ORBIT GAR ANT DRILLING INC NOTES TO THE CONSOLID A TED FINANCIAL ST A TEMENTS Continued Amounts as at March 31 2008 and for the nine and three months ended March 31 2008 and for the six and three months ended March 31 2007 are unaudited 8 BANK O VERDR AF T AND BANK LOAN The company has an authorized line of credit for an amount of 7000000 bearing interest at prime rate plus 0375 renewable o n November 30 2008 Any funds advanced pursuant to this line of credit are secured by a first rank hypothec on the universality of all present and future assets On March 31 2008 the prime rate was 575 June 30 2007 6 The rate is variable with the quart erly calculation of a financial ratio and can vary from prime rate plus 0375 to 1 Under the terms of the bank loan agreement the company must satisfy certain restrictive covenants as to minimum financial rati os 9 LONG TERM DEBT March 31 June 30 2008 2007 unaudited Bank acceptance bearing interest at the rate of the bank acceptance rate plus 175 payable by quarterly payments of 896429 plus interest maturing January 2011 secured by a first rank hypothec on the universality of all present and future assets a b 21917072 24368560 L oan bearing interest at 625 payable by quarterly payments of 97500 plus interest maturing December 2012 secured by a first rank hypothec on the universality of all present and future assets 1800000 Contracts noninterest bearing payable in an aggregate monthly instalments of 3618 maturing from January 2008 to July 2012 secured by vehicles 52799 89030 23769871 24457590 Current portion 4593114 3596702 19176757 20860888 A dvance from a shareholder company variable interest rates no specific terms of repayment 16305 19176757 20877193 a The rate is variable with the quarterly calculation of a financial ratio and can vary from the bank acceptance rate plus 17 5 to 275 b An unamortized amount of 131513 June 30 2007 159692 representing financing fees has been presented in deduction of the longterm debt This amount is being amortized to earnings over the term of the debt using the effective interest method Under the terms of the longterm debt agreement the company must satisfy certain restrictive convenants as to minimum financia l ratios P rincipal payments required in each of the next five years are as follows 2008 4630366 2009 3985838 2010 3985838 2011 11056688 2012 242654 F18