As filed with the Securities and Exchange Commission on June 28, 1996
Registration No. 33-94458
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVEAMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ICON Cash Flow Partners L.P. Seven
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
7394
(Primary Standard Industrial Classification Code Number)
13-3835387
(I.R.S. Employer Identification No.)
600 MAMARONECK AVENUE, HARRISON, NEW YORK 10528 (914) 698-0600
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
PETER D. BEEKMAN
600 Mamaroneck Avenue
Harrison, New York 10528
(914) 698-0600
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Monte E. Wetzler, Esq.
Whitman Breed Abbott & Morgan
200 Park Avenue
27th Floor
New York, New York 10166
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PAGE 1 of ________ PAGES EXHIBIT INDEX IS ON PAGE ________
<PAGE>
ICON CASH FLOW PARTNERS L.P. SEVEN
Cross Reference Sheet Required by Item 501(b) of Regulation S-K
Item Number and Caption Location in Prospectus
1. Forepart of the Registration Cover Pages of Registration Statement
Statement and Outside Front and Prospectus
Cover Page of Prospectus
2. Inside Front and Outside Back Cover Page; Back Page
Cover Pages of Prospectus
3. Summary Information, Risk Summary of the Offering; Risk Factors
Factors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Sources and Uses of Offering Proceeds;
Summary of Compensation; Investment
Objectives and Policies
5. Determination of Offering Price *
6. Dilution *
7. Selling Security Holders *
8. Plan of Distribution Cover Pages; Plan of Distribution
9. Description of Securities to be Cover Pages; Summary of the Offering;
Registered Summary of the Partnership Agreement;
Partnership Agreement
10. Interests of Named Experts Legal Matters; Experts
and Counsel
11. Information with Respect to Summary of the Offering; Management;
the Registrant Investment Objectives and Policies;
Summary of the Partnership Agreement;
Financial Statements
12. Disclosure of Commission Fiduciary Responsiblity;
Position on Indemnification Partnership Agreement
for Securities Act Liabilities
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* Omitted because the item is inapplicable or the answer is negative.
<PAGE>
ICON Cash Flow Partners L.P. Seven
A Delaware Limited Partnership
$1,200,000
12,000 Units Minimum Offering
$100.00 Per Unit/Minimum Investment 25 Units ($2,500)
(10 Units ($1,000) for IRAs and Qualified Plans)
ICON Cash Flow Partners L.P. Seven (the "Partnership") is an equipment
leasing limited partnership. This prospectus describes an investment by
investors ("Limited Partners") in limited partnership securities (or "Units") of
the Partnership.
The Partnership may sell as few as 12,000 or as many as 1,000,000 of Units.
An investment in Units of the Partnership involves certain risks (see "RISK
FACTORS" at Page 16), including:
* Limited Partners must rely on the skills, integrity and business expertise
of the General Partner.
* Certain of the Prior Public Programs experienced losses in excess of
reserves therefor in 1991-92, due primarily to lessee bankruptcies, which
losses may effect, possibly materially, the financial results of such
earlier programs.
* The ownership and leasing of equipment and provision of financing may be
adversely affected by various economic and business factors, including
lessee bankruptcies, which are beyond the control of the General Partner. *
As of the date of this Prospectus, the Partnership did not own any
Investments. As a result, the profitability of an investment in Units
cannot be estimated. All Investment decisions will be made solely by the
General Partner.
* The General Partner and its affiliates will receive substantial fees, only
a portion of which is contingent on amounts paid to Limited Partners
* The cash, if any, which the Partnership receives from future sale of its
Equipment will be reduced by obsolescence.
* No public market for Units exists. As a result, Limited Partners may be
able to resell their Units, if at all, only at a discount and should,
therefore, be prepared to hold their Units for the entire life of the
Partnership.
* A substantial portion of the distributions made to date by the Prior Public
Programs have been, and a substantial portion of the distributions to be
made by the Partnership is expected to be, a return of capital (i.e., the
money you originally invested).
* Each Limited Partner's share of taxable income in the early years of the
Partnership is likely to exceed, and in the later years of the Partnership
to be less than, investment income (as reported to investors for financial
reporting purposes).
* The General Partner manages similar existing partnerships and this may give
rise to potential conflicts of interest, including a conflict for
management services and available investments.
* A significant portion, not exceeding 50%, of the Partnership's Investments
may consist of Financing Transactions.
The Partnership intends to use the funds invested by the Limited Partners,
together with Partnership borrowings, to buy and lease a wide range of equipment
primarily to businesses located in the United States which the General Partner
determines are Creditworthy and that are diversified as to industry types and
geographic location. The Partnership will also provide financing primarily to
such companies secured by equipment used in their businesses and additional or
other collateral owned by them. ICON Capital Corp. (the "General Partner")
estimates that not less than 74.0% of the gross amount of funds invested by
Limited Partners (the "Gross Offering Proceeds") will be used to make
investments in such equipment and financings (assuming the maximum possible
leverage of 80%). 1.0% of Gross Offering Proceeds will be used to establish a
working capital reserve and the balance (of up to 25.0% of Gross Offering
Proceeds) will be used to pay the costs of organizing the Partnership program,
offering Units to the public and acquiring the Partnership's assets. See
"SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS."
The Partnership plans to (a) make regular monthly distributions, primarily
to the Limited Partners and to a much lesser extent to the General Partner, of
cash generated by its operations beginning the month following a Limited
Partner's admission to the Partnership commencing the month after admission of
each Limited Partner and (b) reinvest undistributed cash flow and sale proceeds
during the Reinvestment Period in additional equipment and financing
transactions. Thereafter, the Partnership intends to (a) sell or otherwise
dispose of all its assets in an orderly manner and (b) distribute the cash
proceeds to the Limited Partners, and to a much lesser extent to the General
Partner, in accordance with the terms set forth in this Prospectus. See
"INVESTMENT OBJECTIVES AND POLICIES." The Partnership has been formed for
income-oriented investment purposes and not as a tax shelter. The majority of
its income is expected to be passive activity income.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE
MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Price to Proceeds to
Public(1) Sales Costs(2) Partnership(3)
Per Unit $ 100 $ 10 $ 90
Total (at Minimum
Offering of 12,000 Units) 1,200,000(3)(4) 120,000 1,080,000
--------
Total (at Maximum Offering
of 1,000,000 Units) 100,000,000(4) 10,000,000 90,000,000
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The date of this Prospectus is November 9, 1995
<PAGE>
ICON SECURITIES CORP.
600 Mamaroneck Avenue, Harrison, New York 10528 (914) 698-0600
Any additional supplements which update this Prospectus are contained inside
the back cover.
Footnotes from Cover Page. All capitalized terms used in these footnotes and in
the balance of this Prospectus are defined in the Glossary that appears in
Section 17 of the Partnership Agreement attached hereto as (Exhibit A).
(1) The Gross Unit Price is $100.00, except that:
(a) officers, employees and securities representatives of the General
Partner, its Affiliates and Selling Dealers ("Affiliated Limited Partners")
may purchase Units for investment purposes only for the Net Unit Price of
$92.00 per Unit. The Partnership will incur no obligation to pay any Sales
Commissions with respect to such purchases. The General Partner's and its
Affiliates' purchases of Units are limited to a maximum of 10% of the total
Units purchased.
(b) Investors buying in volume are entitled to Volume Discounts as follows:
Number of Units Discount Net Purchase Price
2,499 or less None $100.00
2,500 to 4,999 $2.50 $ 97.50
5,000 to 9,999 $3.50 $ 96.50
10,000 to 19,999 $4.50 $ 95.50
20,000 or more $6.50 $ 93.50
Volume Discounts reduce the Sales Commissions that would otherwise be
payable in connection with the purchase of Units. An investor entitled
to a Volume Discount will receive such discount through a reduction of
the aggregate cash purchase price required to purchase Units.
The proceeds to the Partnership, net of Sales Commissions and Volume
Discounts, if any, will be the same for all such sales as for sales to the
general public.
(2) The Partnership will pay to a Selling Dealer or to the Dealer-Manager
(which is an Affiliate of the General Partner) a Sales Commission of $8.00 (8%
of the Gross Unit Price) for each Unit sold by their respective registered
representatives (except as noted in footnote 1). In addition, the Partnership
will pay the Dealer-Manager Underwriting Fees of $2.00 (2.0% of Gross Offering
Proceeds) for each Unit sold for its services in managing the Offering and to
reimburse it, on a non-accountable basis, for the wholesaling fees and expenses
of the Sponsor. The Partnership may obtain a loan as of each Closing Date in the
principal amount of the Sales Commissions (collectively "Commission Loans") to
pay Commissions otherwise payable by the Partnership on such Closing Date from
Gross Offering Proceeds for the purpose of increasing the amount of Gross
Offering Proceeds immediately available for Investments. The Partnership's total
payments of principal of, and interest on, any such Commission Loans would
exceed the corresponding amounts of Commissions paid with the proceeds of such
loans by the amount of interest paid thereon. Consequently, the General Partner
expects to utilize Commission Loans only when, it has determined that an
opportunity exists to use such borrowings to obtain Investments which have
contractual payments at least equal to the total payments of principal of, and
interest on, the corresponding Commission Loans. See "PLAN OF DISTRIBUTION."
(3) Proceeds to the Partnership are calculated before deduction of:
(a) the O & O Expense Allowance in an amount equal to 3.5% of Gross Offering
Proceeds. The O & O Expense Allowance is payable to the General Partner
and/or the Dealer-Manager on a non-accountable basis for expenses of
organizing the Partnership, registering it with federal and state securities
authorities and printing the Prospectus and related legal and accounting
costs and other costs of organizing the Partnership and offering Units to
the public. The O & O Expense Allowance may be less or greater than the
General Partner's actual expenses. The General Partner is responsible to pay
Organizational and Offering Expenses which exceed such Allowance; and
(b) Acquisition Fees in an amount equal to 3.0% (subject to certain
conditions and limitations specified in the Partnership Agreement of the sum
of (i) the aggregate Purchase Price paid (including indebtedness incurred)
by the Partnership for all items of Equipment acquired by the Partnership
and (ii) the principal amount of all financing provided by the Partnership
to Users is payable to the General Partner for its services and expenses of
finding, evaluating, documenting and acquiring the Partnership's
Investments. See "SUMMARY OF COMPENSATION."
(4)The amounts shown exclude ten Units ($1,000) in the Partnership that were
purchased by the Original Limited Partner in connection with the organization of
the Partnership and which will be refunded to the Original Limited Partner, and
his Units will be retired, upon the Initial Closing Date. Such amounts also
exclude the excess, if any, of (a) total Units which the General Partner and its
Affiliates are entitled to purchase for their own investment account (a maximum
of 10% of all non-affiliate Unit purchases) over (b) 600 Units ($60,000), the
maximum amount of Unit purchases by the Sponsor
Page 2
<PAGE>
which may be counted in determining whether the Minimum Offering of 12,000 Units
has been completed. Accordingly, of the Minimum Offering of 12,000 Units, only
11,400 Units would need to be purchased by the general public to satisfy such
condition if the General Partner and its Affiliates purchased 600 Units of such
total (as they are permitted to do).
NOTICE TO PENNSYLVANIA INVESTORS: BECAUSE THE MINIMUM CLOSING AMOUNT IS LESS
THAN $24,000,000 (A MAXIMUM TO MINIMUM OFFERING RATIO OF 20:1) YOU ARE CAUTIONED
TO CAREFULLY EVALUATE THE PROGRAM'S ABILITY TO FULLY ACCOMPLISH ITS STATED
OBJECTIVES AND TO INQUIRE AS TO THE CURRENT DOLLAR VOLUME OF PROGRAM
SUBSCRIPTIONS.
THE USE OF FORECASTS IN THIS OFFERING IS PROHIBITED. ANY REPRESENTATIONS TO
THE CONTRARY AND ANY PREDICTIONS, WRITTEN OR ORAL, AS TO THE AMOUNT OR CERTAINTY
OF ANY PRESENT OR FUTURE CASH BENEFIT OR TAX CONSEQUENCE WHICH MAY FLOW FROM AN
INVESTMENT IN THIS PROGRAM IS NOT PERMITTED.
THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND RESALE, AND MAY
ONLY BE TRANSFERRED OR RESOLD IN CONFORMITY WITH THE AGREEMENT OF LIMITED
PARTNERSHIP OF THE PARTNERSHIP AND IN COMPLIANCE WITH APPLICABLE LAW.
Page 3
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TABLE OF CONTENTS
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Page
SUMMARY OF THE OFFERING.................................................. 8
Risk Factors ..................................................... 8
The Partnership.................................................... 9
Terms of the Offering.............................................. 10
Sources and Uses of Offering Proceeds and Related Indebtedness..... 12
Summary of Compensation .......................................... 12
Conflicts of Interest ............................................. 13
Fiduciary Responsibility........................................... 13
Other Offerings by the General Partner and its Affiliates.......... 13
Management; Financial Statements of the General Partner
and of the Partnership .......................................... 13
Investment Objectives and Policies................................. 13
Federal Income Tax Considerations.................................. 15
Capitalization .................................................... 15
Summary of Partnership Agreement................................... 15
Transfer of Units.................................................. 15
Fiscal Year........................................................ 16
Glossary of Terms.................................................. 16
RISK FACTORS............................................................. 16
Operating Risks.................................................... 16
Partnership and Investment Risks................................... 16
Federal Income Tax Risks and ERISA Matters......................... 22
SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS........... 24
SUMMARY OF COMPENSATION.................................................. 25
Organization and Offering Stage.................................... 26
Operational Stage.................................................. 28
Interest in Partnership Profits or Losses.......................... 33
CONFLICTS OF INTEREST.................................................... 36
Lack of Separate Legal Representation and Lack of Arm's Length
Negotiation of the Program Agreements............................ 36
Compensation of the General Partner and Affiliates................. 36
Effect of Leverage on Compensation Arrangements.................... 36
Competition With the General Partner and its Affiliates............ 37
Determination of Reserves and Liability of the General Partner
for Partnership Obligations ..................................... 38
Competition by the Partnership with Other Entities
for Management Services; Conflicts in Fiduciary Duties........... 38
Joint Ventures..................................................... 38
Lease Referrals.................................................... 38
Participation of a Securities Sales Affiliate in this Offering..... 39
General Partner to Act as Tax Matters Partner...................... 39
FIDUCIARY RESPONSIBILITY................................................. 39
General............................................................ 39
Conflicts.......................................................... 39
Indemnification of the General Partner, Dealer-Manager and
Selling Dealers ................................................. 40
Investor Remedies.................................................. 40
Page 4
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OTHER OFFERINGS BY THE GENERAL PARTNER AND ITS AFFILIATES................ 41
Prior Public Programs.............................................. 41
Prior Non-Public Programs.......................................... 43
STATUS OF THE OFFERING................................................... 43
CERTAIN RELATIONSHIPS WITH THE PARTNERSHIP............................... 44
MANAGEMENT............................................................... 44
The General Partner................................................ 44
Affiliates of the General Partner.................................. 46
INVESTMENT OBJECTIVES AND POLICIES....................................... 46
General............................................................ 46
Acquisition Policies and Procedures................................ 47
Credit Review Procedures........................................... 48
Leases and Lessees................................................. 49
Equipment.......................................................... 50
Financing Transactions............................................. 52
Other Investments.................................................. 53
Portfolio Acquisitions............................................. 53
Reserves........................................................... 54
Use of Leverage.................................................... 54
Cash Distributions to Partners..................................... 55
Reinvestment of Undistributed Cash in Additional Equipment, Leases
and Financing Transactions....................................... 58
FEDERAL INCOME TAX CONSEQUENCES.......................................... 59
Summary............................................................ 59
Opinion of Tax Counsel............................................. 59
Classification as a Partnership.................................... 60
Publicly Traded Partnerships....................................... 61
Taxation of Distributions.......................................... 62
Partnership Income Versus Partnership Distributions................ 63
Allocations of Profits and Losses.................................. 63
Deductibility of Losses: Passive Losses, Tax Basis and "At Risk"
Limitation....................................................... 64
Deductions for Organizational and Offering Expenses; Start-up Costs 65
Tax Treatment of the Leases........................................ 66
Cost Recovery...................................................... 66
Limitations on Cost Recovery Deductions............................ 67
Deferred Payment Leases............................................ 68
Sale or Other Disposition of Partnership Property.................. 68
Sale or Other Disposition of Partnership Interest.................. 69
Treatment of Cash Distributions Upon Redemption.................... 70
Gifts of Units..................................................... 70
Consequence of No Section 754 Election............................. 70
Tax Treatment of Termination of the Partnership Pursuant to the
Partnership Agreement............................................ 70
Audit by the Service............................................... 71
Alternative Minimum Tax............................................ 71
Interest Expense................................................... 72
Self-Employment Income and Tax..................................... 72
Maximum Individual Tax Rates....................................... 72
Section 183........................................................ 73
Registration, Interest, and Penalties.............................. 73
State and Local Taxation........................................... 74
Foreign Investors.................................................. 74
Tax Treatment of Certain Trusts and Estates........................ 75
Taxation of Employee Benefit Plans and Other
Tax-Exempt Organizations......................................... 75
Corporate Investors................................................ 75
Page 5
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INVESTMENT BY QUALIFIED PLANS............................................ 75
Fiduciaries under ERISA............................................ 75
Prohibited Transactions Under ERISA and the Code................... 76
Plan Assets........................................................ 76
Other ERISA Considerations......................................... 77
CAPITALIZATION........................................................... 78
MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION........................... 79
Liquidity and Capital Resources.................................... 79
Operations......................................................... 79
SUMMARY OF THE PARTNERSHIP AGREEMENT..................................... 80
Establishment and Nature of the Partnership........................ 80
Name and Address................................................... 80
Purposes and Powers................................................ 80
Duration of Partnership............................................ 80
Capital Contributions.............................................. 81
Powers of the Partners............................................. 81
Limitations on Exercise of Powers by the General Partner........... 81
Indemnification of the General Partner............................. 83
Liability of Partners.............................................. 83
Non-assessability of Units......................................... 83
Distribution of Distributable Cash From Operations
and Distributable Cash From Sales................................ 84
Allocation of Profits and Losses................................... 84
Withdrawal of the General Partner.................................. 85
Transfer of Units.................................................. 86
Dissolution and Winding up......................................... 86
Access to Books and Records........................................ 86
Meetings and Voting Rights of Limited Partners..................... 86
Amendments......................................................... 87
TRANSFER OF UNITS........................................................ 88
Withdrawal ........................................................ 88
Restrictions on the Transfer of Units.............................. 88
Limited Right of Presentment for Redemption of Units............... 89
Certain Consequences of Transfer................................... 90
REPORTS TO LIMITED PARTNERS.............................................. 90
Annual Reports..................................................... 90
Quarterly Reports.................................................. 91
PLAN OF DISTRIBUTION..................................................... 91
Segregation of Subscription Payments .............................. 92
INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS;
SUBSCRIPTION PROCEDURES................................................ 93
General Suitability Considerations................................. 93
State Requirements Concerning Minimum Investment and Minimum
Investor Net Worth/Income........................................ 93
Subscriber Representations......................................... 95
Citizenship ....................................................... 97
Special Limit on Ownership of Units by Benefit Plans............... 98
Minimum Investment and Suitability Standards....................... 98
How to Subscribe................................................... 98
Admission of Partners; Closings.................................... 99
SALES MATERIAL........................................................... 99
Page 6
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LEGAL MATTERS............................................................ 99
EXPERTS..................................................................100
ADDITIONAL INFORMATION...................................................100
TABULAR INFORMATION CONCERNING PRIOR PUBLIC PROGRAMS.....................100
FINANCIAL STATEMENTS.....................................................100
GLOSSARY - Section 17 of the Limited Partnership Agreement
EXHIBITS:
A. Third Amended and Restated Agreement of Limited Partnership....A-1
B. Prior Performance Tables for the Prior Public Programs.........B-1
C. Subscription Documents.........................................C-1
Page 7
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SUMMARY OF THE OFFERING
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The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and in the Exhibits hereto.
See the Glossary contained in Section 17 of the Agreement of Limited Partnership
attached as Exhibit A (the "Partnership Agreement") to this Prospectus for the
definition of certain terms used in this Summary and throughout this Prospectus.
Risk Factors
An investment in the Partnership has many risks. The information appearing
under the caption "RISK FACTORS" in this Prospectus contains a detailed
discussion of the most important risks associated with an investment in
Units. Please refer thereto for a discussion of the following specific risk
factors as well as other relevant risk factors:
Partnership and Investment Risks:
o No one can predict whether Limited Partners will receive cash
distributions in amounts sufficient to return their original investment or
the amount of profit thereon, if any, that they will ultimately receive.
o Certain of the Prior Public Programs experienced losses in excess of
reserves therefor in 1991-92, due primarily to lessee bankruptcies, which
losses may effect, possibly materially, the financial results of such
earlier programs.
o The price, if any, which the Partnership receives from re-leasing or sale
of its Equipment is expected to be a small fraction of the total original
cost since most or all of the Partnership's capital investment in
Equipment is expected to be recovered through rental or royalty payments
during the Partnership's initial Leases (ranging in terms from two to five
years) and, in many cases, the Lease terms may be for a majority of the
expected useful life of the underlying Equipment. Obsolescence and other
factors, such as supply and demand for used equipment at the times that he
Partnership has Equipment available to sell or re-lease will effect the
price, if any, which the Partnership receives for such Equipment.
o The Investments to be acquired or entered into by the Partnership have not
been specified as of the date of this Prospectus and will be determined
solely by the General Partner.
o A substantial portion of the distributions to be made by the Partnership
are expected to be a return of investors' Capital Contributions,
principally due to federal tax deductions for non-cash expenses (e.g.,
depreciation) and cash expenses (e.g., amortization of acquisition costs).
o An investor's share of taxable income in the early years of the
Partnership is likely to exceed, and in the later years of the Partnership
is likely to be less than, investment income for GAAP purposes due to the
allowance of greater deductions for GAAP purposes than for tax purposes in
the early years of the Partnership.
o Investors will not have the opportunity to vote except in extraordinary
circumstances (e.g. to approve by a vote of not less than 50% or more of
all Limited Partners (a "Majority") any amendment to the Partnership
Agreement). As a result, they must rely on the skills, integrity and
business expertise of the General Partner.
o The General Partner, the Dealer-Manager and the Selling Dealers will
receive Front-End Fees of up to 25% of Gross Offering Proceeds (assuming
the maximum possible leverage of 80%) for the expenses of organizing the
Partnership program (the O & O Expense Allowance), offering Units (Sales
Commissions), supervising the sale of Units (the Underwriting Fee) and
acquiring the Partnership's Equipment, Leases and Financing Transactions
(Acquisition Fees) -- see footnotes 2 and 3 on page 2. Because such fees
are primarily paid at either the time of sale of Units or upon the
investment of Net Offering Proceeds, all of such compensation is payable
before the Limited Partners' total return of, and any investment return
on, their investment is known and regardless of whether or not they
receive a return of their entire investment.
Page 8
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In addition, the General Partner is entitled to Management Fees and
reimbursement of certain administrative expenses during the operational
phase of the Partnership and Subordinated Remarketing Fees and a portion
of Cash From Operations and Cash From Sales during the operational and
liquidation phases of the Partnership (subject, in each case, to certain
conditions and limitations set forth in the Partnership Agreement). None
of the foregoing compensation has been the subject of arm's length
negotiations
o Investors must be prepared to hold their Units for the entire five (5)
year (minimum) to eight (8) year (maximum) Reinvestment Period following
the Final Closing Date as well as the additional liquidation period of
from six (6) to thirty-six (36) months thereafter because (a) only a
limited secondary market exists for partnership units generally, (b) a
buyer for Units (other than the Partnership under certain circumstances)
may not exist and (c) they are likely to be unable to resell or dispose of
Units except at a substantial discount from their purchase price. (See
"TRANSFER OF UNITS--Limited Right of Presentment" for a discussion of
redemption rights and prices).
o The risks relating to the continued Creditworthiness of Lessees and Users.
o The risks inherent in all leveraged lease and financing transactions.
Federal Income Tax Risks:
o The risk the Partnership may not be classified as a limited partnership
for federal income tax purposes.
o The risk that income and expenses of the Partnership, due to their
classification as "passive income" or "portfolio income," may not be able
to be offset against other activities on an investor's income tax return.
o The risk that certain Partnership investment transactions or deductions
could be re-characterized which could result in loss of certain tax
benefits associated with an investment in Units.
o Investors may be required to report taxable income that may exceed cash
distributed to them.
o The risk the Partnership may be treated as a "publicly-traded partnership."
The Partnership
ICON Cash Flow Partners L.P. Seven is a Delaware limited partnership which
was formed on May 23, 1995 primarily to engage in the business of leasing
Equipment and providing financing, secured by equipment, to companies
determined to be Creditworthy by the General Partner as well as to engage in
any other businesses which are consistent with the Partnership's objectives
and in which the Partnership may lawfully engage. The General Partner
expects that two-thirds of Net Offering Proceeds will be invested in
Equipment which is subject to Leases which do not produce portfolio income
and that one-third of such Proceeds will be invested in Financing
Transactions as well as Leases or other transactions which produce portfolio
income although the General Partner may determine to invest up to one-half
of such Proceeds in such Investments if, in its sole discretion, it believes
such Investments to be in the best interests of the Partnership. Over the
life of the Partnership, the General Partner expects that approximately
one-third of its Investments, by cost, will consist of such types of
Investments. See "SUMMARY OF THE PARTNERSHIP AGREEMENT." The Partnership is
expected to complete its Reinvestment Period no later than seven (7) years
of the date of this Prospectus and to then liquidate the Partnership's
Investments within a further period ending not later than 9 and one-half
years after the date of this Prospectus (or no later than May 9, 2005). The
Partnership Agreement provides
Page 9
<PAGE>
that the term of the Partnership ends December 31, 2015. Investors should
therefor expect to hold their Units for the full term of the Partnership
(i.e. from 7 1/2 to 9 1/2 years from the time they invest).
Terms of the Offering
The Offering -- The Partnership is offering a minimum of 12,000 Units and a
maximum of 1,000,000 Units of limited partnership interests (or Units) in
the Partnership. Such offering is on a "best efforts" basis; that is, there
is no guarantee that any specified amount of money will be raised. Units
will be offered for sale by ICON Securities Corp. (the "Dealer-Manager") and
NASD-member firms (the "Selling Dealers") which have entered into Selling
Dealer Agreements with the Partnership.
Offering Period -- The Offering commenced on November 9, 1995 (the
"Effective Date")and will terminate no later than the date twenty-four
(24) months after such date. In most states, continued offering beyond one
year after the effective date in such state (see "INVESTOR SUITABILITY AND
MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES" for a chart
showing each state's effective date) is subject to approval by the
applicable state securities authority. The Offering will terminate sooner
than twenty-four (24) months if either (1) the General Partner terminates
the Offering earlier or (2) subscriptions for the Maximum Offering of
1,000,000 Units are received prior to the end of such period. The end of the
Offering Period is also called the Termination Date. Subscriptions for Units
will only be accepted from the date of this Prospectus until the Termination
Date. See "PLAN OF DISTRIBUTION."
Minimum Offering -- The Partnership received subscriptions in excess of
12,000 Units (the "Minimum Offering") and held its initial Closing on
January 19, 1996 (the "Initial Closing").
Escrow Agent; Distribution of Escrow Interest -- Since the Minimum Offering
was received and the Initial Closing was held on January 19, 1996, all
subscription payments will nowbe deposited and held in a special,
segregated, interest-bearing subscription account of the Partnership
with The Bank of New York (NJ), a New Jersey banking corporation (or another
banking institution named by the General Partner ), pending subsequent
Closings. Each subscription payment will earn interest from the time it is
deposited in such account until the subscriber is admitted to the
Partnership . The interest so earned will be paid to the subscriber upon his
admission (or, if heis not admitted to the Partnership, the date on
which his subscription payment is returned to him).
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Subscription -- Every investor must manually execute a Subscription
Agreement in the form attached as Exhibit C hereto in order to purchase
Units. By subscribing for Units, each investor (other than residents of the
states specified on Pages C-3 and C-4 of the Subscription Agreement) will be
deemed to have made all of the representations and warranties contained
therein and will be bound by all of the terms of such Agreement and of the
Partnership Agreement.
Closings -- The Initial Closing was held on January 19, 1996, after
subscriptions for at least 12,000 Units hadbeen received by the Escrow
Agent, at which time subscribers for at least such number of Units were
admitted to the Partnership as Limited Partners. After the Initial Closing
Date, the Partnership intends to hold Closings semi-monthly until the
Offering is completed or terminated.
Status of the Offering -- As of June 15, 1996, 825 Limited Partners
(exclusive of the Initial Limited Partner) with total subscriptions for
150,784.6499 Units ($15,078,464.99) had been admittedto the Partnership.
Investor Suitability -- To be eligible to purchase Units, all prospective
investors are required to comply with the Partnership's basic suitability
requirements. In general, prospective owners of Units must either have:
(i)both (A) a net worth of not less than $30,000 (determined exclusive of
the net fair market value of (a) his or her home, (b) home furnishings
and (c) personal automobiles) and (B) $30,000 of annual gross income;
or
(ii) a net worth of at least $75,000 (determined as above).
Instead of the foregoing standards, to be admitted to the Partnership as a
Limited Partner a subscriber (or fiduciary acting on his, her or its behalf)
who is a resident Alabama, Arizona, Arkansas, California, Indiana,
Kansas, Maine, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma,
Oregon, Pennsylvania, South Carolina,South Dakota, Tennessee, Texas,
Utah, Vermont ,Washington and Wisconsin must (1) either (a) a net
worth of not less than $45,000 (determined exclusive of the net fair market
value of (i) his or her home, (ii) home furnishings and (iii) personal
automobiles) plus (b) $45,000 of annual gross income or (2) a net worth of
at least $150,000 (determined as above) and a subscriber (or fiduciary
acting on his, her or its behalf). In addition, subscribers who are
residents of Iowa, Massachusetts, Michigan, Minnesota, Missouri, New
Jersey and North Carolina must have either (a) annual gross income of
$60,000 plus a net worth of $60,000 or (b) a net worth of at least $225,000.
Finally, each subscriber residing in Michigan or Pennsylvania must also have
a net worth (exclusive of home, home furnishings and automobiles) equal to
the greater of (a) the net worth requirements described under "Minimum Net
Worth/Income"or (b) ten times the amount to be invested by such investor
(e.g., a $200,000 net worth in order to invest $20,000). (See "INVESTOR
SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES"
and the Subscription Agreement for a more detailed explanation of any
specific state suitability requirements).
Who Should Invest -- You should only invest in the Partnership if you (a)
are prepared to make an investment for the entire five (5) year (minimum) to
eight (8) year (maximum) Reinvestment Period following the Final Closing
Date as well as the additional liquidation period of from six (6) to
thirty-six (36) months thereafter, (b) have no need for liquidity of such
investment (except as may be provided by monthly cash distributions) and (c)
are prepared to assume the risks associated with such investment (see "RISK
FACTORS"). An investment in Units is not suitable for investors who will
need access to their Capital Contribution during the term of the Partnership
or for whom the projected monthly cash distributions are an essential source
of funds to pay their necessary living expenses. An investment also may
produce "unrelated business taxable income" for pension, profit-sharing and
other Qualified Plans in excess of applicable exemptions (See "INVESTMENT BY
QUALIFIED PLANS" for further information). Each potential investor should
review the information appearing under the captions "RISK FACTORS," "FEDERAL
INCOME TAX CONSEQUENCES" and "INVESTOR SUITABILITY AND MINIMUM INVESTMENT
REQUIREMENTS; SUBSCRIPTION PROCEDURES" with particular care and should
consult his tax and investment advisors to determine (1) if an investment in
Units is appropriate for him in light of his particular tax and investment
situation and (2) if so, what portion of his total investment portfolio may
prudently be invested in Partnership Units.
Minimum Investment -- All investors other than Qualified Plans and IRAs:
The minimum investment by an investor (whether by subscription or through
resale) is generally 25 Units
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(other than with respect to residents of Nebraska, for whomthe minimum
investment is 50 Units). Qualified Plans and IRAs: The minimum number of
Units which a Qualified Plan or an IRA may purchase is 10 Units, except for
Qualified Plans and IRAs established by residents of the following states:
Arizona, Indiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi,
Missouri, New Mexico, North Carolina, Oklahoma, Pennsylvania, South Dakota,
Tennessee, Texas and Washington (which have established a 20 Unit minimum
IRA and Qualified Plan minimum investment) and for Iowa residents (which has
established a 25Unit minimum IRA and Qualified Plan minimum investment).
(See "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION
PROCEDURES" and the form of Subscription Agreement attached as Exhibit A
hereto). Subscribers who satisfy such minimum purchase requirements may
subscribe for additional Units and fractions of Units during the Offering
Period.
Sources and Uses of Offering Proceeds and Related Indebtedness
Not less than 74.0% of Gross Offering Proceeds will be used to make
Investments (assuming maximum possible leverage of 80%), 1% will be held in
reserves (including working capital) and the balance will be applied to pay
fees and expenses to the Sponsor and its Affiliates and to others involved
in the Offering. See "SOURCES AND USES OF OFFERING PROCEEDS AND RELATED
INDEBTEDNESS" for a breakdown of the Partnership's estimate as to how the
capital it raises and a portion of the indebtedness it may employ will be
used.
Summary of Compensation
The Dealer-Manager (an Affiliate of the General Partner which will select
the Selling Dealers and manage the Offering of Units) and the General
Partner (which will acquire the assets for and manage the business of the
Partnership) will receive compensation for their services. The section of
the Prospectus entitled "SUMMARY OF COMPENSATION" details the estimated
amount and range of each item of compensation payable to the Dealer Manager
and the General Partner by the Partnership. The most significant items of
compensation are:
o Approximately 25.0% of Gross Offering Proceeds (assuming maximum possible
leverage of 80%) will be used to pay the costs of organizing the
Partnership, offering the units to the public and acquiring Partnership
assets and, of such percentage, approximately 17.0% of Gross Offering
Proceeds will be paid to the General Partner or an Affiliate and
approximately 8.0% of Gross Offering Proceeds is expected to be paid to
unrelated Selling Dealers. (See "SOURCES AND USES OF OFFERING PROCEEDS AND
RELATED INDEBTEDNESS"). The Partnership may elect to borrow an amount
equal to sales commissions and use the corresponding amount of Gross
Offering Proceeds (up to 8% thereof) to make Investments and pay operating
expenses of the Partnership. The Partnership's total payments of principal
of, and interest on, any such Commission Loans would exceed the
corresponding amounts of Commissions paid therewith by the amount of
interest paid on any such Loans. Consequently, the General Partner expects
to utilize Commission Loans only when, it has determined that an
opportunity exists to use such borrowings to obtain Investments which have
contractual payments at least equal to the total payments of principal of,
and interest on, the corresponding Commission Loans.
o The General Partner will generally be entitled to receive a Management Fee
of between 2% and 5% of annual gross rental payments (fee percentages for
Leases are based on whether they are Full-Payout or Operating Leases) and
2% of payments on Financing Transactions.
o The General Partner shall receive 1% and the Limited Partners 99% of each
of distribution of Distributable Cash From Operations and Distributable
Cash From Sales until the Limited Partners have received total cash
distributions in an amount equal to Payout (i.e., the time when each of
the Limited Partners has received cash distributions in an amount equal to
the sum of his or her (i) capital contribution plus (ii) an 8.0%
cumulative annual return thereon, compounded daily, computed from a date
not later than the last day of the calendar quarter in which such Capital
Contribution is made (determined by treating cash actually distributed to
such Limited Partner as first being applied to satisfy such 8% return on
capital which has accrued and has not been paid and applying any excess
distributions as a return of such Limited Partner's Capital Contribution).
Income earned on escrowed funds and distributed to Limited Partners may be
used to satisfy such cumulative return requirement).
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After Payout, distributions of Distributable Cash From Operations and
Distributable Cash From Sales, distributions of Distributable Cash From
Operations shall be tentatively attributed 90% to the Limited Partners and
10% to the General Partner; provided, however, that, distributions shall
continue to be made 99% to the Limited Partners and 1% to the General
Partner until the earlier of (i) when the total cash distributions made to
each Limited Partner equal 150% of his or her original Capital
Contribution (reduced by any amounts paid to him or her (A) as a return of
uninvested Capital Contributions and (B) in redemption of Units pursuant
to the Partnership Agreement) or (ii) upon liquidation of the Partnership.
The increased share of Distributable Cash From Operations tentatively
attributed to the General Partner but not actually distributed to it
because of the proviso in the preceding sentence shall accrue, without
interest, and be paid to the General Partner out of the first
Distributable Cash From Operations available to the Partnership after the
earlier of (i) the time when the total cash distributions made to each
Limited Partner equal 150% of such Partner's original Capital Contribution
(reduced by distributions in return of uninvested capital and in
redemption of Units, as described in the preceding sentence) or (ii) upon
liquidation of the Partnership.
o There are a number of other, smaller items of compensation and expense
reimbursements that the General Partner may receive during the operations
of the Partnership. See "SUMMARY OF COMPENSATION."
Conflicts of Interest
The Partnership will be subject to various conflicts of interest arising out
of its relationship to the General Partner and its Affiliates. These
conflicts may include, but are not limited to:
o the lack of arm's length negotiations in determining compensation;
o competition with other leasing programs sponsored by the General Partner
or its Affiliates for the acquisition, lease, financing or sale of
Equipment; and
o competition with other leasing programs sponsored by the General Partner
or its Affiliates for management services.
In addition to the fiduciary duty that the General Partner owes to the
Limited Partners, the Partnership Agreement contains certain provisions
intended to minimize conflicts between the General Partner and its
Affiliates on the one hand and the Limited Partners on the other. See
"SUMMARY OF THE PARTNERSHIP AGREEMENT" and "CONFLICTS OF INTEREST."
Fiduciary Responsibility
The General Partner will act as fiduciary to the Partnership. However, the
Partnership will be obligated to provide certain indemnities to the General
Partner, and, as detailed under "CONFLICTS OF INTEREST," the General Partner
will be permitted to engage in certain activities that may involve a
conflict of interest.
Other Offerings by the General Partner and its Affiliates
The General Partner has sponsored, and is currently managing, six other
public leasing programs with objectives similar to that of the Partnership
and certain Affiliates have sponsored and are managing fourteen non-public
programs with different investment objectives. (See "OTHER OFFERINGS BY THE
GENERAL PARTNER AND ITS AFFILIATES" for more detailed information concerning
the Prior Public Programs (ICON Cash Flow Partners, L.P., Series A through
Series E and ICON Cash Flow Partners L.P. Six, all of which are hereinafter
collectively referred to as the "Prior Public Programs") and the Prior
Performance Tables included in Exhibit B to this Prospectus for tabular and
statistical data concerning the Prior Public Programs.
Management; Financial Statements of the General Partner and of the Partnership
The sole General Partner of the Partnership is ICON Capital Corp., a
Connecticut corporation located at 600 Mamaroneck Avenue, Harrison, New York
10528 (telephone 914-698-0600), which is also the Partnership's address and
telephone number. The General Partner will manage and control the affairs of
the Partnership. See "MANAGEMENT" for a description of the officers and
other key personnel who will be responsible for the management of the
Partnership's business.
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The financial statements of the General Partner and of the Partnership are
located in the Prospectus under the caption "FINANCIAL STATEMENTS."
Investment Objectives and Policies
The Partnership intends to acquire and lease various types of Equipment,
primarily within the United States, to businesses which the General Partner
determines are Creditworthy. The Partnership will also provide financing to
these same types of businesses secured by tangible and intangible personal
property and other or additional collateral located primarily within the
United States which the General Partner determines to be sufficient in
amounts and types to provide adequate security for the current and future
obligations of such borrowers. The General Partner estimates that
approximately one-third of Net Offering Proceeds will be invested in
Financing Transactions and Leases which produce portfolio income although
the General Partner may determine, in its sole discretion, to invest up to
one-half of the Partnership's funds in Financing Transactions as well as
Leases or other transactions which produce portfolio income if, in its sole
discretion, it believes such Investments to be in the best interests of the
Partnership. For the purposes of this Prospectus, the term "Creditworthy"
means, when used hereinwith respect to a prospective Lessee or User, that
(1) the Credit Committee of the General Partner has made the determination,
in its reasonable business judgment, after review of financial, credit,
operational and other information concerning such Lessee or User, that such
party is currently able, and is expected to continue throughout the term of
such transaction to be able, to meet its obligations to the Partnership in a
timely and complete manner, (2) the Lease or Financing Transaction is
adequately secured by equipment and/or other collateral obtained, directly
or indirectly, from theLessee or User (or a guarantor or other party) and
(3) the Lessee or User has satisfied substantially all other criteria
established by the Credit Committee as a condition to the Partnership's
investment in such Lease or Financing Transaction. (See "INVESTMENT
OBJECTIVES AND POLICIES-- Credit Review Procedures" for a discussion of the
procedures used by the General Partner to determine the Creditworthiness of
potential Lessees and Users).
The terms of the Partnership's Leases are expected to range from two to five
years. Each such investment is expected to provide for aggregate, basic
contractual payments (rents in the case of Leases and debt service in the
case of Financing Transactions) which return the Partnership's cost of such
Investments (including Front- End Fees), together with investment income.
After its initial term, each Lease will be expected to produce additional
investment income from the re-lease and/or ultimate sale of the Equipment.
The Partnership's overall investment objectives are to:
(1) achieve sale of the Maximum Offering in an orderly manner;
(2) promptly apply Net Offering Proceeds, together with the principal amount
of any Indebtedness, permitted to be incurred to acquire Investments which
are as broadly diversified by collateral type, lessee/user industry and
geographic location as is possible in accordance with the Partnership's
investment objectives and policies described herein and the Partnership
Agreement;
(3) arrange for financing of substantially all contractual revenues
receivable for such Investments which are not needed for current
distributions and operation expenses;
(4) make monthly cash distributions in an amount equal to the "First Cash
Distributions" to each of its Limited Partners from Cash From Operations
throughout the period which ends five (minimum) to eight (maximum) years
after the Partnership's Final Closing (the "Reinvestment Period") see
"INVESTMENT OBJECTIVES AND POLICIES--Cash Distributions to Partners--Monthly
Cash Distributions" and "--First Cash Distributions to the Limited
Partners";
(5) re-invest all (a) excess financing proceeds and (b) undistributed Cash
From Operations and Cash From Sales in additional Investments during the
Reinvestment Period to continuously increase the total amount of the
Partnership's revenue-generating Investments (see "INVESTMENT OBJECTIVES AND
POLICIES-- Reinvestment of Undistributed Cash in Additional Equipment,
Leases and Financing Transactions"); and
(6) sell or otherwise transfer the Partnership's Investments and other
assets in an orderly manner and thereafter to distribute Cash From Sales
thereof to the Partners within approximately six (6) to thirty-six (36)
months after the end of the Reinvestment Period.
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See "INVESTMENT OBJECTIVES AND POLICIES" for a detailed discussion of (a)
the Partnership's proposed Investments under "--Acquisition Policies and
Procedures," "--Leases and Lessees," "--Financing Transactions" and
"--Portfolio Acquisitions" in such section; (b) the credit criteria to be
employed by the General Partner's Credit Committee and credit staff in
evaluating businesses for proposed Investments under "--Credit Review
Procedures" in such section and (c) the nature and source (e.g. capital or
investment increase) of cash distributions to be made to Limited Partners
under "--Monthly Cash Distributions" in such section.
Not less than 74.0% of the Gross Offering Proceeds will be used to make
investments in Equipment, Leases and Financing Transactions (collectively
"Investments") on behalf of the Partnership (assuming that the Partnership's
initial Investments are acquired using a maximum of 80% leverage) (see
"SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS") and 1.0%
of Gross Offering Proceeds will be initially set aside in a working capital
reserve. If one assumed that individual investors (1) could purchase
Investments with the same average yield as the Partnership is able to
achieve, (2) could arrange financing on the same terms and (3) could make
such acquisitions without paying any transfer taxes or fees to brokers or
attorneys to locate, negotiate and document such transactions (each of which
assumptions the General Partner believes to be unlikely), then an investor's
return from a direct ownership of leases and financing transactions would be
greater than the return from an investment in the Partnership. In addition,
if one assumed that an investor would incur no expenses in (1) managing
Investments (e.g. billing and collecting rents, corresponding with the
Lessees, insurers and others, administering sales, use and property tax
collections, accounting and remittances to appropriate taxing authorities,
etc.) and (2) re-marketing the Equipment (both of which assumptions the
General Partner also believes to be unlikely), then such investor's annual
share of gross revenues could be said to be reduced in direct proportion to
the fees payable to the General Partner for performing such services.
Federal Income Tax Considerations
See "FEDERAL INCOME TAX CONSEQUENCES" for a discussion of significant
federal income tax issues pertinent to the Partnership. Such Section also
contains a description of the legal opinion regarding federal income tax
matters that the Partnership will receive, which together with such opinion,
addresses the material federal income tax issues which are expected to be of
relevance to U.S. taxpayers who are individuals. Other tax issues of
relevance to other taxpayers should be reviewed carefully by such investors,
prior to their subscription, to determine special tax consequences of an
investment to the Partnership.
The Partnership has obtained an opinion from Whitman Breed Abbott & Morgan,
Tax Counsel to the General Partner, concerning the Partnership's
classification as a partnership for federal income tax purposes. See "--
Classification as a Partnership." The opinion states further that the
summaries of federal income tax consequences to individual holders of Units
and to certain tax-exempt entities, including qualified plans, set forth in
this Prospectus under the headings "RISK FACTORS--Federal Income Tax Risks"
and "FEDERAL INCOME TAX CONSEQUENCES" and "INVESTMENT BY QUALIFIED PLANS"
have been reviewed by Tax Counsel and that, to the extent such summaries
contain statements or conclusions of law, Tax Counsel are of the opinion
that such statements or conclusions are correct under the Internal Revenue
Code, as presently in effect, and applicable current and proposed Treasury
Regulations, current published administrative positions of the Service
contained in Revenue Rulings and Revenue Procedures and judicial decisions.
Capitalization
The section of this Prospectus entitled "CAPITALIZATION" details, in tabular
form, the Partnership's current and projected capitalization, after
deduction of Sales Commissions, Underwriting Fees and the O & O Expense
Allowance.
Summary of Partnership Agreement
The Partnership Agreement governs the relationship between the Limited
Partners and the General Partner. Investors should be particularly aware
that under the Partnership Agreement:
(1) they will have limited voting rights;
(2) their Units will not be freely transferable, and, even if transferable,
can probably only be sold at a substantial discount; and
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(3) the fiduciary duty owed by the General Partner to the Limited Partners
has been modified in recognition of its sponsorship of the Prior Public
Programs so as to avoid conflicts in fiduciary standards that would
otherwise apply to the sponsor of only one investment program.
See "SUMMARY OF THE PARTNERSHIP AGREEMENT," "TRANSFER OF UNITS," "REPORTS TO
LIMITED PARTNERS" and "FIDUCIARY RESPONSIBILITY" for further details.
Transfer of Units
The transfer of Units is subject to restrictions contained in the
Partnership Agreement which are primarily intended to avoid having the
Partnership be treated as a "publicly traded partnership" and thereby become
subject to taxation as a corporation (see "FEDERAL INCOME TAX
CONSEQUENCES--Publicly Traded Partnerships" at Pages 61-62). As a result of
such limitations, however, it is possible that a Limited Partner wishing to
transfer Units might not be able to do so if the aggregate transfer limits
of the Partnership had been reached for such year. See the "TRANSFER OF
UNITS" section of the Prospectus discusses the restrictions on transfer of
Units in greater detail.
Fiscal Year
The fiscal year of the Partnership will end on December 31.
Glossary of Terms
For definitions of certain terms used in this Prospectus, see Section 17 of
the Partnership Agreement included as Exhibit A to this Prospectus.
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RISK FACTORS
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The purchase of Units may be considered speculative and subject to certain
risks. In addition to the factors set forth elsewhere in this Prospectus,
prospective investors should consider the following:
Operating Risks
General. The Partnership will engage in the businesses of equipment leasing
and secured financing, which entail certain economic and other risks, including,
but not limited to, the following: the risk of physical deterioration, or
technological obsolescence of some types of Equipment that the Partnership may
lease or finance; risks related to the Creditworthiness of Lessees and the
possibility of Lessee or User defaults; fluctuations in general business and
economic conditions; and the adoption of legislation or regulations that may
affect the cost, manner of operations, and titling and registration (when
necessary), of certain of its assets. Many of the foregoing risks are outside
the control of the Partnership and may adversely affect its operating costs or
revenues, or the amounts actually realizable by it. Certain of such risks are
discussed below.
Partnership and Investment Risks
Certain of the Prior Public Programs with Investment Objectives Similar to
the Partnership have experienced unexpected losses. As discussed in greater
detail in the "OTHER OFFERINGS BY THE GENERAL PARTNER AND ITS AFFILIATES"
Section of this Prospectus at Pages 39-41 and as shown on TABLE III, three of
the early Prior Public Programs experienced losses in 1991-1992 which were in
excess of such Programs' respective provisions or reserves for such losses. The
primary cause of such losses in each case was the bankruptcy of one or more
lessees of such Programs. A secondary cause in the case of one of such Programs
was the rapid obsolescence of equipment subject to an operating lease due to
withdrawal of software support by the manufacturer after it had been acquired by
a competitor and its product line and product support terminated by the
acquiring company. In the case of the largest two of such bankruptcies, it has
been reported in the press that each of the bankrupt companies had materially
overstated their inventories and profits in their financial statements prior to
bankruptcy. While the Partnership will use its diligent business efforts to
avoid and minimize losses and to establish reserves for losses which are
adequate and prudent, there can be no assurance that losses of the Partnership
will not exceed such reserves due to conditions beyond the control of the
General Partner. If the Partnership were to incur any such excess losses, the
amounts otherwise distributable as a return of, and a return on, capital to the
Limited Partners, would be reduced in the absence of offsetting investment gains
or cost savings by the Partnership.
Equipment and Lessees Unspecified. Because the Equipment to be purchased and
the Leases and Financing Transactions to be entered into or acquired have not
been determined as of the date of this Prospectus, the General Partner will have
complete discretion in investing the Net Offering Proceeds from the sale of the
Units and proceeds from Partnership Indebtedness within the limits set forth
under the caption "INVESTMENT OBJECTIVES AND POLICIES." In addition, because the
Partnership's Investments have not been specified, no one can predict if
investors will receive distributions sufficient to return their investment
and/or an investment return thereon.
Investments in "New/Unused," "Seasoned" and "Used/Remarketed" Equipment. The
General Partner also has discretion to invest the Net Offering Proceeds and
Indebtedness in "new/unused," "seasoned" and/or "used/remarketed" Equipment in
any proportion. See "INVESTMENT OBJECTIVES AND POLICIES--General" and
"--Equipment"). Purchasers of Units must therefore rely solely on the judgment
and ability of the executive officers of the General Partner with respect to the
selection of lessees, the purchase of Equipment, incurring Indebtedness, the
negotiation of the terms of purchases of Equipment, Leases and Financing
Transactions and other aspects of the Partnership's business and affairs. The
General Partner expects that a substantial portion, of at least 50%, and as much
as 75%, of all its Equipment may from time to time consist of "seasoned"
Equipment (i.e. Equipment which is acquired by the Partnership during and
subject to the initial (or original) Lease of such Equipment, that at least 25%
of its Equipment will consist of "New/unused Equipment" and that 0 to 25% of its
Equipment might consist of "Used/Remarketed Equipment" (i.e. Equipment in its
second lease). The major risk associated with purchase of "Seasoned" or
"Used/Remarketed" Equipment is that the user has not maintained such Equipment
in strict compliance with the terms of its lease of such Equipment. It will not
usually be cost-effective for the Partnership to inspect each item of such
Equipment prior to its acquisition. Instead, the General Partner will seek, and
expects that it will be able in substantially all instances to obtain for the
Partnership, representations from the sellers of all Equipment, including
"seasoned" and "used" Equipment as well as from the users of such
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Equipment that such Equipment has been maintained in compliance with the terms
of the applicable leases, that neither the seller, as lessor, nor the User, as
lessee, is in violation of any material terms of such Leases and that the
Equipment is in good operating condition and repair and the user has no defenses
to, or offsets against, rents payable with respect to such Equipment as a result
of the condition of the Equipment. The Partnership would have rights against the
seller or user of such "seasoned" or "used" Equipment or both for any losses of
the Partnership arising from their breach of such representations.
Investment Delay. Delay may be expected between the time an investor
purchases Units in the Partnership and the time the Net Offering Proceeds from
such sales are invested in Investments. As a result, a corresponding delay may
occur in the receipt of benefits from cost recovery deductions from the
Equipment. However, the Partnership Agreement requires that all Net Offering
Proceeds from the sale of the Units, after deduction of Front- End Fees, be
invested, or committed to investment, in Equipment, Leases, Financing
Transactions and Reserves (not exceeding 3% of Gross Offering Proceeds), by
November 9, 1997,within 24 months from the Effective Date of the Offering (or,
if later, within 12 months of receipt of such Net Offering Proceeds). All such
Net Offering Proceeds which are not so invested or committed to investment shall
be distributed to the Limited Partners, on a pro rata basis, as a return of
capital without interest and without reduction for Sales Commissions,
Underwriting Fees and O & O Expense Allowance related to such uninvested Capital
Contributions.
Investment Portfolio Composition. There can be no assurance as to the
ultimate composition of the Partnership's actual Investment portfolio, as there
is no way of anticipating what types of Equipment, Leases and Financing
Transactions will be available on reasonable terms at the times the Partnership
is ready to invest its funds. The General Partner may vary the Partnership's
Investment portfolio and may invest a substantial portion of the Net Offering
Proceeds and Cash From Operations and/or Cash From Sales in types of equipment
and financing transactions other than those described under the caption
"INVESTMENT OBJECTIVES AND POLICIES" or may invest in Financing Transactions to
a greater degree than currently anticipated. (The General Partner estimates that
approximately one-third of Net Offering Proceeds will be invested in Financing
Transactions and Leases which produce portfolio income although the General
Partner may determine, in its sole discretion, to invest up to one-half of the
Partnership's funds in Financing Transactions as well as Leases or other
transactions which produce portfolio income if, in its sole discretion, it
believes such Investments to be in the best interests of the Partnership.) Also,
to the extent that less than the maximum number of Units are sold, it is likely
that the Partnership would not be able to achieve as great a degree of
diversification in its portfolio of Investments as would be possible with more
capital to invest.
Residual Value of Equipment. Each investor's ultimate investment return from
the Partnership will depend, in part, upon the residual value of the
Partnership's Equipment at the time of its sale or re-lease. The residual value
of the Equipment will depend upon many factors beyond the control of the
Partnership, including the cost of similar new equipment at the time of sale,
technological obsolescence, supply of and demand for such equipment, competitive
factors and general economic conditions. See "INVESTMENT OBJECTIVES AND
POLICIES-- Acquisition Policies and Procedures."
A Lack of Diversification of Investments Would Result if only the Minimum
Offering were Raised. The Partnership may begin operations with minimum
capitalization of approximately $1,038,000 (after payment of estimated Sales
Commissions, Underwriting Fees and O & O Expense Allowance totaling 13.5% or
$162,000 of Gross Offering Proceeds) or $1,134,000 (assuming the Partnership is
successful in obtaining Commission Loans in an amount equal to the Sales
Commissions payable by the Partnership). The ability of the Partnership to
diversify its Investments and its profitability could be adversely affected by
the amount of funds at its disposal. See "SOURCES AND USES OF OFFERING PROCEEDS
AND RELATED INDEBTEDNESS" and "CAPITALIZATION."
Management of the Partnership; Limited Voting Rights of Limited Partners.
All decisions with respect to management of the Partnership, including the
determination as to which Equipment the Partnership will acquire and which
Leases and Financing Transactions it will enter into or acquire, will be made
exclusively by the General Partner. The success of the Partnership, to a large
extent, will depend on the quality of its management, particularly as it relates
to acquisition of Equipment and Financing Transactions and the re-leasing and
disposition of its Equipment. Limited Partners are not permitted to take part in
the management of the Partnership or the establishment of the Partnership's
investment objectives or policies. Accordingly, potential investors should not
purchase Units unless they are willing to entrust all aspects of the management
of the Partnership to the General Partner. See "MANAGEMENT."
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<PAGE>
Generally speaking, only extraordinary matters, such as a proposed amendment
to the Partnership Agreement, are required to be submitted for vote of the
Limited Partners. For any matter submitted for vote of the Limited Partners, the
Consent of the Majority Interest (more than 50% of the Partnership Interests) is
required for approval. The Partnership Agreement provides that in determining
the requisite percentage of Interests necessary for a vote concerning (i) the
removal of the Sponsor as General Partner or (ii) any transaction between the
Sponsor and the Program, any Interests owned by the Sponsor shall not be
included.
Leveraged Investment--Increased Risk of Loss. The Partnership expects to
acquire a portion of its Investments for cash consideration and to acquire other
Investments (particularly those with investment-grade Lessees and Users) subject
to existing (primarily non-recourse) indebtedness. As an essential element of
its acquisition and operational strategy, the General Partner intends to use
additional borrowings (or "leverage") from banks or other unaffiliated lenders
(which is expected to be recourse debt as to a discrete "pool" of Leases or
other receivables in excess of those needed for current cash expenses and
distributions) to acquire additional Investments and generate additional Gross
Revenues for the Partnership. Such pooled-asset loans are commonly referred to
as "securitizations." The General Partner expects that, from the time the Gross
Offering Proceeds are fully invested in Investments, until the end of the
Reinvestment Period, at least 50% but no more than 80% of the Partnership's
aggregate cost of its Investments will have been supplied by Partnership
borrowings and existing indebtedness. The ability of the Partnership to borrow
and obtain favorable interest rates and other terms will depend in part on the
magnitude of financeable assets which the Partnership owns at any point in time
and other factors such as the general availability of investors willing to lend
money at any point in time. To the extent that the Partnership uses borrowings,
the interest rates paid by it on such borrowings may be higher than those paid
by certain leasing companies which may be able to borrow money at lesser rates
of interest. As a result, the Partnership may be required to charge higher
payments under its Leases and Financing Transactions than would be charged by a
competitor with a lower cost of borrowing in order to achieve a comparable
return on its Investments. Accordingly, the Partnership may operate at a
competitive disadvantage relative to certain other lessors and financiers of
Equipment.
Furthermore, such borrowings may be secured by a lien on some or all of the
Partnership's Equipment, Leases and/or Financing Transactions and the payments
due thereunder. Although the use of borrowings permits the Partnership to
acquire a greater number and variety of Investments, borrowings may also
increase the Partnership's risk of loss. For example, if a Lessee defaults in
the payment of rentals or royalties due under a Lease which has been assigned to
a lender, and if the Partnership is unable either (a) to re-lease or re-license
such Equipment upon rental terms comparable to those under the original Lease or
(b) is unable to pay the debt it has incurred, the lender could foreclose on
such Equipment and the Partnership could suffer a loss of its investment
therein.
It is also possible that the Partnership may, on occasion, find it necessary
to borrow funds for use in operations (for example to repair damaged Equipment
where Reserves and Cash From Operations are not sufficient to cover such costs).
There can be no assurance that, if the need to borrow funds for use in
operations were to develop, financing would be available, or if available, would
be on terms satisfactory to the Partnership.
Risks Associated with Lessee or User Default. If a Lessee or User defaulted
on its payment obligations under a Lease or Financing Transaction, the
Partnership would need to foreclose on the Equipment and/or other collateral
securing such transaction (which might include guaranties, security and time
deposits, manufacturer or vendor guaranties or re-purchase covenants). If the
Partnership were then unable to sell or re-lease the foreclosed Equipment or
collateral or were unable to repossess such Equipment or collateral promptly or
at all, the Partnership might realize a significant loss of anticipated revenues
that may result in the inability of the Partnership to recover fully its
investment in such Lease or Financing Transaction.
In the Early Partnership Years Investors Will be Subject to Federal Income
Taxation on Amounts that are a Return of Capital Under Generally Accepted
Accounting Principles. The Partnership is required to prepare its financial
statements and quarterly and annual financial reports to investors using
generally accepted accounting principles ("GAAP"), and is also required to
follow the Internal Revenue Code of 1986, as amended (the "Code") to compute its
taxable income and deductible expenses. There are many differences between the
timing, amounts and deductibility of items under GAAP and the Code. As a result
of such differences, a higher proportion of investors' monthly cash
distributions during the early (particularly the first two) years of the
Partnership will be a return of investors' capital contributions for GAAP (or
"book") reporting purposes than for tax reporting purposes. Consequently,
investors should be aware that, as a result, there may be substantial
differences each year between net income determined on a GAAP basis, as reported
to investors periodically, and the taxable income on which investors will pay
taxes pursuant to the Code.
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<PAGE>
A Substantial Portion of the Cash Distributions of the Prior Public Programs
has been a Return of Capital. A substantial portion of distributions made to
date by the Prior Public Programs has been a return of investors' capital
contributions. See Table III of the Prior Performance Tables for the Prior
Public Programs which appear as Exhibit B to this Prospectus. Subscribers will
not acquire any ownership interest in any Prior Public Program and should not
assume that they will experience investment results or returns, if any,
comparable to those experienced by investors in any such Prior Public Program
(notwithstanding the similarity in investment objectives and intended operations
of such Programs and the Partnership) or that the prior performance of any such
Prior Public Program indicates the future results of operations of such Prior
Public Program.
Rate of Limited Partner Cash Distributions Not Fixed; Return on Investment
Not Determinable. While it is the Partnership's objective to make monthly cash
distributions from net cash flows from operations, the General Partner may
determine it is in the best interest of the Partnership to change the proportion
of such cash flows which are distributed to the Limited Partners and reinvested
in additional Investments. In addition, until all cash distributions from the
operations of the Partnership and from sale of all its assets has been completed
the level of an investor's return on investment, if any, cannot be determined.
There is no assurance that investors will achieve any specified rate of return
on their respective capital contributions to the Partnership and the total
return on capital of the Partnership can only be determined at the termination
of the Partnership after all residual cash flows (proceeds from sale and
re-leasing of equipment after the initial and any subsequent lease terms have
expired) have been realized.
Lack of a Secondary Market for Units; Restricted Transferability. The Units
are limited partnership interests. In order to avoid treatment as a "publicly
traded partnership," the Code and regulations promulgated thereunder by the
Department of the Treasury of the United States impose severe limitations on the
ability of the General Partner or the Partnership to create or participate in a
"secondary market" for Units. As a result of the foregoing, only a limited
market for limited partnership interests, such as Units, currently exists. The
ability of an owner of Units to sell or otherwise transfer such Units (other
than at a substantial discount) is extremely limited. As a result, an investor
must view an investment in the Partnership as a long-term, illiquid investment.
See "TRANSFER OF UNITS."
Redemption Price for Units Not Equal to Capital Account Balance. Commencing
with the second full quarter following the Final Closing Date, any Limited
Partner (other than any Affiliated Limited Partner) may request that the
Partnership redeem up to 100% of the Units held by such Limited Partner. The
Partnership is under no obligation to do so. The redemption price payable in the
event the General Partner determines in its sole discretion to redeem such Units
has been unilaterally set. Such redemption price initially approximates the Net
Offering Proceeds realized by the Partnership from Capital Contributions of a
Limited Partner on the date of his admission to the Partnership after deduction
of Front-End Fees and has a maximum value equal to the Capital Account balance
of such Limited Partner as of the end of the quarter preceding the redemption,
reduced by cash distributions for the calendar quarter in which the redemption
occurs. See "TRANSFER OF UNITS--Limited Right of Presentment for Redemption of
Units." However, during the term of the Partnership, the redemption price may
have no direct relationship to a Limited Partner's Capital Account at the time
of a redemption.
Conflicts of Interest. The Partnership will be subject to various conflicts
of interest arising out of its relationship to the General Partner and its
Affiliates which may arise during the life of the Partnership--see the
"CONFLICTS OF INTEREST" Section at Pages 31-35 of this Prospectus. Such
conflicts may include:
o the lack of arm's length negotiations in determining compensation;
o competition with other leasing programs sponsored by the General Partner
or its Affiliates for the acquisition, lease, financing or sale of
Equipment and for management services;
o since the General Partner is, as a general rule, liable for the
Partnership's liabilities which exceed its assets, the General Partner may
have a conflict of interest in determining when to allocate cash flow for
distribution to the Limited Partners or to the Partnership's Reserve
Account;
o in joint ventures, a conflict may arise in determining when and whether to
dispose of any jointly owned investments;
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<PAGE>
o the timing and amounts of Acquisition Fees paid to the General Partner are
based upon the total purchase price of all Equipment inclusive of debt
and, thus, are increased (subject to a ceiling on the total amount of such
fees) if a greater percent of debt is employed in acquiring the
Partnership's Investments.
o any Units sold through ICON Securities Corp. because of its affiliation
with the General Partner, will not have the benefit of a review and
investigation by an independent securities firm in the capacity of a
dealer-manager.
o in acting as the Tax Matters Partner under the Partnership Agreement for
purposes of dealing with the Internal Revenue Service ("Service"), there
can be no assurance that any decisions made by the General Partner in such
its capacity as Tax Matters Partner will be in the best interest of any
specific Limited Partner given his or her specific tax situation.
Certain of such conflicts are affected by (i) the fiduciary duty that the
General Partner owes to the Limited Partners and by (ii) provisions of the
Partnership Agreement which are intended to minimize conflicts between the
General Partner and its Affiliates on the one hand and the Limited Partners on
the other. See "SUMMARY OF THE PARTNERSHIP AGREEMENT" and "CONFLICTS OF
INTEREST."
Participation of a Securities Sales Affiliate in this Offering. The
Dealer-Manager is an Affiliate of the General Partner. As a result, the
information provided in this Prospectus will not have the benefit of a review
and investigation by an independent securities firm in the capacity of a
dealer-manager.
General Partner Not Employed by Partnership Exclusively. The Partnership
will not employ its own full-time officers, directors or employees. The General
Partner will supervise and control the business affairs of the Partnership. The
Partnership will contract with the General Partner to manage the Partnership's
Investments. The officers and employees of the General Partner will devote to
the Partnership's affairs only such time as may be reasonably necessary to
conduct its business. See "MANAGEMENT."
The Equipment Leasing and Financing Businesses are Highly Competitive. The
equipment leasing and financing businesses are highly competitive and the
Partnership will be competing with many established entities having
substantially greater financial resources than the Partnership. Many of these
entities have greater experience in said businesses than the General Partner.
See, however, "OTHER OFFERINGS BY THE GENERAL PARTNER AND ITS AFFILIATES."
Risks of Joint Ventures. The Partnership Agreement permits the Partnership
to invest in Joint Ventures with other limited partnerships or investment
programs sponsored by the General Partner and its Affiliates as well as programs
sponsored by non-Affiliates. The maximum amount of the Partnership's Gross
Offering Proceeds which may be so invested is equal to the smallest of 25% of
(a) the Maximum Offering, (b) the sum of (i) the cumulative Gross Offering
Proceeds raised as of the closing date of such investment and (ii) the Gross
Offering Proceeds which the General Partner reasonably estimates the Partnership
will raise from such date to the Termination Date or (c) the cumulative Gross
Offering Proceeds raised as of the Termination Date. Such Joint Ventures will
have substantially identical investments objectives to the Partnership. Joint
Ventures will not permit the Partnership indirectly to engage in activities
which it cannot directly engage in as sole owner of any Investment under the
terms of the Partnership Agreement. See "INVESTMENT OBJECTIVES AND
POLICIES--Other Investments." Investing in Joint Ventures rather than a direct
investment in equipment or financing transactions may, under some circumstances,
involve additional risks, including risks associated with the possibility that
the Partnership's co-investors might become bankrupt or that such co-investors
may have economic or business interests or goals which are inconsistent with the
business interests or goals of the Partnership. Among other things, actions by
such a co-investor might have the result of subjecting equipment or financing
transactions owned by the Joint Venture to liabilities in excess of those
contemplated by the Partnership or might have other adverse consequences for the
Partnership. Inasmuch as, in certain cases, no one Person may control the Joint
Venture, there will be a potential risk of impasse on decisions, including a
proposed sale or other transfer of any equipment or financing transaction, and,
although it is anticipated that the Partnership shall have a right of first
refusal with respect to the purchase of any equipment or financing transactions
held by such Joint Venture, the Partnership may not have the resources to make
such purchase. See "CONFLICTS OF INTEREST--Joint Ventures."
Uninsured Losses. The Partnership's Leases and the documentation for
Financing Transactions will generally require Lessees and Users to arrange, at
their expense, for comprehensive insurance (including fire, liability and
extended coverage) and to assume the risk of loss of the Equipment or the
collateral securing the Leases and
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<PAGE>
Financing Transactions, whether or not insured. When the Lessee or User is not
required to provide such insurance, the Partnership will provide it at its own
expense. However, there are certain types of losses (generally of a catastrophic
nature such as those due to war or earthquakes) which are either uninsurable or
not economically insurable. Should such a disaster occur with respect to
Equipment or collateral securing the Leases and Financing Transactions and, in
connection therewith, the Lessee or User is unable to honor its payment
obligations, the Partnership could suffer a loss of capital invested in, and a
loss of any profits and related cash flow which might be anticipated from, such
Investments.
Risk of Loss of Equipment Registration. Aircraft and marine vessels are
subject to certain registration requirements. Registration with the Federal
Aviation Administration ("FAA") may be required for the operation of aircraft
within the United States. Similarly, certain types of marine vessels must be
registered prior to operation in the waterways of the United States. Failure to
register or loss of such registration for aircraft or marine vessels could
result in substantial penalties, the premature sale of such Equipment and the
inability to operate and lease the Equipment. See "INVESTMENT OBJECTIVES AND
POLICIES--Equipment--Equipment Registration."
Equipment Leases May be Subject to Usury Laws. Equipment Leases have, on
occasion, been held by the courts to be loan transactions subject to state usury
laws. It is expected that all of the Financing Transactions will be treated as
loan transactions. The Partnership intends to structure its Leases and Financing
Transactions so as to avoid application of the usury laws of the states in which
it will conduct its operations. However, there can be no assurance that the
Partnership will be successful in doing so.
Liability of Limited Partners for Certain Distributions. A Limited Partner's
personal liability for obligations of the Partnership generally will be limited
under the Delaware Act to the amount of such Limited Partner's Capital
Contribution. Under the Delaware Act, a Limited Partner may be liable to return
to the Partnership any amount distributed for a period of three years from the
date of such distribution if such distribution causes the liabilities of the
Partnership (other than Partnership liabilities to Partners on account of their
partnership interests and non-recourse debt) to exceed the fair market value of
the assets of the Partnership in the event the Limited Partner knew such facts
at the time of such distribution.
Limited Liability Not Clearly Established. The Partnership has been
organized under the Delaware Act, which is modeled after the Uniform Limited
Partnership Act. The Partnership Agreement provides for Limited Partners to
exercise certain rights relative to the internal affairs or organization of the
Partnership (such as, for example, a right to vote on the removal of the General
Partner or to terminate the Partnership). Under Delaware law, neither the
existence nor the exercise of such rights will cause the Limited Partners to be
deemed to be taking part in the control of the Partnership's business. However,
all states have not adopted the Uniform Limited Partnership Act. As a result, it
is not possible to be certain that the courts of every state would conclude that
the Limited Partners were entitled to limited liability under all circumstances.
Therefore, a risk exists as to whether the exercise (or perhaps even the
existence) of the Limited Partners' voting or other rights under the Partnership
Agreement might provide the basis for a court to hold that the Limited Partners
are not entitled to the limitation of liability which the Partnership Agreement
provides.
Federal Income Tax Risks and ERISA Matters. Although certain federal income
tax aspects may be important in analyzing the attractiveness of an investment in
Partnership Units, prospective investors in the Partnership should make an
investment based primarily on economic rather than tax factors. While the
Partnership has obtained an opinion of Tax Counsel as to various tax matters and
Tax Counsel has reviewed the "FEDERAL INCOME TAX CONSEQUENCES" Section of this
Prospectus for accuracy, that opinion and such review is limited largely to
those tax matters believed to be material to an individual taxpayer.
Furthermore, such tax opinion is
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<PAGE>
subject to certain assumptions concerning the future operations of the
Partnership (which may vary from such assumptions) and is not binding on the
Internal Revenue Service (the "Service"). In addition, no ruling has been or
will be sought from the Service on any federal income tax issue. Because of such
facts and because each investor's other income and expenses may materially
affect the tax consequences of an investment in Units, there can be no assurance
that the tax consequences described in this Prospectus will be obtained by every
investor. Prospective investors and their advisors should, therefore, not only
carefully review the "FEDERAL INCOME TAX CONSEQUENCES" Section of this
Prospectus, but should also carefully review their own particular circumstances.
Federal Tax Considerations in General. No ruling has been obtained from the
Service with respect to any of the tax considerations associated with an
investment in the Partnership. Many of the tax consequences described herein are
unclear because of the passage in recent years of major tax legislation, which
has not been interpreted through Treasury Regulations and court decisions.
Availability of the tax benefits described herein may be challenged by the
Service upon audit of any tax return of the Partnership. Any adjustment to any
tax return of the Partnership as a result of an audit could also result in
adjustments to the income tax returns of the Limited Partners, and might result
in an examination of such returns for items unrelated to the Partnership, or an
examination of such returns for prior years. Moreover, the Limited Partners
could incur substantial legal and accounting costs in contesting any Service
challenge, regardless of the outcome.
Partnership Status. The Service may successfully contend that the
Partnership should be treated as a corporation or a "publicly traded
partnership" ("PTP") which is treated as a corporation for federal income tax
purposes rather than as a partnership. In such event, substantially all of the
possible tax benefits (primarily non- taxation of the Partnership and a
pass-through to investors of all income and losses) of an investment in the
Partnership could be eliminated. See "FEDERAL INCOME TAX
CONSEQUENCES--Classification as a Partnership" and "--Publicly Traded
Partnerships." If the Partnership were treated as a PTP or as a corporation, the
following results would occur: (a) losses realized by the Partnership would not
pass through to Partners, (b) the Partnership would be taxed at income tax rates
applicable to corporations, and (c) distributions to the Partners would be
taxable to them as dividend income to the extent of current and accumulated
earnings and profits. In order to minimize the possibility of PTP treatment for
the Partnership, Section 10 of the Partnership Agreement provides for
restrictions on transfers of Units by incorporating certain "safe harbor" tests
specified by the Service in Notice 88-75.
Tax Treatment of Leases as Sales or Financings. Although the General Partner
expects to structure each Lease so that the Partnership will be treated, for
federal income tax purposes, as the owner and lessor of the Equipment, it is
possible that the Service may challenge some or all of the Partnership's Leases
and assert that they are properly characterized as sales or financings for
federal tax purposes. Such treatment would result in the loss of cost recovery
deductions by the Partnership with respect to the Equipment subject to such
Leases. See "FEDERAL INCOME TAX CONSEQUENCES--Tax Treatment of the Leases."
Tax Liability From Operations And Sales or Other Dispositions. The tax
liability of Partners may materially exceed net income for financial reporting
purposes. The General Partner expects that taxable income for each year will
generally, if not always, be less than cash distributions for the same year.
However, the sale or other disposition of a Unit or Partnership property may
result in Limited Partners realizing federal income tax liabilities which exceed
the amount of cash (if any) realized from such sale or other disposition.
Limitations on the Deduction of Losses. The ability of individuals, trusts,
estates, personal service corporations and certain other closely-held
corporations to deduct losses generated by the Partnership is limited to the
amounts such investors have "at risk" in the activity, i.e., generally the
amount paid for their Units plus any profit allocations, reduced by loss
allocations and distributions. Additionally, such investors are subject to
restriction on the deductibility of losses attributable to certain "passive
activities". The Partnership's operations will constitute a "passive activity".
Such investors can only use "passive losses" to offset "passive income" in
calculating tax liability. See "FEDERAL INCOME TAX CONSEQUENCES--Deductibility
of Losses: Passive Losses, Tax Basis and --'At Risk' Limitations."
Allocation of Profits and Losses. Allocations of Profits or Losses between
the General Partner and Limited Partners might be successfully challenged by the
Service if they did not have substantial economic effect or were not made in
accordance with the "interests" of the Partners. If such a challenge were
upheld, taxable income and loss might be reallocated, resulting in the Limited
Partners being allocated more taxable income or less loss than that allocated to
them under the Partnership Agreement. To avoid such a challenge, the Partnership
Agreement includes provisions regarding "special allocations" and "curative
allocations" to comply with the applicable
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<PAGE>
requirements of Treasury Regulations curative tax allocations. See "FEDERAL
INCOME TAX CONSEQUENCES- -Allocations of Profits and Losses."
Unrelated Business Income. Investors which are entities customarily exempt
from federal income taxation on their income, such as qualified corporate
pension, profit sharing and stock bonus plans, including Keogh Plans ("Qualified
Plans"), IRAs and certain charitable and other organizations described in
Section 501(c) of the Code, are nevertheless subject to "unrelated business tax"
under the Code on "unrelated business taxable income" ("UBTI"). Such entities
are required to file federal income tax returns if they have total UBTI from all
sources in excess of $1,000 per year. Partnership leasing income and certain
other Partnership income will generally constitute UBTI taxable to such
entities. See "FEDERAL INCOME TAX CONSEQUENCES--Taxation of Employee Benefit
Plans and Other Tax-Exempt Organizations."
Equitable Owner of Properties. The Partnership and Joint Ventures in which
it invests will be entitled to cost recovery, depreciation or amortization
deductions with respect to their properties only if they are considered to be
the equitable owners of the Partnership's properties for federal income tax
purposes. The determination of who is the equitable owner is based on many
factors. If the Partnership were deemed not to be the equitable owner of its
Equipment and other properties, it would not be entitled to cost recovery,
depreciation or amortization deductions, and the character of Partnership
leasing income might be deemed to the non-passive. See "FEDERAL INCOME TAX
CONSEQUENCES--Cost Recovery."
Foreign Investors. Foreign investors should be aware that income from the
Partnership will be subject to federal income tax withholding. Such investors
may also be required to file federal income tax returns. See "FEDERAL INCOME TAX
CONSEQUENCES -- Foreign Investors."
Additional Taxes and Reporting Obligations. Limited Partners may be required
to pay various taxes in connection with an investment in the Partnership, such
as the alternative minimum tax ("AMT"). Each Limited Partner is expected to be
allocated a ratable share of "tax preference items" and the operations of the
Partnership may give rise to other adjustments which could increase a particular
investor's AMT. AMT is treated in the same manner as the regular income tax for
purposes of payment of estimated taxes. See "FEDERAL INCOME TAX
CONSEQUENCES--Alternative Minimum Tax."
Limited Partners may also be subject to state and local taxation, such as
income, franchise or personal property taxes in the state in which they are
domiciled, as a result of their Partnership investment. The Partnership's use of
Equipment outside the United States (which is not presently contemplated) might
also subject the Partnership or Limited Partners to income or other taxation in
foreign countries.
ERISA Risks. Under certain circumstances, ERISA and the Code, as interpreted
by the Department of Labor, will apply a "look-through" rule under which the
assets of an entity in which a Qualified Plan or IRA has made an equity
investment may constitute "plan assets." Under certain circumstances, an
investment in Units may not be an appropriate investment for Qualified Plans or
IRAs due to such interpretations. Fiduciaries of Qualified Plans and IRAs, in
consultation with their advisors, should carefully consider: (1) whether an
investment in Units is consistent with their fiduciary responsibilities and (2)
the effect of the possible treatment of assets if the Partnership's underlying
assets are treated as "plan assets." See "INVESTMENT BY QUALIFIED PLANS."
THE FOREGOING IS A SUMMARY OF THE SIGNIFICANT FEDERAL INCOME TAX RISKS
RELATING TO A PURCHASE OF UNITS AND THE FORMATION AND PROPOSED OPERATIONS OF THE
PARTNERSHIP. THE RISKS DESCRIBED ABOVE AND THE OTHER SIGNIFICANT FEDERAL INCOME
TAX CONSEQUENCES RELATING TO THE PURCHASE OF UNITS ARE FURTHER DESCRIBED IN
"FEDERAL INCOME TAX CONSEQUENCES."
VARIOUS TAX RULES INCLUDING, WITHOUT LIMITATION, STATE, LOCAL AND FOREIGN
TAXES, THE ALTERNATIVE MINIMUM TAX, THE 'AT-RISK,' PASSIVE LOSS AND INVESTMENT
INTEREST LIMITATIONS, AND THE UNRELATED BUSINESS INCOME TAX RULES PRODUCE TAX
EFFECTS THAT CAN VARY BASED ON A LIMITED PARTNER'S PARTICULAR CIRCUMSTANCES.
THEREFORE, PROSPECTIVE LIMITED PARTNERS ARE URGED TO CONSULT THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR CONSEQUENCES OF AN INVESTMENT IN UNITS.
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------------------------------------------------------------------------------
SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS
------------------------------------------------------------------------------
The following tables set forth the General Partner's best estimate of the
use of the Gross Offering Proceeds from the sale of the Minimum Offering
($1,200,000) and the Maximum Offering ($100,000,000). Because the Partnership
has not made all of its acquisitions, certain of the amounts below cannot be
precisely calculated at the present time and may vary substantially from these
estimates. As shown below, it is projected that 74.0% of Gross Offering Proceeds
will be used to make investments in Equipment and Financing Transactions
(assuming 80% leverage). See footnote 8to the following table.
<TABLE>
Minimum Offering Maximum Offering
Dollar Dollar
Amount %(1) Amount %(1)
<S> <C> <C> <C> <C>
Gross Offerings Proceeds(2) ........... $ 1,200,000 100.00% $ 100,000,000 100.00%
Expenses:
Sales Commissions (3) ................. (96,000) (8.00%) (8,000,000) (8.00%)
Underwriting Fees (4) ................. (24,000) (2.00%) (2,000,000) (2.00%)
O&O Expense Allowance (5) ............. (42,000) (3.50%) (3,500,000) (3.50%)
------------- ----- ---------- -----
Public Offering Expenses .............. (162,000) (13.50%) (13,500,000) (13.50%)
Reserves (6) .......................... (12,000) (1.00%) (1,000,000) (1.00%)
Gross Offering Proceeds
Available
for Investment ....................... 1,026,000 85.50% 85,500,000 85.50%
Acquisition Fees (attributable to
Offering Proceeds and
Borrowings) (7) ...................... (138,000) (11.50%) (11,500,000) (11.50%)
------------- ----- ------------- -----
Gross Offering Proceeds Used
to Make Investments (8)............ $ 888,000 74.00% $ 74,000,000 74.00%
============= ====== ============= ======
</TABLE>
(1) All percentages shown in the table above are percentages of Gross Offering
Proceeds.
(2) Does not include $1,000 in cash contributed by both the Original Limited
Partner and the General Partner to the Partnership at time of its formation.
Upon the Initial Closing of the Partnership, the Original Limited Partner
will withdraw from the Partnership and his capital contribution of $1,000
will be refunded.
(3) The Partnership will pay to participating broker-dealers a Sales Commission
of $8.00 per Unit sold (8% of Gross Offering Proceeds), subject to reduction
in the case of sales qualifying for Volume Discounts, except that no Sales
Commission will be paid in respect of Units sold to Affiliated Limited
Partners. The General Partner expects that substantially all Sales
Commissions will be paid to unaffiliated Selling Dealers. Sales Commissions
are Front-End Fees regardless of whether paid by the Partnership directly or
with proceeds of Commission Loans (if any).
(4) The Partnership will pay the Dealer-Manager an Underwriting Fee equal to
$2.00 for each Unit sold (2.0% of Gross Offering Proceeds) for managing the
Offering of Units and to reimburse, on a non-accountable basis, for the
wholesaling fees and expenses of the Sponsor.
(5) The Partnership will pay the General Partner or the Dealer-Manager or both a
total amount equal to 3.5% of the Gross Offering Proceeds ($3.50 per Unit
for all Units sold) as an O & O Expense Allowance. The O & O Expense
Allowance will be paid on a non-accountable basis, which means that such
compensation may be less than, or greater than, the actual costs and
expenses paid by the General Partner and the Dealer-Manager in (a)
organizing the Partnership and offering Units for sale (which may include
advertising and promotional expenses incurred in preparing the Partnership
for registration and subsequently offering and distributing the Units to the
public--the "Organizational and Offering Expenses") and (b) bona fide due
diligence fees and
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expenses actually incurred by the Dealer-Manager and prospective Selling
Dealers. Such due diligence fees and expenses are limited to an aggregate
amount not to exceed the lesser of (a) one-half of 1% of Gross Offering
Proceeds or (b) the amount permitted to be paid pursuant to Appendix F to
Article III of the NASD Rules of Fair Practice. The General Partner has
agreed in the Partnership Agreement to pay all Organizational and Offering
Expenses in excess of 3.5% of the Gross Offering Proceeds, in the aggregate,
without recourse to, or reimbursement from, the Partnership. See "PLAN OF
DISTRIBUTION" and "SUMMARY OF THE PARTNERSHIP AGREEMENT."
(6) The Partnership intends to establish an initial Reserve equal to 1% of Gross
Offering Proceeds, which will be maintained and used for insurance, certain
repairs, replacements and miscellaneous contingencies.
(7) The amounts and percentages shown represent the maximum Acquisition Fees
which are payable from Gross Offering Proceeds (assuming indebtedness equal
to the maximum possible leverage of 80% of the purchase price of Equipment
is employed). The amounts and percentage shown are computed by multiplying
3.0% by the total purchase price of Investments purchased with both Capital
Contributions and with borrowings and the result is then reduced to the
amounts and percentages shown on the foregoing chart because the total of
all Acquisition Fees cannot exceed 11.5% of Gross Offering Proceeds under
the provisions of the Partnership Agreement and the NASAA Guidelines.
(8)The Partnership began operations as of January 19, 1996 with initial
capitalization of $2,280,827.80 (after payment of Sales Commissions,
Underwriting Fees and O & O Expense Allowance totalling $355,967.37--or
13.5% of Gross Offering Proceeds). As of June 15, 1996, an additional
$729,420.04 of net offering proceeds (after payment of Sales Commissions,
Underwriting Fees and O & O Expense Allowance totalling $113,840.12--or
13.5% of Gross Offering Proceeds) had become available to the Partnership
from Closings held through June 15, 1996.
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SUMMARY OF COMPENSATION
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The following table discloses in summary fashion the forms and estimated
amounts of all compensation or distributions which may be paid, directly or
indirectly, by the Partnership to the General Partner and its Affiliates. Some
of such compensation will be paid regardless of the success or profitability of
the Partnership's operations.
The following compensation was not determined by arm's-length negotiations.
The General Partner directly controls when Acquisition Fees (which are
payable only upon the Partnership's taking title to Investments) are paid. In
addition, the General Partner directly controls the amount of Acquisition Fees
(subject to overall limitations on all Front-End Fees) through the amount of
borrowings it uses to acquire Investments (which directly affects the Purchase
Price and Acquisition Fees payable for the Partnership's Investments). The
General Partner has subordinated the timing of its receipt of Management Fees,
Subordinated Remarketing Fees and its increased shares of Cash From Operations
and Cash From Sales to the receipt by the Limited Partners of certain total
amounts of cash distributions (as disclosed below). Notwithstanding the fact
that some of the compensation disclosed below may vary in amount from the
amounts projected, the total amounts of compensation payable to all Persons,
including the General Partner, is limited by provisions of the Partnership
Agreement and the requirements of (a) the NASAA Guidelines, which include
specific maximum sponsor compensation and minimum use of proceeds requirements
and (b) the NASD's Rules of Fair Practice (which limit selling compensation).
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Organization and Offering Stage
Form of (and Entity Receiving)
Compensation
Underwriting Fees (payable to
ICON Securities Corp., the
"Dealer-Manager")
Method of Compensation
2.0% ($2.00 per Unit) of the
Gross Offering Proceeds on all
Units sold.
Estimated Dollar Amount
A minimum of $24,000 if the Minimum Offering of 12,000 Units is sold and a
maximum of $2,000,000 if the Maximum Offering of 1,000,000 Units is
sold.
Sales Commissions (expected to be paid primarily to Selling Dealers with a de
minimis amount expected to be paid to ICON Securities Corp.)
8.0% ($8.00 per Unit) of the Gross Offering Proceeds of all Units sold, except
for Units sold to Affiliated Limited Partners, which shall be sold on a net of
Sales Commission basis, and except that the amount of Sales Commission shall be
reduced by any applicable volume discount.
Not determinable at this time.
If all Units sold were sold by of the Dealer-Manager (which is actually expected
to sell only a de minimis number of Units), the maximum amount of Sales
Commissions that the Dealer- Manager could receive would be $96,000 if the
Minimum Offering of 12,000 Units is sold and $8,000,000 if the Maximum Offering
of 1,000,000 Units is sold, in each case calculated without giving effect to
possible Volume Discounts or reduction of such Sales Commissions not payable for
Units purchased by Affiliated Limited Partners, if any.
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O & O Expense Allowance (payable to ICON Capital Corp., the "General Partner",
or the Dealer-Manager, or both, for Organizational and Offering Expenses) A
total amount equal to 3.5% ($3.50 per Unit) of the Gross Offering Proceeds for
each Unit sold, whether the General Partner and/or the Dealer- Manager incur
Organizational and Offering Expenses in a greater or lesser amount than the O &
O Expense Allowance. The General Partner has agreed in the Partnership Agreement
to pay actual Organizational and Offering Expenses for this Offering to the
extent such expenses exceed the O & O Expense Allowance.
The General Partner will pay or advance the bona fide due diligence fees and
expenses of the Dealer-Manager and actual and prospective Selling Dealers on a
fully accountable basis from such Allowance up to, but not in excess, of the
lesser of the maximum amount payable under the NASD Rules of Fair Practice, or
1/2 of 1% of Gross Offering Proceeds. A minimum of $42,000 if the Minimum
Offering of 12,000 Units is sold and a maximum of $3,500,000 if the Maximum
Offering of 1,000,000 Units is sold.
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Operational Stage
Acquisition Fee (payable to ICON Capital Corp.) 3.0% of (A) the purchase price
paid by the Partnership to the seller of each item of Equipment acquired and (B)
the principal amount of each Financing Transaction entered into by the
Partnership(1). The total of all Acquisition Fees paid to the General Partner
and to any other persons over the life of the Partnership will not exceed the
lesser of (a) 15% of Gross Offering Proceeds or (b) an aggregate amount which,
together with other Front-End Fees, does not exceed the maximum amount of
Front-End Fees allowable under Section IV.C.2. of the NASAA Guidelines.
If (a) 80% of the Purchase Price of all Investments consists, on average, of
other borrowed funds(1) and (b) Commission Loans in the maximum amount (8% of
Gross Offering Proceeds) are obtained, then Acquisition Fees equal to 2.49% of
Gross Offering Proceeds(2) would be paid from such Proceeds and Acquisition Fees
equal to 9.01% of Gross Offering Proceeds would be attributable to borrowed
funds (0.23% to Commission Loans and 8.78% to other borrowings).
(1) Total Acquisition Fees paid from all sources is limited to an amount equal
to the lesser of (a) 15.0% of Gross Offering Proceeds or (b) the difference
between (i) the maximum Front-end Fees allowable under the NASAA Guidelines and
(ii) all other Front-End Fees (i.e., Sales Commissions, Underwriting Fees and
the O & O Expense Allowance, which total 13.5% of Gross Offering Proceeds).
Pursuant to the NASAA Guideline, the maximum Front-end Fees which the
Partnership may pay is 20% of Gross Offering Proceeds (if no debt is employed by
the Partnership to acquire its Investments) which percentage is increased by
.0625% for each 1% of indebtedness (up to a maximum of 80% of the cost of the
Partnership's Investments) so utilized. As a result, if the Partnership utilized
indebtedness equal to 80% of the cost of the Partnership's Investments, the
Partnership would be able to pay total Front-end Fees equal to 25% of Gross
Offering Proceeds and Acquisition Fees would be limited to 11.5% of Gross
Offering Proceeds.
(2) Acquisition Fees are calculated as follows: 3.0% times Gross Offering
Proceeds (100.0%) minus the total of the percentages of Gross Offering Proceeds
used for (a) Front-End Fees other than Acquisition Fees (13.5%) and (b) Reserves
(1.0%), which yields an amount equal to 85.5% of Gross Offering Proceeds,
divided by the purchase price for Investments (expressed as a percentage)
inclusive of the Acquisition Fee (103%). (That is, 3.0% X (100.0% - 14.5%) /
103% = 2.49%). Front-End Fees other than Acquisition Fees payable from Gross
Offering Proceeds include (a) Sales Commissions (8.0% of such proceeds), (b)
Underwriting Fees (2.0% of such proceeds) and (c) the O & O Expense Allowance
(3.5% of such proceeds). (Percentages are rounded up to next 0.01% in computing
Acquisition Fees in this Section and in the Section entitled "SOURCES AND USES
OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS" Section).
If (a) 80% of the purchase price of all Investments, on average, consists of
borrowed funds and (b) no Commission Loans are obtained, then Acquisition Fees
equal to 2.49% of Gross Offering Proceeds would be paid from such Proceeds and
Acquisition Fees equal to 9.01% of Gross Offering Proceeds would be attributable
to borrowed funds.
Under both such assumptions, total Acquisition Fees would equal 11.5% of Gross
Offering Proceeds (or $138,000 if the Minimum Offering of 12,000 Units is sold
and $11,500,000 if the Maximum Offering of 1,000,000 Units is sold).
In calculating Acquisition Fees, fees payable by or on behalf of the Partnership
to unaffiliated finders and brokers will be deducted from Acquisition Fees
otherwise payable to the General Partner. No finder's or broker's fees may be
paid to any Affiliate of the General Partner. Acquisition Fees are required to
be reduced or refunded if the Partnership's Investment in Equipment is less than
the greater of (i) 80% of the Gross Offering Proceeds reduced by .0625% for each
1% of borrowings encumbering Partnership Equipment, or (ii) 75% of the Gross
Offering Proceeds. For purposes of determining the Partnership's Investment in
Equipment, Reserves in an amount up to 3% of Gross Offering Proceeds may be
treated as so invested. See "SOURCES AND USES OF OFFERING PROCEEDS AND RELATED
INDEBTEDNESS."
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<PAGE>
Management Fee for actively managing the leasing, re-leasing, financing and
refinancing of Partnership Equipment and Financing Transactions (payable to the
General Partner) The lesser of:
(i)(a) 5% of annual gross rental payments from Operating Leases (except
Operating Leases (if any) for which management services are performed by non-
Affiliates under the supervision of the General Partner for which 1% of annual
gross rental payments shall be payable),
(b) 2% of annual gross rental payments from Full-Payout Leases with net lease
provisions, 2% of annual gross principal and interest payments from Financing
Transactions (see "INVESTMENT OBJECTIVES AND POLICIES-- Financing
Transactions"),
(c) and 7% of gross rental
payments from Equipment
operated by the Partnership as
provided in NASAA Guidelines
Section IV.E.4(3), or
(ii) management fees which are competitive and/or customarily charged by others
rendering similar services as an ongoing public activity in the same geographic
location for similar equipment and financing transactions.
Not determinable at this time.
The General Partner has agreed to subordinate (without interest) its receipt of
monthly payments of the Management Fees to the Limited Partners' receipt of the
First Cash Distributions (up to an amount each year equal to 8.0% of each
respective Limited Partner's unreturned Capital Contribution) until the earlier
of (1) receipt by the Limited Partners, of all accrued but previously unpaid,
and current, installments of First Cash Distributions (as so limited) or (2)
expiration of the Reinvestment Period. Any Management Fees so deferred will be
deferred without interest during the Reinvestment Period until the Limited
Partners have received the previously unpaid portion of First Cash Distributions
described in the preceding sentence.
(3) If the General Partner provides both equipment management and additional
services, relating to the continued and active operation of program Equipment,
such as on-going marketing and re-leasing of Equipment, hiring or arranging for
the hiring of crews or operating personnel for Partnership Equipment and similar
services, it may charge the Partnership a management fee not to exceed 7.0% of
the gross rental payments from Equipment operated by the Partnership.
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<PAGE>
Distributable Cash From Operations (share distributable to the General Partner)
Prior to Payout (i.e. the time when cash distributions in an amount equal to the
sum of the Limited Partners' (i) capital contributions and (ii) an 8.0%
cumulative annual return thereon, compounded daily, have been made),
distributions of Distributable Cash From Operations shall be made 99% to the
Limited Partners and 1% to the General Partner. After Payout, distributions of
Distributable Cash From Operations shall be tentatively attributed 90% to the
Limited Partners and 10% to the General Partner; provided, however, that,
distributions thereof shall continue to be made 99% to the Limited Partners and
1% to the General Partner until the earlier of (i) the time when the total cash
distributions made to each Limited Partner equal 150% of his or her original
Capital Contribution (reduced by any amounts paid to him or her (A) as a return
of uninvested Capital Contributions and (B) in redemption of Units pursuant to
the Partnership Agreement) or (ii) upon liquidation of the Partnership.
The increased share of
Distributable Cash From Operations tentatively attributed to the General Partner
but not actually distributed to it because of the proviso in the preceding
sentence shall accrue, without interest, and be paid to the General Partner out
of the first Distributable Cash From Operations available to the Partnership
after the earlier of (i) the time when the total cash distributions made to each
Limited Partner equal 150% of his or her original Capital Contribution (reduced
as described in the preceding sentence) or (ii) upon liquidation of the
Partnership. Not determinable at this time.
Distributable Cash From Sales
(share distributable to the
General Partner) Prior to Payout (i.e. the time when cash distributions in an
amount equal to the sum of the Limited Partners' (i) capital contributions and
(ii) an 8.0% cumulative annual return thereon, compounded daily, have been
made), distributions of Distributable Cash From Sales shall be made 99% to the
Limited Partners and 1% to the General Partner. After Payout, distributions of
Distributable Cash From Sales shall be tentatively attributed 90% to the Limited
Partners and 10% to the General Partner; provided, however, that, distributions
thereof shall continue to be made 99% to the Limited Partners and 1% to the
General Partner until the earlier of (i) the time when the total cash
distributions made to each Limited Partner equal 150% of his or her original
Capital Contribution (reduced by any amounts paid to him or her (A) as a return
of uninvested Capital Contributions and (B) in redemption of Units, as described
in the preceding sentence)pursuant to the Partnership Agreement) or (ii) upon
liquidation of the Partnership.
The increased share of Distributable Cash From Sales tentatively attributed to
the General Partner but not actually distributed to it because of the proviso in
the preceding sentence shall accrue, without interest, and be paid to the
General Partner out of the first Distributable Cash From Sales available to the
Partnership after the earlier of (i) the time when the total cash distributions
made to each Limited Partner equal 150% of his or her original Capital
Contribution (reduced as described in the preceding sentence) or (ii) upon
liquidation of the Partnership. Not determinable at this time.
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Reimbursement for expenses incurred by the General Partner and its Affiliates
Subject to the limitations contained in Section 6.4 of the Partnership
Agreement, the Partnership will reimburse the
General Partner and its Affiliates for certain expenses incurred by them in
connection with the Partnership's operations. Not determinable at this time.
Subordinated Remarketing Fee
for arranging the sale of
Partnership Equipment and of
Partnership Financing
Transactions (payable to the
General Partner). With respect to sales of the Equipment and of the Financing
Transactions, a Subordinated Remarketing Fee payable to the General Partner in
an amount equal to the lesser of (i) 3% of the contract sales price for the
Partnership's Investments (as defined in the Glossary), or (ii) one-half the
normal competitive commission charged by unaffiliated parties for such services
in light of the size, type and location of the Equipment and Financing
Transactions. No Subordinated Remarketing Fee will accrue or be payable with
respect to any portion of Cash From Sales which is reinvested in additional
Partnership Investments. Payment of such Subordinated Remarketing Fee will be
deferred until after Payout and will be made without interest. Not determinable
at this time.
Interest in Partnership Profits or Losses
Partnership Profits and Losses for Tax Purposes (share allocable to the General
Partner) The General Partner will be allocated shares of Partnership Profits and
Losses for Tax Purposes that generally approximate its share of Distributable
Cash From Operations and of Distributable Cash From Sales. See "FEDERAL INCOME
TAX CONSEQUENCES--Allocations of Profits and Losses." Not determinable at this
time.
The Partnership Agreement permits the Partnership to borrow an amount equal
to the Sales Commissions (up to 8% of the Gross Offering Proceeds from each
Closing) which are paid by the Partnership (the "Commission Loans"). Commission
Loans permit the Partnership to increase the amounts available for investment by
the Partnership. If Commission Loans were obtained in the total amount of Sales
Commissions payable by the Partnership, Net Offering Proceeds and proceeds from
such Commission Loans to be applied to Investments would increase by as much as
$93,203 (from $996,117 to $1,089,320 if the Minimum Offering is subscribed) and
by up to $7,766,990 (from $83,009,709 to $90,776,699 if the Maximum Offering is
fully subscribed). In each such instance, Net Offering Proceeds to be applied to
Investments would increase from 83.01% as a percentage of Gross Offering
Proceeds to 84.05% as a percentage of the total of such (a) Gross Offering
Proceeds and (b) Commission Loan Proceeds. The Partnership's total payments of
principal of, and interest on, any such Commission Loans would exceed the
corresponding amounts of Commissions paid with the proceeds of such loans by the
interest paid
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thereon. Consequently, the General Partner expects to utilize Commission Loans
only when, it has determined that an opportunity exists to use such borrowings
to obtain Investments which have contractual payments which exceed the total
payments of principal of, and interest on, the corresponding Commission Loans.
See "INVESTMENT OBJECTIVES AND POLICIES--Acquisition Policies and Procedures."
As described in the above table, the Partnership will also pay the General
Partner or the Dealer Manager or both on a non-accountable basis a total amount
equal to $3.50 per Unit sold for the O & O Expense Allowance (exclusive of Sales
Commissions), whether or not incurred. Such Organizational and Offering Expenses
include, but are not limited to, legal, accounting and printing costs, and
filing and qualification fees and disbursements, bona fide due diligence fees
and expenses actually incurred by the Dealer-Manager and prospective Selling
Dealers up to an aggregate amount equal to the lesser of one-half of 1% of Gross
Offering Proceeds or the amount permitted to be paid pursuant to Appendix F to
Article III of the NASD Rules of Fair Practice and expenses for salaries and
direct expenses of officers and directors of the General Partner while directly
engaged in organizing the Partnership and registering the Units. The General
Partner has agreed to pay any amount by which such O & O Expense Allowance
exceeds $3.50 per Unit (3.5% of Gross Offering Proceeds).
As described in the above table, the General Partner will be entitled to
receive Acquisition Fees from the Partnership for evaluating, selecting,
negotiating and closing the acquisition of Partnership Equipment and entering
into Financing Transactions. In addition, sellers of Equipment to the
Partnership may pay fees to brokers or finders representing such sellers, but in
no event may such brokers or finders include the General Partner or any of its
Affiliates. Although Acquisition Fees will be reduced by the amount of any fees
paid in connection with the acquisition of items of Equipment and Financing
Transactions payable by or on behalf of the Partnership to finders and brokers
who are not Affiliates of the General Partner, the Purchase Price of any
Equipment and Financing Transactions payable by the Partnership may,
nevertheless, reflect any such fees paid by the seller, so that in effect any
such fees may be indirectly paid by the Partnership without any corresponding
reduction in Acquisition Fees.
Acquisition Fees payable by the Partnership to the General Partner will
equal the sum of 3.0% of (a) the aggregate purchase price paid for all items of
Equipment acquired by the Partnership and (b) the aggregate principal amount of
Financing Transactions entered into by the Partnership with unaffiliated Users,
subject to certain conditions and limitations specified in the Partnership
Agreement. The Acquisition Fees presented under the caption "SOURCES AND USES OF
OFFERING PROCEEDS AND RELATED INDEBTEDNESS" are calculated assuming that, on
average, total indebtedness will equal 80% of the Purchase Price of all of the
Partnership's Investments. Based on such assumption, the total Acquisition Fees
payable upon the Partnership's initial investment in its Equipment and Financing
Transactions are estimated at 11.5% of the Partnership's Gross Offering
Proceeds, of which total percentage approximately 2.49% would be attributable to
Net Offering Proceeds invested in the Partnership's Investments, and 9.01% would
be attributable to borrowings (or Partnership borrowings) so invested. However,
if Commission Loans were obtained in an amount equal to total Sales Commissions
payable by the Partnership (up to 8% of Gross Offering Proceeds) and the
foregoing assumption remains the same, 2.49% of the Acquisition Fees payable to
the General Partner would be attributable to Net Offering Proceeds invested in
the Partnership's Investments, 0.82% would be attributable to Commission Loans
and 8.19% would be attributable to other Partnership borrowings so invested. The
Acquisition Fee for any item of Equipment or Financing Transaction will be
reduced by the amount of fees which are payable by the Partnership to finders or
brokers who are not Affiliates of the General Partner, and no such fees may be
paid to any finder or broker who is an Affiliate of the General Partner.
The Partnership Agreement provides that the Partnership's Investments (which
term includes the Partnership's equity investment in Equipment and Financing
Transactions and, for this purpose, Reserves for working capital and contingent
liabilities, but excludes all Front-End Fees paid to or by any Person, including
Acquisition Fees and O & O Expense Allowance), will be not less than the greater
of (i) 80% of the Gross Offering Proceeds from sale of Units, reduced by .0625%
for each 1% of borrowings encumbering Partnership Investments, or (ii) 75% of
the Gross Offering Proceeds from sale of Units. To the extent that such
limitation is not otherwise satisfied, the Acquisition Fees payable or paid to
the General Partner by the Partnership will be reduced or refunded by the
General Partner to the Partnership to the extent necessary to comply with such
limitation. Any such refund shall bear interest calculated at a rate of 1% per
month if such refund is not made within 30 days after the end of any calendar
quarter in which the Partnership's Investment in Equipment fails to satisfy such
minimum investment. In the event that the Partnership's Investments would
otherwise not be in compliance with the NASAA Guidelines, Acquisition Fees shall
be reduced, or refunded by the General Partner to the Partnership in an amount
necessary to obtain compliance with the NASAA Guidelines.
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In addition to such payment for the O & O Expense Allowance, the Partnership
will reimburse the General Partner and its Affiliates for (1) the actual costs
to them of goods and materials used for or by the Partnership and obtained from
unaffiliated parties; (2) expenses related to the purchase, operation, financing
and disposition of Partnership Equipment and Financing Transactions incurred
prior to the time that the Partnership has funds available to pay such expenses
directly; and (3) administrative services necessary to the prudent operation of
the Partnership, not in excess of the lesser of the General Partner's (or
Affiliate's) costs or 90% of the costs which the Partnership would be required
to pay to independent parties for comparable services. The Partnership's Annual
Reports to its Limited Partners will provide a breakdown of services performed
by, and amounts reimbursed to, the General Partner and its Affiliates.
Assuming the sale of 1,000,000 Units in 1996, the General Partner
estimates that it would incur the following expenses which would be potentially
eligible to be reimbursed by the Partnership in 1996 pursuant to 6.4(i) of the
Partnership Agreement (subject to the limitations on such reimbursements
described below):
Salaries and benefits:
Accounting staff $150,000
Professional staff270,000
Secretarial staff 90,000
Investor relations staff150,000
Computer and equipment90,000
Maintenance 30,000
Total $780,000
Section 6.4(i) of the Partnership Agreement provides limitations on types
and annual amounts of eligible expenses of the Partnership which may actually be
paid by the Partnership. In general, neither the Sponsor nor any Affiliated
Entity may be reimbursed by the Partnership for amounts expended with respect to
the following:
(1) salaries, fringe benefits, travel expenses or other administrative items
incurred by or allocated to any Controlling Person of the Sponsor or any
such Affiliated Entity; and
(2) expenses for rent, depreciation and utilities or for capital equipment
or other administrative items (other than as specified provided in such
Section 6.4(i)).
In addition to the foregoing limitations, the reimbursement for
administrative expenses authorized by such Section 6.4(i) which is made in any
year during the Reinvestment Period may not exceed the sum of (a) 2% of the
Partnership's Gross Revenues (excluding any Cash From Sales) for such year plus
(b) the excess (if any) of such expense reimbursement limitation for all prior
years over the amounts of such expenses actually reimbursed by the Partnership
for such prior years. To the extent that the total of such expenses which are
actually incurred in any year exceed the amount which is actually reimbursed for
such year, the unreimbursed expenses will be accrued and may be paid to the
General Partner, without interest thereon, in any succeeding year for which the
administrative expenses are less than such year's expense reimbursement
limitation.
While the Partnership is not permitted to pay any remuneration to any
officer or director of the General Partner or any Affiliated Entity for services
on the Partnership's behalf, the Sponsor or the Dealer-Manager may apply any
portion or none of the O & O Expense Allowance paid to it to defray such costs.
No specific arrangements have been made for the General Partner or any of
its Affiliates of the General Partner to provide financing for Partnership
Equipment and Financing Transactions. All such financing is subject to certain
restrictions set forth in Section 6.4 of the Partnership Agreement.
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CONFLICTS OF INTEREST
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The Partnership will be subject to various conflicts of interest with the
General Partner, its Affiliates and investment entities advised, managed or
controlled by them. Certain provisions of the Partnership Agreement are intended
to protect the Limited Partners' interests (specifically Sections 6.2 and 6.4,
which limit the General Partner's exercise of powers and its and its Affiliates'
compensation therefor). In addition, see "FIDUCIARY RESPONSIBILITY" for a
discussion of the General Partner's fiduciary obligations to the Limited
Partners, which, in general, require the General Partner to consider the best
interests of the Limited Partners in managing the Partnership's assets and
affairs.
The General Partner intends to use its best business judgment and discretion
and to consider good business practice and the bona fide preferences and
expectations of other parties to transactions in resolving any conflicts which
arise. Conflicts have been resolved to the extent discussed below and, except as
noted in this Section, the Sponsor has no effective means of limiting such
conflicts. These conflicts include, but are not limited to, the following:
Lack of Separate Legal Representation and Lack of Arm's Length Negotiation
of the Program Agreements
The Partnership, the Dealer-Manager and the General Partner are represented
by the same Counsel. The Limited Partners, as a group, have not been represented
by legal counsel and the Partnership's Counsel has not acted on behalf of
prospective investors nor conducted a review or investigation on their behalf.
None of the agreements and arrangements between the Partnership on the one hand
and the General Partner or Dealer-Manager on the other hand have been negotiated
on an arm's length basis. The attorneys, accountants and other experts who
perform services for the Partnership will also perform services for the General
Partner, the Dealer-Manager, certain of its Affiliates and for other
partnerships or ventures which the General Partner or its Affiliates may
sponsor. However, should a dispute arise between the Partnership, on the one
hand, and the General Partner or Dealer- Manager, on the other hand, the General
Partner will cause the Partnership to retain separate legal counsel to represent
the Partnership in connection with such dispute.
Compensation of the General Partner and Affiliates
The compensation payable by the Partnership to the General Partner and
Dealer-Manager have been determined unilaterally by the General Partner and,
therefore, are not the result of arm's-length negotiations. However, the amount
of such compensation is believed to be representative of practices in the
industry and complies with the NASAA Guidelines as in effect on the date of this
Prospectus. The General Partner and Dealer-Manager will receive substantial
compensation upon each Closing and upon, or from, the Partnership's acquisition,
use and sale of its Equipment and Financing Transactions. Decisions involving
these transactions will be made by the General Partner in its discretion. See
"SUMMARY OF COMPENSATION."
A conflict of interest may also arise from decisions by the General Partner
concerning the timing of the Partnership's purchases and sales of Equipment or
the termination of the Partnership, each of which events will have an effect on
the timing and amounts of its compensation. In such circumstances, the interest
of the General Partner in continuing the Partnership and receiving Management
Fees, for example, may conflict with the interests of the Limited Partners in
realizing an earlier return of their capital and any investment return thereon.
Effect of Leverage on Compensation Arrangements
The General Partner intends to acquire the Partnership's Investments with
borrowings approximating 50% of the aggregate purchase price of the
Partnership's total Investments, but is permitted to finance up to 80% of the
aggregate purchase price of all the Partnership Investments. Since Acquisition
Fees are based upon the purchase price of all Equipment acquired by the
Partnership, including related borrowings, the General Partner would realize a
greater amount of Acquisition Fees (subject to a ceiling on such fees) if a
greater percent of debt were employed.
See "SUMMARY OF COMPENSATION."
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Competition With the General Partner and its Affiliates
The General Partner and its Affiliates are engaged directly and indirectly
in the business of acquiring and leasing equipment for their own respective
accounts as well as for other Programs. The General Partner or any of its
Affiliates may in the future form or sponsor, or act as a general partner of, or
as an advisor to, other investment entities (including other public equipment
ownership and leasing partnerships) which have investment objectives similar to
the Partnership's and which may be in a position to acquire the same Investments
at the same time as the Partnership. See "CERTAIN RELATIONSHIPS WITH THE
PARTNERSHIP" and "MANAGEMENT" for a chart of, and a description of the
relationships of, the Partnership to the General Partner and relevant
Affiliates.
The Partnership Agreement does not prohibit the General Partner or its
Affiliates from competing with the Partnership for Equipment acquisitions,
financing, refinancing, leasing and re-leasing opportunities on its or their own
behalf or on behalf of the prior Programs. Neither the General Partner nor any
of its Affiliates will be obligated by the Partnership Agreement to present
particular Investments opportunities that come to its attention to the
Partnership, even if such opportunities are of a character which might be
suitable for the Partnership except as follows:
Acquisition Opportunities
If the General Partner is presented with potential opportunities to acquire
a Lease and related Equipment or a Financing Transaction and the terms of
such transaction meet the investment objectives and policies of (i) the
Partnership as well as (ii) one or more Affiliated Entities:
(A) The General Partner has agreed to first refer all such Investment
opportunities to the Partnership until such time as all Capital
Contributions have been (1) invested or committed to investment in
Investments and Reserves (not exceeding 3% of Gross Offering Proceeds) and
used to pay permitted Front-End Fees or (2) returned to the Limited
Partners as provided in the Partnership Agreement. This priority referral
obligation will not extend to (1) groups of equipment to be leased on
various cost recovery terms, where the Partnership could not purchase all
items in the group; (2) equipment to be leased to a third party on
favorable terms, from a cost recovery viewpoint, subsequent to the lease by
the General Partner or its Affiliates to the same third party of other
items of equipment on substantially less favorable terms; (3) equipment for
which a prospective or existing lessee indicates to the General Partner or
its Affiliates that it will not lease or continue to lease unless the
General Partner or such Affiliate acquires and retains such equipment in
its own equipment portfolio; or (4) equipment subject to a lease which by
its terms is not assignable to an entity such as the Partnership (leases
that permit assignment to a "financial institution" are not deemed
assignable to the Partnership); and
(B) Thereafter, the General Partner will analyze the equipment already
purchased by, and the investment objectives of the Partnership and, each
Affiliated Entity involved and will make the decision as to which entity
should be presented with the investment opportunity based upon such
factors, among others, as (1) the investment objectives and policies of
each entity, including, without limitation, cash distribution objectives
and leverage policies, (2) the amount of cash available in each investment
entity for such acquisition and the length of time such funds have been
available, (3) the current and long-term liabilities of each investment
entity, (4) the effect of such acquisition on the diversification of each
investment entity's equipment portfolio by type of equipment, length of
lease term, industry and geographic area and (5) the estimated income tax
consequences from such acquisition to the investors in each investment
entity.
If the financing available from time to time to the Partnership and to other
Affiliated Entities is less than the aggregate amount of financing then
sought by them, the available financing shall generally be allocated to the
investment entity which has been seeking financing for the longest amount of
time.
Re-Leasing or Sale of Equipment
Conflicts may also arise between two or more Affiliated Entities (including
the Partnership) advised or managed by the General Partner or any of its
Affiliates, or between one or more of such Affiliated Entities and any
Affiliate of the General Partner acting for its own account, which may be
seeking to re-lease or sell similar equipment at the same time. In any such
case involving Affiliated Entities, the first opportunity to release or sell
equipment shall generally be allocated to the Affiliated Entity attempting
to re-lease or sell equipment which has been subject to the lease which
expired first, or, if the leases expire simultaneously, the
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lease which was first to take effect. However, the General Partner in its
discretion may make exceptions to this general policy where equipment is
subject to remarketing commitments which provide otherwise or in cases in
which, in the General Partner's judgment, other circumstances make the
application of such policy inequitable or not economically feasible for a
particular Investment Entity.
