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Exhibit 10.1
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MOULTRIE-COLQUITT COUNTY DEVELOPMENT AUTHORITY
(a
public body corporate and politic)
as Lessor
and
SANDERSON FARMS, INC. (PROCESSING DIVISION)
(a corporation organized and existing
under the laws of the State of Mississippi)
as Lessee
LEASE AGREEMENT
Dated as of December 1, 2004
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THE RIGHTS AND INTEREST OF
MOULTRIE-COLQUITT COUNTY DEVELOPMENT AUTHORITY IN THE
PROJECT LEASED HEREUNDER, THIS LEASE
AGREEMENT AND CERTAIN REVENUES AND RECEIPTS
DERIVED HEREUNDER, EXCEPT FOR CERTAIN
UNASSIGNED RIGHTS, AS DEFINED HEREIN, HAVE
BEEN ASSIGNED AND PLEDGED AS SECURITY FOR
THE $80,000,000 MAXIMUM PRINCIPAL
AMOUNT MOULTRIE-COLQUITT COUNTY DEVELOPMENT
AUTHORITY TAXABLE INDUSTRIAL
DEVELOPMENT REVENUE BOND (SANDERSON FARMS,
INC. (PROCESSING DIVISION) PROJECT),
SERIES 2004, AS PROVIDED IN A DEED TO
SECURE DEBT, ASSIGNMENT OF RENTS AND
LEASES AND SECURITY AGREEMENT, OF EVEN DATE
HEREWITH, BETWEEN MOULTRIE-COLQUITT
COUNTY DEVELOPMENT AUTHORITY AND SANDERSON
FARMS, INC. (PROCESSING DIVISION) AND
SUCCESSOR HOLDERS OF SUCH BOND.
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LEASE AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of the Lease
Agreement and is only for convenience of reference.)
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PARTIES AND
RECITALS........................................................................................................
1
ARTICLE I DEFINITIONS AND OTHER PROVISIONS
OF GENERAL
APPLICATION..........................................................
3
Section 1.1.
Definitions.....................................................................................
3
Section 1.2. Construction Of
Certain
Terms...................................................................
10
Section 1.3. Table of
Contents; Titles and
Headings..........................................................
10
Section 1.4. Contents of
Certificates or
Opinions............................................................
10
ARTICLE II REPRESENTATIONS AND
UNDERTAKINGS.................................................................................
12
Section 2.1. Representations
by the
Issuer...................................................................
12
Section 2.2. Representations
by the
Company..................................................................
14
ARTICLE III LEASING CLAUSE; SECURITY;
TITLE.................................................................................
15
Section 3.1. Lease of the
Project............................................................................
15
Section 3.2. Security for
Payments Under the
Bond............................................................
15
Section 3.3. Warranties and
Covenants of Issuer as to
Title..................................................
15
ARTICLE IV ACQUISITION AND INSTALLATION OF
THE PROJECT; ISSUANCE OF THE BOND;
FUNDS......................................... 16
Section 4.1. Agreement to
Acquire and Install the
Project....................................................
16
Section 4.2. Agreement to
Issue the Bond; Application of
Proceeds............................................ 16
Section 4.3. Disbursements of
Bond
Proceeds..................................................................
16
Section 4.4. Obligation of
the Parties to Cooperate in Furnishing Documents; Reliance of the
Custodian.......
17
Section 4.5. Excess
Costs....................................................................................
17
Section 4.6. Authorized
Company and Issuer
Representatives...................................................
17
Section 4.7. Enforcement of
Remedies Against Contractors and Subcontractors and Their Sureties
and Against
Manufacturers and
Vendors.......................................................................
17
Section 4.8. Establishment of
Completion
Date................................................................
18
ARTICLE V EFFECTIVE DATE OF THIS LEASE;
DURATION OF LEASE TERM; RENTAL PROVISIONS; NATURE OF OBLIGATIONS OF
COMPANY........
19
Section 5.1. Effective Date
of this Lease; Duration of Lease
Term............................................ 19
Section 5.2. Delivery and
Acceptance of
Possession...........................................................
19
Section 5.3. Rents and Other
Amounts
Payable.................................................................
19
Section 5.4. Place of Rental
Payments........................................................................
20
Section 5.5. Nature of
Obligations of Company
Hereunder......................................................
20
Section 5.6. Restrictions on
the Use of
Project..............................................................
21
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ARTICLE VI MAINTENANCE, TAXES, INSURANCE
AND EMINENT
DOMAIN.................................................................
22
Section 6.1. Maintenance of
Project..........................................................................
22
Section 6.2. Removal of
Fixtures and
Equipment...............................................................
22
Section 6.3. Taxes, Other
Governmental Charges, and Utility
Charges.......................................... 23
Notwithstanding the foregoing, under the Act the Project, being
property of the Issuer, is subject to the same
exemption from ad valorem taxation as property of the City and
County, and it is not expected
that any actual ad valorem taxes will be due with respect to any
tax year if on January 1 of
such year the Project is owned by the
Issuer...................................................
23
Section 6.4. Insurance
Required..............................................................................
23
Section 6.5. Application of
Net Proceeds of
Insurance........................................................
24
Section 6.6. Advances by the
Issuer or the
Holder............................................................
24
Section 6.7.
Eminent
Domain..................................................................................
25
ARTICLE VII DAMAGE, DESTRUCTION, AND
CONDEMNATION...........................................................................
26
Section 7.1. Election to
Repair, Restore or
Replace..........................................................
26
Section 7.2. Election Not to
Repair, Restore or
Replace......................................................
26
ARTICLE VIII ADDITIONAL COVENANTS;
ADDITIONAL
BONDS.........................................................................
