SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549-1004
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
Commission file number 0-21256
CYPRESS EQUIPMENT FUND II, LTD.
(Exact name of Registrant as specified in its charter)
Florida 59-3082723
(State or other jurisdiction or (I.R.S. Employer
incorporation or organization) Identification No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (727) 573-3800
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 50,000
Title of Each Class
Units of Limited Partnership Interest
$1,000 per unit
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
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 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
------- -------
Number of shares outstanding of each of Registrant's classes of securities:
Number of Units
Title of Each Class at December 31, 1999
---------------------- --------------------
Units of Limited Partnership 36,469
Interest: $1,000 per unit
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
Parts III and IV - Form S-1 Registration Statement
and all amendments and Supplements thereto
File No. 33-44119
PART I
Item 1. BUSINESS
General Development of Business -
The Registrant is a Florida limited partnership (the "Partnership")
composed of Cypress Equipment Management Corporation II, a California
corporation and a wholly-owned subsidiary of Cypress Leasing Corporation,
as the Managing General Partner; RJ Leasing - 2, Inc., a Florida
corporation and a second-tier subsidiary of Raymond James Financial, Inc.,
as the Administrative General Partner; Raymond James Partners, Inc., a
Florida corporation and a wholly-owned subsidiary of Raymond James
Financial, Inc., as the other General Partner; and purchasers of
partnership units as Limited Partners.
Financial Information about Industry Segments -
The Registrant is engaged in only one industry segment, to acquire
transportation, manufacturing, industrial and other capital equipment (the
"Equipment") and lease the Equipment to third parties.
Narrative Description of Business -
The Partnership's business is to acquire and lease equipment,
primarily through full payout and operating leases expected to generate
income over the useful life of the Equipment, and to generate cash
distributions to the Limited Partners from leasing revenues and proceeds
from the sale or other disposition of the Equipment owned by the
Partnership.
The Registrant has no direct employees. The General Partners have
full and exclusive discretion in management and control of the Partnership.
The equipment leasing industry is highly competitive and offers to
users an alternative to the purchase of nearly every type of equipment. In
seeking lessees, the Partnership will compete with manufacturers of
equipment who provide leasing programs and with established leasing
companies and equipment brokers. In addition, there are numerous other
potential investors, including limited partnerships, organized and managed
similarly to the Partnership, seeking to purchase equipment subject to
leases, some of which have greater financial resources and more experience
than the Partnership or the General Partners.
Item 2. PROPERTIES
The Registrant commenced operations in June 1992, and as of December
31, 1999, the original cost of Equipment owned by the Partnership was
$13,034,322. Equipment and related information consist of the following:
FUTURE REVENUE
LEASE OF REMAINING
MATURITIES ACQUISITION LEASE TERM AT
EQUIPMENT AT 12/31/99 COST 12/31/99
-------------------------- ------------- ---------------- -----------
Tank Barges December 1999 3,623,484 0
2 Aircraft November
2003- June 3,625,392 1,250,000
2004
Aircraft January 2000 1,047,892 36,000
Machine Tools Sept. 1999 - 680,825 142,304
September
2001
Offlease:
Aircraft 1,812,694
Rail Cars 2,244,035
------------ -----------
TOTAL $ 13,034,322 $ 1,428,304
============ ===========
The lessees and the percentages of total equipment owned are as
follows:
% of All
Equipment
Owned
-----
Lone Star Airlines 28%
Dow Chemical Company 28%
Merlin Express 8%
Alliant Technology 5%
Equipment Held for Sale 31%
----
100%
====
The Partnership paid $3,118,969 for the right to obtain title to a
specialty tug and barge on December 30, 2002, at the expiration of the
lease.
The Partnership is also a 50% partner in one other partnership with a
current net investment of $317,828.
Item 3. LEGAL PROCEEDINGS
In August 1998, Varilease Corporation filed an action against Cypress
in the circuit court for the Sixth Judicial Circuit, Pinellas County,
Florida. The suit alleges that Varilease continues to have an interest in
some equipment that Cypress purchased from Varilease in 1995, and seeks
monetary damages. The management of Cypress has retained counsel and
believes the suit is completely without merit.
On July 28, 1999 Cypress Equipment Fund II, LTD filed a lawsuit in Marin
County Superior Court against Ally Capital Partners I, L.P., Ally Capital
Holdings, Inc. and ETL Partners, L.P. (the two general partners of Ally
Capital Partners I) and E. Tod Lindner (the general partner of ETL
Partners). The suit stemmed from Ally Capital Partners' breach of contract
for the lease of 50 Automated Teller Machines from Cypress, and Ally
Capital Partners' continued wrongful use and possession of the ATMs.
Cypress seeks $335,199.36 in past rent due, $42,737.92 in late charges,
$708,265.70 in liquidated damages, plus attorneys fees and prejudgment
interest. Cypress has entered the default of Ally Capital Holdings,Inc.
The case is currently in Court-ordered mediation.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of 1999.
PART II
Item 5. MARKET FOR THE REGISTRANT'S SECURITIES AND RELATED SECURITY
HOLDER MATTERS
(a)The Registrant's limited partnership interests are not
publicly traded. There is no market for the Registrant's limited
partnership interests and it is unlikely that any will develop.
(b) Approximate number of
equity security holders:
Number of Record Holders
Title of Each Class as of December 31, 1999
Units of Limited Partnership Interest 1,979
General Partner Interests 3
Item 6. SELECTED FINANCIAL DATA
1999 1998 1997 1996 1995
Total
Revenues $ 6,823,242 $ 8,736,573 $ 6,606,199 $10,605,555 $ 7,119,741
Net Income $11,551,809 $ 4,560,365 $ 1,479,260 $ 4,472,073 $ 1,550,265
Total Assets $14,553,255 $33,822,260 $47,348,906 $49,121,339 $39,309,444
Notes Payable $ 1,500,921 $ 6,497,730 $19,084,905 $18,628,741 $ 9,900,879
Distributions
to Limited
Partners Per
Weighted
Average
Limited
Partnership
Unit
Outstanding $ 750.98 $ 150.00 $ 100.00 $ 100.00 $ 109.21
Earnings Per
Weighted
Average
Limited
Partnership
Unit
Outstanding $ 313.59 $ 123.80 $ 40.16 $ 121.40 $ 42.08
The selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this report.
This statement is not covered by the auditor's opinion included elsewhere
in this report.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Rental income decreased from $4,803,888 for the year ended December
31, 1998, to $3,066,577 for the year ended December 31, 1999. Equipment
which was sold provided $1,715,938 less revenue in 1999 than in 1998.
There was a net decrease of $21,373 in revenues of leases that were in
place. Interest income increased during the year ended December 31, 1999,
as compared to the year ended December 31, 1998, because of higher interest
rates and the Partnership had a higher average balance of cash for
investment. The equity in income in Partnerships decreased from $1,242,123
for the period ended December 31, 1998 to $662,349 for the period ended
December 31, 1999.
Interest expense decreased from $1,424,978 for the year ended December
31, 1998, to $225,651 for the year ended December 31, 1999. This decrease
primarily resulted from a decreased average level of debt during the
period.
