Common use of Priority and Liens Clause in Contracts

Priority and Liens. (a) Each of the Loan Parties hereby covenants and agrees that the Secured Obligations of the Loan Parties hereunder and under the Loan Documents, the U.S. Guaranteed Obligations and the Canadian Guaranteed Obligations of each of the Loan Parties as follows: (i) With respect to the Secured Obligations of the U.S. Loan Parties and the Canadian Borrower: (A) in the U.S. Cases pursuant to Section 364(c)(1) of the Bankruptcy Code, such Secured Obligations shall at all times constitute an allowed Superpriority Claim and be payable from and have recourse to all pre-petition and post-petition property of the estates of the U.S. Loan Parties and the Canadian Borrower and all proceeds thereof (including, upon entry of the Final Order, any proceeds of Avoidance Actions), and which Superpriority Claim shall be senior to the Superpriority Claim granted to the Pre-Petition Agent and the Pre-Petition Secured Lenders pursuant to Section 2.24(d) below; (B) in the U.S. Cases pursuant to Section 364(c)(2) of the Bankruptcy Code, such Secured Obligations shall at all times be secured by a perfected first priority Lien on all unencumbered property of the U.S. Loan Parties and the Canadian Borrower (including, upon entry of the Final Order, any proceeds of Avoidance Actions) and on all cash maintained in any Collateral Account and any investments of the funds contained therein, provided that amounts in the Collateral Accounts shall not be subject to the Carve-Out or the CCAA Charges; (C) in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy Code, such Secured Obligations shall be secured by a perfected junior Lien upon all property of the U.S. Loan Parties and the Canadian Borrower that is subject to valid and perfected Liens in existence on the Filing Date or that is subject to valid Liens in existence on the Filing Date that are perfected subsequent to the Filing Date as permitted by Section 546(b) of the Bankruptcy Code (other than certain property that is subject to the existing Liens that secure obligations under the Pre-Petition Credit Agreement, which liens shall be primed by the liens to be granted to the Administrative Agent described in the following clause (D)); (D) in the U.S. Cases pursuant to Section 364(d)(1) of the Bankruptcy Code, such Secured Obligations shall be secured by a perfected first priority, senior priming Lien on all of the property of the U.S. Loan Parties and the Canadian Borrower (including, without limitation, cash, inventory, receivables, rights under license agreements, property, plant and equipment and the residual interest of the U.S. Loan Parties and the Canadian Borrower in any Receivables Securitization Programs) that is subject to the existing liens which secure (1) the obligations of the Loan Parties under or in connection with the Pre-Petition Credit Agreement, and (2) other Liens, obligations or indebtedness of the Loan Parties junior to the Pre-Petition Credit Agreement (collectively, the “Primed Liens”), which Primed Liens shall be primed by and made subject and subordinate to the perfected first priority senior priming Liens to be granted to the Administrative Agent, which senior priming Liens in favor of the Administrative Agent shall also prime any Liens granted after the commencement of the Cases to provide adequate protection Liens in respect of any of the Primed Liens, but shall not prime (1) Non-Primed Liens which secure the Calpine Debt or (2) other Non-Primed Liens solely to the extent such Non-Primed Liens secure claims in an aggregate amount less than or equal to US$60,000,000; and (E) in the Canadian Cases, pursuant to an order of the Canadian Court, in respect of the Secured Obligations of the Canadian Borrower, such Secured Obligations will be secured by a superpriority charge and senior priming security interest (“CCAA DIP Lenders’ Charge”) over all of the present and future assets of the Canadian Borrower with priority over all existing liens and security, including the Primed Liens; and

