Loading...
HomeMy WebLinkAboutSEC 098 LLC V1SUMMIT EXCHANGE COMPANY, LLC 111 East Broadway, Suite 1100 Salt Lake City, Utah, 84111 801-238-4618 To: Erin A. Dixon, Commercial Escrow Officer III Alliance Title & Escrow Corp. Email: erin dxon@alliancetitle.com From: John S. Bradley Assistant: Nancy Lakey, 801-238-4641 Subject: Construction AddOn, Exchange Instructions — MV Property, LLC Date: September 24, 2018 Dear Erin: Enclosed is the closing package on the above -referenced Exchange. The document package is self-contained such that all you need to do is fill in the blanks, have the clients sign, where applicable, and return the originals to me at the above address. Please note the following: 1. You will need to fill in the following blanks: i.e. Dates; 2. The Buyer at this closing is SEC 098, LLC, a Utah limited liability company, I am the Manager of the Buyer and will execute documents. Nevertheless, all documents, including closing statements, should be approved by MV Property, LLC as a condition of closing. Please call me so that we can arrange my execution of the documents. 3. The Buyer's Closing Statement should state that the Buyer is "SEC 098, LLC as Construction Accommodator for Exchanger." The Accommodation fee for this Closing is $1,000.00, 4. Title Insurance, although paid for by the Seller, should not be issued at this time but should be issued upon the conveyance by the accommodation entity (SEC) to the Exchanger. Preferably, the accommodation entity and the Exchangers should be listed as co -insureds upon the title policy. But as a minimum only the Exchangers should be insured under the policy. S. Originals of the Exchange Agreement, the accompanying Exhibits TOGETHER WITH COPIES OF THE CLOSING STATEMENTS should be mailed at the above -captioned address. Complete copies should be delivered to the client. IMPORTANT: This is a legal document pertaining to accommodation services for a like -kind exchange ofreal propertypursuant to §1031 of the Internal Revenue Code. Alliance Title & Fvchange Corp. ("Title Company'), SEC 098, LLC., their officers, directors, employees or legal counsel are not required, nor have they provided any legal advice regarding the compliance of the Exchanger's exchange and conveyance of property ivith applicable IRS provisions. You are advised to obtain competent tax advice prior to entering into this transaction. The Exchanger is required to fill out and timely file all exhibits to this Agreement. REAL PROPERTY EXCHANGE AGREEMENT (Construction) This REAL PROPERTY EXCHANGE AGREEMENT (Construction) (the "Agreement") is made and entered into this 28 day of September, 2018, by and between MV Property, LLC, a Nevada limited liability company ("Exchanger"), and SEC 098, LLC, a Utah limited liability company (hereinafter, "Construction Accommodator"). RECITALS: WHEREAS, Exchanger has previously entered into that certain Real Property Exchange Agreement (the `Exchange Agreement") with Summit Exchange Company, LLC ("Summit") wherein Summit acts as the Exchanger's "Qualified Intermediary" for the Exchanger pursuant to I.R.C. § 1031 and Regulations promulgated thereunder (the "Code"), Unless stated otherwise all capitalized terms herein shall have the same definition as set forth in the Exchange Agreement. WHEREAS, the Construction Accommodator is a wholly owned subsidiary of Summit. WHEREAS, Exchanger desires that certain improvements be constructed upon the Replacement Property prior to the Exchanger's acquisition of the Replacement Property and the Construction Accommodator, with the Exchanger's assistance, is willing to construct such improvements upon the Replacement Property as provided herein. WHEREAS, Exchanger has advised the Construction Accommodator and Summit of its bona fide intent to transfer and convey the Relinquished Property through a qualified intermediary within the meaning of Treas. Reg. 1.103 1 (k)-1 (g)(4) for the purpose of effecting a like -kind exchange within. the meaning of § 1031 of the Internal Revenue Code of 1986, as amended (the "Code") and IRS Revenue Procedure 2000-37 (the "Rev, Proc."). WHEREAS, Summit has formed the Construction Accommodator in its capacity as Qualified Intermediary to insulate Summit from liability in conjunction with the construction of the improvements. NOW THEREFORE, in consideration of the mutual promises and covenants set forth herein, the receipt and legal sufficiency of which is hereby acknowledged the parties agree as follows: 1. Purchase and Conveyance of Replacement Property. Exchanger desires to exchange the Relinquished Property for one or more properties to be designated by Exchanger {00273560.DOCX /} SEC 18.064 D3T 1 my Property, LLC September 24, 2018 0 2018 Summit Exchange Company, LLC ConstmctionAddOn and acquired by the Construction Accommodator for purposes of §1031. of the Code pursuant to the Replacement Property Contracts, In furtherance of the "acquiring and transferring" regulations relative to the Replacement Property as provided under the Exchange Agreement, the Construction Accommodator shall acquire the Replacement Property including "qualified indicia of ownership" of the Replacement Property as required under the Rev. Proc, Construction