VALLAURIS II CLO PLC - Irish Stock Exchange

Collateral Debt Obligation is entered into and any failure by such obligation to satisfy the Eligibility
Criteria at a later stage will not result in any requirement to sell it or take any other action.
2.4 Considerations Relating to the Investment Period
The Collateral Managers will, subject to the provisions of the Collateral Management
Agreement, use all reasonable endeavours to make investment decisions in relation to the acquisition
of additional Collateral Debt Obligations that satisfy the Interim Targets as at the Initial Effective
Date, and the Collateral Quality Tests, the Coverage Tests and the Portfolio Profile Tests as at the
Final Effective Date, and, in each case, at all times thereafter to the extent required to do so under
the Reinvestment Criteria. The ability of the Collateral Managers, acting on behalf of the Issuer, to
do so will depend on a number of factors beyond the control of the Issuer or the Collateral
Managers including the condition of certain financial markets, general economic conditions and
international political events and there can therefore be no assurance that such result will be achieved.
To the extent it is not possible to purchase such Collateral Debt Obligations, the level of income
receivable by the Issuer on the Collateral and the weighted average lives of the Notes may be
adversely affected. The independent accountants appointed by the Issuer in accordance with the
Collateral Management Agreement will be requested to issue, within 20 days of the Final Effective
Date, a report confirming details of the aggregate principal amount of the Collateral Debt Obligations
purchased or committed to be purchased as at such date and the computations of the Portfolio
Profile Tests and the computations and results of the Collateral Quality Tests and the Coverage Tests
by reference to such Collateral Debt Obligations. The Collateral Manager, acting on behalf of the
Issuer, shall request that the Rating Agencies confirm the Initial Ratings assigned to the Class I
Senior Notes, the Class II Senior Notes, the Class III Mezzanine Notes and the Class IV Mezzanine
Notes within 30 days of the Initial Effective Date and the Final Effective Date. Failure to satisfy, as
applicable, the Interim Targets or the Portfolio Profile Tests, the Collateral Quality Tests and the
Coverage Tests as a result of any inability to purchase the Collateral Debt Obligations may result in
the Rating Agencies not confirming the Initial Ratings assigned to the Class I Senior Notes, the Class
II Senior Notes and/or the Class III Mezzanine Notes and/or the Class IV Mezzanine Notes on the
Closing Date. A reduction or withdrawal of the ratings assigned to the Class I Senior Notes, the
Class II Senior Notes and/or the Class III Mezzanine Notes and/or the Class IV Mezzanine Notes by
the Rating Agencies as a result of such request for confirmation following the Initial Effective Date
and/or the Final Effective Date and/or failure to satisfy the above tests will (subject as described in
‘‘Description of the Portfolio – 4. Final Effective Date’’) result in redemption of the Notes on the
Payment Date following each of the Initial Effective Date and the Final Effective Date to the extent
required in order to cause such ratings to be reinstated and such tests to be satisfied. See Condition
7(d) (Redemption upon Effective Date Rating Event). Any redemption of the Notes in the
circumstances outlined above will reduce the leverage ratio of Subordinated Notes to the Collateral,
which could adversely affect the level of returns to the holders of the Subordinated Notes.
2.5 Collateral Managers
Pursuant to the terms of the Collateral Management Agreement, the Collateral Managers have
respectively agreed to make investment decisions in relation to the Portfolio, to monitor the Collateral
and, acting on behalf of the Issuer, perform all investment-related duties and functions required to
make and implement investment decisions in relation to the Collateral in accordance with the
parameters and criteria set out in the Collateral Management Agreement. See ‘‘Description of the
Portfolio’’ and ‘‘Description of the Collateral Management Agreement’’. The powers and duties of the
Collateral Managers in making investment decisions in relation to the Collateral Debt Obligations
include making investment decisions on the sale of certain of the securities in the Portfolio during the
Reinvestment Period (subject to certain limits) and, at any time, upon the occurrence of certain events
(including a Collateral Debt Obligation becoming a Defaulted Obligation, a Credit Improved
Obligation or a Credit Risk Obligation), in accordance with the provisions of the Collateral
Management Agreement. See ‘‘Description of the Portfolio’’. In undertaking this role, the Collateral
Managers may review such available public information relating to the obligors or guarantors of
Collateral Debt Obligations as they consider appropriate in their absolute discretion. Such review will
not include due diligence of the kind common in relation to a primary securities offering. The liability
of the Collateral Managers to the Issuer under the Collateral Management Agreement is limited to
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