- 27 -
On or about December 28, 1992, petitioner and each owner
participant modified, effective as of October 1, 1992, the
various agreements that comprised the 1985 sale and leaseback.
Under the modified 1985 sale and leaseback, petitioner agreed to,
and did: (1) Exercise its option under the 1985 sale and
leaseback to elect a five-year extension of the term of the
lease15 and (2) pay the expenditures at issue. With respect to
petitioner’s agreement to pay the expenditures at issue, the
modified 1985 sale and leaseback provided in pertinent part:
Any Bond Premium and accrued interest in respect of a
redemption permitted by * * * [the modified 1985 sale
and leaseback] shall be paid * * * by the Lessee [peti-
tioner] * * *. The Lessee shall pay, or shall reim-
burse the Owner Participant, the Owner Trustee, the
County, the Bank, the Funding Corp and the Indenture
Trustee * * * for all out-of-pocket costs and expenses
paid to unrelated third parties at arm’s length (in-
cluding counsel fees, investment banking fees, fees of
financial advisors, underwriting fees, * * *) incurred
by any of such parties in connection with any refunding
or attempted refunding permitted by or requested pursu-
ant to * * * [the modified 1985 sale and leaseback].
* * * the Lessee shall [also] pay to the Owner Partici-
pant, as additional Supplemental Rent, a tax gross-up
payment * * *.
In addition, pursuant to all six modified sale and leaseback
agreements, petitioner agreed to, and did, share with all the
owner participants 20 percent in the aggregate of the annual
interest savings attributable to the refinancing of the 1984 tax-
exempt bonds after petitioner recouped the expenditures at issue
15See supra note 8.
Page: Previous 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 NextLast modified: May 25, 2011