UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------- -----------------------
------------------------
For Quarter Ended June 30, 1996 Commission File No. 0-15623
American Income 7 Limited Partnership
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2932747
- ---------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
98 North Washington Street, Boston, MA 02114
- ---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (617) 854-5800
-----------------------------
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----------- --------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes No
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AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
INDEX
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statement of Financial Position
at June 30, 1996 and December 31, 1995 3
Statement of Operations for the three and six
months ended June 30, 1996 and 1995 4
Statement of Cash Flows for the six months
ended June 30, 1996 and 1995 5
Notes to the Financial Statements 6-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
PART II. OTHER INFORMATION:
Items 1 - 6 13
2
AMERICAN INCOME 7 LIMITED PARTNERSHIP
STATEMENT OF FINANCIAL POSITION
June 30, 1996 and December 31, 1995
(Unaudited)
June 30, December 31,
1996 1995
----------- ------------
ASSETS
- -------
Cash and cash equivalents $ 370,217 $ 316,150
Rents receivable, net of allowance for
doubtful accounts of $10,000 at
December 31, 1995 4,764 20,124
Accounts receivable - affiliate 164,081 194,735
Equipment at cost, net of accumulated
depreciation of $10,471,372 and
$9,931,106 at June 30, 1996 and
December 31, 1995, respectively 3,124,778 3,679,301
---------- ----------
Total assets $3,663,840 $4,210,310
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
Notes payable $ -- $ 65,165
Accrued interest -- 835
Accrued liabilities 11,750 20,000
Accrued liabilities - affiliate 5,995 1,715
Deferred rental income 103,922 252,724
Cash distributions payable to partners 45,080 180,319
---------- ----------
Total liabilities 166,747 520,758
---------- ----------
Partners' capital (deficit):
General Partner (121,712) (119,787)
Limited Partnership Interests
(71,406 Units; initial purchase
price of $250 each) 3,618,805 3,809,339
---------- ----------
Total partners' capital 3,497,093 3,689,552
---------- ----------
Total liabilities and
partners' capital $3,663,840 $4,210,310
========== ==========
The accompanying notes are an integral part
of these financial statements.
3
AMERICAN INCOME 7 LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
for the three and six months ended June 30, 1996 and 1995
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1996 1995 1996 1995
----------- --------- ----------- ---------
Income:
Lease revenue $ 244,485 $401,539 $ 505,381 $800,083
Interest income 4,160 10,423 9,096 22,015
Gain on sale of equipment 381 4,720 881 11,020
--------- -------- --------- --------
Total income 249,026 416,682 515,358 833,118
--------- -------- --------- --------
Expenses:
Depreciation 228,170 232,228 454,523 464,456
Write-down of equipment 100,000 -- 100,000 --
Interest expense 84 17,480 581 35,728
Equipment management fees
- affiliate 12,224 20,077 25,269 40,004
Operating expenses - affiliate 20,211 18,533 37,284 42,980
--------- -------- --------- --------
Total expenses 360,689 288,318 617,657 583,168
--------- -------- --------- --------
Net income (loss) $(111,663) $128,364 $(102,299) $249,950
========= ======== ========= ========
Net income (loss)
per limited partnership unit $(1.55) $ 1.78 $(1.42) $ 3.47
========= ========= ======== =========
Cash distributions declared
per limited partnership unit $0.63 $ 5.00 $1.25 $ 10.00
========= ======== ========= ========
The accompanying notes are an integral part
of these financial statements.
4
AMERICAN INCOME 7 LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(Unaudited)
1996 1995
----------- ----------
Cash flows from (used in) operating
activities:
Net income (loss) $(102,299) $ 249,950
Adjustments to reconcile net income
(loss) to net cash from operating
activities:
Depreciation 454,523 464,456
Write-down of equipment 100,000 --
Gain on sale of equipment (881) (11,020)
Decrease in allowance for
doubtful accounts (10,000) --
Changes in assets and liabilities
Decrease in:
rents receivable 25,360 884
accounts receivable - affiliate 30,654 1,870
Increase (decrease) in:
accrued interest (835) (827)
accrued liabilities (8,250) (500)
accrued liabilities - affiliate 4,280 (3,528)
deferred rental income (148,802) 533
--------- ---------
Net cash from operating
activities 343,750 701,818
--------- ---------
Cash flows from investing activities:
Proceeds from equipment sales 881 11,020
--------- ---------
Net cash from investing activities 881 11,020
--------- ---------
Cash flows used in financing activities:
Principal payments - notes payable (65,165) (223,788)
Distributions paid (225,399) (721,274)
--------- ---------
Net cash used in financing
activities (290,564) (945,062)
--------- ---------
Net increase (decrease) in cash and
cash equivalents 54,067 (232,224)
Cash and cash equivalents at beginning
of period 316,150 992,497
--------- ---------
Cash and cash equivalents at end of
period $ 370,217 $ 760,273
========= =========
Supplemental disclosure of cash flow
information:
Cash paid during the period for
interest $ 1,416 $ 36,555
========= =========
The accompanying notes are an integral part
of these financial statements.
