Project Agreement and Agreement to Exchange Real Estate dated March 28, 2013 by and between Chromcraft Revington, Inc. and Tate County, Mississippi

 

A.         The County owns certain property located at One Quality Lane, Senatobia, Mississippi (the “County Real Estate”) comprised of approximately 59.86 acres upon which the Company’s plant (the “Plant”) is located and leased from the County in accordance with a series of leases and agreements which are listed on Exhibit “A” attached hereto (collectively, the “Leases”).

B.         The Company owns real estate to the immediate east of the County Real Estate upon which Chromcraft Lake and a small maintenance building are located (the “CRI Real Estate”), with the balance being unimproved, comprised of approximately 50.2 acres.  The County Real Estate and the CRI Real Estate are collectively, or individually, as the case may be, referred to herein as the “Real Estate.”

C.         The parties desire to exchange their respective Real Estate with each other, with the Company making certain economic development commitments, all as hereinafter more specifically provided for herein.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged by each of the parties hereto, the parties hereto agree as follows:

1.         Condition of Properties to be Conveyed.  At the Closing, as hereinafter defined, Company shall convey to County good, marketable and indefeasible title in fee simple, subject to Permitted Exceptions, to the CRI Real Estate in substantially the same condition as it is in now, ordinary wear and tear excepted, and County shall convey to Company good, marketable and indefeasible title in fee simple, subject to Permitted Exceptions, to the County Real Estate in substantially the same condition as it is in now, ordinary wear and tear excepted.

2.         Purchase Price.  The purchase price for each Real Estate shall offset the other so that no consideration shall be paid at Closing.

3.         No Earnest Money.  No earnest money has been paid by either party to the other.

4.         Due Diligence.  Each party shall have thirty (30) days (“Due Diligence Period”) from the Effective Date to complete any inspections and examinations and shall have the unconditional right to terminate this Agreement for any reason whatsoever with no further obligation by written notice within the Due Diligence Period.  The Company’s obligations hereunder are conditioned upon approval of this Agreement by its Board of Directors prior to the expiration of the Due Diligence Period.  Prior to the expiration of the Due Diligence Period, Company shall obtain at its expense a Phase I environmental report on the CRI Real Estate for submittal to the County.

6.         Title Evidence.  Prior to the expiration of the Due Diligence Period, each party may obtain, at its expense, such title insurance or other evidence of title it desires for the Real Estate it is acquiring.

7.         Survey.  Prior to the expiration of the Due Diligence Period, each party may obtain, at its expense, whatever survey it desires for the Real Estate it is acquiring.

Prior to Closing, Company shall cause any encumbrance, or title or survey defect on the CRI Real Estate which is objected to by County during the Due Diligence Period to be removed therefrom or County shall have the right to terminate this Agreement, and prior to Closing, County shall cause any encumbrance, or title or survey defect on the County Estate which is objected to by Company during the Due Diligence Period to be removed therefrom or Company shall have the right to terminate this Agreement.

8.         Taxes, Assessments and Expenses.  The parties agree that the Real Estate taxes shall be not be prorated as of the Closing Date and each party assumes and agrees to pay all tax installments and assessments for public improvements becoming due after the Closing with respect to the Real Estate it is acquiring.  Company and County shall each be responsible for their own legal fees.

9.         Insurance.  Any insurance maintained on either Real Estate shall be cancelled at Closing, and each party shall be responsible for having its own insurance in place at Closing with respect to the real estate being acquired.

10.       Company Warranties.  Company represents and warrants, and the same shall be true as of, and as a condition of, Closing, as follows:

11.       Warranties.  County represents and warrants, and the same shall be true as of, and as a condition of, Closing, as follows:

12.       County Cooperation.  The County acknowledges that Company may be required to provide to its primary lender a mortgage on the County Real Estate which shall be subject to all of such lender’s due diligence requirements regarding the Real Estate, and the County agrees to cooperate with such due diligence requirements at Company’s sole cost and expense.