27
Section 8.1. No Warranty of
Condition or Suitability by the
Issuer........................................... 27
Section 8.2. Access to the
Project and
Records...............................................................
27
Section 8.3. Company to
Maintain its Existence; Conditions Under Which Exceptions
Permitted.................. 27
Section
8.4.
Good Standing in the
State......................................................................
27
Section 8.5.
Indemnity.......................................................................................
27
Section 8.6. Licenses and
Permits............................................................................
28
Section 8.7. Compliance with
Laws............................................................................
28
ARTICLE IX ASSIGNMENT, SUBLEASING,
ENCUMBERING, AND SELLING; REDEMPTION; RENT PREPAYMENTS AND
ABATEMENT; INSTALLATION OF
COMPANY'S OWN MACHINERY AND
EQUIPMENT............................................................................
30
Section 9.1. Assignment and
Subleasing.......................................................................
30
Section 9.2. Restrictions on
Sale, Encumbrance, or Conveyance of the Project by the
Issuer................... 31
Section 9.3. Pledge of this
Lease by the Company;
Easements..................................................
31
Section 9.4. Redemption of
Bond..............................................................................
31
Section 9.5. Prepayment of
Rents.............................................................................
31
Section 9.6. Company Entitled
to Certain Rent Abatements if Bond Paid Prior to
Maturity...................... 32
Section 9.7. Installation of
Other Machinery and Rented
Equipment............................................ 32
Section 9.8. Reference to
Bond Ineffective After Bond
Paid...................................................
32
ARTICLE X EVENTS OF DEFAULT AND
REMEDIES...................................................................................
33
Section 10.1. Events of Default
Defined.......................................................................
33
Section 10.2. Remedies on
Default.............................................................................
33
Section 10.3. Remedies Not
Exclusive..........................................................................
34
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Section 10.4. Company to Pay Fees
and
Expenses................................................................
34
Section 10.5. Waiver of Events of
Default.....................................................................
35
ARTICLE XI OPTIONS IN FAVOR OF
COMPANY......................................................................................
36
Section 11.1. Company's Option to
Terminate Lease
Term........................................................
36
Section 11.2. Option to Purchase
Project......................................................................
36
Section 11.3. No Obligation to
Exercise
Options...............................................................
36
Section 11.4. Conveyance on Exercise
of Option to
Purchase....................................................
36
Section 11.5. Public Purpose of
Lease and Option to
Purchase..................................................
37
Section 11.6. Priority Position of
Option.....................................................................
37
ARTICLE XII
MISCELLANEOUS...................................................................................................
38
Section 12.1. Quiet
Enjoyment.................................................................................
38
Section 12.2.
Notices.........................................................................................
38
Section
12.3.
Construction and Binding
Effect.................................................................
39
Section 12.4.
Severability....................................................................................
39
Section 12.5. Amounts Remaining in
the
Funds..................................................................
39
Section 12.6. Fees Paid by the
Company........................................................................
39
Section 12.7. No Issuer Liability;
Immunity of Members, Officers, and Employees of
Issuer..................... 39
Section 12.8. Amendments, Changes,
and
Modifications..........................................................
40
Section 12.9. Execution of
Counterparts.......................................................................
40
Section 12.10.
Law Governing Construction of this
Lease........................................................
40
Section 12.11.
Covenants Run with
Project......................................................................
40
Section 12.12.
Subordination to Security
Document..............................................................
40
Section 12.13.
Net
Lease.......................................................................................
40
Section 12.14.
Surrender of
Project............................................................................
40
Section 12.15.
Immunity of Members, Managers, and Employees of
Company......................................... 40
Section 12.16.
Payments Due on Other than Business
Days........................................................
41
Section 12.17.
Clawback
Provision..............................................................................
41
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LEASE AGREEMENT
This LEASE
AGREEMENT (this "Lease"), dated as of December 1, 2004, by and
between the MOULTRIE-COLQUITT COUNTY
DEVELOPMENT AUTHORITY (the "Issuer"), a
public body corporate and politic created
and existing under the laws of the
State of Georgia, party of the first part,
and SANDERSON FARMS, INC. (PROCESSING
DIVISION) (the "Company"), a corporation
organized and existing under the laws
of the State of Mississippi and qualified
to do business in Georgia, party of
the second part;
W I T N E S S E T H:
WHEREAS,
the Issuer is a public body corporate and politic and
development
authority duly created by local
constitutional amendment Ga. L. 1960, p. 1402,
amended by Ga. L, 1964, p. 403, further
amended by Ga. L. 1976, p. 1773, and
continued by Ga. L. 1985, p. 4745 (the
"Act"); and
WHEREAS,
pursuant to the Act, the Issuer has been created for the
purpose
of promoting and expanding for the public
good and welfare of the City of
Moultrie (the "City") and Colquitt County
(the "County") and their citizens,
industry, agriculture, trade and commerce
therein, and making long range plans
therefor, and is authorized to acquire
property including lands, improvements
and equipment to be sold or leased to
private persons, firms or corporations for
operation, and to issue its revenue bonds
to finance such property; and
WHEREAS,
the Issuer has been informed by Sanderson Farms, Inc.
