquisition);

                          (iii)   Three (3) term notes issued by the Company in
                 favor of General Electric Capital Corp., secured by certain of
                 the Company's top drives, upon which approximately $2.9
                 million was outstanding at May 15, 1998.

                          (iv)    Indebtedness described in clauses (b), (c),
                 (d), (e), (f), (g), (h), (k) and (h) under the definition of
                 Permitted Indebtedness contained in the Indenture;

                          (v)     Permitted Subsidiary Refinancing Indebtedness
                 of such Subsidiary;

                          (vi)    Indebtedness or Preferred Stock issued in
                 exchange for, or the proceeds of which are used to refinance,
                 repurchase or redeem, Indebtedness or Preferred Stock
                 described in clauses (i) and (iii) of this paragraph (the
                 "Retired Indebtedness or Stock"), provided that the
                 Indebtedness or the Preferred Stock so issued has (i) a
                 principal amount or liquidation value, as the case may be, not
                 in excess of the principal amount or liquidation value of the
                 Retired Indebtedness or Stock plus related expenses for
                 redemption and issuance, (ii) a final redemption date later
                 than the stated maturity or final redemption date (if any) of
                 the Retired Indebtedness or Stock and (iii) an Average Life at
                 the time of issuance of such Indebtedness or Preferred Stock
                 that is greater than the Average Life of the Retired
                 Indebtedness or Stock;

                          (vii)   Indebtedness of a Subsidiary which represents
                 the assumption by such Subsidiary of Indebtedness of another
                 Subsidiary in connection with a merger of such Subsidiary,
                 thereto existing on the Amendment Date shall assume or
                 otherwise become responsible for any Indebtedness of an entity
                 which is not a Subsidiary on the Issue Date, except to the
                 extent that a Subsidiary would be permitted to incur such
                 Indebtedness under this paragraph;

                          (viii)  Non-Recourse Indebtedness incurred by a
                 foreign Subsidiary not constituting a Guarantor; and

                          (ix)    Indebtedness incurred to finance all or a
                 part of the purchase price or construction repair or
                 improvement cost of property acquired, constructed, repaired
                 or improved after the Amendment Date.

                 (bb)     Not later than fifteen (15) days after the end of
         each month after the Amendment Date furnish to the Agent a schedule
         showing the precise location of each Rig and its contract status.





                                       29
<PAGE>   33
                                  ARTICLE IV.
                               EVENTS OF DEFAULT

         If any of the following events shall occur and be continuing, (each an
         "Event of Default"):

                 (a)      the Borrower shall fail to pay any principal of or
         interest on either Note, which failure shall continue for five (5)
         days after the date when due;

                 (b)      any representation or warranty made by the Borrower
         herein or made in any certificate or financial statement furnished to
         the Lenders or the Agent hereunder or under any of the Loan Documents
         shall prove to have been incorrect in any material respect when made;

                 (c)      default in the performance of any agreement,
         covenant, term or condition contained herein or in any Loan Document
         to be performed by the Borrower other than (a). above, if such default
         has continued for twenty (20) days after notice thereof by the Agent
         to the Borrower;

                 (d)      an event of default under any loan agreement, credit
         agreement, security agreement, guaranty agreement or lease agreement
         now existing or hereafter entered into by the Borrower or any
         Guarantor shall not have been remedied within any stated grace periods
         during such time as USD 7,500,000.00 or more is outstanding under such
         agreement;

                 (e)      Any of the following Events of Default shall occur:

                          (i)     the entry by a court of competent
                 jurisdiction of one or more final judgments against the
                 Borrower or any Guarantor in an uninsured or unindemnified
                 aggregate amount in excess of USD 7,500,000.00 which is not
                 discharged, waived, appealed, stayed, bonded or satisfied for
                 a period of sixty (60) consecutive days;

