-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BCMAVa4t1hhaR5woGNMFZZL8ftw8NssMztpmpGwg7o/fuuIYOrGu788LdFcw1MNu FPL4eEmwIRgssUt/aDEsUg== 0000945227-02-000054.txt : 20020814 0000945227-02-000054.hdr.sgml : 20020814 20020814152124 ACCESSION NUMBER: 0000945227-02-000054 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020630 FILED AS OF DATE: 20020814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROFUTURES LONG/SHORT GROWTH FUND LP CENTRAL INDEX KEY: 0001045702 STANDARD INDUSTRIAL CLASSIFICATION: [6221] IRS NUMBER: 742849862 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25585 FILM NUMBER: 02735669 BUSINESS ADDRESS: STREET 1: 1310 HIGHWAY 620 SOUTH STREET 2: SUITE 200 CITY: AUSTIN STATE: TX ZIP: 78734 BUSINESS PHONE: 5122633800 MAIL ADDRESS: STREET 1: 1310 HIGHWAY 620 SOUTH STREET 2: SUITE 200 CITY: AUSTIN STATE: TX ZIP: 78734 FORMER COMPANY: FORMER CONFORMED NAME: PROFUTURES BULL & BEAR FUND L P DATE OF NAME CHANGE: 19980827 10-Q 1 jun02-10q.txt 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: ------------------------------ If to AAI: ABN AMRO Incorporated 208 South LaSalle Street Chicago, Illinois 60604 Attn: Ben A. Witt, President Fax: (312) ----------------------- 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- PROFUTURES, INC. By: ------------------------------------ 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: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- EXHIBIT 99.1 CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE ------------------------------------------------ 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 ---------------------------------- 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 ------------------------------------------------ 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 ---------------------------------- Debi B. Halbert Chief Financial Officer August 13, 2002 -----END PRIVACY-ENHANCED MESSAGE-----