UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF l934
For the fiscal year ended December 30, 1994
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)
Delaware 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) 236-6582
Securities registered pursuant to Section 12(b) of the Act:
None
(Title of each class)
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
Depository Receipts for Certificates of Partnership Interest
(Title of Class)
Word\Nancy\Lib84\L849410K.95A
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 .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of Registrant's knowledge,
in a definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Documents incorporated by reference:
Part I - Pages 17 through 34 of Prospectus, dated August 24,
1984, filed pursuant to Rule 424(b) under the Securities Act of
1933, as supplemented by a Supplement, dated September 12, 1984,
filed pursuant to Rule 424(c) under the Securities Act of 1933.
<PAGE>
Part I
Item 1. Business.
Formation
Liberty Equipment Investors L.P.-1984 ("Registrant"), a Delaware
limited partnership, was organized on July 10, 1984. Whitehall
Partners Inc., a Delaware corporation (the "General Partner"), is
Registrant's sole general partner. The General Partner, is a
wholly-owned subsidiary of ML Leasing Equipment Corp. ("MLLEC")
(which is an indirect wholly-owned subsidiary of Merrill Lynch &
Co., Inc. and the successor in interest to Merrill Lynch Leasing
Inc. and Merlease Leasing Corp.) and is an affiliate of Merrill
Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch").
Registrant is engaged in the business of acquiring, financing,
operating, leasing and holding for investment, equipment, or
interests therein ("Equipment"), manufactured by non-affiliated
companies. See note 7 to the financial statements included in
Item 8 hereof for segment information on Registrant's activities.
Registrant offered through Merrill Lynch up to 75,000 Units
(86,250 Units, if the selling agent's over-allotment option was
exercised in full) of limited partnership interest ("Units") and
depositary receipts for certificates of partnership interest
("Depositary Receipts") at $1,000 per Unit. The Units and
Depositary Receipts were registered under the Securities Act of
1933 under Registration No. 2-92174 which was declared effective
on August 24, 1984 (the "Registration Statement"). Reference is
made to the prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) under the Securities Act of
1933, as supplemented by a supplement dated September 12, 1984
which has been filed pursuant to Rule 424(c) under the Securities
Act of 1933. Pursuant to Rule 12b-23 of the Securities and
Exchange Commission's General Rules and Regulations promulgated
under the Securities Exchange Act of 1934, the description of
Registrant's business set forth under the heading "Risk and Other
Important Factors" at pages 17 through 25 and under the heading
"Investment Objectives and Policies" at pages 25 through 34 of
the above-referenced prospectus is hereby incorporated herein by
reference.
Upon termination of the offering of Units on December 11, 1984,
Registrant accepted subscriptions for 31,338 Units, representing
funds aggregating $31,338,000.
The Equipment
At December 30, 1994, Registrant's equipment investments,
adjusted to reflect casualty losses to date, consisted of 885
refrigerated and dry cargo marine shipping containers, five
intercity buses and a windpowered electric generating plant
designed to produce 21 million kilowatt-hours of electricity per
year. Registrant had owned 179 refrigerated and 14 dry-van
piggyback trailers, all of which remaining trailers were sold
effective August 1, 1993. In addition, Registrant had owned
approximately $8.6 million of medical diagnostic imaging
equipment and had made leasehold improvements totaling
approximately $2.1 million to three separate leased facilities,
operated as outpatient diagnostic imaging centers. As of
December 30, 1994, only one of such centers, located in Costa
Mesa, California, was still being operated. Registrant has
disposed of its equipment and assigned its leasehold for that
center and entered into agreements for the sale of its interest
in that center, to be effective February 20, 1995 (pending
certain conditions).
Trailers
On December 12, 1984, Registrant entered into agreements with
Joseph Land Intermodal, Inc. ("Joseph Land"), a Florida
corporation and Transamerica Trailer Services Inc.
("Transamerica" or "TTS"), a New Jersey corporation, neither of
which entities is affiliated with the General Partner or its
affiliates, pursuant to which, a) for approximately $219,000,
Transamerica sold to Registrant 15 45-foot by 96-inch highway dry-
van trailers manufactured by the Budd Company and b) for
approximately $7,413,000, Joseph Land sold to Registrant 200 45-
foot by 102-inch refrigerated piggyback trailers manufactured by
Utility Trailer Manufacturing with refrigeration units
manufactured by Thermo King Corporation. As of August 1, 1993,
one dry-van trailer and 21 refrigerated trailers had been
accidentally destroyed. The casualty proceeds received by
Registrant were used to repay a pro rata portion of the loan
principal (referred to below).
Concurrent with the purchase of the equipment, Registrant leased
the highway dry-van trailers to Transamerica, and leased the
refrigerated piggyback trailers to Joseph Land and subsequently
to Perishable Shippers Association. In May 1989, Registrant
entered into a lease agreement with Intermodal Express, Inc.
("Intermodal") to lease 100 of its refrigerated piggyback
trailers that were previously off-lease. The trailers had been
leased for a period of thirteen months at a monthly rate of $395
per trailer commencing June 1, 1989. In October of 1989,
Registrant amended its lease agreement with Intermodal whereby
Intermodal agreed to lease 28 additional trailers from Registrant
and extend the termination date of the lease for all 128 trailers
to June 30, 1991. Pursuant to the amendment, the lease rate for
the first 100 trailers was reduced to $350 per month per trailer
commencing November 1, 1989. Additionally, the lease rental
amount for the 28 trailers which commenced on the latter of
January 1990 or the date of acceptance of each trailer was fixed
at $187.50 per trailer per month through April 30, 1990.
Subsequent to April 30, 1990 the rentals for the additional 28
trailers were $350 per month per trailer. In February of 1991,
as a result of severely adverse weather conditions affecting the
fresh produce distribution market, the lease with Intermodal was
renegotiated whereby for the months of January through April of
1991 monthly rental payments required were reduced to $175 per
month per trailer and were to remain at $350 for May and June of
1991, the remainder of the lease term. In consideration,
Intermodal extended its lease for an additional twelve months
through June 1992 at a rate of $383.33 per trailer per month. In
June 1992, The Intermodal lease was extended for 24 months at
$285 per month per trailer. Of the 128 trailers originally
leased to Intermodal one was destroyed in 1990 and three were
destroyed in 1992. Intermodal purchased from Registrant the
remaining 124 leased trailers as of August 1, 1993 in addition to
30 trailers which were previously leased to Interfresh (a
division of Bruch Church Inc.) (see below). The purchase price
for the 154 trailers was $6,800 per trailer or a total of
$1,047,200.
Also in May 1989, Registrant entered into lease agreements with
two additional parties, Jontri Transportation Company, Inc.
("Jontri") and Interfresh, to lease 25 and 32 refrigerated
trailers for monthly rentals of $365 and $350 per month,
respectively. These leases commenced June 1, 1989 and were each
for a term of 12 months.
In May 1990, the Jontri Lease was extended through July 1991 with
rentals of $350 per month per trailer. In May 1991 the Jontri
Lease was extended through July 1992 with rentals continuing at
$350 per month per trailer. Subsequent to July 1992, the Jontri
trailers were leased on a month-to-month basis at a rate of $350
per trailer per month until Jontri extended its lease to July 31,
1993 at the same rate. As of August 1, 1993 the 25 trailers
leased to Jontri were sold to Registrant's equipment manager,
Greenbrier Capital Corporation ("Greenbrier"), for $5,000 per
trailer or a total of $125,000.
Also in May 1990, the Interfresh Lease was extended through
February 1992 at a rate of $325 per month per trailer. In 1992
the lease with Interfresh was amended. That amended lease called
for monthly lease payments of $325.00 per trailer for March and
April 1992, $400 for May through September 1992 and $225 for
October 1992 through February 1993. The lessee returned the
trailers at the end of the lease. Of the 32 trailers originally
leased to Interfresh, two were destroyed in 1992. As discussed
above, Registrant sold the 30 remaining trailers previously
leased to Interfresh to Intermodal.
On June 23, 1987, Registrant entered into an agreement with
Transamerica Equipment Leasing Company, Inc. ("TELCO"), successor
in rights, title and interest to TTS, pursuant to which the lease
for the highway dry-van trailers was extended from its original
termination date of October 12, 1987 until October 12, 1991, at a
monthly rate of $217.70 per trailer. On August 7, 1991 the lease
with TELCO was amended. The amended lease terms, effective
October 12, 1991, required minimum monthly rental payments of
$145.40 per trailer for thirty-six months. Effective November
30, 1992 TELCO assigned its lease to Transport International
Pool, Inc. ("TIP"). Registrant sold the 14 remaining trailers
effective August 1, 1993 to Greenbrier, subject to the TIP lease,
for $2,200 per trailer for a total of $30,800.
Effective August 1, 1993, Registrant sold its 179 refrigerated
trailers and its 14 highway dry van trailers for $1,203,000.
Aggregate revenues earned by Registrant pursuant to these
agreements were $343,757 (14% of total revenues) in 1993 and
$717,465 (21%) in 1992.
Registrant entered into a management agreement dated as of
December 12, 1984, with BRAE Intermodal Corporation ("BIC"), a
California corporation not affiliated with the General Partner or
its affiliates, pursuant to which BIC was engaged to arrange for
the re-lease and maintenance of the trailers and generally
monitor and manage the trailers. During 1985, BIC was acquired
by Greenbrier.
For its services as manager, according to a September 16, 1991
amendment to the management agreement, Greenbrier received a
fixed monthly fee equal to 3.07% of the monthly lease rate for
each trailer leased to Transamerica and 5.5% of the monthly lease
rate for each refrigerated trailer leased. The amendment
extended the term of the management agreement to be co-terminus
with the leases and any extensions thereto. The equipment
manager also received a reimbursement of operating expenses,
property taxes and cost of storage or transportation of the
trailers. The management agreement was terminated in 1993
concurrent with the sale of all the trailers.
In connection with Registrant's purchase of the trailers, as
discussed above, Registrant entered into a loan agreement dated
as of December 11, 1984 with the First Bank National Association
("First Bank") (formerly First National Bank of Minneapolis)
pursuant to which First Bank loaned Registrant $4,960,877, which
represented 65% of the capitalized equipment cost of the dry-van
and refrigerated piggyback trailers purchased by Registrant.
In 1986 the original loan was refinanced with proceeds from a new
loan totaling $4,637,617 which was utilized to prepay the
outstanding principal of the loan and to pay prepayment charges.
On September 30, 1993, proceeds from the sale of Registrant's 179
refrigerated trailers and 14 highway dry-van trailers, totaling
$1,203,000, were used to pay down the remaining outstanding
balance under the trailer loan. Concurrent with the trailer sale
transactions, First Bank released Registrant from all future
obligations relating to the trailer debt. The amount of
obligations from which Registrant was released totaled $877,556.
Maritime Containers
On December 12, 1984, Registrant entered into agreements with
Trans Ocean Ltd. ("TOL"), a California corporation, and TOL's
wholly-owned subsidiary, Trans Ocean Finance Corporation
("TOFC"), neither of which entities is affiliated with the
General Partner or its affiliates, pursuant to which TOL and TOFC
(i) sold 1,475 standard dry cargo and refrigerated marine
shipping containers to Registrant at a total invoice cost of
$8,506,415, (ii) simultaneously leased back the containers from
Registrant under initial leases with 240-day terms, and (iii) at
the expiration of the initial leases, pursuant to the Pooling and
Agency Agreement (the "Agency Agreement") between the Partnership
and TOL, agreed to manage such containers for Registrant as part
of TOL's or TOFC's container operating pools. TOL is a privately-
held corporation engaged in the business of purchasing, owning,
managing, maintaining and leasing maritime shipping containers
world-wide, primarily to ocean-going shipping companies.
The containers consist of standard (i) 20-foot and 40-foot
refrigerated marine shipping containers and (ii) 40-foot dry
cargo marine shipping containers manufactured by several Far
Eastern and European manufacturers and operated as part of TOL's
or TOFC's container fleet no more than 90 days prior to their
purchase and leaseback by Registrant. Since inception, 543 dry
cargo containers and 47 refrigerated containers have been
accidentally destroyed or otherwise disposed. The net proceeds
received by Registrant according to parameters stipulated in the
Agency Agreement were used to repay a pro rata portion of the
loan principal with the balance returned to the partners.
Rentals paid under the initial leases were equal to 1.71% of
container cost (including acquisition fees) per month. By year-
end 1986, all initial leases had expired and the containers were
earning per diem pool rates. During the term of the initial
leases and, thereafter, during the term of the Agency Agreement,
the containers are included in TOL's or TOFC's container
operating pools. As part of such pools, the containers are
leased to ocean-going steamship companies and other maritime
container users either on short-term leases or pursuant to master
lease agreements pursuant to which the user pays for the
container generally on a per diem basis. During 1994, the TOL
fleet experienced an average utilization rate of 77% for
refrigerated containers and 81% for standard dry cargo
containers. The average per diem rate was $10.58 for the 20'
refrigerated containers and $11.97 for the 40' refrigerated
containers. The standard dry cargo containers' average per diem
rate was $2.54. Aggregate revenues earned by Registrant from the
containers in 1994 were $1,203,610 (75% of Registrant's total
revenues) compared to $1,526,589 (62%) in 1993 and $1,989,772
(57%) in 1992.
The Agency Agreement is for a 12-year term through June 30, 1996.
Under the Agency Agreement TOL is responsible for arranging for
leasing, monitoring, maintaining and arranging insurance for the
containers. During the term of the Agency Agreement, operating
revenues and expenses of the container operating pools in which
Registrant's containers are included, are calculated on a pool-
wide basis (except for casualty proceeds and certain capital
expenditures with respect to Registrant's containers) and
allocated among the pooled containers (including Registrant's
containers) on a pro rata basis in proportion to 20-foot
equivalent units.
As compensation for its management, marketing and supervisory
services on the containers performed subsequent to the time the
containers came off their leases to TOL or TOFC, TOL is entitled
to receive an agency fee equal to 31% of Registrant's share of
net operating revenue from the container pools. Total agency
fees earned by TOL during 1994 were approximately $258,000.
Under a Container Sales Agency Agreement entered into between TOL
and Registrant, TOL will act as Registrant's exclusive agent
during the term of the Agency Agreement and for a period of 60
days thereafter, and as a non-exclusive agent for a period of 120
days after the expiration of such exclusive agency, for the
purpose of arranging for the sale of the containers. Under the
terms of such agency, if TOL is instrumental in the sale of a
container, Registrant will pay TOL a sales commission equal to
40% of the excess of the gross sales proceeds over the
container's contractual termination value; provided that the
amount of TOL's sales commission cannot exceed 12% of the greater
of (i) equipment cost and (ii) gross sales proceeds. In
connection with a sale of a container to TOL or an affiliate of
TOL, TOL is entitled to such sales commission only if the sales
price is equal to or greater than the container's then fair
market value as established by an independent third party.
During 1985, Registrant issued three promissory notes to USX
Credit Corporation ("USX"), a subsidiary of USX Corporation
(formerly United States Steel Corporation), totaling $3,908,000.
The final loan payment was made on January 4, 1993.
Intercity Buses
Registrant entered into an Agreement to purchase and lease buses
on December 17, 1984 (the "Purchase Agreement") with BusLease,
Inc. ("BLI"), a Texas corporation unaffiliated with the General
Partner or its affiliates. BLI was engaged in the business of
managing, maintaining and providing leasing services for
intercity buses. Pursuant to the Purchase Agreement, Registrant
acquired a total of 39 new 40-foot intercity buses at an
aggregate purchase price of $6,606,510 (including the cost of
tires which were acquired separately). The buses were
manufactured by Eagle International, Inc., Trailways
Manufacturing Inc., Motor Coach Industries, Inc., Transportation
Manufacturing Corporation or Prevost Car, Inc.
To fund the bus acquisitions, Registrant entered into two loan
agreements with First Bank for loans totaling $3,760,000. On
June 6, 1985 and September 3, 1985 Registrant borrowed $2,470,000
and $1,290,000, respectively. Registrant's final payment under
its bus loan was made on June 30, 1993.
Through 1994, Registrant sold 33 of its intercity buses. In
addition, one bus, for which insurance proceeds were received,
was destroyed by fire. Sales proceeds, net of five percent
commissions paid to the bus equipment manager, and insurance
proceeds were used to pay down the loan principal (referred to
above). At year-end 1993, Registrant owned 14 buses, of which
nine were on lease. At year-end 1994, Registrant owned five
buses of which three were on lease. At December 30, 1994, the
average remaining terms of all leases was approximately three
months. Aggregate revenues earned by Registrant in 1994 were
$149,019 (9% of Registrant's total revenue) compared with
$326,614 (13%) in 1993 and $452,205 (13%) in 1992.
In the fourth quarter of 1991, Registrant wrote down the book
value of its buses by $550,000 in order to reflect then current
market conditions.
The buses were managed for Registrant by BLI, which arranged for
the re-lease of the buses, collected all rents, obtained
insurance for the buses, arranged maintenance for the buses and
generally monitored and managed the buses. The management
agreement was for a term of 10 years, but could be terminated
earlier with respect to any bus sold, destroyed or withdrawn.
Also, the management agreement could be terminated by Registrant
with respect to any bus at the termination of the lease for such
bus. For its services, BLI received a fixed monthly management
fee of $275 per bus, subject to increase after December 31, 1986
in proportion to increases in the Gross National Product
Deflator.
Greyhound Lines, Inc. ("GLI") and its affiliate BLI, filed for
protection from creditors under Chapter 11 of the United States
Bankruptcy Code on June 4, 1990. In accordance with the BLI Plan
of Reorganization, as confirmed by the U.S. Bankruptcy Court,
substantially all the assets of BLI were sold to Continental
Asset Services, Inc. ("CASI"). Registrant entered into a
management agreement with CASI which agreement was substantially
the same as the former BLI agreement. This agreement became
effective at the closing of the BLI Asset sale on August 21,
1991.
