1003-00002 · Harrowgate Capital Partners · Closing

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HARROWGATE FUND V GP LLC 1200 Concord Pike, Suite 600 Wilmington, DE 19803

In its capacity as General Partner of Harrowgate Private Equity Fund V LP

[__], 20[]

To: Each Limited Partner of Harrowgate Private Equity Fund V LP (as set forth on Schedule A hereto)

Re: Distribution Notice No. [__] — Harrowgate Private Equity Fund V LP

Reference is made to the Agreement of Limited Partnership of Harrowgate Private Equity Fund V LP, dated as of [__], 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Partnership Agreement"), governed by the laws of the State of Delaware. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Partnership Agreement.

Section 1 — Notice of Distribution

Harrowgate Fund V GP LLC (the "General Partner"), in its capacity as general partner of Harrowgate Private Equity Fund V LP (the "Fund" or the "Partnership"), hereby gives notice, pursuant to Section [] of the Partnership Agreement, that a distribution will be made to the Limited Partners of the Partnership on the date specified below. This Distribution Notice is being delivered to each Limited Partner in accordance with the notice provisions set forth in Section [] of the Partnership Agreement.

The distribution described herein is being made in accordance with the European-style (whole-fund) distribution waterfall set forth in Article [__] of the Partnership Agreement. As the Limited Partners are aware, under the European-style waterfall structure, distributions are calculated on a cumulative, whole-fund basis rather than on a deal-by-deal basis, such that the General Partner is not entitled to receive Carried Interest until all Capital Contributions (including those attributable to Management Fees, Organizational Expenses, and Fund Expenses) have been returned to the Partners and the Preferred Return has been paid in full on all such Capital Contributions.

Distribution Date: [__], 20[]

Record Date: [__], 20[]

The Record Date is the date as of which the identity and Sharing Percentages of the Limited Partners shall be determined for purposes of this distribution. Only those persons who are admitted as Limited Partners of the Partnership as of the Record Date, and whose interests have not been transferred, assigned, or withdrawn as of such date, shall be entitled to receive their proportionate share of the distribution described herein.

Section 2 — Aggregate Distribution Amount

The total aggregate amount to be distributed to all Partners of the Partnership pursuant to this Distribution Notice is:

$[________]

The source of this distribution is as follows (each applicable source is indicated):

Proceeds from the disposition (in whole or in part) of the Portfolio Investment in [Portfolio Company Name]

Dividend, interest, or other current income received from Portfolio Investment(s)

Refinancing proceeds from the Portfolio Investment in [Portfolio Company Name]

Other: [describe]

The aggregate distribution amount set forth above represents the net amount available for distribution to the Partners after giving effect to: (i) all Fund-level expenses (including Management Fees, Organizational Expenses, and other Fund Expenses) accrued or payable as of the date hereof; (ii) amounts applied to the repayment (whether mandatory or voluntary) of outstanding borrowings under the subscription credit facility maintained by the Partnership with Ashford National Bank, N.A., including any accrued interest, fees, and other amounts due and payable thereunder; (iii) reserves established or maintained by the General Partner in its reasonable discretion in accordance with Section [__] of the Partnership Agreement, as further described in Section 7 of this Distribution Notice; and (iv) applicable withholding taxes, including U.S. federal, state, and local withholding taxes imposed on distributions to non-U.S. Limited Partners as further described in Section 5 below.

The General Partner has determined, in its reasonable judgment and in consultation with the Fund's independent auditors and legal counsel, that the foregoing amount is available for distribution in accordance with the terms of the Partnership Agreement and the Fund's organizational documents, and that such distribution will not impair the ability of the Partnership to satisfy its known or reasonably anticipated obligations, liabilities, and commitments.

Section 3 — Waterfall Tier Allocation and Characterization

The distribution described in this Distribution Notice is allocated among the following tiers of the European-style whole-fund distribution waterfall, as set forth in Section [__] of the Partnership Agreement. The allocation set forth below reflects the cumulative status of all distributions made by the Partnership to date, including the distribution contemplated by this Distribution Notice. For the avoidance of doubt, the waterfall allocation is calculated on a cumulative, whole-fund basis, taking into account all prior Capital Contributions, all prior distributions, and all accrued but unpaid Preferred Return.

Tier 1 — Return of Contributed Capital

Amount allocated to Tier 1: $[________]

Amounts allocated to Tier 1 represent the return to each Partner of an amount equal to such Partner's aggregate Capital Contributions (including Capital Contributions made by such Partner that were applied by the Partnership to pay Management Fees, Organizational Expenses, and Fund Expenses), to the extent such Capital Contributions have not been previously returned through prior distributions. Distributions under this Tier 1 are allocated among the Partners in proportion to their respective unreturned Capital Contributions.

Note to Limited Partners: Amounts distributed under this Tier 1 constitute a return of capital and are not treated as income or gain to the Limited Partners for purposes of the Partnership Agreement waterfall. The federal income tax characterization of such amounts may differ from the waterfall characterization and will be reflected on each Limited Partner's Schedule K-1 for the applicable fiscal year, as further described in Section 5 of this Distribution Notice.

Tier 2 — Preferred Return

Amount allocated to Tier 2: $[________]

Amounts allocated to Tier 2 represent the payment to each Partner of the Preferred Return, being a cumulative, compounded return at the rate of eight percent (8%) per annum on such Partner's unreturned Capital Contributions, to the extent the Preferred Return has not been previously distributed. The Preferred Return accrues from the date on which each Capital Contribution is funded by such Partner and is computed on the basis of unreturned capital (i.e., Capital Contributions reduced by prior Tier 1 distributions attributable thereto). The Preferred Return is compounded annually on each December 31 (the fiscal year end of the Partnership) and on the date of each distribution. Distributions under this Tier 2 are allocated among the Partners in proportion to their respective accrued and unpaid Preferred Return.