(Processing
Division) (the "Company") that it plans to
operate a new poultry processing
plant and waste water treatment facility in
the County and that: (a) the Company
desires for the Issuer to issue its revenue
bond to finance a capital project
consisting of land, a building, other
improvements to such land and equipment to
be used therein (the "Project"); (b) the
Company has estimated that the
planning, acquisition, installation and
carrying out of the Project, the
issuance of the bond, and related costs
permitted by the Act ("Costs of the
Project") may require expenditures of bond
proceeds of up to $80,000,000; and
(c) the Project is expected to create
approximately 1,400 jobs in the County and
will otherwise have a favorable impact on
the welfare of the City and the
County; and
WHEREAS,
it is desirable for the Issuer: (i) to sell and issue its
Taxable
Industrial Development Revenue Bond
(Sanderson Farms, Inc. (Processing Division)
Project), Series 2004 (the "Bond"), having
a maximum principal amount not to
exceed $80,000,000 (hereinafter called the
"Maximum Principal Amount") to pay or
reimburse costs of the Project; (ii) to
acquire the Project; and (iii) to lease
the Project to the Company under this
Lease; and
WHEREAS,
pursuant to the resolution (the "Bond Resolution") adopted by
the
Issuer authorizing the issuance and sale of
the Bond to the Company, as
"Purchaser" and the initial "Bondholder",
the execution of this Lease and the
other Issuer Documents (identified in the
Bond Resolution), the Issuer is
pledging to the payment of the Bond the
Pledged Security (as defined in the
Security Document (hereinafter identified);
and
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WHEREAS,
the Issuer anticipates that (i) it will acquire land for the
Project using the proceeds of a grant from
the OneGeorgia Authority EDGE Fund in
the amount of $2,275,000, (ii) costs of
certain infrastructure for the Project
will be paid for with proceeds of a EDA
grant from the United States Department
of Commerce in an amount of up to
$1,200,000, and (iii) up to $500,000 of the
proceeds of a grant from the Georgia
Department of Community Affairs will be
made available to defray the costs incurred
in the installation of the force
main connecting the waste water treatment
plant to the spray field; and
WHEREAS,
in the Bond Resolution the Issuer found and determined that the
economic benefits that will inure to the
City, the County and to the State of
Georgia, and their citizens from the
Project and the operation thereof by the
Company and the payments to be made by the
Company under this Lease will be
equal to or greater than the benefits to be
derived by the Company under this
Lease (including the purchase option
granted to the Company herein) and from the
grants referred to above (taking into
account payments to be made by the Company
should it fail to operate the Project or
ceases operating the Project as
provided in the Incentives and
Reimbursement Agreement, defined herein);
therefore, the use of proceeds of the Bond
to pay Costs of the Project, the
leasing of the Project to the Company under
this Lease, the granting to the
Company of the purchase option contained in
this Lease, and the use of proceeds
of various grants and other incentives
being provided to the Company under the
Incentives and Reimbursement Agreement, do
not violate the prohibition in the
Georgia constitution on the payment by
public bodies of gratuities to private
sector Persons.
NOW,
THEREFORE, in consideration of the respective representations
and
agreements hereinafter contained, the
parties hereto agree as follows, provided
that, in the performance of the agreements
of the Issuer herein contained, any
obligation it may thereby incur for the
payment of money shall not constitute a
general obligation of the Issuer but shall
be payable solely out of the Pledged
Security, and the Bond shall not constitute
a general obligation of the Issuer
nor constitute an indebtedness or general
obligation of the State of Georgia or
any other agency or political subdivision
of the State of Georgia, within the
meaning of any constitutional or statutory
provision whatsoever:
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ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION
1.1 DEFINITIONS. Certain capitalized words and terms used in
this
Lease are defined in the text hereof or in
the Bond Resolution (defined below).
In addition to the words and terms defined
elsewhere herein and in the Bond
Resolution, the following words and terms
are defined terms under this Lease:
"ACT"
means local constitutional amendment Ga. L. 1960, p. 1402,
amended
by Ga. L, 1964, p. 403, further amended by
Ga. L. 1976, p. 1773, and continued
by Ga. L. 1985, p. 4745.
"ADDITIONAL RENT" means the amounts payable by the Company,
described in
Section 5.3(b) of this Lease.
"ADDITIONS
OR ALTERATIONS" means modifications, upgrades, alterations,
additions, enlargements, or expansions to
property comprising the Project.
"AFFILIATE" means a Person which is controlled by the Company or
its
corporate successor, which controls the
Company or its successor or which is
under common control with the Company or
its successor (direct or indirect
ownership of more than fifty percent (50%)
of the voting power constituting
"control" of a Person for such
purpose).
"AGENCY
AGREEMENT" means the Agency Agreement, dated as of the Document
Date between the Issuer and the Company, in
substantially the form attached to
the Bond Resolution, as Exhibit D thereto,
as it may be amended in accordance
with Article IX of the Bond Resolution.
"AUTHORIZED COMPANY REPRESENTATIVE" means the person who has
executed this
instrument on behalf of the Company and any
other person at the time designated
to act on behalf of the Company by written
certificate furnished to the Issuer
and the Custodian, containing the specimen
signature of such person and signed
on behalf of the Company by an officer of
the Company, or by an officer of each
of its members. Such certificate or any
subsequent or supplemental certificate
so executed may designate an alternate or
alternates.
"AUTHORIZED ISSUER REPRESENTATIVE" means the person who has
executed this
instrument on behalf of the Issuer and any
other person at the time designated
to act on behalf of the Issuer by written
certificate furnished to the Company
and the Custodian, containing the specimen
signature of such person and signed
on behalf of the Issuer by the Chairman or
Vice Chairman of the Issuer. Such
certificate or any subsequent or
supplemental certificate so executed may
designate an alternate or alternates.
"BASIC
RENT" means the rent payable by the Company to the Issuer,
described under the subheading "Basic Rent"
in Section 5.3(a) of this Lease.
"BOND"
means the Issuer's Taxable Industrial Development Revenue Bond
(Sanderson Farms, Inc. (Processing
Division) Project), Series 2004.
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"BOND
GUARANTY AGREEMENT" means the Bond Guaranty Agreement, dated as
of
the Document Date, between the Company and
the Purchaser, in substantially the
form attached to the Bond Resolution as
Exhibit F thereto, as it may hereafter
be amended in accordance with Article IX of
the Bond Resolution.
