Common use of State Action Clause in Contracts

State Action. (a) Under the Securitization Act, the State of Louisiana has pledged that it will not take or permit any action that would impair the value of the Storm Recovery Property or, except as permitted in Section 1228(c)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full. (b) Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery Property, unless such action is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, (y) under the takings clauses of the State of Louisiana and United States Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the Storm Recovery Bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in the Storm Recovery Property and deprive the Storm Recovery Bondholders of their reasonable expectations arising from their investments in the Storm Recovery Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.

State Action. (a) Under the Storm Recovery Securitization ActLaw, the State of Louisiana and the Louisiana Legislature have made the State Pledge and the Council has pledged that it will not take or permit any action that would impair made the value of the Storm Recovery Property or, except as permitted in Section 1228(c)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full. (b) Council Pledge. Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair amend the Storm Recovery Property Securitization Law or take any other rights vested in action contravening the State Pledge and creating an impairment (without, as the Storm Recovery Bondholders Securitization Law requires, providing full compensation by law for the full protection of the Storm Recovery Charges collected pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount Order and full protection of the Storm Recovery PropertyHolders or any assignee or financing party), unless such action impairment clearly is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based on upon reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, (y) under the takings clauses of the State of Louisiana and United States and Louisiana Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal would be required to pay just compensation to Holders, if the State Legislature repealed or amend amended the Storm Recovery Securitization Act Law or take took any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to contravening the Storm Recovery Bondholders, as determined by a court of competent jurisdictionState Pledge, if the court determines doing so would constitute constituted a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in Holders of the Storm Recovery Property and deprive deprived the Storm Recovery Bondholders Holders of their reasonable expectations arising from their investments in the Storm Recovery Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Bonds. (cz) Under under the laws of the State of Louisiana and Louisiana, the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Council Pledge (i) creates a binding contractual obligation of the State City of Louisiana New Orleans for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders Holders could challenge successfully any action of the Louisiana Commission Council of a legislative character, including the rescission or amendment of the Financing OrderOrder or the Council seeking to have the City acquire portions of some or all of ENO’s electric distribution facilities, that such court determines violates the Louisiana Commission Council Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission Council action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.

State Action. (a) Under the Securitization Act, the State of Louisiana has pledged that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana Commission to create a contract right by the issuance of the Financing Order, to create Storm Recovery Property, and to make the Storm Recovery Charges imposed by the Financing Order irrevocable, binding and nonbypassable charges, take or permit any action that impairs or would impair the value of the Storm Recovery Property or, except as permitted in by Section 1228(c)(4) 1234 of the Securitization ActAct and except for Storm Recovery Charge Adjustments, reduce, alter or impair the Storm Recovery Charges imposed, collected and remitted for the benefit of the Storm Recovery Bondholders until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full; provided, that nothing in Section 1234 of the Securitization Act shall preclude limitation or alteration if and when full compensation is made by law for the full protection of the Storm Recovery Charges collected pursuant to the Financing Order and full protection of the Storm Recovery Bondholders and any assignee or financing party. (b) Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery Property, unless such action is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, (y) under the takings clauses of the State of Louisiana and United States Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the Storm Recovery Bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in the Storm Recovery Property and deprive the Storm Recovery Bondholders of their reasonable expectations arising from their investments in the Storm Recovery BondsBonds or substantially reduce, limit or impair the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are fully paid and discharged; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of the Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission could not take any action of a legislative character, including the rescission or amendment of the Financing Order, that which such court determines violates the Louisiana Commission Pledge in a manner that substantially impairs or would substantially impair the value of the Storm Recovery Property or substantially reduces, limits alters or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid and performed in full and dischargedfull, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.

