Bond Purchase Agreement 07/01/06

EXHIBIT 10.2 Adel Industrial Development Authority $17,200,000 Revenue Bonds
(Sanderson Farms, Inc. (Production Division) Project),
Series 2006 Bond Purchase Agreement Dated as of July 1, 2006


Table of Contents Page 1. ISSUANCE OF THE BONDS 1 1.1 Authorization of the Bonds 1 1.2 Terms of the Bonds 1 1.3 Security for the Bonds 2 1.4 Limited Obligation 2 2. SALE AND PURCHASE OF THE BONDS; ADVANCES 2 3. CLOSING 3 4. CONDITIONS TO CLOSING 3 4.1 Representations and Warranties 3 4.2 Performance; No Default 3 4.3 Purchase Permitted by Applicable Law, etc 4 4.4 Lease Agreement 4 4.5 Lien Documents 4 4.6 Proceedings and Documents 4 5. PROJECT FUND 4 5.1 Creation of the Project Fund 4 5.2 Disbursements 5 5.3 Investments 5 5.4 Depositary 5 6. REPRESENTATIONS OF THE PURCHASER 6 7. REDEMPTION OF THE BONDS 6 7.1 Mandatory Redemption 6 7.2 Redemption at Option of Lessee 6 7.3 Partial Redemptions 7 7.4 Maturity 7 8. COVENANTS 7 8.1 Payment of Principal, Interest, and Premium 7 8.2 Performance of Covenants; Authority of the Issuer 7 8.3 Instruments of Further Assurance 7 8.4 Inspection of Project Books 8 8.5 Rights Under and Possession of the Lease 8 8.6 Recording and Filing 8 8.7 Maintenance of Existence; Compliance with Laws 9 9. EVENTS OF DEFAULT AND REMEDIES 9 9.1 Events of Default 9


Page 9.2 Acceleration 10 9.3 Other Remedies 10 9.4 Rescission 11 9.5 No Waivers or Election of Remedies 11 10. REGISTRATION; TRANSFER; SUBSTITUTION OF THE BOND 11 10.1 Registration of the Bond 11 10.2 Transfer of the Bond 12 10.3 Replacement of the Bonds 12 11. PAYMENTS ON THE BONDS 12 12. AMENDMENT AND WAIVER 13 12.1 Requirements 13 12.2 Binding Effect, etc 13 12.3 Lease 13 13. NOTICES 13 14. SUBSTITUTION OF PURCHASER 14 15. INTERPRETATION 14 15.1 Definitions 14 15.2 Construction of Certain Terms 15 15.3 Table of Contents; Titles and Headings 15 16. MISCELLANEOUS 15 16.1 Successors and Assigns 15 16.2 Payments Due on Non-Business Days 16 16.3 Severability 16 16.4 Construction 16 16.5 Counterparts 16 16.6 Governing Law 16 16.7 No Liability of Issuer' s Officers 16 16.8 Third Party Beneficiary 17 Exhibit A - Form of Bonds Exhibit B - Form of Investment Letter


Bond Purchase Agreement July 1, 2006Sanderson Farms, Inc. (Production Division),
a Mississippi corporation
(the " Purchaser" )Ladies and Gentlemen: The Adel Industrial Development Authority (the " Issuer" ), a public body corporate and politic created and existing under the laws of the State of Georgia, agrees with you as follows: Issuance of the Bonds Authorization of the Bonds. The Issuer has duly authorized the issuance and sale of $17,200,000 in principal amount of its Revenue Bonds (Sanderson Farms, Inc. (Production Division) Project), Series 2006 (the " Bonds ," such term to include any such Bonds issued in substitution therefor pursuant to Section 10 of this Agreement). The Bonds shall be substantially in the form set out in Exhibit A, with such changes therefrom, if any, as may be approved by you and the Issuer. Certain capitalized terms used in this Agreement are defined in Section 15 of this Agreement; references to an " Exhibit" are, unless otherwise specified, to an Exhibit attached to this Agreement. Capitalized terms not otherwise defined herein shall be defined as forth in the Lease Agreement of even date (the " Lease Agreement" ) between the Issuer and Sanderson Farms, Inc. (Production Division) (the " Lessee" ), a Mississippi corporation. Terms of the Bonds. The Bonds shall be dated the date of Closing and shall be designated " Adel Industrial Development Authority Revenue Bonds (Sanderson Farms, Inc. (Production Division) Project), Series 2006." The Series 2006 Bonds (the " Bonds" ) shall be issued as a single, fully registered Bond without coupons in an aggregate principal amount not in excess of $17,200,000 and shall be numbered R-1, substantially in the form set forth in Exhibit A. The Bonds shall bear interest from the date advances are made under this Agreement on the outstanding principal amount thereof at the rate per annum of 6.00%, computed on the basis of a 360-day year for the number of days actually elapsed, payable on July 1, 2007, and annually thereafter on July 1 of each year and shall mature on July 1, 2017 (each such date, a " Payment Date" ), unless earlier called for redemption.


