UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-13080
LIBERTY EQUIPMENT INVESTORS L. P. - 1984
(Exact name of Registrant as specified in its charter)
New York 13-3222673
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
World Financial Center - South Tower, N.Y., N.Y. 10080-6114
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(212) 236-6472
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 filing
requirements for the past 90 days. Yes X No
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Liberty Equipment Investors L.P.-1984
Table of Contents
Consolidated Balance Sheets as of March 31, 1995
(Unaudited) and December 30, 1994 (Unaudited)
Consolidated Statements of Operations for the Thirteen
Week Periods Ended March 31, 1995 (Unaudited)and
April 1, 1994 (Unaudited)
Consolidated Statements of Cash Flows for the Thirteen
Week Periods Ended March 31, 1995 (Unaudited) and
April 1, 1994 (Unaudited)
Notes to Financial Statements for the Thirteen Week Period
Ended March 31, 1995 (Unaudited)
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1995 (UNAUDITED) AND
DECEMBER 30, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 30,
Notes 1995 1994
<S> <C> <C> <C>
ASSETS: 3,4,5
Cash and cash equivalents $ 1,761,247 $ 1,717,573
Property under management
contract and held for lease
(less accumulated depreciation
of $4,138,666 as of March 31,
1995 and $4,577,749 as of
December 30, 1994) 1,740,777 2,094,070
Deferred costs (less accumulated
amortization of $352,372 as of
March 31, 1995 and $353,057 as
of December 30, 1994) 3,375 6,045
Net assets of discontinued
operations of Windplant 5 5,364,614 5,246,131
Accounts receivable and other
assets 521,591 395,265
TOTAL ASSETS $ 9,391,604 $ 9,459,084
LIABILITIES AND PARTNERS'
CAPITAL:
Liabilities:
Notes Payable - Windplant 5 $ 4,445,512 $ 4,445,512
Accounts payable and accrued
liabilities 5 870,045 674,421
Liabilities of discontinued
operations of Medical Imaging
Centers 3,4 200,414 221,164
Total Liabilities 5,515,971 5,341,097
</TABLE>
(Continued on the following page)
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1995 (UNAUDITED) AND
DECEMBER 30, 1994 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
March 31, December 30,
Notes 1995 1994
<S> <C> <C> <C>
General Partner: 1
Capital contributions, net of
offering expenses and return
of capital 230,366 233,115
Cash distributions (58,027) (56,978)
Cumulative loss (133,583) (134,958)
38,756 41,179
Limited Partners: 1
Capital contributions, net of
offering expenses and return
of capital (31,338.3 Units
of Limited Partnership
Interest) 22,806,220 23,078,399
Cash distributions (5,744,594) (5,640,713)
Cumulative loss (13,224,749) (13,360,878)
3,836,877 4,076,808
Total Partners' Capital 3,875,633 4,117,987
TOTAL LIABILITIES AND PARTNERS'
CAPITAL $ 9,391,604 $ 9,459,084
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995 (UNAUDITED)
AND APRIL 1, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
March 31, April 1,
Not 1995 1994
es
<S> <C> <C> <C>
REVENUES:
Rental income $ 281,458 $ 363,068
Interest income 24,918 17,337
Gain on disposals of leased
assets 84,315 9,459
Total Revenues 390,691 389,864
EXPENSES:
Depreciation and amortization
expense 100,516 151,353
Property operating expenses 146,188 181,598
Other operating expenses 71,483 54,594
Total Expenses 318,187 387,545
INCOME FROM CONTINUING
OPERATIONS 72,504 2,319
DISCONTINUED OPERATIONS:
Loss from discontinued
operations of medical imaging
centers 4 - (181,699)
Gain on disposal of Costa Mesa
imaging center 3 65,000 -
NET INCOME (LOSS) $ 137,504 $ (179,380)
NET INCOME (LOSS) ALLOCATED TO
GENERAL PARTNER $ 1,375 $ (1,794)
NET INCOME (LOSS) ALLOCATED TO
LIMITED PARTNERS (31,338.3
Units of Limited Partnership
Interest) 136,129 (177,586)
NET INCOME (LOSS) $ 137,504 $ (179,380)
</TABLE>
(Continued on the following page)
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995 (UNAUDITED)
AND APRIL 1, 1994 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
March 31, April 1,
Not 1995 1994
es
<S> <C> <C> <C>
PER UNIT OF LIMITED PARTNERSHIP
INTEREST:
INCOME FROM CONTINUING
OPERATIONS $ 2.29 $ .07
DISCONTINUED OPERATIONS:
Loss from discontinued
operations of medical imaging
centers - (5.74)
Gain on disposal of Costa Mesa
imaging center 2.05 -
NET INCOME (LOSS) $ 4.34 $ (5.67)
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995 (UNAUDITED)
AND APRIL 1, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
March 31, April 1,
1995 1994
<S> <C> <C>
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
Cash flows from operating activities:
Net income (loss) $ 137,504 $ (179,380)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in) operating
activities:
Depreciation and amortization 100,516 151,353
Gain on disposal of leased assets (84,315) (9,459)
Increase/Decrease in:
Accounts payable and accrued
liabilities 195,624 116,616
Deferred costs 2,307 3,836
Accounts receivable and other
assets (41,442) (6,485)
Net assets of discontinued
operations of Windplant (118,483) (136,713)
Liabilities of discontinued
operations of Medical Imaging
Centers (20,750) 38,926
Net cash provided by (used in)
operating activities 170,961 (21,306)
Cash flows from investing activities:
Proceeds from disposed equipment 252,571 172,870
Net cash provided by investing
activities 252,571 172,870
</TABLE>
(Continued on the following page)
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
THIRTEEN WEEK PERIODS ENDED MARCH 31, 1995 (UNAUDITED)
AND APRIL 1, 1994 (UNAUDITED)
(Continued)
<TABLE>
<CAPTION>
March 31, April 1,
1995 1994
<S> <C> <C>
Cash flows from financing activities:
Cash distributed to:
Limited Partners (103,881) (220,536)
General Partner (1,049) (2,227)
Capital returned to:
Limited Partners (272,179) (249,539)
General Partner (2,749) (2,521)
Net cash used in financing
activities (379,858) (474,823)
Net increase (decrease) in cash
and cash equivalents 43,674 (323,259)
Cash and Cash Equivalents at
Beginning of the Year 1,717,573 2,319,346
Cash and Cash Equivalents at End
of the Period $ 1,761,247 $ 1,996,087
</TABLE>
See Notes to Consolidated Financial Statements (Unaudited).
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P.-1984
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THIRTEEN WEEK PERIOD ENDED MARCH 31, 1995 (UNAUDITED)
NOTE 1. Organization
Liberty Equipment Investors L.P. - 1984 (the "Partnership") was
formed and the Agreement and Certificate of Limited Partnership
was filed under the Revised Uniform Limited Partnership Act of
the State of Delaware on July 10, 1984. The General Partner is
Whitehall Partners Inc. (the "General Partner"), a Delaware
Corporation which is an indirect wholly-owned subsidiary of
Merrill Lynch & Co., Inc.
The purpose of the Partnership is to operate, lease and otherwise
invest in and deal with equipment and direct and indirect
interests therein.
Pursuant to the terms of the Partnership Agreement, the General
Partner is liable for all general obligations of the Partnership
to the extent not paid by the Partnership. The Limited Partners
are not liable for the obligations of the Partnership beyond the
amount of their contributed capital.
In the opinion of the General Partner, the financial statements
include all adjustments necessary to fairly reflect the results
of the interim periods presented. All adjustments are of a
normal recurring nature.
Reclassifications
Certain reclassifications were made to the 1994 financial
statements to conform with the current period's presentation.
NOTE 2. Additional Information
Additional information, including the audited year end 1994
Financial Statements and the Summary of Significant Accounting
Policies, is included in the Partnership's Annual Report on Form
10-K for the year ended December 30, 1994 on file with the
Securities and Exchange Commission. All accounting policies are
as stated in the aforementioned annual report except for revenues
and expenses relating to the Partnership's maritime shipping
containers which, for interim reporting purposes, are estimated
based upon the prior quarter's results.
NOTE 3. Sale of Assets Related to the Costa Mesa Imaging Center
The Costa Mesa joint venture agreement and the lease for the
facility which houses the equipment owned by the Partnership and
used by the Costa Mesa joint venture were both scheduled to
expire on May 23, 1995. Effective February 20, 1995 (the
"Effective Date"), the Partnership entered into an agreement (the
"Purchase and Sale Agreement") with CMR pursuant to which the
Partnership sold its interests in the joint venture, the
equipment, the leasehold and leasehold improvements including all
of its obligations to CMR for an aggregate purchase price of
$65,000. CMR had simultaneously caused the joint venture to
enter into an agreement (the "Asset Agreement") with a third
party, not related to the Partnership or CMR, to sell all assets
of the joint venture, including those assets acquired by CMR from
the Partnership. Pursuant to the Purchase and Sale Agreement,
the Partnership was paid the $65,000 purchase price on April 3,
1995. In connection with the sale, the Partnership has been
released as of the Effective Date from all obligations under the
lease, including, without limitation, all future rent payments
and any expenses to restore the premises to their original
condition at the end of the lease. In addition, CMR, MRI and the
joint venture entered into a release agreement with the
Partnership, releasing the Partnership from all obligations,
claims and other liabilities, past, present and future, with
respect to the joint venture and related matters. The
Partnership entered into a similar release agreement for the
benefit of CMR, MRI and the joint venture. The Partnership
recognized a gain of $65,000 on the transaction.