Accommodator shall acquire and own the Replacement Property on behalf of the Exchanger as part of Exchanger's construction exchange as permitted under IRC § 1031, the Regulations and the Rev. Proc. This Agreement shall constitute a Qualified Exchange Accommodation Arrangement as defined in the Rev, Proc., Section 4.02 and all terms, conditions and restrictions set forth in this Agreement and relative to Construction Accommodator's ownership of the Replacement Property shall be interpreted and enforced in accordance with the previously cited code sections, regulations and revenue procedures. Construction Accommodator and Exchanger warrant and represent unto one another that it is their bona fide intent and the purpose of this transaction to complete a like -kind exchange as -permitted under applicable law and that this intent exists as of the time of the Construction Accommodator's acquisition of the Replacement Property. Construction Accommodator and Exchanger shall report, for income tax purposes, the transactions contemplated in the Exchange, in a manner consistent with Rev. Proc. 2000-37. Construction Accommodator shall be considered by the parties to be the beneficial owner of the Replacement Property for all income tax purposes and shall be entitled to the benefits and burdens associated with such ownership. All of the terms and conditions of the Exchange Agreement, including but not limited to all representations, warranties, indemnifications, etc. set forth in the Exchange Agreement are incorporated herein by reference and shall be binding upon the parties to the extent not inconsistent herewith, If not previously done so, Exchanger shall identify the Replacement Property including improvements to be constructed thereon within the 45-day Identification Period identified in the Exchange Agreement. Construction Accommodator shall be required to convey the improved Replacement Property within the 180 Replacement Period required under the Exchange Agreement. 2. Construction of Improvements. Following the acquisition of the Replacement Property, the Construction Accommodator shall construct the Improvements upon the Replacement Property as described upon the Identification Notice. Construction Accommodator shall be entitled to utilize the Exchange Proceeds resulting from the sale of the Relinquished Property to pay for the cost of the Improvements. Exchanger shall fully cooperate with Construction Accommodator . with the completion of the Improvements. Construction Accommodator shall have the right to employ an independent construction manager and\or construction contractor to supervise and complete the construction of the Improvements upon the Replacement Property. Such construction manager shall manage, maintain and operate the Replacement Property during the construction period, which obligation shall include the payment of all mortgage payments, taxes and insurance on the Replacement Property as they come due, the maintenance of fire and casualty insurance in an amount equal to the full replacement value of the Replacement Property, the payment of all property owner's dues and assessments as they come due and the maintenance of the interior and exterior condition of the Replacement Property. Construction Accommodator is authorized to pay any independent contractor a reasonable fee which shall be included as an item of expense. The cost of such management shall be an item of expense to be paid from the income generated by the Replacement Property, if any, or at the time Summit conveys the Replacement Property to the Exchanger. If the Construction Accommodator is required to retain the Replacement Property more than one (00273560.DOCx/) SEC 18.064 D1T 2 i4IV Property, LLC September24, 2018 02018 Summit Exchange Company, LLC ConstructionAddOn hundred. eighty (180) days, the Construction Accommodator shall be entitled to invoice Exchanger for all expenses incurred by the Construction Accommodator and to immediately convey the Replacement Property to the Exchanger. All profits earned shall be netted against expenses associated with the Replacement Property by Exchanger. Exchanger as well as its officers, directors, members, partners and shareholders, individually and collectively agree to indemnify and hold Construction Accommodator, its members, managers, officers, directors and employees harmless from any and all claims resulting from the Construction Accommodator's acquisition, construction and management of the Replacement Property, including costs of defense, including but not limited to any liability resulting from the presence of any Hazardous Waste, Substance or Material upon the Replacement Property. This covenant shall expressly survive closing upon the sale and conveyance of the Replacement Property. 