On November 6, 1992, CASI sold certain of its assets and
liabilities to TMO Acquisition Corporation ("TMOAC"), a Delaware
corporation and, at the time, a wholly-owned subsidiary of The
Dial Corp. On November 6, 1992, in connection with the sale, and
pursuant to an Assignment, Assumption and Amendment Agreement by
and between CASI, TMOAC and Hausman Bus Sales, Inc. ("Hausman"),
substantially all terms of the management agreements and sale
agreements between the Partnership and CASI were jointly assigned
to, and assumed by, TMOAC and Hausman. The assumption of the
management agreements and sale agreements by TMOAC and Hausman
was effective November 6, 1992. TMOAC and Hausman are not
affiliated with the General Partner. On December 13, 1994
Registrant notified the bus equipment manager that the management
agreements shall terminate upon the termination of each current
bus lease but the bus manager shall continue to serve as selling
agent to Registrant with respect to the remaining buses. In
1994, management fees incurred by Registrant for its buses
totaled $30,680.
The charter and tour segments of the intercity bus industry
enjoyed a successful 1994, as the economic climate in most parts
of the United States was at least steady. The booming casino
market continued to provide growth opportunities for both
established and start-up bus companies. The Northeast,
California-Nevada and Mississippi Valley region from the Gulf
Coast to the Upper Midwest were particular benefactors of this
increased demand for transportation services.
The industry followed the financial developments at GLI, the
nation's largest scheduled bus line, with more than passing
interest during the second half of the year. Although most bus
operators do not compete directly with GLI, many have small line
runs that connect to GLI's system, and all are concerned by fleet
values that would be damaged by a GLI bankruptcy or liquidation
action. Both of these scenarios were averted just prior to year-
end 1994 when GLI completed a financial restructuring by
exchanging convertible debt for stock and by issuing additional
shares.
The equipment markets were steady throughout 1994 as previous
stocks of MC9 coaches returned to equipment dealers were sold.
Used bus prices are expected to remain steady with little change
from 1994 as the general economy and the bus industry remains
sound, and reflecting the fact that bus manufacturers have not
announced any new models for early in 1995.
Medical Diagnostic Imaging Centers
On March 12, 1985, Registrant entered into three agreements with
Medical Resources, Inc. ("MRI"). MRI is a Delaware corporation
engaged in the establishment of "outpatient" diagnostic imaging
centers and is not affiliated with the General Partner or its
affiliates. The agreements provided for a commitment by
Registrant to acquire an aggregate of approximately $8 million of
medical diagnostic imaging equipment and approximately $1.5
million of leasehold improvements to three facilities. The
equipment purchased was to be used by each facility in a free
standing outpatient diagnostic imaging center. MRI (or its
affiliates) had previously developed business plans for the
establishment of the three centers which included the design,
equipment operation and supervision, and, in furtherance of such
plans, had entered into leases for the premises, contracts for
the design, construction and installation of various leasehold
improvements, negotiated with manufacturers regarding the
purchase of certain imaging equipment and entered into agreements
with radiology groups which would operate the imaging equipment
and perform diagnostic imaging services at the facilities.
The diagnostic imaging equipment (the "Imaging Equipment")
acquired by Registrant was primarily manufactured by Picker
International, Inc. and Siemens Medical Systems, Inc.
("Siemens"). Each center was set up to operate a magnetic
resonance scanner ("MR") and in addition may operate several
other types of imaging equipment, including computer tomography
("CT") scanners, ultrasound, mammography, and
radiography/fluoroscopic scanners. The total invoice cost for
the Imaging Equipment and leasehold improvements acquired by
Registrant was approximately $10.7 million.
The Costa Mesa facility began operation on December 27, 1985
while the Rockville and Miami centers began operation on March
28, 1986 and August 3, 1986, respectively.
Costa Mesa, California
On May 23, 1985, Registrant entered into various agreements
including a ten-year joint venture agreement with Costa Mesa
Resources, Inc. ("CMR"), a wholly-owned subsidiary of MRI, and
Hutton Center Magnetic Imaging, an investor group comprised of
local physicians, the general partner of which is Magnetic
Imaging of Santa Ana, Inc. The joint venture agreement provides
for the establishment and operation of a diagnostic imaging
center located in Costa Mesa, California. Concurrent with the
signing of the joint venture agreement, Registrant entered into a
Purchase and Assumption agreement with CMR, whereby Registrant
assumed CMR's obligations under facility contracts and equipment
purchase agreements and reimbursed CMR for certain costs incurred
during the development phase of the venture. Registrant also
entered into an Assignment of Lease, as amended, for the premises
under which Registrant assumed all obligations as lessee from
CMR. The lease was scheduled to expire on May 23, 1995 and
required a monthly base rental of $8,890 (see below).
Registrant also entered into a Management Agreement with CMR to
provide ongoing administrative services including staffing,
billing, collections, accounting, and general management of the
day to day operations of the center. The Management Agreement is
for an initial term of ten years with an option to renew for
additional terms. In return for its services, CMR was entitled
to a management fee equal to 5% of gross operating revenues of
the joint venture, net of bad debts and contractual allowances.
CMR entered into an Operation Agreement with an established
radiology group in the community pursuant to which doctors in
that group will staff the center and administer the various
scanning procedures in return for a professional fee.
Under the terms of the joint venture agreement, Registrant was
entitled (through the Effective Date - see below) to receive a
monthly payment from the joint venture equal to total rental
expenses incurred by Registrant. Registrant was also entitled to
a priority payment equal to 1.1666% of Registrant's investment in
equipment and leasehold improvements during the first 12 months
of operations, and 2.0608% thereafter through the 84th month of
operation. The priority payment provision expired in 1993.
Additionally, a small monthly amount of priority distributions
due Registrant for an equipment upgrade expired in the fourth
quarter of 1993. Registrant is currently entitled (through the
Effective Date - see below) to a pro rata share of distributable
cash in the percentages described below.
During the first 35 months of the facility's operations,
Registrant was entitled to receive 20% of distributable cash in
excess of the priority payments and CMR and the physician group
were entitled to receive 55% and 25%, respectively. Beginning in
the 36th month, Registrant's sharing percentage increased to 50%
until Registrant received a return equal to three times its
investment, and decreases to 25% thereafter. Registrant
subsequently entered into an agreement whereby it sold part of
its interest in the center for $70,000 and as a result,
Registrant's 50% interest in distributable cash was reduced to
43%. In order to comply with changes in the laws, ordinances and
regulations applicable to physician referrals and physician-owned
facilities, the Costa Mesa physician group assigned a portion of
its interest in the Costa Mesa imaging center to a third party
unaffiliated with Registrant and the Costa Mesa joint venture
redeemed the remaining portion of the physician group's interest
to the benefit of the MRI affiliate and Registrant, effective
January 1, 1994. As consideration for the redemption, the Costa
Mesa joint venture paid the Costa Mesa physician group $175,000
out of receipts from the joint venture during 1994. As of
January 1, 1994, Registrant's interest in distributable cash,
profits and losses of the joint venture increased to 62.6% from
its previously entitled 43%.
The center generated operating revenues (net of bad debts and
allowances) of $764,668 in 1994, $1,284,700 in 1993 and
$1,885,600 in 1992.
During 1994, Registrant recognized priority payment revenues of
$1,227 and received $31,300 of distributable cash compared to
$96,119 and $0 in 1993, and $603,390 and $8,366 in 1992,
respectively.
On December 24, 1985, Registrant entered into a long-term loan
agreement with a lending institution under which $926,300 was
borrowed with respect to the MR at the Costa Mesa facility. The
final scheduled debt payment under this loan was made on January
4, 1993. In April 1989, Registrant issued a promissory note for
$217,300 to finance an upgrade for the MR equipment located in
Costa Mesa imaging center. Interest on the note was charged at a
rate of 12% per annum. Interest and principal were payable
monthly through September 1993. The note and accrued interest
thereon was fully repaid on August 31, 1993.
The Costa Mesa joint venture agreement and the lease for the
facility which houses the equipment owned by Registrant both
expire by their own terms on May 23, 1995. Due to increased
competition in the area and the age and obsolescence of the
equipment utilized at the Costa Mesa imaging center, joint
venture revenues have decreased substantially over the last two
years.
In light of the above stated conditions, and as part of
Registrant's desire to effectuate a sale of the Costa Mesa
imaging center and thereby reduce its ongoing obligations related
to the center and the obligations under the center lease,
effective February 20, 1995 (the "Effective Date"), Registrant
entered into an agreement (the "Purchase and Sale Agreement")
with CMR pursuant to which Registrant has sold its interest in
the joint venture, its equipment, leasehold improvements and
leasehold interest and 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 Registrant or CMR, to sell all
assets of the joint venture, including those assets acquired by
CMR from Registrant. On March 28, 1995 pursuant to the Asset
Agreement, proceeds from the sale were received by the joint
venture. Pursuant to the Purchase and Sale Agreement, Registrant
expects to be paid a $65,000 purchase price by March 31, 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 have 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 has entered into a
similar release agreement for the benefit of CMR, MRI and the
joint venture. The sale of the equipment, leasehold improvements
and leasehold interest have been consummated as of the Effective
Date. However, the sale of the joint venture interest, as well
as the releases (other than the landlord release) referred to
above, will only be effective (as of the Effective Date)when the
Partnership receives the $65,000 purchase price. The landlord
release under the center lease is currently effective. Upon the
consummation of the Costa Mesa sale transaction, Registrant
expects to recognize a gain of approximately $65,000.
Rockville, Maryland
On July 8, 1985, Registrant entered into various agreements
including a 10-year joint venture agreement with Rockville Assets
Management Associates, L.P. ("RAMA") (the general partner of
which is Rockville Resources, Inc., a Delaware corporation that
is an affiliate of MRI) and Montgomery Imaging Consultants, Inc.,
for the establishment of a diagnostic imaging center located in
Rockville, Maryland.
The Rockville Imaging facility did not perform as projected. The
joint venture and management agreements were terminated in May
1989. Faced with continuing losses for a protracted future
period, a decision was made to discontinue operations in February
1990, and proceed with an orderly liquidation. On September 1
and October 25, 1990, Registrant disposed of certain equipment
associated with its Rockville Imaging Center on those respective
dates. Registrant also entered into a Release and Settlement
Agreement with its equipment lender on October 25, 1990 whereby
the lender released Registrant from all liability under the
equipment notes and Registrant released the manufacturer from
liability regarding the equipment. The lease for the premises,
which Registrant had previously assumed, expired on December 31,
1991. Registrant recorded a gain of $345,996 on the
extinguishment of the Rockville liabilities in 1990.
Miami, Florida
On July 8, 1985, Registrant entered into various agreements,
including a 10-year joint venture agreement with Mid-Miami Assets
Management Associates, L.P. ("MMAM") (the general partner of
which is Mid-Miami Resources, Inc. a Delaware corporation that is
an affiliate of MRI) and Mid-Miami Consultants, Inc. for the
establishment of a diagnostic imaging center located in Miami,
Florida.
Concurrent with the signing of the joint venture agreement,
Registrant entered into a Purchase and Assumption agreement with
MMAM, whereby Registrant assumed MMAM's obligations under
facility contracts and equipment purchase agreements and
reimbursed MMAM for certain costs incurred during the development
phase of the venture. Registrant had also entered into an
Assignment of Lease as of June 18, 1985 whereby Registrant
assumed all obligations as lessee from MMAM. The lease, as
amended, was extended to expire on November 30, 1994.
In 1986, Registrant entered into secured sales contracts with
Siemens in connection with the acquisition of certain medical
diagnostic imaging equipment located at the Miami, Florida
center. Under these agreements, Registrant financed a portion of
the equipment cost through the issuance of promissory notes
totaling $1,550,342. The notes were payable in 84 monthly
installments of principal with interest at a rate of 12.75% per
annum. As collateral for amounts due under the secured sales
contracts, Registrant granted a security interest in the
equipment and certain assets of the center and an assignment of
Registrant's rights to any distributions from the joint venture.
Registrant prepaid in full its remaining obligations under these
notes on May 17, 1993.
Registrant's Miami medical imaging facility had experienced
severe cash flow difficulties. This condition continued despite
Registrant's efforts to increase income and reduce costs. In
addition, Registrant's numerous efforts to consummate a sale of
the facility were unsuccessful. As a result, and in light of no
foreseeable improvement in the operations, Registrant closed the
center on July 27, 1994. In order to obtain a release of
Registrant from any liabilities remaining under the facility's
lease, Registrant assigned its imaging equipment to the landlord,
effective October 7, 1994. On October 28, 1994 voluntary
petitions for protection from creditors were filed under Chapter
7 of the United States Bankruptcy Code for both the limited
partnership which owns the center, Mid-Miami Diagnostics Limited
Partnership. ("Mid-Miami L.P."), and its sole general partner,
Mid-Miami Diagnostics Inc. ("Mid-Miami Inc."). Mid-Miami Inc. is
wholly-owned by Registrant and Registrant owns a 98% limited
partnership interest in Mid-Miami L.P. 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.
The center generated gross operating revenues (net of bad debts
and allowances) of $811,479 through the six-month period ended
July 1, 1994 (on which date Registrant classified the Miami
facility as a discontinued operation), $2,423,202 in 1993 and
$2,460,850 in 1992.
Windplant
Pursuant to a Windplant Construction Contract dated November 27,
1984, Registrant acquired a windpower plant (the "Windplant")
from U.S. Windpower, Inc. ("USW"), a Delaware corporation engaged
in the manufacture of windmills which is not affiliated with the
General Partner or its affiliates. The Windplant, located in the
Altamont Pass area in Alameda and Contra Costa Counties,
California, was designed to generate 21 million kilowatt-hours of
electricity per year under average wind conditions. The
Windplant produces electric power which feeds into the
distribution facilities of an electric utility.
The total purchase price of the completed Windplant was
$15,487,500, of which $7,124,248 was paid in cash and the balance
of $8,363,252 being financed with nonrecourse construction notes
issued to USW. The Windplant was acquired in stages as the
windmills were manufactured, installed, and placed in service.
On December 12, 1984, Registrant paid $4,686,296 in cash and
issued notes totaling $5,501,304 for the then completed portion
of the Windplant which represented approximately 65% of its total
anticipated capacity. In 1985, Registrant acquired additional
windmills in three installments which in the aggregate
represented 33% of total anticipated capacity. The 1985
additions were acquired at a total cost of $5,002,461 with the
Registrant paying $2,140,513 in cash and issuing notes for the
balance of $2,861,948. The remaining portion of the Windplant
(approximately 2% of total anticipated capacity) was installed in
early 1986 and was entirely funded with a cash payment of
$297,439 by Registrant. The construction note delivered with
respect to the portion of the Windplant installed in 1984 bears
interest at the rate of 9%. The construction notes issued in
connection with the 1985 portion of the Windplant bear interest
at a rate equal to 13.49%, compounded annually. The notes
require annual principal and interest payments over 15 years.
Registrant entered into a Management Agreement dated December 12,
1984 with USW, pursuant to which USW is responsible for
supervising the Windplant, administering agreements for the sale
of power therefrom, complying with applicable Federal and state
energy regulations, obtaining insurance, and billing and
collecting rate charges. The Management Agreement has a term of
10 years, and was renewed for an additional 10-year term by
Registrant. There is an additional 10-year renewal term upon
mutual agreement of Registrant and USW. Pursuant to the
Management Agreement, USW receives the following fees: (a) an
annual base management fee equal to 1% of the gross revenues from
the Windplant and (b) commencing in the first month after the
construction notes have been paid and Registrant has received
cash distributions equal to 110% of its cash investment, an
annual incentive management fee equal to an additional 22% of the
gross revenues from the Windplant. During 1994, USW earned
management fees totaling $20,431. In addition, if USW is
instrumental in effecting the sale of any or all of the windmills
comprising the Windplant, USW will receive a commission equal to
10% of the gross sales proceeds of such sale.
Registrant entered into a Maintenance Agreement dated December
12, 1984 with USW, pursuant to which USW is responsible for
maintaining the Windplant in good working order. The Maintenance
Agreement has a term of 10 years, and was renewed for an
additional 10-year term by Registrant. There is an additional 10-
year renewal term upon mutual agreement of Registrant and USW.
USW's annual maintenance fee under the Maintenance Agreement was
4% of gross revenues from the Windplant in 1984 and 1985 (the
primary construction period); 8% of such gross revenues in 1986
through 1988 (the warranty period); and, in each 12 month period
thereafter, will be 115% of the cost of maintenance, but not in
excess of $14,500 per 1,000,000 kilowatt hours of installed
projected output or 15% of gross revenues from the Windplant for
such 12 month period, whichever is greater. In 1994, the
maintenance fee earned by USW was $306,833. USW granted to
Registrant, pursuant to a License dated of December 12, 1984,
rights to use certain land holdings in order to construct and
operate Registrant's Windplant, which rights were granted to USW
under easements from the owners of such land holdings. The
License had an initial term which expired in December 1992 and
was renewed by Registrant for an additional ten-year term. Under
such License, Registrant is required to make easement payments
equal to 2% of the monthly gross income of the Windplant through
the initial term and increases to 10% after the initial term.
USW entered into two Power Purchase Agreements with Pacific Gas
and Electric Company ("PG&E") pursuant to which PG&E will
purchase power produced by the windpower plants operated by USW.
Pursuant to an Assignment of Power Purchase Agreements dated as
of December 12, 1984, USW has assigned to Registrant all of USW's
rights and obligations under the power purchase agreements with
respect to power generated by Registrant's Windplant. Under the
Power Purchase Agreements, the purchase price for such power will
be, for the years through 1995, a levelized formula price,
estimated by USW to range between $.09 and $.11 per kilowatt hour
and for the years 1996 through 2014, will be the utility's
"Standard Offer" from time to time in effect. Under these
agreements, Registrant may be obligated to pay PG&E an amount
equal to the benefits Registrant receives in the event that PG&E
does not receive full performance during the levelized price
period. The utility's Standard Offer is currently based on its
avoided cost for power (representing primarily the cost of
incremental fuel) and a capacity component (representing the cost
of providing capability to deliver energy). The Standard Offer
is revised at least quarterly and may change from time to time as
a result of numerous variables. At present, different rates are
applicable during different times of day and during different
periods of the year.