Management fee expense decreased from $299,802 for the year ended December
31, 1998, to $65,351 for the year ended December 31, 1999 due mainly to
decreased rental revenues. Incentive management fees increased from $0 for
the year ended December 31, 1998, to $516,477 for the year ended December
31, 1999. The 4% incentive management fee was earned with the August 10,
1999, distribution as each Limited Partner has received cumulative cash
distributions equal to his capital contribution. Equipment resale fees
increased from $0 for the year ended December 31, 1998 to $1,970,078 for
the year ended December 31, 1999. The Equipment resale fee was deferred
without interest until the Limited Partners began receiving cumulative cash
distributions equal to payout plus an amount equal to 8% of adjusted
capital contributions per annum cumulative from each limited partner's
closing date.
During the year ended December 31, 1999, rental equipment with a book
value of $4,896,557 was sold for $3,319,276 resulting in a loss on sale of
$1,577,281. During the same period, the option that was to become
available in January 2000 was exercised. In February 1999 the lessee,
General Chemical Partners, was granted an early lease termination and the
option was exercised. General Chemical (Soda Ash) Partners purchased 624
rail cars producing a gain on sale of $1,845,048 for the Partnership. The
remaining 57 cars on this option were purchased by Southern Illinois
Railcar Company in December 1999 producing an additional gain on sale of
$39,424. These transactions netted the Partnership a $307,191 gain on the
sale of rental equipment.
During the year ended December 31, 1999, Equipment Held For Sale with
a book value of $3,672,601 was sold for $7,950,000 less $212,052 for sales
related expenses resulting in a net gain on sale of $4,065,348. During
this period an option on railcars was exercised. This purchase of
$2,244,035 increased Equipment Held For Sale. An off lease aircraft was
transferred to Equipment Held For Sale at a book value of $688,043.
This equipment is currently being remarketed.
The partnership had a loss of $861,681 in writing off a direct
financing lease.
During the year ended December 31, 1998, the Partnership purchased
$345,456 of new equipment. The Partnership sold rental equipment with an
original cost of $8,847,064 for a net sale price of $10,431,101. These
sales produced a gain on sale of $2,989,664. The Partnership had a
casualty event which netted a gain of $103,033. Equipment Held for Sale
with a net book value of $432,473 was sold for $1,100,000 less disposition
expenses resulting in a gain of $639,250.
Depreciation and amortization expense decreased $1,046,168 for the
year ended December 31, 1999 versus the year ended December 31, 1998, due
to an average depreciable basis of equipment of $28,744,000 during 1998
versus an average of $16,115,000 during 1999.
The net effect of the above revenue and expense items resulted in a
net income of $11,551,809 for the year ended December 31, 1999, compared to
a net income of $4,560,365 for the year ended December 31, 1998.
Notes payable decreased $4,996,809 during the year ended December 31,
1999, due to deferred interest of $148,721 and $5,145,530 of principal
payments on notes.
Liquidity and Capital Resources
The primary sources of funds for the year ended December 31, 1999,
were $9,406,326 from operating activities, $15,810,422 from the sale of the
Partnership's interest in a partnership, $12,116,236 from the sale of
rental equipment and $1,332,424 in distributions from other partnerships.
These sources were used primarily for $5,145,530 of notes payments and
$27,664,114 of distributions. As of December 31, 1999, the Partnership had
$2,680,389 of Cash and Cash Equivalents.
In the opinion of the General Partners there are no material trends,
favorable or unfavorable, in the Partnership's capital resources and the
resources will be sufficient to meet the Partnership's needs for the
foreseeable future.
Short-term liquidity requirements consist of funds needed to make
distributions and meet administrative expenses. These short-term needs
will be funded by cash from 2000 operations and Cash and Cash Equivalents
at December 31, 1999.
In the opinion of the General Partners, the Partnership has sufficient
funds or sources of funds to remain liquid for the expected life of the
Partnership. The General Partners are not aware of any trends that
significantly affect the Partnership's liquidity.
The cash balance at December 31, 1999, was $2,680,389. The
Partnership had net income of $11,551,809 and after adjusting for
depreciation and amortization and the changes in operating assets and
liabilities, net cash provided by operating activities was $9,406,326.
Cash provided by investing activities totaled $22,384,306. Cash used in
financing activities was primarily to make payments of notes payable of
$5,145,530 and distributions of $27,664,114.
Actual cash distributions were $27,664,114 in 1999 and $5,525,603 in
1998.
The Partnership anticipates that funds from operations in 2000 will be
adequate to cover all 2000 operating contingencies.
INDEPENDENT AUDITOR'S REPORT
To the Partners of
Cypress Equipment Fund II, Ltd.
We have audited the accompanying balance sheets of Cypress Equipment
Fund II, Ltd. as of December 31, 1999 and 1998, and the related statements
of operations, partners' equity (deficit) and cash flows for each of the
three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Cypress
Equipment Fund II, Ltd. as of December 31, 1999 and 1998, and the results
of its operations and its cash flows for each of the three years in the
period ended December 31, 1999, in conformity with generally accepted
accounting principles.
/s/ Spence, Marston, Bunch, Morris & Co.
SPENCE, MARSTON, BUNCH, MORRIS & CO.
Certified Public Accountants
Clearwater, Florida
April 30, 2000
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CYPRESS EQUIPMENT FUND II, LTD.
BALANCE SHEETS
DECEMBER 31,
1999 1998
---- ----
ASSETS
Rental Equipment, at Cost $ 8,977,593 $ 23,253,102
Less: Accumulated Depreciation (4,021,698) (11,192,367)
------------- -------------
4,955,895 12,060,735
Rental Equipment Held for Sale 2,932,078 3,672,601
Deposit on Equipment 3,118,969 3,118,969
Options 0 2,282,246
Investment In Partnerships 317,828 7,495,781
Net Investment in Direct Financing Lease 0 840,731
Deferred Debt Costs (Net of Accumulated
Amortization of $26,559 and $29,214,
Respectively) 1,000 8,366
Rent and Sales Proceeds Receivable 524,848 537,135
Accounts Receivable - General 0 5,508
Prepaid Expense 22,248 97,737
Cash and Cash Equivalents 2,680,389 3,702,451
------------ ------------
Total Assets $ 14,553,255 $ 33,822,260
============= =============
LIABILITIES AND PARTNERS' EQUITY
Liabilities:
Notes Payable $ 1,500,921 $ 6,497,730
Payable to: General Partners 2,012,014 101,308
Others 433,953 451,612
Interest Payable 0 48,187
Unearned Revenue 18,258 23,009
------------- -------------
Total Liabilities 3,965,146 7,121,846
------------- -------------
Partners' Equity:
Limited Partners (36,469 units outstanding
at December 31, 1999 and 1998) 10,801,153 26,752,336
General Partners (213,044) (51,922)
------------- -------------
Total Partners' Equity 10,588,109 26,700,414
------------- -------------
Total Liabilities and Partners' Equity $ 14,553,255 $ 33,822,260
============= =============
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
1999 1998 1997
---- ---- ----
Revenues:
Rental Income $ 3,066,577 $ 4,803,888 $ 5,770,536
Interest Income 245,807 200,738 270,617
Gain on Sale of
Rental Equipment 307,191 3,092,697 0
Gain on Sale of Rental
Equipment Held for Sale 4,065,348 639,250 565,046
Write Down
of Equipment (861,681) 0 0
----------- ------------ ------------
Total Revenues 6,823,242 8,736,573 6,606,199
----------- ------------ ------------
Operating Expenses:
Management Fees-General
Partners 65,351 299,802 288,328
Incentive Management Fee -
General Partner 516,477 0 0
Equipment Resale Fee -
General Partner 1,970,078 0 0
General & Administrative:
Affiliate 54,517 57,804 69,281
Other 872,992 1,058,425 415,486
Interest Expense 225,651 1,424,978 1,557,497
Depreciation and Amortization 1,531,154 2,577,322 3,338,536
------------ ----------- ----------
Total Operating Expenses 5,236,220 5,418,331 5,669,128
------------ ----------- ----------
Net Income Before Equity in
Income of Partnerships 1,587,022 3,318,242 937,071
Equity in Partnerships 662,349 1,242,123 542,189
Gain on Sale of Investment in
Partnership 9,302,438 0 0
------------ ------------ ------------
Net Income $11,551,809 $ 4,560,365 $ 1,479,260
============ ============ ============
Allocation of Net Income:
Limited Partners $11,436,291 $ 4,514,761 $ 1,464,467
General Partners 115,518 45,604 14,793
------------ ------------ ------------
$11,551,809 $ 4,560,365 $ 1,479,260
============ ============ ============
Net Income per $1,000 Limited
Partnership Unit Outstanding $ 313.59 $ 123.80 $ 40.16
============ ============ ============
Number of Limited Partnership
Units 36,469 36,469 36,469
============ ============ ============
The accompanying notes are an integral part of these financial statements.