Priority and Liens. At all times prior to the Exit Facility Conversion Date, (a) Each Loan Party hereby covenants, represents and warrants that upon entry of each DIP Order, the Loan Parties hereby covenants and agrees that the Secured Obligations of the such Loan Parties Party hereunder and under the Loan Documents, the U.S. Guaranteed Obligations and the Canadian Guaranteed Obligations of each of the Loan Parties as follows: (i) With respect to the Secured Obligations of the U.S. Loan Parties and the Canadian Borrower: (A) in the U.S. Cases pursuant to Section section 364(c)(1) of the Bankruptcy CodeCode and subject to the Carve-Out, such Secured Obligations shall at all times constitute an allowed Superpriority Claim and be payable from and have recourse to all pre-petition and post-petition property of (excluding any avoidance actions under the estates of the U.S. Loan Parties and the Canadian Borrower and all proceeds thereof Bankruptcy Code (including, upon entry of the Final Order, but including any proceeds of Avoidance Actionstherefrom), and which Superpriority Claim shall be senior to the Superpriority Claim granted to the Pre-Petition Agent and the Pre-Petition Secured Lenders pursuant to Section 2.24(d) below); (Bii) in the U.S. Cases pursuant to Section section 364(c)(2) of the Bankruptcy CodeCode and subject to the Carve-Out, such Secured Obligations shall at all times be secured by a first priority, valid, binding, enforceable and perfected first priority Lien on security interests in, and Liens upon, all unencumbered tangible and intangible property of the U.S. such Loan Parties and the Canadian Borrower (includingParty, upon entry of the Final Order, including any proceeds of Avoidance Actions) and on all cash maintained in any Collateral Account and any investments of the funds contained therein, provided that amounts in the Collateral Accounts shall not be subject to the Carve-Out or the CCAA Charges; (C) in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy Code, such Secured Obligations shall be secured by a perfected junior Lien upon all property of the U.S. Loan Parties and the Canadian Borrower that is subject to valid and perfected Liens in existence on the Filing Petition Date, which Liens are thereafter released or otherwise extinguished in connection with the satisfaction of the obligations secured by such Liens (excluding any avoidance actions under the Bankruptcy Code (but including the proceeds therefrom)); (iii) pursuant to section 364(c)(3) of the Bankruptcy Code and subject to the Carve-Out, shall at all times be secured by junior, valid, binding, enforceable and perfected security interests in, and Liens upon, all (A) property of each of the Loan Parties’ estates that, on the Petition Date, was subject to a valid and perfected Lien (other than the Liens securing the Prepetition Indebtedness) or becomes subject to a valid Lien perfected (but not granted) after the Petition Date or to the extent such post-Petition Date perfection in respect of prepetition claims is expressly permitted under the Bankruptcy Code (the “Permitted Prior Liens”), (B) property of each of the Loan Parties’ estates that is subject to valid rights of setoff, and (C) property of each of the Loan Parties’ estates that is subject to such other Liens as are expressly permitted under Section 6.02(c), (d), (e), (f), (g), (h), (i) or (o) (such Liens described in existence on this clause (C), along with the Filing Date Permitted Prior Liens, the “DIP Permitted Liens”); provided that are perfected subsequent the Liens granted under the Loan Documents shall not be subject or subordinate to (1) notwithstanding anything to the Filing contrary in the Loan Documents or the DIP Orders, any DIP Permitted Lien or security interest that is avoided and preserved for the benefit of the Loan Parties and their estates, (2) except as provided in the DIP Orders and the Loan Documents, any Liens arising after the Petition Date as permitted by Section 546(bincluding, any Liens or security interests granted in favor of any federal, state municipal or other governmental unit, commission, board or court for any liability of the Loan Parties; or (3) any intercompany or affiliate Liens of the Loan