The Bonds shall bear interest on any overdue installment of principal or premium, if any, and, to the extent permitted by applicable law, on any overdue installment of interest, at the aforesaid rate. Security for the Bonds. As security for the payment of the Bonds, the Issuer hereby assigns and pledges, and grants a security interest in, all of its right, title, and interest in the Bond Rent and in the amounts pledged pursuant to Section 5.1 and, pursuant to an Assignment and Security Agreement, dated the date hereof (the " Assignment" ) between the Issuer and the Purchaser, all of its right, title and interest in the Lease Agreement (collectively, the " Security" ) to the Bondholder, and this Agreement shall be deemed a security agreement with respect to the security interest so created. Limited Obligation. The Bonds shall be special or limited and not general obligations of the Issuer giving rise to no pecuniary liability of the Issuer, shall be payable solely from the Security, and shall be a valid claim of the Bondholder only against the Security, which Security is hereby again specifically pledged and assigned for the payment of the Bonds and shall be used for no other purpose than to pay the principal of, and premium, if any, and interest on, the Bonds, except as may be otherwise expressly authorized in the Bond Documents. The Bonds shall not constitute a general or moral obligation of Cook County nor a debt, indebtedness, or obligation of, or a pledge of the faith and credit or taxing power of, Cook County or the State of Georgia or any political subdivision thereof, within the meaning of any constitutional or statutory provision whatsoever. Neither the faith and credit nor the taxing power of the State of Georgia, Cook County, or any political subdivision thereof is pledged to the payment of the principal of, or premium, if any, or interest on, the Bonds or other costs incident thereto. The Issuer has no taxing power. Neither the members of the Governing Body nor any person executing the Bonds shall be liable personally on the Bonds by reason of the issuance thereof. Sale and Purchase of the Bonds; Advances. Subject to the terms and conditions of this Agreement, the Issuer shall issue and sell the Bonds to you and you shall purchase from the Issuer, at the Closing provided for in Section 3, the respective Bonds at the purchase price of 100% of the principal amount thereof. You shall pay the purchase price of the Bonds by making advances to the Issuer, from time to time on or prior to December 31, 2016, at the request of the Lessee, upon delivering to the Issuer documents conveying to the Issuer good and marketable title to the Project, as such property now exists, subject to those liens and encumbrances (if any) to which title to said property is subject on the date of delivery of the Bond but excluding the Lessor Contracts. The parties hereto hereby agree and stipulate, solely for purposes of this Agreement, that the value of the Project is equal to 100% of the principal amount of the Bonds being purchased by you. All advances shall be immediately deposited in the Project Fund and shall be held, invested, and disbursed as provided in this Agreement. The purchase price of the Bonds may be disbursed in one or more advances, but your obligation to pay the purchase price of the Bonds shall be reduced by each advance with respect to the Bonds made hereunder, and any purchase price so advanced hereunder may not be repaid and then re-advanced hereunder. Your obligation hereunder to make advances of the

