Under the Base Lease, the District, as lessor, will lease the Real Property to the Lender, as lessee, for a period of approximately 40 years (assuming the 20-year Lease amortization is selected), and as consideration for the Base Lease, the Lender will provide the District with financing needed to purchase the Real Property and will simultaneously enter into the Lease Purchase Agreement with the District. Under the Lease Purchase Agreement, the Lender, as lessor, will simultaneously lease the Real Property back to the District, as lessee, for a period of approximately 20-years in exchange for the District’s payment of rental payments, subject to annual appropriation, during the 20-year period of the Lease Purchase Agreement. After the District makes the final rental payment due under the Lease Purchase Agreement at the end of the 20-year period (or if the District elects to prepay the rental payments under the Lease), the Base Lease and the Lease Purchase Agreement will automatically terminate. If the District were to default on its obligations under the Lease Purchase Agreement, the Base Lease would remain in effect for the full 40 years, providing additional time for the Bank to attempt to monetize its leasehold interest in the property.