Note to Limited Partners: The Preferred Return is calculated on an aggregate, whole-fund basis, taking into account all Capital Contributions made by each Partner over the life of the Fund and all prior distributions of Preferred Return. The General Partner has computed the Preferred Return in accordance with the methodology set forth in the Partnership Agreement, and such calculation has been reviewed by Pinnacle Fund Services LLC, the Fund Administrator.

Tier 3 — GP Catch-Up

Amount allocated to Tier 3: $[________]

Amounts allocated to Tier 3 represent the "catch-up" allocation designed to bring the General Partner's cumulative share of net profits to twenty percent (20%) of all cumulative net profits distributed by the Partnership. Distributions under Tier 3 are allocated eighty percent (80%) to the General Partner (and through the General Partner to Harrowgate Capital Partners LLC, as its sole member) and twenty percent (20%) to the Limited Partners (pro rata based on their respective Sharing Percentages), until the General Partner has received, on a cumulative basis, aggregate distributions equal to twenty percent (20%) of all cumulative net profits (defined as the sum of cumulative Tier 2, Tier 3, and Tier 4 distributions).

Note to Limited Partners: The 80/20 catch-up allocation structure ensures that, once the eight percent (8%) Preferred Return has been fully satisfied, the General Partner receives its twenty percent (20%) Carried Interest on all cumulative profits of the Partnership. The catch-up is calculated on a whole-fund basis, taking into account all prior Tier 2, Tier 3, and Tier 4 distributions. If the catch-up has been fully satisfied by prior distributions, no further amounts will be allocated to this Tier 3.

Tier 4 — Carried Interest / Residual Split

Amount allocated to Tier 4: $[________]

Amounts allocated to Tier 4 represent the residual profit-sharing allocation after the Preferred Return has been paid in full and the GP Catch-Up has been fully satisfied. Distributions under Tier 4 are allocated eighty percent (80%) to the Limited Partners (pro rata based on their respective Sharing Percentages) and twenty percent (20%) to the General Partner as Carried Interest.

Note to Limited Partners: Distributions in this Tier 4 represent the standard profit-sharing ratio applicable to the Fund after the Preferred Return hurdle has been cleared and the General Partner has been brought to its full twenty percent (20%) participation in cumulative net profits through the Tier 3 catch-up mechanism. Carried Interest distributions to the General Partner remain subject to the clawback obligation described in Section 8 of this Distribution Notice and Section [__] of the Partnership Agreement.

Section 4 — Individual Limited Partner Allocation

Each Limited Partner's individual share of the distribution described in this Distribution Notice is set forth on Schedule A attached hereto. The allocation to each Limited Partner reflects such Partner's pro rata Sharing Percentage (as defined in the Partnership Agreement) and the waterfall allocation described in Section 3 above.

Schedule A sets forth, for each Limited Partner, the following information:

(a) the name of the Limited Partner;

(b) the Capital Commitment of such Limited Partner;

(d) the total distribution amount payable to such Limited Partner pursuant to this Distribution Notice;

(e) the breakdown of such distribution amount by waterfall tier, including:

(i) Return of Capital (Tier 1);

(ii) Preferred Return (Tier 2);

(iii) GP Catch-Up Share (Tier 3); and

(iv) Profit Share (Tier 4);

(f) aggregate cumulative distributions to such Limited Partner to date (inclusive of this distribution); and

(g) unreturned Capital Contributions of such Limited Partner after giving effect to this distribution.

Each Limited Partner should review the information set forth on its individual Schedule A and promptly notify the General Partner and the Fund Administrator (Pinnacle Fund Services LLC) if such Limited Partner believes that any information set forth therein is inaccurate or incomplete. Any questions regarding the individual allocation should be directed to Jonathan P. Birch, Partner, Head of Operations & CFO, at the address set forth in Section 6 below.

Section 5 — Tax Characterization

The tax characterization of this distribution — as between return of capital, ordinary income, short-term capital gain, long-term capital gain, qualified dividend income, or other categories — will be reflected on each Limited Partner's Schedule K-1 (IRS Form 1065) for the applicable fiscal year (calendar year ending December 31). The Partnership's tax returns are prepared by Penrose Firth CPAs LLP, the Fund's independent tax advisor, and Schedule K-1s are typically distributed to Limited Partners on or before [March 15 / September 15 (if on extension)] of the year following the close of the applicable fiscal year.

Limited Partners should note that the characterization set forth in Section 3 above is for Partnership Agreement waterfall purposes only and may differ materially from the federal income tax characterization of the distribution. The waterfall allocation among Tiers 1 through 4 reflects the economic distribution priorities as set forth in the Partnership Agreement, whereas the tax characterization is determined in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, and other applicable tax guidance. By way of example, amounts characterized as "Return of Capital" under Tier 1 of the waterfall may nonetheless be treated as taxable income for federal income tax purposes if the Partnership has allocated taxable income to the Limited Partners in prior fiscal years.

Limited Partners are further reminded that amounts characterized as Carried Interest (whether allocated under Tier 3 or Tier 4 of the waterfall) are subject to Section 1061 of the Code, which was enacted as part of the Tax Cuts and Jobs Act of 2017 and imposes a three-year holding period requirement for long-term capital gain treatment on net capital gains with respect to "applicable partnership interests" (as defined in Section 1061(c) of the Code). Under Section 1061, net capital gains allocable to applicable partnership interests that would otherwise be treated as long-term capital gain but for which the underlying assets have been held for three years or less are recharacterized as short-term capital gain. The General Partner will provide relevant information regarding the application of Section 1061 on the Schedule K-1s issued to the Partners.

Each Limited Partner should consult its own tax advisors regarding the federal, state, local, and foreign tax consequences of the distribution described herein, including the applicability and effect of Section 1061 of the Code, and should not rely on the characterization set forth in this Distribution Notice for tax planning or reporting purposes.