"BOND
PURCHASE LOAN AGREEMENT" means the Bond Purchase Loan
Agreement,
dated as of the Document Date, between the
Issuer and the Purchaser, in
substantially the form attached to the Bond
Resolution as Exhibit C thereto as
it may hereafter be amended in accordance
with Article IX of the Bond
Resolution.
"BOND
RESOLUTION" means the resolution, adopted by the Issuer, as it
may
hereafter be amended in accordance with the
terms thereof, providing the terms
and provisions under which the Bond will be
issued and pursuant to which the
Pledged Security is assigned and pledged as
security for the payment of the
principal of, premium, if any, and interest
on the Bond; the term "Bond
Resolution" shall include any resolution
supplemental or amendatory thereto.
"BOND
SECURITY" means the Bond Resolution, the Financing Documents,
and
the Pledged Security.
"BUSINESS
DAY" means a day which is not a Saturday, Sunday, a legal
holiday, or any other day on which banking
institutions are authorized to be
closed in the State.
"CITY"
means the City of Moultrie.
"COMPANY"
means Sanderson Farms, Inc. (Processing Division), a
Mississippi
corporation, and any successor lessee under
this Lease.
"COMPANY
DOCUMENTS" means the Lease, Agency Agreement, the Security
Document, the Bond Guaranty Agreement, the
Bond Purchase Loan Agreement and the
Incentives and Reimbursement Agreement.
"COMPLETION DATE" means, as to the Leased Improvements, the first
date on
which the Leased Improvements have been
substantially completed, as that date
shall be certified as provided in Section
4.8 hereof.
"CORPORATE
SUCCESSOR" and "CORPORATE SUCCESSOR" mean any corporation,
partnership, limited liability company or
limited liability company into which
the Company may merge, any corporation or
limited liability company resulting
from a consolidation to which the Company
is a party or any corporation
partnership, limited liability company or
limited liability company to which the
Company transfers its interest under the
Lease, and also includes any Corporate
Successor (as above defined, but
substituting "corporate successor" for
"Company") of a Corporate Successor.
"COSTS OF
THE PROJECT" means those aggregate costs and expenses paid or
incurred in connection with the planning,
development, acquisition,
construction, equipping, installation and
carrying out of the Project and
permitted by the Act and Section 4.3 hereof
to be paid or reimbursed from Bond
proceeds.
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"COUNTY"
means Colquitt County, Georgia.
"CUSTODIAN" means the Company or any other Person that is serving
from
time to time as Custodian of the Funds.
"DEBT
SERVICE" and "DEBT SERVICE" mean the principal of, interest on
and
redemption price of the Bond.
"DEBT
SERVICE PAYMENT DATE" means any Principal Payment Date or
Interest
Payment Date and any date on which the Bond
is to be redeemed, in whole or in
part, and includes any special Debt Service
Payment Date established as provided
in Section 2.3 of the Bond Resolution.
"DEFAULT
INTEREST RATE" means as to delinquent payments of Basic Rent
and
Debt Service on the Bond, the Stated
Interest Rate and as to delinquent payments
of Additional Rent means the lesser of the
Prime Rate plus 300 basis points or
the maximum rate allowed by law.
"DOCUMENT
DATE" means December 1, 2004.
"ENVIRONMENTAL LAWS" means all federal, state, and local laws,
rules,
regulations, ordinances, programs, permits,
guidance, orders, and consent
decrees relating to health, safety, and
environmental matters, including, but
not limited to, the Comprehensive
Environmental Response, Compensation, and
Liability Act of 1980, as amended, the
Toxic Substances Control Act, as amended,
the Clean Water Act, as amended, the Clean
Air Act, as amended, the Superfund
Amendments and Reauthorization Act of 1986,
as amended, state and federal
superlien and environmental cleanup
programs and laws, and U.S. Department of
Transportation regulations.
"EVENT OF
DEFAULT" means, when used with respect to this Lease, the
events
specified in Section 10.1 of this Lease,
and when used with reference to any
other instrument any "Event of Default,
"event of default," "Default," or
"default" (as such term is defined in such
other instrument).
"FINANCING
DOCUMENTS" means Exhibits B through G to the Bond Resolution.
"FUNDS"
means the Project Fund and Sinking Fund.
"GOVERNING
BODY" means, as to the Issuer, the members of the Issuer acting
as its board of directors.
"GOVERNMENT OBLIGATIONS" means direct general obligations of the
United
States of America (including obligations
issued or held in book-entry form on
the books of the Department of Treasury of
the United States of America) or
obligations the payment of the principal of
and interest on which when due are
fully and unconditionally guaranteed by the
United States of America..
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"HOLDER"
and "BONDHOLDER" mean the Person in whose name the Bond is
registered on the registration books of the
Issuer and, as stated in Section 4.2
of this Lease, initially means the
Purchaser.
"INCENTIVES AND REIMBURSEMENT AGREEMENT" means the Incentives
and
Reimbursement Agreement among the Issuer,
the Company, Colquitt County, the City
of Moultrie, the Colquitt County Board of
Education, and the Colquitt County
Board of Tax Assessors, in substantially
the form attached to this Bond
Resolution as Exhibit G, as it may
hereafter be amended in accordance with
Article IX of the Bond Resolution.
"INTEREST
PAYMENT DATE" means December 1 of each year during the Lease
Term, the date of the final maturity of the
Bond and if the Bond is earlier
retired in full by redemption the date of
such retirement. If on any date any
principal of the Bond is prepaid and
redeemed only in part, such date shall be
an Interest Payment Date on which interest,
that has accrued on the principal
being prepaid, shall also be paid.
"ISSUER"
means the Moultrie-Colquitt County Development Authority.