State Action. (a) Under the Securitization ActDeferred Fuel Cost Statute, the State Commonwealth of Louisiana has Virginia and its agencies, including the Commission, have pledged and agreed not to (i) alter the provisions of the Deferred Fuel Cost Statute that it will not authorize the Commission to create an irrevocable contract right or chose in action by the issuance of a financing order, to create deferred fuel cost property and to make the deferred fuel cost charges imposed by a financing order irrevocable, binding or non-bypassable charges, (ii) take or permit any action that impairs or would impair the value of the Storm Recovery Deferred Fuel Cost Property oror the Deferred Fuel Cost Collateral or revises the Deferred Fuel Costs for which recovery is authorized, except as permitted (iii) in Section 1228(c)(4) any way impair the rights and remedies of the Securitization ActHolders, assignees and other Financing Parties or (iv) except for the True-Up Adjustments, reduce, alter or impair the Storm Recovery Charges until Deferred Fuel Cost Charge to be imposed, billed, charged, collected and remitted for the principalbenefit of the Holders, interest and premium, if any, any assignee and any other Financing Parties until any and all principal, interest, premium, financing costs and other fees, expenses, or charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been Deferred Fuel Cost Bonds are paid and performed in full. (b) Under . Furthermore, under the laws of the State of Louisiana and the federal laws contract clause of the United StatesStates Constitution, any action taken by the Commonwealth of Virginia, including the Commission, that substantially impairs the rights of the Holders of the Deferred Fuel Cost Bonds is likely to be found by a reviewing court of competent jurisdiction would hold that (x) the State to be an impairment of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders pursuant contract with respect to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery PropertyCommonwealth Pledge, unless such action is a reasonable and necessary exercise of the State Commonwealth of LouisianaVirginia’s sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other further a significant and legitimate public purpose justifying such action, and, (y) under purpose. Under the takings clauses Takings Clause of the State of Louisiana and United States ConstitutionsConstitution and Article I, if Section 11 of the court concludes that the Storm Recovery Property is protected by the takings clausesVirginia Constitution, the State Commonwealth of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred Virginia would likely be required to in subsection (a) above without paying pay just compensation to the Storm Recovery Bondholders, as determined by Holders if a court of competent jurisdictionjurisdiction determines that a repeal or amendment of the Deferred Fuel Cost Statute or any other action taken by the Commonwealth of Virginia in contravention of the Commonwealth Pledge, if doing so would constitute (a) constituted a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders bondholders in the Storm Recovery Deferred Fuel Cost Property and deprive or denied all economically productive use of the Storm Recovery Bondholders deferred fuel cost property; (b) destroyed the Deferred Fuel Cost Property other than in response to emergency conditions; or (c) substantially reduced, altered, or impaired the value of their the Deferred Fuel Cost Property so as to unduly interfere with the reasonable expectations of the Holders arising from their investments investment in the Storm Recovery Deferred Fuel Cost Bonds; , unless such court finds that just compensation has been provided to the Holders of the Deferred Fuel Cost Bonds. There is no assurance, however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Deferred Fuel Cost Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana . Nothing in this paragraph precludes any limitation or alteration if full compensation is made by law for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount protection of principal and interest on the Storm Recovery BondsHolders or any assignee or other Financing Parties.

State Action. (a) Under the Securitization ActRate Stabilization Law, the State of Louisiana Maryland has pledged pledged, for the benefit and protection of financing parties and BGE, that it will not take or permit allow any action that would impair the value of the Storm Recovery Rate Stabilization Property transferred on such date, or, except as permitted allowed in Section 1228(c)(4) accordance with Sections 7-531, 7-533 and 7-534 of the Securitization ActRate Stabilization Law, reduce, alter or impair the Storm Recovery Qualified Rate Stabilization Charges to be imposed, collected, and remitted to financing parties until the principal, interest and premium, if any, premium and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, Rate Stabilization Bonds of such Series relating to such Rate Stabilization Property have been paid and performed in full. (b) . Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) neither the State of Louisiana Maryland nor the PSC could not constitutionally take any action of a legislative character, character including the repeal or amendment of the Securitization ActRate Stabilization Law, which would substantially limit, alter or impair the Storm Recovery Rate Stabilization Property or other rights vested in the Storm Recovery Bondholders Holders pursuant to the Financing Order, Qualified Rate Order or substantially limit, alter, impair alter or reduce the value or amount of the Storm Recovery Rate Stabilization Property, unless such action is a reasonable and necessary exercise of the sovereign powers of the State of Louisiana’s sovereign powers based on reasonable conditions Maryland and of a character reasonable and appropriate to the emergency or other further a significant and legitimate public purpose justifying such actionpurpose, and, (y) under the takings clauses of the State of Louisiana and United States and Maryland Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana Maryland could not repeal or amend the Securitization Act or Rate Stabilization Law, and neither the State of Maryland nor the PSC could take any other action in contravention of its the pledge referred to in subsection (a) quoted above without paying just compensation to the Storm Recovery BondholdersHolders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders Holders in the Storm Recovery Rate Stabilization Property and deprive the Storm Recovery Bondholders Holders of their reasonable expectations arising from their investments in the Storm Recovery Rate Stabilization Bonds; . The Seller, however, there is no assurance does not represent or warrant that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Rate Stabilization Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.