                          (ii)    the entry by a court having jurisdiction in
                 the premises of (A) a decree or order for relief in respect of
                 the Borrower or any Guarantor in an involuntary case or
                 proceeding under U.S.  bankruptcy laws, as now or hereafter
                 constituted, or any other applicable Federal, state, or
                 foreign bankruptcy, insolvency, or other similar law or (B) a
                 decree or order adjudging the Borrower or any Guarantor a
                 bankrupt or insolvent, or approving as properly filed a
                 petition seeking reorganization, arrangement, adjustment or
                 composition of or in respect of the Borrower or any Guarantor
                 under U.S.  bankruptcy laws, as now or hereafter constituted,
                 or any other applicable Federal, state or foreign bankruptcy,
                 insolvency, or similar law, or appointing a custodian,
                 receiver, liquidator, assignee, trustee, sequestrator or other
                 similar official of the Borrower or any Guarantor or of any
                 substantial part of the property or assets of the Borrower or
                 any Guarantor, or ordering the winding up or liquidation of
                 the affairs of the Borrower or any Guarantor, and the
                 continuance of





                                       30
<PAGE>   34
                 any such decree or order for relief or any such other decree
                 or order unstayed and in effect for a period of sixty (60)
                 consecutive days;

                          (iii)   (A)  the commencement by the Borrower or any
                 Guarantor of a voluntary case or proceeding under U.S.
                 bankruptcy laws, as now or hereafter constituted, or any other
                 applicable Federal, state or foreign bankruptcy, insolvency or
                 other similar law or of any other case or proceeding to be
                 adjudicated a bankrupt or insolvent; or (B) the consent by the
                 Borrower or any Guarantor to the entry of a decree or order
                 for relief in respect of the Borrower or any Guarantor in an
                 involuntary case or proceeding under U.S. bankruptcy laws, as
                 now or hereafter constituted, or any other applicable Federal,
                 state, or foreign bankruptcy, insolvency or other similar law
                 or to the commencement of any bankruptcy or insolvency case or
                 proceeding against the Borrower or any Guarantor; or (C) the
                 filing by the Borrower or any Guarantor of a petition or
                 answer or consent seeking reorganization or relief under U.S.
                 bankruptcy laws, as now or hereafter constituted, or any other
                 applicable Federal, state or foreign bankruptcy, insolvency or
                 other similar law; or (D) the consent by the Borrower or any
                 Guarantor to the filing of such petition or to the appointment
                 of or taking possession by a custodian, receiver, liquidator,
                 assignee, trustee, sequestrator or similar official of the
                 Borrower or any Guarantor or of any substantial part of the
                 Property or assets of the Borrower or any Guarantor or of any
                 substantial part of the Property or assets of the Borrower or
                 any Guarantor, or the making by the Borrower or any Guarantor
                 of an assignment for the benefit of creditors; or (E) the
                 admission by the Borrower or any Guarantor in writing of its
                 inability to pay its debts generally as they become due; or
                 (F) the taking of corporate action by the Borrower or any
                 Guarantor in furtherance of any such action; or

                          (iv)    an Event of Default occurs under the
                 Indenture or the Fleet Credit Facility; or

                          (v)     any Guaranty shall for any reason cease to
                 be, or be asserted by the Borrower or any Guarantor, as
                 applicable, not to be, in full force and effect (except
                 pursuant to the release of any such Guaranty in accordance
                 herewith),

         then the Agent, subject to Section 5.1(b) below, may by written notice
         to the Borrower (1) immediately terminate the commitment of the
         Lenders hereunder; (2)declare the principal of, and interest accrued
         to the date of such declaration on, the Notes together with all other
         amounts due hereunder or under any of the Loan Documents, to be
         forthwith due and payable, whereupon the same shall become forthwith
         due and payable (provided, however, no notice or declaration shall be
         required and such amounts shall be immediately due and payable upon
         the occurrence of an event described in Article IV(e)(iii) or (iv)
         hereof) and (3) exercise any remedies to which it may be entitled by
         any Loan Document or by applicable law.





                                       31
<PAGE>   35
                                   ARTICLE V.
                                   THE AGENT

         Section 5.1      Appointment and Duties of Agent.