NOTE 4. Discontinued Operations - Medical Imaging Centers
The Partnership recorded its Medical Imaging Segment as a
discontinued operation on July 1, 1994. Together, the Miami and
Costa Mesa imaging centers constituted the Partnership's
discontinued Medical Imaging Segment. As of March 31, 1995 and
December 30, 1994, the Partnership's liabilities of discontinued
operations related to its Medical Imaging Centers were comprised
primarily of accruals for closing, selling or otherwise
liquidating the facilities, totaling $200,414 and $221,164,
respectively.
The income and expenses for the Medical Imaging Centers for the
thirteen weeks ended April 1, 1994 were as follows:
Total revenues $ 550,707
Total expenses 732,406
Loss from discontinued operations
of Medical Imaging Centers
$ (181,699)
NOTE 5. Subsequent Event - Sale of Windplant
The Partnership consummated the sale of its Windplant to an
affiliate of the Windplant manager effective April 12, 1995.
Pursuant to the sale, the Partnership received total
consideration of $6,061,669 consisting of a cash purchase price
of $5,380,399 and the forgiveness of $681,270 of amounts owing to
certain affiliates of the buyer. Of the $5,380,399 cash purchase
price, $5,080,399 was applied to the payment of the outstanding
principal amount of, and all accrued and unpaid interest on, the
construction notes issued by the Partnership in connection with
the Partnership's purchase of the Windplant. Also, as a result
of the sale, the buyer assumed certain agreements related to the
operations and maintenance of, and the sale and transmission of
energy generated by, the Windplant; and the buyer and/or an
affiliate of the buyer assumed all remaining liabilities and
obligations of the Partnership relating to the ownership,
construction, operation, maintenance and/or management of the
Windplant. There will be no gain or loss recorded in the second
quarter resulting from the Partnership's sale of the Windplant.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1995, Registrant had $1,761,247 in cash and cash
equivalents. Of this amount, $1,584,109 was invested in
commercial paper. The balance was primarily maintained in money
market and demand deposit cash accounts. These amounts represent
funds held in reserve for working capital purposes and cash
distributions to Partners. Approximately $744,000 will be
distributed to Partners in the second quarter of 1995.
Registrant generated positive cash flow from its bus and
container investments and equipment sales in the first quarter of
1995, which, together with cash reserves, was utilized to meet
operating requirements and provide for distributions to Partners.
Buses
Registrant expects to opportunistically liquidate its remaining
buses in 1995. Registrant sold two buses during the first
quarter of 1995, leaving three buses remaining in its fleet as of
March 31, 1995, all of which were on-lease.
Sale of Windplant
Registrant consummated the sale of its Windplant to an affiliate
of the Windplant manager effective April 12, 1995. Pursuant to
the sale, Registrant received total consideration of $6,061,669
consisting of a cash purchase price of $5,380,399 and the
forgiveness of $681,270 of amounts owing to certain affiliates of
the buyer. Of the $5,380,399 cash purchase price, $5,080,399 was
applied to the payment of the outstanding principal amount of,
and all accrued and unpaid interest on, the construction notes
issued in connection with Registrant's purchase of the Windplant.
Also, as a result of the sale, the buyer assumed certain
agreements related to the operations and maintenance of, and the
sale and transmission of energy generated by, the Windplant; and
the buyer and/or an affiliate of the buyer assumed all remaining
liabilities and obligations of Registrant relating to the
ownership, construction, operation, maintenance and/or management
of the Windplant.
Medical Imaging Centers
Together, the Miami and Costa Mesa facilities constituted
Registrant's Discontinued Medical Imaging Segment. During the
first quarter of 1995, Registrant expended funds from reserves
allocated for closing and liquidating the facilities. As of
March 31, 1995, Registrant's liabilities from discontinued
operations related to its Medical Imaging Segment, which were
comprised primarily of such reserves, totaled $200,414.
Miami Imaging Center
Registrant believes that it has adequate reserves to satisfy all
future costs associated with liquidating its investment in Mid-
Miami Inc. and Mid-Miami L.P.
Costa Mesa Imaging Center
The Costa Mesa joint venture agreement and the lease for the
facility which houses the equipment owned by Registrant and used
by the Costa Mesa joint venture were both scheduled to expire on
May 23, 1995. Effective February 20, 1995 (the "Effective
Date"), Registrant entered into an agreement (the "Purchase and
Sale Agreement") with CMR pursuant to which Registrant sold its
interests in the joint venture, the equipment, the leasehold and
leasehold improvements including all of its obligations to CMR
for an aggregate purchase price of $65,000. CMR then caused the
joint venture to enter into an agreement (the "Asset Agreement")
with a third party, not related to Registrant or CMR, to sell all
assets of the joint venture, including those assets acquired by
CMR from Registrant. Pursuant to the Purchase and Sale
Agreement, Registrant was paid the $65,000 purchase price on
April 3, 1995. In connection with the sale, Registrant has been
released as of the Effective Date from all obligations under the
lease, including, without limitation, all future rent payments
and any expenses to restore the premises to their original
condition at the end of the lease. In addition, CMR, MRI and the
joint venture entered into a release agreement with Registrant,
releasing Registrant from all obligations, claims and other
liabilities, past, present and future, with respect to the joint
venture and related matters. Registrant entered into a similar
release agreement for the benefit of CMR, MRI and the joint
venture.
Containers
Registrant's container manager has been disposing of certain
containers on Registrant's behalf. These containers required non-
cost-effective rehabilitation due to wear and age. As a result
of the age and condition of the containers, the rate of disposal
of the containers may remain high through 1995.
Typically, as equipment ages, cash flows generated from the
equipment and equipment market values tend to decline. The
degree of decline is a function of the equipment's remaining
useful life, its current physical condition, the type of service
the equipment is employed in, and the impact of newer equipment
entering the market. Aging of Registrant's containers will have
a material impact on the future result of operations and
liquidity of Registrant since as the containers age, more are
retired each year because the cost of repairs becomes non-
economic.
Although Registrant believes that the aging of its containers
will reduce future container revenues and market value, due to
the uncertainty of the timing of container retirements,
Registrant is unable to determine the impact on its future
liquidity and results of operations.
Asset Impairment and Estimated Useful Life of Assets
Registrant assesses the impairment of assets on a quarterly basis
or immediately upon the occurrence of a significant event in the
marketplace or an event that directly impacts its assets or
related contracts. The methodology varies depending on the type
of asset but typically consists of comparing the net book value
of the asset to either: 1) the undiscounted expected future cash
flows generated by the asset plus estimated salvage value, if
any, less estimated selling commissions at the end of the cash
flow stream (usually corresponding to the end of the current
lease term of the asset), and/or 2) the current market values
obtained from industry sources. The market values used are
conservative wholesale values.
If the net book value of a particular asset is materially higher
than the estimated net realizable value, Registrant will write
down the net book value of the asset accordingly; however,
Registrant does not write its assets down to a value below the
asset-related non-recourse debt. Registrant relies on industry
sources and its experience in the particular marketplace to
determine whether an asset impairment is other than temporary.
Each year, Registrant compares the estimated useful life of its
assets to similar assets owned by others in the particular
industry and assesses useful life in light of changing technology
in the particular industry. Registrant also assesses the
estimated useful life of its equipment immediately upon the
occurrence of a significant event in the marketplace or an event
that directly impacts its assets or related contracts.
Summary
Registrant anticipates pursuing a course of liquidation whereby
Registrant would opportunistically liquidate its remaining buses
and its containers in 1995. Due to uncertainty of the timing and
negotiated sales price of future asset sales, Registrant is
unable to determine the impact of such potential sales or
dispositions on its liquidity and future results of operations.
It is currently estimated that Registrant's cash reserves,
together with cash from operations and equipment sales, will be
adequate to satisfy all of its operating obligations and provide
for distributions to Partners.
Results of Operations
Overall Results
Registrant generated net income of $137,504 in the thirteen week
period ended March 31, 1995 compared to a net loss of $179,380 in
the corresponding period in 1994. The favorable change reflects:
(1) higher income from continuing operations in the 1995 first
quarter compared to the 1994 first quarter (2) a gain on the sale
of Registrant's interest in its Costa Mesa medical imaging
venture in the 1995 first quarter and (3) a 1994 loss of
approximately $182,000 from the discontinued operations of the
Medical Imaging Segment.
Continuing Operations
Registrant's continuing operations generated higher income in the
1995 first quarter compared to the same period of 1994 primarily
as a result of lower expenses.