3. Administration and Disbursement of Exchange Proceeds. Exchange Proceeds shall be applied toward the purchase price of the Replacement Property as provided in this Agreement. Exchanger acknowledges and agrees that during the term of this Agreement, all funds held. by or for Summit shall be placed in Summit's interest -bearing trust account with a federally insured bank, a savings and loan institution, or such other investment or account as determined by Summit. Only Summit and the Construction Accommodator shall have the capability of withdrawing or converting the Exchange Proceeds from the account. Exchanger's sole interest shall be in the Exchange Credit which may be credited against the purchase price of the Replacement Property or redeemed upon the termination of this Agreement. Notwithstanding anything herein to the contrary, Exchanger shall not have any right to the Exchange Proceeds, or any portion thereof, nor shall Exchanger have the right to receive, pledge, borrow or otherwise obtain the benefit of the Exchange Proceeds except under the limited conditions provided herein before the end of the applicable time period as specified in Treas. Reg. § 1. 103 1 (k)- 1 (g)(6). Construction Accommodator is authorized to utilize the trust account and escrow services of Summit in conjunction with this Exchange. 4. Representations, Warranties, Knowledge of Relationships. The parties hereto, and each of them, represent and warrant one to another, that as of the date hereof and as of the Relinquished Property Closing Date, as follows: (a) Within the two-year period immediately preceding the Relinquished Property Closing Date, the Construction Accommodator has not served as the Exchanger's employee, attorney, accountant, investment banker or broker, real estate agent or broker, except for: i. performing services with respect to transactions intended to qualify as a like -kind exchange of property pursuant to §1031 of the Code, or, ii. performing routine financial, title insurance, escrow, or trust services for the Exchanger by a financial institution, title insurance or escrow company. (b) Neither the Exchanger and Construction Accommodator, nor the individuals identified in paragraph 4.(a) and the Construction Accommodator: i. are family members as defined in § 267 of the Code; (00273560.DOCX /) SEC 18-064 D1T 3 IVIV Property, LLC September 24, 2018 ® 2018 summit Exchange Company, LLC ConstructionAddOn ii. are partners in a partnership; iii. own nor have an interest (e.g. stock, partnership interest, etc.) in one another; iv, have a fiduciary relationship or beneficial interest in the same trust or in separate trusts created by the same third. -party grantor. (c) Each party.hereto has taken all requisite actions necessary to make this Agreement valid and binding upon each of the parties. S. Limitations on Construction Accommodator's Responsibilities. Construction Accommodator shall not be required, under any circumstance, to assume any secured loan on any Relinquished or Replacement Property or to execute any promissory note, mortgage, deed of trust or other evidence of indebtedness in connection with either the Relinquished or Replacement Property that would impose any liability upon Construction Accommodator for repayment of such obligation, nor shall Construction Accommodator be required to execute any agreement nor participate in any transaction which, in the opinion of the Construction Accommodator's legal counsel, would require Construction Accommodator to assume, or become liable for any obligation other than the services as an Construction Accommodator or to engage in any unlawful or fraudulent actions. Construction Accommodator shall not be required to assume any obligation or liability in dealing with funds or properties, or to make itself liable for any damages, costs, expenses, fines or penalties, or to deal with title to properties as long as any money is due to it hereunder. (a) Except as otherwise provided herein, Construction Accommodator shall not be obligated to pay or disburse any funds under this Agreement or to prosecute or defend any legal proceeding involving this Agreement unless it shall elect to do so and be furnished with sufficient funds or be indemnified to its satisfaction. If Construction Accommodator is served with process or notice of legal proceedings or any other matter concerning this Agreement, the sole duty of Construction Accommodator shall be to serve copies of the process or notice to Exchanger. (b) Construction Accommodator shall have no right to possess, manage, control, rent, repair, maintain or otherwise handle or deal with any real properties, except as specifically provided herein. Construction Accommodator shall have no right or duty with respect to the payment of closing costs, taxes, assessments, insurance premiums, litigation or other matters relating to any real property, except as specifically provided herein. (c) The duties and obligations of the Construction Accommodator are limited to those expressly set forth herein, including, but not limited to, any duties and obligations that may be construed from this Agreement pursuant to paragraph 8 below, and no other duties or obligations, implied or otherwise, shall be read into this Agreement. The Construction Accommodator shall not be liable for any action or omission made by it in good faith, but only to the extent that Exchanger has consented to or directed such action or omission or failed to .respond within a reasonable period of time to a request for consent or direction made by the (00273560.DOCX/) SEC I8-064DIT 4 MV Property, LLC September 24, 2018 0 2018 Summit Exchange Company, LLC ConstructionAddOn Construction Accommodator to Exchanger pursuant to the notice provisions set forth in paragraph 11 below. 