State Action. (a) Under the Investment Recovery Securitization ActLaw, the State of Louisiana and the Louisiana Legislature have made the State Pledge and the LPSC has pledged that it will not take or permit any action that would impair made the value of the Storm Recovery Property or, except as permitted in Section 1228(c)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full. (b) Commission Pledge. Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally repeal or amend the Investment Recovery Securitization Law or take any other action of a legislative charactercontravening the State Pledge and creating an impairment (without, including as the repeal or amendment Investment Recovery Securitization Law requires, providing full compensation by law for the full protection of the Securitization ActInvestment Recovery Charges to be imposed, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders charged and collected pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount Order and full protection of the Storm Recovery PropertyHolders or any assignee or financing party), unless such action impairment clearly is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based on upon reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, and (y) under the takings clauses of the State of Louisiana and United States and Louisiana Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal would be required to pay just compensation to Holders, if the State Legislature repealed or amend amended the Investment Recovery Securitization Act Law or take took any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to contravening the Storm Recovery Bondholders, as determined by a court of competent jurisdictionState Pledge, if the court determines doing so would constitute constituted a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in Holders of the Storm Investment Recovery Property and deprive deprived the Storm Recovery Bondholders Holders of their reasonable expectations arising from their investments in the Storm Investment Recovery Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of (z) and interest on the Storm Recovery Bonds. (c) Under under the laws of the State of Louisiana and Louisiana, the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission LPSC Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders Holders could challenge successfully any action of the Louisiana Commission LPSC of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission LPSC Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Investment Recovery Property or the Storm Investment Recovery Charges, prior to the time that the Storm Investment Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission LPSC action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Investment Recovery Bonds.

State Action. (a) Under the Securitization Act, the State of Louisiana has and the Louisiana Legislature have each pledged that it will not alter the provisions of the Securitization Act that authorize the Louisiana Commission to create an irrevocable contract right by the issuance of a financing order, to create Energy Transition Property and to make the Energy Transition Charges imposed by a financing order irrevocable, binding and nonbypassable charges, take or permit any action that would impair the value of the Storm Recovery Property Energy Transition Property, take or permit any action that impairs or would impair the rights and remedies of the Issuer, any other assignee, any Bondholder or other financing parties, or the security for the Energy Transition Bonds, or, except as permitted in Section 1228(c)(41273(C)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Energy Transition Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Energy Transition Bonds, have been paid and performed in full. (b) Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana and the Louisiana Legislature could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Energy Transition Property or other rights vested in the Storm Recovery Energy Transition Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery Energy Transition Property, unless such action is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and that an evident and more moderate course would not serve the State of Louisiana’s purposes equally well, and, (y) under the takings clauses of the State of Louisiana and United States Constitutions, if the court concludes that the Storm Recovery Energy Transition Property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the Storm Recovery Energy Transition Bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Energy Transition Bondholders in the Storm Recovery Energy Transition Property and deprive the Storm Recovery Energy Transition Bondholders of their reasonable expectations arising from their investments in the Storm Recovery Energy Transition Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Energy Transition Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Energy Transition Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits alters or impairs the value of the Storm Recovery Energy Transition Property or the Storm Recovery Energy Transition Charges, prior to the time that the Storm Recovery Energy Transition Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, that even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Energy Transition Bonds.

State Action. (a) Under the Securitization Act, the State of Louisiana has pledged that it will not take or permit any action that would impair the value of the Storm Recovery Property or, except as permitted in Section 1228(c)(4) of the Securitization Act, reduce, alter or impair the Storm Recovery Charges until the principal, interest and premium, if any, and any other charges incurred and contracts to be performed in connection with the Storm Recovery Bonds, have been paid and performed in full. (b) Under the laws of the State of Louisiana and the federal laws of the United States, a reviewing court of competent jurisdiction would hold that (x) the State of Louisiana could not constitutionally take any action of a legislative character, including the repeal or amendment of the Securitization Act, which would substantially limit, alter or impair the Storm Recovery Property or other rights vested in the Storm Recovery Bondholders pursuant to the Financing Order, or substantially limit, alter, impair or reduce the value or amount of the Storm Recovery Property, unless such action is a reasonable and necessary exercise of the State of Louisiana’s 's sovereign powers based on reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, and, (y) under the takings clauses of the State of Louisiana and United States Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to in subsection (a) above without paying just compensation to the Storm Recovery Bondholders, as determined by a court of competent jurisdiction, if doing so would constitute a permanent appropriation of a substantial property interest of the Storm Recovery Bondholders in the Storm Recovery Property and deprive the Storm Recovery Bondholders of their reasonable expectations arising from their investments in the Storm Recovery Bonds; however, there is no assurance that, even if a court were to award just compensation, it would be sufficient to pay the full amount of principal of and interest on the Storm Recovery Bonds. (c) Under the laws of the State of Louisiana and the United States Constitution, a Louisiana state court reviewing an appeal of Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the State of Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Storm Recovery Bondholders could challenge successfully any action of the Louisiana Commission of a legislative character, including the rescission or amendment of the Financing Order, that such court determines violates the Louisiana Commission Pledge in a manner that substantially reduces, limits or impairs the value of the Storm Recovery Property or the Storm Recovery Charges, prior to the time that the Storm Recovery Bonds are paid in full and discharged, unless there is a judicial finding that the Louisiana Commission action clearly is exercised for a public end and is reasonably necessary to the accomplishment of that public end so as not to be arbitrary, capricious or an abuse of authority. There is no assurance, however, that, even if a court were to award just compensation it would be sufficient to pay the full amount of principal and interest on the Storm Recovery Bonds.