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purchase price of the Bonds shall expire on December 31, 2016. All advances by you of the purchase price of the Bonds under this Agreement shall constitute principal advanced under the Bonds, shall bear interest at the rate provided in Section 1.2 from the dates of the advances until paid, and shall be secured as provided in Section 1.3. All your rights under the Bonds and the Bond Documents shall continue in full force and effect with respect to all such advances. The principal represented by all advances of the purchase price of the Bonds hereunder, including the date and amount of principal represented by each advance, shall be endorsed by you on the Schedule of Advances attached to the Bonds with respect to which such advance is being made; provided, however, that any failure by you to endorse such information on such Schedule shall not in any manner affect the obligation of the Issuer to make payments of principal and interest in accordance with the terms of the Bonds. The Issuer hereby irrevocably authorizes and directs you to enter on the Schedule of Advances attached to the Bonds the date and amount of principal represented by each advance of purchase price of the Bonds. Closing. The sale and purchase of the Bonds shall occur at the offices of Kilpatrick Stockton LLP, Suite 2800, 1100 Peachtree Street, Atlanta, Georgia 30309, at 10:00 a.m., local time, at a closing (the " Closing" ) on August ___, 2006, or on such other Business Day thereafter on or prior to December 31, 2016, as may be agreed upon by the Issuer, the Lessee, and you. At the Closing the Issuer shall deliver to you the Bonds duly executed in the form described in Section 1.2 and registered in your name (or in the name of your nominees), against delivery by you to the Issuer or its order of immediately available funds in the amount of the initial advance of the purchase price therefor, which shall be immediately deposited in the Project Fund. If at the Closing the Issuer shall fail to tender the Bonds to you as provided above in this Section, or any of the conditions specified in Section 4 shall not have been fulfilled to your satisfaction, you may, at your election, be relieved of all further obligations under this Agreement, without thereby waiving any rights you may have by reason of such failure or such nonfulfillment. Conditions to Closing. Unless waived by you in writing, your obligation to purchase and pay for the Bonds at the Closing is subject to the fulfillment to your satisfaction, prior to or at the Closing, of the following conditions: Representations and Warranties. The representations and warranties of the Issuer and the Lessee in the Lease Agreement shall be correct when made and at the time of the Closing. Performance; No Default. The Issuer and the Lessee shall have performed and complied with all agreements and conditions contained in this Agreement and the Lease Agreement required to be performed or complied with by them prior to or at the Closing and after giving effect to the issue and sale of

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the Bonds (and the application of the proceeds thereof as contemplated by the Lease Agreement) no Event of Default under the Lessor Contracts shall have occurred and be continuing. Purchase Permitted by Applicable Law, etc. On the date of the Closing, your purchase of the Bonds shall (i) be permitted by the laws and regulations of each jurisdiction to which you are subject, (ii) not violate any applicable law or regulation, and (iii) not subject you to any tax, penalty, or liability (including, without limitation, Regulation G, T, or X of the Board of Governors of the Federal Reserve System), under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. Lease Agreement. You shall have received in form and substance satisfactory to you original duly executed counterpart of the Lease Agreement. Lien Documents. You shall have received in form and substance satisfactory to you (a) evidence to the effect that all appropriate filings and other steps then necessary for perfection of the liens and security interests created by this Agreement and in the Security, as against third party creditors of and purchasers for value in good faith from the Issuer, have been taken, and (b) certified copies of Requests for Information or Copies (Form UCC-11), or equivalent reports, listing all effective financing statements that name the Issuer as debtor and that are filed in Cook County, Georgia, together with copies of such financing statements, none of which shall cover the collateral purported to be covered by this Agreement, except as shall be terminated on the date of the Closing or as shall constitute Permitted Encumbrances. Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated by this Agreement and the other Bond Documents and all documents and instruments incident to such transactions shall be satisfactory to you and your counsel, and you and your counsel shall have received all such counterpart originals or certified or other copies of such documents as you or they may reasonably request. Project Fund. Creation of the Project Fund. There is hereby created by the Issuer and ordered established with the Depositary a trust fund in the name of the Issuer to be designated the " Project Fund." All advances of the purchase price of the Bonds shall be immediately deposited into the Project Fund. The Depositary hereby accepts and agrees to perform the duties and obligations as herein specified. The Issuer hereby grants a security interest in the moneys and investments in the Project Fund held by the Depositary for the benefit of the Bondholder and this Agreement shall be