13.       Default.  If either party fails to perform as required, the other party shall be entitled to pursue all remedies available at law or equity including specific performance.

14.       Attorney’s Fees.  Any party to this Agreement who is the prevailing party in any legal or equitable proceeding against any other party brought under or with relation to this Agreement or transaction shall be additionally entitled to recover court costs and reasonable attorney’s fees from the non-prevailing party.

15.       Risk of Loss.  The risk of loss due to damage or destruction with respect to each of CRI Real Estate and County Real Estate shall not pass to the other party until delivery of the respective deeds at Closing.  In the event any such damage or destruction is not fully repaired prior to Closing, the party to whom the damaged property is being conveyed, at its option, may either (a) terminate this Agreement, or (b) elect to close the transaction, in which event the current owner’s right to all insurance proceeds resulting from such damage or destruction shall be assigned in writing by the current owner to the party receiving the property at Closing.

16.       Closing.  The closing of the transactions contemplated hereunder shall take place within thirty (30) days after expiration of the Due Diligence Period (the “Closing Date”), or at such other time as the parties hereto may mutually hereafter agree (the “Closing”).

17.       Inspection.  Each party during the Due Diligence Period and its agents shall be allowed reasonable access to the Real Estate for the purpose of conducting environmental, soil and other tests in evaluating the Real Estate.  Each party shall indemnify and hold the other harmless from any damage incurred as a consequence of or related to any such tests and evaluations, but not from the effects of any defects discovered.  In the event that such tests reveal any environmental defect or substandard soil conditions, either party shall have the right to terminate this Agreement by written notice to the other during the Due Diligence Period.  Each party acknowledges that, as a material part of the consideration for this Agreement, each party agrees to accept the Real Estate being conveyed to it on an “AS IS” basis, with all faults and all latent and patent defects, and without any representations or warranties by the conveying party, all of which the conveying party hereby disclaims.  Each party acknowledges that it has entered into this Agreement with the intention of making and relying upon its own investigation of the physical, environmental, general condition, economic use and compliance of the Real Estate being conveyed, and that each party is not now relying, and will not later rely, upon any representations or warranties made by the conveying party or anyone acting or claiming to act by, through, under or on behalf of the conveying party concerning the Real Estate being conveyed.

18.       Economic Incentives.  Prior to the expiration of the Due Diligence Period, the Company and the County shall stipulate to an ongoing real estate tax increase of $60,000 per year (the “Ad Valorem Surcharge”) that will be associated with the Plant real property and included in the tax bill thereof. The Ad Valorem Surcharge shall be binding for a period of ten (10) years upon the then-owner of the Plant.  The Ad Valorem Surcharge shall be recorded at Closing and shall not act to fix the assessment amount or millage rate for real and personal taxes which shall continue to be set per applicable law.  Further, the Company agrees that it will cause the Plant to employ one hundred (100) new jobs over the five (5) year period commencing on the Closing Date, with the hiring of replacement positions, whether due to attrition, change in job classification or otherwise, being counted toward such number of new employees.

19.       Right of First Refusal.  At Closing, the County shall grant Company a right of first refusal on the CRI Real Estate and Company shall grant the County a right of first refusal on the County Real Estate.  The right of first refusal granted by Company shall only apply if it is selling the County Real Estate to a bona fide third party which does not intend to continue manufacturing and distribution at the Plant, provided that the right of first refusal granted by Company shall not apply to: (1) a buyer of the Company business, whether by merger, stock purchase or asset purchase, (2) transfers to any affiliate of Company, (3) transfers to any third party who intends to lease the Plant to Company or an affiliate, or (4) any buyer upon a foreclosure or deed of trust sale, which all of the foregoing clauses (1) - (4) in this paragraph shall discharge the right of first refusal in favor of the County.  Each party shall have a period of thirty (30) days to match the third-party offer.