"ISSUER
DOCUMENTS" means the Lease, the Security Document, the Bond
Purchase Loan Agreement, the Agency
Agreement and the Incentives and
Reimbursement Agreement.
"LEASE"
means this Lease Agreement between the Issuer and the Company,
as
it may be amended in accordance with
Article IX of the Bond Resolution.
"LEASED
EQUIPMENT" means all machinery, equipment and other items of
personal property that are both from time
to time located on the Leased Land and
owned by the Issuer and all replacements
and substitutions for any portion
thereof.
"LEASED
IMPROVEMENTS" means all buildings, structures and other
improvements, building fixtures and goods
to become fixtures from time to time
located on the Leased Land and all
Additions, Alterations, replacements and
substitutions for any portion thereof.
"LEASED
LAND" means the land described in Exhibit A attached hereto.
"LEASED
PREMISES" means the Leased Land and the Leased Improvements.
"LEASE
TERM" means the term of this Lease as specified in Section 5.1
hereof.
"LENDER"
means any financial institution to which the Bond has been
pledged.
"MAXIMUM
PRINCIPAL AMOUNT" means $80,000,000.
"NET
PROCEEDS" means, when used with respect to any proceeds of
casualty
insurance received with respect to any
damage or destruction of the Project,
proceeds of sale or any eminent domain
award (or proceeds of sale in lieu of a
taking by eminent domain) or with respect
to any other recovery on a contractual
claim or claim for damage to or for taking
of the Project, or any part thereof,
the gross proceeds from such insurance,
eminent domain award, sale or recovery
with respect to which that term is used
remaining after payment of all costs and
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expenses (including attorneys' fees and
reimbursable expenses) incurred in the
collection of such gross proceeds.
"OUTSTANDING" means a Bond, or portion thereof, which has been
duly
delivered by the Issuer under the Bond
Resolution, except:
(a) a Bond, or portion thereof, theretofore surrendered and
canceled
or
required to be canceled by the Issuer,
(b) a Bond, or portion thereof, which is deemed to have been paid
in
accordance
with Article XI of the Bond Resolution, and
(c) a
Bond, or portion thereof, in substitution for which another
Bond has
been delivered under Section 2.7 of the Bond Resolution.
If the Bond, or any portion thereof, has
been defeased pursuant to Article XI of
the Bond Resolution, the Bond or such
portion shall not be deemed to be
Outstanding within the meaning of this
provision.
"PAYING
AGENT" means the Company, acting as paying agent for the Issuer
with respect to the payment of debt service
on the Bond.
"PERMITTED
ENCUMBRANCES" means all encumbrances on any portion of the
Project on the date the Issuer acquires
title thereto, encumbrances to which the
Company has consented or which the Company
has granted or shall grant, and
vendors, mechanics' and materialmen's liens
arising from the acquisition,
construction and equipping of Project or
the repair, replacement or renovation
of the Project, or any part thereof,
provided that any such vendors', mechanics'
and materialmen's liens shall be discharged
prior to any foreclosure thereof.
"PERMITTED
INVESTMENTS" means any of the following classes of securities,
to the extent to which investment in such
securities is permitted under State
law:
(1)
the local
government investment pool created in Chapter 83 of Title
36 of the
Official Code of Georgia Annotated;
(2)
bonds or
obligations of the Issuer or bonds or obligations of the
State or other counties, municipal corporations, and political
subdivisions of the State;
(3)
Government
Obligations;
(4)
obligations of
agencies of the United States government issued by
the Federal Land Bank, the Federal Home Loan Bank, the Federal
Intermediate Credit Bank, or the Central Bank for Cooperatives;
(5) bonds or other obligations
issued by any public housing agency or
municipal corporation in the United States, which such bonds or
obligations are fully secured as to the payment of both
principal
and interest by a pledge of annual contributions under an
annual
contributions contract or contracts with the United
-7-
<PAGE>
States government, or project notes issued by any public
housing
agency, urban renewal agency, or municipal corporation in the
United
States which are fully secured as to payment of both principal
and
interest by a requisition, loan, or payment agreement with the
United States government;
(6)
securities of or
other interests in any no-load, open-end management
type investment company or investment trust registered under
the
Investment Company Act of 1940, as from time to time amended, or
any
common trust fund
maintained by any bank or trust company which
holds such proceeds as trustee or by an Affiliate thereof so
long
as:
(a) the portfolio of such investment company or investment trust
or
common
trust fund is limited to the obligations described in clause
(3)
above and
repurchase agreements fully collateralized by any such
obligations;
(b) such investment company or investment trust or common trust
fund
takes
delivery of such collateral either directly or through an
authorized
custodian;
(c) such investment company or investment trust or common trust
fund
is managed
so as to maintain its shares at a constant net asset value; and
(d) securities of or other interests in such investment company
or
investment
trust or common trust fund are purchased and redeemed only
through
the use of national or state banks having corporate trust
powers
and
located within the State; and
(7)
certificates of
deposit of national or state banks located within
the State which have deposits insured by the Federal Deposit
Insurance Corporation and certificates of deposit of federal
savings
and loan associations and state building and loan or savings
and
loan associations located within the State which have deposits
insured by the Savings Association Insurance Fund of the
Federal
Deposit Insurance Corporation or the Georgia Credit Union
Deposit
Insurance Corporation, including the certificates of deposit of
any
bank, savings and loan association, or building and loan
association
acting as depository, custodian, or trustee for any such Bond
proceeds.