Registrant's total revenues were relatively unchanged in the 1995
first quarter when compared to the 1994 first quarter reflecting
lower revenues from Registrant's buses and containers offset by
higher gains from the sale of buses and containers in the 1995
first quarter. Registrant's buses generated revenues in the
first quarter of 1995 of approximately $19,000 compared to
approximately $50,000 in the same period in 1994 reflecting the
sale of a significant number of Registrant's remaining buses
since the end of the first quarter of 1994. Container revenues
decreased to approximately $262,000 in the 1995 first quarter
from approximately $313,000 in the same 1994 period, primarily
reflecting the disposal of containers in the intervening period.
Registrant's total expenses including depreciation and
amortization expense and property operating expenses decreased in
the first quarter of 1995 when compared to the first quarter of
1994 primarily due to the sale of buses and containers in the
intervening period.
Discontinued Operations
Registrant's Medical Imaging Segment, which was recorded as a
discontinued operation in the second quarter of 1994, was
comprised of Registrant's Miami and Costa Mesa medical imaging
centers. The results of operations of Registrant's Medical
Imaging Segment are not comparable since: (1) the Miami imaging
center was closed in the third quarter of 1994 and (2) no results
of operations of the Medical Imaging Segment have been recorded
by Registrant after the 1994 second quarter.
Results by Segment
Registrant's Equipment Leasing Segment, which consisted of
investments in buses and containers in both the 1995 first
quarter and 1994 first quarter composes Registrant's remaining
continuing operations. Information regarding this segment is
described under Overall Results - Continuing Operations, above.
The results from Registrant's discontinued Medical imaging
segment, which was comprised of Registrant's Miami and Costa Mesa
imaging facilities are described above under the Overall Results
- - - - - - Discontinued Operations.
Inflation
The low level of inflation during the first quarter of 1995 did
not significantly affect operating income and expenses.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A). Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE NUMBER
<S> <C> <C>
10 Acquisition Agreement by and among
Kenetech Windpower, Inc., KW
Hayward, L.P., U.S. Windpower
Transmission Corporation and
Registrant
27 Financial Data Schedule
</TABLE>
B). Reports on Form 8-K
Registrant did not file any reports on Form 8-K during
the quarter ended March 31, 1995. However, Registrant
filed a report on Form 8-K on April 27, 1995 with
regard to the sale of its Windplant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
LIBERTY EQUIPMENT INVESTORS L.P.-1984
By: Whitehall Partners Inc.
General Partner
Dated: May 12, 1995 /s/ Robert F. Aufenanger
Robert F. Aufenanger
Director and President
Chief Executive Officer
Dated: May 12, 1995 /s/ David G. Cohen
David G. Cohen
Treasurer
Chief Accounting Officer
and Chief Financial Officer
[ARTICLE]
[LEGEND] Exhibit 10 to Liberty Equipment Investors-1984
1Q 1995 10Q
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT (this "Agreement") is made and entered
into as of April 12, 1995, by and among KENETECH WINDPOWER, INC.,
a Delaware corporation ("KWI"), LIBERTY EQUIPMENT INVESTORS, L.P.-
1984, a Delaware limited partnership (the "Partnership"), KW
HAYWARD, L.P., a Delaware limited partnership ("Hayward"), and
U.S. WINDPOWER TRANSMISSION CORPORATION, a Delaware corporation
("USWTC").
WITNESSETH:
WHEREAS, the Partnership desires to sell, and Hayward desires to
purchase, the Partnership's Windplant Assets (as hereinafter
defined); and
WHEREAS, as part of the sale of Windplant Assets, the Partnership
will assign to Hayward, and Hayward will succeed to and assume,
the rights and obligations of the Partnership under certain
agreements which the Partnership has entered into with KWI; and
WHEREAS, the Partnership is currently indebted to KWI pursuant to
the terms of certain promissory notes issued by the Partnership
to KWI; and
WHEREAS, in connection with the sale of the Windplant Assets, KWI
and USWTC intend to forgive certain debts of the Partnership
relating to the Windplant Assets, and to release the Partnership
from its obligations under certain agreements relating to the
Windplant Assets; and
WHEREAS, KWI, Hayward and the Partnership wish to provide for the
terms and conditions upon which Hayward will acquire the
Windplant Assets (the "Acquisition");
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, representations, warranties and agreements
contained herein, and other good and valuable consideration,
receipt of which is hereby acknowledged, the parties hereto agree
as follows:
1. Definitions. Capitalized items not defined elsewhere herein
shall have the following meanings:
1.1 "Additional KWI Debt" has the meaning given in Section
2.2(d).
1.2 "Assumed Liabilities" has the meaning given in Section
2.2(b).
1.3 "Business Records" has the meaning given in Section
2.1(e).
1.4 "Cash Purchase Price" means $5,380,399 or such other
amount as may be mutually agreed by the parties hereto.
1.5 "Closing" has the meaning given in Section 3.1.
1.6 "Construction Contract" means the Amended and Restated
Windplant Construction Contract dated as of November
27, 1984, between KWI and the Partnership, pursuant to
which the Partnership engaged KWI to produce, construct
and install the Windplant.
1.7 "Excluded Indebtedness" has the meaning given in
Section 2.4.
1.8 "Excluded Liabilities" has the meaning given in Section
2.2(c).
1.9 "Fremont" means USW Fremont Company, a Delaware
corporation.
1.10 "General Partner" means Whitehall Partners Inc., a
Delaware corporation.
1.11 "Licenses" means the Licenses between KWI and the
Partnership, each dated, or extended by a notice dated,
February 13, 1992, pursuant to which KWI granted the
Partnership non-exclusive licenses under the following
Grants of Easement in favor of KWI:
(a) Grant of Easement from Elwyn J. Mulqueeney, Evelyn
M. Griffith, Lois M. Walker, Geraldine M. Deck and
Dolores J. Cornwall, as amended;
(b) Grant of Easement from George Walker and Lois
Walker, as Co-Trustees of the Walker Family Trust,
Hugh A. Walker, Mary L. Ericsson, Ward T. Walker
and Rita L. Roeser, as amended;
(c) Grant of Easement from Russell J. Jackson and A.
Marie Jackson (the Contra Costa Water District is
the successor-in-interest to Russell J. Jackson
and A. Marie Jackson), as amended;
(d) Grant of Easement from Jerry E. and Nancy J.
Bireley, as amended;
(e) Grant of Easement from William Ralph, Marie A.
Ralph and DePaoli Equipment Company (the Alameda
County Waste Management Authority is the successor-
in interest to William Ralph, Marie A. Ralph and
DePaoli Equipment Company), as amended; and
(f) Grant of Easement from Cyril D. Moy and Gladys Moy
(the Alameda County Waste Management Authority is
the successor-in-interest to Cyril D. Moy and
Gladys Moy), as amended.
1.12 "Maintenance Agreement" means the Maintenance Agreement
dated December 12, 1984, between KWI and the
Partnership, as amended by First Amendment to
Maintenance Agreement dated as of February 13, 1992,
pursuant to which the Partnership engaged KWI to
maintain the Windplant.
1.13 "Management Agreement" means the Management Agreement
dated December 12, 1984, between KWI and the
Partnership, as amended, and as extended by agreement
of the parties dated as of February 13, 1992, pursuant
to which the Partnership engaged KWI to manage the
Windplant.
1.14 "Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of the Partnership,
dated December 20, 1984, as from time to time
supplemented and amended.
1.15 "PG&E" means Pacific Gas and Electric Company.
1.16 "Power Purchase Agreement" means the California Public
Utilities Commission Standard Offer #4 Power Purchase
Agreement for Long-Term Energy and Capacity entered
into between KWI and PG&E (PG&E Log No. 01W004)
relating to a 110,000 kilowatt facility, signed by PG&E
on March 2, 1984, as amended by Amendment No. 1 dated
May 18, 1984, by Amendment No. 2 dated March 15, 1985,
and by Amendment No. 3 dated July 29, 1988, and as
assigned to the extent of 10,900 kilowatts to the
Partnership on June 1, 1985, pursuant to which PG&E
agrees to take and pay for all electricity produced and
delivered.
1.17 "Transaction Costs" mean the costs incurred by the
parties hereto in connection with the Acquisition,
including, without limitation, legal, accounting and
financial consulting fees, costs and expenses.
1.18 "Transmission Facilities Agreement" means the
Transmission Facilities Agreement dated December 6,
1985, pursuant to which the Partnership engaged USWTC
to provide transmission facilities interconnecting the
Windplant and PG&E, including the Keepwell Undertakings
of KWI appended thereto.
1.19 "Warranty Obligations" means KWI's obligations under
Section 6 of the Construction Contract.
1.20 "Windplant" means the electric generating facility
consisting of 109 wind turbines and related equipment
installed by KWI and sold to the Partnership.
1.21 "Windplant Assets" has the meaning given in Section
2.1.
1.22 "Windplant Debt" has the meaning given in Section 2.4.
