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under the 1984 bond indenture to require Mercer County to redeem
those bonds, petitioner did not have the right under the 1985
sale and leaseback to request that the owner participant exercise
its right.
Petitioner developed a strategy to overcome the foregoing
hurdles. That strategy included petitioner’s offering certain
inducements to each owner participant and Mercer County in order
to persuade them to agree to the modification of the 1985 sale
and leaseback and the concomitant refinancing of the 1984 tax-
exempt bonds. Thus, petitioner offered (1) to exercise its
option under the 1985 sale and leaseback to elect to extend for
five years the term of the lease and (2) to pay the costs associ-
ated with modifying the 1985 sale and leaseback and effecting the
concomitant refinancing of the 1984 tax-exempt bonds.
Petitioner’s strategy to overcome the hurdles that it faced
in achieving its objective of modifying the 1985 sale and
leaseback was successful, and petitioner, the owner participants,
and Mercer County agreed to take the steps necessary to modify
and enhance the 1985 sale and leaseback, which included the
concomitant refinancing of the 1984 tax-exempt bonds, in order to
achieve a substantial rent reduction for petitioner. Specifi-
cally, they agreed to the 1992 amendments to the 1985 sale and
leaseback agreements and to the concomitant transactions neces-
sary to achieve that objective.
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