Withholding on Distributions to Non-U.S. Limited Partners. The General Partner will withhold from distributions to non-U.S. Limited Partners any amounts required to be withheld under applicable U.S. federal, state, or local tax withholding rules, including, without limitation: (i) withholding on effectively connected income ("ECI") pursuant to Section 1446 of the Code; and (ii) withholding pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") on amounts attributable to gains from the disposition of U.S. real property interests, if applicable. Any amounts so withheld shall be treated as having been distributed to the applicable Limited Partner for all purposes under the Partnership Agreement, including for purposes of the waterfall allocation described in Section 3 and the cumulative distribution calculations set forth on Schedule A.

Section 6 — Wire Transfer Instructions

Distribution payments will be made by wire transfer in immediately available funds, denominated in United States dollars, to the bank account designated by each Limited Partner in its Subscription Agreement (or Investor Questionnaire submitted in connection therewith) or as subsequently updated by such Limited Partner in writing to the General Partner and the Fund Administrator.

Wire transfers will be initiated by Ridgeway Trust Company, in its capacity as Custodian of the Fund, upon instruction from the General Partner, on or about the Distribution Date. The General Partner expects that wire transfers will be received by Limited Partners within one (1) to two (2) business days following the Distribution Date, depending on the receiving bank and applicable clearinghouse processing times. The General Partner shall not be responsible for delays in receipt of funds caused by intermediary banks, receiving banks, or applicable clearinghouse systems.

Any Limited Partner that has changed its banking information since its last distribution from the Partnership (or since the date of its Subscription Agreement, in the case of Limited Partners that have not yet received a distribution) is requested to notify both the General Partner and Pinnacle Fund Services LLC (the Fund Administrator) in writing no later than five (5) business days prior to the Distribution Date. Failure to provide updated wire instructions in a timely manner may result in a delay in the receipt of the distribution.

Updated wire transfer instructions, as well as any questions or inquiries regarding the distribution payment process, should be directed to:

Fund Administrator: Pinnacle Fund Services LLC

Attn: David L. Prentiss, Client Relationship Director

100 Summer Street, Suite 2400 Boston, MA 02110 Telephone: (617) [_]-[__]

Email: [dprentiss@pinnaclefundservices.com]

General Partner: Harrowgate Fund V GP LLC

Attn: Jonathan P. Birch, Partner, Head of Operations & CFO

1200 Concord Pike, Suite 600 Wilmington, DE 19803 Telephone: (302) [_]-[__]

Email: [jbirch@harrowgatecapital.com]

For the avoidance of doubt, the General Partner and the Fund Administrator will only accept updated wire transfer instructions that are submitted in writing (including by email from an authorized signatory of the Limited Partner) and are accompanied by appropriate verification. Verbal instructions for changes to wire transfer information will not be accepted.

Section 7 — Reserves and Holdbacks

The General Partner has established reserves in the aggregate amount of $[________] from the gross proceeds otherwise available for distribution to the Partners. Such reserves have been established by the General Partner in its reasonable discretion, in accordance with Section [__] of the Partnership Agreement, for the following purposes (each applicable purpose is indicated):

Pending or contingent Fund expenses and liabilities, including accrued but unpaid Management Fees, legal fees, accounting fees, and other Fund Expenses reasonably anticipated to be incurred during the remainder of the Fund's term

Potential indemnification obligations of the Partnership arising under the Partnership Agreement or any Portfolio Investment agreement, including indemnification obligations in favor of the General Partner, its affiliates, and their respective officers, directors, employees, and agents

Escrow or holdback amounts required under the definitive disposition agreement (purchase and sale agreement, merger agreement, or similar agreement) for the Portfolio Investment in [Portfolio Company Name], including amounts held in escrow to satisfy post-closing purchase price adjustments, representations and warranties indemnification claims, and similar contingent obligations

Other: [describe]

Reserved amounts will be distributed to the Limited Partners when released or no longer required, in accordance with the waterfall provisions of Article [__] of the Partnership Agreement. The General Partner will provide written notice to the Limited Partners in connection with any distribution of previously reserved amounts. The General Partner will review the adequacy and continued necessity of all reserves on a periodic basis and will release reserves to the extent they are no longer required for the purposes described above. Nothing in this Section 7 shall be construed to create any obligation on the part of the General Partner to release reserves at any particular time or to limit the General Partner's discretion to establish additional reserves in the future in accordance with the Partnership Agreement.

Section 8 — Clawback Notice

The General Partner notes that all Carried Interest distributions made to date by the Partnership to the General Partner (including any Carried Interest distributions made pursuant to this Distribution Notice, if applicable) remain subject to the clawback obligation set forth in Section [__] of the Partnership Agreement.

The clawback obligation requires the General Partner to return to the Partnership, upon the final liquidation and winding up of the Partnership (or at such earlier time as may be specified in the Partnership Agreement), any excess Carried Interest distributions previously received by the General Partner (net of income taxes actually paid or payable by the General Partner and its members that are attributable to such excess Carried Interest distributions, calculated at the highest applicable combined federal, state, and local marginal tax rate), such that, on a cumulative basis and after giving effect to such return, the General Partner has not received more than twenty percent (20%) of cumulative net profits of the Partnership after all Limited Partners have received: (i) a full return of their aggregate Capital Contributions; and (ii) the Preferred Return of eight percent (8%) per annum compounded annually on such Capital Contributions.

The clawback obligation is guaranteed on a several (not joint) basis by the following individuals, in proportion to their respective carried interest allocations:

• Marcus J. Harrowgate, Managing Partner

• Diana R. Castellano, Partner

• Jonathan P. Birch, Partner, Head of Operations & CFO

The individual guaranty obligations of the foregoing persons are set forth in the Clawback Guaranty Agreements executed by each such individual in connection with the closing of the Partnership. Each guarantor's maximum liability under its guaranty is limited to the after-tax amount of Carried Interest distributions received by such guarantor (directly or indirectly through the General Partner and Harrowgate Capital Partners LLC). The Limited Partners' rights under the clawback obligation and the related individual guarantees are as set forth in the Partnership Agreement and the applicable Clawback Guaranty Agreements, and nothing in this Distribution Notice is intended to modify, supplement, or limit such rights.