5
AMERICAN INCOME 7 LIMITED PARTNERSHIP
Notes to the Financial Statements
June 30, 1996
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- ------------------------------
The financial statements presented herein are prepared in conformity with
generally accepted accounting principles and the instructions for preparing Form
10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and are unaudited. As such, these financial statements do not
include all information and footnote disclosures required under generally
accepted accounting principles for complete financial statements and,
accordingly, the accompanying financial statements should be read in conjunction
with the footnotes presented in the 1995 Annual Report. Except as disclosed
herein, there has been no material change to the information presented in the
footnotes to the 1995 Annual Report.
In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at June 30, 1996 and December 31, 1995 and results of operations for
the three and six month periods ended June 30, 1996 and 1995 have been made and
are reflected.
NOTE 2 - CASH
- -------------
The Partnership invests excess cash with large institutional banks in reverse
repurchase agreements with overnight maturities. The reverse repurchase
agreements are secured by U.S. Treasury Bills or interests in U.S. Government
securities.
NOTE 3 - REVENUE RECOGNITION
- ----------------------------
Rents are payable to the Partnership monthly, quarterly or semi-annually and
no significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred. Future minimum rents of
$3,355,452 are due as follows:
For the year ending June 30, 1997 $ 850,213
1998 823,072
1999 792,676
2000 792,676
2001 96,815
----------
Total $3,355,452
==========
6
AMERICAN INCOME 7 LIMITED PARTNERSHIP
Notes to the Financial Statements
(Continued)
NOTE 4 - EQUIPMENT
- ------------------
The following is a summary of equipment owned by the Partnership at June 30,
1996. In the opinion of American Finance Group ("AFG"), the acquisition cost of
the equipment did not exceed its fair market value.
Lease Term Equipment
Equipment Type (Months) at Cost
- -------------- -------------- -------------
Aircraft 36-60 $ 8,179,070
Flight simulators 60 4,290,414
Manufacturing 24-60 598,850
Motor vehicles 12-72 311,192
Communications 36 83,873
Computer and peripherals 12-60 54,612
Tractors and heavy duty trucks 2-60 50,696
Materials handling 2-60 27,443
------------
Total equipment cost 13,596,150
Accumulated depreciation (10,471,372)
------------
Equipment, net of accumulated depreciation $ 3,124,778
============
At June 30, 1996, the Partnership's equipment portfolio included equipment
having a proportionate original cost of $12,780,726, representing 94% of total
equipment cost.
The summary above includes fully depreciated equipment with a cost of
approximately $40,000 which is not subject to an active lease agreement.
During the quarter ended June 30, 1996, the Partnership recorded a write-
down, representing an impairment in value, pertaining to its interest in a
Lockheed L-1011 aircraft. This adjustment was precipitated by continuing
deterioration in the secondary market for wide-body aircraft of this type.
Several air carriers have reduced their commitment to the L-1011 and, currently,
a major domestic air carrier is expected to retire eleven L-1011 aircraft from
its fleet. Further, it appears that future demand for this type of aircraft
will be weak, consisting principally of air cargo carriers or operators of
passenger charters. In consideration of such circumstances and in accordance
with Financial Accounting Standards Board Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, the
Partnership reduced the carrying value of its L-1011 aircraft interest to its
estimated current fair market value. This resulted in a write-down of $100,000,
representing $1.39 per limited partnership unit.
