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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) July 11, 1996
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JG Industries, Inc.
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(Exact name of registrant as specified in its charter)
Illinois 1-258 36-1141010
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
Incorporation)
1615 West Chicago Avenue, Chicago, Illinois 60622
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (312) 850-8000
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N/A
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
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On July 11, 1996, the Goldblatt's Department Stores, Inc. and Goldblatt
Subsidiary, Inc., wholly-owned subsidiaries of the Registrant (collectively, the
"Subsidiaries"), closed the transactions contemplated by an Agreement of
Purchase and Sale (the "Agreement") by and between the Subsidiaries and Delray
Farms, Inc. (the "Purchaser").
Pursuant to the terms of the Agreement, the Subsidiaries sold to the
Purchaser a parking lot located at 91st Street and Exchange Avenue, Chicago,
Illinois and the three properties presently housing Goldblatt's Department
Stores at 1615 West Chicago Avenue, Chicago, Illinois; 3311 West 26th Street,
Chicago, Illinois; and 9100 South Commercial Avenue, Chicago, Illinois, for an
aggregate consideration of $5,000,000.
The Goldblatt's Department Store located on the three properties will be
closed during the ninety day period commencing on July 11, 1996.
Reference is hereby made to a copy of the Agreement which is attached to
this Report as Exhibit 1 for a more complete statement of the terms thereof.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits
1. Agreement of Purchase and Sale among Goldblatt's Department Stores,
Inc., Goldblatt Subsidiary, Inc. and Delray Farms, Inc., dated July 11, 1996.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
JG INDUSTRIES, INC.
/s/William Hellman
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William Hellman,
Chief Executive Officer
Dated: July ___, 1996
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AGREEMENT OF PURCHASE AND SALE
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THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") is made and
entered into this 11th day of July, 1996, by and between GOLDBLATTS DEPARTMENT
STORES, INC., an Illinois corporation, and GOLDBLATTS SUBSIDIARY, INC., an
Illinois corporation (hereinafter collectively called "Seller"), and DELRAY
FARMS, INC., a Delaware corporation, or its nominee, or assigns (hereinafter
called "Purchaser").
1. SALE. In consideration of the sum of Ten and No/100 Dollars
($10.00) and other good and valuable consideration in hand paid, the receipt and
sufficiency of which are hereby acknowledged Seller agrees to sell and convey to
Purchaser, and Purchaser agrees to purchase from Seller, for the purchase price
set forth below and on the terms and conditions set forth in this Agreement, the
following three (3) properties: (i) the building ("Spaulding Building")
containing five (5) stories located on the land ("Spaulding Property")
containing approximately .7647 of an acre located at the southwest corner of
26th Street and Spaulding Avenue, Chicago, Illinois, as legally described on
Exhibit "A-1", attached hereto and shown crosshatched on the plan attached
hereto as Exhibit "B-1", (ii) the building ("Chicago Building") containing five
(5) stories located on the land ("Chicago Property") located on Chicago Avenue
near Ashland Avenue, Chicago, Illinois as legally described on Exhibit "A-2",
attached hereto and shown crosshatched on the plan attached hereto as Exhibit
"B-2", and (iii) the building ("Exchange Building") containing five (5) stories
located on the land containing approximately twenty-eight thousand five hundred
eighty-three (28,583) square feet located on Commercial Avenue and 91st Street,
and the parking lot ("Exchange Parking Lot"), located on 91st Street and
Exchange Avenue, Chicago, Illinois (both collectively called "Exchange
Property"), as legally described on Exhibit "A-3", attached hereto and shown
crosshatched on the plan attached hereto as Exhibit "B-3" (the Spaulding
Building, Chicago Building and Exchange Building are collectively called
"Building") (the Spaulding Property, Chicago Property and Exchange Property are
individually called "Property" and with the Buildings and Improvements are
collectively called Premises"), together with (a) all rights, easements and
interests appurtenant thereto (including any rights in any alley adjacent to the
Spaulding Premises and Chicago Premises, including, but not limited to, any
streets, or other public ways adjacent to said Premises, any water or mineral
rights owned by, or leased to, Seller, (b) all improvements located on the
Spaulding Property, Chicago Property and Exchange Property, including, but not
limited to, the Spaulding Building, Chicago Building and the Exchange Building,
all parking areas, and all other structures, systems and utilities owned by, and
utilized by, Seller in the ownership and operation of the Spaulding Building,
Chicago Building and the Exchange Building (all such improvements being
collectively referred to herein as the "Improvements"); (c) the personal
property owned by Seller, located on or in the Premises or Improvements used in
connection with the operation of the Buildings located on the Premises
(excluding Seller's business fixtures and personal property used in connection
with the operation of Seller's retail business, including but not limited to
computer wiring) (the "Personal Property").
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2. PURCHASE PRICE. The total purchase price to be paid to Seller by
Purchaser for the Premises shall be Five Million and 00/100 Dollars
($5,000,000.00) ("Purchase Price"). Provided that all conditions precedent to
Purchaser's obligations to close as set forth in this Agreement ("Conditions
Precedent") have been satisfied and fulfilled, or waived, in writing, by
Purchaser, and subject to the provisions of this Agreement, the Purchase Price
shall be paid to Seller at Closing, plus or minus prorations and other
adjustments required under this Agreement, by certified check or wire transfer
of funds.