<PAGE>
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
Limited General Total
Partners' Partners' Partners'
Equity Deficit Equity
-------- -------- --------
Balance at December 31, 1996 $29,890,358 $ (20,234) $29,870,124
Net Income - 1997 1,464,467 14,793 1,479,260
Distributions - 1997 (3,646,900) (36,832) (3,683,732)
------------ --------- -----------
Balance at December 31, 1997 27,707,925 (42,273) 27,665,652
Net Income - 1998 4,514,761 45,604 4,560,365
Distributions - 1998 (5,470,350) (55,253) (5,525,603)
----------- --------- ------------
Balance at December 31, 1998 26,752,336 (51,922) 26,700,414
Net Income - 1999 11,436,291 115,518 11,551,809
Distributions - 1999 (27,387,474) (276,640) (27,664,114)
------------ ---------- ------------
Balance at December 31, 1999 $10,801,153 $(213,044) $10,588,109
============ =========== ============
The accompanying notes are an integral part
of these financial statements.
<PAGE>
CYPRESS EQUIPMENT FUND II, LTD.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
1999 1998 1997
---- ---- ----
Cash Flows from Operating
Activities:
Net Income (Loss) $11,551,809 $ 4,560,365 $ 1,479,260
Adjustments to Reconcile Net
Income (Loss) to Net Cash
Provided by Operating
Activities:
(Gain)Loss on Sale of Equipment (307,191) (3,092,697) 0
Depreciation and Amortization 1,531,154 2,577,322 3,338,536
Deferred Interest on Notes
Payable 148,721 246,744 606,257
Write Down of Equipment 861,681 0 0
Equity in Income of Investment
In Partnerships (662,455) (1,242,123) (542,189)
(Gain) on Sale of Investment
in Partnership (9,302,438) 0 0
Changes in Operating Assets
and Liabilities:
Decrease in Rental Equipment
Held for Sale 3,672,601 432,472 20,043
(Increase) Decrease in Rent
Receivable (8,663) 200,468 (79,087)
(Increase) Decrease in
Accounts Receivable Other 5,508 6,492 (8,691)
(Increase) Decrease in
Prepaid Expenses 75,489 22,733 (17,851)
Increase (Decrease) in
Interest Payable (48,187) (93,593) 19,311
Increase (Decrease) in
Payable to:
General Partners 1,910,706 (86,635) (198,424)
Affiliates 0 0 (11,393)
Other (17,658) 182,986 166,568
Increase (Decrease) in
Unearned Revenue (4,751) 23,009 (187)
----------- ------------ ------------
Net Cash Provided by
Operating Activities 9,406,326 3,737,543 4,772,153
----------- ------------ ------------
Cash Flows from Investing
Activities:
Purchases of Rental Equipment 0 (345,456) (1,259,580)
Deposit on Equipment 0 0 (9,420)
(Purchase)Decrease of Direct
Financing Lease 0 26,369 (867,100)
Investment in Partnerships 0 (20,682) (1,541,765)
Distributions Received 1,332,424 3,744,439 868,175
(Exercise) Sale of Options (6,880,009) 0 748,406
Proceeds from Sale of Equipment 12,116,236 10,430,101 0
Sale Federal Paper Board 15,810,422 0 0
Proceeds from Casualty of
Option 5,733 0 2,966
(Increase) Decrease in Sales
Proceeds Receivable 0 0 1,483
----------- ----------- -----------
Net Cash Provided by (Used
In) Investing Activities 22,384,806 13,834,771 (2,056,835)
----------- ----------- -----------
Cash Flows from Financing
Activities:
Proceeds from Notes Payable 0 0 8,658,151
Payment of Notes Payable (5,145,530) (12,833,920) (8,808,244)
(Increase) Decrease in Deferred
Debt Costs (3,550) 9,548 (72,748)
Distributions to Partners (27,664,114) (5,525,603) (3,683,732)
------------ ----------- -----------
Net Cash Used In
Financing Activities (32,813,194) (18,349,975) (3,906,573)
------------ ----------- -----------
Decrease in Cash and
Cash Equivalents (1,022,062) (777,661) (1,191,255)
Cash and Cash Equivalents at
Beginning of Period 3,702,451 4,480,112 5,671,367
------------ ----------- -----------
Cash and Cash Equivalents at End
of Period $ 2,680,389 $ 3,702,451 $ 4,480,112
============ =========== ===========
Supplemental Cash Flow Information:
Interest Paid $ 125,117 $ 1,271,827 $ 931,930
============ =========== ===========
Non-Cash Activities:
Notes Payable in 1997 were increased by $606,257, the amount of Deferred
Interest on Notes Payable.
Notes Payable in 1998 were increased by $246,744 the amount of Deferred
Interest on Notes Payable.
Notes Payable in 1999 were increased by $148,721 the amount of Deferred
Interest on Notes Payable.
In 1999, an option was exercised decreasing Options and increasing
Equipment Held for Sale by $672,437.
In 1999, Leased Equipment with a cost of $1,812,694 and a net book value of
$688,043 was transferred to Equipment Held for Sale.
In 1999, the Investment in a Direct Financing Lease was written down to $0.
The accompanying notes are an integral part
of these financial statements.
Cypress Equipment Fund II, Ltd.