2. The Acquisition
2.1 Windplant Assets. Subject to the terms and conditions
set forth in this Agreement, Hayward agrees to purchase
from the Partnership on an "as is" basis all right,
title and interest of the Partnership in and to the
Windplant Assets, as the same are constituted at the
opening of business on the day of the Closing (as
hereinafter defined). The Windplant Assets consist of
the following (the "Windplant Assets"):
(a) the Windplant, as more fully described on Schedule
2.1(a) attached hereto;
(b) the land rights associated with the Windplant, as
listed on Schedule 2.1(b) attached hereto;
(c) all contractual rights relating to the Windplant,
including, but not limited to, all contractual
rights associated with the operation and
maintenance of, and sale and transmission of
energy generated by, the Windplant;
(d) cash and cash equivalents, accounts and notes
receivable of the Partnership that are held by or
payable to KWI in connection with, or attributable
to, the Windplant or the rights described in
Section 2.1(b) or 2.1(c) above; and
(e) any business records relating to the Windplant,
including, but not limited to, documentation
relating to the construction, operation,
maintenance and management of the Windplant
(collectively, the "Business Records"), that (x)
are in the possession of the Partnership or the
General Partner and (y) are not in the possession
of KWI.
2.2 Consideration. As consideration for the Windplant
Assets:
(a) Hayward shall pay the Partnership the Cash
Purchase Price in accordance with Section 3.4
hereof; and
(b) The Partnership shall assign to Hayward, and
Hayward shall assume and agree to perform,
discharge and indemnify the Partnership against
liability under, the agreements set forth on
Schedule 2.2(b) hereto (the "Assumed
Liabilities"); and
(c) Hayward and KWI, jointly and severally, agree to
assume, pay and discharge all liabilities and
obligations of the Partnership as of the Closing
relating to the ownership, construction,
operation, maintenance and/or management of the
Windplant or any of the Windplant Assets, whether
now existing (including liabilities and
obligations now existing under the contracts
listed in Schedule 2.2(b) hereto) or hereafter
arising, save and excluding only (x) the Assumed
Liabilities, (y) liabilities and obligations of
the Partnership entered into or incurred by the
General Partner other than pursuant to any power
or authority of KWI to act in the name or on
behalf of the Partnership or the General Partner
or in accordance or conformity with any direction,
instruction or request of KWI (the "Excluded
Liabilities") and (z) the Excluded Indebtedness
(all such liabilities and obligations other than
the Assumed Liabilities, the Excluded Liabilities,
the Excluded Indebtedness and the Additional KWI
Debt being the "Discharged Liabilities"), and
agrees to indemnify and hold harmless the
Partnership and the General Partner, from all
suits, actions or legal proceedings brought to
collect or enforce any Discharged Liabilities,
including, without limitation, reasonable legal
fees incurred in connection therewith; provided,
however, that it is expressly understood and
agreed that Hayward and KWI are not assuming and
shall not be liable for the Excluded Liabilities
or the Excluded Indebtedness and that the
Partnership shall indemnify and hold Hayward and
KWI harmless from all suits, actions or legal
proceedings brought to collect or enforce any
Excluded Liability, including, without limitation,
reasonable legal fees incurred by KWI or Hayward
in connection therewith; and provided further that
the provisions of this Section 2.2(c) shall not,
as between Hayward and KWI, affect any agreement
of Hayward and KWI as to the burden or sharing of
the Discharged Liabilities; and
(d) KWI shall cancel all amounts owed by the
Partnership to KWI as of the Closing for accrued
fees under the Management Agreement and the
Maintenance Agreement and all amounts owed by the
Partnership to KWI on account of amounts paid by
KWI on behalf of the Partnership, and USWTC shall
cancel all amounts owed by the Partnership to
USWTC as of the Closing for accrued and unpaid
substation rents under the Transmission Facilities
Agreement, as the case may be, as described on
Schedule 2.2(d) attached hereto (the "Additional
KWI Debt").
2.3 Taxes. KWI shall pay or assume any taxes of KWI or the
Partnership payable in connection with the transfer to
Hayward of the Windplant Assets or the assumption by
Hayward of the Assumed Liabilities and the assumption
by Hayward and KWI of the Discharged Liabilities,
including sales, use, recording, transfer, inspection,
and other taxes and fees (other than taxes payable
solely by the partners of the Partnership, including
any tax on the income of the partners of the
Partnership).
2.4 Excluded Indebtedness. The Assumed Liabilities and the
Discharged Liabilities shall not include any amounts
owed by the Partnership to KWI as of the Closing under
those certain construction notes (the "Windplant Debt")
more fully described on Schedule 2.4 attached hereto
(the "Excluded Indebtedness").
3. The Closing.
3.1 Transfer at Closing. The transfer of the Windplant
Assets by the Partnership, the delivery of the Cash
Purchase Price therefor by Hayward, the assumption of
the Assumed Liabilities by Hayward, the assumption of
the Discharged Liabilities by Hayward and KWI, the
cancellation of the Additional KWI Debt by KWI and
USWTC, and the satisfaction by the Partnership of the
Excluded Indebtedness shall be effected as provided in
this Section on the date and time of closing specified
in Section 3.2 (the "Closing").
3.2 Closing. Subject to the prior satisfaction of the
conditions precedent to the parties' obligations set
forth in Section 7 of this Agreement, the Closing shall
take place at the offices of Coudert Brothers, Four
Embarcadero Center, Suite 3300, San Francisco,
California 94111, or at such other place as mutually
agreed to by the General Partner, Hayward and KWI, on a
date in March or April, 1995, to be mutually agreed to
by the parties hereto.
3.3 Cash Purchase Price. At the Closing, Hayward shall pay
the Cash Purchase Price by causing the funds to be
wired to the account(s) designated by the Partnership.
3.4 Satisfaction of the Windplant Debt. Immediately after
receiving verification that the Cash Purchase Price has
been wired to the appropriate account(s) as set forth
in Section 3.3 above, the Partnership shall pay to KWI
the full amount of the Windplant Debt by causing the
funds to be wired to the accounts designated by KWI.
3.5 Deliveries. At the Closing, Hayward shall cause funds
to be wired as provided in Section 3.3 hereof and
Hayward, KWI and/or USWTC, each as may be appropriate,
shall deliver or cause to be delivered any instruments
of assumption and, agreements of release, and
agreements and evidences of cancellation of
indebtedness, duly executed by Hayward, KWI and/or
USWTC. At the Closing, the Partnership shall cause
funds to be wired as provided in Section 3.4 hereof and
shall deliver or cause to be delivered to Hayward any
and all deeds, bills of sale, assignments and other
instruments necessary or reasonably requested by
Hayward to convey the Windplant Assets to Hayward. All
deliveries shall take place in escrow at the Closing,
and no delivery shall be deemed to be completed until
all deliveries have been made.
3.6 Transaction Costs. KWI, Hayward and the Partnership
hereby severally agree that each party shall bear, and
be responsible for, the Transaction Costs incurred by
each such party in connection with the Acquisition.
3.7 Further Assurances. The General Partner shall, at the
expense of Hayward, execute and deliver any additional
deeds, transfers, conveyances, assignments or other
instruments conveying or further assuring to Hayward
title to the Windplant Assets and shall do such other
acts and things as Hayward may reasonably request in
order to fully effect the purposes of this Agreement
and any other agreements, instruments and documents
delivered pursuant hereto. The General Partner shall
instruct KWI to deliver to Hayward any Business Records
requested by Hayward and not delivered by the General
Partner as part of the Windplant Assets, it being
understood that neither the Partnership nor the General
Partner shall have any responsibility or liability with
respect to any such Business Records or any failure of
KWI to deliver any Business Records.
4. Representations and Warranties of the Partnership. The
Partnership hereby represents and warrants as follows:
4.1 Organization, Standing and Qualification. The
Partnership is duly organized, validly existing and in
good standing under the laws of the State of Delaware
with authority to own its properties and assets and to
conduct its business as presently conducted.
4.2 Authority and Due Execution of this Agreement. At the
time of Closing, the execution and delivery of this
Agreement and any related agreements, including, but
not limited to, any applicable bill of sale and
assignment and assumption agreement (collectively, the
"Related Agreements"), and the consummation of the
transactions contemplated hereby will have been duly
authorized by all requisite corporate action on the
part of the General Partner and all partnership action
on the part of the Partnership. At the time of
Closing, this Agreement and the Related Agreements will
have been duly executed and delivered by the
Partnership. This Agreement and Related Agreements
constitute the valid, binding and enforceable
obligations of the Partnership, subject to the effect
of bankruptcy, insolvency, reorganization and other
similar laws limiting creditors rights generally, and
to equitable principles.
4.3 Prior Approvals; No Conflict. Other than as may be
required in connection with the transfer, conveyance,
or assignment of the Windplant Assets or the continued
operation and maintenance of the Windplant, the
Partnership and the General Partner are not required to
give prior notice to, or obtain any consent, approval
or authorization of, or make any declaration or filing
with, any limited partner of the Partnership, any
governmental authority, creditor or other person or
entity as a result of, or prior to, the execution or
delivery of this Agreement or the consummation of the
transactions contemplated hereby, including, but not
limited to, such notices, consents or approvals as may
be required by any applicable state bulk transfer or
fraudulent conveyance laws. Neither the execution and
delivery of this Agreement, nor compliance with the
terms and conditions hereof on the part of the
Partnership, will conflict with or result in a breach
of any of the terms, conditions or provisions of its
partnership agreement or any agreement or instrument to
which the Partnership is a party.