Determination of Reserves and Liability of the General Partner for Partnership
Obligations
As a general rule, the General Partner is liable for the Partnership's
liabilities which exceed its assets (including Reserves for working capital and
contingent liabilities). The General Partner has sole discretion to determine
the amount of Reserves and the allocation of Partnership cash flow to maintain
or increase the amount the Reserve account. Because a deficiency in the amount
of reserves relative to the Partnership's contingent liabilities may expose the
General Partner to potential liability to creditors of the Partnership, the
General Partner may have a conflict of interest in determining when to allocate
cash flow for distribution to the Limited Partners or to the Partnership's
Reserve Account.
Competition by the Partnership with Other Entities for Management Services;
Conflicts in Fiduciary Duties
The Partnership will rely on the General Partner for the operation of its
business and the management of its portfolio of Equipment and Financing
Transactions. The officers and employees of the General Partner will devote only
so much of their time to the business of the Partnership as, in their judgment,
is reasonably required. There may also be conflicts of interest in the
allocation of time, services and functions between the Partnership and other
entities with which the General Partner or its Affiliates may organize or be
affiliated. The General Partner and each of its Affiliates may engage, for their
own accounts or for the accounts of others, in other business ventures, and
neither the Partnership nor any Limited Partner shall be entitled to any
interest therein.
When the Sponsor owes a fiduciary duty to the Partnership and to another
Program sponsored by it, the Sponsor may have a conflict in the allocation of
fiduciary duties to each of such entities.
The Sponsor will attempt to resolve all of such conflicts by allocating
services or fiduciary duties to all Programs needing services or fiduciary
duties solely in proportion to their respective needs. The Sponsor will not
ignore the fiduciary obligation which it owes to any of such Programs. See "RISK
FACTORS--Partnership and Investment Risks--General Partner Not Employed by
Partnership Exclusively."
Joint Ventures
To permit added diversification, the Partnership may invest in joint
ventures with other limited partnerships sponsored by the General Partner, any
Affiliate or any non-Affiliate. The maximum amount of Gross Offering Proceeds
which the Partnership may so invest is equal to the smallest of the following
amounts: (a) 25% of the Maximum Offering amount, (b) 25% of the sum of (i) the
cumulative Gross Offering Proceeds raised as of the closing date for such
investment and (ii) the Gross Offering Proceeds which the General Partner
reasonably estimates the Partnership to raise through the balance of the
Offering Period (prior to the Termination Date) or (c) 25% of the cumulative
Gross Offering Proceeds raised as of the Termination Date. If the Partnership
enters into a joint venture, the General Partner would have a fiduciary duty to
the Partnership and to any other partnerships sponsored by it which participate
in the joint venture. In order to minimize the likelihood of a conflict between
these fiduciary duties, the Partnership Agreement restricts investments in such
joint ventures in various respects and specifically requires that such joint
investment must comply with the investment criteria and investment objectives of
the Partnership. There is no specific benefit to the General Partner of joint
venturers. See "RISK FACTORS-- Partnership and Investment Risks--Risks of Joint
Ventures."
Lease Referrals
From time to time, the General Partner may be presented with the opportunity
to earn fees or other compensation for referring a prospective lessee to a
lessor other than the Partnership or other programs sponsored by the General
Partner or to its Affiliates. Such activities could involve conflicts of
interest in that the General Partner would receive compensation as a result of
such referral even though the Partnership would not receive any benefits.
Section 6.5 of the Partnership Agreement provides that, if the Partnership has
funds available for investment, the General Partner will not refer prospective
lessees to third parties for compensation unless the lease terms and equipment
are deemed by the General Partner to be inconsistent with the investment
objectives and diversification of the Partnership.
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Participation of a Securities Sales Affiliate in this Offering
Units will be sold on a best-efforts basis through ICON Securities Corp.
which will act as Dealer-Manager and will receive Underwriting Fees, with
respect to sales of all Units and will receive Sales Commissions for Units (if
any) sold by its securities representatives (except for sales of Units to
Affiliated Limited Partners). Because of affiliation with the General Partner,
its review and investigation of the Partnership and of the information provided
in this Prospectus will not have the benefit of a review and investigation by an
independent securities firm in the capacity of a dealer-manager.
General Partner to Act as Tax Matters Partner
The General Partner has been designated as the Tax Matters Partner under the
Partnership Agreement for purposes of dealing with the Internal Revenue Service
("Service") on any audit or other administrative proceeding before the Service
and/or any legal proceeding. As Tax Matters Partner, the General Partner is
empowered, among other acts, to enter into negotiations with the Service, to
settle tax disputes and to thereby bind the Partnership and the Limited Partners
by such settlement. While the General Partner will seek to take into
consideration the interest of the Limited Partners generally in agreeing to any
settlement of any disputed items of Partnership income and expense, there is no
assurance that such settlement will be in the best interest of any specific
Limited Partner given his or her specific tax situation.
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FIDUCIARY RESPONSIBILITY
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General
The General Partner is accountable to the Partnership as a fiduciary
pursuant to the terms of the Partnership Agreement. In accordance therewith, the
General Partner must at all times act with integrity and good faith and exercise
due diligence in the conduct of the business of the Partnership and in resolving
conflicts of interest, subject to certain limitations set forth in the
Partnership Agreement.
Conflicts
General. Under Delaware law, general partners are held to a duty of the
highest good faith in conducting partnership affairs. This has been interpreted
to mean that a general partner cannot engage in a business which would create an
interest for the general partner that is adverse to that of the partnership.
Because the General Partner and certain partnerships which it has sponsored, or
in the future may sponsor, will acquire and lease equipment and enter into
financing arrangements, the General Partner may be deemed to have a position
adverse to the Partnership.
Modification. The Partnership Agreement includes certain provisions which
are intended to facilitate resolution of conflicts of interest which may arise
between the Partnership and other Programs sponsored by the General Partner or
any Affiliates of the General Partner with respect to particular investment
opportunities that become available. See "CONFLICTS OF INTEREST--Competition
with the General Partner and its Affiliates." In particular, the Partnership
Agreement provides that, if, after considering appropriate factors, the General
Partner determines that any investment opportunity would be equally suitable for
the Partnership and various other Affiliated Entities, the General Partner shall
make such investment opportunity available on a rotation basis; provided that
until all Capital Contributions have been invested or committed to investment in
Investments and Reserves (not exceeding 3% of Gross Offering Proceeds), used to
pay permitted Front-End Fees or returned to the Limited Partners as provided in
the Partnership Agreement, all such investment opportunities (other than certain
Leases) shall be presented to the Partnership first. Furthermore, if two or more
entities sponsored by the General Partner or any of its Affiliates are in a
position to lease the same equipment or provide the same financing, the General
Partner will generally afford priority to the entity that has equipment which
has been available for lease or sale or that has had funds available to invest
for the longest period of time. It is not clear under Delaware law whether such
provisions would be enforceable.
Detriment and Benefit. Without modifying the general common law fiduciary
duties, the General Partner could not serve as the general partner for the
Partnership and any other investor program which might acquire, finance
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and lease equipment at the same time. The modification made by the Partnership
Agreement may operate as a detriment to the Limited Partners because there may
be business opportunities that will not be made available to the Partnership.
The foregoing modifications permit the General Partner to act as the General
Partner of more than one similar investment program and for the Partnership to
benefit from its experience resulting therefrom, but relieves the General
Partner and/or its Affiliates of the strict fiduciary duty of a general partner
acting as such for only one investment program at a time, and permits the
Partnership to use joint ventures to acquire larger and more diverse assets. The
Partnership Agreement provisions are intended to reconcile the applicable
requirements of the Delaware Act with the fact that the General Partner is
currently managing, and will continue to manage during the term of the
Partnership, a number of other equipment leasing programs with which possible
conflicts of interest may arise and be resolved in a manner consistent with the
expectation of the investors of all such programs, the General Partner's
fiduciary duties and the Partnership's and such other entities' investment
objectives, including especially that of investment diversification.
Indemnification of the General Partner, Dealer-Manager and Selling Dealers
The Partnership Agreement provides that the General Partner shall have
limited liability to the Partnership and the Limited Partners, and provides for
the indemnification of the General Partner and its Affiliates by the
Partnership, from assets of the Partnership (and not by the Limited Partners),
for any liability, loss, cost and expense of litigation that arises out of
certain acts or omissions by the General Partner and its Affiliates, provided
that the General Partner or the Affiliate determined in good faith that such
action or inaction was in the best interests of the Partnership and such course
of conduct did not constitute negligence or misconduct by the General Partner or
such Affiliate. Notwithstanding the foregoing, the General Partner and each
Affiliate shall be liable, responsible and accountable, and the Partnership
shall not be liable to any such party, for any portion of any such liability,
loss, cost or expense which resulted from such party's own fraud, negligence,
misconduct or, if applicable, breach of fiduciary duty to the Partnership or any
Partner, as determined by a court of competent jurisdiction. As a result,
purchasers of Units may have a more limited right of action in certain
circumstances than they would in the absence of such provisions in the
Partnership Agreement which provisions could be asserted by the General Partner
as a defense to suit by a Limited Partner for alleged breach by the General
Partner of its fiduciary duty in conducting the affairs of the Partnership.
In addition, the General Partner has agreed to indemnify the Dealer-Manager
and the Selling Dealers against all losses, claims, damages, liabilities and
expenses incurred by any of them (except those arising as a result of their own
fraud, negligence or misconduct) in connection with the offer or sale of Units.
A successful claim for any indemnification would deplete the Partnership's
assets by the amount paid and could reduce the amount of distributions
subsequently made to the Limited Partners.
The Partnership is not permitted, however, to furnish indemnification to the
General Partner, any Affiliate of the General Partner, any Affiliate or any
Person acting as a Selling Dealer (as the case may be) for any losses,
liabilities or litigation, settlement or any other costs or expenses arising
from or out of an alleged violation of federal or state securities laws unless
(i)(A) there has been a successful adjudication on the merits in favor of such
indemnitee or Selling Dealer on each count involving alleged securities laws
violations by such indemnitee or Selling Dealer, (B) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction or
(C) a court of competent jurisdiction shall have approved a settlement of the
claims against the indemnitee and indemnification in respect of the costs
thereof, and (ii) the court shall have been advised by the General Partner as to
the current position of the Securities and Exchange Commission, the Securities
Divisions of the Commonwealths of Massachusetts and Pennsylvania, the States of
Missouri and Tennessee and any other relevant regulatory body with respect to
the issue of indemnification for securities law violations.
Investor Remedies
Under the Delaware Act, a Limited Partner may institute legal action (i) on
behalf of himself and all other similarly situated Limited Partners (a class
action) to recover damages for a breach by the General Partner of its fiduciary
duty or (ii) on behalf of the Partnership (a derivative action) to recover
damages from the General Partner or from third parties where the General Partner
has failed or refused to enforce an obligation. In addition, (i) investors may
have the right, subject to procedural and jurisdictional requirements, to bring
partnership class actions in federal courts to enforce their rights under
federal and state securities laws; and (ii) investors who have suffered losses
in connection with the purchase or sale of their Units may be able to recover
such losses from the entity (e.g.,
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<PAGE>
a Selling Dealer or the Dealer-Manager (including all Persons associated
therewith)) which is determined to have violated the anti-fraud provisions of
federal or state securities laws.
In addition, where an employee benefit plan has acquired Units, case law
applying the fiduciary duty concepts of ERISA to an insurance company in
connection with an insurance contract could be viewed to apply with equal force
to the General Partner. The General Partner will provide quarterly and annual
reports of operations and must, on demand, give any Limited Partner or his/her
legal representative a copy of the Form 10-K and true and full information
concerning the Partnership's affairs. Further, the Partnership's books and
records may be inspected or copied by its Limited Partners or their legal
representatives at any time during normal business hours. See "SUMMARY OF THE
PARTNERSHIP AGREEMENT -- Access to Books and Records."
This is a rapidly developing and changing area of the law and this summary,
which describes in general terms the remedies available to Limited Partners for
breaches of fiduciary duty by the General Partner, is based on statutes and
judicial and administrative decisions as of the date of this Prospectus. Limited
Partners who have questions concerning the duties of the General Partner or who
believe that a breach of fiduciary duty by the General Partner has occurred
should consult their own counsel.
To the extent that the indemnification provisions purport to include
indemnification for liabilities arising under the Securities Act, in the opinion
of the Commission, such indemnification is contrary to public policy and
therefore unenforceable. If a claim for indemnification against such liabilities
(other than for expenses incurred in a successful defense) is asserted against
the Partnership by the General Partner under the Partnership Agreement or
otherwise, the Partnership will submit to a court of competent jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
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OTHER OFFERINGS BY THE GENERAL PARTNER AND ITS AFFILIATES
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Prior Public Programs
The General Partner was formed in 1985 to finance and lease equipment, and
sponsor and act as the general partner for publicly offered, income-oriented
equipment leasing limited partnerships. In addition to the Partnership, the
General Partner is the general partner of ICON Cash Flow Partners, L.P., Series
A ("Series A"), ICON Cash Flow Partners, L.P., Series B ("Series B"), ICON Cash
Flow Partners, L.P., Series C ("Series C"), ICON Cash Flow Partners, L.P.,
Series D ("Series D"), ICON Cash Flow Partners, L.P., Series E ("Series E") and
ICON Cash Flow Partners L.P. Six ("L.P. Six") which, together with Series A,
Series B, Series C, Series D and Series E is referred to collectively as the
"Prior Public Programs"). The Prior Public Programs were (or are in the case of
L.P. Six) also publicly-offered and income-oriented equipment leasing limited
partnerships with objectives similar to the Partnership. The General Partner and
its Affiliates have also engaged in the past and may in the future engage, to a
limited extent, in the business of brokering equipment leasing or financing
transactions which do not meet the investment criteria established by the
General Partner and the Prior Public Programs (such as creditworthiness,
equipment types, excess transaction size or concentration by lessee, location or
industry).
In addition, until 1985 Affiliates of the General Partner were engaged in
the business of originating privately-offered real estate investment and
equipment leasing programs which they continue to manage primarily for the
benefit of non-Affiliated parties.
As of February 1, 1989 (the final date for admission of its limited
partners), Series A had held twelve closings beginning May 6, 1988 and ending
January 8, 1989, and had received a total of $2,504,500 in limited partner
capital contributions from 222 investors. As of November 16, 1990 (the final
date for admission of its limited partners), Series B had held twenty-seven
closings beginning September 22, 1989 and ending on November 16, 1990 following
which a total of 1,742 investors, holding limited partnership interests equal to
the entire $20,000,000 offering of such partnership, were admitted as limited
partners in the Series B partnership. As of June 20, 1991 (the final date for
admission of its limited partners), Series C had held thirteen closings
beginning January 3, 1991 and ending on June 20, 1991 following which a total of
1,732 investors, holding limited partnership interests equal to the entire
$20,000,000 offering of such partnership, were admitted as limited partners in
the Series C partnership. As of June 5, 1992 (the final date for admission of
its limited partners), Series D had held nineteen closings
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beginning September 13, 1991 and ending on June 5, 1992, following which a total
of 3,054 investors, holding limited partnership interests equal to the entire
$40,000,000 offering of such partnership, were admitted as limited partners in
the Series D partnership. As of August 6, 1993, Series E had held 27 closings
beginning July 6, 1992 and including August 6, 1993, following which a total of
3,738 investors which had subscribed for units in such partnership through July
31, 1993 (the termination date of Series E's offering period) and which held
limited partnership interests equal to $61,041,150 out of the original
$80,000,000 offering which was registered had been admitted as Limited Partners
to the Series E partnership. As of November 8, 1995, L.P. Six had held 41
closings beginning March 31, 1994 and including November 8, 1995, following
which a total of 2,272 Limited Partners (exclusive of the Initial Limited
Partner) with total subscriptions for 383,857.12 Units ($38,385,712) out of
the original $120,000,000 offering which was registered had been admitted to the
Partnership. See Exhibit B--TABLE I. "EXPERIENCE IN RAISING AND INVESTING
FUNDS."
The Prior Public Programs are all actively engaged in the ownership and
operation of Leases and Financing Transactions. As of March 31, 1996, the
Prior Public Programs had originated or acquired investments (stated in terms of
their respective original acquisition costs) as follows: Series A had acquired a
total of $6,033,973 of leased equipment (by original cost), $1,527,488 of
financing transactions (by original cost) and total investments of $7,561,461
(by original cost). Series B had acquired a total of $61,423,473 leased
equipment, $3,703,510 of financing transactions and total investments of
$65,126,983; Series C had acquired a total of $71,832,630 of leased
equipment, $2,875,838 of financing transactions and total investments of
$68,956,792; Series D had acquired a total of $102,627,122 of leased
equipment, $7,860,332 of financing transactions and total investments of
$110,487,454; Series E had acquired a total of $197,736,209 of leased
equipment, $13,959,456 of financing transactions and total investments of
$183,776,753; and L.P. Six had acquired a total of $110,929,234 of leased
equipment, $8,640,184 of financing transactions and total investments of
$119,569,418.
As of March 31, 1996, Series A had equipment under management (by original
cost of investment acquired less the total original cost of assets sold)
consisting of $577,131 of leases and $702,404 of financing transactions
which represents 45%and 55%of the original cost of investments acquired,
respectively. Series B had equipment under management (by original cost of
investment acquired less the total original cost of assets sold) consisting of
$5,497,632of leases and $356,290of financing transactions which represents
94% and 6%of the original cost of investments acquired, respectively,
Series C had equipment under management (determined as above) consisting of
$13,038,692 of leases and $1,793,644 of financing transactions which
represents 88% and 12% of the original cost of investments acquired,
respectively, Series D had equipment under management (determined as above)
consisting of $56,255,140of leases and $4,430,439of financing transactions
which represents 93%and 7%of the original cost of investments acquired,
respectively, Series E had equipment under management (determined as above)
consisting of $120,343,154 of leases and $11,359,773 of financing
transactions which represents 91%and 9%of the original cost of investments
acquired, respectively and L.P. Six had equipment under management (determined
as above) consisting of $107,512,155of leases and $9,702,698of financing
transactions which represents 92%and 8%of the original cost of investments
acquired, respectively.
The percentages and amounts of cash distributions which represented
investment income (after deductions for depreciation and amortization of initial
direct costs of its investments) and a return of capital (corresponding to a
portion of the depreciation deductions for the related equipment) for Series A
through L.P. Six for each year from their respective dates of formation through
March 31, 1996are included in TABLE III of Exhibit B hereto ("Operating
Results of Prior Public Programs"). Certain additional investment information
concerning such Programs as of March 31, 1996is also included in Tables I, II
and V of Exhibit B and in Table VI to the Registration Statement, as amended, of
which this Prospectus is a part.
Three of the Prior Public Programs, Series A, Series B and Series C
experienced unexpected losses in 1991- 1992 as shown on TABLE III. Series A
experienced losses of $133,569 in 1992 primarily related to the bankruptcy of
Richmond Gordman Stores, Inc. Series B established a provision for bad debts in
1991 of $1,260,999 primarily relating to defaults by guarantors under asset
purchase contracts and, in addition, wrote down its investment in equipment
leases related to Financial News Network, Inc. and Data Broadcasting Services,
Inc. by $148,983 as a
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result of reported lessee fraud by those companies and their eventual
bankruptcy. In 1992, Series B wrote down its residual positions by $506,690,
$138,218 of which was related to the bankruptcy of Richmond Gordman Stores, Inc.
and $368,472 of which was related to rapid obsolescence of equipment due to
unexpected withdrawal of software support by the manufacturer. Series C
wrote-down its residual position in 1992 by $1,412,365 relating to the
bankruptcy of PharMor, Inc. which involved the reported misappropriation of
funds by the management of such company and the overstatement of inventory on
its audited financial statements. The Sponsor has taken certain steps which it
believes will permit Series A, Series B and Series C to recover such losses,
including the following: (1) foregone Administrative Expense reimbursements for
the period July 1, 1991 through September 30, 1993, to which it was otherwise
entitled in the amount of $34,961 (Series A), $697,463 (Series B) and $859,961
(Series C); (2) reduced the annual cash distribution rate to 9% effective
September 1, 1993 for Series A, B and C to make available additional funds for
supplemental reinvestments for each of such Programs; (3) deferred the Sponsor's
receipt of management fees effective September 1, 1993 (which deferrals for the
period September 1, 1993 through June 30, 1995 amount to $28,812 (Series A),
$315,408 (Series B) and $428,503 (Series C)); (4) effective January 1, 1994
reduced the management fees which Series A, Series B and Series C each pays to
the Sponsor to a flat rate of 2% and effective January 1, 1995 further reduced
the management fees which Series A pays to the Sponsor to a flat rate of 1%,
which fee reductions have resulted in decreases in expenses to such Programs for
the period January 1, 1994 to June 30, 1995 of $17,198 (Series A), $262,310
(Series B) and $325,766 (Series C); (5) effective January 31, 1994, converted
the variable rate borrowing facilities of Series A, B and C to fixed rate, term
loan financings in the original principal amounts of $720,000, $1,600,000 and
$1,500,000, respectively, to eliminate interest rate risk on the related
portions of such Programs' portfolios; (6) effective January 31, 1995, amended
the partnership agreement of Series A, by vote of a majority of its limited
partners to (a) extend the reinvestment period of Series A by not less than 2
nor more than 4 years, (b) authorize loans by the Sponsor to Series A under
certain conditions for a term in excess of twelve months and up to $250,000, and
(c) (as noted in clause (4), above) decrease the rate of management fees payable
by Series A to the Sponsor to a flat 1% of gross revenues from all of its leases
and financing transactions (pursuant to the amendments, the Sponsor, in February
and March 1995, lent $75,000 and $100,000, respectively, to Series A); and (7)
effective November 15, 1995, amended the Partnership Agreement of Series B, by
vote of a majority of its Limited Partners to (a) extend the reinvestment period
of Series B for up to four additional years and thereby delay the start and end
of the liquidation period, and (b) eliminate the obligation of Series B to pay
the General Partner $391,000 of the $518,000 of past and anticipated Management
Fees, and (c) limit past Management Fees payable by Series B to $127,000 and
require the General Partner to immediately pay such amount to Series B as an
additional capital contribution. The Sponsor subsequently elected to write off
such loans as of March 31, 1995 (see Note (4) of the Consolidated Financial
Statements of the Sponsor appearing on Page 119 of this Prospectus). There can
be no assurance that the forgoing steps will be successful in recovering the
full amount of the losses of Series A, Series B and Series C which are described
in this paragraph. To the extent such efforts are not successful and, as a
result, Series A, Series B or Series C do not earn sufficient amounts through
their respective remaining periods of operations to recoup such losses, any of
such Programs so effected would not be able to return all of its respective
investors' capital.
The General Partner hereby agrees that it will provide the most recent Form
10-K for any of the Prior Public Programs, upon written request (with no fee but
with reimbursement of its actual out of pocket costs and expenses of copying and
mailing such Form 10-K) and provide copies of the exhibits to such Form 10-K for
a reasonable fee and with reimbursement of its actual out of pocket costs and
expenses of copying and mailing such exhibits to such Form 10-K.
Prior Non-Public Programs
Certain subsidiaries of Soundview Leasing Co., Inc., an Affiliate of the
General Partner (see "MANAGEMENT"), sponsored and completed the sale of
securities for fifty-nine tax-advantaged investment programs (the "Prior
Non-Public Programs") between the years 1979 through 1985. All of such programs'
investment objectives are substantially dissimilar to those of the Prior Public
Programs of the Partnership.
The information presented in this Section concerning the Prior Public
Programs and the Prior Non-Public Programs and the information and data in the
Tables included as Exhibit B for the Prior Public Programs are unaudited and
represent the experience of the General Partner and its Affiliates in the Prior
Programs. Persons who invest in Units in the Partnership will not have any
ownership interest in any other program as a result of such investment and
should not assume that they will experience returns, if any, comparable to those
experienced by the investors in the Prior Public Programs.
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STATUS OF THE OFFERING
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As of June 15, 1996, 825 Limited Partners (exclusive of the Initial Limited
Partner) with total subscriptions for 150,784.6499 Units
($15,078,464.99) had been admitted to the Partnership.
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CERTAIN RELATIONSHIPS WITH THE PARTNERSHIP
------------------------------------------------------------------------------
The following diagram shows the relationship of the Partnership and the
General Partner with certain Affiliates of the General Partner. The solid lines
indicate ownership and the broken lines certain contractual relationships.
All of the entities shown below are corporations except as otherwise indicated.
ICON Securities Corp.
----------------------------------------
ICON Capital Corp.
(the "Dealer-Manager") ("General Partner")
(100% of the outstanding (59.8% of the
securities of the Dealer- outstanding securities
Manager is owned indirectly of the General Partner
by Peter D. Beekman) is owned by
Peter D. Beekman)
- ------------------------------ICON Cash Flow Partners L.P. Seven---------------
(the "Partnership")
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MANAGEMENT
------------------------------------------------------------------------------
The General Partner
The General Partner, ICON Capital Corp., is a Connecticut corporation which
was formed in 1985 under the name ICON Properties, Inc. The name of the General
Partner was changed on July 19, 1990 to more accurately reflect the scope and
focus of its business activities. The General Partner's principal offices are
located at 600 Mamaroneck Avenue, Harrison, New York 10528, and its telephone
number is (914) 698-0600. The officers of the General Partner, listed below,
have extensive experience in selecting, acquiring, leasing, financing, managing
and remarketing (re-leasing and selling) equipment.
The General Partner will perform, or cause to be performed, all services
relating to the day-to-day management of the Equipment and Financing
Transactions of the Partnership. Such services include the collection of
payments due from the lessees of the Equipment and companies which entered into
Financing Transactions ("Users"), releasing services in connection with
Equipment which is off-lease, inspections of the Equipment, liaison with Lessees
and Users, supervision of maintenance being performed by third parties, and
monitoring of performance by the Lessees of their obligations under the Leases
and Users under Financing Transactions, including payment of rent or principal
and interest and all operating expenses.
Peter D. Beekman owns or controls 59.8% of the outstanding capital stock of
the General Partner.
The officers and directors of the General Partner are:
Peter D. Beekman Chairman of the Board and President
Cortes E. DeRussy Executive Vice President and Director
Charles Duggan Executive Vice President, Chief Financial Officer
and Director
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Susan H. Beekman Vice President, Secretary and Director
Gary N. Silverhardt Vice President and Controller
Elizabeth A. Schuette Vice President and Lease Operations Director
Peter D. Beekman - Chairman of the Board and President
Peter D. Beekman, 57, founded the Company in 1985 and previously had
founded the ICON Group, Inc. affiliate in 1978. From 1974 to 1978 he was the
Equity Syndication Director for Litton Industries Credit Corporation. Prior to
1974, Mr. Beekman held marketing positions with International Business Machines
Corp., Itel Corp. and Computer Investors Group, Inc. Earlier, he served as an
officer in the United States Navy. He is a founder and a former director of the
Eastern Association of Equipment Lessors. Mr. Beekman received a B.S.
degree from Worcester Polytechnic Institute.
Cortes E. DeRussy - Executive Vice President, Chief Leasing Officer and Director
Cortes E. DeRussy, 56, joined ICON in 1985. From 1971 to 1985, he was with
Industralease Corporation, most recently as President. Prior to 1971, Mr.
DeRussy was an Account Executive with Cowen & Company, President of Progressive
Data Services and an Account Executive with Merrill Lynch, Pierce, Fenner &
Smith. Earlier he served as an officer in the United States Army. Mr. DeRussy is
a director of the Equipment Leasing Association of America and was a founder,
former president and a former director of the Eastern Association of Equipment
Lessors. He received a BBA degree from Tulane University.
Charles Duggan - Executive Vice President, Chief Financial Officer and Director
Charles Duggan, 54, joined ICON in 1986. From 1985 to 1986, he was Senior
Vice President of CSA Financial Corp., and from 1981 to 1985, Vice President -
Finance of Finalco Group, Inc. Prior to 1981, Mr. Duggan served as chief
financial officer of International Paper Credit Corporation and Litton
Industries Credit Corporation. Earlier, he was with Touche Ross & Co. and
Revlon, Inc. Mr. Duggan is treasurer and a director of the Eastern Association
of Equipment Lessors. He received a B.S. degree from Fordham University and is a
Certified Public Accountant.
Susan H. Beekman - Vice President, Secretary, Treasurer and Director
Susan H. Beekman, 53, joined the ICON Group, Inc. affiliate when it was
founded in 1978 and has been a member of ICON since its inception in 1985. Prior
to 1978, she held system development and programming positions with American
Telephone & Telegraph Company, International Business Machines Corporation, and
American Airlines. Ms. Beekman is the wife of Peter D. Beekman. She received an
MA degree from Manhattanville College and a B.A. degree from Allegheny College.
Gary N. Silverhardt - Vice President and Controller
Gary N. Silverhardt, 36, joined ICON in 1989. From 1985 to 1989 he was
with Coopers & Lybrand, most recently as an Audit Supervisor. Prior to 1985, Mr.
Silverhardt was employed by Katz, Schneeberg & Co. He received a B.S. degree
from the State University of New York at New Paltz and is a Certified Public
Accountant.
Elizabeth A. Schuette - Vice President andLease Operations Director
Elizabeth A. Schuette, 37, joined ICON in 1995. From 1994 to 1995, she was
Vice President - Credit at Phoenixcor, Inc., from 1993 to 1994, Vice President,
Special Credits for Concord Leasing, Inc., from 1989 to
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<PAGE>
1993, a Regional Credit Manager for Household Finance from 1986 to 1989, an
Assistant Vice President for Citytrust Bank and from 1983 to 1986, an Assistant
Vice President for Society for Savings. Prior to 1983, Ms Schuette was a
Financial Consultant for Kaplan, Smith and Associates and a Cost Analyst for
Booz Allen & Hamilton. She received an MA degree from George Washington
University and a BA from The College of William and Mary.
Other key management personnel include:
Mitchell Larkin - Lease Acquisition Director
Mitchell Larkin, 47, joined ICON in 1990. From 1988 to 1990 he was Lease
Acquisition Specialist for LDI Financial Services, Inc., from 1987 to 1988 was a
Regional Sales Manager for First Interstate Credit Alliance from 1987 to 1988
and from 1985 to 1987, he was a marketing representative for ICON. Prior to
1985, Mr. Larkin held marketing and credit positions with Scientific Leasing
Corp., Equilease Corp., Litton Industries Credit Corporation and Leasco
Computer, Inc. He received a B.S. degree from Husson College.
Robert B. Gage - Portfolio Management Director
Robert B. Gage, 58, joined ICON in 1992. From 1981 to 1985, he was with
AIC Leasing Services, Inc., most recently as Vice President and General Manager,
and from 1969 to 1981 he was Director of Operations for Rockwood Computer Corp.
Prior to 1969, Mr.Gage was with Electrographic Corporation. He received BBA
degree from West Virginia Wesleyan College.
Affiliates of the General Partner
ICON Securities Corp. and Soundview Leasing Co., Inc.
ICON Securities Corp., (the "Dealer-Manager"), is a New York corporation and
a wholly owned subsidiary of Soundview Leasing Co., Inc., the surviving company
as a consequence of a merger withInternational Consolidated Group, Inc., which
was formed in 1982 to manage the equity sales for investor programs sponsored by
its Affiliates. The Dealer-Manager is registered with the Securities and
Exchange Commission and is a member of the National Association of Securities
Dealers, Inc. and the Securities Investor Protection Corporation. ICON
Securities Corp. will act as the Dealer-Manager of the Offering.
Soundview Leasing Co., Inc. ("Soundview") is a New York corporation and
the parent of a number of wholly-owned subsidiaries, including the
Dealer-Manager, which were formed to sponsor, own, operate, and manage
privately-offered investment programs in specified leasing, finance and real
estate investments, and to sell equity interests in such programs. Of those
subsidiaries, only the Dealer-Manager is intended to continue to engage in any
material on-going business activity after completion of operations of those
programs.
In the years from 1979 through 1986, Soundview and/or its subsidiaries
successfully syndicated the equity offering of 59 privately offered
tax-advantaged investment programs engaged in the equipment leasing and lease
finance businesses and three real estate leasing programs which in the aggregate
raised approximately $24.6 million of equity and invested the net funds raised
by such offerings in approximately $90 million of equipment, financing
transactions and reserves.
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INVESTMENT OBJECTIVES AND POLICIES
------------------------------------------------------------------------------
General
Investment Objectives. The Partnership intends to acquire and lease various
types of Equipment primarily to businesses located within the United States,
which the General Partner determines are Creditworthy. The Partnership will also
provide financing to these same types of businesses secured by tangible and
intangible personal property and other or additional collateral determined by
the General Partner to be sufficient in amounts and types to provide adequate
security for the current and future obligations of such borrowers. The General
Partner estimates
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<PAGE>
that approximately one-third of Net Offering Proceeds will be invested in
Financing Transactions as well as Leases or other transactions which produce
portfolio income although the General Partner may determine to invest up to
one-half of such Proceeds in such Investments if, in its sole discretion, it
believes such Investments to be in the best interests of the Partnership. Over
the life of the Partnership, the General Partner expects that approximately
one-third of its Investments, by cost, will consist of such types of
Investments. See "Investment Discretion of the General Partner" and "Credit
Review Procedures" in this section.
The Partnership's overall investment objectives are:
(i) to achieve the Maximum Offering in an orderly manner;
(ii) to apply promptly Net Offering Proceeds, together with the principal
amount of any Indebtedness permitted to be incurred, to acquire Investments,
which are as broadly diversified by collateral type, lessee/user industry
and geographic location as is possible in accordance with the Partnership's
investment objectives and policies described herein and in the Partnership
Agreement;
(iii) to arrange for financing of substantially all contractual revenues
receivable for such Investments which are not needed for current
distributions and operating expenses;
(iv) to make monthly cash distributions in an amount equal to "First Cash
Distributions" to each of the Limited Partners from Cash From Operations
during the Reinvestment Period (which shall commence on the Initial Closing
Date and end not less than five (5) years nor more than eight (8) years
thereafter (see "Cash Distributions to Partners--Monthly Cash Distributions
and; "--First Cash Distributions to the Limited Partners" in this section);
(v) to re-invest all undistributed Cash From Operations and Cash From Sales
in additional Investments during the Reinvestment Period to increase
continuously the total amount of the Partnership's revenue-generating
Investments (see "--Reinvestment of Undistributed Cash in Additional
Equipment, Leases and Financing Transactions" in this section); and then
(vi) to sell or otherwise transfer the Partnership's Investments and other
assets in an orderly manner and thereafter to distribute Cash From Sales
thereof to the Partners within approximately six (6) to thirty-six (36)
months after the end of the Reinvestment Period.
It is expected that the Partnership will initially invest a minimum of the
sum of (x) 74.0% of Gross Offering Proceeds (assuming 80% leverage--see "SOURCES
AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS") and (y) related
borrowings (which are projected to average 50%, but may be up to 80%, of the
aggregate Purchase Price of the Partnership's Investments), together with
amounts payable from the rentals due from its Leases and excess Cash From
Operations, to make Investments.
THERE CAN BE NO ASSURANCE THAT THE PARTNERSHIP WILL BE SUCCESSFUL IN MEETING ANY
OF ITS OBJECTIVES OR THAT SUCH OBJECTIVES WILL BE ATTAINED AT ALL.
Investment Discretion of the General Partner. As of the date of this
Prospectus, the Partnership does not have any investment in, or option or
contractual commitment to acquire, lease or finance any specific Investments. In
light of the fact that no proposed Investments have been made by or for the
Partnership by any of the Partnership, the General Partner or any Affiliate of
the General Partner as of the date of this Prospectus, and because there can be
no way of anticipating what types of Investments will be available on reasonable
terms at the times the Partnership is ready to invest its funds, there can be no
assurance as to the ultimate composition of the Partnership's actual Investment
portfolio. In addition, the proportion of the total Investments which will be
made in Equipment and Leases on the one hand and Financing Transactions on the
other hand will depend on a number of factors including, without limitation,
state tax laws (e.g., sales, use, property and/or franchise taxes which apply in
certain jurisdictions to leases and leased equipment but not loans and the
collateral therefor) or other laws (for example, those applicable to secured
transactions) which may make it more cost-effective to a proposed User or
provide the Partnership with additional rights or cost-savings if a transaction
is structured as a Financing Transaction rather than a Lease. Accordingly, the
General Partner may vary the Partnership's Investment portfolio to adjust to
prevailing market, statutory and economic conditions to achieve the
Partnership's investment yield, cash distribution and other objectives. See
"FIDUCIARY RESPONSIBILITY" and "OTHER OFFERINGS BY THE GENERAL PARTNER AND
AFFILIATES" and Table IV to the Registration Statement.
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<PAGE>
The success of the Partnership will largely depend upon the quality of the
Equipment purchased, the timing of such purchases and the Purchase Price and
other lease and remarketing terms negotiated by the General Partner with respect
thereto. Furthermore, in order to ensure that Equipment is suitable for re-lease
or sale, the Partnership may be required to recondition the Equipment and may be
required to borrow funds for that purpose. See "-- Leveraged Investments" below.
Acquisition Policies and Procedures
Equipment. The Partnership will only acquire Equipment which a
non-Affiliated Creditworthy Lessee has committed to lease from the Partnership
or which is subject to an existing lease. See "--Leases and Lessees" in this
section. The Partnership may purchase Used Equipment from the current users
(which may be the proposed Lessees pursuant to a sale-leaseback or other
arrangement) or from dealers in such Equipment at a price which will not exceed
the fair market value of such Equipment. New Equipment purchased by the
Partnership may be acquired from manufacturers, dealers or proposed Lessees
(through a sale-leaseback or other arrangement), either by contracting with such
parties directly or by purchasing rights under previously existing purchase
agreements. Under certain circumstances, Equipment may be purchased from other
sources on an ad hoc basis to meet the needs of a particular Creditworthy
Lessee. Substantial Equipment purchases by the Partnership will be made only
subject to the General Partner obtaining such information and reports, and
undertaking such inspections and surveys, as the General Partner may deem
necessary or advisable to determine the probable economic life, reliability and
productivity of such Equipment, as well as the competitive position, suitability
and desirability of investing in such Equipment as compared with other
investment opportunities. There can be no assurance that favorable purchase
agreements can be negotiated with Equipment manufacturers or their authorized
dealers or lease brokers at the time the Partnership commences operations or at
any time during the life of the Partnership.
The Partnership shall neither purchase, lease or license Investments from,
nor sell, lease or license Investments to, the General Partner or any Affiliate
of the General Partner (including, without limitation, any Program in which the
General Partner or any such Affiliate has an interest); provided, however, that
the Partnership may make Affiliated Investments and Investments in Joint
Ventures after satisfying certain conditions and subject to certain
restrictions. See "SUMMARY OF THE PARTNERSHIP AGREEMENT -- Limitations on
Exercise of Powers by the General Partner." After the Initial Closing Date, it
is anticipated that most of the Partnership's Equipment will be purchased
directly by the Partnership.
The General Partner intends to evaluate the Partnership's Investments at
least annually, and more frequently as circumstances require, to determine
whether all items of Equipment and Financing Transactions should remain in its
portfolio or should be sold. The General Partner will make that decision based
upon the Partnership's operating results, general economic conditions, tax
considerations, the nature and condition of items of Equipment, the financial
condition of the parties obligated to make payments under Leases and Financing
Transactions, alternate investment opportunities then available to the
Partnership and other factors that the General Partner deems appropriate to such
evaluation.
Any Net Offering Proceeds not used to make Investments or committed to
Reserves to the extent permitted to be treated as Investments (see "Reserves")
by November 9, 1997, within 24 months fromthe Effective Date of the
Offering(or, if later, within 12 months of receipt of Offering Proceeds) will
be returned pro rata to the Limited Partners based upon their respective number
of Units, without interest and without deduction for Front- End Fees. See
"--Return of Uninvested Net Proceeds."
Credit Review Procedures
All investment decisions with respect to the acquisition and leasing of
Equipment and the entering into of Financing Transactions shall be made by the
executive officers of the General Partner, subject to the approval of the Credit
Committee of the General Partner and to the investment policies described herein
and the undertakings set forth under "CONFLICTS OF INTEREST." All potential
Leases and Financing Transactions shall be evaluated on the basis of (i) the
extent to which such transaction appears to satisfy the Partnership's investment
objectives, including particularly the economic return to the Partnership, (ii)
the financial condition of the prospective Lessee or User and the character of
its business, (iii) the availability of additional collateral and credit
enhancements to ensure performance by the potential Lessee or User and (iv) the
type of equipment to be purchased for lease or which will secure the proposed
Financing Transaction.
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The General Partner has established a Credit Committee, which has set, and
may from time to time revise, standards and procedures for the review and
approval of potential Leases and Financing Transactions by the credit department
of the General Partner (including, without limitation, the determination whether
any Person qualifies as a Creditworthy Lessee or a Creditworthy User). The
Credit Committee will be responsible for supervising the day-to-day work of the
credit department and approving significant individual transactions or portfolio
purchases as well as transactions which vary from standard credit criteria and
policies. The Credit Committee will, at all times, consist of four persons
designated by the General Partner. It is anticipated that all four persons
comprising the Credit Committee will be and will continue to be officers and
employees of the General Partner or an Affiliate of the General Partner. Action
by the Credit Committee shall be determined by a majority and a report of any
action taken thereby shall promptly be delivered to the General Partner. As of
the date of this Prospectus, the members of the Credit Committee are Messrs.
Beekman, DeRussy and Duggan and Mrs. Schuette, as well as Mr.
Christopher Cook, Credit Manager.
The credit department is responsible for following the credit review
procedures described below and determining compliance therewith. The General
Partner intends that the such procedures (or similar procedures that it believes
to be equally reliable) shall be observed in reviewing either potential Leases
or Financing Transactions whether originated by the General Partner or any
Affiliate of the General Partner or acquired by the Partnership from
non-Affiliated third parties. Such procedures currently in effect are generally
as follows:
(i) receipt of a Lease or financing application from a potential
Creditworthy Lessee or Creditworthy User;
(ii) receipt and analysis of such potential Lessee's or User's current and
recent years' financial statements and, if deemed appropriate, income tax
returns for the most recently completed fiscal year(s) of such Lessee or
User;
(iii) independent verification of the potential Lessee's or User's credit
history, bank accounts and trade references;
(iv) credit reports concerning the potential Lessee or User from credit
agencies such as Dun & Bradstreet, TRW, etc.; and
(v) review and verification of underlying equipment or other collateral.
The General Partner's credit procedures become progressively more stringent
for transactions above $25,000 and $75,000, respectively, at each of which
levels additional procedures, documentation and/or credit enhancement will be
required as specified in such credit procedures and/or as required by the Credit
Committee. See "--Portfolio Acquisitions" in this section.
After a thorough review of the above documents, a credit decision is made by
the credit department of the General Partner and the transaction is submitted
for the review and approval of the Credit Committee. If the transaction is
approved, appropriate documentation (including any applicable Lease or other
financing agreement) is forwarded to the proposed Creditworthy Lessee or
Creditworthy User, as the case may be. In addition, the General Partner will,
where it deems appropriate, seek and obtain the personal guarantees of
principals or corporate parents of, or other forms of credit enhancements
(including, among other things, certificates of deposit, letters of credit,
mortgages on real estate or liens on unrelated equipment) from Creditworthy
Lessees and Creditworthy Users in connection with the funding of the
transaction. Upon the General Partner's receipt, review and acceptance (and (if
applicable) any lender's acceptance) of all appropriate documentation, signed by
the Creditworthy Lessee or the Creditworthy User, as the case may be, the
General Partner will enter into the subject Lease or Financing Transaction in
accordance with the terms thereof.
Leases and Lessees
General. The Partnership's Leases are anticipated to have terms ranging from
two to five years. Each Lease is expected to provide for aggregate contractual
rents that return the Partnership's cost of its Investments (including Front-End
Fees) along with investment income. After its initial term, each Lease will be
expected to produce additional investment income from the re-lease and/or
ultimate sale of the Equipment subject thereto. Nevertheless, the actual
economic return to the Partnership under any Lease will depend upon several
factors, such as the amount of the rental and other payments required to be made
by the Lessee under such Lease and the re-lease or sale value of the Equipment
at the expiration of the term thereof.
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The General Partner anticipates that each Lease entered into on behalf of
the Partnership, as well as each existing Lease acquired on behalf of the
Partnership, will generally provide that the Creditworthy Lessee will: (i) pay
rent and other payments without deduction or offset of any kind; (ii) bear the
risk of loss of the Equipment subject thereto; (iii) pay sales, use or similar
taxes relating to the lease or other use of the Equipment; (iv) indemnify the
Partnership against any liability resulting from any act or omission of the
Creditworthy Lessee or its agents; (v) maintain the Equipment in good working
order and condition during the term of such Lease; and (vi) not permit the
assignment or sublease of the Equipment subject thereto without the prior
written consent of the General Partner. The General Partner also anticipates
that none of such Leases will be cancelable during their initial terms; provided
that the General Partner may agree to Lease provisions which permit cancellation
of a Lease upon payment of an appropriate penalty or upon securing a substitute
Lessee if such provisions are deemed by the General Partner to be in the
Partnership's best interest.
Tax Classification of Leases. Although the Partnership intends to structure
its Leases so that they are treated as leases rather than as conditional sales
or financing transactions for tax purposes, the Service may contend in a given
case that a Lease should be characterized as a sale or financing transaction, in
which case a portion (equivalent to an interest element) of Lease revenues would
be treated as ordinary income without offset or deduction for cost recovery and
the balance of Lease payments would be treated as a return of principal. See
"RISK FACTORS-- Federal Income Tax Risks and ERISA Matters--Tax Treatment of
Leases as Sales or Financings and "FEDERAL INCOME TAX CONSEQUENCES -- Tax
Treatment of the Leases."
Re-Leasing of Equipment. Following the expiration of any Lease entered into
by the Partnership, the Partnership will seek to remarket the Equipment subject
thereto by either (i) extending or renewing such Lease with the existing
Creditworthy Lessee, (ii) leasing such Equipment to a new Creditworthy Lessee or
(iii) selling such Equipment to the existing Lessee or a third party; provided
that, during the Disposition Period, subsequent Leases covering such Equipment
shall be upon terms consistent with the liquidation of the Partnership's
Investments and other assets and the distribution of the proceeds thereof.
Restrictions To Assure Diversification. It is an objective of the
Partnership to maintain adequate diversification of Creditworthy Lessees and
Creditworthy Users. To that end, the General Partner intends not to acquire
Equipment for lease to any one Lessee if, after such acquisition, such Equipment
would have an aggregate Purchase Price in excess of 25% of the Partnership's
original cost for all Investments in its portfolio as of the Final Closing Date,
unless such Lessee has a net worth in excess of $100,000,000.
Lease Provisions. The specific provisions of each Lease to be entered into
or be acquired by the Partnership will depend upon a variety of factors,
including (i) the type and intended use of the Equipment covered thereby, (ii)
the business, operations and financial condition of the Creditworthy Lessee
party thereto, (iii) regulatory considerations and (iv) the tax consequences and
accounting treatment of certain provisions thereof.
The General Partner anticipates that each such Lease will generally require
that Creditworthy Lessees maintain both (i) casualty insurance in an amount
equal to the lesser of the market value of the Equipment subject thereto or a
specified amount set forth in such Lease and (2) liability insurance (naming the
Partnership as an additional insured) in an amount consistent with industry
standards. In addition, each such Lease shall generally require the Creditworthy
Lessee party thereto to indemnify the Partnership as lessor under such Lease
against any loss or liability incurred by or asserted against it arising out of
such Lease, or any performance thereunder, or which is related to the Equipment
subject thereto and to insure the Equipment, the Partnership and any other party
with an interest in the Equipment from the normal risks of owning and operating
the Equipment. In the opinion of the General Partner, each such Lease will also
otherwise generally afford the Partnership overall protection substantially
equivalent to that provided in leases then being negotiated by leasing companies
and financial institutions.
Each such Lease will prescribe certain events of default, including, without
limitation, (i) a default, subject to applicable grace periods (if any), in the
payment of rent, (ii) a failure, subject to applicable grace periods (if any),
to observe or perform covenants or terms of such Lease and (iii) certain events
with respect to the bankruptcy or insolvency of the Creditworthy Lessee party
thereto. Enforcement of remedies is subject to applicable bankruptcy and similar
laws. If, and to the extent that, the Partnership borrows funds in connection
with any Lease, it will generally be required to assign some or all of its
rights under such Lease as collateral for such borrowing.
At the end of each Lease term, the Lessee will often have the option to buy
the Equipment subject thereto or to terminate the Lease and return such
Equipment. The options available to the Lessee at the end of the Lease are
significant in that the nature and extent of such options may determine the
categorization of the Lease for tax,
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financial reporting and other purposes. See "FEDERAL INCOME TAX
CONSEQUENCES--Tax Treatment of the Leases."
While the General Partner anticipates that all of the Equipment acquired by
the Partnership will be leased to Creditworthy Lessees whose businesses are
located within the United States, the Partnership may (but does not presently
anticipate that it will) enter into Leases for Equipment located outside the
United States to an incidental degree, pursuant to which the Partnership may
have an increased risk of loss in the event of a default by the Creditworthy
Lessee party thereto.
Equipment
"New/Unused", "Seasoned" and "Used/Remarketed Equipment". The General
Partner anticipates that the Partnership will acquire both "new/unused"
Equipment (that is, Equipment initially delivered new by the manufacturer or
vendor to the current Lessee less than two months prior to its purchase by the
Partnership) and "seasoned" Equipment (that is, Equipment initially delivered
new by the manufacturer or new equipment vendor to the current Lessee more than
two months prior to the Partnership's purchase of such Equipment and prior to
the earlier of (i) the expiration of the first Lease thereof or (ii) the fifth
anniversary of such initial delivery date). The Partnership expects that
approximately 25% of its Equipment will consist of "new/unused" Equipment,
50-75% its Equipment will consist of "seasoned" Equipment and the balance of its
Equipment will consist of "used/remarketed" (that is, Equipment which was leased
previously to another user) Equipment. The Partnership may also purchase
"used/remarketed" Equipment in lieu of "new/unused" Equipment or "seasoned"
Equipment and, at any time, "used/remarketed" Equipment may comprise 25% of the
aggregate Purchase Price paid by the Partnership for all of its Equipment. Any
item of Equipment shall be purchased by the Partnership at a Purchase Price not
greater than the then current fair market value thereof.
"Seasoned" Equipment would be purchased at discounts from the Seller's
original cost, determined by the Credit Committee to be appropriate, to reflect
the (i) remaining useful life of such Equipment and (ii) the remaining
contractual payments due under the related Leases or Financing Transactions.
"Seasoned" transactions frequently are advantageous because the Partnership's
credit department will have the opportunity to analyze detailed payment
histories for the Creditworthy Lessee and or Creditworthy User prior to entering
into a purchase commitment. In addition, the Partnership frequently can reduce
or eliminate the normal credit risk associated with any Lease by negotiating for
the seller to repurchase those Leases, the payments under which are not kept
current within a specified trial period following the Partnership's purchase of
such Equipment and related Leases. See "RISK FACTORS--Partnership and Investment
Risks--Equipment and Lessees Unspecified; Investments in 'New/Unused,'
'Seasoned' and 'Used/Remarketed' Equipment; Investment Delay; Investment
Portfolio Composition."
Equipment Registration. Aircraft and marine vessels may be subject to
certain registration requirements imposed by federal law and regulations.
Registration, which may be required for operation of aircraft within the United
States, is permitted only if each partner of a partnership which owns such
aircraft is a United States Citizen (as defined below) or a Resident Alien. A
trust of which a United States Citizen is the trustee may own United States
registered aircraft if the trustee is not subject to removal or certain control
or influence by beneficiaries more than 25% of whom are neither United States
Citizens nor Resident Aliens. As a consequence, title to certain aircraft that
the Partnership may acquire may be held by a trust for the benefit of the
Partnership. Similarly, certain types of marine vessels must be registered prior
to operation in the waterways of the United States. A partnership may register
its vessels with the federal government only if at least 75% of its partners are
United States Citizens. If at any time a partnership which owns United States
registered aircraft and/or vessels (or serves as the beneficiary of a trust
which does so) fails to satisfy the registration requirements (whether due to
misrepresentation, change in citizenship status or transfer of units to a Person
other than a United States Citizen or Resident Alien), United States
registration may be challenged by an agency of the federal government. Any
challenge, if successful, could result in substantial penalties, the premature
sale of such Equipment, the loss of the benefits of the central recording system
with respect to aircraft (thereby leaving the aircraft exposed to liens or other
interests not of record) and a breach of lease agreements entered into in
connection with the acquisition and leasing of such Equipment. See "RISK FACTORS
- -- Partnership and Investment Risks -- Risk of Loss of Equipment Registration."
Accordingly, the General Partner will not admit a non-United States Citizen as
an Assignee or Substitute Limited Partner of the Partnership if such admission
would result in the potential invalidation of the registration of aircraft or
vessels. See "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS;
SUBSCRIPTION PROCEDURES -- Citizenship" and "TRANSFER OF UNITS -- Restrictions
on the Transfer of Units.")
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Types of Equipment. The Partnership's Equipment is expected to include:
(i) office and management information systems equipment (including, but not
limited to, small, mini- and microcomputer management information systems)
communication and related peripheral equipment, such as, terminals, tape,
magnetic or optical, disc drives, disc controllers, printers, optical
character scanning devices, and communication devices and modems), graphic
processing equipment (such as typesetters, printing presses, computer aided
design/computer aided manufacturing ("CAD/CAM") equipment) and photocopying
equipment;
(ii) printing systems (including, but not limited to, electronic laser
printers);
(iii) materials handling equipment, including, but not limited to,
fork-lifts and other more specialized equipment for moving materials in
warehouse or shipping or areas;
(iv) machine tools and manufacturing equipment, including, but not limited
to, computer- and mechanically- controlled lathes, drill presses, vertical
or horizontal milling machines, rotary or cylindrical grinders, metal
fabrication or slitting equipment, and other metal forming equipment used in
the production of a broad range of machinery and equipment;
(v) medical diagnostic and testing equipment, including, but not limited to,
(A) radiology equipment (such as CT Scanning, X-Ray, Fluoroscopic, Nuclear
Generators and Gamma Cameras), (B) sonographic equipment, (C) patient
monitoring equipment and (D) miscellaneous medical equipment (such as "Crash
Carts," lab test equipment, blood-gas analyzers, treatment room furniture);
(vi) aircraft (including air frames, engines and/or avionics, ground
handling equipment, passenger loading ramps), rail and over-the-road
transportation equipment (including boxcars, tank cars, hopper cars,
flatcars, locomotives and various other equipment used by railroads in the
maintenance of their railroad track, tractors, trailers, heavy duty trucks
and intermodal (rail to over-the-road) containers and chassis) and marine
vessels (including, but not limited to, towboats and barges); and
(vii) miscellaneous equipment of other types satisfying the investment
objectives of the Partnership and consistent with the remaining term of the
Partnership, including, but not limited to, (A) furniture and fixtures, (B)
store fixtures, display cases, freezers, etc., (C) manufacturing equipment
and (D) electronic test equipment.
Length of Ownership of Equipment. The General Partner intends that the
Partnership will hold and lease the Equipment it acquires until such time as
disposition appears advantageous in light of the Partnership's investment
objectives. In deciding whether to dispose of an item of Equipment, the
Partnership will consider the type and condition of such Equipment, potential
re-lease opportunities relating thereto, economic conditions, interest rates and
many other factors. While the General Partner presently intends that the
Partnership shall own and lease its Equipment for no more than five years
following the Final Closing Date, the Partnership may be required to retain
ownership of Equipment for a longer period in the event that the Sale thereof
appears disadvantageous in light of then prevailing economic conditions or
changes in applicable laws (including, without limitation, federal or state
income tax laws) and, accordingly, the Partnership is permitted to hold
Equipment for up to ten (10) years following the Final Closing Date.
Financing Transactions
The Partnership may also enter into Financing Transactions with Creditworthy
Users, including, without limitation, Financing Transactions pursuant to which
the Partnership shall provide financing to manufacturers and lessors with
respect to equipment leased directly by such manufacturers ("vendor leasing
programs"). Such Financing Transactions shall be evidenced by a written
promissory note of the Creditworthy User party thereto evidencing the
irrevocable obligation of such Creditworthy User to repay the principal amount
thereof, together with interest thereon, in accordance with the terms thereof,
which repayment obligation shall be sufficient to return the Partnership's full
cost associated with such Financing Transaction, together with some investment
income. Furthermore, such repayment obligation would be collateralized by a
security interest in such tangible or intangible personal property (including,
without limitation, the Equipment financed thereby and any Lease to which such
Equipment is subject, as well as the receivables arising thereunder) of such
Creditworthy User as the Credit Committee may deem to be appropriate. The
General Partner will use its best efforts to perfect such security interest so
that such security interest will constitute a first priority secured lien on
such Equipment, Lease and receivables affording certain preferred rights
(superior to any rights of all others who might seek to assert rights
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in or to such Equipment, Lease or receivables) to the Partnership, upon a
default by a User. Financing Transactions will not include participation
features for the General Partner, its Affiliates or Users.
The General Partner believes that the ability of the Partnership to engage
in Financing Transactions will enable the Partnership to transact business with
certain additional desirable manufacturers, lessors and other users and to take
advantage of additional investment opportunities due to certain provisions of
certain states' tax and other laws which make it more favorable under state and
local tax and other laws to structure transactions in those jurisdictions as
Financing Transactions rather than Leases. By illustration, certain states or
localities impose sales or use taxes on the revenues from leases but not
financing transactions. Certain other jurisdictions impose franchise taxes based
on property owned and leased within such states but not on the collateral for
financing transactions. In addition, in Financing Transactions, the User will
realize additional federal and state tax benefits which will effect the total
amount which a User will be willing to pay to finance rather than lease
equipment which it needs. Financing Transactions with Creditworthy Users will be
negotiated on a case-by-case basis, subject to consideration of such factors as
the General Partner shall deem appropriate to the investment decision. See
"--Acquisition Policies and Procedures" in this section.
The General Partner estimates that approximately one-third of Net Offering
Proceeds will be invested in Financing Transactions as well as Leases or other
transactions which produce portfolio income although the General Partner may
determine to invest up to one-half of such Proceeds in such Investments if, in
its sole discretion, it believes such Investments to be in the best interests of
the Partnership. Over the life of the Partnership, the General Partner expects
that approximately one-third of its Investments, by cost, will consist of such
types of Investments.
Other Investments
The Partnership may also, from time to time, invest in certain other types
of property, both real and personal, tangible and intangible, including, without
limitation, contract rights, lease rights, debt instruments and equity interests
in corporations, partnerships (both limited and general and including, subject
to the provisions of this Agreement, Affiliated Entities), joint ventures and
other entities (including, but not limited to, common and preferred stock,
debentures, bonds and other securities of every kind and nature); provided that
the Partnership may make such Investments only in furtherance of its investment
objectives and in accordance with its investment policies. The General Partner
does not expect that such Investments will comprise a substantial portion of the
Partnership's Investments outstanding at any time.
Portfolio Acquisitions
The General Partner also intends that the Partnership acquire lease and/or
financing transaction portfolios (hereinafter "Portfolios"). Such Portfolio
acquisitions and financings are each expected to be in the range of $250,000 to
$10,000,000, but the Partnership is not limited as to the size of any such
acquisition (so long as such Portfolio otherwise satisfies the investment
objectives and policies of the Partnership and, in making such Investment, the
General Partner complies with all applicable provisions of the Partnership
Agreement).
The acquisition of any Portfolio shall be conditioned upon a thorough
financial and documentary review by the legal and accounting departments of the
General Partner in accordance with the following (which generally supplements
the credit review/documentation procedures set forth above):
(i) substantially all of the leases and financing transactions (by dollar
volume) contained in each Portfolio under consideration for acquisition is
reviewed for completeness and accuracy of documentation;
(ii) all potential Lessee and User payment histories are reviewed and
verified, without regard to any credit enhancements obtained in connection
with such acquisition;
(iii) underlying Equipment or other collateral is evaluated and the values
or purchase prices thereof evaluated or verified;
(iv) Dun & Bradstreet and/or TRW credit reports are obtained for a
representative number of potential Lessees and Users;
(v) a complete due diligence review is performed by internal legal and
auditing staff of the General Partner in preparation for documentation and
funding of the acquisition;
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(vi) Uniform Commercial Code lien searches are performed against all
potential Lessees and Users, as well as against the current holder of such
Portfolio; and
(vii) all liens identified in connection with the above review (other than
with respect to Partnership Indebtedness are removed prior to or upon the
acquisition by the Partnership of such Portfolio (or the Partnership will
retain a right of post-acquisition rejection of individual Leases and
Financing Transactions included in, or a right to performance support by the
current holder of, such Portfolio). An escrow or purchase price holdback may
also be employed for the same purposes.
In connection with the acquisition of any Portfolio, the General Partner may
require that such acquisition be full recourse to the current holder of such
Portfolio in the event of any underlying Lessee or User default.
The General Partner may, for its own account, enter into agreements to act
as an independent equipment manager with respect to Portfolios owned by certain
non-Affiliated limited partners and other entities and the General Partner is
entitled to receive compensation for such services. The Partnership may, from
time to time, acquire a Joint Venture interest in all or a portion of such
Portfolios in accordance with the terms of the Partnership Agreement. See
"SUMMARY OF PARTNERSHIP AGREEMENT -- Restrictions on the Exercise of Powers by
the General Partner."
Reserves
The General Partner shall initially establish for the Partnership, and shall
use its best efforts to maintain, Reserves for working capital and contingent
liabilities, including repairs, replacements, contingencies, accruals required
by lenders for insurance, compensating balances required by lenders and other
appropriate items, in an amount not less than (i) during the Reinvestment
Period, 1.0% of Gross Offering Proceeds and (ii) during the Disposition Period,
the lesser of (A) 1% of the Partnership's aggregate Adjusted Capital Accounts
and (B) 1% of Gross Offering Proceeds, of which an amount not in excess of 3% of
Gross Offering Proceeds may be treated as having been invested or committed to
investment. Reserves, once expended, need not be restored, provided, however,
that any such Reserves that are restored in the sole and absolute discretion of
the General Partner shall be restored from Cash From Operations.
Use of Leverage
Leveraged Investments. The General Partner intends to use Partnership
indebtedness (or "leverage") as an essential tool in acquiring and building a
growing pool of Partnership Investments and related receivables. It expects
that, during the Partnership's early operating period, which shall commence on
the Initial Closing Date, the Partnership will acquire a substantial proportion
of its Investments entirely for cash and the balance of its Investments
(particularly Leases with investment-grade Lessees) with a mixture of cash and
existing or new (primarily "non-recourse") indebtedness (as to which the lender
will generally have no recourse to assets of the Partnership other than to
foreclose on the Partnership's interest in such Lease and dispose of the related
Equipment). As the Partnership accumulates Lease and Financing Transaction
receivables from its cash purchases which are sufficiently large in volume and
diverse as to Lessee/User industry types, equipment types and geographic
locations as to be financed at commercially attractive interest rates, then the
General Partner will seek to borrow against the "pool" of such receivables from
banks and other interested, unaffiliated lenders at interest rates which can be
serviced with only a portion of such receivables. If such efforts are
successful, substantial cash flows from such pool of Investment receivables will
become available for use in Partnership operations, for Limited Partner
distributions and for reinvestment in additional Investments and to build an
ever larger base of Partnership Investments, revenues and residual values.
Such "pooled" collateral loans may take the form of a revolving line of
credit or one of a series of "securitizations" for which the lender will have
recourse to the entire "pool" (but only that pool) of receivables to service
such indebtedness. In addition, in securitizations, additional steps will be
taken to create and maintain an intermediate trust, partnership or other
"pass-through" structure which is intended to ensure that the receivables are
collectible by the lender under all circumstances. As a result of such types of
borrowings (if available to the Partnership, as the General Partner believes
will be the case), the General Partner expects that the Partnership will be able
to achieve substantial additional earnings for the Partnership represented by
the difference between the rate at which earnings accrue on its Leases and
Financing Transactions which are subject to such financings and the
significantly lower interest and other costs to the Partnership of such
borrowings.
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The General Partner believes that the use of leverage may (i) enhance the
ability of the Partnership to acquire Investments of greater aggregate cost,
(ii) create the opportunity for the Partnership to obtain a greater return on,
and diversification of, its portfolio of Investments and (iii) reduce the
relative cost of obtaining Partnership capital and acquiring its Investments as
a percentage of its total Partnership Investments. Nevertheless, the use of
borrowings could create additional risks for the Partnership and ultimately
reduce distributions to the Partners. See "RISK FACTORS -- Partnership and
Investment Risks -- Leveraged Investment--Increased Risk of Loss."
The Partnership intends to use borrowings (i) to finance Investments to the
extent deemed necessary or appropriate by the General Partner, (ii) to obtain
Commission Loans and (iii) to invest the proceeds thereof in additional
Investments and, to the extent permitted, add to Reserves; provided that, from
and after the date when all Capital Contributions have been invested or
committed to investment in Investments and Reserves (not exceeding 3% of Gross
Offering Proceeds), used to pay permitted Front-End Fees or returned to the
Limited Partners in accordance with the Partnership Agreement, the Partnership
shall not incur or assume additional Indebtedness in connection with the
acquisition of any Investment to the extent that the sum of the principal amount
of such additional Indebtedness plus the aggregate principal amount of all
Indebtedness then outstanding would exceed 80% of the aggregate Purchase Price
paid by the Partnership for Investments then held by the Partnership (inclusive
of the Purchase Price of any Investment after being acquired). Although the
actual amount of Indebtedness incurred by the Partnership and the terms thereof
shall depend upon the availability of financing, interest rates and other costs
to the Partnership, and the General Partner's determination that the amount
borrowed is desirable in light of the Partnership's investment objectives and
policies, the General Partner expects that, on average, at least 50% of the
Partnership's aggregate cost of its Investments will have been supplied by
Partnership borrowings and existing Indebtedness.
In the exercise of its investment discretion, the General Partner will
attempt to utilize the optimum amounts of all-cash and leveraged investments to
maximize the overall investment return to the Limited Partners from the
Partnership's portfolio of Investments. In employing Indebtedness, the General
Partner will also seek to balance the Gross Revenues after appropriate
adjustments for contingencies against the needs of the Partnership (i) to meet
current and contingent expenses and establish or replenish Reserves, (ii) to
make cash distributions to Partners, (iii) to pay debt service on any
Indebtedness incurred to acquire its current assets and (iv) to permit expansion
of the Partnership's portfolio of Investments to increase future Cash From
Operations and Cash From Sales. Generally speaking, the "mix" of the
Partnership's Investments will include (x) fully "leveraged" Leases (all or
substantially all of the rental revenues of which are expected to be assigned to
a lender to pay debt service), (y) partially leveraged Investments and (z)
"unleveraged" Investments, the gross revenues from which, along with excess cash
flow from the partially leveraged Investments, would be available to the
Partnership to be applied to discharge its operational and investment cash
needs. Since the Partnership's "leveraged" Leases are expected to include a
significant proportion of non-recourse (fully assigned) financings, it is the
General Partner's objective to ensure that the gross revenues from its other
partially and fully "unleveraged" Investments together with Reserves and other
uninvested funds are sufficient at all times to meet the cash needs of the
Partnership including contingencies such as Lessee or User defaults.
If borrowings are utilized, the General Partner will use its best efforts to
obtain financing on the most favorable terms available to the Partnership. All
or a portion of such financing may provide for adjustable interest rates which,
in periods of rising interest rates, could cause borrowing costs to increase
without the ability of the Partnership to pass along to the Lessees and Users of
the related Leases and Financing Transactions all (or perhaps any) of such
increased costs, thereby reducing Distributable Cash From Operations.
Commission Loans. The Partnership intends to seek to obtain a Commission
Loan as of each Closing Date in an amount equal to the Sales Commissions payable
on such Closing Date for the purpose of increasing the total amount of Gross
Offering Proceeds immediately available for Investments. As a result, the
General Partner expects that by obtaining Commission Loans the Partnership will
(i) increase its total revenue-generating Investments over the life of the
Partnership and the amount of Distributable Cash From Sales upon liquidation of
the Partnership's Investments and (ii) produce Cash From Operations available
for distribution to the Limited Partners in excess of the sum of (A) principal
and interest payments on the Commission Loans and (B) all related Front-End
Fees. Generally speaking, the Partnership expects that, as of each Closing Date,
it will be able to obtain a short-term Commission Loan at rates of interest
approximating the most favorable short-term business borrowing rates (or the
"prime rate") applicable to loans of such length on such Closing Date; provided,
however, that (x) no Commission Loan shall have a term in excess of two years
from the date of such Commission Loan and (y) the Partnership shall not incur
any Commission Loan unless the Partnership realizes excess Cash From Operations
(as described in clause (ii) above) as a result thereof. Since the Partnership's
total payments of principal of, and interest on, any such Commission Loans would
exceed the corresponding amounts of Commissions paid therewith by the amount of
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interest paid on any such Loans, the General Partner expects to utilize
Commission Loans only when, it has determined that an opportunity exists to use
such borrowings to obtain Investments which have contractual payments at least
equal to the total payments of principal of, and interest on, the corresponding
Commission Loans.
Usury Laws. Equipment leases have on occasion been held by the courts to be
loan transactions subject to state usury laws. In addition, the Partnership
expects that all Financing Transactions will be subject to state usury laws.
Severe penalties, including loss of interest and treble damages, may be imposed
in connection with a violation of such usury laws. Although the Partnership will
seek to structure its Leases and Financing Transactions in such a manner as to
avoid application of the usury laws of any state or other jurisdiction in which
it conducts its operations, a court could construe a transaction which the
Partnership believes to be exempt from, or in compliance with, applicable usury
laws to be a loan in violation of such usury laws and there can be no assurance
that some of the amounts which the Partnership receives on its Investments may
not be characterized as interest charges and fees which are held to be usurious.
Cash Distributions to Partners
Monthly Cash Distributions. Section 8.1(a) of the Partnership Agreement
provides that each Limited Partner is entitled to receive monthly cash
distributions computed as provided in this paragraph. Such distributions will be
made for the period which begins with his or her admission to the Partnership
and ending with the expiration or termination of the Reinvestment Period (the
period of active investment and reinvestment by the Partnership which ends five
(5) years after the Partnership's Final Closing Date (or no later than May 9,
2005) to the extent that Distributable Cash From Operations and Distributable
Cash From Sales are sufficient for such purpose. The annual amount of such
distributions will be computed by multiplying 10.75% by such Limited Partner's
original Capital Contribution reduced by any portion thereof which has been (A)
returned to such Limited Partner pursuant to Section 8.6, or (B) redeemed by the
Partnership pursuant to Section 10.5, of this Agreement. A ratable portion
(i.e., one-twelfth) of such annual distribution amount shall be payable monthly.
Such distributions, if made, will reduce the amount of money that may be
reinvested by the Partnership. Since Distributable Cash From Operations or From
Sales represents all cash from operations or from sales, as the case may be,
less Partnership expenses (the timing and amounts of which are expected to be
largely non-disretionary) and moneys which the General Partner determines in its
discretion to (i) set aside as Reserves (which must be maintained at a minimum
of 1% of Gross Offering Proceeds) and (ii) reinvest in additional Partnership
Investments, decisions by the General Partner to establish additional Reserves
or to make Investments, or both, might effect the ability of the Partnership to
make such distributions. As noted in this Section in the "--Reinvestment of
Undistributed Cash in Additional Equipment, Leases, and Financing Transactions"
Subsection, the Partnership's ability to make cash distributions to its Limited
Partners may be subject to certain restrictions imposed upon the Partnership by
its banks or other lenders.
Such cash distributions will be noncumulative; meaning that, if
Distributable Cash From Operations and Distributable Cash From Sales are
insufficient in any calendar month to pay the full amount of such distributions,
only the actual amount thereof is required to be distributed. Such cash
distributions will also computed on a non-compounded basis; meaning that the
principal amount upon which such cash distributions is computed will not be
increased as the result of the inability of the Partnership to distribute any
monthly portion of such annual amounts, or reduced by any of such distributions
actually made, in any prior period. It is expected that a substantial portion of
all of such cash distributions (e.g. the portion thereof which exceeds taxable
income for GAAP purposes) will be treated as a return of Limited Partners'
originally invested capital) and that the balance of such distributions will be
treated as a return thereon (e.g. the portion thereof which equals taxable
income for GAAP purposes).
Section 8.1(a) of the Partnership Agreement also provides that each Limited
Partner is entitled to receive monthly cash distributions (if the distributions
described above are not adequate) in amounts which would permit the Limited
Partners to pay federal, state and local income taxes resulting from Partnership
Operations (assuming that all Limited Partners are subject to income taxation at
a 31% cumulative tax rate on taxable distributions for GAAP purposes). Such
distributions will be made to the extent that Distributable Cash From Operations
and Distributable Cash From Sales are sufficient for such purpose.
While it is the Partnership's objective to make all such monthly cash
distributions, no prediction can be made as to what level of distributions or
return on investment, if any, will be achieved.
It is anticipated that distributions of Cash From Operations and Cash From
Sales, if available, will be made monthly (approximately 15 days after the end
of each month), commencing in the first full month following the Initial Closing
Date. The monthly distribution of Cash From Operations and Cash From Sales is
subject to the availability of funds and, accordingly, there can be no assurance
that any such anticipated monthly distributions will
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be made or that any or all of the Capital Contributions of the Limited Partners
will be returned out of Cash From Operations and/or Cash From Sales.
First Cash Distributions to the Limited Partners. Section 6.4(g) of the
Partnership Agreement (Exhibit A) provides that unless each Limited Partner has
received distributions equal to 8.0% as a percentage of such Limited Partner's
Capital Contribution (as reduced by any amounts of uninvested capital returned
to such Limited Partner pursuant to Section 8.6 of the Partnership Agreement and
by any amount paid to such Limited Partner in redemption of such Limited
Partner's Units) (the "First Cash Distributions"), the Management Fees otherwise
payable on a monthly basis to the General Partner in its capacity as Manager
shall be deferred and shall be paid without interest upon the earlier to occur
of (i) receipt by the Limited Partners of all current and accrued but unpaid
First Cash Distributions or (ii) expiration of the Reinvestment Period.
In addition, Section 8.1 of the Partnership Agreement provides that upon
Payout (see Section 17 of the Partnership Agreement for a definition of such
term) of Limited Partners' Capital Contributions and an economic return thereon,
the General Partner is entitled to an increase from 1% to 10% of Cash From
Operations and Cash From Sales when cash distributions to the limited Partners
upon Payout (i.e. the time when cash distributions in an amount equal to the sum
of the Limited Partners' (i) capital contributions and (ii) an 8.0% cumulative
annual return thereon, compounded daily, have been made), distributions of
Distributable Cash From Sales shall be made 99% to the Limited Partners and 1%
to the General Partner and that, after Payout, distributions of Distributable
Cash From Sales shall be tentatively attributed 90% to the Limited Partners and
10% to the General Partner. Section 8.1 goes on to provide that, distributions
shall continue to be made 99% to the Limited Partners and 1% to the General
Partner until the earlier of (i) the time when the total cash distributions made
to each Limited Partner equal 150% of his or her original Capital Contribution
(reduced by any amounts paid to him or her (A) as a return of uninvested Capital
Contributions and (B) in redemption of Units pursuant to the Partnership
Agreement) or (ii) upon liquidation of the Partnership. The increased share of
Distributable Cash From Operations tentatively attributed to the General Partner
but not actually distributed to it because of the proviso in the preceding
sentence shall accrue, without interest, and be paid to the General Partner out
of the first Distributable Cash From Operations available to the Partnership
after the earlier of (i) the time when the total cash distributions made to each
Limited Partner equal 150% of his or her original Capital Contribution (reduced
by any amounts paid to him or her (A) as a return of uninvested Capital
Contributions and (B) in redemption of Units pursuant to the Partnership
Agreement) or (ii) upon liquidation of the Partnership.
It is the objective of the Partnership to make the First Cash Distributions
regardless of the number of Units sold, subject only to the limitations
described in "--Monthly Cash Distributions." A portion of such distributions may
represent a return of Capital Contributions recovered in the form of
depreciation deductions on the Equipment and the balance of such distributions
may represent investment income on such Capital Contribution in the form of a
Limited Partner's proportionate share of net taxable income of the Partnership
for such taxable year. Because neither the Partnership nor the General Partner
or any of its Affiliates had acquired any Equipment, Leases or Financing
Transactions as of the date of this Prospectus, it is not possible to predict
what proportion of such distributions may consist, from month-to-month during
the Reinvestment Period, of a return of, or investment income on, capital. See
Tables III and IV of Exhibit B hereto for Prior Performance of the Prior Public
Programs which contain past performance information with regard to cash
distributions made for such Programs (which information is not necessarily
indicative of either such Programs' or the Partnership's future performance as
to the amount, if any, of such future distributions or the relative composition
thereof from year to year.)
Each cash distribution may consist, in whole or in part, of (1) an
investor's pro rata share of the partnership's net income generated from
operations, after deduction or amortization of non-cash expenses (such as
depreciation and initial direct costs) and cash expenses (such as interest on
indebtedness), (as determined under generally accepted accounting principles
("gaap")) and/or (2) a return of investors' original capital investment (on a
GAAP basis).
A material portion of each cash distribution may consist of a distribution
of an investor's original capital investment which, under GAAP, is deemed to be
that portion of cash distributions which are not attributable to partnership net
income for the period of the distribution, irrespective of whether such
distributions have in fact been paid from cash from current or past operations.
Accordingly, cash distributions received by a limited partner may not, in all
instances, be characterized solely or primarily as investment income earned on
such limited partner's investment in the partnership. The partnership
anticipates that it will receive gross revenues (e.g., rent or debt payments)
from all of its financing transactions and the majority of its leases over the
respective terms of each such investment in an amount equal to the sum of (1)
the purchase price of such financing transactions and the equipment subject to
such leases plus (2) investment income earned on such
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investments. Additionally, the partnership expects that the proceeds from sale
or other disposition of the partnership's equipment (which is expected to occur
at the end of each respective lease of such equipment) will be significantly
less than the partnership's original purchase price of such equipment in large
part because the partnership's equipment is expected to rapidly decline in value
(i.E., Generally be fully depreciated over a three to five year period).
Accordingly, the success of the partnership in realizing both a return of
capital and investment income on its investments in its equipment will depend
heavily on: (1) its ability to (a) generate significant operating cash flow from
its equipment during the terms of the leases of such equipment and (b) reinvest
a substantial portion of its net cash flows (after distributions to investors)
and equipment sale proceeds in additional equipment during the reinvestment
period and (2) the residual value which it realizes from its entire equipment
portfolio during and after the reinvestment period (which is expected to end
within five to eight years after the partnership's final closing). See "RISK
FACTORS-- Partnership and Investment Risks--Residual Value of Equipment" and the
"General--Investment Objectives" and "--Acquisition Policies and Procedures"
subsections in this Section. There can be no assurance that investors will
receive the return of their entire original capital investment in the
partnership or any investment income on such investment.
There can be no assurance that the partnership will be successful in meeting
any of its objectives, or that such objectives will be attained at all.
Distribution of Cash From Sales of the Partnership's Investments. After the
Reinvestment Period, it is an objective of the Partnership to sell or otherwise
dispose of its Equipment and liquidate all its investments in Financing
Transactions and to distribute substantially all the proceeds therefrom
("Distributable Cash From Sales") together with Reserves and other Cash From
Operations and Cash From Sales not previously distributed to its Partners, less
the estimated costs and expenses and projected disbursements and reserves
required for prompt and orderly termination of the Partnership and the payment
of deferred Management Fees and Subordinated Remarketing Fees, which in each
case have accrued but not been paid (if any). In the event the Reinvestment
Period ends before the fifth anniversary of the Final Closing Date, the
Partnership expects to distribute a greater portion of Cash From Sales rather
than reinvesting substantially all such funds in additional Investments. During
the liquidation phase of the Partnership, it is expected that distributions will
ultimately decrease relative to the annual cash distribution objectives for the
Reinvestment Period, because as Investments are liquidated there will be less
Equipment and Financing Transactions available to generate Cash From Operations.
See "RISK FACTORS--Partnership and Investment Risks--Residual Value of
Equipment." Distributions made after the Reinvestment Period will depend upon
results of operations, Cash From Sales of the Partnership's Investments, and the
amount of Cash From Operations (if any) which the Partnership derives from the
operation of its remaining Investments (if any) during such period.
There can be no assurance that the Partnership will be successful in meeting
its objectives with regard to Monthly Cash Distributions, First Cash
Distributions or Distributions of Cash From Sales within the time periods
contemplated, or that such objectives will be met at all. See "RISK
FACTORS--Partnership and Investment Risks--Residual Value of Equipment." While
it is the Partnership's objective to make monthly cash distributions, no
prediction can be made as to what level of distributions or return on
investment, if any, will be achieved.
The Partnership expects that the principal investment return from an
investment in Units will derive from such cash distributions rather than from
tax benefits. The Partnership is not intended to be a "tax shelter." However,
the Partnership will register as a "tax shelter" with the Service for the
reasons discussed in "FEDERAL INCOME TAX CONSEQUENCES--Registration, Interest
and Penalties -- Tax Shelter Registration."
Reinvestment of Undistributed Cash in Additional Equipment, Leases, and
Financing Transactions
During the Reinvestment Period, the Partnership intends to reinvest
substantially all undistributed (1) Cash From Operations and (2) Cash From Sales
as well as (3) proceeds of non-recourse and recourse financing of the streams of
rents from its Leases which are not needed to pay current obligations in
additional Equipment, Leases and Financing Transactions. To the extent the
Partnership reinvests Cash From Operations or Cash From Sales in additional or
replacement Investments, the Partnership intends to make sufficient cash
distributions to the Limited Partners during the Reinvestment Period to enable
them to pay when due their respective federal income taxes on such Cash From
Operations and Cash From Sales (assuming each Limited Partner is in the highest
marginal federal income tax bracket, determined without regard to surtaxes, if
any). The Partnership's ability to make cash distributions to its Limited
Partners may be subject to certain restrictions imposed upon the Partnership by
its banks or other lenders.
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The Cash From Sales realized by the Partnership from the sale or other
disposition of an item of Equipment (including indemnity and insurance payments
arising from the loss or destruction of the Equipment), after the payment of, or
provision for, all related Partnership liabilities, may be reinvested at the
sole discretion of the General Partner, during the Reinvestment Period.
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FEDERAL INCOME TAX CONSEQUENCES
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Summary
THIS SECTION ADDRESSES THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES OF AN
INVESTMENT IN THE PARTNERSHIP FOR AN INDIVIDUAL TAXPAYER. PROSPECTIVE INVESTORS
ARE URGED TO CONSULT THEIR TAX ADVISORS, SINCE TAX CONSEQUENCES WILL NOT BE THE
SAME FOR ALL INVESTORS AND ONLY BY A CAREFUL ANALYSIS OF A PROSPECTIVE
INVESTOR'S PARTICULAR TAX SITUATION CAN AN INVESTMENT IN THE PARTNERSHIP BE
EVALUATED PROPERLY. IN PARTICULAR, INVESTORS WHICH ARE TRUSTS, CORPORATIONS,
TAX-EXEMPT ORGANIZATIONS (SUCH AS EMPLOYEE BENEFIT PLANS), OR ANY OTHER
INVESTORS WHICH ARE NOT DOMESTIC INDIVIDUAL TAXPAYERS SHOULD UNDERSTAND THAT THE
TAX CONSEQUENCES OF AN INVESTMENT IN THE PARTNERSHIP ARE LIKELY TO DIFFER,
PERHAPS MATERIALLY, FROM THE PRINCIPAL TAX CONSEQUENCES OUTLINED IN THIS
SECTION. SEE "-- FOREIGN INVESTORS," "-- TAX TREATMENT OF CERTAIN TRUSTS AND
ESTATES," "-- TAXATION OF EMPLOYEE BENEFIT PLANS AND OTHER TAX- EXEMPT
ORGANIZATIONS" AND "-- CORPORATE INVESTORS." STATE AND LOCAL TAX CONSEQUENCES
MAY ALSO DIFFER FROM THE FEDERAL INCOME TAX CONSEQUENCES DESCRIBED BELOW. SEE
"-- STATE AND LOCAL TAXATION."
For federal income tax purposes, a partnership is treated as a "pass
through" entity as to which the partners, and not the partnership, pay tax on
partnership income and deduct losses incurred by the partnership. The Limited
Partners will report on their federal income tax returns their share of the
income, gain, loss and deduction incurred by the Partnership and pay the tax on
their share of any resulting taxable income generated by the Partnership. The
most substantial tax risk to the Limited Partners is that the Partnership will
not be treated as a partnership or will be treated as a "publicly traded
partnership." In either event, the Partnership would have to pay tax on
Partnership income and the Limited Partners may be subject to a further tax on
distributions from the Partnership. Tax Counsel are of the opinion that the
Partnership will be treated as a partnership and will not be treated as a
"publicly-traded partnership."
The General Partner expects that the items of income and loss generated by
the Partnership will be treated as either "passive" or "portfolio" income and
losses for federal income tax purposes. Limited Partners will not be able to use
any "passive" losses produced by the Partnership to offset either "ordinary
income" (such as salaries and fees) or "portfolio" income (such as dividend or
interest income).
The overwhelming majority of the Partnership's income is expected to be
generated from leasing activities. The General Partner expects its leases to be
treated as such for federal income tax purposes and will attempt to have its
leasing activities comply with any requirements necessary to achieve such
treatment. If the Service were successfully to challenge such tax treatment, the
amount and timing of taxable income or loss to the Limited Partners may be
adversely affected.
Opinion of Tax Counsel
The Partnership has obtained an opinion from Whitman Breed Abbott & Morgan,
Tax Counsel to the General Partner, concerning the Partnership's classification
as a partnership for federal income tax purposes. See "-- Classification as a
Partnership." The opinion states further that the summaries of federal income
tax consequences to individual holders of Units and to certain tax-exempt
entities, including qualified plans, set forth in this Prospectus under the
headings "RISK FACTORS--Federal Income Tax Risks" and "FEDERAL INCOME TAX
CONSEQUENCES" and "INVESTMENT BY QUALIFIED PLANS" have been reviewed by Tax
Counsel and that, to the extent such summaries contain statements or conclusions
of law, Tax Counsel are of the opinion that such statements or conclusions are
correct under the Internal Revenue Code, as presently in effect, and applicable
current and proposed Treasury Regulations, current published administrative
positions of the Service contained in Revenue Rulings and Revenue Procedures and
judicial decisions.
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The opinion of Tax Counsel is based upon facts described in this Prospectus
and upon facts that have been represented by the General Partner to Tax Counsel.
Any alteration of such facts may adversely affect the opinion rendered.
Furthermore, as noted above, the opinion of Tax Counsel is based upon existing
law, which is subject to change, either prospectively or retroactively.
Each prospective investor should note that the tax opinion represents only
Tax Counsel's best legal judgment and has no binding effect or official status
of any kind. There can be no assurance that the Service will not challenge the
conclusions set forth in Tax Counsel's opinion.
As of the date of the opinion of Tax Counsel, no Equipment had been
acquired by the Partnership. Therefore, it was impossible at that time to
opine on the application of the tax law to the specific facts which would
exist when a particular item of Equipment was acquired and placed under lease.
The issues on which Tax Counsel declined to express an opinion, and the likely
adverse federal income tax consequences resulting from an unfavorable resolution
of any of those issues, are set forth below in the following subsections of this
Section: "-- Allocations of Profits and Losses," "-- Tax Treatment of the
Leases," "-- Cost Recovery," and "-- Limitations on Cost Recovery Deductions."
Classification as a Partnership
The Partnership has not applied, and does not intend to apply, for a ruling
from the Service that it will be classified as a partnership and will not be
treated as an association taxable as a corporation for federal income tax
purposes.
The Partnership has received an opinion of Tax Counsel that, under current
federal income tax laws, case law and administrative regulations and published
rulings, the Partnership will be classified as a partnership and not as an
association taxable as a corporation. Unlike a tax ruling, however, an opinion
of Tax Counsel has no binding effect on the Service or official status of any
kind, and no assurance can be given that the conclusions reached in the opinion
would be sustained by a court if contested by the Service. In the absence of a
tax ruling, there can be no assurance that the Service will not attempt to treat
the Partnership as an association taxable as a corporation.
The opinion of Tax Counsel was based, in part, on representations of the
General Partner to the effect that: (1) the Partnership had been organized and
would be operated in substantial compliance with applicable state statutes
concerning limited partnerships, (2) the General Partner had and would
maintain throughout the life of the Partnership a net worth (not including its
interests in the Partnership or in other partnerships in which it is a general
partner) at all times equal to at least $1,000,000, (3) the Partnership's
activities would be conducted in accordance with the provisions of the
Partnership Agreement; (4) the interest of the General Partner in each material
item of Partnership income, gain, loss, deduction or credit would be equal to
at least one percent of each such item, except for temporary allocations, if
any, required under Section 704(b) or (c) of the Code; and (5) neither the
General Partner nor any person or group of persons who has a direct or indirect
interest in the General Partner (by reason of direct or indirect stock
ownership, a creditor-debtor relationship or an employer-employee relationship,
or otherwise) would at any time own, individually or in the aggregate, more
than one percent of the Units in the Partnership.
For purposes of issuing advance rulings as to the tax status of a limited
partnership that has a corporation as its sole general partner, the Service has
set forth certain guidelines, including a net worth requirement for the general
partner. The General Partner did not at the time of the opinion of Tax Counsel
and currently does not satisfy the Service's net worth requirement for an
advance ruling. Accordingly, the Partnership would be unable to obtain an
advance ruling that it will be classified as a partnership for federal income
tax purposes. The Partnership's inability to satisfy the Service's advance
ruling guidelines did not affect Tax Counsel's opinion as to the
classification of the Partnership as a partnership for federal income tax
purposes.
On May 10, 1996, the Service issued proposed regulations which would
provide a simplified elective regime for classifying certain business
organizations as partnerships or as associations taxable as a corporation. Under
these simplified rules, an entity such as the Partnership will be deemed to
constitute a partnership for federal income tax purposes unless it files an
election to be treated otherwise. Although these regulations are proposed to be
effective only for periods beginning on or after the date that final regulations
are published, they contain a transitional rule which provides that an existing
entity's claimed classification under the current rules will be respected for
all periods prior to this effective date if (i) the entity had a
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reasonable basis for its claimed classification, (ii) the entity claimed the
same classification for all prior periods, and (iii) neither the entity nor any
member was notified in writing on or before May 8, 1996 that the entity's
classification is under examination. The Partnership believes that it has a
reasonable basis for its claimed partnership classification for federal income
tax purposes, and has consistently claimed the same classification for all
periods of its existence. Further, the Partnership has not been notified that
such classification is under examination, and is not aware of any of the
Partners having received such notice. Accordingly, it appears that this
transitional rule, if ultimately adopted in final regulation form, will apply to
the Partnership.
If the Partnership is or at any time hereafter becomes taxable as a
corporation, it would be subject to federal income tax at the tax rates and
under the rules applicable to corporations generally. The major consequences of
being treated as a corporation would be that Partnership losses would not be
passed through to the Partners, and Partnership income could be subject to
double tax. Corporations are required to pay federal income taxes on their
taxable income and corporate distributions are taxable to investors at ordinary
income tax rates to the extent of the corporation's earnings and profits and are
not deductible by the corporation in computing its taxable income. If the
Partnership at any time is taxable as a corporation, and particularly should
that occur retroactively, the effects of corporate taxation could have a
substantial adverse effect on the after-tax investment return of investors.
Furthermore, a change in the tax status of the Partnership from a partnership to
an association taxable as a corporation would be treated by the Service as
involving an exchange. Such an exchange may give rise to tax liabilities for the
Limited Partners under certain circumstances (e.g., if the Partnership's debt
exceeds the tax basis of the Partnership's assets at the time of such exchange)
even though they might not receive cash distributions from the Partnership to
cover such tax liabilities.
Publicly Traded Partnerships
Certain limited partnerships may be classified as publicly traded
partnerships ("PTPs"). If a partnership is classified as a PTP (either at
inception or as a result of subsequent events) and derives less than 90% of its
gross income from qualified sources (such as interest and dividends, rents from
real property and gains from the sale of real property) it will be taxed as a
corporation. A PTP is defined as any partnership in which interests are traded
on an established securities market or are readily tradeable on a secondary
market or the substantial equivalent of such market. Units in the Partnership
are not currently traded on an established securities market (and the General
Partner does not intend to list the Units on any such market). Units are also
not readily tradeable on a secondary market nor are they expected to be in the
future. Therefore, the Partnership will be a PTP only if the Units become
"readily tradeable on the substantial equivalent of a secondary market."
Limited partnership interests may be "readily tradeable" if they are
regularly quoted by persons who are making a market in the interests or if
prospective buyers and sellers of the interests have a readily available,
regular and ongoing opportunity to buy, sell or exchange interests in a market
that is publicly available, in a time frame which would be provided by a market
maker, and in a manner which is comparable, economically, to trading on an
established securities market. Limited partnership interests are not "readily
tradeable" merely because a general partner provides information to partners
regarding partners' desires to buy or sell interests to each other or if it
arranges occasional transfers between partners.
The Service has provided certain safe harbor tests relating to PTP status
in Internal Revenue Service Notice 88-75. If the trading of interests in a
partnership falls into one of the safe harbor tests, then interests in the
partnership will not be considered to be traded on a substantial equivalent of a
secondary market and the partnership will not be treated as a PTP. Safe harbor
tests include the "5% safe harbor" test and the "2% safe harbor" test. A
partnership satisfies the "5% safe harbor" test if the partnership interests
that are sold or otherwise disposed of during the taxable year do not exceed 5%
of the total interests in partnership capital or profits. Certain transfers
("Excluded Transfers") are disregarded for the purpose of determining whether
interests in a partnership are to be considered readily tradeable on a secondary
market or the substantial equivalent thereof and are therefore excluded from the
"5% safe harbor" test, including transfers at death, transfers between certain
family members and block transfers (i.e., transfers by a single partner within a
30-day period of interests representing in the aggregate more than 5% of the
total interests in partnership capital or profits). In the case of the "2% safe
harbor" test, annual transfers of interests may not exceed 2% of the total
partnership capital or profits. In addition to Excluded Transfers, for the "2%
safe harbor" test, transfers pursuant to a "matching service" are not counted.
"Matching service" transfers include (1) a notice to potential buyers of the
availability of partnership interests if the sale of such interest is delayed at
least 15 days after the date the matching
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service is advised of such availability (the "contact date"); (2) closing of a
sale does not occur prior to 45 days after the contact date; (3) information
relating to interests for sale is removed from the matching service within 120
days after the contact date; (4) once removed, an investor's interest is not
re-entered into the matching service for at least 60 days; and (5) the total
partnership interests sold or disposed of (other than Excluded Transfers) during
the taxable year do not exceed 10% of the total interests in partnership capital
and profits. A failure to satisfy one of the specified safe harbor tests does
not give rise to a presumption that interests are readily tradeable on a
secondary market or the substantial equivalent thereof.
On November 29, 1995, the Service issued final regulations relating to
the definition of a PTP which would (1) modify the safe harbor tests relating to
PTP status which are contained in Internal Revenue Service Notice 88-75 and (2)
provide other guidance on the circumstances under which interests in a
partnership will be treated as publicly traded. Although these regulations are
generally effective for taxable years beginning after December 31, 1995, this
effective date is postponed for partnerships, such as the Partnership, that
were actively engaged in an activity before December 4, 1995 to the
partnership's first taxable year beginning after December 31, 2005 (or, if
earlier, the partnership's first taxable year beginning on or after it adds a
substantial new line of business after December 4, 1995). Partnerships that
qualify for this postponed effective date may continue to rely on the provisions
of Notice 88-75 for taxable years prior to the effective date of the final
regulations.
In lieu of the 5 % and 2% safe harbors contained in Notice 88-75, the
final regulations provide a more limited de minimis trading exclusion. The
final regulations provide that interests in a partnership are not readily
tradable on a secondary market or the substantial equivalent thereof if the
sum of the percentage interests in partnership capital or profits transferred
during the taxable year of the partnership does not exceed 2 percent of the
total interests in partnership capital or profits. Like notice 88-75, the final
regulations provide a list of excluded transfers that are disregarded in
determining whether interests in a partnership are readily tradeable on a
secondary market or the substantial equivalent thereof and, thus, for the
purpose of applying this 2% safe harbor. In addition, the final regulations
contain a qualified matching service exclusion that is similar to the
matching service exclusion set forth in Notice 88-75 but contain certain
modifications designed to prevent a qualified matching service from operating as
the substantial equivalent of a secondary market.
In the opinion of Tax Counsel, the Partnership will not be treated as a
PTP. For the purpose of this opinion, Tax Counsel has received a representation
from the General Partner that the Units will not be listed on a securities
exchange or NASDAQ and that, acting in accordance with Section 10.2(c) of the
Partnership Agreement, the General Partner will refuse to permit any assignment
of Units which violates the "safe harbor" tests described above.
See "TRANSFER OF UNITS--Restrictions on the Transfer of Units."
If the Partnership were classified as a PTP it would be treated for federal
income tax purposes as an association taxable as a corporation unless 90% or
more of its income were to come from the "qualified sources" discussed
above. The business of the Partnership will be the leasing and financing of
personal (not real) property. Thus, its income would not be from such qualified
sources. The major consequences of being treated as a corporation would be that
Partnership losses would not be passed through to the Partners, and Partnership
income could be subject to double tax. Corporations are required to pay federal
income taxes on their taxable income and corporate distributions are taxable to
investors at ordinary income tax rates to the extent of the corporation's
earnings and profits and are not deductible by the corporation in computing its
taxable income. If the Partnership at any time is taxable as a corporation, and
particularly should that occur retroactively, the effects of corporate taxation
could have a substantial adverse effect on the after-tax investment return of
investors. Furthermore, a change in the tax status of the Partnership from a
partnership to an association taxable as a corporation would be treated by the
Service as involving an exchange. Such an exchange may give rise to tax
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liabilities for the Limited Partners under certain circumstances (e.g., if the
Partnership's debt exceeds the tax basis of the Partnership's assets at the time
of such exchange) even though they might not receive cash distributions from the
Partnership to cover such tax liabilities. See "-- Classification as a
Partnership" and "-- Sale or Other Disposition of Partnership Interest" in this
Section.
Taxation of Distributions
If the Partnership is classified as a partnership for federal income tax
purposes, it will not be subject to federal income tax. Each Partner will be
required to report on his federal income tax return his share of the income,
gains, losses, deductions and credits of the Partnership for each year.
The Partnership will report its operations on an accrual basis for federal
income tax purposes using a December 31 fiscal year and will file an annual
partnership information return with the Service. Each Limited Partner will be
furnished with all information with respect to the Partnership necessary for
preparation of his federal income tax return within 75 days after each fiscal
year end.
Cash distributions to a Limited Partner in any year may be greater or less
than his share of the Partnership's taxable income for such year. Distributions
in excess of income will not be taxable to the Limited Partner but will first
reduce the tax basis for his Units (as increased or decreased by such Limited
Partner's allocable share of Partnership income or loss for the year in which
such distributions occur) to the extent thereof. Any cash distributions in
excess of his basis will then be taxable to such Limited Partner, generally as
capital gains, provided the Units are capital assets in the hands of the Limited
Partner.
To the extent that the principal amount of the Partnership's indebtedness
is repaid from cash derived from rentals or sales of the Partnership's
Equipment, the taxable income of a Limited Partner in the Partnership may exceed
the related cash distributions for such year. Depreciation or other cost
recovery with respect to Equipment may create a deferral of tax liability in
that larger cost recovery deductions in the early years may reduce or eliminate
the Partnership's taxable income in those early years of the Partnership's
operations. However, this deferral is offset in later years by smaller or no
depreciation or cost recovery deductions, while an increasingly larger portion
of the Partnership's income must be applied to reduce debt principal (thereby,
possibly generating taxable income in excess of cash distributions in those
years).
Miscellaneous itemized deductions of an individual taxpayer, which include
investment expenses (such as organizational expenses; see "-- Deductions for
Organizational and Offering Expenses; Start-Up Costs"), are deductible only to
the extent they exceed 2% of the taxpayer's adjusted gross income. Temporary
Regulations prohibit the indirect deduction through partnerships and other
pass-through entities of an amount that would not be deductible if paid by the
individual. Thus, these limitations may apply to certain of the Partnership's
expenses under certain circumstances.
Partnership Income Versus Partnership Distributions
The income reported each year by the Partnership to the Limited Partners
will not be equivalent to the cash distributions made by the Partnership to the
Limited Partners. The difference in the two amounts primarily arise from the
fact that depreciation and other cost recovery deductions reduce the
Partnership's income but not its cash available for distribution, and revenues
reinvested by the Partnership or used to repay debt principal will generally
constitute income even though not distributed to the Limited Partners. See "--
Taxation of Distributions" and "-- Cost Recovery."
Allocations of Profits and Losses
As a general rule, during the Reinvestment Period, 99% of the Partnership's
Profits (including, inter alia, taxable income and gains and items thereof, and
items of revenue exempt from tax) will be allocated among the Limited Partners
in proportion to their respective numbers of Units and 1% will be allocated to
the General Partner, until the later of such time as (1) each Limited Partner's
Adjusted Capital Contribution (i.e., such Limited Partner's Capital Contribution
reduced by distributions from the Partnership that are in excess of such Limited
Partner's 8% Cumulative Return) is reduced to zero and (2) each Limited Partner
has been allocated Profits equal to the sum of (i) such Limited Partner's
aggregate 8% Cumulative Return plus (ii) any Partnership Losses previously
allocated to such Limited Partner. Thereafter the Partnership's Profits will be
allocated after 90% among the Limited
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Partners in proportion to their respective numbers of Units and 10% to the
General Partner. During the Disposition Period, the Partnership's Profits first
will be allocated to all Partners in the amount necessary to eliminate any
deficits in their capital accounts, and, thereafter, will be allocated as
described above.
As a general rule, 99% of the Partnership's Losses (including, inter alia,
tax losses and deductions and items thereof, and items of expense that are not
deductible for federal income tax purposes) will be allocated among the Limited
Partners in proportion to their respective numbers of Units and 1% will be
allocated to the General Partner throughout the term of the Partnership .
A partner's share of any item of income, gain, loss, deduction, or credit
is determined by the partnership agreement, unless the allocation set forth
therein does not have "substantial economic effect." If an allocation made by a
partnership does not have substantial economic effect, the partner's share of
any such item will be determined in accordance with the partner's "interest in
the Partnership," taking into account all the facts and circumstances.
An allocation of partnership income, gain, loss, deduction, or credit
provided for in a partnership agreement will generally be upheld if: (a) the
allocation has "substantial economic effect," or (b) the partners can show that,
taking into account all facts and circumstances, the allocation is "in
accordance with the partner's interest in the partnership" or (c) the allocation
is "deemed" to be in accordance with the partner's interest in the partnership
under special rules requiring that partners receiving allocations of losses and
deductions which the partnership was able to generate as a result of, inter
alia, purchasing assets with borrowed money, be "charged back" income and gain
to the extent that such income and gain is generated by the assets that
generated such losses and deductions ("minimum gain charge-back").
The determination of substantial economic effect is to be made at the end
of each of the partnership's taxable years. In general, the regulations provide
that in order for an allocation to have "economic effect," among other things:
(a) the allocation must be appropriately reflected by an increase or decrease in
the dollar amount of the relevant partner's capital account; (b) liquidation
proceeds must be distributed in accordance with the partners' capital account
balances; and (c) either (i) upon liquidation of the partnership, any partner
with a deficit balance in his capital account must be required to restore the
deficit amount to the partnership, which amount will be distributed to partners
in accordance with their positive capital account balances or paid to creditors
or (ii) in the absence of an obligation to restore such deficit, the partnership
agreement must contain a "qualified income offset" provision pursuant to which a
partner who is allocated losses and deductions by the partnership which cause or
increase a capital account deficit must be allocated income and gains as quickly
as possible so as to eliminate any deficit balance in his capital accounts that
is greater than any amount that he is, in fact, obligated to restore. For this
purpose, capital accounts are required to be kept in accordance with certain tax
accounting principles described in the regulations.
The economic effect of an allocation is deemed to be "substantial" if there
is a reasonable possibility that the allocation will affect substantially the
amount to be received by the partners from the partnership, independent of tax
consequences. An economic effect is not considered substantial if, at the time
the allocation becomes part of the partnership agreement, (1) at least one
partner's after-tax consequences may, in present value terms, be enhanced
compared to such consequences if the allocation were not contained in the
partnership agreement and (2) there is a strong likelihood that the after-tax
consequences of no partner will, in present value terms, be substantially
diminished compared to such consequences if the allocation were not contained in
the partnership agreement. The regulations state that, in determining after-tax
consequences, the partner's tax attributes that are unrelated to the partnership
will also be taken into account.
The Partnership Agreement requires that (1) all allocations of revenues,
income, gain, costs, expenses, losses, deductions and distributions be reflected
by an increase or decrease in the relevant Partners' capital accounts, (2) all
Partners who are allocated losses and deductions generated by assets acquired
with borrowed money be charged back income and gains generated by such assets,
and (3) although no Limited Partner having a deficit balance in his Capital
Account after the final liquidating distribution will be required to make a cash
contribution to capital in the amount necessary to eliminate the deficit, the
Partnership Agreement does contain a provision for a qualified income offset.
The tax benefits of investment in the Partnership are largely dependent on
the Service's acceptance of the allocations provided under the Partnership
Agreement. The allocations in the Partnership Agreement are designed to have
"substantial economic effect." However, because the substantiality of an
allocation having economic effect
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depends in part on the interaction of such allocation with the taxable income
and losses of the Partners derived from other sources, Tax Counsel could
render no opinion on whether the allocations of Partnership income, gain, loss,
deduction or credit (or items thereof) under the Partnership Agreement will be
recognized, and no assurance can be given that the Service will not challenge
those allocations on the ground that they lack "substantial economic effect."
If, upon audit, the Service took the position that any of those allocations
should not be recognized and that position was sustained by the courts, the
Limited Partners could be taxed upon a portion of the income allocated to the
General Partner and all or part of the deductions allocated to the Limited
Partners could be disallowed.
The Partnership will determine its income or loss annually, based on a
fiscal year ending December 31 and using the accrual basis of accounting. For
purposes of allocating such income or loss (or items thereof) among the
Partners, the Partnership will treat its operations as occurring ratably over
each fiscal year. The Partnership's income and loss (or items thereof) for any
fiscal year will be allocated among the Limited Partners based on the number of
Units held by each Limited Partner throughout the fiscal year, or, if any
Partners hold their Units for less than the entire fiscal year, the portion of
the fiscal year during which each of such Partners held his Units.
Deductibility of Losses: Passive Losses, Tax Basis and "At Risk" Limitation
Passive Losses
The "passive activity" rules allow taxpayers to deduct their passive
activity losses only against their passive activity income. Passive activity
income does not include "portfolio income" such as interest, dividends and
royalties, and ordinary income such as salary and other compensation for
personal services. Therefore, taxpayers will generally be required to segregate
income and loss as follows: "active" trade or business income or loss; "passive
activity" income or loss; or "portfolio" income or loss. The passive activity
rules apply to individuals, estates, trusts, personal service corporations and
certain closely-held corporations (including S corporations).
A "passive activity" is one that involves the conduct of a trade or
business in which the taxpayer does not materially participate. All rental
activities generally are considered passive activities. Furthermore, the status
of limited partners is generally considered passive with respect to a
partnership's activities.
Accordingly, a Limited Partner's distributive share of Partnership income
or losses is expected to be characterized as passive activity income or loss
(except to the extent attributable to portfolio income or loss, such as interest
earned on Partnership funds pending their investment or reinvestment in
Equipment). Any loss suspended under the passive activity rules may be carried
forward indefinitely to offset passive activity income, if any, derived in
future years, including income generated from the activity producing the
suspended loss. Additionally, suspended losses may be deducted against
non-passive income when a taxpayer recognizes gain or loss upon a taxable
disposition of his entire interest in the passive activity. Finally, passive
income from the Partnership can be used to absorb losses from other passive
activities, subject to the rules regarding publicly-traded partnerships.
Losses from a "publicly traded partnership" are treated as passive activity
losses which may not be used to offset income from any other activity other than
income subsequently generated by the same "publicly traded partnership." Income
from a "publicly traded partnership" (to the extent not used to offset losses
from the same partnership) is generally treated as portfolio income. The
Partnership has been structured so as to avoid treatment as a "publicly traded
partnership." However, income or losses from the Partnership may not be used to
offset losses or income from a Limited Partner's interest in any other
partnerships which are treated as "publicly traded partnerships."
Tax Basis
A Limited Partner's initial tax basis in his Partnership interest will be
his capital contribution to the Partnership (i.e., the price he paid for his
Units) plus his share of Partnership indebtedness as to which no Partner is
personally liable. His tax basis will then be increased (or decreased) by his
share of income (or loss) and by his share of any increase (or decrease) of
Partnership indebtedness as to which no Partner is personally liable, and
reduced by the amount of any cash distributions. A Limited Partner may only
deduct his allocable share of Partnership losses, if any, to the extent of his
basis in his Partnership interest.
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"At Risk" Limitation
Generally, taxpayers (including certain closely-held corporations) may not
deduct losses incurred in most activities, including the leasing of equipment,
in an amount exceeding the aggregate amount the taxpayer is "at risk" in the
activity at the close of the Partnership's tax year. Generally, a taxpayer is
considered "at risk" with respect to an activity to the extent of money and the
adjusted basis of other property contributed to the activity.
A Limited Partner generally will not be "at risk", and will not be entitled
to increase the tax basis of his Units, with respect to recourse liabilities, if
any, of the Partnership (such as trade payables), and he will not be "at risk"
with respect to nonrecourse liabilities incurred by the Partnership (such as
amounts borrowed to finance purchases of Equipment), even though such
nonrecourse liabilities may increase the tax basis of the Units. Thus, a Limited
Partner's initial amount "at risk" effectively will be the amount of his capital
contribution to the Partnership. Such amount will be reduced subsequently by
cash distributions and loss allocations, and increased by allocations of
Partnership income.
The effect of the "at risk" rules generally is to limit the availability of
the Partnership's losses to offset a Limited Partner's income from other sources
to an amount equal to his capital contribution to the Partnership, less cash
distributions received and allocations of Partnership losses, plus any
Partnership income allocated to him. Therefore, although the Partnership may
generate tax losses for a taxable year, the Limited Partners who are subject to
the "at risk" rules will be unable to use such losses to the extent they exceed
such Limited Partner's "at risk" amount in computing taxable income for the
year. Any unused losses may be carried forward indefinitely until such Limited
Partners have sufficient "at risk" amounts in the Partnership to use the losses.
Deductions for Organizational and Offering Expenses; Start-Up Costs
The costs of organizing and syndicating the Partnership, as well as certain
"start-up" costs, may not be deducted currently and must be capitalized.
Section 709 of the Code provides that no current deduction is allowed to a
partnership for organizational expenses. "Organizational expenses" include legal
fees incident to the organization of the partnership, accounting fees for
establishing a partnership accounting system and necessary filing fees. Such
expenses may be written off ratably over a 60-month period.
Under Section 709, no deduction is allowed at all for any amounts paid or
incurred to promote or effect the sale of an interest in a partnership
("syndication expenses"). Syndication expenses may be deducted, if at all, only
upon liquidation of the Partnership, and then perhaps only as a capital loss.
"Syndication expenses" include brokerage fees (such as the Underwriting Fees and
Sales Commissions), registration fees, legal fees of underwriters and placement
agents and the issuer (the Partnership) for securities advice and advice
concerning the adequacy of tax disclosures in the offering documents, accounting
fees for the preparation of information to be included in the offering
materials, printing and reproduction costs and other selling or promotional
expenses.
The General Partner will endeavor to treat the organizational, start-up and
syndication costs of the Partnership in accordance with the foregoing rules.
However, because there is uncertainty about the distinction between trade or
business expenses that may be currently deducted and organizational, start-up
and syndication costs that must be capitalized and either amortized or deferred,
there can be no assurance that the Service will not challenge the current
deduction of certain expenses of the Partnership on the grounds that such
expenses are not currently deductible.
Tax Treatment of the Leases
The availability to Limited Partners of depreciation or cost recovery
deductions with respect to a particular item of Equipment depends, in part, upon
the classification of the particular lease of that Equipment as a "true lease"
of property under which the Partnership is the owner, rather than as a sale,
financing or refinancing arrangement for federal income tax purposes.
Whether the Partnership is the owner of any particular item of Equipment
and whether any of its Leases is a "true lease" for federal income tax purposes
depends upon questions of fact and law. The Service has published guidelines for
purposes of issuing advance rulings on the tax treatment of "leveraged" leases.
These guidelines do not purport to be substantive rules of law and are not
supposed to be applied in audit contexts (although they have
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been so applied in a number of instances).
The Partnership will not request, and probably would not be able to obtain,
a ruling from the Service that each of its Leases will qualify as such for tax
purposes, nor is it expected that the General Partner will obtain the advice of
Tax Counsel with respect to any particular Lease. Moreover, the General Partner
may determine that the Partnership should enter into specific Leases on such
terms that the tax treatment of the Leases would be questionable. Should a Lease
be recharacterized as a sale, financing, or refinancing transaction for income
tax purposes, a portion of the "rental" income of the Partnership equivalent to
interest on the amount "financed" under such Lease would be treated as interest
income, without offset for deductions for depreciation or cost recovery, and the
balance of such "rental" income would be a tax-free recovery of principal. The
general result would be increased amounts of taxable income in the initial years
of the Lease followed by decreased amounts of income in later years.
Whether each Partnership Lease will meet the relevant requirements and
whether the Partnership otherwise will be treated, for federal income tax
purposes, as the owner of each item of Equipment acquired by the Partnership,
will depend on the specific facts in each case, which are undeterminable because
they will occur in the future. Accordingly, Tax Counsel can render no opinion on
this issue.
Cost Recovery
In general, equipment of the sort anticipated to be acquired and leased by
the Partnership is classified as either "3-year property," "5-year property" or
"7-year property," and may be written off for federal income tax purposes
(through "cost recovery" or "depreciation" deductions) over its respective
recovery period using the 200 percent declining-balance depreciation method,
with a switch to the straight-line method at a time that maximizes the
deduction. A taxpayer may elect to use a straight-line method of depreciation. A
"half-year convention" (under which a half-year's depreciation is allowed in the
year that the property is placed in service) will generally apply in computing
the first year's depreciation. However, if more than 40% of the aggregate basis
of depreciable property is placed in service in the last three months of the tax
year, a "mid-quarter convention" must be used whereunder all property placed in
service during any quarter of a tax year is treated as placed in service at the
midpoint of such quarter.
The General Partner expects that the Partnership's Equipment will consist
primarily of 5-year property. The General Partner intends to claim cost recovery
deductions with respect to the Partnership's Equipment under the method(s)
deemed by the General Partner to be in the best interests of the Partnership,
which generally will be a straight-line method. Whether the Partnership will be
entitled to claim cost recovery deductions with respect to any particular item
of Equipment and the applicable method and convention to be used depends on a
number of factors, including whether the Leases are treated as true leases for
federal income tax purposes. See "-- Tax Treatment of the Leases" in this
Section.
The Partnership will allocate all or part of the Acquisition Fees to be
paid to the General Partner to the cost basis of Equipment on which cost
recovery is computed. No assurance can be given that the Service will agree that
the amount of such fee which is so allocated is properly attributable to
purchased Equipment such that cost recovery deductions based on such additional
basis are properly allowable. The Service might assert that the Acquisition Fees
are attributable to items other than the Equipment or are not subject to cost
recovery at all. If the Service were successful, the cost recovery deductions
available to the Partnership would be reduced accordingly. Because the
determination of this issue will depend on the magnitude and type of services
performed in consideration for these fees, which facts are presently
undeterminable and may vary in connection with each piece of Equipment acquired
by the Partnership, Tax Counsel is unable to render an opinion thereon.
Under certain circumstances, a taxpayer will be required to recover the
cost of an asset over a period longer than the period described above. Such
circumstances include the use of equipment predominantly outside the United
States and the use of equipment by a "tax-exempt entity." See "-- Limitations on
Cost Recovery Deductions."
