Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: ProFutures Long/Short Growth Fund, L.P.
Commission File Number 0-25585
Dear Sirs:
This filing contains Form 10-Q for the quarter ended June 30, 2002.
Very truly yours,
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended June 30, 2002
--------------
Commission File Number 0-25585
-------
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
---------------------------------------
(Exact name of registrant)
Delaware 74-2849862
- ----------------------- ------------------------------------
(State of Organization) (I.R.S. Employer Identification No.)
ProFutures, Inc.
11612 Bee Cave Road
Suite 100
Austin, Texas 78738
---------------------------------------
(Address of principal executive office)
Registrant's telephone number
(800) 348-3601
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X
No
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF FINANCIAL CONDITION
June 30, 2002 (Unaudited) and December 31, 2001 (Audited)
-------------
June 30, December 31,
2002 2001
---- ----
ASSETS
Equity in broker trading accounts
Cash $11,689,494 $12,119,461
Net option premiums (received) (273,500) (291,200)
Unrealized gain on open contracts 583,215 373,755
----------- -----------
Deposits with broker 11,999,209 12,202,016
Cash 14,120 11,652
----------- -----------
Total assets $12,013,329 $12,213,668
=========== ===========
LIABILITIES
Accounts payable $ 14,766 $ 17,680
Commissions and other trading fees
on open contracts 7,655 9,065
Incentive fees payable 81,158 53,703
Management fees payable 49,465 51,559
Redemptions payable 403,191 142,989
----------- -----------
Total liabilities 556,235 274,996
----------- -----------
PARTNERS' CAPITAL (Net Asset Value)
General Partner - 61 units outstanding at
June 30, 2002 and December 31, 2001 63,041 56,537
Limited Partners - 11,105 and 12,913 units
outstanding at June 30, 2002 and
December 31, 2001 11,394,053 11,882,135
----------- -----------
Total partners' capital
(Net Asset Value) 11,457,094 11,938,672
----------- -----------
$12,013,329 $12,213,668
=========== ===========
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
CONDENSED SCHEDULE OF INVESTMENTS
June 30, 2002
(Unaudited)
-----------
LONG FUTURES CONTRACTS
- ----------------------
% of Net
Description Value Asset Value
----------- ----- -----------
Agricultural $ 83,372 0.73%
Currency 408,800 3.57%
Energy 1,473 0.01%
Interest rate 160,295 1.40%
Metal (62,840) (0.55)%
Stock index (31,588) (0.28)%
---------- -----
Total long futures contracts $ 559,512 4.88%
---------- -----
SHORT FUTURES CONTRACTS
- -----------------------
Agricultural $ (50,746) (0.44)%
Energy 2,950 0.02%
---------- -----
Total short futures contracts $ (47,796) (0.42)%
---------- -----
Total futures contracts $ 511,716 4.46%
========== =====
WRITTEN OPTIONS ON FUTURES CONTRACTS
- ------------------------------------
% of Net
Description Value Asset Value
----------- ----- -----------
Stock index options
(premiums received - $273,500) $ (202,000) (1.76)%
========== =====
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Three Months Ended June 30, 2002 and 2001
(Unaudited)
-----------
Three months ended
June 30,
2001 2000
---- ----
INCOME
Trading gains (losses)
Realized $ 1,125,491 $ 1,095,727
Change in unrealized 46,544 (1,160,141)
------------ ------------
Gain (loss) from trading 1,172,035 (64,414)
Interest income 50,021 112,926
------------ ------------
Total income 1,222,056 48,512
------------ ------------
EXPENSES
Brokerage commissions 72,391 72,193
Incentive fees 81,158 80,560
Management fees 88,735 91,713
Operating expenses 24,196 31,067
------------ ------------
Total expenses 266,480 275,533
------------ ------------
NET INCOME (LOSS) $ 955,576 $ (227,021)
============ ============
NET INCOME (LOSS) PER GENERAL AND
LIMITED PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
11,877 and 14,125, respectively) $ 80.45 $ (16.07)
============ ============
INCREASE (DECREASE) IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ 80.76 $ (14.61)
============ ============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)
-----------
Six months ended
June 30,
2001 2000
---- ----
INCOME
Trading gains (losses)
Realized $ 1,637,622 $ 1,704,558
Change in unrealized 209,460 (551,733)
------------ ------------
Gain from trading 1,847,082 1,152,825
Interest income 101,366 273,636
------------ ------------
Total income 1,948,448 1,426,461
------------ ------------
EXPENSES
Brokerage commissions 147,154 139,685
Incentive fees 283,384 292,906
Management fees 179,189 190,423
Operating expenses 56,373 72,262
------------ ------------
Total expenses 666,100 695,276
------------ ------------
NET INCOME $ 1,282,348 $ 731,185
============ ============
NET INCOME PER GENERAL AND LIMITED PARTNER UNIT
(based on weighted average number of
units outstanding during the period of
12,275 and 14,359, respectively) $ 104.46 $ 50.92
============ ============
INCREASE IN NET ASSET VALUE PER
GENERAL AND LIMITED PARTNER UNIT $ 105.86 $ 51.21
============ ============
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
For the Six Months Ended June 30, 2002 and 2001
(Unaudited)
-----------
Total Partners' Capital
Number of ----------------------------------
Units General Limited Total
--------- -------- ----------- -----------
Balances at
December 31, 2001 12,974 $ 56,537 $11,882,135 $11,938,672
Net income for the
six months ended
June 30, 2002 6,504 1,275,844 1,282,348
Redemptions (1,808) 0 (1,763,926) (1,763,926)
------ -------- ----------- -----------
Balances at
June 30, 2002 11,166 $ 63,041 $11,394,053 $11,457,094
====== ======== =========== ===========
Balances at
December 31, 2000 14,773 $ 52,762 $12,633,367 $12,686,129
Net income for the
six months ended
June 30, 2001 3,147 728,038 731,185
Redemptions (1,029) 0 (910,882) (910,882)
------ -------- ----------- -----------
Balances at
June 30, 2001 13,744 $ 55,909 $12,450,523 $12,506,432
====== ======== =========== ===========
Net asset value
per unit at
December 31, 2000 $ 858.74
===========
June 30, 2001 $ 909.95
===========
December 31, 2001 $ 920.18
===========
June 30, 2002 $ 1,026.04
===========
See accompanying notes.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
-----------------------------------------------------------
A. General Description of the Partnership
ProFutures Long/Short Growth Fund, L.P. (the Partnership) is a
Delaware limited partnership which operates as a commodity investment
pool. The Partnership engages in the speculative trading of futures
and option contracts.