The past operating performance of the Windplant did not meet
expectations. Also, PG&E has the ability to purchase its power
at rates which are projected to be significantly lower than
originally projected. As a result, in 1991, Registrant concluded
that the future cash generated by the Windplant will be
significantly less than the carrying value of the windplant
assets. This condition was not expected to be temporary.
Accordingly, Registrant wrote down its net book value of the
windplant assets by $4 million in December of 1991 to reflect
this impairment.
At December 30, 1994, Registrant had accrued liabilities of
$1,089,950 which included fees and rents due to USW under the
Management and Maintenance Agreements and License (see below),
and interest due on the notes payable to USW. Some of these
payments were in arrears due to lack of available operating cash.
Under the terms of the Management and Maintenance Agreements, USW
can terminate the agreements if its fees are not paid. In
addition, the nonpayment of the interest is considered a default
under the terms of the notes payable and USW could commence
foreclosure procedures on the Windplant. The management of USW
has indicated that they will not terminate the Management and
Maintenance Agreements, nor will they commence foreclosure
proceedings through January 1996.
See "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" for information regarding
Registrant's plan to dispose of its Windplant operations in 1995.
Competition
The equipment leasing industry is highly competitive, offering
users alternatives to the purchase of nearly every type of
equipment. Competitive conditions vary considerably depending
upon the type of equipment and the market conditions existing in
the areas in which Registrant operates. Registrant is in
competition with equipment managers, leasing companies and
institutions engaged in leasing or otherwise marketing or
remarketing equipment as well as with other owner-operators of
equipment serving the business areas served by Registrant's
equipment. In many industries manufacturers have established
their own in-house leasing operations for the rental of their
equipment and in other industries some manufacturers have
established vendor leasing programs under which third-party
leasing companies, in cooperation with the manufacturer, acquire
equipment from the manufacturer subject to leases to third-party
lessees.
Many of the firms with which Registrant will compete have
considerably greater financial resources and experience than
Registrant and its affiliates in managing, leasing and operating
equipment. As a result of having greater financial resources,
many of Registrant's competitors have newer, more advanced
equipment and much larger inventories. In addition, manufacturer-
owned lessors and lessors under vendor leasing programs have an
advantage over Registrant in that the manufacturer's salesmen
have an on-going relationship with equipment users.
Finally, when Registrant considers selling its equipment it will
encounter competition from limited partnerships, equipment
managers, leasing companies and other institutions engaged in the
sale of used equipment comparable to and competitive with
Registrant's equipment. Many of such competitors have
considerably greater financial resources and expertise than the
General Partner and its affiliates in selling equipment.
Employees
Registrant has no employees. The business of Registrant is
managed by the General Partner. ML Leasing Management Inc., an
affiliate of the General Partner, performs certain management and
administrative services for Registrant.
<PAGE>
Item 2. Properties
A description of the Equipment and leases of Registrant is
contained in Item 1 above.
Item 3. Legal Proceedings
On October 28, 1994, voluntary petitions for protection from
creditors were filed under Chapter 7 of the Bankruptcy Code in
the United States Bankruptcy Court for the Southern District of
New York for both Mid-Miami Diagnostics Limited Partnership ("Mid-
Miami L.P.") and its sole general partner, Mid-Miami Diagnostics
Inc. ("Mid-Miami Inc."). Mid-Miami Inc. is wholly-owned by
Registrant and Registrant owns a 98% limited partnership interest
in Mid-Miami L.P. See "Item 1. Business - Medical Diagnostic
Imaging Centers -- Miami, Florida."
On October 19, 1994 Med-Lab Supply Co., Inc. filed a complaint in
the Circuit Court of Dade County, Florida, against Mid-Miami
L.P., Registrant and the General Partner, seeking $148,513.43
(plus interest, costs and attorney's fees) pursuant to a claim
for non-payment of amounts due under a contract relating to the
medical diagnostic imaging center in Miami, Florida. Two of the
four counts in the complaint are directed against Registrant and
the General Partner alleging actions for guarantee and promissory
estoppel. Registrant believes that the claims against it are
without merit and that the effect on Registrant, if any, will not
be material to its financial position; however, it is too early
to determine the actual extent of any financial exposure to
Registrant.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the limited partners in
Registrant during the fourth quarter of the fiscal year covered
by this report.
<PAGE>
Part II
Item 5. Market for the Registrant's Equity and Related
Stockholder Matters
There is no established trading market for the Units and
Depositary Receipts. The number of owners of Units as of January
31, 1995 was 2,155, all of such owners holding Depositary
Receipts for Units.
Registrant does not distribute dividends. Registrant distributes
quarterly, to the extent available, Distributable Cash from
Operations and proceeds arising from a sale or refinancing within
forty-five days after the close of the fiscal quarter. The
following distributions have been made during Registrant's prior
two fiscal years:
Amount Distributed
<TABLE>
<CAPTION>
Date Per Unit
<S> <C>
February, 1993 $10.00
May, 1993 10.00
August, 1993 10.00
November, 1993 10.00
February, 1994 15.00
May, 1994 10.00
August, 1994 15.00
November, 1994 6.00
</TABLE>
<PAGE>
Item 6. Selected Financial Data
Year Ended Year Ended Year Ended
12/30/94 12/31/93 12/25/92
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TOTAL REVENUES* $ 1,601,502 $ 2,458,289 $ 3,493,594
INCOME (LOSS)
FROM CONTINUING
OPERATIONS
38,027 (578,157) 793,892
DISCONTINUED
OPERATIONS:
Loss From
Discontinued
operations-
Windplant -- (606,156) (72,574)
Loss on Disposal
of Windplant -- (337,981) --
Loss From
Discontinued
Operations -
Medical Imaging
Centers
(192,357) (731,867) (280,018)
(LOSS) INCOME
BEFORE
EXTRAORDINARY
ITEM (154,330) (2,254,161) 441,300
EXTRAORDINARY
ITEM - GAIN ON
EARLY
EXTINGUISHMENT
OF DEBT -- 877,556 --
NET (LOSS)
INCOME $ (154,330) $(1,376,605) $ 441,300
</TABLE>
Continued on following page
<PAGE>
Year Ended Year Ended Year Ended
12/30/94 12/31/93 12/25/92
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PER UNIT OF
LIMITED
PARTNERSHIP
INTEREST**:
(LOSS) INCOME
FROM CONTINUING
OPERATIONS $ 1.20 $ (18.26) $ 25.08
DISCONTINUED
OPERATIONS:
Loss From
Discontinued
Operations-
Windplant -- (19.15) (2.29)
Loss on Disposal
of Windplant -- (10.68) --
Loss From
Discontinued
Operations -
Medical Imaging
Centers
(6.08) (23.12) (8.85)
(LOSS) INCOME
BEFORE
EXTRAORDINARY
ITEM (4.88) (71.21) 13.94
EXTRAORDINARY
ITEM - GAIN ON
EARLY
EXTINGUISHMENT
OF DEBT -- 27.72 --
NET (LOSS)
INCOME $ (4.88) $ (43.49) $ 13.94
CASH
DISTRIBUTIONS $ 46.00 $ 40.00 $ 28.00
</TABLE>
<PAGE>
As of As of As of
12/30/94 12/31/93 12/25/92
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Total Assets $ 9,459,084 $12,051,380 $18,120,613
Bank Loans
and Notes
Payable $ 4,445,512 $ 5,039,728 $ 8,904,552
</TABLE>
<PAGE>
Year Ended Year Ended
12/27/91 12/28/90
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL REVENUES* $ 3,613,695 $ 3,930,993
(LOSS) INCOME FROM
CONTINUING OPERATIONS $ (269,101) $ (173,579)
DISCONTINUED
OPERATIONS:
Loss From Discontinued
Operations-Windplant (4,255,679) (236,334)
Loss on Disposal of
Windplant -- --
Loss From Discontinued
Operations - Medical
Imaging Centers (71,133) (732,547)
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEM (4,595,913) ( 1,142,460)
EXTRAORDINARY ITEM -
GAIN ON EARLY
EXTINGUISHMENT OF DEBT -- 345,996
NET (LOSS) INCOME $(4,595,913) $ (796,464)
PER UNIT OF LIMITED
PARTNERSHIP INTEREST**
(LOSS) INCOME FROM
CONTINUING OPERATIONS $ (8.50) $ (5.48)
DISCONTINUED
OPERATIONS:
Loss From Discontinued
Operations-Windplant (134.44) (7.47)
Loss on Disposal of
Windplant -- --
Loss From Discontinued
Operations - Medical
Imaging Centers (2.25) (23.14)
(LOSS) INCOME BEFORE
EXTRAORDINARY ITEM (145.19) (36.09)
</TABLE>
Continued on following page
<PAGE>
Year Ended Year Ended
12/27/91 12/28/90
<TABLE>
<CAPTION>
<S> <C> <C>
EXTRAORDINARY ITEM -
GAIN ON EARLY
EXTINGUISHMENT OF DEBT -- 10.93
NET (LOSS) INCOME $ (145.19) $ (25.16)
CASH DISTRIBUTIONS $ -- $ --
As of As of
12/27/91 12/28/90
Total Assets $21,522,858 $28,379,150
Bank Loans and Notes
Payable $11,587,654 $14,014,259
</TABLE>
* Total revenues for 1994, 1993 and 1992 includes gain on
disposal of leased assets.
**31,338.3 units of Limited Partnership Interest.
Fiscal year 1993 consisted of 53 weeks. Other fiscal years
presented consisted of 52 weeks.
Prior year's information above has been restated to separately
report the results of the discontinued Windplant and Medical
Imaging Center Operations.
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Liquidity and Capital Resources
On December 30, 1994, Registrant had $1,717,573 in cash and cash
equivalents which included $1,432,416 invested in short-term
commercial paper and $99,208 invested in bankers acceptances.
The balance was primarily maintained in a money market instrument
and demand deposits. These amounts represent funds held in
reserve for working capital purposes and cash distributions to
partners. Approximately $380,000 was distributed to Partners in
the first quarter of 1995.
Registrant generated positive cash flow from its bus and
container investments and from its equipment sales activities in
1994 which, together with cash reserves, was utilized to meet
operating requirements and provide distributions to Partners.
Buses
Registrant expects to opportunistically liquidate its remaining
buses in 1995. Registrant sold nine buses during the year ended
December 30, 1994. Registrant had five buses remaining in its
fleet as of December 30, 1994 of which three were on-lease.
Subsequent to December 30, 1994, two more buses were sold.
Future Sale of Windplant
Registrant intends to sell its Windplant operations and continues
its discussions with USW for it to purchase the Windplant.
Registrant expects that most, if not all, of the sale proceeds
will be applied to pay down the then-outstanding obligations
under the non-recourse promissory notes (the "Windplant Notes")
which Registrant issued to USW. Registrant issued the Windplant
Notes in conjunction with Registrant's original purchase of the
Windplant from USW. A portion of the accrued interest payable on
the Windplant Notes is in arrears due to a lack of available
Windplant operating cash (see Note 4 to the financial statements
included in Item 8 hereof).
As part of the sale of its Windplant assets, Registrant expects
that USW, at the time of sale, will forgive certain liabilities
which include fees and rents due under the Management Agreement,
Maintenance Agreement and License and assume all remaining
liabilities related to the Windplant. It is also expected that
as part of the sale USW will release Registrant from all future
obligations related to the Windplant. There can be no assurance,
however, that the projected Windplant sale will be consummated.
Registrant currently knows of no trends, events or uncertainties
involving its Windplant operations that may materially affect
Registrant's liquidity, financial condition and results of
operations through the date of sale.
As of December 30, 1994, the Partnership's Windplant net assets,
comprised mainly of equipment and accounts payable, totaled
$5,246,131. The outstanding principal and accrued interest under
the Notes totaled $4,445,512 and $500,619, respectively, as of
December 30, 1994. The accrued interest under the Notes is
classified as accounts payable and accrued liabilities on the
Partnership's Balance Sheet.
Medical Imaging Centers
Costa Mesa Imaging Center
Registrant had been receiving fixed contractual priority
distributions from its investment in the Costa Mesa imaging
center for the initial 84 months the facility was in operation.
This initial period expired in the first quarter of 1993. A
small monthly amount of priority distributions due Registrant for
an equipment upgrade expired in the fourth quarter of 1993.
Registrant no longer receives revenues from priority
distributions from the facility but has received, as venture
partner, 62.6% of all cash available for distribution by the
facility; however such amounts have been less than amounts
historically received as priority distributions.
In order to comply with recent changes in the laws, ordinances
and regulations applicable to physician referrals and physician-
owned facilities, the Costa Mesa physician group assigned a
portion of its interest in the Costa Mesa imaging center to a
third party unaffiliated with Registrant and the Costa Mesa joint
venture redeemed the remaining portion of the physician group's
interest to the benefit of the MRI affiliate and Registrant,
effective January 1, 1994. As consideration for the redemption,
the Costa Mesa joint venture paid the Costa Mesa physician group
$175,000 out of receipts from the joint venture during 1994. As
of January 1, 1994 Registrant's interest in distributable cash,
profits and losses of the joint venture had increased to 62.6%
from its previously entitled 43%.
The Costa Mesa joint venture agreement and the lease for the
facility which houses the equipment owned by Registrant both
expire by their own terms on May 23, 1995. Due to increased
competition in the area and the age and obsolescence of the
equipment utilized at the Costa Mesa imaging center, joint
venture revenues have decreased substantially over the last two
years.
In light of the above stated conditions, and as part of
Registrant's desire to effectuate a sale of the Costa Mesa
imaging center and thereby reduce its ongoing obligations related
to the center and the obligations under the center lease,
effective February 20, 1995 (the "Effective Date"), Registrant
entered into an agreement (the "Purchase and Sale Agreement")
with CMR pursuant to which Registrant has sold its interest in
the joint venture, its equipment, leasehold improvements and
leasehold interest and 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 Registrant or CMR, to sell all
assets of the joint venture, including those assets acquired by
CMR from Registrant. On March 28, 1995, pursuant to the Asset
Agreement, proceeds from the sale were received by the joint
venture. Pursuant to the Purchase and Sale Agreement, Registrant
expects to be paid a $65,000 purchase price by March 31, 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 have 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 has entered into a
similar release agreement for the benefit of CMR, MRI and the
joint venture. The sale of the equipment, leasehold improvements
and leasehold interest have been consummated as of the Effective
Date. However, the sale of the joint venture interest, as well
as the releases (other than the landlord release) referred to
above, will only be effective (as of the Effective Date) when the
Partnership receives the $65,000 purchase price. The landlord
release under the center lease is currently effective. Upon the
consummation of the Costa Mesa sale transaction, Registrant
expects to recognize a gain of approximately $65,000.
Miami Imaging Center
Registrant's Miami medical imaging facility had experienced
severe cash flow difficulties. This condition continued despite
Registrant's efforts to increase income and reduce costs. In
addition, Registrant's numerous efforts to consummate a sale of
the facility were unsuccessful. As a result, and in light of no
foreseeable improvement in the operations, Registrant closed the
center on July 27, 1994. In order to obtain a release of
Registrant from any liabilities remaining under the facility's
lease, Registrant assigned its Imaging Equipment to the landlord,
effective October 7, 1994. On October 28, 1994 voluntary
petitions for protection from creditors were filed under Chapter
7 of the United States Bankruptcy Code for both the limited
partnership which owns the center, Mid-Miami Diagnostics Limited
Partnership ("Mid-Miami L.P."), and its sole general partner, Mid-
Miami Diagnostics Inc. ("Mid-Miami Inc."). Mid-Miami Inc. is
wholly owned by Registrant and Registrant owns a 98% limited
partnership interest in Mid-Miami L.P. 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.
Registrant classified its Medical Imaging Segment as a
discontinued operation on July 1, 1994. Together, the Costa Mesa
and Miami facilities constitute Registrant's Medical Imaging
Segment. During the year ended December 30, 1994, Registrant
expended funds from previously allocated reserves for closing,
selling, liquidating or otherwise disposing of the facilities.
As of December 30, 1994, Registrant's net liabilities from
discontinued operations related to its Medical Imaging Segment,
which were comprised primarily of such accruals, totaled
$221,164.
See Note 4 to the financial statements included in Item 8 hereof
for additional information relating to the Discontinued Medical
Imaging Segment.
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. In 1994,
192 of Registrant's dry shipping containers and 26 of
Registrant's refrigerated shipping containers were sold for
salvage value. As a result of the age of the containers, the
rate of disposal of the containers may continue to 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. Except for Registrant's containers, it is
anticipated that aging of Registrant's equipment will not have a
material impact on the future results of operations and liquidity
of Registrant. However, 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 and the asset is
considered permanently impaired, 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.
The estimated useful life of the Windplant assets was changed in
the fourth quarter of 1992 from 30 years to 20 years to:
a) ensure that revised depreciation would continue to reduce the
net book value of the Windplant assets at a rate by which the net
book value of such assets would consistently be stated at or
lower than net realizable value (especially in light of the
current changes in technology that continue to reduce the
marketability of Registrant's Windplant assets) and (b) to stay
consistent with changing industry standards regarding the useful
life of similar Windplant assets. The effect of this change in
accounting estimate was to increase the 1993 net loss and loss
from discontinued operations by $288,720 ($9.12 per unit of
limited partnership interest) and increase the 1992 loss from
discontinued operations and decrease 1992 net income by $72,180
($2.28 per unit of limited partnership interest).