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Limitations on Cost Recovery Deductions
Property Used Predominantly Outside the United States.
The Partnership may own and lease Equipment which is used predominantly
outside the United States. The cost of such Equipment must be written off for
federal income tax purposes using the straight line method of depreciation over
a period corresponding to the Equipment's "ADR Class Life" (which generally is
longer than the 3-year, 5-year or 7-year periods permitted for other property)
and the applicable half-year or mid-quarter convention. If the Equipment does
not have an ADR Class Life, a 12-year period must be used. See "-- Cost
Recovery."
However, certain types of property which are used predominantly outside the
United States nevertheless qualify for the normal rules discussed in "-- Cost
Recovery" (that is, a shorter depreciable life should be allowable). The
exceptions include the following: (1) aircraft registered in the United States
which are operated to and from the United States; (2) certain railroad rolling
stock which is used within and without the United States; (3) vessels documented
under the laws of the United States which are operated in the foreign or
domestic commerce of the United States; and (4) containers of a United States
person which are used in the transportation of property to and from the United
States. It is not presently determinable whether any Equipment owned and leased
by the Partnership will be in any of these categories.
Tax-Exempt Leasing.
The Partnership may lease Equipment to certain tax-exempt entities.
Property leased to tax-exempt entities ("tax-exempt use property") must be
written off for federal income tax purposes using the applicable half-year or
mid-quarter convention and applying the straight line method of depreciation
over a period corresponding to the longer of (i) the Equipment's "ADR Class
Life" (which generally is longer than the 3-year, 5-year or 7-year periods
permitted for other property) and (ii) or 125% of the term of the lease. The
term of a lease will include all options to renew as well as certain successive
leases, determined under all of the facts and circumstances. The use of property
by a tax-exempt entity at any point in a chain of use results in its
characterization as tax-exempt use property (e.g., a sublease by a
non-tax-exempt lessee to a tax-exempt sublessee).
The definition of a "tax-exempt entity" includes governmental bodies and
tax-exempt governmental instrumentalities, tax-exempt organizations, certain
foreign persons and entities, and certain international organizations. The term
also generally includes certain organizations which were tax-exempt at any time
during the five-year period ending on the date such organization first uses the
property involved. Foreign persons or entities are treated as tax-exempt
entities with respect to property if 50% or less of the income derived from the
leased property is subject to U.S. income tax.
The term "tax-exempt use property" does not include: (1) any portion of
property which is used predominantly by a tax-exempt entity (directly, or
through a partnership in which the tax-exempt entity is a partner) in an
unrelated trade or business if the income from such trade or business is
included in the computation of income subject to the tax on unrelated business
taxable income; (2) property leased to a tax-exempt entity under a "short-term
lease" (that is, a lease which has a term of less than the greater of one year
or 30% of the property's ADR Class Life, but in any case less than three years);
and (3) certain high-technology equipment.
If any property which is not otherwise tax-exempt use property is owned by
a partnership which has both a tax-exempt entity and a person who is not a
tax-exempt entity as partners, such tax-exempt entity's proportionate share of
such property is treated as tax-exempt use property unless certain specific
requirements relating to the allocation of profits and losses among the partners
are met. These requirements will not be met by the Partnership. However, taxable
income from the Partnership will probably be treated as unrelated business
taxable income in the hands of employee benefit plans and other tax-exempt
investors. See "-- Taxation of Employee Benefit Plans and Other Tax-Exempt
Organizations." Additionally, all or substantially all of the Partnership's
taxable income will be treated as United States source business income in the
hands of foreign Limited Partners for which no exemption is available. See "--
Foreign Investors." Therefore, it is not anticipated that the depreciation
limitations applicable to tax-exempt use property will be material as they
relate to Equipment owned by the Partnership and not leased to or used by a
tax-exempt entity.
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Deferred Payment Leases
Both the lessor and lessee under certain rental agreements ("Section 467
rental agreements") are required to accrue annually the rent allocable to the
taxable year, as well as interest on deferred rental payments, where actual
payment of the rent is deferred. A Section 467 rental agreement is defined as
any rental agreement for the use of tangible property which involves total
payments in excess of $250,000 and either (i) provides for increasing or
decreasing rental payments or (ii) provides for rentals payable beyond the close
of the calendar year following the year in which the associated use occurred. In
general, the rent allocable to a taxable year will be determined by reference to
the terms of the lease. However, if a Section 467 rental agreement is silent as
to the allocation of rents, or, if (1) a Section 467 rental agreement provides
for increasing or decreasing rents, (2) a principal purpose for providing for
increasing or decreasing rents is the avoidance of taxes and (3) the lease is
part of a leaseback transaction or is for a term in excess of 75% of certain
prescribed asset write-off periods, then rents will be deemed to accrue on a
level basis in amounts having a present value (as determined by utilizing a
discount rate equal to 110% of the "applicable federal rate," which is roughly
equivalent to the rate on certain U.S. government securities with comparable
maturities) equal to the present value (as so determined) of the aggregate
rentals actually payable under the agreement. The differences between the rent
actually paid and the recomputed rents are treated as loans bearing interest at
the applicable federal rate.
On June 3, 1996, the Service issued proposed regulations under Section 467
prescribing the manner in which these rules are to be applied, and extending
similar principles to situations involving prepaid rentals and other situations
where the amount paid under a lease agreement for the use of property decreases
during the term of the agreement. These regulations are generally proposed to be
effective for rental agreements entered into after the date such regulations are
published as final regulations in the Federal Register. With respect to
disqualified leasebacks and certain long-term agreements, however, the
regulations are currently proposed to be effective for rental agreements entered
into after June 3, 1996.
The Partnership may enter into transactions which will subject it to these
provisions. The application of such provisions could result in a mismatching
of income recognition by the Partnership and corresponding cash flow.
Sale or Other Disposition of Partnership Property
An individual's net long-term capital gains are taxed at 28% under
current law while the maximum tax rate for ordinary income is 39.6%. For
corporations, the highest maximum tax rate for both capital gains and ordinary
income is 35%.
Because of the different individual tax rates for net long-term capital
gains and ordinary income, the Internal Revenue Code provides various rules
concerning the characterization of income as ordinary or capital and for
distinguishing between long-term and short-term gains and losses. The
distinction between ordinary income and capital gains continues to be relevant
for other purposes as well. For example, the amount of capital losses which an
individual may offset against ordinary income is limited to $3,000 ($1,500 in
the case of a married individual filing separately).
Upon a sale or other disposition of the Equipment of the Partnership
(including a sale or other disposition resulting from destruction of the
Equipment or from foreclosure or other enforcement of a security interest in the
Equipment), the Partnership will realize gain or loss equal to the difference
between the basis of the Equipment at the time of sale or disposition and the
amount realized upon sale or disposition. The amount realized on a foreclosure
would include the face amount of the debt being discharged in a foreclosure,
even though the Partnership receives no cash. Since the Equipment constitutes
tangible personal property, upon a sale or other disposition of the Equipment,
all of the recovery deductions ("depreciation") taken by the Partnership will,
to the extent of any realized gain, be subject to recapture (i.e., treated by
the Partners as ordinary income). Recapture cannot be avoided by holding the
Equipment for any specified period of time. If the Partnership were to sell
property on an installment basis, all depreciation recapture income is
recognized at the time of sale, even though the payments are received in later
taxable years.
Any gain in excess of the amount of recapture will constitute gain or loss
described in Section 1231 of the Code if the property sold or otherwise disposed
of either was used in the Partnership's trade or business and held for more than
one year or was a capital asset which was held for more one year and not held
primarily for sale to
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customers. Under Section 1231 of the Code, if the sum of the gains on sale or
exchange of certain assets (generally, depreciable property, other than
inventory and literary properties) used in a trade or business and held for more
than one year and the gains from certain compulsory or involuntary conversions
exceed the losses on such sales, exchanges and conversions, such excess gains
will be treated as capital gains (subject to a special Section 1231 recapture
rule described below). If such losses exceed such gains, however, such excess
losses will be treated as ordinary losses.
There is a special rule under Section 1231 for casualty and theft losses on
depreciable business property and capital assets which are held for more than
one year and are held in connection with a trade or business or a transaction
entered into for profit. Such gains and losses must be separately grouped
together and if casualty gains equal or exceed casualty losses, then the gains
and losses are further grouped with other Section 1231 transactions to determine
whether there is an overall Section 1231 gain or loss. If the casualty or theft
losses exceed gains, the resulting net loss is not further grouped with other
Section 1231 transactions, but is, instead, excluded from Section 1231 and
treated as an ordinary loss.
Under a special "Section 1231 recapture" rule, net Section 1231 gain will
be treated as ordinary income to the extent of the taxpayer's "non-recaptured"
net Section 1231 losses. "Non-recaptured" net Section 1231 losses are any net
Section 1231 losses from the five preceding taxable years which have not yet
been offset against net Section 1231 gains in those years.
If, at the time of sale, the sold Equipment is a capital asset (i.e., was
not used in the Partnership's trade or business) and had been held by the
Partnership for one year or less, or if the Partnership is a "dealer" in
Equipment of the type sold, any gain or loss will be treated as short-term
capital gain or loss or ordinary income or loss, respectively.
Sale or Other Disposition of Partnership Interest
Gain or loss recognized by a Limited Partner on the sale of his interest in
the Partnership (which would include both the cash or other consideration
received by such Limited Partner from the purchaser as well as such Limited
Partner's share of any Partnership nonrecourse indebtedness) will, except as
noted below, be taxable as a long-term or short-term capital gain or loss,
depending on his holding period for his Units and assuming that his Units
qualify as capital assets in his hands. That portion of a selling Partner's gain
allocable to the Partnership's unrealized receivables (including depreciation
recapture) and inventory (the "ordinary income assets"), however, would be
treated as ordinary income. The term "ordinary income assets" would include
assets subject to recapture of recovery deductions determined as if a selling
Partner's proportionate share of the Partnership's properties had been sold at
that time. Thus, a substantial portion of a Limited Partner's gain upon the sale
of his Units may be treated as ordinary income. For a discussion of the
relevance of the distinction between ordinary income and capital gain, see "--
Sale or Other Disposition of Partnership Property" in this Section.
In connection with the sale or exchange of a Partnership interest, the
transferor must promptly notify the Partnership of the sale or exchange, and,
once the Partnership is notified, it is required to inform the Service (and the
seller and the buyer of the Partnership interest) on or before January 31
following the calendar year of sale) of the fair market value of the allocable
share of unrealized receivables and appreciated inventory attributable to the
Partnership interest sold or exchanged. Penalty for failure to file is $50 for
each failure, with a limit of $100,000. In addition, failure of the transferor
of a Partnership interest to notify the Partnership will result in a $50 penalty
per failure.
Treatment of Cash Distributions Upon Redemption
The redemption by the Partnership of all or a portion of a Limited
Partner's Units (see "SUMMARY OF THE PARTNERSHIP AGREEMENT") will be treated as
a sale or exchange of such Units by the Limited Partner and may generate taxable
income to him. The "amount realized" by such Limited Partner on such redemption
will equal the sum of the cash received by such Limited Partner, plus the
Limited Partner's share of the Partnership's liabilities.
Under Section 751(b) of the Code, in the event the Partnership distributes
cash to a Partner and, simultaneously, the Limited Partner's interest in the
Partnership's "ordinary income assets" is reduced, the Limited Partner will be
deemed to receive the cash, or a portion thereof, in exchange for the "ordinary
income assets." The
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Limited Partner will recognize ordinary income to the extent the portion of the
distribution that is attributable to the "ordinary income assets" exceeds such
Limited Partner's undivided interest in the Partnership's adjusted basis in such
assets prior to the exchange. The remainder of the distribution, if any, will be
treated in the same manner as a partnership distribution (i.e., the Limited
Partner will recognize income only to the extent the cash distributions exceed
such Limited Partner's adjusted basis in his Units). See "-- Taxation of
Distributions."
The Partnership anticipates that any redemption of a Limited Partner's
Units will be payable out of Cash From Operations and Cash From Sales that
otherwise would be available for distribution to all Limited Partners or for
reinvestment in additional Equipment. Accordingly, while any redemption of Units
by the Partnership would decrease the aggregate number of Units outstanding and
thereby proportionally increase each remaining Limited Partner's distributive
share of Partnership income, gain, loss and deductions and items thereof, it may
also reduce the total amount of cash which is available for investment or
reinvestment.
Gifts of Units
Generally, no gain or loss is recognized upon the gift of property.
However, a gift of Units (including a charitable contribution) may be treated
partially as a sale to the extent of the transferor's share of Partnership
nonrecourse liabilities, if any. Gain may be required to be recognized in an
amount equal to the difference between such nonrecourse debt share and that
portion of the basis in the Units allocable to the sale transaction. Charitable
contribution deductions for the fair market value of the Units will be reduced
by the amounts involved in such partial sale and, in any event, may be subject
to reduction in certain cases by the amount of gain which would be taxed as
ordinary income to the transferor on a sale of his Units.
Consequence of No Section 754 Election
Because of the complexities of the tax accounting required, the Partnership
does not presently intend to file elections under Section 754 of the Code to
adjust the basis of property in the case of transfers of Units. As a
consequence, a transferee of Units may be subject to tax upon a portion of the
proceeds of sales of the Partnership's property which represents, as to him, a
return of capital. This may affect adversely the price that potential purchasers
would be willing to pay for Units.
Tax Treatment of Termination of the Partnership Pursuant to the Partnership
Agreement
In the event of termination of the Partnership pursuant to the Partnership
Agreement (see "SUMMARY OF THE PARTNERSHIP AGREEMENT -- Duration of
Partnership") the General Partner is required to sell or dispose of the
Partnership assets, apply the proceeds and other Partnership funds to repayment
of the liabilities of the Partnership and distribute any remaining funds to the
Partners in accordance with their positive Capital Accounts balances. Sales and
other dispositions of the Partnership's assets would have the tax consequences
described in "-- Sale or Other Disposition of Partnership Property" in this
Section. Liquidating cash distributions in excess of a Partner's tax basis for
his Partnership interest generally would be taxable (generally as capital gain,
provided the Partnership interests constitute capital assets in the hands of the
Partners); cash distributions in amounts less than such basis may result in a
loss (generally a capital loss which would be subject to the general limitations
on deductibility of losses). The tax basis for the Units of a Limited Partner is
increased (or decreased) by his share of the Partnership's taxable income (or
loss) resulting from the sale or other disposition of Equipment. Hence, if the
Partnership's Equipment has been sold or disposed of under circumstances
resulting in a loss, distribution of the sale proceeds upon liquidation of the
Partnership may result in taxable gain to the Partners.
Audit by the Service
No tax rulings have been sought by the Partnership from the Service. While
the Partnership (and any joint ventures in which the Partnership participates)
intends to claim only such deductions and assert only such tax positions for
which there is a substantial basis, the Service may audit the returns of the
Partnership or any such joint venture and it may not agree with some or all of
the positions taken by the Partnership (or such joint venture).
An audit of the Partnership's information return may result in an increase
in the Partnership's income, the disallowance of deductions, and the
reallocation of income and deductions among the Partners. In addition, an audit
of the Partnership's information return may lead to an audit of income tax
returns of Limited Partners which could lead to adjustments of items unrelated
to the Partnership.
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Partners must report Partnership items on their individual returns in a
manner consistent with the partnership return unless the Partner files a
statement with the Service identifying the inconsistency or unless the Partner
can prove his return is in accordance with information provided by the
Partnership. Failure to comply with this requirement is subject to penalties and
may result in an extended statute of limitations. In addition, in most
circumstances the federal tax treatment of items of a partnership's income,
gain, loss, deduction and credit will be determined at the partnership level in
a unified partnership proceeding rather than in separate proceedings with its
partners.
Any audit of the Partnership will be at the Partnership level and the
Service will deal with the Partnership's "Tax Matters Partner" (the "TMP") with
respect to its tax matters. The General Partner is designated as the
Partnership's TMP in the Partnership Agreement. Only those Limited Partners
having at least a 1% interest in the Partnership (the "Notice Partners") will be
entitled to receive separate notice from the Service of the audit of the
Partnership's return and of the results thereof, and Limited Partners who have
an interest of less than 1% ("Non- notice Partners") will not be entitled to
notice from the Service. However, groups of Non-notice Partners who together own
a 5% or greater interest in the Partnership (a "Notice Group") may, by
notification to the Service, designate a member of their group to receive
Service notices. All Partners in the Partnership have the right to participate
in any audit of the Partnership. The General Partner is required to keep all
Limited Partners informed of any administrative and judicial proceedings
involving the tax matters of the Partnership. Also, the General Partner will
keep Non-notice Partners advised of any significant audit activities in respect
of the Partnership.
The TMP is authorized to enter into settlement agreements with the Service
that are binding upon Non-notice Partners, except Non-notice Partners who are
members of a Notice Group or who have filed a statement with the Service that
the TMP does not have authority to enter into settlement agreements that are
binding upon them. Any Partner will have the right to have any favorable
settlement agreement reached between the Service and any other Partners with
respect to an item of his Partnership applied to him.
The General Partner is empowered by the Partnership Agreement to conduct,
on behalf of the Partnership and Limited Partners, all examinations by tax
authorities relating to the Partnership, at the expense of the Partnership. See
"SUMMARY OF THE PARTNERSHIP AGREEMENT." A tax controversy could result in
substantial legal and accounting expense being charged to the Partnership
subject to the controversy, irrespective of the outcome.
Alternative Minimum Tax
An alternative minimum tax ("AMT") is payable by taxpayers to the extent it
exceeds the taxpayer's regular federal income tax liability for the year. For
noncorporate taxpayers, the AMT is imposed on "alternative minimum taxable
income" ("AMTI") in excess of an exemption amount. The AMTI is based on the
taxpayer's taxable income, as recomputed with certain adjustments and increased
by certain "tax preference" items. A two-tiered AMT rate schedule for
noncorporate taxpayers exists consisting of a 26% rate (which applies to the
first $175,000 ($87,500 for married individuals filing separately) of a
taxpayer's AMTI in excess of the exemption amount) and a 28% rate (which applies
to the amount in excess of $175,000 ($87,500 for married individuals filing
separately) over the exemption amount). The exemption amount is $45,000 for
married individuals filing jointly, $33,750 for single persons, and $22,500 for
estates, trusts, and married individuals filing separately.
The principal adjustments include the following: (1) depreciation
deductions cannot exceed those computed under the 150% declining balance method
and an extended recovery period, (2) mining exploration and development costs
are capitalized and amortized ratably over ten years, (3) magazine circulation
expenditures are amortized over three years, (4) research and experimental
expenditures are amortized over ten years, (5) miscellaneous itemized deductions
are not allowed, (6) medical expenses are deductible only to the extent they
exceed 10% of adjusted gross income, (7) state and local property and income
taxes are not deductible, (8) interest deductions are subject to further
restrictions, (9) the standard deduction and personal exemptions are not
allowed, (10) only "alternative tax net operating losses" are deductible and
(11) the excess of the fair market value of stock received on the exercise of an
incentive stock option over the exercise price must be included as income.
The principal "tax preference" items which must be added to taxable income
for AMT purposes include the following: (1) the excess of depletion over the
adjusted basis of the property at the end of the year, (2) the excess of
intangible drilling costs over 65% of net oil and gas income, (3) the excess of
the reserve for bad debt deductions
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over the deduction that would have been allowable based on actual experience
and (4) private activity bond interest .
The General Partner does not anticipate that any significant "tax
preference" items will be generated by the Partnership. The principal
Partnership items which may have an impact on a particular Partner's AMTI are
interest and depreciation. It is anticipated that the Partnership will generally
depreciate its Equipment using the straight line method. Therefore, the
Partnership's activities should not give rise to any significant depreciation
adjustments for purposes of computing the AMTI of the Limited Partners.
Prospective investors should be aware, however, that for purposes of computing
AMTI, interest incurred to acquire or maintain an ownership interest in a
passive activity (such as the Partnership) is deductible only to the extent that
such interest, when added to the passive activity income or loss of the taxpayer
(computed with the appropriate alternative minimum tax adjustments and tax
preferences), does not result in a passive activity loss (as so computed).
Accordingly, Limited Partners who borrow money and incur interest expense in
connection with their purchase of Units may only be allowed a limited deduction
for such interest in computing their AMTI.
The rules relating to the alternative minimum tax for corporations are
different than those just described. Corporations contemplating purchase of the
Units should consult their tax advisors as to the possible alternative minimum
tax consequences of an investment in the Partnership.
Interest Expense
In general, interest expense incurred in connection with investment
activities is deductible only against investment income. Interest expense
incurred in connection with investments in "passive" activities (such as the
Partnership and other limited partnerships) may only be deducted in accordance
with the rules applicable to losses derived from passive activities. See "--
Deductibility of Losses: Passive Losses, Tax Basis and 'At Risk' Limitation."
Interest expense incurred by the Partnership probably will be treated as
"passive" activity interest, as would interest expense incurred by a Limited
Partner on money he borrows to purchase or carry his interest in the Partnership
but may be deductible against related income of the Partnership allocable to the
Units purchased with such borrowed money.
The Partnership may enter into transactions involving the prepayment of
interest or the payment of "points," commitment fees and loan origination or
brokerage fees. In general, prepaid interest, "points" and similar costs may not
be deductible currently and, instead, may have to be capitalized and written off
over the life of the related loan. The General Partner will treat such costs in
accordance with the applicable requirements.
Self-Employment Income and Tax
A Limited Partner's net earnings from self-employment for purposes of the
Social Security Act and the Code will not include his distributive share of any
item of income or loss from the Partnership, other than any guaranteed payments
made to such Limited Partner for services rendered to or on behalf of the
partnership.
Maximum Individual Tax Rates
The federal income tax on individuals applies at a 15%, 28%, 31% and 36%
rate. In addition, the Code imposes a 10% surtax on taxable income in excess of
$250,000 ($125,000 for married individuals filing separately), which raises the
tax rate for taxpayers in this bracket to 39.6%. The personal exemption, which
is $2,500 for 1996, is reduced by 2% for each $2,500 by which an individual's
adjusted gross income exceeds $150,000 for joint returns, $125,000 for heads of
household, $100,000 for single taxpayers, and $75,000 for married persons filing
separately. An individual is required to reduce the amount of certain of his
otherwise allowable itemized deductions by 3% of the excess of his adjusted
gross income over $100,000 or $50,000 in the case of married taxpayers filing
separately . The dollar figures set forth in this paragraph are subject to
appropriate adjustment to reflect post-1991 inflation.
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Section 183
Section 183 of the Code limits deductions attributable to "activities not
engaged in for profit." Section 183 contains a presumption that an activity is
engaged in for profit if the gross income from the activity exceeds the
deductions from the activity in at least three out of the five consecutive years
ending with taxable year at issue. The General Partner intends to operate the
Partnership for the purpose of providing an economic profit and anticipates that
the Partnership will have sufficient gross income to entitle it to the benefit
of the presumption referred to above. If the Partnership's activities were
treated as not being engaged in for profit, any deductions of the Partnership in
excess of its gross income might be permanently disallowed.
Registration, Interest, and Penalties
Tax Shelter Registration
"Tax shelters" are required to be registered with the Service. Under
Temporary Treasury Regulations, an investment constitutes a "tax shelter" for
this purpose if a potential investor could reasonably infer from representations
made in connection with the sale of the investment that the aggregate amount of
deductions and other tax benefits potentially allowable with respect to the
investment for any of the first five years will be greater than twice the amount
to be invested. The Partnership is a "tax shelter" under this definition because
the term "amount of deductions" means gross deductions and gross income expected
to be realized by the Partnership is not counted. The Temporary Treasury
Regulations also provide that a tax shelter is not required to be registered
initially if it is a "projected income investment." A projected income
investment is any tax shelter that is not expected to reduce the cumulative tax
liability of any investor as of the close of any of the first five years of the
investment. The General Partner expects, based on economic and business
assumptions which the General Partner believes to be reasonable, that no Limited
Partner's cumulative tax liability will be reduced during any of the first five
years after the effective date of this Prospectus by reason of an investment in
the Partnership. There can be no assurance, however, that unexpected economic or
business developments will not cause Limited Partners to incur tax losses from
the Partnership, with the result that their cumulative tax liability during the
first five years might be reduced. Therefore, the General Partner has registered
the Partnership as a "tax shelter" with the Service. A Tax Shelter Registration
Number is expected to be received shortly. However, for so long as the
Partnership is a projected income investment, the Limited Partners are not
required to include the Partnership's registration number on their tax returns.
Even though the Partnership may be a projected income investment, the
Partnership will nonetheless be required to maintain a list identifying each
person who has been sold a Unit and containing such other information as
required by the regulations. This list must be made available to the Service
upon request.
In the event the Partnership ceases to be a projected income investment,
the Partnership and the Limited Partners will become subject to all remaining
requirements applicable to tax shelters. This means, among other things, that
the Limited Partners will be required to include the Partnership's registration
number on their tax returns.
Pursuant to the Temporary Treasury Regulations, the General Partner is
required to notify the Limited Partners that the Partnership is no longer a
projected income investment and to inform each Limited Partner that he must
report the Partnership's registration number on any return on which he claims a
deduction, credit or other tax benefit from the Partnership.
The General Partner is required by the Temporary Treasury Regulations to
include the following legend herein: "ISSUANCE OF A REGISTRATION NUMBER DOES NOT
INDICATE THAT THIS INVESTMENT OR THE CLAIMED TAX BENEFITS HAVE BEEN REVIEWED,
EXAMINED OR APPROVED BY THE INTERNAL REVENUE SERVICE."
Interest on Underpayments
The interest that taxpayers must pay for underpayment of federal taxes is
the Federal short-term rate plus three percentage points, compounded daily. The
Federal short-term rate is set quarterly by the Treasury based on the yield of
U.S. obligations with maturities of three years or less.
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Penalty for Substantial Understatements
The Code also contains a penalty for substantial understatement of federal
income tax liability equal to 20% of the amount of the understatement. An
understatement occurs if the correct tax for the year (as finally determined
after all administrative and judicial proceedings) exceeds the tax liability
actually shown on the taxpayer's returns for the year. An understatement on an
individual's return will be considered substantial for purposes of the penalty
if it exceeds both (a) 10% of the correct tax, and (b) $5,000. The imposition of
this penalty may be avoided however if, in the case of any item that is not
attributable to a "tax shelter," (a) there was substantial authority for the
taxpayer's treatment of the item, or (b) the relevant facts affecting the item's
tax treatment were adequately disclosed in the taxpayer's return provided that
the taxpayer had a "reasonable basis" for the tax treatment of such item. In the
case of an item that is attributable to a "tax shelter," the penalty may be
avoided if (a) there was substantial authority for the taxpayer's treatment of
the item, and (b) the taxpayer reasonably believed that his treatment of the
item on the return was more likely than not the proper treatment.
For purposes of the understatement penalty, "tax shelter" includes a
partnership whose principal purpose is "the avoidance or evasion of Federal
income tax." The Partnership should not be treated as a "tax shelter" within the
meaning of this provision primarily because (1) the Partnership's objectives
include the provision of cash distributions (real economic gain) to the
investors throughout the operating life of the Partnership, and (2) claiming the
tax benefits associated with the ownership of equipment would be consistent with
Congressional purpose in providing those benefits.
State and Local Taxation
In addition to the federal income tax consequences described above,
prospective investors should consider potential state and local tax consequences
of an investment in the Partnership. A Limited Partner's share of the taxable
income or loss of the Partnership generally will be required to be included in
determining reportable income for state or local tax purposes in the
jurisdiction in which the Limited Partner is a resident. In addition, other
states in which the Partnership owns Equipment or does business may require
nonresident Limited Partners to file state income tax returns and may impose
taxes determined with reference to their pro rata share of the Partnership's
income derived from such state. Any tax losses generated through the Partnership
from operations in such states may not be available to offset income from other
sources in other states. To the extent that a nonresident Limited Partner pays
tax to a state by virtue of the operations of the Partnership within that state,
he may be entitled to a deduction or credit against tax owed to his state of
residence with respect to the same income. Payment of state and local taxes will
constitute a deduction for federal income tax purposes, assuming that the
Limited Partner itemizes deductions. Each investor is advised to consult his own
tax adviser to determine the effect of state and local taxes, including gift and
death taxes as well as income taxes, which may be payable in connection with an
investment in the Partnership.
Foreign Investors
Foreign investors in the Partnership should be aware that, for the most
part, the income of the Partnership will consist of trade or business income
which is attributable to or effectively connected with a fixed place of business
("permanent establishment") maintained by the Partnership in the United States.
As such, Partnership income will be subject to U.S. taxation in the hands of
foreign investors and it is unlikely that any exemption will be available under
any applicable tax treaty. Such foreign investors may be required to file a U.S.
federal income tax return to report their distributive shares of Partnership
income, gains, losses and deductions. Additionally, the Partnership is required
to withhold tax on each such foreign investor's distributive share of income
from the Partnership (whether or not any cash distributions are made); any
amount required to be withheld will be deducted from distributions otherwise
payable to such foreign investor and such foreign investor will be liable to
repay the Partnership for any withholdings in excess of the distributions to
which he is otherwise entitled. Foreign investors must consult with their tax
advisors as to the applicability to them of these rules and as to the other tax
consequences described herein.
Tax Treatment of Certain Trusts and Estates
The tax treatment of trusts and estates can differ somewhat from the tax
treatment of individuals. Investors which are trusts and estates should consult
with their tax advisors as to the applicability to them of the tax rules
discussed herein.
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Trusts that purchase Units in the Partnership should be aware that the
Treasury Regulations provide that in certain circumstances trusts which engage
in a trade or business may be taxed as corporations. In this connection, the
courts have held that limited partners (whether trusts or otherwise) are deemed
to be engaged in the trade or business in which the partnership itself is
engaged. The Partnership probably will be treated as engaging in a trade or
business. Accordingly, a Limited Partner which is a trust may be subject to
trust level tax at corporate tax rates, whether or not the income is distributed
to the beneficiaries. This is a question of fact as to each such trust, and Tax
Counsel are not able to express an opinion thereon.
Taxation of Employee Benefit Plans and Other Tax-Exempt Organizations
Employee benefit plans, such as qualified pension and profit sharing plans,
Keogh plans, and IRAs, generally are exempt from federal income tax, except to
the extent their "unrelated business taxable income" exceeds $1,000 in any
taxable year. The excess "unrelated business taxable income" is subject to an
unrelated business income tax. Other charitable and tax-exempt organizations are
likewise subject to the unrelated business income tax. Tax-exempt investors in
the Partnership may be deemed to be engaged in the business carried on by the
Partnership and, therefore, subject to the unrelated business income tax. Such
investors must consult with tax advisors as to the tax consequences to them of
investing in the Partnership.
Corporate Investors
The federal income tax consequences to investors which are corporations
(other than certain closely-held corporations, which are subject to the "at
risk" and "passive loss" limitations discussed herein) may differ materially
from the tax consequences discussed herein, particularly as they relate to the
alternative minimum tax. Such investors must consult with tax advisors as to the
tax consequences to them of investing in the Partnership.
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INVESTMENT BY QUALIFIED PLANS
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Fiduciaries under ERISA
A fiduciary of a Qualified Plan is subject to certain requirements under
ERISA, including the duty to discharge its responsibilities solely in the
interest of, and for the benefit of, the Qualified Plan's participants and
beneficiaries. A fiduciary is required to (a) perform its duties with the skill,
prudence and diligence of a prudent man acting in like capacity, (b) diversify
investments so as to minimize the risk of large losses and (c) act in accordance
with the Qualified Plan's governing documents.
Fiduciaries with respect to a Qualified Plan include, for example, any
persons who exercise any authority or control respecting the management or
disposition of the funds or other property of the Qualified Plan. For example,
any person who is responsible for choosing a Qualified Plan's investments, or
who is a member of a committee that is responsible for choosing a Qualified
Plan's investments, is a fiduciary of the Qualified Plan. Also, an investment
professional who renders, or who has the authority or responsibility to render,
investment advice with respect to the funds or other property of a Qualified
Plan may be a fiduciary of the Qualified Plan, as may any other person with
special knowledge or influence with respect to a Qualified Plan's investment or
administrative activities.
IRAs generally are not subject to ERISA's fiduciary duty rules. In
addition, where a participant in a Qualified Plan exercises control over such
participant's individual account in the Qualified Plan in a "self-directed
investment" arrangement that meets the requirements of Section 404(c) of ERISA,
such Participant (rather than the person who would otherwise be a fiduciary of
such Qualified Plan) will generally be held responsible for the consequences of
his investment decisions under interpretations of applicable regulations of the
Department of Labor. Certain Qualified Plans of sole proprietorships,
partnerships and closely-held corporations of which the owners of 100% of the
equity of such business and their respective spouses are the sole participants
in such plans at all times are generally not subject to ERISA's fiduciary duty
rules, although they are subject to the Code's prohibited transaction rules,
explained below.
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A person subject to ERISA's fiduciary rules with respect to a Qualified
Plan (or, where applicable, IRA) should consider those rules in the context of
the particular circumstances of the Qualified Plan (or IRA) before authorizing
an investment of a portion of the Qualified Plan's (or IRA's) assets in Units.
Prohibited Transactions Under ERISA and the Code
Section 4975 of the Code (which applies to all Qualified Plans and IRAs)
and Section 406 of ERISA (which does not apply to IRAs or to certain
transactions with respect to Qualified Plans that, under the rules summarized
above, are not subject to ERISA's fiduciary rules) prohibit Qualified Plans and
IRAs from engaging in certain transactions involving "plan assets" with parties
that are "disqualified persons" under the Code or "parties in interest" under
ERISA ("disqualified persons" and "parties in interest" are hereinafter referred
to as "Disqualified Persons"). Disqualified Persons include, for example,
fiduciaries of the Qualified Plan or IRA, officers, directors and certain
shareholders and other owners of the company sponsoring the Qualified Plan and
natural persons and legal entities sharing certain family or ownership
relationships with other Disqualified Persons. In addition, the beneficiary -
"owner" or "account holder" - of an IRA is generally considered to be a
Disqualified Person for purposes of the prohibited transaction rules.
"Prohibited transactions" include, for example, any direct or indirect
transfer to, or use by or for the benefit of, a Disqualified Person of a
Qualified Plan's or IRA's assets, any act by a fiduciary that involves the use
of a Qualified Plan's or IRA's assets in the fiduciary's individual interest or
for the fiduciary's own account, and any receipt by a fiduciary of consideration
for his or her own personal account from any party dealing with a Qualified Plan
or IRA in connection with a transaction involving the assets of the Qualified
Plan or the IRA. Under ERISA, a Disqualified Person that engages in a prohibited
transaction will be required to disgorge any profits made in connection with the
transaction and will be required to compensate any Qualified Plan that was a
party to the prohibited transaction for any losses sustained by the Qualified
Plan. In addition, ERISA authorizes additional penalties and further relief from
such transaction. Section 4975 of the Code imposes excise taxes on a
Disqualified Person that engages in a prohibited transaction with a Qualified
Plan or IRA. Prohibited transactions subject to these sanctions will generally
be required to be "unwound" to avoid incurring additional penalties.
In order to avoid the occurrence of a prohibited transaction under Section
4975 of the Code and/or Section 406 of ERISA, Units may not be purchased by a
Qualified Plan or IRA from assets as to which the General Partner or any of its
Affiliates are fiduciaries. Additionally, fiduciaries of Qualified Plans and
IRAs should be alert to the potential for a prohibited transaction in the
context of a particular Qualified Plan's or IRA's decision to purchase Units if,
for example, such purchase were to constitute a use of plan assets by or for the
benefit of, or a purchase of Units from, a Disqualified Person.
Plan Assets
If the Partnership's assets were determined under ERISA or the Code to be
"plan assets" of Qualified Plans and/or IRAs holding Units, fiduciaries of such
Qualified Plans and IRAs might under certain circumstances be subject to
liability for actions taken by the General Partner or its Affiliates. In
addition, certain of the transactions described in this Prospectus in which the
Partnership might engage, including certain transactions with Affiliates, might
constitute prohibited transactions under the Code and ERISA with respect to such
Qualified Plans and IRAs, even if their acquisition of Units did not originally
constitute a prohibited transaction. Moreover, fiduciaries with responsibilities
to Qualified Plans and/or IRAs subject to ERISA's fiduciary duty rules might be
deemed to have improperly delegated their fiduciary responsibilities to the
General Partner in violation of ERISA.
Although under certain circumstances ERISA and the Code, as interpreted by
the Department of Labor ("DOL") in currently effective regulations, generally
apply a "look-through" rule under which the assets of an entity in which a
Qualified Plan or IRA has made an equity investment may constitute "plan
assets," the applicable regulations exempt investments in certain
publicly-registered securities and in certain operating companies, as well as
investments in entities not having significant equity participation by benefit
plan investors, from the application of the "look-through" principle. Under the
DOL's current regulations governing the determination of what constitutes the
assets of a Qualified Plan or IRA in the context of investment securities such
as the Units, an undivided interest in the underlying assets of a collective
investment entity such as the Partnership will not be treated as "plan assets"
of Qualified Plan or IRA investors if (i) the securities are "publicly offered,"
(ii) less than 25% by value of each class of equity securities of the entity is
owned by Qualified Plans, IRAs, and certain other employee benefit plans or
(iii) the entity is an "operating company."
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In order to qualify for the publicly-offered exception described above, the
securities in question must be freely transferable, owned by at least 100
investors independent of the issuer and of one another, and either (a) part of a
class of securities registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934 or (b) sold as part of a public offering pursuant to an
effective registration statement under the Securities Act of 1933 and registered
under the Securities Exchange Act of 1934 within 120 days (or such later time as
may be allowed by the Securities and Exchange Commission) after the end of the
issuer's fiscal year during which the offering occurred. Units will be sold as
part of an offering registered under the Securities Act of 1933. Further, the
General Partner has represented (a) that it intends to register the Units in the
Partnership under the Securities Exchange Act of 1934 in compliance with the
DOL's requirements and (b) that it is highly likely that substantially more than
100 independent investors will purchase and hold Units in the partnership.
Accordingly, the determination of whether the Units will qualify for the
publicly-offered exception will depend on whether they are freely transferable
within the meaning of the DOL regulations. Although whether a security is freely
transferable is a factual determination, the limitations on the assignment of
Units and substitution of Limited Partners contained in Sections 10.2, 10.3 and
10.4 of the Partnership Agreement appear to fall within the scope of certain
restrictions enumerated in the DOL's current regulations that ordinarily will
not affect a determination that securities are freely transferable when the
minimum investment, as in the case of the Units, is $10,000 or less. Because,
however, the effect of the restrictions on transferability of Units on the
ultimate determination of whether Units are "freely transferable" for purposes
of the DOL's regulations (as well as the determination of whether the
Partnership will be an "operating company" under the alternative DOL exemption
set forth above) is not certain, the General Partner has decided to rely on the
25% ownership exemption described above for these purposes. Consequently,
pending favorable clarification of such matters from the DOL, in order to ensure
that the assets of the Partnership will not constitute "plan assets" of
Qualified Plan and IRA Unitholders, the General Partner will take such steps as
are necessary to ensure that ownership of Units by Qualified Plans, IRAs, and
certain other employee benefit plan investors is at all times less than 25% of
the total value of outstanding Units. In calculating this limit, the General
Partner will, as provided in the DOL's regulations, disregard the value of any
Units held by a person (other than a Qualified Plan, IRA, or certain other
employee benefit plans) who has discretionary authority or control with respect
to the assets of the Partnership, or any person who provides investment advice
for a fee (direct or indirect) with respect to the assets of the Partnership, or
any affiliate of any such a person. (See "Investor Suitability Standards.")
Whether the assets of the Partnership will constitute "plan assets" is a factual
issue which may depend in large part on the General Partner's ability throughout
the life of the Partnership to satisfy the 25% ownership exemption. Accordingly,
tax counsel are unable to express an opinion on this issue.
Other ERISA Considerations
In addition to the above considerations in connection with the "plan asset"
question, a fiduciary's decision to cause a Qualified Plan or IRA to acquire
Units should involve, among other factors, considerations that include whether
(a) the investment is in accordance with the documents and instruments governing
the Qualified Plan or IRA, (b) the purchase is prudent in light of the
diversification of assets requirement for such Plan and the potential
difficulties that may exist in liquidating Units, (c) the investment will
provide sufficient cash distributions in light of the Qualified Plan's likely
required benefit payments and other needs for liquidity, (d) the investment is
made solely in the interests of plan participants, (e) the evaluation of the
investment has properly taken into account the potential costs of determining
and paying any amounts of federal income tax that may be owed on unrelated
business taxable income derived from the Partnership, and (f) the fair market
value of Units will be sufficiently ascertainable, and with sufficient
frequency, to enable the Qualified Plan or IRA to value its assets in accordance
with the rules and policies applicable to the Qualified Plan or IRA.
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CAPITALIZATION
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The capitalization of the Partnership as of the date of this Prospectus and
as adjusted to reflect the sale of the Minimum and Maximum Offering of Units is
as follows:
As of
November 9, Minimum Offering Maximum
Offering
1995 (1) (12,000 Units) (1,000,000 Units)
-------------- ---------------- ------------------
General Partner's
Capital Contribution (1) $ 1,000 $ 1,000 $ 1,000
Limited Partner's
Capital Contribution (2) 1,000(1) 1,200,000 100,000,000
----- --------- -----------
Total Capitalization $ 2,000 $ 1,201,000 $ 100,001,000
Less Estimated
Organizational and
Offering Expenses (3) - (162,000) (13,500,000)
---------- -------------- --------------
Net Capitalization $ 2,000 $ 1,039,000(2) $ 86,501,000(2)
======== ============== ==============
(1) The Partnership was originally capitalized by the contribution of $1,000 by
the General Partner and $1,000 by the Original Limited Partner.
(2) On January 19, 1996 (the "Initial Closing Date"), the Original Limited
Partner withdrew from the Partnership and received a return of his
original Capital Contribution . The Partnership began operations as of
January 19, 1996 with initial capitalization of $2,280,828 (after payment of
Sales Commissions, Underwriting Fees and O & O Expense Allowance totalling
$355,967--or 13.5% of Gross
Offering Proceeds).
(3) The amounts shown reflect the Gross Offering Proceeds from sale of Units at
$100.00 per Unit before deduction of (a) Sales Commissions in amount equal
to 8.0% of Gross Offering Proceeds (or $8 per Unit sold, which will be paid
except in the case of Units sold to Affiliated Limited Partners), (b)
Underwriting Fees equal in amount to 2.0% of Gross Offering Proceeds (or
$2.00 per Unit sold) and (c) the O & O Expense Allowance (without regard to
such actual expenses) of 3.5% of Gross Offering Proceeds (or $3.50 per Unit
sold) for a total of all such items of 13.5% of Gross Offering Proceeds (or
$13.50 per Unit) for all Units sold to Limited Partners who are members of
the general public. (No fees or compensation were payable with regard to
either the General Partner's or Original Limited Partner's original
subscription payment).
The maximum dollar amount of such items of compensation payable to the
General Partner, its Affiliates and non-affiliated Selling Dealers will
equal $162,000 for the Minimum Offering of 12,000 Units and $13,500,000 for
the Maximum Offering of 1,000,000 Units, in each case computed as if all
Units are sold to the general public without Volume Discounts or purchases
by Affiliated Limited Partners. Affiliated Limited Partners may acquire
Units (for investment purposes only) on a net of Sales Commissions basis for
a price of $92.00 per Unit (and a proportionate Net Unit Price for each
fractional Unit purchased). In addition, investors who purchase 2,500 or
more Units are entitled to volume discounts. To the extent that Units are
purchased by such Affiliated Limited Partners or in quantities that entitle
the purchaser to a volume discount, both the total Capital Contributions of
the Limited Partners and the Partnership's obligation to pay Sales
Commissions will be reduced accordingly. See "SOURCES AND USES OF OFFERING
PROCEEDS AND RELATED INDEBTEDNESS."
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MANAGEMENT'S DISCUSSION OF FINANCIAL CONDITION
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Liquidity and Capital Resources
As discussed above in footnote (2) under "CAPITALIZATION," the
Partnership began its operations upon the Initial Closing Date of January 19,
1996 with limited funds. As of June 15, 1996, $729,420 of net offering proceeds
(after payment of Sales Commissions, Underwriting Fees and O & O Expense
Allowance totalling $113,840--or 13.5% of Gross Offering Proceeds) had become
available to the Partnership from Closings held through June 15, 1996, and
consequently, only a portion of the capital anticipated to be raised by the
Partnership through the public offering of Units is available on the date of
this Prospectus. The Partnership plans to raise funds from investors by means of
this Offering, and then to use approximately 75% of Gross Offering Proceeds
(inclusive of 1% of such proceeds to established as a Reserve) together with
indebtedness in at least an equal amount to invest in Equipment and Financing
Transactions. That is, the Partnership's total Purchase Price (exclusive of
Acquisition Fees) of Equipment and Financing Transactions is expected to average
approximately 150.0% of Gross Offering Proceeds (although as much as 415.0% of
Gross Offering Proceeds could be invested using the maximum permitted leverage
of 80%).
(See "SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS").
Pending investment in Equipment and Financing Transactions, the Net Offering
Proceeds of this Offering will be held in short-term, liquid investments. The
Partnership intends to establish a working capital reserve (the "Reserve") of
approximately 1% of the Gross Offering Proceeds, which amount the General
Partner believes should be sufficient to satisfy the Partnership's general
liquidity requirements. However, liquidity could be adversely affected by
unanticipated operating costs or losses. To the extent that the Reserve is
insufficient to satisfy future cash requirements of the Partnership, the General
Partner expects that additional funds would be obtained from bank loans,
short-term loans from the General Partner, and Cash from Sales of Equipment and
Financing Transactions.
Following completion of the Minimum Offering of 12,000 Units , the proceeds
of Units sold to Limited Partners admitted at the Initial Closing were
released to the Partnership from the Escrow Account (and at subsequent
Closings, from the Partnership's subscription account), and applied to the
payment or reimbursement of Underwriting Fees, Sales Commissions and the O & O
Expense Allowance, leaving estimated Net Offering Proceeds available for
investment in Equipment and Financing Transactions, payment of Acquisition Fees
of approximately 86.5% of the Gross Offering Proceeds (unless Commission Loans
equal to 8.0% of Gross Offering Proceeds are obtained at such Closing(s), in
which case Net Offering Proceeds and Commission Loan proceeds totaling
approximately 94.5% of Gross Offering Proceeds would be available for such
purposes). The Partnership's funds available for Investments and to meet its
capital needs are expected to undergo major fluctuations during the initial
period of operations of up to twenty-four (24) months while this Offering is
proceeding and during the period (expected to be completed no later than six (6)
months thereafter) during which the Partnership's funds are being invested in
Equipment and Financing Transactions. During the balance of its operating
period, except for infusions of Cash From Operations and Cash From Sales and
reinvestment of such funds in additional Equipment and Financing Transactions,
the capital needs and resources of the Partnership are expected to be relatively
stable. For information concerning the anticipated use of proceeds from the sale
of Units, see "SOURCES AND USES OF OFFERING PROCEEDS AND RELATED INDEBTEDNESS"
and "INVESTMENT OBJECTIVES AND POLICIES."
Operations
The Partnership was formed in May 1995 and commenced operations on January
19, 1996. During this period commencing with the Initial Closing Date and
continuing throughout the Reinvestment Period, the Partnership has been and
will be in active operation. The operations of the Partnership will consist
primarily of the ownership and leasing of the Equipment and to a lesser degree,
making and managing the Financing Transactions. See "INVESTMENT OBJECTIVES AND
POLICIES."
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The Partnership will acquire Equipment with Net Offering Proceeds and
indebtedness, (which is expected to average at least 50% of the Partnership's
aggregate Purchase Price for all of its Equipment, determined when the Net
Offering Proceeds of this Offering are fully invested). However, in the event
the Partnership requires additional cash or the General Partner determines that
it is in the best interests of the Partnership to obtain additional funds to
increase cash available for Investment in Equipment and Financing Transactions
(e.g. to fund Commission Loans of up to 8.0% of Gross Offering Proceeds) or for
any other proper business need of the Partnership, the Partnership may borrow,
on a secured or unsecured basis, amounts up to 80% of the aggregate Purchase
Price of all Investments acquired by the Partnership at any given time following
full investment of the Net Offering Proceeds. The Partnership currently has no
arrangements with, or commitments from, any Lender with respect to any such
borrowings. The General Partner anticipates that any acquisition financing or
other borrowings (including Commission Loans) will be obtained from
institutional lenders. See "INVESTMENT OBJECTIVES AND POLICIES"--"Acquisition
Policies and Procedures".
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SUMMARY OF THE PARTNERSHIP AGREEMENT
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The following is a brief summary of certain provisions of the Agreement of
Limited Partnership (the "Partnership Agreement"), which sets forth the terms
and conditions upon which the Partnership will conduct its business and affairs
and certain of the rights and obligations of the Limited Partners. Such summary
does not purport to be complete and is subject to the detailed provisions of,
and qualified in its entirety by express reference to, the Partnership
Agreement, a copy of which is included as Exhibit A to the Registration
Statement of which this Prospectus forms a part. Prospective investors in the
Partnership should study the Partnership Agreement carefully before making any
investment.
Establishment and Nature of the Partnership
The Partnership was organized under the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act") with ICON Capital Corp., a Connecticut
corporation, as its General Partner. A limited partnership is a partnership
having one or more general partners and one or more limited partners. A limited
partner ordinarily does not play a role in the management or control of a
partnership's affairs and his liability for partnership obligations is generally
limited to his investment, while a general partner is, in general, personally
liable for all partnership obligations.
Name and Address
The Partnership will be conducted under the name "ICON Cash Flow Partners
L.P. Seven" and will have its principal office and place of business at 600
Mamaroneck Avenue, Harrison, New York 10528 (unless such offices are changed by
the General Partner with written notice to the Limited Partners).
Purposes and Powers
The Partnership has been organized, without limitation, for the purposes of
(a) acquiring, investing in, owning, leasing, re-leasing, financing,
refinancing, transferring or otherwise disposing of, and in all respects
otherwise dealing in or with, Equipment of all kinds, (b) lending and providing
financing to other Persons for their acquisition of items of equipment and other
tangible and intangible personal property of all kinds, pursuant to financing
arrangements or transactions secured by various items of equipment (or interests
therein and leases and licenses thereof) and other such personal property, and
(c) establishing, acquiring, conducting and carrying on any business suitable,
necessary, useful or convenient in connection therewith, in order to generate
monthly cash distributions to the Limited Partners during the term of the
Partnership. In conducting such business, the Partnership is not limited to any
part of the world (including, without limitation, all land, waters and space
under, on or above such part of the world).
Duration of Partnership
The term of the Partnership commenced upon the filing of the Certificate of
Limited Partnership with the Secretary of State of the State of Delaware on May
23, 1995 and will terminate at midnight on December 31, 2015,
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subject, however, to earlier termination upon the occurrence of any Dissolution
Event, including, without limitation, (i) the withdrawal, removal or dissolution
of, or the occurrence of certain bankruptcy events with respect to, the General
Partner (unless a Substitute General Partner will be timely admitted to the
Partnership), (ii) the Sale of all or substantially all of the Partnership's
assets and (iii) the voluntary dissolution of the Partnership.
Capital Contributions
General Partner. The General Partner has contributed $1,000, in cash, as
its Capital Contribution to the Partnership in exchange for a one percent (1%)
Partnership Interest.
Original Limited Partner. The Original Limited Partner had made a capital
contribution of $1,000 to the Partnership in exchange for ten (10) Units then
representing a 99% Partnership Interest. On the Initial Closing Date, the
Original Limited Partner withdraw from the Partnership, his capital contribution
of $1,000 was returned to him in full and his original Partnership Interest of
ten (10) Units was retired upon the admission of additional Limited Partners.
Limited Partners. Each Limited Partner (other than the Original Limited
Partner, Affiliated Limited Partners and Limited Partners entitled to Volume
Discounts) will make a Capital Contribution, in cash, in an amount equal to the
Gross Unit Price to the capital of the Partnership for each Unit or fraction
thereof purchased in exchange for such Unit. Each Affiliated Limited Partner
will make a Capital Contribution, in cash, in an amount equal to the Net Unit
Price for each Unit or fraction thereof purchased in exchange for such Unit.
Each Limited Partner entitled to a Volume Discount will make a Capital
Contribution, in cash, to the capital of the Partnership in an amount equal to
the Gross Unit Price for each Unit or fraction thereof purchased less the amount
of the Volume Discount.
Powers of the Partners
General Partner. Except as otherwise specifically provided in the
Partnership Agreement, the General Partner will have complete and exclusive
discretion in the management and control of the affairs and business of the
Partnership and will be authorized to employ all powers necessary or advisable
to carry out the purposes and investment policies, conduct the business and
affairs and exercise the powers of the Partnership. Without limiting the
generality of the foregoing, the General Partner will have the right to make
Investments for and on behalf of the Partnership and to manage such Investments
and all other assets of the Partnership. The Limited Partners will not be
permitted to participate in the management of the Partnership. Except to the
extent limited by the Delaware Act or the Partnership Agreement, the General
Partner may delegate all or any of its duties under the Partnership Agreement to
any Person (including, without limitation, any Affiliate of the General
Partner).
The General Partner will have the sole and absolute discretion to accept or
refuse to accept the admission of any subscriber as a Limited Partner to the
Partnership; provided that no such admission will be accepted unless (i) the
Minimum Offering will have been achieved, (ii) such admission will not have
certain tax consequences and (iii) the Person seeking such admission will agree
in writing to be bound by the provisions of the Partnership Agreement, will make
a written representation as to whether such Person is or is not a United States
Person and will satisfy all applicable suitability requirements (see "INVESTOR
SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES").
The General Partner is designated as the Partnership's Tax Matters Partner
and is authorized and directed by the Partnership Agreement to represent the
Partnership and its Limited Partners in connection with all examinations of the
Partnership's affairs by tax authorities and any resulting administrative or
judicial proceedings, and to expend the Partnership's funds in doing so.
Limited Partners. No Limited Partner shall participate in or have any
control over the Partnership's business or have any right or authority to act
for, or to bind or otherwise obligate, the Partnership (except one who is also
the General Partner, and then only in its capacity as the General Partner).
Limitations on Exercise of Powers by the General Partner
The General Partner will have no power to take any action prohibited by the
Partnership Agreement or the Delaware Act. Furthermore, the General Partner is
subject to certain provisions in its administration of the business and affairs
of the Partnership, as outlined below.
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From and after the date when all Capital Contributions have been invested or
committed to investment in Investments and Reserves (not exceeding 3% of Gross
Offering Proceeds), used to pay permitted Front-End Fees or returned to the
Limited Partners in accordance with the Partnership Agreement, the Partnership
will not incur or assume additional Indebtedness in connection with the
acquisition of any Investment to the extent that the sum of the principal amount
of such additional Indebtedness plus the aggregate principal amount of
Indebtedness of the Partnership then outstanding would exceed 80% of the
aggregate Purchase Price paid by the Partnership for Investments then held by
the Partnership (inclusive of the Purchase Price of any Investment then being
acquired).
The Partnership will neither purchase, lease or license Investments from,
nor sell, lease or license Investments to, the General Partner or any Affiliate
of the General Partner (including, without limitation, any Program in which the
General Partner or any such Affiliate has an interest) except only upon the
satisfaction of certain conditions, including, but not limited to, the
following:
(i) the General Partner has determined that such Affiliated Investment is in
the best interests of the Partnership;
(ii) such Affiliated Investment is made by the Partnership upon terms
(including price) no less favorable to the Partnership than the terms upon
which the General Partner or such Affiliate entered into such Affiliated
Investment;
(iii) neither the General Partner nor any such Affiliate will realize any
gain or other benefit, other than permitted reasonable compensation, as a
result of such Affiliated Investment; and
(iv) such Affiliated Investment was held only on an interim basis (generally
not longer than six months) by the General Partner or any Affiliate of the
General Partner for purposes of facilitating the acquisition of such
Investment by the Partnership, borrowing money or obtaining financing for
the Partnership or for other purposes related to the business of the
Partnership.
No loans may be made by the Partnership to the General Partner or any
Affiliate of the General Partner. The General Partner or any such Affiliate,
however, may make Partnership Loans to the Partnership, provided the terms
of such Partnership Loan will include, without limitation, the following:
(i) interest will be payable with respect to such Partnership Loan at a rate
not in excess of the lesser of (A) the rate at which the General Partner or
such Affiliate itself borrowed funds for the purpose of making such
Partnership Loan, (B) if no such borrowing was incurred, the rate obtainable
by the Partnership in an arms-length borrowing with similar terms (without
reference to the General Partner's or such Affiliate's financial abilities
or guarantees) or (C) the rate from time to time announced by The Chase
Manhattan Bank (National Association) at its principal lending offices in
New York, New York as its prime lending rate plus 3% per annum;
(ii) such Partnership Loan will be fully repaid within twelve months after
the date on which it was made; and
(iii) neither the General Partner nor any such Affiliate may receive
financial charges or fees in connection with such Partnership Loan (except
that the General Partner or such Affiliate may be reimbursed, dollar for
dollar, for actual reasonable out-of-pocket expenses).
The Partnership will not acquire any Investments in exchange for Interests
in the Partnership.
The Partnership may make Investments in Joint Ventures provided that:
(i) at the time any such Investment in a Joint Venture is made, the maximum
amount of Gross Offering Proceeds which the Partnership may so invest shall
equal an amount equal to the smallest of 25% of (A) the Maximum Offering,
(B) the sum of (1) the cumulative Gross Offering Proceeds raised as of the
Closing Date next preceding such investment and (2) the Gross Offering
Proceeds which the General Partner reasonably estimates the Partnership to
raise from such Closing Date to the Termination Date) or (C) the cumulative
Gross Offering Proceeds actually raised as of the Termination Date;
(ii) the General Partner has determined that such Investment is in the best
interests of the Partnership and will not result in duplicate fees to the
General Partner or any Affiliate of the General Partner;
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(iii) such Investment will (if made with certain participants affiliated
with the Sponsor) be made by the Partnership upon terms that are
substantially identical to the terms upon which such participants have
invested in such Joint Venture, except that the Partnership will have a
right of first refusal with respect to the purchase of any equipment or
other tangible or intangible personal property or financing transactions
held by such Joint Venture only for limited purposes; and
(iv) such Investment will (if made with non-affiliated Persons) give a
controlling interest in such Joint Venture to the Partnership and such Joint
Venture will own and lease specific Equipment and/or invest in one or more
specific Financing Transactions.
During the Reinvestment Period, the General Partner may not dissolve the
Partnership or sell or otherwise dispose of all or substantially all of the
assets of the Partnership without the Consent of the Majority Interest.
Indemnification of the General Partner
Pursuant to the Partnership Agreement, except to the limited extent provided
therein, the General Partner and any Affiliate of the General Partner engaged in
the performance of services for the Partnership will be indemnified by the
Partnership from assets of the Partnership (and not by the Limited Partners) for
any liability, loss, cost and expense of litigation suffered by such party,
which arises out of certain actions (for example, legal costs associated with
enforcing the Partnership's rights against Lessees, Users and others) or
omissions to act (for example, the cost of a tax bond while contesting the
magnitude of, or liability for, state or local taxes) by the General Partner or
such Affiliate. See "FIDUCIARY RESPONSIBILITY -- Indemnification of the General
Partner, Dealer-Manager and Selling Dealers."
Liability of Partners
Liability of the General Partner. The General Partner will be liable for all
general obligations of the Partnership to the extent not paid by the
Partnership; provided that neither the General Partner nor any Affiliate of the
General Partner will have any personal liability for obligations of the
Partnership that are specifically non-recourse to the General Partner or for the
repayment of the Capital Contribution of any Limited Partner. All decisions made
for or on behalf of the Partnership by the General Partner will be binding upon
the Partnership.
See "FIDUCIARY RESPONSIBILITY -- General."
Limited Liability of the Limited Partners. No Limited Partner will have any
personal liability on account of any obligations and liabilities of, including
any amounts payable by, the Partnership and will only be liable, in its capacity
as a Limited Partner, to the extent of such Limited Partner's Capital
Contribution and pro rata share of any undistributed Profits and other assets of
the Partnership. Notwithstanding any of the foregoing, any Limited Partner who
participates in the management or control of the Partnership's affairs may be
deemed to be acting as a General Partner and may lose any entitlement to limited
liability as against third parties who reasonably believe, in connection with
the transaction of business with the Partnership, that such Limited Partner is a
General Partner. See also "RISK FACTORS -- Partnership and Investment Risks --
Liability of Limited Partners for Certain Distributions" and " -- Limited
Liability Not Clearly Established."
The Delaware Act provides that, for a period of three years from the date on
which any distribution is made to any Limited Partner, such Limited Partner may
be liable to the Partnership for such distribution if (i) after giving effect to
such distribution, all liabilities of the Partnership (other than liabilities to
Partners on account of their Partnership Interests and liabilities for which the
recourse of creditors is limited to specified property of the Partnership),
exceed the fair value of the assets of the Partnership (except that the fair
value of any property that is subject to such a limited recourse liability will
be included in the assets of the Partnership only to the extent that the fair
value of such property exceeds such liability) and (ii) such Limited Partner
knew at the time of such distribution that such distribution was made in
violation of the Delaware Act.
Non-assessability of Units
The Units are nonassessable. Except as may otherwise be required by law or
by the Partnership Agreement, after the payment of all Subscription Monies for
the Units purchased by such Limited Partner, no Limited Partner will have any
further obligations to the Partnership, be subject to any additional assessment
or be required to contribute any additional capital to, or to loan any funds to,
the Partnership, but may, under certain circumstances,
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be required to return distributions made to such Limited Partner in violation of
the Delaware Act as described in the immediately preceding paragraph.
Distribution of Distributable Cash From Operations and Distributable Cash From
Sales
Distributable Cash from Operations and Distributable Cash From Sales
(Available Cash from such sources) that is not reinvested in Equipment and
Financing Transactions will be distributed 99% to the Limited Partners as a
group and 1% to the General Partner until Payout (which is defined as the time
when the aggregate amount of cash distributions (from whatever sources) to a
Limited Partner equals the amount of such Limited Partner's Capital Contribution
plus an amount equal to an eight (8%) percent annual cumulative return on such
Capital Contribution, compounded daily from a date not later than the last day
of the calendar quarter in which such Capital Contribution is made (determined
by treating distributions actually made to a Limited Partner as first being
applied to satisfy such 8% return on capital which has accrued and has not been
paid and applying any excess distributions as a return of such Limited Partner's
Capital Contribution. Income earned on escrowed funds and distributed to Limited
Partners may be used to satisfy such cumulative return requirement. Thereafter,
such distributions will be tentatively distributable 90% to the Limited Partners
as a group and 10% to the General Partner; provided, however, that the increased
amount so tentatively distributable to the General Partner will be deferred
until aggregate distributions to the Limited Partners equal at least 150% of
their respective Capital Contributions (reduced, but not below zero, by
distributions (if any) made to each of them pursuant to Sections 8.6 (return of
uninvested capital) or 10.5 (redemptions)). Any such deferred amounts will be
paid to the General Partner, without interest, out of the first cash available
to the Partnership upon the earlier of (i) the time when distributions to the
Limited Partners equal 150% of their aggregate Capital Contributions or (ii)
upon liquidation of the Partnership.
During the Reinvestment Period (the period of active investment and
reinvestment by the Partnership which ends five (5) years after the
Partnership's Final Closing Date (or no later than May 9, 2005)), the General
Partner will have the sole discretion to determine the amount of Distributable
Cash From Operations and Distributable Cash From Sales that are to be reinvested
in new Investments and the amounts that are to be distributed; provided,
however, each Limited Partner is entitled to receive, and shall receive, monthly
cash distributions computed as provided in this paragraph. Such distributions
will be made to the extent that Distributable Cash From Operations and
Distributable Cash From Sales are sufficient for such purpose. The annual amount
of such distributions will be computed by multiplying 10.75% by such Limited
Partner's original Capital Contribution reduced by any portion thereof which has
been (A) returned to such Limited Partner pursuant to Section 8.6, or (B)
redeemed by the Partnership pursuant to Section 10.5, of this Agreement. A
ratable portion (i.e., one-twelfth) of such annual distribution amount shall be
payable monthly. Such distributions, if made, will reduce the amount of money
that may be reinvested by the Partnership. As discussed in "INVESTMENT
OBJECTIVES AND POLICIES--Cash Distributions to Partners", decisions by the
General Partner as to the amounts of Reserves which the Partnership establishes
and the amounts of Partnership funds which will be reinvested may effect the
ability of the Partnership to make such cash distributions.
Such cash distributions will be noncumulative; meaning that, if
Distributable Cash From Operations and Distributable Cash From Sales are
insufficient in any calendar month to pay the full amount of such distributions,
only the actual amount thereof is required to be distributed. Such cash
distributions will also computed on a non-compounded basis; meaning that the
principal amount upon which such cash distributions is computed will not be
increased as the result of the inability of the Partnership to distribute any
monthly portion of such annual amounts, or reduced by any of such distributions
actually made, in any prior period. It is expected that a substantial portion of
all of such cash distributions (e.g. the portion thereof which exceeds taxable
income for GAAP purposes) will be treated as a return of Limited Partners'
originally invested capital) and that the balance of such distributions will be
treated as a return thereon (e.g. the portion thereof which equals taxable
income for GAAP purposes).
Section 8.1(a) of the Partnership Agreement also provides that each Limited
Partner is entitled to receive monthly cash distributions (if the distributions
described above are not adequate) in amounts which would permit the Limited
Partners to pay federal, state and local income taxes resulting from Partnership
Operations (assuming that all Limited Partners are subject to income taxation at
a 31% cumulative tax rate on taxable distributions for GAAP purposes). Such
distributions will be made to the extent that Distributable Cash From Operations
and Distributable Cash From Sales are sufficient for such purpose.
During the Disposition Period, the Partnership intends to promptly
distribute substantially all Distributable Cash From Operations and
Distributable Cash From Sales.
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Section 6.4(g) of the Partnership Agreement provides that the General
Partner will be paid its monthly Management Fee for any month during the
Reinvestment Period only after payment in full of any accrued and unpaid First
Cash Distributions for such month and any previous month. To the extent such
Management Fee is not paid currently, it will be paid without interest out of
the first funds available therefore. (See the "SUMMARY OF COMPENSATION.")
Allocation of Profits and Losses
As a general rule, during the Reinvestment Period, the Partnership's Profits
(including, inter alia, taxable income and gains and items thereof, and items of
revenue exempt from tax) will be allocated, first, 99% to the Limited Partners
in proportion to their respective numbers of Units and 1% to the General
Partner, until each Limited Partner has been allocated Profits equal to the
excess, if any, of (1) such Limited Partner's Unpaid Target Distribution (i.e.
the sum of such Limited Partner's (a) Adjusted Capital Contribution plus (b)
Unpaid Cumulative Return thereon) over (2) such Limited Partner's Capital
Account balance; next, in a manner which in a manner that will cause (a) the
excess of the Limited Partners' aggregate Capital Account balances over the
amount of their aggregate Unpaid Target Distributions and (b) the General
Partner's Capital Account balance, to be in the ratio of 90% to 10%; and
thereafter, 90% to the Limited Partners in proportion to their respective
numbers of Units and 10% to the General Partner. During the Disposition Period,
the Partnership's Profits first will be allocated to all Partners in the amount
necessary to eliminate any deficits in their capital accounts, and, thereafter,
will be allocated as described above.
As a general rule, 99% of the Partnership's Losses (including, inter alia,
tax losses and deductions and items thereof, and items of expense that are not
deductible for federal income tax purposes) will be allocated among the Limited
Partners in proportion to their respective numbers of Units and 1% will be
allocated to the General Partner throughout the term of the Partnership .
In addition to the general provisions regarding allocations of Profits and
Losses, the Partnership Agreement contains a number of special allocations that
are intended to meet certain "safe harbor" provisions contained in the Treasury
Regulations relating to partnership allocations (for example, a "qualified
income offset" provision requires that Profits be allocated to any Limited
Partners developing deficits in their Capital Account in an amount necessary to
eliminate such deficits; and "minimum gain chargeback" provisions require that
depreciation recapture and other similar items of income be allocated back to
the Partners who were initially allocated the depreciation deductions or other
related items of deduction); and certain other special allocations that are
designed to reflect the business deal among the Partners (for example, the Sales
Commissions with respect to any Unit are allocated to the owner of that Unit) or
to protect the Limited Partners in the event the Partnership is subjected to an
unexpected tax liability because of a particular Partner (for example, local
taxes that are imposed on the Partnership because of a Partner's residence in
that locality will be charged to that Partner).
The Partnership Agreement provides that Limited Partners who own Units for
less than an entire fiscal year will be allocated Profits or Losses (which will
be treated as if they occurred ratably over the fiscal year) based on the
proportionate part of the fiscal year that they owned their Units.
Withdrawal of the General Partner
Voluntary Withdrawal The General Partner may not voluntarily withdraw as a
General Partner from the Partnership without (i) 60 days' advance written notice
to the Limited Partners, (b) an opinion of Tax Counsel that such withdrawal will
not cause the termination of the Partnership or materially adversely affect the
federal tax status of the Partnership and (c) a selection of, and acceptance of
its appointment as such by, a Substitute General Partner (i) acceptable to a
Majority Interest of the Limited Partners with an adequate net worth in the
opinion of Tax Counsel.
Involuntary Withdrawal The General Partner may be removed by Consent of the
Majority Interest or upon the occurrence of any other event that constitutes an
event of withdrawal under the Delaware Act as then in effect. Neither the
General Partner nor any of its Affiliates may participate in any vote by the
Limited Partners to (i) involuntarily remove the General Partner or (ii) cancel
any management or service contract with the General Partner or any such
Affiliate.
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Liability of Withdrawn General Partner Generally speaking, the General
Partner shall remain liable for all obligations and liabilities incurred by it
or by the Partnership while it was acting in the capacity of General Partner and
for which it was liable as General Partner, but shall be free of any obligation
or liability incurred on account of or arising from the activities of the
Partnership from and after the time such withdrawal shall have become effective.
Transfer of Units
Withdrawal of a Limited Partner A Limited Partner may withdraw from the
Partnership only by Assigning or having all Units owned by such Limited Partner
redeemed in accordance with the Partnership Agreement. A Limited Partner may
generally assign all of his Units and may assign a portion of his or her Units
except certain impermissible types of assignees or assignments which would
adversely effect the Partnership (See Exhibit A-- Section 10.2).
Limited Right of Presentment for Redemption of Units Commencing with the
second full calendar quarter following the Final Closing Date and at any time
and from time to time thereafter until termination of the Partnership, any
Limited Partner (other than an Affiliated Limited Partner) may request that the
Partnership redeem all or any portion of his or her Units. Subject to the
availability of funds and the other provisions of this Section 10 of the
Partnership Agreement (see "TRANSFER OF UNITS" Section "Limited Right of
Presentment for Redemption of Units", below).
Dissolution and Winding-up
Events Causing Dissolution The Partnership shall be dissolved upon the
happening of any of the following events (each a "Dissolution Event") (i) the
withdrawal of the General Partner (unless a Substitute General Partner has been
duly admitted to the Partnership); (ii) the voluntary dissolution of the
Partnership (A) by the General Partner with the Consent of the Majority Interest
or (B) subject to Section 13 of the Partnership Agreement, by the Consent of the
Majority Interest without action by the General Partner; (iii) the Sale of all
or substantially all of the assets of the Partnership; (iv) expiration of the
Partnership term specified in the Partnership Agreement; (v) the Operations of
the Partnership shall cease to constitute legal activities under the Delaware
Act or any other applicable law; or (vi) any other event which causes the
dissolution or winding-up of the Partnership under the Delaware Act.
Liquidation of Partnership Upon the occurrence of a Dissolution Event, the
Investments and other assets of the Partnership will be liquidated and the
proceeds thereof will be distributed to the Partners after payment of
liquidation expenses and the debts of the Partnership and otherwise in the order
of priority set forth in the Partnership Agreement and the existence of the
Partnership will be terminated. No Limited Partner is guaranteed the return of,
or a return on, such Limited Partner's Capital Contribution.
Access to Books and Records
The General Partner will maintain the books and records of the Partnership
at the Partnership's principal office. Each Limited Partner will have the right
to have a copy of the Participant List (including, among other things, the names
and addresses of, and number of Units held by, each Limited Partner) mailed to
it for a nominal fee; provided such Limited Partner will certify as to the
non-commercial use thereof. In addition, each Limited Partner or his
representative will have the right, upon written request, subject to reasonable
Notice and at such Limited Partner's expense, to inspect and copy such other
books and records of the Partnership as will be maintained by the General
Partner.
Meetings and Voting Rights of Limited Partners
Meetings A meeting of the Limited Partners to act upon any matter on which
the Limited Partners may vote may be called by the General Partner at any time
on its own initiative and will be called by the General Partner following its
receipt of written request(s) for a meeting from Limited Partners holding 10% or
more of the then outstanding Units. In addition, in lieu of a meeting, any such
matter may be submitted for action by Consent of the Limited Partners.
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Voting Rights of Limited Partners The Limited Partners, acting by the
Consent of the Majority Interest constituting a numerical majority (i.e., more
than 50%) of Units, may take action on the following matters without the
concurrence of the General Partner:
(i) amendment of the Agreement; provided that such amendment (A) may not in
any manner allow the Limited Partners to take part in the control or
management of the Partnership's business, and (B) may not, without the
specific Consent of the General Partner, alter the rights, powers and duties
of the General Partner as set forth in the Partnership Agreement;
(ii) dissolution of the Partnership;
(iii) Sale or series of Sales of all or substantially all of the assets of
the Partnership (except any such Sale or series of Sales in the ordinary
course of liquidating the Partnership's Investments during the Disposition
Period (see "Dissolution and Winding-up--Liquidation of Partnership", in
this Section); and
(iv) removal of the General Partner and election of one or more Substitute
General Partners.
Limited Partners who dissent from any vote approved by the Majority Interest are
bound by such vote and do not have a right to appraisal of, or automatic
repurchase of, their Units as a result thereof.
Amendments
Amendment by Limited Partners without Concurrence of the General Partner.
The Limited Partners, acting by the Consent of the Majority Interest without the
concurrence of the General Partner, may amend the Partnership Agreement to
effect any change therein, except (i) in any manner to allow the Limited
Partners to take part in the control or management of the Partnership's
business, and (ii) without the specific Consent of the General Partner, to alter
the rights, powers and duties of the General Partner as set forth in the
Partnership Agreement. Notwithstanding the foregoing, (x) any amendment of the
provisions of the Partnership Agreement relating to amendments of the
Partnership Agreement will require the Consent of each Limited Partner and (y)
any amendment that will increase the liability of any Partner or adversely
affect any Partner's share of distributions of cash or allocations of Profits or
Losses for Tax Purposes or of any investment tax credit amounts of the
Partnership will require the Consent of each Partner affected thereby.
Amendment by General Partner without the Consent of the Limited Partners.
The General Partner may, without the Consent of the Majority Interest, amend the
Partnership Agreement to effect any change therein for the benefit or protection
of the Limited Partners, including, without limitation:
(i) to add to the representations, duties or obligations of the General
Partner or to surrender any right or power granted to the General Partner;
(ii) to cure any ambiguity in, or to correct or supplement, any provision
thereof;
(iii) to preserve the status of the Partnership as a "limited partnership"
for federal income tax purposes (or under the Delaware Act or any other
applicable law);
(iv) to delete or add any provision thereof or thereto required to be so
deleted or added by the Commission, by any other federal or state regulatory
body or other agency (including, without limitation, any "blue sky"
commission) or by any Administrator or similar official;
(v) to permit the Units to fall within any exemption from the definition of
"plan assets" contained in Section 2510.3-101 of Title 29 of the Code of
Federal Regulations;
(vi) under certain circumstances, to amend the allocation provisions
thereof, in accordance with the advice of Tax Counsel, the Accountants or
the IRS, to the minimum extent necessary; and
(vii) to change the name of the Partnership or the location of its principal
office.
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TRANSFER OF UNITS
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Withdrawal
A Limited Partner may withdraw from the Partnership only by Assigning having
redeemed all Units owned by such Limited Partner in accordance with the terms of
the Partnership Agreement.
Restrictions on the Transfer of Units
There is no public or secondary market for the Units and none is expected to
develop. Moreover, a Limited Partner may Assign Units owned by such Limited
Partner to an Assignee only upon the satisfaction of certain conditions and
subject to certain restrictions. Finally, an Assignee of any Partnership
Interest will become a Substitute Limited Partner only if the General Partner
has reasonably determined that all conditions to an Assignment have been
satisfied and that no adverse effect to the Partnership does or may result from
the admission of such Substitute Limited Partner to the Partnership and such
Assignee will have executed a transfer agreement and such other forms, including
executing a power of attorney to the effect set forth in the Partnership
Agreement, as the General Partner reasonably may require. Consequently, holders
of Units may not be able to liquidate their investments in the event of
emergencies or for any other reasons or to obtain financing from lenders who
will readily accept Units as collateral.
A Limited Partner may Assign Units held by it to any Person (an "Assignee")
only upon the satisfaction of certain conditions, including, but not limited to
the following:
(i) such Limited Partner and such Assignee will each execute a written
Assignment instrument, in form and substance satisfactory to the General
Partner, which will, among other things, state the intention of such Limited
Partner that such Assignee will become a Substitute Limited Partner,
evidence the acceptance by the Assignee of all of the terms and provisions
of the Partnership Agreement and include a representation by both such
Limited Partner and such Assignee that such Assignment was made in
accordance with all applicable laws and regulations (including, without
limitation, such minimum investment and investor suitability requirements as
may then be applicable under state securities laws); and
(ii) such for Assignee will pay to the Partnership a fee not exceeding
$150.00 to the Partnership for costs and expenses reasonably incurred in
connection with such Assignment.
Furthermore, unless the General Partner will specifically Consent, no Units
may be Assigned:
(i) to a minor or incompetent (unless a guardian, custodian or conservator
has been appointed to handle the affairs of such Person);
(ii) to any Person if, in the Opinion of Tax Counsel, such Assignment would
result in the termination of the Partnership's taxable year or its status as
a partnership for federal income tax purposes, provided that the Partnership
may permit such Assignment to become effective if and when, in the opinion
of Tax Counsel, such Assignment would no longer result in the termination of
the Partnership's taxable year or its status as a partnership for federal
income tax purposes;
(iii) to any Person if such Assignment would affect the Partnership's
existence or qualification as a limited partnership under the Delaware Act
or the applicable laws of any other jurisdiction in which the Partnership is
then conducting business;
(iv) to any Person not permitted to be an Assignee under applicable law,
including, without limitation, applicable federal and state securities laws;
(v) if such Assignment would result in the transfer of a Partnership
Interest representing less than twenty-five (25) Units, or ten (10) Units in
the case of an IRA or Qualified Plan (unless such Assignment is of the
entire Partnership Interest owned by such Limited Partner);
(vi) if such Assignment would result in the retention by such Limited
Partner of a portion of its Partnership Interest representing less than the
greater of (A) twenty-five (25) Units, or ten (10) Units in the case of an
IRA or Qualified Plan, and (B) the minimum number of Units required to be
purchased under minimum investment standards applicable to an initial
purchase of Units by such Limited Partner;
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(vii) if, in the reasonable belief of the General Partner, such Assignment
might violate applicable law;
(viii) if the effect of such Assignment would be to cause the "equity
participation" in the Partnership by "benefit plan investors" (both within
the meaning of DOL Reg. ss. 2510.3-101(f)) to equal or exceed 25%; or
(ix) if such Assignment would cause an impermissible percentage of Units to
be owned by non-United States Citizens.
Any attempt to make any Assignment of Units in violation of the provisions of
the Partnership Agreement or applicable law will be null and void ab initio and
will not bind the Partnership.
The Partnership Agreement provides further that so long as there are adverse
federal income tax consequences from being treated as a "publicly traded
partnership" for federal income tax purposes, the General Partner will not
permit any interest in a Unit to be Assigned on a Secondary Market and, if the
General Partner determines in its sole discretion, that a proposed assignment
was effected on a Secondary Market, the Partnership and the General Partner have
the right to refuse to recognize any such proposed Assignment and to take any
action deemed necessary or appropriate in the General Partner's reasonable
discretion so that such proposed Assignment is not in fact recognized. Any
Assignment which results in a failure to meet the "safe harbor" provisions of
Notice 88-75 (July 5, 1988) issued by the Service, or any substitute safe-harbor
provisions subsequently established by Treasury Regulations or published
notices, will be treated as causing the Units to be publicly traded. Pursuant to
the Partnership Agreement, the Limited Partners will agree to provide all
information respecting Assignments, which the General Partner deems necessary in
order to determine whether a proposed transfer occurred on a Secondary Market.
Assignments of Units will be recognized by the Partnership as of the first
day of the Segment following the date upon which all conditions to such
Assignment will have been satisfied.
Limited Right of Presentment for Redemption of Units
The Partnership will at no time be under any obligation to redeem Units of a
Limited Partner and will do so only in the sole and absolute discretion of the
General Partner. Commencing with the second full calendar quarter following the
Final Closing Date and at any time and from time to time thereafter until
termination of the Partnership, any Limited Partner may request that the
Partnership redeem, and, subject to the availability of funds and provided that
the Partnership will not in any calendar year redeem Partnership Interests that,
in the aggregate, exceed 2% of the total Partnership Interests outstanding as of
the last day of such calendar year, with the prior Consent of the General
Partner, the Partnership will redeem, for cash, up to 100% of the Partnership
Interest of such Limited Partner, at the Applicable Redemption Price. The
Applicable Redemption Price, with respect to any Unit, will be an amount
(determined as of the date of redemption of such Unit), as follows:
(a) during the Reinvestment Period, equal to 85% of the original Capital
Contribution of such Limited Partner less the sum of (i) 100% of previous
distributions to such Limited Partner of uninvested Capital Contributions,
(ii) 100% of previous distributions of Distributable Cash, (iii) 100% of any
previous allocations to such Limited Partner of investment tax credit
amounts and (iv) the aggregate amount, not exceeding $150.00, of expenses
reasonably incurred by the Partnership in connection with the redemption
such Unit; and
(b) during the Disposition Period, equal to 100% of the balance of the
Capital Account of such Limited Partner as of the end of the month next
preceding such date of redemption less the sum of (i) such Limited Partner's
pro rata share (without giving effect to such redemption) of Profits and
Losses of the Partnership (as reasonably estimated by the General Partner)
for the period commencing on the first calendar day of the month in which
such redemption date will occur and (ii) the aggregate amount, not exceeding
$150.00, of expenses reasonably incurred by the Partnership in connection
with the redemption such Unit;
provided, however, that in no event will the applicable redemption price
computed under either clause (a) or (b) exceed an amount equal to such
Limited Partner's Capital Account balance as of the end of the calendar
quarter preceding such redemption minus cash distributions which have been
made or are due to be made for the calendar quarter in which the redemption
occurs (for a redemption of all Units owned by such Limited Partner or that
portion of such amount which is proportionate to the percentage of such
Limited Partner's Units which are redeemed in the case of partial
redemptions).
There can be no assurance that the Applicable Redemption Price will in any
way reflect the fair market value of the Units at the time of redemption.
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The availability of funds for the redemption of any Unit will be subject to
the availability of sufficient Distributable Cash. In this connection, it should
be noted that the General Partner intends to reinvest a substantial portion of
the Partnership's Cash From Operations and substantially all Cash From Sales
during the Reinvestment Period. Furthermore, Units may be redeemed only if such
redemption would not impair the capital or the Operations of the Partnership and
would not result in the termination under the Code of the Partnership's taxable
year or of its federal income tax status as a partnership. Any amounts used to
redeem Units will reduce Partnership funds available to make Investments and
distributions to the remaining Partners. In the event that the Partnership
receives requests to redeem more Units than there are funds sufficient to
redeem, the General Partner will honor redemption requests in the order in which
duly executed and supported redemption requests are received. The General
Partner will use its reasonable efforts to honor requests for redemptions of
Units with the same request date first as to Hardship Redemptions, second so as
to provide liquidity for IRAs or Qualified Plans to meet required distributions
and finally as to all other redemption requests. A Limited Partner desiring to
have a portion or all or his Units redeemed will submit a written request to the
General Partner on a form approved by the General Partner duly signed by all
owners of such Units on the books of the Partnership. Redemption requests
hereunder will be deemed given on the earlier of the date the same is (i)
personally delivered with receipt acknowledged, or (ii) mailed by certified
mail, return receipt requested, postage prepaid, at the General Partners address
set forth herein. Requests arising from death, major medical expense and family
emergency related to disability or a material loss of family income,
collectively "Hardship Redemptions") will be treated as having been received at
12:01 A.M. EST and all other requests will be deemed received with the start of
the business day during which received). Within the times specified above, the
General Partner will accept or deny each redemption request. The General Partner
will, in its sole discretion, decide whether a redemption is in the best
interest of the Partnership.
Certain Consequences of Transfer
Any Units tendered to, and accepted by, the Partnership for redemption will
be canceled when redeemed and, as of the date of such redemption, will no longer
represent a Partnership Interest. In the event that any Limited Partner will
Assign all Units owned by such Limited Partner, or have all such Units accepted
for redemption by the Partnership, such Limited Partner will thereupon cease to
be a Limited Partner and will no longer have any of the rights or privileges of
a Limited Partner in the Partnership. Whether or not any Assignee becomes a
Substitute Limited Partner, however, the Assignment by a Limited Partner of such
Limited Partner's entire Partnership Interest will not release such Limited
Partner from liability to the Partnership to the extent of any portion of such
Limited Partner's Capital Contribution not yet paid and of any distributions
(including any return of or on such Limited Partner's Capital Contribution) made
to such Limited Partner in violation of the Delaware Act or other applicable
law.
The sale of Units by a Limited Partner may result in the recapture of all of
the depreciation deductions previously allocated to such Limited Partner. See
the "FEDERAL INCOME TAX CONSEQUENCES--Sale or Other Disposition of Partnership
Interest."
Neither the General Partner nor any of its Affiliates (i.e., no Affiliate
Limited Partner) may redeem their Partnership Units, if any.
Gain or loss realized on the redemption of a Unit by a Limited Partner who
holds his Units as a capital asset and who has held such Unit for more than one
year, will be capital gain or loss, as the case may be, except that any gain
realized will be treated as ordinary income to the extent attributable to the
Limited Partner's share of potential depreciation recapture on Partnership
Equipment, substantially appreciated inventory items and unrealized receivables.
See "FEDERAL INCOME TAX CONSEQUENCES--Treatment of Cash Distributions Upon
Redemption."
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REPORTS TO LIMITED PARTNERS
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Annual Reports
By March 15 of each Fiscal Year, the General Partner will deliver to each
Limited Partner a statement of such Partner's share of the Partnership's income,
gains, losses, deductions, and items thereof, and credits, if any, for the
Fiscal Year most recently completed to enable such Limited Partner to prepare
his federal income tax return.
Within 120 days after the end of the Partnership's fiscal year, the General
Partner will send to each Person who was a Limited Partner at any time during
such Fiscal Year an annual report including, among other things:
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(i) financial statements for the Partnership for such Fiscal Year, including
a balance sheet as of the end of such Fiscal Year and related statements of
operations, cash flows and changes in Partners' equity, which will be
prepared as required by the Partnership Agreement and accompanied by an
auditor's report containing an opinion of the Accountants;
(ii) a breakdown (by source) of distributions made during such Fiscal Year
to the General Partner and the Limited Partners;
(iii) a status report with respect to each item of Equipment and each
Financing Transaction which individually represents at least 10% of the
aggregate Purchase Price of the Partnership's Investments at the end of such
Fiscal Year, including (among other things) information relevant to the
condition and utilization of such Equipment or the collateral securing such
Financing Transaction;
(iv) a breakdown of the compensation paid to, and any amounts reimbursed to,
the Sponsor, including among other things) a statement of the services
performed or expenses incurred in consideration therefor, a summary of the
terms and conditions of any contract with the Sponsor which was not filed as
an exhibit to the Registration Statement of which this Prospectus forms a
part and a statement of the total amount of all costs and expenses
reimbursed to the Sponsor by the Partnership and any other Programs of the
Sponsor demonstrating the allocation thereof between the Partnership and
such other Programs;
(v) until all Capital Contributions have been invested or committed to
investment in Investments and Reserves (not exceeding 3% of Gross Offering
Proceeds), used to pay permitted Front-End Fees or returned to the Limited
Partners in accordance with the Partnership Agreement, certain information
regarding Investments made by the Partnership during such Fiscal Year.
Quarterly Reports
Within 60 days after the end of each of the first three Fiscal Quarters in
any Fiscal Year, the General Partner will send, to each Person who was a Limited
Partner at any time during such Fiscal Quarter, an interim report for such
Fiscal Quarter including, among other things:
(i) unaudited financial statements for the Partnership at and for such
Fiscal Quarter, including a balance sheet and related statements of
operations, cash flows and changes in Partners' equity;
(ii) a tabular summary of the compensation paid to, and any amounts
reimbursed to, the Sponsor, including (among other things) a statement of
the services performed or expenses incurred in consideration therefor and a
summary of the terms and conditions of any contract with the Sponsor which
was not filed as an exhibit to the Registration Statement of which this
Prospectus forms a part; and
(iv) until all Capital Contributions have been invested or committed to
investment in Investments and Reserves (not exceeding 3% of Gross Offering
Proceeds), used to pay permitted Front-End Fees or returned to the Limited
Partners in accordance with the Partnership Agreement, certain information
regarding Investments made by the Partnership during such Fiscal Quarter.
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PLAN OF DISTRIBUTION
-------------------------------------------------------------------------------
Subject to the conditions set forth in this Prospectus and in accordance
with the terms and conditions of the Partnership Agreement, pursuant to the
Dealer-Manager Agreement between the Partnership and the Dealer- Manager, the
Partnership will offer through the Dealer-Manager, on a best efforts basis, a
Maximum Offering of 1,000,000 Units, all of which are priced at $100 per Unit
(except for certain Units which may be purchased by (i) Affiliated Limited
Partners for the Net Unit Price of $92.00 per Unit and (ii) a single subscriber
which are eligible for Volume Discounts as described on footnote (1) on Page 2
of this Prospectus). The minimum subscription is 25 Units (10 Units for IRAs and
Qualified Plans, including Keogh plans except in certain states as set forth in
the "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION
PROCEDURES" Section). See "INVESTOR SUITABILITY STANDARDS--Minimum Unit
Purchase."
Units will be sold through primarily through the Selling Dealers and to a
limited extent by the Dealer-Manager. The Partnership will pay to the Selling
Dealer or the Dealer-Manager, as the case may be, a Sales Commission equal to
8.0% of the Gross Offering Proceeds from the sale of such Units (except for
Units sold to Affiliated Limited Partners, as to which no Sales Commission is
payable, or to subscribers entitled to a volume discount, in
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<PAGE>
which case the Sales Commission is reduced by the amount of such volume
discount) from Gross Offering Proceeds of such sales or from the proceeds of any
Commission Loans which may be obtained by the Partnership in connection
therewith. The Partnership may obtain a loan as of each Closing Date in the
principal amount of the Sales Commissions (collectively "Commission Loans") to
pay Commissions otherwise payable by the Partnership on such Closing Date from
Gross Offering Proceed for the purpose of increasing the total amount of Gross
Offering Proceeds immediately available for Investments. The Partnership's total
payments of principal of, and interest on, any such Commission Loans would
exceed the corresponding amounts of Commissions paid with the proceeds of such
loans by the interest paid thereon. Consequently, the General Partner expects to
utilize Commission Loans only when, it has determined that an opportunity exists
to use such borrowings to obtain Investments which have contractual payments
which exceed the total payments of principal of, and interest on, the
corresponding Commission Loans.
Generally, Units are purchased by all subscribers at a price of $100.00 per
Units except for:
(a) officers, employees and securities representatives of the General
Partner, its Affiliates and Selling Dealers ("Affiliated Limited Partners")
who may purchase Units for investment purposes only for the Net Unit Price
of $92.00 per Unit. The Partnership will incur no obligation to pay any
Sales Commissions with respect to such purchases. The General Partner's and
its Affiliates' purchases of Units are limited to a maximum of 10% of the
total Units purchased.
(b) Investors buying in volume are entitled to volume discounts as follows:
Number of Units Discount Net Purchase Price
2,499 or less None $100.00
2,500 to 4,999 $2.50 $ 97.50
5,000 to 9,999 $3.50 $ 96.50
10,000 to 19,999 $4.50 $ 95.50
20,000 or more $6.50 $ 93.50
Volume Discounts reduce the Sales Commissions that would otherwise be
payable in connection with the purchase of Units. An investor entitled to a
volume discount will receive such discount through a reduction of the aggregate
cash purchase price required to purchase Units.
The proceeds to the Partnership, net of Sales Commissions and volume
discounts, if any, will be the same for all such sales as for sales to the
general public.
The total marketing compensation to be paid to the Dealer-Manager and all
participating Selling Dealers in connection with the offering of Units in the
partnership, including Sales Commissions and Underwriting Fees, will not exceed
a maximum of 10.0% of the Gross Offering Proceeds (except that the General
Partner may pay bona fide due diligence fees and expenses incurred by the
Dealer-Manager and prospective Selling Dealers from its O & O Expense Allowance
up to the lesser of (i) an additional 1/2 of 1% of such Gross Offering Proceeds
or (ii) the maximum amount allowable under the NASD Rules of Fair Practice). Any
payments made in connection with due diligence activities will only be paid on a
fully accountable basis and only for bona fide due diligence activities. Amounts
paid or advanced for Sales Commissions and due diligence fees and expenses will
be made only for bona fide sales or due diligence activities as evidenced by
receipt of duly executed subscription documents (in the case of sales) and an
invoice and other evidence satisfactory to the General Partner confirming the
nature and cost of due diligence activity performed (in the case of due
diligence activities). The sums which may be expended in connection with due
diligence activities are included in the O & O Expense Allowance paid by the
partnership to the General Partner. See "SUMMARY OF COMPENSATION."
The Dealer-Manager Agreement and the Selling Dealer Agreements contain
provisions for the indemnification of the Dealer-Manager and participating
Selling Dealers by the Partnership with respect to certain liabilities,
including liabilities arising under the Securities Act. The Dealer-Manager may
be deemed to be an "underwriter" for purposes of the Securities Act in
connection with this offering.
Segregation of Subscription Payments
Page 93
<PAGE>
As soon as possible after the receipt and acceptance by the Partnership of
subscriptions pending each Closing, the Partnership will admit as Limited
Partners all subscribers whose subscriptions have been received and accepted by
the Partnership and the funds representing such subscriptions will be released
from the Partnership's segregated subscription account to the Partnership.
Thereafter, funds received through the Termination Date will be deposited in the
Partnership's segregated subscription account.
The General Partner will promptly accept or reject subscriptions for Units
after its receipt of a prospective investor's Subscription Documents and
subscription funds. Subsequent to the Initial Closing Date, it is anticipated
that Closings will be held not less frequently than twice monthly (on the
fifteenth and last day of each month) and as frequently as once a week (provided
the number of Units subscribed for is sufficient to justify the burden and
expense of a Closing). Thereafter subscription payments would continue to be
deposited with the Bank of New York (NJ) (or another banking institution named
by the General Partner) in a special, segregated, subscription account of the
Partnership which will be maintained during the Offering Period for the receipt
and investment of subscription payments. At each Closing, the Partnership will
admit as Limited Partners, effective as of the next day, all subscribers whose
subscriptions have been received and accepted by the Partnership and who are
then eligible to be admitted to the Partnership and the funds representing
such subscriptions will be released from the Partnership's segregated
subscription account to the Partnership.
Interest earned, if any, on subscription funds of subscribers who are
accepted and admitted to the Partnership will be remitted to the subscribers by
the General Partner as soon as practicable after their admission , and shall be
calculated to reflect the length of time each subscribers funds were held in the
Partnership's segregated subscription account, prior to their admission.
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INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS;
SUBSCRIPTION PROCEDURES
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General Suitability Considerations
Among the reasons for establishing investor suitability standards and
minimum dollar amounts of investment is that there is no public market for the
Units, which are not freely transferable, and none is expected to develop.
Accordingly, only Persons able to make a long-term investment and who have
adequate financial means and no need for liquidity with regard to their
investment should purchase Units. Investors subscribing for Units should
carefully consider the risk factors and other special considerations (including
the lack of a market for Units and the resulting long-term nature of an
investment in Units) described under "RISK FACTORS--Partnership and Investment
Risks-- Restricted Transferability and Illiquidity of Units," "TRANSFER OF
UNITS--Restrictions on the Transfer of Units" and "--Limited Right of
Presentment". An investment in Units is not appropriate for investors who must
rely on cash distributions with respect to their Units as their primary, or as
an essential, source of income to meet their necessary living expenses.
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<PAGE>
State Requirements Concerning Minimum Investment and Minimum Investor Net Worth/
Income
Minimum Investment. All Investors other than Qualified Plans and IRAs: The
minimum number of Units an investor may purchase is 25 Units (other than
residents of Nebraska, for whom the minimum investment is 50 Units). Qualified
Plans and IRAs: The minimum number of Units which a Qualified Plan or an IRA may
purchase is 10 Units (except for Qualified Plans and IRAs established by
residents of the following states: Arizona, Indiana, Maine, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, New Mexico, North Carolina,
Oklahoma, Pennsylvania, South Dakota, Tennessee, Texas and Washington (for which
the minimum investment is 20 Units) and Iowa (for which the minimum IRA account
investment is 25 Units)).
Minimum Net Worth/Income. Except with respect to Qualified Plans and IRAs
and except for residents of states with higher suitability standards (as
described below), Units will be sold during the Offering only to an investor who
represents, in writing:
(i) that such investor has either (A) both a net worth of at least $30,000
in excess of Capital Contributions required to be made in respect of Units
subscribed for by such investor and an annual gross income of at least
$30,000, or (B) irrespective of annual gross income, a net worth of at least
$75,000 or that such investor is purchasing in a fiduciary capacity for a
Person who meets either such condition, or
(ii) that such investor satisfies the suitability standards applicable in
such investor's state of residence or domicile, if such standards are more
stringent (as listed in "--Certain State Requirements" paragraph below or in
the current Supplement to this Prospectus).
All computations of net worth for purposes of all suitability standards (whether
described above or below) exclude the value of such investor's home, home
furnishings and personal automobiles and, in connection therewith, all of such
investor's assets must be valued at their fair market value.
If an investor is a Qualified Plan or an IRA, such investor must represent
(i) that the IRA owner or the participant in the self-directed Qualified Plan
satisfies the foregoing standards, or (ii) if other than a self-directed
Qualified Plan, that the Qualified Plan satisfies the foregoing suitability
standards.
Each investor must execute a copy of the Subscription Agreement, the form of
which is included as an exhibit to the Registration Statement of which this
Prospectus forms a part, or an Assignment instrument or other writing, to
evidence such investor's compliance with such standards and the requirements of
applicable laws.
Certain State Requirements. Suitability. The following States have
established more stringent investor suitability standards than those established
by the Partnership: Alabama, Arizona, Arkansas, California, Indiana, Iowa,
Kansas, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Missouri,
Nebraska, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon,
Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont,
Washington, Wisconsin and Wyoming. Units will only be sold to residents of such
jurisdictions who meet such more stringent standards. Any proposed transferee of
a Unit who is a resident of such States must also meet such suitability
standards.
Residents of the States of Alabama, Arizona, Arkansas, California, Indiana,
Kansas, Maine, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, Oregon,
Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont,
Washington and Wisconsin must (i) both (A) a net worth of not less than $45,000
(determined exclusive of the net fair market value of (a) his or her home, (b)
home furnishings and (c) personal automobiles) and (B) $45,000 of annual gross
income; or (ii) a net worth of at least $150,000 (determined as above) and a
subscriber (or fiduciary acting on his, her or its behalf).
Residents of the States of Iowa, Massachusetts, Michigan, Minnesota,
Missouri, New Jersey and North Carolina must have either (a) annual gross income
of $60,000 plus a net worth of $60,000 or (b) a net worth of at least $225,000.
Each investor residing in Michigan or Pennsylvania, must have a net worth
(exclusive of home, home furnishings and automobiles) equal to the greater of
(a) the net worth requirements described under "Minimum Net Worth/Income," or
(b) ten times the amount to be invested by such investor (e.g., a $200,000 net
worth in order to invest $20,000).
Legending of Unit certificates issued to residents of California. The
California Corporations Commissioner requires that certificates evidencing
ownership of Units for all Units issued, or subsequently transferred, to Persons
who are residents of, or who are either domiciled or actually present in, the
State of California, must bear the following legend restricting transfer:
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<PAGE>
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF A LIMITED PARTNERSHIP
INTEREST, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION
THEREFOR,WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE
COMMISSIONER'S RULES."
Fiduciary and Qualified Plan Subscriptions. When Units are purchased for
fiduciary accounts, such as trusts and retirement plans, the foregoing
conditions must be met either by the fiduciary account or by the Person who
directly or indirectly supplies the funds for the purchase of Units. In the case
of gifts to minors by a donor, the foregoing conditions must be met by the donor
who directly or indirectly supplies the funds for such purchase. A transferee
will be required to comply with all of the foregoing requirements as a condition
to admission as a Substitute Limited Partner.
In addition, it should be noted that an investment in the Partnership will
not, in and of itself, create an IRA or Qualified Plan and that, in order to
create an IRA or Qualified Plan, an investor must itself comply with all
applicable provisions of the Code and ERISA. IRAs or Qualified Plans, and other
tax-exempt organizations, when making a decision concerning an investment in the
Partnership, should consider the following:
(i) any income or gain realized by such entity will be "unrelated business
taxable income" and subject to the unrelated business tax;
(ii) investments in the Partnership made by Qualified Plans and IRAs may
cause a pro rata portion of the Partnership's assets to be considered to be
"plan assets" with respect to such entities for purposes of ERISA and the
excise taxes imposed by Section 4975 of the Code; and
(iii) such entities, since they are exempt from federal income taxation,
will be unable to take full advantage of the tax benefits, if any, generated
by the Partnership.
See "RISK FACTORS--Federal Income Tax Risks and ERISA Matters -- Unrelated
Business Income," "FEDERAL INCOME TAX CONSEQUENCES -- Taxation of Employee
Benefit Plans and Other Tax-Exempt Organizations" and "INVESTMENT BY QUALIFIED
PLANS."
A Fiduciary or Investment Manager (as such terms are defined in Sections
3(21) and 3(38) of ERISA, respectively) of a Qualified Plan or IRA or a
fiduciary of another tax-exempt organization should consider all risks and
investment concerns, including those unrelated to tax considerations, in
deciding whether an investment in the Partnership is appropriate and
economically advantageous for a Qualified Plan or other tax-exempt organization.
See "RISK FACTORS," "INVESTMENT OBJECTIVES AND POLICIES," "FEDERAL INCOME TAX
CONSEQUENCES" and "INVESTMENT BY QUALIFIED PLANS."
Although the General Partner believes that Units may represent suitable
investments for individuals, Qualified Plans, IRAs and many different types of
entities, Units may not be suitable investments for such entities due to tax
rules of particular application to certain types of entities. (For example, the
General Partner believes that Units will generally not be a suitable investment
for charitable remainder trusts.) Furthermore, the foregoing standards represent
minimum requirements, and a Person's satisfaction of such standards alone does
not mean that an investment in the Partnership would be suitable for such
Person. A prospective investor should consult his personal tax and financial
advisors to determine whether an investment in the Partnership would be
advantageous in light of his particular situation.
Transfer. Units are subject to substantial transfer restrictions and may be
transferred only under certain circumstances and subject to certain conditions
(see "TRANSFER OF UNITS -- Restrictions of Transfer of Units"), including, among
others, that Units may be sold only to an Assignee who meets all applicable
suitability standards and any Limited Partner making an Assignment of Units may
also become subject to the securities laws of the state or other jurisdiction in
which the transfers are deemed to take place. Furthermore, following a transfer
of less than all of the Units owned by any Limited Partner, each Limited Partner
must generally retain a sufficient number of Units to satisfy the minimum
investment standards applicable to such Limited Partner's initial purchase of
Units. In the case of a transfer in which a member firm of the National
Association of Securities Dealers, Inc. ("NASD") is involved, such firm must be
satisfied that a proposed Assignee of Units satisfies the suitability
requirements as to financial position and net worth specified in Section 3(b) of
Appendix F to the NASD's Rules of Fair Practice and must inform the proposed
Assignee of all pertinent facts relating to the liquidity and marketability of
the Units during the term of any investment therein.
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Subscriber Representations
By signing and initialling the blocks provided in Section 5 of the
Subscription Agreement and paying for Units, each investor makes the
representations contained such Section 5 (except as provided to the contrary
therein) and will be bound by all the terms thereof. In addition, each investor
acknowledges in his Subscription Agreement that his subscription is subject to
acceptance by the General Partner, in its sole discretion, and may be rejected
in whole or in part for any reason.
The representations made by each subscriber (except for certain of the
representations which may not be made by the residents of certain states as
noted on such Page C-4) are set forth on page C-3 of Exhibit C to this
Prospectus and confirm that each subscriber signing the Subscription Agreement:
(i) has received a copy of the Prospectus; (ii) has read the "General
Instructions" (on Page C-2) of the Subscription Agreement; (iii) that an
investment in Units is not liquid; and (iv) that the General Partner may rely
upon the accuracy of the factual data concerning such subscriber which is
contained in the Subscription Agreement (including, without limitation, that (A)
if such investor is an IRA, Qualified Plan or other Benefit Plan, has accurately
identified itself as such; (B) has accurately identified himself as either a
U.S. Citizen or non-U.S. Citizen (i.e., as determined in the manner described
under "Citizenship" below) and (C) has accurately reported his federal taxpayer
identification number and is not subject to backup withholding of federal income
taxes). Specifically, by representing whether he is a United States Citizen,
Resident Alien or resident of another country, each subscriber will be deemed to
have made a representation as to whether he is or is not a "United States
Person" as defined in Section 7710(a)(30) of the Code. In addition, each
subscriber appoints the General Partner as his true and lawful attorney-in-fact
to execute such documents (including the Partnership Agreement) as may be
required for the such subscriber's admission as a Limited Partner.
The Partnership will require such representations to be made by each
subscriber in order to assist NASD- registered securities sales representatives,
Selling Dealers and the Dealer-Manager to determine whether an investment in
Units is suitable for such subscriber. The General Partner will rely upon the
accuracy and completeness of the subscriber's representations in complying with
its obligations under applicable state and federal securities laws and may
assert such representations as a defense against the subscribers or securities
regulatory agencies.
Each subscriber is also instructed on Page C-2 of the Subscription Agreement
that: (a) no offer to sell Units may be made except by means of the Prospectus
and, consequently, (b) SUBSCRIBERS SHOULD NOT RELY UPON ANY ORAL STATEMENTS BY
ANY PERSON, OR UPON ANY WRITTEN INFORMATION OTHER THAN AS SPECIFICALLY SET FORTH
IN THE PROSPECTUS AND SUPPLEMENTS THERETO OR IN PROMOTIONAL BROCHURES CLEARLY
MARKED AS BEING PREPARED AND AUTHORIZED BY THE GENERAL PARTNER, ICON CAPITAL
CORP., OR BY THE DEALER-MANAGER, ICON SECURITIES CORP., FOR USE IN CONNECTION
WITH OFFERING OF UNITS TO THE GENERAL PUBLIC BY MEANS OF THE PROSPECTUS. Each
subscriber is hereby further advised that an investment in Units of the
Partnership involves certain risks including, without limitation, the matters
set forth in this Prospectus under the captions "Risk Factors", "Conflicts of
Interest", "Management" and "Income Tax Considerations." Each subscriber is
hereby advised that the representations set forth herein do not constitute a
waiver of any of such subscriber's rights under the Delaware Limited Partnership
Act and applicable federal and state securities laws. Each subscriber is hereby
instructed that: (a) the Units are subject to substantial restrictions on
transferability; (b) there will be no public market for the Units; and (c) it
may not be possible for subscriber to readily liquidate his investment in the
Partnership, if at all, even in the event of an emergency. Any transfer of Units
is subject to the General Partner's approval and must comply with the terms of
Section 10 of the Partnership Agreement. In particular, any purchaser or
transferee must satisfy the minimum investment and investor suitability
standards for his domiciliary state. See "INVESTOR SUITABILITY AND MINIMUM
INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES". Various states may also
impose more stringent standards than the general requirements. See "INVESTOR
SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES." In
addition, the State of California has additional transfer requirements as
summarized in the following legend:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
Each subscriber's acknowledgement that he has received this Prospectus and
the instruction that he should rely on no information other than that contained
in this Prospectus, are required in order that the General Partner may make an
informed judgment as to whether it should accept such subscriber's offer to
subscribe for Units. The General Partner recognizes that in the sales process of
this Offering a potential subscriber will usually discuss the
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Partnership with his registered representative. It is possible that a subscriber
may misunderstand what he is told or that someone might tell him something
different from, or contrary to, the information contained in this Prospectus.
Additionally, a subscriber might be relying on something he read or heard from
sources for which the neither the Dealer-Manager nor the General Partner is
responsible, over which they have no control and which contradicts the data and
information contained in this Prospectus. If a subscriber becomes a Limited
Partner and later makes claims against the Partnership, the Dealer Manager
and/or the General Partner alleging that he did not receive a Prospectus for
this Offering or that although he did receive a Prospectus, he relied upon
information that is contradictory to that disclosed in this Prospectus, then the
Partnership, the Dealer Manager and the General Partner anticipate that they
will rely upon the acknowledgement and receipt of this Prospectus and the
instruction concerning non-reliance on any offering material other than this
Prospectus as evidence that such subscriber did, in fact, receive a Prospectus
and that such subscriber was properly notified that he should not rely upon any
information other than the information disclosed in this Prospectus.
The General Instructions on Page C-2 also ask a potential investor to review
the disclosure in this Prospectus concerning certain conflicts of interest faced
by the Partnership's management and certain risks involved in an investment in
the Partnership and that any federal income tax benefits which may be available
as a result of such purchase may be adversely affected as set forth in this
Prospectus under the captions "Risk Factors," "Conflicts of Interest,"
"Management" and "Income Tax Considerations". Such instruction has been included
because, since the investment involves inherent conflicts of interest and risks
as disclosed in this Prospectus, the General Partner does not intend to admit a
subscriber as a Limited Partner unless it has reason to believe that the
investor is aware of the risks involved with an investment in the Partnership.
If a subscriber becomes a Limited Partner and later makes claims against the
Partnership, the Dealer Manager and/or the General Partner to the effect that he
was not aware that an investment in the Partnership involved the inherent risks
described in this Prospectus, the Partnership, the Dealer Manager and the
General Partner anticipate that they will rely upon this instruction as evidence
that such subscriber had been aware of the degree of risks involved in an
investment in the Partnership for the reasons set forth in this Prospectus under
"Risk Factors."
Each Selling Dealer must countersign each Subscription Agreement for
subscribers solicited by such firm. By such signature, each Selling Dealer
selling Units to a subscriber certifies that it has obtained information from
the subscriber sufficient to enable it to determine that the subscriber has
satisfied the suitability standards named thereon. Since the Partnership, the
Dealer Manager and the General Partner will not have had the opportunity to
obtain such information directly from the subscriber, the General Partner will
rely on such representation so as to determine whether to admit a subscriber to
the Partnership as a Limited Partner. If a subscriber becomes a Limited Partner
and later makes claims against the Partnership, the Dealer Manager and/or the
General Partner alleging that the Units sold to him were not a suitable
investment for him because he did not meet the financial requirements contained
in the investor suitability standards, the Partnership, the Dealer Manager and
the General Partner anticipate that they will rely upon such representation as
evidence that such subscriber met such financial requirements.
The representation that a subscriber has agreed to all the terms and
conditions of the Partnership Agreement is necessary because the General Partner
and each Limited Partner are bound by all of the terms and conditions there of,
notwithstanding that the Limited Partners do not actually sign the Partnership
Agreement. Since the Partnership Agreement is not actually signed by each
subscriber but pursuant to powers of attorney granted in the Subscription
Agreement, the General Partner thereby obligates each subscriber to each of the
terms and conditions of the Partnership Agreement. If a subscriber becomes a
Limited Partner and later makes claims against the Partnership, the Dealer
Manager and/or the General Partner that he did not agree to be bound by all of
the terms of the Partnership Agreement and the Deposit Agreement, the
Partnership, the Dealer Manager and the General Partner anticipate that they
will rely upon such representation and the power of attorney as evidence of the
subscriber's agreement to be bound by all the terms of such agreement.
Citizenship
Federal law restricts the extent to which aircraft and marine vessels which
are to be registered in the United States may be owned or controlled by Persons
who are not United States Citizens. For these purposes, "United States Citizens"
is defined to include (i) individuals who are citizens of the United States or
one of its possessions, (ii) partnerships in which each partner is an individual
who is a citizen of the United States, in the case of aircraft, or in which at
least 75% of the equity in the partnership is held by citizen of the United
States, in the case of vessels, (iii) certain trusts the trustees of which are
citizens of the United States (provided that, in the case of aircraft, persons
who are not citizens of the United States or resident aliens do not possess more
than 35% of the aggregate power to direct or remove the trustee, and in the case
of vessels, each of the beneficiaries of the trust is a citizen of the United
States), and (iv) domestic corporations of which the president (and the chairman
of the board of directors, in the case of vessels) and two-thirds or more of the
members of the board of directors and other
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<PAGE>
managing officers are citizens of the United States and in which at least 75% of
the voting interest (or, in the case of certain vessels, a majority voting
interest) is owned or controlled by Persons who are citizens of the United
States.
As a consequence of those rules, the Partnership may cause title to certain
aircraft and vessels to be held by a trust of which the Partnership is the sole
beneficiary or by a limited partnership beneficially owned by the Partnership.
See "RISK FACTORS -- Business Risks - Risk of Loss of Equipment Registration."
In addition, each investor will be required to represent and warrant whether or
not the investor is a United States Citizen, and subscriptions will be accepted
from only a limited number of Persons who are not United States Citizens. See
"PLAN OF DISTRIBUTION -- Offering of Units." The General Partner will not admit
a non-United States Citizen as if such admission would result in the potential
invalidation of Equipment registration. See "RISK FACTORS - - General -- Limited
Transferability of Units."
Special Limit on Ownership of Units by Benefit Plans
To avoid classification of a pro rata portion of the Partnership's
underlying assets as "plan assets" of investors which are benefit plan
investors, the Partnership intends to restrict the ownership of Units by benefit
plan investors to less than 25% of the total value of outstanding Units at all
times. (See "INVESTMENT BY QUALIFIED PLANS -- Plan Assets.")
Minimum Investment and Suitability Standards
Each Selling Dealer Agreement and the Dealer-Manager Agreement each requires
that the broker-dealer selling Units in the Partnership make diligent inquiry,
as required by law, of each prospective investor to determine whether a purchase
of Units is suitable for such Person in light of his circumstances and, if so
and upon receipt of a subscription for Units, to promptly transmit to the
General Partner all Subscription Monies and duly executed Subscription
Agreements and related documents received by them.
To demonstrate that its registered representative has complied with Sections
3(b) and 4(d) of Appendix F of Article III, Section 34 of the NASD Rules of Fair
Practice in connection with the offering of Units to an investor, each Selling
Dealer is required to countersign each Subscription Agreement solicited by its
registered representative to confirm that such Selling Dealer had reasonable
grounds to believe (based on information requested from the investor concerning
investment objectives, other investments, financial situation and needs, as well
as any other information known to such registered representative) that (i) the
proposed investment in the Partnership is suitable for such investor, (ii) such
Selling Dealer or registered representative had delivered a copy of this
Prospectus to the investor at the time of or prior to solicitation of the
subscription, (iii) such Selling Dealer or registered representative has
informed the investor of the lack of liquidity and marketability of the
investment and (4) such Selling Dealer or registered representative has
confirmed that the investor's signature or the signature of the authorized
Person appears on the subscribing document where required.
How to Subscribe
An investor who meets the suitability standards set forth above may
subscribe to acquire Units. Subscribers must personally execute the Subscription
Agreement and deliver to a securities sales representative a check for all
Subscription Monies payable in connection with such subscription, made payable
as provided in the next paragraph, in order to subscribe for Units. In the case
of IRA, SEP and Keogh plan owners, both such owners and the plan fiduciary (if
any) must sign the Subscription Agreement. In the case of donor trusts or other
trusts in which the donor is the fiduciary, such donor must sign the
subscription agreement. In the case of other fiduciary accounts in which the
donor neither exercises control over, nor is a fiduciary, the plan fiduciary
alone may sign the Subscription Agreement.
