Exhibit 10(l)
BOND PURCHASE AGREEMENT
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DEVELOPMENT AUTHORITY OF FULTON COUNTY
Taxable Economic Development Revenue Bonds
(ADESA Atlanta, LLC Project)
Series 2002
THIS BOND PURCHASE AGREEMENT dated as of December 1, 2002, among the
DEVELOPMENT AUTHORITY OF FULTON COUNTY, a public body corporate and politic
organized under the laws of the State of Georgia (the "Issuer"), ADESA ATLANTA,
LLC, a New Jersey limited liability company, in its capacity as Purchaser
hereunder (the "Purchaser") and ADESA ATLANTA, LLC, a New Jersey limited
liability company, in its capacity as lessee under the hereinafter mentioned
Lease (the "Lessee").
1. BACKGROUND
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(a) The Issuer proposes to issue and sell not to exceed
$40,000,000 in aggregate principal amount of its Taxable Economic Development
Revenue Bonds (ADESA Atlanta, LLC Project), Series 2002 (the "Bonds"), the
proceeds of which shall be used to finance the acquisition, construction,
development and equipping of a wholesale vehicle auction facility on
approximately 280 acres of land, which facility consists of certain buildings,
structures, machinery, equipment and all related real and personal property
deemed necessary or desirable in connection therewith (the "Project"). The
Project is located in Fulton County, Georgia, and will be leased to the Lessee
and used primarily as a wholesale automobile auction facility. The Project will
be leased by the Issuer to the Lessee under the terms of a Lease, dated as of
December 1, 2002 (the "Lease") between the Issuer and the Lessee requiring the
Lessee to pay to the Issuer rental and other payments in such amounts and at
such times as shall be required to pay the principal of and interest on the
Bonds as and when the same become due. The Bonds shall be issued under and
secured by a Trust Indenture dated as of December 1, 2002 (the "Indenture")
between the Issuer and SunTrust Bank, Atlanta, Georgia, as Trustee (the
"Trustee"), under the terms of which the Issuer's interest in the Lease and the
rents, revenues and receipts to be derived by the Issuer under the Lease will be
assigned and pledged to the Trustee as security for the payment of the Bonds.
(b) The Issuer proposes to sell the Bonds to the Purchaser and
the Purchaser proposes to purchase the Bonds for its own investment purposes and
not with a view towards any resale or public distribution thereof.
(c) The proceeds of the Bonds are to be applied to pay costs
incurred in connection with the acquisition, construction and installation of
the Project as contemplated by the Lease and the Indenture.
(d) The parties hereto contemplate that the interest paid on
the Bonds will be includable in the gross income of the recipient or recipients
thereof for federal income tax purposes because of the application of certain
provisions of the Internal Revenue Code of 1986, as amended, and that, as such,
the Bonds may not be offered for sale to the public without registration under
the Securities Act of 1933, as amended, unless the Trustee has received an
opinion of counsel satisfactory to the Trustee, the Issuer and the Lessee to the
effect that failure to register the Bonds will not violate the Securities Act of
1933. The Issuer will cooperate fully at the request of the Lessee, and at
Lessee's expense, in effecting such registration and in taking such other steps
as may be deemed necessary or appropriate with respect to the Bonds, the Lease,
the Indenture or this Bond Purchase Agreement to effect such registration in the
event of any future public sale or disposition of the Bonds.
(e) The parties contemplate that the purchase price of the
Bonds may be paid by the Purchaser in installments as provided in Paragraph 2
hereof.
2. PURCHASE, SALE AND CLOSING.
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(a) Subject to the terms and conditions and in reliance on the
representations, warranties and covenants herein set forth, the Purchaser agrees
to purchase from the Issuer all of the Bonds, and the Issuer hereby agrees to
sell to the Purchaser all of the Bonds, at a price of 100% of the principal
amount of the Bonds. The parties agree that the aggregate principal amount of
Bonds to be sold and purchased hereunder shall not exceed the principal amount
specified in Paragraph 1(a) hereof. Such purchase price shall be deemed to be
paid on and as of the date of the initial issuance of the Bonds (the "Closing
Date") by (i) the payment of any amount under and pursuant to subparagraph (b)
of this Paragraph as is paid on the Closing Date and (ii) the Purchaser's
obligation evidenced hereby to make payments in the future under and pursuant to
subparagraph (b) of this Paragraph 2. The Bonds shall bear interest at the fixed
rate determined as provided in Section 202 of the Indenture.