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deemed a security agreement with respect to the security interest so created. The Depositary shall be deemed to be (1) the secured party under the Uniform Commercial Code of Georgia, as representative of the Bondholder, or (2) a bailee that under the Uniform Commercial Code of Georgia holds collateral for the benefit of the Bondholder as secured party, in either case with an obligation to use moneys in the Project Fund solely as provided herein. If as a result of the occurrence of an Event of Default under this Agreement the Bondholder declares the unpaid principal balance and accrued interest on the Bonds to be immediately due and payable, the Depositary shall, upon the written direction of the Bondholder, apply all moneys in the Project Fund to the immediate payment of the Bonds, in the same manner as a redemption. Any such application shall reduce and discharge the amount then due and payable on the Bonds to the extent of such application. The Depositary shall promptly notify the Lessee and the Issuer of the amount of such reduction. Disbursements. Moneys in the Project Fund shall be expended in accordance with the provisions of the Lease Agreement, particularly Sections 4.03 and 4.04 thereof. The Depositary is hereby authorized and directed to issue its checks for each disbursement required by the aforesaid provisions of the Lease Agreement. The Depositary shall keep and maintain adequate records pertaining to the Project Fund and all disbursements therefrom, and the Depositary shall, if requested by the Lessee, file an accounting thereof with the Issuer and the Lessee. Investments. The Depositary shall invest and reinvest any moneys held in the Project Fund at the direction of the Lessee as provided in the Lease Agreement, particularly Section 4.11 thereof. The Depositary shall not be required to invest or reinvest any moneys in the Project Fund or any earnings therefrom unless directed by the Lessee. The Depositary shall not be liable for interest upon any moneys held in the Project Fund during any period of time that such moneys are uninvested. Such investments shall be held by or under the control of the Depositary and shall be deemed at all times a part of the Project Fund, and the interest accruing thereon and any profit realized therefrom shall be credited to the Project Fund, and any loss therefrom shall be charged against the Project Fund. The Depositary is directed to sell and convert to cash a sufficient amount of such investments whenever the cash held in the Project Fund is insufficient to pay a requisition for payment from the Project Fund when presented. Neither the Depositary nor the Issuer shall be liable or responsible for any loss resulting from any such investment or resulting from the redemption or sale of any such investment as herein authorized. Depositary. The Company is hereby designated as Depositary of the Project Fund. The Issuer and the Bondholder may, from time to time, with the prior written consent of the Lessee, designate a successor Depositary. All moneys received by the Depositary under this Agreement shall, until used or applied as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by this Agreement or by law. In making any disbursement or payment from the Project Fund as provided herein, the Depositary may rely upon all requisitions, certificates, and other items submitted to it pursuant to

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this Agreement, and the Depositary shall be relieved of all liability with respect to disbursements or payments made in accordance with this Agreement. The Depositary shall be protected in acting upon any requisition, certificate, or other item believed to be genuine and correct and to have been signed or sent by the proper person or persons. The duties of the Depositary hereunder shall be entirely administrative and not discretionary. The Depositary shall be obligated to act only in accordance with written directions or written instructions received by it as provided in this Agreement. The Issuer hereby waives any suit, claim, demand, or cause of action of any kind that it may have or may assert against the Depositary arising out of or relating to the execution or performance by the Depositary of this Agreement, unless such suit, claim, demand, or cause of action is based upon the negligence or willful misconduct of the Depositary. Representations of the Purchaser. You represent that you are purchasing the Bonds for your own account or for one or more separate accounts maintained by you for investment purposes or for your loan portfolio and not with a view to the distribution thereof, provided that the disposition of your property shall at all times be within your control. You agree (1) to execute and deliver to the Issuer and the Lessee an Investment Letter substantially in the form attached hereto as Exhibit B, at or prior to the Closing, and (2) that the Bonds may not be resold unless the purchaser executes and delivers to the Issuer and the Lessee an Investment Letter substantially in the form attached hereto as Exhibit B, at or prior to such resale. Redemption of the Bonds. Mandatory Redemption. The Bonds shall be subject to mandatory redemption by the Issuer prior to maturity on the earliest available Payment Date from excess moneys in the Project Fund to the extent required in Section 4.03(j) of the Lease Agreement. If the Bonds are called for redemption in the event described in the preceding sentence, the Bonds shall be redeemed by the Issuer in a principal amount equal to the excess moneys in the Project Fund at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date, but without premium or penalty. Redemption at Option of Lessee. The Bonds shall be subject to optional redemption by the Issuer upon the written request of the Lessee prior to maturity, in whole on any date or in part on any Payment Date, and if in part in amounts not less than $10,000, at a redemption price equal to one hundred percent (100%) of the principal amount being redeemed plus accrued interest to the redemption date, but without premium or penalty. As a condition precedent to each optional redemption under this Section, the Bondholder shall receive written notice of such optional redemption not less than 30 days and not more than 60 days prior to the date fixed for such redemption. Each such notice shall specify the date of redemption and the principal amount of the Bonds to be redeemed on