Parties; and (iv) pursuant to section 364(d)(1) of the Bankruptcy Code (other than certain property that is and subject only to the existing Carve-Out and clause (iii) above, shall at all times be secured by first priority, priming, valid, binding, enforceable and perfected security interests in, and Liens that secure obligations under upon, all the Pre-Petition Credit Agreement, which liens shall be primed by the liens to be granted to the Administrative Agent Prepetition Collateral. (b) The Secured Parties’ Liens and Superpriority Claim as described in the following clause (D)); (DSection 2.26(a) in the U.S. Cases pursuant to Section 364(d)(1shall have priority over any claims arising under section 506(c) of the Bankruptcy Code, such Secured Obligations and shall be secured by a perfected first prioritysubject and subordinate only to (i) the Carve-Out and (ii) to the extent provided in the Term Loan/Revolving Facility Intercreditor Agreement, senior priming Lien on all the Liens securing the Obligations under and as defined in the Revolving Credit Agreement in respect of the property Revolving Credit Facility First Lien Collateral. Except as set forth herein or in the Term Loan/Revolving Facility Intercreditor Agreement, no other claim having a priority superior to or pari passu with that granted to Secured Parties by the Interim Order and Final Order, whichever is then in effect, shall be granted or approved while any Obligations under this Agreement remain outstanding. (c) Except for the Carve-Out, no costs or expenses of administration shall be imposed against Administrative Agent, Lenders, any other Secured Party or any of the U.S. Collateral under sections 105 or 506(c) of the Bankruptcy Code, or otherwise, and each of the Loan Parties hereby waives for itself and on behalf of its estate in bankruptcy, any and all rights under sections 105 or 506(c) of the Canadian Borrower Bankruptcy Code, or otherwise, to assert or impose or seek to assert or impose, any such costs or expenses of administration against Administrative Agent, the Lenders or any other Secured Party. (d) Except for the Carve-Out, the Superpriority Claims shall at all times be senior to the rights of each Loan Party, any chapter 11 trustee and, subject to section 726 of the Bankruptcy Code, any chapter 7 trustee, or any other creditor (including, without limitation, cashpost-petition counterparties and other post-petition creditors) in the Chapter 11 Cases or any subsequent proceedings under the Bankruptcy Code, inventoryincluding, receivableswithout limitation, rights under license agreements, property, plant and equipment and the residual interest of the U.S. Loan Parties and the Canadian Borrower in any Receivables Securitization Programs) that is subject to the existing liens which secure chapter 7 cases (1) the obligations if any of the Loan Parties Party’s cases are converted to cases under or in connection with the Pre-Petition Credit Agreement, and (2) other Liens, obligations or indebtedness chapter 7 of the Loan Parties junior to the Pre-Petition Credit Agreement (collectively, the “Primed Liens”Bankruptcy Code), which Primed Liens shall be primed by and made subject and subordinate to the perfected first priority senior priming Liens to be granted to the Administrative Agent, which senior priming Liens in favor of the Administrative Agent shall also prime any Liens granted after the commencement of the Cases to provide adequate protection Liens in respect of any of the Primed Liens, but shall not prime (1) Non-Primed Liens which secure the Calpine Debt or (2) other Non-Primed Liens solely to the extent such Non-Primed Liens secure claims in an aggregate amount less than or equal to US$60,000,000; and (E) in the Canadian Cases, pursuant to an order of the Canadian Court, in respect of the Secured Obligations of the Canadian Borrower, such Secured Obligations will be secured by a superpriority charge and senior priming security interest (“CCAA DIP Lenders’ Charge”) over all of the present and future assets of the Canadian Borrower with priority over all existing liens and security, including the Primed Liens; and.