(b) Pursuant to Section 4.3 of the Lease and Section 602 of
the Indenture, the Lessee shall from time to time submit requisitions to the
Trustee in an aggregate amount not to exceed $40,000,000. Unless such
requisition does not clearly indicate that a copy of it has been sent to the
Purchaser, the Trustee shall, upon receipt and review of each requisition,
promptly transmit to the Purchaser by telecopy to the telecopier number set
forth in Paragraph 9 hereof a letter directing the Purchaser to make payment for
the Bonds in the amount of such requisition, in immediately available funds. The
Purchaser shall within three (3) days of its receipt of a copy of such
requisition from the Lessee or such letter of direction from the Trustee,
whichever arrives earlier, pay to the Trustee the amount indicated thereon, and
each such payment shall be deemed to be, and shall be, an installment payment of
the Bonds. Such payments shall be made in such manner, until the Purchaser's
payment obligations under this Agreement shall have been
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discharged in full as provided in subparagraph (d) below. The Trustee shall
deposit all such payments received from the Purchaser in the Project Fund
created under the Indenture.
(c) The Issuer shall be obligated, upon the maturity or
earlier redemption of the Bonds, to pay to the Purchaser only up to the
aggregate of all installments payments made hereunder as shall have been funded
pursuant to the preceding subparagraph and accrued and unpaid interest, if any.
(d) The Purchaser's payment obligations under this Agreement
shall be discharged in full on the earlier of (i) the date when the sum of the
aggregate payments made hereunder equals $40,000,000 or (ii) the date when any
and all directions for payment made pursuant to subparagraph(b) hereinabove made
on or prior to the commencement of the Completion Date (as defined in the Lease)
have been paid in full.
(e) All Bonds issued by the Issuer are to be sold to the
Purchaser under and pursuant to this Bond Purchase Agreement and shall not be
sold to any other purchaser or pursuant to any other agreement without an
agreement in writing signed by the Issuer, the Trustee and such purchaser.
3. PRIVATE SALE. The Purchaser agrees that it is purchasing the
Bonds for its own investment account and not with a view towards any direct or
indirect resale or public distribution thereof and agrees to execute and deliver
to the Trustee on the Closing Date an investment letter in the form attached
hereto as Exhibit "D".
4. ISSUER'S REPRESENTATIONS AND WARRANTIES. The Issuer makes the
following representations and warranties to the Purchaser:
(a) The Issuer is a public body corporate and politic created
by and existing under the laws of the State of Georgia.
(b) The Issuer has full power and authority under the
Constitution and laws of the State of Georgia (i) to acquire, construct and
install the Project, (ii) to finance the acquisition, construction and
installation of the Project by issuing and selling the Bonds, (iii) to lease the
Project to the Lessee as provided in the Lease, (iv) to pledge the rents,
revenues and receipts derived pursuant to the Lease to the Trustee as provided
in the Indenture, (v) to execute, deliver and perform this Bond Purchase
Agreement, the Lease and the Indenture in accordance with their respective
terms, and (vi) to carry out and consummate all other transactions contemplated
by each of the aforesaid documents.
(c) The Issuer has duly authorized all actions and complied
with all provisions of law with respect to the execution, delivery and
performance of this Bond Purchase Agreement, the Lease and the Indenture, and
has taken all actions necessary or appropriate to insure that such documents
constitute valid and legally binding obligations of the Issuer in accordance
with their respective terms.
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(d) When delivered to and paid for by the Purchaser in
accordance with the terms of this Bond Purchase Agreement, the Bonds will have
been duly authorized, executed, authenticated and issued and will constitute
legal, valid and binding limited obligations of the Issuer enforceable in
accordance with their terms and entitled to the benefits of the Indenture,
except to the extent that their enforceability may be limited by bankruptcy,
insolvency or other laws affecting creditor's rights, and subject to the
application of principles of equity, if equitable remedies are sought.
