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(4) after the Lessee has recovered the amounts de-
scribed in paragraph (3) above, the amount of Basic
Rent payable on any Basic Rent Payment Date following
such refinancing shall be reduced by an amount equal to
80% of the difference between the interest that would
have been payable on such Basic Rent Payment Date with
respect to the prepaid Series B Secured Note and the
interest payable on such Basic Rent Payment Date with
respect to the Series B Refunding Note;
As described in the foregoing excerpt from the modified 1985
sale and leaseback, the 1992 amendments did not effect a reduc-
tion in petitioner’s minimum annual basic rent obligation until
the redemption of the 1984 tax-exempt bonds and the issuance of
the new tax-exempt bonds (i.e., the 1995 tax-exempt bonds), which
occurred on January 1, 1995.17
The modified 1985 sale and leaseback granted petitioner the
right to request the owner participants to take reasonable
actions to refinance the 1984 tax-exempt bonds. That modified
sale and leaseback required the owner participants to cooperate
in order to ensure that such refinancing was implemented.18
The 1992 amendments expressly stated that petitioner exer-
cised its right to request that the owner participants take
reasonable actions to refinance the 1984 tax-exempt bonds.19
17The modified 1985 sale and leaseback changed the defini-
tion of “Notes” in the 1985 sale and leaseback to include the
series B refunding note. See supra note 10.
18See supra note 11.
19In petitioner’s answering brief, petitioner argues that at
least certain of the expenditures at issue that it paid after
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