Since subscriptions for the Minimum Offering of 12,000 Units have been
received by the Partnership, and the escrow condition has been completed, all
Subscription Agreements must be accompanied by a check made payable to "ICON
Cash Flow Partners L.P. Seven ".
The General Partner will promptly review, and accept or reject (in its sole
and absolute discretion), each subscription. Investors whose subscriptions are
accepted by the General Partner will receive prompt written confirmation of such
acceptance from the General Partner or its agents.
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<PAGE>
The General Partner and any Affiliate of the General Partner and the Selling
Dealers (and their respective officers and employees) will have the right, but
not the obligation, to subscribe for and purchase Units for their own account
for investment purposes, subject to the terms and conditions contained herein,
including purchases of Units on or before the Initial Closing Date, which will
count, to the extent of 600 Units, toward the achievement of the Minimum
Offering. All Units purchased by such parties will be purchased solely for
investment purposes and not with a present view towards resale or distribution.
The General Partner and its Affiliates (and their respective officers and
employees) may not purchase more than ten (10%) percent of all Units subscribed
for by all nonAffiliated Persons.
The NASD's Rules of Fair Practice require that any member of, or Person
associated with, the Dealer- Manager or a Selling Dealer who sells or offers to
sell Units must make every reasonable effort to assure that such potential
subscriber is a suitable investor for a Partnership investment in light of such
subscriber's age, education level, knowledge of investments, need for liquidity,
net worth and other pertinent factors and further requires each selling broker
and each subscriber to make such determination of suitability. The State of
Maine requires us to inform you that the Dealer-Manager and each Person selling
Units cannot rely upon representations made by a subscriber in a Subscription
Agreement alone in making a determination of the suitability of the investment
for such subscriber.
Admission of Partners; Closings
Subscribers will be admitted to the Partnership as Limited Partners, and
will for all purposes of this Agreement become and be treated as Limited
Partners, as of the first day immediately following the Initial Closing Date or
the Final Closing Date or as of the first day of the Segment immediately
following any subsequent Closing Date (other than the Final Closing Date), as
the case may be, next following the acceptance of their subscriptions by the
General Partner and the receipt by the General Partner of all Subscription
Monies payable in connection therewith. Upon the determination by the General
Partner that the Minimum Offering has been achieved, the General Partner will
set the Initial Closing Date. Following the Initial Closing Date, a Closing may
be held on the last day of any Segment (or, if such day is not a business day,
on the next preceding business day), provided that no Closing will be required
to be held on such last day of any Segment (or the next preceding business day)
if the number of Units subscribed for but as to which the subscribers have not
been admitted to the Partnership as Limited Partners as of such date is
insufficient, in the sole and absolute discretion of the General Partner, to
justify the administrative burden and expense of holding a Closing, and
provided, further, that the Final Closing Date may, in the sole and absolute
discretion of the General Partner, be held on a day other than the last day of a
Segment, as promptly as practicable after the Termination Date. Any subscriber
who is a resident of the Commonwealth of Massachusetts and who has been admitted
as a Limited Partner of the Partnership within five (5) business days following
the date he or she receives a copy of the Prospectus (as evidenced by his or her
signature on the Subscription Agreement or a separate receipt for the
Prospectus) may, by giving written notice to the General Partner or
Dealer-Manager within such five (5) day period, rescind his or her subscription
and shall receive a prompt refund of his or her subscription plus simple
interest at 8% per annum from the date such subscription was received by the
Partnership until returned to such subscriber less distributions, if any, made
to such subscriber from the Escrow Account and the Partnership.
------------------------------------------------------------------------------
SALES MATERIAL
------------------------------------------------------------------------------
In addition to and apart from this Prospectus, the Partnership will utilize
certain sales material in connection with the offering of Units. This material
may include reports describing the General Partner and its Affiliates, summary
descriptions of Investments (including, without limitation, pictures of
Equipment or facilities of Lessees), materials discussing the Prior Programs and
a brochure and audio-visual materials or taped presentations highlighting
various features of this Offering. The General Partner and its Affiliates may
also respond to specific questions from Selling Dealers and prospective
investors. Business reply cards, introductory letters or similar materials may
be sent to Selling Dealers for customer use, and other information relating to
this Offering may be made available to Selling Dealers for their internal use.
However, this Offering is made only by means of this Prospectus. Except as
described herein or in Supplements hereto, the Partnership has not authorized
the use of other sales materials in connection with this Offering. Although the
information contained in such material does not conflict with any of the
information contained in this Prospectus, such material does not purport to be
complete and should not be considered as a part of this Prospectus or the
Registration Statement of which this Prospectus is a part, or as incorporated in
this Prospectus or the Registration Statement by reference or as forming the
basis of this Offering of the Units described herein.
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<PAGE>
No dealer, salesman or other Person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or in Supplements hereto or in supplemental sales literature issued
by the Partnership and described in this Prospectus or in Supplements hereto,
and, if given or made, such information or representations must not be relied
upon. This Prospectus does not constitute an offer to sell, or a solicitation of
an offer to buy, any securities other than the Units to which it relates or any
of such Units to any Person in any jurisdiction in which such solicitation is
unlawful. The delivery of this Prospectus at any time does not imply that the
information contained herein is correct as of any time subsequent to its date.
-------------------------------------------------------------------------------
LEGAL MATTERS
-------------------------------------------------------------------------------
The legality of the securities offered hereby and the tax matters set forth
under "Federal Income Tax Consequences" will be passed upon for the Partnership
by Whitman Breed Abbott & Morgan, New York, New York.
-------------------------------------------------------------------------------
EXPERTS
-------------------------------------------------------------------------------
The audited financial statements of ICON Cash Flow Partners L.P. Seven as
of March 31, 1996 and December 31, 1995 and for the three months ended March
31, 1996 and for the period May 23, 1995 (date of inception) to December 31,
1995, and the audited financial statements of ICON Capital Corp. as of March
31, 1996 and 1995 and for each of the years then ended, have been included
herein in reliance upon the reports of KPMG Peat Marwick LLP, independent
certified public accountants, appearing elsewhere herein, upon the authority of
said firm as experts in accounting and auditing.
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ADDITIONAL INFORMATION
------------------------------------------------------------------------------
A Registration Statement under the Securities Act has been filed with the
Securities and Exchange Commission, Washington, D.C., with respect to the
securities offered hereby. This Prospectus, which forms a part of the
Registration Statement filed with the Securities and Exchange Commission,
contains information concerning the Partnership and includes a copy of the
Limited Partnership Agreement to be utilized by the Partnership, but does not
contain all the information set forth in the Registration Statement and exhibits
thereto. The information omitted may be examined at the principal office of the
Commission located at 450 Fifth Street, N.W., Washington, D.C. 20549, without
charge, and copies thereof may be obtained from such office upon payment of the
fee prescribed by the Rules and Regulations of the Commission.
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TABULAR INFORMATION CONCERNING PRIOR PUBLIC PROGRAMS
-------------------------------------------------------------------------------
Exhibit B contains prior performance and investment information for the
General Partner's previous publicly-offered income-oriented programs, ICON Cash
Flow Partners, L.P., Series A, ICON Cash Flow Partners, L.P., Series B, ICON
Cash Flow Partners, L.P., Series C, ICON Cash Flow Partners, L.P., Series D,
ICON Cash Flow Partners, L.P., Series E and ICON Cash Flow Partners L.P. Six
(the "Prior Public Programs"). Table I through V of Exhibit B contain unaudited
information relating to such Prior Public Programs and their experience in
raising and investing funds and to the compensation paid to the General Partner
and its Affiliates by, the operating results of, and sales or dispositions of
investments by, such Prior Public Programs. PURCHASERS OF THE UNITS OFFERED BY
THIS PROSPECTUS WILL NOT ACQUIRE ANY OWNERSHIP IN INTEREST IN ANY OF THE PRIOR
PUBLIC PROGRAMS AND SHOULD NOT ASSUME THAT THE RESULTS OF ANY OF THE PRIOR
PUBLIC PROGRAMS WILL BE INDICATIVE OF THE FUTURE RESULTS OF THE PARTNERSHIP.
MOREOVER, THE OPERATING RESULTS FOR THE PRIOR PUBLIC PROGRAMS SHOULD NOT BE
CONSIDERED INDICATIVE OF FUTURE RESULTS OF THE PRIOR PUBLIC PROGRAMS NOR OF
WHETHER THE PRIOR PUBLIC PROGRAMS WILL ACHIEVE THEIR INVESTMENT OBJECTIVES WHICH
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<PAGE>
WILL IN LARGE PART DEPEND ON FACTS WHICH CANNOT NOW BE DETERMINED, INCLUDING THE
RESIDUAL VALUE OF EQUIPMENT HELD BY SUCH PRIOR PUBLIC PROGRAMS.
------------------------------------------------------------------------------
FINANCIAL STATEMENTS
------------------------------------------------------------------------------
The audited financial statements of ICON Cash Flow Partners L.P. Seven as
of March 31, 1996 and December 31, 1995 and for the three months ended March
31, 1996 and for the period May 23, 1995 (date of inception) to December 31,
1995, and the audited financial statements of ICON Capital Corp. as of March
31, 1996 and 1995 and for each of the years then ended are included herein.
Notwithstanding the inclusion of the General Partner's financial statements,
purchasers of the Units offered hereby should be aware that they are not thereby
purchasing an interest in ICON Capital Corp. or in any of its Affiliates or in
any Prior Public Program.
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<PAGE>
INDEX TO FINANCIAL STATEMENTS AND GENERAL PARTNER'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ICON Cash Flow Partners L.P. Seven
Financial Statements - March 31, 1996 and December 31, 1995
Independent Auditors' Report
Balance Sheets at March 31, 1996 and December 31, 1995
Statement of Operations for the Three Months Ended March 31, 1996
Statements of Changes in Partners' Equity for the Three Months
Ended March 31, 1996 and the Period from May 23, 1995
(date of inception) to December 31, 1995
Statements of Cash Flows for the Three Months Ended March 31, 1996
and For the Period from May 23, 1995 (date of inception) to
December 31, 1995
Notes to Financial Statements
General Partner's Discussion and Analysis of Financial Condition and
Results of Operations
ICON Capital Corp.
Financial Statements - March 31, 1996 and 1995
Independent Auditors' Report
Balance Sheets at March 31, 1996 and 1995
Statements of Income for the Years Ended March 31, 1996 and 1995
Statements of Changes in Stockholders' Equity for the
Years Ended March 31, 1996 and 1995
Statements of Cash Flows for the Years ended March 31, 1996 and 1995
Notes to Financial Statements
<PAGE>
ICON Cash Flow Partners L.P. Seven
Financial Statements
March 31, 1996 and December 31, 1995
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
ICON Cash Flow Partners L.P. Seven
We have audited the accompanying balance sheets of ICON Cash Flow Partners L.P.
Seven (a Delaware limited partnership) as of March 31, 1996 and December 31,
1995 and the related statement of operations for the three months ended March
31, 1996, and the related statements of changes in partners' equity and cash
flows for the three months ended March 31, 1996 and for the period from May 23,
1995 (date of inception) to December 31, 1995. 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 ICON Cash Flow Partners L.P.
Seven as of March 31, 1996 and December 31, 1995 and the results of its
operations for the three months ended March 31, 1996, and cash flows for the
three months ended March 31, 1996 and for the period from May 23, 1995 (date of
inception) to December 31, 1995 in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
June 21, 1996
New York, New York
- 2 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Balance Sheets
March 31, December 31,
1996 1995
---- ----
Assets
Cash ............................................ $ 6,765,750 $ 2,000
Cash in escrow .................................... -- 1,348,143
----------- -----------
6,765,750 1,350,143
----------- -----------
Investment in finance leases
Minimum rents receivable ....................... 4,469,238 --
Estimated unguaranteed residual values ......... 605,943 --
Initial direct costs ........................... 130,127 --
Unearned income ................................ (655,789) --
----------- -----------
4,549,519 --
----------- -----------
Investment in financings
Receivables due in installments ................ 323,594 --
Initial direct costs ........................... 7,403 --
Unearned income ................................ (75,224) --
----------- -----------
255,773 --
----------- -----------
Other assets ...................................... 163,295 --
----------- -----------
Total assets $ .................................... 11,734,337 $ 1,350,143
=========== ===========
Liabilities and Partners' Equity
Notes payable - non-recourse $ .................... 3,630,043 $ --
Accounts payable to General Partner
and affiliates, net ............................ 253,949 --
Accounts payable - other .......................... 151,433 --
Subscriptions pending admission ................... -- 1,348,143
----------- -----------
4,035,425 1,348,143
----------- -----------
Commitments and Contingencies
Partners' equity
General Partner ................................ 575 1,000
Limited partners (89,485.60 and 0 units
outstanding, $100 per unit original
issue price in 1996 and 1995, respectively) .. 7,698,337 1,000
----------- -----------
Total partners' equity ....................... 7,698,912 2,000
----------- -----------
Total liabilities and partners' equity $ .......... 11,734,337 $ 1,350,143
=========== ===========
See accompanying notes to financial statements.
- 3 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Statement of Operations
For the Three Months Ended March 31, 1996
Revenues
Finance income .................................. $49,350
Interest income and other ....................... 25,785
Total revenues .................................. 75,135
Expenses
Interest ........................................ 34,897
Management fees - General Partner ............... 13,436
Amortization of initial direct costs ............ 9,237
Administrative expense
reimbursements - General Partner .............. 5,898
General and administrative ...................... 4,808
Total expenses .................................. 68,276
Net income ......................................... $ 6,859
=======
Net income allocable to:
Limited partners ................................ $ 6,790
General Partner ................................. 69
-------
$ 6,859
Weighted average number of limited
partnership units outstanding ................... 44,819
Net income per weighted average
limited partnership unit ........................ $ .15
=======
See accompanying notes to financial statements.
- 4 -
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Changes in Partners' Equity
For the Three Months Ended March 31, 1996
and the Period from May 23, 1995 (date of inception)
to December 31, 1995
<TABLE>
Limited Partner Distributions
Return of Investment Limited General
Capital Income Partners Partner Total
(Per weighted average unit)
<S> <C> <C> <C> <C> <C>
Initial partners'
capital contribution
- May 23, 1995 $ 1,000 $ 1,000 $ 2,000
------------- --------- -------------
Balance at
December 31, 1995 1,000 1,000 2,000
Refund of initial
limited partners'
capital contribution (1,000) - (1,000)
Proceeds from issuance
of limited partnership
units (89,485.60 units) 8,948,560 - 8,948,560
Sales and
offering expenses (1,208,056) - (1,208,056)
Cash distributions
to partners $ .94 $ .15 (48,957) (494) (49,451)
Net income 6,790 69 6,859
----------- ----- --------
Balance at
March 31, 1996 $ 7,698,337 $ 575 $ 7,698,912
============= ========= =============
</TABLE>
See accompanying notes to financial statements.
- 5 -
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Cash Flows
For the Period
from
May 23, 1995
(date of
Three Months inception)
Ended to
March 31,1996 December 31,
1995
Cash flows from operating activities:
Net income $ 6,859 ............................ $ --
----------- -----------
Adjustments to reconcile net income to
net cash provided by operating activities:
Finance income portion of
receivables paid directly
to lenders by lessees .................... (44,661) --
Amortization of initial direct costs ....... 9,237 --
Interest expense on non-recourse
financing paid directly by lessees ....... 34,897 --
Collection of principal
- non-financed receivables ............... 9,966 --
Change in operating assets and liabilities:
Accounts payable to General Partner
and affiliates, net ................... 253,949 --
Accounts payable - other ................ 151,433 --
Other assets ............................ (163,295) --
Other, net .............................. (1,441) --
----------- -----------
Total adjustments ....................... 250,085 --
----------- -----------
Net cash provided by operating activities 256,944 --
----------- -----------
Cash flows from investing activities:
Equipment and receivables purchased ........... (1,036,480) --
Initial direct costs .......................... (146,767) --
----------- -----------
Net cash used in investing activities ... (1,183,247) --
----------- -----------
Cash flows from financing activities:
Issuance of limited partnership units,
net of offering expenses .................... 7,740,504 --
Cash distributions to partners ................ (49,451) --
Refund of initial limited partners'
capital contribution ........................ (1,000) --
Initial limited and general partner
capital contributions ....................... -- 2,000
----------- -----------
Net cash provided by financing activities 7,690,053 2,000
----------- -----------
Net increase in cash ............................ 6,763,750 2,000
Cash at beginning of period ..................... 2,000 --
----------- -----------
Cash at end of period $ 6,765,750 $ ............. 2,000
=========== ===========
See accompanying notes to financial statements.
- 6 -
<PAGE>
ICON Cash Flow Partners L. P. Seven
(A Delaware Limited Partnership)
Statements of Cash Flows (continued)
Supplemental Disclosure of Cash Flow Information
For the three months ended March 31, 1996 and for the period from May 23,
1995 (date of inception) to December 31, 1995, non-cash activities included the
following:
For the Period
from
May 23, 1995
(date of
Three Months inception)
Ended To December 31,
March 31, 1996 1995
Fair value of equipment and receivables
purchased for debt and payables $ (3,856,235) $ --
Non-recourse notes payable assumed in
purchase price .............................. 3,856,235 --
Principal and interest on direct
finance receivables paid directly
to lenders by lessees ....................... 261,089 --
Principal and interest on non-recourse
financing paid directly to lenders
by lessees .................................. (261,089) --
Capital subscriptions in escrow ............... -- 1,348,143
Subscriptions pending admission ............... -- (1,348,143)
----------- -----------
-- --
=========== ===========
Interest expense for the three months ended March 31, 1996 consisted of
interest expense on non-recourse financing paid or accrued directly to lenders
by lessees of $34,897.
- 7 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements
March 31, 1996
1. Organization
ICON Cash Flow Partners L.P. Seven (the "Partnership") was formed on May
23, 1995 as a Delaware limited partnership with an initial capitalization of
$2,000. The Partnership is offering limited partnership units on a "best
efforts" basis to the general public with the intention of raising capital of
between $1,200,000 and $100,000,000. It was formed to acquire various types of
equipment, to lease such equipment to third parties and, to a lesser degree, to
enter into secured financing transactions. As of December 31, 1995,
subscriptions had been received for 13,481.43 units at $100 per unit, or
$1,348,143. The Partnership commenced business operations on its initial closing
date, January 19, 1996, with the admission of 26,367.95 limited partnership
units at $100 per unit representing $2,636,795 of capital contributions. Through
March 31, 1996, 76,004.17 additional units were subscribed to, bringing the
total units and capital subscriptions to 89,485.60 and $8,948,560 respectively,
at that date.
The General Partner of the Partnership is ICON Capital Corp. (the "General
Partner"), a Connecticut corporation. The General Partner manages and controls
the business affairs of the Partnership's equipment, leases and financing
transactions under a management agreement with the Partnership.
ICON Securities Corp., an affiliate of the General Partner, receives an
underwriting commission on the gross proceeds from sales of all units. The total
underwriting compensation paid by the Partnership, including underwriting
commissions, sales commissions, incentive fees, public offering expense
reimbursements and due diligence activities is limited to 13 1/2% of the gross
proceeds received from the sale of the units.
Profits, losses, cash distributions and disposition proceeds will be
allocated 99% to the limited partners and 1% to the General Partner until each
limited partner has received cash distributions and disposition proceeds
sufficient to reduce its adjusted capital contribution account to zero and
receive, in addition, other distributions and allocations which would provide a
10% per annum cumulative return, compounded daily, on its outstanding adjusted
capital contribution account. After such time, the distributions will be
allocated 90% to the limited partners and 10% to the General Partner.
2. Significant Accounting Policies
Basis of Accounting and Presentation - The Partnership's records are
maintained on the accrual basis. The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Leases - The Partnership accounts for owned equipment leased to third
parties as finance leases. For finance leases, the Partnership records, at the
inception of the lease, the total minimum lease payments receivable, the
estimated unguaranteed residual values, the initial direct costs related to the
leases and the related unearned income. Unearned income represents the
difference between the sum of the minimum lease payments receivable plus the
estimated unguaranteed residual value minus the cost of the leased equipment.
Unearned income is recognized as finance income over the terms of the related
leases using the interest method. Initial direct costs of finance leases are
capitalized and are amortized over the terms of the related leases using the
interest method. The Partnership's leases have terms ranging from two to five
years. Each
- 8 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements (continued)
lease is expected to provide aggregate contractual rents that, along with
residual proceeds, return the Partnership's cost of its investment along with
investment income.
Investment in Financings - Investment in financings represent the gross
receivables due from the financing of equipment plus the initial direct costs
related thereto less the related unearned income. The unearned income is
recognized as finance income and the initial direct costs are amortized over the
terms of the receivables using the interest method. Financing transactions are
supported by a written promissory note evidencing the obligation of the user to
repay the principal, together with interest, which will be sufficient to return
the Partnership's full cost associated with such financing transaction, together
with investment income. Furthermore, the repayment obligation is collateralized
by a security interest in the tangible or intangible personal property.
Impairment of Estimated Residual Values - The Partnership's policy is to
review the carrying value of its residuals on a quarterly basis and write down a
residual if it has been determined to be impaired. Impairment generally occurs
for one of two reasons: (1) when the recoverable value of the underlying
equipment falls below the Partnership's carrying value or (2) when the primary
security holder has foreclosed on the underlying equipment in order to satisfy
the remaining lease obligation and the amount of proceeds received by the
primary security holder in excess of such obligation is not sufficient to
recover the Partnership's residual position. Generally in such cases, the
residuals would relate to equipment for which non-recourse notes payable were
outstanding. In these cases the lessees pay their rents directly to the third
party lender and the Partnership would not realize any cash flow until the
lessees have satisfied the initial note obligations and the equipment is
remarketed.
Disclosures About Fair Value of Financial Instruments - Statement of
Financial Accounting Standards No. 107 ("SFAS No. 107"), "Disclosures about Fair
Value of Financial Instruments" requires disclosures about the fair value of
financial instruments. The fair value of the receivables and non-recourse notes
payable approximates the carrying value at March 31, 1996. SFAS No. 107 does not
require disclosures about the fair value of lease arrangements.
Income Taxes - No provision for income taxes has been made as the liability
for such taxes is that of each of the partners rather than the Partnership.
- 9 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements (continued)
3. Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the General
Partner or its affiliates for the three months ended March 31, 1996 were as
follows:
Underwriting commissions .............. $179,419 Charged to Equity
Organization and offering ............. 313,200 Charged to Equity
Acquisition fees (initial direct costs) 146,767 Capitalized
Management fees ....................... 13,436 Charged to operations
Administrative expense
reimbursements ...................... 5,898 Charged to operations
Total ................................. $658,720
=====================
There were no fees or expenses paid or accrued by the Partnership to the
General Partner or its affiliates for the period ended December 31, 1995.
4. Receivables Due in Installments
Non-cancelable minimum amounts due on finance leases and financings at
March 31, 1996 follows:
Year Ending
December 31, Finance Leases Financings Total
For the nine months
Ending 1996 $ 1,329,662 $ 43,876 $ 1,373,538
1997 1,671,199 65,816 1,737,015
1998 1,394,469 65,816 1,460,285
1999 44,360 65,816 110,176
2000 25,326 65,816 91,142
Thereafter 4,222 16,454 20,676
----------- ---------- -----------
$ 4,469,238 $ 323,594 $ 4,792,832
=========== ========== ===========
5. Notes Payable
Notes payable non-recourse, which is being paid directly to lenders to
lessees, bearing interest at rates ranging from 7.22% to 9.42%, at March 31,
1996 mature as follows:
Year Ending
December 31,
For the nine months
Ending 1996 $ 1,016,800
1997 1,354,799
1998 1,258,444
-----------
$ 3,630,043
- 10 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
Notes to Financial Statements (continued)
6. Commitments and Contingencies
The Partnership has entered into remarketing and residual sharing
agreements with third parties. In connection therewith, remarketing or residual
proceeds received in excess of specified amounts will be shared with these third
parties based on specified formulas. As of March 31, 1996 the Partnership had
not made any payments pursuant to such agreements.
- 11 -
<PAGE>
ICON Cash Flow Partners L.P. Seven
(A Delaware Limited Partnership)
March 31, 1996
General Partner's Discussion and Analysis of
Financial Condition and Results of Operations
ICON Cash Flow Partners L.P. Seven (the "Partnership") was formed on May
23, 1995 as a Delaware limited partnership with an initial capitalization of
$2,000. The Partnership is offering limited partnership units on a "best
efforts" basis to the general public with the intention of raising capital of
between $1,200,000 and $100,000,000. It was formed to acquire various types of
equipment, to lease such equipment to third parties and, to a lesser degree, to
enter into secured financing transactions. As of December 31, 1995,
subscriptions had been received for 13,481.43 units at $100 per unit, or
$1,348,143. The Partnership commenced business operations on its initial closing
date, January 19, 1996, with the admission of 26,367.95 limited partnership
units at $100 per unit representing $2,636,795.17 of capital contributions.
Through March 31, 1996, 76,004.17 additional units were subscribed to, bringing
the total units and capital subscriptions to 89,485.60 and $8,948,560
respectively, at that date.
The Partnership's portfolio consisted of a net investment in finance
leases and financings representing 95% and 5% of total investments at March 31,
1996.
For the three months ended March 31, 1996, the Partnership leased or
financed equipment with an initial cost of $4,894,156 to 9 lessees or equipment
users. The weighted average initial transaction term was 38 months.
The Partnership commenced operations on January 19, 1996, therefore a
comparison of results of operations and liquidity and capital resources to prior
periods is not possible.
Results of Operations for the Three Months Ended March 31, 1996
Net income for the three months ended March 31, 1996 was $6,859. The net
income per weighted average limited partnership unit was $.15 for 1996.
Liquidity and Capital Resources
The Partnership's primary sources of funds for the three months ended
March 31, 1996 were capital contributions, net of offering expenses, of
$7,740,504 from limited partners and cash provided by operations of $256,944.
These funds were used to make payments on borrowings, to fund cash distributions
and to purchase equipment. The Partnership intends to continue to purchase
equipment and to fund cash distributions utilizing funds from capital
contributions and cash provided by operations.
Cash distributions to the limited partners for the three months ended
March 31, 1996, which were paid monthly, totaled $48,957, of which $6,790 was
investment income and $42,167 was a return of capital. The limited partner
distribution per weighted average unit outstanding for the three months ended
March 31, 1996 was $1.09, of which $.15 was investment income and $.94 was a
return of capital.
As of March 31, 1996, except as noted above, there were no known trends or
demands, commitments, events or uncertainties which are likely to have any
material effect on liquidity. As cash is realized from operations, sales of
equipment and borrowings, the Partnership will invest in equipment leases and
financings where it deems it to be prudent while retaining sufficient cash to
meet its reserve requirements and recurring obligations as they become due.
- 12 -
<PAGE>
ICON CAPITAL CORP.
Financial Statements
March 31, 1996 and 1995
(With Independent Auditors' Report Thereon)
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
ICON Capital Corp.:
We have audited the accompanying balance sheets of ICON Capital Corp. as of
March 31, 1996 and 1995, and the related statements of income, changes in
stockholders' equity, and cash flows for the years then ended. These financial
statements are the responsibility of the Company'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 ICON Capital Corp. as of March
31, 1996 and 1995, and the results of its operations and its cash flows for the
years then ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
June 21, 1996
New York, New York
<PAGE>
ICON CAPITAL CORP.
BALANCE SHEETS
March 31,
<TABLE>
1996 1995
----------- -----------
ASSETS
<S> <C> <C>
Cash ............................................................. $ 114,850 $ 217,306
Receivables from related parties -
managed income funds ........................................... 2,023,380 1,914,981
Receivables from affiliates ...................................... 336,806 79,673
Prepaid and other assets ......................................... 133,588 174,177
Deferred charges ................................................. 302,886 280,690
Fixed assets and leasehold improvements, at cost, less accumulated
depreciation and amortization of $1,246,975 and $917,854 781,058 952,485
Investment in equipment under operating lease, at cost,
less accumulated depreciation of $1,079,939 and $427,235 ....... 4,260,497 4,913,201
----------- -----------
Total assets ..................................................... $ 7,953,065 $ 8,532,513
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 871,770 $ 500,173
Deferred management fees - related parties ....................... 667,824 716,097
Deferred income taxes ............................................ 483,944 409,841
Notes payable - recourse financings .............................. 46,185 393,439
Note payable - non-recourse financings ........................... 4,262,185 4,938,213
----------- -----------
Total liabilities ................................................ 6,331,908 6,957,763
----------- -----------
Commitments and contingencies
Stockholders' equity:
14% Cumulative Convertible preferred stock:
$100 par value; authorized 30,000 shares;
none issued .................................................. -- --
Common stock: no par value; $10 stated
value; authorized 3,000 shares;
issued and outstanding 1,500 shares .......................... 15,000 15,000
Additional paid-in capital ..................................... 716,200 1,416,200
Retained earnings .............................................. 889,957 843,550
----------- -----------
1,621,157 2,274,750
Notes receivable from stockholder .............................. -- (700,000)
----------- -----------
Total stockholders' equity ....................................... 1,621,157 1,574,750
----------- -----------
Total liabilities and stockholders' equity $ 7,953,065 $ 8,532,513
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Note: A purchaser of units is not acquiring an interest in this corporation.
3
<PAGE>
ICON CAPITAL CORP.
STATEMENTS OF INCOME
For the Years Ended March 31,
1996 1995
---- ----
Revenues:
Income funds - related parties $8,862,690 $8,181,364
Lease consulting fees and other .............. 41,591 30,128
---------- ----------
Total revenues .......................... 8,904,281 8,211,492
---------- ----------
Expenses:
Selling, general and administrative .......... 7,982,949 6,920,055
Amortization of deferred charges ............. 473,484 373,075
Depreciation and amortization ................ 329,121 336,944
---------- ----------
Total expenses .......................... 8,785,554 7,630,074
---------- ----------
118,727 581,418
---------- ----------
Other Revenue:
Rental income from investment
in operating lease ......................... 1,009,756 661,165
Interest income and other .................... 5,803 2,972
---------- ----------
1,015,559 664,137
---------- ----------
Other Expenses:
Interest expense - non-recourse financings ... 333,728 329,030
Interest expense - recourse financings ....... 27,344 60,186
Depreciation - equipment under operating lease 652,704 320,426
Write off of related party notes receivable/
capital contribution - managed income fund . -- 225,000
Expenses of proposed acquisition ............. -- 40,299
Net loss from equity investment in
real estate partnership .................... -- 12,823
---------- ----------
1,013,776 987,764
---------- ----------
Income before provision for income taxes ..... 120,510 257,791
Provision for income taxes ........................ 74,103 135,420
---------- ----------
Net income ................................. $ 46,407 $ 122,371
========== ==========
See accompanying notes to financial statements.
Note: A purchaser of units is not acquiring an interest in this corporation.
4
<PAGE>
ICON CAPITAL CORP.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended March 31, 1996 and 1995
<TABLE>
Notes Total
Common Stock Additional Receivable Stock-
Shares Stated Paid-in Retained from holders'
Outstanding Value Capital Earnings Stockholder Equity
<S> <C> <C> <C> <C> <C>
March 31, 1994 ..... 1,500 $ 15,000 $ 1,416,200 $ 721,179 $ (700,000) $ 1,452,379
Net income ......... -- -- -- 122,371 -- 122,371
----------- ----------- ----------- -----------
March 31, 1995 ..... 1,500 $ 15,000 $ 1,416,200 $ 843,550 $ (700,000) $ 1,574,750
Net income ......... -- -- -- 46,407 -- 46,407
Cancellation of note
receivable from
stockholder ....... -- -- (700,000) -- 700,000 --
----------- ----------- ----------- ----------- ----------- -----------
March 31, 1996 ..... 1,500 $ 15,000 $ 716,200 $ 889,957 -- $ 1,621,157
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
Note: A purchaser of units is not acquiring an interest in this corporation.
5
<PAGE>
ICON CAPITAL CORP.
STATEMENTS OF CASH FLOWS
For the Years Ended March 31,
<TABLE>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................................... $ 46,407 $ 122,371
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization .................................. 981,825 657,370
Amortization of deferred charges ............................... 473,484 373,075
Interest expense paid directly to lender by lessee ............. 333,728 329,030
Rental income paid directly to lender by lessee ................ (1,009,756) (661,165)
Principal payments on litigation settlement .................... (55,847) (50,545)
Write off of related party notes receivable/capital contribution
- managed income fund ........................................ -- 225,000
Net loss from equity investment in real estate partnership ..... -- 12,823
Interest income paid directly to lender by lessee .............. -- (62)
Changes in operating assets and liabilities:
Receivables from managed income funds,
net of deferred amounts ................................... (156,672) (218,239)
Receivables from affiliates ................................. (257,133) (66,394)
Prepaid and other assets .................................... 41,589 257,950
Deferred income taxes ....................................... 74,103 135,420
Accounts payable and accrued expenses ....................... 371,597 (20,569)
----------- -----------
Total adjustments ......................................... 796,918 973,694
----------- -----------
Net cash provided by operating activities ......................... 843,325 1,096,065
----------- -----------
Cash flows from investing activities:
Purchase of fixed assets .......................................... (157,694) (145,766)
Increase in deferred charges ...................................... (495,680) (423,259)
Investment in Partnership ......................................... (1,000) --
Loan to related party/capital contribution - managed income fund .. -- (225,000)
----------- -----------
Net cash used in investing activities ............................. (654,374) (794,025)
----------- -----------
Cash flows from financing activities:
Principal payments on notes payable - recourse financings ......... (291,407) (287,908)
----------- -----------
Net cash used in financing activities ............................. (291,407) (287,908)
----------- -----------
Net increase (decrease) in cash ...................................... (102,456) 14,132
Cash, beginning of year .............................................. 217,306 203,174
----------- -----------
Cash, end of year $ 114,850 $ 217,306
=========== ===========
</TABLE>
See accompanying notes to financial statements.
Note: A purchaser of units is not acquiring an interest in this corporation.
6
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements
March 31, 1996
(1) Organization
ICON Capital Corp. (the "Company") was incorporated in 1985 in the state of
Connecticut. The primary activity of the Company is the development,
marketing and management of publicly registered equipment leasing limited
partnerships. The Company also provides consulting services to unrelated
parties in connection with the acquisition and administration of lease
transactions.
The Company had two wholly-owned subsidiaries: ICON Leasing Corp.
("Leasing") and ICON Financial Corp. ("Financial") (collectively "the
Subsidiaries"). Leasing was incorporated in 1985 in the state of New York.
Financial was incorporated in 1992 in the state of Delaware and never
conducted any business operations. On March 28, 1996 the Subsidiaries were
dissolved. This dissolution had no financial effect on the operations for
the current year. The Subsidiaries had no material impact on the financial
statements for the years ended 1996 and 1995.
The Company is the general partner and manager of ICON Cash Flow Partners,
L.P.,Series A ("ICON Cash Flow A"), ICON Cash Flow Partners, L.P., Series B
("ICON Cash Flow B"), ICON Cash Flow Partners, L.P., Series C ("ICON Cash
Flow C"), ICON Cash Flow Partners, L.P., Series D ("ICON Cash Flow D"),
ICON Cash Flow Partners, L.P., Series E ("ICON Cash Flow E") , ICON Cash
Flow Partners L.P. Six ("ICON Cash Flow Six") and ICON Cash Flow Partners
L.P. Seven ("ICON Cash Flow Seven") (collectively the "Partnerships"),
which are publicly registered equipment leasing limited partnerships. The
Partnerships were formed for the purpose of acquiring equipment and leasing
such equipment to third parties. The Company's investments in the
Partnerships of $7,000 are carried at cost and are included in prepaid and
other assets.
The Company earns fees from the Partnerships on the sale of Partnership
units. Additionally, the Company also earns acquisition and management fees
and shares in Partnership cash distributions. ICON Cash Flow Seven, the
newest partnership, was formed on May 23, 1995 with an initial capital
contribution of $1,000 and began offering its units to suitable investors
on November 9, 1995. The Company earned fees from the sale of ICON Cash
Flow Seven units upon its initial closing and will continue to earn fees
thereafter on each subsequent closing. The offering period for ICON Cash
Flow Seven will end 24 months after the Partnership began offering such
units, November 9, 1997.
The following table identifies pertinent offering information by the
Partnerships:
Date Operations Date Ceased Gross Proceeds
Began Offering Units Raised
ICON Cash Flow A May 6, 1988 February 1, 1989 $ 2,504,500
ICON Cash Flow B September 22, 1989 November 15, 1990 20,000,000
ICON Cash Flow C January 3, 1991 June 20, 1991 20,000,000
ICON Cash Flow D September 13, 1991 June 5, 1992 40,000,000
ICON Cash Flow E June 5, 1992 July 31, 1993 61,041,151
ICON Cash Flow Six March 31, 1994 November 8, 1995 38,385,712
ICON Cash Flow Seven January 19, 1996 (1) 15,078,465
------------
$197,009,828
(1) Gross proceeds raised through June 15, 1996
7
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(2) Significant Accounting Policies
(a) Significant Accounting Policies
Basis of Accounting and Presentation - The Company's records are
maintained on the accrual basis. The preparation of financial
statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
(b) Disclosures About Fair Value of Financial Instruments
The Statement of Financial Accounting Standards No. 107 ("SFAS No.
107"), "Disclosures about Fair Value of Financial Instruments"
requires disclosures about the fair value of financial instruments.
The fair value of the Company's financial instruments approximate the
carry value at March 31, 1996.
(c) Revenue and Cost Recognition
Income Fund Fees:
The Company earns fees from the Partnerships for the organization and
offering of each Partnership and for the acquisition, management and
administration of their lease portfolios. Organization and offering
fees are earned based on investment units sold and are recognized at
each closing. Acquisition fees are earned based on the purchase price
paid or the principal amount of each transaction entered into.
Management and administrative fees are earned for actively managing the
leasing, re-leasing, financing and refinancing of Partnership equipment
and financing transactions and for the administration of the
Partnerships. Management and administrative fees are earned based
primarily on gross rental payments. The Company had accounts receivable
due from the Partnerships of $2,023,380 and $1,914,981 at March 31,
1996 and 1995, respectively. Included in these amounts are receivables
of $667,824 and $716,097, respectively, due from ICON Cash Flow A, ICON
Cash Flow B and ICON Cash Flow C relating to management fees which have
been earned, but deferred since September 1, 1993, as discussed below.
Under the Partnership agreements, the Company is entitled to management
fees from the Partnerships. Management fees are subordinate to the
preferred cash distributions to limited partners, on a cumulative
basis, during the period of reinvestment. Effective September 1, 1993,
ICON Cash Flow A, ICON Cash Flow B, and ICON Cash Flow C decreased the
monthly distribution rate to limited partners from the cash
distribution rates stated in their prospectuses. Currently such
distribution rates are at an annual rate of 9%. As a result of the
decreased distribution rate, all management fees payable to the Company
related to these entities have been deferred until the limited partners
of ICON Cash Flow A, ICON Cash Flow B and ICON Cash Flow C have
received their stated cash distribution rate of return on a cumulative
basis. Management fees deferred for the period September 1, 1993 to
March 31, 1996 totaled $667,824 and were comprised of $32,625 for ICON
Cash Flow A, $127,000 for ICON Cash Flow B and $508,199 for ICON Cash
Flow C. Such amounts are included in receivables due from managed
income funds as well as in deferred management fees on the March 31,
1996 balance sheet.
8
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
Lease Consulting Fees:
The Company earns consulting fees for arranging lease financing
transactions between unrelated third parties. Such fees are recognized
as income when the unrelated third parties consummate the lease
financing transaction.
(d) Investment in Real Estate Partnership
The Company had an investment in Welch Center Associates, L.P.
("Welch"), a real estate limited partnership which was accounted for
under the equity method. The remaining investment was written off
during the year ended March 31, 1995.
(e) Deferred Charges
Under the terms of the Partnerships' agreements, the Company is
entitled to be reimbursed for the costs of organizing and offering the
units of the Partnerships from the gross proceeds raised, subject to
certain limitations, based on the number of investment units sold. The
unamortized balance of these costs are included on the balance sheets
as deferred charges and are being amortized over the offering period.
(f) Fixed Assets and Leasehold Improvements
Fixed assets, which consist primarily of computer equipment, software
and furniture and fixtures, are recorded at cost and are being
depreciated over three to five years using the straight-line method.
Leasehold improvements are also recorded at cost and are being
amortized over the estimated useful lives of the improvements, or the
term of the lease, if shorter, using the straight-line method.
(g) Investment in Equipment Under Operating Lease
The Company's investment in equipment under operating lease is recorded
at cost and the equipment is being depreciated to estimated salvage
value. Both lease rentals and depreciation are recognized on the
straight line basis over the lease term. The Company, on a non-recourse
basis, financed the purchase of the equipment with a financial
institution. Interest on the related non-recourse financing is
calculated under the interest method. The excess of rental income over
depreciation and related interest expense represents the net amount
earned under this transaction.
(h) Income Taxes
The Company accounts for its income taxes following the liability
method as provided for in Statement of Financial Accounting Standard
No. 109 (" SFAS 109"), "Accounting for Income Taxes."
The Company and its Subsidiaries have filed consolidated federal and
separate state income tax returns through March 31, 1995. Due to the
dissolution of the Subsidiaries on March 28, 1996, the Company will be
filing a final return on a consolidated basis with the Subsidiaries for
the period ending March 31, 1996. In the future the Company expects to
file stand alone federal income tax returns.
9
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(3) Stockholders' Equity
PeterD. Beekman, the Company's President, owns 60.8% of the Company's
outstanding common stock. The balance of the Company's shares are owned by
Charles Duggan, 19.6% and Cortes E. DeRussy, 19.6%, both are Executive Vice
Presidents of the Company. Additionally, Mr. Beekman is the sole shareholder of
On-Line Telephone, Inc. and Soundview Leasing Co., Inc. ("Soundview") which owns
all of the outstanding shares of the following corporations: NOCI, Inc., ICON
Securities Corp., ICG Credit Corp and ICG Realty Management Corp. Mr. Beekman is
also a limited partner in ICON Cash Flow A, ICON Cash Flow B, ICON Cash Flow C
and ICON Cash Flow D.
As of March 31, 1995, Mr. Beekman had two outstanding demand promissory
notes totaling $700,000 which represent capital contributions. The notes
bear interest at the rate of 18% only in the event of default. The demand
promissory notes are guaranteed by Susan H. Beekman, Mr. Beekman's wife,
who is also Vice President, Secretary and Treasurer of the Company. The
notes are reflected as a reduction from stockholders' equity for financial
statement reporting purposes. On March 28, 1996, the Company canceled these
notes and released the related guarantees. The Company, by canceling these
notes, reduced additional paid in capital by the same amount.
(4) Related Party Transactions
The Company earns fees from the Partnerships for the organization and
offering of each Partnership and for the acquisition, management and
administration of their lease portfolios. Receivables from managed income
funds primarily relate to such fees earned from the Partnerships. The
balance at March 31, 1996 has been fully realized as of May 30, 1996. In
addition, the Company has receivables from affiliates which are due from
entities controlled by Mr. Beekman. These receivables relate primarily to
the reimbursement of amounts paid by the Company on behalf of such
entities.
Pursuant to a proxy solicitation, the limited partners in ICON Cash Flow B
agreed to the following two amendments to their Partnership Agreement: (1)
extend the Reinvestment Period for a maximum of four additional years, and
(2) eliminate ICON Cash Flow B's obligation to pay the Company $220,000 of
the $347,000 in deferred management fees which was outstanding as of
November 15, 1995, the original end of the Reinvestment Period. The
elimination of these fees reduced receivables from related parties -
managed income funds and deferred management fees related parties in the
same amount. In addition, the remaining $127,000 in deferred management
fees, when paid to the Company, would be returned to ICON Cash Flow B in
the form of an additional capital contribution.
Effective January 31, 1995, ICON Cash Flow Series A, by consent of its
limited partners, amended its Partnership Agreement. The amendments: (1)
extend the Reinvestment Period of ICON Cash Flow Series A to January 1997,
(2) allow the Company to lend funds to ICON Cash Flow Series A for a term
in excess of twelve months for amounts up to an aggregate of $250,000, and
(3) decrease management fees to a flat rate of 1% of rentals for all
investments under management.
In February and March 1995, the Company lent $75,000 and $100,000,
respectively, to ICON Cash Flow Series A. Principal on the loans is to be
repaid only after the extended Reinvestment Period expires, and after the
limited partners have received at least a 6% total return on their capital.
The notes bear interest at the lower of 6% per annum or prime interest
rate. The Company has written off these notes as there is doubt as to their
ultimate recoverability.
In January and October 1994, the Company contributed $75,000 and $50,000,
respectively, in additional capital to ICON Cash Flow A. Since management
fees from ICON Cash Flow A are being deferred and the recoverability of the
additional capital contributions is questionable, such contributions were
written off by the Company. Profits, losses and cash distributions will not
be affected by the additional capital contributions and will continue to be
allocated in the same manner as stated in the ICON Cash Flow A prospectus.
10
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(5) Prepaid and Other Assets
Included in prepaid and other assets are amortized insurance costs, tax
refund receivables from Federal and state jurisdictions and sublease
receivables.
(6) Income Taxes
The provision for income taxes for the years ended March 31, 1996 and 1995
of $74,103 and $135,420, respectively, consists of deferred Federal and
State income taxes of $46,078 and $28,025 and $80,344 and $55,076 for 1996
and 1995, respectively.
Deferred income taxes are provided for the temporary differences between
the financial reporting basis and the tax basis of the Company's assets and
liabilities. The deferred tax liability at March 31, 1996 and 1995
represents the net of deferred tax assets of $620,189 and $564,493,
respectively, and deferred tax liabilities of $1,104,133 and $974,334,
respectively for March 31, 1996 and 1995. Deferred income taxes at March
31, 1996 are primarily the result of temporary differences relating to the
carrying value of fixed assets, equipment under an operating lease, the
investments in the Partnerships, and deferred charges. Additionally, the
Company has a tax net operating loss carry forward of $1,625,688 which
fully expires by 2011, as well as a tax rehabilitation credit of $49,520
which expires in 2001. The Company does not have a valuation allowance
against the deferred tax assets because it is more likely than not that
they will be realized.
The following table reconciles income taxes computed at the federal
statutory rate to the Company's effective tax rate for the years ended
March 31, 1996 and 1995:
1996 1995
---- ----
Tax Rate Tax Rate
Federal statutory $ 40,973 34.00% $ 87,649 34.00%
State income taxes, net of
Federal tax effect 18,497 15.35 36,350 14.10
Adjustment to prior year
Federal income tax 12,773 10.60 -- --
Meals and entertainment
exclusion 11,490 9.53 11,744 4.56
Effect of graduated rates (10,724) (8.90) (3,860) (1.50)
Other 1,094 0.91 3,537 1.37
--------- ----- --------- -----
$ 74,103 61.49% $ 135,420 52.53%
========= ===== ========= =====
11
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(7) Notes Payable - Recourse
Notes payable at March 31, 1996 and 1995 were as follows:
1996 1995
---- ----
Note, with imputed interest of 10%,
payable in monthly installments of
$5,208 through October 1996 (see note 11)
On April 1, 1996 the outstanding obligation
was paid in full $ 35,261 $ 91,108
Obligation under capital lease,
payable in monthly installments
of $2,759 through August 1996 (see note 9) 10,924 42,657
Note, guaranteed by Mr. Beekman, payable
in 60 monthly principal payments
of $4,167 plus interest at prime
(8.50% at March 31, 1995) plus 2%. On
March 29, 1996 the outstanding obligation
was paid in full and the related guarantees
were released. - 195,833
Note collateralized by equipment with a
book value of $170,889 at March 31, 1995
bearing interest at 13.5%, payable in monthly
installments of $8,389 through December 1995 - 63,841
----------- ----------
$ 46,185 $ 393,439
=========== ==========
(8) Investment in Equipment Under Operating Lease
On December 12, 1993, the Company invested $5,340,436 in manufacturing
equipment and leased such equipment to a third party user for a two year
period with rent commencing on January 1, 1994. Rentals were payable
monthly in advance. Simultaneously with the purchase of the equipment, the
Company, on a non-recourse basis, obtained $5,393,840 in financing from a
financial institution, of which $5,340,436 of such proceeds were paid
directly to the equipment vendor to satisfy the cost of the equipment. The
excess of the proceeds from the financing over the cost of the equipment,
$53,404, was paid directly to the Company and was earned over the two year
period of the lease. All rental payments by the lessee were paid directly
to the financial institution. The original non-recourse financing bore
interest at a rate of 6.6%, and was paid in 24 monthly installments of
$55,097 through December 1995, with a final payment of $4,699,584 due in
January 1996. The note is collateralized by the equipment under the lease
with a book value of $4,699,584 at December 31, 1995.
Effective January 1, 1996, the lessee renewed the lease and the bank
extended the term of the collateralized non-recourse note. The terms of the
renewal require rentals of $171,294, payable by the lessee monthly in
advance, for two years. Such rental payments will continue to be paid
directly to the financial institution to reduce the loan, with interest now
calculated at 8.95%. Assuming all payments are made timely, at December 31,
1997, the balance due on the note will be $1,101,528, which is equal to the
amount of the estimated residual value of the equipment at that date. On
that date, the lessee will be required to purchase the equipment for the
greater of the note or the fair value of the equipment, or return the
equipment to the financial institution in full satisfaction of the
Company's note.
12
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(9) Commitments and Contingencies
The Company has operating leases for office space through the year 2004.
Rent expense for the years ended March 31, 1996 and 1995 amounted to
$319,866 and $308,123, net of sublease income of $164,879 and $160,285,
respectively. The future minimum rental commitments under non-cancelable
operating leases are due as follows (sublease rental income are all from
short term leases):
Fiscal Year Ending
March 31, Amount
1997 $ 278,768
1998 271,541
1999 461,427
2000 480,800
2001 488,813
Thereafter 1,923,200
------------
$ 3,904,549
(10) Expenses Related to a Proposed Acquisition
In November 1993, Capital entered into a non-binding letter of intent to
acquire the stock of the equipment leasing subsidiaries of another
corporation. A definitive purchase agreement was never executed and
negotiations were terminated in May 1994. During the year ended March 31,
1995 and 1994, Capital incurred $40,299 and $264,358 of legal and other
third party expenses in connection with its due diligence review and such
acquisition costs were written off.
(11) Legal Proceedings
In May, 1990 a suit was filed against Leasing by a financial institution
(the "Financial Institution") alleging breach of a loan covenant in
connection with Leasing's discounting of rental payments due from a lessee
(the "Lessee") under a lease dated June 9, 1988. The Lessee defaulted on
its obligation to the Financial Institution, and its assignee, on the
discounted rental payments under such lease. The Financial Institution
asserted that Leasing failed to perfect its security interest in the
equipment leased to the Lessee prior to the discounting of the rental
payments. As a result, it alleged that Leasing breached its
representations and warranties and should be responsible for the defaulted
rental payments, notwithstanding the fact that the loan documents were
stated to be without recourse to Leasing. In May, 1992, the court entered
judgment in favor of the Financial Institution. Leasing had accrued for
its estimated loss on the financial statements in fiscal 1992 and 1991.
In October 1992, Leasing entered into a settlement agreement with the
Financial Institution which calls for the Company to pay a total of
$250,000 to the Financial Institution payable $5,208 per month (without
interest) over 48 months. On April 1, 1996, the Company retired the
remaining obligation (see note 7).
13
<PAGE>
ICON CAPITAL CORP.
Notes to Financial Statements - Continued
(12) Supplemental Disclosure of Cash Flow Information
During the year ended March 31, 1996 and 1995, the Company paid $27,344
and $56,495 in interest on recourse financing, respectively.
Certain equipment, which the Company is carrying as investment in
equipment under operating lease, was paid for directly by a financing
institution. In connection with this transaction, the lessee's monthly
installments are remitted directly to the financing institution to service
the Company's non-recourse note payable incurred when the financing
institution paid for the equipment on behalf of the Company. For the years
ended March 31, 1996 and 1995, such payments aggregated $1,009,756 and
$661,165, which was comprised of $676,028 and $332,393 of principal and
$333,728 and $328,772 of interest. In addition, another creditor paid
principal and interest directly to a financial institution in the amount
of $1,542 for 1995 to service a non-recourse note of the Company.
14
<PAGE>
EXHIBIT A
THIRD AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
<PAGE>
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ICON CASH FLOW PARTNERS L.P. SEVEN
TABLE OF CONTENTS
Page
Section 1. ESTABLISHMENT OF PARTNERSHIP.................................. 1
Section 2. NAME, PRINCIPAL OFFICE, NAME AND ADDRESS OF REGISTERED AGENT
FOR SERVICE OF PROCESS....................................... 1
2.1 Legal Name and Address........................................ 1
2.2 Address of Partners........................................... 1
Section 3. PURPOSES AND POWERS........................................... 2
3.1 Purposes...................................................... 2
3.2 Investment Objectives and Policies............................ 2
3.3 Powers........................................................ 2
Section 4. TERM.......................................................... 3
Section 5. PARTNERS AND CAPITAL.......................................... 3
5.1 General Partner............................................... 3
5.2 Original Limited Partner...................................... 3
5.3 Limited Partners.............................................. 3
5.4 Partnership Capital........................................... 5
5.5 Capital Accounts.............................................. 5
5.6 Additional Capital Contributions . . . . ...................... 6
5.7 Loans by Partners.............................................. 6
5.8 No Right to Return of Capital.................................. 6
Section 6. GENERAL PARTNER............................................... 6
6.1 Extent of Powers and Duties................................... 6
6.2 Limitations on the Exercise of Powers of General Partner...... 9
6.3 Limitation on Liability of General Partner and its Affiliates;
Indemnification ............................................ 12
6.4 Compensation of General Partner and its Affiliates............ 13
6.5 Other Interests of the General Partner and its Affiliates..... 16
Section 7. POWERS AND LIABILITIES OF LIMITED PARTNERS.................... 17
7.1 Absence of Control Over Partnership Business.................. 17
7.2 Limited Liability............................................. 17
Section 8. DISTRIBUTIONS AND ALLOCATIONS................................. 18
8.1 Distribution of Distributable Cash from Operations and
Distributable Cash from Sales............................... 18
8.2 Allocations of Profits and Losses............................. 19
8.3 Distributions and Allocations Among the Limited Partners...... 21
8.4 Tax Allocations: Code Section 704(c); Revaluations............ 22
8.5 Compliance with NASAA Guidelines Regarding Front-End Fees..... 22
8.6 Return of Uninvested Capital Contribution..................... 22
8.7 Partner's Return of Investment in the Partnership............. 22
8.8 No Distributions in Kind ..................................... 22
8.9 Partnership Entitled to Withhold.............................. 23
Section 9. WITHDRAWAL OF GENERAL PARTNER................................. 23
9.1 Voluntary Withdrawal.......................................... 23
9.2 Involuntary Withdrawal........................................ 23
9.3 Consequences of Withdrawal.................................... 23
9.4 Liability of Withdrawn General Partner........................ 24
9.5 Continuation of Partnership Business.......................... 24
A-i
<PAGE>
Page
Section 10. TRANSFER OF UNITS............................................. 24
10.1 Withdrawal of a Limited Partner............................... 24
10.2 Assignment.................................................... 25
10.3 Substitution.................................................. 26
10.4 Status of an Assigning Limited Partner........................ 26
10.5 Limited Right of Presentment for Redemption of Units.......... 26
Section 11. DISSOLUTION AND WINDING-UP.................................... 27
11.1 Events Causing Dissolution.................................... 27
11.2 Winding Up of the Partnership; Capital Contribution by the
General Partner Upon Dissolution............................ 27
11.3 Application of Liquidation Proceeds Upon Dissolution.......... 28
11.4 No Recourse Against Other Partners............................ 29
Section 12. FISCAL MATTERS................................................ 29
12.1 Title to Property and Bank Accounts........................... 29
12.2 Maintenance of and Access to Basic Partnership Documents...... 29
12.3 Financial Books and Accounting................................ 30
12.4 Fiscal Year................................................... 30
12.5 Reports....................................................... 30
12.6 Tax Returns and Tax Information............................... 32
12.7 Accounting Decisions.......................................... 32
12.8 Federal Tax Elections......................................... 32
12.9 Tax Matters Partner........................................... 33
12.10 Reports to State Authorities.................................. 34
Section 13. MEETINGS AND VOTING RIGHTS OF THE LIMITED PARTNERS............ 34
13.1 Meetings of the Limited Partners.............................. 34
13.2 Voting Rights of the Limited Partners......................... 35
13.3 Limitations on Action by the Limited Partners................. 35
Section 14. AMENDMENTS.................................................... 35
14.1 Amendments by the General Partner............................. 35
14.2 Amendments with the Consent of the Majority Interest.......... 36
Section 15. POWER OF ATTORNEY............................................. 36
15.1 Appointment of Attorney-in-Fact............................... 37
15.2 Amendments to Agreement and Certificate of
Limited Partnership......................................... 37
15.3 Power Coupled With an Interest................................ 37
Section 16. GENERAL PROVISIONS............................................ 37
16.1 Notices, Approvals and Consents............................... 37
16.2 Further Assurances............................................ 38
16.3 Captions...................................................... 38
16.4 Binding Effect................................................ 38
16.5 Severability.................................................. 38
16.6 Integration................................................... 38
16.7 Applicable Law................................................ 38
16.8 Counterparts.................................................. 38
16.9 Creditors..................................................... 39
16.10 Interpretation................................................ 39
16.11 Successors and Assigns........................................ 39
16.12 Waiver of Action for Partition................................ 39
Section 17. DEFINITIONS................................................... 39
A-ii
<PAGE>
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
ICON CASH FLOW PARTNERS L.P. SEVEN
This Third Amended and Restated Agreement of Limited Partnership, dated
as of the September 12, 1995 (this "Agreement"), is made and entered into by and
among ICON Capital Corp., a Connecticut corporation ("ICON"), as general partner
(hereinafter referred to as the "General Partner"), Charles Duggan, as the
original limited partner (the "Original Limited Partner"), and such additional
Limited Partners as may be admitted to the Partnership upon the Initial Closing
Date or any subsequent Closing Date pursuant to the terms hereof; such
additional Limited Partners hereinafter each referred to as a "Limited Partner"
and collectively referred to as the "Limited Partners"; and the General Partner
and the Limited Partners hereinafter occasionally referred to collectively as
the "Partners").
WITNESSETH:
WHEREAS, on May 23, 1995, the General Partner filed a Certificate of
Limited Partnership, dated as of May 23, 1995, establishing ICON Cash Flow
Partners L.P. Seven (the "Partnership") under and pursuant to the Delaware
Revised Uniform Limited Partnership Act (the "Delaware Act").
WHEREAS, on September 12, 1995, the General Partner and Original Limited
Partner have determined that it is necessary and appropriate to amend and
restate the original Agreement of Limited Partnership in certain respects; and
WHEREAS, on November 2, 1995, the General Partner and Original Limited
Partner have determined that it is necessary and appropriate to amend and
restate the original Agreement of Limited Partnership in certain respects; and
WHEREAS, on November 8, 1995, the General Partner and Original Limited
Partner have determined that it is necessary and appropriate to amend and
restate the original Agreement of Limited Partnership in certain respects; and
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, the General Partner and each Limited Partner,intending to
be legally bound, hereby agree as follows:
Section 1. ESTABLISHMENT OF PARTNERSHIP.
The parties hereto hereby enter into this Agreement and do hereby set
forth the terms of the Partnership established under and pursuant to the
provisions of the Delaware Act, which terms shall govern the rights and
liabilities of the Partners, except as otherwise herein expressly stated.
Section 2. NAME, PRINCIPAL OFFICE, NAME AND ADDRESS OF
REGISTERED AGENT FOR SERVICE OF PROCESS.
2.1 Legal Name and Address.
The Partnership shall be conducted under the name "ICON Cash Flow Partners
L.P. Seven". The principal office and place of business of the Partnership shall
be 600 Mamaroneck Avenue, Harrison, New York 10528 or at such other address as
the General Partner may from time to time determine and specify by written
notice to the Limited Partners. The Partnership may also maintain such other
offices and places of business as the General Partner may deem advisable at any
other place or places within the United States and, in connection therewith, the
General Partner shall qualify and remain qualified, and shall use its best
efforts to qualify and keep the Partnership qualified, to do business under the
laws of all such jurisdictions as may be necessary to permit the Partnership
legally to conduct its business in such jurisdictions. The registered office of
the Partnership in the State of Delaware shall be at 1209 Orange Street,
Wilmington, Delaware, 19801. The name of its registered agent at such address
shall be The Corporation Trust Company. The General Partner may change the
registered office and the registered agent of the Partnership, with prior
written notice to the Limited Partners.
2.2 Address of Partners.
A-2
<PAGE>
The principal place of business of the General Partner and the places of
residence of the Limited Partners shall be those addresses set forth opposite
their respective names in Schedule A to this Agreement (as such may be
supplemented or amended from time to time). Any Partner may change his, her or
its respective place of business or residence, as the case may be, by giving
Notice of such change to the Partnership (and, in the case of the General
Partner, by also giving Notice thereof to all of the Limited Partners), which
Notice shall become effective upon receipt.
Section 3. PURPOSES AND POWERS.
3.1 Purposes.
The Partnership has been organized for the object and purpose of (a)
acquiring, investing in, purchasing, owning, holding, leasing, re-leasing,
financing, refinancing, borrowing, managing, maintaining, operating, improving,
upgrading, modifying, exchanging, assigning, encumbering, creating security
interests in, pledging, selling, transferring or otherwise disposing of, and in
all respects otherwise dealing in or with, Equipment of all kinds, (b) lending
and providing financing to other Persons for their acquisition of items of
equipment and other tangible and intangible personal property of all kinds,
pursuant to financing arrangements or transactions secured by various items of
equipment (or interests therein and leases and licenses thereof) and other such
personal property in any part of the world (including, without limitation, all
land, waters and space under, on or above such part of the world), and (c)
establishing, acquiring, conducting and carrying on any business suitable,
necessary, useful or convenient in connection therewith, in order to generate
monthly cash distributions to the Limited Partners during the term of the
Partnership.
3.2 Investment Objectives and Policies.
The Equipment acquired by the Partnership shall be selected from among
new, used and reconditioned (i) office and management information systems,
graphic processing equipment, photocopying equipment and, communications and
related peripheral equipment, (ii) printing equipment, (iii) materials handling
equipment, (iv) machine tools and manufacturing equipment, (v) medical
diagnostic and testing equipment, (vi) aircraft, rail, over-the-road and marine
equipment and (vii) miscellaneous equipment of other types that meet the
investment objectives of the Partnership and shall be leased to Lessees under
Full-Payout Leases and Operating Leases. The Financing Transactions entered into
by the Partnership shall be with Users that are Creditworthy and shall be
evidenced by a written promissory note of such User evidencing the irrevocable
obligation of such User to repay the principal amount thereof, together with
interest thereon, in accordance with the terms thereof, which repayment
obligation may be collateralized by a security interest in tangible or
intangible personal property and in any lease or license of such personal
property, as well as the revenues arising thereunder, or in such other assets of
such User as the General Partner may deem to be appropriate. All funds held by
the Partnership (including, without limitation, Subscription Monies released to
the Partnership on any Closing Date) that are not invested in Equipment,
Financing Transactions or Reserves shall be invested by the Partnership in
Permitted Investments.
3.3 Powers.
In furtherance of the above purposes, the Partnership shall have the
power:
(a) to acquire, invest in, purchase, own, hold, lease, release, finance,
refinance, borrow, manage, maintain, operate, improve, upgrade, modify,
exchange, assign, encumber, create security interests in, pledge, sell, transfer
or otherwise dispose of, and in all respects otherwise deal in or with,
Equipment and other tangible and intangible personal property of all kinds in
any part of the world (including, without limitation, all land, waters and space
under, on or above such part of the world);
(b) to invest substantially all Cash From Operations (other than those
necessary to pay the expenses of the Partnership and to make First Cash
Distributions) and Cash From Sales in additional Investments during the
Reinvestment Period as provided in Section 8.1(a) hereof;
(c) to enter into joint ventures, partnerships and other business,
financing and legal and beneficial ownership arrangements with respect to
equipment and other tangible and intangible personal property and financing
arrangements deemed prudent by the General Partner in order to achieve
successful operations for the Partnership;
(d) to purchase and hold securities issued by any Person if, in the
General Partner's opinion, the purchase is an advisable or necessary step in the
acquisition and financing by the Partnership of Investments;
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(e) to hold interests in property, both real and personal, tangible and
intangible, including, without limitation, contract rights, lease rights, debt
instruments and equity interests in corporations, partnerships (both limited and
general and including, subject to the provisions of this Agreement, Affiliated
Entities), joint ventures and other entities (including, but not limited to,
common and preferred stock, debentures, bonds and other securities of every kind
and nature); provided that the Partnership may make such Investments only in
furtherance of its investment objectives and in accordance with its investment
policies;
(f) subject to any applicable statutes and regulations, to lend and borrow
money to further the purposes of the Partnership, to issue and accept evidences
of indebtedness in respect thereof, and to secure the same by mortgages or
pledges or grants of liens on, or other security interests in, Investments of
the Partnership and accept such kinds and amounts of security for loans, leases
and licenses it makes to others as the General Partner in its sole and absolute
discretion shall deem appropriate; and
(g) to do all things, carry on any activities and enter into, perform,
modify, supplement or terminate any contracts necessary to, connected with, or
incidental to, or in furtherance of, the purposes of the Partnership, all so
long as such things, activities and contracts may be lawfully done, carried on
or entered into by the Partnership under the Delaware Act and the laws of the
United States of America and under the terms of this Agreement.
Section 4. TERM.
The term of the Partnership commenced upon the filing of the Certificate
of Limited Partnership with the Secretary of State of the State of Delaware on
May 23, 1995 and shall terminate at midnight on December 31, 2015, unless sooner
dissolved or terminated as provided in Section 11 of this Agreement.
Section 5. PARTNERS AND CAPITAL.
5.1 General Partner.
The General Partner has contributed $1,000, in cash, as its Capital
Contribution to the Partnership.
The General Partner shall use its best efforts to maintain, at all times
from and after the date of this Agreement through and including the Termination
Date, a Net Worth that is at least sufficient for the Partnership to qualify, in
the opinion of Tax Counsel to the Partnership, as a partnership for federal
income tax purposes and to satisfy the net worth requirements for a "sponsor"
under the NASAA Guidelines.
5.2 Original Limited Partner.
The Original Limited Partner has made a capital contribution of $1,000 to
the Partnership.
By his execution hereof, the Original Limited Partner hereby agrees to
withdraw as Original Limited Partner, and the parties hereto agree to return to
him his capital contribution of $1,000 and to retire his original Partnership
Interest of ten (10) Units upon the Initial Closing Date and admission of
additional Limited Partners.
5.3 Limited Partners.
(a) From and after the Initial Closing Date, there shall be one class of
limited partners, the Interests of which shall consist of up to 1,000,000 Units
that shall initially be held by the Limited Partners.
(b) Any Person desiring to become a Limited Partner shall execute and
deliver to the General Partner a subscription agreement, substantially in the
form filed as an exhibit to the Prospectus, and such other documents as the
General Partner shall reasonably request, which other documents shall be in form
and substance reasonably satisfactory to the General Partner, pursuant to which,
among other things, such Person shall, subject to acceptance of his subscription
by the General Partner, agree to be bound by all terms and provisions of this
Agreement. Units will be sold only to Persons (i) who represent that they have
either (a) an annual gross income of at least $30,000 and a net worth of at
least $30,000 or (b) a net worth of at least $75,000 or (ii) who satisfy the
suitability standards applicable in the state of their residence or domicile, if
more stringent than the standards described in clause (i) above.
(c) Each Limited Partner (other than Affiliated Limited Partners and
Limited Partners entitled to Volume Discounts) shall make a Capital
Contribution, in cash, in an amount equal to the Gross Unit Price to the capital
of the Partnership for
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each Unit or fraction thereof purchased. Each Affiliated Limited Partner shall
make a Capital Contribution, in cash, in an amount equal to the Net Unit Price
for each Unit or fraction thereof purchased. Each Limited Partner entitled to a
Volume Discount shall make a Capital Contribution, in cash, to the capital of
the Partnership in an amount equal to the Gross Unit Price for each Unit or
fraction thereof purchased less the amount of the Volume Discount.
(d) Limited Partners (except residents of certain States) must purchase a
minimum of (i) twenty-five (25) whole Units other than (ii) IRA or Qualified
Plans (including Keogh Plans) may purchase a minimum of ten (10) whole Units.
Above such minimum purchase requirements, Limited Partners may subscribe for
additional Units or fractions thereof equal to 1/10,000th of a Unit or any
multiple thereof (unless prohibited by applicable law) at the Gross Unit Price,
Net Unit Price or Gross Unit Price less Volume Discount, whichever shall be
applicable.
(e) The General Partner and any Affiliate of the General Partner shall
have the right to subscribe for Units for its own account for investment
purposes only; provided that the aggregate number of Units purchased by the
General Partner and such Affiliates collectively shall not exceed ten (10%)
percent of all Units subscribed for by non-Affiliated Persons.
(f) No subscribers shall be admitted to the Partnership unless and until
the Minimum Offering shall be achieved. Upon the determination by the General
Partner that the Minimum Offering has been achieved, the General Partner shall
set the Initial Closing Date. Following the Initial Closing Date, a Closing may
be held on the last day of any Segment (or, if such day is not a business day,
on the next preceding business day), provided that no Closing shall be required
to be held on such last day of any Segment (or the next preceding business day)
if the number of Units subscribed for but as to which the subscribers have not
been admitted to the Partnership as Limited Partners as of such date is
insufficient, in the sole and absolute discretion of the General Partner, to
justify the administrative burden and expense of holding a Closing, and
provided, further, that the Final Closing Date may, in the sole and absolute
discretion of the General Partner, be held on a day other than the last day of a
Segment, and shall be held as promptly as practicable after the Termination
Date. As promptly as is practicable following the admission of each subscriber
as Limited Partner, the General Partner shall send notice to such Limited
Partner in confirmation thereof.
(g) Subscriptions for Units shall promptly be accepted or rejected by the
General Partner after their receipt by the Partnership (but in any event not
later than 30 days thereafter) and a confirmation of receipt thereof sent by the
General Partner. The General Partner retains the unconditional right to refuse
to admit any subscriber as a Limited Partner.
(h) Each Subscriber shall be admitted to the Partnership as a Limited
Partner, and shall for all purposes of this Agreement become and be treated as a
Limited Partner, as of the first day immediately following the Closing Date as
of which such Subscribers is admitted to the Partnership or the Final Closing
Date or as of the first day of the Segment immediately following any subsequent
Closing Date (other than the Final Closing Date), as the case may be, next
following the acceptance of their subscriptions by the General Partner and the
receipt by the General Partner of all Subscription Monies payable in connection
therewith. Any subscriber who is a resident of the Commonwealth of Massachusetts
and who has been admitted as a Limited Partner of the Partnership within five
(5) business days following the date he or she receives a copy of the Prospectus
(as evidenced by his or her signature on the Subscription Agreement or a
separate receipt for the Prospectus) may, by giving written notice to the
General Partner or Dealer-Manager within such five (5) day period, rescind his
or her subscription and shall receive a prompt refund of his or her subscription
plus simple interest at 8% per annum from the date such subscription was
received by the Partnership until returned to such subscriber less
distributions, if any, made to such subscriber from the Escrow Account and the
Partnership.
(i) The name and address of each Limited Partner and the amount of the
Capital Contribution made by such Limited Partner are set forth on Schedule A
hereto, as such may be supplemented or amended from time to time. Promptly
following each Closing Date (and, in any event, within 5 business days
thereafter), the General Partner shall amend Schedule A to this Agreement to
reflect the name, address and Capital Contribution of each Limited Partner
admitted to the Partnership as a result of such Closing; provided that any
failure so to amend such Schedule A following any Closing Date shall not in any
way affect the admission of any Limited Partner to the Partnership for all
purposes of this Agreement if such Limited Partner was duly and properly
admitted to the Partnership as a result of such Closing.
(j) From the date hereof to, but not including, the Initial Closing Date,
all funds in respect of Units for which subscriptions have been received
("Subscription Monies") shall be deposited in the Escrow Account. From and after
the Initial Closing Date, all Subscription Monies shall be held by the
Partnership in a Qualified Subscription Account until the release thereof on the
applicable Closing Date. Both the Escrow Account and any Qualified Subscription
Account shall be established by the General Partner for the sole purpose of
holding and investing Subscription Monies pending admission of subscribers to
the Partnership as Limited Partners.
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(k) On the Initial Closing Date or any subsequent Closing Date, whichever
may be applicable, all Subscription Monies then held in the Escrow Account or
any Qualified Subscription Account, as the case may be, with respect to Units
purchased by any Limited Partner admitted to the Partnership as a result of such
Closing, together with any interest earned thereon, shall be released to the
Partnership. Any interest earned on such Subscription Monies prior to such
release shall be paid to such Limited Partner promptly after such Closing Date.
If the number of Units subscribed for are not sufficient to constitute the
Minimum Offering, all Subscription Monies deposited by any subscriber shall be
returned, together with any interest earned thereon and without deduction for
any Front-End Fees, to such subscriber. Furthermore, any Subscription Monies
deposited by any subscriber who is not accepted by the General Partner to become
a Limited Partner shall be promptly returned, together with any interest earned
thereon and without deduction for any Front-End Fees, to such subscriber. In no
event shall any Subscription Monies be held in the Escrow Account or a Qualified
Subscription Account for more than one year beyond the Effective Date before
either being released to the Partnership upon a Closing or returned to the
subscriber.
5.4 Partnership Capital.
(a) No Partner shall be paid interest on any Capital Contribution (except
any interest earned on Subscription Monies as provided in Section 5.3(k).
(b) Except as provided in Section 10.5 and except that the 10 Units
purchased by the Original Limited Partner shall be redeemed at par on the
Initial Closing Date as provided in Section 5.2, the Partnership shall not
redeem or repurchase any Unit. No Partner shall have the right to withdraw or
receive any return of such Partner's Capital Contribution, except as
specifically provided in this Agreement, and no Capital Contribution may be
returned to any Partner in the form of property other than cash.
(c) Except as otherwise specifically provided herein, no Limited Partner
shall have priority over any other Limited Partner either as to (i) the return
of such Limited Partner's Capital Contribution or Capital Account, (ii) such
Limited Partner's share of Profits and Losses or (iii) such Limited Partner's
share of distributions of Cash From Operations and Cash From Sales.
(d) Neither the General Partner nor any Affiliate of the General Partner
shall have any personal liability for the repayment of the Capital Contribution
of any Limited Partner except, and solely to the extent, provided in Section
6.3, Section 9.3(a) and Section 11.2(a)(iii), above.
5.5 Capital Accounts.
(a) A separate Capital Account shall be established and maintained for the
General Partner and for each Limited Partner.
(b) The Capital Account of the General Partner initially shall be $1,000.
(c) The Capital Account of each Limited Partner initially shall be the
amount of such Limited Partner's Capital Contribution.
(d) The Capital Account of each Partner shall be increased by (i) the
amount of any additional money contributed by such Partner to the Partnership,
(ii) the fair market value of any property contributed by such Partner to the
Partnership (net of liabilities secured by such contributed property that the
Partnership is considered to assume or take subject to under Code Section 752)
and (iii) allocations to such Partner of Partnership Profits (or items thereof),
and items of income and gain specially allocated pursuant to Section 8.2(f)
hereof. The Capital Account of each Partner shall be decreased by (i) the amount
of money distributed to or on behalf of such Partner by the Partnership, (ii)
the fair market value of any property distributed to or on behalf of such
Partner by the Partnership (net of liabilities secured by such distributed
property that such Partner is considered to assume or take subject to under Code
Section 752), and (iii) allocations to such Partner of Partnership Losses (or
items thereof) and items of loss and deduction specially allocated pursuant to
Section 8.2(f) hereof.
(e) For purposes of this Agreement, a Partner who has more than one
Interest in the Partnership shall have a single Capital Account that reflects
all such Interests, regardless of the class of Interests owned by such Partner
(e.g., general or limited) and regardless of the time or manner in which such
Interests were acquired.
(f) If an Interest is sold or otherwise transferred, the Capital Account of
the transferor with respect to such Interest shall carry over to the transferee
in accordance with Treas. Reg. Section 1.704-1(b)(2)(iv)(l). However, if the
transfer causesa termination of the Partnership under Code Section 708(b)(1)(B),
the Capital Account that carries over to the transferee will be adjusted in
accordance with the constructive liquidation and reconstitution rules under
Treas. Reg. Section 1.708-1.
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(g) For any taxable year in which the Partnership has a Code section 754
election in effect, the Capital Accounts shall be maintained in accordance with
Treas. Reg. Section 1.704-1(b)(2)(iv)(m).
(h) Upon the occurrence of the events specified in Treas. Reg. Section
1.704-1(b)(2)(iv)(f)5, the Partners' Capital Accounts shall be adjusted and
thereafter maintained to reflect the revaluation of Partnership assets on the
books of the Partnership in accordance with such Treasury Regulation and Treas.
Reg. Sections 1.704-1(b)(2)(iv)(f) through (h).
(i) Notwithstanding anything herein to the contrary, the Partners' Capital
Accounts shall at all times be maintained in the manner required by Treas. Reg.
Section 1.704-1(b)(2)(iv), and any questions or ambiguities arising hereunder
shall be resolved by reference to such Treasury Regulations. Further, such
Treasury Regulations shall govern the maintenance of the Capital Accounts to the
extent this Agreement is silent as to the treatment of a particular item. In the
event Treas. Reg. Section 1.704-1(b)(2)(iv) shall fail to provide guidance as to
how adjustments to the Capital Accounts should be made to reflect particular
adjustments to Partnership capital on the books of the Partnership, such Capital
Account adjustments shall be made in a manner that is consistent with the
underlying economic arrangement of the Partners and is based wherever
practicable, on federal tax accounting principles.
5.6 Additional Capital Contributions.
(a) The General Partner shall not be required to make any Capital
Contributions in addition to its initial $1,000 Capital Contribution except
pursuant to and in accordance with Section 11.2(a)(iii) of this Agreement.
(b) No Limited Partner shall be required to make any Capital Contribution
in addition to the initial price paid for such Limited Partner's Units pursuant
to the Offering.
5.7 Loans by Partners.
Except as provided in Section 11.2(a)(iii), no loan by any Partner or any
Affiliate of any Partner to the Partnership (including, without limitation, any
Partnership Loan) shall constitute a Capital Contribution to the Partnership or
increase the Capital Account balance of any Partner, but shall be treated, for
all purposes, as indebtedness of the Partnership payable or collectible only out
of the assets of the Partnership in accordance with the terms and conditions
upon which such loan was made.
5.8 No Right to Return of Capital.
No Partner shall be entitled to demand or receive any distribution of or
with respect to such Partner's Capital Contribution or Capital Account, except
as specifically provided under this Agreement.
Section 6. GENERAL PARTNER.
6.1 Extent of Powers and Duties.
(a) General.
Except as expressly limited by the provisions of this Agreement, the
General Partner shall have complete and exclusive discretion in the management
and control of the affairs and business of the Partnership and shall be
authorized to employ all powers necessary, convenient or appropriate to carry
out the purposes, conduct the business and exercise the powers of the
Partnership. Without limiting the generality of the foregoing, the General
Partner shall provide such asset management personnel and services as the
General Partner, in its sole and absolute discretion, may deem necessary or
appropriate to conduct the business activities of the Partnership and the
day-to-day management of its assets, including, but not limited to, leasing,
licensing, re-leasing and re-licensing the Equipment, monitoring the use of
collateral for the Leases and Financing Transactions, arranging for necessary
licensing, registration, maintenance and repair of the Equipment (to the extent
Lessees or Users are not contractually obligated to do so and the General
Partner expressly assumes such duties), collecting revenues, paying Operating
Expenses, determining that the Equipment is used in accordance with all
operative contractual arrangements and providing clerical and bookkeeping
services necessary to provide tax, financial and regulatory reporting to the
Limited Partners and for the operations of the Partnership. The General Partner
may employ on behalf of the Partnership, to the extent that it, in its sole
judgment shall deem advisable, managerial, sales, maintenance, administrative
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or secretarial personnel, agents and other Persons, including any of its
Affiliates, which it determines are necessary for the maintenance of any of the
Partnership's property, and/or the operation of the business of the Partnership,
may engage and retain attorneys, accountants or brokers to the extent that, in
the judgment of the General Partner, their professional services are required
during the term of the Partnership, as well as employ the services of its
Affiliates to assist the General Partner in its managerial duties, and may
compensate all such Persons from the assets of the Partnership at rates which
it, in its sole judgment, deems fair and reasonable; provided that (i) the
compensation, price or fee payable to any of its Affiliates shall not exceed an
amount which is comparable and competitive with the compensation, price or fee
which would be charged by non-Affiliates to render comparable services which
could reasonably be made available to the Partnership upon comparable terms;
(ii) all services for which the Sponsor is to receive compensation from the
Partnership (other than as provided in Section 6.4 hereof) shall be embodied in
a written contract which (A) precisely describes the services to be rendered and
all compensation to be paid therefor and (B) is terminable by either party
without penalty on 60 days notice; (iii) the compensation, price and fees and
other terms of any such contract shall be fully disclosed in the prospectus as
the Effective Date; and (iv) the Sponsor must, at the time such services are to
be rendered, be engaged in the business of providing such services to
non-Affiliates and derive at least 75% of its gross revenues for such services
therefrom. Any such contract may only be amended in a manner which is either
more favorable to the Sponsor or less favorable to the Partnership by the vote
or consent of a Majority Interest of the Limited Partners. Except as otherwise
provided in this Agreement, the General Partner shall possess and enjoy with
respect to the Partnership all of the rights and powers of a partner of a
partnership without limited partners to the extent permitted by Delaware law.
(b) Powers and Duties.
(i) General Powers and Duties. The General Partner shall diligently
and faithfully exercise its discretion to the best of its ability and use
its best efforts during so much of its time as the General Partner, in its
sole and absolute discretion, may deem to be necessary or appropriate to
carry out the purposes and conduct the business of the Partnership in
accordance with this Agreement and in the best interests of the
Partnership and so as, consistent therewith, to protect the interests of
the Limited Partners. The General Partner shall have responsibility as a
fiduciary for the safekeeping and use of all funds and assets of the
Partnership, whether or not in its immediate possession or control, and
shall not employ, or permit any other Person to employ, such funds or
assets in any manner other than as permitted by this Agreement.
Notwithstanding anything to the contrary herein stated or implied, the
Limited Partners may not contract away the fiduciary duty owed to such
Limited Partners by the Sponsor under common law. The General Partner
shall be responsible and shall use its best efforts and exercise
discretion to the best of its ability: (A) to acquire, invest in,
purchase, own, hold, lease, license, re-lease, re-license, finance,
refinance, borrow, manage, maintain, operate, improve, upgrade, modify,
exchange, assign, encumber, create security interests in, pledge, sell,
transfer or otherwise dispose of, and in all respects otherwise deal in or
with, Equipment and Financing Transactions (except as limited by Section
11.1) and to contract with others to do the same on behalf of the
Partnership; (B) to select and supervise the activities of any equipment
management agents for the Partnership; (C) to assure the proper
application of revenues of the Partnership; (D) to maintain proper books
of account for the Partnership and to prepare reports of operations and
tax returns required to be furnished to (1) the Partners pursuant to this
Agreement or (2) taxing bodies or other governmental agencies in
accordance with applicable laws and regulations; (E) to employ the
Dealer-Manager to select Selling Dealers to offer and sell Units; and (F)
to assure the doing of all other things necessary, convenient or advisable
in connection with the supervision of the affairs, business and assets of
the Partnership. In establishing criteria for the resolution of conflicts
of interest between the Partnership, on the one hand, and the General
Partner or any Affiliate of the General Partner, on the other hand, the
General Partner shall not abdicate or ignore its fiduciary duty to the
Partnership.
(ii) Amplification of Powers. In amplification, and not by way of
limitation, of the powers of the General Partner expressed herein, the
General Partner shall have, subject to the provisions of this Agreement,
full power and authority, as herein provided or as provided in the
Delaware Act, on behalf of the Partnership, in order to carry out and
accomplish its purposes and functions: (A) to expend Partnership capital
and income; (B) to purchase, lease, license, sell, exchange, improve,
divide, combine and otherwise in all respects transact business with
respect to interests in real and personal property of any and all kinds
whatsoever, both tangible and intangible, including, without limitation,
equipment, contract rights, lease rights, debt instruments and equity
interests in corporations, partnerships (both limited and general and
including, subject to the provisions of this Agreement, Affiliated
Entities), joint ventures and other entities (including, but not limited
to, common and preferred stock, debentures, bonds and other securities of
every kind and nature), and, in connection therewith, to execute, deliver,
amend, modify and cancel documents and instruments relating to real and
personal property of whatever kind and description, including, but not
limited to, mortgages, leases and other documents of title or conveyance,
assumption agreements pertaining to such agreements, powers of attorney
and other contracts, instruments and agreements of all kinds and to employ
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engineers, contractors, attorneys, accountants, brokers, appraisers, and
such other consultants, advisors, artisans and workmen as may be necessary
or advisable, in the sole and absolute discretion of the General Partner,
for all such purposes; (C) to invest any and all funds held by the
Partnership in accordance with the provisions of clause (x) of this
Section 6.1(b) of this Agreement; (D) to designate depositories of the
Partnership's funds, and the terms and conditions of such deposits and
drawings thereon; (E) to borrow money or otherwise to procure extensions
of credit for the Partnership (except that neither the Partnership nor the
Sponsor shall borrow money solely for the purpose of making First Cash
Distributions which the Partnership would otherwise be unable to make)
and, in connection therewith, to execute, seal, acknowledge and deliver
agreements, promissory notes, guarantees and other written documents
constituting obligations or evidences of indebtedness and to pledge,
hypothecate, mortgage, assign, transfer or convey mortgages or security
interests in the Equipment and other assets of the Partnership as security
therefor; (F) to hold all or any portion of the Investments and other
assets of the Partnership in the name of one or more trustees, nominees,
or other entities or agents of or for the Partnership; (G) to establish
Reserves in accordance with clause (vii) of this Section 6.1(b); and (H)
to take all such actions and execute all such documents and other
instruments as the General Partner may deem necessary, convenient or
advisable to accomplish or further the purposes of the Partnership or to
protect and preserve Partnership assets to the same extent as if the
General Partner were itself the owner thereof.
(iii) Admission of Limited Partners. The General Partner shall have
the right to accept or refuse to accept, in its sole and absolute
discretion, the admission of any Limited Partner (including any Substitute
Limited Partner and the General Partner and any Affiliate of the General
Partner) to the Partnership; provided, however, that the General Partner
shall not admit any Person as a Limited Partner (except the Original
Limited Partner) unless:
(A) such Person shall agree, in writing, to be bound by the
provisions of this Agreement;
(B) such Person shall represent, in writing, that such Person is or
is not a United States Person, as the case may be;
(C) prior to the admission of such Person, the Minimum Offering shall
have been achieved;
(D) the General Partner shall believe that such Person is "suitable"
in all respects under the laws of the state in which such Person
resides;
(E) the General Partner shall have no reason to believe that the
admission of such Person to the Partnership (1) would cause the
Partnership to lose its Partnership status for federal income tax
purposes, (2) would disqualify the Partnership to engage or to
continue to engage in any business which it is otherwise eligible
to transact or (3) would cause an impermissible percentage of
Units to be owned by nonUnited States citizens for purposes of
any applicable title registration law; and
(F) such admission would not cause the "equity participation" in the
Partnership by "benefit plan investors" (both within the meaning
of DOL Reg. ss. 2510.3-101(f)) to equal or exceed 25%.
In connection with such right, the General Partner shall have the
authority to do all things necessary or advisable, in the sole and
absolute discretion of the General Partner, to effect the admission of the
Limited Partners, including, but not limited to, (x) registering the Units
under the Securities Act and (y) effecting the qualification of, or
obtaining exemptions from the qualification of, the Units for sale with
state securities regulatory authorities.
(iv) Authority To Enter into Dealer-Manager Agreement. The General
Partner shall have the authority to enter into, on behalf of the
Partnership, the Dealer-Manager Agreement, substantially in the form filed
as an exhibit to the Registration Statement, with the Dealer-Manager.
(v) Authority to Enter into Selling Dealer Agreements. The General
Partner shall have the authority to enter into, on behalf of the
Partnership, or to authorize the Dealer-Manager so to enter into, separate
selling dealer agreements, each substantially in the form filed as an
exhibit to the Registration Statement (the "Selling Dealer Agreements" and
each a "Selling Dealer Agreement"), with NASD-member broker dealers
selected by the General Partner or the Dealer-Manager (the "Selling
Dealers" and each a "Selling Dealer").
(vi) Authority to Enter Into Escrow Agreement. The General Partner
shall have the authority to enter into, on behalf of the Partnership, the
Escrow Agreement, substantially in the form filed as an exhibit to the
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Registration Statement, with the Escrow Agent, pursuant to which, among
other things, the Escrow Agent shall agree to act as the Escrow Agent with
respect to all Subscription Monies received prior to the Initial Closing
Date and the Escrow Agent shall be entitled to receive for its services in
such capacity such compensation as the General Partner may deem reasonable
under the circumstances, which compensation shall be deemed to be and
shall constitute an Organization and Offering Expense payable by the
General Partner.
(vii) Reserves. The General Partner shall initially establish for
the Partnership, and shall use its best efforts to maintain, Reserves, of
which an amount not in excess of 3% of Gross Offering Proceeds may be
treated as having been invested or committed to investment for purposes of
Section 8.6 of this Agreement. Reserves, once expended, need not be
restored, provided, however, that any such Reserves that are restored in
the sole and absolute discretion of the General Partner shall be restored
from Cash From Operations.
(viii) Insurance. The General Partner shall cause the Partnership to
purchase and maintain such insurance policies as the General Partner deems
reasonably necessary to protect the interests of the Partnership (to the
extent that such policies are not maintained by Lessees, Users or other
Persons for the benefit of the Partnership). The General Partner is
authorized, on behalf of the Partnership, to purchase and pay the premiums
for such types of insurance, including, without limitation, extended
coverage liability and casualty and workers' compensation, as would be
customary for any Person owning comparable property and engaged in a
similar business, and the General Partner and any Affiliate of the General
Partner and their respective employees and agents may be named as
additional insured parties thereunder, provided the cost of premiums
payable by the Partnership is not increased thereby. Notwithstanding the
foregoing, the Partnership shall not incur or assume the cost of any
portion of any insurance which insures any party against any liability the
indemnification of which is prohibited by Section 6.3 of this Agreement.
(ix) Commission Loans. The General Partner may incur Indebtedness on
behalf of the Partnership in an amount up to the total Sales Commissions
payable (up to 8% of the Gross Offering Proceeds) for the purpose of
permitting the Partnership to acquire additional Investments following
each Closing, the cost of any such indebtedness shall be payable as an
operating expense of the Partnership.
(x) Reinvestment. During the Reinvestment Period, the Partnership
may reinvest all or a substantial portion of its Cash From Operations and
Cash From Sales in additional Investments in furtherance of, and
consistent with, the Partnership's purposes and investment objectives set
forth in Sections 3.1 and 3.2.
(c) Delegation of Powers.
Except as otherwise provided under this Agreement or by law, the General
Partner may, in its sole and absolute discretion, delegate all or any of its
duties under this Agreement to, and may elect, employ, contract or deal with,
any Person (including, without limitation, any Affiliate of the General
Partner).
(d) Reliance by Third Parties.
No Person dealing with the Partnership or its assets, whether as assignee,
lessee, licensee, purchaser, mortgagee, grantee or otherwise, shall be required
to investigate the authority of the General Partner in selling, assigning,
leasing, licensing, mortgaging, conveying or otherwise dealing with any
Investments or other assets or any part thereof, nor shall any such assignee,
lessee, purchaser, licensee, mortgagee, grantee or other Person entering into a
contract with the Partnership be required to inquire as to whether the approval
of the Partners for any such assignment, lease, license, sale, mortgage,
transfer or other transaction has been first obtained. Any such Person shall be
conclusively protected in relying upon a certificate of authority or of any
other material fact signed by the General Partner, or in accepting any
instrument signed by the General Partner in the name and behalf of the
Partnership or the General Partner.
6.2 Limitations on the Exercise of Powers of General Partner.
The General Partner shall have no power to take any action prohibited by
this Agreement or by the Delaware Act. Furthermore, the General Partner shall be
subject to the following in the administration of the Partnership's business and
affairs:
(a) Limitations on Indebtedness.
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From and after the date when all Capital Contributions have been invested
or committed to investment in Investments and Reserves (not exceeding 3% of
Gross Offering Proceeds), used to pay permitted Front-End Fees or returned to
the Limited Partners (as provided in Section 8.7, below), the Partnership shall
not incur or assume additional Indebtedness in connection with the acquisition
of any Investment to the extent that the sum of (i) the principal amount of any
such additional Indebtedness plus (ii) the aggregate principal amount of all
Indebtedness then outstanding would exceed 80% of the aggregate Purchase Price
paid by the Partnership for Investments then held by the Partnership (inclusive
of any Investment then being acquired).
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(b) Investment Company Status.
The General Partner shall use its best efforts to assure that the
Partnership shall not be deemed an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(c) Sales and Leases of Equipment From or to the General Partner and its
Affiliates.
The Partnership shall neither purchase, lease or license Investments from,
nor sell, lease or license Investments to, the General Partner or any Affiliate
of the General Partner (including, without limitation, any Program in which the
General Partner or any such Affiliate has an interest) except as provided in
this Section. The Sponsor shall not purchase any equipment or Financing
Transactions from the Partnership or any affiliated program which it has
sponsored (whether held by them on an interim basis or otherwise.
Notwithstanding the first sentence of this Section (c), the Partnership may
purchase Affiliated Investments if:
(i) the General Partner determines that the making of such Affiliated
Investment is in the best interests of the Partnership;
(ii) such Investment is purchased by the Partnership at a Purchase
Price which does not exceed the sum of (A) the net cost to the General
Partner or such Affiliate of acquiring and holding same (adjusted for any
income received and expenses paid or incurred while holding same) plus (B)
any compensation to which the General Partner and any Affiliate of the
General Partner is otherwise entitled pursuant to this Agreement;
(iii) there is no difference in the interest terms of the
Indebtedness secured by the Investment at the time it is acquired by the
General Partner or such Affiliate and the time it is acquired by the
Partnership;
(iv) neither the General Partner nor any Affiliate of the General
Partner realizes any gain, or receives any other benefit, other than
compensation for its services, if any, permitted by this Agreement, as a
result of the Partnership making such Affiliated Investment; and
(v) at the time of transfer thereof to the Partnership, the General
Partner or such Affiliate had held such Affiliated Investment on an
interim basis (generally not longer than six months) for the purposes of
(A) facilitating the acquisition of such Investment by the Partnership,
(B) borrowing money or obtaining financing for the Partnership or (C) any
other lawful purpose related to the business of the Partnership.
(d) Loans to or from the General Partner and its Affiliates.
No loans may be made by the Partnership to the General Partner or any
Affiliate of the General Partner. The General Partner or any Affiliate of the
General Partner, however, may, from time to time, loan or advance funds to the
Partnership (each such loan or advance being hereinafter called a "Partnership
Loan") in accordance with this Section 6.2(d). The terms of any Partnership Loan
permitted to be made hereunder shall include the following:
(i) any interest payable by the Partnership in connection with such
Partnership Loan shall be charged at an annual rate of interest not in
excess of the lesser of the following: (A) the rate of interest payable by
the General Partner or such Affiliate in connection with such borrowing
(in the event that the General Partner or any Affiliate shall borrow money
for the specific purpose of making such Partnership Loan), (B) the rate of
interest that would be charged to the Partnership (without reference to
the General Partner's or such Affiliate's financial abilities or
guarantees) by unrelated lending institutions on a comparable loan for the
same purpose in the same geographic area (if neither the General Partner
nor any such Affiliate has borrowed money to make such Partnership Loan)
or (C) a rate of interest equal to the rate of interest from time to time
announced by The Chase Manhattan Bank (National Association) at its
principal lending offices in New York, New York as its prime lending rate
plus 3% per annum;
(ii) all payments of principal and interest on such Partnership Loan
shall be due and payable within twelve months after the date on which such
Partnership Loan is made; and
(iii) neither the General Partner nor any such Affiliate may receive
points or other financial charges or fees in any amount in respect of such
Partnership Loan (except that the General Partner or such Affiliate may be
reimbursed, dollar for dollar, for the actual reasonable out-of-pocket
expenses (including, without limitation, any points or other financial
charges or fees) incurred by it in connection with the making of such
Partnership Loan), provided that nothing in this clause (iii) shall
prohibit any increase in Acquisition Fees and Management Fees
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otherwise payable to the General Partner or such Affiliate in accordance
with this Agreement, notwithstanding that such increase may be an indirect
result of the making of such Partnership Loan.
If the General Partner or any Affiliate of the General Partner purchases
Equipment in its own name and with its own funds in order to facilitate
ultimate purchase by the Partnership, the General Partner or such
Affiliate, as the case may be, shall be deemed to have made a Partnership
Loan in an amount equal to the purchase price paid for such Equipment and
shall be entitled to receive interest on such amount in accordance with
clause (i) above. Any advances made by the General Partner or any
Affiliate of the General Partner for the purpose of paying Organizational
and Offering Expenses shall not constitute a Partnership Loan, but shall
be reimbursed to the General Partner or such Affiliate (to the extent
possible) from the O & O Expense Allowance without interest thereon in
accordance with, and to the extent provided in, Section 6.4(e) of this
Agreement.
(e) No Exchange of Interests for Investments.
The Partnership shall not acquire any Investments in exchange for
Interests in the Partnership.
(f) Joint Venture Investments.
The Partnership may make Investments in Joint Ventures, provided that:
(i) at the time any such Investment in a Joint Venture is made, the
maximum amount of Gross Offering Proceeds which the Partnership may so
invest shall equal an amount equal to the smallest of 25% of (A) the
Maximum Offering, (B) the sum of (1) the cumulative Gross Offering
Proceeds raised as of the Closing Date next preceding such investment and
(2) the Gross Offering Proceeds which the General Partner reasonably
estimates the Partnership to raise from such Closing Date to the
Termination Date) or (C) the cumulative Gross Offering Proceeds actually
raised as of the Termination Date; and
(ii) the General Partner shall have determined that:
(A) such Investment is in the best interests of the Partnership;
and
(B) such Investment shall not result in duplicate fees to the
General Partner or any Affiliate of the General Partner;
(iii) in the case of any Joint Venture with any non-Affiliated
Person, the Partnership must acquire a controlling interest in such Joint
Venture and the non-Affiliate must acquire the non-controlling interest
therein and such Joint Venture must own and lease specific Equipment
and/or invest in one or more specific Financing Transactions; and
(iv) in the case of any Joint Venture with any Program sponsored by
the General Partner or any Affiliate of the General Partner, all of the
following conditions are met:
(A) all Programs, including the Partnership, participating in
such Joint Venture shall have substantially identical
investment objectives and shall participate in such Joint
Venture on substantially the same terms and conditions;
(B) the compensation payable by the Partnership to the General
Partner or any Affiliate of the General Partner by the
Partnership and by each other Program sponsored by any of them
in connection with such Joint Venture shall be substantially
identical;
(C) the Partnership shall have a right of first refusal with
respect to the purchase of any equipment or other tangible or
intangible personal property or financing transactions held by
such Joint Venture; and
(D) the purpose of such Joint Venture shall be either (1) to
effect appropriate diversification for the Partnership and the
other Programs participating in such Joint Venture or (2) to
relieve the Sponsor or one or more Programs sponsored by it of
the obligation to acquire, or to acquire from any of them,
equipment or other tangible or intangible personal property or
financing transactions
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at any time subject to a purchase commitment entered into
pursuant to Section 6.2(c) of this Agreement.
Subject to the other provisions of this Agreement, the Partnership may
employ, or transact business with, any Person, notwithstanding the fact
that any Partner or any Affiliate thereof may have (or have had) an
interest in or connection with such Person and provided that neither the
Partnership nor the other Partners shall have any rights by virtue of this
Agreement in or to any income or profits derived therefrom.
(g) Exchange, Merger, Roll-Up or Consolidation of the Partnership
Prohibited.
The Partnership shall not (i) be a party to any exchange offer, merger,
Roll-Up or similar combination with any other legal entity (including any
Roll-Up Entity) or (ii) reorganize itself if such reorganization would have the
effect of an exchange offer, merger, Roll-Up or similar combination. Neither the
Partnership nor the General Partner shall solicit, or engage or compensate
members, or persons associated with members, of the NASD to solicit, proxies
from any Limited Partners authorizing any exchange offer, merger, Roll-Up or
similar combination or any such reorganization. The General Partner is not
authorized to take any action inconsistent herewith.
(h) No Exclusive Listings.
No exclusive listing for the sale of Equipment or other Investments, or of
any other Partnership assets, shall be granted to the General Partner or any
Affiliate of the General Partner.
(i) Other Transactions Involving the General Partner and its Affiliates.
Except as specifically permitted by this Agreement, the General Partner is
prohibited from entering into any agreements, contracts or arrangements on
behalf of the Partnership with the General Partner or any Affiliate of the
General Partner. Furthermore, neither the General Partner nor any such Affiliate
shall receive directly or indirectly a commission or fee (except as permitted by
Section 6.4) in connection with the reinvestment of Cash From Sales and Cash
From Operations (including casualty insurance proceeds) in new Investments. In
addition, in connection with any agreement entered into by the Partnership with
the General Partner or any such Affiliate, no rebates or "give-ups" may be
received by the General Partner or any such Affiliate, nor may the General
Partner or any such Affiliate participate in any reciprocal business
arrangements that could have the effect of circumventing any of the provisions
of this Agreement. Neither the General Partner nor any Affiliate shall, directly
or indirectly, pay or award any commissions or other compensation to any Person
engaged by a potential investor as an investment advisor as an inducement to
such Person to advise such potential investor of interests in a particular
Program; provided, however, that this Section 6.2(i) shall not prohibit the
payment to any such Person of the Underwriting Fees and Sales Commissions
otherwise in accordance with the terms of this Agreement.
(j) Sale of All or Substantially All Assets; Dissolution.
During the Reinvestment Period, the General Partner may not dissolve the
Partnership or sell or otherwise dispose of all or substantially all of the
assets of the Partnership without the Consent of the Majority Interest.
(k) No Investments in Limited Partnership Interests of other Programs. The
Partnership shall not invest in limited partnership interests of any other
Program; provided, however, that nothing herein shall preclude the Partnership
from making investments in Joint Ventures, to the extent and in the manner
provided in this Section.
6.3 Limitation on Liability of General Partner and its Affiliates;
Indemnification.
(a) The General Partner, and any Affiliate engaged in the performance of
services on behalf of the Partnership (hereinafter sometimes referred to as an
"Indemnitee"), shall, except as provided to the contrary in this Section 6.3,
(i) be indemnified by the Partnership from assets of the Partnership (and not by
the Limited Partners) for any liability, loss, cost and expense of litigation
(collectively referred to herein as "Liabilities") suffered by such Indemnitee,
and (ii) have no liability, responsibility, or accountability in damages or
otherwise to the Partnership or any Partner for any loss suffered by the
Partnership or any Partner, which arises out of any action or inaction of such
Indemnitee if (A) the General Partner has determined, in good faith, that such
course of conduct was in the best interests of the Partnership and (B) such
course of conduct did not constitute negligence or misconduct by such
Indemnitee. Notwithstanding the foregoing, each Indemnitee shall be liable,
responsible and accountable, and the Partnership shall not be liable to any such
Indemnitee for any portion of such Liabilities, which resulted from such
Indemnitee's own fraud, negligence, misconduct or, if applicable, breach of
fiduciary duty to the Partnership or any Partner, as determined by a court of
competent jurisdiction. Subject to Section 6.3(c)
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hereof, if any action, suit, or proceeding shall be pending against the
Partnership or an Indemnitee which is alleged to relate to, or arise out of, any
action or inaction of the General Partner or any Affiliate, the Partnership
shall have the right to employ, at the expense of the Partnership, separate
counsel of its choice in such action, suit, or proceeding.
Any amounts payable by the Partnership to an Indemnitee pursuant to this
Section 6.3 shall be recoverable only out of the assets of the Partnership and
no Limited Partner shall have any personal liability on account thereof. The
Partnership shall not incur or assume the cost of that portion of liability
insurance which insures the General Partner or any Affiliate for any liability
as to which the General Partner or such Affiliate is prohibited from being
indemnified pursuant to this Section 6.3.
(b) The Partnership shall not furnish indemnification to an Indemnitee or
to any person acting as a Selling Dealer for any Liabilities imposed by a
judgment in a suit arising from or out of a violation of federal or state
securities laws unless (i)(A) there has been a successful adjudication on the
merits in favor of such Indemnitee or Selling Dealer on each count involving
alleged securities laws violations by such Indemnitee or Selling Dealer, (B)
such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction or (C) a court of competent jurisdiction shall have
approved a settlement of the claims against the Indemnitee and indemnification
in respect of the costs thereof, and (ii) the court shall have been advised by
the General Partner as to the current position of the Securities and Exchange
Commission, the Securities Divisions of the Commonwealths of Massachusetts and
Pennsylvania, the States of Missouri and Tennessee and any other relevant
regulatory body with respect to the issue of indemnification for securities law
violations.
(c) The provision of advances from Partnership funds to an Indemnitee for
legal expenses and other costs incurred as a result of any legal action
initiated against an Indemnitee by a Limited Partner of the Partnership in his
capacity as such is prohibited. However, the provision of advances from
Partnership funds to an Indemnitee for legal expenditures and other costs
incurred as a result of any initiated suit, action or proceeding is permissible
only if (i) such suit, action or proceeding relates to or arises out of, or is
alleged to relate to or arise out of, any action or inaction on the part of the
Indemnitee in the performance of its duties or provision of its services on
behalf of the Partnership; (ii) such suit, action or proceeding is initiated by
a third party who is not a Limited Partner; and (iii) the Indemnitee undertakes
to repay any funds advanced pursuant to this Section 6.3 in cases in which such
Indemnitee would not be entitled to indemnification under 6.3(a) and 6.3(b). If
advances are permissible under this Section 6.3, the Indemnitee shall furnish
the Partnership with an undertaking as set forth in the foregoing sentence and
shall thereafter have the right to bill the Partnership for, or otherwise
request that the Partnership pay, at any time and from time to time after such
Indemnitee has become obligated to make payment therefor, any and all amounts
for which such Indemnitee believes in good faith that such Indemnitee is
entitled to indemnification under this Section 6.3. The Partnership shall pay
any and all such bills and honor any and all such requests for payment for which
the Partnership is liable as determined above. In the event that a final
determination is made that the Partnership is not so obligated in respect to all
or any portion of the amounts paid by it or if the Indemnitee enters into a
stipulation or settlement with like effect, such Indemnitee will refund such
amount, plus interest thereon at the then prevailing market rate of interest,
within 60 days of such final determination, and in the event that a final
determination is made that the Partnership is so obligated in respect to any
amount not paid by the Partnership to a particular Indemnitee or if the
Partnership enters into a stipulation or settlement with like effect, the
Partnership will pay such amount to such Indemnitee.
6.4 Compensation of General Partner and its Affiliates.
Neither the General Partner nor any Affiliate of the General Partner
shall, in their respective capacities as such, receive any salary, fees,
profits, distributions or other compensation except in accordance with this
Section 6.4.
(a) Allocations and Distributions.
The General Partner shall be entitled to receive the allocations and
distributions provided for under Section 8 in respect of the Interest held by it
as General Partner.
(b) Underwriting Fees.
Underwriting Fees shall be paid by the Partnership to the Dealer-Manager
in respect of each Unit sold.
(c) Sales Commissions.
Sales Commissions shall be paid by the Partnership to the Dealer-Manager
and each Selling-Dealer in respect of the respective Units sold by each of them,
provided that no Sales Commissions shall be payable by the Partnership in
respect
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of any Units sold to Affiliated Limited Partners, and, provided further, that
the Sales Commissions payable with regard to sales of Units subject to Volume
Discounts shall be reduced by the amount of such Volume Discounts.
(d) Due Diligence Expenses.
Due Diligence Expenses actually incurred in connection with the Offering
shall be paid or reimbursed by the Partnership to the Dealer-Manager and each
Selling Manager, provided that the Dealer-Manager shall be entitled to payment
of or reimbursement for Due Diligence Expenses only after each Selling Dealer
(whether prospective or actual) shall have first been paid or reimbursed for all
Due Diligence Expenses of such Selling Dealer, and provided, further, that the
amount of Due Diligence Expenses actually paid to the Dealer-Manager shall
reduce, dollar-for-dollar, the amount of the O & O Expense Allowance otherwise
payable by the Partnership to the General Partner pursuant to Section 6.4(e) of
this Agreement.
(e) O & O Expense Allowance.
The Partnership shall pay, immediately following each Closing Date, the O
& O Expense Allowance to the General Partner, whether or not the full amount
thereof is actually incurred by the General Partner or any Affiliate of the
General Partner, without deduction for Underwriting Fees and Sales Commissions.
The General Partner shall distribute to the Dealer- Manager all or such portion
of the O & O Expense as the General Partner shall, in its sole and absolute
discretion, deem appropriate and the Partnership shall have no separate
liability to the Dealer-Manager for any Organizational and Offering Expenses
incurred by it. The General Partner shall bear any Organizational and Offering
Expenses incurred by the General Partner or any Affiliate of the General Partner
(including, without limitation, the Dealer-Manager) in excess of the O & O
Expense Allowance.
(f) Acquisition Fees.
In connection with any Investment, the Partnership shall pay to the
General Partner, for services rendered in connection with acquiring such
Investment, an Acquisition Fee equal to the difference (to the extent greater
than zero) between (i) 3.0% of the Purchase Price paid by the Partnership for
any (A) item of Equipment or (B) Financing Transaction, as the case may be, and
(ii) the aggregate amount of Acquisition Fees paid by or on behalf of the
Partnership to any other Person in connection with such Investment; provided,
however, that:
(i) no Acquisition Fees may be paid by or on behalf of the Partnership to
any finder or broker that is an Affiliate of the General Partner;
(ii) the Partnership shall not pay any Acquisition Fees, or part thereof,
that would cause the Partnership's Investment in Equipment and Financing
Transactions to be less than the greater of (x) 80% of the Gross Offering
Proceeds from the Partnership's sale of Units, reduced by .0625% for each
1% of Indebtedness encumbering any Investment acquired by the Partnership,
and (y) 75% of such Gross Offering Proceeds; and
(iii) the aggregate sum of (A) Acquisition Fees and (B) all other
Front-End Fees, which, in each case, may be paid to any Person pursuant to
this Agreement in connection with all Investments made by the Partnership
from any source (including, without limitation, Net Offering Proceeds,
Partnership indebtedness or reinvestment of excess Cash Flows) shall not
exceed an amount equal to the product of multiplying (x) the Gross
Offering Proceeds by (y) a percentage equal to (1) 100% minus (2) the
greater of the two percentages calculated under clause (x) or clause (y)
of subsection 6.4(f)(ii), above.
The following are examples of application of the formula in clause (ii),
above:
(1) No Indebtedness - 80% to be committed to Investment in Equipment and
Financing Transactions.
(2) 50% Indebtedness - 50% x .0625% = 3.125% 80% -
3.125% = 76.875% to be committed to Investment in
Equipment and Financing Transactions.
(3) 80% Indebtedness - 80% x .0625% = 5% 80% - 5% = 75% to be committed to
Investment in Equipment and Financing Transactions.
To calculate the percentage of Indebtedness encumbering Investments, the
aggregate amount of such Indebtedness shall be divided by the aggregate
Purchase Price (without deduction for Front-End Fees) paid for all
Investments.
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Such percentage of Indebtedness so calculated would be multiplied by
.0625% to determine the percentage to be deducted from 80%.
If any payment of Acquisition Fees causes the Partnership to experience a
shortfall in its required Investment in Equipment and Financing Transactions
(computed under clause (ii) above) or the aggregate amount of Acquisition Fees
paid by the Partnership to exceed the amount determined in accordance with
clause (iii) above, the General Partner shall refund to the Partnership that
portion of Acquisition Fees received by it to the extent necessary to correct
such shortfall or overpayment, as the case may be, together with interest
thereon at the rate of 1.0% per month to the extent that such refund is not made
within 30 days.
Where the Partnership purchases an item of Equipment or any Financing
Transaction from the General Partner or one of its Affiliates pursuant to
Section 6.2(d) for a Purchase Price which includes an Acquisition Fee amount,
such Acquisition Fee amount shall be deemed paid pursuant to this Section 6.4(d)
and there shall be no duplicative payment thereof.
(g) Management Fees.
Each month, for management services rendered, the Partnership shall pay to
the General Partner such portion of the Management Fees as shall be attributable
to Gross Revenues actually received by the Partnership during such month;
provided that Management Fees shall be payable solely out of Gross Revenues
received during the month in which paid; and provided, further, that such
Management Fees shall be paid in any month only after payment of any accrued and
unpaid First Cash Distributions for such month and for any previous month (in
each case, up to an amount equal to 8.0% per annum of each respective Limited
Partner's unreturned Capital Contribution), and, to the extent that the
Partnership does not have sufficient Cash From Operations in any month to pay
such proportion of all such First Cash Distributions, the payment of such
Management Fees shall be deferred and paid, without interest, in the next
following month in which the Partnership generates sufficient Cash From
Operations for the payment thereof.
(h) Subordinated Remarketing Fees.
For rendering services in connection with the sale of any Investment, the
Partnership shall pay to the General Partner the applicable Subordinated
Remarketing Fee; provided that:
(i) no such Subordinated Remarketing Fee shall be paid in connection with
the sale of any Investment to the extent that the Cash From Sales realized
thereby is reinvested in additional Investments;
(ii) in no event shall any such Subordinated Remarketing Fee be paid prior
to Payout; and
(iii) the General Partner shall not be entitled to receive any amount of
Subordinated Remarketing Fees to the extent that such amount would cause
the total commissions paid to all Persons, in connection with the sale of
such Investments, to exceed a fee for such services which is reasonable,
customary and competitive in light of the size, type and location of such
Investment.
After Payout, any and all Subordinated Remarketing Fees previously earned by the
General Partner shall be paid, without any interest thereon, by the Partnership,
prior to any other distributions to the Partners.
(i) Partnership Expenses.
(i) Reimbursement. Except as otherwise provided in this Section 6.4(i),
expenses of the Partnership, other than those incurred and otherwise
reimbursed in accordance with Sections 6.4(b) through (h), shall be billed
directly to and paid by the Partnership.
(ii) Goods and Third-Party Services. The General Partner and any Affiliate
of the General Partner may be reimbursed for the actual cost of goods and
services used for or by the Partnership and obtained by it or them from
non-Affiliates.
(iii) Administrative Services Provided by the General Partner and
Affiliates. Subject to clause (iv) of this Section 6.4(i), the General
Partner and any Affiliate of the General Partner may be reimbursed for
Operating Expenses which are actually incurred by it or them in connection
with the performance or arrangement of administrative services reasonably
necessary, convenient or advisable, in the discretion of the General
Partner, to the prudent
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operation of the Partnership (including, without limitation, legal,
accounting, remarketing and agency expenses) provided that the
reimbursement for same shall be limited to the lesser of (A) its or their
actual cost of providing same or (B) the amount the Partnership would be
required to pay to non-Affiliates for comparable administrative services
in the same geographic location and provided further, that no
reimbursement is permitted for such services if the General Partner or any
such Affiliate is entitled to compensation in the form of a separate fee
pursuant to other provisions of this Section 6.4.
(iv) Limitations on Reimbursements. Neither the General Partner nor any
Affiliate of the General Partner shall be reimbursed by the Partnership
for amounts expended by it with respect to the following:
(A) salaries, fringe benefits, travel expenses or other
administrative items incurred by or allocated to any Controlling
Person of the General Partner or of any such Affiliate;
(B) expenses for rent, depreciation and utilities or for capital
equipment or other administrative items (other than as specified
respectively in paragraphs (ii) and (iii) of this Section 6.4(i),
above).