(e) Except for Additional Bonds (as defined in the Indenture),
the Issuer has not and will not issue or sell any other bonds or obligations,
the principal of and/or interest on which shall be payable from the rents,
revenues and receipts derived from the Project or pledged or assigned pursuant
to the Indenture or which shall be secured by any lien upon any of the
properties constituting the Project.
(f) The execution and delivery of this Bond Purchase
Agreement, the Bonds, the Lease and the Indenture and the compliance with the
provisions thereof, do not and will not conflict with or constitute on the part
of the Issuer a violation of, breach of or default (with or without notice or
lapse of time or both) under any constitutional provision, statute, indenture,
mortgage, deed of trust, resolution, note agreement or other agreement or
instrument to which the Issuer is a party or by which the Issuer or any of its
assets is presently bound, or, to the knowledge of the Issuer, any existing
order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Issuer or any of its activities and property; and all
consents, approvals, authorizations and orders of governmental or regulatory
authorities, if any, which are required for the consummation of the transactions
contemplated in this Bond Purchase Agreement have been obtained.
(g) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, known to be pending or threatened against or affecting the Issuer, nor to
the best of the knowledge of the Issuer is there any basis therefor, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
transactions contemplated by this Bond Purchase Agreement, or which in any way
would adversely affect the validity or enforceability of the Bonds, the Lease,
the Indenture, this Bond Purchase Agreement or any agreement or instrument to
which the Issuer is a party and is used or contemplated for use in the
consummation of the transactions contemplated by this Bond Purchase Agreement.
(h) Neither the Issuer nor anyone acting on its behalf
(including the Lessee) has directly or indirectly offered for sale or sold any
of the Bonds or any similar security of the Issuer to, or solicited any offer to
buy any of the same from, anyone other than the Purchaser. Neither the Issuer
nor anyone else acting on its behalf will after the date hereof directly or
indirectly offer any of the Bonds or any other securities under circumstances
which would subject this issue and sale of the Bonds to the provisions of
Section 5 of the Securities Act of 1933, as amended.
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(i) The Issuer has filed any and all reports with any
governmental or public agency as may be required by law, including, without
limitation, all reports required to be filed with the Georgia Department of
Community Affairs pursuant to O.C.G.A. Section 36-82-10.
5. LESSEE'S REPRESENTATIONS AND WARRANTIES. The Lessee makes the
following representations and warranties to the Issuer and the Purchaser:
(a) The Lessee is a limited liability company organized and
existing and in good standing under the laws of the State of New Jersey and
authorized to transact business in the State of Georgia. The Lessee has full
corporate power, authority and legal right to engage in the business and
activities conducted or proposed to be conducted by it with respect to the
Project, to execute, deliver and perform the Lease and this Bond Purchase
Agreement and to perform its obligations thereunder and hereunder, including the
making of payments as provided in the Lease.
(b) The Lessee has duly authorized all action for the
execution, delivery and performance of the Lease and this Bond Purchase
Agreement and has taken all actions necessary or appropriate to insure that such
documents, when executed and delivered by the Lessee, will constitute valid and
legally binding obligations of the Lessee, enforceable in accordance with their
respective terms, except to the extent that their enforceability may be limited
by bankruptcy, insolvency or other laws affecting creditors' rights, and subject
to the application of principles of equity, if equitable remedies are sought.
(c) The execution and delivery of this Bond Purchase Agreement
and the Lease and the compliance with the provisions hereof and thereof by the
Lessee, do not conflict with or constitute on the part of the Lessee a material
violation of, breach of or default under (i) the Articles of Incorporation or
By-Laws of the Lessee, (ii) any indenture, mortgage, deed of trust, lease, note
agreement or other agreement or instrument to which the Lessee is a party or by
which the Lessee is presently bound, or (iii) any constitutional provision or
statute or any order, rule or regulation of any court or governmental or
regulatory authorities, applicable to the Lessee.
(d) There is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, public board or
body, pending, or, to the Lessee's knowledge, threatened against the Lessee
which could reasonably be expected to result in a decision which would
materially adversely affect the transactions contemplated by this Bond Purchase
Agreement or the Lease or the validity or enforceability of the Bonds, the
Lease, this Bond Purchase Agreement, or any agreement or instrument to which the
Lessee is a party, and used or contemplated for use in the consummation of the
transactions contemplated by this Bond Purchase Agreement or the Lease.
