Basin Electric Power Cooperative - Page 4

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          price was to include a 2 percent, or $2,255,000, premium over the           
          stated aggregate principal amount of such bonds.                            
               On December 5, 1984, Mercer County and petitioner entered              
          into an agreement entitled “LEASE AND SUBLEASE”, which was                  
          effective as of November 1, 1984 (1984 lease and sublease).                 
          Pursuant to the 1984 lease and sublease, petitioner agreed to               
          lease the AVS unit II pollution control facilities to Mercer                
          County, and Mercer County agreed to pay $112,750,000 to peti-               
          tioner as rent at the beginning of the term of that lease.                  
          Pursuant to the 1984 lease and sublease, Mercer County agreed to            
          sublease the AVS unit II pollution control facilities to peti-              
          tioner, and petitioner agreed to pay to Mercer County as rent “an           
          amount [of money] sufficient to pay, when due, the principal of             
          and premium, if any, and interest on the [1984 tax-exempt] Bonds            
          in funds available at such times to make all payments when due on           
          the Bonds.”  (We shall refer to the amounts that petitioner was             
          obligated to pay to Mercer County under the 1984 lease and                  
          sublease as the 1984 sublease rent.)  Petitioner agreed to, and             
          did, issue a promissory note (Basin Electric 1984 note) to                  
          evidence its obligation to Mercer County to pay the 1984 sublease           
          rent.                                                                       
               At the time petitioner and Mercer County entered into the              
          1984 lease and sublease, petitioner intended to transfer by sale            
          or otherwise its interest in the AVS unit II to one or more                 






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Last modified: May 25, 2011