Exhibit 10.4

LEASE AGREEMENT
between
GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY
and
FOX FACTORY, INC.
Dated as of June 1, 2020

This Lease Agreement and all right, title and interest of the Gainesville and
Hall County Development Authority (the “Issuer”), in any rents, revenues and
receipts derived under this Lease Agreement have been assigned to Fox Factory,
Inc., as Bondholder, under the Financing Agreement, dated as of June 1, 2020,
between the Issuer and the Bondholder, which secures not to exceed $75,000,000
in aggregate principal amount of Gainesville and Hall County Development
Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc.
Project), Series 2020.

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LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Lease Agreement.)

PagePARTIES1ARTICLE IDEFINITIONSSection 1.1Definitions1Section 1.2Rules of
Construction5ARTICLE IIREPRESENTATION AND WARRANTIESSection 2.1
Representations and Warranties by the Issuer
5Section 2.2
Representations and Warranties by the Lessee
6ARTICLE IIILEASING CLAUSES AND WARRANTY OF TITLESection 3.1
Lease of the Project
7Section 3.2
Title to Project
7Section 3.3
Quiet Enjoyment
8Section 3.4
Agreement of the Issuer to Execute Amendment to Lease Agreement
8Section 3.5
Additional Encumbrances
8ARTICLE IVLEASING CLAUSES AND WARRANTY OF TITLE
COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 2020 BONDS
Section 4.1
Agreement to Acquire and Install the Project
9Section 4.2
Agreement to Issue Series 2020 Bonds; Application of Series 2020 Bond Proceeds
9Section 4.3
Disbursements from the Project Fund
10Section 4.4
Obligation of the Parties to Cooperate in Furnishing Documents to Each Other
11Section 4.5
Establishment of Completion Date
11Section 4.6
Lessee Required to Pay Project Costs in Event Project Fund Insufficient
11Section 4.7
Issuer to Pursue Remedies Against Suppliers, Contractors and Subcontractors and
Their Sureties
11Section 4.8
Investment of Project Fund Moneys Permitted
11ARTICLE V
EFFECTIVE DATE OF THIS LEASE; DURATION OF
LEASE TERM; RENTAL PROVISIONS
Section 5.1
Effective Date of this Lease; Duration of Lease Term
12Section 5.2Delivery and Acceptance of Possession12Section 5.3Rents and Other
Amounts Payable12Section 5.4Place of Rental Payments12Section 5.5Obligations of
Lessee Hereunder Absolute and Unconditional13

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Section 5.6
Lessee’s Performance under Financing Agreement
13ARTICLE VI
MAINTENANCE AND MODIFICATIONS,
TAXES AND INSURANCE
Section 6.1
Maintenance and Modifications of Project by Lessee
13Section 6.2
Removal of Leased Equipment
14Section 6.3
Taxes, Other Governmental Charges and Utility Charges
14Section 6.4
Insurance Required
14Section 6.5
Application of Net Proceeds of Insurance
15Section 6.6
Additional Provisions Respecting Insurance
15Section 6.7
Other Issuer Expenses
15Section 6.8
Advances by Issuer or Bondholder
15Section 6.9
Indemnification of Issuer and Bondholder
16ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1
Damage and Destruction
17Section 7.2
Condemnation
17Section 7.3
Proceeds of Insurance and Condemnation Awards
17ARTICLE VIII
SPECIAL COVENANTS
Section 8.1
No Warranty of Condition or Suitability by the Issuer
17Section 8.2
Inspection of Project; Right of Access to the Project by the Issuer
17Section 8.3
Lessee to Maintain Its Existence; Exceptions Permitted
17Section 8.4
Qualification in Georgia
18Section 8.5
Granting and Release of Easements
18Section 8.6
Report by Lessee
18Section 8.7
Filing of Certain Continuation Statements
18Section 8.8
Special Covenants Related to Ad Valorem Taxation
18Section 8.9
Payments in Lieu of Taxes to the Issuer
19ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 9.1
Assignment and Subleasing
20Section 9.2
Assignment of Lease to Bondholder
20Section 9.3
Restrictions on Sale of Project by Issuer
20Section 9.4
Redemption or Prepayment of Bonds
20Section 9.5
Prepayment of Rents
20Section 9.6
Rent Abatements if Bonds Paid Prior to Maturity
21Section 9.7
Reference to Bonds Ineffective After Bonds Paid
21ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1
Events of Default Defined
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Section 10.2
Remedies on Default
22Section 10.3
No Remedy Exclusive
22Section 10.4
Agreement to Pay Attorneys’ Fees and Expenses
22Section 10.5
No Additional Waiver Implied by One Waiver
23Section 10.6
Waiver of Appraisement, Valuation, Etc
23Section 10.7
Reinstatement of Lease
23ARTICLE XI
OPTIONS IN FAVOR OF LESSEE
Section 11.1
Options to Terminate the Lease Term
23Section 11.2
Option to Purchase Project
23Section 11.3
Conveyance on Purchase
24Section 11.4
Option to Purchase Unimproved Land
24Section 11.5
Relative Position of Options and Financing Agreement
24Section 11.6
Partial Prepayments of the Bonds; Purchase of 2020 Project and 2021 Project
24ARTICLE XII
OBLIGATIONS OF LESSEE
Section 12.1
Option to Purchase Project
25ARTICLE XIII
MISCELLANEOUS
Section 13.1Notices25Section 13.2No Estate in Land25Section 13.3Binding
Effect25Section 13.4Severability25Section 13.5
Amounts Remaining in Bond Fund
25Section 13.6
Amendments, Changes and Modifications
25Section 13.7
Execution Counterparts
26Section 13.8
Captions
26Section 13.9
Recording of Lease
26Section 13.10
Law Governing Construction of Lease
26Section 13.11Net Lease26
SIGNATURES
ACKNOWLEDGMENTS
EXHIBIT A - DESCRIPTION OF THE PROJECT FACILITY SITE
28
EXHIBIT B - DESCRIPTION OF THE PROJECT FACILITY
28
EXHIBIT C - DESCRIPTION OF THE PROJECT EQUIPMENT
29
EXHIBIT D – PROJECT SUMMARY
30
EXHIBIT E – BILL OF SALE (PROJECT EQUIPMENT)
31
EXHIBIT F - WARRANTY DEED
33
EXHIBIT G - FORM OF AMENDMENT TO LEASE AGREEMENT
34
EXHIBIT H - REQUISITION AND CERTIFICATE
35
EXHIBIT I - PERMITTED ENCUMBRANCES
39