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE 1 - ORGANIZATION
Cypress Equipment Fund II, Ltd., (the "Partnership"), a Florida limited
partnership, was formed November 13, 1991, for the purpose of acquiring and
leasing transportation, manufacturing, industrial and other capital
equipment. The Partnership was funded with limited partner capital
contributions and commenced operations on June 22, 1992. The Partnership
will terminate on December 31, 2015, or sooner, in accordance with the
terms of the Limited Partnership Agreement.
Cypress Equipment Management Corporation II, a California corporation
and a wholly-owned subsidiary of Cypress Leasing Corporation, is the
Managing General Partner; RJ Leasing - 2, Inc., a Florida corporation and a
second-tier subsidiary of Raymond James Financial, Inc., is the
Administrative General Partner; and Raymond James Partners, Inc., a Florida
corporation and a wholly-owned subsidiary of Raymond James Financial, Inc.,
is the other General Partner.
Cash distributions, subject to payment of the equipment management fees
and incentive management fees, and profits and losses of the Partnership
shall be allocated 99% to the Limited Partners and 1% to the General
Partners. Once each Limited Partner has received cumulative cash
distributions equal to his capital contributions, an incentive management
fee equaling 4% of cash available for distributions will be paid to the
General Partners. When each Limited Partner has received cumulative cash
distributions equal to his capital contributions plus an amount equal to
8% of adjusted capital contributions per annum, an incentive management fee
equaling 23% of cash available for distributions will be paid to the
General Partners.
As of December 31, 1999, the Partnership has received Limited and
General Partner capital contributions of $36,469,000 and $2,000,
respectively.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The Partnership utilizes the accrual basis of accounting whereby
revenues are recognized when earned and expenses are recognized as
obligations are incurred.
Cash and Cash Equivalents
It is the Partnership's policy to include all money market funds and FTN
Repurchase Agreements in Cash and Cash Equivalents.
Concentration of Credit Risk
Financial instruments that potentially subject the Partnership to
concentrations of credit risk consist principally of cash investments and
rents receivable. The cash investments are placed in high credit quality
financial institutions and in a money market mutual fund that is managed by
a wholly owned subsidiary of Raymond James Financial, Inc. The Partnership
receives rental income exclusively from lessees. Management does not
believe that significant credit risk exists in relation to these accounts
at December 31, 1999.
The Partnership maintains deposits in excess of federally insured
limits. Statement of Financial Accounting Standards No. 105 requires
disclosure regardless of the degree of risk.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates that affect
certain reported amounts and disclosures. These estimates are based on
management's knowledge and experience. Accordingly, actual results could
differ from these estimates.
Offering and Commission Costs
Offering and commission costs are charged against Limited Partners'
Equity upon admission of Limited Partners.
Leases
Operating
The Partnership accounts for qualifying leases in accordance with the
operating method. Under the operating method of accounting, the leased
equipment is recorded as an asset at cost and depreciated on the declining
balance method using a ten to forty year life. Rental income is recognized
ratably over the term of the leases.
In March 1995, the Financial Accounting Standards Board (FASB) issued
statement No. 121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of" (SFAS 121). In accordance with
SFAS 121, the Fund reviews the carrying value of its equipment at least
annually in relation to expected future market conditions for the purpose
of assessing the recoverability of the recorded amounts. If projected
undiscounted cash flows (future lease revenue plus residual values) are
less than the carrying value of the equipment, a loss on revaluation is
recorded. There were no write-downs required during 1999.
Direct Financing Lease
The Partnership wrote down its Investment in Direct Financing Lease to
$0 due to default by the lessee, control of, and location of the equipment.
See Note 12.
Investment In Partnerships
The Partnership accounts for its investments in partnerships using the
equity method of accounting because the Partnership does not have a
majority control of the major operating and financial policies of the
partnerships in which it invests. Under the equity method, the investment
is carried at cost, adjusted for the Partnership's share of income or loss
of the partnership in which it has invested, and additional investments and
cash distributions from the partnership.
Equipment Held for Sale
The Partnership's policy is to transfer off-lease equipment that is held
for sale to Equipment Held for Sale at the lower of its net book value or
its market value. If the value of the equipment subsequently declines, the
carrying amount is adjusted.
Income Taxes
Federal and state income tax regulations provide that taxes on the
income or loss of the Partnership are reportable by the Partners in their
individual income tax returns. Accordingly, no provision for such taxes
has been made.
Per Unit Computations
Per unit computations are based on 36,469 of $1,000 limited partnership
units outstanding for 1999, 1998, and 1997, respectively.
Reclassification
For comparability, 1997 figures have been reclassified where appropriate
to conform to the financial statement presentation used in 1998 and 1999.
The following amounts on the 1997 Statement of Operations have been
reclassified to Equity in Income of Partnerships: Lease Revenue $267,922;
Interest Expense $24,627; and Depreciation $207,654. These
reclassifications had no effect on net income or partners' capital for the
year.
NOTE 3 - RELATED PARTY TRANSACTIONS
General Partners
The General Partners have contributed a total of $2,000 to the
Partnership.
In accordance with the terms of the Limited Partnership Agreement, the
Administrative and Managing General Partners were paid or had accrued
acquisition fees of $43,525, $0, and $116,352 for services related to
locating and leasing equipment (2.85% of the purchase price); equipment
management fees of $65,351, $299,802, and $288,328, (5% of gross rentals
from rental equipment subject to operating leases, 2% of gross rentals
from rental equipment subject to full payout leases, or 1% of gross
rentals from rental equipment subject to operating leases for which the
Administrative and Managing General Partners arrange for and actively
supervise the performance of services); incentive management fees of
$516,477, $0, $0; resale fees of $1,970,078,$0,$0 in 1999, 1998, and
1997, respectively. Gross rentals for purposes of calculating equipment
management fees include cash revenues received by the Partnership
subsequent to the date of purchase including cash revenues that relate
to periods prior to the date of purchase. General Partner distributions
were $276,640, $55,253, and $36,832 for 1999, 1998, and 1997, respectively.
Affiliates of the General Partner
The following amounts were paid or accrued to affiliates of the General
Partners: $54,517 in 1999, $57,804 in 1998, and $69,281 in 1997 for
reimbursement of general and administrative expenses on an accountable
basis.
NOTE 4 - LEASES
The initial lease terms of the equipment are generally 5 to 25 years.
Future minimum rentals to be received from the operating leases at December
31, 1999, are as follows:
Year Ending
December 31, Amount
------------ ------------
2000 $ 443,798
2001 334,506
2002 300,000
2003 287,500
2004 62,500
Thereafter 0
------------
$ 1,428,304
============
NOTE 5 - OPTIONS
During 1995, the partnership purchased three options to acquire
equipment at the termination of the current leases. The Partnership
accounted for these options at costs of $748,405, $674,124, and $1,608,122.
The exercise dates are July 1997, August 1999, and January 2000 with
exercise prices of $566,684, $1,535,122, and $5,107,500, respectively. In
July 1997 the Partnership exercised the option and paid the strike price of
$566,686. The equipment was immediately sold and the partnership realized
a net gain of $548,588.
In August 1999, the partnership exercised the second option and paid the
strike price of $1,535,122. The equipment is currently being re-marketed.