6. LESSEE'S COVENANTS. The Lessee covenants and agrees that it
will:
(a) Refrain from taking or omitting to take any action which
action or omission would in any way cause the proceeds from the sale of the
Bonds to be applied in a
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manner contrary to that provided for in the Lease or in the Indenture, as in
effect from time to time.
(b) Pay or cause to be paid, all reasonable expenses and costs
incident to the authorization, issuance, printing, sale and delivery, as the
case may be, of the Bonds, the Lease, the Indenture and this Bond Purchase
Agreement, including without limitation (i) all filing, registration and
recording fees and expenses; (ii) Trustees' fees and expenses (including the
reasonable fees and expenses of its counsel); and (iii) fees and expenses of
Bond Counsel and Counsel to the Issuer.
7. CONDITIONS OF PURCHASER'S OBLIGATIONS. The Purchaser's
obligation to purchase and pay for the Bonds which is to be delivered as the
initial installment hereunder is subject to the fulfillment of the following
conditions at or before such delivery, any one or more of which may be waived by
the Purchaser:
(a) The Lease, the Indenture and this Bond Purchase Agreement
shall have been duly authorized, executed and delivered by the respective
parties thereto, in substantially the forms heretofore approved by the
Purchaser, with only such changes therein as the Purchaser, the Issuer and the
Lessee shall mutually agree upon;
(b) The Bond to be initially delivered shall have been duly
authorized, executed and authenticated in accordance with the provisions of the
Indenture;
(c) The Purchaser shall have received the following documents:
(i) Executed counterparts of the Lease and the Indenture;
(ii) Opinions dated as of the date of delivery of the Bond
to be initially delivered of (A) Counsel for the Issuer in
substantially the form of that which is attached hereto as
Exhibit "A"; (B) Bond Counsel in substantially the form of
that which is attached hereto as Exhibit "B"; and (C) Counsel
for the Lessee in substantially the form of that which is
attached hereto as Exhibit "C";
(iii) A certificate dated as of the date of delivery of
the Bond to be initially delivered, signed by the Chairman or
Vice Chairman and the Secretary of the Issuer and in form and
substance satisfactory to the Purchaser, to the effect that to
the best of the information, knowledge and belief of such
officers, each of the representations and warranties set forth
in Paragraph 4 hereof and in the Lease is true, accurate and
complete in all material respects as of the date of delivery
of the Bond to be initially delivered and that the Issuer has
complied with each of its covenants and agreements required in
this Bond Purchase Agreement to be complied with at or prior
to the date of delivery of the Bond to be initially delivered;
and
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(iv) Such additional opinions, certificates, instruments
and other documents as the Purchaser or its counsel may
reasonably request to evidence compliance with applicable law,
as of the date of delivery of the Bond to be initially
delivered.
The Purchaser's obligation to purchase and pay for any of the Bonds at
any time or from time to time after the delivery of the Bond to be initially
delivered, as herein provided, is subject to the due execution, authentication
and delivery to the Purchaser of such pertinent Bond.
8. HOME OFFICE PAYMENT. The Issuer agrees that all amounts
payable to the Purchaser with respect to any Bond held by the Purchaser or its
nominee may be made to the Purchaser (without any presentment thereof, except
upon payment of the final installment of principal, and with a notation of any
principal payment being made thereon by the Purchaser) pursuant to and in
accordance with the terms of a Home Office Payment Agreement entered into in
accordance with Section 202(c) of the Indenture. In the event the Purchaser
enters into a Home Office Payment Agreement, the Purchaser agrees that (a) if
any Bonds are sold or transferred it will notify the Issuer, the Trustee and the
Lessee of the name and address of the transferee, and include a copy of the
notation referred to hereafter in this sentence and (b) prior to delivery of
such Bonds, a notation shall be made on such Bonds of the date to which interest
has been paid thereon and of the amount of any prepayments made on account of
the principal thereof. The Purchaser agrees to indemnify the Trustee and hold it
harmless from any loss, claim, action, damage or expense arising out of the
Purchaser's failure to give the notice or, if it is holding such Bonds, to make
the notation with respect to prepayment of the Bonds, as required in the
immediately preceding sentence. The rights and obligations of the Issuer, the
Lessee and the Purchaser under this Paragraph 8 shall not be assignable upon any
partial transfer of the Bonds.