Summary
Registrant anticipates pursuing a course of liquidation whereby
Registrant would opportunistically liquidate its remaining fleet
of buses and its maritime shipping containers during 1995 and, to
the extent the conditions to the February 20, 1995 sale of its
joint venture interest have not been satisfied, to liquidate or
sell its Costa Mesa imaging center investment. Registrant
intends to sell its Windplant operations during 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, except for Registrant's Windplant
non-recourse debt obligations, where Registrant does not plan to
utilize its unrestricted cash to meet required payments that may
not be satisfied by cash flows realized from the underlying
investment through the date of sale, 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
1994 vs. 1993
Overall Results
Registrant generated a net loss of $154,330 in 1994 compared to a
net loss of $1,376,605 in 1993. The favorable change reflects:
(1) a loss from discontinued operation in 1994 of approximately
$192,000 compared to a loss from discontinued operations in 1993
of approximately $732,000 from Registrant's Medical Imaging
Segment, (2) the 1993 total loss from discontinued operations of
approximately $944,000, from Registrant's Windplant and (3)
income from continuing operations in 1994 compared to a loss from
continuing operations in 1993. These favorable changes were
partially offset by the 1993 gain of approximately $878,000 from
Registrant's early extinguishment of trailer debt.
Continuing Operations
Registrant's continuing operations generated income of
approximately $38,000 in 1994 compared to a loss of approximately
$578,000 in 1993 as a result of lower expenses, partially offset
by lower revenues.
Registrant's total revenues decreased in 1994 when compared to
1993 reflecting lower revenues from Registrant's buses and
containers and no revenues in 1994 from Registrant's trailers
which were sold in 1993. Registrant's buses generated revenues
of approximately $149,000 in 1994 compared to approximately
$327,000 in 1993 due primarily to the sale of over one-half of
Registrant's buses since the end of 1993. Container revenues
decreased to approximately $1,204,000 in 1994 compared to
approximately $1,526,000 in 1993, primarily reflecting the
disposal of 218 containers during 1994 as well as lower average
per diem lease rates received for the containers. Registrant's
trailers which were sold as of the third quarter of 1993,
generated revenues of approximately $344,000 in 1993.
Registrant's total expenses decreased in 1994 when compared to
1993 primarily due to the writedown of Registrant's trailers to
net realizable value by approximately $632,000 in 1993, as well
as a loss on disposal of Registrant's trailers of approximately
$83,000 in 1993. Depreciation and amortization expense decreased
by approximately $337,000 due to the sale of containers, buses
and trailers.
Interest expense of approximately $135,000 was incurred in 1993
only, as a result of repayment in the second half of 1993 of the
remaining bus and trailer debt. Property operating expenses
decreased by approximately $346,000 when compared to 1993 due, in
part, to the sale of buses, trailers and containers in the
intervening period.
Discontinued Operations
Registrant's Windplant was recorded as a discontinued operation
in the fourth quarter of 1993 and no results of operations were
recorded in 1994, as such results were estimated and reflected in
the loss on the disposal of the Windplant in the 1993 fourth
quarter. The operations of this segment generated a net loss of
approximately $606,000 in 1993.
Registrant's Miami and Costa Mesa Medical Imaging facilities were
recorded as discontinued operations on July 1, 1994. No results
of operations from the Medical Imaging Segment were recorded
after the 1994 second quarter. The 1994 results reflect a loss
from the Miami operation of approximately $220,000 in 1994
compared to a loss of approximately $708,000 in 1993. The Costa
Mesa imaging center's operations generated net income of
approximately $28,000 in 1994 compared to a net loss of
approximately $24,000 in 1993. Generally, in addition to the
effect of the closing of the Miami medical imaging center
operations in the 1994 third quarter, the results of the Medical
Imaging segment for 1994, when compared to 1993, reflect reduced
patient volume and reduced fees the center are contractually
permitted to charge providers of health care services.
Gain on Extinguishment of Debt
In 1993 Registrant also recorded a gain on early extinguishment
of its trailer debt reflecting the trailer lender's forgiveness
of $877,556 in obligations due pursuant to the trailer loan.
Registrant was released from these non-recourse obligations in
connection with the sale of the remaining trailer fleet.
Results by Segment
Registrant's Equipment Leasing Segment, which consists of
investments in buses and containers in 1994 and also included an
investment in trailers in 1993 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 is comprised of Registrant's Miami and Costa Mesa
imaging facilities, and the results from Registrant's
discontinued Alternative Energy Segment, which is comprised of
Registrant's Windplant, are fully described above under the
Overall Results - Discontinued Operations.
1993 vs. 1992
Overall Results
Registrant generated a net loss of $1,376,605 in 1993 compared to
net income in 1992 of $441,300. The results reflect a loss from
continuing operations in 1993 compared to income from continuing
operations in 1992, coupled with a higher loss from discontinued
operations in 1993. These unfavorable results were partially
offset by the gain on early extinguishment of the trailer debt in
1993.
Continuing Operations
Registrant's total revenues decreased in 1993 when compared to
1992 as a result of lower revenues from Registrant's buses,
trailers and containers. Registrant's buses generated revenues
of approximately $327,000 in 1993 compared to approximately
$452,000 in 1992 reflecting greater off-lease time in 1993 and
the sale of three buses in 1993. Registrant's trailers generated
revenues of approximately $344,000 in 1993 compared to
approximately $717,000 in 1992 primarily reflecting the sale of
all of Registrant's remaining trailers effective August 1, 1993
as well as lower lease rates and fewer trailers on lease in 1993.
Revenue from Registrant's containers in 1993 was approximately
$1,526,000 compared to approximately $2,000,000 in 1992. The
lower revenue reflects the disposition of 257 of Registrant's
containers during 1993 as well as lower utilization rates and
lower per diem rates received for the containers due to the age
of the equipment.
Registrant's total expenses increased mostly as a result of a
writedown of the value of the sale of Registrant's trailers,
partially offset by lower depreciation and amortization expense
and lower interest expense.
Property operating expenses increased slightly to approximately
$1.09 million in 1993 from approximately $1.05 million in 1992
primarily reflecting an increase in container operating expenses.
Depreciation and amortization expense decreased by approximately
$0.2 million reflecting the sale of the trailers effective August
1, 1993 as well as sales/retirements of certain other assets in
1993. Interest expense decreased by approximately $0.3 million
reflecting the repayment in full of Registrant's trailer,
container and bus debt in 1993, as well as scheduled debt
repayments during 1993.
Discontinued Operations
Registrant's loss from the discontinued Windplant operations was
approximately $606,000 in 1993 compared to approximately $73,000
in 1992 reflecting lower revenues and higher expenses in 1993.
Revenue decreased by approximately $360,000 primarily as a result
of extremely poor wind resources causing power production to fall
to record low levels in the first half of 1993. Expenses
increased by approximately $173,000 due mostly to higher
depreciation expense in 1993 compared to 1992 as a result of the
changes in the estimated life of the Windplant from 30 years to
20 years in the fourth quarter of 1992. The increase in
depreciation expense of approximately $215,000 was partially
offset by lower interest expense of approximately $42,000.
reflecting scheduled payments of principal in 1993.
In 1993, the Medical Imaging Facilities generated a loss of
approximately $732,000 compared to a loss of approximately
$280,000 in 1992. Excluding depreciation and amortization, the
results reflect a loss from the Miami operation of approximately
$455,000 in 1993 compared to a loss of approximately $118,000 in
1992. Excluding depreciation and amortization, the Costa Mesa
imaging center's operations generated net income of approximately
$94,000 in 1993 compared to net income of approximately $584,000
in 1992. Depreciation and amortization expense for the Medical
Imaging Segment was approximately $371,000 in 1993 and $746,000
in 1992. The results of the Medical Imaging Segment for 1993,
when compared to 1992, reflect reduced patient volume and reduced
fees the centers were contractually permitted to charge providers
of health care services in the latter period.
Gain on Extinguishment of Debt
In 1993 Registrant also recorded a gain on early extinguishment
of its trailer debt reflecting the trailer lender's forgiveness
of $877,556 in obligations due pursuant to the trailer loan.
Registrant was released from these non-recourse obligations in
connection with the sale of the remaining trailer fleet.
Results by Segment
Registrant's Equipment Leasing Segment, which consisted of
investments in trailers, buses and containers in 1993 and 1992
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 is comprised of Registrant's Miami and Costa Mesa
imaging facilities, and the results from Registrant's
discontinued Alternative Energy Segment, which is comprised of
only Registrant's Windplant, are fully described above under the
Overall Results - Discontinued Operations.
Inflation
The low levels of inflation during 1994, 1993 and 1992 had no
significant effect on Registrant's operations.
<PAGE>
Item 8. Financial Statements and Supplementary Data
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
Table of Contents
Independent Auditors' Reports
Consolidated Balance Sheets as of December 30, 1994 and
December 31, 1993
Consolidated Statements of Operations for the Years
Ended December 30, 1994, December 31, 1993 and
December 25, 1992
Consolidated Statements of Cash Flows for the Years
Ended December 30, 1994, December 31, 1993 and
December 25, 1992
Consolidated Statements of Changes in Partners' Capital
for the Years Ended December 30, 1994, December 31,
1993 and December 25, 1992
Notes to Consolidated Financial Statements for the
Years Ended December 30, 1994, December 31, 1993 and
December 25, 1992
Schedule II - Valuation and Qualifying Accounts as of
December 30, 1994, December 31, 1993 and December 25,
1992
<PAGE>
INDEPENDENT AUDITORS' REPORT
Liberty Equipment Investors L.P. - 1984:
We have audited the accompanying consolidated financial
statements and the related financial statement schedule of
Liberty Equipment Investors L.P.-1984 (the "Partnership"), listed
in the accompanying table of contents. These financial
statements and the financial statement schedule are the
responsibility of the Partnership's general partner. Our
responsibility is to express an opinion on these financial
statements and the financial statement schedule based on our
audits. We did not audit the financial statements of Mid Miami
Diagnostics Limited Partnership ("Mid Miami"), wholly-owned by
the Partnership, which statements reflect total revenues
constituting 31 percent of consolidated total revenues for the
year ended December 25, 1992. Those statements were audited by
other auditors whose report has been furnished to us, and our
opinion, insofar as it relates to the amounts included for Mid
Miami for 1992, is based solely on the report of such other
auditors.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by the general partner, as well as
evaluating the overall financial statement presentation. We
believe that our audits and the report of the other auditors
provide a reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other
auditors, such consolidated financial statements present fairly,
in all material respects, the financial position of the
Partnership at December 30, 1994 and December 31, 1993 and the
results of their operations and their cash flows for each of the
three years in the period ended December 30, 1994 in conformity
with generally accepted accounting principles. Also, in our
opinion, based on our audits and the report of the other
auditors, such financial statement schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set
forth therein.
As discussed in Note 4 to the consolidated financial statements,
the Partnership intends to sell its windplant operations in 1995.
The estimated loss on sale and losses from operations are
included in the 1993 loss from discontinued operations-windplant,
in the accompanying financial statements.
Also, as discussed in Note 4 to the consolidated financial
statements, Mid Miami experienced cash flow difficulties during
1994. This condition continued despite the general partner's
efforts to increase income and reduce costs. As a result, the
center was closed on July 27, 1994 and on October 28, 1994
voluntary chapter VII bankruptcy petitions were filed for Mid
Miami and its general partner, Mid-Miami Diagnostics Inc. In
addition, the Partnership intends to sell its interest in the
Costa Mesa medical imaging joint venture ("Costa Mesa").
Subsequent to December 30, 1994, the Partnership entered into an
agreement to sell such interest. The net losses from operations
of the Partnership's medical imaging segment, which is comprised
solely of the Partnership's Mid Miami and Costa Mesa operations,
are included in the 1994 loss from discontinued operations-
medical imaging centers, in the accompanying financial
statements.
/s/ Deloitte & Touche LLP
New York, New York
March 16, 1995
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Partners
Mid Miami Diagnostics Limited Partnership
We have audited the statements of operations and partners'
capital (deficit) and cash flows of Mid Miami Diagnostics Limited
Partnership (the "Partnership") for the year ended December 31,
1992. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the results of
operations and cash flows of Mid Miami Diagnostics Limited
Partnership for the year ended December 31, 1992 in conformity
with generally accepted accounting principles.
/s/ Rachlin & Cohen
Coral Gables, Florida
February 2, 1993
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 30, 1994
AND DECEMBER 31, 1993
NOTES 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ASSETS:
Cash and cash equivalents 1,2 $ 1,717,573 $ 2,319,346
Property under management
contract and held for
lease (less accumulated
depreciation of
$4,577,749 in 1994 and
$5,807,811 in 1993) 1,3 2,094,070 3,552,668
Deferred costs (less
accumulated amortization
of $353,057 in 1994 and
$321,949 in 1993) 1 6,045 42,052
Net assets of discontinued
operations - Windplant 4 5,246,131 5,848,565
Accounts receivable 3 395,265 288,749
TOTAL ASSETS $ 9,459,084 $ 12,051,380
LIABILITIES AND PARTNERS'
CAPITAL:
Liabilities:
Notes payable- Windplant 4,5 $ 4,445,512 $ 5,039,728
Accounts payable and
accrued liabilities 4 674,421 831,340
Net liabilities of
discontinued operations -
Medical Imaging
Centers 4 221,164 451,871
Total Liabilities 5,341,097 6,322,939
</TABLE>
Continued on following page.
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 30, 1994
______________________AND DECEMBER 31, 1993_____________________
(continued)
NOTES 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Partners' Capital: 1
General Partner:
Capital contributions,
net of offering expenses
and return of capital 233,115 242,316
Cash distributions (56,978) (51,618)
Cumulative loss (134,958) (133,415)
41,179 57,283
Limited Partners:
Capital contributions,
net of offering expenses
and return of
capital(31,338.3 Units of
Limited Partnership
Interest) 23,078,399 23,989,290
Cash distributions (5,640,713) (5,110,041)
Cumulative loss (13,360,878) (13,208,091)
4,076,808 5,671,158
Total Partners' Capital 4,117,987 5,728,441
TOTAL LIABILITIES AND
PARTNERS' CAPITAL $ 9,459,084 $ 12,051,380
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993, AND DECEMBER 25, 1992
NOTES 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
REVENUES:
Rental income 1,3 $1,352,629 $2,196,960 $3,159,441
Interest
income 75,889 72,991 108,657
Gain on
disposals of
leased assets 172,984 188,338 225,496
Total Revenues 1,601,502 2,458,289 3,493,594
EXPENSES:
Depreciation
and
amortization 1 547,503 884,195 1,110,748
Interest
expense 5 -- 135,016 405,739
Property
operating
expenses 740,417 1,086,012 1,053,929
Other
operating
expenses 6 275,555 216,017 129,286
Writedown of
trailers -- 631,779 --
Loss on
disposals of
leased assets
-- 83,427 --
Total Expenses
1,563,475 3,036,446 2,699,702
INCOME (LOSS)
FROM
CONTINUING
OPERATIONS 38,027 (578,157) 793,892
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993, AND DECEMBER 25, 1992
(continued)
NOTES 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DISCONTINUED
OPERATIONS: 4
Loss from
Discontinued
Operations -
Windplant -- (606,156) (72,574)
Loss from
Discontinued
Operations -
Medical
Imaging
Centers (192,357) (731,867) (280,018)
Loss on
Disposal of
Windplant -- (337,981) --
(LOSS) INCOME
BEFORE
EXTRAORDINARY
ITEM (154,330) (2,254,161) 441,300
EXTRAORDINARY
ITEM-GAIN ON
EARLY
EXTINGUISHMENT
OF DEBT -- 877,556 --
NET (LOSS)
INCOME $ (154,330) $(1,376,605) $ 441,300
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993, AND DECEMBER 25, 1992
(continued)
NOTES 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(LOSS) INCOME
- GENERAL
PARTNER (1,543) (13,766) 4,413
(LOSS) INCOME
- LIMITED
PARTNERS
(31,338.3
Units of
Limited
Partnership
Interest) (152,787) (1,362,839) 436,887
$ (154,330) $(1,376,605) $ 441,300
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993, AND DECEMBER 25, 1992
(continued)
NOTES 1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PER UNIT OF
LIMITED
PARTNERSHIP
INTEREST:
INCOME (LOSS) FROM
CONTINUING
OPERATIONS
$ 1.20 $ (18.26) $ 25.08
DISCONTINUED
OPERATIONS:
Loss from
Discontinued
Operations -
Windplant -- (19.15) (2.29)
Loss from
Discontinued
Operations -
Medical Imaging
Centers
(6.08) (23.12) (8.85)
Loss on Disposal
of Windplant -- (10.68) -
(LOSS) INCOME
BEFORE
EXTRAORDINARY
ITEM (4.88) (71.21) 13.94
EXTRAORDINARY
ITEM-GAIN ON
EARLY
EXTINGUISHMENT
OF DEBT -- 27.72 --
NET (LOSS)
INCOME $ (4.88) $ (43.49) $ 13.94
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INCREASE
(DECREASE) IN
CASH AND CASH
EQUIVALENTS
Cash Flows from
operating
activities:
Net (loss) income $ (154,330) $(1,376,605) $ 441,300
Adjustments to
reconcile net
(loss) income to
net cash provided
by operating
activities:
Depreciation and
amortization
547,503 884,195 1,110,748
Net gain on
disposition of
leased assets (172,984) (104,911) (225,496)
Equipment write
downs and other
reserves -- 631,779 -
Gain on early
extinguishment of
debt -- (877,556) -
Increase/decrease
in:
Accounts payable
and accrued
liabilities (16,209) 33,422 (274,106)
Accounts
receivable and
other assets (73,601) 692,540 (141,832)
Other 3,501 1,777 1,681
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net assets/
liabilities of
discontinued
operations:
Medical Imaging
Centers (230,707) 552,202 498,999
Windplant 602,434 1,461,659 692,415
Net cash provided
by operating
activities 505,607 1,898,502 2,103,709
Cash flows from
investing
activities:
Proceeds from
disposition of
equipment 942,960 1,992,967 808,252
Decrease
(Increase) in
short-term
investments -- 371,191 (174,628)
Net cash provided
by investing
activities 942,960 2,364,158 633,624
Cash flows from
financing
activities:
Repayments of
bank loans and
notes (594,216) (2,987,268) (2,683,102)
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
(Continued)
1994 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Cash distributed to
limited partners
(530,672) (810,211) (10,805)
Cash distributed to
general partner (5,360) (8,184) (109)
Capital returned to
limited partners
(910,891) (443,321) (866,668)
Capital returned to
general partner (9,201) (4,478) (8,755)
Net cash used in
financing
activities (2,050,340) (4,253,462) (3,569,439)
Net (decrease)
increase in cash
and cash
equivalents (601,773) 9,198 (832,106)
Cash and Cash
Equivalents -
Beginning of year 2,319,346 2,310,148 3,142,254
Cash and Cash
Equivalents - End
of year $ 1,717,573 $ 2,319,346 $ 2,310,148
Cash Paid For
Interest (Includes
cash paid for
interest related
to discontinued
operations of
$542,394 in 1994,
$588,611 in 1993
and $849,020 in
1992.) $ 542,394 $ 807,089 $ 1,305,401
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE
YEARS ENDED DECEMBER 30, 1994, DECEMBER 31, 1993,
AND DECEMBER 25, 1992
General Limited
Partner Partners Total
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BALANCE AT
DECEMBER 27, 1991
$ 88,162 $ 8,728,115 $ 8,816,277
1992:
NET INCOME 4,413 436,887 441,300
RETURN OF CAPITAL (8,755) (866,668) (875,423)
DISTRIBUTIONS TO
PARTNERS:
GENERAL PARTNER (109) - (109)
LIMITED PARTNERS
($3.45 PER 10
UNITS OF LIMITED
PARTNERSHIP
INTEREST) - (10,805) (10,805)
BALANCE AT
DECEMBER 25, 1992
83,711 8,287,529 8,371,240
1993:
NET LOSS (13,766) (1,362,839) (1,376,605)
RETURN OF CAPITAL (4,478) (443,321) (447,799)
DISTRIBUTIONS TO
PARTNERS:
GENERAL PARTNER (8,184) - (8,184)
LIMITED PARTNERS
($258.54 PER 10
UNITS OF LIMITED
PARTNERSHIP
INTEREST) - (810,211) (810,211)
BALANCE AT
DECEMBER 31, 1993
57,283 5,671,158 5,728,441
</TABLE>
Continued on following page
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL FOR THE
YEARS ENDED DECEMBER 30, 1994, DECEMBER 31, 1993,
________________________AND DECEMBER 25, 1992____________________
(Continued)
General Limited
Partner Partners Total
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994:
NET LOSS (1,543) (152,787) (154,330)
RETURN OF CAPITAL (9,201) (910,891) (920,092)
DISTRIBUTIONS TO
PARTNERS:
GENERAL PARTNER (5,360) -- (5,360)
LIMITED PARTNERS
($195.29) PER 10
UNITS OF LIMITED
PARTNERSHIP
INTEREST -- (530,672) (530,672)
BALANCE AT
DECEMBER 30 1994 $ 41,179 $4,076,808 $4,117,987
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED
DECEMBER 30, 1994 DECEMBER 31, 1993 AND DECEMBER 25, 1992
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
Under the terms of the Restated Agreement and Certificate of
Limited Partnership (the "Partnership Agreement"), on December
11, 1984, Whitehall Partners Inc., the General Partner
("Whitehall"), admitted additional limited partners to the
Partnership with capital contributions amounting to $31,338,000.