(See Subsequent Events - Note 11) During the year ended December 31, 1999,
the third option that was to become available in January 2000 was
exercised. In February 1999 the lessee, General Chemical Partners, was
granted an early lease termination and General Chemical (Soda Ash) Partners
purchased 624 rail cars producing a gain on sale of $1,845,048 for the
Partnership. The remaining 57 cars on this option were purchased by
Southern Illinois Railcar Company in December 1999 producing an additional
gain on sale of $39,424.
NOTE 6 - DEPOSIT ON EQUIPMENT
During 1996 the Partnership paid $3,109,549 for the right to obtain
title to certain equipment on December 31, 2002, at the expiration of the
lease.
NOTE 7 - INVESTMENT IN PARTNERSHIPS
During 1997 the Partnership acquired a 50% interest in a Limited
Partnership which purchased intermodal marine containers and chassis for
approximately $1.7 million. These containers and chassis are on lease to
Transamerica Leasing for a term of three years.
During 1999 the Partnership sold its 40% interest in a partnership,
which owns a recovery boiler facility, used in the production of wood pulp
and on lease to International Paper.
The following is a summary of the Investment in Partnerships:
December 31, 1999 December 31, 1998
----------------- -----------------
Investment in Federal Paper Board $ 0 $ 8,859,010
Cumulative Distributions 0 (3,134,155)
Cumulative Equity in Income 0 1,433,657
------------ ------------
Net Investment $ 0 $ 7,158,512
============ ============
Investment in Cypress Access
Container $ 1,481,879 $ 1,481,879
Acquisition Expense 48,506 48,506
Cumulative Distributions (1,774,591) (1,579,412)
Cumulative Equity in Income 562,034 386,296
------------ ------------
Net Investment $ 317,828 $ 337,269
============ ============
Total Investment in Partnerships $ 317,828 $ 7,495,781
============= =============
SUMMARIZED BALANCE SHEET:
CYPRESS ACCESS CONTAINER PARTNERS DECEMBER 31, 1999 DECEMBER 31, 1998
--------------------------------- ------------------ ------------------
ASSETS:
Cash $ 3,131 $ 2,693
Rent Receivable 68,926 150,350
Other receivable 106,090 417,044
Containers, net of accumulated
depreciation 614,696 1,134,171
Organization costs, net of
accumulated amortization 16,430 43,752
------------ ------------
Total Assets $ 809,273 $ 1,748,010
============ ============
LIABILITIES AND PARTNERS' EQUITY:
Accrued Expenses $ 2,948 $ 11,479
Note Payable 266,025 1,157,349
Partner's Equity - Access 270,150 289,591
Partner's Equity - Cypress 270,150 289,591
------------ ------------
Total Liabilities and
Partners' Equity $ 809,273 $ 1,748,010
============= ============
SUMMARIZED STATEMENT OF OPERATIONS:
Rental Income $ 370,557 $ 765,145
Gain on Sale of Containers 256,230 474,873
Interest Income 211 257
------------- -----------
Total Income 626,998 1,240,275
------------- -----------
Expenses:
General & Administrative 4,583 7,777
Interest Expense 48,284 104,626
Depreciation & Amortization 222,657 337,782
------------ -----------
Total Expenses 275,524 450,185
------------ -----------
Net Income $ 351,474 $ 790,090
============ ===========
Other Partner's Share of Net
Income $ 175,737 $ 395,045
Cypress' Share of Net Income 175,737 395,045
----------- ----------
$ 351,474 $ 790,090
=========== ==========
SUMMARIZED BALANCE SHEET:
FEDERAL PAPER BOARD DECEMBER 31, 1999 DECEMBER 31, 1998
------------------ ----------------- -----------------
ASSETS:
Equipment, net of accumulated
depreciation $ 0 $ 7,248,728
----------- -----------
$ 0 $ 7,248,728
Total Assets ============ ============
LIABILITIES AND PARTNERS' EQUITY:
Unearned Revenue $ 0 $ 225,524
------------ ------------
Total Liabilities 0 225,524
------------ ------------
Partners' Equity - Cypress 0 7,158,512
Partners' Equity - Other 0 (135,308)
------------ ------------
Total Partners' Equity 0 7,023,204
------------ ------------
Total Liabilities and Partners'
Equity $ 0 $ 7,248,728
============ ============
SUMMARIZED STATEMENT OF OPERATIONS:
Rental income $ 0 $ 5,412,569
Depreciation expense 0 1,317,950
Interest expense 0 0
Amortization expense 0 0
------------ ------------
Net Income $ 0 $ 4,094,619
============ ============
Other partners' share of Net $ 0 $ 3,247,541
Income 0 847,078
Cypress' share of Net Income ------------ ------------
$ 0 $ 4,094,619
============ ============
NOTE 8 - NOTES PAYABLE
Notes payable consist of the following:
December 31, December 31,
1999 1998
----------- ------------
Non-recourse notes payable secured by
equipment with fixed interest rates of 5% to
16 5/8% and maturities in 1999. $ 0 $ 489,844
Non-recourse note payable secured by
equipment, original terms of 72 months each,
no payments for the first 48 months with the
accruing interest converted to additional
principal, then fully amortizing over the
remaining 24 months, with a fixed interest
rate of 7.85% and final maturity in 2000. 0 1,501,267
Recourse notes payable secured by assets of
the Partnership, original terms of 52 to 56
months, no payments due until maturity with
the accruing interest converted to
additional principal, with fixed interest
rate of 10% and final maturity in 2000.
$150,244 is expected to be converted to 0 1,692,863
principal.
Recourse note secured by assets of the
Partnership with a floating rate of
commercial paper rate + 3.5% up to and
including 3/16/98, and thereafter a floating
rate of commercial paper rate + 4% with a
maturity in 1999. The interest rate as of
December 31, 1998 was 8.95%. 0 956,699
Recourse non-revolving line of credit
secured by equipment with a floating rate of
"Prime Rate" + .75% with maturity in 2002.
The interest rate as of December 31, 1998
was 8.5%. 0 455,931
Non-recourse note payable secured by
residual proceeds after lease termination in
2002 with fixed interest rate of 7%. Interest
is added to principal. 1,500,921 1,401,126
----------- -----------
TOTAL $ 1,500,921 $ 6,497,730
=========== ===========
The aggregate amounts of principal payments due in the years after December
31, 1999 are : 2000 - $0; 2001 - $0; 2002 - $0 and 2003 - $1,500,921.
NOTE 9 - TAXABLE INCOME
The Partnership's taxable income/(loss) differs from financial income
primarily due to depreciation which is recorded under the Modified
Accelerated Cost Recovery System (MACRS). The following is reconciliation
between net income as reported and Partnership income (loss) for tax
purposes:
1999 1998 1997
---- ---- ----
Net income per financial
statements $11,551,809 $ 4,560,365 $ 1,479,260
Tax gain in excess of (less
than) financial gain on sale of
equipment 1,850,896 1,338,921 (3,774)
(Additional) less tax
depreciation 36,803 (672,679) (960,164)
Adjustment to Direct Financing
Lease from tax to financial
statements 861,681 245,901 42,541
Other Adjustments (106,514) 6,864 (6,496)
Additional taxable gains
(losses) from Investment in
Partnerships 1,625,173 (360,349) (830,585)
---------- ------------ ------------
Partnership income (loss) for
tax purposes $15,819,848 $ 5,119,023 $ (279,218)
=========== ============ ============
NOTE 10 - MAJOR LESSEE INFORMATION
Four leases accounted for $1,485,940, $507,870, $349,563 and $287,500
of the rental income for the year ended December 31, 1999. Four leases
accounted for $1,879,121, $940,749, $634,395 and $609,444 of rental income
for the year ended December 31, 1998. Four leases accounted for
$2,012,983, $1,075,911, $988,251 and $609,534 for the year ended December
31, 1997.