Section 9 — Partnership Agreement Governs

This Distribution Notice is provided for informational purposes only and is subject in all respects to the terms, conditions, and provisions of the Partnership Agreement. In the event of any conflict or inconsistency between this Distribution Notice and the Partnership Agreement, the terms of the Partnership Agreement shall control and govern in all respects. No provision of this Distribution Notice shall be construed to amend, modify, supplement, or waive any provision of the Partnership Agreement or any rights or obligations of any Partner thereunder.

This Distribution Notice and any disputes arising hereunder or in connection herewith shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law that would result in the application of the laws of any other jurisdiction.

Any action, suit, or proceeding arising out of or in connection with this Distribution Notice shall be brought exclusively in the Delaware Court of Chancery (or, if the Delaware Court of Chancery lacks subject matter jurisdiction, in the Superior Court of the State of Delaware, New Castle County), and each Partner hereby irrevocably consents and submits to the exclusive jurisdiction of such courts for purposes of any such action, suit, or proceeding.

Section 10 — Confidentiality

This Distribution Notice, and the information contained herein (including, without limitation, the amounts, allocations, and other financial information set forth on Schedule A and any attachments or exhibits hereto), constitutes confidential and proprietary information of the Partnership and is subject to the confidentiality provisions set forth in Section [__] of the Partnership Agreement.

Each Limited Partner is reminded of its obligations under the Partnership Agreement not to distribute, disclose, reproduce, or otherwise make available this Distribution Notice or any information contained herein to any third party, except as expressly permitted under the Partnership Agreement or as required by applicable law or regulation. Limited Partners that are subject to the Freedom of Information Act ("FOIA"), state public records laws, or similar open records obligations are referred to the provisions of their respective Side Letters (if any) addressing confidential treatment requests with respect to Partnership information. Any Limited Partner that receives a request or demand for disclosure of information contained in this Distribution Notice pursuant to FOIA, subpoena, court order, or similar legal process is requested to promptly notify the General Partner prior to making any such disclosure so that the General Partner may take appropriate steps to protect the confidentiality of Partnership information.

[Signature Page Follows]

SIGNATURE PAGE TO DISTRIBUTION NOTICE NO. [__] HARROWGATE PRIVATE EQUITY FUND V LP

IN WITNESS WHEREOF, the General Partner has caused this Distribution Notice to be executed and delivered as of the date first set forth above.

HARROWGATE FUND V GP LLC

By: Harrowgate Capital Partners LLC, its Sole Member

By: ________

Name: Marcus J. Harrowgate

Title: Managing Partner

Date: [__], 20[]

SCHEDULE A

Individual Limited Partner Distribution Allocations

Distribution Notice No. [__] — Harrowgate Private Equity Fund V LP

Distribution Date: [________], 20[__]

Note: This Schedule A is specific to each Limited Partner. Each Limited Partner will receive a copy of this Distribution Notice reflecting only such Limited Partner's individual allocation. The General Partner retains a master Schedule A reflecting the allocations to all Partners, which is maintained on a confidential basis and is not distributed to individual Limited Partners (except to the extent required by the Partnership Agreement or applicable law).

EXHIBIT B

Wire Transfer Information

(For Internal Use Only)

CONFIDENTIAL — NOT FOR DISTRIBUTION TO LIMITED PARTNERS. This Exhibit B is for use by the General Partner and Ridgeway Trust Company (in its capacity as Custodian) only, and shall not be distributed to, or shared with, any Limited Partner or any other third party. Wire transfer instructions contained herein are maintained on file by Pinnacle Fund Services LLC, the Fund Administrator, and are verified by the Fund Administrator prior to each distribution in accordance with the Fund's anti-fraud and operational controls.

Wire instructions are maintained on file by Pinnacle Fund Services LLC and verified prior to each distribution. Any changes to wire instructions must be received by the Fund Administrator in writing no later than five (5) business days prior to the applicable Distribution Date, and must be confirmed by callback or other verification procedures established by the Fund Administrator in accordance with the Fund's operational controls. The General Partner and the Fund Administrator reserve the right to delay any distribution payment pending satisfactory verification of updated wire transfer instructions.

[End of Distribution Notice]

Limited Partner Name	Capital Commitment ($)	Sharing Percentage (%)	Total Distribution ($)	Tier 1 — Return of Capital ($)	Tier 2 — Preferred Return ($)	Tier 3 — GP Catch-Up ($)	Tier 4 — Profit Share ($)	Cumulative Distributions to Date ($)	Unreturned Capital Contributions After Distribution ($)
[Limited Partner 1]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 2]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 3]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 4]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 5]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
[Additional Limited Partners]	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
Harrowgate Fund V GP LLC (General Partner)	[__]	[__]%	[__]	[__]	[__]	[__]	[__]	[__]	[__]
TOTALS	[________]	100.00%	[________]	[________]	[________]	[________]	[________]	[________]	[________]
Limited Partner Name	Bank Name	ABA / SWIFT Code	Account Number	Account Name	Reference / Special Instructions
[Limited Partner 1]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 2]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 3]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 4]	[__]	[__]	[__]	[__]	[__]
[Limited Partner 5]	[__]	[__]	[__]	[__]	[__]
[Additional Limited Partners]	[__]	[__]	[__]	[__]	[__]