                 (a)      The parties hereto agree that The CIT Group/Equipment
         Financing, Inc. shall act, subject to the terms and conditions of this
         Article V, as the Agent for the Lenders in connection with the Loan,
         and to the extent set forth herein each Lender hereby irrevocably
         appoints, authorizes, empowers and directs the Agent to take such
         action on its behalf and to exercise such powers as are specifically
         delegated to the Agent herein or are reasonably incidental thereto in
         connection with the administration of and the enforcement of any
         rights or remedies with respect to this Agreement, the Notes and the
         other Loan Documents.  It is expressly understood and agreed that the
         obligations of the Agent under the Loan Documents are only those
         expressly set forth in this Agreement.  The Agent shall use reasonable
         diligence to examine the face of each document received by it
         hereunder to determine whether such documents, on its face, appears to
         be what it purports to be.  However, the Agent shall not under any
         duty to examine into and pass upon the validity or genuineness of any
         documents received by it hereunder and the Agent shall be entitled to
         assume that any of the same which appears regular on its face is
         genuine and valid and what it purports to be.

                 (b)      The Agent shall:

                          (i)     as to matters not specifically referred to in
                 Section 5.1(b)(ii) below, act pursuant to the instructions of
                 the Lenders in all matters relating to the Loan Documents
                 including but not limited to, all collateral for the Loan and
                 waivers or amendments of the Loan Documents; and

                          (ii)    act pursuant to the instructions of The CIT
                 Group/Equipment Financing, Inc. as to the Events of Default
                 (and any waivers or remedies arising because of such defaults)
                 referred to in Article IV. A. and E, above.

         Section 5.2      Discretion and Liability of Agent.  Subject to
Sections 5.1(b) above and 5.3 and 5.5 below, the Agent shall be entitled to use
its discretion with respect to exercising or refraining from exercising any
rights which may be vested in it under any of the Loan Documents or otherwise,
or with respect to taking or refraining from taking any action or actions which
it may be able to take under any of the Loan Documents.  Neither the Agent nor
any of its directors, officers, employees, agents or representatives shall be
liable for any action taken or omitted by it hereunder or in connection
herewith, except for its own gross negligence or wilful misconduct.  The Agent
shall incur no liability under, or in respect of this Agreement or the other
Loan Agreements by acting upon a notice, certificate, warranty or other paper
or instrument reasonably believed by it to be genuine or authentic or to be
signed by the proper party or parties, or with respect to anything which it may
do or refrain from doing in the reasonable exercise of its judgment, or which
may seem to it to be necessary or desirable in the premises.





                                       32
<PAGE>   36
         Section 5.3      Event of Default.

                 (a)      The Agent shall be entitled to assume that no Event
         of Default or event which would constitute an Event of Default after
         notice or lapse of time, or both, has occurred and is continuing,
         unless the Agent has actual knowledge of such facts or has received
         notice from a Lender in writing that such Lender considers that an
         Event of Default or event which would constitute an Event of Default
         after notice or lapse of time, or both, has occurred and is continuing
         and which specifies the nature thereof.

                 (b)      In the event that the Agent shall acquire actual
         knowledge of any Event of Default or event which would constitute an
         Event of Default after notice or lapse of time, or both, the Agent
         shall promptly notify (either orally, confirmed in writing, or in
         writing) the Lenders of such Event of Default or event and (i) in the
         case of default under Article IV(a) or (e) above may, or if instructed
         in writing by The CIT Group/Equipment Financing, Inc. shall, take such
         action and assert such rights as are contemplated under this Agreement
         and (ii) in the case of any other default under Article IV above may
         in an emergency, or if requested in writing by the Lenders shall, take
         such action and assert such rights as are contemplated under this
         Agreement.  The Agent shall be indemnified pro rata by the Lenders
         against any liability or expenses, including, but not limited to,
         travel expenses and internal and external counsel fees and expenses,
         incurred in connection with taking such action.  The Agent may refrain
         from acting in accordance with any instructions from the Lenders until
         it shall have been indemnified to its satisfaction against any and all
         costs and expenses which it will or may expend or incur in complying
         with such instructions.

