Distribution Requirement Sample Clauses
A Distribution Requirement clause sets out the obligations and conditions under which a party must distribute products, services, or information. Typically, it specifies the territories, channels, or minimum quantities involved, and may outline standards for marketing, reporting, or compliance with local laws. This clause ensures that distribution is carried out in a manner that meets the expectations of the parties and helps prevent disputes over how, where, and to what extent distribution must occur.
Distribution Requirement. During each taxable year, in order to qualify as a REIT, the deduction for dividends paid (computed without regard to capital gain dividends) must equal or exceed the following:
(1) the sum of (a) 95 percent (90 percent for taxable years beginning after December 31, 2000) of real estate investment trust taxable income computed without regard to the deduction for dividends paid and excluding net capital gain, and (b) 95 percent (90 percent for taxable years beginning after December 31, 2000) of the excess of net income from foreclosure property over the tax on such income; minus
(2) any excess non-cash income. This requirement (the “Distribution Requirement”) is defined by reference to the dividends paid deduction. Therefore, only distributions that qualify for that deduction will count in meeting the Distribution Requirement.7 Such dividends must be paid in the taxable year to which they relate, or in the 12-month period following the close of such taxable year, if declared before the Company timely files it tax return for such taxable year and if paid on or before the first regular dividend payment after such declaration. Any dividend declared by the Company in October, November, or December of any calendar year and payable to shareholders of record on a specified date in such a month shall be deemed to have been paid on December 31 of such calendar year if such dividend is actually paid by the Company during January of the following calendar year. If a REIT has more than one class of stock, the Distribution Requirement must be met on an aggregate basis and not with respect to each separate class of stock. Distributions within each class of stock must be pro rata and non-preferential. Further, any distribution shall not be considered as a dividend for purposes of computing the dividends paid deduction, unless such distribution is with no preference to one class of stock as compared with another class except to the extent that the former is entitled (without reference to waivers of their rights by shareholders) to such preference. To the extent that a REIT does not distribute all of its net capital gain or distributes at least 95 percent (90 percent for taxable years beginning after December 31, 2000), but less than 100 percent, of its REIT taxable income, it will be subject to tax at regular corporate tax rates. A REIT may also be subject to an excise tax if it fails to meet certain other distribution requirements. The Company has represented that it has ...
Distribution Requirement. Notwithstanding anything in Section 8(d) to the contrary, if taking into account the entire amount of anticipated distributions of Sale Proceeds pursuant to such Section, the General Partner has determined that it would be unable to satisfy the distribution requirement of Section 857(a)(1)(A)(i) of the Code (the “Distribution Requirement”) with respect to the year of such distribution (taking into account all anticipated distributions with respect to such year, including distributions expected to be made in the following year and treated as distributions made with respect to such year), then prior to entering into an agreement to consummate the Capital Transaction giving rise to such Sale Proceeds, the General Partner shall present to the iStar Representative and the BREDS Representative a written pro forma analysis of the taxable income to be allocated to the General Partner arising from such Capital Transaction and the manner in which the General Partner has determined the related Sale Proceeds distributable to the General Partner would be required to be distributed to the General Partner’s shareholders in order to satisfy the Distribution Requirement (the “Section 8(i) Notice”). If that plan shows less than 100% of the Sale Proceeds otherwise payable to the Series D Unitholders as required by Section 8(d) being distributed to the holders of the Series D Preferred Stock and holders of the Series D Preferred Partnership Units, then the General Partner agrees to take any action that such iStar Representative and the BREDS Representative, by unanimous written consent, require the General Partner to take in order to minimize the impact of any reduction in distributions to the holders of the Series D Preferred Stock and the holders of the Series D Preferred Partnership Units, provided that the General Partner or the iStar Representative and the BREDS Representative are able to procure an opinion from a nationally recognized U.S. federal income tax counsel that such action will not prevent the General Partner from qualifying as a REIT, which opinion (if not provided by the General Partner’s tax counsel) will provide that it may be relied upon by the General Partner’s tax counsel for purposes of issuing opinions on the General Partner’s qualification as a REIT. Any Capital Transaction giving rise to a distribution of less than 100% of Sale Proceeds to the holders of Series D Preferred Stock and the holders of Series D Preferred Partnership Units pursuant to Sec...