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LEASE AGREEMENT
THIS LEASE AGREEMENT, dated as of June 1, 2020, by and between the GAINESVILLE
AND HALL COUNTY DEVELOPMENT AUTHORITY (the “Issuer”), a public body corporate
and politic and an instrumentality of the City of Gainesville and Hall County,
Georgia, duly organized and existing under the Constitution and laws of the
State of Georgia, as lessor, and FOX FACTORY, INC. (the “Lessee”), a California
corporation, as lessee.
W I T N E S S E T H:
That in consideration of the respective representations and agreements
hereinafter contained, the Issuer and the Lessee 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 be a general
debt on its part but shall be payable solely out of the rents, revenues and
receipts derived from this Lease Agreement, the sale of the bonds referred to in
Section 2.1 hereof, the insurance and condemnation awards as herein described
and any other rents, revenues and receipts arising out of or in connection with
its ownership of the Project as hereinafter defined):
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. In addition to the words and terms elsewhere defined
in this Lease Agreement, the following words and terms as used in this Lease
Agreement shall have the following meanings unless the context or use indicates
another or different meaning or intent. Terms which are not defined in this
Lease Agreement shall have the meaning specified in Article I of the Financing
Agreement except as herein otherwise expressly provided or unless the context
requires otherwise.
“2020 Project” means the Project Facility Site, the Project Facility and the
Project Equipment acquired with part of the proceeds of the Series 2020 Bonds
during 2020 and designated as 2020 Project Equipment on Exhibit “C” hereto or by
amendment thereof.
“2021 Project” means the Project Equipment acquired with part of the proceeds of
the Series 2020 Bonds during 2021 and designated as 2021 Project Equipment on
Exhibit “C” by amendment thereof.
“2022 Project” means the Project Equipment acquired with part of the proceeds of
the Series 2020 Bonds during 2022 and designated as 2022 Project Equipment on
Exhibit “C” by amendment thereof.
“Act” means an amendment to the Constitution of the State of Georgia (Ga. Laws
1964, page 866, et seq., as continued by Ga. Laws 1986, page 4328, et seq.),
ratified and proclaimed, and an act of the General Assembly of the State of
Georgia (Ga. Laws 1964, page 2282, et seq.), as amended.
“Acquisition Period” means the period beginning on the date on which the Series
2020 Bonds are delivered to the first purchaser or purchasers thereof or the
date upon which the acquisition, construction and installation of the Project
began, whichever is earlier, and ending on the Completion Date.
“Affiliate” means a corporation or other entity that controls the Lessee, that
the Lessee controls or that is under common control with the Lessee through a
common “parent” corporation or other entity. For such purposes the ownership of
more than 50% of the voting stock or ownership interest of a corporation or
other entity shall constitute “control.”
“Authorized Issuer Representative” means the person or persons at the time
designated to act on behalf of the Issuer by certificate furnished to the Lessee
and the Bondholder containing the specimen signature of each such person and
signed by the Chairman or Vice Chairman of the Issuer. Such certificate may
designate an alternate or alternates, each of whom shall be entitled to perform
all duties of the Authorized Issuer Representative. Should any Authorized Issuer
Representative not be satisfactory to the Lessee, then upon the request of the
Lessee and the Bondholder, the Issuer will designate another Authorized Issuer
Representative.
“Authorized Lessee Representative” means the person or persons at the time
designated to act on behalf of the Lessee by written certificate furnished to
the Issuer and the Bondholder containing the specimen signature of each such
persons and signed on behalf of the Lessee by an officer of the Lessee. Such
certificate may designate an alternate or alternates.
“Bill of Sale” means the Bill of Sale (Project Equipment) to be dated the date
of actual execution and delivery thereof, held in trust by the Escrow Agent in
accordance with the provisions hereof. The Bill of Sale, in substantially the
form it is to be executed and delivered, is attached as Exhibit “E” hereto.
“Bond” or “Bonds” means any or all of the Series 2020 Bonds issued by the Issuer
pursuant to the Financing Agreement.
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“Bond Fund” means the Bond principal and interest payment fund created by
Section 602 of the Financing Agreement and within which has been established a
general account and a special account. Any reference herein to the “Bond Fund”
without further limitation or explanation shall be deemed to be a reference to
the general account in the Bond Fund.
The term “Bondholder” means Fox Factory, Inc., and its successors and assigns.
“Completion Date” means the date of completion of the acquisition, construction
and installation of the Project as provided in Section 4.5 hereof.
“Counsel” means an attorney or firm thereof admitted to practice law before the
highest court of any State of the United States of America or the District of
Columbia. An attorney for the Issuer or the Lessee may be eligible for
appointment as Counsel.
“Direct Payment Agreement” means the Direct Payment Agreement, dated as of June
1, 2020, among the Issuer, the Lessee and the Bondholder, as authorized by
Section 208 of the Financing Agreement.
“Event of Default” means any of the events described in Section 10.1 hereof.
“Financing Agreement” means the Financing Agreement between the Issuer and the
Bondholder of even date herewith, pursuant to which the Bonds are authorized to
be issued and the Issuer’s interest in the Lease and the rents, revenues and
receipts arising out of or in connection with the Issuer’s ownership of the
Project are to be pledged and assigned to the Bondholder as security for the
payment of the principal of, prepayment premium (if any) and interest on the
Bonds, including any agreement supplemental thereto.
“Financing Statements” means any and all financing statements (including
continuation statements) filed for record from time to time to perfect the
security interests created by Financing Agreement and the security interests
created by the Security Deed.
“Government Obligations” means (a) direct obligations of the United States of
America for the payment of which the full faith and credit of the United States
of America is pledged, or (b) obligations issued by any agency controlled or
supervised by and acting as an instrumentality of the United States of America,
the payment of the principal of and interest on which is fully and
unconditionally guaranteed as a full faith and credit obligation of the United
States of America (including any securities described in (a) or (b) issued or
held in book-entry form on the books of the Department of Treasury of the United
States of America), which obligations, in either case, are held in the name of
the Issuer and are not subject to redemption prior to maturity by anyone other
than the holder thereof.
“Independent Counsel” means an attorney or firm thereof duly admitted to
practice law before the highest court of any state or the District of Columbia
and not an employee of the Issuer or the Lessee.
“Issuer” means the Gainesville and Hall County Development Authority, a public
body corporate and politic and an instrumentality of the City of Gainesville and
Hall County, Georgia, created and existing pursuant to Act, and its successors
and assigns.
“Issuer Documents” means this Lease, the Financing Agreement, the Bond Purchase
Agreement, the Bill of Sale, the Warranty Deed, the Security Deed, the Direct
Payment Agreement and the PILOT Agreement.
“Lease” means this Lease Agreement as it now exists and as it may hereafter be
amended pursuant to Article XIV of the Financing Agreement.
“Lease Term” means the duration of the lessee interest created by this Lease as
specified in Section 5.1 hereof.
“Lessee” means Fox Factory, Inc., a California corporation, and its successors
and assigns, including any surviving, resulting or transferee Person as provided
in Section 8.3 hereof.
“Lessee Documents” means this Lease and the Direct Payment Agreement.
“Net Proceeds” when used with respect to any insurance or condemnation award,
means the gross proceeds from the insurance or condemnation award with respect
to which that term is used remaining after payment of all expenses (including
attorneys and fees) incurred in the collection of such gross proceeds.
The term “Payment in Full of the Bonds” specifically encompasses the situations
referred to in Section 1002 of the Financing Agreement.
“Permitted Beneficiary” has the meaning set forth in Section 3.5 hereof.
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“Permitted Encumbrances” means, as of any particular time, (i) liens for ad
valorem taxes and special assessments not then delinquent or permitted to exist
as provided in Section 6.3 hereof, (ii) this Lease, the Financing Agreement, and
the Security Deed, and the security interests created herein, in the Security
Deed, and in the Financing Agreement, (iii) unfiled and inchoate mechanics, and
materialmen’s liens for construction work in progress, (iv) architects’,
contractors’, subcontractors’, mechanics’, materialmen’s, suppliers’, laborers,
and vendors’ liens or other similar liens not then payable or permitted to exist
as provided in Section 6.1(c) hereof, (v) those matters set forth on Exhibit “I”
attached hereto and by reference made a part hereof, (vi) utility, access or
other easements and rights of way, restrictions, reservations, reversions and
exceptions in the nature of easements that Lessee will certify will not
materially interfere with or impair the operations being conducted at the
Project, (vii) the liens permitted by Section 3.5 and defined as Permitted
Mortgages therein and (viii) such minor defects, irregularities and encumbrances
as the Lessee, by an Authorized Lessee Representative, certifies do not, in the
aggregate, materially impair the property affected thereby for purpose for which
it was acquired or is held by the Issuer.
“Permitted Investments” means the following securities, and no other:
(1) Bonds or obligations of such county, municipal corporation, school district,
political subdivision, authority, or body or bonds or obligations of the State
of Georgia or of other counties, municipal corporations, and political
subdivisions of the State of Georgia which are rated in the highest rating
category by a nationally recognized rating agency (e.g., at least “A” by Moody’s
or S&P);
(2) Bonds or other obligations of the United States government or of subsidiary
corporations of the United States government which are fully guaranteed by such
government;
(3) Obligations of agencies of the United States government issued by the
Federal Land Bank, the Federal Home Loan Bank, the Federal Intermediate Credit
Bank, and the Central Bank for Cooperatives and any other such agency or
instrumentality now or hereafter in existence; provided however, that all such
obligations shall have e a current credit rating from a nationally recognized
rating service of at least one of the three highest rating categories available
and have a nationally recognized market;
(4) 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 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;
(5) Certificates of deposit of national or state banks located within the State
of Georgia 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 saving and loan associations located within the
State of Georgia 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, saving and loan association, or building and loan
association acting as depository, custodian, or trustee for any such bonds
proceeds. The portion of such certificates of deposit 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, shall 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 Georgia, 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 of
Georgia or of any county or municipal corporation in the State of Georgia,
obligations of the United States or subsidiary corporations included in
paragraph (2) of the Official Code of Georgia Annotated Title 36, Chapter 82-7,
obligations of the agencies of the United States government included in
paragraph (3) of said Code section, or bonds, obligations, or project notes of
public housing agencies, urban renewal agencies, or municipalities included in
paragraph (4) of said Code section;
(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 referenced in paragraphs (2) and (3) of the
Official Code of Georgia annotated Title 36, Chapter 82-7 and repurchase
agreements fully collateralized by any such obligations;
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(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 of Georgia;
(7) Interest bearing time deposits, repurchase agreements, reverse repurchase
agreements, rate guarantee agreements, or other similar banking arrangements
with a bank or trust company having capital and surplus aggregating at least $50
million or with any government bond dealer reporting to, trading with, and
recognized as a primary dealer by the Federal Reserve Bank of New York having
capital aggregating at least $50 million or with any corporation which is
subject to registration with the Board of Governors of the Federal Reserve
System pursuant to the requirements of the Bank Holding Company Act of 1956,
provided that each such interest-bearing time deposit, repurchase agreement,
reverse repurchase agreement, rate guarantee agreement, or other similar banking
arrangement shall permit the moneys so placed to be available at the time
provided with respect to the investment or reinvestment o such moneys; and
(8) Any other investments to the extent now or hereafter permitted for the
investment of public funds under the Constitution and laws of the State of
Georgia.
“Permitted Mortgage” has the meaning set forth in Section 3.5 hereof.
“Person” means natural persons, firms, associations, corporations and public
bodies and any other legal entities.
“PILOT Agreement” means that certain PILOT Agreement, dated as of June 1, 2020,
between the Issuer and the Lessee.
“Project” means the acquisition of the Project Facility Site, the acquisition,
construction and installation of the Project Facility on the Project Facility
Site and the Project Equipment installed in the Project Facility or on the
Project Facility Site, and consists of the 2020 Project, the 2021 Project and
the 2022 Project.
“Project Equipment” means those items of machinery, equipment and related
property required or authorized herein to be acquired and installed in the
Project Facility or on the Project Facility Site with proceeds from the sale of
the Bonds or the proceeds of any payment by the Lessee pursuant to Section 4.6
hereof or otherwise as agreed to between the Lessee and the Issuer and any item
of machinery, equipment and related property acquired and installed in the
Project Facility or on the Project Facility Site in substitution therefor and
renewals and replacements thereof pursuant to Sections 6.2, 7.1 and 7.2 hereof,
less such machinery, equipment and related property as may be released from this
Lease pursuant to Section 6.2 hereof or taken by the exercise of power of
eminent domain as provided in Section 7.2 hereof, but not including the Lessee’s
own machinery, equipment and related property installed under the provisions of
Section 6.1(b) hereof. The Project Equipment is more fully described in Exhibit
“C” attached hereto, as amended from time to time, and by this reference made a
part of this Lease. The items of leased equipment comprising part of the Project
at any time and from time to time may be tagged or otherwise identified by
serial number or other recognizable identification system as being the property
of the Issuer and leased to the Lessee hereunder. The Project Equipment shall be
divided into “2020 Project Equipment,” “2021 Project Equipment” and “2022
Project Equipment” as designated on Exhibit “C” hereto.
“Project Facility” means the facility for the manufacture of shock absorbers for
automobiles, trucks and motorcycles located on the Project Facility Site in
Gainesville Industrial Park West, Gainesville, Hall County, Georgia, said
Project Facility being more particularly described in Exhibit ”B” attached
hereto and by this reference made a part hereof.
“Project Facility Site” means the real estate and interests in real estate
described in Exhibit “A” attached hereto and by this reference made a part
hereof.
“Project Fund” means the project fund created by Section 701 of the Financing
Agreement and referred to in Sections 4.2 and 4.3 hereof.
“Project Summary” means the Project Summary, dated as of June 1, 2020, filed
with the Secretary of the Issuer, as the same may be amended from time to time
in accordance with the provisions of this Lease. The Project Summary is
contained in Exhibit “D” attached hereto and by this reference made a part of
this Lease.
“Security Deed” means the deed to secure debt and security agreement of even
date herewith from Issuer to the Bondholder, and any amendments or supplements
thereto, pursuant to which the Issuer will convey a security interest in the
Project to the Bondholder as additional security for the payment of the
principal of and interest on the Bonds, which deed shall be recorded in the
Clerk’s Office, Hall County Superior Court.
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“Security interest” or “security interests” shall have the meaning set forth in
the Uniform Commercial Code of Georgia, as now or hereafter amended.
“Series 2020 Bonds” means the Gainesville and Hall County Development Authority
Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series
2020, in the aggregate principal amount not to exceed $75,000,000, delivered in
installments in accordance with Section 304 of the Financing Agreement.
“Warranty Deed” means the Warranty Deed to be dated the date of actual execution
and delivery thereof, held in trust by the Escrow Agent in accordance with the
provisions hereof. The Warranty Deed, in substantially the form it is to be
executed and delivered, is attached as Exhibit “F” hereto.
Section 1.2. Rules of Construction. Unless the context clearly indicates to the
contrary:
(a) “Herein”, “hereby”, “hereunder”, “hereof”, “hereinbefore”, “hereinafter” and
other equivalent words refer to this Lease and not solely to the particular
portion thereof in which any such word is used.
(b) Words importing the singular number shall include the plural number and vice
versa, and any pronoun used herein shall be deemed to cover all genders.
(c) All references herein to particular Articles or Sections are references to
Articles or Sections of this Lease.
(d) Any certificate or statement required to be delivered under the provisions
of this Lease or the Financing Agreement shall, in the absence of manifest
error, be deemed to be conclusive evidence of the truth, correctness and
accuracy of the matters covered in such certificate or statement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties by Issuer. The Issuer makes the
following representations and warranties:
(a) Organization and Authority. The Issuer is a public body corporate and
politic and an instrumentality of the City of Gainesville and Hall County,
Georgia, duly organized and existing under the Constitution and laws of the
State of Georgia, including particularly the provisions of the Act. Under the
provisions of the Act, the Issuer has the power to execute and deliver the
Issuer Documents, to enter into the transactions contemplated thereby and to
perform and observe its obligations contained therein in accordance with the
terms thereof. By proper corporate action, the Issuer has duly authorized the
execution and delivery of the Issuer Documents.
(b) Qualification of Project Under Act. The Project constitutes a “project”
within the meaning of the Act for which bonds may be issued under the Act, and
is located in Gainesville, Hall County, Georgia.
(c) Public Purpose. The Issuer has found and hereby declares that the issuance
of the Bonds and the use of the proceeds of the Bonds to acquire, construct and
install the Project and the leasing of the Project to the Lessee and the sale of
the Project to the Lessee at the expiration or sooner termination of the Lease
Term is in furtherance of the public purposes for which the Issuer was created.
(d) Agreements are Legal and Authorized. The Issuer is not subject to any
charter, by-law or contractual limitation or provision of any nature whatsoever
which in any way limits, restricts or prevents the Issuer from entering into the
Issuer Documents or performing any of its obligations thereunder, except to the
extent that such performance may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditor’s rights.
(e) Limited Obligations. Notwithstanding anything herein contained to the
contrary, any obligation the Issuer may hereby incur for the payment of money
shall not be a general debt on its part but shall be payable solely from rents,
revenues and receipts derived from this Lease, the sale of the Bonds and any
other rents, revenues and receipts derived by the Issuer arising out of or in
connection with its ownership of the Project.
(f) Issuance of Bonds. To accomplish the foregoing, the Issuer proposes to issue
not to exceed $75,000,000 in aggregate principal amount of its Series 2020 Bonds
immediately following the execution and delivery of this Lease. The date,
denominations, interest rate, maturity date, prepayment provisions and other
pertinent provisions with respect to the Bonds are set forth in the Financing
Agreement (particularly Articles II and III thereof) and by this reference
thereto they are incorporated herein.
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(g) Security for Bonds. The Bonds are to be issued under and secured by the
Financing Agreement, pursuant to which the Issuer’s right, title and interest in
this Lease (except for certain rights of indemnification and payment of
expenses), and the rents, revenues and receipts arising out of or in connection
with the Issuer’s ownership of the Project will be assigned to the Bondholder
and pledged as security for the payment of the principal of and interest on the
Bonds. In addition, the Issuer will execute and deliver the Security Deed
conveying to the Bondholder a security interest in the Project, as additional
security for the payment of the principal of and interest on the Bonds.
(h) No Prior Pledge. Neither this Lease nor the receipts and revenues hereunder
have been pledged or hypothecated in any manner or for any purpose (other than
as provided in the Financing Agreement).
(i) 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 any of the Bonds is such as to require the consent, approval 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 any of the Issuer Documents or the offer,
issue, sale or delivery of the Bonds, other than those already obtained or
filed; provided, however, no representation is made herein as to compliance with
the securities or “blue sky” laws of any jurisdiction.
(j) No Defaults. No event has occurred and no condition exists with respect to
the Issuer which would constitute an event of default, as defined therein, under
any of the Issuer Documents or which, with the lapse of time or with the giving
of notice or both, would become an event of default under any of the Issuer
Documents.
(k) Enforceability. Each of the Issuer Documents is a legal, valid and binding
obligation of the Issuer enforceable in accordance with its terms, except to the
extent the Enforceability hereof may be subject to (i) the exercise of judicial
discretion in accordance with general principles of equity, and (ii) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting
creditors, rights heretofore or hereinafter enacted to the extent
constitutionally applicable.
(1) No Warranty by Issuer of Condition or Suitability of the Project. The Issuer
makes no warranty, either express or implied, as to the suitability or utility
of the Project or as to the condition of the Project or that the Project is or
will be suitable for the Lessee’s purposes or needs.
(m) Pending Litigation. There are no actions, suits, proceedings, inquiries or
investigations pending, or to the knowledge of the Issuer threatened, against or
affecting the Issuer in any court or before any governmental authority or
arbitration board or tribunal which is reasonably anticipated to materially and
adversely affect the transactions contemplated by any of the Issuer Documents or
which is reasonably anticipated to adversely affect the validity or
enforceability of the Bonds or any of the Issuer Documents or the ability of the
Issuer to perform its obligations under any of the foregoing.
Section 2.2. Representations and Warranties by the Lessee. The Lessee makes the
following representations and warranties:
(a) Organization and Power. The Lessee is a corporation duly organized and
validly existing under the laws of the State of California, has the power to
enter into the Lessee Documents and to perform and observe its obligations
contained therein in accordance with the terms thereof, and has, by proper
action, been duly authorized to execute, deliver and perform the Lessee
Documents in accordance with their respective terms.
(b) Pending Litigation. There are no actions, suits, proceedings, inquiries or
investigations pending, or to the knowledge of the Lessee threatened, against or
affecting the Lessee in any court or before any governmental authority or
arbitration board or tribunal which are reasonably anticipated to materially and
adversely affect the transactions contemplated on its part by any of the Lessee
Documents or which are reasonably anticipated to adversely affect the validity
or Enforceability of the Bonds or any of the Lessee Documents or the ability of
the Lessee to perform its obligations under any of the foregoing.
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(c) Agreements Are Valid and Authorized. The execution and delivery by the
Lessee of the Lessee Documents and the compliance by the Lessee with all of the
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby (i) are within the power of the Lessee (ii) will
not conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, its Articles of Incorporation, its
bylaws, or in any material respect any commitment, agreement or instrument of
whatever nature to which the Lessee is a party or by which it may be bound, or
to which any of its properties may be subject, or any license, judgment, decree,
law, statute, order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Lessee or any of its activities or properties
(or the Lessee will have obtained an express, written waiver of such condition
or provision for the purposes hereof), or (iii) result in the creation or
imposition of any prohibited lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of the Lessee under the terms of
any instrument or agreement.
(d) Governmental Consents. Neither the Lessee nor any of its business or
properties, nor any relationship between the Lessee and any other Person, nor
any circumstance in connection with the execution, delivery and performance by
the Lessee of the Lessee Documents, or the offer, issue, sale or delivery by the
Issuer of the Bonds, is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Lessee, other than those already
obtained as of the Closing Date; provided, however, no representation is made
herein as to compliance with the securities or “blue sky” laws of any
jurisdiction nor is any representation made as to any permits or similar
approvals not required as of the date hereof with respect to the Project.
(e) No Defaults. No event has occurred and no condition exists with respect to
the Lessee that would constitute an event of default, as defined therein, under
any of the Lessee Documents or which, with the lapse of time or with the giving
of notice or both, would become an event of default under any of the Lessee
Documents.
(f) Governmental Approvals. The Project will be acquired, constructed and
installed in such manner as to conform in all material respects with all
applicable zoning, planning, building and other regulations of governmental
authorities having jurisdiction over the Project and all necessary utilities
will be available in all material respects to the Project.
(g) Enforceability. This Lease is a legal, valid and binding obligation of the
Lessee enforceable in accordance with its terms, except to the extent the
enforceability hereof may be subject to (i) the exercise of judicial discretion
in accordance with general principles of equity, and (ii) bankruptcy,
insolvency, reorganization, moratorium, or other similar laws affecting