Priority and Liens. At all times prior to the Exit Facility Conversion Date, (a) Each Grantor hereby covenants, represents and warrants that upon entry of each DIP Order, the Loan Parties hereby covenants and agrees that the Secured Obligations of the Loan Parties such Grantor hereunder and under the other Loan Documents, the U.S. Guaranteed Obligations and the Canadian Guaranteed Obligations of each of the Loan Parties as follows: (i) With respect to the Secured Obligations of the U.S. Loan Parties and the Canadian Borrower: (A) in the U.S. Cases pursuant to Section section 364(c)(1) of the Bankruptcy CodeCode and subject to the Carve-Out, such Secured Obligations shall at all times constitute an allowed Superpriority Claim and be payable from and have recourse to all pre-petition and post-petition property of (excluding any avoidance activity under the estates of Bankruptcy Code (but including the U.S. Loan Parties and the Canadian Borrower and all proceeds thereof (including, upon entry of the Final Order, any proceeds of Avoidance Actionstherefrom), and which Superpriority Claim shall be senior to the Superpriority Claim granted to the Pre-Petition Agent and the Pre-Petition Secured Lenders pursuant to Section 2.24(d) below); (Bii) in the U.S. Cases pursuant to Section section 364(c)(2) of the Bankruptcy CodeCode and subject to the Carve-Out, such Secured Obligations shall at all times be secured by a first priority, valid, binding, enforceable and perfected first priority Lien on security interests in, and Liens upon, all unencumbered tangible and intangible property of the U.S. Loan Parties and the Canadian Borrower (includingsuch Grantor, upon entry of the Final Order, including any proceeds of Avoidance Actions) and on all cash maintained in any Collateral Account and any investments of the funds contained therein, provided that amounts in the Collateral Accounts shall not be subject to the Carve-Out or the CCAA Charges; (C) in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy Code, such Secured Obligations shall be secured by a perfected junior Lien upon all property of the U.S. Loan Parties and the Canadian Borrower that is subject to valid and perfected Liens in existence on the Filing Petition Date, which Liens are thereafter released or otherwise extinguished in connection with the satisfaction of the obligations secured by such Liens (excluding any avoidance actions under the Bankruptcy Code (but including the proceeds therefrom)). (iii) pursuant to section 364(c)(3) of the Bankruptcy Code and subject to the Carve-Out, shall at all times be secured by junior, valid, binding, enforceable and perfected security interests in, and Liens upon, all (A) property of each of the Loan Parties’ estates that, on the Petition Date, was subject to a valid and perfected Lien (other than the Liens securing the Prepetition Indebtedness) or becomes subject to a valid Lien perfected (but not granted) after the Petition Date or to the extent such post-Petition Date perfection in respect of prepetition claims is expressly permitted under the Bankruptcy Code (the “Permitted Prior Liens”), (B) property of each of the Grantors’ estates that is subject to valid rights of setoff, and (C) property of each of the Grantors’ estates that is subject to such other Liens as are expressly permitted under Sections 6.02(c), (d), (e), (f), (g), (h), (i) or (o) of the Credit Agreement (such Liens described in existence on this clause (C), along with the Filing Date Permitted Prior Liens, the “DIP Permitted Liens”); provided that are perfected subsequent the Liens granted under the Loan Documents shall not be subject or subordinate to (1) notwithstanding anything to the Filing contrary in the Loan Documents or the DIP Orders, any DIP Permitted Lien or security interest that is avoided and preserved for the benefit of the Grantors and their estates, (2) except as provided in the DIP Orders and the Loan Documents, any Liens arising after the Petition Date as permitted by Section 546(bincluding, any Liens or security interests granted in favor of any federal, state municipal or other governmental unit, commission, board or court for any liability of the Grantors; or (3) any intercompany or affiliate Liens of the Grantors; and (iv) pursuant to section 364(d)(1) of the Bankruptcy Code (other than certain property that is and subject only to the existing Liens that secure obligations under the PreCarve-Petition Credit