B. Regulation
As a registrant with the Securities and Exchange Commission, the
Partnership is subject to the regulatory requirements under the
Securities Act of 1933 and the Securities Exchange Act of 1934. As a
commodity investment pool, the Partnership is subject to the
regulations of the Commodity Futures Trading Commission, an agency of
the U.S. government which regulates most aspects of the commodity
futures industry; rules of the National Futures Association, an
industry self-regulatory organization; and the requirements of
commodity exchanges and Futures Commission Merchants (brokers) through
which the Partnership trades.
C. Method of Reporting
The Partnership's financial statements are presented in accordance
with accounting principles generally accepted in the United States of
America, which require the use of certain estimates made by the
Partnership's management. Transactions are accounted for on the trade
date. Gains or losses are realized when contracts are liquidated.
Unrealized gains or losses on open contracts (the difference between
contract trade price and quoted market price) are reflected in the
statement of financial condition as a net gain or loss, as there
exists a right of offset of unrealized gains or losses in accordance
with Financial Accounting Standards Board Interpretation No. 39 -
"Offsetting of Amounts Related to Certain Contracts." Any change in
net unrealized gain or loss from the preceding period is reported in
the statement of operations.
For purposes of both financial reporting and calculation of redemption
value, Net Asset Value Per Unit is calculated by dividing Net Asset
Value by the total number of units outstanding.
D. Brokerage Commissions
Brokerage commissions include other trading fees and are charged to
expense when contracts are opened.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED)
-----------
E. Income Taxes
The Partnership prepares calendar year U.S. and applicable state
information tax returns and reports to the partners their allocable
shares of the Partnership's income, expenses and trading gains or
losses.
F. Organizational Charge
The General Partner pays all organizational and offering costs of the
Partnership. As reimbursement for such costs, the General Partner
(or the Distributor, ProFutures Financial Group, Inc., a broker/dealer
affiliate of the General Partner) receives an organizational charge of
1% of the subscription amount of each subscriber to the Partnership.
There were no such organizational charges received by the General
Partner during the six months ended June 30, 2002 and 2001.
G. Foreign Currency Transactions
The Partnership's functional currency is the U.S. dollar; however, it
transacts business in currencies other than the U.S. dollar. Assets
and liabilities denominated in currencies other than the U.S. dollar
are translated into U.S. dollars at the rates in effect at the date
of the statement of financial condition. Income and expense items
denominated in currencies other than the U.S. dollar are translated
into U.S. dollars at the rates in effect during the period. Gains
and losses resulting from the translation to U.S. dollars are reported
in income currently.
H. Statements of Cash Flows
The Partnership has elected not to provide statements of cash flows as
permitted by Statement of Financial Accounting Standards No. 102 -
"Statement of Cash Flows - Exemption of Certain Enterprises and
Classification of Cash Flows from Certain Securities Acquired for
Resale."
I. Interim Financial Statements
In the opinion of management, the unaudited interim financial
statements reflect all adjustments, which were of a normal and
recurring nature, necessary for a fair presentation of financial
position as of June 30, 2002, and the results of operations for the
three and six months ended June 30, 2002 and 2001.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 2. GENERAL PARTNER
---------------
The General Partner of the Partnership is ProFutures, Inc., which
conducts and manages the business of the Partnership. The Limited
Partnership Agreement requires the General Partner and/or its
principals and affiliates to maintain capital accounts equal to at
least 1% of the total capital of the Partnership. At June 30, 2002
and December 31, 2001, the capital accounts of the General Partner
and/or its principals and affiliates totaled $549,255 and $498,903,
respectively.
The Limited Partnership Agreement was amended effective February 16,
1999 and generally requires that the General Partner maintain a net
worth of up to $1,000,000. ProFutures, Inc. has callable subscription
agreements with ABN AMRO Incorporated (ABN), the Partnership's broker,
whereby ABN has subscribed to purchase (up to $7,000,000 subject to
the conditions set forth in the subscription agreement as amended
effective May 20, 2002) the number of shares of common stock of
ProFutures, Inc. necessary to maintain the General Partner net worth
requirements.
The Partnership pays the General Partner a monthly management fee
equal to 1/6 of 1% (2% annually) of month-end Net Assets (as defined
in the Limited Partnership Agreement).
Total management fees earned by ProFutures, Inc. for the six months
ended June 30, 2002 and 2001 were $119,238 and $126,768, respectively.
Such management fees earned for the three months ended June 30, 2002
and 2001 were $59,070 and $61,081, respectively. Management fees
payable to ProFutures, Inc. as of June 30, 2002 and December 31, 2001
were $19,800 and $20,170, respectively.
Note 3. COMMODITY TRADING ADVISORS
--------------------------
The Partnership has trading advisory contracts with several trading
advisors to furnish investment management services to the Partnership.
Each advisor is paid a monthly management fee of 1/12 of 1% (1%
annually) of Allocated Net Asset Value (as defined in each respective
advisory agreement). In addition, each advisor receives a quarterly
incentive fee of 20% of Trading Profits (as defined).
Note 4. DEPOSITS WITH BROKER
--------------------
The Partnership deposits funds with ABN to act as broker, subject to
Commodity Futures Trading Commission regulations and various exchange
and broker requirements. The Partnership earns interest income on its
assets deposited with the broker.
At June 30, 2002 and December 31, 2001, the initial margin requirement
of $2,501,011 and $1,706,987, respectively, is satisfied by the
deposit of cash with such broker.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 5. SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS
--------------------------------------------
Investments in the Partnership were made by subscription agreement,
subject to acceptance by the General Partner. Effective November
2000, the Partnership is closed to new investment; however, the
General Partner may reopen the Partnership to new investments in the
future.
The Partnership is not required to make distributions, but may do so
at the sole discretion of the General Partner. A Limited Partner may
require the Partnership to redeem any or all of such Limited Partner's
units at Net Asset Value as of the close of business on the last day
of any month upon advance written notice to the General Partner. The
Limited Partnership Agreement contains a complete description of the
Partnership's redemption policies and procedures.