creditors, rights heretofore or hereinafter enacted to the extent
constitutionally applicable.
(h) Purpose of Project. The Lessee presently intends to operate the Project,
located wholly within Gainesville, Hall County, Georgia, in a manner consistent
with the Act, principally as a facility for the manufacture of shock absorbers
for automobiles, trucks and motorcycles from the Completion Date until the
expiration or sooner termination of the Lease Term as provided herein.
ARTICLE III
LEASING CLAUSES AND WARRANTY OF TITLE
Section 3.1. Lease of the Project. The Issuer hereby leases to the Lessee, and
the Lessee hereby leases from the Issuer, subject to Permitted Encumbrances, the
Project at the rental set forth in Section 5.3 hereof and in accordance with the
provisions of this Lease.
Section 3.2. Title to Project. The Issuer for itself, its successors and
assigns, warrants to the Lessee, its successors and assigns, that the Issuer has
good and valid title in and to the Project, free from all encumbrances except
Permitted Encumbrances.
The Issuer agrees that it shall upon request of the Lessee join where necessary
in any proceeding to protect and defend the Issuer’s title in and to the
Project, provided that the Lessee shall pay the entire cost of any such
proceeding, reimburse and indemnify and hold harmless the Issuer from any cost
or liability whatsoever.
The Lessee and the Issuer agree that the Issuer will hold title to such of the
Project as is conveyed by the Lessee to the Issuer from time to time.
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Section 3.3. Quiet Enjoyment. The Issuer warrants and covenants that it will
defend the Lessee in the quiet enjoyment and peaceful possession, use and
operation of the Project, and all appurtenances thereunto belonging, free from
all claims of all persons whomsoever acting by, through or under the Issuer,
throughout the Lease Term.
In addition to the foregoing warranty, the Issuer agrees that it will not take
or cause another party to take any action to interfere with the Lessee’s
peaceful, use, operation and quiet enjoyment of the Project. The Issuer agrees
that in the event the peaceful and quiet enjoyment of the Project shall
otherwise be denied to the Lessee or contested by anyone, the Issuer shall upon
request of the Lessee join where necessary in any proceeding to protect and
defend the quiet enjoyment of the Lessee, provided that, unless such denial or
contest shall result from the gross negligence or willful misconduct of the
Issuer or violation by the Issuer of its warranties and covenants contained
herein, the Lessee shall pay the entire cost of any such proceeding, and
reimburse and indemnify and hold harmless the Issuer from any cost or liability
whatsoever.
Section 3.4. Agreement of the Issuer to Execute Amendment to Lease Agreement.
The Issuer and the Lessee understand and agree that additional items of
machinery, equipment and related personal property for the Project Facility and
additional real property may be acquired, constructed or installed by the Lessee
and conveyed to the Issuer or may be acquired directly by the Issuer from time
to time hereafter and in each event thereby comprise a portion of the Project
hereunder. The Issuer agrees, at the request of the Lessee, to execute an
Amendment to Lease Agreement in the form contained as Exhibit “G” hereto without
further action on its part contained and the additional property added thereby
shall become a part of the Project and leased by the Issuer to the Lessee
pursuant to the provisions of this Lease Agreement.
Section 3.5. Additional Encumbrances; Consents; Subordination; Estoppel
Certificates. The Issuer agrees with the Lessee that the Issuer shall not grant
any security interest, liens, mortgages, deeds of trust or other pledges or
encumbrances on the Project Facility, the Project Facility Site, the Project
Equipment, or any other equipment or other property which is or may from time to
time become subject to this Lease (collectively, the “Leased Property”), except
that, at the written request of the Lessee, the Issuer shall grant to any of the
Lessee’s lenders, creditors or other parties as requested by the Lessee from
time to time (each, a “Permitted Beneficiary”), a security interest in, lien on,
pledge of, mortgage in, deed to secure debt and deed of trust on, all or any
portion of the Leased Property and, at the written request of the Lessee, the
Issuer will enter into any security agreements, mortgages, deeds of trust, deeds
to secure debt or other instruments as may be requested by the Lessee (each a
“Permitted Mortgage”) in connection with any such grant. The Lessee will
reimburse the Issuer for all of its reasonable fees and expenses relating to any
such grant or documentation and the Issuer shall not have any pecuniary
liability resulting from any such grant or documentation. All Permitted
Mortgages shall be considered Permitted Encumbrances.
From time to time during the term of this Lease, Lessee expects to secure
financing of its interest in the Project by collaterally assigning Lessee’s
interest in this Lease together with the Bonds. In the event of any such
assignment to a Permitted Beneficiary, Issuer will, upon not less than ten (10)
days prior request by Lessee, execute, acknowledge and deliver to Lessee (i) a
consent to such assignment addressed to such Permitted Beneficiary or (ii) a
subordination agreement, whichever shall be requested by Lessee, in a form
satisfactory to such Permitted Beneficiary; and Issuer will produce, at Lessee’s
expense, such certificates, subordination agreements, opinions of counsel and
other documents as may be reasonably requested by such Permitted Beneficiary
Nothing contained in this Lease or any of the other Issuer Documents or Lessee
Documents or related documents shall prohibit the Lessee from granting to any
Permitted Beneficiary a security interest in, a lien upon, a pledge of, a
mortgage on, and a deed of trust on, any of the Leased Property, including a
leasehold deed to secure debt, from time to time.
Issuer and Lessee will, at any time from time to time, upon not less than ten
(10) days prior request by the other party or by a Permitted Beneficiary,
execute, acknowledge and deliver a certificate (a) to the effect that (i) this
Lease is unmodified and in full effect (or setting forth any modifications and
that this Lease is in full effect as modified); (ii) to the knowledge of the
signer, the rent and other amounts payable and the dates to which the rent and
other amounts payable hereunder have been paid; (iii) to the knowledge of the
signer, there are no Events of Default or events which with the passage of time
or notice or both would become an Event of Default (or describing the Event of
Default); (iv) the commencement and expiration dates of this Lease; (v) the
amount of any security or other deposits; and (vi) the Lessee is in possession
of the Project (or who is in possession) and (b) concerning such other matters
as may reasonably be required by the requesting party. Any such certificate may
be relied upon by any mortgagee or prospective purchaser or prospective
mortgagee of the Project or Lessee’s interest therein.
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ARTICLE IV
COMMENCEMENT AND COMPLETION OF THE PROJECT;
ISSUANCE OF THE SERIES 2020 BONDS
Section 4.1. Agreement to Acquire, Construct and Install the Project. Not later
than the delivery of this Lease the Issuer will have acquired the title in and
to the Project Facility Site and, subject to the provisions of Section 4.6
hereof, the Issuer agrees that it will cause the acquisition, construction,
installation and completion of the Project to be made in accordance with the
Project Summary, as may be amended from time to time by the Lessee, the Project
to consist of the Project Facility, the Project Facility Site, and the
machinery, equipment and related property comprising the Project Equipment, said
Project Equipment being more particularly described in the list attached hereto
as Exhibit “C,” as from time to time amended, and such other items of machinery,
equipment and related property as in the Lessee’s judgment may be necessary or
desirable for the operation of the Project and as shall from time to time prior
to the Completion Date be specified in written orders from the Lessee to the
Issuer, all of which acquisitions, construction and installations shall be made
substantially in accordance with directions given by the Lessee. Any changes to
the Project Summary shall be made at the sole discretion of the Lessee and shall
also be filed with the Secretary of the Issuer and the Authorized Lessee
Representative. Upon the request of the Lessee, the Issuer shall deliver to the
Lessee an Amendment to Lease Agreement in substantially the form of Exhibit “G”
hereto and other appropriate documents necessary to convey to the Issuer title
to any real property and any items of machinery, equipment and related personal
property acquired and installed with the proceeds of the Bonds or acquired and
installed by the Lessee with its own funds.
The Issuer, to the maximum extent permitted by law, hereby makes, constitutes
and appoints the Lessee as its true, lawful and exclusive agent for the
acquisition, construction and installation of the Project, and the Lessee hereby
accepts such agency to act and do all things on behalf of the Issuer, to perform
all acts of the Issuer hereinbefore provided in this Section 4.1, and to bring
any actions or proceedings against any person which the Issuer might bring with
respect thereto as the Lessee shall deem proper. The Issuer hereby ratifies and
confirms all actions of the Lessee with respect to the Project prior to the date
hereof. This appointment of the Lessee to act as agent and all authority hereby
conferred or granted is conferred and granted irrevocably, until all activities
in connection with the acquisition, construction and installation of the Project
shall have been completed, and shall not be terminated prior thereto by act of
the Issuer or of the Lessee.
The Issuer agrees that only such changes will be made in the Project Summary as
may be specified by an Authorized Lessee Representative. The Issuer agrees that
it will enter into, or accept the assignment of, such contracts as the Lessee
may request in order to effectuate the purposes of this Section, but that it
will not execute any other contract or give any order for the acquisition,
construction and installation of the Project unless and until the Authorized
Lessee Representative shall have approved the same in writing.
The Lessee, as agent of the Issuer, shall acquire, construct and install the
Project in accordance with the Project Summary as it exists from time to time.
The Lessee agrees to complete the acquisition, construction and installation of
the Project as promptly as practicable after the date of the execution and
delivery of this Lease, to continue such acquisition, construction and
installation with all reasonable dispatch and to use its best efforts to cause
the same to be completed as soon as practicable, delays incident to strikes,
riots, acts of God or the public enemy beyond the reasonable control of the
Issuer and the Lessee only excepted, but if said acquisition, construction and
installation is not completed within the time herein contemplated there shall be
no resulting liability on the part of the Issuer and no diminution in or
postponement of the rents required in Section 5.3 hereof to be paid by the
Lessee. The Issuer agrees to effect the acquisition, construction and
installation of the Project as promptly as practicable after specification by
the Lessee of the items to be acquired, constructed and installed, and receipt
of the acquisition, construction and installation schedule desired by the
Lessee.
Section 4.2. Agreement to Issue Series 2020 Bonds; Application of Series 2020
Bond Proceeds. In order to provide funds for payment of the costs of the
acquisition, construction and installation of the Project provided for in
Section 4.1 hereof, the Issuer agrees that as soon as possible it will
authorize, sell and cause to be delivered to the initial purchaser or purchasers
thereof, the Series 2020 Bonds, bearing interest and maturing as set forth in
Article III of the Financing Agreement, at a price to be approved by the Lessee.
Upon receipt of the proceeds derived from the sale of the Series 2020 Bonds, the
Issuer will deposit said proceeds received upon said sale in the Project Fund.
The Project shall be divided into three parts, the 2020 Project, the 2021
Project and the 2022 Project. The Bonds will be delivered in one or more
installments and at different times as provided in Article II of the Financing
Agreement. Notwithstanding anything to the contrary contained herein or in the
Financing Agreement, on the date of execution of this Lease, the Issuer will
purchase the Project Facility Site and any improvements thereon in exchange for
an initial Bond in the principal amount of $34,554,100 in accordance with the
provisions of Paragraph 2 of the Bond Purchase Agreement dated as of June 1,
2020, by and between the Issuer and the Lessee, and on each date thereafter that
an additional Bond is issued, the Issuer will purchase any additional
improvements to the Project Facility Site and/or Project Equipment in exchange
for an additional Bond in accordance with such Bond Purchase Agreement.
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Section 4.3. Disbursements from the Project Fund. The Issuer will use the moneys
in the Project Fund for the following purposes:
(a) Payment of the fees and expenses for recording or filing the deed whereby
fee simple title to the Project Facility Site is to be conveyed to the Issuer;
payment of the fees and expenses for recording or filing this Lease, the
Security Deed, the Financing Agreement and any other documents by which this
Lease is assigned as security for the Bonds; the fees and expenses for recording
or filing any documents that the Lessee may deem desirable to file for record in
order to protect the title of the Issuer to the Project, or any part thereof;
and the fees and expenses in connection with any actions or proceedings that the
Lessee may deem desirable to bring in order to perfect or protect the title of
the Issuer to the Project or any part thereof;
(b) Payment to the Lessee and the Issuer, as the case may be, of such amounts,
if any, as shall be necessary to reimburse the Lessee and the Issuer in full for
all advances and payments made by them or either of them prior to or after the
delivery of the Bonds for expenditures in connection with the acquisition by the
Issuer or the Lessee of title to the Project or any part thereof, preparation of
the plans and specifications for the Project (including any preliminary study or
planning of the Project or any aspect thereof), the acquisition, construction
and installation of the Project, the acquisition and installation necessary to
provide utility services or other facilities, and the acquisition, construction
and installation of all properties, including machinery and equipment, deemed
necessary in connection with the Project or any part thereof, and any
architectural, engineering and supervisory services with respect to any of the
foregoing;
(c) Payment of, or reimbursement of the Issuer or the Lessee for, the customary
and reasonable legal and accounting fees and expenses, financial consultants’
fees, rating agencies, fees, financing charges (including underwriting or
placement fees) and printing and engraving costs incurred in connection with the
authorization, sale and issuance of the Bonds, the preparation of this Lease,
the Financing Agreement, the Security Deed, the Financing Statements and all
other documents in connection therewith and in connection with the acquisition
of title to the Project;
(d) Payment for labor, services, materials and supplies used or furnished in
site improvement and in the acquisition, construction and installation of the
Project or any part thereof, all as provided in the plans and specifications
therefor; payment for the cost of the acquisition, construction and installation
of utility services or other facilities and payment for the cost of all property
deemed necessary in connection with the Project or any part thereof; and payment
for the miscellaneous expenses incidental to any of the foregoing;
(e) Payment of the fees, if any, for architectural, engineering and supervisory
services with respect to the Project or any part thereof;
(f) To such extent as they shall not be paid by a contractor for acquisition,
construction or installation with respect to any part of the Project, payment of
the premiums on all insurance required to be taken out and maintained during the
Acquisition Period under this Lease, or reimbursement thereof if paid by the
Lessee under Section 6.4 hereof;
(g) Payment of the taxes, assessments and other charges, if any, referred to in
Section 6.3 hereof that may become payable during the Acquisition Period; and
(h) Payment of expenses incurred with approval of the Lessee in seeking to
enforce any remedy against any contractor or subcontractor in respect of any
default under a contract relating to the Project or any part thereof.
        All moneys remaining in the Project Fund (including moneys earned on
investments made pursuant to the provisions of Section 4.8 hereof) after the
Completion Date and payment in full of the costs of the acquisition,
construction and installation of the Project, and after payment of all other
items provided for in the preceding subsections of this Section then due and
payable shall, at the written direction of the Authorized Lessee Representative,
be (i) used for the purchase of Bonds for the purpose of cancellation or
prepayment of the Bonds, or (ii) paid into the Bond Fund, or (iii) a combination
of (i) and (ii) as is provided in such direction, provided that amounts approved
by the Lessee shall be retained by the Issuer in the Project Fund for payment of
Project costs not then due and payable. Any balance remaining of such retained
funds after full payment of all such Project costs shall be used by the Issuer
as directed by the Lessee in the manner specified in clauses (i), (ii) and (iii)
of this subsection.
The payments specified in subsections (a) through (h) of this Section shall be
made by the Issuer only upon receipt of a written Requisition for such payment
signed by the Lessee by an Authorized Lessee Representative, in the form
contained as Exhibit “H” hereto.
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In making any such payment from the Project Fund the Issuer may rely on any such
requisitions and certificates delivered to it pursuant to this Section and the
Issuer shall be relieved of all liability with respect to making such payments
in accordance with such requisitions and certificates without inspection of the
Project or any other investigation. The Issuer acknowledges and agrees that it
shall not be entitled to any reimbursement for moneys advanced or expended by it
as an economic incentive to the Lessee.
Section 4.4. Obligation of the Parties to Cooperate in Furnishing Documents to
Each Other. The Issuer and the Lessee agree to cooperate with each other in
furnishing the documents referred to in Section 4.3 hereof that are required to
effect payments out of the Project Fund, and to cause such requisitions and
certificates to be directed by the Authorized Issuer Representative and the
Authorized Lessee Representative to the appropriate party as may be necessary to
effect payment out of the Project Fund in accordance with Section 4.3 hereof.
Such obligation of the Issuer and the Lessee is subject to any provisions of
this Lease or the Financing Agreement requiring additional documentation with
respect to payments and shall not extend beyond the moneys in the Project Fund
available for payment under the terms of the Financing Agreement.
Section 4.5. Establishment of Completion Date. The Completion Date shall be
evidenced to the Issuer by a certificate signed on behalf of the Lessee by an
Authorized Lessee Representative stating that, except for amounts retained by
the Issuer for Project costs not then due and payable as provided in Section 4.3
hereof, (i) the acquisition, construction and installation of the Project has
been substantially completed and all labor, services, materials and supplies
used in such acquisition, construction and installation have been paid for, and
(ii) the Project has been acquired, constructed and installed to the Lessee’s
satisfaction and all costs and expenses incurred in connection therewith have
been paid, and (iii) all permissions required of governmental authorities for
the occupancy of the Project Facility have been obtained, including a
certificate of occupancy. Notwithstanding the foregoing, the Completion Date
shall not be later than December 31, 2022, and such certificate of the Lessee
shall state that it is given without prejudice to any rights against third
parties which exist on the date of such certificate or which may subsequently
come into being. The Issuer and the Lessee agree to cooperate one with the other
in causing such certificates to be furnished as herein provided.
Section 4.6. Lessee Required to Pay Project Costs in Event Project Fund
Insufficient. In the event that moneys in the Project Fund available for payment
of the costs of the Project should not be sufficient to pay the costs thereof in
full, the Lessee agrees to complete the Project and to pay all that portion of
the costs of the Project as may be in excess of the moneys available therefor in
the Project Fund. The Issuer does not make any warranty, either express or
implied, that the moneys which will be paid into the Project Fund and which,
under the provisions of this Lease, will be available for payment of costs of
the Project, will be sufficient to pay all the costs which will be incurred in
that connection. The Lessee agrees that if after exhaustion of the moneys in the
Project Fund, the Lessee should pay any portion of the costs of the Project
pursuant to the provisions of this Section, it shall not be entitled to any
reimbursement therefor from the Issuer or from the Bondholder, nor shall it be
entitled to any diminution in or postponement of the rental payments required in
Section 5.3 hereof to be paid by the Lessee.
Section 4.7. Issuer to Pursue Remedies Against Suppliers, Contractors and
Subcontractors and Their Sureties. In the event of any default of any supplier,
contractor or subcontractor under any contract made by it in connection with the
Project or in the event of breach of warranty with respect to any material,
workmanship or performance guaranty, the Lessee will promptly proceed, either
separately or in conjunction with others, to exhaust the remedies that the
Issuer or the Lessee may have against any defaulting supplier, contractor or
subcontractor and against any surety therefor, for the performance of any
contract made in connection with the Project. The Lessee may, in its own name
or, if it notifies the Issuer, in the name of the Issuer, prosecute or defend
any action or proceeding or take any other action involving any such supplier,
contractor, subcontractor or surety which the Lessee deems reasonably necessary,
and in such event the Issuer hereby agrees to cooperate fully with the Lessee
and to take all action necessary to effect the substitution of the Lessee for
the Issuer in any such action or proceeding. Any amounts recovered by way of
damages, refunds, adjustments or otherwise in connection with the foregoing
shall be paid to the Lessee.
Section 4.8. Investment of Project Fund Moneys Permitted. Any moneys held as
part of the Project Fund shall be invested or reinvested by the Issuer upon the
written request and direction of the Authorized Lessee Representative in
Permitted Investments. Such investments shall mature or shall be subject to sale
prior to maturity in such amounts and at such times as may be necessary to
provide funds when needed to make payments from the Project Fund. Any interest
or gain received from such investments of the moneys in the Project Fund shall
be credited to and held in the Project Fund and any loss from such investments
shall be charged against the Project Fund.
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ARTICLE V
EFFECTIVE DATE OF THIS LEASE; DURATION
OF LEASE TERM; RENTAL PROVISIONS
Section 5.1. Effective Date of this Lease; Duration of Lease Term. This Lease
shall become effective upon its delivery and upon the issuance of the initial
Series 2020 Bond, and the usufruct or bailment for hire created by this Lease
shall then begin. Subject to the other provisions of this Lease (including
particularly Articles X, XI, and XII hereof), this Lease shall expire at
midnight, September 1, 2027, or if at said time and on said date Payment in Full
of the Bonds shall not have been made, then on such date as such payment shall
have been made.
Section 5.2. Delivery and Acceptance of Possession. The Issuer agrees to deliver
to the Lessee sole and exclusive possession of the Project (subject to the right
of the Bondholder to enter the Project Facility for inspection and other
purposes as set forth in Section 8.2 hereof) on the effective date of this Lease
and the Lessee agrees to accept possession of the Project upon such delivery.
Section 5.3. Rents and Other Amounts Payable. Subject to Section 208 of the
Financing Agreement, on or before September 1, 2020, and on or before each March
1 and September 1 thereafter until Payment in Full of the Bonds, the Lessee
shall pay or cause to be paid to the Issuer as rents for the Project a sum equal
to the amount payable on such date as principal of and interest on the Bonds, as
provided in the Financing Agreement. Each rental payment under this Section
shall be sufficient to pay the total amount of principal and interest payable on
such semiannual interest payment date, and if at any semiannual interest payment
date the balance in the Bond Fund is insufficient to make required payments of
principal and interest on such date, the Lessee shall forthwith pay any such
deficiency.
Anything herein to the contrary notwithstanding, any amount at any time held by
the Issuer in the Bond Fund shall be credited against the next succeeding rental
payment and such credit shall reduce the payment to be then made by the Lessee;
and further, if the amount held by the Issuer in the Bond Fund should be
sufficient to pay at the times required the principal of and interest on all
Bonds then remaining unpaid, the Lessee shall not be obligated to make any
further rental payments under the provisions of this Section.
Notwithstanding the foregoing or anything to the contrary contained herein or in
the Financing Agreement, while the Lessee is the sole Bondholder, payment shall
be made as set forth in the Direct Payment Agreement so long as it is in effect.
If the Lessee should fail to make any of the payments required in this Section,
the item or installment so in default shall continue as an obligation of the
Lessee until the same shall have been fully paid, and the Lessee agrees to pay
the same with interest thereon, to the extent legally enforceable, at the rate
borne by the Bonds per annum until paid. The provisions of this Section shall be
subject to the provisions of Section 9.6 hereof.
Section 5.4. Place of Rental Payments. The rents provided for in the first
paragraph of Section 5.3 hereof and the interest on delinquent rents shall be
paid directly to the Issuer and will be deposited in the Bond Fund subject to
the provisions of the Direct Payment Agreement and Section 208 of the Financing
Agreement.
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Section 5.5. Obligations of Lessee Hereunder Absolute and Unconditional. Subject
to the provisions of Section 9.6 hereof, the obligations of the Lessee to make
the payments required in Section 5.3 hereof and to perform and observe the other
agreements on its part contained herein shall be absolute and unconditional.
Until such time as Payment in Full of the Bonds shall have been made, the Lessee
(i) will not suspend or discontinue any payments provided for in Section 5.3
hereof except to the extent the same have been prepaid, (ii) will perform and
observe all of its other agreements contained in this Lease Agreement, and (iii)
except as provided in Sections 11.1 and 11.2 hereof, will not terminate the
Lease Term for any cause, including, without limiting the generality of the
foregoing, failure of the Issuer to complete the Project, failure of the
Issuer’s title in and to the Project or any part thereof, any acts or
circumstances that may constitute failure of consideration, eviction or
constructive eviction, destruction of or damage to the Project, commercial
frustration of purpose, any change in the tax or other laws of the United States
of America or of the State of Georgia or any political subdivision of either
thereof or any failure of the Issuer to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Lease Agreement or the Financing Agreement. Nothing