4.4 Title to Assets. The right, title and interest of the
Partnership in the Windplant Assets is held by the
Partnership free and clear of any judgment, claim, lien
or encumbrance created by the Partnership, or held by
any person claiming through or under the Partnership,
other than (w) the Windplant Debt and the related notes
issued by the Partnership to KWI and the security
interest of KWI securing the Windplant Debt, (x)
claims, liens, encumbrances or security interests under
or securing the Assumed Liabilities, (y) claims, liens,
encumbrances or security interests securing the Dis
charged Liabilities, or (z) any judgments, claims,
liens, encumbrances or security interests entered into
or incurred by the Partnership or by the General
Partner pursuant to any power or authority of KWI to
act in the name or on behalf of the Partnership or the
General Partner or in accordance or conformity with any
direction, instruction or request of KWI. Upon
Closing, the right, title and interest of the
Partnership in the Windplant Assets will be effectively
transferred to Hayward free and clear of the Windplant
Debt and the related notes issued by the Partnership to
KWI and the security interest of KWI securing the
Windplant Debt. The Partnership shall defend Hayward's
title to the Windplant Assets against all claims and
demands whatsoever arising out of a breach by the
Partnership of its representations and warranties in
this Section 4.4, and shall pay all costs related
thereto, including, but not limited to, reasonable
attorneys' fees and disbursements.
4.5 Solvency. The Partnership is not insolvent, and will
not be rendered insolvent by reason of the transactions
contemplated herein. For purposes of this section, the
term "insolvent" shall mean that, at the time of
reference thereto, (i) the fair value of the
Partnership's property is not greater than the total
amount of its debts or (ii) the Partnership is unable
to pay its debts as they mature.
4.6 Validity of Representations. No representation made by
the Partnership herein contains, or on the Closing will
contain, any untrue statement of a material fact, or
omits, or on the Closing will omit, any material fact
the omission of which would render the statement made
materially misleading.
5. Representations and Warranties of Hayward. Hayward hereby
represents and warrants as follows:
5.1 Organization, Standing and Qualification. Hayward is
duly organized, validly existing and in good standing
under the laws of the State of Delaware.
5.2 Authority and Due Execution of this Agreement. At the
time of Closing, the execution and delivery of this
Agreement and any related agreements, including, but
not limited to, any applicable assignment and
assumption agreement (collectively, the "Hayward
Agreements"), and the consummation of the transactions
contemplated hereby will have been duly authorized by
all requisite corporate action on the part of the
general partner of Hayward and all partnership action
on the part of Hayward. At the time of Closing, this
Agreement and the Hayward Agreements will have been
duly executed and delivered by Hayward. This Agreement
and the Hayward Agreements constitute the valid,
binding and enforceable obligations of Hayward, subject
to the effect of bankruptcy, insolvency, reorganization
and other similar laws limiting creditors rights
generally, and to equitable principles.
5.3 Prior Approvals; No Conflict. Other than the waivers
and consents set forth on Schedule 5.3 hereto, Hayward
and the general partner thereof are not required to
give prior notice to, or obtain any consent, approval
or authorization of, or make any declaration or filing
with, any limited partner of Hayward, any governmental
authority, creditor or other person or entity as may be
required as a result of, or prior to, the execution or
delivery of this Agreement or the consummation of the
transactions contemplated hereby. Neither the
execution and delivery of this Agreement, nor
compliance with the terms and conditions hereof on the
part of Hayward, will conflict with or result in a
breach of any of the terms, conditions or provisions of
its partnership agreement or any agreement or
instrument to which Hayward is a party.
5.4 Solvency. Hayward is not insolvent and will not be
rendered insolvent by reason of the transactions
contemplated herein. For purposes of this section, the
term "insolvent" has a meaning analogous to that given
in Section 4.5.
5.5 Validity of Representations. No representation made by
Hayward herein contains, or on the Closing will
contain, any untrue statement of a material fact, or
omits, or on the Closing will omit, any material fact
the omission of which renders the statement made
materially misleading.
6. Representations and Warranties of KWI. KWI hereby
represents and warrants as follows:
6.1 Organization, Standing and Qualification. KWI, USWTC
and Fremont each is duly organized, validly existing
and in good standing under the laws of the State of
Delaware with authority to own its properties and
assets and to conduct its business as presently
conducted.
6.2 Authority and Due Execution of this Agreement. At the
time of Closing, the execution and delivery of this
Agreement and any related agreements, including, but
not limited to, any applicable releases, discharge of
indebtedness and consents and waivers (collectively,
the "KWI Agreements"), and the consummation by KWI,
USWTC and Fremont of the transactions contemplated
hereby will have been duly authorized by all requisite
corporate action on the part of KWI, USWTC and Fremont,
respectively. At the time of Closing, this Agreement
and the KWI Agreements will have been duly executed and
delivered by KWI, USWTC and Fremont, as the case may
be. This Agreement and the KWI Agreements constitute
the valid, binding and enforceable obligations of KWI,
USWTC and Fremont, as the case may be, subject to the
effect of bankruptcy, insolvency, reorganization and
other similar laws limiting creditors rights generally,
and to equitable principles.
6.3 Required Waivers and Consents. Other than the waivers
and consents set forth on Schedule 5.3 hereto, and the
assignments, assumptions and consents provided for in
the Assignment and Assumption Agreement in the form
attached hereto as Exhibit A, neither Hayward nor the
Partnership (other than as may be required under the
Partnership's partnership agreement or other agreements
to which the Partnership is a party) is required to
give prior notice to, or obtain any consent, approval
or authorization of, or make any declaration or filing
with, any governmental authority or other person in
order to transfer the Windplant Assets or to continue
to operate or maintain the Windplant.
6.4 Prior Approvals; No Conflict. Other than the waivers
and consents set forth on Schedules 5.3 and 6.4 hereto,
KWI is not required to give prior notice to, or obtain
any consent, approval or authorization of, or make any
declaration or filing with, any governmental authority,
creditor or other person or entity as may be required
as a result of, or prior to, the execution or delivery
of this Agreement or the consummation of the
transactions contemplated hereby. Neither the
execution and delivery of this Agreement, nor
compliance with the terms and conditions hereof on the
part of Hayward or KWI, will conflict with or result in
a breach of any of the terms, conditions or provisions
of its By-laws or Certificate of Incorporation or any
agreement or instrument to which KWI is a party.
6.5 Solvency. KWI is not insolvent and will not be
rendered insolvent by reason of the transactions
contemplated herein. For purposes of this section, the
term "insolvent" has a meaning analogous to that given
in Section 4.5.
6.6 Validity of Representations. No representation made by
KWI herein contains, or on the Closing will contain,
any untrue statement of a material fact, or omits, or
on the Closing will omit, any material fact the
omission of which renders the statement made materially
misleading.
7. Conditions Precedent.
7.1 Conditions to the Obligations of all Parties. The
obligations of all the parties to this Agreement to
effect the Acquisition as contemplated by this
Agreement shall be subject to the fulfillment of the
following conditions:
(a) The board of directors of KWI, the General Partner
and the general partner of Hayward shall have
approved the execution of this Agreement and the
transactions contemplated herein, and, further,
the Partnership, KWI and Hayward shall each have
delivered to the other parties hereto, copies of
resolutions adopted by, with respect to KWI, its
board of directors, and, with respect to the
Partnership and Hayward, the general partner of
each, authorizing the execution, delivery and
performance of this Agreement and the transactions
contemplated herein;
(b) No temporary restraining order, preliminary or
permanent injunction or other order or restraint
issued by any court of competent jurisdiction, no
order, decree, restraint or pronouncement by any
governmental authority, and no other legal
restraint or prohibition which would challenge,
restrain, prevent or have the effect of preventing
the consummation of the transactions contemplated
by this Agreement shall have been issued or
adopted and be in effect; and
(c) None of the parties hereto shall have received any
notice on or prior to the day of Closing that
there is pending or threatened any proceeding
against KWI, the Partnership, Hayward or any of
their affiliates before any court of competent
jurisdiction relating to the transactions
contemplated hereby which, in the good faith and
reasonable judgment of the party receiving such
notice, could have a material adverse effect on
KWI, Hayward, the Partnership or any of their
affiliates or on the ability of KWI, Hayward, the
Partnership, or any of their affiliates to perform
their respective obligations hereunder or under
any agreement related hereto. Any party receiving
such notice shall promptly deliver to the other
parties a copy thereof.
(d) Notices. The waivers and consents set forth on
Schedule 5.3 hereto shall have been obtained.
