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Notwithstanding any other provision of [the 1985 sale
and leaseback] * * * the amount of Basic Rent payable
[by petitioner] on each Basic Rent Payment Date shall
be at least equal to the aggregate amount of principal
and interest payable on all Notes then Outstanding
* * *.
(We shall refer to the minimum amount of basic rent payable by
petitioner under the above-quoted provision of the 1985 sale and
leaseback as the “minimum annual basic rent”.) The “Notes”
referred to in the above-quoted provision of the 1985 sale and
leaseback included the series B secured note, which evidenced the
owner participant’s obligation to pay that portion of peti-
tioner’s obligation to pay the 1984 sublease rent (i.e., to make
payments when due of interest and principal on the 1984 tax-
exempt bonds) which was proportionate to the percentage undivided
interest that such owner participant acquired from petitioner.
Under the 1985 sale and leaseback, the minimum annual basic
rent was to be adjusted if, inter alia, Mercer County refinanced
the 1984 tax-exempt bonds. The 1985 sale and leaseback did not
contain a provision under which petitioner had the right to
request a refinancing of the 1984 tax-exempt bonds. However,
each owner participant had the right under the 1984 bond inden-
ture to require Mercer County to redeem those bonds.
It was petitioner’s practice to examine and consider ways to
reduce its operating expenses, including its lease expenses. In
late 1991, petitioner focused on its rent obligations under the
1985 sale and leaseback, which were based in substantial part on
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