NOTE 11 - SUBSEQUENT EVENTS
On January 31, 1999, the Partnership paid distributions of $4,665,955
to the Limited Partners and $307,091 to the General Partners.
On January 12, 2000, the Partnership sold equipment with an original
cost of $3,623,484 for $2,382,632.
On February 11, 2000, the Partnership sold equipment with an original
cost of $2,244,035 for a net sales price of $2,625,041.
On March 30, 2000, the Partnership sold equipment with an original
cost of $1,047,892 for $1,020,000.
NOTE 12 - COMMITMENTS AND CONTINGENCIES
On July 28, 1999 Cypress Equipment Fund II, LTD filed a lawsuit in
Marin County Superior Court against Ally Capital Partners I, L.P., All
Capital Holdings, Inc. and ETL Partners, L.P. (the two general partners of
Ally Capital Partners I) and E. Tod Lindner (the general partner of ETL
Partners). The suit stemmed from Ally Capital Partners' breach of contract
for the lease of 50 Automated Teller Machines from Cypress, and Ally
Capital Partners' continued wrongful use and possession of the ATMs.
Cypress seeks $335,199.36 in past rent due, $42,737.92 in late charges,
$708,265.70 in liquidated damages, plus attorneys fees and prejudgment
interest. Cypress has entered the default of Ally Capital Holdings, Inc.
The case is currently in Court-ordered mediation. Due to the uncertainty
of the mediation, no contingency has been recorded in the financial
statements.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers. The Partnership's
affairs are managed and controlled by the General Partners. The General
Partners make all decisions regarding acquisitions, financing and
refinancing, leases and sales of equipment.
Information regarding the officers and directors of the General
Partner is listed within the section captioned "Management" consisting of
pages 29 through 32 of the Prospectus which are incorporated herein by
reference.
Item 11. Executive Compensation
The Partnership has no directors or officers. See Item 13 for
compensation to the General Partners and affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The General Partners of Cypress Equipment Fund II, Ltd., as purchasers
of Partnership units, own 0 units of the outstanding securities of the
Partnership as of December 31, 1999. Directors and officers of the General
Partners of Cypress Equipment Fund II, Ltd. own 0 units of the outstanding
securities of the Partnership as of December 31, 1999.
The Registrant is a Limited Partnership and therefore does not have
voting securities. To the knowledge of the Partnership, no person owns of
record, or beneficially, more than 5% of the Partnership's outstanding
units.
Item 13. Certain Relationships and Related Transactions
The Partnership has no officers or directors. However, under the
terms of the public offering, various kinds of compensation and fees are
payable to the General Partners and their affiliates during the
organization and operations of the Partnership. The amounts and kinds of
compensation and fees are described on pages 19 through 23 of the
Prospectus under the caption "Management Compensation", which is
incorporated herein by reference. See Note 3 of Notes to Financial
Statements in Item 8 of this Annual Report on Form 10-K for amounts accrued
or paid to the General Partners and their affiliates during the years ended
December 31, 1999, 1998, and 1997.
PART IV
Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
a. (1) Financial Statements - see accompanying index to
financial statements, Item 8.
All other schedules are omitted because they
are not applicable or not required, or because the
required information is shown in the financial
statements or in the notes thereto.
(2) Exhibit Index -
Table
Number Page
2 Plan of liquidation, organization,
arrangement, liquidation, or
succession ***
3 Articles of incorporation and by-laws *
4 Instruments defining the rights of
security holders, including
debentures *
9 Voting Trust Agreement ***
10 Material Contracts ***
11 Computation of per share earnings ***
12 Computation of ratios ***
13 Annual report to security holders ***
18 Letter re: change in accounting
principles ***
19 Previously unfiled documents ***
22 Subsidiaries of the Registrant ***
23 Published report regarding matters
submitted to vote of security holders ***
24 Consents of experts and counsel ***
25 Power of Attorney *
28 Additional Exhibits
28.01 OPTION AGREEMENT dated as of February 1,
1993 between BLC Corporation "Optionor")
and Cypress Equipment Fund II, Ltd.
("Optionee") **
28.02 TRUST AGREEMENT dated as of February
1, 1993 between First Security Bank
of Utah, National Association
("Owner-Trustee") and BLC Corporation
("Trustor") **
28.03 SECURITY AGREEMENT-TRUST DEED dated
as of February 1, 1993 between First
Security Bank of Utah, National
Association as Owner-Trustee under
BLC Trust No. 92-1 and State Street
Bank and Trust Company of
Connecticut, National Association **
28.04 SECURITY AGREEMENT-TRUST DEED
SUPPLEMENT NO. 1 dated February,
1993, between First Security Bank of
Utah, National Association ("Owner-
Trustee") under BLC Trust No. 92-1
and State Street Bank and Trust
Company of Connecticut, National
Association ("Security Trustee") **
28.05 NOTE PURCHASE AGREEMENT dated as of
February 1, 1993 re: BLC Trust No.
