VALLAURIS II CLO PLC - Irish Stock Exchange

into the Interest Account and distributed as Interest Proceeds, save for such Scheduled Interest Rate
Hedge Counterparty Payments due and payable to the Issuer each Payment Date which shall, to the
extent received by the Issuer, be paid into the Payment Account, each as subject to and in
accordance with Condition 3(i)(Accounts).
9.2 Reduction or Sale of Interest Rate Hedge Transactions
The Collateral Manager may, acting on behalf of the Issuer, enter into Interest Rate Hedge
Transactions provided that any such Interest Rate Hedge Transaction contains the standard
provisions referred to in paragraph 10 below and is in the Pre-Approved Form, save to the extent of
any material change thereto as agreed by the Issuer, the applicable Interest Rate Hedge Counterparty
and Collateral Manager and subject to receipt of Rating Agency Confirmation in respect thereof.
Subject to the receipt of Rating Agency Confirmation in relation thereto, the Issuer, or the
Collateral Manager acting on its behalf, may sell, terminate and/or reduce the notional amount of
any Interest Rate Hedge Transaction, in whole or in part, at any time at the discretion of the Issuer
or the Collateral Manager acting on its behalf.
Any Interest Rate Hedge Termination Receipt shall be paid into the Interest Account and any
Interest Rate Hedge Termination Payment payable by the Issuer to an Interest Rate Hedge
Counterparty in such circumstances shall be payable on the next following Payment Date in
accordance with the Priorities of Payment. Any Interest Rate Hedge Termination Receipts not
required for application towards the payment of Interest Rate Hedge Termination Payments (save for
interest accrued thereon which shall constitute Interest Proceeds and shall be retained in the Interest
Account) shall constitute Principal Proceeds and shall be transferred to the Principal Account and
applied in accordance with the Priorities of Payment on the next following Payment Date.
9.3 Replacement Interest Rate Hedge Agreements
In the event that any Interest Rate Hedge Agreement terminates in whole at any time as a
result of an ‘‘Event of Default’’ or ‘‘Termination Event’’ thereunder under which the applicable
Interest Rate Hedge Counterparty is the sole ‘‘Defaulting Party’’ or ‘‘Affected Party’’ (each such term
as defined therein), the Collateral Manager, acting on behalf of the Issuer shall, subject to and in
accordance with the terms of the Collateral Management Agreement, enter into a Replacement
Interest Rate Hedge Agreement on behalf of the Issuer on substantially the same terms as the
terminated Interest Rate Hedge Agreement within 30 days of the termination thereof with a
counterparty satisfying the Required Ratings applicable thereto, and subject to receipt of a Rating
Agency Confirmation in respect thereof (including the cost of entry thereof).
In the event of termination of any Interest Rate Hedge Agreement in whole in the circumstances
referred to above, any Interest Rate Hedge Termination Receipts will be paid into the Interest
Account and shall be applied by the Issuer or the Collateral Manager, acting on behalf of the Issuer,
towards the costs of entry into a Replacement Interest Rate Hedge Agreement, save where:
(a)
(b)
(c)
the Collateral Manager, acting on behalf of the Issuer, determines not to replace such
Interest Rate Hedge Agreement, and notifies the Rating Agencies of such determination
and Rating Agency Confirmation from Moody’s and S&P is received in respect of such
determination; or
termination of the applicable Interest Rate Hedge Agreement occurs on a Redemption
Date pursuant to Conditions 7(a) (Final Redemption), 7(b) (Optional Redemption) or 10
(Events of Default); or
to the extent that such Interest Rate Hedge Termination Receipts or a part thereof are not
required for application towards the costs of entry of any such Replacement Interest Rate
Hedge Agreement,
in which event such Interest Rate Hedge Termination Receipts (save for interest accrued thereon
which shall constitute Interest Proceeds and shall be retained in the Interest Account) shall constitute
Principal Proceeds and shall be transferred to the Principal Account and applied in accordance with
the Priorities of Payment on the next following Payment Date.
185