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Exhibit 10.2
BOND PURCHASE LOAN AGREEMENT
This BOND
PURCHASE LOAN AGREEMENT (this "Agreement"), dated for purposes
of reference as of December 1, 2004, by and
between MOULTRIE-COLQUITT COUNTY
DEVELOPMENT AUTHORITY (the "Issuer"), a
public body corporate and politic,
created and existing under the laws of the
State of Georgia, and SANDERSON
FARMS, INC. (PROCESSING DIVISION), a
corporation organized and existing under
the laws of the State of Mississippi that
is qualified to do business in
Georgia, in its capacity as the lessee (the
"Company") of the Project, referred
to herein, and its successors and assigns
as such lessee, and in its capacity as
the purchaser (the "Purchaser") of the
hereinafter described revenue bond of the
Issuer;
W I T N E S S E T H:
WHEREAS,
the Issuer is a development authority and public body corporate
and politic 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 Grantor 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, and improvements
and equipment to be sold or leased to
private persons, firms or corporations for
operation and to, and (iii) to issue its
revenue bonds to finance such property;
and
WHEREAS,
the Act further authorizes and empowers the Issuer: (i) to
lease
any such project at a rental which,
together with other revenues which may be
pledged for such purpose, shall be
sufficient to pay Debt Service on such
revenue bonds and to pay all other expenses
which the Issuer may incur in
connection with the undertaking; (ii) to
pledge, mortgage, convey, assign,
hypothecate or otherwise encumber such
projects and the revenues therefrom as
security for the Issuer's revenue bonds;
and (iii) to do any and all acts and
things necessary or convenient to
accomplish the purpose and powers of the
Issuer; and
WHEREAS,
the Company desires to lease a capital project consisting of
land, a building and related improvements,
and equipment (the "Project") from
the Issuer for use as a poultry processing
plant and waste water treatment
facility; and
WHEREAS,
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 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
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(the "Bond") having a maximum principal
amount not to exceed $80,000,000 (the
"Maximum Principal Amount") maturing
December 1, 2019 and bearing interest at 7%
per annum, payable annually on December 1
of each year; (ii) to acquire the
Project; and (iii) to lease the Project to
the Company under a Lease Agreement
(the "Lease"), pursuant to the terms of
which the Company will acquire and equip
the Project to the extent the same has not
been so acquired, constructed and
equipped on the issue date of the Bond,
convey the Project to the Issuer,
subject to certain Permitted Encumbrances,
and lease the Project from the Issuer
and will pay to the Issuer Basic Rent
payments at such times and in such amounts
as will be required to pay debt service on
the Bond, as and when the same become
due; and
WHEREAS,
pursuant to the resolution (the "Bond Resolution") adopted by
the
Issuer authorizing the issuance of the
Bond, the execution of this Bond Purchase
Loan Agreement and the other Issuer
Documents (identified in the Bond
Resolution), the Issuer is pledging as
security for the payment of the Bond the
Pledged Security (as defined in the Bond
Resolution); and
WHEREAS,
all capitalized terms used herein and which are not defined
herein shall be defined as set forth in the
Bond Resolution and in the Exhibits
thereto; and
WHEREAS,
the Purchaser desires to purchase the Bond, which is to be
issued
in the form of a draw-down instrument and
to advance funds or transfer items of
property to the Issuer hereunder, initially
on the date of issuance of the Bond
and thereafter from time to time until the
earlier of (i) the date the Maximum
Principal Amount of the Bond has been
advanced or (ii) the Expiration Date (set
forth in Section 4, below); and
WHEREAS,
the Issuer desires to sell the Bond pursuant to the provisions
hereof;
NOW,
THEREFORE, in consideration of the premises, the parties hereto
agree
as follows:
SECTION 1.
THE CREDIT FACILITY AND THE COMMITMENT AMOUNT. The Purchaser
agrees to purchase the Bond and in
connection therewith to provide to the Issuer
a credit facility (the "Credit Facility")
of up to the Maximum Principal Amount
on the following terms and conditions.
SECTION 2.
PURPOSE: Amounts advanced in cash under the Credit Facility
shall be used to pay or to reimburse the
Issuer and the Company for Costs of the
Project, which is to be leased by the
Issuer to the Company pursuant to the
Lease. Items of property may also be
transferred to the Issuer by the Purchaser,
in which case the same shall be treated as
if cash in an amount equal to the
Purchaser's cost of such items were paid by
the Purchaser and immediately
disbursed to pay to the Purchaser the book
value to the Company of such items,
such value on an aggregate basis being
stated in the deed or bill of sale
conveying such items to the Issuer or in
the request for advance hereunder. For
purposes of the foregoing and all other
purposes related to the Bond, "Costs of
the Project", "Purchaser's cost of such
items", and "cost to the Company" as
mentioned in the attached form of
Certificate and Requisition for Payment shall
be Purchaser's book value for the related
property.
SECTION 3.
COMMENCEMENT DATE: The commencement date of the Credit Facility
shall be the date of issuance of the Bond
(the date set forth above being merely
for
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purposes of reference).
SECTION 4.
EXPIRATION DATE: The expiration date of the Credit Facility
shall be December 31, 2018. The Purchaser
shall not make any further advances to
the Issuer under the Credit Facility with
respect to Requests for Advances
received after the Expiration Date.
Notwithstanding that there is an Expiration
Date to the Credit Facility, this Agreement
shall remain in effect until the
date the Bond is fully retired and all
amounts payable hereunder have been paid.
SECTION 5.
UTILIZATION: An initial advance shall be made on the
Commencement Date in exchange for the Bond.
Thereafter, from time to time to,
and including, the Expiration Date, the
Issuer may make one or more requests for
advances which shall, when aggregated, not
exceed the Maximum Principal Amount.
SECTION 6.
THE BOND: All advances in cash or in property under the Credit
Facility shall be evidenced by the Bond
which shall be issued in the form of a
draw-down instrument in substantially the
form reviewed by the Purchaser and
approved by the Bond Resolution, with such
modifications, if any, as are
acceptable to the Issuer and the Purchaser,
the Issuer's approval of such
modifications, if any, to be conclusively
presumed by the execution and delivery
thereof, and the Purchaser's acceptance of
such modifications, if any, to be
conclusively presumed by the Purchaser's
acceptance of the Bond at the time of
the initial advance with respect to the
initial draw hereunder. The Bond shall
be registered in the name of the
Purchaser.
SECTION 7.
ADVANCES: Advances under the Credit Facility shall be made in
cash, except where the Purchaser has
acquired an item or items of property for
the Project and in connection with such
request for advance conveys such item or
items of property to the Issuer by deed or
bill of sale