NOTE 5 - RELATED PARTY TRANSACTIONS
- -----------------------------------
All operating expenses incurred by the Partnership are paid by AFG on behalf
of the Partnership and AFG is reimbursed at its actual cost for such
expenditures. Fees and other costs incurred during each of the six month
periods ended June 30, 1996 and 1995, which were paid or accrued by the
Partnership to AFG or its Affiliates, are as follows:
7
AMERICAN INCOME 7 LIMITED PARTNERSHIP
Notes to the Financial Statements
(Continued)
1996 1995
-------- --------
Equipment management fees $25,269 $40,004
Administrative charges 7,878 7,878
Reimbursable operating expenses
due to third parties 29,406 35,102
------- -------
Total $62,553 $82,984
======= =======
All rents and proceeds from the sale of equipment are paid directly to either
AFG or to a lender. AFG temporarily deposits collected funds in a separate
interest-bearing escrow account prior to remittance to the Partnership. At June
30, 1996, the Partnership was owed $164,081 by AFG for such funds and the
interest thereon. These funds were remitted to the Partnership in July 1996.
NOTE 6- LEGAL PROCEEDINGS
- -------------------------
On March 15, 1993, Herman's Sporting Goods, Inc., a lessee of the Partnership
(the "Debtor"), filed for protection under Chapter 11 of the Bankruptcy Code in
the United States District Court, Trenton, New Jersey (the "District Court").
Certain unpaid rents due to the Partnership were scheduled by the Debtor as
unsecured claims. Upon order of the District Court, renewal rental schedules
for all equipment leased to the Debtor by the Partnership were executed and are
currently in effect. On August 23, 1994, the District Court confirmed the
Debtor's First Modified Plan of Reorganization, as Amended and Modified. On
April 26, 1996, the Debtor refiled for protection under Chapter 11 of the
Bankruptcy Code in the District Court. Rents due to the Partnership pursuant to
the renewal schedules due to expire on June 30, 1996 were scheduled by the
Debtor as unsecured claims. At June 30, 1996, the Partnership was due $1,501
from the Debtor with respect to its 1993 and 1996 unsecured claims. The
Partnership's equipment portfolio includes equipment on lease to the Debtor with
an original cost of approximately $83,873, which is expected to be purchased by
the Debtor, and is fully depreciated for financial reporting purposes. This
equipment represents less than 1% of the Partnership's aggregate equipment
portfolio at June 30, 1996. These bankruptcies did not have a material adverse
effect on the financial position of the Partnership.
8
AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations.
- --------------
Three and six months ended June 30, 1996 compared to the three and six months
- -----------------------------------------------------------------------------
ended June 30, 1995:
- --------------------
Overview
- --------
The Partnership was organized in 1986 as a direct-participation equipment
leasing program to acquire a diversified portfolio of capital equipment subject
to lease agreements with third parties. The Partnership's stated investment
objectives and policies contemplated that the Partnership would wind-up its
operations within approximately seven years of its inception. Accordingly, the
General Partner is pursuing the remarketing of all of the Partnership's
remaining equipment and has engaged an investment adviser to solicit interested
third-party buyers. This effort is being undertaken in conjunction with certain
other affiliated partnerships and, if successful, would result in the sale of
each affected partnership's assets to a selected buyer. The General Partner
believes this approach will (i) maximize the disposition prices of each
partnership's assets and (ii) prevent the incidence of future expenses to
operate a publicly-registered limited partnership with a declining asset base.
The General Partner is evaluating expressions of interest submitted by the
investment adviser from a number of potential buyers, but is under no obligation
to accept any proposal. If successful, the General Partner anticipates that it
would wind-up the operations of the Partnership and make a liquidating
distribution to the Partners, net of any cash reserves which the General Partner
may consider appropriate, on or before December 31, 1996.
Results of Operations
- ---------------------
For the three and six months ended June 30, 1996 the Partnership recognized
lease revenue of $244,485 and $505,381, respectively, compared to $401,539 and
$800,083 for the same periods in 1995. The decrease in lease revenue between
1996 and 1995 was expected and resulted principally from renewal lease term
expirations and the sale of equipment. The Partnership also earns interest
income from temporary investments of rental receipts and equipment sales
proceeds in short-term instruments.
The Partnership's equipment portfolio includes certain assets in which the
Partnership holds a proportionate ownership interest. In such cases, the
remaining interests are owned by AFG or an affiliated equipment leasing program
sponsored by AFG. Proportionate equipment ownership enables the Partnership to
further diversify its equipment portfolio by participating in the ownership of
selected assets, thereby reducing the general levels of risk which could result
from a concentration in any single equipment type, industry or lessee. The
Partnership and each affiliate individually report, in proportion to their
respective ownership interests, their respective shares of assets, liabilities,
revenues, and expenses associated with the equipment.