         Section 5.4      Consultation.  When acting in connection with this
Agreement, or the other Loan Documents, the Agent may engage and pay for the
advice and services of any lawyers, accountants, surveyors, appraisers or other
experts whose advice or services may to it appear necessary, expedient or
desirable and the Agent shall be entitled to fully rely upon any opinion or
such advice so obtained.

         Section 5.5      Communications to and from Agent.  When any notice,
approval, consent, waiver or other communication or action is required or may
be delivered by the Lenders hereunder or the other Loan Documents, action by
the Agent shall be effective for all purposes hereunder; provided, that upon
any occasion requiring or permitting an approval, consent, waiver, election or
other action on the part of the Lenders, unless action by the Agent alone, or
only upon instruction of all of the Lenders, is expressly permitted or required
hereunder, action shall be taken by the Agent for and on behalf of or for the
benefit of all the Lenders as provided in Section 5.3 above.  The Borrower may
rely on any communication from the Agent hereunder or the other Loan Documents,
and need not inquire into the propriety of or authorization for such
communication.  Upon receipt by the Agent from the Borrower or any Lender of
any communication it will, in turn, promptly forward such communication to the
Lenders; provided, however, that the Agent shall not be liable for any costs,
expenses or losses arising from any failure to so forward any such
communication.





                                       33
<PAGE>   37
         Section 5.6      Limitations of Agency.  Notwithstanding anything in
the Loan Documents, expressed or implied, it is agreed by the parties hereto,
that the Agent will act under the Loan Documents as Agent solely for the Lenders
and only to the extent specifically set forth herein, and will, under no
circumstances, be considered to be an agent or fiduciary of any nature
whatsoever in respect to any other person.  The Agent may generally engage in
any business with the Borrower or any of their affiliates as if it was not the
Agent.

         Section 5.7      No Representations or Warranty.

                 (a)      No Lender (including the Agent) makes to any other
         Lender any representation or any warranty, expressed or implied, or
         assumes any responsibility with respect to the Loan or the execution,
         construction or enforceability of the Loan Documents or any instrument
         or agreement executed by the Borrower or any other person in
         connection therewith.

                 (b)      The Agent takes no responsibility for the accuracy or
         completeness of any information concerning the Borrower distributed by
         the Agent in connection with the Loan nor for the truth of any
         representation or warranty given or made herein, nor for the validity,
         effectiveness, adequacy or enforceability of this Agreement or any of
         the other Loan Documents.

         Section 5.8      Lender Credit Decision.  Each Lender acknowledges
that it has independent of and without reliance upon any other Lender
(including the Agent) or any information provided by any other Lender
(including the Agent) and based on the financial statements of the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independent of and without reliance upon any other
Lender (including the Agent) and based on such documents and information as it
shall deem appropriate at that time, continue to make its own credit decisions
in taking or not taking action under this Agreement and any other documents
relating thereto.

         Section 5.9      Indemnity.  Notwithstanding any of the provisions
hereof, to the extent the Agent has not been so indemnified by the Borrower,
the Lenders shall severally indemnify the Agent against any and all losses,
costs, liabilities, damages or expenses, including but not limited to,
reasonable travel expenses and internal and external counsel's reasonable fees
and expenses, arising from, or in connection with, its performance as Agent
hereunder and not caused by its gross negligence or willful misconduct.

         Section 5.10     Resignation.  The Agent may resign as such at any
time upon at least 30 days' prior notice to the Borrower and the Lenders,
provided that such resignation shall not take effect until a successor agent
has been appointed.  In the event of a resignation by the Agent, the Lenders
shall promptly appoint a successor agent from among the Lenders.





                                       34
<PAGE>   38
         Section 5.11     Distribution.  The Agent shall be responsible for
promptly distributing each Lender's pro rata share of all net amounts received
by the Agent under any of the Loan Documents.  Each Lender shall be responsible
for designating by written notice to the Agent the account to which such
distribution shall be deposited.