The
portion of the certificates of deposit described in clause (7)
above
in excess of the amount insured by the
Federal Deposit Insurance Corporation,
the Savings Association Insurance Fund of
the Federal Deposit Insurance
Corporation, or the Georgia Credit Union
Deposit Insurance Corporation, if any,
must be secured by deposit, with the
Federal Reserve Bank of Atlanta, Georgia,
or with any national or state bank or
federal savings and loan association or
state building and loan or savings and loan
association located within the
State, of one or more of the following
securities in an aggregate principal
amount equal at least to the amount of such
excess: direct and general
obligations of the State or of any county
or municipal corporation in the State,
Government Obligations described in clause
(3) above, obligations of the
agencies of the United States government
described in clause (4) above, or
bonds, obligations, or project notes of
public housing agencies, urban renewal
agencies, or municipalities described in
clause (5) above.
-8-
<PAGE>
"PERSON"
means a natural person, business organization, public body, or
legal entity.
"PLEDGED
SECURITY" means the Pledged Security described in the Security
Document.
"PRIME
RATE" means the index rate, base rate or reference rate from
time
to time published as the Wall Street
Journal Prime Rate.
"PRINCIPAL
BALANCE" means, as of any particular time (i) the total amount
drawn down by the Issuer under the Bond
Purchase Loan Agreement, reduced by (ii)
any principal amounts which have
theretofore been paid.
"PRINCIPAL
PAYMENT DATE" means the final maturity date of the Bond, unless
the Bond is earlier retired in full by
redemption.
"PROJECT"
means the Leased Land and the Leased Improvements and Leased
Equipment as the same shall exist from time
to time, but shall not include the
force main connecting the waste water
treatment plant to the sprayfield.
"PROJECT
FUND" means the "Moultrie-Colquitt County Development Authority
Taxable Industrial Development Revenue Bond
(Sanderson Farms, Inc. (Processing
Division) Project), Series 2004--Project
Fund" created by the Bond Resolution.
"PURCHASER" means the Company, being the purchaser and initial
Holder of
the Bond.
"REDEMPTION DATE" or "REDEMPTION DATE" means any date on which the
Bond is
to be prepaid and redeemed, in whole or in
part, as established by the notice of
redemption relating thereto.
"REGISTER" means
the registration books for the Bond maintained and to be
maintained by the Registrar.
"REGISTRAR" means the Company, acting on behalf of the Issuer,
as
registrar for the Bond.
"REGULAR
RECORD DATE" means, with respect to any Debt Service Payment
Date, the 15th day of the calendar month
next preceding such Debt Service
Payment Date.
"SECURITY
DOCUMENT" means the instrument entitled "Deed to Secure Debt,
Assignment of Rents and Leases and Security
Agreement" from the Issuer to the
Purchaser, its successors and assigns, in
substantially the form attached to the
Bond Resolution as Exhibit E.
"SINKING
FUND" means the "Moultrie-Colquitt County Development Authority
Taxable Industrial Development Revenue Bond
(Sanderson Farms, Inc. (Processing
Division) Project), Series 2004--Sinking
Fund" created by the Bond Resolution.
"SPECIAL
RECORD DATE" means the date established pursuant to the Bond
Resolution for the payment of delinquent
debt service and deficiency interest
thereon.
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<PAGE>
"STATE"
means the State of Georgia.
"UNASSIGNED RIGHTS" means all of the rights of the Issuer (i) to
receive
reimbursements and payments pursuant to
Sections 5.3(b)(i) and 10.4 hereof, (ii)
to receive notices under or pursuant to any
provision of this Lease or the Bond
Resolution (iii) certain consensual and
enforcement rights pursuant to Sections
5.6, 6.3, 6.4, 8.7 and 10.2 hereof and (iv)
to be indemnified as provided in
Sections 6.6 and 8.5 of this Lease.
SECTION
1.2. CONSTRUCTION OF CERTAIN TERMS. For all purposes of this
Lease, except as otherwise expressly
provided or unless the context otherwise
requires, the following rules of
construction shall apply:
(1)
the use of the
masculine, feminine, or neuter gender is for
convenience only and shall be deemed and construed to include
correlative words of the masculine, feminine, or neuter gender,
as
appropriate;
(2)
"this Lease"
means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more
leases supplemental to this Lease and entered into pursuant to
the
applicable provisions hereof;
(3)
all references
in this instrument to designated "Articles,"
"Sections," and other subdivisions are to the designated
articles,
sections, and other subdivisions of this instrument;
(4)
the words
"herein, "hereof," and "hereunder" and other words of
similar import refer to this Lease as a whole and not to any
particular article, section, or other subdivision;
(5)
the terms
defined in this Article shall have the meanings assigned
to them in this Article and include the plural as well as the
singular; and
(6)
all accounting
terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted
accounting
principles as promulgated by the American Institute of
Certified
Public Accountants, on and as of the date of this Lease.
SECTION
1.3. TABLE OF CONTENTS; TITLES AND HEADINGS. The table of
contents, the titles of the articles, and
the headings of the sections of this
Lease are solely for convenience of
reference, are not a part of this Lease, and
shall not be deemed to affect the meaning,
construction, or effect of any of its
provisions.
SECTION
1.4. CONTENTS OF CERTIFICATES OR OPINIONS. Every certificate or
written opinion delivered by any director
or official of the Issuer or the
Company with respect to the compliance by
the Issuer or the Company with any
condition or covenant provided for in this
Lease shall be delivered only after
the person or persons signing the same has
made such examination or
investigation as is necessary to enable
him, her or them to express an informed
opinion as to whether or not such covenant
or condition has been complied with.