Prior to that date, the only capital transactions were capital
contributions of $5,000 by Whitehall and $300 by the Initial
Limited Partners. As provided in the Partnership Agreement,
Whitehall made an additional cash contribution of $311,548,
which, together with its previous cash contributions, represented
1% of the total Partnership capital contributions.
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.
The purpose of the Partnership is to operate, lease, and
otherwise invest in and deal with equipment and direct and
indirect interests therein. The Partnership shall not engage in
any other business or activity.
Basis of Accounting and Fiscal Year
The Partnership's records are maintained on the accrual basis of
accounting for financial reporting and tax purposes.
Prior to the second quarter of 1994, the Partnership consolidated
the financial position and operating results of the majority-
owned Miami medical imaging center and utilized the equity method
of accounting for its interest in the profits, losses and
distributable cash of the Costa Mesa medical imaging venture.
Since the second quarter of 1994, the Partnership has recorded
its Medical Imaging Segment (consisting of the Miami center and
the Costa Mesa Venture) as a discontinued operation (see Note 4).
As of January 1, 1994 the Partnership's interest in distributable
cash, profits and losses of the Costa Mesa center increased to
62.6% from its previously entitled 43%.
The fiscal year of the Partnership ends on the last Friday of
each calendar year. Fiscal year 1994 consisted of 52 weeks.
Fiscal year 1993 consisted of 53 weeks. Fiscal year 1992
consisted of 52 weeks.
Cash Flows
For purposes of the Consolidated Statements of Cash Flows, the
Partnership considers all highly liquid investments purchased
with an original maturity of three months or less to be cash
equivalents.
Asset Impairment
The Partnership 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 and the asset is
considered permanently impaired, the Partnership will write down
the net book value of the asset accordingly; however, the
Partnership does not write its assets down to a value below the
asset-related non-recourse debt. The Partnership relies on
industry sources and its experience in the particular marketplace
to determine whether an asset impairment is other than temporary.
<PAGE>
Property and Depreciation
Property under management contract and operating leases is
depreciated on a straight-line basis with the following estimated
useful lives:
<TABLE>
<CAPTION>
<S> <C>
Windplant* (See Note 4) 20 years
Intercity Buses 15 years
Marine Shipping Containers 12 years
Refrigerated Piggyback Trailers 12 years
Dry-van Trailers 12 years
Medical Diagnostic Imaging Equipment
(See Note 4) 7-10 years
</TABLE>
The cost of such properties includes related acquisition fees.
* The estimated useful life of the Windplant assets was changed
in the fourth quarter of 1992 from 30 years to 20 years to:
a) ensure that revised depreciation would continue to reduce
the net book value of the Windplant assets at a rate by which
the net book value of such assets would consistently be stated
at or lower than net realizable value (especially in light of
the current changes in technology that continue to reduce the
marketability of the Partnership's Windplant assets) and (b)
to stay consistent with changing industry standards regarding
the useful life of similar Windplant assets. The effect of
this change in accounting estimate was to increase the 1993
net loss and loss from discontinued operations by $288,720
($9.12 per unit of limited partnership interest) and increase
the 1992 loss from discontinued operations and decrease 1992
net income by $72,180 ($2.28 per unit of limited partnership
interest).
Deferred Costs
Deferred costs were amortized on a straight-line basis over
various periods.
Revenue Recognition
Rental income is recognized as earned according to the terms of
individual lease agreements.
Income Taxes
No provision for income taxes has been included in the
Partnership's financial statements since all income and losses
are allocated to the Partners for inclusion in their respective
tax returns. In accordance with Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes", the
Partnership has included in Note 8 certain disclosure related to
differences in the book and tax bases of accounting.
Insurance
The Partnership's equipment related insurance is maintained by
its respective equipment manager or lessee. For the buses,
lessees maintain physical damage and auto liability coverage and
buses off-lease are covered under the bus equipment manager's
casualty insurance policy while in the bus manager's possession
while the Partnership maintains additional contingent physical
damage and contingent auto liability insurance. Insurance
coverage for the Partnership's medical imaging center and
equipment includes comprehensive and general liability.
Insurance for the Partnership's Windplant includes property
damage and general liability and for the containers includes
physical damage and equipment liability. Property losses have
not had a material impact on the Partnership's financial
statements.
Reclassifications
Certain reclassifications have been made to 1993 and 1992 amounts
to conform with the current year's presentation.
2. CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
On December 30, 1994, the Partnership had $1,717,573 in cash and
cash equivalents which included $1,432,416 invested in short-term
commercial paper and $99,208 invested in bankers acceptances.
The balance was primarily maintained in money market investments
and demand deposits. Approximately $380,000 was distributed to
Partners in the first quarter of 1995.
On December 31, 1993, the Partnership had $2,319,346 in cash and
cash equivalents which included $1,874,546 invested in short-term
commercial paper. The balance was primarily maintained in money
market instruments and demand deposits.
The investments in commercial paper and banker's acceptances are
stated at cost which approximates market.
<PAGE>
3. PROPERTY
Partnership property under management contract and held for lease
consisted of the following at December 30, 1994 and December 31,
1993:
<TABLE>
<CAPTION>
1994 1993
Property Quantity Amount Quantity Amount
<S> <C> <C> <C> <C>
A) Marine Shipping
Containers:
Refrigerated Cargo
184 $3,175,397 210 $3,671,133
Dry Cargo 701 2,643,306 893 3,276,388
B) Intercity Buses 5 853,116 14 2,412,958
6,671,819 9,360,479
Less accumulated
depreciation (4,577,749) (5,807,811)
TOTAL $ 2,094,070 $ 3,552,668
</TABLE>
A) The containers are managed under a Pooling and Agency
Agreement which extends through June 30, 1996 and are
included in the equipment manager's container operating
pools. Operating revenues and expenses of the containers are
calculated on a pool-wide basis and allocated among the
pooled containers on a per twenty-foot equivalent unit pro-
rata basis. As part of such pools, the containers are leased
to ocean-going shipping companies and other maritime users
either on short-term leases or pursuant to master lease
agreements under which the user pays for the containers
generally on a per diem basis. During 1994, the containers
earned $1,203,610, or 75 percent of the Partnership's total
revenues compared to $1,526,589, or 62 percent, in 1993 and
$1,989,772, or 57 percent, in 1992.
Under the Pooling and Agency Agreement, the manager is
responsible for arranging the marketing, maintenance, repair,
insurance, positioning and other activities in connection
with the day-to-day operations of the containers in return
for a fee. The manager is also the agent for the Partnership
in arranging for the sale of the containers.
B) The buses were under a management agreement whereby the
equipment manager, BusLease, Inc., and subsequently,
Continental Asset Services, Inc. ("CASI"), placed the buses
under operating leases, collected the rental payments,
arranged for and monitored maintenance and was otherwise
responsible for the day-to-day operations of the buses, and
remitted the rentals to the Partnership net of management
fees and operating expenses.
On November 6, 1992, CASI sold certain of its assets and
liabilities to TMO Acquisition Corporation ("TMOAC"), a
Delaware corporation and, at the time, a wholly-owned
subsidiary of The Dial Corp. On November 6, 1992, in
connection with the sale, and pursuant to an Assignment,
Assumption and Amendment Agreement by and between CASI, TMOAC
and Hausman Bus Sales, Inc. ("Hausman"), substantially all
terms of the management agreements and sale agreements
between the Partnership and CASI were jointly assigned to,
and assumed by, TMOAC and Hausman. The assumption of the
management agreements and sale agreements by TMOAC and
Hausman was effective November 6, 1992. TMOAC and Hausman
are not affiliated with the General Partner. The Partnership
has notified the bus equipment manager that the management
agreement shall terminate upon the termination of each
current bus lease.
As of December 30, 1994, the average remaining term of all
leases was approximately three months. During 1994, the
buses earned revenues of $149,019, or 9 percent of the
Partnership's total revenues compared with $326,614, or 13
percent, in 1993 and $452,205, or 13 percent in 1992. The
Partnership owned five buses as of December 30, 1994, which
reflects the disposal of nine buses during the year. At year
end 1994, of the Partnership's five buses, three were on
lease.
Future minimum rentals under noncancellable operating leases
for the buses as of December 30, 1994 totaled $18,800, all of
which is due in 1995.
4. DISCONTINUED OPERATIONS
WINDPLANT
Description of Operations in General:
The Windplant was designed to produce approximately 21 million
kilowatt hours of electricity per year under estimated wind
conditions when operating at designed capacity. Revenues are
generated from the sale of such electricity under Power Purchase
Agreements with a utility, Pacific Gas and Electric Company
("PG&E"). Under the Power Purchase Agreements, the purchase
price for such power will be, for the years through 1995, a
levelized formula price, and for the years 1996 through 2014,
will be the utility's "Standard Offer" from time to time in
effect. Under these agreements, if by reason of a breach by the
Partnership whereby PG&E does not receive full performance during
the levelized price period, the Partnership may be obligated to
pay PG&E a calculated damage amount as specified in these
agreements. Through 1994, there were no such breaches by the
Partnership and PG&E has received full performance.
The utility's Standard Offer is currently based on its avoided
cost for power (representing primarily the cost of incremental
fuel) and a capacity component (representing the cost of
providing capability to deliver energy). The Standard Offer is
revised at least quarterly and may change from time to time as a
result of numerous variables. At present, different rates are
applicable during different times of day and during different
periods of the year.
Pursuant to a maintenance agreement and a management agreement
for the Windplant, for a fee calculated as a function of gross
revenue, actual costs incurred and projected revenues, the
equipment manager is responsible for maintaining the property,
administering the Power Purchase Agreements, complying with
applicable government regulations, obtaining insurance, billing
and collecting rate charges, and performing other services
incidental to the foregoing in connection with the operation of
the Windplant. The maintenance agreement and management
agreement, each entered into on December 12, 1984, have a term of
10 years and were renewed for an additional 10-year term by the
Partnership. There is an additional 10-year renewal term upon
mutual agreement of the Partnership and the equipment manager.
USW granted to the Partnership, pursuant to a License dated as of
December 12, 1984, rights to use certain land holdings in order
to construct and operate the Partnership's Windplant, which
rights were granted to USW under easements from the owners of
such land holdings. The License had an initial term which
expired in December 1992 and was renewed by the Partnership for
an additional ten-year term. Under such License, the Partnership
is required to make easement payments equal to 2% of the monthly
gross income of the Windplant through the initial term and
increases to 10% after the initial term.
The past operating performance of the Windplant did not meet
expectations. Also, PG&E had the ability to purchase its power
at rates which were projected to be significantly lower than
originally projected. As a result, in 1991, the Partnership
concluded that the future cash generated by the Windplant would
be significantly less than the carrying value of the windplant
assets. This condition was not expected to be temporary.
Accordingly, the Partnership wrote down its net book value of the
Windplant assets by $4 million in December of 1991 to reflect
this impairment. The Partnership discounted projected net cash
flow from its Windplant investment for the years 1992 through
2004 (through the term of the renewed Management Agreement) at an
approximate 12% discount rate. The projected discounted cash
flow was compared to the net book value after debt and resulted
in a $4 million writedown.
Projected net cash flow from the Windplant operations was
calculated using certain assumptions for power sales and
Windplant operating expenses and was provided by persons
experienced in this industry. Power sales projections were based
on past performance, estimates of future energy output and prices
to be paid by PG&E per KWH. Projected Windplant operating
expenses were based on fixed contractual obligations and past
performance.
Description of Discontinued Operations:
The Partnership intends to sell its Windplant operations and
continues its discussions with USW for it to purchase the
Windplant. The Partnership expects that most, if not all, of the
sale proceeds will be applied to pay down the then-outstanding
obligations under the non-recourse promissory notes (the
"Windplant Notes") which the Partnership issued to USW. The
Partnership issued the Windplant Notes in conjunction with the
Partnership's original purchase of the Windplant from USW. A
portion of the accrued interest payable on the Windplant Notes is
in arrears due to a lack of available operating cash. See Note 5
for further information regarding the Windplant Notes.
As part of the sale of its Windplant assets, the Partnership
expects that USW, at the time of sale, will forgive certain
liabilities which include fees and rents due under the Management
Agreement, Maintenance Agreement and License and assume all
remaining liabilities related to the Windplant. It is also
expected that as part of the sale USW will release the
Partnership from all future obligations related to the Windplant.
There can be no assurance, however, that the projected Windplant
sale will be consummated.
As of December 30, 1994, the Partnership's Windplant net assets,
comprised primarily of equipment and accounts payable, totaled
$5,246,131. The outstanding principal and accrued interest under
the Notes totaled $4,445,512 and $500,619, respectively, as of
December 30, 1994. The accrued interest under the Notes is
classified as accounts payable and accrued liabilities on the
Partnership's Balance Sheet.
MEDICAL IMAGING FACILITIES
Description of Operations in General:
In 1985, the Partnership entered into agreements with Medical
Resources, Inc. ("MRI") pursuant to which the Partnership
committed to acquire certain medical diagnostic imaging equipment
and make certain leasehold improvements to three properties which
would be operated as free standing medical diagnostic imaging
centers located in Costa Mesa, California; Rockville, Maryland
and Miami, Florida.
The Partnership subsequently entered into three 10-year joint
venture agreements with subsidiaries of, or partnerships formed
by subsidiaries of, MRI ("MRI affiliates") and an investor group
comprised of local physicians. The Partnership also entered into
management agreements for each of the facilities with the MRI
affiliates which, for a percentage of gross operating revenues,
they provide ongoing administrative services including staffing,
billing, collections, accounting, and general management of the
day-to-day operations of the centers. The initial term of the
management agreements are ten years with an option to renew for
additional terms. However, as of December 30, 1994, only the
joint venture and management agreement for the Costa Mesa
facility is still in effect (however, see below).
The Partnership also assumed leases for the premises of each of
the facilities. The Costa Mesa lease, as amended, was scheduled
to expire on May 23, 1995 and required a monthly base rental of
$8,890 (see below). The Rockville facility lease expired on
December 31, 1991. The Miami facility lease, as amended, was
extended through November 30, 1994 and required a monthly base
rental of $8,971, subject to annual increase based upon
percentage increases in the CPI. The Partnership closed the
Miami center on July 27, 1994 (see below).
Under the terms of the Costa Mesa joint venture agreement, the
Partnership was entitled to receive monthly payments from the
joint venture equal to total occupancy rental expenses incurred
by the Partnership, plus a priority payment equal to 1.1666% of
the Partnership's investment in equipment and leasehold
improvements during the first 12 months of operations, and
2.0608% thereafter, through the 84th month of operation. The
priority payment provision expired during 1993. The Partnership
was then entitled to a pro rata share of distributable cash in
the percentages described below.
