Swiss guarantee Clause Samples
A Swiss guarantee is a contractual provision where a Swiss entity agrees to guarantee the obligations of another party, typically in a cross-border financing or commercial arrangement. This clause outlines the terms under which the Swiss guarantor will fulfill the obligations if the primary obligor defaults, and may include specific requirements to comply with Swiss legal and regulatory standards, such as limitations on upstream or cross-stream guarantees. The core function of a Swiss guarantee clause is to provide additional security to the beneficiary by ensuring that a reputable Swiss entity stands behind the obligations, thereby reducing credit risk and increasing the likelihood of performance.
Swiss guarantee. (i) The guarantees, obligations, liabilities and undertakings of any Swiss Guarantor under Section 7 (Guaranty) of this Agreement in relation to obligations, liabilities or undertakings of an obligor (other than the respective Swiss Guarantor or any of its subsidiaries) shall only be deemed to be undertaken or incurred to the extent and in the maximum amount of its free reserves available for distribution (being the positive difference between the assets of the Swiss Guarantor and the aggregate of all liabilities, the amount of the registered share capital and the mandatory reserves at any given time, all these amounts to be established in accordance with Swiss law and to be confirmed by the auditors of the relevant Swiss Guarantor based on an interim audited balance sheet as of the date the guarantee is drawn), taking into account the deduction of Swiss withholding tax at the rate of 35% (or such other rate in force from time to time), subject to any applicable double taxation treaty, levied on any such reserves made available for distribution.
(ii) The subordination by an Obligee Guarantor incorporated in Switzerland (a “Swiss Obligee Guarantor”) for the benefit of any Borrower or any Guarantor (other than subsidiaries of the respective Swiss Obligee Guarantor) shall only be deemed to be undertaken or incurred to the extent and in the maximum amount of its free reserves available for distribution (being the positive difference between the assets of the Swiss Obligee Guarantor and the aggregate of all liabilities, the amount of the registered share capital and the mandatory reserves at any given time, all these amounts to be established in accordance with Swiss law and to be confirmed by the auditors of the relevant Swiss Obligee Guarantor based on an interim audited balance sheet as of the date the guarantee is drawn), taking into account the deduction of Swiss withholding tax at the rate of 35% (or such other rate in force from time to time), subject to any applicable double taxation treaty, levied on any such reserves made available for distribution.
(iii) The obligation of a Swiss Obligee Guarantor not without the prior written consent of the Administrative Agent acting pursuant to the instructions of Requisite Banks to commence or join with any other Person in commencing any bankruptcy, reorganization or insolvency case or proceeding of or against any Borrower or any Guarantor (other than subsidiaries of the respective Swiss Obligee Guarantor), shall...