Any such certificate or opinion made or
given by any director or official of the
Issuer or the Company,
-10-
<PAGE>
insofar as it relates to legal or
accounting matters, may be made or given in
reliance upon an opinion of counsel or a
letter of such accountant. Any such
opinion of counsel or accountant's letter
may be based (insofar as it relates to
factual matters with respect to information
which is in the possession of a
director or an official of the Issuer, the
Company or any third party) upon the
certificate or opinion of, or
representations, by such director or official of
the Issuer, the Company or such third party
on whom such counsel or accountant
may reasonably rely, unless such counsel or
such accountant knows that the
certificate or opinion or representations
with respect to the matters upon which
his legal opinion or accountant's letter
may be based, as aforesaid, is
erroneous or in the exercise of reasonable
care should have known that the same
was erroneous. The same director or
official of the Issuer, the Company or third
party, or the same counsel or accountant,
as the case may be, need not certify
or opine to all of the matters required to
be certified or opined under any
provision of this Lease, but different
directors, officials, counsel, or
accountants may certify or opine to
different matters, respectively.
[End of Article I]
-11-
<PAGE>
ARTICLE II
REPRESENTATIONS AND UNDERTAKINGS
SECTION
2.1. REPRESENTATIONS BY THE ISSUER. The Issuer makes the
following
representations and warranties as the basis
for the undertakings on its part
herein contained:
(a)Creation and Authority. The Issuer is a development authority
and a
public body corporate and politic duly
created and validly existing under the
laws of the State. The Issuer has all
requisite power and authority under the
Act and the laws of the State (i) to issue
the Bond, (ii) to acquire, construct,
and equip the Project and to lease the same
to the Company, and (iii) to enter
into, perform its obligations under, and
exercise its rights under the Issuer
Documents. The Issuer has found that the
Project will promote and expand for the
public good and welfare industry and trade
within the County and reduce
unemployment and has found that the Project
is for the lawful and valid public
purposes set forth in the Act.
(b)
Pending Litigation. There are no actions, suits, proceedings,
inquiries, or investigations pending or, to
the knowledge of the Issuer, after
making due inquiry with respect thereto,
threatened against or affecting the
Issuer in any court or by or before any
governmental authority or arbitration
board or tribunal, which involve the
possibility of materially and adversely
affecting the transactions contemplated by
the Issuer Documents or which, in any
way, would adversely affect the validity or
enforceability of the Bond, the Bond
Resolution, this Lease, or any agreement or
instrument to which the Issuer is a
party and which is used or contemplated for
use in the consummation of the
transactions contemplated hereby or
thereby, nor is the Issuer aware of any
facts or circumstances presently existing
which would form the basis for any
such actions, suits, proceedings,
inquiries, or investigations.
(c) Issue,
Sale, and Other Transactions Are Legal and Authorized. The
issue and sale of the Bond, the execution
and delivery by the Issuer of the
Issuer Documents, and the adoption by the
Issuer of the Bond Resolution and the
compliance by the Issuer with all of the
provisions of each thereof (i) are
within the purposes, powers, and authority
of the Issuer, (ii) have been done in
full compliance with the provisions of the
Act and have been or will be approved
by the Governing Body of the Issuer, and
(iii) the Bond and the Issuer Documents
have been or will be duly authorized by all
necessary action on the part of the
Issuer, have been or will be duly executed,
are legal and valid and do not or
will not conflict with or constitute on the
part of the Issuer a violation of or
a breach of or a default under, or result
in the creation or imposition of any
lien, charge, restriction, or encumbrance
upon any property of the Issuer under
the provisions of, any charter instrument,
bylaw, indenture, mortgage, deed to
secure debt, pledge, note, lease, loan, or
installment sale agreement, contract,
or other agreement or instrument to which
the Issuer is a party or by which the
Issuer or its properties are otherwise
subject or bound, or any license,
judgment, decree, law, statute, order,
writ, injunction, demand, rule, or
regulation of any court or governmental
agency or body having jurisdiction over
the Issuer or any of its activities or
properties.
(d)
Governmental Consents. Neither the nature of the Issuer nor any of
its
activities or properties, nor any
relationship between the Issuer and any other
Person, nor any circumstance in connection
with the offer, issue, sale, or
delivery of the Bond is such as to require
the consent,
-12-
<PAGE>
approval, permission, order, license, or
authorization of, or the filing,
registration, or qualification with, any
governmental authority on the part of
the Issuer in connection with the
execution, delivery, and performance of the
Issuer Documents, the adoption of the Bond
Resolution, the consummation of any
transaction therein contemplated, or the
offer, issue, sale, or delivery of the
Bond, except as shall have been or will be
obtained.
(e) No
Defaults. To the knowledge of the Issuer, after making due
inquiry
with respect thereto, no event has occurred
and no condition exists which would
constitute an Event of Default or which,
with the lapse of time or with the
giving of notice or both, would become an
Event of Default hereunder. To the
knowledge of the Issuer, after making due
inquiry with respect thereto, the
Issuer is not in default or violation in
any material respect under the Act or
under any charter instrument, bylaw, or
other agreement or instrument to which
it is a party or by which it may be
bound.
(f) No
Prior Pledge. Neither the Project, this Lease, nor any of the
payments or amounts to be received by the
Issuer hereunder have been or will be
mortgaged, pledged, or hypothecated by the
Issuer in any manner or for any
purpose or have been or will be the subject
of a grant of a security interest by
the Issuer other than as security for the
payment of the Bond, as shall be
provided in the Bond Resolution and the
Security Document.
(g)
Disclosure. The representations of the Issuer to be contained in
the
Issuer Documents and any certificate,
document, written statement, or other
instrument furnished or to be furnished to
the Company by or on behalf of the
Issuer in connection with the transactions
contemplated thereby do not or will
not contain any untrue statement of a
material fact relating to the Issuer and
do not or will not omit to state a material
fact relating to the Issuer
necessary in order to make the statements
contained herein and therein relating
to the Issuer not misleading. Nothing has
come to the attention of the Issuer
which would materially and adversely affect
or in the future may (so far as the
Issuer can now reasonably foresee)
materially and adversely affect the
acquisition of the Project by the Issuer or
any other transactions contemplated
by the Issuer Documents and the Bond
Resolution which has not been or will not
be set forth in writing to the Company and
the Purchaser or in the certificates,
documents, and instruments furnished to the
Company and the Purchaser by or on
behalf of the Issuer on or prior to the
date of the issuance of the Bond.