         Section 5.12     Limitation of Suits.  All rights of action and claims
under this Agreement and the Security Agreements of the Lenders shall be
prosecuted and enforced only by the Agent.  The Lenders agree that they shall
not independently institute any proceedings, judicial or otherwise, to enforce
their rights against the Borrower under this Agreement or the Security
Agreements.  However, notwithstanding anything contained in this Section 5.12,
the Lenders shall always retain their ability to retain independent counsel and
to protect their rights under this Agreement and the other Loan Documents.

         Section 5.13     Right of Setoff.  Upon the occurrence and during the
continuation of any Event of Default, the Lenders each are hereby authorized at
any time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower), to setoff and apply any and all
deposits (general or special, time or demand, provisional or final, whether or
not such setoff results in any loss of interest or other penalty, and including
without limitation all certificates of deposit) at any time held by the Lenders
and all of the indebtedness arising in connection with this Agreement
irrespective of whether or not such Lender will have made any demand under this
Agreement, the Notes or any other Loan Document.  The Borrower also hereby
grant to each of the Lenders a security interest in and hereby transfer,
assign, set over and convey to each of the Lenders, as security for payment of
the Loan, all such deposits, funds or property of the Borrower or indebtedness
of any Lender to the Borrower.  Should the right of any Lender to realize funds
in any manner set forth hereinabove be challenged and any application of such
funds be reversed, whether by court order or otherwise, the Lenders shall make
restitution or refund to the Borrower pro rata in accordance with their
respective portions of the Loan.  Each Lender agrees to promptly notify the
Borrower and the Agent after any such setoff and application, provided that the
failure to give such notice will not affect the validity of such setoff and
application.  The rights of the Agent and the Lenders under this Section 5.13
are in addition to other rights and remedies (including without limitation
other rights of setoff) which the Agent or the Lenders may have.  Nothing
contained herein shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower to such Lender.  This Section is
subject to the terms and provision of Section 1.3 hereof.

                                  ARTICLE VI.
                                 MISCELLANEOUS

         Section 6.1      Notices.  All notices, requests and demands shall be
in writing (including telecopier transmission) given to or made upon the
respective parties hereto as follows:





                                       35

<PAGE>   39

In the case of the Borrower, at    Bayard Drilling Technologies, Inc.
                                   4005 Northwest Expressway, Suite 400E
                                   Oklahoma City, Oklahoma 73116
                                   Attention: Mr. James Brown
                                   Telecopier: (405) 879-3847
                                   
In the case of the Lenders, at     The CIT Group/Equipment Financing, Inc.
                                   1211 Avenue of the Americas
                                   New York, New York 10036
                                   
                                   Attention:  (a)    Senior Vice President - 
                                                      Credit
                                                      Telecopier: (212) 536-1385
                                               
                                               (b)    Legal Department
                                                      Telecopier: (212) 536-1388
                                   
with a copy to                     The CIT Group/Equipment Financing, Inc.
                                   1211 Avenue of the Americas
                                   New York, New York  10036
                                   Attention:  Mr. Bruce Halstead
                                   Telecopier: (212) 536-1385
                                   
and                                
                                   
                                   Fleet Capital Corporation
                                   2711 North Haskell
                                   Suite 2100, LB21
                                   Dallas, Texas  75204
                                   Attention: Loan Administration
                                   Manager Telecopier: (214) 828-6530
                                   
In the case of the Agent, at       The CIT Group/Equipment Financing, Inc.
                                   1211 Avenue of the Americas
                                   New York, New York 10036
                                   Attention:  (a)    Senior Vice President - 
                                                      Credit
                                                      Telecopier: (212) 536-1385
                                               
                                               (b)    Legal Department
                                                      Telecopier: (212) 536-1388





                                       36
<PAGE>   40
with a copy to                     The CIT Group/Equipment Financing, Inc.
                                   1211 Avenue of the Americas
                                   New York, New York  10036
                                   Attention:  Mr. Bruce Halstead
                                   Telecopier: (212) 536-1385



or in such other manner as any party hereto shall designate by written notice
to the other parties hereto.  All such notices shall be effective upon delivery
or three (3) days after being deposited in the United States mail with postage
prepaid certified, return receipt requested in a correctly addressed wrapper,
or upon receipt if delivered to Federal Express or similar courier company or
transmitted by telefax during normal business hours.  All notices, demands,
requests, communications and other documents delivered hereunder or under the
Loan Documents, unless submitted in the English language, shall be accompanied
by certified English translation thereof.

