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

any entity by “Benefit Plan Investors” is not significant then the “look through” rule will not apply to such
entity. “Benefit Plan Investors” are defined in the Plan Asset Regulation to include (1) any employee benefit
plan (as defined in Section 3(3) of ERISA), subject to the provisions of part 4 of subtitle B of Title I of ERISA,
(2) any plan described in Section 4975(e)(1) of the Code, and (3) any entity whose underlying assets include
“plan assets” by reason of any such employee benefit plan’s or plan’s investment in the entity, but only to the
extent of the percentage of the equity interests in such entity that are held by Benefit Plan Investors. Equity
participation by Benefit Plan Investors in an entity is significant if, immediately after the most recent acquisition
of any equity interest in the entity, 25 per cent. or more of the value of any class of equity interests in the entity
(excluding the value of any interests held by certain persons, other than Benefit Plan Investors, exercising
discretionary authority or control over the assets of the entity or providing investment advice to the entity for a
fee, direct or indirect (such as the Collateral Manager), or any affiliates of such persons (any such person, a
“Controlling Person”)) is held by Benefit Plan Investors.
Although there can be no assurances in this regard, based on the credit quality (as reflected by the credit
rating assigned by the Rating Agencies) of the Senior Notes, Class B Notes, Class C Notes, and Class D Notes,
the traditional debt characteristics of such Notes and the absence of rights to payment in excess of principal and
stated interest under such Notes, the Issuer is initially treating such Notes as not being “equity interests” in the
Issuer at the time of their issuance for purposes of the Plan Asset Regulation. The treatment of such Notes as
not being “equity interest” in the Issuer for the purposes of the Plan Asset Regulation could, however, be
affected, subsequent to their issuance, by certain changes in the structure or financial condition of the Issuer.
There is a risk that the Class E Notes and Class N Notes (the “ERISA Restricted Notes”) would be likely to
constitute “equity interests” in the Issuer for the purposes of the Plan Asset Regulation. There is little pertinent
authority in this area.
The Issuer intends to restrict ownership of the ERISA Restricted Notes so that no assets of the Issuer will be
deemed to be “plan assets” subject to Title I of ERISA or Section 4975 of the Code. Accordingly, the Issuer
intends to prohibit Plans from acquiring or holding any ERISA Restricted Note or any interest therein.
However, there can be no assurance that at any time no Plan will hold an interest in an ERISA Restricted Note.
If for any reason the assets of the Issuer are deemed to be “plan assets” of a Plan because one or more Plans is
an owner of an ERISA Restricted Note and no exception under ERISA and the Plan Asset Regulation applies,
certain transactions that the Issuer might enter into, or may have entered into, in the ordinary course of its
business might be deemed to constitute direct or indirect non-exempt “prohibited transactions” under Section
406 of ERISA or Section 4975 of the Code and might have to be rescinded. In addition, if the assets of the
Issuer are deemed to be “plan assets” of a Plan subject to Title I of ERISA or Section 4975 of the Code, the
payment of certain of the fees payable to the Collateral Manager might be considered to be a non-exempt
“prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code. Moreover, if the underlying
assets of the Issuer were deemed to be assets constituting “plan assets” of a Plan, there are several provisions of
ERISA that could be implicated if an ERISA Plan were to acquire and hold ERISA Restricted Notes either
directly or by investing in an entity whose underlying assets are deemed to be assets of the ERISA Plan. It is
not clear that the limitations of Section 403(a) of ERISA on the delegation of investment management
responsibilities by fiduciaries of ERISA Plans would be satisfied. It is also not clear whether Section 404(b) of
ERISA, which generally provides that no fiduciary may maintain the indicia of ownership of any assets of a plan
outside the jurisdiction of the district courts of the United States, would be satisfied or any of the exceptions to
this requirement set forth in 29 C.F.R. Section 2550.404b-1 would be available.
EACH PURCHASER AND EACH TRANSFEREE OF A SENIOR NOTE, A CLASS B NOTE, A CLASS
C NOTE OR A CLASS D NOTE OR ANY INTEREST THEREIN WILL BE DEEMED TO REPRESENT
AND WARRANT (OR, IF REQUIRED BY THE TRUST DEED, A TRANSFEREE WILL BE REQUIRED
TO CERTIFY) (1) EITHER THAT (A) IT IS NOT (AND FOR SO LONG AS IT HOLDS ANY NOTE OR
INTEREST THEREIN WILL NOT BE), AND IS NOT ACTING ON BEHALF OF (AND FOR SO LONG AS
IT HOLDS ANY SUCH NOTE OR INTEREST THEREIN WILL NOT BE) (I) A PLAN OR A
GOVERNMENTAL, CHURCH OR NON-U.S. PLAN WHICH IS SUBJECT TO ANY FEDERAL, STATE,
LOCAL OR NON-U.S. LAW THAT IS SIMILAR TO THE PROHIBITED TRANSACTION PROVISIONS
OF SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE, OR (II) ANOTHER BENEFIT PLAN
INVESTOR, AS DEFINED IN SECTION 3(42) OF ERISA, OR (B) ITS PURCHASE AND HOLDING OF
SUCH NOTE DOES NOT AND WILL NOT RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION
UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE (OR, IN THE CASE OF A
GOVERNMENTAL, CHURCH, OR NON-U.S. PLAN, A VIOLATION OF ANY SIMILAR FEDERAL,
STATE, LOCAL OR NON- U.S. LAW); AND (2) IT AGREES NOT SELL OR OTHERWISE TRANSFER
SUCH NOTES OR ANY INTEREST THEREIN OTHERWISE THAN TO A PURCHASER OR
TRANSFEREE THAT IS DEEMED TO REPRESENT AND AGREE (OR, IF REQUIRED BY THE TRUST
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