contained in this Section shall be construed to release the Issuer from the
performance of any of the agreements on its part herein contained; and if the
Issuer should fail to perform any such agreement, the Lessee may institute such
action against the Issuer as the Lessee may deem necessary to compel performance
or recover its damages for nonperformance so long as such action shall not
conflict with the agreements on the part of the Lessee contained in the
preceding sentence. The Lessee may, however, at its own cost and expense and in
its own name or in the name of the Issuer, prosecute or defend any action or
proceeding or take any other action involving third persons which the Lessee
deems reasonably necessary or in order to insure the acquisition, construction,
installation and completion of the Project or to secure or protect its right of
possession and use of the Project hereunder, and in such event the Issuer hereby
agrees to cooperate fully with the Lessee and to take all lawful action which is
required to effect the substitution of the Lessee for the Issuer in any such
action or proceeding if the Lessee shall so request.
Section 5.6. Lessee’s Performance under Financing Agreement. The Lessee agrees,
for the benefit of the Bondholder to do and perform all acts and things
contemplated in the Financing Agreement to be done or performed by it.
ARTICLE VI
MAINTENANCE AND MODIFICATIONS, TAXES AND INSURANCE
Section 6.1. Maintenance and Modifications of Project by Lessee.
(a) The Lessee will cause the Project to be maintained, preserved and kept in
good repair, working order and condition, ordinary wear and tear excepted, and
will from time to time cause to be made all necessary and proper repairs,
replacements and renewals; provided, however, that the Lessee will have no
obligation to cause to be maintained, preserved, repaired, replaced or renewed
any element or unit of the Project, the maintenance, repair, replacement or
renewal of which, in the opinion of the Lessee, becomes uneconomical to the
Lessee because of damage or destruction or obsolescence, or change in economic
or business conditions, or change in government standards and regulations, or
the termination by the Lessee of the operation of the production facilities to
which such element or unit of the Project is an adjunct. The Lessee agrees that
the Issuer shall have no obligation to maintain the Project or any portion
thereof. The Lessee covenants that as long as the Lessee or one of its
Affiliates operates the Project, it or one of its Affiliates will cause the
Project to be maintained and operated as a “project” within the meaning of the
Act as in effect on the date hereof.
(b) The Lessee may from time to time, in its sole discretion, at its own expense
and not from the proceeds of the Bonds, make any additions, modifications or
improvements to the Project, including installation of additional machinery,
equipment and related property in the Project Facility, or on the Project
Facility Site, which it may deem desirable for its business purposes; provided
that all such additions, modifications or improvements do not adversely affect
the structural integrity of the Project Facility and are located wholly within
the boundary lines of the Project Facility Site, as applicable. All machinery,
equipment and related property so installed by the Lessee shall remain the sole
property of the Lessee in which the Issuer shall have no interest, and
accordingly, Lessee may dispose of it in any manner desired by Lessee. All such
machinery, equipment and other related property may be modified or removed at
any time; provided that any damage to the Project occasioned by such
modification or removal shall be repaired by the Lessee at its own expense.
(c) The Lessee shall not permit any mechanic’s liens, materialmen’s liens or
other liens to be established and remain against the Project for labor or
materials furnished or services rendered in connection with any additions,
modifications, improvements, repairs, renewals or replacements so made by it;
provided, the Lessee may in good faith contest any mechanic’s liens,
materialmen’s liens or other liens filed or established against the Project, and
in such event may permit the items so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal therefrom. The
Issuer will cooperate fully with the Lessee in any such contest.
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Section 6.2. Removal of Leased Equipment. The Issuer shall not be under any
obligation to renew, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable, inappropriate or unnecessary items of leased equipment
comprising the Project. In any instance where the Lessee in its sole discretion
determines that any such items have become inadequate, obsolete, worn out,
unsuitable, undesirable, inappropriate or unnecessary for their purposes at such
time, the Lessee may remove such items of leased equipment and (on behalf of the
Issuer) sell, trade in, exchange or otherwise dispose of them (as a whole or in
part) without any responsibility or accountability to the Issuer therefor,
provided that the Lessee shall certify that such removal or substitution shall
not materially impair the operation of the Project. Any substitution of Leased
Equipment shall be accounted for as a capital investment in equipment as
described under the PILOT Agreement.
At the option of the Lessee, at any time prior to the Completion Date, the
Lessee may pay the proceeds of any such sale, trade-in or other disposition of
such items of leased equipment to the Issuer with written instructions to
deposit such moneys into the Project Fund whereupon such moneys shall become a
part of the Project Fund and used in the manner set forth in Article IV hereof.
After the Completion Date, the Lessee shall retain such proceeds.
The removal from the Project of any portion of the Project pursuant to the
provisions of this Section shall not entitle the Lessee to any abatement or
diminution in amount of the rents payable under Section 5.3 hereof.
The Lessee will not remove or permit the removal of any item of leased equipment
except in accordance with the provisions of this Section.
The Lessee shall deliver to the Issuer a bill of sale or other appropriate
documents conveying to the Issuer title to any machinery, equipment or related
property installed or placed in the Project Facility or upon the Project
Facility Site pursuant to this Section 6.2 prior to the Payment in Full of the
Bonds, and upon the request of the Lessee, the Issuer shall deliver to the
Lessee an Amendment to Lease Agreement in substantially the form of Exhibit “G”
hereto or other appropriate documents, including, without limitation, a bill of
sale, conveying to the Lessee title to any property removed from the Project
thereof pursuant to this Section 6.2 and releasing the same from the provisions
of this Lease.
Section 6.3. Taxes, Other Governmental Charges and Utility Charges. The Lessee
and the Issuer have entered into certain special covenants related to ad valorem
taxation, as specifically set forth in Section 8.8 hereof and as set forth in
the PILOT Agreement. The Issuer and the Lessee further acknowledge that under
present law no part of the Project owned by the Issuer will be subject to ad
valorem taxation by the State of Georgia or by any political or taxing
subdivision thereof, and that under present law the income and profits (if any)
of the Issuer from the Project are not subject to either federal or Georgia
taxation, and that under present law the interest held by the Lessee under this
Lease is not subject to ad valorem taxation by the State of Georgia or by any
political or taxing subdivision thereof, and these factors have induced the
Lessee to enter into this Lease. The Issuer and the Lessee acknowledge that the
Lessee’s willingness to acquire, construct and equip the Project are based in
part upon such covenants and the PILOT Agreement. However, the Lessee shall pay,
as the same become lawfully due and payable, (i) all taxes and governmental
charges of any kind whatsoever upon or with respect to the interest held by the
Lessee under this Lease, (ii) all taxes and governmental charges of any kind
whatsoever upon or with respect to the Project or any machinery, equipment or
related property installed or brought by the Lessee in the Project Facility
(including, without limiting the generality of the foregoing, any taxes levied
upon or with respect to the income or profits of the Issuer from the Project
which, if not paid, will become a charge on the rents, revenues and receipts
from the Project prior to or on a parity with the pledge or assignment thereof
created and made in the Financing Agreement), (iii) all utility and other
charges incurred in the operation, maintenance, use, and upkeep of the Project
and (iv) all assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a lien on the Project; provided, that
with respect to special assessments or other governmental charges that may
lawfully be paid in installments over a period of years, the Lessee shall be
obligated to pay only such installments as are required to be paid during the
Lease Term.
The Lessee may, at its own expense and in its own name and behalf or in the name
and behalf of the Issuer, in good faith contest any such taxes, assessments and
other charges and, in the event of any such contest, may permit the taxes,
assessments and other charges so contested to remain unpaid (if allowed by law)
during the period of such contest and any appeal therefrom.
Section 6.4. Insurance Required. During the acquisition, construction and
installation of the Project, and throughout the Lease Term, the Lessee shall
cause the Project to be continually insured against such property and personal
injury risks as are customary with industry standards for comparable facilities
and shall pay or cause to be paid all premiums due in respect of such insurance.
Without limiting the foregoing, the Issuer acknowledges and agrees that the
Lessee may, in certain circumstances, elect to self-insure; provided, however,
the Lessee shall maintain a commercial general liability policy covering claims
for bodily injury, death or property damage in or about the Project to the
extent of at least $2,000,000. In lieu of separate insurance policies, such
insurance may be in the form of a blanket insurance policy or policies of the
Lessee. Insurance policies may be written with deductible amounts and exceptions
and exclusions as the Lessee deems necessary in the normal course of its
business and as customary with industry standards. The Issuer shall be listed as
an additional named insured on the general liability policy.
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Section 6.5. Application of Net Proceeds of Insurance. The Net Proceeds of the
insurance carried pursuant to the provisions of Section 6.4 hereof shall be
applied as follows: Net Proceeds of the insurance required in Section 6.4 hereof
or pursuant to any blanket policy carried as an alternative to the insurance
required to be carried pursuant to Section 6.4 hereof shall be applied, at the
sole discretion of the Lessee, as provided in Section 7.1 hereof or toward
extinguishment or satisfaction of the liability with respect to which such
insurance proceeds may be paid.
Section 6.6. Additional Provisions Respecting Insurance. All claims made under
any insurance policies carried pursuant to the requirements of Section 6.4
hereof, regardless of amount, may be adjusted by the Lessee with the insurers.
The Lessee shall furnish to the Issuer and the Bondholder annually a certificate
of the Authorized Lessee Representative executed by one of its officials or
other evidence satisfactory to the Issuer and the Bondholder that it is in
compliance with the requirements of Section 6.4 hereof and that such general
liability insurance provides coverage of at least $2,000,000 for third party
liability.
Section 6.7. Other Issuer Expenses. The Lessee shall pay any expenses of the
Issuer not specifically mentioned herein which do not result from the willful
misconduct of the Issuer and which are reasonably incurred by the Issuer in
connection with the Project, this Lease, the Financing Agreement, the Security
Deed, or the Bonds, and which are not paid from the Project Fund pursuant to
Section 4.3 hereof.
Section 6.8. Advances by Issuer or Bondholder. If the Lessee fails to maintain
the full insurance coverage required by this Lease or fails to keep the Project
in as reasonably safe condition as its operating conditions will permit, or
fails to keep the Project in good repair and good operating condition, the
Issuer or the Bondholder may (but unless satisfactorily indemnified shall be
under no obligation to), after notice to the Lessee, take out the required
policies of insurance and pay the premiums on the same or make the required
repairs, renewals and replacements if Lessee shall fail to do so within thirty
(30) days after written notice of failure to do so has been delivered to Lessee
by the Bondholder or the Issuer; and all amounts so advanced therefor by the
Issuer or the Bondholder will become an additional obligation of the Lessee to
the one making the advancement, which amounts, together with interest thereon at
the rate of five percent (5%) per annum from the date thereof, the Lessee agrees
to pay. Notwithstanding the foregoing, if the failure stated in the notice
cannot be corrected in the applicable time period, the Lessee shall be afforded
such additional time as shall be reasonably necessary to correct such failure
provided that corrective action is initiated by the Lessee within the applicable
time period and diligently pursued until the failure is corrected.
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Section 6.9. Indemnification of Issuer and Bondholder. The Lessee shall, to the
extent permitted by applicable law, indemnify and save the Issuer and the
Bondholder and the officers, agents, employees and attorneys of each harmless
against and from all claims by or on behalf of any person, firm or corporation
arising from the conduct or management of, or from any work or thing done on,
the Project during the Lease Term, and against and from all claims arising
during the Lease Term from (a) any condition of the Project or its operation,
(b) any breach or default on the part of the Lessee in the performance of any of
its obligations under this Lease, (c) any contract entered into in compliance
with the provisions of Section 4.1 hereof in connection with the acquisition,
construction and installation of the Project, (d) any act of negligence of the
Lessee or of any of its agents, contractors, servants, employees or licensees,
and (e) any act of negligence of any assignee or sublessee of the Lessee, or of
any agents, contractors, servants, employees or licensees of any assignee or
sublessee of the Lessee. The Lessee shall indemnify and save the Issuer and the
Bondholder and the officers, agents, employees and attorneys of each harmless
from and against all costs and expenses incurred in or in connection with any
action or proceeding brought on such claims, and upon notice from the Issuer or
the Bondholder, the Lessee shall defend them or either of them in any such
action or proceeding. Nothing contained herein shall require the Lessee to
indemnify the Issuer and the Bondholder and the officers, agents, employees and
attorneys of each for any claim or liability resulting from the Issuer’s or the
Bondholder’s own willful acts, gross negligence, or for any claim or liability
which the Lessee was not given the opportunity to contest. The Issuer or the
Bondholder shall reimburse the Lessee for payments made by the Lessee pursuant
to this Section 6.9 to the extent of any proceeds, net of all expenses of
collection, actually received by either such party from any insurance covering
such claims with respect to the losses sustained. The Issuer or the Bondholder,
as applicable, shall promptly claim any such insurance proceeds and shall assign
its rights to such proceeds, to the extent of such required reimbursement, to
the Lessee. In case any action shall be brought against the Issuer or the
Bondholder in respect of which indemnity may be sought against the Lessee, the
Issuer or the Bondholder, as applicable, shall promptly notify the Lessee in
writing and the Lessee shall have the right to assume the investigation and
defense thereof including the employment of counsel and the payment of all
expenses. Failure to give any such notice shall not affect the right of the
Issuer or Bondholder, as applicable, to receive the indemnification provided
herein; unless such failure resulted from the gross negligence or willful
misconduct of the Issuer or the Bondholder, such failure could not be remedied
and the result of such failure is that the interests of the Lessee were
materially and adversely affected as a direct result of such failure. The Issuer
or the Bondholder, as applicable, shall have the right to employ separate
counsel in any such action and participate in the investigation and defense
thereof, but the fees and expenses of such counsel shall be paid by the Issuer
or the Bondholder, as applicable, unless (i) the employment of such counsel has
been authorized by the Lessee or, (ii) the Lessee shall have failed promptly
after receiving notice of such action from the Issuer or the Bondholder, as
applicable, to assume the defense of such action and employ counsel reasonably
satisfactory to the Issuer or the Bondholder, as applicable, or (iii) the named
parties to any such action (including any impleaded parties) include both the
Issuer or the Bondholder, as applicable, and the Lessee or an Affiliate of the
Lessee, and the Issuer or the Bondholder, as applicable, shall have been advised
by counsel that there may be one or more legal defense available to such party
which are different from or in addition to those available to the Lessee or
Affiliate of the Lessee or (iv) the Issuer or the Bondholder, as applicable,
shall have been advised by counsel that there is a conflict on any issue between
the Issuer or the Bondholder, as applicable, and the Lessee (in which case, if
the Issuer or the Bondholder, as applicable, notifies the Lessee in writing that
it elects to employ separate counsel at the expense of the Lessee, the Lessee
shall not have the right to assume the defense of such action or proceeding on
behalf of the Issuer or the Bondholder, as applicable). The Lessee shall not be
liable for any settlement of any such action without its consent but, if any
such action is settled with the consent of the Lessee or if there be a final
unappealable judgment for the plaintiff in any such action, the Lessee agrees
to, subject to the limitations herein, indemnify and hold harmless the Issuer
and the Bondholder and the officers, agents, employees and attorneys of each
from and against any loss by reason of such settlement or judgment. Nothing
herein shall be construed as requiring the Issuer or the Bondholder to acquire
or maintain insurance of any form or nature with respect to the Project or any
portion thereof or with respect to any phrase, term, provision, condition or
obligation of this Lease or any other matter in connection herewith. The
obligations of the Lessee under this Section 6.9 shall survive the termination
of this Lease Agreement and the satisfaction and discharge of the Financing
Agreement and shall continue in full force and effect, binding the Lessee to the
provisions of this Section 6.9 without regard to the manner of termination of
this Lease Agreement, but not longer than the statute of limitations applicable
to the particular claim.
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ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1. Damage and Destruction. Unless the Lessee shall have exercised its
options to prepay the Bonds in whole, terminate the Lease Term and purchase the
Project, if prior to Payment in Full of the Bonds the Project is damaged or
destroyed by fire or other casualty, the Lessee, shall promptly replace, repair,
rebuild or restore the property damaged to substantially the same condition as
existed prior to the event causing such damage, with such changes, alterations
and modifications (including the substitution and addition of property) as may
be desired by the Lessee in its sole discretion and as will not hinder or
restrict the operating unity of the Project or change its character to the
extent that its ownership by the Issuer would not be permitted under the Act.
Section 7.2. Condemnation. Unless the Lessee shall have exercised its options to
prepay the Bonds in whole, terminate the Lease Term and purchase the Project, if
the title in and to, or the temporary use of, the Project or any part thereof
shall be taken under the exercise of the power of eminent domain by any
governmental body or by any person, firm or corporation acting under
governmental authority, the Lessee shall be obligated to continue to make the
rental payments specified in Section 5.3 hereof, and to the extent the Lessee
deems necessary, shall cause the restoration of the Project to substantially the
same condition as it existed prior to the exercise of the said power of eminent
domain, or shall acquire and install other machinery, equipment or related
property suitable for the Lessee’s operations at the Project, title to which
machinery, equipment or related property will be conveyed to the Issuer by bill
of sale and which will be deemed a part of the Project and available for use,
possession and occupancy by the Lessee without the payment of any rent other
than the payments specified in Section 5.3 hereof.
Section 7.3. Proceeds of Insurance and Condemnation Awards. All Net Proceeds of
insurance resulting from claims for such losses described in this Article and
all Net Proceeds of any condemnation award shall be paid to the Lessee.
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1. No Warranty of Condition or Suitability by the Issuer. THE ISSUER
MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION OF THE PROJECT
OR THAT IT WILL BE SUITABLE FOR THE LESSEE’S PURPOSES OR NEEDS. The Lessee
releases the Issuer from, agrees that the Issuer shall not be liable for and
agrees, to the extent permitted by applicable law, to hold the Issuer harmless
against, any loss that may be occasioned by the condition of the Project or its
suitability for the Lessee’s purposes or needs.
Section 8.2. Inspection of Project; Right of Access to the Project by the
Issuer. The Lessee agrees that the Authorized Issuer Representative, the
Bondholder or either of their duly authorized agents who are acceptable to the
Lessee shall have the right at all reasonable times during business hours and
upon five business days’ notice to the Lessee, to enter upon, examine and
inspect the Project, provided that this does not result in any interference or
prejudice to the Lessee’s operations, and provided further that the Authorized
Issuer Representative, the Bondholder or the agent of either of them shall have
executed a confidentiality agreement, in a form acceptable to the Lessee,
whereby such parties agree to keep confidential all information relating to the
operations of the Lessee, its financial information, business records, and
information received from the Lessee relating to the Lessee or its business,
other than such information that is available to the Issuer or the Bondholder on
a non-confidential basis prior to disclosure. Provided that the Lessee is not in
default hereunder, such inspection shall only be made in the presence of an
official of the Lessee. The Lessee further agrees that the Issuer and its duly
authorized agents shall have such rights of access to the Project as may be
reasonably necessary to cause to be completed the acquisition, construction and
installation of the Project provided for in Section 4.1 hereof.
Section 8.3. Lessee to Maintain Its Existence; Exceptions Permitted. The Lessee
agrees that so long as the Bonds or any portion thereof shall remain outstanding
it shall maintain its corporate existence and shall not merge or consolidate
with or into any other person and shall not transfer or convey all or
substantially all of its property, assets and licenses; provided, however, the
Lessee may, without violating any provisions of this Lease, consolidate with or
merge into another Person and permit one or more Persons to consolidate with or
merge into it, and transfer all or substantially all of its assets to such other
Person, but only on the condition that the Person resulting from or surviving
such merger (if other than the Lessee) or consolidation is then solvent and
shall expressly assume in writing and agree to pay and to perform all of the
Lessee’s obligations under this Lease. If the Lessee is the surviving Person in
such a merger the express assumption shall not be required.
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Section 8.4. Qualification in Georgia. The Lessee warrants (except as may be
otherwise permitted pursuant to the provisions of Section 8.3 above) that it is
and throughout the Lease Term it will continue to be a corporation either
organized under the laws of the State of Georgia or duly qualified to do
business in the State of Georgia as a foreign corporation, as the case may be.
Section 8.5. Granting and Release of Easements. The Lessee may, on behalf of the
Issuer and itself, at any time or times (a) cause to be granted easements,
licenses, rights-of-way (temporary or perpetual and including the dedication of
public highways) and other rights or privileges in the nature of easements with
respect to any property included in the Project and such grant will be free from
the lien or security interests created by the Financing Agreement, the Security
Deed, or this Lease or (b) cause to be amended, modified or released existing
easements, licenses, rights-of-way and other rights or privileges in the nature
of easements, with respect to any property included in the Project with or
without consideration. The Issuer agrees that it shall execute and deliver and
will cause the Bondholder to execute and deliver any instrument necessary or
appropriate to confirm and grant, amend, modify or release any such easement,
license, right-of-way or other right or privilege upon receipt of a certificate
of an Authorized Lessee Representative stating that the granting or release of
the easement, license, right-of-way or other right or privilege so proposed to
be made will not materially impair the operation of the Project and will not
destroy the means of ingress thereto and egress therefrom.
Section 8.6. Reports by Lessee. The Lessee agrees so long as any of the Bonds
are outstanding to furnish to the Bondholder or an authorized representative of
the Bondholder publicly available information with respect to Lessee’s corporate
parent (FOXF) filed with the Securities Exchange Commission.
Section 8.7. Filing of Certain Continuation Statements. From time to time, the
Lessee shall duly file or cause to be filed continuation statements for the
purpose of continuing without lapse the effectiveness of (i) those Financing
Statements which shall have been filed at or prior to the issuance of the Bonds
in connection with the security for the Bonds pursuant to the authority of the
Uniform Commercial Code of Georgia, and (ii) any previously filed continuation
statements which shall have been filed as herein required.
Section 8.8. Special Covenants Related to Ad Valorem Taxation. The Issuer has
consulted with the Board of Tax Assessors of Hall County (“BOTA”) with reference
to the ad valorem tax treatment of the Project during the Lease Term. The
exemption set forth below is acceptable to the BOTA. The Issuer is granting to
the Lessee hereunder only a usufruct, which is a limited right to use the
Project during the Lease Term upon the terms set forth herein. The Issuer and
the Lessee hereby agree to ad valorem taxation of the Project in the manner set
forth below.
The fair market value of the 2020 Project shall be determined pursuant to the
normal and customary procedures and guidelines established by BOTA under
applicable law that are utilized for the valuation of property used for business
purposes (including, without limitation, utilization of generally applicable
depreciation factors). The fair market value of the 2020 Project so determined
shall be multiplied by the statutory assessment rate of forty percent (40%) for
Hall County, and one hundred percent (100%) for City of Gainesville and
Gainesville School District to determine the pro forma assessed values. Subject
to adjustment as provided in the PILOT Agreement, the pro forma assessed values
shall be multiplied by the following percentages (the “Leasehold Valuation
Factors”) for the applicable years set forth below to determine the “base value”
for the leasehold interest of the Company in the 2020 Project. The base value
shall be multiplied by the millage rates for ad valorem taxes applicable to the
2020 Project.