6. Indemnification, Exchanger agrees to indemnify and hold Construction Accommodator, together with its officers, directors, shareholders, employees, agents and legal counsel, harmless from any and all liabilities, damages, suits, actions, penalties, costs, expenses, fees, (including court costs and reasonable attorney's fees), foreseen or unforeseen, incurred by or asserted against the Construction Accommodator, or its officers, directors, legal counsel, etc. arising out of, or relating to: (i) the Construction Accommodator's acquisition, holding or conveyance of the Replacement Property; (ii) the Construction Accommodator's holding of funds pursuant to this Agreement; (iii) the Construction Accommodator's participation in any closing as provided herein; or, (iv) the Construction Accommodator's participation in any aspect of this Agreement, including, without limitation, any and all consequential damage arising therefiorn, except as may arise out of the willful misconduct or gross negligence of the Construction Accommodator. The indemnity provided in this paragraph shall include all costs and fees of attorneys hired by Construction Accommodator in Construction Accommodator's defense, whether or not there is a lawsuit, for participation in this exchange, including, without limitation, such costs and fees incurred in tax, audit, bankruptcy or appeal proceedings. The defense of the Construction Accommodator pursuant to this paragraph shall be by counsel selected by the Construction Accommodator. (a) Exchanger further agrees ' to indemnify and hold Construction Accommodator, together with its officers, directors, shareholders, employees, agents and legal counsel, harmless from any and all liabilities, damages, suits, actions, penalties, costs, expenses, fees, (including court costs and reasonable attorney's fees), foreseen or unforeseen, incurred by or asserted, against the Construction Accommodator, or its officers, directors, etc. arising out of, or caused in whole. or in part, directly or indirectly, by the presence of any hazardous materials or hazardous substances, including the use, analysis, discharge or generation of such hazardous materials or hazardous substances in, on, under, or about the Relinquished Property or the Replacement Property or any improvements thereon. Exchanger's obligation under this paragraph shall include, without limitation, all costs of, any required or necessary repair, cleanup or detoxification or decontamination of any of the properties or improvements, and the preparation and implementation of any closure, remedial action 'or other required plans in connection therewith, and these obligations shall survive the transfer of any such property or improvements to Construction Accommodator's successor in interest. For purposes of this paragraph, "hazardous materials" and "hazardous substances" shall include but not be limited to substances defined as "hazardous substance", "hazardous materials" or "toxic substances" in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended 42 U.S.C. §9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et seq. the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq.; and those substances similarly defined under any federal, state or local laws of any instrumentality having jurisdiction over any such properties or improvements, as such laws may be amended from time to time, and in regulations adopted in publications promulgated pursuant to said laws. Exchanger hereby assigns to Construction Accommodator any and all rights to indemnification that Exchanger may have against any third party but only to the extent Construction Accommodator suffers any damage, liability and/or cost as a result of the presence of hazardous materials and hazardous substances upon any property involved in this exchange. The foregoing assignment shall be as to {00273560.DOCX/) SEC I8-064 D1T 5 MY Property, LLC September 24, 2018 © 2018 summit Exchange Company, LLC ConstructionAddOn money damages or injunction relief only as necessary to provide the Construction Accommodator with adequate protection. Exchanger expressly reserves all other indemnification rights including all rights regarding choice of counsel, control of negotiations and settlement. 7. Tax Counsel Reliance. Exchanger acknowledges and agrees that Exchanger has relied solely upon the advice and judgment of Exchanger's own tax advisors as to the tax consequences and implications of the transfer, conveyance and exchange of the Relinquished Property under the Relinquished Property Contract, the acquisition and transfer of the Replacement Property under the Replacement Property Contract and this Agreement. Exchanger has not relied upon any conversations with or advice from the Construction Accommodator or the Title Company, and their respective officers, directors, agents and legal counsel, which assisted in the transfers and conveyances contemplated hereby, regarding such tax consequences or implications. Construction Accommodator's execution of this Agreement nor its participation in the acquisition and transfer of the Relinquished Property