6.5 Other Interests of the General Partner and its Affiliates.
The General Partner shall be required to devote only such time to the
affairs of the Partnership as the General Partner shall, in its sole and
absolute discretion, determine in good faith to be necessary for the business
and operations of the Partnership.
The General Partner and any Affiliate of the General Partner may engage
in, or possess an interest in, business ventures (other than the Partnership) of
every kind and description, independently or with others, including, but not
limited to, serving as sponsor or general partner of other Programs and
participating in the equipment leasing and financing businesses, whether or not
such business ventures may be competitive with the business or Investments of
the Partnership. Neither the Partnership nor any Limited Partner shall have any
rights in and to such independent ventures or the income or profits therefrom by
reason of the General Partner's position with the Partnership.
Neither the General Partner nor any Affiliate of the General Partner shall
be obligated to present any particular investment opportunity to the
Partnership, and the General Partner and each such Affiliate shall have the
right, subject only to the provisions of the next following paragraph, to take
for its own account (individually or otherwise), or to recommend to any
Affiliated Entity (including the Partnership), any particular investment
opportunity, considering, among other things, the following factors with respect
to itself and each Affiliated Entity:
(a) its own and each Affiliated Entity's general investment
objectives and policies, including, without limitation, cash distribution
objectives and leverage policies;
(b) its own and each Affiliated Entity's existing portfolio,
including the diversification thereof (by type of equipment, by length of
lease term, by industry and by geographic area) and the effect the making
of such investment would have thereon;
(c) the cash available to it and to each Affiliated Entity for the
purpose of making such investment and the length of time such funds have
been available;
(d) its own and each Affiliated Entity's current and long-term
liabilities; and
(e) the estimated income tax consequences of such investment to it
and each Affiliated Entity and to the individual investors participating
therein.
If, considering such factors and any other appropriate factors, the
General Partner determines that any investment opportunity would be equally
suitable for various Affiliated Entities, the General Partner shall make such
investment opportunity available to such Affiliated Entities on a rotation
basis, with the order of priority determined by the date of each Affiliated
Entity's initial closing.
Notwithstanding the foregoing, until all Capital Contributions have been
invested or committed to investment in Investments and Reserves (not exceeding
3% of Gross Offering Proceeds), used to pay permitted Front-End Fees or returned
to the Limited Partners (as provided in Section 8.7, below), the General Partner
and each Affiliate of the General Partner shall present to the Partnership
first, before any other Affiliated Entity (including any Affiliated Entity that
the General
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Partner or any such Affiliate advises or manages), the opportunity to purchase
any Investment meeting the investment objectives and policies of the
Partnership, other than a Lease relating to:
(i) used equipment previously leased by the General Partner or any such
Affiliate to third parties that becomes available for re-lease;
(ii) groups of items of equipment to be leased on terms providing various
cost recovery terms for various items, where the Partnership may not, in
accordance with this Agreement, purchase all items in the group;
(iii) equipment to be leased to a third party on favorable terms, from a
cost recovery viewpoint, subsequent to the lease by the General Partner or
its Affiliates to the same third party of other items of equipment on
substantially less favorable terms;
(iv) equipment as to which a prospective or existing lessee indicates to
the General Partner or its Affiliate that it will not lease or continue to
lease through the General Partner or such Affiliate unless the General
Partner or such Affiliate acquires and retains such equipment in its own
equipment portfolio; or
(v) equipment subject to a lease that by its terms is not assignable to an
entity such as the Partnership (leases that permit assignment to a
"financial institution" shall not, without more, be deemed assignable to
the Partnership).
In the event of a conflict between two or more Affiliated Entities
(including the Partnership) that are advised or managed by the General Partner
and that are seeking to re-lease or sell similar equipment contemporaneously,
the first opportunity to re-lease or sell equipment shall generally be allocated
to the Affiliated Entity attempting to re-lease or sell equipment that was
subject to the lease that expired first or, if two or more leases expire
simultaneously, the lease which was first to take effect; provided, however,
that the General Partner may, in its discretion, otherwise provide opportunities
to re-lease or sell equipment if such equipment is subject to remarketing
commitments or if there are other circumstances, in the General Partner's
judgment, under which the withholding of such an opportunity would be
inequitable or uneconomic for a particular Affiliated Entity.
If the financing available from time to time to two or more Affiliated
Entities (including the Partnership) is less than the aggregate amount then
sought by them, the available financing shall generally be allocated to the
investment entity that has been seeking financing the longest.
Nothing in this Section 6.5 shall be deemed to diminish the General
Partner's overriding fiduciary obligation to the Partnership or to act as a
waiver of any right or remedy the Partnership or other Partners may have in the
event of a breach of such obligation.
Section 7. POWERS AND LIABILITIES OF LIMITED PARTNERS.
7.1 Absence of Control Over Partnership Business.
The Limited Partners hereby consent to the exercise by the General Partner
of the powers conferred on the General Partner by this Agreement. No Limited
Partner shall participate in or have any control over the Partnership's business
or have any right or authority to act for, or to bind or otherwise obligate, the
Partnership (except one who is also the General Partner, and then only in its
capacity as the General Partner). No Limited Partner shall have the right to
have the Partnership dissolved and liquidated or to have all or any part of such
Limited Partner's Capital Contribution or Capital Account returned except as
provided in this Agreement.
7.2 Limited Liability.
The liability of each Limited Partner in such capacity shall be limited to
the amount of such Limited Partner's Capital Contribution and pro rata share of
any undistributed Profits and other assets of the Partnership. Except as may
otherwise be required by law or by this Agreement, after the payment of all
Subscription Monies for the Units purchased by such Limited Partner, no Limited
Partner shall have any further obligations to the Partnership, be subject to any
additional assessment or be required to contribute any additional capital to, or
to loan any funds to, the Partnership.
No Limited Partner shall have any personal liability on account of any
obligations and liabilities of, including any amounts payable by, the
Partnership under or pursuant to, or otherwise in connection with, this
Agreement or the conduct of the business of the Partnership.
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Section 8. DISTRIBUTIONS AND ALLOCATIONS.
8.1 Distribution of Distributable Cash From Operations and Distributable
Cash From Sales.
(a) During the Reinvestment Period, the General Partner shall determine in
its sole discretion what portion, if any, of the Partnership's Distributable
Cash From Operations and Distributable Cash From Sales shall be invested and
reinvested in additional Investments and which portion shall be distributed to
the Partners; provided, however, that the General Partner shall not reinvest,
but shall distribute to the extent available, Distributable Cash From Operations
and Distributable Cash From Sales to Limited Partners in an amount equal to the
following amounts for the periods specified (pro rated, as necessary, for
periods of less than one year):
(i) For the period beginning with a Limited Partner's admission to the
Partnership and ending with the expiration or termination of the
Reinvestment Period, each Limited Partner shall be entitled to receive
monthly cash distributions, to the extent that Distributable Cash From
Operations and Distributable Cash From Sales are sufficient for such
purpose. The annual amount of such distributions will be computed by
multiplying 10.75% by each Limited Partner's respective original Capital
Contribution reduced by any portion thereof which has been (A) returned to
such Limited Partner pursuant to Section 8.6, or (B) redeemed by the
Partnership pursuant to Section 10.5, of this Agreement. A ratable portion
(i.e., one-twelfth) of such annual distribution amount shall be payable
monthly; and
Any portion of the monthly distribution amounts described in this clause
(i) which exceeds the sum of Distributable Cash From Operations and
Distributable Cash From Sales for any year (if any) shall be distributable
(if at all) solely at the discretion of the General Partner. Each monthly
cash distribution amount shall be computed as provided in the preceding
sentence on a non-cumulative basis (that is, without increase for any
portion of the monthly cash distribution amount computed pursuant to this
clause (i) which the Partnership is unable to make, and without reduction
for any cash distributions actually made, in any prior period.
(ii) Each Limited Partner is entitled to receive monthly cash
distributions (if the distributions described in paragraph (i) above are
not adequate) in amounts which would permit the Limited Partners to pay
federal, state and local income taxes resulting from Partnership
Operations (assuming that all Limited Partners are subject to income
taxation at a 31% cumulative tax rate on taxable distributions for GAAP
purposes). Such distributions will be made, to the extent that
Distributable Cash From Operations and Distributable Cash From Sales are
sufficient for such purpose.
(b) During the Disposition Period, no Available Cash From Operations or
Available Cash From Sales shall be reinvested in additional Investments, and all
Available Cash From Operations and Available Cash From Sales shall be
distributed to the Partners.
(c) Distributions of Distributable Cash From Operations and Distributable
Cash From Sales (collectively, "Distributable Cash") shall be made to the
Partners monthly. Subject to Section 8.1(a), the amount of each such monthly
distribution shall be determined by the General Partner, in its sole discretion,
based upon the amount of the Partnership's then available Distributable Cash and
other funds of the Partnership and the General Partner's estimate of the
Partnership's total Distributable Cash for such Fiscal Year. Prior to Payout,
distributions pursuant to this Section 8.1(c) shall be made 99% to the Limited
Partners and 1% to the General Partner; provided, however, that prior to the
admission to the Partnership of any Limited Partners, such distributions shall
be made 1% to the Original Limited Partner and 99% to the General Partner. After
Payout, distributions pursuant to this Section 8.1(c) shall be tentatively
attributed and distributed 90% to the Limited Partners and 10% to the General
Partner; provided, however, that, if at the time of Payout, each respective
Limited Partner has not yet received total cash distributions pursuant to this
Section 8.1(c) equal to 150% of such Limited Partner's original Capital
Contribution (reduced by any amounts paid to such Limited Partner (i) as a
return of his uninvested Capital Contributions pursuant to Section 8.6 and (ii)
in redemption of his Units pursuant to Section 10.5), distributions shall
continue to be made 99% to the Limited Partners and 1% to the General Partner
until the total cash distributions made to the Limited Partners equal 150% of
the Limited Partners' aggregate original Capital Contributions. The amount
tentatively attributed to the General Partner pursuant to the previous sentence
and not theretofore distributed to the General Partner shall be distributed to
the General Partner, without interest, out of the first Distributable Cash
available to the Partnership after the Limited Partners have received
distributions equal to 150% of their aggregate original Capital Contributions.
(d) Notwithstanding the provisions of Section 8.1(c), distributions of
Distributable Cash made during the Disposition Period shall be made in
accordance with the provisions of Section 11.3.
<PAGE>
8.2 Allocations of Profits and Losses.
(a) The Profits and Losses of the Partnership shall be determined for each
Fiscal Year or Fiscal Period.
(b) Except as otherwise provided in this Agreement, whenever a
proportionate part of the Partnership's Profits or Losses is allocated to a
Partner, every item of income, gain, loss or deduction entering into the
computation of such Profits or Losses, or arising from the transactions with
respect to which such Profits or Losses were realized, shall be allocated to
such Partner in the same proportion.
(c) Profits for any Fiscal Period during the Reinvestment Period shall be
allocated to the Partners as follows:
(i) first, 1% to the General Partner and 99% to the Limited Partners until
the Limited Partners have been allocated Profits equal to the excess, if
any, of their aggregate Unpaid Target Distributions over their aggregate
Capital Account balances;
(ii) next, in a manner that will cause (A) the excess of the Limited
Partners' aggregate Capital Account balances over the amount of their
aggregate Unpaid Target Distributions and (B) the General Partner's
Capital Account balance, to be in the ratio of 90% to 10%; and
(iii) thereafter, 90% to the Limited Partners and 10% to the General
Partner.
(d) Profits for any Fiscal Period during the Disposition Period shall be
allocated to the Partners as follows:
(i) first, to the Partners in proportion to and to the extent of the
deficit balances, if any, in their respective Capital Accounts;
(ii) next, 1% to the General Partner and 99% to the Limited Partners until
the Limited Partners have been allocated Profits equal to the excess, if
any, of their aggregate Unpaid Target Distributions over their aggregate
Capital Account balances;
(iii) next, in a manner that will cause (A) the excess of the Limited
Partners' aggregate Capital Account balances over the amount of their
aggregate Unpaid Target Distributions and (B) the General Partner's
Capital Account balance, to be in the ratio of 90% to 10%; and
(iv) thereafter, 90% to the Limited Partners and 10% to the General
Partner.
(e) Losses for any Fiscal Period shall be allocated to the Partners as
follows:
(i) first, 1% to the General Partner and 99% to the Limited Partners until
the Limited Partners have been allocated Losses equal to the excess, if
any, of their aggregate Capital Account balances over their aggregate
Adjusted Capital Contributions;
(ii) next, to the Partners in proportion to and to the extent of their
respective remaining positive Capital Account balances, if any; and
(iii) thereafter, 1% to the General Partner and 99% to the Limited
Partners; provided, however, that if and to the extent that an allocation
of Losses to any Limited Partner pursuant to this Section 8.2(e) or
Section 8.2(f) would result in any Limited Partner having an Adjusted
Capital Account Deficit, such Losses shall be allocated to all other
Partners in accordance with this Section 8.2(e) and, when no Limited
Partner can be allocated any such Losses without violating the limitation
contained in this proviso, such remaining Losses shall be allocated to the
General Partner.
(f) Special Allocations.
The following special allocations shall, except as otherwise provided, be
made prior to allocations in Section 8.2(a)- (e) in the following order:
(i) Minimum Gain Charge-Back. Notwithstanding any other provision of this
Section 8, if there is a net decrease in Partnership Minimum Gain or in
any Partner Nonrecourse Debt Minimum Gain during any Fiscal Period, prior
to any other allocation pursuant this Section 8, each Partner shall be
specifically allocated items of Partnership income and gain for such
Fiscal Period (and, if necessary, subsequent Fiscal Periods) in an amount
and manner
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required by Treas. Reg. Sections 1.704-2(f) and 1.704-2(i)(4) or any
successor provisions. The items to be so allocated shall be determined
in accordance with Treas. Reg. Section 1.704-2(j)(2) or any successor
provision.
(ii) Partnership Nonrecourse Deductions. Partnership Nonrecourse
Deductions for any Fiscal Period shall be allocated 99% to the Limited
Partners and 1% to the General Partner.
(iii) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions
for any Fiscal Period shall be allocated to the Partner who made or
guaranteed or is otherwise liable with respect to the loan to which such
Partner Nonrecourse Deductions are attributable in accordance with
principles of Treas. Reg. Section 1.704-2(i) or any successor provision.
(iv) Qualified Income Offset. If in any Fiscal Period, any Partner has an
Adjusted Capital Account Deficit, whether resulting from an unexpected
adjustment, allocation or distribution described in Treas. Reg. Section
1.704- 1(b)(2)(ii)(d)(4), (5) or (6) or otherwise, such Partner shall be
allocate items of Partnership income and gain (consisting of a pro rata
portion of each item of Partnership income, including gross income, and
gain for such Fiscal Period) sufficient to eliminate such Adjusted Capital
Account Deficit as quickly as possible, to the extent required by such
Treasury Regulation. It is the intention of the parties that this
allocation provision constitute a "qualified income offset" within the
meaning of Treas. Reg. Section 1.704-1(b)(2)(ii)(d).
(v) Curative Allocations. The special allocations provided for in the
proviso of Section 8.2(e) and in Sections 8.2(f)(i)-(iv) are intended to
comply with certain requirements of Treas. Reg. Sections 1.704-1 and
1.704-2. To the extent that any of such special allocations shall have
been made, subsequent allocations of income, gains, losses and deductions
and items thereof ("curative allocations") shall be made as soon as
possible and in a manner so as to cause, to the extent possible without
violating the requirements of Treas. Reg. Sections 1.704-1 and 1.704- 2,
the Partners' Capital Account balances to be as nearly as possible in the
same proportions in which they would have been had such special
allocations not occurred. In making such curative allocations, due regard
shall be given to the character of the Profits and Losses and items
thereof that were originally allocated pursuant to the provision of
Sections 8.2(e) and Sections 8.2(f)(i)-(iv) in order to put the Partners
as nearly as possible in the positions in which they would have been had
such special allocations not occurred.
If the General Partner determines, after consultation with Tax
Counsel, that the allocation of any item of Partnership income, gain, loss
or deduction is not specified in this Section 8 (an "unallocated item"),
or that the allocation of any item of Partnership income, gain, loss or
deduction hereunder is clearly inconsistent with the Partners' economic
interests in the Partnership determined by reference to this Agreement,
the general principles of Treas. Reg. Section 1.704-1(b) and the factors
set forth in Treas. Reg. Section 1.704-1(b)(3)(ii) (a "misallocated
item"), then the General Partner may allocate such unallocated items and
reallocate such misallocated items, to reflect such economic interests.
(vi) Special Allocation of State, Local and Foreign Taxes. Any state,
local or foreign taxes imposed on the Partnership by reason of a Partner
being a citizen, resident or national of such state, locality or foreign
jurisdiction, including any item(s) of taxable income or tax loss
resulting therefrom, shall be specially allocated to such Partner.
(vii) Transactions with Partnership. If, and to the extent that, any
Partner is deemed to recognize any item of income, gain, loss, deduction
or credit as a result of any transaction between such Partner and the
Partnership pursuant to Code Sections 482, 483, 1272-1274, 7872 or any
similar provision now or hereafter in effect, any corresponding Profits or
Losses or items thereof shall be allocated to the Partner who was charged
with such item.
(viii) Fees and Commissions Paid to General Partner. It is the intent of
the Partnership that any amount paid or deemed paid to the General Partner
as a fee or payment described in Section 6.4 shall be treated as a
"guaranteed payment" or a payment to a partner not acting in his capacity
as a partner pursuant to Section 707(c) of the Code to the extent
possible. If any such fee or payment is deemed to be a distribution to the
General Partner and not a guaranteed payment or a payment to a partner not
acting in his capacity as a partner, the General Partner shall be
allocated an amount of Partnership gross ordinary income equal to such
payment.
(ix) Selling Commissions, Underwriting Fees, Acquisition Fees and O & O
Expense Allowance. Selling Commissions, Underwriting Fees, Acquisition
Fees and the O & O Expense Allowance shall be allocated 100% to the
Limited Partners. Organizational and Offering Expenses, in excess of Sales
Commissions, Underwriting Fees and the O & O Expense Allowance, shall be
allocated 100% to the General Partner.
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8.3 Distributions and Allocations Among the Limited Partners.
(a) Except to the extent otherwise provided herein, all distributions of
Distributable Cash and all allocations of Profits and Losses and items thereof
for any Fiscal Year or Fiscal Period shall be distributed or allocated, as the
case may be, among the Limited Partners in proportion to their respective
numbers of Units. Each distribution of Distributable Cash shall be made to the
Limited Partners (or their respective assignees) of record as of the last day of
the month next preceding the date on which such distribution is made.
(b) All distributions of Distributable Cash and all allocations of Profits
and Losses or items thereof for any Fiscal Year in which any Limited Partners
are admitted to the Partnership, shall be allocated among the Limited Partners
as follows:
(i) first, the Operations and Sales of the Partnership shall be deemed to
have occurred ratably over such Fiscal Year, irrespective of the actual
results of Operations or Sales of the Partnership during or within any
given Segment;
(ii) second, (A) each Limited Partner who was admitted to the Partnership
prior to the commencement of such Fiscal Year shall be deemed to have held
his respective Units commencing as of the first Segment in such Fiscal
Year; (B) each Limited Partner who was admitted to the Partnership as of
the first day of any subsequent Segment in such Fiscal Year in accordance
with Section 5.3(h), shall be deemed to have held his respective Units
commencing with such Segment; and (C) each Limited Partner who was
admitted to the Partnership commencing as of the day following the Initial
Closing Date or the Final Closing Date (where such Initial Closing Date or
Final Closing Date falls on other than the 15th day or last day of a month
or next preceding business day), shall be deemed to have held his
respective Units for a fraction of the Segment within which such Limited
Partner was admitted to the Partnership, determined by dividing the number
of days within such Segment following the Initial Closing Date or Final
Closing Date, as the case may be, by the number of days in such Segment;
(iii) third, all Profits and Losses for such Fiscal Year shall be
allocated among the Limited Partners in the ratio that the number of Units
held by each Limited Partner multiplied by the number of Segments (pro
rated for fractions of Segments) in such Fiscal Year that such Units were
held by such Limited Partner bears to the sum of that calculation for all
Limited Partners; and
(iv) fourth, all monthly distributions of cash made to the Limited
Partners pursuant to Section 8.1(c) shall be distributed among the Limited
Partners in the ratio that the number of Units held by each Limited
Partner multiplied by the number of Segments (pro rated for fractions of
Segments) in the month preceding the month in which the distribution is
made that such Units were held by such Limited Partner bears to the sum of
that calculation for all Limited Partners. If the General Partner
determines at any time that the sum of the monthly distributions made to
any Limited Partner during or with respect to a Fiscal Year does not (or
will not) properly reflect such Limited Partner's share of the total
distributions made or to be made by the Partnership for such Fiscal Year,
the General Partner shall, as soon as practicable, make a supplemental
distribution to such Limited Partner, or withhold from a subsequent
distribution that otherwise would be payable to such Limited Partner, such
amount as shall cause the total distributions to such Limited Partner for
such Fiscal Year to be the proper amount.
(c) In the event of a transfer of a Unit during a Fiscal Year in
accordance with Section 10, the transferor and transferee shall be allocated a
ratable share of Profits and Losses for such Fiscal Year based on the number of
Segments (pro rated for fractions of Segments) in such Fiscal Year that each
held such transferred Units. Monthly distributions made by the Partnership in
accordance with Section 8.1(c) shall be allocated between the transferor and
transferee (and subsequently adjusted, if necessary) in the manner set forth in
clause (iv) and the last sentence of Section 8.3(b).
(d) Each distribution made to a Limited Partner pursuant to Section
8.1(c), 8.6 or 11.3 of this Agreement, any interest on Subscription Monies
relating to such Limited Partner's Units paid to such Limited Partner pursuant
to Section 5.3(k), and any amount paid to such Limited Partner in redemption of
such Limited Partner's Units pursuant to Section 10.5 shall be applied as
follows:
(i) first, in reduction of such Limited Partner's Unpaid Cumulative
Return, to the extent thereof, as determined immediately before such
distribution; and
(ii) then, in reduction of such Limited Partner's Adjusted Capital
Contribution, to the extent thereof, as determined immediately before such
distribution.
8.4 Tax Allocations: Code Section 704(c); Revaluations.
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(a) In accordance with Code section 704(c) and the Treasury Regulations
thereunder, income, gain, loss, and deduction, and items thereof, with respect
to any property contributed to the capital of the Partnership shall, solely for
tax purposes, be allocated among the Partners so as to take account of any
variation between the adjusted basis of such property to the Partnership for
federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to Clause (ii) of the definition of Gross Asset Value herein
and Section 5(h) hereof, subsequent allocations of income, gain, loss and
deduction, and items thereof, with respect to such asset shall take account of
any variation between the adjusted basis of such asset for federal income tax
purposes and its Gross Asset Value in a manner consistent with the requirements
of Proposed Treas. Reg. Section 1.704-3(a)(4) or the corresponding provision of
final or successor Treasury Regulations.
(c) Any elections or other decisions relating to the allocations required
by clauses (a) and (b) of Section 8.4 shall be made in a manner that reasonably
reflects the purpose and intention of this Agreement. Allocations pursuant to
this clause (c) of Section 8.4 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this Agreement.
8.5 Compliance with NASAA Guidelines Regarding Front-End Fees.
Notwithstanding anything in this Agreement to the contrary, in the event
the Partnership fails, at any time after the expiration of 30 months from the
date of the Prospectus, to comply with the restrictions set forth in Section
6.4(b) through (f) above, the General Partner shall appropriately adjust the
allocations and distributions set forth in this Section 8 so as to comply with
the requirements contained in NASAA Guidelines. No adjustment proposed to be
made pursuant to this Section 8.5 shall require the General Partner to obtain
the consent of the Limited Partners unless such proposed adjustment adversely
effects the allocations or distributions made, or to be made, to any Limited
Partner.
8.6 Return of Uninvested Capital Contribution.
In the event that 100% of Net Offering Proceeds have not been used to make
Investments or committed to Reserves to the extent permitted to be treated as
Investments pursuant to Section 6.1(b)(vii) within the later of (i) twenty-four
(24) months after the Effective Date of the Offering or (ii) 12 months of the
receipt thereof by the Partnership, the amount of such uninvested Net Offering
Proceeds shall be promptly distributed by the Partnership to the Limited
Partners, pro rata based upon their respective number of Units, as a return of
capital, without interest and without reduction for Front-End Fees in respect of
such uninvested Capital Contributions (which distributions shall not in any
event exceed the related Capital Contribution of any Limited Partner). Funds
shall be deemed to have been committed to investment and need not be returned to
a Limited Partner to the extent written agreements in principle, commitment
letters, letters of intent or understanding, option agreements or any similar
contracts or understandings are executed and not terminated during the
applicable twenty-four (24) or twelve (12) month period described above, if such
investments are ultimately consummated within a further period of twelve (12)
months. Funds deemed committed which are not actually so invested within such
twelve (12) month period will be promptly distributed, without interest and
without reduction for Front-End Fees in respect of such uninvested Net Offering
Proceeds, to the Limited Partners on a pro rata basis, as a return of capital.
8.7 Partner's Return of Investment in the Partnership.
Each Limited Partner shall look solely to the assets of the Partnership
for the return of his Capital Contribution and for any other distributions with
respect to his Partnership Interest. If the assets of the Partnership remaining
after payment or discharge, or provision for payment or discharge, of its debts
and liabilities are insufficient to return such Capital Contribution or to make
any other distribution to such Partner, he shall not have any recourse against
the personal assets of any other Partner, except to the limited extent set forth
in Section 6.3, Section 9.3(a) and Section 11.2(a)(iii).
8.8 No Distributions in Kind.
Distributions in kind shall not be permitted except upon dissolution and
liquidation of the Partnership's assets and may only then be made to a
liquidating trust established for the purposes of (a) liquidating the assets
transferred to it and (b) distributing the net cash proceeds of such liquidation
in cash to the Partners in accordance with the provisions of this Agreement.
8.9 Partnership Entitled to Withhold.
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The Partnership shall at all times be entitled to withhold or make
payments to any governmental authority with respect to any federal, state, local
or foreign tax liability of any Partner arising as a result of such Partner's
participation in the Partnership. Each such amount so withheld or paid shall be
deemed to be a distribution for purposes of Section 8 and Section 11, as the
case may be, to the extent such Partner is then entitled to a distribution. To
the extent that the amount of such withholdings or payments made with respect to
any Partner exceeds the amount to which such Partner is then entitled as a
distribution, the excess shall be treated as a demand loan, bearing interest at
a rate equal to twelve percent (12%) per annum simple interest from the date of
such payment or withholding until such excess is repaid to the Partnership (i)
by deduction from any distributions subsequently payable to such Partner
pursuant to this Agreement or (ii) earlier payment of such excess and interest
by such Partner to the Partnership. Such excess and interest shall, in any case,
be payable not less than 30 days after demand therefore by the General Partner,
which demand shall be made only if the General Partner determines that such
Partner is not likely to be entitled to distributions within 12 months from the
date of such withholding or payment by the Partnership in an amount sufficient
to pay such excess and interest. The withholdings and payments referred to in
this Section 8.9 shall be made at the maximum applicable statutory rate under
the applicable tax law unless the General Partner shall have received an opinion
of counsel or other evidence, satisfactory to the General Partner, to the effect
that a lower rate is applicable, or that no withholding or payment is required.
Section 9. WITHDRAWAL OF GENERAL PARTNER.
9.1 Voluntary Withdrawal.
The General Partner may not voluntarily withdraw as a General Partner from
the Partnership unless (a) the Limited Partners have received 60 days' advance
written notice of the General Partner's intention to withdraw, (b) the
Partnership shall have received an opinion of Tax Counsel to the Partnership to
the effect that such withdrawal will not constitute a termination of the
Partnership or otherwise materially adversely affect the status of the
Partnership for federal income tax purposes and (c) a Substitute General Partner
shall have been selected and such Substitute General Partner (i) shall have
expressed a willingness to be admitted to the Partnership, (ii) shall have
received the specific written Consent of the Majority Interest to such admission
and (iii) shall have a Net Worth sufficient, in the opinion of Tax Counsel to
the Partnership, for the Partnership to continue to be classified as a
partnership for federal income tax purposes and to satisfy the net worth
requirements for "sponsors" under the NASAA Guidelines.
9.2 Involuntary Withdrawal.
The General Partner shall be deemed to have involuntarily withdrawn as a
General Partner from the Partnership upon the removal of the General Partner
pursuant to the Consent of the Majority Interest or upon the occurrence of any
other event that constitutes an event of withdrawal under the Delaware Act as
then in effect.
For purposes of this Section 9.2 and Section 13, neither the General
Partner nor any Affiliate of the General Partner will participate in any vote by
the Limited Partners to (a) involuntarily remove the General Partner or (b)
cancel any management or service contract with the General Partner or any such
Affiliate.
9.3 Consequences of Withdrawal.
(a) Upon the voluntary withdrawal of the General Partner in accordance
with Section 9.1, the General Partner, or its estate, successors or legal
representatives, shall be entitled to receive from the Partnership (i) an amount
equal to the positive balance, if any, in the General Partner's Capital Account
(as adjusted to the date of such withdrawal by allocation pursuant to Section 8
of any Profits or Losses or other allocable items realized by the Partnership
through such date of Withdrawal and any unrealized gains and losses inherent in
the Partnership's assets as of such date), provided, however, that in no event
shall such amount exceed the fair market value of the Partnership Interest then
held by the General Partner, as calculated in accordance with the provisions of
clause (c) of this Section 9.3, plus or minus, as the case may be, (ii) an
amount equal to the difference between (A) any amounts due and owing to the
General Partner by the Partnership and (B) any amounts due and owing by the
General Partner to the Partnership. The right of the General Partner, or its
estate, successors or legal representatives, to receipt of such amount shall be
subject to (x) any claim for damages by the Partnership or any Partner against
the General Partner, or its estate, successors or legal representatives, that
such withdrawal shall have been made in contravention of this Agreement and (y)
if the General Partner has a negative balance in its Capital Account after
making the adjustments provided for in the first sentence of this clause (a) of
Section 9.3, payment to the Partnership of an amount equal to the lesser of (1)
the amount of such deficit balance or (2) the excess of 1.01% of the total
Capital Contributions of the Limited Partners over the capital previously
contributed by the General Partner.
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(b) Upon involuntary withdrawal of the General Partner as such from the
Partnership in accordance with Section 9.2, the Partnership shall pay to the
General Partner (i) the fair market value of the Partnership Interest then held
by the General Partner, as calculated in the manner set forth in clause (c) of
this Section 9.3, plus or minus, as the case may be, (ii) an amount equal to the
difference between (A) any amounts due and owing to such withdrawn General
Partner by the Partnership and (B) any amounts due and owing by such withdrawn
General Partner to the Partnership, and, upon such payment, the General
Partner's Interest in the income, losses, distributions and capital of the
Partnership shall be terminated.
(c) For purposes of this Section 9.3, the fair market value of the
withdrawn General Partner's Interest shall be determined, in good faith, by such
General Partner and the Partnership, or, if they cannot agree, by arbitration in
accordance with the then current rules of the American Arbitration Association
by two independent appraisers, one selected by the withdrawn General Partner and
one by the Limited Partners. In the event that such two appraisers are unable to
agree on the value of the withdrawn General Partner's Interest within 90 days,
they shall within 20 days thereafter jointly appoint a third independent
appraiser whose determination shall be final and binding; provided, however,
that if the two appraisers are unable to agree within such 20 days on a third
appraiser, the third appraiser shall be selected by the American Arbitration
Association. The expense of arbitration shall be borne equally by the withdrawn
General Partner and the Partnership.
(d) The method of payment to the General Partner upon withdrawal, whether
voluntary or involuntary, must be fair and must protect the solvency and
liquidity of the Partnership. When the withdrawal is voluntary, the method of
payment will be presumed to be fair if it provides for a non-interest-bearing,
unsecured promissory note of the Partnership, with principal payable, if at all,
from distributions that the withdrawn General Partner otherwise would have
received under the Partnership Agreement had the General Partner not withdrawn.
When the withdrawal is involuntary, the method of payment will be presumed to be
fair if it provides for a promissory note bearing interest on the outstanding
principal amount thereof at the lesser of (i) the rate of interest (inclusive of
any points or other loan charges) which the Partnership would be required to pay
to an unrelated bank or commercial lending institution for an unsecured, 60
month loan of like amount or (ii) the rate of interest from time to time
announced by The Chase Manhattan Bank (National Association) at its principal
lending offices in New York, New York as its prime lending rate plus 3% and
providing for repayments of principal thereunder in sixty (60) equal monthly
installments, together with accrued but unpaid interest.
9.4 Liability of Withdrawn General Partner.
If the business of the Partnership is continued after withdrawal of the
General Partner, the General Partner, or its estate, successors or legal
representatives, shall remain liable for all obligations and liabilities
incurred by it or by the Partnership while it was acting in the capacity of
General Partner and for which it was liable as General Partner, but shall be
free of any obligation or liability incurred on account of or arising from the
activities of the Partnership from and after the time such withdrawal shall have
become effective.
9.5 Continuation of Partnership Business.
In the event that the General Partner withdraws from the Partnership, the
General Partner, or its estate, successors or legal representatives, shall
deliver to the Limited Partners Notice stating the reasons for such withdrawal.
If, within 90 days following such withdrawal, any Person shall be admitted to
the Partnership as a Substitute General Partner, such Substitute General Partner
shall execute a counterpart of this Agreement and the business of the
Partnership shall continue. If no Substitute General Partner shall have been so
admitted to the Partnership within 90 days following the date of the General
Partner's withdrawal, then the Partnership shall be dissolved.
Section 10. TRANSFER OF UNITS.
10.1 Withdrawal of a Limited Partner.
A Limited Partner may withdraw from the Partnership only by Assigning or
having redeemed all Units owned by such Limited Partner in accordance with this
Section 10. The withdrawal of a Limited Partner shall not dissolve or terminate
the Partnership. In the event of the withdrawal of any Limited Partner because
of death, legal incompetence, dissolution or other termination, the estate,
legal representative or successor of such Limited Partner shall be deemed to be
the Assignee of the Partnership Interest of such Limited Partner and may become
a Substitute Limited Partner upon compliance with the provisions of Section
10.3.
10.2 Assignment.
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(a) Subject to the provisions of Sections 10.2(b) and (c) and 10.3 of this
Agreement, any Limited Partner may Assign all or any portion of the Units owned
by such Limited Partner to any Person (the "Assignee"); provided that
(i) such Limited Partner and such Assignee shall each execute a written
Assignment instrument, which shall:
(A) set forth the terms of such Assignment;
(B) in the case of assignments other than by operation of law, state
the intention of such Limited Partner that such Assignee shall
become a Substitute Limited Partner and, in all cases, evidence the
acceptance by the Assignee of all of the terms and provisions of
this Agreement;
(C) include a representation by both such Limited Partner and such
Assignee that such Assignment was made in accordance with all
applicable laws and regulations (including, without limitation, such
minimum investment and investor suitability requirements as may then
be applicable under state securities laws); and
(D) otherwise be satisfactory in form and substance to the
General Partner; and
(ii) such Assignee shall pay to the Partnership an aggregate amount, not
exceeding $150.00, of expenses reasonably incurred by the Partnership in
connection with such Assignment.
(b) Notwithstanding the foregoing, unless the General Partner shall
specifically Consent, no Units may be Assigned:
(i) to a minor or incompetent (unless a guardian, custodian or conservator
has been appointed to handle the affairs of such Person);
(ii) to any Person if, in the Opinion of Tax Counsel, such Assignment
would result in the termination of the Partnership's taxable year or its
status as a partnership for federal income tax purposes, provided that the
Partnership may permit such Assignment to become effective if and when, in
the opinion of Tax Counsel, such Assignment would no longer result in the
termination of the Partnership's taxable year or its status as a
partnership for federal income tax purposes;
(iii) to any Person if such Assignment would affect the Partnership's
existence or qualification as a limited partnership under the Delaware Act
or the applicable laws of any other jurisdiction in which the Partnership
is then conducting business;
(iv) to any Person not permitted to be an Assignee under applicable law,
including, without limitation, applicable federal and state securities
laws;
(v) if such Assignment would result in the transfer of a Partnership
Interest representing less than twenty-five (25) Units, or ten (10) Units
in the case of a Qualified Plan (unless such Assignment is of the entire
Partnership Interest owned by such Limited Partner);
(vi) if such Assignment would result in the retention by such Limited
Partner of a portion of its Partnership Interest representing less than
the greater of (A) twenty-five (25) Units, or ten (10) Units in the case
of a Qualified Plan, and (B) the minimum number of Units required to be
purchased under minimum investment standards applicable to an initial
purchase of Units by such Limited Partner;
(vii) if, in the reasonable belief of the General Partner, such Assignment
might violate applicable law;
(viii) if the effect of such Assignment would be to cause the "equity
participation" in the Partnership by "benefit plan investors" (both
within the meaning of DOL Reg. ss. 2510.3-101(f)) to equal or exceed
25%; or
(ix) if such transfer would cause an impermissible percentage of Units to
be owned by non-United States citizens.
Any attempt to make any Assignment of Units in violation of this Section
10.2(b) shall be null and void ab initio.
(c) So long as there are adverse federal income tax consequences from
being treated as a "publicly traded partnership" for federal income tax
purposes, the General Partner shall not permit any interest in a Unit to be
Assigned on a secondary public market (or a substantial equivalent thereof) as
defined under the Code and any Treasury Regulations or
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published notices promulgated thereunder (a "Secondary Market") and, if the
General Partner determines in its sole and absolute discretion, that a proposed
Assignment was effected on a Secondary Market, the Partnership and the General
Partner have the right to refuse to recognize any such proposed Assignment and
to take any action deemed necessary or appropriate in the General Partner's
reasonable discretion so that such proposed Assignment is not, in fact,
recognized. For purposes of this Section 10.2(c), any Assignment which results
in a failure to meet the "safe-harbor" provisions of Notice 88-75 (July 5, 1988)
issued by the IRS, or any substitute safe-harbor provisions subsequently
established by Treasury Regulations or published notices, shall be treated as
causing the Units to be publicly traded. The Limited Partners agree to provide
all information respecting Assignments, which the General Partner deems
necessary in order to determine whether a proposed transfer occurred or will
occur on a Secondary Market.
(d) Assignments made in accordance with this Section 10.2 shall be
effective for record purposes and for purposes of Section 8 as of the first day
of the Segment following the date upon which all of the conditions of this
Section 10.2 shall have been satisfied.
10.3 Substitution.
(a) An Assignee of a Limited Partner shall be admitted to the Partnership
as a Substitute Limited Partner only if:
(i) the General Partner has reasonably determined that all conditions
specified in Section 10.2 have been satisfied and that no adverse effect
to the Partnership does or may result from such admission; and
(ii) such Assignee shall have executed a transfer agreement and such other
forms, including a power of attorney to the effect required by Section 15,
as the General Partner reasonably may require to determine compliance with
this Section 10.
(b) An Assignee of Units who does not become a Substitute Limited Partner
in accordance with this Section 10.3 and who desires to make a further
Assignment of his Units shall be subject to all the provisions of Sections 10.2,
10.3 and 10.4 to the same extent and in the same manner as a Limited Partner
desiring to make an Assignment of his Units. Failure or refusal of the General
Partner to admit an Assignee as a Substitute Limited Partner shall in no way
affect the right of such Assignee to receive distributions from Distributable
Cash From Operations and Distributable Cash From Sales and the share of the
Profits or Losses for Tax Purposes to which his predecessor in interest would
have been entitled in accordance with Section 8.
10.4 Status of an Assigning Limited Partner.
Any Limited Partner that shall Assign the entire Partnership Interest
owned by such Limited Partner to an Assignee who shall become a Substitute
Limited Partner shall cease to be a Limited Partner in the Partnership and shall
no longer have any of the rights or privileges of a Limited Partner in the
Partnership.
10.5 Limited Right of Presentment for Redemption of Units.
(a) Commencing with the second full calendar quarter following the Final
Closing Date and at any time and from time to time thereafter until termination
of the Partnership, any Limited Partner (other than an Affiliated Limited
Partner) may request that the Partnership redeem, and, subject to the
availability of funds in accordance with clause (b) below and the other
provisions of this Section 10.5 and provided that the Partnership shall not, in
any calendar year, redeem Partnership Interests that, in the aggregate, exceed
2% of the total Partnership Interests outstanding as of the last day of such
year, with the prior Consent of the General Partner, the Partnership shall
redeem, for cash, up to 100% of the Partnership Interest of such Limited
Partner, at the Applicable Redemption Price. The Partnership shall be under no
obligation to redeem Units of a Limited Partner and shall do so only in the sole
and absolute discretion of the General Partner.
(b) No reserves shall be established by the Partnership for the redemption
of Units. The availability of funds for the redemption of any Unit shall be
subject to the availability of sufficient Distributable Cash. Furthermore, Units
may be redeemed only if such redemption would not impair the capital or the
Operations of the Partnership and would not result in the termination under the
Code of the Partnership's taxable year or of its federal income tax status as a
partnership.
(c) A Limited Partner desiring to have a portion or all of his Units
redeemed shall submit a written request to the General Partner on a form
approved by the General Partner duly signed by all owners of such Units on the
books of the Partnership. Redemption requests hereunder shall be deemed given on
the earlier of the date the same is (i) personally delivered with receipt
acknowledged, or (ii) mailed by certified mail, return receipt requested,
postage prepaid, at the General
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Partner's address set forth herein. Requests arising from death, major medical
expense and family emergency related to disability or a material loss of family
income, collectively "Hardship Redemptions" shall be treated as having been
received at 12:01 A.M. EST and all other redemption requests shall be deemed
received with the start of the business day during which received. The General
Partner shall promptly accept or deny each redemption request. The General
Partner shall, in its sole discretion, decide whether a redemption is in the
best interests of the Partnership.
(d) In the event that the General Partner receives requests for the
Partnership to redeem more Units than there are funds sufficient to redeem, the
General Partner shall honor redemption requests in the order in which duly
executed and supported redemption requests are received. The General Partner
shall use its reasonable efforts to honor requests for redemptions of Units with
the same request date first as to Hardship Redemptions, second so as to provide
liquidity for IRAs or Qualified Plans to meet required distributions and finally
as to all other redemption requests.
(e) Within 30 days following the date upon which the General Partner
receives a written request from any Limited Partner to redeem Units held by such
Limited Partner, the General Partner shall deliver written notice to such
Limited Partner indicating (i) the number, if any, of such Units to be redeemed
and (ii) if appropriate, the date of redemption thereof, which shall be a date
within 30 days following the date of such notice, and the Applicable Redemption
Price with respect thereto. Not less than ten (10) days prior to the redemption
date specified in the Partnership's notice, the Limited Partner requesting
redemption shall deliver to the Partnership all transfer instruments and other
documents reasonably requested by the Partnership to evidence such redemption
and the Partnership shall pay to such Limited Partner the Applicable Redemption
Price per Unit redeemed. In the event that all Units of any Limited Partner are
so redeemed, such Limited Partner shall be deemed to have withdrawn from the
Partnership and shall, from and after the date of the redemption of all Units of
such Limited Partner, cease to have the rights of a Limited Partner.
Section 11. DISSOLUTION AND WINDING-UP.
11.1 Events Causing Dissolution.
The Partnership shall be dissolved upon the happening of any of the
following events (each a "Dissolution Event"):
(a) the withdrawal of the General Partner, unless a Substitute General
Partner shall have been admitted to the Partnership in accordance with Section
9.5; or
(b) the voluntary dissolution of the Partnership (i) by the General
Partner with the Consent of the Majority Interest or (ii) subject to Section 13,
by the Consent of the Majority Interest without action by the General Partner;
or
(c) the Sale of all or substantially all of the assets of the Partnership
(which Sale prior to the end of the Reinvestment Period requires the Consent of
the Majority Interest); or
(d) the expiration of the Partnership term specified in Section 4 of this
Agreement; or
(e) the Operations of the Partnership shall cease to constitute legal
activities under the Delaware Act or any other applicable law; or
(f) any other event which causes the dissolution or winding-up of the
Partnership under the Delaware Act to the extent not otherwise provided herein.
11.2 Winding Up of the Partnership; Capital Contribution by the General
Partner Upon Dissolution.
(a) Upon the occurrence of a Dissolution Event, the winding-up of the
Partnership and the termination of its existence shall be accomplished as
follows:
(i) the General Partner (or if there shall be none, such other
Person as shall be selected by the Consent of the Majority Interest, or if
no such other Person is so selected, such other Person as is required by
law to wind up the affairs of the Partnership, which Person, in either
event, may exercise all of the powers granted to the General Partner
herein and is hereby authorized to do any and all acts and things
authorized by law and by this Agreement for such purposes and any and all
such other acts or things consistent therewith as may be expressly
authorized by the Majority Interest) shall proceed with the liquidation of
the Partnership (including, without limitation, the Sale of any remaining
Investments and cancellation of the Certificate of Limited Partnership),
and
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is hereby authorized to adopt such plan, method or procedure as may be
deemed reasonable by the General Partner (or such other Person effecting
the winding up) to effectuate an orderly winding-up;
(ii) all Profits or Losses or items thereof and all amounts required
to be specially allocated pursuant to Section 8.2(f) for the period prior
to final termination shall be credited or charged, as the case may be, to
the Partners in accordance with Section 8;
(iii) in the event that, after all requirements of clauses (i) and
(ii) of this Section 11.2(a) shall have been accomplished, the General
Partner shall have a deficit balance in its Capital Account, the General
Partner shall contribute within thirty (30) days to the Partnership as a
Capital Contribution an amount equal to the lesser of (A) the amount of
such deficit balance or (B) the excess of 1.01% of the total Capital
Contributions of the Limited Partners over the capital previously
contributed by the General Partner (for this purpose, any payments made by
the General Partner as co-signatory or guarantor of any of the
indebtedness of the Partnership and not yet reimbursed to the General
Partner at the time of dissolution of the Partnership and any amounts due
and unpaid to the General Partner on, under or with respect to any
Partnership Loans at the time of such dissolution shall be deemed to be
Capital Contributions by the General Partner to the Partnership and any
obligation of the Partnership to reimburse or repay such amounts shall
thereupon cease);
(iv) the proceeds from Sales and all other assets of the Partnership
shall be applied and distributed in liquidation as provided in Section
11.3; and
(v) the General Partner (or such other Person effecting the winding
up) shall file such certificates and other documents as shall be required
by the Delaware Act, the Code and any other applicable laws to terminate
the Partnership.
(b) If the winding-up of the Partnership is effected by the General
Partner, the General Partner shall be compensated for its services in connection
therewith as provided in Section 6.4 of this Agreement and, if such winding up
is effected by any such other Person (whether selected by the Majority Interest
or as required by law), such other Person shall be compensated for its services
in connection therewith in an amount not in excess of the amount customarily
paid to non-affiliated third parties rendering similar services in respect of
similar entities in the same geographic location.
11.3 Application of Liquidation Proceeds Upon Dissolution.
Following the occurrence of any Dissolution Event, the proceeds of
liquidation and the other assets of the Partnership shall be applied as follows
and in the following order of priority:
(a) first, to the payment of creditors of the Partnership in order of
priority as provided by law, except obligations to Partners or their Affiliates;
(b) next, to the setting up of any reserve that the General Partner (or
such other Person effecting the winding-up) shall determine is reasonably
necessary for any contingent or unforeseen liability or obligation of the
Partnership or the Partners; such reserve may, in the sole and absolute
discretion of the General Partner (or such other Person effecting the winding
up) be paid over to an escrow agent selected by it to be held in escrow for the
purpose of disbursing such reserve in payment of any of the aforementioned
contingencies, and at the expiration of such period as the General Partner (or
such other Person effecting the winding up) may deem advisable, to distribute
the balance thereafter remaining as provided in clauses (c)-(e) of this Section
11.3.
(c) next, to the payment of all obligations to the Partners in proportion
to and to the extent of advances made by each Partner pursuant to the provisions
of this Agreement;
(d) next, to the payment of all reimbursements to which the General Partner
or any Affiliate of the General Partner may be entitled pursuant to this
Agreement; and
(e) thereafter, to the Partners in proportion to and to the extent of the
positive balances of their Capital Accounts.
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11.4 No Recourse Against Other Partners.
Following the occurrence of any Dissolution Event, each Limited Partner
shall look solely to the assets of the Partnership for the return of, and any
return on, such Limited Partner's Capital Contribution. If, after the complete
payment and discharge of all debts, liabilities and other obligations of the
Partnership, the assets of the Partnership are insufficient to provide the
return of, or a return on, the Capital Contribution of any Limited Partner, such
Limited Partner shall have no recourse against any other Limited Partner or the
General Partner, except to the extent that the General Partner is obligated to
make an additional Capital Contribution to the Partnership pursuant to Section
11.2(a)(iii) hereof.
Section 12. FISCAL MATTERS.
12.1 Title to Property and Bank Accounts.
Except to the extent that trustees, nominees or other agents are utilized
as permitted by Section 6.1(b)(ii)(F), all Investments and other assets of the
Partnership shall be held in the name of the Partnership. The funds of the
Partnership shall be deposited in the name of the Partnership in such bank
account or accounts as shall be designated by the General Partner, and
withdrawals therefrom shall be made upon the signature of the General Partner or
such Person or Persons as shall be designated in writing by the General Partner.
The funds of the Partnership shall not be commingled with the funds of any other
Person.
12.2 Maintenance of and Access to Basic Partnership Documents.
(a) The General Partner shall maintain at the Partnership's principal
office, the following documents:
(i) the Participant List;
(ii) a copy of the Certificate of Limited Partnership and all amendments
thereto, together with executed copies of any powers of attorney pursuant
to which the Certificate or any such amendment has been executed;
(iii) copies of this Agreement and any amendments hereto;
(iv) copies of the audited financial statements of the Partnership for the
three most recently completed Fiscal Years, including, in each case, the
balance sheet and related statements of operations, cash flows and changes
in Partners' equity at or for such Fiscal Year, together with the report
of the Partnership's independent auditors with respect thereto;
(v) copies of the Partnership's federal, state and local income tax
returns and reports, if any, for the three most recently completed Fiscal
Years;
(vi) records as required by applicable tax authorities including those
specifically required to be maintained by "tax shelters", if so required
by the Partnership; and
(vii) investor suitability records for Units sold by any Affiliate of the
General Partner.
(b) Each Limited Partner and his designated representative shall be given
access to all of the foregoing records of the Partnership and such other records
of the Partnership which relate to business affairs and financial condition of
the Partnership, and may inspect the same and make copies of the same (subject,
in the case of copying the Participant's List, to compliance with clause (c) of
this Section 12.2) at such Limited Partner's expense, during normal business
hours upon reasonable advance written notice to the General Partner, which
notice shall specify the date and time of the intended visit and identify with
reasonable specificity the documents which such Limited Partner or its
representative will wish to examine or copy or both.
(c) A copy of the Participant List shall be mailed to any Limited Partner
making written request for the Participant List within ten (10) days of such
request (or, if later, within seven (7) days of the Partnership's receipt of
such request); provided that the General Partner may request, and shall be
entitled to first receive, (i) reimbursement of the reasonable cost of copying
and mailing of the Participant List to the Limited Partner, and (ii) a
representation from such Limited Partner that the Participant List is not being
requested for a commercial purpose unrelated to such Limited Partner's interest
as a Limited Partner relative to the affairs of the Partnership. The purposes
for which a Limited Partner may request a copy of
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the Participant List include, without limitation, matters relating to the
Limited Partners' voting rights under this Agreement and the exercise of Limited
Partners' proxy rights under federal or state securities laws.
(d) If the General Partner refuses or neglects to (i) permit a Limited
Partner or his duly authorized representative to examine the Participant List
(as provided in Paragraph (b) of this Section 12.2) or (ii) produce and mail a
copy of the Participant List within ten (10) days after such request (or, if
later, within seven (7) days of the Partnership's receipt of the applicable
Limited Partner's written request) (as provided in Paragraph (c) of this Section
12.2), the General Partner shall be liable to such Limited Partner for the
costs, including attorneys' fees, incurred by such Limited Partner to compel
production of the Participant List, and for the actual damages suffered by such
Limited Partner by reason of such refusal or neglect; provided, that it shall be
a defense to liability under this clause (d) that (x) the requesting Limited
Partner has failed or refused to make the representation described in clause
(c)(ii) of this Section 12.2 after being requested to do so by the General
Partner or (y) the actual purpose and reason for such Limited Partner's requests
for inspection or for a copy of the Participant List is to secure such List for
the purpose of (1) selling, or reproducing and selling, such List or any portion
of the information contained therein, or (2) using such List or any of such
information for a commercial purpose other than in the interest of the Limited
Partner relative to the affairs of the Partnership. The remedies provided under
this Section 12.2 to Limited Partners requesting copies of the Participant List
are in addition to, and shall not in any way limit, other remedies available to
Limited Partners under federal law or the laws of any state.
12.3 Financial Books and Accounting.
The General Partner shall keep, or cause to be kept, complete and accurate
financial books and records with respect to the business and affairs of the
Partnership. Except to the extent otherwise required by the accounting methods
adopted by the Partnership for federal income tax purposes, such books and
records shall be kept on an accrual basis and all financial statements of the
Partnership shall be prepared for each Fiscal Year in accordance with generally
accepted accounting principles as applied within the United States of America.
12.4 Fiscal Year.
Except as may otherwise be determined from time to time by the General
Partner (in a manner which is consistent with the Code and the Treasury
Regulations thereunder or is consented to by the IRS), the Fiscal Year of the
Partnership for both federal income tax and financial reporting purposes shall
end on December 31 of each year.
12.5 Reports.
(a) Quarterly Reports. Within 60 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, the General Partner shall send, to
each Person who was a Limited Partner at any time during such Fiscal Quarter,
the following written materials:
(i) a report containing the same financial information as is contained in
the Partnership's quarterly report on Form 10-Q filed with the Commission
under the Securities Exchange Act of 1934, as amended, which shall include
unaudited financial statements for the Partnership at and for such Fiscal
Quarter, including a balance sheet and related statements of operations,
cash flows and changes in Partners' equity, all of which financial
statements shall be prepared in accordance with Section 12.3;
(ii) a tabular summary, prepared by the General Partner, with respect to
the fees and other compensation and costs and expenses which were paid or
reimbursed by the Partnership to the Sponsor during such Fiscal Quarter,
identified and properly allocated as to type and amount. Such tabulation
shall (A) include a detailed statement identifying any services rendered
or to be rendered to the Partnership and the compensation received
therefor and (B) summarize the terms and conditions of any contract, which
was not filed as an exhibit to the Registration Statement, as amended and
in effect as on the Effective Date. The requirement for such summary shall
not be circumvented by lump-sum payments to non-Affiliates who then
disburse the funds to, or for the benefit of, the Sponsor; and
(iii) until all Capital Contributions have been invested or committed to
investment in Investments and Reserves (not exceeding 3% of Gross Offering
Proceeds), used to pay permitted Front-End Fees or returned to the Limited
Partners (as provided in Section 8.7, above), a special report concerning
all Investments made during such Fiscal Quarter which shall include (A) a
description of the types of Equipment acquired and Financing Transactions
made, (B) the total Purchase Price paid for such categories of
Investments, (C) the amounts of Capital Contributions and indebtedness
used to acquire such Investments, (D) the Acquisition Fees and Acquisition
Expenses paid (identified
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by party) in connection therewith and (E) the amount of Capital
Contributions, if any, which remain unexpended and uncommitted to pending
Investments as of the end of such Fiscal Quarter.
(b) Annual Reports. Within 120 days after the end of each Fiscal Year, the
General Partner shall send to each Person who was a Limited Partner at any time
during such Fiscal Year the following written materials:
(i) financial statements for the Partnership for such Fiscal Year,
including a balance sheet as of the end of such Fiscal Year and related
statements of operations, cash flows and changes in Partners' equity,
which shall be prepared in accordance with Section 12.3 and shall be
accompanied by an auditor's report containing an opinion of the
Accountants;
(ii) an analysis, prepared by the General Partner (which need not be
audited, but shall be reviewed, by the Accountants), of distributions made
to the General Partner and the Limited Partners during such Fiscal Year
separately identifying the portion (if any) of such distributions from:
(A) Cash Flow during such period;
(B) Cash Flows from prior periods;
(C) Cash From Sales;
(D) Capital Contributions originally used to establish a Reserve;
(iii) a status report with respect to each piece of Equipment and each
Financing Transaction which individually represents at least 10% of the
aggregate Purchase Price of the Partnership's Investments held at the end
of such Fiscal Year, which report shall state:
(A) the condition of each such item of Equipment and of any personal
property securing any Financing Transaction to which such report
applies;
(B) how such Equipment was being utilized as of the end of such
Fiscal Year (i.e., leased, operated directly by the Partnership
or held for lease, repair or sale);
(C) the remaining term of any Lease to which such Equipment is
subject;
(D) the projected or intended use of such Equipment during the next
following Fiscal Year;
(E) the method used to determine values set forth therein;
(F) such other information as may be relevant to the value or use of
such Equipment or any personal property securing any such
Financing Transaction as the General Partner, in good faith,
deems appropriate;
(iv) the annual report shall contain a breakdown of all fees and other
compensation paid, and all costs and expenses reimbursed, to the Sponsor
by the Partnership during such Fiscal Year identified (and properly
allocated) as to type and amount:
(A) In the case of any fees and other compensation, such breakdown
shall identify the services rendered or to be rendered to the
Partnership and the compensation therefor and shall summarize the
terms and conditions of any contract which was not filed as an
exhibit to the Registration Statement, as amended and in effect on
the Effective Date. The requirement for such information shall not
be circumvented by lump-sum payments to non-Affiliates who then
disburse the funds to, or for the benefit of, the Sponsor;
(B) In the case of reimbursed costs and expenses, the General
Partner shall also prepare an allocation of the total amount of all
such items and shall include support for such allocation to
demonstrate how the Partnership's portion of such total amounts were
allocated between the Partnership and any other Programs in
accordance with this Agreement and the respective governing
agreements of such other Programs. Such cost and expense allocation
shall be reviewed by the Accountants in connection with their audit
of the financial statements of the Partnership for such Fiscal Year
in accordance with the American Institute of Certified Public
Accountants United States Auditing standards relating to special
reports and such
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Accountants shall state that, in connection with the performance of
such audit, such Accountants reviewed, at a minimum, the time
records of, and the nature of the work performed by, individual
employees of the Sponsor, the cost of whose services were
reimbursed; and
(C) The additional costs of the special review required by this
clause will be itemized by the Accountants on a Program by Program
basis and may be reimbursed to the Sponsor by the Partnership in
accordance with this subparagraph only to the extent such
reimbursement, when added to the cost for all administrative
services rendered, does not exceed the competitive rate for such
services as determined in such report;
(v) until all Capital Contributions have been invested or committed to
investment in Investments and Reserves (not exceeding 3% of Gross Offering
Proceeds), used to pay permitted Front-End Fees or returned to the Limited
Partners (as provided in Section 8.7, above), a special report concerning
all Investments made during such Fiscal Year which shall include (A) a
description of the types of Equipment acquired or Financing Transactions
made, (B) the total Purchase Price paid for such categories of
Investments, (C) the amounts of Capital Contributions and indebtedness
used to acquire such Investments, (D) the Acquisition Fees and Acquisition
Expenses paid (identified by party) in connection therewith and (E) the
amount of Capital Contributions, if any, which remain unexpended and
uncommitted to pending Investments as of the end of such Fiscal Year.
12.6 Tax Returns and Tax Information.
The General Partner shall:
(a) prepare or cause the Accountants to prepare, in accordance with
applicable laws and regulations, the tax returns (federal, state, local and
foreign, if any) of the Partnership for each Fiscal Year within 75 days after
the end of such Fiscal Year; and
(b) deliver to each Partner by March 15 following each Fiscal Year a Form
K-1 or other statement setting forth such Partner's share of the Partnership's
income, gains, losses, deductions, and items thereof, and credits if any, for
such Fiscal Year.
12.7 Accounting Decisions.
All decisions as to accounting matters, except as specifically provided to
the contrary herein, shall be made by the General Partner in accordance with the
accounting methods adopted by the Partnership for federal income tax purposes or
otherwise in accordance with generally accepted accounting principles. Such
decisions must be acceptable to the Accountants, and the General Partner may
rely upon the advice of the Accountants as to whether such decisions are in
accordance with the methods adopted by the Partnership for federal income tax
purposes or generally accepted accounting principles.
12.8 Federal Tax Elections.
The Partnership, in the sole and absolute discretion of the General
Partner, may make elections for federal tax purposes as follows:
(a) In case of a transfer of all or part of the Partnership Interest of a
Partner, the Partnership, in the absolute discretion of the General Partner, may
timely elect pursuant to Section 754 of the Code (or corresponding provisions of
future law), and pursuant to similar provisions of applicable state or local
income tax laws, to adjust the basis of the assets of the Partnership. In such
event, any basis adjustment attributable to such election shall be allocated
solely to the transferee.
(b) All other elections, including but not limited to the adoption of
accelerated depreciation and cost recovery methods, required or permitted to be
made by the Partnership under the Code shall be made by the General Partner in
such manner as will, in the opinion of the General Partner (as advised by Tax
Counsel or the Accountants as the General Partner deems necessary) be most
advantageous to the Limited Partners as a group. The Partnership shall, to the
extent permitted by applicable law and regulations, elect to treat as an expense
for federal income tax purposes all amounts incurred by it for state and local
taxes, interest and other charges which may, in accordance with applicable law
and regulations, be considered as expenses.
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12.9 Tax Matters Partner.
(a) The General Partner is hereby designated as the "Tax Matters Partner"
under Section 6231(a)(7) of the Code and may hereafter designate its successor
as Tax Matters Partner, to manage administrative and judicial tax proceedings
conducted at the Partnership level by the Internal Revenue Service with respect
to Partnership matters. Any Partner shall have the right to participate in such
administrative or judicial proceedings relating to the determination of
Partnership items at the Partnership level to the extent provided by Section
6224 of the Code. The Limited Partners shall not act independently with respect
to tax audits or tax litigation affecting the Partnership, and actions taken by
the General Partner as Tax Matters Partner in connection with tax audits shall
be binding in all respects upon the Limited Partners.
(b) The Tax Matters Partner shall have the following duties;
(i) To the extent and in the manner required by applicable law and
regulations, the Tax Matters Partner shall furnish the name, address,
Interest and taxpayer identification number of each Partner to the
Secretary of the Treasury or his delegate (the "Secretary"); and
(ii) To the extent and in the manner required by applicable law and
regulations, the Tax Matters Partner shall keep each Partner informed of
administrative and judicial proceedings for the adjustment at the
Partnership level of any item required to be taken into account by a
Partner for income tax purposes (such judicial proceedings referred to
hereinafter as "judicial review").
(c) Subject to Section 6.3 hereof, the Partnership shall indemnify and
reimburse the Tax Matters Partner for all expenses, including legal and
accounting fees, claims, liabilities, losses and damages incurred in connection
with any administrative or judicial proceeding with respect to the tax liability
of the Partners. The payment of all such expenses shall be made before any
distributions are made from Cash from Operations or Cash From Sales. Neither the
General Partner nor any Affiliate nor any other Person shall have any obligation
to provide funds for such purpose. The taking of any action and the incurring of
any expense by the Tax Matters Partner in connection with any such proceeding,
except to the extent required by law, is a matter in the sole and absolute
discretion of the Tax Matters Partner; and the provisions on limitations of
liability of the General Partner and indemnification set forth in Section 6.3 of
this Agreement shall be fully applicable to the Tax Matters Partner in its
capacity as such.
(d) The Tax Matters Partner is hereby authorized, but not required:
(i) to enter in to any settlement with the IRS or the Secretary with
respect to any tax audit or judicial review, in which agreement the Tax
Matters Partner may expressly state that such agreement shall bind the
other Partners, except that such settlement agreement shall not bind any
Partner who (within the time prescribed pursuant to Section 6224(c)(3) of
the Code and regulations thereunder) files a statement with the Secretary
providing that the Tax Matters Partner shall not have the authority to
enter into a settlement agreement on the behalf of such Partner;
(ii) in the event that a notice of a final administrative adjustment at
the partnership level of any item required to be taken into account by a
Partner for tax purposes (a "final adjustment") is mailed to the Tax
Matters Partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the Tax Court,
the District Court of the United Sates for the district in which the
partnership's principal place of business is located, the United States
Court of Claims or any other appropriate forum;
(iii) to intervene in any action brought by any other Partner for judicial
review of a final adjustment;
(iv) to file a request for an administrative adjustment with the Secretary
at any time and, if any part of such request is not allowed by the
Secretary, to file a petition for judicial review with respect to such
request;
(v) to enter into an agreement with the IRS to extend the period for
assessing any tax which is attributable to any item required to be taken
in to account by a Partner for tax purposes, or an item affected by such
item; and
(vi) to take any other action on behalf of the Partners or the Partnership
in connection with any administrative or judicial tax proceeding to the
extent permitted by applicable law or regulations.
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12.10 Reports to State Authorities.
The General Partner shall prepare and file with all appropriate state
regulatory bodies and other authorities all reports required to be so filed by
state securities or "blue sky" authorities and by the NASAA Guidelines.
Section 13. MEETINGS AND VOTING RIGHTS OF THE LIMITED PARTNERS.
13.1 Meetings of the Limited Partners.
(a) A meeting of the Limited Partners may be called by the General Partner
on its own initiative, and shall be called by the General Partner following its
receipt of written request(s) for a meeting from Limited Partners holding 10% or
more of the then outstanding Units, to act upon any matter on which the Limited
Partners may vote (as set forth in this Agreement). Every such request for a
meeting shall state with reasonable specificity (i) the purpose(s) for which
such meeting is to be held and (ii) the text of any matter, resolution or action
proposed to be voted upon by the Limited Partners at such meeting (which text
the General Partner shall, subject to the provisions of Section 13.3, submit an
accurate summary of such proposal in its Notice of such meeting to the Limited
Partners). Within ten days following the receipt of such a request, the General
Partner shall give Notice to all Limited Partners of such meeting in the manner
and for a time and place as specified in paragraph 13.1(b). In addition, the
General Partner acting on its own initiative may, and following its receipt of
written request(s) therefor from Limited Partners holding more than 10% of the
then outstanding Units shall, submit for action by Consent of the Limited
Partners, in lieu of a meeting, any matter on which the Limited Partners may
vote (as set forth in this Section 13.
(b) A Notice of any such meeting (or action by written Consent without a
meeting) shall be given to all Limited Partners either (i) personally or by mail
(if such meeting is being called, or Consent action is being solicited, by the
General Partner upon the request of the Limited Partners) or (ii) by regular
mail (if such meeting is being called, or Consent action is being solicited, by
the General Partner on its own initiative) and a meeting called pursuant to such
Notice shall be held (or Consent action taken) not less than 15 days nor more
than 60 days after the date such Notice is distributed. Such Notice shall be
delivered or mailed to each Limited Partner at his record address, or at such
other address as he may have furnished in writing to the General Partner for
receipt of Notices, and shall state the place, date and time of such meeting
(which shall be the place, date and time, if any, specified in the request for
such meeting or such other place, date and time as the General Partner shall
determine to be reasonable and convenient to the Limited Partners) and shall
state the purpose(s) for which such meeting is to be held. If any meeting of the
Limited Partners is properly adjourned to another time or place, and if any
announcement of the adjournment of time or place is made at the meeting, it
shall not be necessary to give notice of the adjourned meeting. The presence in
person or by proxy of the Majority Interest shall constitute a quorum at all
meetings of the Limited Partners; provided, however, that, if there be no such
quorum, holders of a majority of the Interests so present or so represented may
adjourn the meeting from time to time without further notice, until a quorum
shall have been obtained. No Notice of any meeting of Limited Partners need be
given to any Limited Partner who attends in person or is represented by proxy
(except when a Limited Partner attends a meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business on
the ground that the meeting is not lawfully called or convened) or to any
Limited Partner otherwise entitled to such Notice who has executed and filed
with the records of the meeting, either before or after the time thereof, a
written waiver of such Notice.
(c) For the purpose of determining the Limited Partners entitled to vote
on any matter submitted to the Limited Partners at any meeting of such Limited
Partners (or to take action by Consent in lieu thereof), or any adjournment
thereof, the General Partner or the Limited Partners requesting such meeting may
fix, in advance, a date as the record date, which shall be a date not more than
fifty (50) days nor less than ten (10) days prior to any such meeting (or
Consent action), for the purpose of any such determination.
(d) Any Limited Partner may authorize any Person or Persons to act for
such Limited Partner by proxy in respect of all matters as to which such Limited
Partner is entitled to participate, whether by waiving Notice of any meeting,
taking action by Consent or voting as to any matter or participating at a
meeting of the Limited Partners. Every proxy must be signed by a Limited Partner
or his attorney-in-fact. No proxy shall be valid after the expiration of eleven
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it.
(e) At each meeting of the Limited Partners, the Limited Partners present
or represented by proxy may adopt such rules for the conduct of such meeting as
they shall deem appropriate, provided that such rules shall not be inconsistent
with the provisions of this Agreement.
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13.2 Voting Rights of the Limited Partners.
Subject to Section 13.3, the Limited Partners, acting by Consent of the
Majority Interest may take the following actions without the concurrence of the
General Partner:
(a) amend this Agreement, other than (1) in any manner to allow the
Limited Partners to take part in the control or management of the Partnership's
business, and (2) without the specific Consent of the General Partner, to alter
the rights, powers and duties of the General Partner as set forth in this
Agreement;
(b) dissolve the Partnership;
(c) remove the General Partner and elect one or more Substitute General
Partners; and
(d) approve or disapprove of the Sale or series of Sales of all or
substantially all the assets of the Partnership except for any such Sale or
series of Sales in the ordinary course of liquidating the Partnership's
Investments during the Disposition Period.
In determining the requisite percentage in interest of Units necessary to
approve a matter on which the Sponsor may not vote or consent, any Units owned
by the Sponsor shall not be included. With respect to any Interests owned by the
Sponsor, the Sponsor may not vote on matters submitted to the Limited Partners
regarding the removal of the Sponsor or regarding any transaction between the
Program and the Sponsor. In determining the requisite percentage and interest of
Interests necessary to approve a matter in which a Sponsor may not vote or
consent, any Interests owned by the Sponsor shall not be included.
13.3 Limitations on Action by the Limited Partners.
The rights of the Limited Partners under Section 13.2 shall not be
exercised or be effective in any manner (a) to subject a Limited Partner to
liability as a general partner under the Delaware Act or under the laws of any
other jurisdiction in which the Partnership may be qualified or own an item of
Equipment or (b) to contract away the fiduciary duty owed to such Limited
Partner by the Sponsor under common law. Any action taken pursuant to Section
13.2 shall be void if any non-Affiliated Limited Partner, within 45 days after
such action is taken, obtains a temporary restraining order, preliminary
injunction or declaratory judgment from a court of competent jurisdiction on
grounds that, or an opinion of legal counsel selected by the Limited Partners to
the effect that, such action, if given effect, would have one or more of the
prohibited effects referred to in this Section 13.3. For purposes of this
Section 13.3, counsel shall be deemed to have been selected by the Limited
Partners if such counsel is affirmatively approved by the Consent of the
Majority Interest within 45 days of the date that the holders of 10% or more of
the Units propose counsel for this purpose.
Section 14. AMENDMENTS.
14.1 Amendments by the General Partner.
Subject to Section 13.2 of this Agreement and all applicable law, this
Agreement may be amended, at any time and from time to time, by the General
Partner without the Consent of the Majority Interest to effect any change in
this Agreement for the benefit or protection of the Limited Partners, including,
without limitation:
(a) to add to the representations, duties or obligations of the General
Partner or to surrender any right or power granted to the General Partner
herein;
(b) to cure any ambiguity, to correct or supplement any provision herein
that may be inconsistent with any other provision herein or to add any other
provision with respect to matters or questions arising under this Agreement that
will not be inconsistent with the terms of this Agreement;
(c) to preserve the status of the Partnership as a "limited partnership"
for federal income tax purposes (or under the Delaware Act or any comparable law
of any other state in which the Partnership may be required to be qualified);
(d) to delete or add any provision of or to this Agreement required to be
so deleted or added by the staff of the Commission, by any other federal or
state regulatory body or other agency (including, without limitation, any "blue
sky" commission) or by any Administrator or similar such official;
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(e) to permit the Units to fall within any exemption from the definition
of "plan assets" contained in Section 2510.3- 101 of Title 29 of the Code of
Federal Regulations;
(f) if the Partnership is advised by Tax Counsel, by the Partnership's
Accountants or by the IRS that any allocations of income, gain, loss or
deduction provided for in this Agreement are unlikely to be respected for
federal income tax purposes, to amend the allocation provisions of this
Agreement, in accordance with the advice of such Tax Counsel, such Accountants
or the IRS, to the minimum extent necessary to effect as nearly as practicable
the plan of allocations and distributions provided in this Agreement; and
(g) to change the name of the Partnership or the location of its principal
office.
14.2 Amendments with the Consent of the Majority Interest.
In addition to the amendments permitted to be made by the General Partner
pursuant to Section 14.1, the General Partner may propose to the Limited
Partners, in writing, any other amendment to this Agreement. The General Partner
may include in any such submission a statement of the purpose for the proposed
amendment and of the General Partner's opinion with respect thereto. Upon the
Consent of the Majority Interest, such amendment shall take effect; provided,
however, that (a) no such amendment shall increase the liability of any Partner
or adversely affect any Partner's share of distributions of cash or allocations
of Profits or Losses for Tax Purposes or of any investment tax credit amounts of
the Partnership without in each case the consent of each Partner affected
thereby; and (b) no such amendment shall modify or amend this Section 14 without
the consent of each Limited Partner.
Section 15. POWER OF ATTORNEY.
15.1 Appointment of Attorney-in-Fact.
By their subscription for Units and their admission as Limited Partners
hereunder, Limited Partners make, constitute and appoint the General Partner,
each authorized officer of the General Partner and each Person who shall
thereafter become a Substitute General Partner during the term of the
Partnership, with full power of substitution, the true and lawful
attorney-in-fact of, and in the name, place and stead of, such Limited Partner,
with the power from time to time to make, execute, sign, acknowledge, swear to,
verify, deliver, record, file and publish:
(a) this Agreement, Schedule A to this Agreement and the Certificate of
Limited Partnership under the Delaware Act and any other applicable laws of the
State of Delaware and any other applicable jurisdiction, and any amendment of
any thereof (including, without limitation, amendments reflecting the addition
of any Person as a Partner or any admission or substitution of other Partners or
the Capital Contribution made by any such Person or by any Partner) and any
other document, certificate or instrument required to be executed and delivered,
at any time, in order to reflect the admission of any Partner (including,
without limitation, any Substitute General Partner and any Substitute Limited
Partner);
(b) any other document, certificate or instrument required to reflect any
action of the Partners duly taken in the manner provided for in this Agreement,
whether or not such Limited Partner voted in favor of or otherwise consented to
such action;
(c) any other document, certificate or instrument that may be required by
any regulatory body or other agency or the applicable laws of the United States,
any state or any other jurisdiction in which the Partnership is doing or intends
to do business or that the General Partner deems advisable;
(d) any certificate of dissolution or cancellation of the Certificate of
Limited Partnership that may be reasonably necessary to effect the termination
of the Partnership; and
(e) any instrument or papers required to continue or terminate the
business of the Partnership pursuant to Sections 9.5 and 11 hereof; provided
that no such attorney-in-fact shall take any action as attorney-in-fact for any
Limited Partner if such action could in any way increase the liability of such
Limited Partner beyond the liability expressly set forth in this Agreement or
alter the rights of such Limited Partner under Section 8, unless (in either
case) such Limited Partner has given a power of attorney to such
attorney-in-fact expressly for such purpose.
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15.2 Amendments to Agreement and Certificate of Limited Partnership.
(a) Each Limited Partner is aware that the terms of this Agreement permit
certain amendments of this Agreement to be effected and certain other actions to
be taken or omitted by, or with respect to, the Partnership, in each case with
the approval of less than all of the Limited Partners, if a specified percentage
of the Partners shall have voted in favor of, or otherwise consented to, such
action. If, as and when:
(i) any amendment of this Agreement is proposed or any action is proposed
to be taken or omitted by, or with respect to, the Partnership, which
amendment or action requires, under the terms of this Agreement, the
Consent of the Partners;
(ii) Partners holding the percentage of Interests specified in this
Agreement as being required for such amendment or action have consented to
such amendment or action in the manner contemplated by this Agreement; and
(iii) any Limited Partner has failed or refused to consent to such
amendment or action (hereinafter referred to as the "non-consenting
Limited Partner"),
then each non-consenting Limited Partner agrees that each attorney-in-fact
specified in Section 15.1 is hereby authorized and empowered to make, execute,
sign, acknowledge, swear to, verify, deliver, record, file and publish, for and
on behalf of such non-consenting Limited Partner, and in his name, place and
stead, any and all documents, certificates and instruments that the General
Partner may deem necessary, convenient or advisable to permit such amendment to
be lawfully made or such action lawfully taken or omitted. Each Limited Partner
is fully aware that he has executed this special power of attorney and that each
other Partner will rely on the effectiveness of such special power of attorney
with a view to the orderly administration of the Partnership's business and
affairs.
(b) Any amendment to this Agreement reflecting the admission to the
Partnership of any Substitute Limited Partner shall be signed by the General
Partner and by or on behalf of the Substitute Limited Partner. Any amendment
reflecting the withdrawal or removal of the General Partner and the admission of
any Substitute General Partner of the Partnership upon the withdrawal of the
General Partner need be signed only by such Substitute General Partner.
15.3 Power Coupled With an Interest.
The foregoing grant of authority by each Limited Partner:
(a) is a special power of attorney coupled with an interest in favor of
such attorney-in-fact and as such shall be irrevocable and shall survive the
death, incapacity, insolvency, dissolution or termination of such Limited
Partner;
(b) may be exercised for such Limited Partner by a signature of such
attorney-in-fact or by listing or referring to the names of all of the Limited
Partners, including such Limited Partner, and executing any instrument with a
single signature of any one of such attorneys-in-fact acting as attorney-in-fact
for all of them; and
(c) shall survive the Assignment by any Limited Partner of the whole or
any portion of such Limited Partner's Partnership Interest, provided that, if
any Assignee of an entire Partnership Interest shall have furnished to the
General Partner a power of attorney complying with the provisions of Section
15.1 of this Agreement and the admission to the Partnership of such Assignee as
a Substitute Limited Partner shall have been approved by the General Partner,
this power of attorney shall survive such Assignment with respect to the
assignor Limited Partner for the sole purpose of enabling such attorneys-in-fact
to execute, acknowledge and file any instrument necessary to effect such
Assignment and admission and shall thereafter terminate with respect to such
Limited Partner.
Section 16. GENERAL PROVISIONS.
16.1 Notices, Approvals and Consents.
All Notices, approvals, Consents or other communications hereunder shall
be in writing and signed by the party giving the same, and shall be deemed to
have been delivered when the same are (a) deposited in the United States mail
and sent by first class or certified mail, postage prepaid, (b) hand delivered,
(c) sent by overnight courier or (d) telecopied. In each case, such delivery
shall be made to the parties at the addresses set forth below or at such other
addresses as such parties may designate by notice to the Partnership:
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(a) If to the Partnership or the General Partner, at the principal office
of the Partnership, to:
ICON Cash Flow Partners L.P. Seven
c/o ICON Capital Corp.
600 Mamaroneck Avenue
Harrison, New York 10528
Attention: President
Telephone: (914) 698-0600
Telecopy: (914) 698-0699
(b) If to any Limited Partner, at the address set forth in Schedule A
hereto opposite such Limited Partner's name, or to such other address as may be
designated for the purpose by Notice from such Limited Partner given in the
manner hereby specified.
16.2 Further Assurances.
The Partners will execute, acknowledge and deliver such further
instruments and do such further acts and things as may be required to carry out
the intent and purpose of this Agreement.
16.3 Captions.
Captions contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provisions hereof.
16.4 Binding Effect.
Except to the extent required under the Delaware Act and for fees, rights
to reimbursement and other compensation provided as such, none of the provisions
of this Agreement shall be for the benefit of or be enforceable by any creditor
of the Partnership.
16.5 Severability.
If one or more of the provisions of this Agreement or any application
thereof shall be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and any
other application thereof shall not in any way be affected or impaired thereby,
and such remaining provisions shall be interpreted consistently with the
omission of such invalid, illegal or unenforceable provisions.
16.6 Integration.
This Agreement constitutes the entire agreement among the parties
pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings of the parties in connection
therewith that conflict with the express terms of this Agreement. No covenant,
representation or condition not expressed in this Agreement shall affect, or be
effective to interpret, change or restrict, the express provisions of this
Agreement.
16.7 Applicable Law.
This Agreement shall be construed and enforced in accordance with, and
governed by, the laws of the State of Delaware, including, without limitation,
the Delaware Act (except and solely to the extent that provisions of the laws of
any other jurisdiction are stated to be applicable in any section of this
Agreement), without giving effect to the conflict of laws provisions thereof.
16.8 Counterparts.
This Agreement may be signed by each party hereto upon a separate
counterpart (including, in the case of a Limited Partner, a separate
subscription agreement or signature page executed by one or more such Partners),
but all such counterparts, when taken together, shall constitute but one and the
same instrument.
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16.9 Creditors.
No creditor who makes a loan to the Partnership shall have or acquire at
any time, as a result of making such a loan, any direct or indirect interest in
the profits, capital or property of the Partnership other than as a secured
creditor except solely by an assignment of the interest of the Limited Partner
as provided herein above.
16.10 Interpretation.
Unless the context in which words are used in this Agreement otherwise
indicates that such is the intent, words in the singular shall include the
plural and in the masculine shall include the feminine and neuter and vice
versa.
16.11 Successors and Assigns.
Each and all of the covenants, terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the successors and
assigns of the respective parties hereto.
16.12 Waiver of Action for Partition.
Each of the parties hereto irrevocably waives, during the term of the
Partnership, any right that he may have to maintain any action for partition
with respect to the property of the Partnership.
Section 17. DEFINITIONS.
Defined terms used in this Agreement shall have the meanings specified
below. Certain additional defined terms are set forth elsewhere in this
Agreement. Unless the context requires otherwise, the singular shall include the
plural and the masculine gender shall include the feminine and neuter, and vice
versa, and "Article" and "Section" references are references to the Articles and
Sections of this Agreement.
"Accountants" means KPMG Peat Marwick LLP, or such other firm of
independent certified public accountants as shall be engaged from time to
time by the General Partner on behalf of the Partnership.
"Acquisition Expenses" means expenses (other than Acquisition Fees)
incurred and paid to any Person which are attributable to selection and
acquisition of Equipment and Financing Transactions, whether or not
acquired or entered into, including legal fees and expenses, travel and
communications expenses, costs of credit reports and appraisals,
non-refundable option payments on equipment and other tangible or
intangible personal property not acquired, commissions, selection fees,
fees payable to finders and brokers which are not Affiliates of the
Sponsor, accounting fees and expenses, costs of each acquisition of an
item of Equipment or a Financing Transaction (including the negotiation of
Leases and the negotiation and documentation of Partnership borrowings,
including commitment or standby fees payable to Lenders), insurance costs
and miscellaneous other expenses however designated.
"Acquisition Fees" means, in connection with any Investment, the amount
payable from all sources (including without limitation, Gross Offering
Proceeds, Indebtedness and reinvestments) in respect of (a) all fees and
commissions paid by any party in connection with the selection and
purchase of any item of Equipment and the negotiation and consummation of
any Financing Transaction by the Partnership, however designated and
however treated for tax or accounting purposes, and (b) all finder's fees
and loan fees or points paid in connection therewith to a Lender not
affiliated with the Sponsor, but not any Acquisition Expenses.
In calculating Acquisition Fees, fees payable by or on behalf of the
Partnership to finders and brokers which are not Affiliates of the Sponsor
shall be deducted from the amount of Acquisition Fees payable to the
Sponsor, and no such fees may be paid to any finder or broker which is an
Affiliate of the Sponsor.
"Adjusted Capital Account Deficit" means with respect to any Capital
Account as of the end of any taxable year, the amount by which the balance
in such Capital Account is less than zero. For this purpose, a Partner's
Capital Account balance shall be (a) reduced for any items described in
Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(4),(5), and (6), (b) increased
for any amount such Partner is unconditionally obligated to contribute to
the Partnership no later than the end of the taxable year in which his
Units, or the General Partner's Partnership Interest, are liquidated (as
defined in Treas. Reg. Section 1.704-1(b)(2)(ii)(g)) or, if later, within
90 days after such liquidation, and (c)
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increased for any amount such Partner is treated as being obligated to
contribute to the Partnership pursuant to the penultimate sentences of Treas.
Reg. Sections 1.704-2(g)(1) and 1.704-2(i)(5) (relating to Minimum Gain).
"Adjusted Capital Contribution" means, as to any Limited Partner, as of
the date of determination, such Limited Partner's Capital Contribution
reduced, but not below zero, by all distributions theretofore made to such
Limited Partner by the Partnership which are deemed to be in reduction of
such Limited Partner's Capital Contribution pursuant to Section
8.3(d)(ii).
"Administrator" means the official or agency administering the securities
laws of a state.
"Affiliate" means, with respect to any Person, (a) any other Person
directly or indirectly controlling, controlled by or under common control
with such Person, (b) any officer, director or partner of such Person, (c)
any other Person owning or controlling 10% or more of the outstanding
voting securities of such Person and (d) if such Person is an officer,
director or partner, any other Person for which such Person acts in such
capacity.
"Affiliated Entity" means any investment entity of whatever form that is
managed or advised by the General Partner.
"Affiliated Investment" means any Investment in which the General Partner,
any Affiliate of the General Partner or any Program sponsored by the
General Partner or any Affiliate of the General Partner (including,
without limitation, any Program in which the General Partner or any such
Affiliate has an interest) either has or in the past has had an interest,
but excluding any Joint Venture.
"Affiliated Limited Partner" means any officer, employee or securities
representative of the General Partner or any Affiliate of the General
Partner or of any Selling Dealer who is admitted as a Limited Partner at a
Closing.
"Agreement" means this Agreement of Limited Partnership, as the same may
hereafter be amended, supplemented or restated from time to time.
"Applicable Redemption Price" means, with respect to any Unit, the amount
(determined as of the date of redemption of such Unit):
(a) during the Reinvestment Period, equal to 85% of the original Capital
Contribution of such Limited Partner less the sum of (i) 100% of previous
distributions to such Limited Partner of uninvested Capital Contributions
pursuant to Section 8.6, (ii) 100% of previous distributions to such
Limited Partner in redemption of a portion or all of his Units pursuant to
Section 10.5, (iii) 100% of previous distributions of Distributable Cash,
(iv) 100% of any previous allocations to such Limited Partner of
investment tax credit amounts and (v) the aggregate amount, not exceeding
$150.00, of expenses reasonably incurred by the Partnership in connection
with the redemption such Unit; and
(b) during the Disposition Period, equal to 100% of the balance of the
Capital Account of such Limited Partner as of the end of the month next
preceding such date of redemption less the sum of (i) such Limited
Partner's pro rata share (without giving effect to such redemption) of
Profits and Losses of the Partnership (as reasonably estimated by the
General Partner) for the period commencing on the first calendar day of
the month in which such redemption date shall occur and (ii) the aggregate
amount, not exceeding $150.00, of expenses reasonably incurred by the
Partnership in connection with the redemption such Unit;
provided, however, that in no event shall the applicable redemption price
computed under either clause (a) or (b) of this definition exceed an
amount equal to such Limited Partner's Capital Account balance as of the
end of the calendar quarter preceding such redemption minus cash
distributions which have been made or are due to be made for the calendar
quarter in which the redemption occurs (for a redemption of all Units
owned by such Limited Partner or that portion of such amount which is
proportionate to the percentage of such Limited Partner's Units which are
redeemed in the case of partial redemptions).
"Assignee" means any Person to whom any Partnership Interest has been
Assigned, in whole or in part, in a manner permitted by Section 10.2 of
this Agreement.
"Assignment" means, with respect to any Partnership Interest or any part
thereof, the offer, sale, assignment, transfer, gift or otherwise
disposition of, such Partnership Interest, whether voluntarily or by
operation of law, except that in the case of a bona fide pledge or other
hypothecation, no Assignment shall be deemed to have
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occurred unless and until the secured party has exercised his right of
foreclosure with respect thereto; and the term "Assign" has a correlative
meaning.
"Available Cash From Operations" means Cash From Operations as reduced by
(a) payments of all accrued but unpaid Management Fees not required to be
deferred, and (b) after Payout, payments of all accrued but unpaid
Subordinated Remarketing Fees.
"Available Cash From Sales" means Cash From Sales, as reduced by (a)
payments of all accrued but unpaid Management Fees not required to be
deferred, and (b) after Payout, payments of all accrued but unpaid
Subordinated Remarketing Fees.
"Book Value" means, with respect to any Partnership property, the
Partnership's adjusted basis for federal income tax purposes, adjusted from
time to time to reflect the adjustments required or permitted by Treas.
Reg. Section 1.704-1(b)(2)(iv)(d)-(g).
"Capital Account" means the capital account maintained for each Partner
pursuant to Section 5.5 of this Agreement
"Capital Contributions" means (1) as to the General Partner, its initial
$1,000 contribution to the capital of the Partnership plus such additional
amounts as may be contributed to the capital of the Partnership by the
General Partner and (2) as to any Limited Partner, the gross amount of
investment in the Partnership actually paid by such Limited Partner for
Units, without deduction for Front-End Fees (whether payable by the
Partnership or not).
"Cash Flow" means the Partnership's cash funds provided from normal
operations of the Partnership and from Financing Transactions (but
excluding Cash from Sales), without deduction for depreciation, but after
deducting cash funds used to pay all other cash expenses, debt payments,
capital improvements and replacements (other than cash funds withdrawn
from reserves).
"Cash From Operations" means Cash Flow (a) reduced by amounts allocated to
Reserves to the extent deemed reasonable by the General Partner and (b)
increased by any portion of Reserves then deemed by the General Partner as
not required for Partnership operations.
"Cash From Refinancings" means the cash received by the Partnership as a
result of any borrowings by the Partnership, reduced by (a) all
Indebtedness of the Partnership evidencing such borrowings, and (b) the
portion of such cash allocated to Reserves to the extent deemed reasonable
by the General Partner.
"Cash From Sales" means the cash received by the Partnership as a result
of a Sale reduced by (a) all Indebtedness of the Partnership required to
be paid as a result of the Sale, whether or not then payable (including,
without limitation, any liabilities on an item of Equipment sold that are
not assumed by the buyer and any remarketing fees required to be paid to
Persons who are not Affiliates of the General Partner), (b) the
Subordinated Remarketing Fee (to the extent permitted to be paid at the
time pursuant to Section 6.4(f) of this Agreement), (c) any accrued but
previously unpaid Management Fees to the extent then payable, (d) any
Reserves to the extent deemed reasonable by the General Partner and (e)
all expenses incurred in connection with such Sale. In the event the
Partnership takes back a promissory note or other evidence of indebtedness
in connection with any Sale, all payments subsequently received in cash by
the Partnership with respect to such note shall be included in Cash From
Sales upon receipt, irrespective of the treatment of such payments by the
Partnership for tax or accounting purposes. If, in payment for Equipment
sold, the Partnership receives purchase money obligations secured by liens
on such Equipment, the amount of such obligations shall not be included in
Cash From Sales until and to the extent the obligations are realized in
cash, sold or otherwise disposed of.
"Closing" means the admission of Limited Partners to the Partnership in
accordance with Section 5.3 of this Agreement.
"Closing Date" means any date on which any Limited Partner shall be
admitted to the Partnership, and includes the Initial Closing Date and any
subsequent Closing Date, including the Final Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended, and in effect
from time to time, or corresponding provisions of subsequent laws.
"Commission" means the Securities and Exchange Commission.
"Commission Loans" means Indebtedness of the Partnership authorized by
Section 6.1(b)(ix).
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"Competitive Equipment Sale Commission" means that brokerage fee paid for
services rendered in connection with the purchase or sale of Equipment and
the sale or absolute assignment for value of Financing Transactions which
is reasonable, customary and competitive in light of the size, type and
location of the Equipment or other collateral securing the applicable
Partnership Investment which is so transferred.
"Consent" means either (a) consent given by vote at a meeting called and
held in accordance with the provisions of Section 13.1 of this Agreement
or (b) the written consent without a meeting, as the case may be, of any
Person to do the act or thing for which the consent is solicited, or the
act of granting such consent, as the context may require.
"Controlling Person" means, with respect to the General Partner or any of
Affiliate of the General Partner, any of its chairmen, directors,
presidents, secretaries or corporate clerks, treasurers, vice presidents,
any holder of a 5% or larger equity interest in the General Partner or any
such Affiliate, or any Person having the power to direct or cause the
direction of the General Partner or any such Affiliate, whether through
the ownership of voting securities, by contract or otherwise.
"Counsel" and "Counsel to the Partnership" means Whitman Breed Abbott &
Morgan, New York, New York, or any successor law firm selected by the
General Partner.
"Credit Committee" means a committee established by the General Partner to
establish credit review policies and procedures, supervise the efforts of
the credit department and approve significant transactions and
transactions which differ from the standards and procedures it has
established. The Credit Committee will, at all times, consist of three
persons designated by the General Partner.
"Creditworthy" means, when used herein with respect to a prospective
Lessee or User, that (1) the Credit Committee of the General Partner has
made the determination, in its reasonable business judgment, after review
of financial, credit, operational and other information concerning such
prospective Lessee or User, that such party is currently able and is
expected to continue throughout the term of such transaction to be able to
meet its obligations to the Partnership in a timely and complete manner,
(2) the Lease or Financing Transaction is adequately secured by Equipment
and/or other collateral obtained, directly or indirectly, from the Lessee
or User (or a guarantor or other party) and (3) the Lessee or User has
satisfied substantially all other criteria established by the Credit
Committee as a condition to the Partnership's investment in such Lease or
Financing Transaction.
"Cumulative Return" means, as to any Limited Partner, an amount equal to
an eight (8%) percent annual cumulative return on such Limited Partner's
Adjusted Capital Contribution (calculated before application of any
distribution made to such Limited Partner pursuant on the date of such
calculation) as outstanding from time to time, compounded daily from a
date not later than the last day of the calendar quarter in which the
original Capital Contribution is made
"Dealer-Manager" means ICON Securities Corp., an Affiliate of the General
Partner.
"Dealer-Manager Agreement" means the agreement entered into between the
General Partner and the Dealer- Manager, substantially in the form thereof
filed as an exhibit to the Registration Statement.
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del. Code Ann. tit. 6, ss. 17-101, et seq., as amended from time to time,
and any successor to such Delaware Act.
"Disposition Period" means the period commencing on the first day
following the end of the Reinvestment Period and continuing for the period
deemed necessary by the General Partner for orderly termination of its
operations and affairs and liquidation or disposition of the Partnership's
Investments and other assets and the realization of maximum Liquidation
Proceeds therefor, which period is expected to continue not less than six
(6), and not more than thirty (30), months beyond the end of the
Reinvestment Period and which, in any event, will end no later than ten
and one-half (10 1/2) years after the Final Closing Date.
"Distributable Cash" has the meaning specified in Section 8.1(c) of this
Agreement.
"Distributable Cash From Operations" means Available Cash From Operations
as reduced by (1) amounts which the General Partner determines shall be
reinvested through the end of the Reinvestment Period in additional
Equipment and Financing Transactions and which ultimately are so
reinvested.
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"Distributable Cash From Sales" means Available Cash From Sales, as
reduced by (1) amounts which the General Partner determines shall be
reinvested through the end of the Reinvestment Period in additional
Equipment and Financing Transactions and which ultimately are so
reinvested.
"Due Diligence Expenses" means fees and expenses actually incurred for
bona fide due diligence efforts expended in connection with the Offering
in a maximum amount not to exceed the lesser of (i) 1/2 of 1% of Gross
Offering Proceeds and (ii) the maximum amount permitted to be reimbursed
under Appendix F to Article III of the NASD Rules of Fair Practice.
"Effective Date" means the date the Registration Statement is declared
effective by the Commission.
"Equipment" means any new, used or reconditioned capital equipment and
related property acquired by the Partnership, including, but not limited
to, the types of equipment referred to in Section 3.2 of this Agreement
and shall also be deemed to include other tangible and intangible personal
property which at any time is subject to, or the collateral for, a Lease.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Account" means an interest-bearing account established and
maintained by the General Partner with the Escrow Agent, in accordance
with the terms of the Escrow Agreement, for the purpose of holding,
pending the distribution thereof in accordance with the terms of this
Agreement, any Subscription Monies received from Persons who are to be
admitted as Limited Partners as a result of the Closing occurring on the
Initial Closing Date.
"Escrow Agent" means The Bank of New York (NJ) or another United States
banking institution with at least $50,000,000 in assets, which shall be
selected by the General Partner to serve in such capacity pursuant to the
Escrow Agreement.
"Escrow Agreement" means that certain Escrow Agreement, dated as of July
10, 1993, between the General Partner and the Escrow Agent, substantially
in the form thereof filed as an exhibit to the Registration Statement, as
amended and supplemented from time to time as permitted by the terms
thereof.
"Final Closing Date" means the last Closing Date on which any Limited
Partner (other than a Substitute Limited Partner) shall be admitted to the
Partnership, which shall be as soon as practicable following the
Termination Date.
"Financing Transaction" means any extension of credit or loan to any User,
which is secured by a security interest in tangible or intangible personal
property and in any lease or license of such property.
"First Cash Distributions" means, with respect to any Limited Partner, all
distributions made to such Limited Partner by the Partnership during the
Reinvestment Period equal to an eight percent (8%) annual, cumulative
return on the amount of such Limited Partner's Capital Contribution (as
reduced by any amounts of uninvested Capital Contributions distributed to
such Limited Partner pursuant to Section 8.6 and by any amount paid to
such Limited Partner in redemption of such Limited Partner's Units
pursuant to Section 10.5).
"Fiscal Period" means any interim accounting period established by the
General Partner within a Fiscal Year.
"Fiscal Quarter" means, for each Fiscal Year, the three-calendar-month
period which commences on the first day of such Fiscal Year and each
additional three-calendar-month period commencing on the first day of the
first month following the end of the preceding such period within such
Fiscal Year (or such shorter period ending on the last day of a Fiscal
Year).
"Fiscal Year" means the Partnership's annual accounting period established
pursuant to Section 12.4 of this Agreement.
"Front-End Fees" means fees and expenses paid by any Person for any
services rendered during the Partnership's organizational and offering or
acquisition phases (including Sales Commissions, Underwriting Fees, O & O
Expense Allowance, Acquisition Fees and Acquisition Expenses (other than
any Acquisition Fees or Acquisition Expenses paid by a manufacturer of
equipment to any of its employees unless such Persons are Affiliates of
the Sponsor) and Leasing Fees, and all other similar fees however
designated).
"Full-Payout Lease" means any lease or license, entered into or acquired
from time to time by the Partnership, pursuant to which the aggregate
noncancelable rental or royalty payments due during the initial term of
such lease
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or license, on a present value basis, are at least sufficient to permit
the Partnership to recover the Purchase Price of the Equipment subject to
such lease or license.
"General Partner" means ICON Capital Corp., a Connecticut corporation, and
any Person who subsequently becomes an additional or Substitute General
Partner duly admitted to the Partnership in accordance with this
Agreement, in such Person's capacity as a general partner of the
Partnership.
"Gross Asset Value" means, with respect to any asset of the Partnership,
the asset's adjusted tax basis, except that:
(a) the initial Gross Asset Value of any asset contributed by a Partner to
the Partnership shall be the fair market value of such asset on the date
of contribution;
(b) the Gross Asset Values of all Partnership assets shall be adjusted to
equal their respective gross fair market values at such times as the
Partners' Capital Accounts are adjusted pursuant to Section 5.5(h) hereof;
(c) the Gross Asset Value of any Partnership asset distributed to any
Partner shall be the gross fair market value of such asset on the date of
distribution;
(d) to the extent not otherwise reflected in the Partners' Capital
Accounts, the Gross Asset Values of Partnership assets shall be increased
(or decreased) to appropriately reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b); and
(e) if on the date of contribution of an asset or a revaluation of an
asset in accordance with (b)-(d) above, the adjusted tax basis of such
asset differs from its fair market value, the Gross Asset Value of such
asset shall thereafter be adjusted by reference to the depreciation method
described in Treas. Reg. Section 1.704- 1(b)(2)(iv)(g)(3).
"Gross Offering Proceeds" means the gross amount of Capital Contributions
(before deduction of Front-End Fees payable by the Partnership and the
discount for Sales Commissions) of all Limited Partners admitted to the
Partnership.
"Gross Revenue" means gross cash receipts of the Partnership from whatever
source including, but not limited to, (a) rental and royalty payments
realized under Leases, (b) principal and interest payments realized under
Financing Transactions and (c) interest earned on funds on deposit for the
Partnership (other than Subscription Monies).
"Gross Unit Price" means $100.00 for each whole Unit, and $.01 for each
1/10,000th Unit, purchased by a Limited Partner (other than an Affiliated
Limited Partner).
"Indebtedness" means, with respect to any Person as of any date, all
obligations of such Person (other than capital, surplus, deferred income
taxes and, to the extent not constituting obligations, other deferred
credits and reserves) that could be classified as liabilities (exclusive
of accrued expenses and trade accounts payable incurred in respect of
property purchased in the ordinary course of business which are not
overdue or which are being contested in good faith by appropriate
proceedings and are not so required to be classified on such balance sheet
as debt) on a balance sheet prepared in accordance with generally accepted
accounting principles as of such date.
"Independent Expert" means a Person with no material current or prior
business or personal relationship with the Sponsor who is engaged to a
substantial extent in the business of rendering opinions regarding the
value of assets of the type held by the Partnership, and who is qualified
to perform such work.
"Initial Closing Date" means the first Closing Date for the Partnership on
which Limited Partners with Interests equal to, or greater than, the
Minimum Offering are admitted to the Partnership.
"Interest" or "Partnership Interest" means the limited partnership unit or
other indicia of ownership in the Partnership. The entire ownership
interest of a Partner in the Partnership, whether held by such Partner or
an immediate or subsequent Assignee thereof, including, without
limitation, such Partner's right (a) to a distributive share of the Cash
From Operations, Cash From Sales and any other distributions of cash from
operation or sale of the Partnership's Investments or liquidation of the
Partnership and its assets, and of the Partnership's Profits or Losses for
Tax Purposes and (b) if a General Partner, to participate in the
management of the business and affairs of the Partnership.
"Investment in Equipment and Financing Transactions" means the aggregate
amount of Capital Contributions actually paid or allocated to the
purchase, manufacture or renovation of Equipment acquired, and investment
in
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Financing Transactions entered into or acquired, by the Partnership
together with other cash payments such as interest, taxes and Reserves
allocable thereto (not exceeding 3% of Capital Contributions) and
excluding Front-End Fees.
"Investments" means, collectively, the Partnership's portfolio, from time
to time, of Equipment, Leases and Financing Transactions, including any
equity interest of the Partnership therein, whether direct or indirect,
through a nominee, Joint Venture or otherwise.
"IRA" means an Individual Retirement Account and its related funding
vehicle.
"IRS" or "Service" means the Internal Revenue Service or any successor
agency thereto.
"Involuntary Withdrawal" means, with respect to the General Partner, the
removal or involuntary withdrawal of the General Partner from the
Partnership pursuant to Section 9.2 of this Agreement.
"Joint Venture" means any syndicate, group, pool, general partnership,
business trust or other unincorporated organization through or by means of
which the Partnership acts jointly with any Program sponsored by the
General Partner or any Affiliate of the General Partner or with any
non-Affiliated Person to invest in Equipment, Leases or Financing
Transactions.
"Lease" means any Full-Payout Lease and any Operating Lease.
"Leasing Fees" means the total of all fees and commissions paid by any
party in connection with the initial Lease of Equipment acquired by the
Partnership.
"Lender" means any Person that lends cash or cash equivalents to the
Partnership, including any Person that acquires by purchase, assignment or
otherwise an interest in the future rents payable under any Lease and in
the related Equipment or other assets or in payments due under any
Financing Transaction, and any property securing, any such transaction.
"Lessee" means a lessee or license under a Lease.
"Limited Partner" means any Person who is the owner of at least one Unit
and who has been admitted to the Partnership as an Limited Partner and any
Person who becomes a Substitute Limited Partner, in accordance with this
Agreement, in such Person's capacity as a Limited Partner of the
Partnership.
"Majority" or "Majority Interest" means Limited Partners owning more than
50% of the aggregate outstanding Units.
"Management Fees" means, for any Fiscal Year, an annual fee in an amount
equal to the lesser of (a) the sum of (i) an amount equal to 5% of annual
gross rental revenues realized under Operating Leases, (ii) an amount
equal to 2% of annual gross rental payments realized under Full-Payout
Leases that are Net Leases, (iii) an amount equal to 2% of annual gross
principal and interest revenues realized in connection with Financing
Transactions and (iv) an amount equal to 7% of annual gross rental
revenues from Equipment owned and operated by the Partnership in the
manner contemplated by the NASAA Guidelines (i.e., the General Partner
provides both asset management and additional services relating to the
continued and active operation of such Equipment, such as on-going
marketing and re-leasing or re-licensing of Equipment, hiring or arranging
for the hiring of crews or operating personnel for such Equipment and
similar services), and (b) the amount of reasonable management fees
customarily paid to non-affiliated third parties rendering similar
services in the same geographic location and for similar types of
equipment.
"Maximum Offering" means receipt and acceptance by the Partnership of
subscriptions by Persons eligible to purchase a total of 1,000,000 Units
of Partnership Interest on or before the Final Closing Date.
"Minimum Offering" means receipt and acceptance by the Partnership of
subscriptions for not less than 12,000 Units (excluding the ten (10) Units
subscribed for by the Original Limited Partner and any Units in excess of
600 Units collectively subscribed for by the General Partner or any
Affiliate of the General Partner).
"NASAA Guidelines" means the Statement of Policy regarding Equipment
Programs adopted by the North American Securities Administrators
Association, Inc., as in effect on the date of the Prospectus.
"NASD" means the National Association of Securities Dealers, Inc.
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"Net Disposition Proceeds" means the proceeds realized by the Partnership
from the Sale or other disposition of an item of Equipment (including
insurance proceeds or lessee indemnity payments arising from the loss or
destruction of the Equipment), Financing Transactions, or any other
Partnership property, less all related Partnership liabilities.
"Net Lease" means a Lease under which the Lessee assumes responsibility
for, and bears the cost of, insurance, taxes, maintenance, repair and
operation of the leased or licensed asset and where the noncancelable
rental or royalty payments pursuant to such Lease are absolutely net to
the Partnership.
"Net Offering Proceeds" means the Gross Offering Proceeds minus the
Underwriting Fees, Sales Commissions and the O & O Expense Allowance
payable by the Partnership.
"Net Unit Price" means the Gross Unit Price less an amount equal to 8% of
the Gross Unit Price (equivalent to Sales Commissions) for each Unit or
fraction thereof purchased by an Affiliated Limited Partner.
"Net Worth" means, with respect to any Person as of any date, the excess,
on such date, of assets over liabilities, as such items would appear on
the balance sheet of such Person in accordance with generally accepted
accounting principles.
"Notice" means a writing containing the information required by this
Agreement to be communicated to any Person, personally delivered to such
Person or sent by registered, certified or regular mail, postage prepaid,
to such Person at the last known address of such Person.
"O & O Expense Allowance" means the aggregate amount equal to the product
of (a) the number of Units subscribed for in the Offering and (b) $3.50.
"Offering" means the offering of Units pursuant to the Prospectus.
"Offering Period" means the period from the Effective Date to the
Termination Date.
"Operating Expenses" means (a) all costs of personnel (including officers
or employees of the General Partner or its Affiliates other than
Controlling Persons) involved in the business of the Partnership,
allocated pro rata to their services performed on behalf of the
Partnership, but excluding overhead expenses attributable to such
personnel); (b) all costs of borrowed money, taxes and assessments on
Partnership Investments and other taxes applicable to the Partnership; (c)
legal, audit, accounting, brokerage, appraisal and other fees; (d)
printing, engraving and other expenses and taxes incurred in connection
with the issuance, distribution, transfer, registration and recording of
documents evidencing ownership of an interest in the Partnership or in
connection with the business of the Partnership; (e) fees and expenses
paid to independent contractors, bankers, brokers and services, leasing
agents and sales personnel consultants and other equipment management
personnel, insurance brokers and other agents (all of which shall only be
billed directly by, and be paid directly to, the provider of such
services); (f) expenses (including the cost of personnel as described in
(a) above) in connection with the disposition, replacement, alteration,
repair, refurbishment, leasing, licensing, re-leasing, re-licensing,
financing, refinancing and operation of Partnership Equipment and
Financing Transactions (including the costs and expenses of insurance
premiums, brokerage and leasing and licensing commissions, if any, with
respect to its Investments and the cost of maintenance of its Equipment;
(g) expenses of organizing, revising, amending, converting, modifying or
terminating the Partnership; (h) expenses in connection with distributions
made by the Partnership to, and communications and bookkeeping and
clerical work necessary in maintaining relations with, its Limited
Partners, including the costs of printing and mailing to such Person
evidences of ownership of Units and reports of meetings of the Partners
and of preparation of proxy statements and solicitations of proxies in
connection therewith; (i) expenses in connection with preparing and
mailing reports required to be furnished to the Limited Partners for
investor, tax reporting or other purposes, and reports which the General
Partner deems it to be in the best interests of the Partnership to furnish
to the Limited Partners and to their sales representatives; (j) any
accounting, computer, statistical or bookkeeping costs necessary for the
maintenance of the books and records of the Partnership (including an
allocable portion of the Partnership's costs of acquiring and owning
computer equipment used in connection with the operations and reporting
activities of the Partnership and any other investment programs sponsored
by the General Partner or any of its Affiliates, the Partnership's
interest in which equipment shall be liquidated in connection with the
Partnership's liquidation); (k) the cost of preparation and dissemination
of the informational material and documentation relating to potential
sale, refinancing or other disposition of Equipment and Financing
Transactions; (l) the costs and expenses incurred in qualifying the
Partnership to do business in any jurisdiction, including fees and
expenses of any resident agent appointed by the Partnership; and (m) the
costs incurred in connection with any litigation or regulatory proceedings
in which the Partnership is involved.
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"Operating Lease" means a lease or license, entered into or acquired from
time to time by the Partnership, pursuant to which the aggregate
noncancelable rental or royalty payments during the original term of such
lease or license, on a net present value basis, are not sufficient to
recover the Purchase Price of the Equipment leased or licensed thereby.
"Operations" means all operations and activities of the Partnership except
Sales.
"Organizational and Offering Expenses" means (a) all costs and expenses
incurred in connection with, and in preparing the Partnership for,
qualification under federal and state securities laws and subsequently
offering and distributing the Units to the public (except for Sales
Commissions and Underwriting Fees payable to the General Partner, the
Dealer-Manager or any Selling Dealer), including but not limited to, (i)
printing costs, (ii) registration and filing fees, (iii) attorneys',
accountants' and other professional fees and (iv) Due Diligence Expenses
and (b) the direct costs of salaries to and expenses (including costs of
travel) of officers and directors of the General Partner or any Affiliate
of the General Partner while engaged in organizing the Partnership and
registering the Units.
"Original Limited Partner" means Charles Duggan.
"Participant List" means a list, in alphabetical order by name, setting
forth the name, address and business or home telephone number of, and
number of Units held by, each Limited Partner, which list shall be printed
on white paper in a readily readable type size (in no event smaller than
10-point type) and shall be updated at least quarterly to reflect any
changes in the information contained therein.
"Partner" means the General Partner (including any Substitute General
Partner) and any Limited Partner (including the Original Limited Partner
and any Substitute Limited Partner).
"Partner Nonrecourse Debt" means any Partnership nonrecourse liability for
which any Partner bears the economic risk of loss within the meaning of
Treas. Reg. Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" has the meaning specified in
Treas. Reg. Section 1.704-2(i)(3), and such additional amount as shall be
treated as Partner Nonrecourse Minimum Gain pursuant to Treas. Reg.
Section 1.704-2(j)(1)(iii).
"Partner Nonrecourse Deductions" shall consist of those deductions and in
those amounts specified in Treas. Reg. Sections 1.704-2(i)(2) and (j).
"Partnership" means ICON Cash Flow Partners L.P. Seven, the limited
partnership formed pursuant to, and governed by the terms of, this
Agreement.
"Partnership Loan" means any loan made to the Partnership by the General
Partner or any Affiliate of the General Partner in accordance with Section
6.2(d) of this Agreement.
"Partnership Minimum Gain" has the meaning specified in Treasury
Regulation ss.ss. 1.704-2(b)(2) and (d) and such additional amount as
shall be treated as Partnership Minimum Gain pursuant to Treas. Reg.
Section 1.704- 2(j)(1)(iii).
"Partnership Nonrecourse Deductions" shall consist of those deductions and
in those amounts specified in Treas. Reg. Sections 1.704-2(c) and (j).
"Payout" means the time when the aggregate amount of cash distributions
(from whatever sources) to a Limited Partner equals the amount of such
Limited Partner's Capital Contribution plus an amount equal to an eight
(8%) percent annual cumulative return on such Capital Contribution,
compounded daily from a date not later than the last day of the calendar
quarter in which such Capital Contribution is made (determined by treating
distributions actually made to a Limited Partner as first being applied to
satisfy such 8% return on capital which has accrued and has not been paid
and applying any excess distributions as a return of such Limited
Partner's Capital Contribution). Income earned on escrowed funds and
distributed to Limited Partners may be used to satisfy the cumulative
return requirement.
"Permitted Investment" means an investment in any of (a) certificates of
deposit or savings or money-market accounts insured by the Federal Deposit
Insurance Corporation of banks located in the United States; (b)
short-term debt securities issued or guaranteed by the United States
Government or its agencies or instrumentalities, or bank repurchase
agreements collateralized by such United States Government or agency
securities, (c) other highly liquid types of money-market investments and
(d) shares of one or more public investment companies (but excluding any
A-49
<PAGE>
such company managed by any Affiliate of the General Partner) registered
with the Commission whose assets exceed $10,000,000 and are invested in
such money market investments and held by an independent custodian.
"Person" shall mean any natural person, partnership, trust, corporation,
association or other legal entity, including, but not limited to, the
General Partner and any Affiliate of the General Partner.
"Prior Program" means any Program previously sponsored by the General
Partner or any Affiliate of the General Partner.
"Prior Public Programs" means ICON Cash Flow Partners, L.P., Series A,
ICON Cash Flow Partners, L.P., Series B, ICON Cash Flow Partners, L.P.,
Series C, ICON Cash Flow Partners, L.P., Series D, and ICON Cash Flow
Partners, L.P., Series E and ICON Cash Flow Partners L.P. Six.
"Profits" or "Losses" means, for any Fiscal Year, the Partnership's
taxable income or loss for such Fiscal Year, determined in accordance with
Code section 703(a) (for this purpose, all items of income, gain, loss or
deduction required to be stated separately pursuant to Code section
703(a)(1) shall be included in taxable income or loss), with the following
adjustments:
(a) Any income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Profits or Losses shall
be applied to increase such taxable income or reduce such loss;
(b) any expenditure of the Partnership described in Code section
705(a)(2)(B), or treated as such pursuant to Treas. Reg. ss.
1.704-1(b)(2)(iv)(i) and not otherwise taken into account in computing
Profits and Losses shall be applied to reduce such taxable income or
increase such loss;
(c) gain or loss resulting from a taxable disposition of any asset of the
Partnership shall be computed by reference to the Gross Asset Value of
such asset and the special depreciation calculations described in Treas.
Reg. ss. 1.704- 1(b)(2)(iv)(g), notwithstanding that the adjusted tax
basis of such asset may differ from its Gross Asset Value;
(d) in lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss for
such Fiscal Year, there shall be taken into account depreciation,
amortization or other cost recovery determined pursuant to the method
described in Treas. Reg. ss. 1.704-1(b)(2)(iv)(g)(3); and
(e) any items which are specially allocated pursuant to Section 8.2(f)
shall not be taken into account in computing Profits or Losses.
