Exhibit 10.5
Form of Net Worth Agreement
NET WORTH AGREEMENT dated as of _______________, 2001 by and among ▇▇▇▇▇▇▇
ASSET MANAGEMENT, INC., a New York corporation having an address at ▇▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "General Partner"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an
individual having an address c/▇ ▇▇▇▇▇▇▇ Asset Management, Inc., ("▇▇▇▇▇▇▇▇▇"),
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual having an address c/▇ ▇▇▇▇▇▇▇ Asset
Management, Inc., ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇").
W I T N E S S E T H :
WHEREAS, ▇▇▇▇▇▇▇ is the sole officer, director and shareholder of the
General Partner, ▇▇▇▇▇▇▇▇▇ is an employee of the General Partner and the General
Partner is the general partner of ▇▇▇▇▇▇▇ DIVERSIFIED FUND, L.P., a Delaware
limited partnership (the "Fund");
WHEREAS, there will be registered with the Securities and Exchange
Commission (the "SEC") certain units of limited partnership interest ("Units")
in the Fund pursuant to a registration statement on Form S-1 (the "Registration
Statement") filed with the SEC (File No.33-46550);
WHEREAS, the General Partner is required to maintain a minimum "net worth"
pursuant to the Amended and Restated Agreement of Limited Partnership, as
amended, governing the Fund (the "Limited Partnership Agreement") and the
requirements imposed by the administrators of the securities laws in certain
jurisdictions as a condition to approval of the offering of the Units therein;
WHEREAS, the General Partner is also required to make certain minimum
purchases of units of general partnership interest in the Fund pursuant to the
Limited Partnership Agreement and the aforesaid requirements; and
WHEREAS, the parties hereto desire to make certain provisions relating to
contributions to the capital of the General Partner in connection with the
General Partner's "net worth" obligations to the Fund and to enable the General
Partner to purchase units of general partnership interest in the Fund;
NOW, THEREFORE, the parties hereto hereby jointly and severally agree as
follows:
1. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ hereby jointly and severally agree that within
five (5) days following the consummation of the initial offering of the Units
under the Registration Statement (provided that at least 1,000 Units have been
sold to the public and accepted by the General Partner), and within five (5)
days following the consummation of any and all subsequent offerings of Units
under the Registration Statement, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ will contribute funds,
promissory notes or capital to the General Partner as capital, in an amount
sufficient so that the General Partner will at all such times have a "net
worth," calculated in accordance with Generally Accepted Accounting Principles
("GAAP") , equal to not less than the greater of (i) five percent (5%) of the
aggregate capital contributions made by all the partners to the Fund (including
the contribution made by the General Partner), or (ii) Fifty Thousand Dollars
($50,000). In addition, with respect to each other limited partnership for which
the General Partner acts as the general partner, ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ hereby
jointly and severally agree to contribute funds, promissory notes or capital to
the General Partner as capital, in an amount sufficient so that the General
Partner will have at all such times a "net worth" at least equal to the net
worth required by the preceding sentence plus, for each such
additional limited partnership, an amount equal to five percent (5%) of the
total capital contributions made by all the partners to such other limited
partnership (including the contribution made by the General Partner).
Notwithstanding the foregoing, the General Partner's net worth need not exceed
$1,000,000. For purposes of this Agreement, in computing the "net worth" of the
General Partner, the capital contributions of the General Partner to the Fund
and to the other limited partnerships of which it acts as a general partner will
be disregarded.
2. The General Partner agrees that ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall have the
absolute right to determine the manner in which and the form by which they will
provide the funds, notes or capital contributions that they is required to make
pursuant to Section 1, above, including, but not limited to, demand promissory
notes in the form of Exhibit A attached hereto and made a part hereof in
exchange for demand promissory notes in the form of Exhibit B attached hereto
and made a part hereof.
3. So long as the General Partner is the general partner of the Fund, the
General Partner agrees that it will not, and ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ agree that
they will not, cause the General Partner to (i) declare any distribution, or
(ii) intentionally take any other formal corporate action which would cause the
General Partner's net worth to fall below a level required to satisfy the
criteria of Section 1, above.
4. As soon as practicable after at least 1,000 Units shall have been sold
pursuant to the Registration Statement and accepted by the General Partner, and
at all times thereafter when Units are sold and accepted by the General Partner,
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ hereby jointly and severally agree to provide the General
Partner with sufficient capital so as to enable the General Partner to purchase
units of general partnership interest in the Fund in an amount equal to not less
than the greater of (i) one percent (1%) of the aggregate capital contributions
made by all partners to the Fund (including the contributions of the General
Partner) or (ii) Twenty Five Thousand Dollars ($25,000). The General Partner
agrees that ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ shall have the absolute right to determine the
form in and the terms upon which they will provide funds to the General Partner
pursuant to this Section 4, including, but not limited to, loans upon such terms
as ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ may ▇▇▇▇ necessary or advisable in their sole
discretion.
5. This Agreement, which is intended solely for the benefit of the parties
hereto and the limited partners of the Fund, shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.
6. This Agreement constitutes the entire understanding between the parties
hereto with respect to the matters referred to herein and no waiver or
modification of the terms hereof shall be valid unless in writing signed by the
party to be charged therewith.
7 This Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to principles of
conflicts of laws.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement
as of the day and year first above written.
▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC.
By:______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
_________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Exhibit A
Demand Negotiable Promissory Note
White Plains, New York
Dated: _______________, 20_
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, individuals having an address c/▇ ▇▇▇▇▇▇▇ Asset Management, Inc., ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, hereby jointly and severally promise
to pay to the order of ▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC., a New York corporation
having an address at ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the
"Holder"), or any subsequent holder hereof, the principal sum of
_________________________ Dollars ($______), on demand, in lawful currency of
the United States of America, with interest (computed on the basis of a 360 day
year of twelve 30 day months) at the prime rate as of the end of each month
charged by The Chase Manhattan Bank to its best commercial customers for 90 day
unsecured loans. Simple interest is to be calculated monthly at such rate.
Payment of both principal and interest is to be made at the offices of the
Holder, which are located at ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
Interest is to be paid annually commencing ________, 20__.
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Exhibit B
Demand Negotiable Promissory Note
White Plains, New York
Dated: _______________, 20_
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇ ASSET MANAGEMENT, INC., a New
York corporation having an address at ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, hereby promises to pay to the order of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, individuals having an address c/▇ ▇▇▇▇▇▇▇ Asset Management, Inc., ▇▇
▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (collectively, the "Holders"), or any
subsequent holder hereof, the principal sum of _________________________ Dollars
($______), on demand, in lawful currency of the United States of America, with
interest (computed on the basis of a 360 day year of twelve 30 day months) at
the prime rate as of the end of each month charged by The Chase Manhattan Bank
to its best commercial customers for 90 day unsecured loans. Simple interest is
to be calculated monthly at such rate. Payment of both principal and interest is
to be made at the offices of the Holders, which are located c/▇ ▇▇▇▇▇▇▇ Asset
Management, Inc., ▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Interest is to
be paid annually commencing ________, 20__.
______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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