         Section 6.2      No Waiver.  No failure on the part of the Lenders or
the Agent to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise by the
Lenders or the Agent of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.

         Section 6.3      Applicable Law and Jurisdiction.

                 (a)      THIS AGREEMENT AND THE LOAN DOCUMENTS PROVIDED FOR
         HEREIN (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY
         HEREOF AND THEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
         WITH THE LAWS OF THE STATE OF NEW YORK, OTHER THAN CONFLICT OF LAWS
         RULES THEREOF.  Any legal action or proceeding against the Borrower
         with respect to this Agreement or any Loan Document may be brought in
         the courts of the State of New York, the U.S. Federal Courts in such
         state, sitting in the County of New York, or in the courts of any
         other jurisdiction where such action or proceeding may be properly
         brought, and the Borrower hereby irrevocably accept the jurisdiction
         of such courts for the purpose of any action or proceeding.  The
         Borrower hereby designates and irrevocably appoints and empowers C T
         Corporation System (the "Process Agent"), currently located at 1633
         Broadway, New York, New York 10019 in each case as its authorized
         agent to accept, receive and acknowledge for and on behalf of each and
         its property service of any and all process which may be served but
         only in any action, suit or proceeding of the nature referred to above
         in the State of New York and further agree that failure of such firm
         to give the Borrower any notice of any such service shall not impair
         or affect the validity of such service or of any judgment rendered in
         any action or proceeding based thereon.  The Borrower hereby
         irrevocably authorizes and directs the Process Agent to accept such
         service on its behalf.  The Borrower further irrevocably consents to
         the service of process out of said courts by the mailing thereof by
         the Agent by U.S. registered or certified mail postage prepaid to the
         party to be served at its address designated in Section





                                       37
<PAGE>   41
         6.1.  The Borrower agrees that a final judgment in any action or
         proceeding shall be conclusive and may be enforced in any other
         jurisdiction by suit on the judgment or in any other manner provided
         by law.  Nothing in this Section 6.3 shall affect the right of the
         Lenders or the Agent to serve legal process in any other manner
         permitted by law or affect the right of the Lenders or the Agent to
         bring any action or proceeding against the Borrower or its properties
         in the courts of any other jurisdiction.  To the extent that the
         Borrower has or hereafter may acquire any immunity from jurisdiction
         of any court or from any legal process (whether through service of
         notice, attachment prior to judgment, attachment in aid of execution,
         execution or otherwise) with respect to either itself or its property,
         the Borrower hereby irrevocably waives such immunity in respect of
         their obligations under this Agreement and the other Loan Documents.
         The Borrower hereby irrevocably waives any objection which it may now
         or hereafter have to the laying of venue of any suit, action or
         proceeding arising out of or relating to this Agreement or any Loan
         Document brought in the Supreme Court of the State of New York, County
         of New York or the U.S. District Court for the Southern District of
         New York, and hereby further irrevocably waive any claim that any such
         suit, action or proceeding brought in any such court has been brought
         in an inconvenient forum.

                 (b)      THE LENDERS, THE AGENT AND THE BORROWER IRREVOCABLY
         WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
         COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTE OR
         THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
         THEREBY.

         Section 6.4      Severability.  In the event that any provision of
this Agreement is held to be void or unenforceable in any jurisdiction, all
other provisions shall remain unaffected and be enforceable in accordance with
their terms in such jurisdiction, and all provisions of this Agreement shall
remain unaffected and shall be enforceable in accordance with their terms in
all other jurisdictions.

