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Subiect to Annual Appropriation Obligation Mav Be Viewed as a General Obli ag tion In the event of a non-appropriation by a Participating Member, rating agencies may view the provision of energy to a Participating Member's electric accounts as a governmental function. The Participating Member's failure to appropriate may be considered a default by one or more credit rating agency on the Participating Member's general obligation debt, regardless of the fact that a Participating Member has the choice to appropriate or not. Further risks regarding non-appropriation were addressed in section "PPA - Risk of Non-Appropriation by Participating Members" above. ObliQation to Levy Ad Valorem Tax As discussed in prior sections above, the Member Contract obligates each Participating Member to pledge ad valorem taxes to pay for its portion of the capacity payment that CAPP is paying to Seller to acquire energy capacity over the 24 year term of the PPA. The capacity payment under the Member Contract is a debt of the Participating Member municipality which is subject to enforcement by a mandamus action brought by the trustee related to CAPP's contract revenue bonds against a Participating Member municipality to levy taxes sufficient within the limits prescribed by law to make such payments. In the event of a termination of the PPA, there are a number of situations in which CAPP would not be able to defease all of its contract revenue bonds and a portion of each Participating Member's capacity payments under the CAPP-Participating Member Contract would remain, even though such Participating Member will not receive any electric energy through the then terminated PPA. Such situations are discussed above. Acknowledgment This Disclosure Memorandum dated September 10, 2008 is acknowledged and accepted by the undersigned on behalf of the Participating Member indicated below. The governing body of such Participating Member has taken official action acknowledging its understanding of the risks and considerations discussed or described in this Disclosure Memorandum and has formally authorized and directed the undersigned to execute this Disclosure Memorandum on behalf of the Participating Member. Participating Member By: Title: Date: 12 . 0001120