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as a gift to the University for tax purposes.
Mr. Felman made it known during the negotiations regarding
the proposed exchange transaction that he was unwilling to
purchase the St. Clair property unless MHR Properties’ purchase
option with respect to that property was extinguished. Mr.
Felman further stated during those negotiations that he preferred
that MHR Properties’ leasehold interest with respect to the St.
Clair property be terminated before he purchased that property.
However, Mr. Felman indicated that if no agreement regarding
cancellation of that leasehold interest could be reached, he
would attempt to negotiate an agreement with Mr. Signom regard-
ing, inter alia, the length of the lease term under the Mumma/MHR
Properties lease agreement.
By around May 1991, the University, Mr. Signom, and Mr.
Felman reached a tentative agreement on the following basic
structure of the proposed exchange transaction (tentative ex-
change transaction) that would enable them to accomplish their
respective objectives: (1) The termination of MHR Properties’
St. Clair property interests by mutual agreement of the Univer-
sity and Mr. Signom and Ms. Signom as the general partners of MHR
Properties and the transfer by the University to, and the pur-
chase by, Mr. Felman of the St. Clair property unencumbered by
those property interests; (2) the transfer by Mr. Signom to the
University of the Irving property subject to the existing mort-
gage on that property; and (3) the acquisition by the University
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