3. CLOSING. The purchase and sale contemplated in this Agreement
shall be consummated at closing ("Closing") to take place at the offices of the
title company (as hereinafter defined) in downtown Chicago, Illinois, on July
10, 1996 ("Closing Date"). The risk of loss of all or any portion of the
Spaulding Property, the Chicago Property and the Exchange Property, the
Spaulding Building, the Chicago Building and the Exchange Building shall be
borne by Seller up to and including the actual time of the Closing, and
thereafter by Purchaser, subject to the terms and conditions of Paragraph 14
below.
4. EARNEST MONEY. Within three (3) business days after Seller's
acceptance of this Agreement, Purchaser shall deposit with Chicago Title
Insurance Company (the "Escrowee"), its earnest money deposit ("Earnest Money"),
being an irrevocable (for a period of six (6) months) commercial Letter of
Credit issued by Bank of America Illinois, in the amount of Two Hundred Thousand
and 00/100 Dollars ($200,000.00), in the form reasonably acceptable to Seller.
At Closing, the Letter of Credit shall be delivered to Purchaser. All
Earnest Money shall be appropriately dealt with by the Escrowee so as to be
delivered to the Seller or Purchaser, as the case may be, as provided in this
Agreement.
5. DOCUMENTS TO BE DELIVERED BY SELLER. Unless otherwise expressly
provided herein, upon execution of this Agreement, Seller shall deliver to
Purchaser, to the extent not previously delivered and to the extent in Seller's
possession, or reasonably available to Seller, true, accurate and correct copies
of the following with respect to all three (3) of the Premises:
(i) All licenses, permits, authorizations, and approvals, if any,
required by law and issued by all governmental authorities having
jurisdiction over the Premises and in the possession of Seller.
(ii) All management, service and executory contracts, if any,
affecting any of the Premises.
(iii) All existing liens and encumbrances.
(iv) All plans and specifications, studies, audits, certificates of
occupancy, plans, soils tests, engineering studies, warranties and
environmental studies (verbal and written) pertaining to the Building
and/or Premises.
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(v) Title documents in the possession or control of Seller
consisting of any existing title policy, later title commitment, survey and
documents affecting title as specified in any such policy or commitment.
(vi) Copies of any lawsuits, claims and building code violations
filed or threatened with respect to any of the Premises.
(vii) True and accurate copies of all leases (including lease with
Edmar ("Edmar Lease") and the lease with Mt. Sinai ("Mt. Sinai Lease") and
subleases, licenses and concession agreements affecting any of the
Premises.
6. CONTINGENCY PERIOD. (a) At all times during the "Environmental
Contingency Period" (which Environmental Contingency Period is defined to be the
period from and after the Contract Date and continuing through and including
June 30, 1996, Purchaser, its agents and representatives shall be entitled to
enter upon the Spaulding Property, the Chicago Property and the Exchange
Property, the Spaulding Building, the Chicago Building and the Exchange Building
and Improvements, on reasonable notice to Seller, to perform an environmental
audit and analysis of the presence of any asbestos, chlordane, formaldehyde or
other hazardous or toxic substance in, under or upon the Spaulding Property, the
Chicago Property and the Exchange Property, the Spaulding Building, the Chicago
Building and the Exchange Building, or any underground storage tanks on, or
under, the Spaulding Property, the Chicago Property and the Exchange Property.
If Purchaser determines there are material (material being defined as costing in
excess of Twenty Thousand and 00/100 Dollars ($20,000.00) to cure),
environmental problems (including but not limited to the presence of any toxic
or hazardous substances, asbestos, chlordane, formaldehyde, or the existence of
underground storage tanks or underground gas or oil leaks within any of the
Premises), Purchaser, upon written notice to Seller prior to the expiration of
the Environmental Contingency Period, which notice shall describe such
environmental problems, can terminate this Agreement, in which event the Earnest
Money shall be returned to Purchaser and both parties shall be released from
liability hereunder. Purchaser shall indemnify and hold Seller harmless for any
damage or injury caused by Purchaser's investigations hereunder.
(b) At all times during the "Building Contingency Period" (which
Building Contingency Period is defined to be the period from and after the
Contract Date and continuing through and including June 26, 1996), Purchaser,
its agents and representatives shall be entitled to enter into the Spaulding
Building, on reasonable notice to Seller to perform inspections and tests on the
Spaulding Building. If Purchaser determines that there are any material defects
(material is defined as costing more than Twenty Thousand and 00/100 Dollars
($20,000.00) to cure), material structural problems (material is defined as
costing more than Twenty Thousand and 00/100 Dollars ($20,000.00) to cure), or
any material code violations (material is defined as costing more than Twenty
Thousand and 00/100 Dollars ($20,000.00) to cure) with respect to the Spaulding
Building, Purchaser, upon notice to Seller prior to the expiration of the
Building Contingency Period, can terminate this Agreement, in which event the
Earnest Money shall be returned to Purchaser and both parties shall be
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released from liability hereunder. Purchaser shall indemnify and hold Seller
harmless for any damage or injury caused by Purchaser's investigation hereunder.
7. TITLE AND SURVEY MATTERS. (a) Conveyance of Title. At Closing,
Seller agrees to deliver to Purchaser a Warranty Deed, in recordable form,
conveying the Premises to Purchaser, or its nominee free and clear of all liens,
claims and encumbrances except for the Permitted Exceptions (as hereinafter
defined). At Closing, the parties shall exchange each of the documents listed
in Paragraph 11 below.