Tax YearLeasehold Valuation Factor2020100%20210%20220%202350%202450%202550%2026
and thereafter100%

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        The fair market value of that portion of the Project constituting the
2021 Project shall be determined pursuant to the normal and customary procedures
and guidelines established by the BOTA under applicable law that are utilized
for the valuation of real and personal property used for business purposes
(including, without limitation, utilization of generally applicable depreciation
factors). The fair market value of the 2021 Project so determined shall be
multiplied by the statutory assessment rate of forty percent (40%) for Hall
County and one hundred percent (100%) for City of Gainesville and Gainesville
School District to determine the pro forma assessed values. Subject to
adjustment as provided in the PILOT Agreement, the pro forma assessed values
shall be multiplied by the following percentages (the “Leasehold Valuation
Factors”) for the applicable years set forth below to determine the “base value”
for the leasehold interest of the Lessee in the 2021 Project. The base value
shall be multiplied by the millage rates for ad valorem taxes applicable to the
2021 Project.

Tax YearLeasehold Valuation Factor20220%20230%202450%202550%202650%2027 and
thereafter100%

        The fair market value of that portion of the Project constituting the
2022 Project shall be determined pursuant to the normal and customary procedures
and guidelines established by the BOTA under applicable law that are utilized
for the valuation of real and personal property used for business purposes
(including, without limitation, utilization of generally applicable depreciation
factors). The fair market value of the 2022 Project so determined shall be
multiplied by the statutory assessment rate of forty percent (40%) for Hall
County and one hundred percent (100%) for City of Gainesville and Gainesville
School District to determine the pro forma assessed values. Subject to
adjustment as provided in the PILOT Agreement, the pro forma assessed values
shall be multiplied by the following percentages (the “Leasehold Valuation
Factors”) for the applicable years set forth below to determine the “base value”
for the leasehold interest of the Lessee in the 2022 Project. The base value
shall be multiplied by the millage rates for ad valorem taxes applicable to the
2022 Project.