         Section 6.5      Amendment.  Neither this Agreement nor any provision
hereof, including without limitation this Section 6.5, may be amended,
modified, waived, discharged or terminated orally, but only by an instrument in
writing signed by the Agent, the Lenders and the Borrower.  This Agreement
shall be binding upon and inure to the benefit of the Borrower, the Agent and
the Lenders, and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Agent.

         Section 6.6      Assignment and Participation.  The Lenders shall have
the right, provided they comply with all applicable state and federal
securities laws, to assign or grant participation in all or any portion of the
Loan outstanding under this Agreement or the Notes to any affiliate of the
Lenders or to any foreign, federal or state banking institution, savings and
loan institution or finance company upon thirty (30) days written notice to the
Borrower of such assignment or participation;





                                       38
<PAGE>   42
provided, however, that CIT agrees that it will always retain a portion of the
Loan and a percentage of the Loan outstanding under this Agreement equal to or
greater than Fleet's.

         Section 6.7       Costs, Expenses and Taxes.  The Borrower agrees to
pay on demand all reasonable fees, costs and expenses in connection (i) with
the preparation, execution, delivery, administration, amendment and enforcement
of this Agreement, the Notes, the other Loan Documents and any other documents
to be delivered hereunder and thereunder (including, without limitation, the
appraisal and inspection reports required hereunder) and any amendment,
modification or supplement hereto or thereto, including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Lenders and
the Agent, and any special counsel associated with them, and with respect
thereto and the filing of any document or instrument in connection with any of
the foregoing, (ii) with respect to reasonable fees and out of pocket expenses
of counsel for advising the Lenders and the Agent as to their rights and
responsibilities under this Agreement and the transactions contemplated thereby
after an Event of Default or an event which, with the giving of notice or lapse
of time, or both, shall have occurred, and (iii) with any filing or recording
of any document or instrument.  In addition, the Borrower shall pay any and all
stamp and other taxes (including, without limitation penalties and interest
assessed thereon) other than Excluded Income Taxes payable or determined to be
payable in connection with the execution, delivery or performance of this
Agreement and the Loan Documents and any other documents to be delivered
hereunder and thereunder and agrees to save the Agent and Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes.

         Section 6.8      Counterparts.  This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument.

         Section 6.9      Section Headings.  The headings of the various
Sections and subsections of this Agreement are for convenience of reference
only and shall not define or limit any of the terms or provisions hereof.

         Section 6.10     Merger.  THIS AGREEMENT AND THE LOAN DOCUMENTS EMBODY
THE ENTIRE AGREEMENT AMONG THE BORROWER, THE AGENT AND THE LENDERS AND
SUPERSEDE ALL PRIOR AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, IF ANY,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF.





                                       39
<PAGE>   43
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

                              BAYARD DRILLING TECHNOLOGIES, INC.
                              
                              
                              By:    /s/  DAVD E. GROSE, III             
                                     -----------------------------------
                              Name:     David E. Grose, III             
                                     -----------------------------------
                              Title:       Chief Financial Officer      
                                     -----------------------------------
                              
                              
                              THE CIT GROUP/EQUIPMENT FINANCING,
                               INC.
                              
                              
                              By:       /s/   BRUCE A. HALSTEAD          
                                     -----------------------------------
                              Name:         Bruce A. Halstead            
                                     -----------------------------------
                              Title:           Credit Officer           
                                     -----------------------------------
                              
                              
                              FLEET CAPITAL CORPORATION
                              
                              
                              
                              By:     /s/   BRUCE CLARK                 
                                     -----------------------------------
                              Name:       Bruce Clark                    
                                     -----------------------------------
                              Title:         Vice President                  
                                     -----------------------------------
                              
                              
                              THE CIT GROUP/EQUIPMENT FINANCING,
                               INC., AS AGENT
                              
                              
                              By:       /s/   BRUCE A. HALSTEAD          
                                     -----------------------------------
                              Name:         Bruce A. Halstead            
                                     -----------------------------------
                              Title:           Credit Officer                  
                                     -----------------------------------





                                       40