(b) Title Commitment; Title Policy. Within three (3) days of the Contract
Date, Seller has caused to be ordered from, and as soon thereafter as
practicable, but in no event more than five (5) days after the Contract Date,
cause to be furnished to Purchaser a Commitment for Owner's ALTA Title Insurance
Form B with extended coverage (the extended coverage endorsement is for the
Premises which contain Buildings, extended coverage will not be available for
the parking lots) ("Commitment") issued by a Chicago Title Insurance Company
("Title Company") setting forth the state of title to the Premises and all
exceptions and restrictions of record including deed restrictions, liens and
covenants; it being expressly understood that, notwithstanding anything herein
contained to the contrary, the cost of the extended coverage shall be paid for
by Seller. Purchaser may at its expense request Title Company to issue a 3.1
zoning endorsement (including parking), location endorsement, survey
endorsement, contiguity endorsement (to the alley contiguous to the Chicago
Property) and access endorsement. Said Commitment shall indicate that Seller
and Jupiter Real Estate Corp. are the sole owners of the Premises, that it is
fully authorized to convey the Premises and it shall indicate the amount of any
real estate taxes attributable to the Premises. Along with such commitment, the
Title Company shall also furnish Purchaser with copies of all documents
affecting the Premises and reflected in the Commitment. In the event any
exceptions appear in such Commitment or title documents other than the standard
printed exceptions (which shall be modified in the Owner's Title Policy as
hereafter provided) that are unacceptable to Purchaser, then Purchaser shall,
within two (2) days after Purchaser's receipt of the last of such Commitment and
title documents notify Seller in writing of such fact. Any such exceptions not
objected to by Purchaser shall hereinafter be referred to as "Permitted
Exceptions." Any exceptions objected to by Purchaser shall hereinafter be
called "Unpermitted Exceptions."
(c) Survey. Purchaser acknowledges Seller has delivered to Purchaser a
copy of all surveys in Seller's possession. Seller shall have no other
obligations related to surveys. Seller warrants that there are no new
improvements not shown on the surveys delivered to Purchaser.
(d) UCC Searches. Purchaser shall order (at Purchaser's expense), prior to
Closing, current searches (dated no more than thirty (30) days prior to Closing)
of all Uniform Commercial Code financing statements and judgment liens filed
with the Secretary of the State of Illinois, and the appropriate county
official, against Seller. If such searches reveal claims or liens against any of
such parties encumbering all or any portion of the Premises, then the cure
provisions set forth in Subparagraph (e) below shall apply.
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(e) Defects and Cure. The items described in Paragraph 7(b) is
collectively referred to as "Title Evidence." If the Title Evidence discloses
Unpermitted Exceptions, said Unpermitted Exceptions shall, as a Condition
Precedent to Closing, be cured or, removed by Seller from the Title Commitment
or insured over by the Title Company to the Purchaser's satisfaction prior to
Closing. If Seller fails to so cure all Unpermitted Exceptions, or if Seller
fails to cause all Unpermitted Exceptions to be insured over by the Title
Company, by the date of Closing then Purchaser (i) may terminate this Agreement
by written notice to the Seller in which event, the Earnest Money, shall be
returned to Purchaser and neither party shall have any further liability to the
other hereunder, or (ii) proceed to close by deducting from the cash otherwise
due at Closing and/or escrowing with the Title Company the amount necessary to
cure such Unpermitted Exceptions (if and only if such Unpermitted Exceptions are
of a liquidated nature and an ascertainable specific amount or can be endorsed
over by the Title Company by the payment or escrowing of an ascertainable
specific amount) and/or cause the Title Company to insure and/or endorse over
such Unpermitted Exceptions.
8. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and
warrants to Purchaser that the following matters are true as of the Contract
Date and shall be true as of the Closing Date:
(a) Title. Seller, or companies owned by or under common control with
Seller have title to the Premises and other than with respect to the Permitted
Exceptions, will at Closing be able to convey, good, marketable and insurable
title to the Premises, free and clear of all mortgages and security interests,
leases, agreements and tenancies, licenses, claims, liens, covenants,
conditions, restrictions, rights-of-way, easements, judgments and other matters
affecting title to the Premises (except the Permitted Exceptions).
(b) Contracts. Except for the Mt. Sinai Lease and Edmar Lease, there are
no contracts and Seller has entered into no contracts which affect the Premises
or Seller's ability to perform its covenants and promises made in this Agreement
which will survive date of possession.
(c) Compliance with Codes. To the best of Seller's actual knowledge, (i)
the Premises, and the use and operation thereof, are in full compliance with all
applicable municipal licenses, permits and authorizations; and (ii) there are
presently in effect all licenses, permits and other authorizations necessary for
the use, occupancy and operation of the Premises as it is presently being
operated.
(d) Insurance. Seller is not actually aware of any defects or inadequacies
in the Premises which, if not corrected, would result in termination of
insurance coverage or increase in the cost thereof.
(e) Zoning. The Seller agrees that prior to Closing, the Seller shall not
initiate any proceedings which could or would involve the change, redesignation,
redefinition or other modification of the zoning classification of the Premises,
or any portion thereof.
