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 XXXXXXXX-XXXXXXXX COUNTY
DEVELOPMENT AUTHORITY (the "Issuer"), a public body corporate and politic,
created and existing under the laws of the State of Georgia, and XXXXXXXXX
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
Xxxxxxxx (the "City") and Xxxxxxxx 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 (Xxxxxxxxx Farms, Inc. (Processing Division)
Project), Series 0000
-0-
(xxx "Xxxx") 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 xxxx 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
-2-
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 xxxx of sale and such request for
advance or xxxx of sale states the Costs of the Project with respect to such
item or items of property. Advances under the Credit Facility shall be made upon
the written Request for Advance in the form attached hereto as Exhibit A, signed
by an Authorized Company Representative, acting on behalf of the Issuer, which
shall be delivered to the Purchaser at its notice address by mail, courier, hand
delivery or fax, which request for advance shall be accompanied by a copy of one
or more requisitions of the Issuer (in the form provided for at the end hereof),
submitted by the Company, as agent of the Issuer, which are in an aggregate
amount equal to the amount of the net advance being requested. In the case of an
advance in the form of cash or in the form of a transfer of property, it shall
not be necessary for the Company to attach to said Request for Advance or
requisitions evidence of cost of the property with respect to which the
requested advance is made, but the Purchaser, at the request of the Issuer,
shall make such information available to the Issuer.
Requests for advances shall be promptly honored, provided that (i) the
conditions precedent set forth in Section 9, below, shall have been satisfied at
the time of each advance, (ii) the gross amount requested in such Request for
Advance, plus the aggregate gross amounts of all prior advances shall not exceed
the Maximum Principal Amount, and (iii) the Request for Advance is received on
or before the Expiration Date. The Purchaser shall be entitled to rely upon any
Request for Advance which the Purchaser reasonably believes in good faith to
have been signed by the proper person. In addition, the Purchaser shall have no
obligation, but may if it so elects, to fund any advance under the Credit
Facility if an "Event of Default" (being an
-3-
"Event of Default" as defined in the Bond Resolution or in any of the Issuer
Documents or Company Documents) has occurred and is continuing on and as of such
date. In connection with the initial advance, the Company shall deliver to the
Issuer a deed to the Leased Land and to the Leased Improvements, and a xxxx of
sale relating to the fixtures and goods that are to become fixtures.
SECTION 8. ISSUANCE FEE. There shall be no issuance fee paid to the
Issuer.
SECTION 9. CONDITIONS PRECEDENT: The Purchaser's obligation to fund the
initial advance hereunder shall be subject to its receipt from the Issuer on or
prior to the date thereof of the duly executed Bond in the Maximum Principal
Amount, together with an approving Bond Counsel opinion of Seyfarth Xxxx LLP,
which shall be in form and substance reasonably acceptable to the Purchaser.
SECTION 10. INVESTMENT: By acceptance hereof, the Purchaser understands,
represents and agrees that: (i) the obligations of the Issuer under the Bond and
under the Issuer Documents, are special and limited obligations payable solely
from the Pledged Security; (ii) the obligations of the Issuer under the Bond and
under the Issuer Documents, and the obligations of the Company under the Company
Documents and any other obligations that would constitute "separate securities"
relating to the Bond (collectively, herein called the "securities") have not
been registered under the Securities Act of 1933, as amended and Securities
Exchange Act of 1934, as amended, (the "Federal Acts"), under the Georgia
Securities Act of 1973, as amended (the "Georgia Act"), or the securities laws,
if applicable, of any other state, and applicable rules and rules and
regulations thereunder (collectively, the "Securities Acts") and are unrated;
(iii) the Bond is being sold to the Purchaser in a private placement; (iv) the
Purchaser has performed its own "due diligence" investigation as to the Issuer,
the Project, the Company, and as to any of the sources of payment of debt
service on the Bond and has not relied on any representations of the Issuer, its
members, directors, officials, employees, agents or legal counsel as to any
matters relating to the adequacy of the Pledged Security to provide for the
payment of debt service on the Bond; (v) the Bond is being purchased by the
Purchaser for investment purposes only and not with a view to distribution or
transfer; (vi) the Bond may not be sold, transferred, pledged or hypothecated by
the Purchaser or any subsequent holders except in accordance with the provisions
of the Bond Resolution governing transfers of the Bond; and (vii) if any
transfer of the Bond would subject the Issuer or the Company to any disclosure
requirements under any of the Securities Acts, the Company shall, at its own
expense and without cost to the Issuer, make such disclosure as to the Issuer
and the Company, the Project and the Pledged Security, as is required by the
Securities Acts. The representations and agreements contained in this Section
shall prevail over any inconsistent term or condition that may be contained in
the Lease, in the Bond Resolution or in the Bond.