For the three and six months ended June 30, 1996, the Partnership sold fully
depreciated equipment which resulted in net gains, for financial statement
purposes, of $381 and $881, respectively. For the three and six months ended
June 30, 1995, the Partnership sold fully depreciated equipment which resulted
in net gains, for financial statement purposes, of $4,720 and $11,020,
respectively.
It cannot be determined whether future sales of equipment will result in a net
gain or a net loss to the Partnership, as such transactions will be dependent
upon the condition and type of equipment being sold and its marketability at the
time of sale. In addition, the amount of gain or loss reported for financial
statement purposes is partly a function of the amount of accumulated
depreciation associated with the equipment being sold.
9
AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including AFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. AFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Partnership and which will
maximize total cash returns for each asset.
The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Partnership
classifies such residual rental payments as lease revenue. Consequently, the
amount of gain or loss reported in the financial statements is not necessarily
indicative of the total residual value the Partnership achieved from leasing the
equipment.
Depreciation expense was $228,170 and $454,523 for the three and six months
ended June 30, 1996, respectively, compared to $232,228 and $464,456 for the
same periods in 1995. For financial reporting purposes, to the extent that an
asset is held on primary lease term, the Partnership depreciates the difference
between (i) the cost of the asset and (ii) the estimated residual value of the
asset on a straight-line basis over such term. For purposes of this policy,
estimated residual values represent estimates of equipment values at the date of
primary lease expiration. To the extent that an asset is held beyond its
primary lease term, the Partnership continues to depreciate the remaining net
book value of the asset on a straight-line basis over the asset's remaining
economic life.
During the quarter ended June 30, 1996, the Partnership recorded a write-down,
representing an impairment in value, pertaining to its interest in a Lockheed L-
1011 aircraft. This adjustment was precipitated by continuing deterioration in
the secondary market for wide-body aircraft of this type. Several air carriers
have reduced their commitment to the L-1011 and, currently, a major domestic air
carrier is expected to retire eleven L-1011 aircraft from its fleet. Further,
it appears that future demand for this type of aircraft will be weak,
consisting principally of air cargo carriers or operators of passenger
charters. In consideration of such circumstances and in accordance with
Financial Accounting Standards Board Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, the
Partnership reduced the carrying value of its L-1011 aircraft interest to its
estimated current fair market value. This resulted in a write-down of $100,000,
representing $1.39 per limited partnership unit.
Interest expense was $84 and $581 or less than 1% of lease revenue for each of
the three and six months ended June 30, 1996, respectively, compared to $17,480
and $35,728 or 4.4% and 4.5% of lease revenue for the same periods in 1995.
Interest expense is not expected to be incurred in future periods due to the
retirement of all of the Partnership's debt obligations.
Management fees were 5% of lease revenue during each of the periods ended
June 30, 1996 and 1995 and will not change as a percentage of lease revenue in
future periods.
Operating expenses consist principally of administrative charges, professional
service costs, such as audit and legal fees, as well as printing, distribution
and remarketing expenses. In certain cases, equipment storage or repairs and
maintenance costs may be incurred in connection with equipment being remarketed.
Collectively, operating expenses represented approximately 8.3% and 7.4% of
lease revenue for the three and six months ended June 30, 1996, respectively,
compared to 4.6% and 5.4% of lease revenue for the same periods in 1995. The
amount of future operating expenses cannot be predicted with certainty; however,
such expenses are usually higher during the acquisition and liquidation phases
of a partnership. Other fluctuations typically occur in relation to the volume
and timing of remarketing activities.
10
AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
Liquidity and Capital Resources and Discussion of Cash Flows
- ------------------------------------------------------------
The Partnership by its nature is a limited life entity which was established
for specific purposes described in the preceding "Overview". As an equipment
leasing program, the Partnership's principal operating activities derive from
asset rental transactions. Accordingly, the Partnership's principal source of
cash from operations is provided by the collection of periodic rents. These
cash inflows are used to satisfy debt service obligations associated with
leveraged leases, and to pay management fees and operating costs. Operating
activities generated net cash inflows of $343,750 and $701,818 for the six
months ended June 30, 1996 and 1995, respectively. Future renewal, re-lease and
equipment sale activities will cause a gradual decline in the Partnership's
lease revenue and corresponding sources of operating cash. Overall, expenses
associated with rental activities, such as management fees, and net cash flow
from operating activities will decline as the Partnership experiences a higher
frequency of remarketing events.