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(f) Litigation. To the best of Seller's knowledge there are no pending (or
threatened) judicial, municipal or administrative proceedings affecting the
Premises or any portion thereof, including, without limitation, proceedings for
or involving collections, condemnation, eminent domain, alleged building code,
environmental or zoning violations or personal injuries or property damage
alleged to have occurred on the Premises or by reason of the condition, use of,
or operations on the Premises. To the best of Seller's knowledge, Seller has
received no written notice from any municipal, state, federal or other
governmental authority of zoning, building, fire, water, use, health,
environmental or other statute, ordinance, code or regulatory violations issued
in respect of the Premises. To the best of Seller's knowledge, no attachments,
execution proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings are pending (or to the best of
Seller's actual knowledge, threatened) against Seller, nor are any of such
proceedings contemplated by Seller. In the event any proceeding of the character
described in this Paragraph 8(f) is initiated prior to Closing, Seller shall
promptly advise Purchaser thereof in writing. Seller shall indemnify and hold
Purchaser harmless from any liability, damages or causes of action resulting
from any building code violations of which Seller had knowledge, and with
regards to causes of actions regarding personal injury, (but excluding building
code violations for which Seller had no knowledge) that accrued with respect to
the Premises prior to the Closing. Purchaser shall indemnify and hold Seller
harmless for any liability, damages or causes of action that accrued with
respect to the Premises after the later of: (i) Closing, or (ii) the date Seller
(or the tenant under the Leases (as hereinafter defined) vacated the Premises.
The provisions of this Paragraph shall survive the Closing.
(g) Leases. There are no leases, or license agreements for the Premises
except for the Leases, Edmar Lease and the Sinai Lease. The Edmar Lease will
expire on May 31, 1997 (and there are no options to extend). The Mt. Sinai
Lease has a ten (10) year term, with one (1) five (5) year extension.
(h) Authority. The execution and delivery of this Agreement by Seller, and
the performance of this Agreement by Seller, have been duly authorized by
Seller, and this Agreement is binding on Seller and enforceable against Seller
in accordance with its terms. No consent of any creditor, investor, judicial or
administrative body, governmental authority or other party to such execution,
delivery and performance is required. Neither the execution of this Agreement
nor the consummation of the transactions contemplated hereby will (i) result in
a breach of, default under, or acceleration of, any agreement to which Seller,
or the Premises are a party, or by which Seller, or the Premises are bound; or,
(ii) to the best of Seller's actual knowledge, violate any restriction, court
order or agreement to which any or all of Seller, or the Premises are subject.
(i) Environmental Matters. Except for the two (2) underground storage
tanks at the Spaulding Property, to Seller's actual knowledge and belief, the
Premises, the mechanical and electrical equipment installed in, on, under and/or
around the Premises and the site, soil and ground water are free from any
underground storage tanks, underground vaults, asbestos and any toxic and/or
hazardous substances as defined in
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Section 101(14) of the Comprehensive Environmental Response, Compensation and
Liability Act, as amended, 42 U.S.C. Section 9601(14) which exist in violation
of any applicable law, statue or ordinance or any regulation promulgated
thereunder.
(j) United States Person. Seller is a "United States Person" and not a
"Foreign Person" within the meaning of Section 1445(f)(3) of the Internal
Revenue Code of 1986, as amended and shall execute and deliver an "Entity
Transferor" certification at Closing.
The continued validity in all material respects of all representations,
covenants and warranties set forth in this Agreement shall be a condition
precedent to the performance of Purchaser's obligations hereunder. All
representations and warranties set forth in this Agreement shall be continuing
and shall be true and correct on and as of the Closing Date with the same force
and effect as if made at that time, and Seller shall deliver an affidavit or
certificate at Closing making all representations, covenants and warranties as
of the Closing Date. The effect of Seller's representations and warranties set
forth in this Paragraph, or elsewhere in this Agreement, shall not be affected
by any investigation, verification or approval by any party hereto or by anyone
on behalf of any party hereto or by delivery of the transfer documents
contemplated herein, unless specifically agreed to or waived in writing by
Purchaser. If any of the representations, covenants and warranties contained in
this Agreement shall be untrue or invalid either on the date hereof or as of the
Closing Date, Purchaser, upon notice to Seller, can terminate this Agreement and
the Earnest Money shall be returned to Purchaser.
9. COVENANTS OF SELLER. Seller hereby covenants with Purchaser as
follows:
(a) New Leases During the Contingency Period. Seller may not execute any
lease, or extend any lease affecting the Premises, or any portion thereof prior
to the Closing Date. The Premises will not be subject to any lease, sublease,
concession agreement or license agreement as of the Closing Date (including but
not limited to the Ground Lease between Gold Shoes, Inc., as Lessor and
Goldblatt's Department Stores, Inc., as Lessee, which will be terminated prior
to Closing), except for the Leases, Edmar Lease and Mt. Sinai Lease.
(b) New Contracts. Seller shall not enter into any contract which will not
be fully performed prior to termination of the Leases with respect to the
ownership and operation of the Premises which will survive the Closing, or which
would otherwise affect the use, operation or enjoyment of the Premises, without
Purchaser's prior written consent.
(c) Operation of Premises. Seller shall operate and manage the Premises in
the same manner as it does as of, and on, the Contract Date; shall maintain the
Premises in the same condition that existed on the date of this Agreement; and
shall perform, when due, all obligations under the Governmental Approvals and
other agreements relating to the Premises and otherwise in accordance with
applicable laws,
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ordinances, rules and regulations affecting the Premises, except as otherwise
provided under this Agreement. Except as otherwise specifically provided herein,
Seller shall deliver the Premises at Closing in substantially the same condition
as it is on the Contract Date, reasonable wear and tear excepted.
(d) Pre-Closing Expenses. Seller has paid or will pay in full, (i) all
bills and invoices for labor, goods, material and services of any kind relating
to the Premises, for which Seller is responsible, and (ii) utility charges,
relating to the period prior to Closing, for which Seller is responsible.
(e) No Lien or Encumbrance. After the Contract Date and prior to Closing,
Seller shall not create any new liens or encumbrances over all or any part of
the Premises or any interest thereon that will survive Closing.