and Replacement Properties does not constitute any type of representation, warranty or guaranty, expressed or implied, that the contemplated transaction is, or will be in compliance with § 1031 of the Code and the regulations promulgated thereunder. Exchanger shall look solely to its own tax advisors relative to the compliance of this transaction with applicable provisions of the Code and expressly releases Construction Accommodator from any and all claims relative the transfer, conveyance and exchange of the Relinquished Property and the Replacement Property except for the duties and obligations specifically identified in this Agreement. Exchanger shall prepare, execute and deliver to Construction Accommodator and applicable agencies all required federal and state forms relative to taxation matters and shall otherwise be responsible for all filing requirements pertaining to this Agreement and the transactions contemplated herein. S. Y.R.C. 0031 Compliance. Subject to the limitations set forth. in paragraph 7, it is the specific intent of the parties, that the transfer, conveyance and exchange of the Relinquished Property and Replacement Property contemplated hereby shall constitute a tax deferred, like -kind exchange of real property pursuant to § 1031 of the Code. This Agreement is to be construed in accordance with such intent. If any provision of this Agreement is inconsistent or contrary to that purpose, not in compliance with § 1031 of the Code, or otherwise unenforceable or invalid, this Agreement shall be construed to exclude or to modify that provision to the extent necessary to satisfy the intended purpose of this Agreement. Notwithstanding the foregoing, neither the execution of this Agreement nor the Construction Accommodator's participation in the exchange of property contemplated hereby shall constitute any type of representation, warranty, guarantee or contractual obligation that the exchange of property shall in fact qualify as a like -kind exchange. Exchanger shall look solely to its own tax advisor for advice and compliance with applicable provisions of the Code. 9. Construction Accommodator's Fee. In consideration for the Construction Accommodator's performance and observance of the terms and conditions to be performed herein, Exchanger agrees to pay the Construction Accommodator the fee of $1,000.00 or as otherwise agreed upon by the parties. This fee shall be due, owing and earned by the Construction Accommodator upon the execution of this Agreement and can be deducted from funds currently held by Summit. (00273560.DOCX1) SEC 18-064 DJT 6 MV property, LLC September 24, 2018 0 2018 Summit Exchange Company, LLC ConstrtwtionAddOn 10. DefauIt. Should the Exchanger default in any of its obligations provided herein, or should any of the Exchanger's representations and warranties herein prove untrue or are inaccurate in any material part, then the Construction Accommodator may, in its sole discretion: (a) elect to transfer its rights and duties under this Agreement to another person or entity that is a qualified intermediary, as defined in the Code and regulations promulgated thereunder to act as the Construction Accommodator in the place and stead of the Construction Accommodator in completing the transaction contemplated hereunder. Exchanger, in light of its default activating this provision, hereby agrees to consent to such assignment and to the new Construction Accommodator, or, (b) refuse to further participate in the exchange, in which event this agreement, except for the indemnifications in favor of Construction Accommodator shall be null and void. The foregoing election of the Construction Accommodator, shall be in writing which shall be delivered to Exchanger pursuant to paragraph I 1 hereof. Such remedies shall be in addition to and not in lieu of any and all other rights Construction Accommodator may have at law or in equity. 11. Notices. All notices to be given under this Agreement, if any, shall be in writing and served personally or be registered or certified mail, return receipt requested with proper postage prepaid, or telecopied (with transmission confirmation and subsequently mailed) upon the proper party at the following addresses, or at such other addresses as may be designated by a party by notice given in a manner aforesaid, to wit: To Exchanger: MV Property, LLC 197 West 4860 South Salt Lake City, Utah 84107 Attention: James Petersen To Construction Accommodator: Summit Exchange Company, LLC 111 East Broadway, Suite 1100 Salt Lake City, Utah 84111 Attention: John S. Bradley All notices delivered by mail, in the manner aforesaid, shall be deemed to have been delivered to and received by the addressee on the day following the day on which notice is deposited in the mail, All notices delivered personally shall be deemed to have been delivered and received on the date of such personal delivery. Construction Accommodator shall deliver to Exchanger copies of all notices delivered to Construction Accommodator relating to the Replacement Property or to a Replacement Property Contract that it may receive. 