92.1 among BLC Corporation Trustor"),
First Security Bank of Utah, National
Association ("Owner-Trustee"),
Hitachi Credit America Corporation
("Note Purchaser") and State Street
Bank and Trust Company of
Connecticut, National Association
("Security Trustee") **
28.06 ACKNOWLEDGEMENT OF ASSIGNMENT AND
AGREEMENT dated as of February 25,
1993 among Southern Pacific
Transportation Company, BLC
Corporation, First Security Bank of
Utah, National Association and State
Street Bank and Trust Company of
Connecticut, National Association **
28.07 BILL OF SALE executed as of February
24, 1993 between BLC Corporation and
First Security Bank of Utah, National
Association **
28.08 PURCHASE AND SALE AGREEMENT dated as
of June 22, 1993 by and between BLC
Corporation and Cypress Equipment
Fund II, Ltd. re: BLC Trust No. 92-1. **
28.09 ASSIGNMENT AND ASSUMPTION AGREEMENT
made and entered into as of June 22,
1993 by BLC Corporation, a Utah
corporation ("Assignor") and Cypress
Equipment Fund II, Ltd., a Florida
limited partnership ("Assignee") **
28.10 TRANSFER AND ASSUMPTION AGREEMENT
("Agreement"), entered into as of
June 19, 1993 by and between Twenty-
Sixth HFC Leasing Inc., a Delaware
Corporation ("Assignor") and Cypress
Equipment Fund II, Ltd., a Florida
limited partnership ("Assignee") **
28.11 EQUIPMENT LEASE dated as of June 1,
1980 between The Connecticut Bank and
Trust Company, As Trustee under
I.C.G. Trust No. 80-4 ("Lessor") and
Illinois Central Gulf Railroad
Company ("Lessee") **
28.12 SECURITY AGREEMENT-TRUST DEED dated
as of June 1, 1980 from The
Connecticut Bank and Trust Company,
As Trustee under I.C.G. Trust No. 80-
4 ("Debtor") to Mercantile-Safe
Deposit and Trust Company ("Secured
Party") **
28.13 TRUST AGREEMENT dated as of June 1,
1980 between The Connecticut Bank and
Trust Company ("Trustee") and Twenty-
Sixth HFC Leasing Corporation
("Trustor") **
28.14 ESCROW AGREEMENT 902 dated December
31, 1994 by and among Continental
Bank, N.A. (the "Transferor"),
Cypress Equipment Fund II, Ltd. (the
"Transferee") and Continental Bank,
National Association, Corporate Trust
Services (the "Escrow Agent"). **
28.15 TRANSFER AGREEMENT 902 dated as of
December 31, 1994 between Continental
Bank, N.A. (the "Transferor"), and
Cypress Equipment Fund II, Ltd. (the
"Transferee"). **
28.16 TRANSFEROR'S INTERESTS ASSIGNMENT AND
ASSUMPTION AGREEMENT 902 dated
December 31, 1994 between Continental
Bank, N.A. (the "Transferor"), and
Cypress Equipment Fund II, Ltd. (the
"Transferee"). **
28.17 ASSIGNMENT AND ASSUMPTION AGREEMENT
902 dated December 31, 1994 between
The Kinsman Marine Transit Company
(the "Assignor") and Pringle Transit
Company (the "Assignee"). **
28.18 KINSMAN AGREEMENT dated as of
December 31, 1994 by The Kinsman
Marine Transit Company. **
28.19 REVOLVING CREDIT AGREEMENT dated
December 31, 1994 by and between
Cypress Equipment Fund II, Ltd.
("Borrower") and First Union National
Bank of Florida ("Lender"). **
28.20 SECURITY AGREEMENT dated December 31,
1994 by and between Cypress Equipment
Fund II, Ltd. ("Debtor") and First
Union National Bank of Florida
("Secured Party"). **
28.21 COLLATERAL ASSIGNMENT OF RIGHTS UNDER
TRUST AGREEMENT dated December 31,
1994 by and between Cypress Equipment
Fund II, Ltd. ("Assignor") and First
Union National Bank of Florida
("Assignee"). **
28.22 LEASE AGREEMENT dated as of March 30,
1988 between Capital Associates
International, Inc. ("Lessor") and
Comair, Inc. ("Lessee"). **
28.23 PURCHASE AGREEMENT ("Agreement")
dated as of August 31, 1994, by and
between Capital Associates
International, Inc. ("Seller") and
First Security Bank of Utah, National
Association not in its individual
capacity but as owner trustee
pursuant to that certain Trust dated
August 31, 1994 between itself and
Cypress Equipment Fund II ("Buyer"). **
28.24 BILL OF SALE dated August 31, 1994
between Capital Associates
International, Inc. ("Seller") and
First Security Bank of Utah, National
Association not in its individual
capacity but as owner trustee
pursuant to that certain Trust dated
August 31, 1994 between itself and
Cypress Equipment Fund II, Ltd.
("Buyer"). **
28.25 TRUST AGREEMENT dated as of August
31, 1994 between Cypress Equipment
Fund II, Ltd. ("Owner Participant")
and First Security Bank of Utah,
National Association ("Owner
Trustee"). **
28.26 ASSIGNMENT OF LEASE dated August 31,
1994, between Capital Associates
International, Inc. ("Assignor") and
First Security Bank of Utah not in
its individual capacity but as owner
trustee pursuant to that certain
Trust dated August 31, 1994 between
itself and Cypress Equipment Fund II
("Assignee"). **
28.27 SECURITY AGREEMENT dated as of August
31, 1994 between First Security Bank
of Utah, National Association, solely
as Owner Trustee under Trust
Agreement dated as of August 31, 1994
and not in its individual capacity
("Trustee") and First Union National
Bank of Florida, a national banking
association ("Secured Party"). **
28.28 TRUST AGREEMENT dated as of April 1,
1970 among Union Bank ("Trustor") and
W. H. Ruskaup and Ben Maushardt
("Trustees") and United States
Leasing International, Inc. ("Agent
for Trustees"). **
28.29 LEASE OF RAILROAD EQUIPMENT dated as
of April 1, 1970 among W. H. Ruskaup
and Ben Maushardt ("Trustees") and
United States Leasing International,
Inc. ("Agent for Trustees") and Union
Carbide Corporation ("Lessee"). **
28.30 ASSIGNMENT AGREEMENT (Residual
Interest) dated as of September 30,
1994 by and between United States
Leasing International, Inc., a
Delaware corporation ("Assignor") and
Cypress Equipment Fund II, Ltd.
("Assignee"). **
28.31 TRANSFER AND ASSUMPTION AGREEMENT
dated as of September 30, 1994, by
and between Union Bank, a California
state chartered bank ("Assignor") and
Cypress Equipment Fund II, Ltd.
("Assignee). **
28.32 AGREEMENT TO ACQUIRE AND LEASE dated
as of April 1, 1970 among W. H.
Ruskaup and Ben Maushardt
("Trustees") and United States
Leasing International, Inc. ("Agent")
and Union Carbide Corporation
("Lessee"). **
28.33 SECURITY AGREEMENT - TRUST DEED dated
as of June 1, 1970 from W. H. Ruskaup
and Ben Maushardt ("Debtor") to Wells
Fargo Bank, N.A. ("Secured Party"). **
28.34 PURCHASE AGREEMENT made as of July
25, 1994, by and among Trust Company
for USL, Inc., an Illinois trust
company as successor trustee to W.H.