(f) Change in Conditions. Seller shall promptly notify Purchaser of any
substantive or material change in any condition with respect to the Premises or
of the occurrence of any substantive or material event or circumstance which
make any representation or warranty of Seller to Purchaser under this Agreement
untrue or misleading, or any covenant of Seller under this Agreement incapable
or less likely of being performed.
10. ADDITIONAL CONDITIONS PRECEDENT TO CLOSING. In addition to the other
conditions enumerated in this Agreement, the following shall be additional
Conditions Precedent to Purchaser's obligation to close hereunder:
(a) Physical Condition. The physical condition of the Spaulding Building
shall be substantially the same on the Closing Date as on the Contract Date,
reasonable wear and tear excepted. Seller shall remove all personal property
from the Premises including the fifty-five (55) gallon drums at all of the
Premises prior to the expiration of the term of the Leases.
(b) Pending Actions. At Closing, there shall be no condemnation, pending
or threatened, which, after Closing, would, materially and adversely affect the
value of the Premises or the ability of Purchaser to operate its business on the
Premises.
11. CLOSING DELIVERIES. At Closing (or such other times as may be
specified below), Seller and Purchaser, as applicable, shall deliver or cause to
be delivered to each other the following, in form and substance acceptable to
Purchaser:
(a) Deed. A Warranty Deed, executed by the Owner of Record, in recordable
form conveying the Premises to Purchaser (or as Purchaser otherwise directs
pursuant to a right to do so) free and clear of all liens, claims and
encumbrances except for the Permitted Exceptions.
(b) UCC Search. Uniform Commercial Code Searches of all financing
statements and judgment liens filed with the Secretary of State or Cook County
Recorder of Deeds against Seller, as provided in Paragraph 7(d).
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(c) Bill of Sale. A Bill of Sale, executed by Seller, to Purchaser of all
right, title and interest of Seller and its agents in and to the Personal
Property located on the Premises on the Contract Date.
(d) Affidavit of Title and ALTA Statement. An Affidavit of Title and an
ALTA Statement, each executed by Seller and in form and substance acceptable to
the Title Company and to Purchaser.
(e) Possession. Possession of that portion of the Premises that is subject
to the Mt. Sinai Lease, subject to the rights of Mt. Sinai.
(f) Leases. Leases (executed by Seller and Purchaser) and the Guarantor
(as hereinafter defined).
(g) Title Policy. The Title Policy issued by the Title Company, dated as
of the Closing Date, in the amount of the Purchase Price, with such endorsements
and otherwise in accordance with the requirements of Paragraph 7 above, with all
exceptions other than Permitted Exceptions deleted or endorsed over.
(h) Closing Statement. A closing statement conforming to the prorations
and other relevant provisions of this Agreement.
(i) Tax Bills. Copies of the most currently available tax bills.
(j) Entity Transfer Certificate. Entity Transfer Certification confirming
that Seller is a "United States Person" within the meaning of Section 1445 of
the Internal Revenue Code of 1986, as amended.
(k) Illinois Responsible Property Transfer Act. If applicable, copies of
any and all documents relating to, or required to be prepared pursuant to, the
Illinois Responsible Property Transfer Act. S.H.A. Ch. 30 Sec. 901 et. seq.,
including, but not limited to, the Environmental Disclosure Document for
Transfer of Real Property, as provided for in the Act.
(l) Assignment and Assumption of Edmar Lease and Mt. Sinai Lease.
Assignment and Assumption of the Edmar Lease and Mt. Sinai Lease executed by
Purchaser and Seller to Purchaser. Seller shall indemnify Purchaser for any
causes of action that accrued under the Edmar Lease and Mt. Sinai Lease prior to
the date of the assignment. Purchaser shall indemnify Seller for any causes of
action that accrued under the Edmar Lease and Mt. Sinai Lease after the date of
the Assignment. Seller will pay at Closing any broker commissions payable
pursuant to the Mt. Sinai Lease. Seller will complete any Landlord Work
required under the Mt. Sinai Lease.
(m) Estoppel Certificate. (i) Estoppel certificate from the tenant under
the Edmar Lease evidencing the following: landlord and tenant are not in
default, the landlord does not owe the tenant any money, there is no landlord
work required under the lease, the term of the lease shall expire on May 31,
1997, there are no options to
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extend the term of the lease, the amount of rent payable under the lease, rent
has not been paid more than thirty (30) days in advance and the amount of any
security deposit under the Lease (ii) Estoppel certificate from the tenant under
the Mt. Sinai Lease evidencing the following: landlord and tenant are not in
default, the Landlord does not owe the Tenant any money, the Landlord's work
required under the Lease has been completed (or what portion of Landlord's Work
has not been completed), the term of the lease shall expire on ________________,
there are no options to extend the term of the lease, the amount of rent payable
under the lease, rent has not been paid more than thirty (30) days in advance
and the amount of any security deposit under the Lease.
(n) Tax Stop Order. Seller shall provide a letter from the Illinois
Department of Revenue advising that Seller has no assessed for unpaid taxes,
penalties or interest under Section 9.02(d) Illinois Income Tax Act and that no
withholding is necessary to comply with such acts. Seller shall provide a
letter from the City of Chicago advising that Seller has no assessment for
unpaid taxes, penalties or interest under the City of Chicago Bulk Sales Act.
(o) Other. Such other documents and instruments as may reasonably be
required by Seller, Purchaser, their counsel, Purchaser's lender, or the Title
Company agreed to between Seller and Purchaser, or may be reasonably requested
by Purchaser's lender, and which may be necessary to consummate this transaction
and to otherwise effect the agreements of the parties hereto and not
inconsistent with the terms of this Agreement.