Note 6. TRADING ACTIVITIES AND RELATED RISKS
------------------------------------
The Partnership engages in the speculative trading of U.S. and foreign
futures contracts and options on futures contracts (collectively
"derivatives"). The Partnership is exposed to both market risk, the
risk arising from changes in the market value of the contracts, and
credit risk, the risk of failure by another party to perform according
to the terms of a contract.
Purchase and sale of futures and options on futures contracts requires
margin deposits with the broker. Additional deposits may be necessary
for any loss on contract value. The Commodity Exchange Act requires a
broker to segregate all customer transactions and assets from such
broker's proprietary activities. A customer's cash and other property
(for example, U.S. Treasury bills) deposited with a broker are
considered commingled with all other customer funds subject to the
broker's segregation requirements. In the event of a broker's
insolvency, recovery may be limited to a pro rata share of segregated
funds available. It is possible that the recovered amount could be
less than total cash and other property deposited.
Open contracts generally mature within three months, however, the
Partnership intends to close all contracts prior to maturity. At
June 30, 2002, the latest maturity date for open contracts is
September 2003, and at December 31, 2001, the latest maturity date
for open contracts is March 2003.
For derivatives, risks arise from changes in the market value of the
contracts. Theoretically, the Partnership is exposed to a market risk
equal to the notional contract value of futures contracts purchased
and unlimited liability on such contracts sold short. As both a buyer
and seller of options, the Partnership pays or receives a premium at
the outset and then bears the risk of unfavorable changes in the price
of the contract underlying the option. Written options expose the
Partnership to potentially unlimited liability, and purchased options
expose the Partnership to a risk of loss limited to the premiums paid.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 6. TRADING ACTIVITIES AND RELATED RISKS (CONTINUED)
------------------------------------------------
The Partnership has assets on deposit with a financial institution in
connection with its cash management activities. In the event of a
financial institution's insolvency, recovery of Partnership assets on
deposit may be limited to account insurance or other protection
afforded such deposits.
The General Partner has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The General
Partner's basic market risk control procedures consist of continuously
monitoring the trading activity of the various trading advisors, with
the actual market risk controls being applied by the advisors
themselves. The General Partner seeks to minimize credit risk
primarily by depositing and maintaining the Partnership's assets at
financial institutions and brokers which the General Partner believes
to be creditworthy. The Limited Partners bear the risk of loss only
to the extent of the market value of their respective investments and,
in certain specific circumstances, distributions and redemptions
received.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
-----------
Note 7. FINANCIAL HIGHLIGHTS
--------------------
The following information presents per unit operating performance data
and other supplemental financial data for the three months and six
months ended June 30, 2002 and 2001. This information has been
derived from information presented in the financial statements.
Three months ended
June 30,
2002 2001
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $ 945.28 $ 924.56
--------- ---------
Income (loss) from operations:
Net investment (loss) (1), (3) (12.13) (6.40)
Net realized and change in unrealized
gain (loss) from trading (2), (3) 92.89 (8.21)
--------- ---------
Total income (loss) from operations 80.76 (14.61)
--------- ---------
Net asset value per unit at
end of period $1,026.04 $ 909.95
========= =========
Total Return (4) 8.54% (1.58)%
====== ======
Supplemental Data
Ratios to average net asset value: (5)
Expenses prior to incentive fees (1) (3.94)% (3.98)%
Incentive fees (2.83)% (2.62)%
------- -------
Total expenses (1) (6.77)% (6.60)%
======= =======
Net investment (loss) (1) (5.02)% (2.93)%
======= =======
Six months ended
June 30,
2002 2001
(Unaudited) (Unaudited)
----------- -----------
Per Unit Performance
(for a unit outstanding throughout the entire period)
-----------------------------------------------------
Net asset value per unit at
beginning of period $ 920.18 $ 858.74
--------- ---------
Income (loss) from operations:
Net investment (loss) (1), (3) (34.02) (19.64)
Net realized and change in unrealized
gain from trading (2), (3) 139.88 70.85
--------- ---------
Total income from operations 105.86 51.21
--------- ---------
Net asset value per unit at
end of period $1,026.04 $ 909.95
========= =========
Total Return (4) 11.50% 5.96%
====== ======
Supplemental Data
Ratios to average net asset value: (5)
Expenses prior to incentive fees (1) (4.04)% (4.19)%
Incentive fees (4.86)% (4.68)%
------- -------
Total expenses (1) (8.90)% (8.87)%
======= =======
Net investment (loss) (1) (7.16)% (4.50)%
======= =======
Total return is calculated based on the change in value of a unit
during the period. An individual partner's total return and ratios
may vary from the above total return and ratios based on the timing
of additions and redemptions.
--------------------
(1) Excludes brokerage commissions and other trading fees.
(2) Includes brokerage commissions and other trading fees.
(3) The net investment (loss) per unit is calculated by dividing the
net investment (loss) by the average number of units outstanding
during the period. The net realized and change in unrealized
gain (loss) from trading is a balancing amount necessary to
reconcile the change in net asset value per unit with the other
per unit information.
(4) Not annualized.
(5) Annualized.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
A. LIQUIDITY: Substantially all of the Partnership's assets are
highly liquid, such as cash and open futures and option contracts.
It is possible that extreme market conditions or daily price
fluctuation limits at exchanges could adversely affect the liquidity
of open futures contracts. There are no restrictions on the
liquidity of these assets except for amounts on deposit with the
broker needed to meet margin requirements on open futures contracts.
B. CAPITAL RESOURCES: Since the Partnership's business is the purchase
and sale of various commodity interests, it will make few, if any,
capital expenditures.
The Partnership raises additional capital only through the sale of
Units and trading profits (if any) and does not engage in borrowing.
The Partnership sells no securities other than the Units. Effective
November 2000, the Partnership is closed to new investment; however,
the General Partner may reopen the Partnership to new investments in
the future.
C. RESULTS OF OPERATIONS: The Partnership's net income (loss) for the six
months ended June 30, 2002 and 2001 consisted of the following:
2002 2001
---- ----
Three months ended March 31 $ 326,772 $ 958,206
Three months ended June 30 955,576 (227,021)
---------- ---------
Six months ended June 30 $1,282,348 $ 731,185
========== =========
At June 30, 2002, partners' capital totaled $11,457,094, a net
decrease of $481,578 from December 31, 2001, due to redemptions
of limited partner units exceeding net income for the six months
ended June 30, 2002.
At June 30, 2001, partners' capital totaled $12,506,432, a net
decrease of $179,697 from December 31, 2000, due to redemptions of
$910,882 exceeding net income for the six months ended June 30, 2001.
