TPGI » Topics » DISTRIBUTIONS

This excerpt taken from the TPGI 10-K filed Mar 18, 2008.

DISTRIBUTIONS

5.1 Distributions. (a) Net Distributable Cash shall be distributed to the Partners in accordance with the provisions of this Section 5.1; provided, however, that with respect to the portion of any Net Distributable Cash which represents Returned Capital, the Partnership may, in the sole discretion of the General Partner, (i) during the Investment Period, reinvest such Returned Capital in other Investments or (ii) distribute such Returned Capital to the Partners; provided that to the extent that any amounts constituting Returned Capital are distributed to any Partner pursuant to this Section 5.1 during the Investment Period, such amounts may, in the sole discretion of the General Partner, be deemed a reinstatement of undrawn Capital Commitments and be subject to future Capital Calls in accordance with the provisions of Section 3.3; and provided further, that at the time that the Partnership distributes such Returned Capital to the Partners during the Investment Period, the General Partner delivers a Notice of Returned Capital to the Limited Partners in respect of such Returned Capital. If there is a change in the Percentage Interests of any of the Partners during any period in which Net Distributable Cash has been received by the Partnership, distributions shall be made to the Partners in a manner reasonably determined by the General Partner which takes into account the varying Percentage Interests of the Partners during such period, using the interim closing of the books method or the daily proration method, as determined by the General Partner in its sole discretion.

(b) Subject to the provisions of Section 5.1(c) hereof, distributions of Net Distributable Cash shall be calculated on an “investment-by-investment basis” and shall be allocated among the Partners in proportion to each Partner’s respective Percentage Interest and shall be distributed to the Partners on a quarterly basis, except that Net Distributable Cash attributable to Capital Events shall be distributed upon the realization of such Capital Event. With respect to each Investment, the full amount of Net Distributable Cash allocated to the General Partner or its Affiliates shall be distributed to the General Partner or such Affiliates.

 

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The amount of Net Distributable Cash allocated to the Limited Partners who are not Affiliated with the General Partner shall be distributed in the following manner:

(i) First, 100% to the Limited Partner until it has received an amount equal to an annual rate of nine percent (9%), compounded annually, on such Limited Partner’s aggregate unreturned Capital Contributions allocable to such Investment;

(ii) Second, 100% to the Limited Partner pro rata until it has received an amount equal to the aggregate of such Limited Partner’s unreturned Capital Contributions allocated to such Investment plus such Limited Partner’s allocable share of all Management Fees and other expenses paid by the Partnership expenses that were paid from Partnership cash flow rather than from Capital Contributions;

(iii) Third, (A) 50% to the Limited Partner and (B) 50% to the General Partner, until the General Partner has received a cumulative distribution pursuant to this clause (B) equal to 20% of all distributions made pursuant to clause (i) and this clause (iii); and

(iv) Fourth, (A) 80% to the Limited Partner and (B) 20% to the General Partner.

(c) Notwithstanding the provisions of Section 5.1(b), prior to any distribution of Net Distributable Cash pursuant to Section 5.1(b), the General Partner may cause the Partnership to distribute to the General Partner an amount of Net Distributable Cash equal to the sum of any taxable income of the Partnership allocable to the General Partner with respect to the applicable Fiscal Year, after taking into account all tax losses allocable to the General Partner with respect to such Fiscal Year and any prior Fiscal Year (to the extent that such tax losses have not previously been applied against taxable income allocable to the General Partner with respect to such Fiscal Year or any prior Fiscal Year), multiplied by an assumed tax rate equal to the then maximum federal, state and local (as applicable) tax rates that could be applicable to the General Partner (or its partners) with respect to the character of taxable income allocated to the General Partner for which such distribution is to be made (whether taxable income classified for tax purposes as ordinary income, or taxable income classified for tax purposes as long term capital gains, as applicable). Distributions to the General Partner pursuant to this Section 5.1(c) shall be made only to the extent that the General Partner would not receive, for the applicable Fiscal Year, distributions pursuant to Section 5.1(b) in an amount at least equal to the amount described in this Section 5.1(c). Any amount distributed to the General Partner pursuant to this Section 5.1(c) shall be treated as an advance against future distributions to which the General Partner is entitled pursuant to Section 5.1(b). Notwithstanding the foregoing, the Partnership will not call capital to fund any or all of the distributions to which the General Partner is entitled pursuant to this Section 5.1(c). In the event that all such tax distributions and interest are not offset against subsequent distributions to the General Partners, the General Partner shall return such non-offset tax distributions upon liquidation of the Partnership for distribution pro rata to the Limited Partners.

 

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(d) Pending distribution, funds held by the Partnership which are required to be distributed pursuant to this Section 5.1 shall be invested in Interim Investments, to the extent practicable, at the sole discretion of the General Partner.

(e) Any receipts or other revenues of the Partnership (excluding Capital Contributions) not included in Net Distributable Cash, including, without limitation, the net revenues from Interim Investments, may be applied by the General Partner to pay or reserve for the payment of Management Fees, Operating Expenses, Organizational Expenses and Indebtedness, to establish Reserves, or be distributed in accordance with the provisions of Section 5.1(b) hereof, in each case in the sole discretion of the General Partner.

(f) All distributions shall be made to the Partners in cash.

(g) Notwithstanding any provision of this Agreement to the contrary, neither the Partnership, nor the General Partner on behalf of the Partnership, shall make any distribution to any Partner if such distribution would violate the Act or other applicable law.

5.2 Amounts Withheld. The Partners shall be required, upon request by the Partnership, to fund their share of any applicable withholding taxes with respect to the Partnership. If the Partnership is required pursuant to the Code, the laws of any state, or any other provision of law, to withhold any amount from amounts otherwise distributable to any Partner, the Partnership shall withhold such amounts as shall be required by law and any amounts so withheld shall be deemed to have been distributed to such Partner under this Agreement. If any sums are withheld pursuant to this provision, the Partnership shall remit the sums so withheld to, and file the required forms with, the Internal Revenue Service and the appropriate authority of any such state or other applicable government agency. In the event of any claimed over-withholding, a Partner shall be limited to an action against the Internal Revenue Service, the appropriate authority of any such state, or other applicable government agency for refund and each Partner hereby waives any claim or right of action against the Partnership on account of such withholding. Furthermore, if the amounts required to be withheld exceed the amounts which would otherwise have been distributed to such Partner, such Partner shall contribute any deficiency to the Partnership within ten (10) Business Days after notice from the General Partner. If such deficiency is not contributed within such time, any non-contributed amounts shall be considered a demand loan from the Partnership to such Partner, with interest at a rate equal to the lesser of (a) the Prime Rate plus five percent (5%) (but in no event less than nine percent (9%)) and (b) the highest rate permitted by law, which interest shall be treated as an item of Partnership income, until discharged by such Partner by repayment. Such demand loan shall be repaid, without prejudice to other remedies at law or in equity that the Partnership may have, out of distributions to which the debtor Partner would otherwise subsequently be entitled under this Agreement.

 

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ARTICLE VI.

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