12. Assil4ament. Except as provided herein, the rights of Exchanger under this Exchange Agreement are non -assignable and non-negotiable. No part of this Agreement is, nor intended to be negotiable or marketable. Except as provided herein, the Construction (00273 560.DOCX 1) SEC I8-064 D3T 7 MV Property, LLC September 24, 2018 0 2018 Summit Exchange Company, LLC ConstructionAddOn Accommodator may not assign its interest in this Agreement nor delegate its duties under this Agreement without the prior written consent of the Exchanger, which consent may be withheld in the Exchanger's sole and absolute discretion. 13. Costs. All closing costs, taxes, commissions, assessments, title insurance expense, and so forth shall be prorated and/or set forth in closing statements prepared by the Title Company, in accordance with generally accepted procedures, or as may otherwise be agreed to by the particular parties prior to closing. 14. Foreign Person Affidavit. Exchanger hereby certifies, under penalty of perjury, that Exchanger is not a "foreign person" as defined by § 1445 of the Code, and the regulations promulgated thereunder, that Exchanger's United States taxpayer identification number is , and that Exchanger is not subject to backup withholding. Exchanger agrees that Construction Accommodator may rely on this certification. 15. Miscellaneous. (a) This Agreement may not be amended or modified in any respect whatsoever except by an instrument in writing signed by the parties hereto. (b) Every provision of this Agreement is intended to be severable if any term or provision hereof is illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder of the Agreement. (c) The rights and remedies provided by the Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive its rights to use any or all other remedies. Said rights and remedies are given in addition to other rights the parties may have by law, statute, ordinance or otherwise. (d) In the event any legal action or court or arbitration proceeding is brought by either party against the other in this Agreement, the prevailing party shall be entitled to recover its fees of its attorneys in such action or proceeding, including costs on appeal, if any, in such amount as the court may adjudge reasonable as attorneys' fees and costs. In addition, should it be necessary for either party to employ legal counsel to enforce any of the provisions of this Agreement through measures which do not involve legal actions, court or arbitration proceedings, then the other party agrees to pay all attorneys' fees and the costs reasonably incurred by the party who was so required to employ legal counsel. (e) The terms and provisions of this Exchange Agreement, including without limitation the indemnity provisions hereof, shall survive all closings and the termination of this Agreement and shall be binding upon the heirs, representatives, successors and assigns of the parties hereto. (f) Time is of the essence for this Agreement. (g) This Agreement shall be construed in accordance with the laws of the State of Utah. (0027356D.DOCX I) SEC 18.064 DJT 8 MV Property, LLC September 24, 2018 C9 2018 Summit Exchange Company, LLC ConstructionAddon (h) Nothing contained in the Agreement is intended nor shall be construed to establish an agency relationship, partnership or joint venture between Exchanger and Construction Accommodator. It is specifically acknowledged and agreed that Construction Accommodator is acting as an independent principal in the exchange transaction described herein. Exchanger is not the agent of Construction Accommodator and has no authority to do any act for or in the name of Construction Accommodator. (i) The parties shall execute and deliver, at the request of a party or the Construction Accommodator, any further documents or instruments, and shall perform any further acts that may be reasonably required to fully effect the exchange transaction intended in this Agreement. 0) This Agreement may be executed in counterparts and shall be binding on all the parties hereto as if one agreement had been signed. Further transmittal and receipt of a telecopy facsimile copy of this Agreement with facsimile signature shall be binding on the parties hereto, with the originally signed document to be delivered subsequently via regular mail or overnight express mail. (k) In this Agreement, the plural includes the singular, and vice versa. Further, any reference to he, she, its, etc. shall refer to all genders. (remainder ofpage intentionally left blank) (signatures follow on nextpage) {00273560.DOCX/1 SEC 18-064DIT 9 1VIV Property, LLC September 24, 2018 0 2018 Summit Exchange Company, LLC ConstructionAddOn IN WITNESS WHEREOF, the parties hereto have made and entered into this Agreement on the date first above written. EXCHANGER: MV Property, LLC, a Nevada limited liability company By: North American Management, LLC a Utah limited liability company its Manager By: Name: Ja es P tersen Its: Managing Member By its execution of this Agreement, Exchanger acknowledges that: i) it is solely responsible for the tax effect of'this Agreement; ii) it has been encouraged to obtain independent tax advice and, iii) it is solely responsible to full its obligation under this Agreement, including the proper and timely execution of all Exhibits. Construction Accommodator