Agreement, which liens shall be primed by the liens to be granted to the Administrative Agent described in the following Out and clause (D));iii) above, shall at all times be secured by first priority, priming, valid, binding, enforceable and perfected security interests in, and Liens upon, all the Prepetition Collateral. (Db) in The Secured Parties’ Liens and Superpriority Claims as described herein and Section 2.26(a) of the U.S. Cases pursuant to Section 364(d)(1Credit Agreement shall have priority over any claims arising under section 506(c) of the Bankruptcy Code, such Secured Obligations and shall be secured by a perfected first prioritysubject and subordinate only to (i) the Carve-Out and (ii) to the extent provided in the Term Loan/Revolving Facility Intercreditor Agreement, senior priming Lien on all the Liens securing the Obligations under and as defined in the Revolving Facility Credit Agreement in respect of the property Revolving Facility First Lien Collateral. Except as set forth herein or in the Term Loan/Revolving Facility Intercreditor Agreement, no other claim having a priority superior to or pari passu with that granted to Secured Parties by the Interim Order and Final Order, whichever is then in effect, shall be granted or approved while any Obligations under this Agreement remain outstanding. (c) Except for the Carve-Out, no costs or expenses of administration shall be imposed against Administrative Agent, Lenders, any other Secured Party or any of the U.S. Loan Parties Collateral under sections 105 or 506(c) of the Bankruptcy Code, or otherwise, and each of the Canadian Borrower Grantors hereby waives for itself and on behalf of its estate in bankruptcy, any and all rights under sections 105 or 506(c) of the Bankruptcy Code, or otherwise, to assert or impose or seek to assert or impose, any such costs or expenses of administration against Administrative Agent, the Lenders or any other Secured Party. (d) Except for the Carve-Out, the Superpriority Claims shall at all times be senior to the rights of each Grantor, any chapter 11 trustee and, subject to section 726 of the Bankruptcy Code, any chapter 7 trustee, or any other creditor (including, without limitation, cashpost-petition counterparties and other post-petition creditors) in the Chapter 11 Cases or any subsequent proceedings under the Bankruptcy Code, inventoryincluding, receivableswithout limitation, rights under license agreements, property, plant and equipment and the residual interest of the U.S. Loan Parties and the Canadian Borrower in any Receivables Securitization Programs) that is subject to the existing liens which secure chapter 7 cases (1) the obligations of the Loan Parties under or in connection with the Pre-Petition Credit Agreement, and (2) other Liens, obligations or indebtedness of the Loan Parties junior to the Pre-Petition Credit Agreement (collectively, the “Primed Liens”), which Primed Liens shall be primed by and made subject and subordinate to the perfected first priority senior priming Liens to be granted to the Administrative Agent, which senior priming Liens in favor of the Administrative Agent shall also prime any Liens granted after the commencement of the Cases to provide adequate protection Liens in respect of if any of the Primed LiensGrantor’s cases are converted to cases under chapter 7 of the Bankruptcy Code). (e) Notwithstanding any failure on the part of any Grantor or the Collateral Agent or the Lenders to perfect, but maintain, protect or enforce the Liens and security interests in the Collateral granted hereunder, the Interim Order and the Final Order (when entered) shall not prime automatically, and without further action by any Person, perfect such Liens and security interests against the Collateral (1) Non-Primed Liens which secure the Calpine Debt or (2) other Non-Primed Liens solely if and to the extent such Non-Primed Liens secure claims in an aggregate amount less than or equal to US$60,000,000; and (E) in perfection may be achieved by the Canadian Cases, pursuant to an order entry of the Canadian Court, in respect of the Secured Obligations of the Canadian Borrower, such Secured Obligations will be secured by a superpriority charge and senior priming security interest (“CCAA DIP Lenders’ Charge”) over all of the present and future assets of the Canadian Borrower with priority over all existing liens and security, including the Primed Liens; andFinancing Orders).