"Profits from Operations" or "Losses from Operations" means all Profits
for Tax Purposes or Losses for Tax Purposes of the Partnership other than
Profits for Tax Purposes or Losses for Tax Purposes generated by Sales.
"Profits from Sales" or "Losses from Sales" means all Profits for Tax
Purposes or Losses for Tax Purposes of the Partnership generated by Sales.
"Program" means a limited or general partnership, Joint Venture,
unincorporated association or similar organization, other than a
corporation, formed and operated for the primary purpose of investment in
and the operation of or gain from an interest in equipment.
"Prospectus" means the prospectus included as part of the Registration
Statement on Form S-1 (No. 33-36376) in the final form in which such
prospectus is filed with the Commission pursuant to Rule 424(b) under the
Securities Act and as thereafter supplemented or amended pursuant to Rule
424(c) under the Securities Act.
"Purchase Price" means, with respect to any Investment, the price paid by,
or on behalf of, the Partnership for or in connection with the purchase or
improvement of any item of Equipment or the acquisition or consummation of
any Financing Transaction, as the case may be, including the amount of the
related Acquisition Fees and all liens and encumbrances on such item of
Equipment or Financing Transaction (but excluding "points" and prepaid
interest), plus that portion of the reasonable, necessary and actual
expenses (limited to accounting, auditing or other such services, interest
and principal payments, and loan commitment and other financing fees on
funds used to acquire or maintain Equipment or Financing Transactions)
incurred by the General Partner or any such Affiliate in acquiring
Equipment or Financing Transactions on an arm's length basis with a view
to transferring such Equipment or Financing Transaction to the
Partnership, which is allocated to the Equipment or Financing Transaction
in question in accordance with allocation procedures employed by the
General Partner or such Affiliate from time to time and within generally
accepted accounting principles, reduced (to a negative figure, if
applicable) by the aggregate amount of any revenues from such Equipment or
Financing Transaction payable to the General
A-50
<PAGE>
Partner or such Affiliate during the period from such acquisition until
the Equipment is transferred to the Partnership.
"Qualified Plan" means a pension, profit-sharing or stock bonus plan,
including Keogh Plans, meeting the requirements of Sections 401 et seq. of
the Code, as amended, and its related trust.
"Qualified Subscription Account" means the interest-bearing account
established and maintained by the Partnership for the purpose of holding,
pending the distribution thereof in accordance with the terms of this
Agreement, of Subscription Monies received from Persons who are to be
admitted as Limited Partners as a result of Closings to be held subsequent
to the Initial Closing Date.
"Registration Statement" means the Registration Statement on Form S-1 (No.
33-36376) filed with the Commission under the Securities Act in the form
in which such Registration Statement is declared to be effective.
"Reinvestment Period" means the period commencing with the Initial Closing
Date and ending five (5) years after the Final Closing Date; provided that
such period may be extended at the sole and absolute discretion of the
General Partner for a further period of not more than an additional 36
months.
"Reserves" means reserves established and maintained by the Partnership
for working capital and contingent liabilities, including repairs,
replacements, contingencies, accruals required by lenders for insurance,
compensating balances required by lenders and other appropriate items, in
an amount not less than (a) during the Reinvestment Period, 1.0% of Gross
Offering Proceeds and (b) during the Disposition Period, the lesser of (1)
1% of Gross Offering Proceeds and (2) 1% of the Partnership's aggregate
Adjusted Capital Accounts.
"Roll-Up" means any transaction involving the acquisition, merger,
conversion, or consolidation, either directly or indirectly, of the
Partnership and the issuance of securities of a Roll-Up Entity. Such term
does not include (a) a transaction involving securities of the Partnership
if they have been listed on a national securities exchange or traded
through the National Association of Securities Dealers Automated Quotation
National Market System for at least 12 months; or (b) a transaction
involving the conversion of only the Partnership to corporate, trust or
association form if, as a consequence of such transaction, there will be
no significant adverse change in (i) Partnership's voting rights; (ii) the
term of existence of the Partnership; (iii) Sponsor's compensation; or
(iv) the Partnership's investment objectives.
"Roll-Up Entity" means any partnership, corporation, trust, or other
entity that is created by, or surviving after, the successful completion
of a proposed Roll-Up transaction.
"Sale" means the sale, exchange, involuntary conversion, foreclosure,
condemnation, taking, casualty (other than a casualty followed by
refurbishing or replacement), or other disposition of any of the
Partnership's Equipment and Financing Transactions.
"Sales Commissions" means, with respect to any Unit, an amount equal to
8.0% of the Gross Offering Proceeds attributable to the sale of such Unit.
"Schedule A" means Schedule A attached to and made a part of, this
Agreement, which sets forth the names, addresses, Capital Contributions
and Interests of the Partners, as amended or supplemented from time to
time to add or delete, as the case may be, such information with respect
to any Partner.
"Secondary Market" has the meaning specified in Section 10.2(c) of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Segment" shall mean each period consisting of that portion of any
calendar month that includes either the first through the fifteenth day of
such month or the sixteenth through the last day of such month, commencing
with the first such period ending after the Initial Closing Date; provided
that the first Segment shall begin on the first day after the Initial
Closing Date and end on the earlier of the fifteenth or the last day of
the month in which the Initial Closing Date occurs and the final Segment
shall end on the date of final liquidation of the Partnership.
"Selling Dealer" means each member firm of the National Association of
Securities Dealers, Inc. which has been selected by the General Partner or
the Dealer-Manager to offer and sell Units and which has entered into a
Selling Dealer Agreement with the General Partner or the Dealer-Manager.
A-51
<PAGE>
"Selling Dealer Agreement" means each of the agreements entered into
between the General Partner or the Dealer- Manager and any Seller Dealer,
each substantially in the respective form thereof filed as an exhibit to
the Registration Statement.
"Sponsor" means any Person directly or indirectly instrumental in
organizing, in whole or in part, the Partnership or any Person who will
manage or participate in the management of the Partnership, and any
Affiliate of such Person. The term Sponsor does not include any Person
whose only relationship to the Partnership is that of (1) an independent
equipment manager and whose only compensation is as such or (2) a wholly
independent third party, such as an attorney, accountant or underwriter,
whose only compensation is for professional services rendered in
connection with the Offering.
"Subordinated Remarketing Fee" means, with respect to any Investment, a
fee in the amount equal to the lesser of (a) 3% of the contract sales
price applicable to such Investment, or (b) one-half of that brokerage fee
that is reasonable, customary and competitive in light of the size, type
and location of such Investment.
"Subscription Agreement" means the Subscription Agreement substantially in
the form thereof filed as an exhibit to the Prospectus.
"Subscription Monies" has the meaning specified in Section 5.3(j) of this
Agreement.
"Substitute General Partner" means any Assignee of or successor to the
General Partner admitted to the Partnership in accordance with Section 9.5
of the Agreement.
"Substitute Limited Partner" means any Assignee of Units who is admitted
to the Partnership as a Limited Partner pursuant to Section 10.3 of this
Agreement.
"Tax Counsel" means Whitman Breed Abbott & Morgan, New York, New York, or
such other tax counsel acceptable to the General Partner.
"Tax Matters Partner" means the Person designated pursuant to Section
6231(a)(7) of the Code to manage administrative and judicial tax
proceedings conducted at the Partnership level by the Internal Revenue
Service with respect to Partnership matters. The General Partner is
designated Tax Matters Partner for the Partnership in Section 12.6(e) of
this Agreement.
"Termination Date" means the earliest of (a) the date on which the Maximum
Offering has been sold, (b) twenty-four (24) months following the
Effective Date, and (c) the termination of the Offering by the General
Partner at any time.
"Treasury Regulation" or "Treas. Reg." means final or temporary
regulations issued by the United States Treasury Department pursuant to
the Code.
"Underwriting Fees" means, in the aggregate, fees in an amount equal to
2.0% of the Gross Offering Proceeds of Units sold.
"Unit" means a Unit of Partnership interest held by any Limited Partner.
"Unpaid Cumulative Return" means, as to any Limited Partner, the amount of
such Limited Partner's Cumulative Return calculated through the date as of
which such Unpaid Cumulative Return is being calculated, reduced (but not
below zero) by the aggregate distributions theretofore made to such
Limited Partner by the Partnership pursuant to Sections 8.1(c) and 11.3 of
this Agreement which are deemed to be a reduction of such Limited
Partner's Unpaid Cumulative Return pursuant to Section 8.3(d)(i).
"Unpaid Target Distribution" means, as to any Limited Partner, as of any
given date, the sum of such Partner's Adjusted Capital Contribution plus
such Limited Partner's Unpaid Cumulative Return.
"User" means any (a) manufacturer, (b) unrelated third-party lessor of
equipment to non-Affiliated equipment users, (c) equipment user to whom
the Partnership provides financing pursuant to a Financing Transaction and
(d) intangibles user to whom the Partnership leases or licenses intangible
assets pursuant to a Financing Transaction.
A-52
<PAGE>
"Volume Discount" means the following discounts in the price of Units to
which investors purchasing Units in volume are entitled:
================================================================================
Net Purchase
Number of Units Discount Price
- --------------------------------------------------------------------------------
2,499 or less None $100.00
- --------------------------------------------------------------------------------
2,500 to 4,999 $2.50 $ 97.50
- --------------------------------------------------------------------------------
5,000 to 9,999 $3.50 $ 96.50
- --------------------------------------------------------------------------------
10,000 to 19,999 $4.50 $ 95.50
- --------------------------------------------------------------------------------
20,000 or more $6.50 $ 93.50
================================================================================
"Voluntary Withdrawal" means, with respect to the General Partner, the
voluntary withdrawal from the Partnership of the General Partner as the
General Partner of the Partnership, or the voluntary sale, assignment,
encumbrance or other disposition of all of the General Partner's General
Partnership Interest pursuant to Section 9.1 of this Agreement.
"Withdrawal" means, with respect to the General Partner, the Voluntary or
Involuntary Withdrawal of such General Partner.
"Withdrawn General Partner" means a General Partner which has completed a
Withdrawal in accordance with the provisions of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
GENERAL PARTNER: ORIGINAL LIMITED PARTNER:
ICON CAPITAL CORP.
BY: BY:
s/Peter D. Beekman s/Charles Duggan
- -------------------------- ----------------------------
PETER D. BEEKMAN, President CHARLES DUGGAN
A-53
<PAGE>
SCHEDULE A
NAMES, ADDRESSES AND CAPITAL CONTRIBUTIONS OF PARTNERS
Name and Address Capital Contributions Made
I. General Partner
ICON Capital Corp. $1,000
600 Mamaroneck Avenue
Harrison, New York 10528
II. Original Limited Partner
Charles Duggan $1,000
600 Mamaroneck Avenue
Harrison, New York 10528
A-54
<PAGE>
EXHIBIT B
PRIOR PERFORMANCE TABLES
FOR THE PRIOR PUBLIC PROGRAMS
<PAGE>
Prior Performance Tables
The following unaudited tables disclose certain information relating to
the performance, operations and investment for six of the General Partner's
previous publicly-offered income-oriented programs, ICON Cash Flow Partners,
L.P., Series A ("Series A"), ICON Cash Flow Partners, L.P., Series B ("Series
B"), ICON Cash Flow Partners, L.P., Series C ("Series C"), ICON Cash Flow
Partners, L.P., Series D ("Series D"), ICON Cash Flow Partners, L.P., Series E
("Series E") and ICON Cash Flow Partners L.P. Six ("LP Six"), collectively the
"Prior Public Programs"). Purchasers of the Units of limited partnership
interest in ICON Cash Flow Partners L.P. Seven being offered by this Prospectus
will not acquire any ownership interest in any of the Prior Public Programs and
should not assume that they will experience investment results or returns, if
any, comparable to those experienced by investors in the Prior Public Programs.
Additional information concerning the Prior Public Programs will be
contained in Form 10-K Annual Reports for each such Program which may be
obtained (after their respective filing dates) without charge by contacting ICON
Capital Corp., 600 Mamaroneck Avenue, Harrison, New York 10528-1632. Such Form
10-K Annual Reports will also be available upon request at the office of the
Securities and Exchange Commission, Washington, D.C. The results of the Prior
Public Programs should not be considered indicative of the likely results of the
Partnership. Moreover, the information presented below should not be considered
indicative of the extent to which the Prior Public Programs will achieve their
objectives, because this will in large part depend upon facts which cannot now
be determined or predicted.
See "Other Offerings By the General Partner and Its Affiliates" in this
Prospectus for a narrative discussion of the general investment objectives of
the Prior Public Programs and a narrative discussion of the data concerning the
Prior Public Programs contained in these Tables. Additionally, see Table VI
"Acquisition of Equipment by the Prior Public Programs" which is contained as an
Exhibit to the Registration Statement, as amended, of which this Prospectus is a
part.
Table Description
I Experience in Raising and Investing Funds
II Compensation to the General Partner and Affiliates
III Operating Results of Prior Public Programs
* Series A
* Series B
* Series C
* Series D
* Series E
* LP Six
* LP Seven
IV Results of Completed Prior Public Programs (None)
V Sales or Disposition of Equipment by Prior Public Programs
* Series A
* Series B
* Series C
* Series D
* Series E
* LP Six
<PAGE>
TABLE I
Experience in Raising and Investing Funds
(unaudited)
The following table sets forth certain information concerning the experience of
the General Partner in raising and investing limited partners' funds in its
Prior Public Programs as of March 31, 1996:
<TABLE>
Series A Series B
<S> <C> <C> <C> <C>
Dollar amount offered ................................ $40,000,000 $20,000,000
=========== ===========
Dollar amount raised ................................. $ 2,504,500 100.0% $20,000,000 100.0%
Less: Offering expenses:
Selling commissions ................................ 262,973 10.5% 1,800,000 9.0%
Organization and offering expenses paid to
General Partner or its Affiliates ................ 100,180 4.0% 900,000 4.5%
Reserves ............................................. 25,045 1.0% 200,000 1.0%
----------- ---- ----------- ----
Offering proceeds available for investment ........... $ 2,116,302 84.5% $17,100,000 85.5%
=========== ==== =========== ====
Debt proceeds ........................................ $ 4,190,724 $46,092,749
=========== ===========
Total equipment acquired ............................. $ 7,561,461 $65,126,983
=========== ===========
Acquisition fees paid to General Partner
and its affiliates ................................. $ 206,710 $ 2,219,998
=========== ===========
Equipment acquisition costs as a percentage
of amount raised:
Purchase price 81.84% 82.20%
Acquisition fees paid to General Partner
or its Affiliates 2.66% 3.30%
---- ----
Percent invested 84.5% 85.5%
==== ====
Percent leveraged (non-recourse debt
financing divided by total purchase price) 55.4% 70.8%
Date offering commenced 1/9/87 7/18/89
Original offering period (in months) 24 18
Actual offering period (in months) 24 17
Months to invest 90% of amount available for
investment (measured from the beginning of offering) 24 18
Series C Series D
Dollar amount offered ............................... $20,000,000 $40,000,000
=========== ===========
Dollar amount raised ................................. $20,000,000 100.0% $40,000,000 100.0%
Less: Offering expenses:
Selling commissions ................................ 2,000,000 10.0% 4,000,000 10.0%
Organization and offering expenses paid to
General Partner or its Affiliates ................ 600,000 3.0% 1,400,000 3.5%
Reserves ............................................. 200,000 1.0% 400,000 1.0%
----------- ---- ----------- ----
Offering proceeds available for investment ........... $17,200,000 86.0% $34,200,000 85.5%
=========== ==== =========== ====
Debt proceeds ........................................ $50,355,399 $61,457,744
=========== ===========
Total equipment acquired ............................. $68,956,792 $110,487,454
=========== ============
Acquisition fees paid to General Partner
and its affiliates ................................. $ 2,396,810 $ 4,407,448
=========== ============
Equipment acquisition costs as a percentage
of amount raised:
Purchase price 83.14% 81.72%
Acquisition fees paid to General Partner
or its Affiliates 3.36% 3.78%
---- ----
Percent invested 86.0% 85.5%
==== ====
Percent leveraged (non-recourse debt
financing divided by total purchase price) 73.0% 55.6%
Date offering commenced 12/7/90 8/23/91
Original offering period (in months) ................. 18 18
Actual offering period (in months) ................... 7 10
Months to invest 90% of amount available for
investment (measured from the beginning of offering) 10 4
</TABLE>
(1) L.P. Seven began offering its units to suitable investors on November 9,
1995. As of June 15, 1996, L.P. Seven had raised an aggregate dollar amount
of $15,078,465. The offering period for L.P. Seven will end 24 months after
the Partnership began offering such units, November 8, 1997.
<PAGE>
TABLE I
Experience in Raising and Investing Funds
(unaudited)
The following table sets forth certain information concerning the experience of
the General Partner in raising and investing limited partners' funds in its
Prior Public Programs as of March 31, 1996:
<TABLE>
Series E L.P. Six L.P. Seven
<S> <C> <C> <C> <C> <C> <C>
Dollar amount offered $ 80,000,000 $120,000,000 $100,000,000 (1)
============= ============ ============
Dollar amount raised $ 61,041,151 100.0% $ 38,385,712 100.0% $ 8,948,560
Less: Offering expenses:
Selling commissions 6,104,115 10.0% 3,838,571 10.0% 894,856 10.0%
Organization and offering expenses paid to
General Partner or its Affiliates 2,136,440 3.5% 1,343,500 3.5% 313,200 3.5%
Reserves 610,412 1.0% 383,857 1.0% 89,485 1.0%
------------- ----- ------------ ---- ------------ ----
Offering proceeds available for investment $ 52,190,184 85.5% $ 32,819,784 85.5% $ 7,651,019 85.5%
============= ===== ============ ==== ============ ====
Debt proceeds $ 105,049,572 $ 83,466,313 $ 3,856,235
============= ============ ============
Total equipment acquired $ 183,776,753 $119,569,418 $ 4,894,156
============= ============ ============
Acquisition fees paid to General Partner
and its affiliates $ 7,015,294 $ 3,401,077 $ 146,767
============= ============ ============
Equipment acquisition costs as a percentage
of amount raised:
Purchase price 81.82% 82.73% 82.59%
Acquisition fees paid to General Partner
or its Affiliates 3.68% 2.77% 2.91%
------------- ------------ ------------
Percent invested 85.5% 85.5% 85.5%
============= ============ ============
Percent leveraged (non-recourse debt
financing divided by total purchase price) 57.2% 69.8% 78.8%
Date offering commenced 6/5/92 11/12/93 11/13/95
Original offering period (in months) 24 24 24
Actual offering period (in months) 13 24 (1)
Months to invest 90% of amount available for
investment (measured from the beginning
of offering) 9 16
</TABLE>
(1) L.P. Seven began offering its units to suitable investors on November 9,
1995. As of June 15, 1996, L.P. Seven had raised an aggregate dollar amount
of $15,078,465. The offering period for L.P. Seven will end 24 months after
the Partnership began offering such units, November 8, 1997.
<PAGE>
TABLE II
Compensation to the General Partner and Affiliates
(unaudited)
The following table sets forth certain information concerning the compensation
derived by the General Partner and its affiliates from its Prior Public Programs
as of March 31, 1996:
<TABLE>
Series A Series B Series C Series D Series E L.P. Six L.P. Seven
-------- -------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Date offering commenced 1/9/87 7/18/89 12/7/90 8/23/91 6/5/92 11/12/93 11/9/96
Date offering closed 1/8/89 11/16/90 6/20/91 6/5/92 7/31/93 11/8/95 (1)
Dollar amount raised $2,504,500 $20,000,000 $20,000,000 $40,000,000 $61,041,151 $38,385,712 $8,948,560
========== =========== =========== =========== =========== =========== ==========
Amounts paid to the General Partner
and its Affiliates from proceeds
of the offering:
Underwriting and sales commissions $ 63,450 $ 215,218 $ 413,120 $ 807,188 $ 1,226,111 $ 767,714 $ 179,419
========== =========== =========== =========== =========== =========== ==========
Organization and
offering reimbursements $ 100,180 $ 900,000 $ 600,000 $ 1,400,000 $ 2,136,440 $ 1,343,500 $ 313,200
========== =========== =========== =========== =========== =========== ==========
Acquisition fees $ 206,710 $ 2,219,998 $ 2,396,810 $ 4,407 448 $ 7,015,294 $ 3,401,077 $ 146,767
========== =========== =========== =========== =========== =========== ==========
Dollar amount of cash generated from
operations before deducting such
payments/accruals to the
General Partner and Affiliates $4,226,939 $16,160,607 $15,136,619 $23,487,248 $58,860,149 $12,714,831 $ 276,278
========== =========== =========== =========== =========== =========== ==========
Amount paid or accrued to
General Partner and Affiliates:
Management fee $ 302,423 $ 2,468,570 $ 2,559,279 $ 3,308,482 $ 4,441,294 $ 1,194,408 $ 13,436
========== =========== =========== =========== =========== =========== ==========
Administrative expense
reimbursements $ 98,410 $ 586,044 $ 426,170 $ 1,076,544 $ 2,330,534 $ 613,620 $ 5,898
========== =========== =========== =========== =========== =========== ==========
</TABLE>
(1) L.P. Seven began offering its units to suitable investors on November 9,
1995. As of June 15, 1996, L.P. Seven had raised an aggregate dollar amount
of $15,078,465. The offering period for L.P. Seven will end 24 months after
the Partnership began offering such units, November 8, 1997.
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series A
(unaudited)
The following table summarizes the operating results of Series A. The Program's
records are maintained in accordance with Generally Accepted Accounting
Principles ("GAAP") for financial statement purposes.
<TABLE>
For the Three For the Years
Months Ended March 31, Ended December 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues ......................................... $ 17,257 $ 128,935 $ 188,148
Net gain (loss) on sales or remarketing
of equipment ................................... 38,044 74,970 87,985
--------- --------- ---------
Gross revenue .................................... 55,301 203,905 276,133
Less:
Interest expense .............................. 5,787 39,350 63,423
General and administrative .................... 8,915 36,641 34,468
Provision for bad debts (3) ................... -- 10,000 33,500
Depreciation expense .......................... -- 18,236 46,330
Administrative expense reimbursement
- General Partner ........................... 2,028 9,690 11,404
Management fees - General Partner ............. 1,152 5,951 13,607
Amortization of initial direct costs .......... -- -- 27
---------
Net income (loss) - GAAP ......................... $ 37,419 $ 84,037 73,374
========= ========= =========
Net income (loss) - GAAP - allocable to
limited partners .............................. $ 35,548 $ 79,835 $ 69,705
========= ========= =========
Taxable income from operations (2) ............... (1) $ 94,532 $ 111,397
========= ========= =========
Cash generated from operations ................... $ 101,002 $ 184,430 $ 301,679
Cash generated from sales ........................ 51,513 136,363 216,200
Cash generated from refinancing .................. -- -- --
--------- --------- ---------
Cash generated from operations, sales and
refinancing ................................... 152,515 320,793 517,879
Less:
Cash distributions to investors from operations 56,352 225,533 233,651
Cash distributions to General Partner from
operations .................................. 2,966 11,867 12,297
--------- --------- ---------
Cash generated from operations, sales
and refinancing after cash distributions ...... $ 93,197 $ 83,393 $ 271,931
========= ========= =========
1993 1992 1991 1990
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues ......................................... $ 317,069 $ 279,699 $ 476,420 $ 782,017
Net gain (loss) on sales or remarketing
of equipment ................................... 118,143 14,608 (22,574) 3,096
--------- --------- --------- ---------
Gross revenue .................................... 435,212 294,307 453,846 785,113
Less:
Interest expense .............................. 84,324 81,976 127,819 119,027
General and administrative .................... 32,040 24,601 29,221 28,204
Provision for bad debts (3) ................... 87,551 133,569 -- 12,707
Depreciation expense .......................... 97,179 91,244 140,917 355,430
Administrative expense reimbursement
- General Partner ........................... 4,125 -- 11,673 24,840
Management fees - General Partner ............. 36,261 39,297 55,316 64,403
Amortization of initial direct costs .......... 686 4,129 48,370 60,832
--------- --------- --------- ---------
Net income (loss) - GAAP ......................... $ 93,046 $ (80,509) $ 40,530 $ 119,670
========= ========= ========= =========
Net income (loss) - GAAP - allocable to
limited partners .............................. $ 88,394 $ (76,484) $ 38,503 $ 113,687
========= ========= ========= =========
Taxable income from operations (2) ............... 130,892 $ 216,617 $ 180,715 $ 180,723
========= ========= ========= =========
Cash generated from operations ................... $ 382,184 $ 499,383 $ 529,343 $ 742,238
Cash generated from sales ........................ 490,078 72,608 63,767 16,955
Cash generated from refinancing .................. -- -- -- --
--------- --------- --------- ---------
Cash generated from operations, sales and
refinancing ................................... 872,262 571,991 593,110 759,193
Less:
Cash distributions to investors from operations 356,915 385,108 388,279 380,003
Cash distributions to General Partner from
operations .................................. 18,785 20,269 20,436 20,032
--------- --------- --------- ---------
Cash generated from operations, sales
and refinancing after cash distributions ...... $ 496,562 $ 166,614 $ 184,395 $ 359,158
========= ========= ========= =========
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series A (Continued)
(unaudited)
For the Three
Months Ended March 31, For the Years Ended December 31,
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Tax data and distributions per $1,000
limited partner investment
Federal income tax results:
Taxable from operations (2) (1) $ 35.86 $ 42.25 $ 49.65 $ 82.17 $ 68.55 $ 68.55
======== ========= ======= ======== ======== ======== ========
Cash distributions to investors
Source (on GAAP basis)
Investment income $ 14.19 $ 31.88 $ 27.83 $ 35.29 - $ 15.37 $ 45.39
Return of capital $ 8.31 $ 58.18 $ 65.46 $ 107.22 $ 153.77 $ 139.66 $ 106.34
Source (on Cash basis)
- Operations $ 22.50 $ 90.06 $ 93.29 $ 142.51 $ 153.77 $ 155.03 $ 151.73
- Sales - - - - - - -
- Refinancing - - - - - - -
- Other - - - - - - -
Weighted average number of
limited partnership
($500) units outstanding 5,009 5,009 5,009 5,009 5,009 5,009 5,009
======= ======== ====== ====== ======= ======= =======
</TABLE>
(1)Interim tax information is not available.
(2)The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue on
Direct Finance Leases.
(3)The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series B
(unaudited)
The following table summarizes the operating results of Series B. The Program's
records are maintained in accordance with Generally Accepted Accounting
Principles ("GAAP") for financial statement purposes.
<TABLE>
For the Three
Months Ended March 31, For the Years Ended December 31,
1996 1995 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue .......................................... 98,493 $ 715,841 $ 1,327,962 $ 2,526,762
Net gain on sales or remarketing
of equipment ................................... 104,571 480,681 288,714 185,542
----------- ----------- ----------- -----------
Gross revenue .................................... 203,064 1,196,522 1,616,676 2,712,304
Less:
Interest expense .............................. 16,008 182,419 612,643 1,285,458
General and administrative .................... 25,110 102,334 102,444 120,094
Administrative expense reimbursement
- General Partner ........................... 12,971 85,848 153,287 38,467
Management fees - General Partner (6) ......... (228,096) 84,811 151,316 517,107
Depreciation expense .......................... -- 54,799 106,001 244,819
Amortization of initial direct costs .......... 4 33,433 100,949 255,570
Provision for bad debts (4) ................... -- 25,000 -- 20,000
Write down of estimated residual values (5) ... -- -- -- --
----------- -----------
Net income (loss) - GAAP ......................... $ 377,877 $ 627,878 $ 390,036 $ 230,789
=========== =========== =========== ===========
Net income (loss) - GAAP - allocable to
limited partners $ ............................ $ 374,098 $ 621,599 $ 386,136 $ 228,461
=========== =========== =========== ===========
Taxable income from operations (2) ............... (1) $ 2,363,289 $ 475,707 $ 103,180
=========== =========== =========== ===========
Cash generated from operations ................... $ 218,842 $ 999,015 $ 800,648 $ 2,434,478
Cash generated from sales ........................ 335,194 2,148,030 3,443,168 1,129,325
Cash generated from refinancing .................. -- -- -- --
----------- ----------- ----------- -----------
Cash generated from operations, sales and
refinancing ................................... 554,036 3,147,045 4,243,816 3,563,803
Less:
Cash distributions to investors from operations 449,550 1,799,763 1,800,000 2,466,667
Cash distributions to General Partner from
operations .................................. 4,541 18,180 18,182 24,917
----------- ----------- ----------- -----------
Cash generated from operations, sales
and refinancing after cash distributions ...... $ 99,945 $ 1,329,102 $ 2,425,634 $ 1,072,219
=========== =========== =========== ===========
1992 1991 1990
---- ---- ----
<S> <C> <C> <C>
Revenue ......................................... $ 4,569,135 $ 7,052,209 $ 3,541,054
Net gain on sales or remarketing
of equipment ................................... 74,302 1,172 6,934
----------- ----------- -----------
Gross revenue .................................... 4,643,437 7,053,381 3,547,988
Less:
Interest expense .............................. 2,164,581 3,473,311 1,270,602
General and administrative .................... 55,188 96,885 35,341
Administrative expense reimbursement
- General Partner ........................... -- 163,845 127,357
Management fees - General Partner (6) ......... 727,931 926,449 282,714
Depreciation expense .......................... 1,070,890 1,855,915 1,000,075
Amortization of initial direct costs .......... 507,241 870,851 363,859
Provision for bad debts (4) ................... 8,734 1,260,999 138,138
Write down of estimated residual values (5) ... 506,690 148,983 --
----------- ----------- -----------
Net income (loss) - GAAP ......................... $ (397,818) $(1,743,857) $ 329,902
=========== =========== ===========
Net income (loss) - GAAP - allocable to
limited partners $ ............................ $ (393,840) $(1,726,419) $ 326,603
=========== =========== ===========
Taxable income from operations (2) ............... $ 140,974 $ 656,495 $ 1,239,858
=========== =========== ===========
Cash generated from operations ................... $ 3,238,479 $ 2,887,980 $ 2,369,781
Cash generated from sales ........................ 741,775 698,106 43,438
Cash generated from refinancing .................. -- -- --
----------- ----------- -----------
Cash generated from operations, sales and
refinancing ................................... 3,980,254 3,586,086 2,413,219
Less:
Cash distributions to investors from operations 2,800,000 2,800,000 1,325,735
Cash distributions to General Partner from
operations .................................. 28,283 28,283 13,391
----------- ----------- -----------
Cash generated from operations, sales
and refinancing after cash distributions ...... $ 1,151,971 $ 757,803 $ 1,074,093
=========== =========== ===========
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series B (Continued)
(unaudited)
For the Three
Months Ended March 31, For the Years Ended December 31,
1996 1995 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Tax data and distributions per
$1,000 limited
partner investment
Federal income tax results:
Taxable from operations (2) (1) $ 116.99 $ 23.55 $ 5.11 $ 6.98 $ 32.50 $ 111.13
======= ======== ========= ======== ======== ======== ========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income $ 18.72 $ 31.08 $ 19.31 $ 11.42 - - $ 29.57
Return of capital $ 3.78 $ 58.92 $ 70.69 $ 11.91 $ 140.00 140.00 $ 90.46
Source (on Cash basis)
- Operations $ 10.95 $ 49.96 $ 39.63 $ 120.50 $ 140.00 $ 140.00 $ 120.03
- Sales 11.55 40.04 50.37 2.83 - - -
- Refinancing - - - - - - -
- Other - - - - - - -
Weighted average number of
limited partnership
($100) units outstanding 199,800 199,986 200,000 200,000 200,000 $200,000 $110,451
======== ======== ========= ========= ======== ======== ========
</TABLE>
(1)Interim tax information is not available.
(2)The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue on
Direct Finance Leases.
(3)The program held its initial closing on September 22, 1989 and as of its
final closing date on November 16, 1990 it had twenty-six (26) additional
monthly and semi-monthly closings. Taxable income from operations per $1,000
limited partner investment is calculated based on the weighted average number
of limited partnership units outstanding during the period.
(4)The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
(5)The Partnership records a write down to its residual position if it has been
determined to be impaired. Impairment generally occurs for one of two
reasons: (1) when the recoverable value of the underlying equipment falls
below the Partnership's carrying value or (2) when the primary security
holder has foreclosed on the underlying equipment in order to satisfy the
remaining lease obligation and the amount of proceeds received by the primary
security holder in excess of such obligation is not sufficient to recover the
Partnership's residual position.
(6)The Partnership's Reinvestment Period expired on November 15, 1995, five
years after the Final Closing Date. The General Partner distributed a
Definitive Consent Statement to the Limited Partners to solicit approval of
two amendments to the Partnership Agreement. As of March 20, 1996 these
amendments were agreed to and are effective from and after November 15, 1995.
The amendments: (1) extend the Reinvestment Period for a maximum of four
additional years and likewise delay the start and end of the Liquidation
Period, and (2) eliminate the Partnership's obligation to pay the General
Partner $220,000 of the $347,000 accrued and unpaid management fees as of
November 15, 1995, and $171,000 of additional management fees which would
otherwise accrue during the present Liquidation Period. The portion of the
accrued and unpaid management fees that would be payable to the General
Partner, or $127,000 ($347,000 less $220,000) will be returned to the
Partnership in the form of an additional Capital Contribution by the General
Partner.
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series C
(unaudited)
The following table summarizes the operating results of Series C. The Program's
records are maintained in accordance with Generally Accepted Accounting
Principles ("GAAP") for financial statement purposes.
<TABLE>
For the Three Months
Ended March 31, For the Years Ended December 31,
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues ..................................... $ 179,856 $ 964,104 $ 1,775,547 $ 3,203,141 $ 6,146,119 $ 4,669,728
Net gain on sales or remarketing of equipment 260,973 95,250 361,407 101,463 43,020 4,373
----------- ----------- ----------- ----------- ----------- -----------
Gross revenue ................................ 440,829 1,059,354 2,136,954 3,304,604 6,189,139 4,674,101
Less:
Interest expense .......................... 9,545 253,143 920,433 1,715,520 3,510,307 2,586,892
Administrative expense reimbursement
- General Partner ....................... 24,550 130,482 174,261 78,969 -- 17,908
Management fees - General Partner ......... 24,096 128,533 171,135 695,662 969,667 570,186
General and administrative ................ 16,358 107,419 104,307 133,274 354,559 93,712
Amortization of initial direct costs ...... 2,835 38,892 154,879 427,625 865,051 654,692
Depreciation expense ...................... -- -- 224,474 393,185 694,933 498,594
Provision for/(reversal of) bad debt (4) .. -- -- 141,000 (90,000) 135,000 80,863
Write down of estimated residual values (5) -- -- -- -- 1,412,365 --
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) - GAAP ..................... $ 363,445 $ 400,885 $ 246,645 $ (49,631) $(1,752,743) $ 171,254
=========== =========== =========== =========== =========== ===========
Net income (loss) - GAAP - allocable
to limited partners ........................ $ 359,811 $ 396,876 $ 244,000 $ (49,135) $(1,735,216) $ 169,541
=========== =========== =========== =========== =========== ===========
Taxable income (loss) from
operations (2) ............................. (1) $ (649,775) $(3,611,476) $ 1,780,593 $ 1,722,134 $ 1,718,009
=========== =========== =========== =========== =========== ===========
Cash generated from operations ............... $ 402,057 $ 391,072 $ 2,854,887 $ 2,694,348 $ 2,861,889 $ 2,946,917
Cash generated from sales .................... 328,826 3,058,969 1,665,032 1,266,452 245,274 173,950
Cash generated from refinancing .............. -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Cash generated from operations,
sales and refinancing ...................... 730,883 3,450,041 4,519,919 3,960,800 3,107,163 3,120,867
Less:
Cash distributions to investors
from operations ......................... 447,319 1,796,363 1,799,100 2,466,667 2,800,000 1,820,401
Cash distributions to General Partner from
operations .............................. 4,518 18,144 18,173 24,916 28,283 18,388
----------- ----------- ----------- ----------- ----------- -----------
Cash generated from operations, sales and
refinancing after cash distributions ...... $ 279,046 $ 1,635,534 $ 2,702,646 $ 1,469,217 $ 278,880 $ 1,282,078
=========== =========== =========== =========== =========== ===========
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series C (Continued)
(unaudited)
For the Three Months
Ended March 31, For the Years Ended December 31,
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Tax data and distributions per $1,000
limited partner investment
Federal income tax results:
Taxable (loss) from operations (2) (1) $ (32.24) $(178.86) $ 88.14 $ 85.25 $ 115.75
========= ========= ======== ======== ======== =========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income $ 18.10 $ 19.87 $ 12.21 $ - - $ 11.54
Return of capital $ 4.40 $ 70.13 $ 77.79 $ 123.33 $ 140.00 $ 112.35
Source (on Cash basis)
- Operations $ 20.22 $ 19.59 $ 90.00 $ 123.33 $ 140.00 $ 123.89
- Sales 2.28 70.41 - - - -
- Refinancing - - - - - -
- Other - - - - - -
Weighted average number of
limited partnership
($100) units outstanding 198,775 199,558 199,900 199,992 200,000 146,942
======== ======== ======== ======== ========= =========
</TABLE>
(1)Interim tax information is not available.
(2)The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue on
Direct Finance Leases.
(3)The program held its initial closing on January 3, 1991 and as of its final
closing date on June 20, 1991 it had eleven (11) additional semi-monthly
closings. Taxable income from operations per $1,000 limited partner
investment is calculated based on the weighted average number of limited
partnership units outstanding during the period.
(4)The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
(5)The Partnership records a write down to its residual position if it has been
determined to be impaired. Impairment generally occurs for one of two
reasons: (1) when the recoverable value of the underlying equipment falls
below the Partnership's carrying value or (2) when the primary security
holder has foreclosed on the underlying equipment in order to satisfy the
remaining lease obligation and the amount of proceeds received by the primary
security holder in excess of such obligation is not sufficient to recover the
Partnership's residual position.
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series D
(unaudited)
The following table summarizes the operating results of Series D. The
Program's records are maintained in accordance with Generally Accepted
Accounting Principles ("GAAP") for financial statement purposes.
<TABLE>
From Inception,
For the Three August 23, 1991,
Months Ended Through
March 31, For the Years Ended December 31, December 31,
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues ......................................... $ 1,003,439 $ 3,270,722 $ 3,661,321 $ 6,300,753 $ 7,519,451 $ 968,933
Net gain on sales or remarketing of equipment .... 119,071 1,931,333 1,199,830 313,468 31,225 --
----------- ----------- ----------- ----------- ----------- -----------
Gross revenue .................................... 1,122,510 5,202,055 4,861,151 6,614,221 7,550,676 968,933
Less:
Management fees - General Partner ............. 142,090 594,623 778,568 996,356 751,419 45,426
Amortization of initial direct costs .......... 165,475 511,427 580,457 931,983 937,320 45,502
General and administrative .................... 45,690 273,663 412,655 184,604 33,228 22,548
Interest expense .............................. 396,577 621,199 652,196 1,261,312 1,344,123 109,934
Provision for bad debts (4) ................... -- 150,000 475,000 575,000 850,000 70,399
Administrative expense reimbursement
- General Partner ........................... 57,889 257,401 337,867 423,387 -- --
Depreciation expense .......................... -- -- 4,167 1,144,609 2,773,402 587,664
----------- ----------- ----------- ----------- ----------- -----------
Net income - GAAP ................................ $ 314,789 $ 2,793,742 $ 1,620,241 $ 1,096,970 $ 861,184 $ 87,460
=========== =========== =========== =========== =========== ===========
Net income - GAAP - allocable to limited partners $ 311,641 $ 2,765,805 $ 1,604,039 $ 1,086,000 $ 852,572 $ 86,585
=========== =========== =========== =========== =========== ===========
Taxable income from operations (2) ............... (1) $ 1,641,323 $ 2,612,427 $ 5,766,321 $ 1,883,943 $ 243,697
=========== =========== =========== =========== =========== ===========
Cash generated from operations ................... $ 791,846 $ 2,756,354 $ 1,969,172 $ 6,330,281 $ 8,297,264 $ 829,797
Cash generated from sales ........................ 260,317 6,776,544 9,054,589 5,143,299 199,841 --
Cash generated from refinancing .................. 1,000,000 4,148,838 -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Cash generated from operations, sales and
refinancing ................................... 2,052,163 13,681,736 11,023,761 11,473,580 8,497,105 829,797
Less:
Cash distributions to investors from operations 1,397,229 5,589,207 5,596,503 5,600,000 4,347,156 192,005
Cash distributions to General Partner from
operations .................................. 14,113 56,457 56,530 56,564 43,911 1,939
----------- ----------- ----------- ----------- ----------- -----------
Cash generated from operations, sales and
refinancing after cash distributions .......... $ 640,821 $ 8,039,072 $ 5,370,728 $ 5,817,016 $ 4,106,038 $ 635,853
=========== =========== =========== =========== =========== ===========
<PAGE>
TABLE III
Operating Results of Prior Public Programs - Series D (Continued)
(unaudited)
From Inception,
For the Three August 23, 1991,
Months Ended Through
March 31, For the Years Ended December 31, December 31,
1996 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Tax data and distributions per $1,000
limited partner investment
Federal income tax results:
Taxable from operations (2) (1) $ 40.70 $ 64.71 $ 142.72 $ 55.85 $ 29.00
========== ========= ========= ========= ========= ========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income $ 7.81 $ 69.28 $ 40.13 $ 27.15 $ 25.53 $ 10.41
Return of capital $ 27.19 $ 70.72 $ 99.87 $ 112.85 $ 104.65 $ 12.67
Source (on Cash basis)
- Operations $ 19.84 $ 69.04 $ 48.77 $ 140.00 $ 130.18 $ 23.08
- Sales 15.16 70.96 91.23 - - -
- Refinancing - - - - - -
- Other - - - - - -
Weighted average number of
limited partnership ($100)
units outstanding 399,233 399,229 399,703 400,000 333,945 83,201
========== ========= ========= ========= ========= ========
</TABLE>
(1) Interim tax information is not available.
(2) The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue
on Direct Finance Leases.
(3) The program held its initial closing on September 13, 1991 and as of its
final closing date on June 5, 1992 it had eighteen (18) additional
semi-monthly closings. Taxable income from operations per $1,000 limited
partner investment is calculated based on the weighted average number of
limited partnership units outstanding during the period.
(4) The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
<PAGE>
TABLE III
Operating Results of Prior Public Programs-Series E
(unaudited)
The following table summarizes the operating results of Series E. The
Program's records are maintained in accordance with Generally Accepted
Accounting Principles ("GAAP") for financial statement purposes.
<TABLE>
For the Three
Months Ended
March 31, For the Years Ended December 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Revenues ......................................................... $2,138,088 $10,570,473 $10,946,254 $ 8,748,076 $ 490,347
Net gain on sales or remarketing of equipment .................... 238,199 1,610,392 628,027 1,486,575 --
----------- ----------- ----------- -----------
Gross revenue .................................................... 2,376,287 12,180,865 11,574,281 10,234,651 490,347
Less:
Interest expense .............................................. 829,234 4,377,702 4,868,950 3,023,934 140,306
Amortization of initial direct costs .......................... 250,593 1,530,505 1,840,714 1,667,212 74,126
Management fees - General Partner ............................. 331,845 1,596,569 1,547,509 949,468 15,903
Depreciation .................................................. 265,428 1,061,712 289,478 18,037 --
Administrative expense reimbursement - General Partner ........ 159,116 784,775 408,114 811,966 574,677
General and administrative .................................... 87,608 638,362 438,569 315,000 16,401
Provision for bad debts (4) ................................... -- 600,000 250,000 2,186,750 150,000
Minority interest in joint venture ............................ 1,506 5,438 -- -- --
----------- ----------- ----------- ----------- -----------
Net income - GAAP ................................................ $ 450,957 $ 1,585,802 $ 1,527,095 $ 1,499,573 $ 93,611
=========== =========== =========== =========== ===========
Net income - GAAP - allocable to limited partners ................ $ 446,447 $ 1,569,944 $ 1,511,824 $ 1,484,577 $ 92,675
=========== =========== =========== =========== ===========
Taxable income from operations (2) ............................... (1) $ 1,700,386 $ 2,793,029 $ 3,293,140 $ 247,921
=========== =========== =========== =========== ===========
Cash generated from operations ................................... $ 6,332,183 $ 8,768,414 $17,597,929 $18,415,294 $ 974,501
Cash generated from sales ........................................ 1,190,114 7,419,261 6,492,842 9,416,909 --
Cash generated from refinancing .................................. 780,000 7,400,000 -- 38,494,983 --
----------- ----------- ----------- -----------
Cash generated from operations, sales and refinancing ............ 8,302,297 23,587,675 24,090,771 66,327,186 974,501
Less:
Cash distributions to investors from operations ............... 1,943,053 7,773,082 8,390,043 5,796,799 468,726
Cash distributions to General Partner from operations ......... 19,627 78,512 78,582 58,637 4,735
----------- ----------- ----------- ----------- -----------
Cash generated from operations, sales and refinancings
after cash distributions ....................................... $ 6,339,617 $15,736,081 $15,622,146 $60,471,750 $ 501,040
=========== =========== =========== =========== ===========
<PAGE>
TABLE III
Operating Results of Prior Public Programs-Series E (Continued)
(unaudited)
For the Three
Months Ended March 31,
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Tax and distribution data per $1,000
limited partner investment
Federal Income Tax results:
Taxable income from operations (2) ............. (1) $ 27.61 $ 45.32 $ 66.54 $ 21.81
== =========== ========== ========== ========== ==========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income ............................ $ 7.32 $ 25.75 $ 24.78 $ 30.32 $ 8.23
Return of capital ............................ $ 24.55 $ 101.75 $ 112.74 $ 88.06 $ 33.41
Source (on cash basis)
- Operations ................................... $ 31.87 $ 127.50 $ 137.52 $ 118.38 $ 41.64
- Sales ........................................ -- -- -- -- --
- Refinancings ................................. -- -- -- -- --
- Other ........................................ -- -- -- -- --
Weighted average number of
limited partnership
($100) units outstanding ........................ 609,576 609,650 610,080 489,966 112,552
===== ========== ========= ========= ========= =========
</TABLE>
(1)Interim tax information is not available.
(2)The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue on
Direct Finance Leases.
(3)The program held its initial closing on July 6, 1992 and as of its final
closing date of July 31, 1993 it had twenty-six (26) additional semi-monthly
closings. Taxable income from operations per $1,000 limited partner
investment is calculated based on the weighted average number of limited
partnership units outstanding during the period.
(4)The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
<PAGE>
TABLE III
Operating Results of Prior Public Programs-L.P. Six
(unaudited)
The following table summarizes the operating results of L.P. Six. The
Program's records are maintained in accordance with Generally Accepted
Accounting Principles ("GAAP") for financial statement purposes.
<TABLE>
For the Three For the Years
Months Ended March 31, Ended December 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Revenues ................................................................. $ 2,474,520 $6,622,180 $ 203,858
Net gain on sales or remarketing of equipment ............................ 58,597 107,733 --
Gross revenue ............................................................ 2,533,117 6,729,913 203,858
Less:
Interest expense ..................................................... 1,180,959 3,003,633 2,142
Amortization of initial direct costs ................................. 331,719 828,154 12,748
Management fees - General Partner .................................... 489,485 696,096 8,827
Depreciation ......................................................... 212,162 636,487 --
Administrative expense reimbursement - General Partner ............... 225,277 381,471 6,872
Provision for bad debts (4) .......................................... 150,000 570,000 63,500
Minority interest in joint venture ................................... 18,471 177,769 --
General and administrative ........................................... 168,798 360,235 38,879
----------- ----------- -----------
Net income - GAAP ........................................................ $ (243,754) $ 76,068 $ 70,890
=========== =========== ===========
Net income - GAAP - allocable to limited partners ........................ $ (241,316) $ 75,307 $ 70,181
=========== =========== ===========
Taxable income from operations (2) ....................................... (1) $ 2,239,753 $ 71,033
Cash generated from operations $ ......................................... $ 1,690,687 $ 8,776,203 $ 439,913
Cash generated from sales ................................................ 270,677 1,016,807 --
Cash generated from refinancing .......................................... 5,941,893 33,151,416 --
----------- ----------- -----------
Cash generated from operations, sales and refinancing .................... 7,903,257 42,944,426 439,913
Less:
Cash distributions to investors from operations ...................... 1,030,903 2,543,783 311,335
Cash distributions to General Partner from operations ................ 10,413 25,694 3,145
----------- ----------- -----------
Cash generated from operations, sales and refinancing
after cash distributions ............................................. $ 6,861,941 $40,374.949 $ 125,433
=========== =========== ===========
<PAGE>
TABLE III
Operating Results of Prior Public Programs-L.P. Six
(unaudited)
For the Three For the Years
Months Ended March 31, Ended December 31,
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Tax data and distributions per $1,000 limited
partner investment
Federal income tax results:
Taxable from operations (2) ................... (1) $ 85.13 $ 22.15
========= ========= ========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income .......................... $ -- $ 2.89 $ 22.10
Return of capital .......................... $ 26.89 $ 94.78 $ 75.94
Source (on cash basis)
- Operations ............................... $ 26.89 $ 97.67 $ 98.04
- Sales .................................... -- -- --
- Refinancing .............................. -- -- --
- Other .................................... -- -- --
Weighted average number of limited partnership
($100) units outstanding ...................... 383,436 260,453 31,755
========== ========= =======
</TABLE>
(1)Interim tax information is not available.
(2)The difference between Net income (loss) - GAAP and Taxable income from
operations is due to different methods of calculating depreciation and
amortization, the use of the reserve method for providing for possible
doubtful accounts under GAAP and different methods of recognizing revenue on
Direct Finance Leases.
(3)The program held its initial closing on March 31, 1994. Taxable income from
operations per $1,000 limited partner investment is calculated based on the
weighted average number of limited partnership units outstanding during the
period.
(4)The Partnership records a provision for bad debts to provide for estimated
credit losses in the portfolio. This policy is based on an analysis of the
aging of the Partnership's portfolio, a review of the non-performing
receivables and leases, prior collection experience and historical loss
experience.
<PAGE>
TABLE III
Operating Results of Prior Public Programs-L.P. Seven
(unaudited)
The following table summarizes the operating results of L.P. Seven. The
Program's records are maintained in accordance with Generally Accepted
Accounting Principles ("GAAP") for financial statement purposes.
For the Three
Months Ended
March 31,
1996
Revenues .................................................. $ 75,135
Net gain on sales or remarketing of equipment ............... --
---------
Gross revenue ............................................... 75,135
Less:
Interest expense ........................................ 34,897
Management fees - General Partner ....................... 13,436
Amortization of initial direct costs .................... 9,237
Administrative expense reimbursement - General Partner .. 5,898
General and administrative .............................. 4,808
---------
Net income - GAAP ......................................... $ 6,859
=========
Net income - GAAP - allocable to limited partners ......... $ 6,790
=========
Taxable income from operations (2) .......................... (1)
=========
Cash generated from operations ............................ $ 154,937
Cash generated from sales ................................... --
Cash generated from refinancing ............................. --
Cash generated from operations, sales and refinancing ....... 154,937
Less:
Cash distributions to investors from operations ......... 48,957
Cash distributions to General Partner from operations ... 494
Cash generated from operations, sales and refinancing
after cash distributions ................................ $ 105,486
=========
<PAGE>
TABLE III
Operating Results of Prior Public Programs-L.P. Seven
(unaudited)
For the Three
Months Ended
March 31,
1996
Tax data and distributions per $1,000 limited
partner investment
Federal income tax results:
Taxable from operations (2) (1)
=========
Cash distributions to investors (3)
Source (on GAAP basis)
Investment income $ 1.50
Return of capital $ 9.41
Source (on cash basis)
- Operations $ 10.91
- Sales -
- Refinancing -
- Other -
Weighted average number of limited partnership
($100) units outstanding 44,819
=========
(1)Interim tax information is not available.
(2)The program held its initial closing on January 19, 1996. Taxable income from
operations per $1,000 limited partner investment is calculated based on the
weighted average number of limited partnership units outstanding during the
period.
<PAGE>
TABLE IV
Results of Completed Prior Public Programs
(unaudited)
No Prior Public Programs have completed operations in the five years ended March
31, 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., ended December 31, 1995, and the three months ended
March 31, 1996. Each of the Programs' records are ma with Generally Accepted
Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Computers 1988 1990 $32,352 $13,859 $16,955 $3,096 $1,064
Office Copier 1988 1990 $180,922 $52,504 $52,504 $0 ($30,400)
Agriculture 1988 1991 $19,032 $8,921 $7,225 ($1,696) ($2,214)
Computers 1988 1991 $8,450 $0 $465 $465 $0
Computers 1989 1991 $363,540 $28,027 $56,077 $28,050 $14,962
Telecommunications 1990 1991 $827,804 $49,393 $0 ($49,393) $0
Medical 1988 1991 $29,756 $0 $0 $0 ($10,626)
Copiers 1988 1991 $235,863 $0 $0 $0 ($18,115)
Agriculture 1988 1992 $61,200 $25,810 $24,152 ($1,658) $0
Computers 1988 1992 $51,353 $0 $0 $0 $0
Copiers 1988 1992 $195,875 $0 $0 $0 $0
Material Handling 1988 1992 $78,321 $0 $0 $0 $0
Medical 1988 1992 $50,433 $15,250 $7,000 ($8,250) $34,389
Computers 1989 1992 $41,058 $4,553 $6,606 $2,053 ($13,951)
Copiers 1989 1992 $81,913 $6,495 $6,495 $0 $1,114
Office Equipment 1989 1992 $81,986 $2,821 $12,298 $9,477 ($28,695)
Computers 1991 1992 $3,607 $3,196 $4,142 $946 $1,076
Furniture And
Fixtures 1992 1992 $4,325 $4,430 $4,390 ($40) $65
Computers 1988 1993 $71,813 $0 $0 $0 $0
Furniture 1988 1993 $350,000 $0 $0 $0 $0
Medical 1988 1993 $221,191 $182 $2,382 $2,200 $2,341
Agriculture 1989 1993 $57,975 $2,050 $2,932 $882 ($1,724)
Printing 1989 1993 $126,900 $5,661 $7,800 $2,139 ($10,729)
Reprographics 1989 1993 $112,500 $115 $115 $0 ($12,079)
Computers 1990 1993 $79,043 $0 $0 $0 $0
Reprographics 1990 1993 $71,805 $8,391 $12,528 $4,137 $0
Retail 1990 1993 $198,513 ($32,916) $67,894 $100,810 $0
Video Production 1990 1993 $341,796 $67,965 $161,615 $93,650 $24,507
Computers 1991 1993 $135,380 $6,540 $20,134 $13,594 ($50,622)
Fixture 1992 1993 $2,267 $1,635 $1,824 $189 $11
Telecommunications 1992 1993 $20,000 $11,840 $11,200 ($640) ($4,800)
Video Production 1992 1993 $3,362 $1,110 $592 ($518) ($2,867)
Manufacturing &
Production 1993 1993 $22,660 $0 $0 $0 $0
Agriculture 1988 1994 $30,000 $288 $288 $0 $0
Medical 1988 1994 $46,050 $6,438 $6,438 $0 $0
Computers 1989 1994 $71,152 $6,942 $500 ($6,442) ($1,449)
Computers 1991 1994 $156,552 $6,882 $16,611 $9,729 ($41,137)
Material Handling 1991 1994 $7,013 $1,973 $2,203 $230 ($604)
Medical 1991 1994 $40,556 ($11,278) $1,460 $12,738 $375
Fixture 1992 1994 $3,396 $751 $845 $94 ($1,192)
Manufacturing &
Production 1992 1994 $17,103 ($199) $0 $199 ($5,443)
Furniture 1993 1994 $26,868 $0 $0 $0 $0
Manufacturing &
Production 1993 1994 $27,096 $10,139 $11,054 $915 $0
Agriculture 1989 1994 $14,191 $350 $350 $0 $0
Printing 1993 1994 $24,112 $24,030 $27,061 $3,031 $0
Computers 1991 1995 $17,200 $173 $3,522 $3,349 $1,594
Copiers 1991 1995 $49,081 $7,350 $7,423 $73 ($3,044)
Sanitation 1991 1995 $21,452 $560 $4,818 $4,258 $3,010
Agriculture 1992 1995 $7,828 $462 $737 $275 ($1,901)
Computers 1993 1995 $64,391 $36,094 $5,863 ($30,231) $0
Manufacturing &
Production 1993 1995 $28,557 $8,752 $8,912 $160 $0
Retail 1993 1995 $28,507 ($9) $697 $706 $0
Computers 1991 1996 $798 $79 $51 ($28) (4)
Computers 1993 1996 $28,479 ($8) $477 $484 (4)
Furniture 1993 1996 $9,978 ($2) $0 $2 (4)
Manufacturing &
Production 1993 1996 $22,012 $401 $403 $2 (4)
Retail 1993 1996 $27,588 ($5) $0 $5 (4)
Sanitation 1993 1996 $5,822 $0 $0 $0 (4)
Video Production 1993 1996 $41,465 $12,099 $12,441 $342 (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., Series B for ended December 31, 1995, and the three
months ended March 31, 1996. Each of the Programs' records are maintained in
with Generally Accepted Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Manufacturing & Production 1990 1990 $31,129 $28,288 $34,142 $5,854 $3,013
Mining 1990 1990 $145,227 $120,804 $120,804 $0 $0
Video Production 1990 1990 $10,201 $8,006 $9,086 $1,080 $671
Agriculture 1989 1991 $5,986 $4,003 $0 ($4,003) $0
Computers 1989 1991 $76,899 $52,134 $7,492 ($44,642) $0
Construction 1989 1991 $48,299 $43,554 $7,784 ($35,770) ($7,007)
Copiers 1989 1991 $7,469 $4,997 $16 ($4,981) $0
Environmental 1989 1991 $10,609 $11,546 $0 ($11,546) $0
Furniture 1989 1991 $86,965 $62,229 $19,339 ($42,890) $0
Manufacturing & Production 1989 1991 $55,125 $34,435 $12,807 ($21,628) $0
Medical 1989 1991 $9,447 $7,643 $0 ($7,643) $0
Office Equipment 1989 1991 $25,171 $24,586 $64 ($24,522) ($1,985)
Retail 1989 1991 $4,405 $4,792 $0 ($4,792) $0
Sanitation 1989 1991 $15,448 $17,983 $0 ($17,983) $0
Telecommunications 1989 1991 $2,238 $0 $60 $60 $0
Transportation 1989 1991 $9,474 $10,801 $0 ($10,801) $0
Video Production 1989 1991 $11,925 $1,762 $7 ($1,755) $0
Agriculture 1990 1991 $35,245 $4,694 $0 ($4,694) ($5,210)
Computers 1990 1991 $2,671,588 $601,346 $136,169 ($465,177) ($476,397)
Construction 1990 1991 $64,544 $29,979 $24,379 ($5,600) ($9,949)
Copiers 1990 1991 $30,699 $18,760 $911 ($17,849) $0
Environmental 1990 1991 $14,658 $15,434 $0 ($15,434) $0
Fixture 1990 1991 $29,510 $27,027 $808 ($26,219) $0
Furniture 1990 1991 $53,420 $34,771 $3,598 ($31,173) ($5,953)
Manufacturing & Production 1990 1991 $526,568 $504,823 $226,978 ($277,845) ($47,036)
Material Handling 1990 1991 $112,075 $59,977 $34,758 ($25,219) $0
Medical 1990 1991 $93,771 $47,016 $0 ($47,016) ($19,410)
Mining 1990 1991 $221,706 $0 $0 $0 ($82,375)
Miscellaneous 1990 1991 $29,443 $28,179 $0 ($28,179) $0
Office Equipment 1990 1991 $44,560 $34,289 $760 ($33,529) $0
Restaurant 1990 1991 $97,304 $45,062 $18,564 ($26,498) ($24,787)
Retail 1990 1991 $43,751 $18,362 $9,230 ($9,132) ($12,624)
Sanitation 1990 1991 $171,345 $66,074 $77,146 $11,072 ($78,222)
Telecommunications 1990 1991 $980,613 $119,372 $0 ($119,372) ($11,618)
Transportation 1990 1991 $13,434 $13,858 $0 ($13,858) $0
Video Production 1990 1991 $46,645 $26,631 $3,754 ($22,877) $11,741
Material Handling 1991 1991 $109,115 $108,512 $113,482 $4,970 $0
Agriculture 1989 1992 $89,766 $19,058 $21,912 $2,854 ($12,999)
Computers 1989 1992 $60,747 $1,659 $2,593 $934 $0
Copiers 1989 1992 $79,556 $10,817 $10,839 $22 ($9,798)
Furniture 1989 1992 $35,512 $2,418 $2,911 $493 $0
Manufacturing & Production 1989 1992 $117,236 $1,924 $1,936 $12 $0
Material Handling 1989 1992 $16,058 $670 $789 $119 ($7,845)
Medical 1989 1992 $31,701 $7,548 $1,967 ($5,580) $0
Office Equipment 1989 1992 $19,981 $1,381 $1,427 $46 $0
Printing 1989 1992 $25,000 $3,510 $2,510 ($1,000) ($8,247)
Telecommunications 1989 1992 $18,779 $1,910 $2,012 $102 $0
Video Production 1989 1992 $21,849 $3,275 $3,283 $8 $0
Agriculture 1990 1992 $46,968 $2,847 $3,463 $617 ($4,451)
Computers 1990 1992 $3,872,456 $671,632 $342,387 ($329,245) ***********
Construction 1990 1992 $23,493 $1,229 $1,229 $0 $0
Copiers 1990 1992 $19,240 $2,165 $3,524 $1,358 ($8,884)
Environmental 1990 1992 $7,195 $1,164 $1,164 $0 ($4,683)
Fixture 1990 1992 $55,869 $7,661 $9,096 $1,436 ($34,594)
Furniture 1990 1992 $58,095 $7,193 $7,719 $525 ($26,836)
Manufacturing & Production 1990 1992 $192,143 $47,665 $43,213 ($4,452) ($45,657)
Material Handling 1990 1992 $104,852 $23,011 $7,775 ($15,236) ($15,648)
Medical 1990 1992 $88,537 $12,382 $13,393 $1,011 ($38,945)
Miscellaneous 1990 1992 $4,999 $1,313 $1,236 ($77) ($2,804)
Office Equipment 1990 1992 $1,203,666 $179,190 $2,513 ($176,678) ($6,351)
Printing 1990 1992 $4,055 $787 $787 $0 ($2,487)
Restaurant 1990 1992 $83,624 $194 $6,850 $6,657 ($12,961)
Retail 1990 1992 $63,030 $35,999 $581 ($35,419) ($1,296)
Sanitation 1990 1992 $200,642 $12,623 $13,101 $478 ($14,846)
Telecommunications 1990 1992 $64,899 $11,997 $4,965 ($7,032) ($18,620)
Transportation 1990 1992 $7,610 $1 $1 $0 $0
Video Production 1990 1992 $18,558 $3,521 $4,302 $781 ($7,177)
Furniture 1991 1992 $25,909 $28,313 $0 ($28,313) $0
Manufacturing & Production 1991 1992 $51,311 $47,497 $57,487 $9,990 $0
Material Handling 1991 1992 $10,023 $10,462 $10,595 $133 $0
Office Equipment 1991 1992 $15,789 $0 $0 $0 $0
Sanitation 1991 1992 $18,840 $10,122 $10,516 $394 $0
Agriculture 1989 1993 $31,500 $4,370 $10,095 $5,725 $1,431
Computers 1989 1993 $93,554 $267 $661 $394 $0
Copiers 1989 1993 $168,679 $19,448 $23,072 $3,624 ($26,046)
Furniture 1989 1993 $116,287 $17,152 $19,536 $2,384 ($9,084)
Manufacturing & Production 1989 1993 $14,804 $2,832 $3,541 $709 $0
Material Handling 1989 1993 $20,725 $0 $1,650 $1,650 $0
Office Equipment 1989 1993 $81,777 $990 $17,490 $16,500 ($4,999)
Telecommunications 1989 1993 $2,524 $0 $0 $0 $0
Video Production 1989 1993 $22,321 $0 $0 $0 $0
Agriculture 1990 1993 $132,350 $11,556 $11,963 $407 ($42,903)
Automotive 1990 1993 $75,730 $45,795 $51,888 $6,093 ($3,043)
Computers 1990 1993 $1,069,393 $140,198 $164,423 $24,225 ($267,270)
Construction 1990 1993 $41,779 $5,058 $5,075 $17 ($9,774)
Copiers 1990 1993 $23,318 $3,058 $2,505 ($553) ($7,670)
Fixture 1990 1993 $73,038 $10,235 $10,235 $0 ($22,303)
Furniture 1990 1993 $118,834 $11,204 $11,509 $305 ($10,168)
Manufacturing & Production 1990 1993 $1,120,324 $139,342 $186,899 $47,557 ($271,929)
Material Handling 1990 1993 $210,922 $20,462 $29,157 $8,695 ($51,481)
Medical 1990 1993 $380,749 $56,711 $37,821 ($18,890) ($68,880)
Office Equipment 1990 1993 $69,232 $8,695 $9,275 $580 ($18,731)
Printing 1990 1993 $6,061 $1,431 $1,050 ($381) ($1,388)
Reprographics 1990 1993 $82,000 $8,200 $40,000 $31,800 $7,109
Restaurant 1990 1993 $121,682 $10,330 $11,517 $1,187 ($28,626)
Retail 1990 1993 $11,280 $813 $1,797 $984 ($2,806)
Sanitation 1990 1993 $43,697 $5,148 $5,152 $4 ($10,588)
Telecommunications 1990 1993 $278,193 $20,246 $22,616 $2,370 ($58,857)
Unknown 1990 1993 $595,538 ($98,697) $203,595 $302,292 $0
Video Production 1990 1993 $7,981 $374 $374 $0 ($1,484)
Computers 1991 1993 $248,090 $36,021 $36,834 $813 ($9,175)
Construction 1991 1993 $10,590 $869 $1,875 $1,006 ($4,480)
Furniture 1991 1993 $73,541 ($66) $603 $669 ($7,311)
Manufacturing & Production 1991 1993 $12,951 $0 $0 $0 $0
Material Handling 1991 1993 $43,408 $20,390 $23,147 $2,757 ($1,015)
Medical 1991 1993 $9,425 $5,708 $6,513 $805 $858
Sanitation 1991 1993 $37,743 $16,285 $15,506 ($779) $0
Computers 1992 1993 $79,557 $38,668 $38,668 $0 ($36,961)
Material Handling 1992 1993 $30,692 $149 $6,578 $6,429 ($17,976)
Computers 1989 1994 $468,870 $109,719 $109,720 $1 $102,026
Copiers 1989 1994 $13,461 $30 $30 $0 $0
Furniture 1989 1994 $218,655 $79,000 $79,000 $0 $80,901
Manufacturing & Production 1989 1994 $90,725 ($13) $0 $13 $0
Medical 1989 1994 $97,017 $699 $1,141 $441 $0
Office Equipment 1989 1994 $2,796 $0 $126 $126 $0
Printing 1989 1994 $14,123 $0 $0 $0 $0
Telecommunications 1989 1994 $10,950 ($2) $127 $129 $0
Agriculture 1990 1994 $73,503 $11,518 $12,258 $740 ($3,345)
Computers 1990 1994 $3,937,366 $957,935 $959,231 $1,295 $367,292
Construction 1990 1994 $141,052 $16,265 $16,265 $0 ($14,659)
Fixture 1990 1994 $100,514 $10,959 $10,959 $0 ($6,640)
Furniture 1990 1994 $282,115 $89,792 $94,919 $5,127 $43,164
Manufacturing & Production 1990 1994 $443,855 $121,619 $137,376 $15,757 ($8,207)
Material Handling 1990 1994 $411,986 $20,972 $20,972 $0 ($33,402)
Medical 1990 1994 $462,679 $42,572 $62,365 $19,792 $805
Mining 1990 1994 $9,631,966 $1,298,813 $1,298,813 $0 ($689,039)
Office Equipment 1990 1994 $34,402 $3,434 $3,434 $0 ($8,258)
Reprographics 1990 1994 $16,482 $4,547 $4,547 $0 $904
Restaurant 1990 1994 $297,355 $32,327 $33,776 $1,449 ($29,158)
Retail 1990 1994 $841,977 $440,914 $440,914 $0 $668,569
Sanitation 1990 1994 $7,147 $0 $0 $0 $0
Telecommunications 1990 1994 $261,049 ($6,700) $30,311 $37,011 $11,248
Video Production 1990 1994 $45,804 $5,357 $5,365 $8 ($4,684)
Agriculture 1991 1994 $15,633 $625 $629 $4 $0
Computers 1991 1994 $684,631 $59,296 $59,296 $0 ($213,947)
Copiers 1991 1994 $39,270 $2,598 $648 ($1,950) ($15,152)
Environmental 1991 1994 $44,016 $864 $904 $41 $0
Furniture 1991 1994 $20,546 $906 $923 $17 $0
Material Handling 1991 1994 $66,497 $2,470 $2,642 $172 ($5,750)
Medical 1991 1994 $602,400 $306,415 $373,385 $66,970 $139,985
Sanitation 1991 1994 $83,638 $4,459 $4,634 $174 $0
Telecommunications 1991 1994 $11,188 $898 $1,146 $248 ($3,419)
Manufacturing & Production 1993 1994 $81,735 ($61) $34 $95 $0
Material Handling 1993 1994 $6,578 $3,110 $3,600 $490 $0
Sanitation 1994 1994 $7,320 $0 $0 $0 $0
Computers 1989 1995 $24,831 $1,574 $13 ($1,561) $0
Manufacturing & Production 1989 1995 $11,262 $4,128 $0 ($4,128) $0
Computers 1990 1995 $3,151,688 $784,267 $578,324 ($205,942) $61,278
Construction 1990 1995 $397,553 $139,680 $93,172 ($46,508) $2,914
Copiers 1990 1995 $26,920 $6,048 ($0) ($6,048) $0
Furniture 1990 1995 $64,010 $5,908 $4,760 ($1,148) $5,171
Material Handling 1990 1995 $108,329 $7,629 $6,899 ($730) ($15)
Medical 1990 1995 $919,987 $320,531 $260,980 ($59,551) $56,955
Manufacturing & Production 1990 1995 $846,718 $211,207 $244,937 $33,730 $243,103
Office Equipment 1990 1995 $38,014 $4,192 $2,111 ($2,081) $1,950
Reprographics 1990 1995 $102,003 $1 $1 $0 $0
Restaurant 1990 1995 $63,437 $4,636 $1,896 ($2,740) $897
Retail 1990 1995 $2,703,611 $349,429 $193,032 ($156,397) $184,637
Sanitation 1990 1995 $58,070 $4,110 $1,738 ($2,372) $1,518
Video Production 1990 1995 $3,404 $773 $0 ($773) $0
Agriculture 1991 1995 $23,262 $7,034 $7,449 $415 $1,921
Computers 1991 1995 $2,712,345 $677,342 $648,479 ($28,863) $126,108
Construction 1991 1995 $25,214 $1,539 $2,727 $1,188 ($2,122)
Furniture 1991 1995 $62,471 $16,192 $5,091 ($11,101) ($4,400)
Material Handling 1991 1995 $34,473 $12,502 $12,105 ($397) $0
Manufacturing & Production 1991 1995 $132,184 $5,116 $50,110 $44,993 $27,132
Office Equipment 1991 1995 $48,350 $7,177 $9,506 $2,329 ($2,320)
Restaurant 1991 1995 $73,807 $3,637 $2,910 ($728) ($1,107)
Telecommunications 1991 1995 $52,499 $3,093 $7,262 $4,169 ($3,403)
Audio 1992 1995 $128,455 $98,566 $122,689 $24,123 $32,942
Computers 1992 1995 $76,900 $2,447 $15,248 $12,801 ($10,269)
Furniture 1992 1995 $188,807 $19,652 $19,652 $0 ($57,369)
Telecommunications 1992 1995 $64,731 $47,017 $55,634 $8,616 $23,500
Video Production 1992 1995 $382,790 $247,199 $298,045 $50,846 $122,650
Copiers 1993 1995 $35,000 $0 $0 $0 $0
Computers 1994 1995 $1,043,007 $346,471 $739,181 $392,710 $661,239
Furniture 1994 1995 $204,779 $171,324 $181,605 $10,281 $0
Medical 1994 1995 $23,671 $2,015 $2,015 $0 $0
Manufacturing & Production 1994 1995 $21,038 $17,225 $18,733 $1,509 $1,436
Computers 1995 1995 $17,231 $16,864 $2,383 ($14,481) $0
Computers 1990 1996 $909,092 $106,145 $98,506 ($7,639) (4)
Medical 1990 1996 $15,713 $1,043 ($0) ($1,043) (4)
Printing 1990 1996 $26,691 $728 ($0) ($728) (4)
Retail 1990 1996 $1,332,608 $139,542 $238,200 $98,658 (4)
Construction 1991 1996 $25,713 $3,791 $3,857 $66 (4)
Furniture 1991 1996 $15,289 ($381) $0 $381 (4)
Fixtures 1994 1996 $11,052 $0 $0 ($0) (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., Series C for ended December 31, 1995, and the three
months ended March 31, 1996. Each of the Programs' records are maintained in a
with Generally Accepted Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Agriculture 1991 1991 $2,942 $0 $0 $0 $0
Computers 1991 1991 $1,389 $0 $31 $31 $31
Construction 1991 1991 $906 $102 $256 $154 $154
Manufacturing & Production 1991 1991 $1,800 $328 $343 $15 $15
Material Handling 1991 1991 $1,383 $0 $269 $269 $269
Office Equipment 1991 1991 $1,233 $0 $0 $0 $0
Printing 1991 1991 $19,967 $0 $6 $6 $6
Retail 1991 1991 $6,714 $557 $639 $83 $83
Sanitation 1991 1991 $167,899 $168,591 $172,406 $3,815 $3,815
Agriculture 1991 1992 $7,013 $1,133 $300 ($834) ($773)
Computers 1991 1992 $451,724 $57,141 $55,313 ($1,828) ($38,009)
Construction 1991 1992 $233,875 $115,470 $119,943 $4,473 ($49,808)
Copiers 1991 1992 $4,634 ($1,798) $336 $2,134 $0
Fixture 1991 1992 $10,326,838 $1,421,047 $614 ($1,420,433) $0
Furniture 1991 1992 $3,478 $1 $1 $0 $0
Material Handling 1991 1992 $25,677 $10,492 $11,432 $940 ($3,074)
Medical 1991 1992 $12,817 $100 $100 $0 ($10,859)
Manufacturing & Production 1991 1992 $43,629 ($1,124) $1,754 $2,878 ($32,166)
Office Equipment 1991 1992 $8,342 $8,593 $3,261 ($5,332) $0
Printing 1991 1992 $16,961 $790 $944 $154 ($9,907)
Restaurant 1991 1992 $35,504 $22,369 $8,777 ($13,592) $0
Retail 1991 1992 $118,527 $273,200 $10,583 ($262,617) ($69,026)
Sanitation 1991 1992 $253,845 $111,627 $115,785 $4,158 $0
Telecommunications 1991 1992 $12,916 $7,936 $9,356 $1,420 ($2,588)
Miscellaneous 1991 1992 $53,827 $21,578 $13,932 ($7,646) $1,797
Agriculture 1991 1993 $57,287 $7,456 $9,998 $2,542 ($18,745)
Automotive 1991 1993 $6,266 $1,328 $1,427 $99 ($2,344)
Computers 1991 1993 $1,051,652 $162,294 $207,909 $45,615 ($325,207)
Construction 1991 1993 $464,100 $55,261 $78,501 $23,240 ($73,626)
Fixture 1991 1993 $2,403 $0 $0 $0 ($15,392)
Furniture 1991 1993 $99,455 $25,656 $15,551 ($10,105) ($138,905)
Medical 1991 1993 $1,313,194 $708,948 $710,991 $2,043 ($81,725)
Manufacturing & Production 1991 1993 $207,168 $25,494 $33,904 $8,410 ($2,771)
Office Equipment 1991 1993 $50,397 $10,621 $11,360 $739 ($12,948)
Printing 1991 1993 $23,682 $425 $1,500 $1,075 $0
Reprographics 1991 1993 $3,898 $464 $464 $0 ($12,279)
Restaurant 1991 1993 $52,281 $8,374 $11,424 $3,050 ($45,442)
Retail 1991 1993 $107,672 $6,184 $14,538 $8,354 ($5,137)
Sanitation 1991 1993 $369,044 $58,844 $72,766 $13,922 ($3,854)
Telecommunications 1991 1993 $13,462 $609 $995 $386 ($1,686)
Transportation 1991 1993 $3,762 $271 $612 $341 $0
Construction 1992 1993 $14,788 ($961) $0 $961 $0
Retail 1992 1993 $4,093 ($139) $396 $535 ($2,058)
Agriculture 1991 1994 $37,987 $10,692 $14,276 $3,584 ($1,742)
Automotive 1991 1994 $54,591 $161 $190 $29 $0
Computers 1991 1994 $3,845,015 $145,861 $176,290 $30,428 ($761,570)
Construction 1991 1994 $144,438 $8,068 $10,874 $2,806 ($2,060)
Copiers 1991 1994 $2,041 ($0) $89 $89 $0
Environmental 1991 1994 $213,173 $94,203 $123,051 $28,848 ($38,471)
Fixture 1991 1994 $234,136 $31,188 $32,228 $1,040 ($64,973)
Furniture 1991 1994 $544,084 ($33,508) $42,733 $76,241 ($111,133)
Material Handling 1991 1994 $27,610 $9,861 $12,180 $2,320 ($8,523)
Medical 1991 1994 $166,398 $1,386 $15,777 $14,391 $490
Manufacturing & Production 1991 1994 $351,497 $31,295 $56,139 $24,844 ($79,430)
Office Equipment 1991 1994 $30,245 $0 $126 $125 $0
Printing 1991 1994 $1,066,789 $210,962 $210,962 $0 ($222,154)
Restaurant 1991 1994 $70,707 ($339) $796 $1,136 ($10,709)
Retail 1991 1994 $1,381,039 $152,323 $153,469 $1,146 ($361,934)
Sanitation 1991 1994 $173,772 $2,892 $4,374 $1,482 $0
Telecommunications 1991 1994 $277,162 ($2,629) $13,384 $16,013 ($57,036)
Video 1991 1994 $8,139 ($1) $327 $328 $0
Fixture 1992 1994 $15,450 $1,223 $1,552 $328 ($8,169)
Manufacturing & Production 1992 1994 $122,247 $21,475 $31,910 $10,435 ($37,107)
Furniture 1994 1994 $65,659 $69,225 $73,420 $4,195 $0
Computers 1991 1995 $14,393,689 $1,892,673 $1,681,499 ($211,174) ($60,114)
Construction 1991 1995 $238,913 $14,433 $27,420 $12,987 ($149,560)
Copiers 1991 1995 $39,507 $3,456 $4,077 $621 $13,504
Fixtures 1991 1995 $804,453 $113,148 $89,760 ($23,388) ($16,463)
Furniture 1991 1995 $603,534 $29,758 $76,781 $47,023 $0
Medical 1991 1995 $3,713,348 $1,692,752 $2,084,752 $392,000 ($260,046)
Manufacturing & Production 1991 1995 $3,123,635 $917,619 $768,141 ($149,478) ***********
Office Equipment 1991 1995 $347,197 $17,431 $17,435 $5 ($3,502)
Retail 1991 1995 $1,765,207 $206,416 $117,745 ($88,670) $854,893
Sanitation 1991 1995 $26,224 $6,541 ($655) ($7,196) $0
Telecommunications 1991 1995 $373,595 $37,285 $38,143 $858 ($103,967)
Video Production 1991 1995 $192,070 $4,450 $23,511 $19,062 $55,805
Furniture 1993 1995 $54,942 $42,999 $23,436 ($19,562)
Material Handling 1993 1995 $46,931 $13,325 $13,753 $428 $0
Restaurant 1994 1995 $436,966 $379,595 $411,179 $31,584 ($17,421)
Retail 1994 1995 $35,025 $10,101 $10,120 $19
Telecommunications 1994 1995 $19,591 $11,665 $1,542 ($10,123) ($13,275)
Fixtures 1995 1995 $25,958 $26,768 $26,866 $99
Computers 1991 1996 $2,108,121 $342,028 $367,006 $24,979 (4)
Furniture 1991 1996 $1,670,320 ($155,540) $71,630 $227,169 (4)
Medical 1991 1996 $560,871 $170,411 $94,534 ($75,877) (4)
Manufacturing & Production 1991 1996 $70,898 $2,858 ($19) ($2,877) (4)
Retail 1991 1996 $71,352 $8,481 $1,150 ($7,331) (4)
Video 1991 1996 $71,636 $1,778 $7,388 $5,610 (4)
Telecommunications 1994 1996 $4,820 $0 $0 $0 (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., Series D for the four yea ended December 31, 1995, and
the three months ended March 31, 1996. Each of the Programs' records are
maintained in accordance with Generally Accepted Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Medical 1991 1992 $48,364 $0 $0 $0 $0
Medical 1992 1992 $422,800 $406,812 $180,617 ($226,195) ($21,855)
Manufacturing & Production 1992 1992 $922,806 $0 $0 $0 $0
Telecommunications 1991 1992 $2,965 $3,153 $0 ($3,153) $0
Telecommunications 1992 1992 $9,287 $2,960 $19,223 $16,262 $9,564
Video Production 1992 1992 $66,253 $0 $0 $0 $0
Medical 1991 1993 $1,473,719 $767,962 $767,962 $0 ($367,414)
Manufacturing & Production 1991 1993 $729,750 $554,748 $690,006 $135,258 $230,288
Restaurant 1991 1993 $10,967 $9,300 $12,098 $2,798 $5,185
Computers 1992 1993 $804,823 $52,481 $51,141 ($1,340) ($28,781)
Construction 1992 1993 $4,788 $1,071 $1,076 $5 ($2,902)
Copiers 1992 1993 $3,464 $1,071 $1,072 $1 ($1,699)
Furniture 1992 1993 $38,333 $847 $4,245 $3,398 ($26,422)
Manufacturing & Production 1992 1993 $1,659,018 $235,971 $239,336 $3,365 ($108,394)
Material Handling 1992 1993 $4,261 $1,826 $1,826 $0 ($1,617)
Medical 1992 1993 $1,053,825 $421,329 $499,671 $78,342 ($312,299)
Office Equipment 1992 1993 $7,692 $968 $2,919 $1,951 ($3,263)
Sanitation 1992 1993 $9,167 $1,457 $1,457 $0 ($6,364)
Telecommunications 1992 1993 $210,033 $97,163 $97,355 $192 ($118,167)
Medical 1993 1993 $190,018 $27,839 $31,758 $3,919 ($15,146)
Computers 1991 1994 $5,918,285 $1,988,610 $1,988,610 $0 $364,917
Medical 1991 1994 $4,337,672 $1,324,650 $1,325,089 $440 $275,632
Manufacturing & Production 1991 1994 $564,133 $135,237 $139,295 $4,058 ($4,466)
Mining 1991 1994 $6,882,703 $1,911,959 $1,911,959 $0 ($335,688)
Telecommunications 1991 1994 $4,457 $0 $207 $207 $0
Agriculture 1992 1994 $14,661 $308 $392 $84 ($5,218)
Automotive 1992 1994 $2,180 $596 $596 $0 ($752)
Computers 1992 1994 $1,742,271 $515,871 $517,638 $1,767 ($202,085)
Construction 1992 1994 $6,320 $1,583 $1,511 ($72) ($575)
Copiers 1992 1994 $27,272 $3,088 $3,088 $0 ($6,206)
Environmental 1992 1994 $18,502 $3,377 $3,334 ($43) ($8,169)
Fixtures 1992 1994 $30,123 $4,000 $4,966 $966 $0
Furniture 1992 1994 $128,339 $33,457 $34,909 $1,452 ($45,840)
Material Handling 1992 1994 $1,292,595 $1,131,118 $1,129,165 ($1,953) ($7,118)
Medical 1992 1994 $2,243,134 $607,899 $713,599 $105,700 ($627,651)
Manufacturing & Production 1992 1994 $160,816 $85,334 $89,861 $4,527 ($30,668)
Office Equipment 1992 1994 $15,083 $3,869 $3,866 ($3) ($5,979)
Photography 1992 1994 $3,696 $747 $747 $0 ($1,651)
Printing 1992 1994 $12,680 $728 $728 $0 ($2,409)
Restaurant 1992 1994 $85,349 $4,717 $3,740 ($977) ($7,665)
Retail 1992 1994 $14,260 $1,686 $1,686 $0 ($3,106)
Sanitation 1992 1994 $2,333 $707 $707 $0 $0
Telecommunications 1992 1994 $10,655 $3,409 $3,569 $160 ($3,119)
Transportation 1992 1994 $2,452 $716 $442 ($274) ($1,046)
Video Production 1992 1994 $6,320 $2,055 $1,755 ($301) ($2,283)
Medical 1993 1994 $99,286 $21,595 $21,772 $178 $0
Restaurant 1994 1994 $287,433 $276,973 $296,218 $19,245 $0
Computers 1991 1995 $54,716 $6,105 $8,769 $2,664 $66,761
Fixtures 1991 1995 $20,592 $6,858 $466 ($6,391) ($5,577)
Furniture 1991 1995 $671,313 $182,750 $320,524 $137,774 ($6,770)
Medical 1991 1995 $4,238,594 $737,052 $700,553 $17,535 ($71,628)
Manufacturing & Production 1991 1995 $27,177 $1,358 $0 ($1,358) ($1,358)
Retail 1991 1995 $130,096 $31,986 $65,301 $33,315 ($1,749)
Sanitation 1991 1995 $74,519 $8,525 $40,968 $32,443 ($3,429)
Agriculture 1992 1995 $61,210 $12,058 $12,959 $1,475 ($15,540)
Audio 1992 1995 $15,467 $2,721 $0 ($1,964) ($1,964)
Automotive 1992 1995 $21,561 $11,527 ($0) ($1,840) ($1,840)
Computers 1992 1995 $212,151 $24,123 $20,948 ($2,754) ($21,058)
Construction 1992 1995 $39,933 $7,207 $6,398 $0 $38
Fixtures 1992 1995 $18,898 $2,668 $2,668 $0 ($432)
Furniture 1992 1995 $12,485 $1,209 $0 ($1,209) ($1,209)
Material Handling 1992 1995 $2,697,355 $3,586,072 $3,969,642 $1,139,585 ($724,447)
Medical 1992 1995 $3,348,398 $714,943 $494,343 ($220,601) ($1,322,760)
Manufacturing & Production 1992 1995 $1,101,940 $268,754 $269,476 $4,782 ($67,950)
Office Equipment 1992 1995 $2,469 $0 $198 $198 $0
Restaurant 1992 1995 $21,586 $3,710 $3,732 $22 $0
Retail 1992 1995 $160,369 $29,643 $26,957 $1,227 ($751)
Sanitation 1992 1995 $6,460 $1,545 $1,497 ($48) $0
Telecommunications 1992 1995 $224,337 $37,338 $70,923 $33,585 ($718)
Video Production 1992 1995 $95,387 $25,897 $30,829 $5,442 ($428)
Medical 1993 1995 $426,311 $0 $0 $0 $0
Material Handling 1993 1995 $26,836 $19,079 $0 ($19,079) ($19,078)
Agriculture 1994 1995 $16,304 $9,913 $10,262 $348 $0
Computers 1994 1995 $16,175 $15,485 $0 ($15,485) ($15,485)
Medical 1994 1995 $30,222 $5,772 $8,996 $3,225 $0
Manufacturing & Production 1994 1995 $17,817 $14,606 $15,678 $1,072 $0
Restaurant 1994 1995 $312,000 $247,116 $271,401 $24,285 $0
Medical 1995 1995 $10,146 $1,999 $2,000 $1 $0
Fixtures 1991 1996 $25,308 $1,210 $3,244 $2,034 (4)
Computers 1992 1996 $25,629 $3,296 $0 ($3,296) (4)
Construction 1992 1996 $15,340 $2,615 $2,615 $0 (4)
Copier 1992 1996 $2,228 $0 $0 $0 (4)
Medical 1992 1996 $457,006 $59,596 $60,361 $765 (4)
Manufacturing & Production 1992 1996 $805,638 $3,685 $1,655 ($2,030) (4)
Telecommunications 1992 1996 $400,523 $44,812 $157,751 $112,939 (4)
Fixtures 1994 1996 $12,057 $0 $781 $781 (4)
Furniture 1994 1996 $27,035 $23,539 $26,106 $2,567 (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., Series E for the three ye ended December 31, 1995, and
the three months ended March 31, 1996. Each of the Programs' records are
maintained in accordance with Generally Accepted Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Automotive 1992 1993 $78,708 $20,578 $21,261 $683 ($1,297)
Computers 1992 1993 $215,949 $106,608 $109,268 $2,660 $2,490
Construction 1992 1993 $19,166 $19,167 $19,758 $591 $2,748
Copiers 1992 1993 $20,119 $15,801 $16,186 $385 $2,162
Fixture 1992 1993 $34,015 $9,860 $11,228 $1,368 ($3,366)
Furniture 1992 1993 $35,126 $19,425 $19,425 $0 $0
Material Handling 1992 1993 $10,885 $6,689 $6,261 ($428) ($3,371)
Medical 1992 1993 $64,989 $4,223 $7,894 $3,671 ($22,951)
Manufacturing & Production 1992 1993 $214,901 $175,434 $180,435 $5,001 $7,349
Office Equipment 1992 1993 $56,763 $43,220 $45,905 $2,685 $2,491
Photography 1992 1993 $26,342 $21,122 $21,730 $608 ($2,163)
Printing 1992 1993 $5,275 $3,153 $3,153 $0 ($1,923)
Restaurant 1992 1993 $409,680 $272,826 $287,325 $14,499 $12,819
Sanitation 1992 1993 $16,288 $15,857 $16,556 $699 $2,098
Telecommunications 1992 1993 $61,395 $61,417 $62,977 $1,560 $8,481
Video Production 1992 1993 $17,990 $14,524 $15,710 $1,186 $1,867
Miscellaneous 1993 1993 $120,994 $77,602 $83,587 $5,985 $0
Agriculture 1993 1993 $116,298 $66,730 $83,866 $17,136 ($13,187)
Automotive 1993 1993 $271,300 $116,885 $117,399 $514 $0
Computers 1993 1993 $195,697 $48,654 $56,378 $7,724 $0
Construction 1993 1993 $38,791 $21,486 $25,834 $4,348 ($5,210)
Copiers 1993 1993 $80,019 $9,877 $13,724 $3,847 $0
Environmental 1993 1993 $14,991 $0 $0 $0 $0
Fixture 1993 1993 $111,120 $93,400 $109,342 $15,942 $0
Furniture 1993 1993 $25,242 $19,885 $18,203 ($1,682) $0
Material Handling 1993 1993 $176,632 $155,737 $183,099 $27,362 ($1,077)
Medical 1993 1993 $71,355 $57,939 $61,890 $3,951 $3,111
Manufacturing & Production 1993 1993 $26,412 $13,095 $15,580 $2,485 $0
Office Equipment 1993 1993 $14,703 $6,487 $7,422 $935 $0
Printing 1993 1993 $60,010 $12,274 $14,636 $2,362 $1,433
Restaurant 1993 1993 $63,908 $27,607 $31,424 $3,817 $0
Retail 1993 1993 $6,477 $1 $0 ($1) $0
Sanitation 1993 1993 $2,107 $82 $88 $6 ($1,893)
Telecommunications 1993 1993 $6,178,527 $5,799,650 $7,119,747 $1,320,097 $1,417,499
Transportation 1993 1993 $324,407 $260,480 $292,416 $31,936 $34,565
Video Production 1993 1993 $20,683 $20,683 $25,715 $5,032 $0
Agriculture 1992 1994 $49,841 $10,474 $10,474 $0 ($6,108)
Audio 1992 1994 $32,788 $7,383 $7,782 $399 $0
Automotive 1992 1994 $126,970 $11,657 $12,272 $615 $0
Computers 1992 1994 $198,376 $8,722 $8,549 ($172) ($14,333)
Construction 1992 1994 $54,843 $17,730 $17,730 $0 ($4,433)
Copiers 1992 1994 $15,376 $1,775 $1,775 $0 ($1,079)
Environmental 1992 1994 $31,995 $0 $0 $0 $0
Fixture 1992 1994 $20,674 $164 $1,064 $900 ($9,736)
Furniture 1992 1994 $61,625 $5,370 $5,636 $266 $0
Manufacturing & Production 1992 1994 $101,122 $13,969 $14,432 $463 ($21,582)
Material Handling 1992 1994 $2,734,334 $2,174,030 $2,212,133 $38,103 $0
Medical 1992 1994 $314,509 $34,726 $59,635 $24,909 ($113,150)
Office Equipment 1992 1994 $2,540 $118 $118 $0 $0
Photography 1992 1994 $47,692 $6,973 $6,973 $0 ($16,375)
Printing 1992 1994 $48,147 $36,679 $36,679 $0 $16,360
Restaurant 1992 1994 $474,258 $92,399 $94,557 $2,158 ($10,127)
Retail 1992 1994 $8,087 $878 $274 ($604) ($2,014)
Sanitation 1992 1994 $103,149 $38,401 $39,685 $1,284 ($358)
Telecommunications 1992 1994 $66,815 $26,524 $27,991 $1,468 ($1,110)
Video Production 1992 1994 $12,663 $1,074 $1,074 $0 ($663)
Agriculture 1993 1994 $43,840 $19,762 $20,825 $1,063 $0
Automotive 1993 1994 $786,378 $155,107 $163,558 $8,450 ($634)
Computers 1993 1994 $771,516 $130,886 $181,111 $50,226 ($3,077)
Construction 1993 1994 $274,175 $30,496 $38,465 $7,969 ($55,502)
Copiers 1993 1994 $82,454 $24,366 $26,172 $1,806 $0
Environmental 1993 1994 $49,112 $73 $93 $20 $0
Fixture 1993 1994 $77,419 $302 $303 $1 $0
Furniture 1993 1994 $280,317 $46,066 $50,280 $4,214 $0
Material Handling 1993 1994 $192,609 $37,782 $45,441 $7,659 ($11,521)
Medical 1993 1994 $77,005 $27,502 $29,111 $1,609 $0
Manufacturing & Production 1993 1994 $173,000 $18,644 $22,629 $3,986 ($2,632)
Miscellaneous 1993 1994 $10,796 $2,469 $2,469 $0 $0
Office Equipment 1993 1994 $43,986 $4,723 $5,910 $1,187 ($975)
Photography 1993 1994 $4,929 $292 $293 $1 $0
Printing 1993 1994 $77,122 $8,529 $8,530 $1 ($10,269)
Restaurant 1993 1994 $626,431 $287,444 $335,720 $48,276 ($340)
Retail 1993 1994 $103,594 $3,848 $4,856 $1,008 ($412)
Telecommunications 1993 1994 $3,820,321 $919,560 $1,253,601 $334,040 ($102,561)
Transportation 1993 1994 $287,586 $42,283 $51,224 $8,941 $0
Computers 1994 1994 $534,310 ($4,957) $0 $4,957 $0
Telecommunications 1994 1994 $1,787 $74 $95 $22 $0
Audio 1992 1995 $67,722 $9,191 $8,143 ($1,048) ($8,721)
Automotive 1992 1995 $245,537 $55,390 $30,876 ($24,514) ($62,029)
Computers 1992 1995 $670,255 $143,868 $69,402 ($74,466) ($139,420)
Construction 1992 1995 $91,856 $12,337 $11,839 ($498) ($12,399)
Copiers 1992 1995 $68,193 $17,372 $8,598 ($8,775) ($14,211)
Fixtures 1992 1995 $191,523 $41,188 $15,314 ($25,874) ($49,304)
Furniture 1992 1995 $321,142 $35,203 $22,974 ($12,230) ($28,301)
Material Handling 1992 1995 $34,982 $10,003 $10,666 $662 ($1,678)
Medical 1992 1995 $89,384 $3,814 $4,681 $867 ($11,772)
Manufacturing & Production 1992 1995 $315,323 $29,833 $26,162 ($3,671) ($53,473)
Office Equipment 1992 1995 $33,105 $17,344 $13,159 ($4,185) ($4,487)
Photography 1992 1995 $84,703 $13,769 $11,838 ($1,931) ($17,573)
Printing 1992 1995 $73,624 $14,780 $12,386 ($2,394) ($19,388)
Restaurant 1992 1995 $712,329 $90,616 $75,578 ($15,038) ($124,260)
Retail 1992 1995 $32,891 $10,703 $8,863 ($1,840) ($2,270)
Sanitation 1992 1995 $38,998 $767 $174 ($594) ($5,619)
Telecommunications 1992 1995 $79,770 $15,518 $12,517 ($3,001) ($14,459)
Video Production 1992 1995 $49,130 $2,010 $3,312 $1,302 ($6,072)
Agriculture 1993 1995 $30,211 $1 $0 ($1) $0
Automotive 1993 1995 $4,282,836 $349,513 $264,887 ($84,626) ($136,043)
Computers 1993 1995 $2,229,596 $188,186 $300,197 $112,011 ($168,156)
Construction 1993 1995 $156,808 $13,060 $13,838 $778 ($4,890)
Copiers 1993 1995 $182,402 $34,023 $41,091 $7,068 ($10,107)
Environmental 1993 1995 $72,193 $5,272 $10,169 $4,897 ($6,179)
Fixtures 1993 1995 $46,183 $4,458 $11,658 $7,200 $0
Furniture 1993 1995 $188,312 $22,536 $30,392 $7,856 ($2,545)
Material Handling 1993 1995 $215,464 $49,495 $47,550 ($1,945) ($8,613)
Medical 1993 1995 $321,168 $95,551 $62,632 ($32,918) ($11,098)
Manufacturing & Production 1993 1995 $214,562 $27,462 $18,400 ($9,062) ($10,793)
Office Equipment 1993 1995 $139,093 $6,376 $8,860 $2,485 ($240)
Printing 1993 1995 $86,115 $4,822 $7,457 $2,635 ($13,293)
Restaurant 1993 1995 $409,084 $48,198 $13,030 ($35,168) ($34,988)
Retail 1993 1995 $1,611,420 $1,042,917 $1,159,756 $116,839 $229,970
Telecommunications 1993 1995 $4,286,056 $743,382 $725,892 ($17,490) ($498,634)
Transportation 1993 1995 $492,417 $107,360 $20,019 ($87,341) ($41,603)
Video Production 1993 1995 $44,694 $834 $2,186 $1,353 ($38)
Computers 1994 1995 $87,124 $6,538 $6,681 $143 ($23,642)
Manufacturing & Production 1994 1995 $4,274,389 $3,282,651 $3,920,390 $637,739 $197,449
Restaurant 1994 1995 $328,731 $249,347 $279,689 $30,342 ($13,335)
Telecommunications 1994 1995 $216,656 $23,994 $131,743 $107,749 ($34,910)
Computers 1995 1995 $36,958 $33,442 $33,448 $6 $0
Copiers 1995 1995 $7,609 $6,148 $6,493 $346 $0
Medical 1995 1995 $2,583 $1,128 $2,188 $1,059 $0
Manufacturing & Production 1995 1995 $6,457 $2,849 $2,850 $1 $0
Automotive 1992 1996 $136,970 $5,109 $6,592 $1,483 (4)
Computers 1992 1996 $213,332 $15,269 $10,924 ($4,345) (4)
Construction 1992 1996 $7,178 $743 $795 $52 (4)
Copiers 1992 1996 $25,820 ($540) $0 $540 (4)
Environmental 1992 1996 $17,833 $935 ($0) ($935) (4)
Furniture 1992 1996 $21,455 ($1,155) $0 $1,155 (4)
Medical 1992 1996 $68,461 $5,465 $4,365 ($1,100) (4)
Manufacturing & Production 1992 1996 $173,552 $31,714 $18,893 ($12,821) (4)
Mining 1992 1996 $578,501 $183,408 $198,386 $14,978 (4)
Office Equipment 1992 1996 $16,072 $569 $689 $120 (4)
Photography 1992 1996 $64,548 $7,252 $3,777 ($3,475) (4)
Printing 1992 1996 $9,839 $167 $500 $333 (4)
Restaurant 1992 1996 $243,931 $6,327 $8,771 $2,444 (4)
Retail 1992 1996 $48,320 $2,510 $4,241 $1,731 (4)
Sanitation 1992 1996 $31,460 ($0) $0 $0 (4)
Telecommunications 1992 1996 $31,124 $2,274 $2,122 ($152) (4)
Video Production 1992 1996 $94,418 $3,748 $5,655 $1,907 (4)
Automotive 1993 1996 $2,548,593 $61,462 $61,800 $338 (4)
Computers 1993 1996 $1,390,198 $186,527 $228,740 $42,212 (4)
Copiers 1993 1996 $25,428 $2 $0 ($2) (4)
Environmental 1993 1996 $1,525 $83 $271 $188 (4)
Fixtures 1993 1996 $34,635 $0 $1,315 $1,315 (4)
Furniture 1993 1996 $41,638 $6,244 $8,600 $2,356 (4)
Material Handling 1993 1996 $1,422 $0 $0 $0 (4)
Medical 1993 1996 $19,878 $0 $10,403 $10,403 (4)
Manufacturing & Production 1993 1996 $148,829 $12,274 $19,665 $7,392 (4)
Miscellaneous 1993 1996 $35,855 $0 $3,057 $3,057 (4)
Office Equipment 1993 1996 $272,464 $2,739 $12,461 $9,722 (4)
Printing 1993 1996 $20,076 $3,071 $11,309 $8,239 (4)
Restaurant 1993 1996 $51,922 $539 $6,000 $5,461 (4)
Retail 1993 1996 $146,548 $49,389 $48,471 ($919) (4)
Telecommunications 1993 1996 $863,053 $120,324 $179,930 $59,606 (4)
Transportation 1993 1996 $15,664 $1 $0 ($1) (4)
Computers 1994 1996 $17,498 $2,487 $3,139 $652 (4)
Manufacturing & Production 1994 1996 $72,474 $28,609 $12,219 ($16,390) (4)
Computers 1995 1996 $13,336 $0 $1 $1 (4)
Fixtures 1995 1996 $32,795 $9,917 $7,530 ($2,388) (4)
Medical 1995 1996 $21,684 $20,837 $21,195 $359 (4)
Manufacturing & Production 1995 1996 $43,800 $19,908 $20,523 $615 (4)
Retail 1995 1996 $13,636 $5,519 $5,904 $385 (4)
Telecommunications 1995 1996 $4,206 $0 $0 $0 (4)
Video Production 1995 1996 $8,608 $4,515 $4,832 $317 (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
TABLE V
Sales or Dispositions of equipment - Prior Public Programs
(unaudited)
The following table summarizes the sales or dispositions of equipment for ICON
Cash Flow Partners, L.P., Six for the year ended December 31, 1995, and the
three months ended March 31, 1996. Each of the Programs' records are maintained
in accordance with Generally Accepted Accounting Principles ("GAAP").
<TABLE>
Total Federal
Type of Year of Year of Acquisition Net Book Net GAAP Taxable
Equipment Acquisition Disposition Cost (1) Value (2) Proceeds (3) Gain (Loss) Gain (Loss)
<S> <C> <C> <C> <C> <C> <C> <C>
Restaurant 1994 1995 $326,412 $274,229 $292,998 $18,770 ($8,364)
Computers 1995 1995 $40,355 $36,171 $4,310 ($31,861) $0
Manufacturing & Production 1995 1995 $107,995 $70,846 $13,253 ($57,593) ($6,821)
Printing 1995 1995 $1,820,770 $1,218,354 $847,650 ($370,703) ($189,624)
Telecommunications 1994 1996 $24,655 $18,456 $20,460 $2,004 (4)
Computers 1995 1996 $37,303 $6,384 $5,552 ($832) (4)
Manufacturing & Production 1995 1996 $184,175 $129,568 $108,706 ($20,862) (4)
Printing 1995 1996 $515,243 $315,981 $160,739 ($155,242) (4)
</TABLE>
(1) Acquisition cost includes Acquisition Fee.
(2) Represents the total acquisition cost less accumulated depreciation and
other reserves, calculated on a GAAP Basis.
(3) Cash received and/or principal amount of debt reduction less any direct
selling cost.
(4) Federal Taxable Gain (Loss) information not yet available for 1996.
<PAGE>
EXHIBIT C
SUBSCRIPTION DOCUMENTS
<PAGE>
ICON CASH FLOW PARTNERS L.P. SEVEN
INSTRUCTIONS FOR COMPLETING THE SUBSCRIPTION AGREEMENT
INSTRUCTIONS: To purchase or acquire ownership interests in ICON Cash Flow
Partners L.P. Seven, please complete and sign the Subscription Agreement. Please
print or type your responses clearly in the spaces provided.
1. INVESTED AMOUNT: Units Purchased. Indicate the total dollar amount and
the number of Units you wish to purchase in ICON Cash Flow Partners L.P. Seven.
Each whole Unit has a cost of $100.00 and each 1/10,000th of a Unit costs $.01.
(Example: For an investment of $2,723.23, the number of Units will equal 27.2325
Units.) The Partnership has a minimum Initial Investment requirement of $2,500
except for IRAs, SEPs and Qualified Pension, Profit-Sharing or Stock Option
Plans including Keogh Plans for which the minimum Investment is $1,000. (Please
see the "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION
PROCEDURES" Section in the Prospectus for details and restrictions.)
2. REGISTRATION INFORMATION:
A. Subscriber or Investor Information. Fill in the name, address and tax
identification number for each subscriber. (If necessary, attach an additional
sheet and have the additional subscribers sign such sheet.)
B. Trustee or Custodian Information. Please have the Trustee(s) or
Custodian(s) of your fiduciary account complete Section 2B, if the investment is
to be held in a trustee or custodial account (such as your IRA, SEP or Qualified
Plan), or in another fiduciary account. (Note: Section 2A must be completely
filled out for subscriber information address.)
C. Citizenship. Please indicate if you are a U.S. Citizen or U.S. Resident
Alien or the citizen of a country other than the United States. If so, please
specify the country of which you are a citizen.
3. FORM OF OWNERSHIP: (Mark only one box. Information as to signatures that are
required, depending on the type of ownership, is provided below.)
INDIVIDUAL OWNERSHIP-investor's signature required.
HUSBAND AND WIFE, AS COMMUNITY PROPERTY-both parties' signature required.
JOINT TENANTS-signatures of all parties are required.
TENANTS IN COMMON-signatures of all parties are required.
PARTNERSHIP-signature of an authorized partner required.
CORPORATION-signature of an authorized officer required.
IRA, SEP, KEOGH-signature of trustee or custodian required.
CUSTODIAL ACCOUNT-signature of custodian required.
TRUST-signature of trustee required.
4. DISTRIBUTIONS: For Non-Custodial Accounts, if you want your distribution
checks to be mailed to an address other than as shown in Section 2A, please
complete this section.
5. SIGNATURES: Please complete the Investor Data Sheet of the Subscription
Agreement (Page C-3) and read the Investor Suitability Requirements and
Representations on the reverse side of the Data Sheet (Page C-4). After you have
done so, please sign and date the Subscription Agreement. (Please refer to
Section 3 on Page C-1 for information as to who should sign.)
6. BROKER/DEALER INFORMATION: The Registered Representative must complete this
section of the Subscription Agreement. An authorized Branch Manager or
Registered Principal of the Broker/Dealer firm must sign the Subscription
Agreement. Orders cannot be accepted without this Broker/Dealer authorization.
7. INVESTMENT CHECKS & SUBSCRIPTIONS: Until you are notified that the escrow
condition of the sale of 12,000 Units has been completed, please make checks
payable to "The Bank of New York (N.J.) ICON L.P. Seven Escrow Account."
Thereafter, checks should be made payable to "ICON Cash Flow Partners L.P.
Seven" Your check should be in the amount of your subscription as shown in
Section 1 of the Subscription Agreement. Mail your completed white and pink
copies of the Subscription Agreement (Page C-3) together with your subscription
check, in the amount of the subscription price (as shown in Section 1 on Page
C-3) to: ICON Securities Corp., 600 Mamaroneck Avenue, Harrison, New York 10528.
An original executed pink copy of this Subscription Agreement will be returned
to you for your files.
NO SUBSCRIPTION AGREEMENT WILL BE PROCESSED UNLESS FULLY COMPLETED AND
ACCOMPANIED BY PAYMENT IN FULL. ANY SUBSCRIPTION PAYMENT WHICH IS DISHONORED
WILL CAUSE THE SUBSCRIPTION AND ANY CERTIFICATE FOR UNITS TO BE VOID AS OF THE
SUBSCRIPTION DATE AND SHALL OBLIGATE THE SUBSCRIBER TO PAY ALL COSTS AND CHARGES
ASSOCIATED THEREWITH. PLEASE SEE PAGE C-2 FOR GENERAL INSTRUCTIONS AND PAGE C-4
FOR INVESTOR SUITABILITY REQUIREMENTS AND REPRESENTATIONS.
If you have any questions about completing this Subscription Agreement, please
call ICON Securities Corp., Subscription Processing Desk, at (800) 343-3736.
White-ICON copy, Yellow-Broker/Dealer copy, Pink-Investor copy
C-1
<PAGE>
GENERAL INFORMATION
1. Each Subscriber is hereby advised that: (a) no offer to sell Units may
be made except by means of the Prospectus and, consequently; (b) YOU SHOULD NOT
RELY UPON ANY ORAL STATEMENTS BY ANY PERSON, OR UPON ANY WRITTEN INFORMATION
OTHER THAN AS SPECIFICALLY SET FORTH IN THE PROSPECTUS AND SUPPLEMENTS THERETO
OR IN PROMOTIONAL BROCHURES CLEARLY MARKED AS BEING PREPARED AND AUTHORIZED BY
THE GENERAL PARTNER, ICON CAPITAL CORP., OR BY THE DEALER-MANAGER, ICON
SECURITIES CORP., FOR USE IN CONNECTION WITH OFFERING OF UNITS TO THE GENERAL
PUBLIC BY MEANS OF THE PROSPECTUS; (c) your investment in Units of the
Partnership involves certain risks including, without limitation, the matters
set forth in the Prospectus in the "Risk Factors", "Conflicts of Interest",
"Management" and "Income Tax Considerations" Sections of the Prospectus; and (d)
your representations in Section 5 on Page C-3 (as evidenced by signing and
initialling therein) and in Paragraphs 3 - 5 on Page C-4 (as evidenced by your
initialling of clause (3) of Section 5 on Page C-3) do not constitute a waiver
of any of your rights under the Delaware Limited Partnership Act and applicable
federal and state securities laws.
2. Each Subscriber is further advised that: (a) the Units are subject to
substantial restrictions on transferability; (b) there will be no public market
for the Units; and (c) it may not be possible for you to readily liquidate his
investment in the Partnership, if at all, even in the event of an emergency. Any
transfer of Units is subject to the General Partner's approval and must comply
with the terms of Section 10 of the Partnership Agreement. In particular, each
Subscriber or transferee must satisfy either (a) the general minimum investment
and investor suitability standards established by the Partnership or (b) if more
stringent, the minimum investment and investor suitability standards of the
State where such Subscriber or transferee resides. Both the Partnership's
general requirements and more stringent standards imposed by certain States are
described in the "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS;
SUBSCRIPTION PROCEDURES" Section of the Prospectus. Finally, the State of
California imposes requirements on transfers to residents of California, as
summarized in the following legend, which are in addition to the provisions of
Section 10 of the Partnership Agreement:
"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR
ANY INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT
THE PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."
C-2
<PAGE>
ICON CASH FLOW PARTNERS L.P. SEVEN
SUBSCRIPTION AGREEMENT A Delaware Limited Partnership
1. INVESTMENT: (Check Appropriate Boxes)
A. UNITS PURCHASED. Dollar Amount____________ No. of Units ____________
B. TYPE OF INVESTMENT.____Initial Investment ____Additional Investment
2. REGISTRATION INFORMATION: (Please type or print clearly)
A. SUBSCRIBER INFORMATION. (Please specify Mr. or Ms.)
Subscriber's
Name(s):______________________________________________________________________
Subscriber Tax I.D. No. or Social Security No._____________________
Subscriber's Residential Address:
Street______________________________________________________________________
City/Town _________________________ State__________ Zip Code__________
Telephone No.(Day)______________________________________
B. TRUSTEE OR CUSTODIAL INFORMATION. (of IRAs, Qualified Plans, other
Trustees,etc., if applicable)
Trustee's or Custodian's Name(s):___________________Trustee Tax I.D.No:_______
FBO:_______________________________________ Acct. No:_______________________
Date Trust or Account Established:____________
Year to which Subscription applicable: 19_____
Trustee's or Custodian's Address:
Street______________________________________________________________________
City/Town _________________________ State_____________ Zip Code _______
Contact Name __________________________ Phone_________________________________
C. CITIZENSHIP. (Check One) __ U.S.Citizen __ U.S.Resident Alien Non-Resident
(Specify Country):
D. FORM OF OWNERSHIP: (Mark only one box)
___ Individual Ownership ___ Partnership
___ Husband and Wife, as Community Property ___ Corporation
___ Joint Tenants
___ Tenants in Common
___ Custodial Account
FIDUCIARY ACCOUNTS (All Sections in 2B must be filled out)
___ IRA, SEP, Keogh ___ Trust
___ Custodial Account
4. DISTRIBUTION ALTERNATIVES:(COMPLETE ONLY IF PAYEE IS DIFFERENT THAN SECTION
2A OR 2B ABOVE)
Check if:
__ You wish Distributions of the Partnership to be reinvested in additional
Units during the Offering Period.
__ You wish Direct Deposit of Distributions or that they be sent to more than
one Payee. Please complete the Special Payment Instruction Form.
__ You wish Distributions to be sent to the Payee and Address listed below.
Please complete the following information:
Payee Name:_________________________________________________________________
Branch: _________________________________ Account Number:_________
Street Address:_____________________________________________________________
City/Town _________________________ State__________ Zip Code ___________
5. SIGNATURES AND INITIALS: The undersigned confirms that he/she (1) has
received a copy of the Prospectus (Initial____); (2) has read Page C-2 hereof
(Initial____) (except residents of Iowa, Maine, Massachusetts, Minnesota and
Missouri); and (3) makes the representations contained on Page C-4 hereof
(Initial____). The undersigned (4) acknowledges that an investment in Units is
not liquid (Initial____); (5) declares that, to the best of his/her knowledge,
all information in Sections 1-4 of this Page C-3 is accurate and may be relied
upon by the General Partner (Initial____); and (6) appoints the General Partner
as his/her attorney-in-fact as described in Paragraph 2 on Page C-4
(Initial____).
Sign X_______________________________ Sign X________________________________
Here Subscriber's Signature Date Here Authorized Signature Date
Custodian/Trustee/Officer/Partner)
X_______________________________ X________________________________
Subscriber's Signature Date Print Name
Custodian/Trustee/Officer/Partner
6. BROKER/DEALER INFORMATION: The Seller Dealer must sign below to complete the
order and, by doing so, thereby represents that (1) both it and its registered
representative which solicited the subscription (the "Sales Representative"):
(a) is duly licensed by, and in good standing with, the NASD and may lawfully
offer Units in the State(s) listed in Section 2.A, above; (b) has reasonable
grounds to believe, based on information obtained from the Subscriber concerning
his /her investment objectives, other investments, financial situation and needs
and other information known by the Selling Dealer or the Sales Representative,
that the Investment described in Section 1, above is suitable in light of
Subscriber's income, net worth and other characteristics; and (c) the Sales
Representative has (i) informed Subscriber as to the limited liquidity of the
Units and (ii) delivered a current copy of the Prospectus to the Subscriber in
connection with the offering of Units.
Brokerage Firm
Name______________________Supervisor____________Tele.Number____________
Sales Representative's
Name___________________________ CRD Number _________Tele.Number__________
Sales Representative's Street Address_______________________________________
City/Town______________________ State_____________ Zip Code_______________
Authorized signature (Branch Manager or Registered Principal).
Order cannot be completed without signature.
X____________________________________________________________
7. INVESTMENT CHECKS & SUBSCRIPTIONS: Mail the completed Subscription Agreement
with a check payable as indicated in the instructions, to: ICON Securities
Corp., 600 Mamaroneck Avenue, Harrison, New York 10528.