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such date, and the accrued interest (if the same can be calculated) to be paid on the redemption date with respect to the principal amount being redeemed. Partial Redemptions. Any partial redemptions of the Bonds shall be applied to the principal portions due on the Bonds, and in the ratios of their respective principal amounts to the aggregate principal amount of the Bonds. Maturity. In the case of each redemption of the Bonds pursuant to this Section, the principal amount of the Bonds to be redeemed shall mature and become due and payable on the date fixed for such redemption, together with interest on such principal amount accrued to such date and the applicable premium, if any. From and after such date, unless the Issuer shall fail to pay such principal amount when so due and payable, together with the interest and premium, if any, as aforesaid, interest on such principal amount shall cease to accrue. Covenants. Payment of Principal, Interest, and Premium. The Issuer covenants that it will promptly pay or cause to be paid the principal of, and premium, if any, and interest on, the Bonds at the place, on the dates, and in the manner provided herein and in the Bonds according to the true intent and meaning thereof, but solely from the Security. The principal of, and premium, if any, and interest on, the Bonds are payable solely from the sources as provided herein, which sources are hereby specifically pledged to the payment thereof in the manner and to the extent specified herein, and nothing in the Bonds or in this Agreement shall be construed as pledging any other funds or assets of the Issuer. Performance of Covenants; Authority of the Issuer. The Issuer covenants that it shall faithfully perform at all times any and all covenants, undertakings, stipulations, and provisions contained in this Agreement, in the Bonds, and in all proceedings pertaining thereto. The Issuer represents that it is duly authorized under the Constitution and laws of the State, including particularly the Act, to issue the Bonds and to execute this Agreement, and to pledge the Security pledged in the manner and to the extent set forth herein, that all action required on its part for the issuance of the Bonds and the execution and delivery of this Agreement have been duly and effectively taken, and that the Bonds in the hands of the Bondholder are and will be the valid and enforceable obligations of the Issuer according to the import thereof. Instruments of Further Assurance. The Issuer agrees that the Bondholder may defend its rights to the payments and other amounts due under the Lease against the claims and demands of all persons whomsoever. The Issuer covenants that it will do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered such agreements and such further acts, instruments, and transfers

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as the Bondholder may reasonably require for the better assuring, transferring, conveying, pledging, assigning, and confirming unto the Bondholder the Security. The Issuer covenants and agrees that, except as herein and in the Lease Agreement provided, it has not and will not sell, transfer, convey, assign, pledge, encumber, grant a security interest in, or otherwise dispose of, or create or suffer to be created any lien, encumbrance, security interest, or charge upon, any part of the Security or the income and revenues therefrom or of its rights under the Lease or enter into any contract or take any action by which the rights of the Bondholder may be impaired. Inspection of Project Books. The Issuer covenants and agrees that all books and documents in its possession relating to the Project and the income and revenues derived from the Project shall at all reasonable times be open to inspection by such accountants or other agents as the Bondholder may from time to time designate. Rights Under and Possession of the Lease. The Lease, duly executed originals or counterparts of which have been filed with you, set forth the covenants and obligations of the Issuer and the Lessee, ...