Second Quarter 2002
-------------------
The futures markets continued to be volatile in the second quarter of
2002, though there was a surge at the end of the quarter. The extreme
volatility of the equity markets, mainly on the downside, had a major
impact on the commodities markets. Many of the US and overseas stock
indexes and foreign currencies were very active. Some of this was the
result of the corporate scandals that continue to rock the markets.
The Partnership had a good second quarter, starting in April with a
gain of .56%. There was a gain in S & P 500 options, with gains in
lean hogs and corn futures. These were partially offset by losses in
the S & P 500 Index, copper futures and coffee futures.
In May, the Partnership continued its positive quarter with a gain of
5.66%. There were gains in foreign currencies, stock indexes and
precious metals. There were losses in the energy complex and some
agricultural commodities.
In June, the Partnership posted another gain of 2.16%. There were
gains in British Pounds, the S & P 500 Index, Euro futures and
EuroDollar futures. These were partially offset by losses in options
on the S & P 500, lean hogs and sugar futures.
The Partnership had a total return of 8.54% for the quarter and 11.50%
for the six months ended June 30, 2002. For the second quarter 2002,
the majority of the Partnership's trading gains were in foreign
currencies and the largest loss was in the energy markets.
First Quarter 2002
------------------
The futures markets remained choppy in the first quarter of 2002.
While the economy was showing some signs of improvement, there were
also some negative signs that caused uncertainty. The troubles in
the Middle East lead to large increases in oil and gas prices. Gold
prices also moved higher early in the quarter, but gave back some of
their gains at the end of the quarter.
In January 2002, the Partnership gained a modest 0.99%. There were
large gains in stock index, along with some smaller gains in energy
and foreign currencies. These were mostly offset by losses in
interest rates, agricultural commodities and precious metals.
In February 2002, there was another gain of 4.34%. This resulted
from gains in stock index, once again. There were also gains in
interest rates and agricultural commodities. There were some
losses incurred in energy and foreign currencies.
In March 2002, the Partnership incurred a loss of 2.51%. Again there
were profits in the stock indexes. These however were offset by
losses in foreign currencies, interest rates and agricultural
commodities. Coffee and Eurodollar futures incurred the largest
losses.
For the first quarter 2002, the majority of the Partnership's gains
came from profits in options on S&P 500 Index futures. The largest
loss for the quarter was from coffee.
Second Quarter 2001
-------------------
April 2001 brought a large loss for the Fund, almost all of which came
from stock indexes. On April 18th, the U.S. Federal Reserve announced
a surprise cut in interest rates. This caused the stock market, which
had been trending lower, to move up dramatically in a mid-day surge.
One of the Trading Advisors had sold call options based on a bearish
forecast. The sudden reversal led to these positions being stopped
out at a major loss within a few moments of the Federal Reserve
announcement. April ended with a net loss for the Fund of 10.73%.
May and June 2001 were much more favorable, bringing gains of 3.69%
and 6.32% respectively. Much of the gain came from stock indexes and
foreign currencies as well as agricultural commodities. The second
quarter of 2001 ended with a loss of 1.58% and the first six months of
2001 were a gain of 5.96%.
First Quarter 2001
------------------
The Partnership's Trading Advisors were able to profit during the
first quarter of 2001, even though many markets were relatively
trendless, by using very short-term trading strategies in the stock
index futures and writing options on the S&P 500. The decision in
late 2000 to expand the Partnership's focus beyond stock indexes by
allocating part of the assets to a more diversified program proved
helpful, with additional gains coming in markets such as foreign
currencies, agricultural commodities, short-term interest rates and
metals. The first quarter ended with a gain of 7.66%.
The General Partner has established procedures to actively monitor
market risk and minimize credit risk, although there can be no
assurance that it will, in fact, succeed in doing so. The General
Partner's basic market risk control procedures consist of continuously
monitoring the trading activity of the various advisors with the
actual market risk controls being applied by the advisors themselves.
The General Partner seeks to minimize credit risk primarily by
depositing and maintaining the Partnership's assets at financial
institutions and brokers which the General Partner believes to be
creditworthy.
Due to the speculative nature of trading derivatives, the
Partnership's income or loss from operations may vary widely from
period to period. Management cannot predict whether the Partnership's
future Net Asset Value per Unit will increase or experience a decline.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
D. POSSIBLE CHANGES: The General Partner reserves the right to
terminate certain and/or engage additional trading advisors or
change any of the Partnership's clearing arrangements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
There were no reports filed on Form 8-K.
Exhibits filed herewith:
10.6. Form of Amended and Restated Stock Subscription Agreement by
and between ABN AMRO Incorporated and ProFutures, Inc.
99.1 Form of Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code.
99.2 Form of Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Partnership has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
PROFUTURES LONG/SHORTH GROWTH FUND, L.P.
(Partnership)
By /s/ Gary D. Halbert
---------------------------------
Gary D. Halbert, President
ProFutures, Inc., General Partner
EXHIBIT 10.6
AMENDED AND RESTATED
STOCK SUBSCRIPTION AGREEMENT
----------------------------
THIS STOCK SUBSCRIPTION AGREEMENT (as it may be amended from time to time,
the "Agreement"), by and between ABN AMRO Incorporated ("AAI") and ProFutures,
Inc. ("ProFutures"), is made as of this 20th day of May, 2002.
