SECTION 8. WITHHOLDING OBLIGATIONS

Sec. 8.01. Primary Withholding Responsibility Under Chapter 3 Not Assumed. QI shall withhold the difference between the amount of tax required to be withheld under chapter 3 of the Code and the amount actually withheld by any other withholding agent to the extent that QI knows, or has reason to know, that the appropriate amount has not been withheld. In addition, if QI has insufficient information to allocate the reportable amounts (other than bank deposit interest and short-term interest or OID) to each of a nonqualified intermediary’s account holders (or partners of a foreign partnership that is not a withholding foreign partnership) then QI must withhold the difference between 30 percent of the amount paid to those account holders (or partners) for whom QI does not hold allocation information and the amount, if any, actually withheld by the withholding agent. Notwithstanding the preceding sentence, QI shall not have any liability for tax under section 1461 of the Code if QI obtains the allocation information by the time that QI is required to file Forms 1042 and 1042-S for the calendar year. The amounts so withheld shall be deposited in accordance with section 8.05 of this Agreement and shall be reported on Forms 1042 and 1042-S in accordance with sections 9 and 10 of this Agreement. QI is not required, however, to withhold on amounts it pays to another qualified intermediary or withholding foreign partnership that has certified to QI on Form W-8IMY that it has assumed primary withholding responsibility.

Sec. 8.02. Primary Withholding Responsibility Under Chapter 3 Assumed. To the extent that QI has assumed primary withholding responsibility for reportable amounts it receives from a withholding agent, QI shall withhold the amount of tax required to be withheld under chapter 3 of the Code. The amounts withheld shall be deposited in accordance with section 8.05 of this Agreement and shall be reported on Forms 1042 and 1042-S in accordance with sections 9 and 10 of this Agreement. QI is not required, however, to withhold on amounts it pays to another qualified intermediary or withholding foreign partnership that has certified to QI on Form W-8IMY that it has assumed primary withholding responsibility.

Sec. 8.03. Backup Withholding Responsibility Not Assumed. Notwithstanding its ineligibility to assume backup withholding or its election not to assume backup withholding, QI shall withhold under section 3406 on any reportable payments that it pays to an account holder only if it has actual knowledge that the account holder is a U.S. non-exempt recipient on whose behalf QI has received a reportable amount and QI cannot reliably associate the reportable payment with a valid Form W-9 and another payor has not withheld under chapter 3 or section 3406 of the Code. That is, in accordance with Treas. Reg. §31.3406(g)-1(e), QI shall not be required

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to withhold under section 3406 on a reportable payment that QI makes outside the United States to an offshore account (or, in the case of broker proceeds, effects a sale outside the United States) unless QI has actual knowledge that the account holder is a United States non-exempt recipient who has not provided a valid Form W-9. An offshore account means an account maintained at an office or branch of QI at any location outside the United States and outside possessions of the United States. Whether a payment is made outside the United States is determined under the rules of Treas. Reg. §1.6049-5(e). QI is not required to withhold under section 3406 on any reportable payment that was subject to 30 percent withholding under chapter 3 of the Code by another payor. The amounts withheld shall be deposited in accordance with section 8.05 of this Agreement and shall be reported on Forms 945 and 1099 filed in accordance with sections 9 and 10 of this Agreement. QI is not required, however, to withhold on amounts it pays to another qualified intermediary if that other qualified intermediary has certified to QI on Form W-8IMY that it has assumed primary backup withholding responsibility.

Sec. 8.04. Backup Withholding Responsibility Assumed. To the extent that QI has assumed Form 1099 reporting and backup withholding responsibility for reportable payments it receives from a withholding agent, QI shall report and withhold in accordance with chapter 61 and section 3406 of the Code. Notwithstanding the preceding sentence, the exceptions to Form 1099 reporting under chapter 61 that apply to a foreign source amount paid outside the United States by a non-U.S. payor or non-U.S. middleman shall not apply to QI to the extent those amounts are received from an account for which QI is acting as a qualified intermediary. In addition, the exception from backup withholding under Treas. Reg. §31.3406(g)-1(e) shall not apply. That is, QI must backup withhold on amounts it actually knows, or must presume, to be paid to a U.S. non-exempt recipient. The amounts withheld shall be deposited in accordance with section 8.05 of this Agreement and shall be reported on Forms 945 and 1099 filed in accordance with sections 9 and 10 of this Agreement. QI is not required, however, to withhold on amounts it pays to another qualified intermediary if that other qualified intermediary has certified to QI on Form W-8IMY that it has assumed primary backup withholding responsibility.

Sec. 8.05. Deposit Requirements. QI must deposit amounts withheld under sections 1441, 1442, 1443, or 3406 of the Code with a Federal Reserve bank or authorized financial institution as provided in Treas. Reg. §1.6302-2(a) or §31.6302-1.