(h)
Compliance with Conditions Precedent to the Issuance of the Bond.
All
acts, conditions, and things required to
exist, happen, and be performed
precedent to and in the execution and
delivery by the Issuer of the Bond shall
exist, have happened, and will be performed
in due time, form, and manner as
required by law; the issuance of the Bond,
together with all other obligations
of the Issuer, will not exceed or violate
any constitutional or statutory
limitation.
(i)
Grants. The Issuer will use its reasonable best efforts to cause
the
proceed of the grants referred to in the
recitals here to and in the Incentives
and Reimbursement Agreement to be received
and applied as provided in said
recitals and in the Incentives and
Reimbursement Agreement. However, the Issuer
does not guaranty that such proceeds will
be received and shall suffer no
liability for the failure of any of such
grants to be received in the amounts
stated in said recitals and in the
Incentives and Reimbursement Agreement.
-13-
<PAGE>
SECTION
2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations and warranties as
the basis for the undertakings on
its part herein contained:
(a)
Organization and Power. The Company is a corporation duly
organized,
validly existing, and in good standing
under and by virtue of the laws of the
State of Mississippi and is qualified to do
business in Georgia, and has all
requisite power and authority to lease the
Project from the Issuer and to enter
into, perform its obligations under, and
exercise its rights under the Company
Documents.
(b)
Agreements Are Legal and Authorized. The Company Documents, the
consummation of the transactions therein
contemplated, and the fulfillment of or
the compliance with all of the provisions
thereof (i) are within the power,
legal right, and authority of the Company,
(ii) have been or will be duly
authorized by all necessary and appropriate
action on the part of the Company,
(iii) have been or will be duly executed
and delivered on the part of the
Company, (iv) are legal and valid as to the
Company, and (v) will not conflict
with or constitute on the part of the
Company a violation of or a breach of or a
default under any charter instrument,
bylaw, indenture, mortgage, deed to secure
debt, pledge, note, lease, loan, or
installment sale agreement, contract, or
other agreement or instrument to which the
Company is a party or by which the
Company or its properties are otherwise
subject or bound which would have a
material adverse impact on the Company's
ability to perform its obligations
hereunder, or any judgment, order, writ,
injunction, decree, or demand of any
court or governmental agency or body having
jurisdiction over the Company or any
of its activities or properties.
(c) No
Defaults. No event has occurred and no condition exists that
would
constitute an Event of Default by the
Company or which, with the lapse of time
or with the giving of notice or both, would
become an Event of Default by the
Company hereunder.
(d)
Disclosure. The representations of the Company contained in the
Company Documents and any certificate,
document, written statement, or other
instrument furnished by or on behalf of the
Company to the Issuer or Purchaser
in connection with the transactions
contemplated hereby, do not or will not
contain any untrue statement of a material
fact and do not or will not omit to
state a material fact necessary to make the
statements contained herein or
therein not misleading. There is no fact
that the Company has not disclosed to
the Issuer and to the Purchaser in writing
that materially and adversely affects
or in the future may (so far as the Company
can now reasonably foresee)
materially and adversely affect the
acquisition of the Project or the ability of
the Company to perform its obligations
under the Company Documents or any of the
documents or transactions contemplated
thereby which has not been set forth in
writing to the Issuer and to the Purchaser
or in the certificates, documents,
and instruments furnished to the Issuer and
to the Purchaser by or on behalf of
the Company prior to the date of execution
of this Lease in connection with the
transactions contemplated hereby.
(e)
Inducement. The issuance of the Bond by the Issuer for the benefit
of
the Company has induced the Company to
operate the Project within the County and
thereby to promote industry and reduce
unemployment in the County.
[End of Article II]
-14-
<PAGE>
ARTICLE III
LEASING CLAUSE; SECURITY; TITLE
SECTION
3.1. LEASE OF THE PROJECT. The Issuer, as lessor, hereby leases
to
the Company, as lessee, and the Company
hereby leases from the Issuer, the
Project at the rental set forth in Section
5.3 hereof and for the Lease Term
described in Section 5.1 hereof, all in
accordance with the provisions of this
Lease. Nothing in this Lease shall be
construed to require the Issuer to operate
the Project.
SECTION
3.2. SECURITY FOR PAYMENTS UNDER THE BOND. As security for the
payment of the Bond, the Issuer shall adopt
the Bond Resolution, under the terms
of which the Issuer shall execute and
deliver to the Purchaser the Security
Document, in which the Issuer shall grant
unto the Purchaser, its successors and
assigns, security title to the Project and
shall assign unto the Purchaser, its
successors and assigns, all of the right,
title, interest, and remedies of the
Issuer in, to, and under this Lease (except
the Unassigned Rights), together
with all rents, revenues, and amounts to be
received by the Issuer hereunder
(except for amounts the Issuer shall be
entitled to receive and retain on
account of being included in such
Unassigned Rights), as security for, among
other things, the payment of the Bond. The
Company hereby agrees that its
obligations to pay Basic Rent under this
Lease shall be absolute and shall not
be subject to any defense, except payment,
or to any right of set off,
counterclaim, or recoupment arising out of
any breach by the Issuer of any
obligation to the Company, whether
hereunder or otherwise, or arising out of any
indebtedness or liability at any time owing
to the Company by the Issuer;
provided,