WHEREAS, ProFutures is the general partner of ProFutures Diversified Fund,
L.P., a Delaware limited partnership ("PDF"), Alternative Asset Growth Fund,
L.P., a Delaware limited partnership ("AAGF"), and ProFutures Long/Short Growth
Fund, L.P., a Delaware limited partnership ("PLSGF"), and is the managing owner
of ProFutures Strategic Allocation Trust, a Delaware business trust ("PSAT");
WHEREAS, pursuant to separate customer agreements (the "Brokerage
Agreements"), AAI is the futures commission merchant and clearing broker for
each of PDF, AAGF, PLSGF and PSAT (collectively, the "Funds");
WHEREAS, ProFutures is obligated by the Amended and Restated Agreement of
Limited Partnership of PDF dated as of December 1, 1993 (the "PDF Limited
Partnership Agreement") to maintain a net worth equal to: (i) the lesser of
$250,000 or 15% of the aggregate initial capital contributions of any limited
partnerships for which it shall act as general partner and which are
capitalized at less than $2.5 million and (ii) 10% of the aggregate initial
capital contributions of any limited partnerships for which it shall act as
general partner and which are capitalized at greater than $2.5 million (the
"PDF Net Worth Requirement");
WHEREAS, ProFutures is obligated by the Amended and Restated Limited
Partnership Agreement of AAGF dated as of September 25, 1989 (the "AAGF Limited
Partnership Agreement") to maintain a net worth equal to at least the sum of
(i) the lesser of $250,000 or 15% of the aggregate capital contributions of any
limited partnerships for which it shall act as general partner and which are
capitalized at less than $2.5 million and (ii) 10% of the aggregate capital
contributions of any limited partnerships for which it acts as general partner
and which are capitalized at greater than $2.5 million (the "AAGF Net Worth
Requirement");
WHEREAS, ProFutures is obligated by the Second Amended and Restated
Limited Partnership Agreement of PLSGF dated as of February 16, 1999 (the
"PLSGF Limited Partnership Agreement") to maintain a net worth of not less than
the greater of $50,000 or at least 5% of the total contributions to PLSGF and
all other partnerships of which ProFutures is general partner, but in no event
shall ProFutures be required to maintain a net worth in excess of $1,000,000
(the "PLSGF Net Worth Requirement");
WHEREAS, ProFutures is obligated by the First Amended and Restated
Declaration of Trust and Trust Agreement of PSAT dated as of August 1, 2000
(the "PSAT Trust Agreement") to maintain a net worth of not less than the
greater of $50,000 or at least 5% of the total contributions to PSAT and all
other partnerships of which ProFutures is manager, but in no event shall
ProFutures be required to maintain a net worth in excess of $1,000,000 (the
"PSAT Net Worth Requirement");
WHEREAS, AAI has agreed to subscribe for common stock of ProFutures to
enable ProFutures to continue to meet each Net Worth Requirement pursuant to
the terms and conditions set forth herein;
WHEREAS, AAI and ProFutures are party to Stock Subscription Agreement
dated as of May 20, 2002; and
WHEREAS, AAI and ProFutures desire to amend and restate such Stock
Subscription Agreement in its entirety.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Purchase of Shares. AAI hereby agrees to subscribe for and purchase
shares of the [$.01] par value common stock of ProFutures (the "Shares") upon
call therefor by ProFutures and upon receipt of a certificate substantially in
the form attached hereto as Exhibit A (the "Certificate"). AAI's obligation to
purchase the Shares is subject to the conditions set forth herein. The
purchase price for the Shares subscribed for by AAI pursuant to this Agreement
shall equal the book value per share as determined by ProFutures' regularly
employed independent certified public accountants in accordance with generally
accepted accounting principles consistently applied on the date the
subscription is called (as to each Fund, the "Call Date"), but in no event less
than $.01 per share. Payment for the subscription shall be made by wire
transfer within thirty (30) days after the Call Date in exchange for the Shares
(the "Closing Date").
(a) PDF. In the event that PDF suspends trading pursuant to its
trading suspension policy (as set forth in the PDF Limited Partnership
Agreement) and exhausts all of its assets to satisfy its obligations, AAI
agrees to subscribe for the Shares and pay to ProFutures such amount as it may
from time to time call pursuant to this Agreement, up to the PDF Subscription
Amount (as defined). The PDF Subscription Amount shall be determined as of the
first PDF Call Date and shall mean: (i) the PDF Net Worth Requirement as of
such date, but in no event more than $7,000,000; minus (ii) the net worth of
ProFutures (excluding AAI's obligations under this Agreement) as of such date,
as determined by ProFutures' regularly employed independent certified public
accountants in accordance with generally accepted accounting principles
consistently applied.
(b) AAGF. In the event that AAGF suspends trading pursuant to its
trading suspension policy (as set forth in the AAGF Trust Agreement) and
exhausts all of its assets to satisfy its obligations, AAI agrees to subscribe
for the Shares and pay to ProFutures such amount as it may from time to time
call pursuant to this Agreement, up to the AAGF Subscription Amount (as
defined). The AAGF Subscription Amount shall be determined as of the first
AAGF Call Date and shall mean: (i) the AAGF Net Worth Requirement as of such
date, but in no event more than $7,000,000; minus (ii) the net worth of
ProFutures (excluding AAI's obligations under this Agreement) as of such date,
as determined by ProFutures' regularly employed independent certified public
accountants in accordance with generally accepted accounting principles
consistently applied.
(c) PLSGF. In the event that PLSGF suspends trading pursuant to its
trading suspension policy (as set forth in the PLSGF Limited Partnership
Agreement) and exhausts all of its assets to satisfy its obligations, AAI
agrees to subscribe for the Shares and pay to ProFutures such amount as it may
from time to time call pursuant to this Agreement, up to the PLSGF Subscription
Amount (as defined). The PLSGF Subscription Amount shall be determined as of
the first PLSGF Call Date and shall mean: (i) the PLSGF Net Worth Requirement
as of such date; minus (ii) the net worth of ProFutures (excluding AAI's
obligations under this Agreement) as of such date, as determined by ProFutures'
regularly employed independent certified public accountants in accordance with
generally accepted accounting principles consistently applied.
(d) PSAT. In the event that PSAT suspends trading pursuant to its
trading suspension policy (as set forth in the PSAT Trust Agreement) and
exhausts all of its assets to satisfy its obligations, AAI agrees to subscribe
for the Shares and pay to ProFutures such amount as it may from time to time
call pursuant to this Agreement, up to the PSAT Subscription Amount (as
defined). The PSAT Subscription Amount shall be determined as of the first
PSAT Call Date and shall mean: (i) the PSAT Net Worth Requirement as of such
date; minus (ii) the net worth of ProFutures (excluding AAI's obligations under
this Agreement) as of such date, as determined by ProFutures' regularly
employed independent certified public accountants in accordance with generally
accepted accounting principles consistently applied.
2. Calls with Respect to Multiple Funds. In the event that ProFutures
makes a call pursuant to two or more of (a) through (d) above, the aggregate
subscription requirement with respect to all such Funds shall not exceed the
highest Subscription Amount of any such Fund.
3. Amendment of Fund Net Worth Requirements. In the event that, at any
time, the PDF Net Worth Requirement, the PLSGF Net Worth Requirement, the AAGF
Net Worth Requirement or the PSAT Net Worth Requirement are reduced, ProFutures
shall immediately notify AAI and this Agreement shall be deemed to be amended
and restated, effective as of the date of such reduction, to reflect the change
in such Fund's Net Worth Requirement.