HARROWGATE FUND V GP LLC 1200 Concord Pike, Suite 600 Wilmington, DE 19803
In its capacity as General Partner of Harrowgate Private Equity Fund V LP
[__], 20[]
To: Each Limited Partner of Harrowgate Private Equity Fund V LP (as set forth on Schedule A hereto)
Re: Distribution Notice No. [__] — Harrowgate Private Equity Fund V LP
Reference is made to the Agreement of Limited Partnership of Harrowgate Private Equity Fund V LP, dated as of [__], 2025 (as amended, restated, supplemented, or otherwise modified from time to time, the "Partnership Agreement"), governed by the laws of the State of Delaware. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Partnership Agreement.
Section 1 — Notice of Distribution
Harrowgate Fund V GP LLC (the "General Partner"), in its capacity as general partner of Harrowgate Private Equity Fund V LP (the "Fund" or the "Partnership"), hereby gives notice, pursuant to Section [] of the Partnership Agreement, that a distribution will be made to the Limited Partners of the Partnership on the date specified below. This Distribution Notice is being delivered to each Limited Partner in accordance with the notice provisions set forth in Section [] of the Partnership Agreement.
The distribution described herein is being made in accordance with the European-style (whole-fund) distribution waterfall set forth in Article [__] of the Partnership Agreement. As the Limited Partners are aware, under the European-style waterfall structure, distributions are calculated on a cumulative, whole-fund basis rather than on a deal-by-deal basis, such that the General Partner is not entitled to receive Carried Interest until all Capital Contributions (including those attributable to Management Fees, Organizational Expenses, and Fund Expenses) have been returned to the Partners and the Preferred Return has been paid in full on all such Capital Contributions.
Distribution Date: [__], 20[]
Record Date: [__], 20[]
The Record Date is the date as of which the identity and Sharing Percentages of the Limited Partners shall be determined for purposes of this distribution. Only those persons who are admitted as Limited Partners of the Partnership as of the Record Date, and whose interests have not been transferred, assigned, or withdrawn as of such date, shall be entitled to receive their proportionate share of the distribution described herein.
Section 2 — Aggregate Distribution Amount
The total aggregate amount to be distributed to all Partners of the Partnership pursuant to this Distribution Notice is:
$[________]
The source of this distribution is as follows (each applicable source is indicated):
Proceeds from the disposition (in whole or in part) of the Portfolio Investment in [Portfolio Company Name]
Dividend, interest, or other current income received from Portfolio Investment(s)
Refinancing proceeds from the Portfolio Investment in [Portfolio Company Name]
Other: [describe]
The aggregate distribution amount set forth above represents the net amount available for distribution to the Partners after giving effect to: (i) all Fund-level expenses (including Management Fees, Organizational Expenses, and other Fund Expenses) accrued or payable as of the date hereof; (ii) amounts applied to the repayment (whether mandatory or voluntary) of outstanding borrowings under the subscription credit facility maintained by the Partnership with Ashford National Bank, N.A., including any accrued interest, fees, and other amounts due and payable thereunder; (iii) reserves established or maintained by the General Partner in its reasonable discretion in accordance with Section [__] of the Partnership Agreement, as further described in Section 7 of this Distribution Notice; and (iv) applicable withholding taxes, including U.S. federal, state, and local withholding taxes imposed on distributions to non-U.S. Limited Partners as further described in Section 5 below.
The General Partner has determined, in its reasonable judgment and in consultation with the Fund's independent auditors and legal counsel, that the foregoing amount is available for distribution in accordance with the terms of the Partnership Agreement and the Fund's organizational documents, and that such distribution will not impair the ability of the Partnership to satisfy its known or reasonably anticipated obligations, liabilities, and commitments.
Section 3 — Waterfall Tier Allocation and Characterization
The distribution described in this Distribution Notice is allocated among the following tiers of the European-style whole-fund distribution waterfall, as set forth in Section [__] of the Partnership Agreement. The allocation set forth below reflects the cumulative status of all distributions made by the Partnership to date, including the distribution contemplated by this Distribution Notice. For the avoidance of doubt, the waterfall allocation is calculated on a cumulative, whole-fund basis, taking into account all prior Capital Contributions, all prior distributions, and all accrued but unpaid Preferred Return.
Tier 1 — Return of Contributed Capital
Amount allocated to Tier 1: $[________]
Amounts allocated to Tier 1 represent the return to each Partner of an amount equal to such Partner's aggregate Capital Contributions (including Capital Contributions made by such Partner that were applied by the Partnership to pay Management Fees, Organizational Expenses, and Fund Expenses), to the extent such Capital Contributions have not been previously returned through prior distributions. Distributions under this Tier 1 are allocated among the Partners in proportion to their respective unreturned Capital Contributions.
Note to Limited Partners: Amounts distributed under this Tier 1 constitute a return of capital and are not treated as income or gain to the Limited Partners for purposes of the Partnership Agreement waterfall. The federal income tax characterization of such amounts may differ from the waterfall characterization and will be reflected on each Limited Partner's Schedule K-1 for the applicable fiscal year, as further described in Section 5 of this Distribution Notice.
Tier 2 — Preferred Return
Amount allocated to Tier 2: $[________]
Amounts allocated to Tier 2 represent the payment to each Partner of the Preferred Return, being a cumulative, compounded return at the rate of eight percent (8%) per annum on such Partner's unreturned Capital Contributions, to the extent the Preferred Return has not been previously distributed. The Preferred Return accrues from the date on which each Capital Contribution is funded by such Partner and is computed on the basis of unreturned capital (i.e., Capital Contributions reduced by prior Tier 1 distributions attributable thereto). The Preferred Return is compounded annually on each December 31 (the fiscal year end of the Partnership) and on the date of each distribution. Distributions under this Tier 2 are allocated among the Partners in proportion to their respective accrued and unpaid Preferred Return.