Tax YearLeasehold Valuation Factor20230%20240%202550%202650%202750%2028 and
thereafter100%

        Section 8.9. Payments in Lieu of Taxes to the Issuer. As additional
consideration for leasing and agreeing to sell the Project to the Lessee
hereunder, the Lessee agrees to make the payments in lieu of taxes to the Issuer
as set forth in Section 5(a) and 5(b) of the PILOT Agreement. The right to
receive said payments is personal to the Issuer and not assignable to anyone
including the Bondholder.
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ARTICLE IX
ASSIGNMENT, SUBLEASING, PLEDGING AND SELLING;
REDEMPTION: RENT PREPAYMENT AND ABATEMENT
Section 9.1. Assignment and Subleasing. Except as otherwise provided in Section
8.3 hereof or except to an Affiliate, this Lease may not be assigned, in whole
or in part, and the Project may not be subleased, as a whole or in part, by the
Lessee without the consent of the Issuer and the Bondholder, which consents
shall not be unreasonably withheld; any such assignment or sublease is further
subject to the following conditions:
(a) no assignment (other than pursuant to Section 8.3 hereof) or sublease shall
relieve the Lessee from primary liability for any of its obligations hereunder,
and if any such assignment occurs the Lessee shall continue to remain primarily
liable for payment of the rents specified in Section 5.3 hereof and for
performance and observance of the other agreements on its part herein provided
to be performed and observed by it unless the Lessee shall have obtained the
consent of the Issuer and the Bondholder, which consents shall not be
unreasonably withheld; and
(b) the Lessee shall within thirty (30) days after the delivery thereof, furnish
or cause to be furnished to the Issuer and to the Bondholder a true and complete
copy of each such assignment or sublease, as the case may be, together with any
instrument of assumption.
Section 9.2. Assignment of Lease to Bondholder. The Issuer shall assign its
interest in and pledge all rents, revenues and receipts derived under this Lease
or otherwise arising out of or in connection with its ownership of the Project
pursuant to the Financing Agreement, to the Bondholder as security for the
payment of the principal of and interest on the Bonds, but such assignment shall
be subject and subordinate to this Lease. The Issuer shall not assign its
interest in the Lease or otherwise create a security interest in this Lease,
except as provided in the Financing Agreement, and any attempted assignment or
transfer prohibited hereby shall be null and void.
Section 9.3. Restrictions on Sale of Project by Issuer. The Issuer agrees that,
except as otherwise permitted under the terms of this Lease, including, without
limitation, Section 3.5 hereof, or the Financing Agreement, it will not
mortgage, sell, assign, transfer, convey or otherwise encumber the Project or
any portion thereof during the Lease Term and that it will not take any other
action which may reasonably be construed as tending to cause or induce the levy
or assessment of ad valorem taxes on the Project or any portion thereof. If the
laws of the State of Georgia at the time require such action to be taken,
nothing contained in this Section shall prevent the consolidation of the Issuer
with, or the merger of the Issuer into, or the transfer of the Project as an
entirety to, any public corporation whose property and income are not subject to
taxation and which has corporate authority to carry on the business of owning
and leasing the Project; provided, (a) that no such action shall be taken
without the prior written consent of the Lessee, unless such action shall be
required by law, and (b) that upon any such consolidation, merger or transfer,
the due and punctual payment of the principal of and interest on the Bonds
according to their tenor, and the due and punctual performance and observance of
all the agreements and conditions of this Lease to be kept and performed by the
Issuer, shall be expressly assumed in writing by the corporation resulting from
such consolidation or surviving such merger or to which the Project shall be
transferred as an entirety.
Section 9.4. Prepayment of Bonds. The Issuer, at the request at any time of the
Lessee and if the same are then prepayable, shall forthwith take all steps that
may be necessary under the applicable prepayment provisions of the Financing
Agreement to effect prepayment of all or any portion of the Bonds, as may be
specified by the Lessee, on the earliest redemption or prepayment date on which
such redemption or prepayment may be made under such applicable provisions. So
long as the Lessee is not in default hereunder and the Issuer is not obligated
to prepay the Bonds pursuant to the terms of the Financing Agreement, the Issuer
shall not prepay any Bonds prior to their maturity unless requested in writing
by the Lessee. The Lessee agrees to give notice to the Issuer and the Bondholder
of any prepayment at least twenty (20) days prior to the prepayment date or such
shorter period of time as may be acceptable to the Issuer unless the Bondholder
waives, in writing, notice of such prepayment.
Section 9.5. Prepayment of Rents. There is expressly reserved to the Lessee the
right, and the Lessee is authorized and permitted, at any time it may choose, so
long as it is not in default hereunder, to prepay all or any part of the rents
payable under Section 5.3 hereof, and the Issuer agrees that the Bondholder may
accept such prepayment when the same is tendered by the Lessee. All prepaid
rents shall be credited on the rents specified in Section 5.3, in the
chronological order of their due dates.
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Section 9.6. Rent Abatements if Bonds Paid Prior to Maturity. If at any time the
aggregate moneys in the Bond Fund are sufficient to retire, in accordance with
the terms of the Financing Agreement, all of the outstanding Bonds under
circumstances not resulting in termination of the Lease Term, and if the Lessee
is not at the time otherwise in default hereunder, the Lessee shall be entitled
to use, possess and occupy the Project from the date on which such aggregate
moneys are in the Bond Fund to and including maturity of the Bonds, without the
payment of rent under Section 5.3 during that interval (but otherwise on the
terms and conditions hereof).
Section 9.7. Reference to Bonds Ineffective After Bonds Paid. Upon Payment in
Full of the Bonds, all references in this Lease to the Bonds shall be
ineffective and the Bondholder shall not thereafter have any rights hereunder,
saving and excepting those that shall have theretofore vested. Reference is
hereby made to Section 1002 of the Financing Agreement which sets forth the
conditions upon the existence or occurrence of which Payment in Full of the
Bonds shall be deemed to have been made.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default Defined. The following shall be Events of
Default under this Lease:
(a) failure by the Lessee to make any rental payments required under Section 5.3
hereof on or before the date that the payment is due;
(b) failure by the Lessee to observe and perform any other material covenant,
condition or agreement on its part under this Lease (other than as referred to
in subsection (a) of this Section), for a period of 60 days after written
notice, specifying such failure and requesting that it be remedied, shall be
given to the Lessee by the Bondholder, unless the Issuer and the Bondholder
shall agree in writing to an extension of such time prior to its expiration;
provided, however, if the failure stated in the notice cannot be corrected
within the applicable period, the Issuer and the Bondholder will consent to an
extension of such time if it is possible to correct such failure and corrective
action is instituted by the Lessee within the applicable period and diligently
pursued until the default is corrected;
(c) the entry of a decree or order by a court having jurisdiction in the
premises for relief in respect of the Lessee or adjudging the Lessee a bankrupt
or insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Lessee under
Title 11 of the United States Code, as now constituted or as amended or any
other applicable Federal or state bankruptcy or other similar law, and such
decree or order shall have continued undischarged or unstayed for a period of 90
days; or the entry of a decree or order of a court having jurisdiction of the
premises for the appointment of a receiver or liquidator or trustee or custodian
or assignee in bankruptcy or insolvency of the Lessee or of all or a major part
of its property, or for the winding up or liquidation of its affairs and such
decree or order shall have remained in force undischarged or unstayed for a
period of 90 days; or
(d) the Lessee shall institute proceedings to be adjudicated as bankrupt or
insolvent, or shall consent to the filing of a bankruptcy or insolvency
proceeding against it, or shall file a petition or answer or consent seeking
relief under Title 11 of the United States Code, as now constituted or as
amended, or any other applicable Federal or state bankruptcy or other similar
law, or shall consent to the institution of proceedings thereunder or to the
filing of any such petition, or shall consent to the appointment or taking
possession of a receiver or liquidator or trustee or custodian or assignee in
bankruptcy or insolvency of it or of all or a major part of its property, or
shall make an assignment for the benefit of its creditors, or shall admit in
writing its inability to pay its debts generally as they become due, or the
failure of the Lessee generally to pay its debts as such debts become due, or
the taking of action by the Lessee in furtherance of any such action.
The foregoing provisions of this Section are subject to the following
limitations: if by reason of force majeure the Lessee is unable in whole or in
part to carry out the agreements on its part herein contained, other than the
obligations on the part of the Lessee contained in Sections 5.3, 6.3, 6.4 and
8.3 hereof, the Lessee shall not be deemed in default during the continuance of
such inability. The term “force majeure” as used herein shall mean, without
limitation, the following: acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the government of
the United States of America or of the State of Georgia or any of their
departments, agencies, political subdivisions or officials, or any civil or
military authority; insurrections; riots; epidemics; landslides; lightning;
earthquakes; fires; hurricanes; storms; floods; washouts; droughts; arrests;
restraint of government and people; civil disturbances; explosions; breakage or
accident to machinery, transmission pipes or canals; partial or entire failure
of utilities; or any other cause or event not reasonably within the control of
,the Lessee. The Lessee agrees, however, to use its best efforts to remedy with
all reasonable dispatch the cause or causes preventing the Lessee from carrying
out its agreements; provided, that the settlement of strikes, lockouts and other
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industrial disturbances shall be entirely within the discretion of the Lessee,
and the Lessee shall not be required to make settlement of strikes, lockouts and
other industrial disturbances by acceding to the demands of the opposing party
or parties when such course is, in the judgment of the Lessee, unfavorable to
the Lessee.
Section 10.2. Remedies on Default. Whenever any Event of Default shall have
happened and be subsisting, the Issuer, with the written consent of the
Bondholder, or the Bondholder as provided in the Financing Agreement, may take
any one or more of the following remedial steps:
(a) declare all installments of rent payable under Section 5.3 hereof for the
remainder of the Lease Term to be immediately due and payable, whereupon the
same shall become immediately due and payable. If the Issuer or the Bondholder
elects to exercise the remedy afforded in this Section 10.2(a) and accelerates
all rents payable under Section 5.3 hereof for the remainder of the Lease Term,
the amount then due and payable as accelerated rents shall be the sum of (1) the
aggregate principal amount of the outstanding Bonds, and (2) all interest on the
Bonds accruing to the date of maturity by declaration;
(b) re-enter and take possession of the Project without terminating this Lease
and without any liability to the Lessee for such entry and repossession, and
sublease the Project for the account of the Lessee, holding the Lessee liable
for the difference in the rents and other amounts payable by such sublessee in
such subleasing and the rents and other amounts payable by the Lessee under
Section 5.3;
(c) terminate this Lease (provided, however, that upon such termination, the
options of the Lessee to purchase the Project pursuant to the provisions of
Article XI hereof and the obligations of the Lessee to make the rental payments
pursuant to Section 5.3 hereof and to purchase the Project pursuant to Section
12.1 hereof contained therein shall survive such termination), exclude the
Lessee from possession of the Project and use its best efforts to lease the
Project to another for the account of the Lessee, holding the Lessee liable for
all rent and other payments due up to the effective date of such leasing;
(d) require accounting books and records of the Lessee pertaining exclusively to
the Project only for an Event of Default under Section 10.1(a);
(e) take whatever action at law or in equity may appear necessary or desirable
to collect the rents then due, or to enforce performance and observance of any
obligation, agreement or covenant of the Lessee under this Lease; and
(f) exercise any remedies provided for in the Financing Agreement, or in the
Uniform Commercial Code of the State of Georgia.
Any amounts collected pursuant to action taken under this Section shall be paid
into the Bond Fund and applied in accordance with the provisions of the
Financing Agreement and after Payment in Full of the Bonds and the payment of
any costs occasioned by an Event of Default hereunder, any excess moneys in the
Bond Fund shall be returned to the Lessee as an overpayment of rent.
Notwithstanding the foregoing, unless the Issuer has obtained the written
consent of the Bondholder, upon the occurrence of an Event of Default by the
Lessee the Issuer may as its sole remedy take whatever action at law or in
equity to collect any amounts then due from the Lessee to the Issuer or to
enforce performance of any obligation, agreement or covenant of the Lessee under
this Lease.
Section 10.3. No Remedy Exclusive. No remedy herein conferred upon or reserved
to the Issuer or the Bondholder is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Lease or now or
hereafter existing at law or in equity or by statute. The Issuer will not
exercise any remedies without the express written consent of the Bondholder. No
delay or omission to exercise any right or power accruing upon the occurrence of
any Event of Default shall impair any such right or power or shall be construed
to be a waiver thereof, but any such right and power may be exercised from time
to time and as often as may be deemed expedient. In order to entitle the Issuer
or the Bondholder to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice or notices as
may be herein expressly required. Such remedies as are given to the Issuer
hereunder shall also extend to the Bondholder, and the Bondholder shall be
deemed a third party beneficiary of all covenants and agreements herein
contained.
Section 10.4. Agreement to Pay Attorneys’ Fees and Expenses. Should an Event of
Default occur and the Issuer and/or the Bondholder should employ attorneys or
incur other expenses for collection of rents or the enforcement of performance
or observance of any obligation or agreement on the part of the Lessee herein
contained, the Lessee agrees that it shall on demand therefor pay to the Issuer
and/or the Bondholder the reasonable fees of such attorneys actually incurred at
standard billable rates and such other reasonable expenses so incurred by the
Issuer and/or the Bondholder.
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Section 10.5. No Additional Waiver Implied by One Waiver. If any agreement
contained in this Lease should be breached by either party and thereafter waived
by the other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
Section 10.6. Waiver of Appraisement, Valuation, Etc. If the Lessee should
default under any of the provisions of this Lease, the Lessee agrees to waive,
to the extent it may lawfully do so, the benefit of all appraisement, valuation,
stay, extension or redemption laws now or hereafter in force, and all right of
appraisement and redemption to which it may be entitled.
Section 10.7. Reinstatement of Lease. Notwithstanding any termination of this
Lease in accordance with the provisions of Section 10.2, unless and until the
Issuer shall have entered into a valid and binding agreement providing for the
reletting of the Project and shall have provided Lessee with thirty (30) days
prior written notice of such reletting, the Lessee may at any time after such
termination pay all accrued unpaid rent, except rent accelerated pursuant to
Section 10.2(a) of this Lease, plus any costs to the Issuer and the Bondholder
occasioned by the default, including all interest required to be paid in
accordance with the Financing Agreement on overdue principal and, to the extent
lawful, on any overdue interest, or on the principal of Bonds not redeemed in
accordance with the Financing Agreement by reason of any default by the Lessee
in the payment of rent, and fully cure all other defaults then capable of being
cured. Upon such payment and cure and the rescission and annulment of
acceleration as provided in Section 1111 of the Financing Agreement, this Lease
shall be fully reinstated, as if it had never been terminated, and the Lessee
shall be restored to the use, possession and occupancy of the Project and any
acceleration pursuant to Section 10.2(a) of this Lease shall thereupon be
rescinded and annulled.
ARTICLE XI
OPTIONS IN FAVOR OF LESSEE
Section 11.1. Options to Terminate the Lease Term. The Lessee shall have the
following unconditional and irrevocable options to terminate the Lease Term:
(a) At any time prior to Payment in Full of the Bonds, the Lessee may terminate
the Lease Term by giving the Issuer and the Bondholder notice in writing of such
termination and by paying to the Issuer an amount which, when added to the funds
in the Bond Fund, will be sufficient to pay, retire and prepay without premium
or penalty all of the outstanding Bonds in accordance with the provisions of the
Financing Agreement (including, without limiting the generality of the
foregoing, principal, interest to maturity or earliest applicable prepayment
date, as the case may be, expenses of prepayment and the Bondholder’s fees and
expenses), and, in case of prepayment, making arrangements satisfactory to the
Issuer and the Bondholder for the giving of the required notice of prepayment;
or
(b) At any time after Payment in Full of the Bonds, the Lessee may terminate the
Lease Term by giving the Issuer notice in writing of such termination and such
termination shall forthwith become effective.
Section 11.2. Option to Purchase Project. The Lessee shall have, and is hereby
granted, the option to purchase the Project prior to the expiration of the Lease
Term and prior to the Payment in Full of the Bonds. To exercise such option, the
Lessee shall give written notice to the Issuer specifying the date of closing
such purchase, which date shall be not less than fifteen (15) nor more than one
hundred twenty (120) days from the date such notice is given, and shall make
arrangements for the giving of the required notice of prepayment of the Bonds in
accordance with the provisions of the Financing Agreement. The amount which
shall be paid to the Issuer by the Lessee in the event of its exercise of the
option granted in this Section shall be the sum of the following:
(1) an amount of money which, when added to the funds in the Bond Fund, will be
sufficient to retire and prepay all of the then outstanding Bonds at par on the
date specified by the Lessee for such prepayment including, without limitation,
principal plus accrued interest thereon to said prepayment date, or the
Bondholder has stated that it has been paid in full, plus
(2) an amount of money equal to the Bondholder’s and the paying agent’s, fees
and expenses under the Financing Agreement accrued and to accrue until such
final payment and prepayment of the Bonds or satisfactory arrangements are made
for the payment of such fees; plus
(3) the sum of ten dollars ($10) which shall be paid by the Lessee to the
Issuer, which sum the parties hereto acknowledge and agree constitutes good and
adequate consideration for the purchase of the Project.
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Section 11.3. Conveyance on Purchase. At the closing of any purchase pursuant to
Article XI or Article XII hereof or pursuant to the exercise of any option to
purchase granted herein, the Issuer will, upon receipt of the purchase price,
deliver to the Lessee the Warranty Deed and the Bill of Sale or documents
satisfactory to the Lessee conveying to the Lessee good and marketable title in
and to the property with respect to which such obligation or option was
exercised, by limited warranty deed and/or bill of sale without other warranty
of title, subject to the following: (i) those liens and encumbrances (if any) to
which such title in and to said property was subject when conveyed to the
Issuer, (ii) those liens and encumbrances created by the Lessee or to the
creation or suffering of which the Lessee consented in writing, including liens
permitted under Section 3.5 hereof, (iii) those liens, security interests and
encumbrances resulting from the failure of the Lessee to perform or observe any
of the agreements on its part contained in this Lease, and (iv) Permitted
Encumbrances other than the Financing Agreement, the Security Deed, and this
Lease. In addition, the Lessee and the Issuer shall execute such documents as
are customary in the State of Georgia for the purchase and sale of improved real
property and such other documents as may be reasonably required by the Lessee’s
title company to ensure good and marketable title has been transferred to
Lessee.
Section 11.4 Option to Release Unimproved Land. The Lessee may from time to time
request that the Issuer release, and the Issuer shall release, any unimproved
part of the Project Facility Site (on which no building or equipment essential
to the continued operation of the Project is situated) without consideration. In
connection with such release, there shall be deposited with the Issuer (a) a
certificate of the Authorized Lessee Representative dated not more than sixty
(60) days prior to the date of the release and stating that, in the opinion of
the Authorized Lessee Representative, (i) the portion of the Project Facility
Site so proposed to be released is not needed for the continued operation of the
Project for the purpose hereinabove stated and (ii) the release so proposed to
be made will not destroy the means of ingress and egress therefrom, and (b) a
copy of the instrument conveying the portion of the Project Facility Site to be
released. No release effected under the provisions of this Section 11.4 shall
entitle Lessee to any abatement or diminution of the rents payable under Section
5.3 hereof. The costs associated with obtaining releases contemplated by this
Section, and elsewhere in this Lease, shall be borne by the Lessee.
The Issuer shall release all or any portion of the Project Facility Site and
Project Facility which are taken by eminent domain.
The Issuer shall release the Project on or about September 1, 2027 in accordance
with the PILOT Agreement.
The Issuer shall execute a limited warranty deed in favor of the Lessee
conveying the Project Facility Site or Project Facility released pursuant to
this Section. The Issuer and Lessee shall execute and amendment or amendments to
this Lease in substantially the form of Exhibit G in connection with all
releases of the Project Facility Site and Project Facility.
Section 11.5. Relative Position of Options and Financing Agreement. The options
respectively granted to the Lessee in this Article shall be and remain prior and
superior to the Financing Agreement and may be exercised whether or not the
Lessee is in default hereunder, provided that such default will not result in
non-fulfillment of any condition to the exercise of any such option.
Section 11.6. Partial Prepayments of the Bonds; Purchase of 2020 Project and
2021 Project. The Lessee agrees to take all actions necessary to cause the
Issuer to prepay on September 1, 2025 an outstanding principal amount of the
Bonds equal to the cost of the 2020 Project and agrees to prepay a sufficient
amount of the rents payable under Section 5.3 hereof necessary for the Issuer to
make said prepayment of the Bonds on September 1, 2025.
The Lessee agrees to take all actions necessary to cause the Issuer to prepay on
September 1, 2026 an outstanding principal amount of the Bonds equal to the cost
of the 2021 Project and agrees to prepay a sufficient amount of the rents
payable under Section 5.3 hereof necessary for the Issuer to make said
prepayment of the Bonds on September 1, 2026.
After the September 1, 2025 principal prepayment on the Series 2020 Bonds is
made, the Lessee shall purchase and the Issuer shall sell the 2020 Project for a
purchase price of $10.00. Closing of the purchase and sale shall be held on or
before December 30, 2025. The Bill of Sale and Limited Warranty Deed, along with
such other documents necessary for closing of the purchase and sale, shall be
executed and delivered to the Lessee. This Lease shall be amended to reflect the
release of the 2020 Project from the terms of this Lease.
After the September 1, 2026 principal prepayment on the Series 2020 Bonds is
made, the Lessee shall purchase and the Issuer shall sell the 2021 Project for a
purchase price of $10.00. Closing of the purchase and sale shall be held on or
before December 30, 2026. The Bill of Sale, along with such other documents
necessary for closing of the purchase and sale, shall be executed and delivered
to the Lessee. This Lease shall be amended to reflect the release of the 2021
Project from the terms of this Lease.
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ARTICLE XII
OBLIGATIONS OF LESSEE
        Section 12.1 Obligation to Purchase Project. The Lessee hereby agrees to
purchase, and the Issuer hereby agrees to sell, the Project for Ten Dollars
($10.00) plus Payment in Full of the Bonds at the expiration or sooner
termination of the Lease Term following Payment in Full of the Bonds. At any
time subsequent to the expiration or sooner termination of this Lease as
aforesaid upon notice to the Issuer by the Lessee, the Issuer shall upon receipt
of the purchase price deliver to the Lessee those documents set forth in Section
11.3 hereof. The obligation specified in this Section shall be and remain prior
and superior to the Financing Agreement and may be exercised whether or not the
Lessee is in default hereunder provided that such default will not result in
nonfulfillment of any condition to this right.
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Notices. All notices, certificates or other communications
hereunder shall be mailed by first class or registered or certified mail or by
delivery to physical address, return receipt requested, postage prepaid,
addressed as follows or by facsimile with receipt confirmed:

