Common use of Distribution Requirement Clause in Contracts

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 Section 8(j) of the Series D Articles Supplementary and this Section 8(i) (and any agreement to enter into any such Capital Transaction) will be conditioned on the unanimous written approval of the iStar Representative and the BREDS Representative and, if requested by unanimous written consent of the iStar Representative and the BREDS Representative, the written agreement by the General Partner to take all steps specified by such Representatives in their sole discretion to minimize distributions to the holders of Common Equity and minimize the reduction in amounts otherwise distributable to the Series D Unitholders and holders of Series D Preferred Stock, including but not limited to by paying the maximum amount payable on the Series D Unitholders and holders of Series D Preferred Stock to the extent the General Partner would be entitled to a distributions paid deduction for such amount, paying corporate-level tax on the gain and paying a cash-stock election distribution utilizing the least amount of cash possible. If after applying the foregoing principles and complying with any requirements imposed by the iStar Representative and the BREDS Representative and any agreement between such Representatives and the General Partner, Sale Proceeds are generated and there remains an amount of Sale Proceeds to be distributed to holders of Common Equity, the General Partner may make a distribution thereof to holders of Common Equity, but only to the extent provided in the unanimous consent of the iStar Representative and the BREDS Representative and, if applicable, such agreement with the General Partner, and not in excess of the minimum amount required to satisfy the Distribution Requirement consistent with the Section 8(i) Notice. The General Partner shall cause any such proceeds paid to holders of Common Equity to be treated as having been distributed by the Partnership to the General Partner with respect to the Common Units and not with respect to the Series D Preferred Partnership Units. Any Sale Proceeds so treated as paid with respect to Common Units in lieu of holders of Series D Preferred Partnership Units by reason of this Section 8(i) will accrue a return at the rate otherwise in effect with respect to unpaid amounts at the time such payment would have been made, plus the Default Rate, and such amount shall be deemed an additional accruing distribution with respect to the then-outstanding shares of Series D Preferred Partnership Units, and will be paid pari passu with the payment of PIK Distributions. Neither the iStar Representative, the BREDS Representative, nor any holder of Series D Preferred Partnership Units or Series D Preferred Stock shall have any liability to the General Partner or any other Person by acting or failing to act pursuant to this Section 8(i). The inability of the General Partner to enter into or effectuate a Capital Transaction by reason of this Section 8(i) shall not adversely affect the rights and remedies otherwise available to the holders of the Series D Preferred Partnership Units. This Section 8(i) shall not apply at any time during which Section 8(e) is in effect.

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 stockholders 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 E Preferred Unitholders as required by Section 8(d) being distributed to the holders of the Series D E Preferred Stock and holders of the Series D E Preferred Partnership Units, then the General Partner agrees to take any action that such the 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 E Preferred Stock and the holders of the Series D E 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 E Preferred Stock and the holders of Series D E Preferred Partnership Units pursuant to Section 8(j) of the Series D E Preferred Articles Supplementary and this Section 8(i) (and any agreement to enter into any such Capital Transaction) will be conditioned on the unanimous written approval of the iStar Representative and the BREDS Representative and, if requested by unanimous written consent of the iStar Representative and the BREDS Representative, the written agreement by the General Partner to take all steps specified by such Representatives in their sole discretion to minimize distributions to the holders of Common Equity and minimize the reduction in amounts otherwise distributable to the Series D E Preferred Unitholders and holders of Series D E Preferred Stock, including but not limited to by paying the maximum amount payable on the Series D E Preferred Unitholders and holders of Series D E Preferred Stock to the extent the General Partner would be entitled to a distributions paid deduction for such amount, paying corporate-level tax on the gain and paying a cash-stock election distribution utilizing the least amount of cash possible. If after applying the foregoing principles and complying with any requirements imposed by the iStar Representative and the BREDS Representative and any agreement between such Representatives and the General Partner, Sale Proceeds are generated and there remains an amount of Sale Proceeds to be distributed to holders of Common Equity, the General Partner may make a distribution thereof to holders of Common Equity, but only to the extent provided in the unanimous consent of the iStar Representative and the BREDS Representative and, if applicable, such agreement with the General Partner, and not in excess of the minimum amount required to satisfy the Distribution Requirement consistent with the Section 8(i) Notice. The General Partner shall cause any such proceeds paid to holders of Common Equity to be treated as having been distributed by the Partnership to the General Partner with respect to the Common Units and not with respect to the Series D E Preferred Partnership Units. Any Sale Proceeds so treated as paid with respect to Common Units in lieu of holders of Series D E Preferred Partnership Units by reason of this Section 8(i) will accrue a return at the rate otherwise in effect with respect to unpaid amounts at the time such payment would have been made, plus the Default Rate, and such amount shall be deemed an additional accruing distribution with respect to the then-outstanding shares of Series D E Preferred Partnership Units, and will be paid pari passu with the payment of PIK Distributions. Neither the iStar Representative, the BREDS Representative, nor any holder of Series D E Preferred Partnership Units or Series D E Preferred Stock shall have any liability to the General Partner or any other Person by acting or failing to act pursuant to this Section 8(i). The inability of the General Partner to enter into or effectuate a Capital Transaction by reason of this Section 8(i) shall not adversely affect the rights and remedies otherwise available to the holders of the Series D E Preferred Partnership Units. This Section 8(i) shall not apply at any time during which Section 8(e) is in effect.