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substantial completion (as determined by the CWCB) and notify BORROWER of such amount. The BORROWER shall repay that amount to the CWCB either within ten (10) days from the date of notification from the CWCB, or, at the CWCB's discretion, said interest shall be deducted from the final disbursement of loan funds that the CWCB makes to the BORROWER. 5. Return of Unused Loan Funds. Any loan funds disbursed but not expended for the PROJECT in accordance with the terms of this CONTRACT shall be remitted to the CWCB within 30 calendar days from notification from the CWCB of either (1) completion of the PROJECT or (2) determination by the CWCB that the PROJECT will not be completed. 6. BORROWER'S Authority To Contract. The BORROWER warrants that it has full power and authority to enter into this CONTRACT. The execution and delivery of this CONTRACT and the performance and observation of its terms, conditions and obligations have been duly authorized by all necessary actions of the BORROWER. The BORROWER'S AUTHORIZING RESOLUTION(S) are attached as APPENDIX 3a and 3b and incorporated herein. 7. Attorney's Opinion Letter. Prior to the execution of this CONTRACT by the CWCB, the BORROWER shall submit to the CWCB a letter from its attorney stating that it is the attorney's opinion that a. the CONTRACT has been duly executed by officers of the BORROWER who are duly elected or appointed and are authorized to execute the CONTRACT and to bind the BORROWER; b. the resolutions of the BORROWER authorizing the execution and delivery of the CONTRACT were duly adopted by the BORROWER'S board of directors and/or shareholders c. there are no provisions in the BORROWER'S articles of incorporation or bylaws or any state or local law that prevent this CONTRACT from binding the BORROWER; and d. the CONTRACT will be valid and binding against the BORROWER if entered into by the CWCB. 8. PLEDGE OF PROPERTY. The BORROWER irrevocably pledges to the CWCB for purposes of repayment of this loan: (1) revenues from assessments levied for that purpose as authorized by the BORROWER'S resolution(s) and (2) all of the BORROWER'S rights to receive said assessment revenues, hereinafter collectively referred to as the "PLEDGED PROPERTY". a. Segregation of Pledged Revenues. The BORROWER shall set aside and keep the pledged revenues in an account separate from other BORROWER revenues and warrants that these revenues will not be used for any other purpose. b. Establish Security Interest. The BORROWER has duly executed a SECURITY AGREEMENT, attached hereto as APPENDIX 4 and incorporated herein, to provide a security interest to the CWCB in the PLEDGED PROPERTY. The CWCB shall have priority over all other competing claims for said PLEDGED PROPERTY, except for the liens of the BORROWER'S existing loans as listed in Section 5 (Schedule of Existing Loan Contract C150351 Page 3 of 12