Ruskaup and Ben Maushardt, and United
States Leasing International, Inc. as
agent for successor trustee
("Seller") and Cypress Equipment Fund
II, L.P., a Florida limited
partnership, with its principal place
of business at 880 Carillon Parkway,
St. Petersburg, Florida 33716 as the
beneficial owner of the Trust Estate
("Beneficial Owner") and Union
Carbide Corporation, a New York
corporation ("Purchaser"), with its
principal place of business at 39 Old
Ridgebury Rd., E-1, Danbury,
Connecticut 06817 **
28.35 PURCHASE AGREEMENT dated as of
February 1, 1995, between Cypress
Equipment Fund II, Ltd., a Florida
limited partnership ("Seller"), and
Helm-Atlantic Associates Limited
Partnership, a Delaware limited
partnership ("Purchaser"). (This
Purchase Agreement pertains to
seventeen (17) of the nineteen (19)
sold locomotives.) **
28.36 ASSIGNMENT AND ASSUMPTION AGREEMENT
dated as of June 1, 1995, by and
between Cypress Equipment Fund II,
Ltd., a Florida limited partnership
("Seller"), and Helm-Atlantic
Associates Limited Partnership, a
Delaware limited partnership
("Purchaser"). **
28.37 ASSIGNMENT OF LEASE dated as of June
1, 1995, by and between Cypress
Equipment Fund II, Ltd., a Florida
limited partnership ("Seller"), and
Helm-Atlantic Associates Limited
Partnership, a Delaware limited
partnership ("Purchaser"). **
28.38 PURCHASE AGREEMENT dated as of
February 1, 1995, between Cypress
Equipment Fund II, Ltd., a Florida
limited partnership ("Seller"), and
Helm-Atlantic Associates Limited
Partnership, a Delaware limited
partnership ("Purchaser"). (This
Purchase Agreement pertains to two
(2) of the nineteen (19) sold
locomotives.) **
28.39 Purchase Agreement dated as of April
17, 1995, between Varilease
Corporation, a Michigan corporation
("Seller"), and Cypress Equipment
Fund II, Ltd., a Florida limited
partnership ("Buyer"). **
28.40 Bill of Sale and Assignment dated
April 28, 1995, between Varilease
Corporation, a Michigan corporation
"Seller"), and Cypress Equipment Fund
II, Ltd., a Florida limited
partnership ("Buyer"). **
28.41 Consent and Agreement dated April 28,
1995, between IBJ Schroder Leasing
Corporation, a New York corporation
("Schroder"), and Cypress Equipment
Fund II, Ltd. ("Cypress"). **
28.42 Escrow Agreement dated April 17,
1995, between Varilease Corporation,
a Michigan corporation ("Seller"),
Cypress Equipment Fund II, Ltd., a
Florida limited partnership
("Buyer"), and Griffinger, Freed,
Heinemann, Cook & Foreman ("Escrow
Agent"). **
28.43 Bill of Sale and Assignment
(Remaining Interest) dated January 1,
1996, between Varilease Corporation,
a Michigan corporation ("Seller"),
and Cypress Equipment Fund II, Ltd.,
a Florida limited partnership
("Buyer"). **
28.44 Assignment and Assumption Agreement,
dated as of December 30, 1996 (this
"Agreement"), between NTFC Capital
Corporation, a Delaware corporation
(the "Seller"), and Cypress
Equipment Fund, II, Ltd., a Florida
limited partnership (the "Buyer"). **
28.45 Amended and Restated Purchase
Agreement No. 2 dated as of March
13, 1996, between NTFC Capital
Corporation (formerly named Northern
Telecom Acceptance Corporation), the
Seller, and Cypress Equipment Fund
II, Ltd, the Buyer. **
28.46 Promissory Note for Value Received
dated as of December 30, 1996,
between Cypress Equipment Fund II,
Ltd., a Florida limited partnership
("Maker") promises and agrees to pay
to the order of NTFC Capital
Corporation, its successors, assigns
or any subsequent holder of this
Note (the "Holder") at its offices
located at 220 Athens Way,
Nashville, Tennessee, 37228-1314, or
at such other place as may be
designated in writing by Holder, in
lawful money of the United States of
America in immediately available
funds, the principal amount of Two
Million Six Hundred Eight Three
Thousand Four Hundred Thirty Five
($2,683,435) together with interest
thereon and other amounts due as
provided below. **
28.47 Amended and Restated Security
Agreement ("Security Agreement"),
dated as of March 13, 1996, and made
by Cypress Equipment Fund II, Ltd.,
a Florida limited partnership, with
offices located at One Sansome
Street, Suite 1900, San Francisco,
California, 94104, 415-951-4605
(facsimile) (the "Debtor"), in favor
of NTFC Capital Corporation, a
Delaware corporation, with offices
located at 220 Athens Way,
Nashville, Tennessee 37228 ("Secured
Party"). **
28.48 Participation Agreement dated as of
July 15, 1982 among Federal Paper
Board Company, Inc., Lessee,
Riegelwood, Inc., Secured Note
Issuer, The Bank of New York,
individually and as Owner Trustee,
North Carolina National Bank, as
Indenture Trustee, Teachers
Insurance and Annuity Association of
America, Sun Life Assurance Company
of Canada, Sun Life Assurance
Company of Canada (U.S.), The North
Atlantic Life Insurance Company of
America, and Northern Life Insurance
Company, Loan Participants, and EFH
Leasing Corporation, BNY Leasing,
Inc., and Northern Telecom
Acceptance Corporation, as Owner
Participants. **
28.49 Bill of Sale dated the 13th of May, 1999,
Between State Street Bank and Trust
Company ("Seller"); not in its
individual capacity but solely as
successor Trustee under a certain Trust
Agreement dated as of December 30, 1970,
between Edward C. Laber and Jane S.
Kubiak as Trustees and Pennsylvania
Power and Light Company (now PP&L,
Inc.); Access Turbine Corporation
("Seller"); and Cypress Equipment Fund
II, Ltd. ("Seller") and PP&L, Inc.
("Buyer"). **
28.50 Purchase Agreement, dated as of July 15, 1999,
is between Cypress Equipment Fund II, Ltd., a
Florida limited partnership, and its Successors
and permitted assigns (the "Seller"), and ICX
Corporation, an Ohio corporation, and its
successors and permitted assigns (the "Buyer"). **
28.51 ASSIGNMENT AND ASSUMPTION AGREEMENT, dated
July 29, 1999 (this "Agreement"), between
Cypress Equipment Fund II, Ltd., a Florida limited
partnership (the "Seller"), and ICX Corporation,
an Ohio corporation (the "Buyer"). **
28.52 This AMENDMENT NO. 2 TO LEASE, dated as of
July 15, 1999 (this "Amendment"), is entered
into by and between THE BANK OF NEW YORK, a New
York banking corporation, not in its individual
capacity, but Solely as trustee under the Trust
Agreement, as lessor ("Lessor") and International
Paper Company, a New York corporation, as
successor by Merger to Federal Paper Board
Company, Inc., a New York corporation, as
lessee ("Lessee"). **
29 Information from reports furnished to
state insurance regulatory
authorities ***
* Included with Form S-1, Registration No. 33-
27741 previously filed with the Securities and
Exchange Commission.
** Included with Form 8-K, as amended,
previously filed with the Securities and
Exchange Commission.
*** Exhibits were omitted as not required, not
applicable, or the information required to
be shown therein is included elsewhere in
this report.
b. Reports filed on Form 8-K - None.
c. Exhibits filed with this report - None.
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.
Cypress Equipment Fund II, Ltd.
Date: June 12, 2000 By: /s/J. Davenport Mosby, III
-----------------------------------
J. Davenport Mosby, III
President
RJ Leasing - 2, Inc.
A General Partner
Date: June 12, 2000 By: /s/Stephen R. Harwood
---------------------------------
Stephen R. Harwood
President
Cypress Equipment Management Corp. II
Date: June 12, 2000 By: /s/ Alex A. Najjar
---------------------------------
Alex A. Najjar
Executive Vice President
Cypress Equipment Management Corp.II
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Cypress Equipment Fund II, Ltd.
ATTEST:
By: /s/ Stephen R. Harwood By: /s/J. Davenport Mosby, III
-------------------------------- -----------------------------------
Stephen R. Harwood J. Davenport Mosby, III
President President
Cypress Equipment Management Corp.II RJ Leasing - 2, Inc.