7.2 Conditions to the Obligations of KWI and Hayward. The
obligations of KWI and Hayward to effect the
Acquisition as contemplated by this Agreement shall be
subject to the fulfillment of the following conditions:
(a) Hayward shall have entered into an Assignment and
Assumption Agreement substantially in the form
attached hereto as Exhibit A, executed by the
Partnership, KWI, USWTC and Fremont; and
(b) KWI and USWTC shall have received from the
Partnership a release in substantially the form
attached hereto as Exhibit B; and
(c) The consent set forth on Schedule 6.4 hereto shall
have been obtained; and
(d) The representations and warranties set forth in
Section 4 hereof shall be true and correct in all
material respects on and as of the Closing Date,
and KWI and Hayward shall each have received a
certificate dated the Closing Date and executed by
the General Partner of the Partnership to that
effect.
7.3 Conditions to the Partnership's Obligations. The
obligation of the Partnership to effect the Acquisition
as contemplated by this Agreement shall be subject to
the fulfillment of the following conditions:
(a) The Partnership shall have entered into an
Assignment and Assumption Agreement substantially
in the form attached hereto as Exhibit A, executed
by Hayward, KWI, USWTC and Fremont; and
(b) The Partnership shall have received from KWI,
USWTC and Fremont a release in substantially the
form attached hereto as Exhibit B; and
(c) The Partnership shall have received from KWI and
USWTC discharges of the Additional KWI Debt in
substantially the form attached hereto as Exhibits
C-1 and C-2, respectively; and
(d) The Partnership shall have received from KWI a
Termination Statement on Form UCC-2, executed by
KWI as creditor and secured party, with respect to
the Windplant Debt and, if applicable, the
Additional KWI Debt; and
(e) The representations and warranties set forth in
Sections 5 and 6 hereof shall be true and correct
in all material respects on and as of the Closing
Date, and the Partnership shall have received
certificates dated the Closing Date and executed
by the general partner of Hayward and a Vice
President of KWI to that effect.
8. Indemnification. Each of the parties hereto shall indemnify
and hold the other parties harmless against any loss,
liability, damage or expense (including reasonable
attorneys' fees and disbursements) arising out of or
resulting from any inaccuracy or misrepresentation in or
breach of any of the representations and warranties made by
such party herein.
9. Termination, Amendments and Waivers.
9.1 Termination. This Agreement may be terminated at any
time on or prior to the day of Closing:
(a) by the General Partner if a third party makes a
bona fide offer to purchase the Windplant Assets
on terms which, in the good faith opinion of the
General Partner, are more favorable to the
Partnership than those set forth herein; or
(b) by mutual consent of Hayward, KWI and the
Partnership.
9.2 Amendment. This Agreement may not be amended except by
an instrument in writing signed on behalf of KWI,
Hayward and the Partnership.
9.3 Waiver. Any term, condition, or provision of this
Agreement may be waived in writing at any time by the
party which is entitled to the benefits thereof. In
the case of the Partnership, a written waiver by the
General Partner shall constitute a waiver by the
Partnership.
10. Maintenance of Business. Between the date hereof and the
Closing, the Partnership shall carry on its business in the
ordinary course consistent with past practice.
11. Miscellaneous.
11.1 Risk of Loss. Title to the Windplant Assets shall pass
from the Partnership to Hayward upon the Partnership's
receipt of the Cash Purchase Price and transfer from
the Partnership to Hayward of a bill of sale reasonably
satisfactory to Hayward. Any risk of loss, injury,
destruction or damage to the Windplant Assets shall be
assumed by Hayward only upon transfer of title and
shall remain with the Partnership until such transfer,
and such loss, injury, destruction, damage, or other
material adverse change to the condition of the
Windplant Assets prior to the Closing shall relieve
Hayward of all its obligations hereunder.
11.2 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the
Partnership, Hayward and KWI and their respective
successors and permitted assigns. This Agreement may
not be assigned by any party hereto without the prior
written consent of the other parties hereto, which
consent shall not be unreasonably withheld.
11.3 Entire Agreement. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire
agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether
oral or written, of the parties in connection
therewith. No supplement, modification or waiver of
this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall
such waiver constitute a continuing waiver unless
otherwise expressly provided.
11.4 Survival of Representations. The representations made
by the Partnership in Section 4, Hayward in Section 5
and KWI in Section 6 shall survive the Closing. No
representation has been given to Hayward or KWI by the
Partnership in connection with the condition of the
Windplant Assets. Hayward has agreed to the purchase
of the Windplant Assets on an "as is" basis after
having the opportunity to inspect the Windplant Assets
and review such Business Records as it has deemed
necessary or desirable.
11.5 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed
an original but all of which shall constitute one and
the same instrument.
11.6 Sections. All references to Sections shall be the
sections of this Agreement, except as otherwise
specifically provided. The words "hereof," "herein,"
"hereto," and "hereunder" and words of similar purport
when used in this Agreement shall refer to this
Agreement as a whole and not to any particular
provision of this Agreement.
11.7 Headings. All headings appearing herein are for
convenience only and shall be disregarded in construing
the substantive provisions of this Agreement.
* * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Acquisition Agreement upon the day and year hereinabove first set
forth.
KWI:
KENETECH WINDPOWER, INC.,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
THE PARTNERSHIP:
LIBERTY EQUIPMENT INVESTORS L.P.-1984
a Delaware limited partnership
By:
Whitehall Partners Inc.,
a Delaware corporation,
its general partner
By:
Steven N. Baumgarten,
Executive Vice President
HAYWARD:
KW HAYWARD, L.P.,
a Delaware limited partnership
By:
KW Hayward, Inc.,
a Delaware corporation,
its general partner
By:
Mark D. Lerdal,
Vice President
USWTC:
U.S. WINDPOWER TRANSMISSION CORPORATION,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
<PAGE>
SCHEDULE 2.1
ASSETS
SCHEDULE 2.1(a)
Description of the Windplant
The Windplant consists of 109 USW Model 56-100 windmills and
related transformers, transmission lines and other facilities as
constructed by KWI in accordance with the Construction Contract.
SCHEDULE 2.1(b)
Land Rights Associated with the Windplant
The land rights included in the Windplant Assets consist of
the non-exclusive licenses, granted by KWI to the Partnership
under the Licenses.
<PAGE>
SCHEDULE 2.2(b)
DESCRIPTION OF ASSUMED LIABILITIES
Hayward agrees to assume, and the Partnership agrees to
assign, any and all rights, liabilities and obligations of the
Partnership as of the Closing Date accruing under, or related to,
the following agreements, other than the Additional KWI Debt,
which will be canceled by KWI and USWTC pursuant to Section
2.2(d) of the Agreement:
1. Transmission Facilities Agreement.
2. Maintenance Agreement.
3. Management Agreement.
4. Power Purchase Agreement.
5. The Licenses.
6. License Agreement for Transformer Facilities dated as of
February 13, 1992 between Fremont and the Partnership.
7. License Agreement for Transformer Facilities dated as of
February 13, 1992 between USWTC and the Partnership.
8. Guaranty Agreement dated as of December 6, 1985 by USWTC and
KWI for the benefit of the Partnership, among others.
9. Negative Pledge Agreement dated as of December 6, 1985, by
USWTC, as amended, for the benefit of the Partnership, among
others.
<PAGE>
SCHEDULE 2.2(d)
DESCRIPTION OF ADDITIONAL KWI DEBT
AS OF APRIL 12, 1995
(a) Amounts owed to KWI under the Management
Agreement: $ 69,885
(b) Amounts owed to KWI under the Maintenance
Agreement: 495,596
(c) Amounts owed to KWI for payments made on behalf
of the Partnership for various operating costs:
10,121
(d) Amounts owed to USWTC in substation rent under
the Transmission Facilities Agreement:
105,668
TOTAL: $ 681,270
<PAGE>
SCHEDULE 2.4
EXCLUDED INDEBTEDNESS
Under the terms of the Construction Contract, the
Partnership executed 15-year, nonrecourse promissory notes
payable to KWI. The notes and interest are each to be paid in
equal annual installments and are collateralized by the
Windplant. Details of the notes payable to KWI are as follows:
Interest Balance Equal Annual
Issue Date Rate 12/31/94 Installments
12/20/84 9.00% $2,185,659 $ 561,916
12/21/84 9.00% 344,980 88,694
12/22/84 9.00% 123,981 31,875
08/29/85 13.49% 376,236 95,404
09/25/85 13.49% 723,626 183,494
09/25/85 13.49% 691,018 175,226
$4,445,500 $1,136,609
<PAGE>
SCHEDULE 5.3
REQUIRED WAIVERS AND CONSENTS
- - - - - - Notice to, and Consent to Assignment and Agreement executed
by, PG&E.
- - - - - - Consents to each Security Assignment and Agreement relating
to the Power Purchase Agreement executed by PG&E.
<PAGE>
SCHEDULE 6.4
REQUIRED WAIVER FOR KWI
- - - - - - Consent to Substitution of Collateral by John Hancock Mutual
Life Insurance Company and John Hancock Variable Life
Insurance Company.
<PAGE>
EXHIBIT A
ASSIGNMENT AND ASSUMPTION
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement")
is entered into as of the 12th day of April, 1995, by and between
LIBERTY EQUIPMENT INVESTORS, L.P.-1984, a Delaware limited
partnership (the "Partnership"), and KW HAYWARD, L.P., a Delaware
limited partnership ("Assignee").