If to the Issuer:
Gainesville and Hall County Development Authority
P. O. Box 3280
Gainesville, GA 30503
Attention: Chairman
If to the Lessee:
Fox Factory, Inc.
6634 Highway 53
Braselton, Georgia 30517
Attention: David Haugen

If to the Bondholder:
Fox Factory, Inc.
6634 Highway 53
Braselton, Georgia 30517
Attention: David Haugen

A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer, the Lessee or the Bondholder shall be given to
each of the others. The Issuer, the Lessee and the Bondholder may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent. Notices
shall be effective upon receipt.
Section 13.2 No Estate in Land. This agreement shall create the relationship of
landlord and tenant between the parties hereto; no estate shall pass out of the
Issuer. The Lessee shall have only a usufruct in the Project.
Section 13.3. Binding Effect. This Lease shall inure to the benefit of and shall
be binding upon the Issuer, the Lessee and their respective successors and
assigns.
Section 13.4. Severability. If any provision of this Lease shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 13.5. Amounts Remaining in Bond Fund. It is agreed by the parties hereto
that, subject to and in accordance with the terms and conditions of Section 609
of the Financing Agreement certain surplus moneys remaining in the Bond Fund
shall belong and be paid to the Lessee by the Issuer as an overpayment of rents.
Section 13.6. Amendments, Changes and Modifications. Except as otherwise
provided in this Lease or in the Financing Agreement, subsequent to the initial
issuance of the Bonds and prior to Payment in Full of the Bonds, this Lease may
only be amended, changed, modified, altered or terminated by the written
agreement of the Issuer and the Lessee and may not be effectively amended,
changed, modified, altered or terminated without the concurring written consent
of the Bondholder in accordance with the Financing Agreement.
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The Lessee and the Issuer, if requested by the Lessee in connection with an
authorized assignment by the Lessee of this Lease, shall bifurcate this Lease
into two substantially identical leases in order to accommodate the separate
assignment of the Lease relating to the Project Equipment and the remainder of
the Project subject hereto. In addition, the Lessee and the Issuer agree to
amend the Financing Agreement, the Security Deed, the PILOT Agreement and such
documents executed in connection with the issuance of the Bonds as necessary to
implement such bifurcation by the Issuer and the Lessee.
Section 13.7. Execution Counterparts. This Lease may be simultaneously executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
Section 13.8. Captions. The captions and headings in this Lease are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions of this Lease.
Section 13.9. Recording of Lease. This Lease (or a Memorandum of Lease
acceptable to Issuer and Lessee) and every assignment and modification hereof
shall be recorded in the office of the Clerk of the Superior Court of Hall
County, Georgia, or in such other office as may be at the time provided by law
as the proper place for such recordation.
Section 13.10. Law Governing Construction of Lease. This Lease shall be governed
by, and construed in accordance with, the laws of the State of Georgia.
Section 13.11. Net Lease. This Lease shall be deemed a “net lease”, and the
Lessee shall pay absolutely net during the Lease Term the rents, revenues and
receipts pledged hereunder, without abatement, deduction or set-off other than
those herein expressly provided.
IN WITNESS WHEREOF, the Issuer and the Lessee have caused this Lease to be
executed under seal in their respective corporate names and their respective
corporate seals to be hereunto affixed and attested by their duly authorized
officers, all as of the date first above written.

GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY
By: /s/ Philip A. Wilheit
Chairman
Attest: /s/ T. Treadwell Syfan
Secretary

As to the Issuer, signed and sealed and delivered in the presence of:
By: /s/ J. Randall Trot
Witness
By: /s/ D. Thomas Lefevre
Notary Public
My commission expires: February 13, 2024

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FOX FACTORY, INC.
By: /s/ John E. Blocher
Name: John E. Blocher
Title: Chief Financial Officer

As to the Lessee, signed and sealed an delivered in the presence of:
By: /s/ Teresa P. Finister
Witness

By: /s/ Sandra Dover
Notary Public
My commission expires: August 2, 2021

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EXHIBIT A

DESCRIPTION OF PROJECT FACILITY SITE

(41.224 Acre Tract in Gainesville Industrial Park West)

All that tract or parcel of land lying and being in Land Lot 11 of the 8th
District, City of Gainesville, Hall County, Georgia, and being that certain
41.224 acre tract shown on that certain ALTA/NSPS Land Title Survey for FF US
Holding, LLC and Chicago Title Insurance Company dated March 29, 2019, last
revised April 25, 2019, prepared by Rochester & Associates, Inc., and recorded
in Plat Book 877, page 58, Hall County Plat Records, and being more particularly
described according to said plat as follows:
Commencing at the intersection of the southerly right of way of Industrial Park
West Drive, said right of way being 60 feet in width, with the westerly right of
way of State Route 13, a.k.a. Atlanta Highway, said right of way having a
variable width; thence proceed along said westerly right of way of State Route
13 in a southwesterly direction 1,249.53 feet to a 1/2 inch rebar found being
the TRUE POINT OF BEGINNING;
From the TRUE POINT OF BEGINNING thus establish and continuing along said
westerly right of way of State Route 13 South 24 degrees 25 minutes 56 seconds
West a distance of 60.00 feet to a 1/2 inch rebar found; thence leaving said
westerly right of way and proceeding along the property now or formerly of
Industrial Park West Business Center North 65 degrees 45 minutes 01 seconds West
a distance of 370.60 feet to a 1/2 inch rebar found; thence South 29 degrees 23
minutes 55 seconds West a distance of 439.51 feet to a 1/2 inch rebar found;
thence South 51 degrees 09 minutes 50 seconds West a distance of 771.53 feet to
a 1/2 inch rebar found; thence South 30 degrees 35 minutes 12 seconds East a
distance of 123.61 feet to a 1/2 inch rebar found; thence proceeding along the
property now or formerly of Athens Holdings, L.P. South 52 degrees 34 minutes 46
seconds West a distance of 209.44 feet to a 1/2 inch rebar found; thence
proceeding along the property now or formerly of Presco Properties, Inc. North
30 degrees 32 minutes 54 seconds West a distance of 1384.38 feet to a concrete
monument found; thence proceeding along the property now or formerly of the City
of Gainesville North 73 degrees 28 minutes 06 seconds East a distance of 504.66
feet to a 1/2 inch rebar found; thence North 58 degrees 55 minutes 28 seconds
East a distance of 138.38 feet to a 1/2 inch rebar found; thence North 14
degrees 38 minutes 52 seconds West a distance of 197.79 feet to a 1/2 inch rebar
found on the aforementioned southerly right of way of Industrial Park West
Drive; thence proceeding along said southerly right of way the following courses
and distances: along a curve to the left having a radius of 630.00 feet, and an
arc length of 278.70 feet, being subtended by a bearing of North 62 degrees 40
minutes 45 seconds East, having a distance of 276.43 feet to a point; North 50
degrees 00 minutes 22 seconds East a distance of 404.23 feet to a point; and
along a curve to the right having a radius of 1270.00 feet, and an arc length of
322.20 feet, being subtended by a bearing of North 57 degrees 16 minutes 27
seconds East, having a distance of 321.33 feet to a 1/2 inch rebar found; thence
leaving said southerly right of way and proceeding along the property now or
formerly of Industrial Park West Business Center, LLC South 16 degrees 22
minutes 12 seconds East a distance of 1059.49 feet to a 1/2 inch rebar found;
thence South 65 degrees 45 minutes 01 seconds East a distance of 340.00 feet to
the TRUE POINT OF BEGINNING.
Said tract contains 41.224 acres.

