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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
December 20, 2000 0-16834
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Date of Report (Date of Earliest Event Reported) (Commission File Number)
IEA Income Fund VII,
(A California Limited Partnership)
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(Exact name of registrant as specified in its charter)
California 94-2966976
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(State or jurisdiction of incorporation) (IRS Employer Identification No.)
444 Market Street, 15th Floor, San Francisco, California 94111
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(Address of principal executive offices) (Zip Code)
(415) 677-8990
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(Registrant's Telephone Number, Including Area Code)
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ITEM 2. Acquisition or Disposition of Assets.
On December 20, 2000, the Registrant sold its remaining marine dry cargo
containers to two unaffiliated parties, Cypress Equipment Fund IV LLC, a
California limited liability company ("Cypress Fund IV") and Access Leasing
Corporation, a Delaware corporation ("Access Leasing") (Cypress Fund IV and
Access Leasing referred to collectively as the "Buyers"). The Buyers paid
$627,900 in cash to the Registrant. The Registrant intends to dissolve and
liquidate by December 31, 2000, and to make a final liquidating distribution to
its limited partners amounting to approximately $75 per outstanding unit of
limited partnership interest.
The Registrant, A California Limited Partnership, was organized on June 27,
1985 to engage in the business of leasing marine dry cargo containers to
third-party lessees. The Registrant is managed by Cronos Capital Corp., a
California corporation ("CCC"), its managing general partner.
One of the principal investment objectives of the Registrant was to lease
its containers for ten to fifteen years, and then to dispose of them and
liquidate. The Registrant has been in operation for over 15 years. Through
occasional sales, retirement, and casualty losses, the Registrant had sold
approximately 65% of its container fleet prior to the Registrant's sale of its
remaining container fleet to the Buyers. With the reduction in the size of the
Registrant's container fleet, the administrative expenses incurred by the
Registrant, as a percent of its gross revenues, has increased. For these
reasons, CCC, as the managing general partner, concluded that it would be in the
best interest of the Registrant and its limited partners to sell its remaining
containers in bulk.
CCC solicited bids from independent parties for the purchase of the
remaining containers of the Registrant. The Buyers submitted a joint proposal
for the purchase of the Registrant's remaining containers and those of another
limited partnership managed by CCC, the IEA Income Fund VI, A California Limited
Partnership, at a price and upon terms that CCC deemed to be in the best
interest of the Registrant and its limited partners.
On December 20, 2000, the Registrant entered into identical container
purchase agreements (the "Purchase Agreements") with the Buyers, selling
one-half of its remaining containers to Cypress Fund IV and one-half to Access
Leasing. Closing of the sale occurred on that date, with the Buyers
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paying, in cash, $627,900 to the Registrant. The purchase price is equal to 98%
of the net book value of the Registrant's remaining containers as of September
30, 2000. Under the terms of the Purchase Agreements, the Buyers are entitled to
all revenues attributable to the leasing of the containers from and after
December 1, 2000, and the Registrant is entitled to all revenues from the
leasing of the containers through November 30, 2000.
The Purchase Agreements contain standard indemnification covenants. To
allow the Registrants to liquidate and dissolve, these covenants are only
enforceable against CCC, and not the Registrant.
Neither of the Buyers is in the business of managing marine cargo
containers. At the closing of the sale of the Registrant's containers to the
Buyers, each entered into an Equipment Lease Agreement ("Lease Agreement") with
CCC, pursuant to which CCC agreed to manage the containers for the Buyers. Each
of the Lease Agreements is for a three-year term, subject to earlier termination
upon the occurrence of certain events. The term of the Lease Agreements shall be
automatically renewed for successive one-year terms, unless prior notice is
given by the Buyers (as to the first renewal term) or by either by the Buyers or
by CCC (with respect to all subsequent renewal terms). CCC has agreed to lease
the containers on a non-discriminatory basis and shall be entitled, as its
management fee, to 20% of the net revenues attributable to the containers,
defined as the revenues from the leasing of the containers minus all operating
costs of leasing them to third party container lessees. Upon any subsequent
sales of the containers, the Buyers shall pay to CCC a fee of 10% of the net
sale proceeds from the sale of the containers.
Neither Buyer is an affiliate of the Registrant or of CCC. In September
1998, affiliates of the Buyers purchased, for cash, the remaining container
fleets in connection with the liquidation of four older container leasing
partnerships managed by CCC - the IEA Marine Container Income Fund III, the IEA
Marine Container Income Fund IV, and the IEA Marine Container Income Funds V(A)
and V(B). The buyers of the containers from these earlier sales also entered
into lease agreements with CCC on terms similar to those of the Lease Agreements
that the Buyers entered into with CCC with respect to the management of the
containers sold by the Registrant to the Buyers.
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Upon its dissolution and liquidation, the Registrant will file a Form 15
with the Securities and Exchange Commission, terminating its reporting
obligations under the Securities Act of 1934, as amended.
ITEM 7. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) The following documents are furnished as Exhibits to this Current
Report on Form 8-K pursuant to Item 601 of Regulation S-K:
2.1 The Container Purchase Agreement, dated as of December 20,
2000, by and among Cronos Capital Corp., IEA Income Fund VII,
A California Limited Partnership, and Cypress Equipment Fund
IV, LLC.
2.2 The Container Purchase Agreement, dated as of December 20,
2000, by and among Cronos Capital Corp., IEA Income Fund VII,
A California Limited Partnership, and Access Leasing
Corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IEA Income Fund VII
(A California Limited Partnership)
By Cronos Capital Corp.
The Managing General Partner
By /s/ Elinor A. Wexler
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Elinor A. Wexler
Vice President/Administration
and Secretary of Cronos Capital Corp.
Date: December 28, 2000
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EXHIBIT INDEX
Exhibit
2.1 The Container Purchase Agreement, dated as
of December 20, 2000, by and among Cronos
Capital Corp., IEA Income Fund VII, A
California Limited Partnership, and Cypress
Equipment Fund IV, LLC.
2.2 The Container Purchase Agreement, dated as
of December 20, 2000, by and among Cronos
Capital Corp., IEA Income Fund VII, A
California Limited Partnership, and Access
Leasing Corporation.