Note to Limited Partners: The Preferred Return is calculated on an aggregate, whole-fund basis, taking into account all Capital Contributions made by each Partner over the life of the Fund and all prior distributions of Preferred Return. The General Partner has computed the Preferred Return in accordance with the methodology set forth in the Partnership Agreement, and such calculation has been reviewed by Pinnacle Fund Services LLC, the Fund Administrator.
Tier 3 — GP Catch-Up
Amount allocated to Tier 3: $[________]
Amounts allocated to Tier 3 represent the "catch-up" allocation designed to bring the General Partner's cumulative share of net profits to twenty percent (20%) of all cumulative net profits distributed by the Partnership. Distributions under Tier 3 are allocated eighty percent (80%) to the General Partner (and through the General Partner to Harrowgate Capital Partners LLC, as its sole member) and twenty percent (20%) to the Limited Partners (pro rata based on their respective Sharing Percentages), until the General Partner has received, on a cumulative basis, aggregate distributions equal to twenty percent (20%) of all cumulative net profits (defined as the sum of cumulative Tier 2, Tier 3, and Tier 4 distributions).
Note to Limited Partners: The 80/20 catch-up allocation structure ensures that, once the eight percent (8%) Preferred Return has been fully satisfied, the General Partner receives its twenty percent (20%) Carried Interest on all cumulative profits of the Partnership. The catch-up is calculated on a whole-fund basis, taking into account all prior Tier 2, Tier 3, and Tier 4 distributions. If the catch-up has been fully satisfied by prior distributions, no further amounts will be allocated to this Tier 3.
Tier 4 — Carried Interest / Residual Split
Amount allocated to Tier 4: $[________]
Amounts allocated to Tier 4 represent the residual profit-sharing allocation after the Preferred Return has been paid in full and the GP Catch-Up has been fully satisfied. Distributions under Tier 4 are allocated eighty percent (80%) to the Limited Partners (pro rata based on their respective Sharing Percentages) and twenty percent (20%) to the General Partner as Carried Interest.
Note to Limited Partners: Distributions in this Tier 4 represent the standard profit-sharing ratio applicable to the Fund after the Preferred Return hurdle has been cleared and the General Partner has been brought to its full twenty percent (20%) participation in cumulative net profits through the Tier 3 catch-up mechanism. Carried Interest distributions to the General Partner remain subject to the clawback obligation described in Section 8 of this Distribution Notice and Section [__] of the Partnership Agreement.
Section 4 — Individual Limited Partner Allocation
Each Limited Partner's individual share of the distribution described in this Distribution Notice is set forth on Schedule A attached hereto. The allocation to each Limited Partner reflects such Partner's pro rata Sharing Percentage (as defined in the Partnership Agreement) and the waterfall allocation described in Section 3 above.
Schedule A sets forth, for each Limited Partner, the following information:
(a) the name of the Limited Partner;
(b) the Capital Commitment of such Limited Partner;
(c) the Sharing Percentage of such Limited Partner;
(d) the total distribution amount payable to such Limited Partner pursuant to this Distribution Notice;
(e) the breakdown of such distribution amount by waterfall tier, including:
(i) Return of Capital (Tier 1);
(ii) Preferred Return (Tier 2);
(iii) GP Catch-Up Share (Tier 3); and
(iv) Profit Share (Tier 4);
(f) aggregate cumulative distributions to such Limited Partner to date (inclusive of this distribution); and
(g) unreturned Capital Contributions of such Limited Partner after giving effect to this distribution.
Each Limited Partner should review the information set forth on its individual Schedule A and promptly notify the General Partner and the Fund Administrator (Pinnacle Fund Services LLC) if such Limited Partner believes that any information set forth therein is inaccurate or incomplete. Any questions regarding the individual allocation should be directed to Jonathan P. Birch, Partner, Head of Operations & CFO, at the address set forth in Section 6 below.
Section 5 — Tax Characterization
The tax characterization of this distribution — as between return of capital, ordinary income, short-term capital gain, long-term capital gain, qualified dividend income, or other categories — will be reflected on each Limited Partner's Schedule K-1 (IRS Form 1065) for the applicable fiscal year (calendar year ending December 31). The Partnership's tax returns are prepared by Penrose Firth CPAs LLP, the Fund's independent tax advisor, and Schedule K-1s are typically distributed to Limited Partners on or before [March 15 / September 15 (if on extension)] of the year following the close of the applicable fiscal year.
Limited Partners should note that the characterization set forth in Section 3 above is for Partnership Agreement waterfall purposes only and may differ materially from the federal income tax characterization of the distribution. The waterfall allocation among Tiers 1 through 4 reflects the economic distribution priorities as set forth in the Partnership Agreement, whereas the tax characterization is determined in accordance with the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, and other applicable tax guidance. By way of example, amounts characterized as "Return of Capital" under Tier 1 of the waterfall may nonetheless be treated as taxable income for federal income tax purposes if the Partnership has allocated taxable income to the Limited Partners in prior fiscal years.
Limited Partners are further reminded that amounts characterized as Carried Interest (whether allocated under Tier 3 or Tier 4 of the waterfall) are subject to Section 1061 of the Code, which was enacted as part of the Tax Cuts and Jobs Act of 2017 and imposes a three-year holding period requirement for long-term capital gain treatment on net capital gains with respect to "applicable partnership interests" (as defined in Section 1061(c) of the Code). Under Section 1061, net capital gains allocable to applicable partnership interests that would otherwise be treated as long-term capital gain but for which the underlying assets have been held for three years or less are recharacterized as short-term capital gain. The General Partner will provide relevant information regarding the application of Section 1061 on the Schedule K-1s issued to the Partners.
Each Limited Partner should consult its own tax advisors regarding the federal, state, local, and foreign tax consequences of the distribution described herein, including the applicability and effect of Section 1061 of the Code, and should not rely on the characterization set forth in this Distribution Notice for tax planning or reporting purposes.
