Teruya Brothers, Ltd. & Subsidiaries - Page 4

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               In June 1994, Teruya proposed buying Times’s interest in               
          “two pad sites” in Waipahu, Hawaii (these properties are                    
          hereinafter referred to collectively as Kupuohi II).  Teruya’s              
          written proposal included these provisions:                                 
               The purchase will be subject to a [section] 1031 four                  
               party exchange.                                                        
               Teruya may cancel the proposed purchase of * * *                       
               [Times’s] pad sites should the Ocean Vista transaction                 
               fail to proceed according to present plans.                            
          Times accepted Teruya’s proposal.                                           
               In a letter to Teruya and Golden, dated April 3, 1995, the             
          Association offered to purchase Teruya’s fee simple interest in             
          Ocean Vista for $1,468,500.2  Paragraph 9 of the offer to                   
          purchase states:                                                            
               Tax-deferred Exchange.  Teruya may, in its sole                        
               discretion, structure this transaction as a tax-                       
               deferred exchange pursuant to section 1031 of the                      
               Internal Revenue Code.                                                 
          Paragraph 12 of the offer to purchase states:                               
               Conditions Precedent.  The following shall be                          
               conditions precedent to the closing of the transaction                 
               contemplated hereunder: * * *                                          
                         (h) Teruya shall be in a position to close on                
                    its exchange replacement properties.                              
          On April 27, 1995, Teruya’s board of directors accepted the                 
          Association’s offer.                                                        

               2 On June 14, 1994, Teruya, Golden, and the Association                
          executed an “Assignment, Assumption and Release”, wherein the               
          Association was substituted as a party in place of Golden.                  

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Last modified: May 25, 2011