After Closing, Seller and Purchaser shall execute and deliver to each other
such further documents and instruments as Seller and Purchaser may agree, which
either party shall reasonably request to effect this transaction and otherwise
effect the agreements of the parties hereto. The Closing shall be closed
pursuant to a deed and money escrow with the Title Company.
12. PRORATIONS AND ADJUSTMENTS. The following shall be prorated and
adjusted between Seller and Purchaser as of the Closing Date, except as
otherwise specified:
(a) Purchaser and Seller shall divide the cost of any escrows (except
Purchaser's Money Lender's escrow which shall be the sole obligation of
Purchaser) hereunder equally between them. Seller shall be responsible for the
cost of any "New York Style" Closing if Seller chooses to close in a "New York
Style" Closing.
(b) Amounts paid or payable under Assigned Contracts shall be prorated.
(c) All assessments, general or special, which are due and payable prior
to Closing (or installments of special assessments due after Closing for
improvements completed prior to Closing), shall be paid by Seller prior to
Closing. All assessments, general or special, which are first due and payable
after expiration of the term of the Leases shall be paid by Purchaser.
<PAGE>
(d) All non-delinquent general real estate taxes shall be prorated at
Closing based on one hundred five percent (105%) of the most recently
ascertainable tax bill (or most recent ascertainable tax rate, assessed
valuation and state equalization factor, if more recent). The date used for the
proration of the taxes shall be the date the Leases are terminated and Seller
will be responsible to pay the taxes through the termination date of the Leases.
The parties agree to re-prorate the credit when the actual tax bills are
received. This provision will survive Closing.
(e) Seller shall pay for all utilities used with respect to the Premises
prior to the Closing Date and Purchaser shall (subject to the Leases and the Mt.
Sinai Lease) pay for utilities used after the Closing Date. All items of income
and expense and such other items that are customarily prorated in transactions
of this nature shall be ratably prorated.
(f) The rent and other payments under the Edmar Lease and Mt. Sinai Lease
shall be prorated, and Purchaser will be given a credit for the security
deposit, if any.
For purposes of calculating prorations, Seller shall be deemed to be in
title to the Premises, for the entire day upon which the Closing occurs. All
such prorations shall be made on the basis of the actual number of days of the
year and month which shall have elapsed as of the Closing Date. To the extent
not ascertainable at the Closing Date, the amount of such prorations shall be
adjusted in cash after Closing, as and when complete and accurate information
becomes available. Seller and Purchaser agree to cooperate and use their
diligent and good faith efforts to make such adjustments no later than thirty
(30) days after the Closing. Items of income and expense for the period prior
to and including the Closing Date will be for the account of Seller and items of
income and expense for the period after the Closing Date will be for the account
of Purchaser, all as determined by the accrual method of accounting. Bills
received after Closing which relate to expenses incurred, services performed on
other amounts allocable to the period prior to and including the Closing Date
shall be paid by Seller.
13. CLOSING EXPENSES. Seller will pay the entire cost of the Extended
Coverage Title Policy, and Seller will pay all documentary and state and county
transfer taxes relating to the instruments of conveyance contemplated herein,
and one-half of any escrow hereunder (exclusive of any money-lenders escrow).
Purchaser will pay the costs of any requested endorsements to the Title Policy
and one-half (2) of any escrows hereunder and any money lenders escrow and the
City of Chicago Transfer Tax.
14. DESTRUCTION, LOSS OR DIMINUTION OF PREMISES. If prior to Closing, all
or any portion of any one of the Premises is made subject to condemnation,
eminent domain or other governmental acquisition proceedings, or if the
Spaulding Building as a fire or other casualty, then the following provisions
shall apply:
(a) If the cost of repair or replacement or the value of the governmental
taking is Twenty Thousand and 00/100 Dollars ($20,000.00) or less, in the
opinion of Purchaser's and Seller's respective engineering consultants and the
condemnation will
<PAGE>
not adversely effect Purchaser's intended use of the Property, Purchaser shall
in the event of a condemnation close and take an assignment of the condemnation
proceedings, Purchaser shall in the event of fire or casualty, receive a credit
in the amount necessary to repair the damages.
(b) If the cost of repair or replacement in the event of a condemnation is
greater than Twenty Thousand and 00/100 Dollars ($20,000.00) in the opinion of
Purchaser's and Seller's respective engineering consultants, or the condemnation
will adversely effect the Purchaser's intended use of the Property, then
Purchaser, at its sole option, may, with written notice to Seller, elect either
to (i) terminate this Agreement, in which event the Earnest Money shall be
returned to Purchaser, or (ii) proceed to close subject to an assignment to
Purchaser of the Seller's condemnation proceeds. In the event Purchaser elects
to proceed to close, Seller shall fully cooperate with Purchaser in the
adjustment and settlement of the condemnation proceeds to be transferred and
paid over to Purchaser.
(c) In the event of a fire or casualty at the Spaulding Property, the cost
to repair is in excess of Twenty Thousand and 00/100 Dollars ($20,000.00) and
the Mt. Sinai Lease requires the Landlord to rebuild the Building, then
Purchaser, at its sole option, may, with written notice to Seller, select either
to (i) terminate this Agreement, in which event the Earnest Money shall be
returned to Purchaser, or (ii) proceed to close and Seller will assign to
Purchaser all of Seller's insurance proceeds with respect to the Spaulding
Property that is subject to the casualty, and give Purchaser a credit equal to
the deductible under the insurance policy.