Withholding on Distributions to Non-U.S. Limited Partners. The General Partner will withhold from distributions to non-U.S. Limited Partners any amounts required to be withheld under applicable U.S. federal, state, or local tax withholding rules, including, without limitation: (i) withholding on effectively connected income ("ECI") pursuant to Section 1446 of the Code; and (ii) withholding pursuant to the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA") on amounts attributable to gains from the disposition of U.S. real property interests, if applicable. Any amounts so withheld shall be treated as having been distributed to the applicable Limited Partner for all purposes under the Partnership Agreement, including for purposes of the waterfall allocation described in Section 3 and the cumulative distribution calculations set forth on Schedule A.
Section 6 — Wire Transfer Instructions
Distribution payments will be made by wire transfer in immediately available funds, denominated in United States dollars, to the bank account designated by each Limited Partner in its Subscription Agreement (or Investor Questionnaire submitted in connection therewith) or as subsequently updated by such Limited Partner in writing to the General Partner and the Fund Administrator.
Wire transfers will be initiated by Ridgeway Trust Company, in its capacity as Custodian of the Fund, upon instruction from the General Partner, on or about the Distribution Date. The General Partner expects that wire transfers will be received by Limited Partners within one (1) to two (2) business days following the Distribution Date, depending on the receiving bank and applicable clearinghouse processing times. The General Partner shall not be responsible for delays in receipt of funds caused by intermediary banks, receiving banks, or applicable clearinghouse systems.
Any Limited Partner that has changed its banking information since its last distribution from the Partnership (or since the date of its Subscription Agreement, in the case of Limited Partners that have not yet received a distribution) is requested to notify both the General Partner and Pinnacle Fund Services LLC (the Fund Administrator) in writing no later than five (5) business days prior to the Distribution Date. Failure to provide updated wire instructions in a timely manner may result in a delay in the receipt of the distribution.
Updated wire transfer instructions, as well as any questions or inquiries regarding the distribution payment process, should be directed to:
Fund Administrator: Pinnacle Fund Services LLC
Attn: David L. Prentiss, Client Relationship Director
100 Summer Street, Suite 2400 Boston, MA 02110 Telephone: (617) [_]-[__]
Email: [dprentiss@pinnaclefundservices.com]
General Partner: Harrowgate Fund V GP LLC
Attn: Jonathan P. Birch, Partner, Head of Operations & CFO
1200 Concord Pike, Suite 600 Wilmington, DE 19803 Telephone: (302) [_]-[__]
Email: [jbirch@harrowgatecapital.com]
For the avoidance of doubt, the General Partner and the Fund Administrator will only accept updated wire transfer instructions that are submitted in writing (including by email from an authorized signatory of the Limited Partner) and are accompanied by appropriate verification. Verbal instructions for changes to wire transfer information will not be accepted.
Section 7 — Reserves and Holdbacks
The General Partner has established reserves in the aggregate amount of $[________] from the gross proceeds otherwise available for distribution to the Partners. Such reserves have been established by the General Partner in its reasonable discretion, in accordance with Section [__] of the Partnership Agreement, for the following purposes (each applicable purpose is indicated):
Pending or contingent Fund expenses and liabilities, including accrued but unpaid Management Fees, legal fees, accounting fees, and other Fund Expenses reasonably anticipated to be incurred during the remainder of the Fund's term
Potential indemnification obligations of the Partnership arising under the Partnership Agreement or any Portfolio Investment agreement, including indemnification obligations in favor of the General Partner, its affiliates, and their respective officers, directors, employees, and agents
Escrow or holdback amounts required under the definitive disposition agreement (purchase and sale agreement, merger agreement, or similar agreement) for the Portfolio Investment in [Portfolio Company Name], including amounts held in escrow to satisfy post-closing purchase price adjustments, representations and warranties indemnification claims, and similar contingent obligations
Other: [describe]
Reserved amounts will be distributed to the Limited Partners when released or no longer required, in accordance with the waterfall provisions of Article [__] of the Partnership Agreement. The General Partner will provide written notice to the Limited Partners in connection with any distribution of previously reserved amounts. The General Partner will review the adequacy and continued necessity of all reserves on a periodic basis and will release reserves to the extent they are no longer required for the purposes described above. Nothing in this Section 7 shall be construed to create any obligation on the part of the General Partner to release reserves at any particular time or to limit the General Partner's discretion to establish additional reserves in the future in accordance with the Partnership Agreement.
Section 8 — Clawback Notice
The General Partner notes that all Carried Interest distributions made to date by the Partnership to the General Partner (including any Carried Interest distributions made pursuant to this Distribution Notice, if applicable) remain subject to the clawback obligation set forth in Section [__] of the Partnership Agreement.
The clawback obligation requires the General Partner to return to the Partnership, upon the final liquidation and winding up of the Partnership (or at such earlier time as may be specified in the Partnership Agreement), any excess Carried Interest distributions previously received by the General Partner (net of income taxes actually paid or payable by the General Partner and its members that are attributable to such excess Carried Interest distributions, calculated at the highest applicable combined federal, state, and local marginal tax rate), such that, on a cumulative basis and after giving effect to such return, the General Partner has not received more than twenty percent (20%) of cumulative net profits of the Partnership after all Limited Partners have received: (i) a full return of their aggregate Capital Contributions; and (ii) the Preferred Return of eight percent (8%) per annum compounded annually on such Capital Contributions.
The clawback obligation is guaranteed on a several (not joint) basis by the following individuals, in proportion to their respective carried interest allocations:
•  Marcus J. Harrowgate, Managing Partner
•  Diana R. Castellano, Partner
•  Jonathan P. Birch, Partner, Head of Operations & CFO
