- 5 -
Mumma also agreed to give MHR Properties an option to purchase
the St. Clair property. In this regard, that agreement provided:
ARTICLE 19. PURCHASE OPTION
The parties agree that the present value of the
property is $135,000. During the term of this Lease
Tenant shall have the right to, at its sole option,
purchase the property from Landlord for $135,000, which
price shall be reduced by one-half (�) of all rents
paid by Tenant to Landlord from the inception of this
Lease to the time of purchase.
(We shall refer to the purchase option granted by Mr. Mumma to
MHR Properties in the Mumma/MHR Properties lease agreement as MHR
Properties’ purchase option.) After MHR Properties paid the July
1991 rent due under the Mumma/MHR Properties lease agreement, it
could have exercised MHR Properties’ purchase option for
$108,500, which was calculated under that lease agreement by
reducing $135,000 (the value according to the Mumma/MHR Proper-
ties lease agreement of the St. Clair property as of March 16,
1987) by $26,500 (one-half of the rental payments through July
1991 that MHR Properties had made to Mr. Mumma under that lease
agreement). (We shall sometimes refer collectively to MHR
Properties’ leasehold interest and MHR Properties’ purchase
option as MHR Properties’ St. Clair property interests.)
Sometime after Mr. Mumma and MHR Properties entered into the
Mumma/MHR Properties lease agreement, Mr. Mumma died. On May 23,
1988, Mr. Mumma’s widow, Retha Mumma (Ms. Mumma), transferred by
quitclaim deed the St. Clair property, which was subject to the
Mumma/MHR Properties lease agreement, to the University of Dayton
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