SECTION 11. GOVERNING LAW: This Agreement shall be governed by and
construed under and in accordance with the internal laws of the State of Georgia
(without giving effect to its conflicts of law principles).
SECTION 12. NON-ASSIGNMENT: Neither the Bond nor this Agreement may be
assigned by the Purchaser prior to the Expiration Date of the Credit Facility if
the full Maximum Principal Amount has not been drawn down unless the assignee is
a bank or other financial
-4-
institution approved in writing by the Company.
SECTION 13. AMENDMENT: No amendment or modification of this Agreement
shall be effective unless it is in writing and executed by the Issuer, the
Company and the Purchaser.
SECTION 14. HEADINGS: All paragraphs or other headings used in this Bond
Purchase Loan Agreement are for convenience of reference only and do not
constitute a substantive part of this Bond Purchase Loan Agreement.
SECTION 15. REQUESTS FOR ADVANCES AND NOTICES: All Requests for Advances
shall be delivered to the Purchaser at its address set forth below. All other
requests, notices, demands, and other communications under this Bond Purchase
Loan Agreement shall be given in writing or by fax and are to be deemed to have
been duly given and to be effective upon delivery to the party to whom they are
directed, to such party at its notice address set forth below, provided that any
party may by written notice or fax to the other parties designate a different
address for receiving notices under this Bond Purchase Loan Agreement; provided,
however, that no such change of address will be effective unless and until
written notice thereof is actually received by the party to whom such change of
address notice is sent.
To the Issuer: Xxxxxxxx-Xxxxxxxx County Development Authority
000 Xxxxx Xxxxxx, X. X.
Xxxxxxxx, XX 00000
Attn: Chairman
Fax: (000) 000-0000
To the Company Xxxxxxxxx Farms, Inc. (Processing Division)
X.X. Xxx 000
Xxxxxx, Xxxxxxxxxxx 00000
Attn: Chief Financial Officer
Fax: (000) 000-0000)
SECTION 16. EFFECTIVE DATE: This Agreement may be executed prior to the
delivery of the Bond to the Purchaser, but shall not become effective until a
counterpart hereof executed by all parties hereto is delivered simultaneously
with the issuance of the Bond. Such counterparts, taken together, shall
constitute one and the same instrument. Upon execution and delivery hereof, as
aforesaid, this Bond Purchase Loan Agreement and the terms and provisions of the
Bond, the Resolution and other documents approved by the Bond Resolution shall
supersede the provisions of any commitment letter(s) heretofore issued by the
Purchaser to the Issuer and the Company with respect to the Bond, the Credit
Facility and the Maximum Principal Amount.
[Signatures Continued On Next Page]
-5-
IN WITNESS WHEREOF, each of the parties have caused this Agreement to be
duly executed and delivered, under seal, by its respective duly authorized
officers.