ACCEPTANCE BY GENERAL PARTNER ICON Capital Corp., General Partner
ICON CASH FLOW PARTNERS L.P. SEVEN By:_______________________________
A Delaware Limited Partnership Authorized Signature Date
C-3
<PAGE>
INVESTOR SUBSCRIPTION; APPOINTMENT OF ATTORNEY-IN-FACT; AND REPRESENTATIONS
1. Subscription for Units. Each subscriber (a "Subscriber"), by signing
his/her name in Section 5 on Page C-3, thereby (a) subscribes for the number and
dollar amount of limited partnership units ("Units") in ICON Cash Flow Partners
L.P. Seven, a Delaware limited partnership (the "Partnership"), as set forth in
Section 1.A on Page C-3; (b) agrees to become a Limited Partner of the
Partnership upon acceptance of his/her subscription by the General Partner of
the Partnership, ICON Capital Corp. (the General Partner"); and (c) adopts, and
agrees to be bound by each and every provision of, the Partnership Agreement and
this Subscription Agreement (except as provided to the contrary herein or
therein for residents of certain States). Subscriber hereby subscribe for the
number of Units (whole and fractional), and has tendered good funds herewith in
full payment of the "Dollar Amount" therefor (computed at $100 fer each
Unit/$.01 for each 1/100th of a Unit shown in Section 1.A on Page C-3, subject
to (i) any volume or other discounts (as described in the "Plan of Distribution"
Section. of the Prospectus) and to the minimum investment requirements (as
described in the "INVESTOR SUITABILITY AND MINIMUM INVESTMENT REQUIREMENTS;
SUBSCRIPTION PROCEDURES" Section of the Prospectus).
2. Appointment of the General Partner as Subscriber's Attorney-in-Fact. By
signing his/her name in Section 5 on Page C-3 (and effective upon admission to
the Partnership), each Subscriber thereby makes, constitutes and appoints the
General Partner, each authorized officer of the General Partner and each Person
who shall thereafter become a Substitute General Partner during the term of the
Partnership, with full power of substitution, as the true and lawful
attorney-in-fact of, in the name, place and stead of, such Limited Partner, to
the full extent, and for the purposes and duration, set forth in Section 15 of
the Partnership Agreement (all of the terms of which are hereby incorporated
herein by this reference). Such purposes include, without limitation, the power
to make, execute, sign, acknowledge, affirm, deliver, record and file any (a)
document or instrument which the General Partner deems necessary or desirable to
carry out fully the provisions of the Partnership Agreement (in the manner and
for the purposes provided in Section 15.1 of the Partnership Agreement) and (b)
amendment to the Partnership Agreement and to the Certificate of Limited
Partnership of the Partnership (in the manner and for the purposes provided in
Section 15.2 of the Partnership Agreement, including, without limitation,
admission of Limited Partners to the Partnership and any application,
certificate, instrument, affidavit or other document required or appropriate in
connection with registration or documentation of the Partnership's Investments).
The foregoing appointment shall not in any way limit the authority of the
General Partner as attorney-in-fact for each Limited Partner of the Partnership
under Section 15 of the Partnership Agreement. The power of attorney hereby
granted is coupled with an interest, is irrevocable and shall survive
Subscriber's death, incapacity, insolvency or dissolution or his/her delivery of
any assignment of all or any portion of his/her Units.
3. General Subscriber Representations. As a condition to Subscriber's being
admitted to the Partnership, Subscriber hereby represents that he/she: (a)
either (i) has annual gross income of $30,000 plus a net worth of $30,000
(exclusive of his/her investment in Units, home, home furnishings and
automobiles) or a net worth of $75,000 (determined in the same manner) or (ii)
meets any higher investor gross income and/or net worth standards applicable to
residents of his/her State, as set forth in the "INVESTOR SUITABILITY AND
MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES" Section of the
Prospectus (except residents of Iowa, Maine, Massachusetts, Minnesota and
Missouri who may not make such representation); (b) if Subscriber is an IRA or a
Qualified Plan, it has been accurately identified as such in Sections 2.A and 3
on Page C-3; (c) has accurately identified himself/herself in Section 2.C on
Page C-3 as either a U.S. Citizen or a non-U.S. Citizen (Note: a Subscriber
which is a corporation, a partnership or trust should review the requirements
for being considered a U.S. Citizen described in the the "INVESTOR SUITABILITY
AND MINIMUM INVESTMENT REQUIREMENTS; SUBSCRIPTION PROCEDURES" Section); and (d)
each subscriber who is purchasing Units for Individual Ownership (as indicated
in Section 3 on Page C-3) is purchasing for his or her own account. If
Subscriber is investing in a fiduciary or representative capacity, such
investment is being made for one or more persons, entities or trusts meeting the
above requirements.
4. Additional Fiduciary and Entity Representations. If the person signing
this Subscription Agreement is doing so on behalf of another person or entity
who is the Subscriber, including, without limitation, a corporation, a
partnership, an IRA, a Qualified Plan, or a trust (other than a Qualified Plan),
such signatory by signing his/her/its name in Section 5 of Page C-3 thereby
represents and warrants that (a) he is duly authorized to (i) execute and
deliver this Subscription Agreement, (ii) make the representations contained
herein on behalf of Subscriber and (iii) bind Subscriber thereby and (b) this
investment is an authorized investment for such Subscriber under applicable
documents and/or agreements (e.g., articles of incorporation or corporate
by-laws or action; partnership agreement; trust indenture; etc.) and applicable
law.
5. Tax Representations. Under the penalties of perjury, by signing his/her
name in Section 5 on Page C-3, each Subscriber thereby certifies that: (a) the
Taxpayer Identification Number or Social Security Number listed in Section 2.A
on Page C-3 is correct; and (b) he/she is not subject to backup withholding
either because the Internal Revenue Service has (i) not notified such Subscriber
that he/she is subject to backup withholding as a result of a failure to report
all interest or dividends or (ii) has notified such Subscriber that he/she is
are no longer subject to backup withholding. (If you have been notified that you
are currently subject to backup withholding, strike the language under clause
(b) of this Paragraph 5 before signing).
UPON SUBSCRIBER'S EXECUTION OF THIS SUBSCRIPTION AGREEMENT AND ACCEPTANCE
THEREOF BY THE GENERAL PARTNER, THIS SUBSCRIPTION AGREEMENT (CONSISTING OF PAGES
C-1 THROUGH C-5) WILL BECOME A PART OF THE PARTNERSHIP AGREEMENT.
C-4
<PAGE>
ICON CASH FLOW PARTNERS L.P. SEVEN
SPECIAL PAYMENT INSTRUCTION FORM
FOR DISTRIBUTIONS TO DIRECT DEPOSIT ACCOUNTS
AND/OR MULTIPLE PAYEES
* * * IMPORTANT * * *
ALL SPLIT DISTRIBUTIONS MUST BE MADE BY DIRECT DEPOSIT ONLY!
PLEASE USE THIS SPECIAL PAYMENT FORM FOR ALL SPLIT DISTRIBUTIONS!
Please use this form only if you would like your cash distributions to be
directly deposited into an account and/or sent to more than one account,
location or payee. A maximum of two (2) choices are allowed. If these
instructions are being delivered in connection with an additional investment in
this Partnership which is being combined with a prior investment, the
designations of account, location and payee(s) must be exactly the same unless
we are advised that you are requesting prior instructions be changed. Original
signatures of all joint investors or custodial authorization are required.
First Payee:
Bank Name___________________________ Bank Address___________________________
Bank ABA #__________________________ Bank Routing No._______________________
Name of Account Holder______________ Account Type___________________________
Account No.______________________
% to be Paid*_______________________ New Instructions: Yes |_|No|_|
Second Payee:
Bank Name___________________________ Bank Address___________________________
Bank ABA #__________________________ Bank Routing No._______________________
Name of Account Holder______________ Account Type___________________________
Account No._______________________
% to be Paid*_______________________ New Instructions: Yes |_|No|_|
* Please note that the total of First Payee and Second Payee (if
applicable) should equal 100% of distribution.
- ----------------------------------- ------------------------------------
Original signature - Original signature -
Subscriber - Limited Partner Subscriber - Limited Partner
or Authorized/Custodial Representative
- ---------------------------------- ------------------------------------
Date Signed Original Signature -
Subscriber - Limited Partner
Please make a copy for your records.
ICON Securities Corp. o 600 Mamaroneck Avenue o Harrison, New York 10528
C-5
<PAGE>
No dealer, salesman or other person has been authorized to give any information
or to make any representations other than those contained in this Prospectus or
in Supplements hereto or in supplemental sales literature issued by the
Partnership and referred to in this Prospectus or in Supplements thereto, and,
if given or made, such information or representations must not be relied upon.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, any securities other than the Units to which it relates or any of
such Units to any person in any jurisdiction in which such offeror solicitation
is unlawful. The delivery of this Prospectus at any time does not imply that the
information contained herein is correct as of any time subsequent to its date.
ICON
CASH FLOW PARTNERS
L.P. SEVEN
A Delaware Limited Partnership
$1,200,000 (Minimum Offering)
12,000 Units of Limited Partnership Interest
$100.00 Per Unit
Minimum Investment 25 Units ($2,500)
(10 Units or $1,000 for IRAs or Qualified Plans)
PROSPECTUS
ICON SECURITIES CORP.
Dealer-Manager
November 9, 1995
ICON Securities Corp.
600 Mamaroneck Avenue
Harrison, New York 10528
(914) 698-0600
UNTIL FEBRUARY 7, 1996 (90 DAYS FROM THE EFFECTIVE DATE OF THE REGISTRATION
STATEMENT FOR THIS OFFERING, AS AMENDED), ALL DEALERS EFFECTING TRANSACTIONS IN
THE UNITS, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits and Financial Statement Schedules.
a) Exhibits. See attached Exhibit Index.
b) Financial Statement Schedules.
See Table VI - Acquisition of Equipment by
the Prior Public Programs.
<PAGE>
<PAGE>
<PAGE>
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Post-Effective Amendment No. 1to the S-1 Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Harrison, State of New York, on this 28thday of
June, 1996.
ICON CASH FLOW PARTNERS L.P. SEVEN
(A Delaware limited partnership)
By: ICON CAPITAL CORP.,
General Partner
Peter D. Beekman
By: _________________________________
Peter D. Beekman
President
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 1to the S-1 Registration Statement has been
signed below by the following persons on behalf of the Registrant and in the
capacities indicated, on this 28thday of June, 1996.
Signatures Title(s)
Peter D. Beekman
__________________________ * President (Principal Executive
Peter D. Beekman Officer) and Director of ICON
Capital Corp., the General Partner
of the Registrant
Peter D. Beekman
__________________________ * Executive Vice President
Charles Duggan (Chief Financial Officer) and
Director of ICON Capital Corp.
Peter D. Beekman
__________________________ * Executive Vice President
Cortes E. DeRussy and Director of ICON Capital Corp.
* Peter D. Beekman by signing his name hereto, does sign this document on behalf
of himself and each of Messrs. Duggan and DeRussy indicated immediately above
pursuant to the power of attorney duly executed by each such persons and filed
with the Securities and Exchange Commission as part of the Registration
Statement.
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------
ICON CASH FLOW PARTNERS L.P. SEVEN
<PAGE>
ICON CASH FLOW PARTNERS L.P. SEVEN
EXHIBIT INDEX
Exhibit
No. DESCRIPTION Page
1. Underwriting agreements.
1.1 Form of Dealer-Manager Agreement........................... **
1.2 Form of Selling Dealer Agreement........................... **
4. Instruments defining the rights of security holders.
4.1 The Partnership's Third Amended and Restated
Agreement of Limited Partnership is included
as Exhibit A to the Prospectus.
4.2 The Subscription Agreement, including the Limited Partner Signature
Page and Power of Attorney, whereby a subscriber agrees to purchase
Units and adopts the provisions of the Agreement of Limited
Partnership is included in Exhibit C to the Prospectus.
4.3 Copy of the Partnership's Certificate of Limited
Partnership filed with the Delaware Secretary of State
on May 23, 1995............................................. *
5. Opinion re legality.
5.1 Opinion of Whitman Breed Abbott & Morgan with
respect to securities being registered...................... *
8. Opinion re tax matters.
8.1 Opinion of Whitman Breed Abbott & Morgan with
respect to certain tax matters.............................. *
10. Material Contracts.
10.2 Escrow Agreement........................................... *
23. Consents of experts and counsel.
23.1 Consent of KPMG Peat Marwick LLP........................... E-
23.2 Consent of Whitman Breed Abbott & Morgan appears in
that firm's opinion (Exhibit 5.1) and is incorporated
herein by reference.
23.3 Consent of Whitman Breed Abbott & Morgan appears in that firm's
opinion (Exhibit 8.1) and is incorporated herein by reference.
24. Power of Attorney.
24.1 Powers of Attorney ........................................ *
99. Additional Exhibits.
99.1 Table VI - Acquisition of Equipment by the Prior
Public Programs............................................. E-
* Filed as an Exhibit to the S-1 Registration Statement filed on July 11, 1995
and is incorporated herein by reference.
** Filed as an Exhibit to Amendment No.3to the S-1 Registration Statement
filed on November 9, 1995 and is incorporated herein by reference.
<PAGE>
EXHIBIT 23.1
CONSENT OF
KPMG PEAT MARWICK LLP
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
ICON Cash Flow Partners L.P. Seven
We consent to the use of our reports on ICON Cash Flow Partners L.P. Seven and
on ICON Capital Corp. included herein and to the reference to our firm under the
heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
June 21, 1996
New York, New York
<PAGE>
EXHIBIT 99.1
TABLE VI
ACQUISITION OF EQUIPMENT
BY THE PRIOR PUBLIC PROGRAMS
<PAGE>
TABLE VI
Acquisition of Equipment - Prior Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partn at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
Campbell Soup Company Sacramento, CA Computers Sep-91 $0 $27,411 $27,411
Center For The Media Arts New York, NY Audio Visual Nov-88 0 377,126 377,126
Center For The Media Arts New York, NY Audio Visual Mar-90 0 82,204 82,204
Chesebrough Ponds Westport, CT Material Handling Jun-88 23,058 4,475 27,533
Chesebrough Ponds Westport, CT Material Handling Jun-88 0 54,508 54,508
Ciba-Geigy Corp. Greensboro, NC Copiers Sep-91 0 49,081 49,081
Ciba-Geigy Corp. Greensboro, NC Computers Sep-91 0 74,389 74,389
Ciba-Geigy Corp. Summit, NJ Computers Sep-91 0 39,459 39,459
Corporate Mailings, Inc. Whippany, NJ Office Copier Jun-88 130,113 29,440 159,553
Data Broadcasting Corporation Vienna, VA Computers Jun-90 771,520 56,283 827,803
Doran & Doran PC Ames, IA Medical Jun-88 25,642 4,115 29,757
First Boston Corp. New York, NY Copiers Feb-89 73,438 8,475 81,913
First Hudson Equipment Leasing Corp. White Plains, NY Computer Jun-88 0 75,224 75,224
Godiva Chocolatier, Inc. Reading, PA Computers Sep-91 0 32,561 32,561
Gould, Inc. Ft. Lauderdale, FL Office Copier Jun-88 34,982 14,857 49,839
Hospital Authority Of Gwinnett Lawrenceville, GA Medical Jun-88 49,274 7,117 56,391
Ingalls Same Day Surgery Tinley Park, IL Medical Jun-88 71,572 9,490 81,062
Ingersoll-Rand Company Mayfield, KY Copiers Sep-91 0 117,238 117,238
Intelligent Light Fairlawn, NJ Computers Jun-88 46,131 7,662 53,793
Internal Revenue Service Philadelphia, PA Office Equipment May-89 0 83,114 83,114
Ivan C. Namihas MD Las Vegas, NV Medical Jun-88 0 29,784 29,784
L & H Abstracts White Plains, NY Telecommunications Jul-89 0 41,229 41,229
Laclede Steel Company St. Louis, MO Computers Jun-89 69,618 2,513 72,131
Ladera Heights Hospital Los Angeles, CA Computers May-89 0 271,415 271,415
Liverpool Blueprint, Inc. Liverpool, NY Commercial Copier May-89 0 114,048 114,048
Liverpool Blueprint, Inc. Liverpool, NY Reprographics Jul-93 0 53,149 53,149
Marvin Sugarman Productions Valencia, CA Audio Visual Aug-90 179,379 4,617 183,996
Massachusetts General Life Englewood, CO Computers Dec-89 327,971 19,220 347,191
Mcginn Tool & Engineering Co. Franklin, IN Manufacturing & Prod Jun-95 0 27,000 27,000
Medical Center Of Independence Independence, MO Medical Jun-88 59,838 8,192 68,030
New York Telephone New York, NY Copiers Jun-88 173,024 32,155 205,179
Newark Beth Israel Medical Ctr Newark, NJ Medical Sep-91 0 40,556 40,556
Pandick Technologies, Inc. New York, NY Office Copier Jun-88 184,910 44,661 229,571
Payless Cashways/Parctec New York, NY Retail Dec-93 141,791 7,365 149,156
Professional Blueprinters Norfolk, VA Commercial Copier Mar-89 0 120,682 120,682
Quality Plants Manorville, NY Agriculture May-89 0 37,991 37,991
Rainbow Abstracts White Plains, NY Office Copier Jul-88 0 107,503 107,503
Ralph's Foods Edroy, TX Printing May-89 0 83,027 83,027
Richman Gordman Stores, Inc. Omaha, NE Retail Dec-90 172,690 25,823 198,513
Richman Gordman Stores, Inc. Omaha, NE Retail Dec-93 0 39,887 39,887
Ridgebury Equestrian Center New Hampton, NY Agriculture Sep-88 0 27,968 27,968
S.J.C. Video Corporation Valencia, CA Video Production Aug-90 0 341,796 341,796
Santangelo dba Valley Shopping Derby, CT Agriculture Dec-88 0 31,425 31,425
Sparta, Inc. La Jolla, CA Computer Jun-88 33,587 7,593 41,180
Stamford Lithographics Stamford, CT Printing Feb-89 0 50,258 50,258
Staten Island Ob & Gyn Assoc. Staten Island, NY Medical Jun-88 0 26,215 26,215
Taco Amigo Audubon, NJ Restaurant Mar-89 0 103,459 103,459
Texas Instruments, Inc. Dallas, TX Computers Jun-88 175,382 35,954 211,336
The Guardian Life Insurance Company Spokane, WA Office Copier Jun-88 221,181 46,190 267,371
Triangle Reproductions, Inc. Houston, TX Commercial Copier Dec-90 0 74,677 74,677
Tucker Anthony New York, NY Office Copier Jun-88 22,813 7,083 29,896
V. Bruce Mccord Gardiner, NY Agriculture Sep-88 0 36,139 36,139
Wakefern Food Corp. Elizabeth, NJ Office Copier Jun-88 41,749 22,756 64,505
William F. Hineser Dpm, P.C. Arvada, CO Medical Jun-88 0 25,695 25,695
Total Equipment transactions less than $25,000 266,061 1,370,193 1,636,254
$3,295,724 $4,472,447 $7,768,171
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Prior Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are owned
and leased by ICON Cash Flow Partners, L.P., Series A at March 31, 1996 pursuant
to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Computer Systems $136,052 $254,052 $390,104
Retail Systems 189,043 83,080 272,123
Manufacturing & Production - 209,708 209,708
Copiers 117,238 - 117,238
Material & Handling 14,996 39,082 54,078
Repographics 53,149 - 53,149
Video Production 180 44,248 44,428
Sanitation 35,854 - 35,854
Printing - 33,033 33,033
Telecommunications - 26,238 26,238
Medical 12,167 12,963 25,130
Furniture & Fixtures 18,452 - 18,452
------ -------- ------
$577,131 $702,404 $1,279,535
======== ======== ==========
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners, at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1) Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
A Action Rental, Inc. Pittsburg, PA Environmental Equipment Sep-91 $0 $45,514 $45,514
A & E Reprographics & Supply Memphis, TN Reprographics Jan-90 0 102,003 102,003
Ad Art Design Co., Inc. Gaitherburg, MD Computers Aug-94 0 26,405 26,405
Adams Optics Athens, GA Furniture Jun-90 0 26,278 26,278
Advance Waste Mableton, GA Sanitation Dec-91 0 24,282 24,282
Aladdin Carpet Cleaning & Rest Huntington Bch, CA Manufacturing & Product May-95 0 28,292 28,292
Alan Williams & Associates N. Hollywood, CA Computers Jun-95 0 40,975 40,975
Aluminum Company of America Pittsburgh, PA Computers Dec-89 0 107,733 107,733
American Disposal, Inc. Palmyra, PA Front Load Containers Sep-91 0 57,847 57,847
American Senior Citizens Alliance Orlando, FL Computers Jul-90 0 54,290 54,290
American Senior Citizens Alliance Orlando, FL Telecommunications Aug-90 0 56,219 56,219
AP Propane, Inc. King Of Prussia, PA Computers Nov-90 352,251 43,294 395,545
AP Propane, Inc. King Of Prussia, PA Computers Nov-90 1,216,935 115,673 1,332,608
AP Propane, Inc. King Of Prussia, PA Computers Nov-90 458,472 43,819 502,291
Ascom Communications, Inc. Bronx, NY Telecommunications Apr-94 0 36,547 36,547
Assix International, Inc. Tampa, MA Computers Nov-89 192,258 20,187 212,445
Assix International, Inc. Tampa, FL Furniture Nov-89 0 75,299 75,299
B & D Hauling, Inc. Columbus, OH Front Load Containers Sep-91 0 51,268 51,268
B & P Refuse Disposal, Inc. Manassas, VA Containers & Carts Jul-90 0 47,913 47,913
Badalaty, DMD Madeline M. Ocean Township, NJ Medical Oct-90 0 25,882 25,882
Ballingers USA, Inc. New York, NY Furniture May-92 0 188,807 188,807
Barry S. Kaplan Md Pa Miami, FL Computers Jun-95 0 35,313 35,313
Bell Telephone of Pennsylvania Pittsburgh, PA Office Equipment Oct-89 0 85,048 85,048
Bendor Corp. Dallas, TX Fixture Dec-90 24,599 3,048 27,648
BJ's Kountry Kitchen Fresno, CA Restaurant Equipment Jun-91 0 60,255 60,255
Blispak, Inc. Whippany, NJ Manufacturing & Product Aug-90 0 125,371 125,371
Bluebonnet Milling Company Ardmore, OK Material Handling Dec-90 34,378 3,014 37,391
BOC, Inc. Murray Hill, NJ Computers Sep-89 178,212 36,246 214,459
Bowers Sanitation Vickery, OH Sanitation Dec-91 0 32,682 32,682
Braintec Corporation Irvine, CA Computers Apr-95 0 27,291 27,291
Brenlar Investments, Inc. Novaro, CA Furniture Oct-94 0 303,000 303,000
Bull Run Metal Fabricators Powel, TN Manufacturing & Product Mar-90 0 31,129 31,129
Buntastic, Inc. Savannah, GA Restaurant Equipment Dec-90 36,986 2,989 39,975
Business Application Soures Costa Mesa, CA Furniture Dec-90 0 29,806 29,806
Cal Rentals & Sales, Inc. Pittsburg, PA Construction Jun-91 0 24,724 24,724
Captain Cookie Company Shreveport, LA Restaurant Equipment Jun-90 0 26,305 26,305
Card Brothers Equipment, Inc. Merrill, MI Computers Dec-90 55,570 4,943 60,513
Career Systems, Inc. Knoxville, TN Computers Mar-90 0 26,489 26,489
Centran Mississippi Farm Vicksburg, MS Agriculture Sep-90 0 126,048 126,048
Channel 17 Associates, Ltd. Birmingham, AL Audio Equipment Aug-93 0 128,455 128,455
Channel 17 Associates Ltd. Birmingham, AL Video Production Sep-92 0 104,457 104,457
Channel 17 Associates Ltd. Birmingham, AL Video Production Sep-92 0 278,333 278,333
Channel 17 Associates Ltd. Birmingham, AL Telecommunications Sep-92 0 64,731 64,731
Chester Wojda Dba Zephyrhills, FL Material Handling Oct-95 0 26,533 26,533
Chris & John's Auto Body, Inc. Milwaukie, OR Material Handling Dec-90 43,082 3,740 46,822
Chrysler Motor Corp. Highland, MI Computers Mar-91 2,039,527 649,217 2,688,744
Ciba-Geigy Ardsley, NY Computers Sep-89 123,897 9,984 133,882
Circuit Wise, Inc. North Haven, CT Manufacturing & Product Jan-95 0 50,110 50,110
Circuit Wise, Inc. North Haven, CT Manufacturing & Product Jan-91 0 108,613 108,613
Clark Bagels Inc. Clark, NJ Fixture Apr-95 0 27,790 27,790
Clear Film Printing, Inc. Kaufman, TX Printing Sep-89 0 26,000 26,000
Coastal Blue, Inc. San Juan Capistrano, CA Copiers Nov-89 0 130,000 130,000
Colorgraphics of Arizona, Inc. Phoenix, AZ Reprographics Dec-90 48,787 4,289 53,076
Concord Chrysler Plymouth Concord, MA Manufacturing & Product Jun-93 0 26,401 26,401
Consolidated Waste Ind., Inc., Washington, DC Sanitation Jun-90 0 31,990 31,990
Criterion Labs, Inc. San Jose, CA Manufacturing & Product Mar-95 0 37,594 37,594
D & V Carting Wellington, FL Sanitation Dec-91 0 28,137 28,137
Dalane Machining, Inc. Tampa, FL Material Handling Jul-92 0 30,692 30,692
Dalla Corte Lumber, Inc. Stafford Spring, CT Manufacturing & Product Jul-90 0 28,875 28,875
Data Broadcasting Corp. Vienna, VA Satellite Dishes Jun-90 771,520 56,283 827,803
Days Inn Motel Orlando, FL Telecommunications Dec-90 65,891 5,409 71,300
Dennis Owens Dba Dekalb, IL Manufacturing & Product Apr-95 0 28,253 28,253
Dow Chemical Company Midland, MI Manufacturing & Product Aug-90 612,686 187,631 800,317
Dr. Alexander A. Tocher, MD Millerplace, NY Furniture Jun-90 0 56,460 56,460
Dr. Peter Williams Brooklyn, NY Medical Nov-89 0 25,919 25,919
Dr. Ronald C. Pluese Boca Raton, FL Medical Jun-90 0 41,659 41,659
Dr. Travis A. Gresham Bonita Springs, FL Medical Jun-90 0 28,408 28,408
DSC Corporate Services, Inc. Plano, TX Computers Jun-90 934,676 476,765 1,411,441
Durand's Meat & Grocery Co., Inc. Youngsville, LA Computers Sep-90 0 27,391 27,391
East Tennessee Warehousing Ooltewah, TN Material Handling Apr-90 0 135,655 135,655
Edward Lewis and Sons Mineola, NY Furniture Sep-89 0 25,392 25,392
EPI Technologies, Inc. Richardson, TX Medical May-90 0 168,516 168,516
Expedi Printing, Inc. New York, NY Manufacturing & Product Jun-90 0 32,435 32,435
Express Food Stores, Inc. Flagstaff, AZ Restaurant Equipment Dec-90 28,595 2,759 31,354
First Coast Paralegal Clinic Jacksonville Beach, FL Computers Sep-90 0 46,267 46,267
FMC Corporation Chrcago, IL Computers Nov-90 326,531 41,141 367,673
Ford Motor Company Dearborn, MI Computers Feb-91 194,951 32,193 227,144
Fred Meyer, Inc. Portland, OR Computers Oct-90 2,767,380 351,826 3,119,206
Fred Meyer, Inc. Portland, OR Computers Jun-94 475,927 193,466 669,394
Fred Meyer, Inc. Portland, OR Computers Jun-94 271,472 116,806 388,278
Fred Meyer, Inc. Portland, OR Computers Oct-90 1,134,269 149,549 1,283,818
Fred Meyer, Inc. Portland, OR Retail Oct-90 585,706 59,424 645,130
Fred Meyer, Inc. Portland, OR Computers Sep-90 1,288,916 130,877 1,419,794
Fred Meyer, Inc. Portland, OR Retail Oct-90 101,709 12,845 114,554
Fred Meyer, Inc. Portland, OR Retail Sep-90 2,274,335 300,261 2,574,596
Frymaster Corporation Shrevport, LA Copiers Feb-91 0 40,840 40,840
Gary Baldwin Dallas, TX Agriculture Apr-90 0 26,036 26,036
Gaton St. Clement Corp. Chavin, LA Point Of Sale Registers Jul-90 0 27,679 27,679
GE Plastics Pittsfield, MA Copiers Sep-89 45,069 5,579 50,648
GE Plastics Pittsfield, FL Furniture Dec-89 0 31,376 31,376
GE Plastics Pittsfield, MA Furniture May-90 91,362 14,539 105,901
GE Plastics Business Group Pittsfield, MA Telecommunications May-90 29,988 4,862 34,850
Gem City Engineering Co. Dayton, OH Electrical Dec-90 0 68,755 68,755
Goshen Crossing Mobile Gaithersburg, MD Material Handling Jul-90 0 26,219 26,219
Greystone Drugs, Inc. Bronx, NY Fixture Jan-95 0 28,449 28,449
Harlan M. Kretch Dba Mankato, MN Manufacturing & Product Nov-95 0 31,312 31,312
Harnischfeger Industries Pensacola, FL Medical Dec-90 0 44,148 44,148
Harnischfeger Industries Brookfield, WI Computers Oct-92 79,557 0 79,557
Henry Guzmah Fountain Valley, CA Furniture Jun-91 0 26,005 26,005
Hexcel Corp. Dublin, CA Computers Nov-90 566,036 76,534 642,571
HMS Property Management Group Beachwood, OH Furniture Jul-90 0 34,265 34,265
Hometown Buffet, Inc. San Diego, CA Restaurant Feb-95 0 618,000 618,000
Hughes Aircraft Company Los Angeles, CA Computers Apr-90 37,907 502,692 540,599
Imperial Plastics, Inc. Lakeville, MN Manufacturing & Product Aug-90 0 530,400 530,400
Indy Pro Audio Production Srvc Indianapolis, IN Manufacturing & Product Aug-95 0 35,155 35,155
Institutional Laundry Services Lakewood, NJ Manufacturing & Product May-95 0 39,006 39,006
International Business Software St. Louis, MO Computers Feb-90 0 28,642 28,642
International Tollers, Inc. Grand Haven, MI Material Handling Dec-90 28,688 2,540 31,228
Iowa Electric Light & Power Co. Cedar Rapids, IA Computers Nov-90 0 42,714 42,714
J & M Enterprises, Inc. Fletcher, OH Manufacturing & Product Mar-94 0 27,927 27,927
J & P Party Supply Garden City Park, NY Computers Oct-90 0 26,174 26,174
JGQ Corp. Medina, OH Computers Aug-90 0 26,000 26,000
Jim Malhart Piano & Organ Co. Mcallen, TX Computers May-90 0 69,222 69,222
Joe Ledbetter Visalia, CA Material Handling Dec-90 81,012 6,659 87,672
Joel Rubenstein MD PhD Reno, NV Medical Feb-91 0 527,280 527,280
Joseph A Seagrams & Sons, Inc. New York, NY Computers Oct-90 68,287 8,086 76,373
Joseph A Seagrams & Sons, Inc. New York, NY Telecommunications May-90 67,199 6,068 73,266
Joseph L. Taylor Dba Las Vegas, NV Computers Apr-95 0 26,752 26,752
J. K. & Susie L. Wadley Dallas, TX Medical Apr-90 0 140,608 140,608
K & M Fashion, Inc. South Gate, CA Retail Oct-90 0 44,385 44,385
Ken Davis Watertown, MA Manufacturing & Product Sep-89 0 42,659 42,659
Kimberling Inn, Inc. Kimberling City, MO Computers Dec-90 23,230 1,884 25,113
K-Jon, Inc. Lake Charles, LA Restaurant Equipment Jun-90 0 29,620 29,620
Lageroza, Inc. Atlantic City, NJ Computers Sep-90 0 25,549 25,549
Lee's Famous Recipe Country Ch. Muskegon, MI Restaurant Equipment Dec-90 100,200 8,995 109,195
Legal Arts Dallas, TX Reprographics Feb-90 0 85,280 85,280
Letap of St. George, Inc. St. George, SC Furniture Jan-91 0 239,742 239,742
Liberty Collection Bureau, Inc. Antamonte Springs, FL Computers Dec-90 42,434 3,495 45,929
Logic Automation, Inc. Beauerton, OR Computers Jul-90 0 249,135 249,135
Lorelei Productions, Inc. Sevierville, TN Video Production Apr-90 0 26,174 26,174
Louisiana Interests Inc Dba Oz New Orleans, LA Restaurant Equipment Dec-95 0 36,672 36,672
Lusk Onion, Inc. Clovis, NM Manufacturing & Product Dec-90 37,414 2,956 40,369
L. Cade Havard Plano, TX Computers Jul-90 0 25,795 25,795
Madison Auto Body Shop Inc. Madison, NJ Automotive Apr-95 0 44,157 44,157
Main Street Cafe Medina, OH Point Of Sale Registers Aug-90 0 26,000 26,000
Maxtor Corp. San Jose, CA Computers Feb-91 233,149 32,500 265,649
McCaw-Benzi Insurnace Agency Greenville, TX Computers Dec-90 33,922 2,845 36,767
Medfone Nationwide, Inc. Wantagh, NY Telecommunications Feb-91 0 52,499 52,499
Medical Home Health, Inc. Sallisaw, OK Telecommunications Mar-94 0 28,233 28,233
Melhart Piano McAllen, TX Network System May-90 0 69,222 69,222
Message X Communications, Inc. Hartford, CT Telecommunications Jun-90 0 41,237 41,237
Mosta Corp. Miami, FL Manufacturing & Product Sep-89 0 33,997 33,997
Mott General Contractors, Inc. Chaplin, CT Agriculture Dec-89 0 32,760 32,760
Mountain Air Systems Burlington, VT Computers Oct-90 0 25,630 25,630
National News Network Los Angeles, CA Satellite Dishes Jun-90 1,622,934 114,499 1,737,433
Neuro Electric Test Associates Oakland, CA Printing Oct-90 0 26,691 26,691
Nevada Medical Red Rock Las Vegas, NV Medical Dec-89 0 39,799 39,799
New Century Marble & Granite Oakland, CA Manufacturing & Product Nov-94 0 30,157 30,157
New England Digital Lebanon, NH Office Equipment Aug-90 136,268 13,828 150,096
Niagara Mohawk Power Corp. Syracuse, NY Computers Feb-91 182,483 39,082 221,565
Niagara Mohawk Power Corp. Syracuse, NY Computers Feb-91 168,889 45,288 214,176
Nice & Fresh Bakery Bridgeport, CT Fixture Dec-90 0 54,500 54,500
Nice & Fresh Bakery Bridgeport, CT Manufacturing & Product Nov-90 0 98,792 98,792
One Hour Martinizing Fresno, CA Sanitation Dec-90 53,640 4,430 58,070
Orman Brothers Rosser, TX Agriculture Dec-90 25,972 2,396 28,369
Packaging Plus Services Middletown, NY Furniture Jul-90 0 27,572 27,572
Parametric Technology Corp. Waltham, MA Computers May-90 302,349 57,334 359,683
Parctec, Inc. New York, NY Retail Nov-93 42,759 1,976 44,736
Parctec, Inc. New York, NY Retail Dec-93 42,395 1,946 44,341
Parctec, Inc. New York, NY Retail Dec-93 0 45,788 45,788
Parctec, Inc. New York, NY Retail Nov-93 143,882 6,651 150,533
Parctec, Inc. New York, NY Retail Dec-93 0 86,612 86,612
Parctec, Inc. New York, NY Retail Nov-93 304,074 14,055 318,130
Parctec, Inc. New York, NY Retail Nov-93 84,329 3,898 88,227
Parctec, Inc. New York, NY Retail Dec-93 30,941 1,420 32,361
Parctec, Inc. New York, NY Retail Nov-93 82,018 3,791 85,810
Parctec, Inc. New York, NY Retail Nov-93 123,588 5,713 129,301
Parctec, Inc. New York, NY Retail Nov-93 80,898 3,739 84,637
Parctec, Inc. New York, NY Retail Nov-93 427,938 19,781 447,719
Parctec, Inc. New York, NY Retail Nov-93 165,227 7,637 172,864
Parctec, Inc. New York, NY Retail Dec-93 35,099 1,611 36,710
Parctec, Inc. New York, NY Retail Nov-93 41,570 1,921 43,491
Paul's Market & Deli Knoxville, TN Restaurant Equipment Apr-90 0 27,487 27,487
Paul-Scott Industries Tampa, FL Manufacturing & Product Nov-89 0 69,264 69,264
Pepperidge Farms, Inc. Norwalk, CT Computers May-90 321,109 264,074 585,183
Pepperidge Farms, Inc. Norwalk, CT Manufacturing & Product Aug-90 122,085 99,631 221,716
Performance Semiconductor Sunnyvale, CA Computers Oct-90 513,117 55,895 569,012
Performance Semiconductor Sunnyvale, CA Medical Oct-90 591,377 76,009 667,386
Performance Semiconductor Sunnyvale, CA Computers Oct-90 292,735 33,332 326,067
Performance Semiconductor Sunnyvale, CA Computers Oct-90 401,560 47,546 449,107
Performance Semiconductor Sunnyvale, CA Construction Oct-90 353,899 43,655 397,553
Perry Morris Irvine, CA Manufacturing & Product Mar-92 0 600,000 600,000
Pete Williams, MD Brooklyn, NY Medical Nov-89 0 25,919 25,919
Pfister Industries, Inc. Fair Lawn, NJ Manufacturing & Product Nov-94 0 31,025 31,025
Phil's Place for Ribs Mentor, OH Restaurant Equipment Jun-90 0 54,040 54,040
Phyliss Moriarty Poughkeepsie, NY Medical Jan-95 0 30,287 30,287
Physiologic Reps, Inc. Glendadle, CA Medical Jun-91 0 41,924 41,924
Pineville Piggly-Wiggly, Inc. New Iberia, LA Computers Dec-90 0 44,854 44,854
Plante Construction, Inc. Huntington, CT Agriculture Sep-89 0 44,200 44,200
Polk Opticians, Inc. Lakeland, FL Medical Dec-89 0 37,733 37,733
Prestige Auto Body, Inc. Springfield, VA Paint Booth Jul-90 0 34,599 34,599
Putnam Companies, Inc. Boston, MA Computers Nov-90 269,294 43,844 313,138
Pyramid Vitamins & Health Metuchen, NJ Fixture Dec-95 0 26,465 26,465
Qualicare Medical Labs Astoria, NY Medical Aug-90 0 47,403 47,403
Raleigh Athletic Equipment Corp. New Rochelle, NY Computers Jun-93 0 25,907 25,907
Raleigh Crane Corp. Raleigh, NC Material Handling Jun-90 0 33,613 33,613
Randy's General Merchandise Boyce, LA Computers Sep-90 0 43,536 43,536
Raynet Corporation Menlo Park, CA Computers Oct-90 98,601 12,540 111,140
Red Rock Surgical Center Las Vegas, NV Medical Dec-89 0 39,799 39,799
Refuse Systems, Inc. Cleveland, OH Sanitation Jun-90 0 32,228 32,228
Rehab Management, Inc. Midlothian, VA Furniture Jun-90 0 33,055 33,055
Richman Gordman Stores, Inc. Omaha, NE Office Equipment Dec-90 902,150 177,729 1,079,880
Richman Gordman Stores, Inc. Omaha, NE Retail Dec-93 0 119,662 119,662
Richman Gordman Stores, Inc. Omaha, NE Office Equipment Dec-90 518,068 101,291 619,360
Robert A. Masters San Pedro, CA Video Production Jun-91 0 56,632 56,632
Rocky Mountain Denver, CO Computers Oct-90 469,838 62,796 532,633
Romano's Pack & Save, Inc. Baton Rouge, LA Computers Jul-90 0 32,186 32,186
Roulette P.C.H., Inc. San Jose, CA Computers Aug-94 0 26,964 26,964
Royal Glass Corporation Englewood, NJ Manufacturing & Product Jul-94 0 25,395 25,395
Rsvp Services Edmond, OK Telecommunications Dec-95 0 33,014 33,014
R/T Enterprises, Inc. Richmond, VA Construction Jun-90 0 43,914 43,914
Safeguard Business Systems, Inc. Fort Washington, PA Material Handling Jul-90 0 99,148 99,148
Safeguard Business Systems, Inc. Fort Washington, PA Manufacturing & Product Jul-90 0 109,753 109,753
Safeguard Business Systems, Inc. Fort Washington, PA Manufacturing & Product Jul-90 0 99,148 99,148
Safeguard Business Systems, Inc. Fort Washington, PA Manufacturing & Product Jul-90 0 99,148 99,148
Schremp Fairfax, VA Manufacturing & Product Nov-89 0 26,067 26,067
Serologicals, Inc. Pensacola, FL Computers May-91 0 70,789 70,789
Serologicals, Inc. Pensacola, FL Computers May-92 0 76,900 76,900
Serologicals, Inc. Pensacola, FL Office Equipment Nov-91 0 46,490 46,490
Serologicals, Inc. Brookfield, WI Computers Nov-90 551,499 140,680 692,179
Sigmatel, Inc. Tenafly, NJ Telecommunications Aug-90 0 37,492 37,492
Snyder / Newell , Inc. San Francisco, CA Telecommunications Dec-95 0 33,636 33,636
Solar Graphics Inc. St. Petersburg, FL Computers Oct-95 0 34,749 34,749
Soltex Polymer Corp. Houston, TX Computers Feb-90 0 170,882 170,882
Steve Oglesby Productions Inc. Evansville, IN Video Production Dec-95 0 42,495 42,495
Streets, Ltd. Long Island City, NY Computers Jun-93 0 29,329 29,329
Structural Steel Inc. Rockledge, FL Manufacturing & Product May-95 0 32,728 32,728
Sunrise Duplication Services Englewood, CO Video Production Apr-95 0 27,067 27,067
Sunset Estates of Watonaga, Inc. Watonga, OK Fixture Dec-90 36,763 3,212 39,975
Tarzar, Inc. Evansville, IN Manufacturing & Product Jul-91 0 51,311 51,311
Teel Lumber Company Pocahontas, AR Manufacturing & Product Jun-93 0 26,412 26,412
Telebit Corp. Sunnyvale, CA Medical May-90 139,567 15,671 155,238
Telebit Corp. Sunnyvale, CA Computers May-90 367,953 47,582 415,535
Telebit Corp. Sunnyvale, CA Computers Mar-90 925,370 148,270 1,073,640
Terrance Reay, Inc. Mission Viejo, CA Furniture Jun-91 0 60,351 60,351
Terrance Reay, Inc. Mission Viejo, CA Furniture Jun-91 0 59,064 59,064
The Gaton Clement Corp. Chavin, LA Computers Jul-90 0 27,679 27,679
The Real Estate Collection Hermosa Beach, CA Furniture Jun-91 0 27,732 27,732
Thermal Dynamics Corporation West Lebanon, NH Manufacturing & Product Dec-90 0 189,364 189,364
Tri Star Optics, Inc. New York, NY Furniture Jun-90 0 47,990 47,990
T.B.G. of Merrick, Inc. Whitestone, NY Furniture Nov-94 0 204,779 204,779
Unity Broadcasting Network New York, NY Telecommunications Sep-89 0 80,231 80,231
Unity Broadcasting Network New York, NY Telecommunications Jul-90 0 36,082 36,082
Upper Crust Pizza San Luis Obispo, CA Restaurant Equipment Dec-90 40,991 3,341 44,332
USX Corporation Pittsburgh, PA Mining May-90 2,540,177 944,382 3,484,559
USX Corporation Pittsburgh, PA Computers Mar-90 862,520 156,933 1,019,453
USX Corporation Pittsburgh, PA Mining Aug-90 5,454,428 1,078,257 6,532,685
USX Corporation Pittsburgh, PA Computers Mar-90 1,295,084 228,447 1,523,531
U.S. Communications/Westchester Boca Raton, FL Telecommunications Sep-90 0 104,000 104,000
U.S. Pipeline Service, Inc. Clearwater, FL High Pressure Jetter Jul-90 0 25,232 25,232
Viridis Corp. Los Angeles, CA Computers Jul-95 0 29,409 29,409
Volvo North America Corporation Rockleigh, NJ Telecommunications Nov-90 140,737 20,163 160,900
Walnut Valley Auto Body Walnut, CA Material Handling Dec-90 32,567 3,172 35,739
Weissinger Steel Erection Orlando, FL Construction Dec-90 29,666 2,692 32,358
Weron, Inc. Englewood, CO Automotive Dec-90 0 68,782 68,782
West Atlantic Medical Center Delray Beach, FL Medical Apr-90 0 27,594 27,594
Westside Sanitaion, Inc. Miami, FL Steel Refuse Containers Jul-90 0 35,548 35,548
Wil-Ray Cabinets & Millwork, Inc. Temple, TX Material Handling Feb-91 0 45,771 45,771
Xerox Corporation Blauvelt, NY Copiers Sep-89 40,053 5,373 45,426
Yumi Yogurt San Mateo, CA Material Handling Dec-90 24,201 2,246 26,447
Total Equipment transactions less than $25,000 1,312,672 6,879,043 8,191,715
$40,950,305 $26,396,676 ***********
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are owned
and leased by ICON Cash Flo at March 31, 1996 pursuant to leases or which secure
its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Retail Systems $1,946,308 - $1,946,308
Computer Systems 815,630 28,710 844,340
Furniture & Fixtures 575,556 240,700 816,256
Restaurant Equipment 701,484 - 701,484
Manufacturing & Production 642,751 49,647 692,398
Telecommunications 242,201 - 242,201
Video Production 167,192 - 167,192
Medical 123,313 - 123,313
Printing 94,790 - 94,790
Repographics 39,779 35,000 74,779
Material & Handling 68,310 2,233 70,543
Automotive 55,776 - 55,776
Audio 24,542 - 24,542
------ -------- ------
$5,497,632 $356,290 $5,853,922
========== ======== ==========
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners, L at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
A & S Shotcrete Inc. Phoenix, AZ Manufacturing & Production Apr-95 $0 $36,284 $36,284
Abco Cesspol Services, Inc. Marston Mills, MA Construction Jun-91 0 34,858 34,858
Adamson Tire & Brake Sun City, CA Retail Jan-92 0 97,767 97,767
Adzima Funeral Home, Inc. Stratford, CT Computers Dec-94 0 25,266 25,266
Alliant Techsystems, Inc. Edina, MN Manufacturing & Production Dec-91 0 76,982 76,982
Alliant Techsystems, Inc. Edina, MN Video Production Oct-91 0 38,401 38,401
Alliant Techsystems Inc. Everett, WA Manufacturing & Production Oct-95 0 25,764 25,764
American Association of Retired Washington, DC Computers Mar-91 238,596 35,284 273,880
Aneree Associates Palmdale, CA Retail Feb-92 0 53,003 53,003
Apollo Group, Inc. Phoenix, AZ Computers Mar-91 0 238,708 238,708
Apollo Group, Inc. Phoenix, AZ Telecommunications Jul-91 0 42,923 42,923
Avel Hotel of Naples Boca Raton, FL Furniture Mar-91 0 267,800 267,800
Avel Hotel of Naples, Inc. Boca Raton, FL Furniture Jun-94 0 65,659 65,659
Baptist Health Care of Oklahoma Oklahoma City, OK Medical Jun-91 304,538 129,016 433,554
Bath Ironworks Corp. Bath, ME Computers Jun-91 720,683 80,405 801,088
Bath Ironworks Corp. Bath, ME Computers Jun-91 1,036,469 244,135 1,280,604
Benson Brothers Disposal, Inc. Wynantskill, NY Sanitation May-91 0 28,205 28,205
Benson Brothers Disposal, Inc. Wyantskill, NY Sanitation Mar-91 0 27,469 27,469
Blackhawk Audio Inc. Goodlettsville, TN Audio Equipment Feb-96 0 46,335 46,335
Bobby Rubino's USA, Inc. Fort Lauderdale, FL Computers Oct-91 0 96,121 96,121
Brad & Sharon Sessions Lafayette, CO Manufacturing & Production Sep-91 0 25,529 25,529
Bradlees Braintree, MA Fixture Feb-91 77,880 9,706 87,587
Bradlees Braintree, MA Computers Feb-91 94,175 10,954 105,129
Bradlees Braintree, MA Computers Feb-91 57,531 6,603 64,134
Bradlees Braintree, MA Fixture Feb-91 228,418 27,426 255,844
Bradlees Braintree, MA Fixture Feb-91 193,191 25,093 218,284
Bradlees Braintree, MA Fixture Feb-91 219,521 26,358 245,878
Bradlees Braintree, MA Fixture Feb-91 192,081 23,063 215,144
Bradlees Braintree, MA Computers Feb-91 157,979 17,611 175,590
Brenlar Investments, Inc. Novaro, CA Furniture Oct-94 0 303,000 303,000
Brennick Constuction, Inc. Marston Mills, MA Construction Jun-91 0 25,101 25,101
Bullet Proof, Inc. Encino, CA Restaurant Equipment Aug-91 0 74,344 74,344
Cadbury Beverages, Inc. Stamford, CT Computers May-91 0 57,654 57,654
California Micro Devices Corp. Milpitas, CA Computers Sep-91 738,362 219,596 957,958
Carter Hill Sanitation, Inc. Kingston, NC Sanitation May-91 0 27,334 27,334
Carter Mckenzie Inc. West Orange, NJ Computers May-95 0 36,088 36,088
Centocor, Inc. Malvern, PA Furniture Mar-91 1,383,374 286,946 1,670,320
Centocor Inc. Malvern, PA Furniture Jan-96 0 470,368 470,368
Christ The King Regional Middle Village, NY Computers Jun-95 0 167,544 167,544
Chrysler Corp. Highland Park, MI Computers Apr-91 2,258,176 718,751 2,976,927
Chrysler Financial Corp. Southfield, MI Computers Jun-91 7,414,503 969,294 8,383,797
Ciba-Geigy Corp. Tarrytown, NY Telecommunications May-91 0 35,553 35,553
Ciba-Geigy Corp. Tarrytown, NY Video Production May-91 0 139,950 139,950
Ciba-Geigy Corp. Tarrytown, NY Telecommunications May-91 0 38,589 38,589
Clem Fab Associates Atlantic City, NJ Fixture Oct-94 0 25,973 25,973
Community Health Services, Inc. Hartford, CT Computers May-91 0 117,739 117,739
Community Home Nursing Care Atlanta, GA Telecommunications Aug-91 0 30,068 30,068
Consolidated Waste Industries Washington, DC Sanitation Mar-91 0 29,081 29,081
Conway Excavating Lakeville, MA Construction Jun-91 0 34,334 34,334
Cup or Cone, Inc. Philadelphia, PA Restaurant Equipment Mar-95 0 36,144 36,144
Cuza Corp. Cathederal City, CA Transportation Dec-91 0 94,354 94,354
D & V Carting, Inc. Wellington, FL Sanitation Mar-91 0 31,982 31,982
Databank South, Inc. Thompson, GA Computers Apr-91 763,377 79,680 843,057
Dave Sanborn San Bernadino, CA Material Handling Jun-93 0 26,724 26,724
Decorel Mundelein, IL Retail Oct-91 0 30,855 30,855
Delmar's Body Shop, Inc. Staunton, VA Automotive Mar-91 0 39,741 39,741
Dennis Aagard, Inc. Sanford, FL Construction May-91 0 60,721 60,721
Detroit-Malcomb Hospital Corp. Detroit, MI Medical Jun-91 980,422 462,219 1,442,641
Diamond Head, Inc. Leesville, LA Sanitation May-91 0 43,396 43,396
Douglas Pelleymounter Rocklin, CA Manufacturing & Production Apr-91 0 33,612 33,612
Dr. Norman M. Kline, MD Coral Springs, FL Medical Jun-91 0 28,523 28,523
Dvonch Inc. Dba Signal Hill, CA Copiers Apr-95 0 32,912 32,912
EMJ/McFarland Binghamton, NY Computers Mar-91 268,119 34,957 303,076
Enkon Environmental Services Livonia, MI Environmental Sep-91 0 210,728 210,728
Enviroclean Systems, Inc. Vernon Parish, LA Front Load Containers May-91 0 43,396 43,396
Environmental Construction Co. North Scituate, RI Construction Jun-91 0 34,613 34,613
Episcopal Hospital Philadelphia, PA Medical Sep-91 224,403 112,369 336,773
Executone Information Darien, CT Construction May-91 0 85,692 85,692
Executone Information Darien, CT Office Equipment May-91 0 139,427 139,427
Exterior Home Designs Inc. Shawnee Mission, KS Telecommunications Feb-96 0 37,927 37,927
Forte Hotels International El Cajon, CA Computers Feb-91 1,184,673 110,605 1,295,278
Forte Hotels International El Cajon, CA Computers Feb-91 780,651 71,016 851,667
Fotoball Usa Inc. San Diego, CA Printing Dec-95 0 71,477 71,477
Fourth Shift Corp. Bloomington, MN Computers Aug-91 0 155,240 155,240
General Electric, CIT Bridgeport, CT Printing Mar-91 958,130 151,330 1,109,460
Guest Quarters Hotel Limited Boston, MA Furniture Jun-91 0 33,790 33,790
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 48,041 48,041
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 30,924 30,924
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 48,065 48,065
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 47,969 47,969
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 47,969 47,969
Guest Quarters Hotel Limited Boston, MA Computers Jun-91 0 48,129 48,129
G.S. Tire Center, Inc. Grand Junction, CO Manufacturing & Production May-91 0 32,077 32,077
H & K Tires, Inc. Rancho Cucamong, CA Automotive Jan-92 0 97,543 97,543
H & O Technology, Inc. Ballston Spa, NY Computers May-91 0 29,048 29,048
Harte Toyota, Inc. Dartmouth, MA Manufacturing & Production Jun-91 0 51,331 51,331
Healthtrust, Inc. Nashville, TN Medical Sep-91 446,586 114,285 560,871
High Point Regional Hospital High Point, NC Medical Sep-91 657,013 471,709 1,128,722
Highlands Hospital Corp. Prestonburg, KY Medical Jun-91 341,892 200,517 542,409
Hometown Buffet, Inc. San Diego, CA Restaurant Equipment Jan-95 0 618,000 618,000
Honling Food, Inc. Brisbane, CA Manufacturing & Production Sep-91 0 99,407 99,407
Horizon Imaging & Therapy Columbus, OH Medical Sep-91 96,052 41,989 138,041
Horizon Imaging & Therapy Columbus, OH Medical Sep-91 327,493 150,741 478,234
Iberia General Hospital New Iberia, LA Medical Sep-91 259,382 77,855 337,237
Imperial Plastic Lakeville, MN Manufacturing & Production Jun-91 0 124,803 124,803
Imperial Plastic Lakeville, MN Manufacturing & Production Jan-92 0 122,247 122,247
In Time Entertainment Corp Warren, OH Computers Oct-95 0 38,443 38,443
Ingersall Rand Woodcliff Lake, NJ Computers May-91 0 26,610 26,610
I. Spence, N. Constantinople Washington, DC Medical Jun-91 0 90,150 90,150
James E. Connolly Manchester, NH Furniture Dec-93 0 54,942 54,942
James E. Houtz Midpines, CA Restaurant Equipment Aug-91 0 60,489 60,489
Jason Tynan & Company, Inc. New York, NY Telecommunications Sep-94 0 28,289 28,289
Johnson & Dugan Ins. Services Redwood City, CA Computers Mar-96 0 44,246 44,246
Kendall Diagnostic Center Ltd. Miami, FL Medical Sep-91 1,195,860 770,230 1,966,090
Kendall Diagnostic Center Ltd. Miami, FL Medical Jun-91 217,894 105,722 323,616
King Carpet Mart, Inc. King Of Prussia, PA Fixture Dec-94 0 29,856 29,856
Landtech Data Corporation West Palm Beach, FL Computers Jun-95 0 29,774 29,774
Local Favorite, Inc. Newport Beach, CA Restaurant Equipment Dec-94 0 525,049 525,049
Lone Star Disposal, Inc. Cedar Park, TX Sanitation Mar-91 0 29,366 29,366
Marriott Corp. Washington, DC Transportation Aug-91 61,960 6,210 68,170
Marriott Corp. Scottsdale, AZ Transportation Aug-91 83,184 8,336 91,520
Marriott Corp. El Paso, TX Transportation Aug-91 25,189 2,524 27,713
Marriott Corp. Greensboro, NC Transportation Aug-91 24,004 2,406 26,410
Marriott Corp. Tampa, FL Computers Aug-91 65,637 6,578 72,215
Marriott Corp. Miami, FL Video Production Aug-91 29,941 3,001 32,942
Marriott Corp. Chicago, IL Computers Aug-91 140,201 14,051 154,251
Marriott Corp. Point Clear, AL Sanitation Aug-91 149,148 14,947 164,096
Marriott Corp. Scottsdale, AZ Transportation Aug-91 56,365 5,653 62,018
Marriott Corp. Miami, FL Transportation Aug-91 47,487 4,759 52,246
Marriott Corp. Albuquerque, NM Furniture Aug-91 58,628 5,876 64,503
Masterforce, Inc. Jordon, MN Manufacturing & Production Jul-91 0 48,422 48,422
Mbs Business Products Inc. Whippany, NJ Computers Feb-96 0 34,492 34,492
Message X Communications, Inc. Hartford, CT Telecommunications May-91 0 25,594 25,594
Mitech, Inc. Rockville, MD Furniture Aug-91 0 547,330 547,330
Mitzel's American Kitchen Seattle, WA Fixture Mar-95 0 35,143 35,143
MPQ Business Suppliers, Inc. Upland, CA Office Equipment Sep-91 0 29,466 29,466
National Board for Professional Cortez, FL Furniture Mar-91 0 152,675 152,675
Navarra Insurance Associates Warrendale, PA Computers Feb-95 0 34,232 34,232
Network Telephone Services,Inc. Woodland Hills, CA Telecommunications Aug-91 0 330,123 330,123
New England Marina Dorchester, MA Restaurant Equipment Jun-91 0 27,528 27,528
New Liberty Hospital District Liberty, MI Medical Dec-91 1,368,794 251,343 1,620,137
Newark Beth Israel Medical Ctr. Newark, NJ Computers May-91 0 38,181 38,181
Nissan Lift Trucks of Memphis Memphis, TN Forklifts Jun-91 0 231,239 231,239
North Star Foods, Inc. St Charles, MN Computers Mar-91 0 406,135 406,135
Paine's, Inc. Simsbury, CT Environmental Jan-92 0 157,907 157,907
Parctec, Inc. New York, NY Retail Dec-93 132,493 5,933 138,426
Parctec, Inc. New York, NY Retail Dec-93 220,006 9,851 229,857
Parctec, Inc. New York, NY Retail Dec-93 262,388 11,749 274,137
Parctec, Inc. New York, NY Retail Dec-93 45,369 2,031 47,400
Parctec, Inc. New York, NY Retail Dec-93 33,035 1,512 34,547
Parctec, Inc. New York, NY Retail Dec-93 76,610 3,559 80,169
Parctec, Inc. New York, NY Retail Dec-93 31,034 1,420 32,455
Parctec, Inc. New York, NY Retail Dec-93 121,275 5,550 126,825
Parctec, Inc. New York, NY Retail Dec-93 374,247 17,130 391,377
Parctec, Inc. New York, NY Retail Dec-93 169,961 7,610 177,571
Parctec, Inc. New York, NY Retail Nov-93 243,961 11,166 255,128
Parctec, Inc. New York, NY Retail Dec-93 206,603 9,251 215,854
Parctec, Inc. New York, NY Retail Dec-93 51,592 2,361 53,954
Parctec, Inc. New York, NY Retail Dec-93 47,944 2,147 50,091
Parctec, Inc. New York, NY Retail Dec-93 45,585 2,086 47,671
Parctec, Inc. New York, NY Retail Dec-93 38,352 1,755 40,108
Parctec, Inc. New York, NY Retail Dec-93 40,779 1,867 42,645
Parctec, Inc. New York, NY Retail Dec-93 39,391 1,803 41,194
Parctec, Inc. New York, NY Retail Dec-93 204,537 9,159 213,696
Parctec, Inc. New York, NY Retail Dec-93 78,596 3,597 82,193
Parctec, Inc. New York, NY Retail Nov-93 91,777 4,110 95,887
Pepperidge Farm Newark, NJ Telecommunications May-91 0 50,938 50,938
Perry Morris Irvine, CA Manufacturing & Production Mar-92 0 1,000,000 1,000,000
Peter Kim Santa Monica, CA Fixture Mar-95 0 25,958 25,958
Phar-Mor, Inc. Youngstown, OH Fixture Feb-91 4,402,289 590,339 4,992,627
Phar-Mor, Inc. Youngstown, OH Fixture Feb-91 5,060,835 672,186 5,733,022
Philadelphia HSR Ltd. Partners Sharon Hills, PA Manufacturing & Production Jun-91 0 31,733 31,733
Phillips Productions, Inc. Dallas, TX Video Production May-91 0 71,636 71,636
Pizza Factory Susanville, CA Restaurant Equipment Aug-91 0 25,003 25,003
Planned Parenthood of NYC, Inc. New York, NY Computers Jun-91 0 26,637 26,637
Planning Sciences, Inc. Littleton, CO Furniture Mar-96 0 51,853 51,853
Progress Realty, Inc. Plympton, MA Construction Jun-91 0 43,260 43,260
R & H Group, Inc. Oviedo, FL Retail Feb-94 0 35,025 35,025
Read-Rite Corp. Milpitas, CA Manufacturing & Production Sep-91 867,854 250,377 1,118,231
Read-Rite Corp. Milpitas, CA Manufacturing & Production Sep-91 269,574 78,071 347,645
Read-Rite Corp. Milpitas, CA Manufacturing & Production Sep-91 447,292 120,375 567,667
Read-Rite Corp. Milpitas, CA Computers Sep-91 456,308 119,765 576,073
Read-Rite Corp. Milpitas, CA Manufacturing & Production Sep-91 655,369 191,571 846,940
Richard A. Rennolds Dba Santa Clara, CA Manufacturing & Production Jun-95 0 30,477 30,477
Rico's Place, Inc. San Carlos, CA Restaurant Equipment Jun-93 0 25,794 25,794
RJM Equipment Corp. Boston, MA Construction Jun-91 0 41,194 41,194
Robert Dayan Los Angeles, CA Computers Jul-95 0 29,594 29,594
Robert Jones Mission Viejo, CA Video Production Sep-91 0 28,684 28,684
Robinson, Brebner & Moga Lake Bluff, IL Computers Jun-91 0 36,530 36,530
Samuel & Sandy Stephens Midland, VA Construction May-91 0 45,158 45,158
Sep Tech, Inc. South Chatham, MA Material Handling Jun-91 0 32,946 32,946
Separation Technology Inc. St. Paul, MN Computers Aug-95 0 36,013 36,013
Sessions Lafayette, CO Embroidery Equipment Sep-91 0 25,529 25,529
Sfuzzi, Inc. New York, NY Office Equipment Aug-91 0 180,084 180,084
Sheraton Portland Airport Hotel Portland, OR Computers Mar-96 0 31,193 31,193
Sliphod Graphics, Inc. San Diego, CA Video Production May-94 0 29,696 29,696
South Shore Rehabilitation Rockland, MA Medical Jun-91 0 25,793 25,793
Southern Refrigerated Ashdown, AR Telecommunications Nov-92 0 362,250 362,250
Specialty Metals, Inc. Stamford, CT Furniture Jun-91 0 92,560 92,560
Spitz Clinic, PC Morton, PA Medical Mar-91 0 30,956 30,956
Star Tire And Service, Inc. Columbus, IN Fixture Oct-91 0 45,775 45,775
Stop & Shop Braintree, MA Computers Feb-91 116,332 14,454 130,786
Stop & Shop Braintree, MA Computers Feb-91 569,145 68,131 637,276
Stop & Shop Braintree, MA Retail Feb-91 387,311 50,308 437,619
Stop & Shop Braintree, MA Computers Feb-91 114,090 14,773 128,863
Stop & Shop Braintree, MA Retail Feb-91 175,093 21,822 196,915
Stop & Shop Braintree, MA Computers Feb-91 35,126 4,205 39,331
Stop & Shop Braintree, MA Retail Feb-91 169,376 20,337 189,713
Stop & Shop Braintree, MA Computers Feb-91 141,920 17,634 159,554
Stop & Shop Braintree, MA Retail Feb-91 118,084 13,053 131,136
Stop & Shop Braintree, MA Retail Feb-91 367,507 40,617 408,124
Stop & Shop Braintree, MA Retail Feb-91 99,072 11,896 110,968
Stop & Shop Braintree, MA Computers Feb-91 30,019 3,594 33,613
Stop & Shop Braintree, MA Retail Feb-91 64,032 7,187 71,219
Stop & Shop Braintree, MA Retail Feb-91 284,138 33,367 317,506
Stop & Shop Braintree, MA Retail Feb-91 50,920 5,727 56,647
Stop & Shop Braintree, MA Retail Feb-91 209,029 27,151 236,179
Stop & Shop Braintree, MA Retail Feb-91 169,841 20,393 190,234
Stop & Shop Braintree, MA Retail Feb-91 121,255 13,982 135,237
Stop & Shop Braintree, MA Retail Feb-91 103,621 12,442 116,062
Stop & Shop Braintree, MA Retail Feb-91 82,969 9,456 92,425
Stop & Shop Braintree, MA Computers Feb-91 26,428 2,946 29,374
Stop & Shop Braintree, MA Retail Feb-91 184,177 22,114 206,291
Stop & Shop Braintree, MA Retail Feb-91 62,067 7,736 69,803
Stop & Shop Braintree, MA Computers Feb-91 726,459 84,499 810,958
Stop & Shop Braintree, MA Retail Feb-91 198,850 23,876 222,725
St. Louis University St. Louis, MO Medical Sep-91 295,414 202,779 498,193
Sun Presentations, Inc. Palm Springs, CA Video Production Nov-92 0 66,253 66,253
Superior Disposal Service, Inc. Newfield, NY Sanitation May-91 0 35,048 35,048
Superior Tire, Inc. Canoga Park, CA Transportation Dec-91 0 92,236 92,236
Super-Miami Ltd Concord, CA Fixture Nov-91 0 96,968 96,968
Surface Specialists Inc. Harvey, LA Manufacturing & Production Feb-96 0 59,358 59,358
Synoptic Systems Corp. Springfield, VA Computers May-91 0 164,520 164,520
Transportation Corp. of America Minneapolis, MN Telecommunications Oct-91 0 51,588 51,588
Transportation Corp. of America Minneapolis, MN Telecommunications Sep-91 0 38,224 38,224
T.B.G. of Fresh Meadows, Inc. Whitestone, NY Restaurant Equipment Dec-94 0 395,221 395,221
T.W. Productivity Centers San Francisco, CA Computers Feb-96 0 46,549 46,549
United Diagnostics, Inc. Miami, FL Medical Jun-91 0 27,181 27,181
USA Waste Services, Inc. Dallas, TX Material Handling Mar-91 0 30,352 30,352
USA Waste Services, Inc. Dallas, TX Material Handling Mar-91 0 32,422 32,422
USA Waste Services, Inc. Dallas, TX Telecommunications Mar-91 0 45,637 45,637
U.S. Public Technologies Inc. San Diego, CA Computers Jun-95 0 37,362 37,362
Vacation Escape Inc. Boca Raton, FL Telecommunications Apr-95 0 34,104 34,104
Valley Porge HSR Ltd Wayne, PA Manufacturing & Production Jun-91 0 31,733 31,733
Vermont Sand & Stone, Inc. Waterbury, VT Construction Jun-91 0 45,396 45,396
Walid J. Talia San Diego, CA Fixture Dec-94 0 27,381 27,381
William N. Cann Inc. Willington, DE Computers Dec-95 0 47,838 47,838
Wrap Up Productions Castro Valley, CA Video Production Oct-91 0 47,315 47,315
Total Equipment transactions less than $25,000 55,673 3,991,444 4,047,117
$45,800,967 $25,552,635 $71,353,602
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are
owned and leased by ICON Cash Flow Partners, L.P., Series C at March 31,
1996 pursuant to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Medical $4,324,567 $16,462 $4,341,029
Retail Systems 2,863,956 16,346 2,880,302
Computer Systems 1,602,921 504,120 2,107,041
Restaurant Equipment 1,313,791 98,210 1,412,001
Furniture & Fixtures 758,661 448,091 1,206,752
Manufacturing & Production 431,682 298,172 729,854
Telecommunications 628,596 - 628,596
Transportation 398,210 100,290 498,500
Sanitation 161,979 147,542 309,521
Video Production 200,700 - 200,700
Environmental 157,907 - 157,907
Automotive 129,207 - 129,207
Printing - 85,164 85,164
Audio - 46,335 46,335
Copiers - 32,912 32,912
Construction 26,819 - 26,819
Office Equipment 17,293 - 17,293
Material & Handling 15,324 - 15,324
Agriculture 7,079 - 7,079
----- ----- -----
$13,038,692 $1,793,644 $14,832,336
=========== ========== ===========
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners, at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
4Th Street Cleaners St. Petersburg, FL Manufacturing & Production Mar-92 $0 $49,130 $49,130
5Th Street Pharmacy, Inc. Philadelphia, PA Medical Mar-92 0 25,694 25,694
Aacro Precision Griding Sparks, NV Manufacturing & Production Sep-92 24,200 3,047 27,247
ABC Cleaners Pasadena, CA Manufacturing & Production Mar-92 0 93,410 93,410
Absolute Maintenance, Inc. Tampa, FL Material Handling Oct-93 0 26,836 26,836
Adult Career Training Corp. Farmington Hill, MI Medical Mar-92 0 32,035 32,035
Advanced Communication Minneapolis, MN Computers Feb-95 0 33,517 33,517
Adventure Components Inc. Westlake Villge, CA Manufacturing & Production Apr-95 0 25,719 25,719
AHF Marketing Research, Inc. New York, NY Computers Dec-92 0 105,114 105,114
AHS-Kosciusko Community Hospital Warsaw, IN Medical Dec-91 0 773,178 773,178
AHS/USC Imaging Equipment Newport Beach, CA Medical Dec-91 0 1,546,288 1,546,288
AHS/USC Imaging Equipment Newport Beach, CA Medical Dec-91 0 1,178,775 1,178,775
AHS/USC Imaging Equipment Newport Beach, CA Medical Dec-91 0 114,911 114,911
Ajc Associates Inc. Fort Lauderdale, FL Manufacturing & Production Apr-95 0 26,538 26,538
Alamance Knit Fabrics Inc. Burlington, NC Manufacturing & Production Aug-92 0 46,776 46,776
Alpharetta-Woodstock Ob/Gyn Canton, GA Medical Mar-92 0 40,974 40,974
Ambe, Kishore S., Ph.D., MD Anaheim, CA Medical Mar-92 25,597 9,937 35,534
Ambel Precision Manuf. Corp. Bethel, CT Manufacturing & Production Mar-95 0 39,487 39,487
Ambrose Dry Cleaners South Yarmouth, MA Manufacturing & Production Mar-92 0 91,239 91,239
American Garment Care Co. Huntington Park, CA Sanitation Oct-92 29,030 3,283 32,313
Antelope Valley MRI Lancaster, CA Medical Dec-91 806,855 863,495 1,670,350
Ap Propane, Inc. King Of Prussia, PA Computers Dec-92 359,756 152,563 512,319
Apollo Group, Inc. Phoenix, AZ Furniture Dec-91 0 120,110 120,110
Arter & Hadden Cleveland, OH Telecommunications Mar-92 0 62,795 62,795
Aspen Cleaners Cincinnati, OH Manufacturing & Production Mar-92 0 97,627 97,627
Associates In Family Care Olathe, KS Medical Mar-92 0 56,126 56,126
Associates In Family Care Olathe, KS Medical Mar-92 0 31,693 31,693
Atlantic Care Medical Center Lynn, MA Medical Dec-91 5,235 46,420 51,655
Audio Mixers, Inc. New York, NY Manufacturing & Production May-92 0 29,777 29,777
Bakowski, George M., O.D. Shreveport, LA Medical Mar-92 0 36,211 36,211
Ball-Incon Glass Packaging Corp. Muncie, IN Manufacturing & Production Dec-92 795,970 297,574 1,093,544
Ball-Incon Glass Packaging Corp. Muncie, IN Manufacturing & Production Dec-92 515,021 162,816 677,836
Barber Coleman, Co. Loves Park, IL Computers Jun-95 1,216,864 63,692 1,280,556
Barrios, Jose A., MD, Pa Boynton Beach, FL Medical Mar-92 0 44,322 44,322
Batniji, Sobhi A., D.D.S. Laguna Niguel, CA Medical Mar-92 0 39,802 39,802
Bay Center Corporation Tampa, FL Manufacturing & Production Jul-92 0 108,814 108,814
Bayou Cleaners Tarpon Springs, FL Manufacturing & Production Mar-92 0 90,557 90,557
Bell Family Health Center Bell, CA Medical Mar-92 0 35,146 35,146
Blount, Inc. Portland, OR Manufacturing & Production Jun-95 720,176 43,877 764,053
Bob's Cylinder Head Service Fresno, CA Manufacturing & Production Sep-92 23,958 3,360 27,318
Boca Raton Outpatient Surgery Boca Raton, FL Medical Mar-92 0 47,202 47,202
Bordwell And Bratton, D.D.S. Memphis, TN Medical Mar-92 0 43,328 43,328
Bourns, Inc. Riverside, CA Telecommunications Mar-92 0 129,155 129,155
Brenlar Investments, Inc. Novaro, CA Furniture Oct-94 0 315,120 315,120
Brookside Northbrook, IL Manufacturing & Production Mar-92 0 59,494 59,494
Campo, Alphonse, MD Stamford, CT Medical Mar-92 0 38,489 38,489
Cardiovascular Consultants Psc Louisville, KY Medical Mar-92 0 108,549 108,549
Carullo, Emilio J., MD Coral Gables, FL Medical Mar-92 0 25,389 25,389
Center For Special Immunology Ft. Lauderdale, FL Medical Mar-92 0 65,945 65,945
Center For Special Immunology Ft. Lauderdale, FL Medical Mar-92 0 27,292 27,292
Chacko Dry Cleaner Winchester, MA Manufacturing & Production Mar-92 0 80,875 80,875
Charcon Enterprises Charlotte, NC Manufacturing & Production Mar-92 0 79,086 79,086
Chef's Pride, Inc. Seaside, CA Restaurant Oct-92 28,370 3,061 31,431
Childrens & Presbyterian Plano, TX Medical Mar-92 0 31,037 31,037
Chrysler Capital Highland Park, MI Computers Apr-92 390,050 249,974 640,025
Chrysler Corporation Highland Park, MI Computers Sep-91 231,979 117,821 349,800
Chrysler Corporation Highland Park, MI Computers Apr-92 128,043 58,753 186,797
Chrysler Corporition Highland Park, MI Computers Sep-91 131,105 125,194 256,299
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 109,254 117,190 226,444
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 110,329 86,469 196,798
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 123,405 117,839 241,244
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 394,760 191,056 585,817
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 588,742 257,475 846,217
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 33,771 16,346 50,116
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 122,627 51,378 174,004
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 435,087 173,683 608,770
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 567,404 217,122 784,526
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 640,401 245,050 885,450
Chrysler Motors Corp. Highland Park, MI Computers Sep-91 643,095 239,344 882,439
Co-Care Eye Centers, Inc. Germantown, TN Medical Mar-92 26,940 10,458 37,398
Colby, Harker Desoto Bradenton, FL Dry Cleaning Equipment May-92 0 119,600 119,600
Conceptions, Reproductive Denver, CO Medical Jun-92 0 27,338 27,338
Coopwestein Dry Cleaner Brooklyn, NY Manufacturing & Production Jul-92 0 89,776 89,776
Corpus Christi Diagnostic Corpus Christi, TX Medical Aug-92 21,757 8,446 30,203
Costa, Giovanni, MD Orchard Park, NY Medical Mar-92 0 35,304 35,304
Coventry Cleveland Heights, OH Restaurant Sep-93 0 350,000 350,000
Cruttenden & Company Irvine, CA Telecommunications Mar-92 0 33,494 33,494
Daga, Inc. Hilton Head, SC Fixture Nov-92 0 99,216 99,216
Danbury Ob/Gyn Danbury, CT Medical Mar-92 0 25,921 25,921
Delong Sportswear, Inc. Grinnell, IA Manufacturing & Production Jun-95 479,073 12,042 491,115
Delta Point, Inc. Monterey, CA Computers Dec-91 0 67,293 67,293
Delta Point, Inc. Monterey, CA Computers Feb-92 0 78,920 78,920
Delta Point, Inc. Monterey, CA Computers Mar-92 0 91,459 91,459
Delta Point, Inc. Monterey, CA Computers Apr-92 0 32,190 32,190
Deltapoint, Inc. Monterey, CA Computers Sep-94 0 31,309 31,309
Deltapoint, Inc. Monterey, CA Computers Sep-94 0 36,743 36,743
Deltapoint, Inc. Monterey, CA Computers Sep-94 0 51,415 51,415
Denton Hall Burgin & Warrens Los Angeles, CA Telecommunications Mar-92 0 30,906 30,906
Design Design, Inc. Rutland, VT Manufacturing & Production May-92 0 28,109 28,109
Dettmer Hospital Troy, OH Medical Mar-92 0 53,209 53,209
Dimaano, Cecilia D., MD, PC Mesa, AZ Medical Mar-92 0 28,431 28,431
Doctors Hospital Houston, TX Medical Mar-92 0 34,772 34,772
Dominion Medical Associates, Inc. Richmond, VA Medical Mar-92 0 25,231 25,231
Douglas General Hospital Douglasville, GA Medical Dec-91 0 45,129 45,129
Dr. Robert S. Guminey DDS Tomball, TX Medical Oct-91 0 162,864 162,864
Draffin, David S., MD, PA Summerville, SC Medical Mar-92 0 26,385 26,385
Drs. Eade, J.D. & Brooks, B.J. Campbellsville, KY Medical Mar-92 0 69,800 69,800
Dumfries Pharmacy, Inc. Dumfries, VA Medical Mar-92 0 68,276 68,276
Duracell, Inc. Bethel, CT Computers Jun-95 2,152,323 101,227 2,253,550
Duracell, Inc. Bethel, CT Computers Jun-95 1,078,280 28,573 1,106,853
East Point Hospital Lehigh Acres, FL Medical Dec-91 0 175,044 175,044
Eaton Coin Laundry Dunwoody, GA Manufacturing & Production Mar-92 0 94,704 94,704
Emanuel Hospital & Health Center Portland, OR Medical Dec-91 0 438,498 438,498
Eskaton Carmichael, CA Telecommunications Mar-92 0 143,943 143,943
Ettrick Medical Center Ettrick, VA Medical Mar-92 0 40,539 40,539
Executive Dry Cleaners Cranston, RI Manufacturing & Production Mar-92 0 70,054 70,054
Fawcett Memorial Hospital Port Charlotte, IL Medical Dec-91 77,159 190,178 267,337
FCR, Inc. Weymouth, MA Manufacturing & Production Dec-94 0 27,805 27,805
Ferson Dry Cleaner Miami, FL Manufacturing & Production Mar-92 0 77,400 77,400
Festival Cleaners Chantilly, VA Manufacturing & Production Mar-92 0 133,664 133,664
Fiesta Lilburn, GA Manufacturing & Production Mar-92 0 191,108 191,108
First Security Atlanta, GA Manufacturing & Production Mar-92 0 454,480 454,480
Florida Hospitality Resorts Pompano Beach, FL Furniture Jun-94 0 200,251 200,251
Florida Hospitality Resorts Pompano Beach, FL Furniture Jun-94 0 296,849 296,849
Foggy Bottom Washington, DC Medical Mar-92 0 68,280 68,280
Fountain Valley Regional Fountain Valley, CA Medical Dec-91 0 897,554 897,554
Fountain Valley Regional Fountain Valley, CA Medical Oct-93 0 409,914 409,914
G&S Foundry & Manufacturing Co. Red Bud, IL Manufacturing & Production Jan-95 0 36,288 36,288
G.T.R. Inc. Dba Atlanta, GA Restaurant Apr-95 0 55,991 55,991
Garmar Medical Group Montebello, CA Medical Mar-92 0 25,085 25,085
Gerlay Gary S., MD Deming, NM Medical Mar-92 0 51,551 51,551
Gray Television, Inc. Greensboro, NC Computers Mar-95 0 39,376 39,376
Great American Cleaners Friendswood, TX Manufacturing & Production Mar-92 0 93,880 93,880
Greenbrier Family Medical Center Chesapeake, VA Medical Mar-92 0 28,178 28,178
Greene Dot Inc. San Diego, CA Video Production Jul-92 0 25,273 25,273
Gustafson Master Cleaners N. Providence, RI Manufacturing & Production Mar-92 0 94,241 94,241
Hanley, III, James R., MD Macclenny, FL Medical Mar-92 0 28,330 28,330
Hasley Dry Cleaner Ft. Smith, AR Manufacturing & Production Mar-92 0 76,356 76,356
Hatfield, Bonnie Louisville, KY Medical Mar-92 0 52,195 52,195
Healthtrust, Inc. Sun City, FL Medical Dec-91 0 257,223 257,223
Hempstead Park Nursing Home Hempstead, NY Medical Mar-92 0 25,947 25,947
Highland Tap Atlanta, GA Furniture Mar-92 0 39,866 39,866
Hometown Buffet, Inc. San Diego, CA Restaurant Feb-95 0 642,720 642,720
Hope-Gill, Herbert F., MD PA Sarasota, FL Medical Mar-92 0 34,917 34,917
Howard's Tavern Snacks, Inc. Portland, OR Fixture Mar-95 0 30,445 30,445
Howard, Donald C., D.O. Hallandale, FL Medical Mar-92 0 33,618 33,618
Hrangl Medical Development,Inc. Estherville, IA Medical Mar-92 0 31,521 31,521
Humana Inc. Louisville, KY Medical Dec-92 0 37,181 37,181
IMP, Inc. San Jose, CA Manufacturing & Production Mar-95 1,376,519 315,061 1,691,580
Information Storage Devices San Jose, CA Computers Jun-94 0 126,414 126,414
Information Storage Devices San Jose, CA Computers Jun-94 0 358,927 358,927
Information Storage Devices San Jose, CA Computers Aug-94 0 67,381 67,381
Innovo, Inc. Springfield, TN Fixture Jun-94 0 90,785 90,785
Intermark Components, Inc. Huntington Bch, CA Manufacturing & Production Feb-95 0 32,242 32,242
Internal Medicine Group, PA Little Rock, AR Medical Mar-92 0 34,769 34,769
Internal Medicine Specialists Las Vegas, NV Medical Mar-92 0 34,803 34,803
International Communctns Solut Elizabeth, NJ Computers Jun-95 0 42,344 42,344
International Rectifier Corp. El Segundo, CA Telecommunications Jul-93 0 175,626 175,626
International Rectifier Corp. Temecula, CA Telecommunications Mar-92 0 118,882 118,882
Jimenez Soft Touch Tampa, FL Manufacturing & Production Mar-92 0 85,349 85,349
John Corkery Jr Dba Canton, MA Printing Jun-95 0 38,679 38,679
Johnny P. Singh Brawley, CA Material Handling Sep-92 41,049 8,068 49,117
K & I Plastics, Inc. Jacksonville, FL Manufacturing & Production Oct-91 0 25,720 25,720
Ka-Va Inc Dba Clothes Clinic Watertown, MA Manufacturing & Production Jun-95 0 39,148 39,148
Kehne, Susan M & Diaz, Luis MD Las Vegas, NV Medical Mar-92 0 34,859 34,859
Kerr Glass Manufacturing Corp. Los Angeles, CA Manufacturing & Production Dec-92 239,822 103,386 343,208
Kerr Glass Manufacturing Corp. Los Angeles, CA Manufacturing & Production Dec-92 1,046,565 348,824 1,395,388
King, Purtich & Morrice Los Angeles, CA Telecommunications Apr-93 0 53,799 53,799
Kingman Hospital, Inc. Kingman, AZ Medical Dec-91 0 256,524 256,524
Kissimee Memorial Hospital Kissimee, FL Medical Dec-91 0 487,203 487,203
Klasky & Csupo, Inc. Hollywood, CA Office Equipment Sep-92 28,448 4,759 33,207
Klein, Roger MD, Psc Ashland, KY Medical Mar-92 0 45,195 45,195
Knox Insurance Agency Inc. Albany, NY Computers Jun-95 0 28,558 28,558
Kreegr Dry Cleaner Arvada, CO Manufacturing & Production Mar-92 0 80,343 80,343
Kurusu, Shozo, MD Charleston, WV Medical Mar-92 0 50,433 50,433
L.W. Blake Hospital Bradenton, FL Medical Dec-91 0 319,245 319,245
Laclede Steel, Inc. St. Louis, MO Fixture Sep-93 0 79,718 79,718
Lawrence Medical Laboratory Monrovia, CA Medical Mar-92 0 51,876 51,876
Lee-Koh Medical Corporation PC Reseda, CA Medical Mar-92 0 44,052 44,052
Leroy Gorzell Falls City, TX Manufacturing & Production Mar-95 0 34,762 34,762
Little Rock Internal Medicine Little Rock, AR Medical Mar-92 0 53,858 53,858
Long, Nancy L., MD Henderson, NV Medical Mar-92 0 25,072 25,072
Loy Loy Restaurant Clovis, CA Restaurant Sep-92 36,956 4,907 41,863
Mallory Smith Management Srvc. Santa Barbara, CA Computers Apr-94 0 32,683 32,683
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 151,308 151,308
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 81,041 81,041
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 36,106 36,106
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 33,980 33,980
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 29,862 29,862
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 29,549 29,549
Matsco Financial Corp. Emeryville, CA Manufacturing & Production Dec-91 0 28,390 28,390
Mc Hargue, Chauncey A., MD Culpeper, VA Medical Mar-92 0 25,400 25,400
Med Access Stafford, TX Medical Mar-92 0 26,344 26,344
Merle West Medical Center Klamath Falls, OR Medical Mar-92 0 108,517 108,517
Merritt, Melvin D., MD Aurora, CO Medical Mar-92 0 50,555 50,555
Metro-Continental, Inc. Dayton, TX Manufacturing & Production Mar-92 0 78,792 78,792
MGM Enterprises, Inc. Amarillo, TX Fixture Jun-94 0 28,291 28,291
Milpitas Cleaners Milpitas, CA Sanitation Sep-92 29,977 3,019 32,997
Mind's Eye Graphics, Inc. Richmond, VA Computers Mar-95 0 26,972 26,972
Missouri Eye Institute Springfield, MO Medical Mar-92 0 37,398 37,398
Mojabe Chiropractic Rancho Cucamong, CA Medical Mar-92 0 30,595 30,595
Montgomery City Hospital Rockville, MD Medical Dec-91 0 1,148,225 1,148,225
Montgomery City Hospital Rockville, MD Medical Dec-91 0 296,171 296,171
Montgomery City Hospital Rockville, MD Medical Dec-91 0 171,735 171,735
Morgan's Creative Restaurant Beachwood, OH Restaurant Mar-95 0 234,091 234,091
Morgan's Foods Stafford, TX Restaurant Mar-95 0 189,746 189,746
Morgan's Foods, Inc. Beachwood, OH Computers Sep-94 0 102,805 102,805
Mount Pleasant Spinal Health Mount Pleasant, SC Medical Mar-92 0 26,797 26,797
Mount Sinai Medical Center Miami Beach, FL Medical Dec-91 954,276 195,228 1,149,504
Mount Sinai Medical Center Miami Beach, FL Medical Dec-91 1,138,257 356,746 1,495,003
Nair Dry Cleaner Oak Lawn, IL Manufacturing & Production Mar-92 0 98,653 98,653
Nasco Sportswear, Inc. Springfield, TN Computers Sep-92 0 46,691 46,691
Nasco Sportswear, Inc. Springfield, TN Manufacturing & Production Jun-92 0 87,360 87,360
Nasco Sportswear, Inc. Springfield, TN Manufacturing & Production Jun-92 0 87,360 87,360
Nasco Sportswear, Inc. Springfield, TN Manufacturing & Production Jun-92 0 87,360 87,360
Nasco, Inc. Springfield, TN Computers Jun-92 0 780,000 780,000
Ngo Dry Cleaner Beltsville, MD Manufacturing & Production Mar-92 0 73,242 73,242
Norgetown Cleaners Clarendon Hills, IL Manufacturing & Production Mar-92 0 78,588 78,588
Norman's Food Store's, Inc. Nebraska City, NE Computers Dec-93 0 99,615 99,615
Ohio Power Company Columbus, OH Material Handling Oct-92 11,846,000 473,840 12,319,840
Ohio Power Company Columbus, OH Material Handling Oct-92 0 9,525,880 9,525,880
Olash And Van Vooren, MD Louisville, KY Medical Mar-92 0 35,430 35,430
Old Dominion Carstar Eugene, OR Computers Apr-94 0 29,854 29,854
One Hour Martinizing Stone Mountain, GA Manufacturing & Production Mar-92 0 27,289 27,289
Oswego Cleaners Oswego, IL Manufacturing & Production Mar-92 0 71,745 71,745
Oswego Village Clinic Lake Oswego, OR Medical Mar-92 0 25,669 25,669
Palo Alto Car Wash Partners San Francisco, CA Manufacturing & Production Jul-92 0 122,425 122,425
Parker K. Bagley MD Inverness, FL Medical Feb-95 0 88,444 88,444
Parker K. Bagley, MD PA Inverness, FL Medical Dec-91 0 323,733 323,733
Parks, Sheryl L., MD, PC Garden City, MI Medical Mar-92 0 29,018 29,018
Performance A/V, Inc. Alexandria, VA Video Production Sep-93 0 233,785 233,785
Perry Morris Irvine, CA Manufacturing & Production Mar-92 0 5,200,000 5,200,000
Physician Hospital Cedar Knolls, NJ Medical Dec-91 0 234,870 234,870
Pivaroff Chiropractic Corp. Corona Del Mar, CA Medical Mar-92 0 35,324 35,324
Pleasant Hill Cleaners Duluth, GA Manufacturing & Production Mar-92 0 115,657 115,657
Pro Sew Cincinnati, OH Manufacturing & Production Dec-91 0 40,018 40,018
Quail Cleaners Missouri City, TX Manufacturing & Production Mar-92 0 90,402 90,402
R & M Baking Corp. Dba Oceanside, NY Manufacturing & Production Nov-93 0 27,490 27,490
R & M Levy Lafayette, CA Manufacturing & Production Sep-92 0 73,668 73,668
R.E. Smith Printing, Co. Fall River, MA Printing Jun-95 487,200 41,021 528,221
R.U.R. Enterprises, Inc. Houston, TX Furniture Dec-94 0 27,035 27,035
Radiology Assoc. of Mc Allen TX Mc Allen, TX Medical Dec-91 0 190,800 190,800
Radiology Assoc. of Mc Allen TX Mc Allen, TX Medical Dec-91 0 40,776 40,776
Radiology Assoc. of Mc Allen TX Mc Allen, TX Medical Jun-93 0 97,644 97,644
Radiology Assoc. Of Westport Westport, CT Retail May-92 309,873 39,188 349,061
Raintree Cleaners Roswell, GA Manufacturing & Production Mar-92 0 105,265 105,265
Re/Max Fireside Blue Jay Villag, CA Telecommunications Sep-92 27,089 4,030 31,119
Re/Max International, Inc. Englewood, CO Furniture Sep-92 25,462 10,615 36,077
Red Bug Cleaners Winter Springs, FL Manufacturing & Production Mar-92 0 58,238 58,238
Redwood Medical Offices Crescent City, CA Medical Mar-92 0 25,997 25,997
Reino Linen Service, Inc. Gibsonburg, PA Manufacturing & Production Oct-91 0 759,040 759,040
Reino Linen Service, Inc. Gibsonburg, OH Material Handling Dec-92 0 34,022 34,022
Reiter And Perkes MD, PC Medford, NY Medical Dec-91 0 282,435 282,435
Restaurant Management Nw Inc. Portland, OR Restaurant Jun-95 0 373,379 373,379
RLL Miami, FL Manufacturing & Production Mar-92 0 110,112 110,112
Rmc Environmental Service Spring City, PA Computers Mar-92 0 27,592 27,592
Roberts, J.N., MD Boaz, AL Medical Mar-92 0 27,787 27,787
Rockwood Clinic, P.S. Spokane, WA Medical Dec-91 1,120,875 280,122 1,400,997
Roger Colby Cortez, FL Manufacturing & Production Mar-92 0 111,697 111,697
Rogers, Gene W., MD, Pa Sonora, TX Medical Mar-92 0 25,821 25,821
S. Johnson And Sons, Inc. Belvidere, NJ Manufacturing & Production Sep-93 0 77,698 77,698
S.C.W. Corporation Scituate, MA Restaurant May-94 0 27,259 27,259
S.W. FL Regional Medical Ctr Fort Meyers, FL Medical Dec-91 44,580 161,521 206,102
Sage Enterprises, Inc. Des Plains, IL Computers Jun-94 0 119,252 119,252
Sam Houston Memorial Hospital Houston, TX Medical Dec-91 0 585,021 585,021
San Angelo Medical Practice San Angelo, TX Medical Mar-92 0 68,346 68,346
San Angelo Medical Practice San Angelo, TX Medical Mar-92 0 39,846 39,846
Sass, Friedman & Associates Cleveland, OH Medical Mar-92 0 39,205 39,205
Sass, Friedman & Associates Cleveland, OH Medical Mar-92 0 48,444 48,444
Schooley-Steen Medical Fresno, CA Furniture Sep-92 40,167 5,899 46,065
Sharon - John Dry Cleaner Kensigton, CT Manufacturing & Production Mar-92 0 64,410 64,410
Shift & Goldman, Inc. Somerset, NJ Computers Sep-93 0 26,738 26,738
Shin & Washinsky, MD's Las Vegas, NV Medical Mar-92 0 32,602 32,602
Siebe North, Inc. Rockford, IL Computers Jun-95 411,535 19,451 430,986
Sierra Nevada Memorial Hospital Grass Valley, CA Medical Mar-92 0 53,349 53,349
Skal Beverages East, Inc. Easton, MA Restaurant Feb-95 0 37,626 37,626
Skolniks Bagel Bakery Springfield, PA Restaurant Mar-92 0 68,997 68,997
Solom-Page Group Ltd. New York, NY Computers Feb-94 0 42,908 42,908
Solomon Page Group Ltd. New York, NY Furniture Sep-94 0 42,697 42,697
South Florida Family Physician Pembroke Pines, FL Medical Mar-92 0 68,320 68,320
Southhill Company Beverly Hills, CA Fixture Dec-91 0 25,308 25,308
Springfield Tool & Dye, Inc. Springfield, NJ Printing May-92 0 26,256 26,256
St. Elizabeth Hospital, Inc. Appleton, WI Medical Mar-92 0 90,033 90,033
St. Louis Leasing Corp. Ellisville, MO Manufacturing & Production Oct-92 0 780,181 780,181
Staples, Inc. #1 Framingham, MA Retail Feb-94 25,041 5,124 30,165
Staples, Inc. #10 Framingham, MA Retail Feb-94 23,547 4,657 28,204
Staples, Inc. #11 Framingham, MA Retail Feb-94 27,258 5,577 32,835
Staples, Inc. #113 Framingham, MA Retail Feb-94 22,895 4,248 27,142
Staples, Inc. #116 Framingham, MA Retail Feb-94 25,493 4,730 30,223
Staples, Inc. #121 Framingham, MA Retail Feb-94 25,493 4,730 30,223
Staples, Inc. #134 Framingham, MA Retail Feb-94 21,250 3,789 25,040
Staples, Inc. #135 Framingham, MA Retail Feb-94 21,250 3,789 25,040
Staples, Inc. #143 Framingham, MA Retail Feb-94 23,546 4,652 28,198
Staples, Inc. #163 Framingham, MA Retail Feb-94 22,895 4,248 27,142
Staples, Inc. #163 Framingham, MA Retail Feb-94 23,612 4,262 27,874
Staples, Inc. #5 Framingham, MA Retail Feb-94 22,075 4,517 26,591
Staples, Inc. #802 Framingham, MA Retail Feb-94 23,329 4,609 27,938
Stater Brothers Markets Colton, CA Furniture Sep-91 0 551,203 551,203
Stater Brothers Markets Colton, CA Retail Sep-91 104,149 25,947 130,096
Stater Brothers Markets Colton, CA Sanitation Sep-91 56,680 17,839 74,519
Staubach, Co. Dallas, TX Telecommunications Jun-95 455,273 21,858 477,131
Stein-Sloan Blue Bell, PA Medical Mar-92 0 28,366 28,366
Steven Braff, MD Clifton Springs, NY Medical Dec-91 95,724 165,555 261,280
Summit Cleaners Houston, TX Manufacturing & Production Mar-92 0 131,372 131,372
Sun Presentations, Inc. Palm Springs, CA Computers Jun-92 0 25,909 25,909
Sun Presentations, Inc. Palm Springs, CA Video Production Nov-92 0 68,903 68,903
Sunset Screening Room Los Angeles, CA Video Production Jun-95 0 31,136 31,136
Super Miami Ltd Concord, CA Fixture Jun-92 0 104,162 104,162
Svogun, John A., MD Norwalk, CT Medical Mar-92 0 31,203 31,203
Sweet Potato Pie, Inc. Hawthorne, NJ Manufacturing & Production Oct-93 0 26,055 26,055
T & L Creative Salads, Inc. Brooklyn, NY Computers Jan-95 0 27,307 27,307
T.B.G. of Little Neck, Inc. Whitestone, NY Restaurant Oct-94 0 312,000 312,000
Tender Touch Dry Cleaners Winter Haven, FL Manufacturing & Production Mar-92 0 61,819 61,819
The Coin Laundry Grayson, GA Manufacturing & Production Mar-92 0 99,672 99,672
Thompson Medical Specialists Lenoir, NC Medical Mar-92 0 37,859 37,859
Tuckers Square Laundry Atlanta, GA Manufacturing & Production Mar-92 0 84,476 84,476
Twin Cities Hospital Niceville, FL Medical Dec-91 0 154,751 154,751
Ultimate Cleaners Tempe, AZ Manufacturing & Production Mar-92 0 48,143 48,143
United Communications Center Los Alamitos, CA Medical Mar-92 0 35,534 35,534
USX Corporation Pittsburgh, PA Mining Dec-91 5,952,703 1,205,308 7,158,011
Ventura Toyota Ventura, CA Computers Sep-92 30,105 2,958 33,064
Victoria Cleaners Ocala, FL Manufacturing & Production Mar-92 0 47,599 47,599
Video Tape Magazines, Inc. Sun Valley, CA Telecommunications Oct-93 0 27,247 27,247
Visiting Nurse Association Carmichael, CA Telecommunications Mar-92 0 143,943 143,943
Watkins-Johnson Company Palo Alto, CA Telecommunications Mar-92 0 373,874 373,874
Watkins-Johnson Company Palo Alto, CA Telecommunications Mar-92 0 26,650 26,650
Wayfield Foods, Inc. Atlanta, GA Retail Sep-92 70,367 9,359 79,726
Wayfield Foods, Inc. Atlanta, GA Retail Sep-92 64,377 9,769 74,146
Weir Partners Rancho Santa, CA Restaurant Mar-94 0 365,000 365,000
Western Mailing Service Las Vegas, NV Printing Sep-92 37,970 4,552 42,522
Westgate Cleaners Spring City, PA Manufacturing & Production Mar-92 0 85,984 85,984
Westlight Los Angeles, CA Computers Nov-91 0 27,771 27,771
Wilkinson, Maurice G., MD Shiner, TX Medical Mar-92 0 30,692 30,692
Windy City Bagels, Inc. Clinton, NY Restaurant Jun-94 0 138,653 138,653
Windy City Bagels, Inc. Clinton, NY Restaurant Jun-94 0 160,277 160,277
Young Dry Cleaner N. Dartmouth, MA Manufacturing & Production Mar-92 0 130,601 130,601
Young, Walter Russell, MD Waldron, AZ Medical Mar-92 0 60,625 60,625
Zisman, Frank & Katerina, O.D. Hercules, CA Medical Mar-92 0 40,182 40,182
Graphic Consultants Inc Paul Ramsey, MN Manufacturing & Production Mar-96 0 25,030 25,030
Triangle Eye Institute Bakersfield, CA Computers Jul-95 0 25,280 25,280
The Mountain Corp. Marlborough, NH Computers Nov-95 0 26,299 26,299
Champlain Cable Corp. Colchester, VT Manufacturing & Production Jan-96 24,790 2,041 26,831
New London Press Inc. Alpharetta, GA Manufacturing & Production Mar-96 0 26,903 26,903
David Klee Poway, CA Manufacturing & Production Mar-96 0 26,918 26,918
Gary J. Elmer Huntington Beach, CA Manufacturing & Production Nov-95 0 27,441 27,441
Commercial Printing Virginia Beach, VA Manufacturing & Production Mar-96 0 29,218 29,218
The Foxboro Company Foxboro, MA Furniture Jan-96 26,942 2,480 29,421
Kopy King Inc. Chattanooga, TN Manufacturing & Production Mar-96 0 30,284 30,284
Aero Bookbinding Sterling, VA Manufacturing & Production Mar-96 0 30,440 30,440
Centennial Technologies Inc. Billerica, MA Computers Jan-96 29,261 2,606 31,867
J & B Finishers Tucker, GA Manufacturing & Production Mar-96 0 31,949 31,949
Centennial Technologies Inc. Billerica, MA Office Equipment Jan-96 29,691 2,659 32,350
Hurricane Graphics Miami Lakes, FL Manufacturing & Production Mar-96 0 32,734 32,734
International Power Devices Inc. Boston, MA Telecommunications Jan-96 30,916 2,381 33,297
Bell'S Answering Service Inc. Greenwich, CT Telecommunications Jul-95 0 33,747 33,747
Norfolk Warehouse Distribution Norfolk, VA Furniture Jul-95 0 36,945 36,945
Salon 2000 Eden Prairie, MN Fixture Feb-96 0 37,237 37,237
International Power Devices Inc. Boston, MA Computers Jan-96 35,567 2,782 38,349
Tuttle Bowling Enterprises Inc. Scotia, NY Restaurant Equipment Mar-96 0 40,560 40,560
Defcon Ii Carisbed, CA Computers Jul-95 0 40,744 40,744
Gilroy Printers & Office Supplies Gilroy, CA Computers Sep-95 0 44,482 44,482
Boulgourjian Brothers Corp. West Hills, CA Furniture Feb-96 0 46,132 46,132
Matassa'S Market - Dauphine New Orleans, LA Fixture Jan-96 0 51,207 51,207
Beck-Ola Productions, Inc. Santa Monica, CA Computers Mar-96 0 53,292 53,292
I.V.L. Inc. Ft. Lauderdale, FL Computers Jan-96 0 55,589 55,589
Summit Health Inc. Fort Worth, TX Computers Sep-95 0 55,952 55,952
Bombay Duck Company Ltd. Concord, MA Fixture Feb-96 0 57,507 57,507
Steven B. Zelicof Md White Plains, NY Medical Feb-96 0 57,971 57,971
Laguna Graphic Arts Inc Irvine, CA Manufacturing & Production Mar-96 0 72,146 72,146
Frone'S Brokerage Inc. Central Point, OR Fixture Jan-96 0 80,468 80,468
Long Beach Acceptance Corp. Oradell, NJ Computers Nov-95 0 110,452 110,452
Sbs Commercial Leasing Inc. Jericho, NY Computers Jan-96 0 128,369 128,369
The Foxboro Company Foxboro, MA Fixture Sep-95 117,682 12,711 130,393
Downtown Press Inc. Baltimore, MD Manufacturing & Production Mar-96 0 134,240 134,240
Rose Casual Dining, Inc. Newtown, PA Restaurant Equipment Dec-95 0 135,403 135,403
Centennial Technologies Inc. Billerica, MA Manufacturing & Production Jan-96 174,139 15,592 189,732
Centennial Technologies Inc. Billerica, MA Manufacturing & Production Jan-96 248,039 22,215 270,254
Charlie & Jakes Bar-B-Q Inc. Melbourne, FL Manufacturing & Production Dec-95 0 285,762 285,762
Quality Baking L.L.C. Maplewood, MO Restaurant Equipment Dec-95 0 296,400 296,400
The Foxboro Company Foxboro, MA Fixture Jan-96 286,844 27,311 314,154
Centennial Technologies Inc. Billerica, MA Manufacturing & Production Jan-96 349,484 31,125 380,608
Long Beach Acceptance Corp. Oradell, NJ Computers Sep-95 0 569,155 569,155
Clancy'S Inc. Noblesville, IN Restaurant Equipment Dec-95 0 624,000 624,000
General Electric Co. Hartford, CT Computers Dec-95 575,464 102,647 678,111
International Power Devices Inc. Boston, MA Manufacturing & Production Jan-96 35,567 782,577 818,144
The Foxboro Company Foxboro, MA Computers Sep-95 814,341 87,452 901,793
Champlain Cable Corp. Colchester, VT Manufacturing & Production Jan-96 827,839 123,382 951,220
The Foxboro Company Foxboro, MA Manufacturing & Production Sep-95 944,934 84,060 1,028,995
The Foxboro Company Foxboro, MA Manufacturing & Production Jan-96 1,018,693 86,626 1,105,319
The Foxboro Company Foxboro, MA Computers Jan-96 1,388,929 133,331 1,522,260
System Fuels Inc. New Orleans, LA Manufacturing & Production Dec-95 0 2,648,916 2,648,916
Alexander & Alexander Srvs Inc Owings Mill, MD Computers Jan-96 3,263,945 548,331 3,812,276
Total Equipment transactions less than $25,000 2,736,301 1,141,745 3,878,045
$52,375,664 $62,519,238 ***********
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are
owned and leased by ICON Cash Flow Partners, L.P., Series D at March 31,
1996 pursuant to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Material & Handling $17,252,738 - $17,252,738
Manufacturing & Production 14,430,935 518,591 14,949,526
Computer Systems 13,329,428 765,243 14,094,671
Medical 4,635,069 43,561 4,678,630
Restaurant Equipment 1,192,779 1,775,839 2,968,618
Retail Systems 2,073,147 88,953 2,162,100
Furniture & Fixtures 1,061,763 785,793 1,847,556
Telecommunications 1,081,410 239,756 1,321,166
Printing 656,008 74,630 730,638
Video Production 273,636 50,658 324,294
Sanitation 74,519 10,114 84,633
Office Equipment 57,841 23,264 81,105
Automotive 56,077 - 56,077
Audio 15,516 34,545 50,061
Construction 33,926 - 33,926
Agriculture - 19,492 19,492
Copiers 16,827 - 16,827
Photography 6,973 - 6,973
Environmental 6,548 - 6,548
----- -------- -----
$56,255,140 $4,430,439 $60,685,579
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners, at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
19 March Street, Inc. Stamford, CT Furniture Mar-93 $0 $47,942 $47,942
301 BP Service Station Fayetteville, NC Automotive Nov-92 0 30,129 30,129
4 Star Laundry & Supply, Inc. Plattsmouth, NE Manufacturing & Production Nov-92 0 31,043 31,043
A & S Rental Tifton, GA Computers Nov-92 0 30,183 30,183
Aaa Ansafone Answering Service Santa Ana, CA Manufacturing & Production Aug-95 0 25,804 25,804
AATW, Inc. Oakland, CA Material Handling Aug-93 0 31,375 31,375
Abington Obstetrical Windsor, CT Medical Mar-93 0 49,501 49,501
Able Pallet Mfg Hilliard, OH Manufacturing & Production Dec-92 23,518 2,217 25,735
Ace Tree Movers, Inc. Gaithersburg, MD Transportation Mar-93 0 29,412 29,412
Action Technologies, Inc. Alameda, CA Computers Dec-92 0 66,976 66,976
Action Technologies, Inc. Alameda, CA Computers Apr-93 0 71,102 71,102
Addison Tool Inc Oxford, MI Computers Aug-95 0 36,504 36,504
Advance Presort Service Inc Chicago, IL Office Equipment May-93 0 235,358 235,358
Advance Presort Service Inc Chicago, IL Retail May-93 0 101,761 101,761
Advanced Precision Newbury, MA Manufacturing & Production Mar-93 0 38,297 38,297
Advanced Research Concepts, Inc. Simi Valley, CA Sanitation Nov-92 0 33,493 33,493
Advantage Kbs Inc. Edison, NJ Computers Aug-95 0 27,195 27,195
Adventure Sportswear, Inc. Doraville, GA Manufacturing & Production Nov-92 0 30,174 30,174
Advo System, Inc. Windsor, CT Telecommunications May-93 0 77,530 77,530
Advo System, Inc. Hartford, CT Telecommunications May-93 0 68,167 68,167
Advo System, Inc. Windsor, CT Telecommunications Jan-95 0 43,466 43,466
Alaska Airlines, Inc. Seattle, WA Transportation Oct-94 16,808,912 4,778,717 21,587,628
Albert Kemperle Inc. Valley Stream, NY Manufacturing & Production Aug-95 0 29,726 29,726
Albert & Dolores Gaynor Menlo Park, CA Computers Feb-96 0 40,739 40,739
Alpha Music Productions Lenexa, KS Computers Nov-92 0 27,166 27,166
Alternate Curcuit Technology Ward Hill, MA Manufacturing & Production Aug-93 0 529,545 529,545
Alves Precision Engineered Watertown, CT Manufacturing & Production Mar-93 0 41,366 41,366
AMCA International Newington, CT Telecommunications May-93 0 31,308 31,308
American Deburring Dba Afab Irvine, CA Manufacturing & Production May-95 0 29,755 29,755
American Energy Services, Inc. Houston, TX Telecommunications Nov-92 0 30,824 30,824
American Red Cross Hartford Farmington, CT Telecommunications Mar-93 0 25,138 25,138
American Rest Group Newport Beach, CA Restaurant Mar-94 0 652,404 652,404
American Rest Group Newport Beach, CA Retail Mar-94 0 31,606 31,606
American Rest Group Newport Beach, CA Restaurant Mar-94 0 526,016 526,016
American T-Shirts Mesquite, TX Computers Nov-92 0 30,502 30,502
AMI Resort Telecommunications San Clemente, CA Fixture Nov-92 0 31,847 31,847
Amodeo Petti & Flatiron New York, NY Computers Aug-95 0 39,169 39,169
Anderson Glass Co. Inc. Columbus, OH Manufacturing & Production Aug-95 0 26,645 26,645
Anthony Vasselli Md PC Princeton, NJ Medical Aug-95 0 26,143 26,143
Anthony's Auto Body, Inc. Bridgeport, CT Telecommunications Mar-93 0 26,661 26,661
Anton's Airfood Of Bakersfield Bakersfield, CA Restaurant Nov-92 0 26,994 26,994
Apec Display Inc. Clifton, NJ Manufacturing & Production Aug-95 0 35,567 35,567
Applause Management, Inc. Little Falls, NJ Computers Nov-92 0 25,588 25,588
Aqualon Incorporated Louisiana, MO Environmental Feb-93 0 25,243 25,243
Arby's Gainesville, FL Fixture Nov-92 0 28,892 28,892
Arden Nursing Home Inc Hamden, CT Telecommunications May-93 0 29,232 29,232
ARG Enterprises Newport Beach, CA Restaurant Jul-94 0 436,451 436,451
Arianne Productions Corp. Clearwater, FL Audio Equipment Jan-96 0 48,014 48,014
Asbestos Transportation Moncks Conrner, SC Transportation Mar-93 0 27,697 27,697
Atex Knitting Mills Inc. Ridgewood, NY Manufacturing & Production Aug-95 0 31,120 31,120
Athens Obstetrics Windsor, CT Medical Mar-93 0 48,302 48,302
Atlantic Paste & Glue Co., Inc. Brooklyn, NY Manufacturing & Production Nov-92 0 26,664 26,664
AU Technologies Providence, RI Manufacturing & Production Nov-92 0 27,685 27,685
Audioforce New York, NY Telecommunications Aug-95 0 33,295 33,295
Automated Building Systems, Inc. Johnson City, TN Computers Mar-93 0 35,807 35,807
Automated Component Hudson, MA Manufacturing & Production Mar-94 0 102,089 102,089
Automation, Inc. Canton, MA Telecommunications Mar-93 0 25,240 25,240
Aziz Edib Poughkeepsie, NY Fixture Dec-95 0 74,135 74,135
B & B Coffee Service, Inc. Fairfield, CT Restaurant Mar-93 0 31,923 31,923
Baer Aggregates Inc. Phillipsburg, NJ Manufacturing & Production Aug-95 0 30,695 30,695
Bagel Chalet Inc. Commack, NY Restaurant Equipment Jan-96 0 39,003 39,003
Baron Consulting Co. Milford, CT Medical Aug-95 0 26,444 26,444
Barton & Cooney Inc. Trenton, NJ Manufacturing & Production Aug-95 0 27,637 27,637
Baskin Robbins Houston, TX Restaurant Nov-92 0 30,824 30,824
Bassetts of Ft. Lauderdale Ft Lauderdale, FL Restaurant Nov-92 0 31,822 31,822