In connection with the acquisition by Assignee of the
Partnership's Windplant (the "Windplant") and related facilities
as of the date hereof, the parties hereto agree as follows:
AGREEMENT
1. Assignment by the Partnership. The Partnership hereby
assigns to Assignee all of the Partnership's right, title and
interest under each of the following contracts and agreements
(collectively, the "Contracts"):
(a) License between KENETECH Windpower, Inc. (formerly
known as U.S. Windpower, Inc.) ("KWI") and the Partnership dated
February 13, 1992, pursuant to which KWI granted the Partnership
a non-exclusive windmill license, under a Grant of Easement in
favor of KWI from Elwyn J. Mulqueeney, Evelyn M. Griffith, Lois
M. Walker, Geraldine M. Deck and Dolores J. Cornwell, as amended
(12 windmills are operated under such license);
(b) License between KWI and the Partnership dated February
13, 1992, pursuant to which KWI granted the Partnership a non-
exclusive windmill license, under a Grant of Easement in favor of
KWI from George Walker and Lois Walker, as Co-Trustees of the
Walker Family Trust, Hugh A. Walker, Mary L. Ericsson, Ward T.
Walker and Rita L. Roeser, as amended (18 windmills are operated
under such license);
(c) License between KWI and the Partnership dated December
12, 1984, pursuant to which KWI granted the Partnership a non-
exclusive windmill license, under a Grant of Easement in favor of
KWI from Russell J. Jackson and A. Marie Jackson, as amended (the
Contra Costa Water District is the successor-in-interest to
Russell J. Jackson and A. Marie Jackson), which License was
extended by notice from the Partnership to KWI dated February 13,
1992 (41 windmills are operated under such license);
(d) License between KWI and the Partnership dated February
13, 1992, pursuant to which KWI granted the Partnership a non-
exclusive windmill license, under a Grant of Easement in favor of
KWI from Jerry E. and Nancy J. Bireley, as amended (two windmills
are operated under such license);
(e) License between KWI and the Partnership dated June 1,
1985, pursuant to which KWI granted the Partnership a non-
exclusive windmill license, under a Grant of Easement in favor of
KWI from William Ralph, Marie A. Ralph and DePaoli Equipment Co.,
a California corporation (the Alameda County Waste Management
Authority is the successor-in-interest to William Ralph, Marie A.
Ralph and DePaoli Equipment Co.), which License was extended by
notice from the Partnership to KWI dated February 13, 1992 (27
windmills are operated under such license);
(f) License between KWI and the Partnership dated June 1,
1985, pursuant to which KWI granted the Partnership a non-
exclusive windmill license, under a Grant of Easement in favor of
KWI from Cyril D. Moy and Gladys Moy, as amended (the Alameda
County Waste Management Authority is the successor-in-interest to
Cyril D. Moy and Gladys Moy), which License was extended by
notice from the Partnership to KWI dated February 13, 1992 (nine
windmills are operated under such license);
(g) The License Agreement for Transformer Facilities dated
as of February 13, 1992 between USW Fremont Company and the
Partnership pursuant to which the Partnership was licensed to use
certain transformer facilities;
(h) The License Agreement for Transformer Facilities dated
as of February 13, 1992 between U.S. Windpower Transmission
Corporation ("USWTC") and the Partnership pursuant to which the
Partnership was licensed to use certain transformer facilities;
(i) The Maintenance Agreement dated as of December 12,
1984, as amended by First Amendment to Maintenance Agreement
dated as of February 13, 1992, between KWI and the Partnership,
pursuant to which the Partnership engaged KWI to maintain the
Windplant;
(j) The Management Agreement dated as of December 12, 1984,
as extended by agreement of the parties dated as of February 13,
1992, between KWI and the Partnership pursuant to which the
Partnership engaged KWI to manage the Windplant;
(k) The Assignment of Power Purchase Agreement between KWI
and the Partnership dated June 1, 1985, by which KWI assigned
part of its rights under the California Public Utilities
Commission Standard Offer #4 Power Purchase Agreement for Long-
Term Energy and Capacity entered into between KWI and Pacific Gas
& Electric Company ("PG&E") (PG&E Log No. 01W004) dated March 2,
1984, as amended by Amendment No. 1 dated May 18, 1984, by
Amendment No. 2 dated March 15, 1985, and by Amendment No. 3
dated July 29, 1988 (the "PPA"), pursuant to which PG&E agreed to
take and pay for all electricity produced and delivered, and all
other such rights the Partnership has in the PPA to the extent
assignable hereby;
(l) The Transmission Facilities Agreement dated December 6,
1985, between USWTC and the Partnership pursuant to which the
Partnership engaged USWTC to provide transmission facilities
interconnecting the Windplant and PG&E, including the Keepwell
Undertakings of KWI appended thereto;
(m) The Guaranty Agreement dated as of December 6, 1985,
executed by USWTC and KWI for the benefit of the Partnership,
among others; and
(n) Negative Pledge Agreement executed by USWTC for the
benefit of the Partnership, among others, dated as of December 6,
1985, as amended by First Amendment to Negative Pledge Agreement
executed by USWTC as of June 30, 1987 and recorded in the
Official Records of Alameda County, California on July 7, 1987 as
Document No. 87-190456, and by Second Amendment to Negative
Pledge Agreement executed by USWTC on December 31, 1991 and
recorded in the Official Records of Alameda County, California on
December 31, 1991 as Document No. 91347599.
2. Assumption. Assignee hereby assumes and agrees to pay and
discharge, commencing on the date hereof, all duties, liabilities
and obligations of the Partnership under each of the Contracts as
if Assignee were an original party to the Contracts; provided,
however, that Assignee does not assume duties and obligations
which may have arisen prior to the date hereof. Assignee further
agrees to indemnify and hold the Partnership harmless from any
liability, loss, damages or claim for performance or
nonperformance of each and all of the Contracts commencing on the
date hereof; provided, further, that the Assignee shall not
indemnify the Partnership for any liability, loss, damages or
claim arising as a result of, or which is related to, performance
or nonperformance of each and all of the Contracts prior to the
date hereof. It is understood and agreed that the provisions of
this Section 2 do not affect or limit the obligations of Assignee
and KWI, jointly and severally, under Section 2.2(c) of the
Acquisition Agreement dated April 12, 1995 among KWI, the
Partnership, Assignee and USWTC.
3. Severability. If any provision of this Agreement is held to
be unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the
parties to the extent possible. In any event, all other
provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
5. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
6. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the respective heirs,
devisees, legatees, executors, administrators, trustees,
successors and assigns of the parties hereto.
7. Amendment. This Agreement may be amended only by a writing
signed by the party against whom or against whose successors and
assigns enforcement of the change is sought.
* * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into
this Assignment and Assumption Agreement as of the day and year
first written above.
LIBERTY EQUIPMENT INVESTORS L.P.-1984
a Delaware limited partnership
By: Whitehall Partners, Inc.,
a Delaware corporation,
its general partner
By:
Steven N. Baumgarten,
Executive Vice President
KW HAYWARD, L.P.,
a Delaware limited partnership
By: KW Hayward, Inc.,
a Delaware corporation,
its general partner
By:
Mark D. Lerdal,
Vice President
<PAGE>
The following parties hereby consent and agree to the
assignments and accept the assumptions contemplated by this
Assignment and Assumption Agreement, consent to the substitution
of Assignee for the Partnership as a party to or beneficiary of
the Contracts, and as of the date hereof, remise and discharge
the Partnership from each and every duty, liability and
obligation under the Contracts:
U.S. WINDPOWER TRANSMISSION CORPORATION,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
KENETECH WINDPOWER, INC.,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
USW FREMONT COMPANY
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
<PAGE>
EXHIBIT B
FORM OF MUTUAL RELEASE
THIS MUTUAL RELEASE (this "Mutual Release") is entered into
among LIBERTY EQUIPMENT INVESTORS, L.P.-1984, a Delaware limited
partnership (the "Partnership"), KENETECH WINDPOWER, INC., a
Delaware corporation ("KWI"), and U.S. WINDPOWER TRANSMISSION
CORPORATION, a Delaware corporation ("USWTC"), in reference to
the following facts:
A. Under Section 7 of the Construction Contract dated
November 27, 1984 (the "Construction Contract") between
KWI and the Partnership, KWI made certain warranties in
favor of the Partnership in connection with the
Partnership's Windplant (including the components and
connecting parts) (the "Warranty Obligations").
B. KWI, USWTC and the Partnership are also parties to
other contracts and desire to release each other from
their respective obligations under the Construction
Contract, including the Warranty Obligations, and under
such other contracts.
C. KW Hayward, L.P., a Delaware limited partnership, KWI,
USWTC and the Partnership have entered into an
Acquisition Agreement dated as of April 12, 1995 (the
"Acquisition Agreement"), pursuant to which KWI, USWTC
and the Partnership have agreed to enter into this
Mutual Release.