4. Termination of Brokerage Relationship. In the event that, at any
time, AAI ceases to act as the exclusive futures commission merchant and
clearing broker for any of the Funds, this Agreement shall be deemed to be
amended and restated, effective as of the date of such reduction, to reflect
the deletion of all references to such Fund(s).
5. Preservation of Business. During the term of this Agreement,
ProFutures shall operate only in the ordinary and usual course of business and
shall attempt to preserve intact the present business organization, good will
and advantageous relationships with the Funds, and shall not permit any action
or omission which would cause any of its representations or warranties
contained herein to become inaccurate or any of its covenants to be breached.
Without limiting the generality of the foregoing, ProFutures will not, without
the prior written consent of AAI which consent shall not be unreasonably
withheld or delayed:
(a) incur any obligation or enter into any contract which requires a
payment by any party in excess of, or a series of payments which in the
aggregate exceed, $250,000 or provides for the delivery of goods or performance
of services, or any combination thereof, having a value in excess of $250,000
other than contracts entered into in the ordinary course of ProFutures'
business consistent with past practice;
(b) sell, transfer, convey, assign or otherwise dispose of any of
its material assets or properties with a value in excess of $100,000, except to
existing affiliated companies for which notice will be provided to AAI.
(c) waive, release or cancel any material claims against third
parties or material debts owing to it, or any rights which are in excess of
$100,000;
(d) authorize for issuance, issue, sell, deliver or agree or commit
to issue, sell or deliver (whether through the issuance or granting of options,
warrants, convertible or exchangeable securities, commitments, subscriptions,
rights to purchase or otherwise) any shares of capital stock or any other
securities of ProFutures, or amend any of the terms of any such capital stock
or other securities;
(e) split, combine, or reclassify any shares of its capital stock,
declare any stock dividend in respect of its capital stock, or redeem or
otherwise acquire any capital stock or other securities of ProFutures;
(f) make any borrowings, incur any debt (other than trade payables
in the ordinary course of business and consistent with past practice), or
assume, guarantee, endorse (except for the negotiation or collection of
negotiable instruments in the ordinary course of business and consistent with
past practice) or otherwise become liable (whether directly, contingently or
otherwise) for the obligations of any other person, or make any payment or
repayment in respect of any indebtedness (other than trade payables and accrued
expenses in the ordinary course of business and consistent with past practice)
in excess of $250,000;
(g) make any loans, advances or capital contributions to, or
investments in, any other person, except in the ordinary course of business
consistent with past practices in excess of $100,000;
(h) acquire, lease or encumber any assets outside the ordinary
course of business or any assets in excess of $100,000;
(i) pay any material amount, perform any material obligation or
agree to pay any material amount or perform any material obligation, in
settlement or compromise of any suits or claims of liability against ProFutures
or any of its directors, officers, controlling persons, employees or agents.
For purposes of this section, material is defined as an amount in excess of
$100,000; or
(j) terminate (other than an expiration), modify, amend or otherwise
alter or change any of the terms or provisions of any agreement with a Fund.
6. Maintenance of Insurance. The Company shall continue to carry
insurance with substantially the same coverages and in reasonable amounts as
currently in effect, and shall use reasonable best efforts not to allow any
breach, default, termination or cancellation of such insurance policies or
agreements to occur or exist.
7. ProFutures' Activities. ProFutures agrees, for so long as this
Agreement is in effect, not to engage, without the prior written consent of
AAI, in any activities unrelated to its current activities of being: (a) a
commodity trading advisor; (b) general partner of PLSGF, AAGF and PDF; and (c)
managing owner of PSAT. Further, ProFutures agrees that AAI shall be its sole
clearing broker for all funds owned or controlled by ProFutures. ProFutures
shall use best efforts to conserve capital and avoid expenses to the extent
feasible to minimize the need of ProFutures to require AAI to purchase the
Shares. ProFutures also agrees to cooperate in good faith with AAI in the
conduct of its affairs including, without limitation, its full cooperation in
responding to any reasonable request for information by AAI.
8. AAI's Activities. AAI hereby agrees that it shall: (a) not purchase
or otherwise acquire any units of limited partnership interest or beneficial
interest of any of the Funds and (b) provide all information which in the
opinion of counsel for ProFutures is reasonably required for ProFutures to
comply with federal and state securities and tax laws, subject to ProFutures
maintaining strict confidentiality as to the information so provided.
9. Bank Holding Company Act. In the event a subscription payment is
called by ProFutures pursuant to Section 1, ProFutures agrees that it will (i)
operate each Fund in compliance with the Bank Holding Company Act of 1956, as
amended ("BHCA"), (ii) liquidate and prohibit the Funds from establishing any
positions that, in the reasonable judgment of AAI, may not be held by such
Funds under the BHCA, and (iii) upon AAI's request, cause the Funds to make,
constitute and appoint AAI as an attorney-in-fact of such Funds with the power
to liquidate any positions that in the reasonable judgment of AAI may not be
held by such Funds under the BHCA. ProFutures and AAI acknowledge and agree
that such positions shall be liquidated in a commercially reasonable manner
consistent with ProFutures' fiduciary duties to such Funds.
10. Representations and Warranties of ProFutures. ProFutures represents,
warrants and covenants to AAI as follows:
(a) ProFutures is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Texas, and has all
requisite corporate power and authority to carry on its business as proposed to
be conducted.
(b) True, accurate and complete copies of ProFutures' certificate or
articles of incorporation and bylaws are attached hereto as Exhibit B.
(c) ProFutures has all requisite legal and corporate power to enter
into this Agreement, to issue the Shares and to perform its other obligations
under the terms of this Agreement.
(d) The Shares shall, when issued, have been duly authorized and,
upon receipt of the purchase price therefor, will be (i) validly issued, fully
paid and nonassessable, (ii) free of preemptive rights and (iii) free and clear
of any and all liens.
(e) ProFutures has taken all corporate action necessary for its
authorization, execution, and delivery of, and its performance under, this
Agreement.
(f) This Agreement constitutes a legal, valid and binding obligation
of ProFutures, enforceable against ProFutures in accordance with its terms,
except that enforceability may be limited by (i) bankruptcy, insolvency or
other laws affecting the enforcement of creditors' rights generally and (ii)
general principles of equity regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(g) The issuance of a Certificate shall constitute a representation
and warranty by ProFutures that the information contained therein is true and
complete as of the date of issuance.