(d) In the event of a dispute between Seller and Purchaser with respect to
the cost of repair, restoration or replacement with respect to the matters set
forth in this Paragraph 14, an engineer designated by Seller and an engineer
designated by Purchaser shall select an independent engineer licensed to
practice in the jurisdiction where the Premises is located who shall resolve
such dispute. All fees, costs and expenses of such third engineer so selected
shall be shared equally by Purchaser and Seller.
15. DEFAULT. (a) Default by Seller. If Seller is unable to convey title
to all three of the Premises in accordance with and subject to the conditions in
this Agreement, if there has occurred a material breach of any of Seller's
representations, warranties, and/or covenants, or if the conditions precedent to
Purchaser's performance specified herein have neither been satisfied nor waived
by Purchaser, Purchaser may, at Purchaser's option, terminate this Agreement by
written notice forwarded to Seller on or prior to the Closing Date, in which
event the Earnest Money shall be returned to Purchaser, or Purchaser may
enforce, by an action for specific performance, the terms of this Agreement as
its sole remedies.
(b) Default by Purchaser. In the event Purchaser defaults in its
obligations to close the purchase of the Premises, then Seller's sole and
exclusive remedy shall be to cause the Escrowee to deliver the Earnest Money to
Seller as liquidated damages, it being understood that Seller's actual damages
in the event of such default are difficult
<PAGE>
to ascertain and that such proceeds represent the parties' best current estimate
of such damages. Seller shall have no other remedy for any default by
Purchaser.
16. ASSIGNMENT. Purchaser may assign its rights in this Agreement and
such assignment shall be effective upon the date a copy of said assignment is
delivered to Seller and Purchaser shall remain liable for the performance of the
covenants and conditions herein contained on the part of Purchaser to be
performed.
17. NOTICES. Any notice, demand or request which may be permitted,
required or desired to be given in connection therewith shall be given in
writing and directed to Seller and Purchaser as follows:
If to Seller: Goldblatt Bros., Inc.
1615 West Chicago Avenue
Chicago, Illinois 60622
Facsimile (312) 787-5625
If to Purchaser: Delray Farms, Inc.
815 West Van Buren, Suite #500
Chicago, Illinois 60607
Attention: James P. McDermott
Facsimile (312) 455-9829
With a copy to: Schain, Firsel & Burney, Ltd.
222 North LaSalle Street, Suite #1910
Chicago, Illinois 60601
Attention: Michael E. Ross
Facsimile: (312) 332-4514
Notices shall be deemed properly delivered and received when and if either
(i) personally delivered, (ii) delivered by national overnight courier, (iii)
three (3) business days after being deposited in the U.S. Mail, by registered or
certified mail, return receipt requested, postage prepaid, or (iv) by facsimile,
upon confirmation of transmittal, if followed by a hard copy deposited in U.S.
Mail.
18. LIMITATION OF LIABILITY. Upon the Closing, Purchaser shall neither
assume nor undertake to pay, satisfy or discharge any liabilities, obligations
or commitments of Seller other than those specifically agreed to between the
parties and set forth in this Agreement. Except with respect to the foregoing
obligations, Purchaser shall not assume or discharge any debts, obligations,
liabilities or commitments of Seller, whether accrued now or hereafter, fixed or
contingent known or unknown.
19. BROKERAGE. Seller and Purchaser represent and warrant to each other
that each has not dealt with any broker with respect to the transaction
contemplated by this Agreement. Seller and Purchaser each hereby indemnify,
protect and defend and hold the other harmless from and against all losses,
claims, costs, expenses, damages (including, but not limited to, attorneys' fees
of counsel selected by the
<PAGE>
indemnified party) resulting from the claims of any broker, finder, or other
such party claiming by, through or under the acts or agreements of the
indemnifying party. Notwithstanding any provision of this Agreement to the
contrary, the obligations of the parties pursuant to this Paragraph 19 shall
survive any termination of this Agreement.
20. MISCELLANEOUS. (a) Entire Agreement. This Agreement and Exhibits "A"
and "B" which are attached hereto and made a part hereof, constitute the entire
agreement between Seller and Purchaser, and there are no other covenants,
agreements, promises, terms, provisions, conditions, undertakings, or
understandings, either oral or written, between them concerning the Premises
other than those herein set forth. No subsequent alteration, amendment, change,
deletion or addition to this Agreement shall be binding upon Seller or Purchaser
unless in writing and signed by both Seller and Purchaser.
(b) Headings. The headings, captions, numbering system, etc., are inserted
only as a matter of convenience and may under no circumstances be considered in
interpreting the provisions of the Agreement.
(c) Binding Effect. All of the provisions of this Agreement are hereby
made binding upon and shall inure to the benefit of the personal
representatives, heirs, successors, and assigns of both parties hereto.
(d) Time of Essence. Time is of the essence of this Agreement.
(e) Unenforceable or Inapplicable Provisions. If any provision hereof is
for any reason unenforceable or inapplicable, the other provisions hereof will
remain in full force and effect in the same manner as if such unenforceable or
inapplicable provision had never been contained herein.
(f) Counterparts. This Agreement may be executed in any number of
counterparts, each of which will for all purposes be deemed to be an original,
and all of which are identical.
(g) Applicable Law, Place of Performance. This Agreement shall be
construed under and in accordance with the laws of the State of Illinois. All
obligations contained in this Agreement are performed in Cook County, State of
Illinois.
(h) Purchaser's Waiver of Conditions Precedent. Purchaser may, at
Purchaser's sole option, waive any of the conditions precedent to Purchaser's
performance specified in this Agreement by giving written notice to Seller at
any time on or before the Closing Date.
