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

all the Notes, (b) to rescind such declaration of acceleration, (c) to direct the sale and liquidation of the
Collateral, and (d) to waive certain defaults with respect to the Notes.
Security
(a) Clearing Systems: The Collateral Debt Securities purchased by the Collateral Manager on behalf of the
Issuer, which are securities, and will be held by the Custodian. The Custodian holds and will hold
certain of the securities (i) through its accounts with Euroclear, Clearstream, Luxembourg and DTC, as
appropriate, and (ii) through its sub-custodians who in turn hold such Collateral Debt Securities which
are securities both directly and through any appropriate clearing system. Those securities held in
clearing systems may not be held in special purpose accounts and will be fungible with other securities
from the same issue held in the same accounts on behalf of the other customers of the Custodian or its
sub-custodian, as the case may be. A fixed charge over the Issuer’s rights in and to such Collateral
Debt Securities which are securities was created under English law pursuant to the Trust Deed on the
Issue Date and has effect as a security interest over the right of the Issuer to require delivery of such
securities from the Custodian in accordance with the terms of the Agency Agreement. However, the
charge created pursuant to the Trust Deed may be insufficient or ineffective to secure the Collateral
Debt Securities which are securities for the benefit of Noteholders, particularly in the event of any
insolvency or liquidation of the Custodian or any sub-custodian that has priority over the right of the
Issuer to require delivery of such assets from the Custodian in accordance with the terms of the Agency
Agreement. Any risk of loss arising from any insufficiency or ineffectiveness of the security for the
Notes will be borne by the Noteholders without recourse to the Trustee, the Initial Purchaser or any
other party.
Some Collateral Debt Securities, Collateral Enhancement Securities, Defaulted Equity Securities and
Eligible Investments are securities held by the Custodian in a pledged account with Euroclear (the
“Euroclear Pledged Account”). These securities held in the Euroclear Pledged Account are the
subject of a commercial pledge under Belgian law created by the Issuer pursuant to the Euroclear
Pledge Agreement entered into by the Issuer on the Issue Date. The effect of this security interest, inter
alia, enables the Custodian, on enforcement, to sell the securities in the Euroclear Pledged Account on
behalf of the Trustee. The Euroclear Pledge Agreement does not entitle the Trustee to require delivery
of the relevant securities from the depositary or depositaries that have physical custody of such
securities or allow the Trustee to dispose of such securities directly other than by sale upon an
enforcement of the security interest.
In addition, custody and clearance risks may be associated with Collateral Debt Securities which are
securities that do not clear through DTC or Euroclear or Clearstream, Luxembourg. There is a risk, for
example, that such securities could be counterfeit, or subject to a defect in title or claims to ownership
by other parties.
(b) Fixed Charge: Although the security constituted by the Trust Deed over certain of the Collateral Debt
Securities and certain other assets of the Issuer held from time to time, including the security over the
Accounts, is expressed to take effect as fixed security, it may (as a result, inter alia, of the substitutions
of Collateral Debt Securities contemplated by the Collateral Management Agreement and the payments
to be made from the Accounts in accordance with the Transaction Documents) take effect as a floating
charge which, in particular, would rank after a subsequently created fixed security interest. However,
the Issuer has covenanted not to create any such subsequent security interests unless the Rating
Agencies have confirmed that such actions would not adversely affect the then current ratings of any of
the Senior Notes and the other Rated Notes.
(c) Governing Law of the Security: The Trust Deed and security interests created pursuant to it are
governed by English law. Some of the Collateral Debt Securities are and will be obligations governed
by the laws of jurisdictions other than England and Wales and which require different and/or additional
procedures and/or documentation to create or perfect any security interest. The Trust Deed contains a
further assurance clause under which the Issuer agrees to take such further action as the Trustee may
require to ensure that it creates valid security over its assets in favour of the Trustee. The Euroclear
Pledge Agreement is governed by Belgian law.
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