11. Representations and Warranties of AAI. AAI represents and warrants
to ProFutures as follows (which representations and warranties shall be deemed
to be repeated at each Call Date and Closing Date):
(a) AAI is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of New York and has all requisite
corporate power and authority to carry on its business as conducted on the date
hereof.
(b) AAI has taken all actions required for its authorization,
execution, and delivery of, and its performance under, this Agreement.
(c) This Agreement constitutes a valid and binding obligation of
AAI, enforceable against AAI in accordance with its terms, except that
enforceability may be limited by (i) bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity regardless of whether such enforceability is considered
in a proceeding in equity or at law.
12. Conditions to AAI's Obligations at each Call Date and Closing Date.
AAI's obligation to purchase the Shares at the Closing is subject to the
fulfillment at each Call Date and Closing Date of the following conditions:
(a) The representations and warranties made by ProFutures herein
shall be true and correct when made, and shall be deemed to be repeated at each
Call Date and Closing Date;
(b) ProFutures shall have performed all obligations and conditions
herein required to be performed or observed by it on or prior to the Call Date
and all documents incident thereto shall be satisfactory in form and content to
AAI and its counsel;
(c) The conditions to the call set forth in Section 1 shall have
been met and the Certificate shall have been duly executed and delivered;
(d) The Shares shall have been delivered to AAI.
(e) Information Requirements of ProFutures. During the term of this
Agreement, AAI shall have the right, upon reasonable notice and during normal
business hours, to review and, at its expense, copy the books and records of
ProFutures at the offices of ProFutures. In addition, ProFutures shall furnish
to AAI:
(f) The Subscription Amount of each Fund on the date hereof, within
twenty (20) days of each month-end, and upon reasonable request by AAI;
(g) Immediate notice of a suspension of trading in any Fund;
(h) Immediate notice in the event that any of the Funds' assets have
declined as of the close of business on any business day to a level less than
80% of the net assets of such Fund at the end of the preceding month (adjusted
for contributions, redemptions and distributions);
(i) Quarterly and annual unaudited financial statements and annual
and other audited statements of ProFutures, promptly following their
completion;
(j) A monthly statement of the net worth of ProFutures (excluding
AAI's obligations under this Agreement) determined in accordance with generally
accepted accounting principles consistently applied, within twenty (20) days of
each month-end;
(k) Copies of all regulatory notices, complaints, legal actions or
proceedings, and other claims involving or in any way relating to ProFutures or
any Fund including, without limitation, claims by any limited partner or
unitholder, as the case may be, of a Fund, as soon as practicable following
filing or receipt thereof by ProFutures;
(l) Copies of all financial statements required to be delivered to
participants in the Funds pursuant to the rules of the Commodity Futures
Trading Commission or National Futures Association, promptly and in no event
later than the date of distribution to the participants in the Fund; and
(m) Copies of marketing material used in connection with any Fund,
promptly following their use.
13. Other Conditions. In the event ProFutures either makes a general
assignment of its assets to creditors under applicable state law; is placed
into receivership under any governing state or federal law; or made subject to
any foreign insolvency proceeding, this Agreement shall terminate without any
further notice or action of AAI being necessary or required (collectively, an
"Insolvency Event"); provided, however, that AAI, in its sole and absolute
discretion, may elect within ten (10) days of receipt of written notice of an
Insolvency Event to continue the term of the Agreement by providing written
notice of such election to ProFutures (and any assignee or receiver, as the
case may be), subject to whatever additional or other terms and conditions as
AAI may reasonably request. In the event an order for relief is entered
against ProFutures under any chapter of Title 11 of the United States Code,
(the "Bankruptcy Code") and a case is commenced in a United States Bankruptcy
Court (a "Bankruptcy Proceeding"), ProFutures or (if applicable) its trustee
may request, but shall not be entitled to require, cash contributions from AAI
under this Agreement. AAI, in its sole and absolute discretion, may elect to
make such cash contribution in the Bankruptcy Proceeding, subject to
satisfaction of the following conditions: First, in lieu of issuing any shares
in exchange for such a requested cash contribution, ProFutures or (if
applicable) its trustee shall obtain entry of an order under Section 363 of the
Bankruptcy Code, in form and substance satisfactory to AAI (the "Sale Order")
authorizing the sale to AAI of so much of the assets of the estate of
ProFutures as AAI determines in its reasonable discretion to have a value that
is at least equal in amount to the cash contribution that it has agreed to make
(the "Purchase Price"). Second, any assets so transferred to AAI in
consideration for the Purchase Price shall be conveyed pursuant to Section 363
of the Bankruptcy Code free and clear of all liens, claims or encumbrances.
Third, the Sale Order shall provide a finding that AAI is a "good faith"
purchaser and is entitled to the protections of Section 363(m). Fourth, AAI
shall be entitled to reasonable overbid procedures in connection with any such
asset sale, including, but not necessarily limited to entry of an order in the
Bankruptcy Proceeding authorizing ProFutures to reimburse AAI, as an
administrative expense under Section 503(b) of the Bankruptcy Code, for any
fees, costs or expenses, including attorneys' fees, reasonably incurred by AAI
in connection with its offer to pay the Purchase Price.
14. Term. This Agreement shall continue in effect for a period of one
(1) year from the date hereof and shall be automatically renewed for additional
one (1) year terms. Notwithstanding the foregoing, (i) either party may
terminate this Agreement at any time after having given the other party at
least sixty (60) days' prior written notice of its intent to terminate, and
(ii) AAI may, in its sole discretion, terminate this Agreement immediately
following a capital call made pursuant to Section 1 hereof, provided that AAI's
obligation to make payment pursuant to such call shall survive the termination
of this Agreement. In the event of any such termination, AAI will provide
ProFutures with prompt written notice.
15. Amendments; Waiver; Assignments; Beneficiaries. Except as otherwise
provided in Section 3 and Section 4 above, none of the provisions of this
Agreement may be amended or waived except by a written instrument duly executed
by the party to be charged therewith. No waiver of any right or remedy or any
breach of or default under any provision of this Agreement shall constitute a
waiver of any other right or remedy for any breach of or default under any
other provision or of any other breach of or default under the same provision.