The Partnership's lease agreement in connection with its 21.37% ownership
interest in a SAAB SF340A aircraft expired in June 1996. The Partnership's
proportionate interest in the aircraft had a cost and net book value of
$1,676,561 and $523,483, respectively, at June 30, 1996. The lessee has agreed
to release the aircraft on a month to month basis at a base rent to the
Partnership of $8,014 per month. This agreement may be terminated by either
party by giving sixty days notice of the termination. The General Partner is
actively pursuing the further remarketing of this aircraft.
Ultimately, the Partnership will dispose of all assets under lease. This will
occur principally through sale transactions whereby each asset will be sold to
the existing lessee or to a third party. Generally, this will occur upon
expiration of each asset's primary or renewal/re-lease term. In certain
instances, casualty or early termination events may result in the disposal of an
asset. Such circumstances are infrequent and usually result in the collection
of stipulated cash settlements pursuant to terms and conditions contained in the
underlying lease agreements.
Cash realized from asset disposal transactions is reported under investing
activities on the accompanying Statement of Cash Flows. During the six months
ended June 30, 1996, the Partnership realized $881 in equipment sale proceeds
compared to $11,020 for the same period in 1995. Future inflows of cash from
asset disposals will vary in timing and amount and will be influenced by many
factors including, but not limited to, the frequency and timing of lease
expirations, the type of equipment being sold, its condition and age, and future
market conditions.
The Partnership obtained long-term financing in connection with certain
equipment leases. The repayments of principal related to such indebtedness are
reported as a component of financing activities. All of the Partnership's
outstanding debt obligations have been retired.
Cash distributions to the General and Limited Partners are declared and
generally paid within fifteen days following the end of each calendar quarter.
The payment of such distributions is presented as a component of financing
activities. For the six months ended June 30, 1996, the Partnership declared
total cash distributions of Distributable Cash From Operations and Distributable
Cash From Sales and Refinancings of $90,160. In accordance with the Amended and
Restated Agreement and Certificate of Limited Partnership, the Limited Partners
were allocated 99% of these distributions, or $89,258, and the General Partner
was allocated 1%, or $902. The second quarter 1996 cash distribution was paid
on July 15, 1996.
Cash distributions paid to the Limited Partners consist of both a return of
and a return on capital. To the extent that cash distributions consist of Cash
From Sales or Refinancings, substantially all of such cash distributions should
be viewed as a return of capital. Cash distributions do not represent and are
not
11
AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
PART I. FINANCIAL INFORMATION
indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Partnership and will be
dependent upon the collection of all contracted rents, the generation of renewal
and/or re-lease rents, and the residual value realized for each asset at its
disposal date. Market conditions, technological changes, the ability of AFG to
manage and remarket the assets, and many other events and circumstances, could
enhance or detract from individual asset yields and the collective performance
of the Partnership's equipment portfolio.
12
AMERICAN INCOME 7 LIMITED PARTNERSHIP
FORM 10-Q
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Response:
Refer to Note 6 herein and to Note 7 in
the 1995 Annual Report
Item 2. Changes in Securities
Response: None
Item 3. Defaults upon Senior Securities
Response: None
Item 4. Submission of Matters to a Vote of Security Holders
Response: None
Item 5. Other Information
Response: None
Item 6(a). Exhibits
Response: None
Item 6(b). Reports on Form 8-K
Response: None
13
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.
AMERICAN INCOME 7 LIMITED PARTNERSHIP
By: AFG Leasing Associates II, a Massachusetts
general partnership and the General Partner of
the Registrant.
By: AFG Leasing Incorporated, a Massachusetts
corporation and general partner in such general
partnership.
By: /s/ Michael J. Butterfield
----------------------------------------------
Michael J. Butterfield
Treasurer of AFG Leasing Incorporated
(Duly Authorized Officer and
Principal Accounting Officer)
Date: August 13, 1996
--------------------------------------------
By: /s/ Gary M. Romano
----------------------------------------------
Gary M. Romano
Clerk of AFG Leasing Incorporated
(Duly Authorized Officer and
Principal Financial Officer)
Date: August 13, 1996
--------------------------------------------
14