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oversight appropriate to assure development of the Project is carried out in a <br /> timeframe and with sufficient resources to give the Project the best opportunity to <br /> mature and be successful. <br /> THEREFORE, for and in consideration of the premises and the mutual <br /> covenants, conditions, and promises herein, the Parties agree as follows: <br /> 2. CWCB Loan Restructure Plan. <br /> 2.1. This Agreement to restructure the Loan is based upon the Appraisal. <br /> Following execution of this Agreement by all Parties, the CWCB will restructure the <br /> Loan into two separate loans:Loan A and Loan B. <br /> 2.2. Loan A: <br /> 2.2.1. The principal balance of Loan A will be ascertained by reducing <br /> the remaining principal balance of the Loan by the amount of the approved <br /> Appraisal. Therefore, the remaining principal balance will be reduced by the <br /> Appraised value ($8,855,930.32- $4,565,000=$4,290,930.32) <br /> 2.2.2. The CWCB agrees to reduce the interest rate for Loan A from <br /> 3.5% for the Loan to 1.75%. The new principal balance of Loan A will be amortized <br /> over twenty (20) years so based on the example above, the new annual payment for <br /> Loan A will be $256,130.89. <br /> 2.2.3. As a condition of the interest rate reduction, PAWSD agrees to <br /> use no less than fifty percent (50%) of the annual payment savings for the repair <br /> and replacement of its current aging water distribution system to address leakage. <br /> The annual payment saving to PAWSD will be$245,138.19. <br /> 2.2.4. All of PAWSD's leakage reduction efforts shall be consistent <br /> with the American Water Works Association Water, Audits and Loss Control <br /> Program,M36 Manual of Water Supply Practice. <br /> 2.2.5. PAWSD's leakage reduction efforts shall continue until the <br /> delivered supply to metered usage ratio for PAWSD's water distribution system <br /> reaches a level determined acceptable by the American Water Works Association <br /> Water, Audits and Loss Control Program,M36 Manual of Water Supply Practice. <br /> 2.2.6. Once an acceptable delivered supply to metered usage ratio for <br /> its water distribution system has been achieved pursuant to Paragraph 2.2.5 <br /> herein, PAWSD will be allowed to apply the entire annual payment reduction <br /> amount to debt reduction. <br /> Page 3 of 14 <br />