This Agreement may not be assigned by either party without the prior written
consent of the other, and any attempted assignment without such consent shall
be void. No change in ownership of either party shall in any way affect its
obligation hereunder. This Agreement and the conditions and provisions hereof
are intended to be and are for the sole and exclusive benefit of the parties
hereto and their respective successors and assigns and for the benefit of no
other person or entity.
16. Governing Law; Jurisdiction; Venue. This Agreement shall be governed
by and construed in accordance with the laws of the State of Illinois
(excluding conflict of laws principles). All disputes, claims, actions or
proceedings arising directly or indirectly from or in connection with this
Agreement shall be litigated only in a court located in the State of Illinois.
The parties hereby consent and submit to the jurisdiction of any state or
federal court located in the County of Cook, State of Illinois. The parties
hereby waive any right to transfer or change the venue of any such litigation.
17. Notices. Any notices required or desired to be given under this
Agreement shall be given in writing and shall be effective when given
personally on the date delivered or, when given by mail, overnight courier or
facsimile (provided receipt of the latter is orally confirmed), upon the date
of receipt, addressed as follows (or to such other address as the party
entitled to notice shall hereafter designate in accordance with the terms
hereof):
If to ProFutures:
ProFutures, Inc.
11612 Bee Cave Road - Suite 100
Austin, Texas 78738
Attn: Gary D. Halbert, President
Fax:
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If to AAI:
ABN AMRO Incorporated
208 South LaSalle Street
Chicago, Illinois 60604
Attn: Ben A. Witt, President
Fax: (312)
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with a mandatory copy to:
ABN AMRO Incorporated
208 South LaSalle Street
Chicago, Illinois 60604
Attn: Maureen Guilfoile
Fax: (312) 855-5284
18. Severability of this Agreement. In case any provision of this
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
19. Counterparts. This Agreement may be executed in any number of
counterparts, all of such counterparts together to be deemed one instrument.
20. Captions. Any captions appearing in this Agreement are inserted as a
matter of convenience and for reference only and shall not define, limit, or
describe the scope and intent of this Agreement or any of the provisions
hereof.
21. Entire Agreement; Prior Agreements. This Agreement contains the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings (written and oral) of
the parties in connection herewith.
IN WITNESS WHEREOF, the parties have duly caused this Agreement to be
executed and delivered by their duly authorized agents as of the date first
above written.
ABN AMRO INCORPORATED
By:
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Name:
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Title:
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PROFUTURES, INC.
By:
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Gary D. Halbert, President
EXHIBIT A
CERTIFICATE
ProFutures, Inc. ("ProFutures") hereby certifies to ABN AMRO Incorporated
("AAI") pursuant to the Amended and Restated Stock Subscription Agreement dated
as of , 2002 by and between ProFutures and AAI (the
"Subscription Agreement") as follows:
1. Its Certificate or Articles of Incorporation and By-laws attached to
the Agreement as Exhibit B have not been amended in any respect and remain in
full force and effect as of the date hereof.
2. The representations and warranties of ProFutures set forth in Section
11 of the Subscription Agreement are true and correct in all respects as of the
date hereof.
3. At the date hereof, ProFutures has performed, satisfied and complied
with the covenants, agreements and conditions required by the Subscription
Agreement to be performed or satisfied by it or with which it is required to be
in compliance.
4. The undersigned represents and warrants that the following conditions
to the call have been met:
(a) The Fund to which the call relates is
(the "Call Fund");
(b) The Call Fund suspended trading in accordance with its trading
suspension policy (as set forth in its limited partnership agreement or trust
agreement) on , 20 ;
(c) The Call Fund has exhausted all of its assets to satisfy its
obligations;
(d) The net worth of ProFutures (excluding AAI's obligations under
the Subscription Agreement) as of the date hereof, as determined by ProFutures'
regularly employed independent certified public accountants in accordance with
generally accepted accounting principles consistently applied is $ .
(e) Subject to paragraph 5 hereof, the Subscription Amount
determined as of the date hereof is $ (which amount is equal to:
(i) the Call Fund's Net Worth Requirement as of the Fund's first Call Date;
minus (ii) the net worth of ProFutures (excluding AAI's obligations under the
Subscription Agreement) as of such date, as determined by ProFutures' regularly
employed independent certified public accountants in accordance with generally
accepted accounting principles consistently applied.
5. The Subscription Amount shall in no event exceed: (i) $7,000,000, if
the Call Fund is either ProFutures Diversified Fund, L.P. or Alternative Asset
Growth Fund, L.P.; or (ii) $1,000,000 if the Call Fund is either ProFutures
Long/Short Growth Fund, L.P. or ProFutures Strategic Allocation Trust. In the
event that ProFutures makes a call with respect to two or more Funds, the
aggregate subscription requirement with respect to all such Call Funds shall
not exceed the highest Subscription Amount of any such Call Fund.
6. Capitalized terms used herein but not defined herein have the same
meaning as in the Subscription Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed by its duly authorized officer on this day of ,
20 .
PROFUTURES, INC.
By:
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Name:
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Title:
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EXHIBIT 99.1
CERTIFICATION PURSUANT TO SECTION 1350 OF
CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE
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I, Gary D. Halbert, the President of ProFutures, Inc. as general partner of
ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form 10Q for the
quarter ended June 30, 2002 of ProFutures Long/Short Growth Fund, L.P. fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 and (ii) the information contained in the Form 10Q for the
quarter ended June 30, 2002 fairly presents, in all material respects, the
financial condition and results of operations of ProFutures Long/Short Growth
Fund, L.P.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
By: ProFutures, Inc., general partner
By: /s/ Gary D. Halbert
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Gary D. Halbert
President
August 13, 2002
EXHIBIT 99.2
CERTIFICATION PURSUANT TO SECTION 1350 OF
CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE
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I, Debi B. Halbert, the Chief Financial Officer of ProFutures, Inc. as general
partner of ProFutures Long/Short Growth Fund, L.P., certify that (i) the Form
10Q for the quarter ended June 30, 2002 of ProFutures Long/Short Growth Fund,
L.P. fully complies with the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 and (ii) the information contained in the Form
10Q for the quarter ended June 30, 2002 fairly presents, in all material
respects, the financial condition and results of operations of ProFutures
Long/Short Growth Fund, L.P.
PROFUTURES LONG/SHORT GROWTH FUND, L.P.
By: ProFutures, Inc., general partner
By: /s/ Debi B. Halbert
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Debi B. Halbert
Chief Financial Officer
August 13, 2002