Common use of Upstream Clause in Contracts

Upstream. and cross-stream undertakings granted at non-arm’s length terms are also treated as dividend distributions for tax purposes. Therefore, there is a risk that the Company may become subject to Swiss withholding tax of up to 53.8% on (i) the amount of a guarantee or similar fee customarily paid to an independent guarantor under similar circumstances, (ii) the amounts paid under the upstream and cross-stream undertakings (if any), and (iii) if at the time of the grant of the upstream and cross-stream undertakings it was foreseeable that the affiliate for whose obligations the upstream and cross-stream undertakings have been granted might become insolvent, the entire amount of the upstream and cross-stream undertakings. Further, for income tax purposes, (i) the amount of an adequate guarantee or similar fee may be subject to a profit tax adjustment at the level of the Company, (ii) payments under the upstream and cross-stream undertakings may not be admissible as deductible business expenses, and (iii) any provisions made in respect of the upstream and cross-stream undertakings may be disregarded.