Priority and Liens. (a) Each of the Loan Parties hereby covenants and agrees that that, pursuant to the Secured Obligations of the Loan Parties Orders, its obligations hereunder and under the Loan Documents, Documents and under the U.S. Guaranteed Obligations and the Canadian Guaranteed Obligations of each of the Loan Parties as follows: Secured Agreements: (i) With respect to the Secured Obligations of the U.S. Loan Parties and the Canadian Borrower: (A) in the U.S. Cases pursuant to Section 364(c)(1) of the Bankruptcy Code, such Secured Obligations shall at all times constitute an allowed Superpriority Claim and be payable from and have recourse in the Cases (excluding a claim on Avoidance Actions, other than pursuant to all pre-petition and post-petition property Section 549 of the estates of Bankruptcy Code, but including the U.S. Loan Parties and the Canadian Borrower and all proceeds thereof (including, upon entry of the Final Order, any proceeds of Avoidance Actions), and which Superpriority Claim Actions (provided that such proceeds shall be senior available to the satisfy such Superpriority Claim granted to the Pre-Petition Agent and the Pre-Petition Secured Lenders pursuant to Section 2.24(dClaims)); (ii) below; (B) in the U.S. Cases pursuant to Section 364(c)(2) of the Bankruptcy Code, such Secured Obligations shall at all times be secured by a valid, binding, continuing, enforceable perfected first priority Lien (that is subject to the terms of the New DIP Order and the Intercreditor Agreement) on all unencumbered of the property of such Loan Parties, whether now existing or hereafter acquired, that is not subject to valid, perfected, non-voidable liens in existence at the U.S. Loan Parties and the Canadian Borrower (including, upon entry time of commencement of the Final OrderCases or to valid, any proceeds non-voidable liens in existence at the time of Avoidance Actionssuch commencement that are perfected subsequent to such commencement as permitted by Section 546(b) of the Bankruptcy Code (limited, in the case of voting equity interests of CFC’s to 65% of such voting equity interests), and on all of its cash maintained in any Collateral the L/C Cash Deposit Account and any investments investment of the funds contained therein, provided that amounts in the Collateral Accounts L/C Cash Deposit Account or the Secured Agreements Cash Deposit Account (as defined in the Final Order) shall not be subject to the Carve-Out or the CCAA Charges; Out); (Ciii) in the U.S. Cases pursuant to Section 364(c)(3) of the Bankruptcy Code, such Secured Obligations shall be secured by a valid, binding, continuing, enforceable perfected junior Lien upon all property of the U.S. such Loan Parties and the Canadian Borrower Parties, whether now existing or hereafter acquired, that is subject to valid valid, perfected and perfected non-voidable Liens in existence on at the Filing Date time of the commencement of the Cases or that is subject to valid Liens in existence on at the Filing Date time of the commencement of the Cases that are perfected subsequent to the Filing Date such commencement as permitted by Section 546(b) of the Bankruptcy Code (other than certain property that is subject to the existing Liens that secure obligations under in respect of the Pre-Petition Credit AgreementExisting Second Lien Debt, which liens shall be primed by the liens to be granted to the Administrative Agent described in the following clause (Div)); (D) in the U.S. Cases pursuant to Section 364(d)(1) of the Bankruptcy Code, such Secured Obligations shall be secured by a perfected first priority, senior priming Lien on all of the property of the U.S. Loan Parties and the Canadian Borrower (including, without limitation, cash, inventory, receivables, rights under license agreements, property, plant and equipment and the residual interest of the U.S. Loan Parties and the Canadian Borrower in any Receivables Securitization Programs) that is subject to the existing liens which secure (1) the obligations of the Loan Parties under or in connection with the Pre-Petition Credit Agreement, and (2) other Liens, obligations or indebtedness of the Loan Parties junior to the Pre-Petition Credit Agreement (collectively, the “Primed Liens”), which Primed Liens shall be primed by and made subject and subordinate to the perfected first priority senior priming Liens to be granted to the Administrative Agent, which senior priming Liens in favor of the Administrative Agent shall also prime any Liens granted after the commencement of the Cases to provide adequate protection Liens in respect of any of the Primed Liens, but shall not prime (1) Non-Primed Liens which secure the Calpine Debt or (2) other Non-Primed Liens solely to the extent such Non-Primed Liens secure claims in an aggregate amount less than or equal to US$60,000,000; and (E) in the Canadian Cases, pursuant to an order of the Canadian Court, in respect of the Secured Obligations of the Canadian Borrower, such Secured Obligations will be secured by a superpriority charge and senior priming security interest (“CCAA DIP Lenders’ Charge”) over all of the present and future assets of the Canadian Borrower with priority over all existing liens and security, including the Primed Liens; and