9. NOTICES AND OTHER ACTIONS. Except as set forth elsewhere
herein, all notices, demands and formal actions hereunder will be in writing and
sent by certified or registered mail to:
The Issuer - Development Authority of Fulton County
---------- 141 Pryor Street, S.W.
Suite 5001
Atlanta, Georgia 30303
with copies to: Lewis C. Horne, Jr., Esq.
--------------- Nelson, Mullins, Riley & Scarborough
999 Peachtree Street, N.E.
Suite 1400
Atlanta, Georgia 30309
Telecopy No.: (404) 817-6050
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The Lessee - ADESA Atlanta, LLC
---------- 310 E. 96th Street, Suite 400
Indianapolis, Indiana 46240
Attn: General Counsel
Telecopy No.: (317) 815-3656
with copies to: Glenn R. Thomson, Esq.
--------------- Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
Telecopy No.: (404) 253-8266
The Purchaser - ADESA Atlanta, LLC
------------- 310 E. 96th Street, Suite 400
Indianapolis, Indiana 46240
Attn: General Counsel
Telecopy No.: (317) 815-3656
The Trustee - SunTrust Bank
----------- 25 Park Place, 24th Floor
Atlanta, Georgia 30303
Attn: Corporate Trust Department
Telecopy No.: (404) 588-7335
The Issuer, the Lessee, the Purchaser and the Trustee may, by notice
given hereunder, designate any further or different addresses or telecopier
numbers to which subsequent notices, certifications or other communications
shall be sent.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All
representations, warranties and agreements of the Issuer and the Lessee
contained herein shall remain operative and in full force and shall survive (a)
the execution and delivery of this Bond Purchase Agreement, and (b) the purchase
of any or all of the Bonds hereunder.
11. COUNTERPARTS. This Bond Purchase Agreement may be executed in
any number of counterparts with each executed counterpart constituting an
original but all of which together shall constitute one and the same instrument.
12. SUCCESSORS; GOVERNING LAW. This Bond Purchase Agreement will
inure to the benefit of and be binding upon the parties hereto and their
successors and assigns. This Bond Purchase Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, each of the parties hereto have executed and sealed
this Agreement through its duly authorized representative as of the date and
year first above written.
ISSUER
DEVELOPMENT AUTHORITY OF
FULTON COUNTY
(SEAL)
By: /s/ Robert J. Shaw
----------------------------------------
Chairman
Attest:
/s/ Lewis C. Horne, Jr.
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Assistant Secretary
[Signature page - Bond Purchase Agreement]
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LESSEE
ADESA ATLANTA, LLC
(SEAL)
By: /s/ Paul J. Lips
-----------------------------------------
Name: Paul J. Lips
---------------------------------------
Title: Treasurer
--------------------------------------
Attest:
/s/ Karen C. Turner
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Karen C. Turner
---------------
Secretary
[Signature Page - Bond Purchase Agreement]
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PURCHASER
ADESA ATLANTA, LLC
(SEAL)
By: /s/ Paul J. Lips
-----------------------------------------
Name: Paul J. Lips
---------------------------------------
Attest: Title: Treasurer
--------------------------------------
/s/ Karen C. Turner
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Karen C. Turner
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Secretary
[Signature Page - Bond Purchase Agreement]
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ACKNOWLEDGMENT OF TRUSTEE
The undersigned Trustee acknowledges receipt of and agrees to perform
those functions required of it pursuant to the provisions of Sections 2 and 8 of
this Bond Purchase Agreement:
SUNTRUST BANK, as Trustee
(SEAL) SUNTRUST BANK
CORPORATE
SEAL By: /s/ Jack Ellerin
GEORGIA -----------------------------------------
Jack Ellerin
Assistant Vice President
Attest:
/s/ Muriel Shaw
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Name: MURIEL SHAW
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Title: TRUST OFFICER
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[Signature Page - Bond Purchase Agreement]
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