During the first 35 months of the operations, the Partnership was
entitled to receive 20% of distributable cash in excess of the
priority payments while the MRI affiliate and the physician group
were entitled to receive 55% and 25%, respectively. Beginning in
the 36th month after the facility was placed in service, the
Partnership's sharing percentage increased to 50%, while the MRI
affiliate and the physician group each received 25%. The
Partnership subsequently entered into an agreement whereby it
sold part of its interest in the center for $70,000. As a
result, the Partnership's 50% interest in distributable cash was
reduced to 43%. The Partnership had been receiving fixed
contractual priority distributions from its investment in the
Costa Mesa imaging center for the initial 84 months the facility
was in operation. This initial period expired in the first
quarter of 1993. A small monthly amount of priority
distributions due the Partnership for an equipment upgrade
expired in the fourth quarter of 1993. The Partnership no longer
received revenue from priority distributions from the facility
but continued to earn its distributable share of available cash
generated by the facility; however such amounts were less than
amounts historically received as priority distributions.
In order to comply with changes in the laws, ordinances and
regulations applicable to physician referrals and physician owned
facilities, the Costa Mesa physician group ("Hutton") has
assigned a portion of its interest in the Costa Mesa imaging
center to a third party unaffiliated with the Partnership and
the Costa Mesa joint venture redeemed the remaining portion of
Hutton's interest to the benefit of the MRI affiliate and the
Partnership, effective January 1, 1994. As consideration for the
redemption, the Costa Mesa joint venture paid Hutton $175,000 out
of receipts from the joint venture during 1994. As of January 1,
1994, the Partnership's interest in cash distributions, profits
and losses of the joint venture increased to 62.6% from its
previously entitled 43%.
Description of Discontinued Operations
The Partnership's Miami medical imaging facility experienced cash
flow difficulties. This condition continued despite the
Partnership's efforts to increase income and reduce costs. In
addition, the Partnership's numerous efforts to consummate a sale
of the facility were unsuccessful. As a result, and in light of
no foreseeable improvement in the operations, the center was
closed on July 27, 1994. In order to obtain a release of the
Partnership from any liabilities remaining under the facility's
lease, the Partnership assigned its imaging equipment to the
landlord, effective October 7, 1994. Also, on October 28, 1994
voluntary Chapter VII Bankruptcy petitions were filed for both
the limited partnership which owns the center, Mid-Miami
Diagnostics Limited Partnership. ("Mid-Miami L.P."), and its
general partner, Mid-Miami Diagnostics Inc. ("Mid-Miami Inc.").
Mid-Miami Inc. is wholly owned by the Partnership and the
Partnership owns a 98% limited partnership interest in Mid-Miami
L.P. The Partnership 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.
The Costa Mesa joint venture agreement and the lease for the
facility which houses the equipment owned by the Partnership both
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 has sold its interest in the joint venture, its
equipment, leasehold improvements and leasehold interest and
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 expects to be paid the $65,000 purchase price by
March 31, 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 have 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 has entered into a similar release agreement for
the benefit of CMR, MRI and the joint venture. The sale of the
equipment and leasehold improvements and leasehold interest have
been consummated as of the Effective Date. However, the sale of
the joint venture interest, as well as the releases (other than
the landlord release) referred to above, will only be effective
(as of the Effective Date)when the Partnership receives the
$65,000 purchase price. The landlord release under the center
lease is currently effective. Upon the consummation of the Costa
Mesa sale transaction, the Partnership expects to recognize a
gain of approximately $65,000.
The Partnership recorded its Medical Imaging Segment as a
discontinued operation on July 1, 1994. Together, the Miami and
Costa Mesa imaging centers constitute the Partnership's
discontinued Medical Imaging Segment. As of December 30, 1994,
the Partnership's liabilities of discontinued operations related
to its Medical Imaging Segment were comprised primarily of
accruals for closing, selling or otherwise liquidating the
facilities, totaling $221,164. Net liabilities of the Medical
Imaging Segment as of December 31, 1993 totaled $451,871 and were
comprised primarily of accounts receivable and trade accounts
payable.
<PAGE>
The income and expenses for the Medical Imaging Segment for the
years ended December 30, 1994, December 31, 1993 and December 25,
1992 were as follows:
December 30, December 31, December 25,
1994 1993 1992
Total revenues $ 844,007 $ 2,519,321 $ 3,072,606
Total expenses (1,036,364) (3,251,188) (3,352,624)
Loss from
discontinued
Medical Imaging
Segment operations
$ (192,357) $ (731,867) $ (280,018)
The 1994 loss from the discontinued Medical Imaging Segment
operations reflects activity for the first half of 1994 only as
the segment was classified as discontinued on July 1, 1994.
<PAGE>
5. NOTES PAYABLE - WINDPLANT
In December 1984 and September 1985, the Partnership issued the
Windplant Notes totaling $5,501,304 and $2,861,948, respectively,
in connection with the purchase of the Windplant. The Windplant
Notes bear interest at a rate of 9% and 13.49%, respectively, per
annum with interest and principal payable in fifteen equal annual
installments through September 25, 2000. At December 30, 1994,
the outstanding balances of the Windplant Notes were $2,654,630
and $1,790,882, respectively. Interest and principal are payable
only from cash generated by the operation of the Windplant. The
Windplant Notes are collateralized by a security interest in the
Windplant, the rights relating to the Windplant under certain
licenses to use the land on which the Windplant is located, two
Power Purchase Agreements, a Management Agreement and a
Maintenance Agreement, the Construction Contract and the warranty
thereunder, and any other assets of the Partnership relating to
the Windplant and all proceeds thereof. The Windplant Notes are
nonrecourse to the Partnership.
Under the terms of the Management and Maintenance Agreements, USW
can terminate the agreements if its fees are not paid. In
addition, the nonpayment of interest is considered a default
under the terms of the Windplant Notes and USW could commence
foreclosure procedures on the Windplant. The Partnership has
defaulted on interest payments due under the terms of the Notes
during 1990 through 1994. The management of USW has indicated
that they will not terminate the Management and Maintenance
Agreements, nor will they commence foreclosure proceedings
through 1995. See Note 4 regarding the discontinued operations
of the Windplant.
Future Principal Payments
At December 30, 1994, aggregate principal payments totaling
$4,445,512 related to the Partnership's Windplant are expected to
be repaid in 1995 upon the sale of the Windplant assets.
<PAGE>
6. TRANSACTIONS WITH GENERAL PARTNER
During the years ended December 30, 1994, December 31, 1993 and
December 25, 1992, the Partnership incurred the following fees
and expenses in connection with services provided by the General
Partner.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 1993 1992
Management Fees - 6% of
Distributable
Cash from Operations as
defined in the
Partnership Agreement $34,214 $52,239 $ 697
Administrative Costs $70,000 $70,000 $70,000
</TABLE>
7. SEGMENT INFORMATION
The Partnership's continuing operations are currently comprised
of only its equipment leasing segment. Accordingly, no separate
segment information is provided; however, refer to Note 4 for
additional information relating to the Partnership's discontinued
Alternative Energy Segment which is comprised of the
Partnership's Windplant operations and its discontinued Medical
Imaging Segment which is comprised of the Partnership's Miami and
Costa Mesa imaging facilities.
<PAGE>
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
The differences between the method of accounting used for income
tax reporting and the method of accounting used in the
accompanying consolidated financial statements are as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net (Loss) Income -
Financial Statements
$ (154,330) $(1,376,605) $ 441,300
Difference resulting
from:
Gain on disposal of
investment properties
464,910 2,880,278 582,672
Income and expense
recognition 34,214 52,239 (2,629)
Depreciation and
amortization 497,648 1,808,689 2,022,906
Income/(Loss) from
partnership/joint
venture investments 1,570,877 (151,740) (168,846)
Net Income - Income
Tax Method $ 2,413,319 $ 3,212,861 $ 2,875,403
Partners' Capital -
Financial Statements
$ 4,117,987 $ 5,728,441 $ 8,371,240
Difference resulting
from:
Offering costs 3,347,454 3,347,454 3,347,454
Gain on disposal of
investment properties
5,249,026 4,784,116 1,903,838
Income and expense
recognition (300,007) (334,221) (386,460)
Depreciation and
amortization (18,853,649) (19,351,297) (21,159,986)
</TABLE>
Continued on following page
<PAGE>
8. RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Income from
partnership/joint
venture
investments 4,438,129 2,867,252 3,018,992
Provision for loss
on impairment of
assets 8,050,000 8,050,000 8,050,000
Other 8,289 8,289 8,289
Partners' Capital -
Income Tax Method
$ 6,057,229 $5,100,034 $3,153,367
</TABLE>
<PAGE>
Schedule II
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
VALUATION AND QUALIFYING ACCOUNTS AS OF
DECEMBER 30, 1994, DECEMBER 31, 1993 AND DECEMBER 25, 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Additions
Balance at Charged to Retirements Balance at
Beginning Costs and and Other End of
Period of Expenses Changes Period
Period
Accumulated
Amortization
of Deferred
Costs:
1994 $321,949 $ 33,401 $(2,293) $353,057
1993 $294,362 $ 29,433 $(1,846) $321,949
1992 $265,406 $ 29,574 $ (618) $294,362
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None.
<PAGE>
Part III
Item 10. Directors and Executive Officers of the Registrant
Registrant has no executive officers or directors. The General
Partner manages the Registrant's affairs and has general
responsibility and authority in all matters affecting its
business. The directors and executive officers of the General
Partner are:
Served in Present
Capacity
Name Since (l) Position Held
Kevin K. Albert November 8, 1985 Director
Robert F. Aufenanger February 2, 1993 President
February 27, 1987 Director
Robert W. Seitz February 1, 1993 Director
February 2, 1993 Vice President
Steven N. Baumgarten February 2, 1993 Executive Vice
President
Michael A. Giobbe February 2, 1993 Vice President
David G. Cohen March 7, 1994 Treasurer
(1)Directors hold office until their successors are elected and
qualified. All officers serve at the pleasure of the Board
of Directors.
Kevin K. Albert, 42, a Managing Director of Merrill Lynch
Investment Banking Group ("ML Investment Banking"), joined
Merrill Lynch in 1981. Mr. Albert works in the Equity Private
Placement Group and is involved in structuring and placing a
diversified array of private equity financings including common
stock, preferred stock, limited partnership interests and other
equity-related securities. Mr. Albert is also a director of
Maiden Lane Partners Inc. ("Maiden Lane"), an affiliate of the
General Partner and the general partner of Liberty Equipment
Investors - 1983; a director of ML Media Management Inc. ("ML
Media"), an affiliate of the General Partner and a joint venturer
of Media Management Partners, the general partner of ML Media
Partners, L.P.; a director of ML Film Entertainment Inc. ("ML
Film"), an affiliate of the General Partner and the managing
general partner of the general partners of Delphi Film Associates
II, III, IV, V and ML Delphi Premier Partners, L.P.; a director
of ML Opportunity Management Inc. ("ML Opportunity"), an
affiliate of the General Partner and a joint venturer in Media
Opportunity Management Partners, the general partner of ML Media
Opportunity Partners, L.P.; a director of MLL Antiquities Inc.
("MLL Antiquities"), an affiliate of the General Partner and the
administrative general partner of The Athena Fund II, L.P.; a
director of ML Mezzanine Inc. ("ML Mezzanine"), an affiliate of
the General Partner and the sole general partner of the managing
general partner of ML-Lee Acquisition Fund, L.P.; a director of
ML Mezzanine II Inc. ("ML Mezzanine II"), an affiliate of the
General Partner and sole general partner of the managing general
partner of ML-Lee Acquisition Fund II, L.P. and ML-Lee
Acquisition Fund (Retirement Accounts) II, L.P.; a director of
Merrill Lynch Venture Capital Inc. ("ML Venture"), an affiliate
of the General Partner and the general partner of the Managing
General Partner of ML Venture Partners I, L.P. ("Venture I"), ML
Venture Partners II, L.P. ("Venture II"), and ML Oklahoma Venture
Partners Limited Partnership ("Oklahoma"); a director of Merrill
Lynch R&D Management Inc. ("ML R&D"), an affiliate of the General
Partner and the general partner of the General Partner of ML
Technology Ventures, L.P.; and a director of MLL Collectibles
Inc. ("MLL Collectibles"), an affiliate of the General Partner
and the administrative general partner of The NFA World Coin
Fund, L.P. Mr. Albert also serves as an independent general
partner of Venture I and Venture II.
Robert F. Aufenanger, 41, a Vice President of Merrill Lynch & Co.
Corporate Strategy, Credit and Research, and a Director of the
Partnership Management Department, joined Merrill Lynch in 1980.
Mr. Aufenanger is responsible for the ongoing management of the
operations of the equipment and project related limited
partnerships for which subsidiaries of ML Leasing Equipment
Corp., an affiliate of Merrill Lynch, are general partners. Mr.
Aufenanger is also a director of Maiden Lane, ML Media, ML Film,
ML Opportunity, MLL Antiquities, ML Venture, ML R&D, MLL
Collectibles, ML Mezzanine and ML Mezzanine II.
Robert W. Seitz, 48, a First Vice President of Merrill Lynch &
Co. Corporate Strategy, Credit and Research, and a Managing
Director within the Corporate Credit Division of Merrill Lynch,
joined Merrill Lynch in 1981. Mr. Seitz is the Private Client
Senior Credit Officer and is also responsible for the firm's
Partnership Management and Asset Recovery Management Departments.
Mr. Seitz is also director of Maiden Lane, ML Media, ML
Opportunity, ML Venture, ML R&D, ML Film, MLL Antiquities and MLL
Collectibles.
Steven N. Baumgarten, 39, a Vice President of Merrill Lynch & Co.
Corporate Strategy, Credit and Research, joined Merrill Lynch in
1986. Mr. Baumgarten shares responsibility for the ongoing
management of the operations of the equipment and project related
limited partnerships for which subsidiaries of ML Leasing
Equipment Corp., an affiliate of Merrill Lynch, are general
partners. Mr. Baumgarten is also a director of ML Film.
Michael A. Giobbe, 36, an Assistant Vice President of Merrill
Lynch & Co. Corporate Strategy, Credit and Research, joined
Merrill Lynch in 1986. Mr. Giobbe currently shares the
responsibility for managing the assets owned by the equipment and
project related limited partnerships for which subsidiaries of ML
Leasing Equipment Corp., an affiliate of Merrill Lynch, are
general partners.
David G. Cohen, 32, an Assistant Vice President of Merrill Lynch
& Co. Corporate Strategy, Credit and Research, joined Merrill
Lynch in 1987. Mr. Cohen's responsibilities include
controllership and financial management functions for certain
partnerships for which subsidiaries of ML Leasing Equipment
Corp., an affiliate of Merrill Lynch, are general partners.
Messrs. Aufenanger and Giobbe are executive officers of Mid-Miami
Diagnostics Inc. ("Mid-Miami Inc."). On October 28, 1994 both
Mid-Miami Inc. and Mid-Miami Diagnostics, L.P. filed voluntary
petitions for protection from creditors under Chapter 7 of the
United States Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York. See "Item 1.
Business-Medical Diagnostic Imaging Centers--Miami, Florida."
Item 11. Executive Compensation
Registrant does not pay the executive officers or directors of
the General Partner any remuneration. The General Partner does
not presently pay any remuneration to any of its executive
officers or directors. See Note 6 to the Financial Statements
included in Item 8 hereof, however, for sums paid by Registrant
to affiliates for the years ended December 30, 1994, December 31,
1993 and December 25, 1992.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Effective December 30, 1988, two of the three Initial Limited
Partners of the Registrant each with an interest in Registrant
equal in amount to one-tenth of one Unit, transferred such
interests to the General Partner. A third initial Limited
Partner with a interest in Registrant equal in amount to one-
tenth of one Unit still retains such interest. Therefore, in
addition to its interest in Registrant as general partner, the
General Partner also owns .2 Units. No officers or directors of
the General Partner own any units of Registrant.
To the knowledge of the General Partner, as of February 1, 1995,
officers and directors of the General Partner in aggregate own
less than .01% of the outstanding common stock of Merrill Lynch &
Co., Inc. the ultimate parent of the General Partner.
Item 13. Certain Relationships and Related Transactions
All of the directors of Registrant's General Partner are
executive officers of affiliates that have received fees for
services provided to Registrant as described in Note 6 to the
Financial Statements included in Item 8 hereof, and in Item 1.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) Financial Statements, Financial Statement Schedules
and Exhibits
Financial Statements and Financial Statement
Schedules
See Item 8."Financial Statements and Supplementary Data - Table
of Contents."
<TABLE>
<CAPTION>
<S> <C> <C>
Incorporated by
Exhibits Reference to _
3.1 Agreement and Certificate Exhibit 3.1 to Form S-1
of Limited Partnership, Registration Statement
dated as of July 10, (File No. 2-92174).
1984.
3.2 Restated Agreement and Exhibit 3.2 to 1984 Form
Certificate of Limited 10-K Report (File No. 2-
Partnership, dated 92174)
December 11, 1984.
4.1 Agreement to Act as Exhibit 4.2 to 1993 Form
Depositary dated as of 10-K Report
January 1, 1993 between (File No. 0-13080)
Registrant, Security
Pacific National Trust
Company and Bank of New
York.
10.1 Windplant Construction Exhibit 10.1 to Form 8
Contract, dated as of dated January 10, 1985
November 27, 1984, amending Form 8-K Report
between Registrant and dated December 11, 1984
U.S. Windpower, Inc. (File No. 2-92174).
("USW").
10.2 Assignment of Power Exhibit 10.2 to Form 8
Purchase Agreements, dated January 10, 1985
dated as of December 12, amending Form 8-K Report
1984 between Registrant dated December 11, 1984
and USW. (File No. 2-92174).
10.3 License, dated as of Exhibit 10.3 to Form 8
December 12, 1984 dated January 10, 1985
between Registrant and amending Form 8-K Report
USW. dated December 11, 1984
(File No. 2-92174).
10.4 Management Agreement, Exhibit 10.4 to Form 8
dated as of December 12, dated January 10, 1985
1984 between Registrant amending Form 8-K Report
and USW. dated December 11, 1984
(File No. 2-92174).
10.5 Maintenance Agreement, Exhibit 10.5 to Form 8
dated as of December 12, dated January 10, 1985
1984 between Registrant amending Form 8-K Report
and USW. dated December 11, 1984
(File No. 2-92174).