XXXXXXXX-XXXXXXXX COUNTY
DEVELOPMENT AUTHORITY
By: ___________________________
Chairman
ATTEST:
_______________________________
Secretary
[Authority's Seal]
[Signatures Continued On Next Page]
-6-
XXXXXXXXX FARMS, INC. (PROCESSING DIVISION)
By: ____________________________________
Title: Authorized Company Representative
[Company's Signature Page to the Bond
Purchase Loan Agreement]
-7-
EXHIBIT A
(Request for Advance and Requisition Form follow)
-8-
REQUEST FOR ADVANCE UNDER THE BOND PURCHASE LOAN AGREEMENT,
DATED AS OF DECEMBER 1, 2004, BETWEEN THE
XXXXXXXX-XXXXXXXX COUNTY DEVELOPMENT AUTHORITY, AS ISSUER,
AND
XXXXXXXXX FARMS, INC. (PROCESSING DIVISION)
AS THE LESSEE AND AS PURCHASER
RELATING TO THE
XXXXXXXX-XXXXXXXX COUNTY DEVELOPMENT AUTHORITY
TAXABLE INDUSTRIAL DEVELOPMENT REVENUE BOND
(XXXXXXXXX FARMS, INC. (PROCESSING DIVISION) PROJECT), SERIES 2004,
TO: XXXXXXXXX FARMS, INC. (PROCESSING DIVISION), as Purchaser
REQUEST FOR ADVANCE NO. ____________________________
AMOUNT OF ADVANCE REQUESTED: $___________________
DATE OF REQUEST FOR ADVANCE:_______________________
The undersigned, being an Authorized Company Representative of Xxxxxxxxx
Farms, Inc. (Processing Division), as agent for Xxxxxxxx-Xxxxxxxx County
Development Authority, hereby requests an advance in the amount indicated above
to pay or to reimburse the Costs of the Project reflected on the accompanying
Requisition(s).
The undersigned hereby certifies that:
1. The net amount of the requested advance is equal to the total amount
requested in the attached Requisition(s) and the gross amount of the requested
advance when added to the gross amount of previously requested advances does not
exceed the Maximum Principal Amount;
2. The date that this Request for Advance is being delivered is not later
than the expiration date set forth in Section 4 of the Bond Purchase Loan
Agreement, referred to above.
3. No "Event of Default" as defined in the Bond Purchase Loan Agreement
has occurred and is continuing, except:
______ None
______ As described on the attached page.
XXXXXXXX-XXXXXXXX COUNTY
DEVELOPMENT AUTHORITY
BY: XXXXXXXXX FARMS, INC.
(PROCESSING DIVISION)
By: ________________________
Authorized Company Representative
CERTIFICATE AND REQUISITION FOR PAYMENT
Date: ______, _____
Draw Request #____
Xxxxxxxxx Farms, Inc. (Processing Division) (the "Company") hereby
requests, pursuant to the Bond Purchase Loan Agreement, dated as of December 1,
2004 and the Lease Agreement (the "Lease"), dated as of December 1, 2004, by and
among the Company and Xxxxxxxx-Xxxxxxxx County Development Authority (the
"Issuer"), that (check one of the following):
______ the following amounts be disbursed pursuant to the Bond Purchase
Loan Agreement relating to the Issuer's Taxable Industrial Development Bond
(Xxxxxxxxx Farms, Inc. (Processing Division) Project), Series 2004 in accordance
with the following payment instructions to the following parties :
Name of Payee Nature of Cost of Project Amount
------------- ------------------------- ------
Payment Instructions:
or that:
_____ the Company is conveying by the items of property listed therein
having an aggregate book value of $_____________ (determined as provided in
Section 2 of the related Bond Purchase Loan Agreement), and directs that said
amount be treated as an advance by the Purchaser to the Project Fund under the
Bond Purchase Loan Agreement and a purchase by the Issuer from the Purchaser of
such property at such cost.
The Company does hereby certify to the Issuer and to the Purchaser that,
as of the date hereof, (1) the representations and warranties of the Company in
the Lease are hereby ratified and confirmed, and (2) the above-listed items are
included within the definition "Costs of the Project" contained in the Lease.
XXXXXXXXX FARMS, INC. (PROCESSING DIVISION)
By:____________________________________
Authorized Company Representative