Bay Foods, Inc. Providence, RI Restaurant Mar-93 0 28,766 28,766
Bella Roma, Inc. Taunton, MA Restaurant Mar-93 0 29,291 29,291
Berol Corporation Brentwood, TN Telecommunications May-93 0 25,651 25,651
Besser Company Alpena, MI Computers Aug-94 0 47,498 47,498
Besser Company Alpena, MI Computers Feb-94 506,779 48,903 555,682
Best Brew, Inc. Elk Grove Villa, IL Restaurant Mar-93 0 41,386 41,386
Best Brew, Inc. Elk Grove Villa, IL Restaurant Mar-93 0 40,221 40,221
Bethlehem Baptist Church Fairfax, VA Retail Mar-93 0 32,348 32,348
Big Star of Many, Inc. Many, LA Retail Feb-93 0 70,442 70,442
Blimpie of Cornwell Cromwell, CT Restaurant Nov-92 0 30,093 30,093
Blue Cross & Blue Shield Of CT North Haven, CT Telecommunications May-93 0 93,286 93,286
Blue Cross & Blue Shield Of CT North Haven, CT Telecommunications May-93 0 362,317 362,317
Blue Cross & Blue Shield Of CT North Haven, CT Computers May-93 0 25,020 25,020
Blue Cross & Blue Shield Of CT North Haven, CT Telecommunications May-93 0 92,259 92,259
Blue Cross & Blue Shield Of CT North Haven, CT Telecommunications May-93 0 242,250 242,250
Blue Cross & Blue Shield Of CT North Haven, CT Telecommunications May-93 0 38,924 38,924
Blue Grass Business Service Lexington, KY Office Equipment May-93 0 263,303 263,303
Blume USA Auto Sales, Inc. Pearland, TX Manufacturing & Production Nov-92 0 25,908 25,908
Bml Productions Inc. Raritan, NJ Retail Oct-95 0 37,173 37,173
Bob's Cleaner Santa Ana, CA Manufacturing & Production Nov-92 0 30,824 30,824
Bodine Corporation Bridgeport, CT Telecommunications May-93 0 60,751 60,751
Boozer Lumber Co., Inc. Columbia, SC Computers Mar-93 0 27,382 27,382
Boston Pie, Inc. Melrose, MA Restaurant Apr-93 0 26,916 26,916
Bowling, Inc. Jackson, MS Fixture Mar-93 0 45,109 45,109
Boxley Enterprises, Inc. Oviedo, FL Restaurant Aug-94 0 27,415 27,415
Bradley Memorial Southington, CT Telecommunications May-93 0 69,398 69,398
Breckenridge Food Systems Inc. Rancho Santa Maria, CRestaurant Equipment Sep-95 0 241,206 241,206
Brenlar Investments, Inc. Novato, CA Furniture Oct-94 0 840,320 840,320
Brewskis Gaslamp Pub, Inc. San Diego, CA Furniture Nov-92 0 30,359 30,359
Bridgeport Machines Bridgeport, CT Telecommunications May-93 0 32,411 32,411
Bridgeport Metal Goods Bridgeport, CT Fixture Mar-93 0 52,425 52,425
Bristol Babcock Inc. Watertown, CT Telecommunications May-93 0 82,427 82,427
Bristol Babcock Inc. Watertown, CT Telecommunications Dec-95 0 42,646 42,646
Buckeye Pressure Washes Cambridge, OH Manufacturing & Production Nov-92 0 30,538 30,538
Burch Trash Service, Inc. Capital Heights, MD Transportation Mar-93 0 41,489 41,489
Burger King Naples, FL Fixture Nov-92 0 31,751 31,751
Business Office Systems & Service Peterborough, NH Furniture Nov-92 0 29,913 29,913
Business Television Washington, DC Video Production Apr-93 0 28,754 28,754
B.M.F. Fitness Of Irving, Inc. Irving, TX Medical Nov-92 0 30,268 30,268
C H Dexter Windsor Locks, CT Computers May-93 0 68,086 68,086
C & B Cleaning Fairfax, VA Sanitation Nov-92 0 30,824 30,824
C & C Duplicators Inc. Bohemia, NY Manufacturing & Production Jan-96 0 37,799 37,799
C & J Contracting, Inc. Campbell, CA Manufacturing & Production Jun-94 30,444 3,105 33,549
Caa Marketing Inc. Westmont, IL Manufacturing & Production Aug-95 0 31,397 31,397
Cafe Chardonnay, Inc. Palm Beach Garden, FLRestaurant Dec-92 0 150,231 150,231
Cain's Drain & Plumbing Co., Inc. Newport News, VA Fixture Dec-93 0 25,948 25,948
California School Furnishings Fresno, CA Telecommunications Feb-96 0 51,659 51,659
Cape Fear Supply Co., Inc. Fayetteville, NC Computers Mar-93 0 50,808 50,808
Caregivers Home Health Montgomery, AL Computers May-93 0 29,142 29,142
Cargill Investor Services, Inc. Chicago, IL Computers Mar-93 0 56,109 56,109
Carolina Truss & Manufacturing Monroe, NC Computers Mar-93 0 32,415 32,415
Catalog Media Corp. Memphis, TN Computers Nov-92 0 30,705 30,705
Cavalleria Rusticana, Inc. Miami, FL Restaurant Nov-92 0 30,180 30,180
CDI Medical Services Inc. Bloomfield, CT Computers May-93 0 30,494 30,494
Centennial Printing King Of Prussia, PA Computers Mar-93 0 44,207 44,207
Center For Continuing Care Stamford, CT Telecommunications Mar-93 0 27,468 27,468
Centocor, Inc. Melvern, PA Medical Mar-94 0 557,191 557,191
Centra Collison, Inc. Long Island City, NY Automotive Mar-93 0 29,122 29,122
Champions Pure Fitness, Inc. Fayetteville, NY Medical Nov-92 0 29,217 29,217
Charten, Inc. Southbury, CT Restaurant Mar-93 0 36,934 36,934
Chase Collections Ltd. Fall River, MA Manufacturing & Production Mar-93 0 25,128 25,128
Chef's Requested Foods, Inc. Oklahoma City, OK Restaurant Mar-93 0 35,449 35,449
Chicago Food Corp. Chicago, IL Manufacturing & Production Nov-92 0 25,728 25,728
City of West Haven West Haven, CT Telecommunications Mar-93 0 37,611 37,611
City of West Haven West Haven, CT Telecommunications Mar-93 0 26,365 26,365
Clearwater Health Club Clearwater Beach, FL Medical Mar-93 0 42,058 42,058
Clearwater Health Club Clearwater Beach, FL Medical Mar-93 0 35,565 35,565
Clement's Supermarket, Inc. Chauvin, LA Retail Mar-93 0 66,711 66,711
Clonetics Corporation San Diego, CA Computers Apr-93 0 29,198 29,198
Club 2520 Tucson, AZ Video Production Nov-92 0 30,176 30,176
Cm Clark Enterprises Inc. Dba Bernardsville, NJ Furniture Jun-95 0 27,551 27,551
Cnc Systems, Inc. Kennebunk, ME Computers Mar-93 0 27,552 27,552
Coastal Septic Sharpes, FL Transportation Mar-93 0 36,493 36,493
Coburn & Meredith Inc. Hartford, CT Telecommunications May-93 0 27,879 27,879
Coffee Time, Inc. Anaheim, CA Restaurant Mar-93 0 49,936 49,936
Coffee Time, Inc. Anaheim, CA Restaurant Mar-93 0 28,256 28,256
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 42,117 42,117
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 43,872 43,872
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 43,932 43,932
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 38,225 38,225
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 45,436 45,436
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 41,342 41,342
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 57,433 57,433
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 42,117 42,117
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 60,818 60,818
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 43,266 43,266
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 75,268 75,268
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 39,471 39,471
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 87,592 87,592
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 42,117 42,117
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 41,562 41,562
Colorado Prime Corp. Farmingdale, NY Telecommunications Nov-92 0 91,474 91,474
Colour Impressions Anaheim, CA Printing Dec-92 30,529 2,903 33,432
Columbia Services Group, Inc. Arlington, VA Fixture Nov-92 0 32,543 32,543
Community Health Center Inc Middletown, CT Telecommunications May-93 0 32,205 32,205
Community Health Service, Inc. Hartford, CT Telecommunications Mar-93 0 29,344 29,344
Complete Tool & Grinding Inc. Minneapolis, MN Manufacturing & Production Feb-96 0 28,720 28,720
Comtec Computer Services, Inc. Houston, TX Computers Mar-93 0 27,306 27,306
Concord Teacakes Excetra Inc. Concord, MA Fixture Mar-96 0 55,768 55,768
Conn Medical Adjustment East Hartford, CT Telecommunications May-93 0 25,602 25,602
Connecticut College New London, CT Telecommunications May-93 0 2,211,435 2,211,435
Connecticut College New London, CT Telecommunications May-93 0 223,296 223,296
Connecticut College New London, CT Telecommunications May-93 0 81,898 81,898
Connecticut College New London, CT Telecommunications May-93 0 97,710 97,710
Connecticut State Newington, CT Telecommunications May-93 0 64,744 64,744
Connecticut Water Company, The East Windsor, CT Telecommunications May-93 0 46,084 46,084
Connecticut Yankee Atomic Hartford, CT Telecommunications May-93 0 304,754 304,754
Consolidated Fitness Enterprises Bedford, TX Manufacturing & Production Nov-92 0 30,485 30,485
Consolidated Waste Industries North Haven, CT Material Handling Mar-93 0 61,323 61,323
Consolidated Waste Industries N.E. Washington, DC Transportation Mar-93 0 66,455 66,455
Constantine G. Scrivanos Atklnson, NH Restaurant Mar-93 0 29,182 29,182
Contento & Kaplan Optomet Bronx, NY Medical Aug-95 0 26,327 26,327
Continental Coin Processors Buffalo, NY Manufacturing & Production Feb-96 0 52,320 52,320
Continental Contractors Audubon, PA Material Handling Mar-93 0 32,128 32,128
Convalescent Center Of Bloomfield Bloomfield, CT Medical May-93 0 30,761 30,761
Corporate Health New Haven, CT Telecommunications May-93 0 40,114 40,114
Costello Lomasney & Denapoli Manchester, NH Computers Mar-93 0 29,771 29,771
Country Club Liquors Largo, FL Restaurant Nov-92 0 26,942 26,942
Countryside Manor, Inc. Bristol, CT Telecommunications Mar-93 0 26,257 26,257
Covalent Systems Corp. Fremont, CA Computers Mar-93 0 27,216 27,216
Craftsman Auto Body Sterling, VA Computers Aug-95 0 33,202 33,202
Creative Vision Graphics Marina Del Ray, CA Printing May-95 0 33,037 33,037
CT Junior Rebulic Assoc. Litchfield, CT Telecommunications Mar-93 0 26,061 26,061
CT Transit/HNS Management Hartford, CT Transportation May-93 0 44,728 44,728
Custom Print, Inc. Pleasanton, CA Computers Mar-93 0 29,993 29,993
D & B Computing Wilton, CT Telecommunications May-93 0 132,764 132,764
Dallas Recording Co., Inc. Denton, TX Audio Nov-92 0 27,036 27,036
Danbury Eye Physicians Danbury, CT Telecommunications Mar-93 0 25,267 25,267
Danbury Printing & Litho Danbury, CT Telecommunications May-93 0 69,330 69,330
Danville Ob/Gyn Assoc. Windsor, CT Medical Mar-93 0 41,481 41,481
Dark House Comics, Inc. Milwaukie, OR Manufacturing & Production May-94 57,129 6,362 63,492
Data Works Glen Avon, CA Printing Nov-92 0 27,068 27,068
Datahr Rehabilitation Brookfield, CT Telecommunications Mar-93 0 27,960 27,960
David A. Grossman DDS PC Baldwin, NY Medical Aug-95 0 86,381 86,381
David A. Kamlet MD PC New York, NY Medical Aug-95 0 27,479 27,479
Deburr Company Inc. Plantsville, CT Manufacturing & Production May-95 0 34,928 34,928
Decarlo & Doll Inc. Hamden, CT Telecommunications May-93 0 25,611 25,611
Deitsch Plastic Co. Inc. West Haven, CT Telecommunications May-93 0 32,671 32,671
Dejean Construction Co. Texas City, TX Computers Apr-95 0 36,633 36,633
Delta Video, Inc. Anaheim, CA Video Production May-94 0 43,569 43,569
Delta Video Duplicating Anaheim, CA Video Production Nov-92 0 30,301 30,301
Denville Bagel Baking Denville, NJ Restaurant Nov-92 0 25,863 25,863
Detroit Osteopathic Hospital Southfield, MI Medical Mar-93 0 47,853 47,853
Digital Computing System, Inc. Bryan, TX Furniture Mar-93 0 39,735 39,735
Digital Operations Technical New York, NY Computers Mar-93 0 41,797 41,797
Dillon Video Production Ocala, FL Video Production Apr-93 0 28,363 28,363
Dino's Dallas, TX Agriculture Nov-92 0 31,460 31,460
Discovery Research Group Salt Lake City, UT Copiers Nov-92 0 25,820 25,820
Donald L. Eger Jr., Inc. Cincinnati, OH Computers May-94 27,791 2,788 30,579
Douglas F. Johnson Hillsboro, TX Manufacturing & Production Jun-94 25,853 2,848 28,701
Driscoll Motors, Inc. Hartford, CT Telecommunications May-93 0 44,565 44,565
Drs. Nat-Grant Associates Windsor, CT Medical Mar-93 0 54,018 54,018
Drummey Donuts, Inc. Norwood, MA Restaurant Mar-93 0 34,171 34,171
Dynatenn, Inc. Weymouth, MA Manufacturing & Production Mar-93 0 55,208 55,208
Dynatenn, Inc. Weymouth, MA Computers Mar-93 0 55,262 55,262
D' La Colmena Mexican Food Watsonville, CA Restaurant Nov-92 0 28,211 28,211
East Hartford Ltd. Partnership Windsor, CT Medical Mar-93 0 37,746 37,746
Easter Seal Society Hebron, CT Telecommunications Mar-93 0 27,304 27,304
Eastway Metals Cleveland Heigh, OH Manufacturing & Production Nov-92 0 29,361 29,361
Edison Brothers Stores, Inc. St. Louis, MO Retail Jun-94 7,642,182 606,511 8,248,693
Edmond's Corner Body Shop Chesapeake, VA Automotive Nov-92 0 28,783 28,783
Edward Greenberg Nyack, NY Video Production Mar-95 0 35,848 35,848
Ellen Fitzenrider Barnwell, SC Medical Nov-92 0 27,619 27,619
Ellman Hahn Schwartz Windsor, CT Medical Mar-93 0 39,195 39,195
Emco Sales & Service Inc North Bergen, NJ Manufacturing & Production Aug-95 0 28,568 28,568
Empac Design, Inc. Dallas, TX Printing Mar-93 0 30,984 30,984
Empire of Orange Realtors Pomona, NY Furniture Nov-92 0 31,271 31,271
Engineers Country Club, Inc. Rosalyn Harbor, NY Medical Mar-93 0 31,210 31,210
Enthone Omi, Inc. West Haven, CT Telecommunications Mar-93 0 29,686 29,686
Enthone Omi, Inc. West Haven, CT Telecommunications Nov-93 0 53,318 53,318
Enthone Omi, Inc. West Haven, CT Telecommunications May-93 0 34,295 34,295
Enthone Omi, Inc. West Haven, CT Telecommunications Mar-93 0 35,855 35,855
ESM/Exton, Inc. Blue Bell, PA Restaurant Dec-94 0 416,000 416,000
Eugene Shiffett Stafford, VA Transportation Mar-93 0 35,688 35,688
Evernet Education Services, Inc. Los Angeles, CA Computers May-94 24,423 3,043 27,466
Ewing Farms, Inc. Smyrna, DE Transportation Mar-93 0 39,403 39,403
Executrain Of Texas Dallas, TX Computers Apr-95 0 53,872 53,872
Extech Instruments Corporation Waltham, MA Computers Mar-93 0 34,725 34,725
Fair Auto Supply Bridgeport, CT Telecommunications Mar-93 0 32,206 32,206
Faith Pleases God Church Harlingen, TX Fixture Apr-95 0 30,127 30,127
Fallick Klein Partnership Houston, TX Manufacturing & Production Apr-95 0 27,615 27,615
Farah H Vikoren, MD Windsor, CT Medical Mar-93 0 48,666 48,666
Farm Acquisitions Corporation Pomfret, CT Telecommunications May-93 0 52,754 52,754
Farmco, Inc. Seguin, TX Manufacturing & Production Jul-93 0 160,202 160,202
Felecia L. Dawson Md Atlanta, GA Medical May-95 0 33,861 33,861
Fergy's Expresso Seattle, WA Restaurant Nov-92 0 32,458 32,458
Field's Bakery, Inc. Pleasentville, NJ Restaurant Mar-93 0 37,631 37,631
Figs West Hollywood, CA Restaurant Nov-92 0 25,400 25,400
Filterfresh Denver, Inc. Denver, CO Restaurant Mar-93 0 33,886 33,886
First Quality Health Care Chicago, IL Medical Nov-92 0 31,460 31,460
First Stop Bagel, Inc. Babylon, NY Restaurant Nov-92 0 31,460 31,460
Fiserv New Haven, Inc. Wallingford, CT Computers May-93 0 39,751 39,751
Fit Physique, Inc. Longview, WA Manufacturing & Production Nov-92 0 34,174 34,174
Flextex Pinellas Park, FL Printing Nov-92 0 33,251 33,251
Flint Hill School Oakton, VA Retail Mar-93 0 26,950 26,950
Floor Covering Interiors, Inc. Tucson, AZ Manufacturing & Production Aug-94 0 28,449 28,449
Florida Homes Showcase, Inc. Lake City, FL Telecommunications Mar-93 0 26,532 26,532
Food For Thought Exton, PA Restaurant Nov-92 0 30,609 30,609
Foster Medical Supply Inc Hartford, CT Telecommunications May-93 0 30,034 30,034
Francis Poirier Ellington, CT Printing Mar-93 0 42,219 42,219
Francis Poirier Ellington, CT Manufacturing & Production Mar-93 0 33,236 33,236
Fred Talarico MD Utica, NY Manufacturing & Production Aug-95 0 26,788 26,788
Freemont House Of Pizza, Inc. Fremont, NH Restaurant Nov-92 0 26,510 26,510
Fuel Cell Manufacturing Danbury, CT Telecommunications May-93 0 25,265 25,265
Fuller Roberts Clinic, Inc. Windsor, CT Medical Mar-93 0 50,236 50,236
Future Productions, Inc. New York, NY Video Production Mar-93 0 41,473 41,473
Gale H. Pike Laguna Beach, CA Furniture Dec-92 0 40,283 40,283
Gale H. Pike Laguna Beach, CA Furniture Dec-92 0 63,573 63,573
Gale H. Pike Laguna Beach, CA Furniture Dec-92 0 60,286 60,286
Gamma One, Inc. North Haven, CT Telecommunications May-93 0 31,131 31,131
Garrison Fuel Oil Of L.I. Plainview, NY Office Equipment Aug-95 0 29,013 29,013
Gary Eagan Easton, MA Restaurant Mar-93 0 38,295 38,295
Gasoline Merchants, Inc. Waltham, MA Automotive Mar-93 0 29,568 29,568
Gasoline Merchants, Inc. Waltham, MA Environmental Mar-93 0 35,439 35,439
Gaspari Corporation Ocean Township, NJ Medical Mar-93 0 48,434 48,434
GCSG Ob-Gyn Associates Windsor, CT Medical Mar-93 0 38,372 38,372
General Foam Sun Valley, CA Construction Mar-93 0 39,399 39,399
General Video-Tex Corporation Cambridge, MA Computers Mar-93 0 27,775 27,775
Genesis Mobile Diagnostic, Inc. Miami, FL Medical Nov-92 0 31,772 31,772
Geno's West Jefferson, NC Restaurant Nov-92 0 27,626 27,626
Gibson Co. The C.R. Norwalk, CT Telecommunications May-93 0 237,384 237,384
Glastonbury Town Of Police Glastonbury, CT Telecommunications May-93 0 57,940 57,940
Goldate Enterprises Inc. Dba Corpus Christi, TX Manufacturing & Production Jun-95 0 27,357 27,357
Golden Corral Steakhouse Hueytown, AL Restaurant Nov-92 0 28,005 28,005
Gold's Gym Canton, MA Medical Nov-92 0 29,529 29,529
Grand Union Wayne, NJ Retail Dec-93 0 331,713 331,713
Grand Union Wayne, NJ Retail Dec-93 0 260,075 260,075
Grand Union Passaic, NJ Retail Dec-93 0 217,409 217,409
Graphic Data of New Jersey, Inc. Mount Laurel, NJ Computers Mar-93 0 46,867 46,867
Graphic Options Inc. Plainview, NY Printing Jan-96 0 42,141 42,141
Graphic Press Flint, MI Printing Dec-92 24,124 2,371 26,495
Graphic Services, Inc. Tacoma, WA Manufacturing & Production Jun-94 39,350 4,899 44,249
Graphik Dimensions Ltd. Flushing, NY Computers Mar-93 0 29,999 29,999
Grolier, Inc. Danbury, CT Telecommunications Mar-93 0 32,525 32,525
Grolier, Inc. Danbury, CT Telecommunications Mar-93 0 29,427 29,427
Guadalajara Mexican Deli Tracy, CA Restaurant Nov-92 0 26,037 26,037
Gumby'S Pizza Systems Inc. Gainesville, FL Restaurant Apr-95 0 26,879 26,879
Gun Hill Collision Bronx, NY Manufacturing & Production Apr-93 0 26,341 26,341
H & R Block Lebanon, TN Computers Nov-92 0 28,540 28,540
H & T Tool Fairfield, NJ Manufacturing & Production Nov-92 0 27,286 27,286
Hahner, Foreman & Harness, Inc Wichita, KS Computers Mar-96 0 41,888 41,888
Harco Laboratories, Inc. Branford, CT Telecommunications Mar-93 0 25,156 25,156
Harold Hawes Charlottesville, VA Transportation Mar-93 0 33,760 33,760
Harold Hawes Charlottesville, VA Transportation Mar-93 0 47,557 47,557
Harold Wasson, Jr. Corona, CA Furniture Mar-93 0 38,041 38,041
Harry's Oyster Bar Club Oklahoma City, OK Restaurant Nov-92 0 30,806 30,806
Hazen, Inc. East Moline, IL Environmental Feb-93 0 52,425 52,425
Hazen Inc East Moline, IL Manufacturing & Production Dec-92 27,486 4,926 32,412
HBO & Co #11 Atlanta, GA Computers Sep-93 843,016 113,310 956,326
HBO & Co. #10 Atlanta, GA Computers Sep-93 269,389 49,673 319,063
HBO & Co. #12 Atlanta, GA Computers Sep-93 385,363 69,995 455,358
HBO & Co. #2 Atlanta, GA Computers Sep-93 58,230 10,750 68,980
HBO & Co. #3 Atlanta, GA Computers Sep-93 100,579 18,568 119,147
HBO & Co. #4 Atlanta, GA Computers Sep-93 152,343 28,124 180,467
HBO & Co. #5 Atlanta, GA Computers Sep-93 332,268 61,340 393,608
Health Systems International Wallingford, CT Telecommunications May-93 0 55,360 55,360
Hebrew Home & Hospital West Hartford, CT Telecommunications May-93 0 110,600 110,600
Hedges, David C. Nashville, TN Retail Mar-93 0 32,425 32,425
Helvetia Coal Company Indiana, PA Mining Dec-92 151,276 66,138 217,414
Helvetia Coal Company Indiana, PA Mining Dec-92 427,481 151,020 578,501
Hendersonville Obst. Windsor, CT Medical Mar-93 0 44,348 44,348
Hesco, Inc. Watertown, SD Manufacturing & Production Jun-94 39,746 4,586 44,333
Hickey Chemists Ltd. New York, NY Computers Aug-95 0 28,393 28,393
Himani Enterprises, Inc. Rego Park, NY Restaurant Mar-93 0 27,299 27,299
Hi-G Company Inc. Pitman, NJ Telecommunications May-93 0 26,945 26,945
Hi-Tech of DFW Hurst, TX Automotive Nov-92 0 29,299 29,299
Hocking Chemical Corp. National City, CA Manufacturing & Production Apr-93 0 29,699 29,699
Holy Bagel Hackettstown, NJ Restaurant Nov-92 0 30,904 30,904
Homesteaders Life Company Des Moines, IA Printing Feb-93 0 26,777 26,777
Hometown Buffet, Inc. San Diego, CA Restaurant Feb-95 0 618,000 618,000
Honey Dew Associates, Inc. Planville, MA Restaurant Mar-93 0 47,019 47,019
Hospitality Franchise Systems Parsippany, NJ Furniture Mar-93 0 40,219 40,219
Hospitality Springs Atlanta, GA Restaurant Dec-93 0 126,000 126,000
HPK Corporation Mesquite, TX Manufacturing & Production Mar-95 0 26,949 26,949
HTB Restaurant, Inc. Salt Lake City, UT Restaurant Mar-94 0 425,871 425,871
HTB Restaurant, Inc. Salt Lake City, UT Restaurant Mar-94 0 426,137 426,137
Huston-Lynn Enterprises Inc. Indianapolis, IN Restaurant Equipment Jan-96 0 26,384 26,384
H. John Schutze DDS Queensbury, NY Computers Aug-95 0 33,429 33,429
Il Bacio, Inc. Marlboro, NJ Restaurant Nov-92 0 30,866 30,866
Image Data Management Systems Orange, CA Manufacturing & Production Nov-92 0 25,762 25,762
Immaculate Conception Church Towson, MD Retail Mar-93 0 25,891 25,891
Impressions, Inc. East Windsor, CT Computers Mar-93 0 44,541 44,541
In Hyun Cho Whitestone, NY Manufacturing & Production Aug-95 0 34,285 34,285
Indiana Michigan Power Company Columbus, OH Material Handling Sep-92 9,082,384 363,295 9,445,679
Indiana Michigan Power Company Columbus, OH Material Handling Sep-92 0 4,610,840 4,610,840
Innerdyne Medical, Inc. Sunnyvale, CA Furniture May-94 24,481 2,600 27,081
Inrad, Inc. Northvale, NJ Computers Mar-93 0 57,087 57,087
Inrad, Inc. Northvale, NJ Manufacturing & Production Mar-93 0 41,547 41,547
Intense Bodyworks, Inc. Edgewood, NY Medical Mar-93 0 48,200 48,200
International Biotechnologies New Haven, CT Telecommunications May-93 0 68,672 68,672
International Rectifier Corp 2 El Segundo, CA Material Handling Dec-92 91,681 16,147 107,828
International Rectifier Corp 5 El Segundo, CA Material Handling Dec-92 59,963 10,194 70,157
International Rectifier Corp 6 El Segundo, CA Material Handling Dec-92 27,603 4,837 32,439
International Rectifier Corp 8 El Segundo, CA Material Handling Dec-92 40,710 7,022 47,732
International Rectifier Corp. El Segundo, CA Material Handling Dec-92 928,919 168,139 1,097,058
International Rectifier Corp. El Segundo, CA Material Handling Dec-92 366,711 60,948 427,660
International Rectifier Corp. El Segundo, CA Material Handling Dec-92 540,297 92,579 632,877
International Rectifier Corp. El Segundo, CA Material Handling Dec-92 337,702 56,148 393,850
International Software Frederick, MD Printing Dec-92 22,653 3,445 26,098
Inter-Church Residences Inc Bridgeport, CT Telecommunications May-93 0 74,453 74,453
Inter-Financial Group Schaumburg, IL Furniture Apr-93 0 27,943 27,943
Investors Fudiciary Services Atlanta, GA Computers Nov-92 0 27,580 27,580
Item Nine Montpeller, VT Restaurant Mar-93 0 29,163 29,163
Itt Flygt Corporation Trumbull, CT Telecommunications May-93 0 56,986 56,986
IVF America, Inc. Greenwich, CT Medical Dec-92 0 165,805 165,805
IVF America, Inc. Greenwich, CT Medical Dec-92 0 123,254 123,254
IVI Travel, Inc. Northbrook, IL Furniture Mar-93 0 35,784 35,784
IVI Travel, Inc. Northbrook, IL Furniture Mar-93 0 39,314 39,314
Jacobs Mfg Bloomfield, CT Telecommunications May-93 0 48,356 48,356
James Lyver East Hartford, CT Construction Mar-93 0 46,909 46,909
Janin Corporation Perth Amboy, NJ Computers Apr-93 0 26,047 26,047
Jaymee Housefield Ft. Walton Beac, FL Medical Mar-93 0 30,539 30,539
Jetstream Cafe Avon, CT Furniture Mar-93 0 28,537 28,537
Jim Whitman Studios, Inc. Clifton, NJ Computers Jun-94 35,732 4,183 39,914
John F. Almeida Dairy Tulare, CA Agriculture Nov-92 0 28,070 28,070
John Hassell's Dry Cleaning Plano, TX Sanitation Nov-92 0 30,824 30,824
John Kruse DDS New York, NY Medical Aug-95 0 31,470 31,470
John M. Hulbrook New York, NY Furniture Mar-93 0 26,020 26,020
John & Frank Chaung DDS New York, NY Medical Aug-95 0 36,143 36,143
Joseph H. Tees & Son Inc. Bensalem, PA Manufacturing & Production Aug-95 0 27,044 27,044
Joseph P. Mccain DMD PA Miami, FL Computers Aug-95 0 26,667 26,667
Joseph-Beth Booksellers Of Ohio Cincinnati, OH Audio Equipment Jan-96 0 26,373 26,373
Joyland Country Enterprises Clearwater, FL Restaurant Dec-92 0 52,369 52,369
Jo-Ann's Nut House Garden City, NY Manufacturing & Production Jun-93 0 28,691 28,691
Jpr Enterprises Inc. Marina Del Ray, CA Computers Jul-95 0 40,681 40,681
Juliet Cafe Billiards Poughkeepsie, NY Furniture Nov-92 0 25,428 25,428
J&J Burger, Inc. Dba Burger King Harrisburg, PA Restaurant Dec-93 0 149,773 149,773
J&J Burger, Inc. Dba Burger King Harnsburg, PA Restaurant Dec-93 0 167,885 167,885
J. Baker, Inc. Canton, MA Manufacturing & Production Mar-94 0 265,815 265,815
J. Walter Thompson USA, Inc. New York, NY Video Production Sep-93 0 80,952 80,952
K & M Machine Co., Inc. Newport, NH Manufacturing & Production Mar-93 0 32,185 32,185
Kaman Aerospace Bloomfield, CT Telecommunications May-93 0 276,151 276,151
Kaman Aerospace Bloomfield, CT Telecommunications May-93 0 55,660 55,660
Kaman Aerospace Corporation Bloomfield, CT Telecommunications Jan-94 0 208,323 208,323
Kaman Aerospace Corp. Bloomfield, CT Telecommunications Nov-95 0 131,743 131,743
Kaman Aerospace Corp. Bloomfield, CT Telecommunications Nov-95 0 70,544 70,544
Kaman Corporation Boston, MA Manufacturing & Production Mar-94 1,391,054 159,268 1,550,321
Karen Lietz Ionia, NY Material Handling May-94 24,280 3,135 27,415
Keja Associates Inc. Vista, CA Manufacturing & Production Aug-95 0 29,942 29,942
Kent School Corporation Kent, CT Telecommunications May-93 0 69,262 69,262
Kerr Steamship Company, Inc. Rosemont, IL Telecommunications Mar-93 45,117 8,993 54,110
Keywest Instant Images Keywest, FL Computers Nov-92 0 25,361 25,361
Kidco Enterprises, Inc. New York, NY Computers Mar-95 0 31,667 31,667
Kinkos Of Thousand Oaks W. Lake Village, CA Furniture Aug-95 0 25,418 25,418
Kinnett Dairies, Inc. Columbus, GA Manufacturing & Production Aug-94 0 361,275 361,275
Klein Rubbish Removal Sarasota, FL Material Handling Mar-93 0 42,636 42,636
Knight-Ridder, Inc. Washington, DC Printing Mar-93 0 25,689 25,689
KNNC-FM Georgetown, TX Audio Nov-92 0 29,938 29,938
Koman Sportswear Manufacturing Carlstadt, NJ Computers Mar-95 0 35,731 35,731
Kouri Capital Group, Inc. New York, NY Computers May-94 24,132 2,628 26,759
Kurzweil Applied Intelligence Waltham, MA Computers Mar-93 0 46,598 46,598
Kustaards Ltd. Bethel, CT Fixture Aug-95 0 49,980 49,980
K.S. Fashions Inc. Los Angeles, CA Manufacturing & Production May-95 0 37,210 37,210
L & N Label Co., Inc. Clearwater, FL Printing Mar-94 0 33,526 33,526
La Parisienne Bakery, Inc. Austin, TX Restaurant Nov-92 0 29,234 29,234
Lane Foods, Inc. Providence, RI Restaurant Mar-93 0 39,811 39,811
Lane Randolph New Castle, DE Transportation Mar-93 0 39,868 39,868
Latham Tire St. Louis, MO Automotive Feb-93 0 37,371 37,371
Lawrence Friedman Brooklyn, NY Furniture Mar-93 0 48,739 48,739
Lawrence Ob-Gyn Windsor, CT Medical Mar-93 0 47,062 47,062
Lechters, Inc. Harrison, NJ Copiers Mar-93 0 60,876 60,876
Legal Eagles Copy Service Irvine, CA Copiers Nov-92 0 29,195 29,195
Lenders Bagel Bakery West Haven, CT Computers Mar-93 0 49,402 49,402
Life Reassurance Corp. of America Stamford, CT Telecommunications Mar-93 0 48,004 48,004
Lilyblad Petroleum, Inc. Tacoma, WA Sanitation Mar-93 0 32,085 32,085
Linc Systems Corp. Bloomfield, CT Computers Mar-93 0 52,621 52,621
Linguistic Systems, Inc. Cambridge, MA Printing Mar-93 0 33,176 33,176
Lino Press New York, NY Manufacturing & Production Aug-95 0 49,039 49,039
LNS Group, Inc. Yantic, CT Telecommunications May-93 0 34,809 34,809
Load Star, Inc. Lavonia, GA Computers Mar-93 0 34,963 34,963
Loh Corporation Dba Arlington, TX Computers Apr-95 0 42,005 42,005
Longford Homes of Nevada, Inc. Las Vegas, NV Computers Nov-92 0 26,524 26,524
Louis Frey Co., Inc. New York, NY Computers Mar-93 0 39,059 39,059
Louis Vinagro Johnston, RI Construction Mar-93 0 45,714 45,714
Louis Vinagro Johnston, RI Manufacturing & Production Mar-93 0 58,707 58,707
Lo-Est Printing Co., Inc. Carmel, IN Computers Mar-93 0 31,658 31,658
Madeux Vending Fernandina, FL Restaurant Nov-92 0 30,824 30,824
Madison Board of Education Madison, CT Computers Mar-93 0 56,540 56,540
Magnetek Century Electric St. Louis, MO Telecommunications Dec-92 25,906 2,385 28,291
Management Professional Redondo Beach, CA Computers May-93 0 27,082 27,082
Manchester Ob/Gyn Associates Windsor, CT Medical Mar-93 0 43,662 43,662
Mancuso Sr. Inc. Houston, TX Manufacturing & Production Feb-96 0 35,600 35,600
Manhattan Cable Television New York, NY Copiers Mar-93 0 41,371 41,371
Manufacturer's Lease Company Norwalk, CT Printing Mar-93 0 40,538 40,538
Marikina Engineers West Haven, CT Construction Mar-93 0 32,958 32,958
Marine Container, Inc. Los Angeles, CA Computers Jul-93 0 25,899 25,899
Mario J. Dominquez, DC La Puente, CA Medical Mar-95 0 25,922 25,922
Market Street Grill Columbus, OH Computers Nov-92 0 26,808 26,808
Maro Electronic's Bristol, PA Audio Jun-93 0 27,123 27,123
Martin Mcgrath DPM New York, NY Medical Aug-95 0 30,379 30,379
Marymount University Arlington, VA Retail Mar-93 0 40,501 40,501
Marymount University Arlington, VA Retail Mar-93 0 28,867 28,867
Masco Corporation of Indiana Cumberland, IN Computers Mar-93 0 28,127 28,127
Mashantucket Pequot Gaming Ledyard, CT Fixture Mar-93 0 44,078 44,078
Mashantucket Pequot Gaming Ledyard, CT Furniture Mar-93 0 26,271 26,271
Mashantucket Pequot Gaming Ledyard, CT Manufacturing & Production Mar-93 0 32,783 32,783
Mashantucket Pequot Gaming Ledyard, CT Computers Mar-93 0 35,365 35,365
Mashantucket Pequot Gaming Ledyard, CT Photography Mar-93 0 41,581 41,581
Mashantucket Pequot Gaming Ledyard, CT Fixture Mar-93 0 45,174 45,174
Mashantucket Pequot Gaming Ledyard, CT Photography Mar-93 0 36,441 36,441
Mashantucket Pequot Gaming Ledyard, CT Fixture Mar-93 0 29,456 29,456
Mashantucket Pequot Gaming Ledyard, CT Restaurant Mar-93 0 40,352 40,352
Mashantucket Pequot Gaming Ledyard, CT Furniture Mar-93 0 40,895 40,895
Mashantucket Pequot Gaming Ledyard, CT Restaurant Mar-93 0 33,126 33,126
Mashantucket Pequot Gaming Ledyard, CT Computers Mar-93 0 28,576 28,576
Mashantucket Pequot Gaming Ledyard, CT Telecommunications Mar-93 0 43,122 43,122
Mashantucket Pequot Gaming Ledyard, CT Furniture Mar-93 0 41,487 41,487
Mashantucket Pequot Gaming Ledyard, CT Computers Mar-93 0 40,460 40,460
Mc Cue Mortgage Co., Inc. New Britain, CT Telecommunications May-93 0 36,360 36,360
Medstar, Inc. Waterbury, CT Medical Nov-92 0 28,789 28,789
Medstar Inc. Waterbury, CT Telecommunications May-93 0 115,110 115,110
Mefa, Inc. Medford, MA Manufacturing & Production Nov-92 0 31,429 31,429
Meikejohn & Stone Clinic Pc Windsor, CT Medical Mar-93 0 53,763 53,763
Mekka Java San Diego, CA Restaurant Nov-92 0 27,416 27,416
Melvin J.Kordon, MD PA Ellicott City, MD Medical Nov-92 0 28,945 28,945
Mesh, Inc. Iselin, NJ Restaurant Mar-93 0 27,921 27,921
Met Life Insurance Co. Clayton, MO Furniture Feb-94 0 37,773 37,773
Metal Leve #2 Ann Arbor, MI Manufacturing & Production Sep-93 256,817 61,114 317,931
Metal Leve #3 Ann Arbor, MI Manufacturing & Production Sep-93 241,282 54,650 295,931
Metal Leve #4 Ann Arbor, MI Manufacturing & Production Sep-93 1,856,605 425,263 2,281,868
Metal Leve #5 Ann Arbor, MI Manufacturing & Production Sep-93 963,924 220,375 1,184,300
Metal Leve #6 Ann Arbor, MI Manufacturing & Production Sep-93 590,764 134,986 725,751
Metal Leve #7 Ann Arbor, MI Manufacturing & Production Sep-93 504,410 115,125 619,534
Metal Leve #8 Ann Arbor, MI Manufacturing & Production Sep-93 176,119 30,921 207,040
Metal Level #1 Ann Arbor, MI Manufacturing & Production Sep-93 1,636,613 389,489 2,026,102
Metrology Systems, Inc. Santa Ana, CA Manufacturing & Production Aug-93 0 29,446 29,446
Michael Gulotta DDS Holtsville, NY Medical Aug-95 0 25,070 25,070
Microgenesys, Inc. Meriden, CT Computers Mar-93 0 32,634 32,634
Microgenesys, Inc. Meriden, CT Manufacturing & Production Mar-93 0 27,458 27,458
Microgenesys, Inc. Meriden, CT Material Handling Mar-93 0 37,064 37,064
Microgenesys, Inc. Meriden, CT Manufacturing & Production Mar-93 0 53,737 53,737
Microgenesys, Inc. Meriden, CT Manufacturing & Production Mar-93 0 34,763 34,763
Microwave Satellite Wycoff, NJ Computers Mar-93 0 37,346 37,346
Microwave Satellite Technologies Wyckoff, NJ Telecommunications Mar-96 0 49,538 49,538
Mid America Truck & Equip Rosemont, IL Material Handling Aug-95 0 29,476 29,476
Minute Mart Dba Breaux's Mart Lafayette, LA Computers May-93 0 57,277 57,277
Mirkin'S Ideal Cleaning Springfield, MA Manufacturing & Production Aug-95 0 30,185 30,185
Mission Fitness Center Mission, KS Furniture Nov-92 0 28,092 28,092
Mission Fitness Center Mission, KS Office Equipment Nov-92 0 29,404 29,404
Mobile Radiology Services Philadelphia, PA Medical Aug-95 0 42,109 42,109
Mohawk Ltd. Chadwicks, NY Manufacturing & Production Aug-95 0 33,624 33,624
Monmouth Mower, Inc. Middletown, NJ Computers Jun-93 0 28,614 28,614
Moore Special Tool Co. Bridgeport, CT Telecommunications May-93 0 92,193 92,193
Morande Ford, Inc. Berlin, CT Telecommunications May-93 0 45,398 45,398
Morgan's Creative Restaurant Brachwood, OH Restaurant Dec-94 0 205,463 205,463
Morgan's Creative Restaurant Beachwood, OH Restaurant Nov-94 0 191,984 191,984
Murphy & Beane New London, CT Telecommunications Mar-93 0 34,887 34,887
N & T Supermarkets Inc. Warminster, PA Retail Aug-95 0 31,866 31,866
Nassau Mobil, LLC Nassau, NY Fixture Mar-96 0 56,035 56,035
National Bio Systems, Inc. Rockville, MD Copiers Mar-93 0 44,574 44,574
Natural Pantry Simi Valley, CA Environmental Nov-92 0 25,027 25,027
Nelco Rehab. Medical Services Jackson Heights, NY Computers Aug-95 0 38,811 38,811
Neptune Dental Associates Brooklyn, NY Medical Aug-95 0 35,976 35,976
Neumonics, Inc. Hopkinton, MA Computers Mar-93 0 25,436 25,436
New Britain Memorial Hospital New Britain, CT Telecommunications Mar-93 0 48,190 48,190
New Canaan Public Schools New Canaan, CT Telecommunications Mar-93 0 29,708 29,708
New Country Motors Cars Hartford, CT Telecommunications Dec-95 0 27,644 27,644
New Mexico Eye Clinic Albuquerque, NM Medical May-94 43,200 5,269 48,469
New Opportunities Waterbury, CT Telecommunications Mar-93 0 39,030 39,030
New Wave Graphics Costa Mesa, CA Computers Nov-92 0 29,982 29,982
New York Institute Tarrytown, NY Computers Mar-93 0 52,840 52,840
Nidec Corporation Torrington, CT Telecommunications May-93 0 48,477 48,477
Nordberg Capital Inc. New York, NY Computers Aug-95 0 26,936 26,936
Normandy Station, Inc. Sanford, FL Medical Mar-93 0 41,866 41,866
North Central Broadcasting, Inc. Nappanee, IN Furniture Nov-92 0 25,828 25,828
Northeast Nuclear Energy Co. Hartford, CT Telecommunications May-93 0 776,263 776,263
Novametrix Medical Sys. Inc. Wallingford, CT Telecommunications May-93 0 62,676 62,676
Oak Park Electronics Raleigh, NC Computers Nov-92 0 26,707 26,707
Oakdale Locksmith Oakdale, CA Manufacturing & Production Apr-93 0 26,398 26,398
Oakwood Card & Gifts Edison, NJ Fixture Nov-92 0 28,886 28,886
Obstetrics & Gynecolgoy Windsor, CT Medical Mar-93 0 38,828 38,828
Ob-Gyn Associates of Arlington Windsor, CT Medical Mar-93 0 44,475 44,475
Ob/Gyn Columbus GA Windsor, CT Medical Mar-93 0 50,961 50,961
Oldies 98 Diner Bartlett, TN Restaurant Nov-92 0 28,102 28,102
On Line Data, Inc. Richardson, TX Computers Mar-93 0 27,576 27,576
On Site Deland, Inc. Altamonte Springs, FLTelecommunications Mar-93 0 35,575 35,575
On Site Dyer Square, Inc. Altamonte Springs, FLTelecommunications Mar-93 0 39,329 39,329
Orange Police Orange, CT Telecommunications Mar-93 0 33,493 33,493
Our Front Porch Pittsford, NY Computers Jun-93 0 29,125 29,125
Oyster River Petroleum, Inc. West Haven, CT Transportation Mar-93 0 33,045 33,045
Ozone Diagnostics Inc. Ozone Park, NY Medical Aug-95 0 27,759 27,759
Palestrini Film Editing, Inc. New York, NY Video Production Mar-93 0 30,290 30,290
Panagos Services Station, Inc. Queens Village, NY Automotive Mar-93 0 37,489 37,489
Papa Kelsey's Pizza Twin Falls, ID Restaurant Nov-92 0 28,098 28,098
Paragon Steak House San Diego, CA Restaurant Dec-93 0 412,517 412,517
Paragon Steak House San Diego, CA Restaurant Dec-93 0 427,214 427,214
Paragon Steakhouse Restaurant San Diego, CA Restaurant Dec-94 395,347 46,582 441,929
Paragon Steakhouse Restaurant San Diego, CA Furniture Jul-94 326,431 38,238 364,669
Paragon Steakhouse Restaurant San Diego, CA Restaurant May-94 781,885 91,434 873,319
Paragon Steakhouse Restaurant San Diego, CA Restaurant Sep-94 418,639 48,960 467,599
Paragon Steakhouse Restaurant San Diego, CA Restaurant Mar-95 1,944,996 138,637 2,083,633
Paragon Steakhouse Restaurant San Diego, CA Furniture Oct-94 390,849 45,968 436,817
Paragon Steakhouse Restaurant San Diego, CA Restaurant Nov-94 269,224 31,488 300,712
Paragon Steakhouse Restaurant San Diego, CA Restaurant Jan-95 79,578 5,892 85,470
Paragon Steakhouse Restaurant San Diego, CA Restaurant Apr-95 186,883 21,789 208,672
Parctec, Inc. New York, NY Retail Dec-93 39,158 3,565 42,723
Parctec, Inc. New York, NY Retail Dec-93 79,437 7,231 86,669
Parctec, Inc. New York, NY Retail Nov-93 88,165 7,670 95,836
Parctec, Inc. New York, NY Retail Dec-93 83,894 7,299 91,192
Parctec, Inc. New York, NY Retail Nov-93 40,752 3,545 44,298
Parctec, Inc. New York, NY Retail Dec-93 119,197 10,851 130,048
Parctec, Inc. New York, NY Retail Dec-93 41,400 3,769 45,168
Parctec, Inc. New York, NY Retail Dec-93 131,040 11,400 142,440
Parctec, Inc. New York, NY Retail Dec-93 74,954 6,823 81,778
Parctec, Inc. New York, NY Retail Dec-93 321,220 29,242 350,462
Parctec, Inc. New York, NY Retail Dec-93 49,912 4,544 54,456
Parctec, Inc. New York, NY Retail Nov-93 203,367 17,693 221,059
Parkview Nursing Home Bountiful, UT Manufacturing & Production Nov-92 0 31,620 31,620
Pasta Blitz, Inc. Rockaway, NJ Restaurant Mar-93 0 49,972 49,972
Patterson Country Club Fairfield, CT Telecommunications May-93 0 31,844 31,844
Paul Evans Germantown, MD Transportation Mar-93 0 55,519 55,519
Paul Evans Germantown, MD Transportation Mar-93 0 57,517 57,517
Paul Robinson Cannon Falls, NM Agriculture Feb-95 0 35,080 35,080
Pct Services Tucker, GA Manufacturing & Production Jun-93 0 28,348 28,348
PDH Enterprises, Inc. Merrifield, VA Restaurant Mar-93 0 42,591 42,591
PDH Enterprises, Inc. Merrifield, VA Restaurant Mar-93 0 48,624 48,624
PDH Enterprises, Inc. Merrifield, VA Restaurant Mar-93 0 48,853 48,853
PDH Enterprises, Inc. Merrifield, VA Restaurant Mar-93 0 49,577 49,577
PDH Enterprises, Inc. Merrifield, VA Restaurant Mar-93 0 46,337 46,337
Peacock Cleaners San Marcos, CA Sanitation Nov-92 0 31,460 31,460
Peninsular Printing Daytona Beach, FL Manufacturing & Production Jun-94 36,636 4,198 40,834
Penn National Race Course Grantville, PA Computers Mar-93 0 30,377 30,377
Perfect Impressions Hair Salon Greenville, NC Fixture Nov-92 0 27,609 27,609
Pet Foods Plus, Inc. Houston, TX Furniture Mar-93 0 34,822 34,822
Peterson's Guides, Inc. Princeton, NJ Computers Mar-93 0 34,845 34,845
Philbrick Booth & Spencer, Inc. Hartford, CT Construction Mar-93 0 34,674 34,674
Phillips Medical Systems North Shelton, CT Transportation May-93 0 233,501 233,501
Phillips Medical Systems North Shelton, CT Telecommunications May-93 0 558,853 558,853
Phillips Medical Systems North Shelton, CT Telecommunications May-93 0 75,647 75,647
Photonika Inc. Richmond Hill, NY Manufacturing & Production Aug-95 0 52,556 52,556
Physical Therapy Services Leesville, LA Medical Aug-95 0 47,272 47,272
Physiologic Reps Glendale, CA Manufacturing & Production Mar-93 0 42,553 42,553
Physiques Unlimited, Inc. Belleville, NJ Medical Mar-93 0 31,341 31,341
Physiques Unlimited, Inc. Belleville, NJ Medical Mar-93 0 35,380 35,380
Pinski Weiner Grasso, MD Windsor, CT Medical Mar-93 0 41,481 41,481
Pizza Innovative Equipment Co. Rancho Cordova, CA Restaurant Nov-92 0 25,351 25,351
Plainfield Medical Center Windsor, CT Medical Mar-93 0 46,899 46,899
Poli-Twine Western, Inc. Dead Deal Manufacturing & Production Mar-95 1,082,910 92,090 1,175,000
Poly Tech Industries, Inc. Madison Heights, MI Computers Mar-93 0 28,085 28,085
Precision Automotive Engineers Birmingham, AL Automotive Nov-92 0 26,170 26,170
Preferred Health Strategies Rye, NY Computers Aug-95 0 25,469 25,469
Presbyterian Hospital In The New York, NY Material Handling Feb-93 76,925 6,483 83,408
Prime Energy Mgmt Corp. Stamford, CT Telecommunications May-93 0 26,479 26,479
Prime Tanning Berwick, ME Manufacturing & Production Mar-94 0 59,796 59,796
Princeton Armored Services Trenton, NJ Manufacturing & Production Aug-95 0 37,790 37,790
Pro Car Care of Garland Garland, TX Automotive Nov-92 0 25,738 25,738
Producto Machine Company, Inc. Bridgeport, CT Manufacturing & Production Mar-93 0 50,289 50,289
Professional Touch Answering Grapevine, TX Computers Nov-92 0 25,738 25,738
Pros, Inc. Stratford, CT Computers Mar-93 0 35,512 35,512
Pro-Lign (A Partnership) Orange, CA Manufacturing & Production Aug-95 0 25,973 25,973
Pro-Tech Manufacturing, Inc. San Antonio, TX Computers Mar-93 0 31,754 31,754
Prudential Empire of NY Pomona, NY Furniture Nov-92 0 28,211 28,211
PSCU Service Centers, Inc. Tampa, FL Computers Jul-93 0 110,031 110,031
PTC Aerospace Litchfield, CT Telecommunications May-93 0 25,565 25,565
Pulmonary Dis. Spec. Center Passaic, NJ Medical Aug-95 0 28,150 28,150
Pure Software, Inc. Sunnyvale, CA Computers Mar-93 0 124,107 124,107
Pure Software Inc. Sunnyvale, CA Furniture Apr-93 0 94,119 94,119
Purvis Disposal Houston, TX Transportation Mar-93 0 57,589 57,589
Qmed, Inc. Laurence Harbor, NJ Furniture Mar-93 0 30,872 30,872
Quality Care Review, Inc. Middletown, CT Computers Mar-93 0 27,033 27,033
Queen Anne Hotel San Francisco, CA Fixture Jun-95 0 38,625 38,625
Rainbow Industries, Inc. Chantilly, VA Material Handling Mar-93 0 44,799 44,799
Raje Inc. Ocean, NJ Medical Aug-95 0 28,724 28,724
Ramada Inn Mystic Mystic, CT Telecommunications May-93 0 54,027 54,027
Ramsey Taylor Johnston Etc. Windsor, CT Medical Mar-93 0 48,753 48,753
Rappoport/Metropolitan New York, NY Computers Mar-93 0 43,566 43,566
Ratchford & Mc Daniel Windsor, CT Medical Mar-93 0 37,917 37,917
Raymond Engineering, Inc. Middletown, CT Telecommunications May-93 0 39,102 39,102
Red Blazer Restaurant & Pub Concord, NH Restaurant Nov-92 0 30,824 30,824
Refuse Systems Cleveland, OH Construction Mar-93 0 51,059 51,059
Regan Engineering & Srvc Corp. Providence, RI Manufacturing & Production May-95 0 30,268 30,268
Regency Telecommunications Houston, TX Computers Apr-95 0 29,883 29,883
Regina O. Hillsman MD Naugatuck, CT Medical Aug-95 0 27,389 27,389
Regional School District Higganum, CT Telecommunications Mar-93 0 25,165 25,165
Rembrandt Stampng & Embos Pennsauken, NJ Manufacturing & Production Aug-95 0 36,098 36,098
Remington Products Inc. Bridgeport, CT Telecommunications May-93 0 80,745 80,745
Reserve Iron & Metal Chicago, IL Structure Mar-94 0 361,000 361,000
Restaurant Management Nw Inc. Portland, OR Retail Jun-95 0 605,814 605,814
Re/Max Acclaimed Reality Cincinnati, OH Office Equipment Nov-92 0 30,844 30,844
Rhone-Poulenc Basic Shelton, CT Computers Mar-93 0 35,517 35,517
Rick's Quality Printing Cocoa, FL Printing May-93 0 25,077 25,077
Riverside Sand Company Jones, OK Office Equipment Nov-92 0 26,981 26,981
Riviera Quality Cleaners Redondo Beach, CA Computers Nov-92 0 28,342 28,342
Robert Morgan & Company, Inc. Battle Creek, MI Manufacturing & Production Jun-94 28,137 3,141 31,278
Robustelli Coporate Services Stamford, CT Telecommunications May-93 0 28,108 28,108
Robustelli Corporate Services Stamford, CT Telecommunications May-93 0 48,281 48,281
Rockbestos Company, Inc. East Granby, CT Telecommunications May-93 0 179,251 179,251
Rockville Family Physician Windsor, CT Medical Mar-93 0 29,106 29,106
Rod's Sign & Neon Company Elberton, GA Manufacturing & Production Jan-95 0 26,935 26,935
Rowland Inc. Rocky Hill, CT Telecommunications May-93 0 30,157 30,157
Rubber Craft Corp. Gardena, CA Manufacturing & Production Mar-93 0 46,391 46,391
Rudolph G. Bruhel, DDS Bullhead, AZ Medical Nov-92 0 30,428 30,428
Sandefur Companies Sanford, FL Medical Mar-93 0 31,538 31,538
Sandefur Companies Sanford, FL Medical Mar-93 0 44,402 44,402
Sandvik Milford Corporation Branford, CT Telecommunications Mar-93 0 27,414 27,414
Sargent Manufacturing Company New Haven, CT Telecommunications May-93 0 202,316 202,316
Savco Drugs, Inc. Baton Rouge, LA Computers Mar-93 0 27,197 27,197
Savings Bank Life Insurance Hartford, CT Telecommunications May-93 0 45,086 45,086
Scan Code, Inc. East Hartford, CT Retail Mar-93 0 42,670 42,670
Schwartz Coffee Enterprises Deer Park, NY Restaurant Mar-93 0 43,741 43,741
Schwartz Coffee Enterprises Deer Park, NY Restaurant Mar-93 0 43,202 43,202
Screen Printing Plus Indianapolis, IN Manufacturing & Production Nov-92 0 30,599 30,599
Scriver #1 Oklahoma City, OK Retail Sep-93 1,171,883 265,692 1,437,575
Scriver #2 Oklahoma City, OK Retail Sep-93 42,220 9,397 51,618
SDC Properties, Inc. Hilton Head, SC Computers Jan-95 0 26,186 26,186
Seaberg Audio Services Fresno, CA Computers Nov-92 0 30,144 30,144
Seacoast Telecommunciations Dover, NH Telecommunications Nov-92 0 28,726 28,726
Seafare Seafood Restaurant Murrells Inlet, SC Restaurant Nov-92 0 32,713 32,713
Shaffner Coffee Company, Inc. Winston-Salem, NC Restaurant Mar-93 0 42,903 42,903
Shelburg of Tucson Tucson, AZ Computers Nov-92 0 30,750 30,750
Sheplers, Inc. Witchita, KS Computers Oct-93 0 991,120 991,120
Shirey Thomason OD Thousand Oaks, CA Medical Aug-95 0 32,187 32,187
Shoreline Care Ltd Partnership North Branford, CT Telecommunications May-93 0 80,886 80,886
Shutterbug Photo Centers Aiken, SC Telecommunications Aug-95 0 43,769 43,769
Sibson & Co., Inc. Princeton, NJ Computers Mar-93 0 29,009 29,009
Signs of the Times Las Vegas, NV Telecommunications Nov-92 0 31,772 31,772
Sikorsky Aircraft Divison Stratford, CT Telecommunications May-93 0 65,692 65,692
Smugglers Enterprises, Inc. Punta Gorda, FL Restaurant Jul-93 0 25,081 25,081
SNA, Inc. Cincinnati, OH Restaurant Mar-93 0 44,367 44,367
SNA, Inc. Cincinnati, OH Restaurant Mar-93 0 48,187 48,187
SNA, Inc. Cincinnati, OH Restaurant Mar-93 0 45,248 45,248
SNA, Inc. Cincinnati, OH Restaurant Mar-93 0 45,350 45,350
Soaring Eagle Outerwear LLC Minot, ND Manufacturing & Production Sep-95 0 29,329 29,329
Solid Waste Disposal, Inc. Larose, LA Transportation Mar-93 0 26,777 26,777
Somerville Foreign Auto Repair Cambridge, MA Automotive Nov-92 0 26,298 26,298
Soup Exchange Hollywood, FL Restaurant Nov-92 0 31,157 31,157
South Bay Cardiovascular Bayshore, NY Computers Aug-95 0 40,506 40,506
South Shore Veterinary Staten Island, NY Computers Aug-95 0 29,256 29,256
South Windsor Town South Windsor, CT Telecommunications May-93 0 64,368 64,368
Southern Cross O'Fallon, MO Computers Mar-93 0 30,431 30,431
Southern New England Federal New Haven, CT Telecommunications Mar-93 0 25,489 25,489
Southwest Auto Supply Little Rock, AR Computers Mar-93 0 38,858 38,858
Spa Elysium Ltd. Erdenheim, PA Retail Nov-92 0 26,558 26,558
Spectral Systems, Inc. Irvington, NY Manufacturing & Production Mar-93 0 35,687 35,687
Spectrascan Imaging Services Windsor, CT Medical Mar-93 0 28,668 28,668
Spectrascan Imaging Systems Windsor, CT Medical Mar-93 0 38,828 38,828
Speer Air Conditioning Denville, NJ Manufacturing & Production Aug-95 0 47,513 47,513
Spring House Inn Lagrange, GA Restaurant Nov-92 0 34,054 34,054
Spruce Creek Development Summerfield, FL Agriculture Mar-93 0 45,594 45,594
St John's Home Health Agency Miramar, FL Furniture May-94 23,857 2,668 26,525
Standard Knapp Inc. Portland, CT Telecommunications May-93 0 40,961 40,961
Standard Oil Of Connecticut Bridgeport, CT Telecommunications May-93 0 29,552 29,552
Stanley Rockwell Co. Hartford, CT Environmental Mar-93 0 26,466 26,466
Staples, Inc. Framingham, MA Retail Jun-94 136,194 19,100 155,295
Staples, Inc. Framingham, MA Computers Jun-94 1,818,271 277,723 2,095,995
Starter Sportswear, Inc. New Haven, CT Telecommunications May-93 0 274,772 274,772
Stephen C. Allen MD PC New York, NY Medical Aug-95 0 37,267 37,267
Steve A. Hamric Memphis, TN Restaurant Apr-95 0 51,132 51,132
Stirling & Stirling Inc. Milford, CT Telecommunications May-93 0 47,474 47,474
STM Industries, Inc. Randolph, MA Computers Mar-93 0 25,753 25,753
Stone Safety Corp. Fairfield, CT Telecommunications May-93 0 28,286 28,286
Structured Computer Systems Avon, CT Telecommunications Mar-93 0 26,453 26,453
Sturm Ruger & Company Inc. Southport, CT Telecommunications May-93 0 28,340 28,340
Sturm Ruger & Company Inc. Southport, CT Telecommunications May-93 0 63,815 63,815
Subway Enterprises, Inc. Quincy, FL Restaurant Nov-92 0 29,283 29,283
Summit Imaging Inc Akron, OH Medical Oct-95 0 58,146 58,146
Super Textile, Inc. Knoxville, TN Manufacturing & Production Mar-93 0 38,919 38,919
Superior Bar & Grill Inc. Birmingham, AL Restaurant Equipment Oct-95 0 347,480 347,480
Susan Domuczicz West Briggwater, MA Restaurant Mar-93 0 40,637 40,637
Sutter Audio Tallahassee, FL Automotive Nov-92 0 31,496 31,496
Sweet Water Restaurant New York, NY Computers Nov-92 0 26,681 26,681
S.J.A. Society Inc Virginia Beach, VA Computers Feb-96 0 37,165 37,165
S.M.F. American Inc. Billerica, MA Furniture Mar-96 0 91,530 91,530
T & T Liquors Inc. Lake Hopatcong, NJ Retail Aug-95 0 34,492 34,492
Tans R Us, Inc. West Palm Beach, FL Manufacturing & Production Nov-92 0 27,751 27,751
Tectonic Industries Berlin, CT Telecommunications May-93 0 25,813 25,813
Telescope Casual Fixture, Inc. Granville, NY Computers Mar-93 0 33,398 33,398
Tele-Pizza Gift Services Vista, CA Computers Nov-92 0 31,468 31,468
Terence Murphy Md PC Mamaroneck, NY Medical Aug-95 0 29,368 29,368
Texas State Communications Houston, TX Telecommunications Nov-92 0 26,067 26,067
Thai Classic Corp. Chantilly, VA Restaurant Nov-92 0 28,207 28,207
The Allen Products Co. Milford, CT Computers Mar-93 0 32,047 32,047
The Alley Companies Little Rock, AR Retail Dec-94 0 130,739 130,739
The Electric Beach San Bruno, CA Furniture Nov-92 0 27,492 27,492
The Futures Group Inc. Glastonbury, CT Telecommunications May-93 0 25,019 25,019
The Grand Union Company Wayne, NJ Retail Mar-95 0 281,978 281,978
The Grand Union Company Wayne, NJ Retail Dec-93 0 344,982 344,982
The Herzog-Hart Group, Inc. Boston, MA Computers Jun-94 24,317 2,652 26,969
The Hull Printing Company, Inc. Meriden, CT Computers Mar-93 0 32,490 32,490
The J.M. Ney Company Bloomfield, CT Telecommunications May-93 0 75,786 75,786
The LTA Group, Inc. North Bergen, NJ Computers Mar-94 0 85,143 85,143
The Printing Press, Inc. Boise, ID Printing Mar-95 0 28,965 28,965
The Royal Bank Of Scotland New York, NY Computers Mar-93 0 37,575 37,575
The Sherwood Group Inc. Northbrook, IL Computers Jan-96 0 29,044 29,044
The Sports Center By Ron Langhorne, PA Medical Mar-93 0 35,904 35,904
The Women's Health Group Windsor, CT Medical Mar-93 0 50,236 50,236
Thurston Foods, Inc. Wallingford, CT Computers May-93 0 41,872 41,872
Timex Waterbury, CT Telecommunications May-93 0 164,926 164,926
Tire Eagle, Inc. Apopka, FL Material Handling Mar-93 0 36,264 36,264
Titan Sports, Inc. Stamford, CT Telecommunications Mar-93 0 25,223 25,223
Titan Sports, Inc. Stamford, CT Telecommunications Mar-93 0 36,065 36,065
Tom Orza Distribution Selden, NY Restaurant Mar-93 0 40,857 40,857
Torrington Co Torrington, CT Telecommunications May-93 0 572,136 572,136
Tournament Players Club Cromwell, CT Telecommunications May-93 0 107,027 107,027
Town of Plymouth Terryville, CT Telecommunications Mar-93 0 26,456 26,456
Trad-A-House Corp. Slidell, LA Fixture Mar-94 0 850,949 850,949
Trager And Trager, PC Fairfield, CT Telecommunications Mar-93 0 45,368 45,368
Transformer Service, Inc. Concord, NH Fixture Mar-93 0 41,384 41,384
Travelers Insurance Company Hartford, CT Telecommunications May-93 0 55,906 55,906
Travelers Insurance Company Hartford, CT Telecommunications May-93 0 47,518 47,518
Treats Bakery Cafe Washington, DC Restaurant Nov-92 0 31,460 31,460
Triton Fuel Group, Inc. Dallas, TX Material Handling Mar-93 0 37,320 37,320
Triton Fuel Group, Inc. Dallas, TX Fixture Mar-93 0 28,892 28,892
Triton Fuel Group, Inc. Dallas, TX Fixture Mar-93 0 28,892 28,892
Triton Fuel Group, Inc. Dallas, TX Material Handling Mar-93 0 37,320 37,320
Triton Fuel Group, Inc. Dallas, TX Fixture Mar-93 0 57,783 57,783
Tropical Screw Products Miami, FL Manufacturing & Production Nov-92 0 31,460 31,460
TW Recreational Services, Inc. Orlando, FL Telecommunications Mar-93 0 42,388 42,388
Tyler Cooper New Haven, CT Telecommunications May-93 0 73,532 73,532
Tyler Cooper & Alcorn New Haven, CT Computers May-93 0 39,170 39,170
Tyler Cooper & Alcorn New Haven, CT Computers May-93 0 30,544 30,544
Tyler Cooper & Alcorn New Haven, CT Computers May-93 0 34,673 34,673
Typed Letters Corp. Wichita, KS Manufacturing & Production Sep-92 0 106,105 106,105
Typed Letters Corp. Wichita, KS Manufacturing & Production Sep-92 0 40,019 40,019
T.B.G. of Great Neck, Inc. Whitestone, NY Restaurant Oct-94 0 312,000 312,000
U3S Corp/Dba Must Software Norwalk, CT Telecommunications May-93 0 27,440 27,440
U3S Corp/Dba Must Software Norwalk, CT Telecommunications May-93 0 57,859 57,859
Ultra Diagnostics, Inc. Hingham, MA Medical Mar-93 0 41,462 41,462
Union Camp Richmond, VA Telecommunications May-93 0 44,735 44,735
United Illuminating New Haven, CT Telecommunications May-93 0 26,306 26,306
United Medical Centers Eagle Pass, TX Computers Mar-95 0 299,376 299,376
United Way of Connecticut, Inc. Hartford, CT Telecommunications Mar-93 0 43,407 43,407
Universal Seismic Assoc. Sugerland, TX Fixture Apr-95 0 26,318 26,318
Uno Mill, Inc. Tempe, AZ Restaurant Mar-94 0 602,000 602,000
Up Town Body & Fender Oakland, CA Automotive Nov-92 0 32,654 32,654
Urban League of Greater Hartford Hartford, CT Telecommunications Mar-93 0 29,690 29,690
US Repeating Arms Company, Inc. New Haven, CT Telecommunications May-93 0 219,508 219,508
USI, Inc. Branford, CT Telecommunications May-93 0 61,353 61,353
USI Of Westchester Elmsford, NY Computers May-93 0 27,309 27,309
USX Corporation Pittsburgh, PA Manufacturing & Production Sep-94 0 2,862,296 2,862,296
USX Corporation Pittsburgh, PA Manufacturing & Production Sep-94 1,236,437 49,457 1,285,895
Valley Best Way Building Spokane, WA Computers Mar-93 0 26,664 26,664
Valley Stream Sch Dist. Valley Stream, NY Telecommunications May-93 0 27,288 27,288
Van Den Bergh Foods Company Atlanta, GA Environmental Feb-93 0 78,864 78,864
Van Gogh Offset Plat Co. New York, NY Manufacturing & Production Aug-95 0 40,008 40,008
Van Gorderr Studios Inc Fairfield, CT Fixture Aug-95 0 34,638 34,638
Vaxa International Inc. San Diego, CA Computers Apr-95 0 35,070 35,070
Vermont Yankee Nuclear Brattleboro, VT Manufacturing & Production Mar-94 0 165,888 165,888
Viking Air Tools, Inc. Indanapolis, IN Manufacturing & Production Dec-93 0 89,992 89,992
Viking Air Tools, Inc. Indianapolis, IN Manufacturing & Production Jan-94 0 110,663 110,663
Viking Air Tools, Inc. Indianapolis, IN Manufacturing & Production Mar-94 0 43,874 43,874
Villa Enterprises Ltd. Morristown, NJ Restaurant Mar-93 0 56,147 56,147
Villa Enterprises Ltd. Morristown, NJ Restaurant Mar-93 0 31,568 31,568
Villa Enterprises Ltd. Morristown, NJ Restaurant Mar-93 0 37,513 37,513
Visicom Laboratories Inc. San Diego, CA Manufacturing & Production Aug-95 0 32,964 32,964
Vogt Construction Co., Inc. Omaha, NE Computers Mar-95 0 32,368 32,368
Volante's Ranch Market, Inc. Rancho Santa Fe, CA Retail Nov-92 0 29,972 29,972
Voyale Corp. Cleveland, OH Computers Aug-95 0 34,843 34,843
Waggoner Shumate Printing Rogers, AR Printing Dec-92 59,662 5,778 65,440
Wagner College Staten Island, NY Environmental Mar-93 0 44,174 44,174
Waltec American Forgings, Inc. Waterbury, CT Computers Mar-93 0 26,944 26,944
Wang's International, Inc. Memphis, TN Material Handling Dec-92 946,723 333,462 1,280,185
Wang's International, Inc. Memphis, TN Fixture Dec-93 591,042 285,442 876,484
Waterford Hotel Group, Inc. Waterford, CT Computers Mar-93 0 38,174 38,174
Welding Equip & Supply Corp. Greenwich, CT Material Handling Mar-93 0 50,739 50,739
West Coast Video of Falls Church Falls Church, VA Computers Nov-92 0 32,713 32,713
Western Property Financial, Inc. Irvine, CA Telecommunications Feb-93 0 27,205 27,205
West-Reeves, Inc. Waxahatchie, TX Manufacturing & Production Feb-95 0 34,101 34,101
WFSB TV-3 Hartford, CT Telecommunications May-93 0 65,647 65,647
What's Cooking Newport Beach, CA Computers Nov-92 0 31,460 31,460
Whelen Engineering Company Chester, CT Telecommunications May-93 0 85,982 85,982
Whiting Products Inc Hamden, CT Telecommunications May-93 0 33,153 33,153
William A Schmidt & Sons, Inc. Chester, PA Manufacturing & Production Mar-93 0 28,961 28,961
William Carter Company Shelton, CT Telecommunications May-93 0 47,049 47,049
William Pressley & Associates Cambridge, MA Computers Nov-92 0 25,232 25,232
WINK Investment Group Bloomingdale, IL Restaurant Nov-92 0 30,388 30,388
Winn Associates, Inc. Foster City, CA Copiers Aug-94 0 30,026 30,026
Wisconsin Truss, Inc. Cornell, WI Computers Mar-93 0 26,664 26,664
Women's Health Consultants Chicago, IL Computers Feb-93 0 37,576 37,576
Women's Medical Care Newburgh, NY Medical Mar-93 0 30,101 30,101
Woodway Country Club Darien, CT Telecommunications Mar-93 0 28,071 28,071
Worcester Brothers Company, Inc. Baltimore, MD Manufacturing & Production Mar-93 0 30,735 30,735
World Gym Poughkeepsie, Inc. Poughkeepsie, NY Medical Mar-93 0 26,500 26,500
World Gym Stamford Stamford, CT Medical Mar-93 0 25,883 25,883
Wymore Ob-Gyn Windsor, CT Medical Mar-93 0 47,995 47,995
Young Men's Christian Center Stamford, CT Fixture Mar-93 0 34,635 34,635
Yves' Bistro Anaheim, CA Restaurant Nov-92 0 28,556 28,556
YWC, Inc. Monroe, CT Telecommunications Mar-93 0 30,856 30,856
Total Equipment transactions less than $25,000 1,798,978 60,609,746 62,408,724
$62,507,789 ************ ***********
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are
owned and leased by ICON Cash Flow Partners, L.P., Series E at March 31,
1996 pursuant to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Manufacturing & Production $23,837,483 $2,061,252 $25,898,735
Aircraft 20,771,628 - 20,771,628
Material & Handling 15,159,486 79,958 15,239,444
Retail Systems 13,055,254 758,668 13,813,922
Furniture & Fixtures 11,698,468 1,267,391 12,965,859
Computer Systems 9,054,523 2,375,589 11,430,112
Restaurant Equipment 9,889,590 1,504,468 11,394,058
Telecommunications 7,971,078 1,312,539 9,283,617
Medical 2,525,852 1,396,585 3,922,437
Automotive 3,339,014 32,036 3,371,050
Printing 569,494 125,735 695,229
Office Equipment 345,411 61,788 407,199
Environmental 216,659 93,862 310,521
Video Production 198,058 112,270 310,328
Transportation 205,537 86,937 292,474
Construction 286,495 - 286,495
Audio 229,395 12,885 242,280
Other 240,459 - 240,459
Copiers 182,309 42,730 225,039
Photography 218,223 - 218,223
Sanitation 209,052 - 209,052
Agriculture 139,686 35,080 174,766
------- ------ -------
$120,343,154 $11,359,773 $131,702,927
============ =========== ============
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners, L. at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
21-44 Utopia Parkway Restaurant Washingtonville, NY Fixture Mar-95 $0 $29,651 $29,651
3 East 48th Restaurant, Inc. New York, NY Retail Jun-94 0 26,897 26,897
A C Color Separators Los Angeles, CA Printing Feb-95 0 41,118 41,118
Act Manufacturing Inc. Hudson, MA Furniture Jan-96 71,318 6,643 77,961
Act Manufacturing Inc. Hudson, MA Computers Jan-96 589,879 55,535 645,414
Act Manufacturing Inc. Hudson, MA Manufacturing & Production Jan-96 618,516 64,137 682,653
Act Manufacturing Inc. Hudson, MA Telecommunications Jan-96 134,943 14,228 149,172
Action Printech, Inc. Westland, MI Printing Feb-95 0 163,066 163,066
Ad Press Communications Greensboro, NC Printing Feb-95 0 54,897 54,897
Advance Mailing & Fulfillment Marietta, GA Printing Feb-95 0 32,885 32,885
Advanced Graphics, Inc. Sandy, UT Printing Feb-95 0 53,999 53,999
Ad-Mat Coasters USA, Inc. Johnson City, TN Printing Feb-95 0 55,658 55,658
Aero Bookbinding Sterling, VA Printing Feb-95 0 91,318 91,318
Afc Cable Systems Inc. New Bedford, MA Manufacturing & Production Jan-96 2,083,928 233,936 2,317,864
Alaska Air Seatle, WA Transportation Mar-95 16,316,603 3,630,337 19,946,940
Alberto's Printing San Francisco, CA Printing Feb-95 0 26,813 26,813
Alden Graphics, Inc. Lincoln Park, MI Printing Feb-95 0 55,763 55,763
Alexander & Alexander Owings Mills, MD Computers Jan-96 2,699,221 347,976 3,047,197
All Star Printing, Inc. Woodstock, GA Printing Feb-95 0 51,579 51,579
Allen Printing Co. Nashville, TN Printing Feb-95 0 122,663 122,663
Allied Printing Services Inc. Manchester, CT Manufacturing & Production Jan-96 401,449 54,708 456,157
Allied Printing Services Inc. Manchester, CT Computers Jan-96 84,339 7,259 91,598
Alvmar, Inc. Lawrence, KS Agriculture Mar-95 0 37,934 37,934
American Advertising Federation Washington, DC Printing Feb-95 0 35,792 35,792
American Foundrymen's Society Des Plaines, IL Printing Feb-95 0 36,551 36,551
Amvets National Headquarters Lanham, MD Printing Feb-95 0 29,071 29,071
Anderson Performance Printing Cookeville, TN Printing Feb-95 0 580,736 580,736
ARG Enterprises, Inc. Newport Beach, CA Restaurant Dec-94 0 583,037 583,037
Arrow Comp, Inc. West Boylston, MA Manufacturing & Production Feb-95 0 55,110 55,110
Artco Printing, Inc. Boiceville, NY Printing Feb-95 0 69,370 69,370
Artcraft Photo Lab, Inc. Statesville, NC Printing Feb-95 0 40,079 40,079
Arthur Morgan Publishing Co. Morton Grove, IL Computers Feb-95 0 237,800 237,800
Atlanta Printing & Design Smyrna, GA Printing Feb-95 0 48,510 48,510
Augat, Inc. Mansfield, MA Computers Mar-95 1,111,386 97,107 1,208,493
Augustin Graphics Fullerton, CA Printing Feb-95 0 72,442 72,442
A.F. Salciccia, Inc. Campbell, CA Retail Apr-94 0 27,931 27,931
A.J.L.C. Inc. Alamonte Spring, FL Restaurant Equipment Dec-95 0 31,118 31,118
A.J.L.C. Inc. Altamonte Spring, FL Restaurant Equipment Sep-95 0 39,620 39,620
A.W. Chesterton Company Stoneham, MA Manufacturing & Production Jan-96 118,415 12,062 130,477
A.W. Chesterton Company Stoneham, MA Manufacturing & Production Jan-96 217,267 22,296 239,563
A.W. Chesterton Company Stoneham, MA Copiers Jan-96 206,026 14,099 220,126
A.W. Chesterton Company Stoneham, MA Telecommunications Jan-96 114,538 11,923 126,461
Bailey Oil Co., Inc. Heyburn, ID Material Handling Mar-95 0 115,273 115,273
Banana Blueprint, Inc. Costa Mesa, CA Printing Feb-95 0 68,351 68,351
Best Shot, Inc. Landover, MD Printing Feb-95 0 43,209 43,209
Bet Inc. Atlanta, GA Construction Dec-95 16,990,448 5,073,822 22,064,270
Birchwood Marketing Graphics Rancho Cucamong, CA Computers Feb-95 0 27,414 27,414
Black Lab, Inc. Richmond, VT Printing Feb-95 0 35,945 35,945
Blacktop Industries Kenova, WV Manufacturing & Production Aug-95 0 54,335 54,335
Blazing Pages, Inc. Huntington Beac, CA Printing Feb-95 0 118,039 118,039
Bmg Printing Holbrook, NY Printing Feb-95 0 121,201 121,201
Boge/Nelson, Inc. Anaheim, CA Manufacturing & Production Feb-95 0 70,269 70,269
Brenlar Investments, Inc. Novaro, CA Furniture Oct-94 0 312,090 312,090
Brett Corporation San Diego, CA Printing Feb-95 0 33,178 33,178
Brett Corporation San Diego, CA Printing Feb-95 0 86,013 86,013
Brevard County School Board Melbourne, FL Printing Feb-95 0 43,978 43,978
Brian D. Mudd DDS Oceanside, CA Computers Aug-95 0 35,593 35,593
Brt Video Inc. Ft. Lauderdale, FL Computers Nov-95 0 50,193 50,193
Burns & Kent, Inc. Atlanta, GA Printing Feb-95 0 25,609 25,609
Camino West Coast Service Redlands, CA Computers Aug-95 0 32,857 32,857
Carrousel Saloon, Inc. West Mifflin, PA Restaurant Sep-94 0 94,554 94,554
Cartersville Letter Shop, Inc. Cartersville, GA Printing Feb-95 0 33,952 33,952
Central Typesetting, Inc. San Diego, CA Printing Feb-95 0 362,431 362,431
Chia Financial Group Pico Rivers, CA Retail Jan-96 0 30,958 30,958
CJ Printing Montclair, CA Printing Feb-95 0 63,150 63,150
Coastal Offset Preparations Santa Ana, CA Printing Feb-95 0 42,061 42,061
Color On Line New Berlin, WI Printing Feb-95 0 39,236 39,236
Coloredge, Inc. Newport Beach, CA Printing Feb-95 0 185,685 185,685
Colour Concepts Riverside, CA Manufacturing & Production Feb-95 0 183,665 183,665
Colours Printing & Graphics Irvine, CA Printing Feb-95 0 64,543 64,543
Com/Tech Communication New York, NY Manufacturing & Production Aug-95 0 58,004 58,004
Concept II Graphics, Inc. Baltimore, MD Manufacturing & Production Feb-95 0 117,790 117,790
Coppinger & Affiliates Cleveland, TN Printing Feb-95 0 47,018 47,018
Copy Corner, Inc. San Diego, CA Printing Feb-95 0 25,592 25,592
Corporate Printing, Inc. Tampa, FL Printing Feb-95 0 30,602 30,602
Creative Directors, Inc. Coral Gables, FL Manufacturing & Production Feb-95 0 26,041 26,041
Creative Playthings Herndon, PA Manufacturing & Production Jun-95 343,336 35,301 378,637
Creative Playthings Ltd. Framingham, MA Material Handling Jan-96 39,397 4,607 44,004
Creative Playthings Ltd. Framingham, MA Manufacturing & Production Jan-96 272,439 30,196 302,634
Creative Printing & Graphic Orlando, FL Printing Feb-95 0 26,196 26,196
Crooks Printing Service, Inc. Hollywood, FL Printing Feb-95 0 27,801 27,801
Crooks Printing Service, Inc. Hollywood, FL Printing Feb-95 0 29,214 29,214
Cumberland Farms Inc. Canton, MA Manufacturing & Production Oct-95 0 3,200,554 3,200,554
Curtin & Pease/Peneco, Inc. Tampa, FL Printing Feb-95 0 28,549 28,549
Custom Black & White Santa Ana, CA Printing Feb-95 0 55,227 55,227
C&A Industries, Inc. Omaha, NE Printing Feb-95 0 104,341 104,341
David Levey Concord, CA Restaurant Equipment Aug-95 0 85,143 85,143
David M. Levey Dba Levey Concord, CA Restaurant Equipment Sep-95 0 117,421 117,421
Dicon Inc. Fairlawn, NJ Manufacturing & Production Aug-95 0 46,388 46,388
Digit Imaging Centers, Inc. Minneapolis, MN Computers Feb-95 0 163,080 163,080
Doran Printing Co. Inc. New Brunswick, NJ Manufacturing & Production Aug-95 0 31,505 31,505
Doyle Printing & Offset Co., Inc. Landover, MD Printing Feb-95 0 126,596 126,596
Duncan Oil Company, Inc. Beavercreek, OH Fixture Mar-94 0 116,421 116,421
D.G.A. Printing, Inc. Sterling Height, MI Printing Feb-95 0 25,710 25,710
D.S.I. Graphics, Inc. Irvine, CA Printing Feb-95 0 47,158 47,158
Eagle Graphics, Inc. Wall, NJ Printing Feb-95 0 49,511 49,511
Eberle Communications Group Mclean, VA Furniture Nov-94 0 119,407 119,407
Economy Motels, Inc. Shreveport, LA Fixture Jun-94 0 42,320 42,320
Econ-O-Plate, Inc. Los Angeles, CA Printing Feb-95 0 39,520 39,520
Econ-O-Plate, Inc. Los Angeles, CA Printing Feb-95 0 316,135 316,135
Edwards Graphic Arts, Inc. Des Moines, IA Printing Feb-95 0 38,291 38,291
Electric Pencil Los Angeles, CA Computers Feb-95 0 37,768 37,768
Electro Graphics Fountain Valley, CA Printing Feb-95 0 58,499 58,499
Electronic Publishing Services Kahului, HI Printing Feb-95 0 88,012 88,012
Eli's, Inc. Omaha, NE Manufacturing & Production Mar-95 0 410,745 410,745
Eli's, Inc. Omaha, NE Printing Feb-95 0 362,433 362,433
Eli's, Inc. Omaha, NE Computers Feb-95 0 33,797 33,797
Elk Litho Service, Inc. Fraser, MI Printing Feb-95 0 35,633 35,633
Elmwood Park Physcl Therapy Elmwood Park, NJ Medical Aug-95 0 38,614 38,614
Entrepreneur, Inc. Irvine, CA Printing Feb-95 0 43,448 43,448
Equinox Travel Inc. Manhasset, NY Manufacturing & Production Aug-95 0 30,195 30,195
Eurocolor Corp. San Francisco, CA Office Equipment Aug-95 0 27,724 27,724
Ever Ready Printers San Francisco, CA Printing Feb-95 0 25,092 25,092
Executive Computer Services Clearwater, FL Printing Feb-95 0 27,373 27,373
Eye Four Color, Inc. Marina Del Rey, CA Printing Feb-95 0 47,067 47,067
E. John Schmitz & Sons, Inc. Sparks, MD Printing Feb-95 0 32,377 32,377
E.R.S. Wash Inc. Glouster, MA Restaurant Equipment Nov-95 0 52,487 52,487
F & F General Corp. Brooklyn, NY Computers Aug-95 0 47,752 47,752
Fairfield Center East Orange, NJ Manufacturing & Production Aug-95 0 50,393 50,393
Fidelity Printing Corporation Saint Petersbur, FL Printing Feb-95 0 33,213 33,213
Fidelity Printing Corporation Saint Petersbur, FL Printing Feb-95 0 75,061 75,061
Fitch Graphics Ltd. New York, NY Printing Feb-95 0 62,674 62,674
For Color Springfield, IL Printing Feb-95 0 25,014 25,014
Fordick Corporation Lenexa, KS Manufacturing & Production Jan-95 0 28,250 28,250
Fox Family Printing Las Vegas, NV Printing Feb-95 0 115,553 115,553
Fox Family Printing Las Vegas, NV Printing Feb-95 0 51,829 51,829
Frantz Printing Service, Inc. Dallas, TX Printing Feb-95 0 43,863 43,863
Fredco Manufacturer's Mission Viego, CA Computers Apr-94 0 26,079 26,079
G & W Enterprises, Inc. Sacramento, CA Printing Feb-95 0 81,747 81,747
General Computer Corp. Twinsburg, OH Computers Aug-95 0 46,784 46,784
Gesek's, Inc. Glen Burnie, MD Automotive Nov-94 0 27,829 27,829
Girardo & Decaro Cardiolo Philadelphia, PA Medical Aug-95 0 31,874 31,874
Glenville Family Dental Glenville, NY Computers Aug-95 0 26,209 26,209
Global Graphics, Inc. Elmhurst, IL Computers Feb-95 0 51,499 51,499
Global Group, Inc. Fort Worth, TX Printing Feb-95 0 33,277 33,277
Glory Bound Nashville, TN Printing Feb-95 0 51,168 51,168
Gopher State Litho Corporation Minneapolis, MN Printing Feb-95 0 69,910 69,910
Graphicomm San Diego, CA Printing Feb-95 0 26,212 26,212
Graphics Plus Printing, Inc. Cortland, NY Printing Feb-95 0 260,067 260,067
Great Impressions, Inc. Nashville, TN Printing Feb-95 0 42,082 42,082
Greece Central School District North Greece, NY Printing Feb-95 0 41,635 41,635
Grossmont Medical Center La Mesa, CA Computers Aug-95 0 27,239 27,239
Hafer Marketing Corporation Clearwater, FL Manufacturing & Production Oct-95 0 47,614 47,614
Haig Press, Inc. Plainview, NY Printing Feb-95 0 48,906 48,906
Haig's Printing Palm Springs, CA Printing Feb-95 0 33,566 33,566
Hamco Corporation Poughkeepsie, NY Printing Feb-95 0 443,524 443,524
Hamco Corporation Poughkeepsie, NY Printing Feb-95 0 26,382 26,382
Hampton Pediatric Dental Southampton, NY Medical Aug-95 0 28,955 28,955
Harvard Pinnacle Group Harvard, MA Manufacturing & Production Aug-95 0 30,535 30,535
Healthsmart Inc. Ossining, NY Manufacturing & Production Aug-95 0 36,202 36,202
Heritage Printing & Graphics Lexington Park, MD Printing Feb-95 0 62,626 62,626
Hodgins Printing Co., Inc. Batavia, NY Printing Feb-95 0 36,113 36,113
Home Paramount Pest Control Co. Baltimore, MD Printing Feb-95 0 37,676 37,676
Hotopp Associates Limited New York, NY Computers Feb-96 0 58,646 58,646
Howard Schwartz Recording New York, NY Audio Equipment Aug-95 0 43,608 43,608
Howard University Washington, DC Printing Feb-95 0 125,401 125,401
HSM Packaging Corporation Syracuse, NY Printing Feb-95 0 26,008 26,008
Hunt Valley Motor Coach, Inc. Hunt Valley, MD Computers Mar-95 0 34,977 34,977
Idom Inc. Newark, NJ Furniture Aug-95 0 35,487 35,487
Industrial Printing Anaheim, CA Manufacturing & Production Feb-95 0 52,197 52,197
Ink On Paper Printing Co. Farmington Hill, MI Printing Feb-95 0 37,979 37,979
Inland Color Graphics Corona, CA Printing Feb-95 0 201,733 201,733
Inland Color Graphics Corona, CA Printing Feb-95 0 28,353 28,353
Inland Printworks Riverside, CA Printing Feb-95 0 110,604 110,604
Institute Publishing, Inc. Loganville, GA Printing Feb-95 0 227,055 227,055
Institute Publishing, Inc. Loganville, GA Printing Feb-95 0 27,568 27,568
Institutional Laundry Services Lakewood, NJ Manufacturing & Production Aug-95 0 39,636 39,636
Intellisys Technology Corporation Fairfax, VA Printing Feb-95 0 28,768 28,768
International Software Frederick, MD Printing Feb-95 0 50,695 50,695
International Software Frederick, MD Printing Feb-95 0 177,146 177,146
International Software Frederick, MD Printing Feb-95 0 42,216 42,216
Intersolv, Inc. Rockville, MD Computers Dec-94 956,149 99,775 1,055,923
Intersolve, Inc. Rockville, MD Computers Mar-95 2,373,543 314,047 2,687,590
Interstate Graphics Dayton, OH Printing Feb-95 0 58,119 58,119
IPS Corporation Gardena, CA Printing Feb-95 0 26,606 26,606
Isons Kwick Printing Center Winter Park, FL Printing Feb-95 0 36,636 36,636
J K Strauss, Inc. Indianapolis, IN Printing Feb-95 0 26,872 26,872
J & B Finishing Tucker, GA Printing Feb-95 0 47,067 47,067
J & M Ventures, Inc. Morgan Hill, CA Manufacturing & Production Mar-96 0 46,382 46,382
J & R Graphics, Inc. Hanover, MA Printing Feb-95 0 207,509 207,509
Jaguar Litho, Inc. Anaheim, CA Computers Feb-95 0 166,979 166,979
Jimmy the Printer Upland, CA Printing Feb-95 0 48,982 48,982
John M. Riddle Mendota, CA Medical Feb-96 0 58,295 58,295
Joseph Sansevere DMD Flemington, NJ Medical Aug-95 0 41,026 41,026
JP Graphics & Printing Lake Elsinore, CA Printing Feb-95 0 27,996 27,996
K T Press Orlando, FL Printing Feb-95 0 49,745 49,745
Kaminer & Thomson, Inc. Charlottesville, VA Printing Feb-95 0 122,579 122,579
Kandall Fabr. & Supply East Rutherford, NJ Computers Aug-95 0 32,696 32,696
Keystone Custodian Funds Boston, MA Computers Mar-95 2,000,558 242,355 2,242,913
Keystone Investment Mgmt Co. Boston, MA Computers Sep-95 421,324 49,527 470,851
Kilpatrick Graphics Marietta, GA Printing Feb-95 0 34,382 34,382
Kilpatrick Graphics Marietta, GA Printing Feb-95 0 34,230 34,230
Kilpatrick Graphics Marietta, GA Manufacturing & Production Feb-95 0 48,083 48,083
Kings Smile Dental & Medical Brooklyn, NY Medical Aug-95 0 34,647 34,647
Knight's Inc. Beebe, AR Retail Oct-95 0 128,694 128,694
Knight'S Inc. Beebe, AR Retail Jun-95 0 125,141 125,141
Kochar/Gurprett MD Ridley Park, PA Medical Aug-95 0 41,546 41,546
Kohn, Inc. Owings Mills, MD Printing Feb-95 0 51,178 51,178
Kolton/Shimlock & Gruss New York, NY Medical Aug-95 0 29,853 29,853
Korobkin & Associates Irvine, CA Computers Feb-95 0 25,614 25,614
Kovin Corp., Inc. San Diego, CA Printing Feb-95 0 26,330 26,330
K.C. Gutenberg, Inc. Phoenix, AZ Printing Feb-95 0 249,944 249,944
La Grange Printers, Inc. La Grange, IL Printing Feb-95 0 36,537 36,537
Laberge Printers, Inc. Orlando, FL Printing Feb-95 0 27,512 27,512
Laguna Graphic Design Irvine, CA Printing Feb-95 0 25,076 25,076
Laguna Graphics Arts Irvine, CA Printing Feb-95 0 49,380 49,380
Lasergraphics Printing Torrance, CA Printing Feb-95 0 45,049 45,049
Leavens Awards Co Inc. Attleboro, MA Computers Aug-95 0 54,711 54,711
Legend Lithograph Van Nuys, CA Printing Feb-95 0 30,884 30,884
Lenexa Dental Group Chartered Lenexa, KS Telecommunications Dec-94 0 35,338 35,338
Lettermen Inc. Blane, MN Manufacturing & Production Sep-95 0 26,525 26,525
Limra International Inc. Windsor, CT Computers Jan-96 490,477 46,494 536,971
Lisa M Mcconnell, Inc. San Diego, CA Printing Feb-95 0 104,938 104,938
Litho Impressions, Inc. Temple Hills, MD Printing Feb-95 0 195,078 195,078
Litho Legends, Inc. Fairfax, VA Printing Feb-95 0 34,845 34,845
Lodge Laser Graphics Las Vegas, NV Printing Feb-95 0 40,214 40,214
Lote Enterprises Chicago, IL Restaurant Equipment Feb-96 0 30,415 30,415
Lowes & Kendis, Inc. Tustin, CA Computers Feb-95 0 343,309 343,309
M Copiers, Inc. San Diego, CA Printing Feb-95 0 58,378 58,378
Mac Press Group, Inc. Hyde Park, MA Printing Feb-95 0 209,961 209,961
Main Office Supply Coshocton, OH Printing Feb-95 0 42,963 42,963
Manufacturers Products Co. Warren, MI Manufacturing & Production Dec-95 0 846,717 846,717
Marick, Inc. Phoenix, AZ Printing Feb-95 0 52,869 52,869
Mario G. Loomis MD PC Middletown, NY Computers Aug-95 0 31,252 31,252
Mark Levenson MD New York, NY Medical Aug-95 0 37,475 37,475
Mark Popkin MD Morristown, NJ Medical Aug-95 0 31,076 31,076
Marsh Printing, Inc. Gainesville, FL Printing Feb-95 0 28,217 28,217
Mates Graphics Corp. Clifton, NJ Computers Mar-96 0 36,865 36,865
Max Loftin's Quality Graphics Santa Ana, CA Printing Feb-95 0 326,634 326,634
Mazhar Elamir MD Jersey City, NJ Medical Aug-95 0 41,805 41,805
Mega Mart Inc. Astoria, NY Retail Aug-95 0 45,774 45,774
Mekong Printing Santa Ana, CA Printing Feb-95 0 137,276 137,276
Mekong Printing Santa Ana, CA Printing Feb-95 0 65,238 65,238
Mel Printing Co., Inc. Melvindale, MI Printing Feb-95 0 36,206 36,206
Melco Group, Inc. Fishers, IN Printing Feb-95 0 36,193 36,193
Metro Graphics, Inc. Orlando, FL Printing Feb-95 0 52,588 52,588
Michael Gershanok DDS Scarsdale, NY Medical Aug-95 0 27,174 27,174
Microtrek Enterprises Inc. New York, NY Telecommunications Jun-95 0 44,888 44,888
Millflow Spice Corp. Lindenhurst, NY Manufacturing & Production Aug-95 0 29,345 29,345
Miltburne Drug Co. Melrose Park, IL Retail Aug-95 0 33,425 33,425
Mini-Maid Systems, Inc. Coeur D Alene, ID Printing Feb-95 0 289,781 289,781
Mise En Place Inc. Tampa, FL Computers Mar-96 0 27,086 27,086
Modern Age Business Forms Phoenix, AZ Manufacturing & Production Feb-95 0 52,456 52,456
Mohammed Jawed Dba Garland, TX Manufacturing & Production Jun-95 0 31,828 31,828
Monitor, Co. Cambridge, MA Computers Jun-95 779,370 58,517 837,887
Moon & Stars Specialty Foods Los Angeles, CA Restaurant Jun-95 0 28,043 28,043
Morgan's Creative Restaurant Beachwood, OH Restaurant Jun-95 0 138,653 138,653
Morris Lithostrippers Anaheim, CA Printing Feb-95 0 30,619 30,619
Multi-Image Graphics, Inc. Buffalo, NY Manufacturing & Production Feb-95 0 115,349 115,349
My Own Printing Co. Anaheim, CA Printing Feb-95 0 27,654 27,654
Nanda D'Aleo DDS Inwood, NY Medical Aug-95 0 34,230 34,230
Nassau County Eye Associcates Garden City, NY Medical Aug-95 0 29,907 29,907
National Wire Alloy, Inc. Fountain Inn, SC Manufacturing & Production Nov-94 0 33,180 33,180
Nationwide Business Systems Norcross, GA Printing Feb-95 0 29,922 29,922
Needleworks Inc. Millersburg, PA Manufacturing & Production Aug-95 0 48,740 48,740
Network Circuit Technologies Redmond, WA Manufacturing & Production Nov-95 0 93,598 93,598
Network Printing, Inc. Gaithersburg, MD Manufacturing & Production Feb-95 0 39,297 39,297
News World Communications, Inc. Washington, DC Manufacturing & Production Feb-95 0 204,921 204,921
NFA Corp. Chestnut Hill, MA Manufacturing & Production Jan-96 2,251,872 260,524 2,512,396
Nix Printing Columbus, GA Printing Feb-95 0 41,675 41,675
No Anchovies Italian Restaurant Palm Beach, FL Restaurant Mar-95 0 205,485 205,485
Norman Smith MD Florham Park, NJ Computers Aug-95 0 30,802 30,802
Nyt Video News International Conshohocken, PA Manufacturing & Production Aug-95 0 25,421 25,421
Oakdale Printing Pleasant Ridge, MI Printing Feb-95 0 40,176 40,176
Occupational & Hand Therapy Orland Park, IL Manufacturing & Production Aug-95 0 26,237 26,237
Ocean Medical Group PC Brooklyn, NY Medical Aug-95 0 26,111 26,111
Ohio Clinic For Aesthetic C/O Westlake, OH Medical Aug-95 0 30,250 30,250
Old Dominion Freight Line Highpoint, NC Manufacturing & Production Mar-95 402,443 42,460 444,903
Omni Printing, Inc. Clearwater, FL Printing Feb-95 0 141,345 141,345
Orange County Nameplate Co., Inc. Santa Fe Spring, CA Printing Feb-95 0 35,942 35,942
Orthodontics For Children Haddonfield, NJ Medical Aug-95 0 27,807 27,807
Output San Francisco, CA Printing Feb-95 0 36,829 36,829
Ozark Printing, Inc. Ozark, MO Printing Feb-95 0 61,954 61,954
Pacific Homes Woodland Hills, CA Telecommunications Mar-96 0 31,272 31,272
Pacific West Litho, Inc. Anaheim, CA Printing Feb-95 0 118,017 118,017
Palm Print, Inc. West Palm Beach, FL Printing Feb-95 0 27,921 27,921
Patricia L. Johnson DMD Philadelphia, PA Medical Aug-95 0 32,381 32,381
Peninsula Blueprint, Inc. Mountain View, CA Computers Mar-96 0 31,270 31,270
Peninsula Printing Corporation Newport News, VA Printing Feb-95 0 37,967 37,967
Performance Press, Inc. Orlando, FL Printing Feb-95 0 67,956 67,956
Phillips Productions, Inc. Dallas, TX Video Production Jun-94 0 82,844 82,844
Phoenix Manufacturers Inc. Mcallen, TX Manufacturing & Production Aug-95 0 27,816 27,816
Photo Finish Las Vegas, NV Manufacturing & Production Aug-95 0 26,758 26,758
Pioneer Press, Inc. Rockville, MD Printing Feb-95 0 49,752 49,752
Platinum Communications Inc. Dallas, TX Computers Feb-96 0 37,781 37,781
Ponte Vedra Printing, Inc. Ponte Vedra Bea, FL Printing Feb-95 0 43,480 43,480
Popcorn Press, Inc. Troy, MI Printing Feb-95 0 150,780 150,780
Potomac Press, Inc. Sterling, VA Printing Feb-95 0 40,861 40,861
Precision Converter Oxford, PA Printing Feb-95 0 51,328 51,328
Precision Graphics Amherst, NY Printing Feb-95 0 36,038 36,038
Precision Pallets & Lumber Addison, PA Manufacturing & Production Aug-95 0 33,215 33,215
Precision Pre Press, Inc. Burke, VA Printing Feb-95 0 61,335 61,335
Press Express, Inc. Hanover, MD Printing Feb-95 0 35,157 35,157
Prestige Graphics, Inc. New Berlin, WI Printing Feb-95 0 135,363 135,363
Prestige Graphics, Inc. Las Vegas, NV Printing Feb-95 0 40,349 40,349
Prestige Graphics, Inc. New Berlin, WI Printing Feb-95 0 29,542 29,542
Primary Color Systems Corporation Irvine, CA Printing Feb-95 0 58,058 58,058
Prime Mover Irvine, CA Printing Feb-95 0 33,823 33,823
Print Perfect, Inc. Batavia, IL Printing Feb-95 0 63,112 63,112
Print Rite Printing & Graphics San Diego, CA Printing Feb-95 0 25,416 25,416
Printastic, Inc. Carlsbad, CA Printing Feb-95 0 75,619 75,619
Printing By Rodney Campbell, CA Printing Feb-95 0 86,395 86,395
Printing Gallery Florence, KY Printing Feb-95 0 77,448 77,448
Printing Impressions, Inc. Pompano Beach, FL Printing Feb-95 0 31,980 31,980
Prism Printing & Design Warren, NJ Printing Aug-95 0 35,752 35,752
Professional Litho Art, Inc. Minneapolis, MN Printing Feb-95 0 111,430 111,430
Professional Packaging Fairfield, NJ Manufacturing & Production Aug-95 0 28,250 28,250
Prospect Park Press, Inc. West Chesterfie, NH Printing Feb-95 0 106,705 106,705
Proteus Typography, Inc. Palo Alto, CA Printing Feb-95 0 94,788 94,788
Prout/Ross Dds Inc. Tarzana, CA Medical Aug-95 0 28,304 28,304
PRW Holding Corporation Greenwich, CT Retail Apr-94 0 27,050 27,050
Psinet Inc. Herndon, VA Telecommunications Aug-95 0 1,626,078 1,626,078
Quality House Envelope Grants Pass, OR Printing Feb-95 0 37,306 37,306
Quality Printing Services, Inc. Athens, TN Printing Feb-95 0 83,981 83,981
Quick Print & Bindery of Florida Tallahassee, FL Printing Feb-95 0 100,769 100,769
R Martin Printing & Design, Inc. Costa Mesa, CA Printing Feb-95 0 34,916 34,916
Rainbow Printing, Inc. Marietta, GA Printing Feb-95 0 240,561 240,561
Rainbow Printing, Inc. Marietta, GA Printing Feb-95 0 29,592 29,592
Reading Cleaner & Tailoring In Reading, MA Manufacturing & Production Jun-95 0 43,243 43,243
Rehabilitation Associates Utica, NY Manufacturing & Production Aug-95 0 37,152 37,152
Reliance Graphics, Inc. Marietta, GA Printing Feb-95 0 56,332 56,332
River Valley Family Medical Barryville, NY Manufacturing & Production Aug-95 0 45,114 45,114
Rmh Sales & Marketing Wynnewood, PA Manufacturing & Production Aug-95 0 28,478 28,478
Robertshaw Controls Co. New Stanton, PA Manufacturing & Production Oct-95 49,806 5,904 55,711
Robertshaw Controls Co. Kittery, ME Manufacturing & Production Oct-95 114,190 14,239 128,428
Rose Casual Dining Inc. Newtown, PA Restaurant Equipment Sep-95 0 268,961 268,961
Royal Business Group, Inc. Oceanside, CA Printing Feb-95 0 393,783 393,783
Royal Press of Central Florida Longwood, FL Printing Feb-95 0 44,349 44,349
RPM Color Graphics San Diego, CA Printing Feb-95 0 67,066 67,066
RSE, Inc. Bakersfield, CA Printing Feb-95 0 184,184 184,184
Ryden, Inc. Austin, TX Printing Feb-95 0 111,669 111,669
Santoro Printing North Hollywood, CA Printing Feb-95 0 28,846 28,846
Satterwhite Printing Co., Inc. Richmond, VA Manufacturing & Production Feb-95 0 41,603 41,603
Scannercraft, Inc. Salt Lake City, UT Computers Feb-95 0 98,903 98,903
Schmidt-Fletcher Medical Newton, NJ Medical Aug-95 0 31,209 31,209
Schonfeld Securities, Inc. Jericho, NY Furniture Dec-94 0 362,371 362,371
Sciandra Enterprises, Inc. Jacksonville, FL Printing Feb-95 0 33,110 33,110
Scott E. Newman MD PC Yonkers, NY Medical Aug-95 0 28,054 28,054
Scott-Merriman, Inc. Dallas, TX Printing Feb-95 0 35,583 35,583
Sentinel Printing Co., Inc. Saint Cloud, MN Printing Feb-95 0 45,234 45,234
Shasta Graphics, Inc. El Toro, CA Printing Feb-95 0 35,003 35,003
Shasta Graphics, Inc. El Toro, CA Printing Feb-95 0 189,656 189,656
Shriji Corp. Dba Gallup, NM Furniture Mar-94 0 138,094 138,094
Siebe North Inc. Rockford, IL Manufacturing & Production Sep-95 242,278 23,016 265,294
Siebe North Inc. Cranston, RI Manufacturing & Production Sep-95 151,257 14,561 165,818
Simon/Drabkin & Margulies New York, NY Computers Aug-95 0 26,705 26,705
Sir Speedy Printing Canoga Park, CA Printing Feb-95 0 35,056 35,056
Smith Lithographic Arts, Inc. Tustin, CA Printing Feb-95 0 146,438 146,438
Snewo Graphics, Inc. Tempe, AZ Printing Feb-95 0 41,548 41,548
So. Island Medical Associates Far Rockaway, NY Medical Aug-95 0 26,955 26,955
Spc Semaan Printing Co., Inc. Placentia, CA Printing Feb-95 0 57,450 57,450
Spectrum Graphics Roswell, GA Printing Feb-95 0 26,888 26,888
Spectrum Press, Inc. Richmond, VA Printing Feb-95 0 32,051 32,051
Spectrum Press, Inc. Richmond, VA Manufacturing & Production Feb-95 0 25,090 25,090
Spectrum Press, Inc. Richmond, VA Printing Feb-95 0 28,300 28,300
Spectrum Press, Inc. Richmond, VA Manufacturing & Production Feb-95 0 72,886 72,886
Spectrum Press, Inc. Richmond, VA Printing Feb-95 0 48,353 48,353
Spectrum Press, Inc. Richmond, VA Printing Feb-95 0 98,636 98,636
Speedy Bindery, Inc. San Diego, CA Printing Feb-95 0 32,003 32,003
Speedy Bindery, Inc. San Diego, CA Printing Feb-95 0 150,175 150,175
Spindler/Andre & Bellovin Bayside, NY Medical Aug-95 0 31,398 31,398
Staines, Inc. Somerdale, NJ Printing Feb-95 0 25,209 25,209
Standard-Hart Printing Co., Inc. Topeka, KS Manufacturing & Production Feb-95 0 233,870 233,870
Starr Printing Co. Casselberry, FL Printing Feb-95 0 25,970 25,970
Sterling Litho Placentia, CA Printing Feb-95 0 153,287 153,287
Stinnett Printing Maryville, TN Printing Feb-95 0 26,032 26,032
St. Bernard R.C. Church Levittown, NY Manufacturing & Production Aug-95 0 36,862 36,862
St. Joseph's University Philadelphia, PA Manufacturing & Production Feb-95 0 38,535 38,535
St. Mary's Children Syosset, NY Computers Jun-94 0 42,682 42,682
St. Mary's Children Syosett, NY Computers Dec-94 0 91,213 91,213
Sun Photo Morehead City, NC Printing Feb-95 0 48,400 48,400
Supreme Printing Co. Dallas, TX Printing Feb-95 0 204,496 204,496
Swell Printing Irvine, CA Printing Feb-95 0 191,289 191,289
T W Recreational Services, Inc. Yellowstone Nat, WY Printing Feb-95 0 34,014 34,014
Takahiro Kono, Inc. Honolulu, HI Printing Feb-95 0 29,220 29,220
Taufiq Ahmed Dba Ft. Worth, TX Manufacturing & Production Apr-95 0 27,720 27,720
TBJ Graphic Arts Supply, Inc. Coventry, RI Computers Feb-95 0 29,602 29,602
Technical Graphics Services Severna Park, MD Manufacturing & Production Feb-95 0 38,390 38,390
Technographics Pontiac, MI Printing Feb-95 0 89,093 89,093
Tendler Printing, Inc. Mableton, GA Printing Feb-95 0 104,956 104,956
Terrapin Cleaners, Inc. Ft. Lauderdale, FL Manufacturing & Production Sep-94 0 27,001 27,001
Terry W. Slaughter DDS Salinas, CA Computers Aug-95 0 40,120 40,120
Terry'S Autobody & Paint Oceanside, CA Computers Aug-95 0 27,953 27,953
The Art Department of Rome Rome, GA Printing Feb-95 0 30,291 30,291
The Automobile Club of Missouri Saint Louis, MO Manufacturing & Production Feb-95 0 113,154 113,154
The Bagel Peddler Inc. Tallahassee, FL Restaurant Equipment Nov-95 0 42,669 42,669
The Barton-Gillet Co., Inc. Baltimore, MD Computers Feb-95 0 36,207 36,207
The Big Room Irvine, CA Printing Feb-95 0 124,780 124,780
The Elson Sudi Corporation Pittsburgh, PA Printing Feb-95 0 25,669 25,669
The Fisher Co. Grand Rapids, MI Printing Feb-95 0 25,456 25,456
The Fisher Co. Grand Rapids, MI Printing Feb-95 0 96,944 96,944
The Foxboro Company Foxboro, MA Manufacturing & Production Dec-94 2,208,437 318,179 2,526,616
The Foxboro Company Foxboro, MA Computers Mar-95 2,719,251 344,980 3,064,231
The Foxboro Company Foxboro, MA Computers Jun-95 1,226,129 88,589 1,314,718
The George Group Inc. Dallas, TX Audio Equipment Feb-96 0 47,167 47,167
The Grand Union Company Wayne, NJ Retail Mar-94 0 285,267 285,267
The Monitor Company Cambridge, MA Computers Mar-95 2,436,477 196,773 2,633,250
The Print Shop Orlando, FL Printing Feb-95 0 42,838 42,838
The Print Shop Orlando, FL Printing Feb-95 0 44,990 44,990
The Printery Greensboro, NC Printing Feb-95 0 30,954 30,954
The Printing Gallery Florence, KY Printing Feb-95 0 39,198 39,198
The Printing Standard Corporation Kennesaw, GA Printing Feb-95 0 36,554 36,554
The Printmaker Ltd. Santa Fe, NM Manufacturing & Production Feb-95 0 37,174 37,174
The Proceres Companies, Inc. Savage, MD Construction Nov-94 0 32,848 32,848
The West Company Lionville, PA Manufacturing & Production Mar-95 754,335 100,354 854,689
The World & News Communications Washington, DC Computers Feb-95 0 107,248 107,248
Thorpe Printing Services, Inc. Marysville, MI Printing Feb-95 0 499,345 499,345
Thunder Audio Inc. Lincoln Park, MI Audio Equipment Jan-96 0 61,281 61,281
Thunderbird Press Titusville, FL Printing Feb-95 0 90,708 90,708
TJ Printing, Inc. New Berlin, WI Printing Feb-95 0 40,678 40,678
TLC Printing & Copying Co., Inc. Metairie, LA Printing Feb-95 0 50,498 50,498
Tomken Die Cutting, Inc. Opa Locka, FL Printing Feb-95 0 47,916 47,916
Trade Bindery, Inc. Fort Lauderdale, FL Manufacturing & Production Feb-95 0 26,310 26,310
Trade Bindery, Inc. Fort Lauderdale, FL Printing Feb-95 0 39,030 39,030
Twin Rivers Printing Madison, NC Manufacturing & Production Feb-95 0 45,105 45,105
Typography Plus, Inc. Dania, FL Printing Feb-95 0 38,994 38,994
T.B.G. of Flushing, Inc. Whitestone, NY Restaurant Nov-94 0 309,000 309,000
Ultrasound Health Systems Brooklyn, NY Medical Aug-95 0 29,194 29,194
Universal Press Ltd. San Clemente, CA Printing Feb-95 0 34,585 34,585
Universal Press Ltd. San Clemente, CA Printing Feb-95 0 30,290 30,290
U-Save Auto Rental of America Hanover, MD Printing Feb-95 0 38,371 38,371
V I P Printing, Inc. Hauppauge, NY Printing Feb-95 0 44,860 44,860
Versatype, Inc. Long Beach, CA Printing Feb-95 0 39,883 39,883
Video Plaza Milford, CT Furniture Mar-95 0 29,923 29,923
Viking Color Separations, Inc. Fairfield, CT Printing Feb-95 0 79,584 79,584
Village Of Freeport Inc. Freeport, NY Office Equipment Aug-95 0 39,090 39,090
Vinings Printing Co., Inc. Atlanta, GA Printing Feb-95 0 44,873 44,873
W C G P, Inc. Van Nuys, CA Printing Feb-95 0 63,728 63,728
Warren & Stiles, Inc. Calhoun, GA Printing Feb-95 0 58,612 58,612
Wegman Companies, Inc. Rochester, NY Computers Nov-94 0 103,000 103,000
Westcott Press, Inc. Altadena, CA Printing Feb-95 0 316,150 316,150
Westwind Forms & Graphics San Diego, CA Printing Feb-95 0 28,787 28,787
Wholesale Printers, Inc. Norfolk, VA Printing Feb-95 0 27,575 27,575
Winnett Motels, Inc. Asheville, NC Fixture Sep-94 0 32,998 32,998
Winterhawk Graphics, Inc. Hunt Valley, MD Printing Feb-95 0 132,666 132,666
Wissing's, Inc. San Diego, CA Printing Feb-95 0 131,986 131,986
Woodbridge Stereo Woodbridge, NJ Computers Aug-95 0 38,287 38,287
Woodfine Printing Co., Inc. Buffalo, NY Printing Feb-95 0 26,646 26,646
XL Graphics, Inc. Phoenix, AZ Printing Feb-95 0 105,295 105,295
York International Corp. New York, NY Telecommunications Aug-95 0 37,252 37,252
Young Phillips Clemmons, NC Computers Feb-95 0 29,055 29,055
Z T Enterprises Inc. Dba Irving, TX Manufacturing & Production Apr-95 0 35,670 35,670
Total Equipment transactions less than $25,000 168,351 13,487,406 13,655,757
$62,159,695 $60,810,801 $122,970,495
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are
owned and leased by ICON Cash Flow Partners, L.P. Six at March 31, 1996
pursuant to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Printing $21,694,254 68,309 $21,762,563
Construction 21,421,621 31,891 21,453,512
Computer Systems 19,060,853 1,554,504 20,615,357
Aircraft 19,371,603 - 19,371,603
Manufacturing & Production 14,064,443 2,428,624 16,493,067
Medical 6,616,606 1,217,969 7,834,575
Material & Handling 1,555,992 1,217,969 2,773,961
Restaurant Equipment 1,797,352 455,864 2,253,216
Telecommunications 157,489 1,807,712 1,965,201
Furniture & Fixtures 854,778 530,304 1,385,082
Retail Systems 777,047 147,029 924,076
Audio 45,793 101,835 147,628
Video Production 94,324 - 94,324
Office Equipment - 64,868 64,868
Agriculture - 36,829 36,829
Automotive - 27,018 27,018
Transportation - 11,973 11,973
---------- ------ ------
$107,512,155 $9,702,698 $117,214,853
============ ========== ============
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
The following table sets forth the aggregate equipment acquisition, leasing and
financing information for ICON Cash Flow Partners L.P. Seven at March 31, 1996:
<TABLE>
Original Lessee Date Total Cash Acquisition
or Equipment User Location Equipment Purchased Financing (1)Expended (2) Cost (3)
<S> <C> <C> <C> <C> <C> <C>
Alexander & Alexander Owings Mills, MD Computers Jan-96 $2,805,739 $366,163 $3,171,902
All Car Distributors Inc. Antigo, WI Automotive Mar-96 0 101,445 101,445
Blount Inc. Montgomery, AL Computers Jan-96 471,271 37,083 508,354
C.P. Shades Inc. Sausalito, CA Manufacturing & Production Mar-96 0 247,608 247,608
DCR Communications Inc. Washington, DC Furniture Feb-96 0 123,781 123,781
Intersolv Inc. Rockville, MD Computers Jan-96 576,678 47,155 623,834
Tuscon Bagel Co. L.L.C. Brainerd, MN Restaurant Equipment Mar-96 0 261,319 261,319
Total Equipment transactions less than $25,000 0 2,681 2,681
$3,853,688 $1,187,234 $5,040,923
</TABLE>
(1) This is the financing at the date of acquisition.
(2) Cash expended is equal to cash paid plus amounts payable on equipment
purchases at June 30, 1995. (3) Total acquisition cost is equal to the
contractual purchase price plus acquisition fee.
<PAGE>
TABLE VI
Acquisition of Equipment - Recent Public Program
(unaudited)
SUPPLEMENTAL SCHEDULE
The following is a summary of the types and amounts of equipment which are
owned and leased by ICON Cash Flow Partners L.P. Seven at March 31, 1996
pursuant to leases or which secure its Financing Transactions.
Equipment Equipment Total
Equipment Category Leases Financings Portfolio
Computer Systems $4,181,386 - $4,181,386
Restaurant Equipment - 253,708 253,708
Manufacturing & Production 240,396 - 240,396
Furniture & Fixtures 120,176 - 120,176
Automotive 98,490 - 98,490
------ ------- ------
$4,640,448 $253,708 $4,894,156
========== ======== ==========