10.6 Notification of Extension Exhibit 10.6 to 1993 Form
of Partnership Documents 10-K Report
(Management Agreement, (File No. 0-13080)
Maintenance Agreement,
and Licenses to which
Registrant and USW are
both parties) dated
February 13, 1992.
10.7.1 Trailer Lease Agreement, Exhibit 10.8 to Form 8
dated as of December 12, dated January 10, 1985
1984, between Registrant amending Form 8-K Report
and Transamerica. dated December 11, 1984
(File No. 2-92174).
10.7.2 Amendment Agreement to Exhibit 10.6.1 to 1987
Trailer Lease Agreement Form 10-K report
between Registrant and (File No. 0-13080).
Transamerica dated June
23, 1987.
10.7.3 Second Amendment to Exhibit 10.6.3 to 1001
Trailer Lease Agreement Form 10-K Report
between Registrant and (File No. 0-13080).
Transamerica dated
August 7, 1991.
10.8.1 Trailer Lease Agreement, Exhibit 10.1 to Form 10-Q
dated as of June 1, 1986 Report for the quarter
between Registrant and ended June 27, 1986
Perishable Shippers (File No. 0-13080).
Association.
10.8.2 Equipment Lease between Exhibit 10.1 to Form 10-Q
Registrant and Report for the quarter
Intermodal Express, Inc. ended March 31, 1989
(File No. 0-13080).
10.8.3 Second Amendment to Exhibit 10.7.3 to 1991
Equipment Lease Form 10-K Report
Agreement between (File No. 0-13080).
Registrant and
Intermodal dated January
2, 1991.
10.8.4 Equipment Lease between Exhibit 10.1 to Form 10-Q
Registrant and Jontri Report for the quarter
Transportation Company, ended June 30, 1989
Inc. (File No. 0-13080).
10.8.5 First Amendment to Exhibit 10.2 to Form 10-Q
Trailer Lease Agreement Report for the quarter
between Registrant and ended June 29, 1990
Jontri Transportation (File No. 0-13080).
Co., Inc. dated June 1,
1990.
10.8.6 Equipment Lease between Exhibit 10.2 to Form 10-Q
Registrant and Report for the quarter
Interfresh, a Division of ended June 30, 1989
Bruce Church, Inc. (File No. 0-13080).
10.8.7 First Amendment to Exhibit 10.1 to Form 10-Q
Trailer Lease Agreement Report for the quarter
between Registrant and ended June 19, 1990
Interfresh, a Division (File No. 0-13080).
of Bruce Church Inc.
dated February 28, 1990.
10.9.1 Management Agreement, Exhibit 10.12 to Form 8
dated December 12, 1984, dated January 10, 1985
between Registrant and amending Form 8-K Report
BRAE Intermodal dated December 11, 1984
Corporation ("BIC"). (File No. 2-92174).
10.9.2 Amendment Agreement, Exhibit 10.3 to Form 10-Q
dated as of June 1, 1986 Report for the quarter
to Management Agreement ended June 27, 1986
between Registrant and (File No. 0-13080).
Greenbrier Capital
Corporation ("GCC")
formerly BIC.
10.9.3 Second Amendment Exhibit 10.10.1 to 1987
Agreement, dated as June Form 10-K Report
23, 1987 to Management (File No. 0-13080).
Agreement between
Registrant and GCC.
10.9.4 Third Amendment to Exhibit 10.8.4 to 1001
Management Agreement form 10-K Report
between Registrant and (File No. 0-13080).
GCC dated September 16,
1991.
10.10.1 Container Purchase and Exhibit 10.13 to Form 8
Leaseback Contract, dated January 10, 1985
dated December 12, 1984, amending Form 8-K Report
between Registrant and dated December 11, 1984
Trans Ocean Ltd. (File No. 2-92174).
("TOL").
10.10.2 Container Purchase and Exhibit 10.14 to Form 8
Leaseback Contract, dated January 10, 1985
dated December 12, 1984, amending Form 8-K dated
between Registrant and December 11, 1984
Trans Ocean Finance (File No. 2-92174).
Corporation ("TOFC").
10.10.3 Container Sales Agency Exhibit 10.15 to Form 8
Agreement, dated dated January 10, 1985
December 12, 1984, amending Form 8-K report
between Registrant and dated December 11, 1984
TOL. (File No. 2-92174).
10.10.4 Pooling and Agency Exhibit 10.16 to Form 8
Agreement, dated dated January 10, 1985
December 12, 1984 amending Form 8-K report
between Registrant and dated December 11, 1984
TOL. (File No. 2-92174).
10.11 Management Agreement Exhibit 10.10 to 1991
effective August 21, Form 10-K Report
1991 between Continental (File No. 0-13080).
Asset Services Inc. and
Registrant.
10.12.1 Loan Agreement, dated as Exhibit 10.19 to 1984
of December 11, 1984, Form 10-K Report
between Registrant and (File No. 2-92174).
the First National Bank
of Minneapolis ("First
Minneapolis").
10.12.2 Amendment No. 1, dated as Exhibit 10.4 to Form 10-Q
of July 1, 1986 to Loan Report for the quarter
Agreement between ended June 27, 1986
Registrant and First (File No. 0-13080).
Minneapolis.
10.12.3 Amendment to Loan Exhibit 10.1 to form 10-Q
Agreement (Trailer Report for the quarter
Financing) between ended June 27, 1986
Registrant and First (File No. 0-13080).
Bank National
Association dated July
1, 1989.
10.12.4 Security Agreement, dated Exhibit 10.20 to 1984
as of December 11, 1984, Form 10-K Report
between Registrant and (File No. 2-92174).
First Minneapolis.
10.13 Joint Venture Agreement Exhibit 2.1.2 to Form 10-
among Registrant, Costa Q Report for the quarter
Mesa Resources Inc. ended June 28, 1985
("CMR") and Other (File No. 0-13080).
Investor.
10.14 Management Agreement Exhibit 2.1.3 to Form 10-
between Registrant and Q Report for the quarter
CMR. ended June 28, 1985
(File No. 0-13080).
10.15 Sublease Agreement Exhibit 10.21.4 to 1990
between Registrant and Form 10-K Report
MIW. (File No. 0-13080).
10.16 Mid-Miami Diagnostics Exhibit 10.22.2 to 1989
Limited Partnership Form 10-K Report
Limited Partnership (File No. 0-13080).
Agreement, dated August
1, 1989, among
Registrant, Mid-Miami
Diagnostics Limited
Partnership, and Other
Investor.
10.17 Equipment Lease, dated Exhibit 10.22.3 to 1989
August 1, 1989, between Form 10-K Report
Registrant and Mid-Miami (File No. 0-13080).
Diagnostics Limited
Partnership ("MMDLP").
10.18.1 Lease Agreement dated Attached to Exhibit 2.1.2
January 4, 1984 between to Form 10-Q Report for
Landlord and Mid-Miami the quarter ended June
Asset Management 28, 1985
Associates, L.P. (File No. 0-13080).
("MMAM").
10.18.2 Assignment of Lease from Attached to Exhibit 2.1.2
MMAM to Registrant dated to Form 10-Q Report for
June 18, 1985. the quarter ended June
28, 1985
(File No. 0-13080).
10.18.3 Real Property Sublease, Exhibit 10.22.4 to 1989
dated August 1, 1989, Form 10-K Report
between Registrant and (File No. 0-13080).
MMDLP.
10.18.4 Addendum dated February Exhibit 10.18.4 to 1993
28, 1991 to lease dated Form 10-K Report
January 4, 1984, between (File No. 0-13080)
Landlord and MMAM.
10.18.5 Letter Agreement between
Registrant and Landlord
regarding Landlord
release and sale of
equipment related to
MMDLP dated October 7,
1994
10.19 Letter from Registrant, Exhibit 10.23.1 to 1989
dated April 25, 1989, to Form 10-K Report
Mid-Miami terminating (File No. 0-13080).
Management Agreement.
10.20.1 Loan Agreement, dated as Exhibit 10.32 to 1985
of June 3, 1985, as Form 10-K Report
amended, between (File No. 0-13080).
Registrant and First
Minneapolis.
10.20.2 Amendment to Loan Exhibit 10.3 to Form 10-Q
Agreement (Bus Report for the quarter
Financing) between ended June 30, 1989
Registrant and First (File No. 0-13080).
Bank National
Association dated June
16, 1989.
10.20.3 Second Amendment to Loan Exhibit 10.24.3 to 1991
Agreement and Consent Form 10-K Report (File
between Registrant and No. 0-13080).
first Bank dated August
20, 1991.
10.21 Security Agreement, dated Exhibit 10.33 to 1985
as of June 3, 1985 Form 10-K Report
between Registrant and (File No. 0-13080).
First Minneapolis.
10.22.1 Loan Agreement, dated as Exhibit 10.34 to 1985
of December 24, 1985, form 10-K Report
between Registrant and (File No. 0-13080).
U.S. concord, Inc.
10.22.2 First Amendment to Loan Exhibit 10.4 to Form 10-Q
Agreement between Report for the quarter
Registrant and U.S. ended June 30, 1989
Concord, Inc. dated (File No. 0-13080).
October 7, 1988.
10.23 Security Agreement dated Exhibit 10.35 to 1985
as of December 24, 1985, Form 10-K Report
between Registrant and (File No. 0-13080).
U.S. Concord, Inc.
10.24 Credit Agreement, dated Exhibit 10.36 to 1985 10-
as of February 5, 1985, K Report
between Registrant and (File No. 0-13080).
U.S. Steel Credit
Corporation ("USSCC").
10.25 Security Agreement, dated Exhibit 10.37 to 1985
as of February 5, 1985, Form 10-K Report
between Registrant and (File No. 0-13080).
USSCC.
10.26 Subordination Agreement, Exhibit 10.38 to 1985
dated as of February 5, Form 10-K Report
1985, among Registrant, (File No. 0-13080).
Trans Ocean Ltd. and
USSCC.
10.27 Secured Sales contracts Exhibit 10.47 to 1986
dated July 14, 1986 Form 10-K Report
between Registrant and (File No. 0-13080).
Siemens Medical Systems,
Inc.
10.28 Amendment to Promissory Exhibit 10.33 to 1989
Note, between Registrant Form 10-K Report
and Siemens Credit (File No. 0-13080).
Corporation.
10.29 Assignment, Assumption Incorporated herein by
and Amendment Agreement reference to Exhibit 10.1
dated November 6, 1992, to Registrant's Form 8
by and between TMO Amendment to its
Acquisition Corporation, Quarterly Report on Form
Hausman Bus Sales, Inc. 10-Q for the quarter
and Continental Asset ending September 25,
Services, Inc. 1992, dated November 20,
1992 (File No. 0-13080).
10.30 Agreement dated February
20, 1995 between CMR and
Registrant
10.31 Assignment of Lease Attachment A to Exhibit
Agreement dated February 10.30 of this filing
20, 1995 between
Registrant and Prime
Health Care Network,
Inc.
10.32 Consent to Assignment of
Lease dated February 20,
1995 among Registrant,
Prime and Tobishima
Development Company,
Inc.
27.0 Financial Data Schedule
to Form 10-K Report for
the fiscal year ended
December 30, 1994.
28.1 Pages 17 through 34 of Prospectus dated
Prospectus, dated September 11, 1984, filed
September 11, 1984, pursuant to Form 424(b)
filed pursuant to Rule under the Securities Act
424(b) under the of 1933, as supplemented
Securities Act of 1933, (File No. 2-92174).
as supplemented (5).
</TABLE>
(b) Reports on form 8-K.
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of l934, the 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: March 29, 1995 /s/ Robert F. Aufenanger
Robert F. Aufenanger
President
Pursuant to the requirements of the Securities Exchange Act of
l934, this report has been signed below by the following persons
on behalf of the Registrant in the capacities and on the dates
indicated.
Signature Title Date
/s/ Kevin K. Albert Director of the General March 29, 1995
(Kevin K. Albert) Partner
/s/ Robert F. Aufenanger Director and President March 29, 1995
(Robert F. Aufenanger) of the General Partner
(chief executive
officer)
/s/ Robert W. Seitz Director and Vice March 29, 1995
(Robert W. Seitz) President of the
General Partner
/s/ David G. Cohen Treasurer of the March 29, 1995
(David G. Cohen) General Partner (chief
accounting officer and
chief financial
officer)
[ARTICLE]
[LEGEND] EXHIBIT 10.18.5 TO 1994 10-K
October 7, 1994
Mrs. Theresa N. Ashkar
Carlos Salman Management
1405 S.W. 107 Avenue
Suite 301B
Miami, FL 33174
Dear Mrs. Ashkar:
This letter will confirm the agreement we have reached with
respect to the premises located at 2975 Coral Way, Miami, Florida
33145 (the "Premises") and the Lease Agreement dated January 1,
1984, as amended and extended (the "Center Lease") between
Liberty and MMDLP and landlord (as those terms are hereinafter
defined) related to the Premises. As used in this letter, the
words "we", "our", and "us" refers to Liberty Equipment Investors
L.P.-1984, a limited partnership organized under the laws of the
State of Delaware ("Liberty") and Mid-Miami Diagnostics, L.P., a
limited partnership organized under the laws of the State of
Delaware ("MMDLP") and the words "you" and "your" refers to Fuad
S. Ashkar, Theresa N. Ashkar, Carlos Salman, and Gudelia Salman
as landlord of the Premises ("Landlord"). As used herein, the
term "Personal Property" means all of the equipment, personal
property and fixtures located on the Premises. This letter
supersedes all of our previous discussions concerning the subject
matter hereof and represents our entire agreement with respect
thereto.
Except as otherwise provided herein, we acknowledge that you have
a Landlord's lien and security interest in all of the MMDLP
property now placed in or upon the premises, and that such
property is subject to the lien and security interest of Landlord
for the payment of all rent and other sums agreed to be paid
under the Center Lease.
We and you agree that, in consideration of your valid Landlord's
lien and your agreement to release Liberty and MMDLP and the
Liberty/MMDLP Affiliated (as hereinafter defined), and in
acknowledgment that MMDLP is in default of the lease agreement,
we hereby transfer all of our right, title and interest in and to
the Personal Property located on the Premises in full settlement,
release and discharge of any and all claims that you have or may
have against Liberty or MMDLP or any shareholder, partnership or
affiliate of either, or any directors, officers, shareholders,
representatives, affiliates, partners or agents of any of the
foregoing (collectively, the "Liberty/MMDLP Affiliates") in
connection with MMDLP's occupation of the Premises including,
without limitation, any claims that you may have against Liberty,
MMDLP, or any Liberty/MMDLP Affiliate arising under or in any way
connected with the Center Lease. You understand and acknowledge
that, except as otherwise provided herein, the above-described
Personal Property is being transferred "as is" and "where is" and
that we are not making any warranties or representations
whatsoever with respect to the Personal Property, provided,
however, that we represent, warrant, covenant and agree that we
own the Personal Property free and clear of all liens, material
leases or security interests of other parties or entities. We
agree to indemnify you and hold you harmless from and against any
and all liabilities, claims, demands, costs and expenses of every
kind and nature (including reasonable attorneys' fees) should
this warranty and representation not be correct. It is
understood and agreed that your Landlord's lien will not merge in
title with the Personal Property but will be continuing and
survive the execution of this Agreement.
This will also confirm that you accept the above-described
Personal Property on the terms and conditions set forth and that
your acceptance of the above-described Personal Property, except
as otherwise provided herein, is in full settlement, release and
discharge of any and all claims, liabilities and obligations of
Liberty and MMDLP and/or any Liberty/MMDLP Affiliate under the
Center Lease, whether as "Tenant" or otherwise, including,
without limitation, any obligation to pay rent under the Center
Lease or to restore the premises.
This Agreement may be executed in any number of counterparts
which together shall be but one and the same document. As soon
as this document is executed by all of the parties hereto, it
shall automatically become effective and the transfer of title to
the equipment and the release referred to above shall thereupon
become effective without further action by any party hereto.
Attached hereto as Composite Exhibit "A:, are the following, each
duly executed and dated, in form and substance reasonably
satisfactory to you:
(1) Resolutions. Certified copies of resolutions of our Board
of Directors and/or General Partners as appropriate, authorizing
the execution, delivery and performance of this Agreement, and
nay other documents provided for in this Agreement otherwise
necessary for the performance of this Agreement.
(2) A letter from Liberty confirming that Liberty owns a Siemens
MRI System, a Siemens CT Scanner, a Siemens R/F System, and a
Diasonics Peripheral Vascular System and that, to the extent such
equipment is located on the Premises, Liberty is transferring
title to the Landlord.
In consideration of the foregoing, we hereby release and
discharge you from any and all claims that we have or may have
against you in connection with the Center Lease and your
ownership of the Premises.
Each of the parties hereto agree to take any additional actions,
including the execution and delivery of any additional documents
necessary or desirable in the reasonable opinion of another party
hereto, to effectuate the provisions and spirit of this
Agreement.
Each of the parties hereto expressly represents and warrants to
the other that there are no other understandings or agreements
relating to the matters and things set forth herein other than
those expressly set forth herein. Each of the parties or persons
executing this letter agreement also expressly represents and
warrants to the other parties to this letter agreement that he or
she is authorized and empowered to execute this letter agreement.
<PAGE>
Liberty Equipment Investors, LP-1984
Witnesses:
By: Whitehall Partners, Inc.
its General Partner
By: /s/ Michael Giobbe
Title: Vice President
MID-MIAMI DIAGNOSTICS, L.P.
By: Mid-Miami Diagnostics, Inc.
its General Partner
By: /s/ Michael Giobbe
Title: Vice President
<PAGE>
Consented and Agreed to:
Witnesses: Fuad S. Ashkar, Theresa N. Ashkar,
Carlos Salman, and Gudelia Salman in
their capacity as Landlord
of the Premises
FUAD S. ASHKAR
THERESA N. ASHKAR
CARLOS SALMAN
GUDELIA SALMAN
[ARTICLE]
[LEGEND] EXHIBIT 10.30 TO 1994 10-K
THIS AGREEMENT is made and entered into as of this 20th
day of February, 1995 between Costa Mesa Resources, Inc. ("Costa
Mesa"), a corporation organized and existing under the laws of
the State of Delaware, and Liberty Equipment Investors L.P. -
1984 ("Liberty"), a limited partnership organized and existing
under the laws of the State of Delaware.