NOW, THEREFORE, in consideration of the mutual promises set
forth in, and as a condition to the consummation of the
transactions contemplated by, the Acquisition Agreement, the
parties hereby agree as follows:
I. General Releases.
A. By the Partnership. The Partnership hereby releases,
remises and forever discharges KWI, its officers,
directors, shareholders and their successors and
assigns from any and all claims, demands and causes of
action, whether accrued or unaccrued, contingent or
liquidated, known or unknown, existing in the past,
present, or future, including, without limitation, any
arising out of, directly or indirectly connected with,
or incidental to KWI's Warranty Obligations or any and
all contracts, other than and not including the
Acquisition Agreement, to which the Partnership and KWI
are parties. Any claims, demands or causes of action,
of any nature whatsoever, arising out of, directly or
indirectly connected with, or incidental to the
Acquisition Agreement are hereby expressly not
released, remised or discharged.
B. By KWI. KWI hereby releases, remises and forever
discharges the Partnership, the General Partner of the
Partnership, the limited partners of the Partnership,
the officers, directors and shareholders of the General
Partner, and their successors and assigns from any and
all claims, demands and causes of action, whether
accrued or unaccrued, contingent or liquidated, known
or unknown, existing in the past, present, or future,
including, without limitation, any arising out of,
directly or indirectly connected with, or incidental
to, any and all contracts, other than and not including
the Acquisition Agreement, to which KWI and the
Partnership are parties. Any claims, demands or causes
of action, of any nature whatsoever, arising out of,
directly or indirectly connected with, or incidental to
the Acquisition Agreement are hereby expressly not
released, remised or discharged.
C. By USWTC. USWTC hereby releases, remises and forever
discharges the Partnership, the General Partner of the
Partnership, the limited partners of the Partnership,
the officers, directors and shareholders of the General
Partner, and their successors and assigns from any and
all claims, demands and causes of action, whether
accrued or unaccrued, contingent or liquidated, known
or unknown, existing in the past, present, or future,
including, without limitation, any arising out of,
directly or indirectly connected with, or incidental
to, any and all contracts, other than and not including
the Acquisition Agreement, to which USWTC and the
Partnership are parties. Any claims, demands or causes
of action, of any nature whatsoever, arising out of,
directly or indirectly connected with, or incidental to
the Acquisition Agreement are hereby expressly not
released, remised or discharged.
D. For USW Fremont Company. KWI, on behalf of USW Fremont
Company ("Fremont"), hereby releases, remises and
forever discharges, and agrees that it will cause
Fremont to release, remise and forever discharge, the
Partnership, the General Partner of the Partnership,
the limited partners of the Partnership, the officers,
directors and shareholders of the General Partner, and
their successors and assigns from any and all claims,
demands and causes of action, whether accrued or
unaccrued, contingent or liquidated, known or unknown,
existing in the past, present or future, including,
without limitation, any arising out of, directly or
indirectly connected with, or incidental to, any and
all contracts to which Fremont and the Partnership are
parties.
E. Unknown Claims. This Mutual Release applies to any and
all injuries, damages or losses whether known or
unknown, foreseen or unforeseen, which may arise in any
way from the matters covered by the releases set forth
in this Mutual Release. The parties specifically waive
the benefit of the provisions of Section 1542 of the
Civil Code of the State of California, which reads as
follows:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with
the debtor."
Each party understands and acknowledges the
significance and consequence of its specific waiver of
California Civil Code Section 1542.
II. Representations and Warranties. Each of the parties hereto
represents, warrants and agrees as follows:
A. Legal Advice. Each of the parties has been represented
by independent legal counsel with respect to the effect
of the releases provided herein and the meaning of
California Civil Code Section 1542.
B. Prior Assignment. Neither of the parties has
heretofore assigned, transferred or granted, or
purported to assign, transfer or grant, any claims,
demands and cause or causes of action which are
disposed of by this Mutual Release.
III. Governing Law. This Mutual Release has been executed and
delivered within the State of California and shall be
construed and enforced in accordance with, and governed by,
the laws of the State of California.
* * *
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Mutual
Release effective as of April 12, 1995.
LIBERTY EQUIPMENT INVESTORS, L.P.-1984
a Delaware corporation
By: Whitehall Partners, Inc.,
a Delaware corporation,
its general partner
KENETECH WINDPOWER, INC.,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
U.S. WINDPOWER TRANSMISSION CORPORATION,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
As to Sections 1.4, 1.5 and 2, consented
and agreed to as of April 12, 1995
USW FREMONT COMPANY,
a Delaware corporation
By: ____________________
Mark D. Lerdal,
Vice President
<PAGE>
EXHIBIT C-1
KENETECH WINDPOWER, INC. DISCHARGE OF INDEBTEDNESS
DISCHARGE OF INDEBTEDNESS
THIS DISCHARGE OF INDEBTEDNESS (this "Discharge of
Indebtedness") is given as of the 12th day of April, 1995, from
KENETECH WINDPOWER, INC., a Delaware corporation ("KWI"), to
LIBERTY EQUIPMENT INVESTORS, L.P.-1984, a Delaware limited
partnership (the "Partnership").
THIS DISCHARGE OF INDEBTEDNESS IS GIVEN on the basis of the
foregoing facts, understandings and intentions:
A. KWI, KW Hayward, L.P., a Delaware limited partnership
("Hayward"), the Partnership, and U.S. Windpower Transmission
Corporation, a Delaware corporation, have entered into that
certain Acquisition Agreement dated as of April 12, 1995 (the
"Acquisition Agreement") pursuant to which Hayward agreed to
purchase the Windplant Assets (as defined in the Acquisition
Agreement) of the Partnership (the "Acquisition").
B. Pursuant to Sections 2.2(d) and 7.3(c) of the
Acquisition Agreement, KWI has agreed to cancel and forgive
approximately $575,602 of accrued fees payable to it and amounts
paid by it on the Partnership's behalf, as set forth on Schedule
2.2(d) to the Acquisition Agreement, as part of and as a
condition to the consummation of the Acquisition.
C. Pursuant to Section 7.3 of the Acquisition Agreement,
KWI has agreed to deliver to the Partnership this Discharge of
Indebtedness.
NOW, THEREFORE, IN CONSIDERATION of the foregoing, KWI
hereby cancels and forgives all amounts referred to in Section
2.2(d) and Schedule 2.2(d) owed by the Partnership to KWI.
* * *
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Discharge of Indebtedness as of the date first
above written.
KENETECH WINDPOWER, INC.,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
<PAGE>
EXHIBIT C-2
U.S. WINDPOWER TRANSMISSION CORPORATION
DISCHARGE OF INDEBTEDNESS
DISCHARGE OF INDEBTEDNESS
THIS DISCHARGE OF INDEBTEDNESS (this "Discharge of
Indebtedness") is given as of the 12th day of April, 1995, from
U.S. WINDPOWER TRANSMISSION CORPORATION, a Delaware corporation
("USWTC"), to LIBERTY EQUIPMENT INVESTORS, L.P.-1984, a Delaware
limited partnership (the "Partnership").
THIS DISCHARGE OF INDEBTEDNESS IS GIVEN on the basis of the
foregoing facts, understandings and intentions:
D. KENETECH Windpower, Inc., a Delaware corporation, KW
Hayward, L.P., a Delaware limited partnership ("Hayward"), the
Partnership and USWTC have entered into that certain Acquisition
Agreement dated as of April 12, 1995 (the "Acquisition
Agreement") pursuant to which Hayward agreed to purchase the
Windplant Assets (as defined in the Acquisition Agreement) of the
Partnership (the "Acquisition").
E. Pursuant to Sections 2.2(d) and 7.3(c) of the
Acquisition Agreement, USWTC has agreed to cancel and forgive
approximately $105,668 of accrued fees payable to it, as set
forth on Schedule 2.2(d) to the Acquisition Agreement, as part of
and as a condition to the consummation of the Acquisition.
F. Pursuant to Section 7.3 of the Acquisition Agreement,
USWTC has agreed to deliver to the Partnership this Discharge of
Indebtedness.
NOW, THEREFORE, IN CONSIDERATION of the foregoing, USWTC
hereby cancels and forgives all amounts referred to in Section
2.2(d) and Schedule 2.2(d) owed by the Partnership to USWTC.
* * *
IN WITNESS WHEREOF, the undersigned has executed and
delivered this Discharge of Indebtedness as of the date first
above written.
U.S. WINDPOWER TRANSMISSION CORPORATION,
a Delaware corporation
By:
Mark D. Lerdal,
Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the first quarter ended 1995 Form
10Q Consolidated Balance Sheets and Consolidated Statements
of Operations and is qualified in its entirety by reference
to such financial statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 177,138
<SECURITIES> 1,584,109
<RECEIVABLES> 521,591
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,879,443
<DEPRECIATION> 4,138,666
<TOTAL-ASSETS> 9,391,604
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 3,875,634
<TOTAL-LIABILITY-AND-EQUITY> 9,391,605
<SALES> 0
<TOTAL-REVENUES> 390,691
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 72,504
<INCOME-TAX> 0
<INCOME-CONTINUING> 72,504
<DISCONTINUED> 65,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 137,504
<EPS-PRIMARY> 4.34
<EPS-DILUTED> 0
</TABLE>