(i) Survival Clause. The representations, warranties and covenants
contained herein shall not merge in the deed or any other document and shall
survive the Closing.
<PAGE>
(j) Closing Date. In the event that the Closing Date or any other deadline
date described in this Agreement falls on a weekend or a holiday, the Closing
Date or other deadline date shall be deemed to be the next business day.
(k) Expiration of Offer. The execution of this document by Purchaser shall
be null and void unless Purchaser receives a fully executed original of this
Agreement on or before July 2, 1996.
(l) Contract Date. The Contract Date shall be the latest date both Seller
and Purchaser have executed this Agreement.
(m) As Is. Except as expressly provided in this Agreement, Purchaser
acknowledges that Seller shall convey the Premises to Purchaser at Closing in an
"AS IS" condition without representation and warranty.
(n) Approval. Seller's obligations under this Agreement are contingent
upon the Board of Directors approving this Agreement on or before June 25, 1996.
If Seller does not give Purchaser notice on or before June 26, 1996, than its
Board of Directors did not approve this Agreement, this Agreement will be deemed
approved and the contingency under this Section shall be deemed satisfied.
(o) Leases. At Closing Purchaser, as the landlord and Goldblatt's
Department Store, Inc., as the tenant, will enter into a lease for the Spaulding
Building (excluding any space lease to Mt. Sinai) and Spaulding Property
("Spaulding Lease"), a lease for the Chicago Building and Chicago Property
(excluding any space leased to Edmar) ("Chicago Lease") and a lease for the
Exchange Building and Exchange Property ("Exchange Lease") (the Spaulding Lease,
Chicago Lease and Exchange Lease are collectively called "Leases"). The term of
the Spaulding Lease shall commence on the Closing Date and shall expire sixty
(60) days thereafter. The term of the Chicago Lease shall commence on the
Closing Date and shall expire ninety (90) days thereafter. The term of the
Exchange Lease shall commence on the Closing Date and shall expire sixty (60)
days thereafter. There shall be no options to extend the term of the Leases.
JG Industries, Inc. ("Guarantor") shall guaranty the tenant's obligations under
the Leases, including but not limited to the obligation to pay for any holdover
penalties.
The Leases will provide that the premises will be rent free and only be
used as a Goldblatt's Store. The tenant must maintain the leased premises in
the same condition that existed on the Closing Date. The tenant must pay all
utilities used on the leased premises during the term of the Leases. The tenant
must pay the real estate taxes for the leased premises during the term of the
Lease. The tenant must maintain for the mutual benefit of landlord and tenant
(landlord will be named as an additional insured) comprehensive general public
liability insurance (including contractual liability) against claims for bodily
injury, death or property damage, occurring upon, in or about the leased
premises and adjoining sidewalks and parking areas for at least Three Million
and 00/100 Dollars ($3,000,000.00) combined single limit for bodily injury and
property damage. The tenant shall keep the improvements of the leased premises
insured during the term of the Leases, against loss or damage by fire or
<PAGE>
casualty, with an extended coverage endorsement, in an amount equal to one
hundred percent (100%) of the full replacement value (including clean up) of the
improvements, exclusive of the cost of foundations, without any deductible, the
landlord shall be the named insured under the policy. All insurance shall be
effected under valid and enforceable policies (which shall be for the term of
the Leases and the policies shall be given to the landlord at Closing), issued
by insurers licensed to do business in the State of Illinois, with a Bests
Rating of at least A/X. The tenant will indemnify and hold the landlord
harmless for any liabilities, damages, causes of action, loss, cost, expense,
and attorneys' fees which may be imposed upon, or incurred, or asserted by
landlord by reason of the tenants occupancy or use of the leased premises or the
use by tenant, its agents, contractors, customers, or invitees of the leased
premises.
In the event the tenant holds over after the term of the Spaulding Lease
expires, the landlord shall be paid Ten Thousand and 00/100 Dollars ($10,000.00)
a day from the tenant for each day the tenant is in possession after the term of
the Spaulding Lease expired. In the event the tenant holds over after the term
of the Chicago Lease expires, the landlord shall be paid Ten Thousand and 00/100
Dollars ($10,000.00) a day from the tenant, for each day the tenant is in
possession after the term of the Chicago Lease expired. In the event the tenant
holds over after the term of the Exchange Lease expires, the landlord shall be
paid Ten Thousand and 00/100 Dollars ($10,000.00) a day from the tenant, for
each day the tenant is in possession after the term of the Exchange Lease
expires.
(p) Confidentiality. Seller and Purchaser acknowledge and agree that the
terms of this Agreement and the transaction contemplated hereby are confidential
in nature and shall not be disclosed except as reasonably necessary to
consummate the terms of this transaction and as applicable law, including,
without limitation, securities laws, may require. Purchaser acknowledges that
Seller is a subsidiary of a publicly traded corporation, and upon consummation
of the transaction contemplated hereby may be required by applicable law, or by
its reasonable interpretation thereof, to issue a public statement regarding
this Agreement, but Seller will use diligent efforts not to issue the economic
terms thereof in any press release.
SELLER:
------
GOLDBLATT DEPARTMENT STORES, INC., an
Illinois corporation
By:
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Its:
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Dated:
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<PAGE>
GOLDBLATT SUBSIDIARY, INC.
By:
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Its:
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Dated:
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PURCHASER:
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DELRAY FARMS, INC., a Delaware corporation
By:
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Its:
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Attest:
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Its:
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Dated:
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