WHEREAS, Costa Mesa, Liberty and Irvine Coast Magnetic
Resonance Medical Group, a California general partnership
consisting of professional corporations (as the successor in
interest to Hutton Centre Magnetic Imaging) ("Irvine") are
parties to a joint venture operating under the name of "Costa
Mesa Services Group" pursuant to an agreement dated as of the
23rd day of May, 1985 (the "Joint Venture");
WHEREAS, the Joint Venture expects to enter into an
agreement (the "Asset Agreement") in the form of Exhibit A hereto
providing for the sale of substantially all of its assets,
including certain of the assets being sold by Liberty to Costa
Mesa pursuant hereto, to Prime Care Health Network, Inc.
("Prime"); and
WHEREAS, Costa Mesa desires to (a) acquire Liberty's
interest in the Joint Venture and the leasehold interest,
leasehold improvements and equipment of Liberty, the use of which
is currently contributed to the Joint Venture, and (b) to
contribute the leasehold interest, the leasehold improvements and
the equipment to the Joint Venture in order to enable the Joint
Venture to fulfill its obligations under the Asset Agreement, and
the parties desire to settle all other matters.
NOW, THEREFORE, in consideration of the foregoing and
for other good and valuable consideration, the parties hereby
agree to the following:
1. Liberty hereby sells and assigns all its right,
title and interest in the Joint Venture (the "Joint Venture
Interest"), the leasehold interest relating to the Joint
Venture's facility, the use of which is currently contributed to
the Joint Venture (as set forth in that certain lease dated
November 1, 1992 between Liberty and Tobishima Development
Company, Inc., the "Lease"), and all equipment and leasehold
improvements owned by Liberty, the use of which is currently
contributed to the Joint Venture (the "Equipment and
Improvements"), together in each case with all contracts,
insurance policies and licenses, if any, and all obligations
related thereto, whether arising prior to, on or after the date
hereof (collectively, the "Interest") to Costa Mesa for an
aggregate purchase price of $65,000 less any amounts received by
Liberty as a return of its security deposit under the Lease. In
evidence of the assignment of the Lease referenced above, Liberty
will enter into an Assignment of Lease in the form annexed hereto
as Attachment A, with the Joint Venture or with Prime, as Costa
Mesa's designee. The parties acknowledge that all assignments
are being made as an accommodation to enable the Joint Venture to
meet its obligations under the Asset Agreement and that such
assignments shall not be characterized as contributions to the
capital of the Joint Venture or have any effect on allocations of
profit or loss or on distributions made by the Joint Venture.
2. In evidence of the assignment of the Lease,
Equipment and Improvements by Costa Mesa to the Joint Venture,
Costa Mesa will enter into an Assignment Agreement, in the form
annexed hereto as Attachment B, with the Joint Venture.
3. This Agreement shall be effective upon execution
of the Asset Agreement and the consideration set forth in
paragraph 1 shall be paid by Costa Mesa to Liberty three days
after the date on which Costa Mesa receives payment from Prime
(the "Prime Payment") pursuant paragraph 1(a) of the Asset
Agreement. Notwithstanding the foregoing, if (a) Prime has not
arranged for an assignment of the Lease as of the date of the
execution of the Asset Agreement which provides for a full
release of Liberty from any obligations thereunder, or (b) the
Asset Agreement is not executed on or before February 21, 1995,
or (c) the Prime Payment is not received by April 1, 1995, then,
in any of such events, this Agreement shall be null and void and
of no further force or effect and neither party shall have any
obligation to the other hereunder except that each party agrees
to take all reasonable action to cause the Joint Venture to
pursue its remedies against Prime. Notwithstanding the
foregoing, the assignment of the Lease, the Equipment and the
Improvements shall remain in full force and effect upon
satisfaction of the conditions set forth in clauses (a) and (b)
above, even if the condition in clause (c) is not satisfied.
4. Each party hereby represents and warrants to the
other that it has authority to enter into this Agreement; that
this Agreement has been duly authorized, executed and delivered
by it; and that this Agreement constitutes its valid and binding
obligation, enforceable in accordance with its terms. Liberty
represents and warrants that it (a) has made no prior transfer or
assignment of all or any portion of the Joint Venture Interest or
of any of its rights under the Joint Venture Agreement, and (b)
has incurred no obligation in the name or on behalf of the Joint
Venture, except such as have been disclosed to Costa Mesa in
writing or as required by the terms of the Lease. Costa Mesa
represents and warrants that it has obtained, or as of the
effective date hereof will have obtained, all consents and
approvals as shall be necessary to consummate the transactions
contemplated by this Agreement and the Asset Agreement, including
without limitation, any consents of governmental or regulatory
authorities, as well as Irvine and any entities doing business
with the Joint Venture.
5. Costa Mesa hereby agrees to indemnify and hold
Liberty harmless from and against all past, current and future
claims and liabilities of the Joint Venture or incurred by
Liberty in connection with the Joint Venture or as the result of
being a venturer therein or otherwise related to the Interest,
including, without limitation, any obligation to restore any
negative balance in its capital account, any claim or obligation
related to any disputed distributions heretofore made by the
Joint Venture or any obligations pursuant to the Lease or in
connection with the Equipment and Improvements, except for
payments under the Lease (including, without limitation, any
obligation to restore the premises under the Lease to their
original condition) due through the date on which the Asset
Agreement is executed by Prime, which payments will be made by
Liberty out of funds advanced to Liberty by Costa Mesa for this
purpose. Without limitation of the foregoing, Costa Mesa will
reimburse Liberty or will cause the Joint Venture to reimburse
Liberty for all costs related to the Lease until such time as it
is released by the landlord from all obligations under the Lease.
6. Any notice given under this Agreement shall be in
writing and shall be deemed to have been properly given when
delivered personally or sent by prepaid certified mail, return
receipt requested, or delivered by facsimile transmission
(receipt confirmed), to the addresses set forth on the signature
page of this Agreement, with copies by certified mail or
facsimile transmission (which copies shall not be deemed to be
notice hereunder), in the case of Costa Mesa to Hutton Ingram
Yuzek Gainen Carroll & Bertolotti, 250 Park Avenue, New York, New
York 10177, Attn: Paulette Kendler, Telecopier No. (212) 907-
9682, Brown & Wood, One World Trade Center, New York, New York
10048, Attn: Susan D. Lewis, Telecopier No. (212) 839-5599. The
date of service shall be deemed to be the date on which said
notice was personally delivered or delivered by facsimile
transmission (receipt confirmed) or three days after posted by
U.S. mail, prepaid. Either party may give written notice of a
change of address, and after notice of such change has been
received, any notice shall be given as above provided at such
changed address.
7. This Agreement will be governed and construed in
accordance with the laws of the State of New York, without regard
to its law of conflicts.
8. This Agreement constitutes the entire
understanding between the parties as to the subject matter
hereof; all prior agreements, drafts, representations,
statements, negotiations and undertakings are superseded hereby.
No amendment to this Agreement shall be effective unless it is in
writing and signed by all of the parties hereto.
9. Since it is the agreement and desire of the
parties hereto that the provisions of this Agreement be enforced
to the fullest extent possible under the laws and public policies
applied in each jurisdiction in which enforcement is sought,
should any particular provision of this Agreement be deemed
invalid or unenforceable, the same shall be deemed reformed and
amended to delete that portion that is adjudicated to be invalid,
and the deletion shall apply only with respect to the operation
of said provision and to the extent of said provision.
10. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and
all of which taken together shall be deemed to be one and the
same instrument.
11. Each of the parties hereto agrees to execute and
deliver such documents and instruments and to take such further
actions as may be reasonably requested to effectuate the purposes
of this Agreement.
12. Each of the parties hereto will execute and Costa
Mesa will cause the Joint Venture to execute and deliver to an
Escrow Agent, on the date of execution of this Agreement, a
release of all claims against the other, the Joint Venture, and
each parent, subsidiary and other affiliate of the other, related
to the ownership, management or other participation, or otherwise
related in any way to, the Joint Venture, the Equipment and
Improvements or the Lease, or the operation of the foregoing, as
well as any claims for $497,000 asserted in a letter dated
January 3, 1990 from Liberty to Medical Resources, Inc., except
for claims arising out of this Agreement. Upon payment of the
$65,000 pursuant to paragraph 2, the Escrow Agent shall deliver
the releases to the beneficiaries thereof. If however, this
Agreement is terminated, each release shall be returned by the
Escrow Agent to the party who executed it.
13. The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and the
respective successors of each Liberty and Costa Mesa.
<PAGE>
IN WITNESS WHEREOF, the parties have caused this
Agreement to be duly executed in their names.
COSTA MESA RESOURCES, INC.
By:___________________________
Name:
Title:
Address: c/o Medical Resources, Inc.
1339 Broad Street
Clifton, NJ 07013
Telecopier No.: (201) 773-9092
LIBERTY EQUIPMENT INVESTORS L.P. - 1984
By: Whitehall Partners Inc.
General Partner
By:___________________________
Name:
Title:
Address: c/o Whitehall Partners Inc.
World Financial Center
South Tower - 14th Floor
New York, NY 10080-6114
Telecopier No.: (212) 236-6587
<PAGE>
The undersigned, Medical Resources, Inc., a Delaware corporation
and the sole stockholder of Costa Mesa, hereby unconditionally
guarantees the obligations of Costa Mesa pursuant to paragraph 5
of the foregoing Agreement.
MEDICAL RESOURCES, INC.
By:___________________________
Name:
Title:
Address: 1339 Broad Street
Clifton, NJ 07013
Telecopier No.: (201) 773-9092
[ARTICLE]
[LEGEND] EXHIBIT 10.31 TO 1994 10-K
ATTACHMENT A
ASSIGNMENT OF LEASE AGREEMENT
ASSIGNMENT OF LEASE AGREEMENT dated as of February 20,
1995 by and between Liberty Equipment Investors L.P.-1984, a
limited partnership organized under the laws of the state of
Delaware ("Liberty"), and Prime Care Health Network, Inc., a
Nevada corporation (the "Prime").
WITNESSETH
WHEREAS, pursuant to an agreement of even date herewith
(the "Purchase Agreement") between Liberty and Costa Mesa
Resources, Inc. ("Costa Mesa"), Liberty has agreed to assign to
Costa Mesa and/or Costa Mesa Services Group ("Group") or Prime,
as their designee, Liberty's right, title and interest to and
obligations under a certain lease dated November 1, 1992 (the
"Lease") between Liberty and Tobishima Development Company, Inc.
("Landlord"), and Costa Mesa has agreed to assume or cause such
designee to assume all obligations under the Lease; and
WHEREAS, Costa Mesa and Group have designated Prime as
their designee for purposes of the aforementioned assignment and
Prime has agreed to take such assignment and assumption;
NOW THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows:
1. Assignment. For valuable consideration, the
receipt of which is hereby acknowledged, Liberty hereby assigns
to Prime any and all of its right, title and interest in the
Lease and any and all of its obligations thereunder. Prime
hereby accepts the assignment of the Lease, assumes all of
Liberty's obligations under the Lease and agrees to fulfill all
of the duties and obligations imposed upon Liberty under the
Lease, whether arising prior to, o, or after the date hereof.
2. Consent of Landlord; Release. This Assignment of
Lease Agreement shall not be effective until the Lessor has
consented hereto and released Liberty from all obligations under
the Lease (including, without limitation, any obligation to
restore the leasehold premises to their original condition),
whether occurring prior to, on or after the date hereof.
3. Counterparts. This Assignment of Lease Agreement
may be executed in any number of counterparts which together
shall be but one and the same instrument.
4. Amendment. This Assignment of Lease Agreement may
not be amended except in writing in an instrument executed by the
party or parties to be charged.
5. Governing Law. This Assignment of Lease Agreement
shall be governed by and construed in accordance with the laws of
the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment of Lease Agreement to be executed by their duly
authorized officers as of the day and year first above written.
LIBERTY EQUIPMENT INVESTORS L.P.-1984
By: Whitehall Partners Inc.
its General Partner
By:___________________________
Title:
PRIME CARE HEALTH NETWORK, INC.
Clifton, NJ 07013
By:___________________________
Title:
Agreed to and Acknowledged as of the
day and year first above written:
COSTA MESA RESOURCES, INC.
By:___________________________
Title:
COSTA MESA SERVICES GROUP
By: Costa Mesa Resources, Inc.
Manager
By:___________________________
Title:
[ARTICLE]
[LEGEND] EXHIBIT 10.32 TO 1994 10-K
CONSENT TO ASSIGNMENT OF LEASE
THIS CONSENT TO ASSIGNMENT OF LEASE ("Consent") is made
and entered into as of this ____ day of __________, 1995, by and
among Liberty Equipment Investors, L.P.-1984, a Delaware Limited
Partnership as assignor ("Assignor"), Prime Care Health Network,
Inc., a Nevada corporation as assignee ("Assignee"), and
Tobishima Development Company, Inc., a California corporation
("Landlord").
R E C I T A L S
A. Landlord, as Lessor, and Assignor as Lessee, are
parties to a lease dated November 1, 1992 ("Lease"), pursuant to
which Landlord leased to Assignor and Assignor leased from
Landlord those certain premises (the "Premises") more
particularly described in the Lease. A copy of the Lease is
attached hereto and incorporated herein as Exhibit "A".
B. Assignor desires Landlord's consent to Assignor's
assignment to Assignee of all of Assignor's right, title and
liabilities interest in the Lease.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained and for other good and
valuable consideration, the receipt and sufficiency of which the
parties hereby acknowledge, the parties hereto agree as follows:
1. Assignor's Covenants. Assignor hereby agrees:
(a) Deleted.
(b) Deleted.
(c) that it shall not have any right to take
possession of the Premises without the prior written
consent of Landlord; and
(d) that it is, by a separate ("Assignment
Agreement") with Assignee, assigning to Assignee all of
Assignor's right, title and interest in and obligations
under the Lease, other than the security deposit, and
(e) that it has not failed to disclose to
Landlord any information reasonably requested by
Landlord in connection with its granting consent to the
assignment.
2. Assignee's Covenants. Assignee hereby agrees:
(a) that it has accepted the assignment made
under the Assignment Agreement;
(b) to perform and be bound by all of the terms
and conditions of the Lease and any amendments thereto
as though Assignee was the original Lessee under the
Lease;
(c) that its address for receipt of notices
under the Lease is:
Prime Care Health Network, Inc.
201 E. Sandpointe Avenue, Suite 130
Santa Ana, CA 92707
(d) the Landlord has not made any express or
implied oral or written representation of promise that:
(i) future assignments will be approved;
(ii) Assignee will enjoy financial success
in operating any business on the Premises; or
(iii) it will grant an extension of the
Term or enter into any other modification of the
Lease;
(e) that it has been provided with a copy of the
Lease, together with all amendments thereto, if any,
and that it has read the Lease and all amendments and
fully understands its obligations as Lessee under the
Lease.
(f) see below by signature block.
3. Landlord's Consent. For valuable consideration,
including the agreements, acknowledgments, and representations of
Assignor and Assignee set forth above, Landlord hereby consents
to Assignor's assignment to Assignee of all of Assignor's right,
title and interest in the Lease upon and subject to the foregoing
terms and conditions.
See a.) and b.) below by signature block.
4. Miscellaneous.
(a) Attorney's Fees. The provisions of the
Lease respecting attorney's fees shall apply to this
Consent or, if the Lease does not contain an attorney's
fees clause, then if legal action shall be commenced to
enforce or declare the effect of any provision of this
Consent or of the Lease, the court as part of its
judgment shall award reasonable attorney's fees and
costs to the prevailing party.
(b) Authority to Execute Agreement. Each
individual executing this Consent on behalf of a
partnership or corporation represents that he or she is
duly authorized to execute and deliver this Consent on
behalf of the partnership and/or corporation and agrees
to deliver evidence of his or her authority to Landlord
upon request by Landlord.
<PAGE>
IN WITNESS WHEREOF, Assignor, Assignee and Landlord have executed
this Consent as of the date first set forth above
ASSIGNOR Liberty Equipment Investors, LP-1984
a Delaware Limited Partnership
By: Whitehall Partners, Inc.
Name
Its: General Partner
By: Michael Giobbe
Name
Its: Vice President
ASSIGNEE Prime Care Health Network, Inc.
a Nevada corporation
(f) Assignee agrees to
replenish the By: James Graf
security deposit Name
amount that is Its: President
being refunded to
the Assignor.
LANDLORD Tobishima Development Company, Inc.
a California corporation
(a) Landlord agrees
that upon execution By:
of this Assignment, Name
Landlord releases Its:
Assignor of all
liabilities and
claims with respect
to the above
mentioned Lease;
and
(b) Landlord agrees
to a full refund
of Assignee's
security deposit
within 10 working
days after the full
execution of this
Agreement.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial
information extracted from the year end 1994 Form 10K
Consolidated Balance Sheets and Consolidated Statements of
Operations as of December 30, 1994, and is qualified in its
entirety by reference to such financial statements.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1994
<PERIOD-END> DEC-30-1994
<CASH> 185,949
<SECURITIES> 1,531,624
<RECEIVABLES> 395,265
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 6,671,819
<DEPRECIATION> 4,577,749
<TOTAL-ASSETS> 9,459,084
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 4,117,987
<TOTAL-LIABILITY-AND-EQUITY> 9,459,084
<SALES> 0
<TOTAL-REVENUES> 1,601,502
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (38,027)
<INCOME-TAX> 0
<INCOME-CONTINUING> (38,027)
<DISCONTINUED> (192,357)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (154,330)
<EPS-PRIMARY> (4.88)
<EPS-DILUTED> 0
</TABLE>
