Gresham Capital CLO IV B.V. - Irish Stock Exchange

(ii) the aggregate Principal Balance of Collateral Debt Securities with a rating of “CCC+” or below by
S&P or “CCC+” or below by Fitch is less than 5 per cent. of the Maximum Investment Amount;
(iii) (A) the ratings of the Senior Notes have not been reduced by one or more rating sub categories
from those assigned on the Issue Date or withdrawn by any Rating Agency (other than
following a redemption of the relevant Notes in full); or
(B) the ratings of the Class B Notes, the Class C Notes, the Class D Notes or the Class E Notes
have not been reduced by two or more rating sub categories from those assigned on the Issue
Date or withdrawn by any Rating Agency (other than following a redemption of the relevant
Notes in full); and
(iv) the Weighted Average Life Test is met.
In determining whether the Reinvestment Criteria or the Additional Reinvestment Criteria will be satisfied
by the purchase of any Additional Collateral Debt Security, the Collateral Manager will apply the Collateral
Quality Tests and paragraphs (b) and (c) of the Eligibility Criteria to (i) the Portfolio prior to such purchase, as if
any such Collateral Debt Security which has been sold or prepaid, but not replaced were deemed to remain in
the Portfolio and (ii) the Portfolio as if such purchase had been made with the proposed Additional Collateral
Debt Security being treated as replacing the same principal amount of any Collateral Debt Security that has been
sold or prepaid as the Collateral Manager may in its discretion select, with any other Collateral Debt Security
that has been sold or prepaid but not replaced being deemed to remain in the Portfolio. The above methodology
will not apply following the sale of a Credit Risk Security or a Defaulted Security.
It is expected that the Collateral Manager will reinvest Sale Proceeds, to the extent permitted or required as
described above, in Additional Collateral Debt Securities promptly following such sale. In certain of the
circumstances described above, the Collateral Manager is required to reinvest such Sale Proceeds on a best
efforts basis within specified time limits. In the event that the Collateral Manager does not immediately apply
any such Sale Proceeds in the acquisition or exercise of Additional Collateral Debt Securities, it shall procure
that such amounts are paid into the Additional Collateral Account or Sterling Additional Collateral Account, as
applicable, and will notify the Collateral Administrator that such amounts have been designated for reinvestment
pursuant to the provisions of the Collateral Management Agreement, together with details of the time limits for
such reinvestment applicable thereto. In the event that the Collateral Manager fails to reinvest any such
designated Sale Proceeds within the time limits prescribed in the Collateral Management Agreement, they will
cease to be designated for reinvestment and will be treated as Principal Proceeds for the applicable Due Period
and paid out in accordance with the Priorities of Payment on the next following Payment Date; to the extent that
this results in the Class A1A Notes being repaid, the amount repaid will, until cancellation of the commitment
pursuant to the Class A1A Note Purchase Agreement, be capable of being redrawn for investment in Additional
Collateral Debt Securities during the Reinvestment Period.
(j)
Collateral Enhancement Securities
The Collateral Manager (acting on behalf of the Issuer) may, from time to time, purchase Collateral
Enhancement Securities independently or as part of a unit with Collateral Debt Securities being so purchased,
provided that such Collateral Enhancement Securities may not constitute Margin Stock (as defined under
Regulation U issued by the Board of Governors of the United States Federal Reserve System). The amounts
that may be applied by the Collateral Manager (acting on behalf of the Issuer) in the acquisition of Collateral
Enhancement Securities shall be limited to amounts standing to the credit of the Collateral Enhancement
Account from time to time. The Collateral Manager (acting on behalf of the Issuer) may sell Collateral
Enhancement Securities at any time.
(k) Exercise of Warrants and Options
The Collateral Manager may at any time exercise a warrant or option attached to a Collateral Debt Security
or comprised in a Collateral Enhancement Security and shall request the Trustee to instruct the Account Bank to
make any necessary payment in respect of such exercise.
(l)
Margin Stock and Dutch Ineligible Securities
The Collateral Management Agreement requires that the Collateral Manager, on behalf of the Issuer, will
sell any Collateral Debt Security, Defaulted Equity Security or Collateral Enhancement Security which is or at
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