is not responsible for the tax effect of this transaction. CONSTRUCTION ACCOMMODATOR: SEC 098, LLC, a Utah limited liability company By: Name: John S. Bradley Its: Manager �Z// (00273560.DCCX /) SSC 18-064 DJT 10 N V Property, LLC September 24, 2018 2018 Summit Exchange Company, LLC ConstructionAddOn ASSIGNMENT AND ASSUMPTION OF MEMBERSHIP INTEREST This Assignment and Assumption of Membership Agreement (the "Assignment") is entered into by and between Summit Exchange Company, LLC, a Utah limited liability company ("Summit"), and MV Property, LLC, a Nevada limited liability company ("MV Property") as of the Effective Date set forth below. WHEREAS, MV Property is completing a "Construction Exchange" pursuant to IRC 1031 and regulations promulgated thereunder (the "Exchange"). WHEREAS, MV Property has engaged Summit as its "Qualified Intermediary" relative to the Exchange. WHEREAS, Summit, to facilitate the completion of improvements upon MV Property's Replacement Property pursuant to the Exchange as contemplated in Treas. Reg. § 1.1031(k), formed a wholly owned, single member limited liability company known as SEC 098, LLC ("SEC 098"). WHEREAS, SEC 098 has acquired and improved one or more parcels of real property located in the State of Utah. WHEREAS, MV Property now desires to complete the Exchange and acquire title to the improved Replacement Property through the assignment of 100% of the Membership Interests in SEC 098 pursuant to the terms and conditions of this Agreement (the "Interests"). WHEREAS, Summit desires to assign to MV Property the Interests together with all burdens and benefits associated therewith as of the Effective Date (defined below). NOW THEREFORE, in consideration of the mutual covenants and promises set forth herein the receipt and legal sufficiency of which is hereby acknowledged, the parties agree as follows: 1. Assignment. Summit hereby assigns, conveys and transfers unto MV Property the Interests consisting of one hundred percent (100%) of the Membership Interests in SEC 098 including all right, title and interest in all capital, profits and losses associated therewith. By execution of this Assignment, MV Property intends to become the sole Member of SEC 098. MV Property hereby accepts the assignment and transfer of the Interests in SEC 098 from Summit and does hereby ratify, accept, adopt and agree to be and is hereby bound by all of the terms, provisions, contracts and covenants applicable to SEC 098. MV Property hereby assumes all obligations, responsibilities, duties, liabilities and costs of a member accruing or become due from and after the Effective Date hereof. Conversely, MV Property is hereby assigned and entitled to receive all benefits, rents, profits, credits, economic or otherwise derived from the ownership of SEC 098 and its assets accruing on or after the Effective Date. The Operating { 00413776.DOCX !} Agreement for SEC 098 is hereby amended to provide that MV Property is the new sole member of the SEC 098. MV Property agrees to indemnify and hold Summit harmless fiom any and all liabilities relative to SEC 098 which may arise after the Effective Date. MV Property is hereby admitted as a Member of SEC 098 (as opposed to only owning an economic interest) and is the sole Member of SEC 098. MV Property agrees that any and all obligations of SEC 098 or Summit to acquire and improve the Replacement Property and to convey the Interests to MV Property are hereby satisfied. 2. Appointment. MV Property, as the assignee and owner of 100% of the outstanding Membership interests in SEC 098, hereby appoints John Robertson as the sole Manager of SEC 098, effective as of the Effective Date. John Robertson accepts such appointment as evidenced by his/her signature to this document. John Robertson agrees to amend any and all state filings to reflect the new ownership of SEC 098, including the designation of a new Registered Agent and business office for SEC 098. 3. Severability. Any provision of this Assignment that is prohibited or unenforceable shall be ineffective but only to the extent of such provision but without invalidating the remaining provisions hereof, and any such prohibition or unenforceability shall not invalidate or render unenforceable any other provisions of this Assignment. 4. Effective Date. The Effective Date of this Assignment shall be November 25, 2018. All benefits and burdens of ownership of the Interests and the assets of SEC 098 shall transfer as of the Effective Date. MV Property shall assume all risk of loss and shall be entitled to receive all benefits and burdens derived from the ownership of the Interests as of 12:01 A.M. as of the Effective Date. The parties have expressly negotiated the terms and conditions of this Assignment relative to the Effective Date as an essential element of the agreements between the parties. 5. Situs. This Agreement shall be construed in accordance with the laws of the State of Utah. Summit Exchange Company, LLC MV Property, LLC, a Utah limited liability company a Nevada limited liability company By: By: Name: Daniel J. Torkelson Its: ` Manager 18-064 DJT North American Management, LLC a Utah limited liability company its Manager By: Name Its: {00413776.DOCX !} 2