The individual guaranty obligations of the foregoing persons are set forth in the Clawback Guaranty Agreements executed by each such individual in connection with the closing of the Partnership. Each guarantor's maximum liability under its guaranty is limited to the after-tax amount of Carried Interest distributions received by such guarantor (directly or indirectly through the General Partner and Harrowgate Capital Partners LLC). The Limited Partners' rights under the clawback obligation and the related individual guarantees are as set forth in the Partnership Agreement and the applicable Clawback Guaranty Agreements, and nothing in this Distribution Notice is intended to modify, supplement, or limit such rights.
Section 9 — Partnership Agreement Governs
This Distribution Notice is provided for informational purposes only and is subject in all respects to the terms, conditions, and provisions of the Partnership Agreement. In the event of any conflict or inconsistency between this Distribution Notice and the Partnership Agreement, the terms of the Partnership Agreement shall control and govern in all respects. No provision of this Distribution Notice shall be construed to amend, modify, supplement, or waive any provision of the Partnership Agreement or any rights or obligations of any Partner thereunder.
This Distribution Notice and any disputes arising hereunder or in connection herewith shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflicts of law that would result in the application of the laws of any other jurisdiction.
Any action, suit, or proceeding arising out of or in connection with this Distribution Notice shall be brought exclusively in the Delaware Court of Chancery (or, if the Delaware Court of Chancery lacks subject matter jurisdiction, in the Superior Court of the State of Delaware, New Castle County), and each Partner hereby irrevocably consents and submits to the exclusive jurisdiction of such courts for purposes of any such action, suit, or proceeding.
Section 10 — Confidentiality
This Distribution Notice, and the information contained herein (including, without limitation, the amounts, allocations, and other financial information set forth on Schedule A and any attachments or exhibits hereto), constitutes confidential and proprietary information of the Partnership and is subject to the confidentiality provisions set forth in Section [__] of the Partnership Agreement.
Each Limited Partner is reminded of its obligations under the Partnership Agreement not to distribute, disclose, reproduce, or otherwise make available this Distribution Notice or any information contained herein to any third party, except as expressly permitted under the Partnership Agreement or as required by applicable law or regulation. Limited Partners that are subject to the Freedom of Information Act ("FOIA"), state public records laws, or similar open records obligations are referred to the provisions of their respective Side Letters (if any) addressing confidential treatment requests with respect to Partnership information. Any Limited Partner that receives a request or demand for disclosure of information contained in this Distribution Notice pursuant to FOIA, subpoena, court order, or similar legal process is requested to promptly notify the General Partner prior to making any such disclosure so that the General Partner may take appropriate steps to protect the confidentiality of Partnership information.
[Signature Page Follows]
SIGNATURE PAGE TO DISTRIBUTION NOTICE NO. [__] HARROWGATE PRIVATE EQUITY FUND V LP
IN WITNESS WHEREOF, the General Partner has caused this Distribution Notice to be executed and delivered as of the date first set forth above.
HARROWGATE FUND V GP LLC
By: Harrowgate Capital Partners LLC, its Sole Member
By: ________
Name: Marcus J. Harrowgate
Title: Managing Partner
Date: [__], 20[]
SCHEDULE A
Individual Limited Partner Distribution Allocations
Distribution Notice No. [__] — Harrowgate Private Equity Fund V LP
Distribution Date: [________], 20[__]
Note: This Schedule A is specific to each Limited Partner. Each Limited Partner will receive a copy of this Distribution Notice reflecting only such Limited Partner's individual allocation. The General Partner retains a master Schedule A reflecting the allocations to all Partners, which is maintained on a confidential basis and is not distributed to individual Limited Partners (except to the extent required by the Partnership Agreement or applicable law).
EXHIBIT B
Wire Transfer Information
(For Internal Use Only)
CONFIDENTIAL — NOT FOR DISTRIBUTION TO LIMITED PARTNERS. This Exhibit B is for use by the General Partner and Ridgeway Trust Company (in its capacity as Custodian) only, and shall not be distributed to, or shared with, any Limited Partner or any other third party. Wire transfer instructions contained herein are maintained on file by Pinnacle Fund Services LLC, the Fund Administrator, and are verified by the Fund Administrator prior to each distribution in accordance with the Fund's anti-fraud and operational controls.
Wire instructions are maintained on file by Pinnacle Fund Services LLC and verified prior to each distribution. Any changes to wire instructions must be received by the Fund Administrator in writing no later than five (5) business days prior to the applicable Distribution Date, and must be confirmed by callback or other verification procedures established by the Fund Administrator in accordance with the Fund's operational controls. The General Partner and the Fund Administrator reserve the right to delay any distribution payment pending satisfactory verification of updated wire transfer instructions.
[End of Distribution Notice]
Limited Partner Name | Capital Commitment ($) | Sharing Percentage (%) | Total Distribution ($) | Tier 1 — Return of Capital ($) | Tier 2 — Preferred Return ($) | Tier 3 — GP Catch-Up ($) | Tier 4 — Profit Share ($) | Cumulative Distributions to Date ($) | Unreturned Capital Contributions After Distribution ($)
[Limited Partner 1] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 2] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 3] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 4] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 5] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
[Additional Limited Partners] | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
Harrowgate Fund V GP LLC (General Partner) | [__] | [__]% | [__] | [__] | [__] | [__] | [__] | [__] | [__]
TOTALS | [________] | 100.00% | [________] | [________] | [________] | [________] | [________] | [________] | [________]
Limited Partner Name | Bank Name | ABA / SWIFT Code | Account Number | Account Name | Reference / Special Instructions
[Limited Partner 1] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 2] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 3] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 4] | [__] | [__] | [__] | [__] | [__]
[Limited Partner 5] | [__] | [__] | [__] | [__] | [__]
[Additional Limited Partners] | [__] | [__] | [__] | [__] | [__]

HARROWGATE FUND V GP LLC 1200 Concord Pike, Suite 600 Wilmington, DE 19803

HARROWGATE FUND V GP LLC

SCHEDULE A

EXHIBIT B

Record

Parties

Dates

Amounts