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. (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