Common use of State Action Clause in Contracts

State Action. Under the Storm Recovery Securitization Law, the State of Louisiana and the Louisiana Legislature have made the State Pledge and the Council has made the Council Pledge. Under the laws of the State of Louisiana and the United States, (x) the State of Louisiana could not constitutionally repeal or amend the Storm Recovery Securitization Law or take any other action contravening the State Pledge and creating an impairment (without, as the Storm Recovery Securitization Law requires, providing full compensation by law for the full protection of the Storm Recovery Charges collected pursuant to the Financing Order and full protection of the Holders or any assignee or financing party), unless such impairment clearly is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based upon reasonable conditions and of a character reasonable and appropriate to the emergency or other significant and legitimate public purpose justifying such action, (y) under the takings clauses of the United States and Louisiana Constitutions, the State of Louisiana would be required to pay just compensation to Holders, if the State Legislature repealed or amended the Storm Recovery Securitization Law or took any other action contravening the State Pledge, if the court determines doing so constituted a permanent appropriation of a substantial property interest of the Holders of the Storm Recovery Property and deprived the Holders of their reasonable expectations arising from their investments in the Storm Recovery Bonds, and (z) under the laws of the State of Louisiana, the Council Pledge (i) creates a binding contractual obligation of the City of New Orleans for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Holders could challenge successfully any action of the Council of a legislative character, including the rescission or amendment of the Financing Order 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 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 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 Storm Recovery Securitization LawAct, the State of Louisiana and has pledged that it will not alter the provisions of the part of the Securitization Act which authorizes the Louisiana Legislature have made Commission to create a contract right by the State Pledge and the Council has made the Council Pledge. Under the laws issuance of the State of Louisiana Financing Order, to create Storm Recovery Property, and the United States, (x) the State of Louisiana could not constitutionally repeal or amend to make the Storm Recovery Securitization Law Charges imposed by the Financing Order irrevocable, binding and nonbypassable charges, take or take permit any other action contravening that impairs or would impair the State Pledge and creating an impairment (without, as value of the Storm Recovery Property or, except as permitted by Section 1234 of the Securitization Law requiresAct and except for Storm Recovery Charge Adjustments, providing 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 Holders or 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 impairment clearly action is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based upon 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 and Louisiana Constitutions, if the court concludes that the Storm Recovery Property is protected by the takings clauses, the State of Louisiana would be required could not repeal or amend the Securitization Act or take any other action in contravention of its pledge referred to pay in subsection (a) above without paying just compensation to Holders, if the State Legislature repealed or amended the Storm Recovery Securitization Law or took any other action contravening the State PledgeBondholders, as determined by a court of competent jurisdiction, if the court determines doing so constituted would constitute a permanent appropriation of a substantial property interest of the Holders of Storm Recovery Bondholders in the Storm Recovery Property and deprived deprive the Holders Storm Recovery Bondholders of their reasonable expectations arising from their investments in the Storm Recovery Bonds 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, and . (zc) under Under the laws of the State of LouisianaLouisiana and the United States Constitution, a Louisiana state court reviewing an appeal of the Council Louisiana Commission action of a legislative character would conclude that the Louisiana Commission Pledge (i) creates a binding contractual obligation of the City State of New Orleans Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Holders Louisiana Commission could challenge successfully not take any action of the Council of a legislative character, including the rescission or amendment of the Financing Order or the Council seeking to have the City acquire portions of some or all of ENO’s electric distribution facilitiesOrder, that which such court determines violates the Council 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 Council 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. Under the Storm Investment Recovery Securitization Law, the State of Louisiana and the Louisiana Legislature have made the State Pledge and the Council LPSC has made the Council Commission Pledge. Under the laws of the State of Louisiana and the United States, (x) the State of Louisiana could not constitutionally repeal or amend the Storm Investment Recovery Securitization Law or take any other action contravening the State Pledge and creating an impairment (without, as the Storm Investment Recovery Securitization Law requires, providing full compensation by law for the full protection of the Storm Investment Recovery Charges to be imposed, charged and collected pursuant to the Financing Order and full protection of the Holders or any assignee or financing party), unless such impairment clearly is a reasonable and necessary exercise of the State of Louisiana’s sovereign powers based 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 United States and Louisiana Constitutions, the State of Louisiana would be required to pay just compensation to Holders, if the State Legislature repealed or amended the Storm Investment Recovery Securitization Law or took any other action contravening the State Pledge, if the court determines doing so constituted a permanent appropriation of a substantial property interest of the Holders of the Storm Investment Recovery Property and deprived the Holders of their reasonable expectations arising from their investments in the Storm Investment Recovery Bonds, and (z) and under the laws of the State of Louisiana, the Council LPSC Pledge (i) creates a binding contractual obligation of the City State of New Orleans Louisiana for purposes of the contract clauses of the United States and Louisiana Constitutions, and (ii) provides a basis upon which the Holders could challenge successfully any action of the Council LPSC of a legislative character, including the rescission or amendment of the Financing Order or the Council seeking to have the City acquire portions of some or all of ENO’s electric distribution facilitiesOrder, that such court determines violates the Council 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 Council 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.