EXHIBIT B

DESCRIPTION OF PROJECT FACILITY

The Project Facility consists of a 347,000 square foot building for the
manufacture of shock absorbers for automobiles, trucks and motorcycles in
Gainesville Industrial Park West on West Park Drive, Gainesville, Hall County,
Georgia.

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EXHIBIT C
PROJECT EQUIPMENT
I. Description of the 2020 Project Equipment:
All items of personal property located on the Project Facility Site, owned by
the Issuer and acquired by the Issuer with part of the proceeds of the Series
2020 Bonds and designated as 2020 Project Equipment, including, without
limitation, the following:

[To be provided by an amendment or amendments to the Lease Agreement]

II. Description of the 2021 Project Equipment:
All items of personal property located on the Project Facility Site, owned by
the Issuer and acquired by the Issuer with part of the proceeds of the Series
2020 Bonds and designated as 2021 Project Equipment, including, without
limitation, the following:

[To be provided by an amendment or amendments to the Lease Agreement]

III. Description of the 2022 Project Equipment:
All items of personal property located on the Project Facility Site, owned by
the Issuer and acquired by the Issuer with part of the proceeds of the Series
2020 Bonds and designated as 2022 Project Equipment, including, without
limitation, the following:

[To be provided by an amendment or amendments to the Lease Agreement]

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EXHIBIT D
PROJECT SUMMARY
Fox Factory, Inc. (“Corporation”), pursuant to the foregoing Lease Agreement
between Corporation and the Gainesville and Hall County Development Authority
(the “Authority”), has undertaken, for the use and benefit of the Corporation,
the acquisition of the Project Facility Site (hereinafter defined) and the
acquisition, construction and installation of a facility for the manufacture of
shock absorbers for automobiles, trucks and motorcycles (the “Project Facility”)
in Gainesville Industrial Park West on West Park Drive, Gainesville, Hall
County, Georgia, on the property described in Exhibit A to the Lease Agreement
to which this Project Summary is attached (the “Project Facility Site”), and the
acquisition and installation in the Project Facility or on the Project Facility
Site of certain items of machinery, equipment and related property (the “Project
Equipment”), for the use and benefit of the Corporation (the Project Facility,
the Project Facility Site and the Project Equipment are hereinafter referred to
collectively as the “Project”). The Project Facility is more particularly
described on Exhibit B to the Lease Agreement to which this Project Summary is
attached. The Project Equipment is more fully described in Exhibit C to the
Lease Agreement to which this Project Summary is attached. The Project shall be
divided into three phases for funding and investment purposes. The first phase
of the Project shall be implemented in 2019 and 2020 and is referred herein as
the 2020 Project. The second phase of the Project shall begin in 2021 and is
referred to herein as the 2021 Project. The third phase of the Project shall
begin in 2022 and is referred to herein as the 2022 Project. Pursuant to the
Lease Agreement, Corporation has leased the Project from the Authority. The
Authority or Corporation, as the exclusive agent of the Authority, will acquire,
construct and install the Project.
The Project will require expenditures presently estimated not to exceed
$75,000,000 and is expected to increase employment in the area served by the
Authority by approximately 791 jobs within five years from the date hereof.

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EXHIBIT E
BILL OF SALE
(PROJECT EQUIPMENT)
This BILL OF SALE, (the “Bill of Sale”) dated the date hereof by the hereinafter
described Grantee, by and between the GAINESVILLE AND HALL COUNTY DEVELOPMENT
AUTHORITY (the “Grantor”) and FOX FACTORY, INC., a California corporation, as
grantee (the “Grantee”):
W I T N E S E T H:
WHEREAS, the Grantor and the Grantee have entered into a Lease Agreement, dated
as of June 1, 2020 (the “Lease Agreement”); and
WHEREAS, the Grantor and the Grantee, pursuant to the terms of the Lease
Agreement have agreed to enter into this Bill of Sale; and
WHEREAS, all capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Lease Agreement; and
WHEREAS, the Grantor desires to assign its right, title and interest in and to
the Project Equipment to the Grantee and to execute a Bill of Sale with respect
to all property rights it has in and to the Project Equipment;
NOW THEREFORE, in consideration of the premises and the respective undertakings
and agreements hereinafter set forth, THE GRANTOR HEREBY AGREES AS FOLLOWS:
1. The Grantor hereby, with effect as and from the date hereof, grants, assigns,
transfers and conveys to the Grantee, all of its right, title and interest in,
to and under the Project Equipment.
2. The Grantor warrants to the Grantee that the Grantor holds title in and to
the Project Equipment, free of all claims of all persons whomsoever claiming by,
through or under the Grantor.
3. The Grantee hereby accepts the Assignment of all of the foregoing rights,
title and interest of the Grantor in, to and under the Project Equipment.
4. The Grantor does hereby bargain, sell and convey to the Grantee its interest,
if any, in the Project Equipment and being more particularly described in
Exhibit “A” attached hereto, such property being free from all claims of all
persons whomsoever claiming by, through or under the Grantor.
THE GRANTOR AND THE GRANTEE FURTHER AGREE AS FOLLOWS:
The Grantor, in consideration of the sum of Ten Dollars ($10.00) by it in hand
paid at and before the sealing of these presents (the receipt whereof is hereby
acknowledged), has granted, bargained, sold and released, and by these presents
does grant, bargain, sell and release, unto the said Grantee, its successors and
assigns, whatever right, title, and interest the Grantor does possess, and does
by these presents demise, release, and forever quitclaim unto the Grantee all of
the interest of the Grantor, if any, in and to the Project Equipment;
TOGETHER, with all and singular the rights, tenements, hereditaments and
appurtenances to the said Project Equipment belonging or in anywise incident or
appertaining.
TO HAVE AND TO HOLD, all and singular the said property before mentioned unto
the said Grantee, its successors and assigns forever.
The Grantor agrees that it will do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered such consents, assignments or
other agreements supplemental thereto and such further acts, instruments and
transfers as the Grantee may reasonably require for the better giving, granting,
assigning, pledging, conveying, mortgaging, transferring, assuring and
confirming unto the Grantee all and singular the rights of the Grantor in and to
the Project Equipment.
IN WITNESS WHEREOF, the Gainesville and Hall County Development Authority, has
caused these presents to be executed in its name and its corporate seal to be
hereto affixed this _____ day of _________________, 20___.

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GAINESVILLE AND HALL COUNTY
DEVELOPMENT AUTHORITY

By: ______________________________
Chairman
              Attest: _____________________________
                Secretary

                (SEAL)
Signed, sealed and delivered in
the presence of:
______________________________
Witness
______________________________
Notary Public
MY Commission Expires:________
(NOTARIAL SEAL)

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EXHIBIT F
WARRANTY DEED
LIMITED WARRANTY DEED
GEORGIA, COUNTY OF HALL
THIS INDENTURE, made this ____ day of __________, 20____, between GAINESVILLE
AND HALL COUNTY DEVELOPMENT AUTHORITY, a public body corporate and politic and
an instrumentality of the City of Gainesville and Hall County, Georgia
(hereinafter called “GRANTOR”), and FOX FACTORY, INC., a California corporation
(hereinafter called “GRANTEE”).
WITNESSETH: That the said GRANTOR, for and in consideration of the sum of TEN
DOLLARS AND OTHER VALUABLE CONSIDERATION ($10.00) Dollars, in hand paid at and
before the sealing and delivery of these presents, the receipt of which is
hereby acknowledged, has granted, bargained, sold and conveyed, and by these
presents does grant, bargain, sell and convey unto the said GRANTEE the property
described on Exhibit “A” attached hereto and incorporated herein by reference.
TO HAVE AND TO HOLD the said tract or parcel of land with all and singular the
rights, members and appurtenances thereof, to the same being, belonging, or in
anywise appertaining, to the only proper use, benefit and behoof of the said
GRANTEE, forever, in FEE SIMPLE.
AND THE SAID GRANTOR will warrant and forever defend the right and title to the
above described property unto the said GRANTEE against the claims of all persons
claiming under GRANTOR.
WHEREVER there is a reference herein to the GRANTOR or the GRANTEE, the singular
includes the plural and the masculine includes the feminine and the neuter, and
said terms include and bind the heirs, executors, administrators, successors and
assigns of the parties hereto.
IN WITNESS WHEREOF, the said GRANTOR has executed this deed under seal, the day
and year above written.
Signed, sealed and delivered    GAINESVILLE AND HALL COUNTY
in presence of:      DEVELOPMENT AUTHORITY
____________________________   By: ________________________________
Unofficial Witness      Chairman

____________________________   Attest: _____________________________
Notary Public       Secretary
My Commission Expires: _______
               (SEAL)
        (SEAL)

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EXHIBIT G
FORM OF AMENDMENT TO LEASE AGREEMENT
        Number _______
THIS AMENDMENT TO LEASE AGREEMENT, dated as of _________, _____, between the
GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY (the “Authority”), a public
body corporate and politic and an instrumentality of the City of Gainesville and
Hall County, Georgia, duly organized and existing under the Constitution and
laws of the State of Georgia, as Lessor, and FOX FACTORY, INC. (the “Lessee”), a
California corporation.
W I T N E S E T H:
WHEREAS, the Authority and the Lessee have heretofore entered into a Lease
Agreement, dated as of June 1, 2020 (said Lease Agreement, as from time to time
modified or amended, is herein called the “Lease”), relating to the Project (as
defined in the Lease); and
WHEREAS, the Authority and the Lessee have now determined that it is necessary
to amend the Lease in certain respects to reflect the [removal from] [addition
to] the description of Project , the items described in Exhibit “1” hereto; and
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
hereinafter contained, the Authority and the Lessee agree to and do hereby amend
the Lease to modify the description of the Project, contained as Exhibit
“_______” attached thereto in order to [remove therefrom] [add thereto],
effective as of the date hereof, the items described in Exhibit “1” to this
Amendment to Lease Agreement.
Section 1. Amendment of Lease. The Lease shall be deemed to be modified and
amended in accordance with the provisions of this Amendment to Lease Agreement
and the respective rights, duties and obligations of the Authority and the
Lessee under the Lease shall hereafter be determined, exercised and enforced
under the Lease subject in all respects to this Amendment to Lease Agreement,
and all the terms and conditions of this Amendment to the Lease Agreement shall
be part of the terms and conditions of the Lease for any and all purposes.
All references in the Lease to the Project, described in Exhibit “______”
thereof shall refer to said Exhibit as hereby amended and modified.
Section 2. Execution in Counterparts. This Amendment to Lease Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 3. Recordation. This Amendment to Lease Agreement may be recorded in the
office of the Superior Court of Hall County, or in such other office as may be
at the time provided by law as the proper place for such recordation.
Section 4. Lease to Continue in Full Force and Effect. All other terms of the
Lease shall continue in full force and effect subject to this Amendment to Lease
Agreement as set forth herein.
IN WITNESS WHEREOF, the Authority and the Lessee have caused this Amendment to
the Lease Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers as of _____________, 20___.
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GAINESVILLE AND HALL COUNTY
DEVELOPMENT AUTHORITY
By: ______________________________
(SEAL)       Chairman
Attest:
_____________________________
Secretary
Signed, sealed and delivered
in the presence of
______________________________
Witness
______________________________
Notary Public
My commission expires:________
(NOTARIAL SEAL)
FOX FACTORY, INC.

By:________________________________
Title:___________________________

               (CORPORATE SEAL)
Signed, sealed and delivered
in the presence of:
______________________________
Witness
______________________________
Notary Public
My commission expires:________
(NOTARIAL SEAL)

EXHIBIT H
REQUISITION AND CERTIFICATE
Requisition and Certificate No._____
Reference to Bill of Sale No.
Date: ____________, 20____
Amount of Requisition: $______________
Gainesville and Hall County Development Authority (the “Issuer”)

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RE: Financing Agreement, dated as of June 1, 2020, relating to Gainesville and
Hall County Development Authority Taxable Industrial Revenue Bonds (Fox Factory,
Inc. Project), Series 2020, in an aggregate principal amount not to exceed
$75,000,000

Gentlemen:
All capitalized terms used but not defined herein shall have the meanings
assigned to them in that certain Lease Agreement, dated as of June 1, 2020, by
and between the Gainesville and Hall County Development Authority and Fox
Factory, Inc.
This is a requisition for payment from the Gainesville and Hall County
Development Authority Project Fund — Fox Factory, Inc. Project, of an obligation
in the stated amount incurred by or on behalf of the Issuer in connection with
the issuance of the Series 2020 Bonds in caption or the acquisition,
construction and installation of the Project.
1. This obligation is a proper charge against the Project Fund, the payment
thereof is being made in connection with the Project and has not been the basis
of any previous withdrawal from the Project Fund.
2. No other certificate in respect of the foregoing obligation is being or has
been previously delivered to the Issuer.
3. The Lessee has no notice of any vendor’s, mechanic’s, or other liens or right
to liens, chattel mortgages or conditional sales contracts, or other contracts
or obligations (other than those being contested in good faith as permitted in
Section 6.1(c) of the Lease Agreement) which should be satisfied or discharged
before such payment is made; and
4. Such requisition contains no item representing payment on account of any
retained percentages which the Issuer or the Lessee is, as of the date of such
requisition, entitled to retain under retained percentage agreements.
5. Purpose and circumstances of such obligation: reimbursement of costs of the
Project owing to Fox Factory, Inc.
6. A bill or statement of account for such obligation is available upon request
made to the Lessee.
7. If not covered by the Lease Agreement as originally executed, a Lease
Amendment relating to the portion of the Project for which such obligation has
been incurred is attached hereto, and has been executed by the Lessee. If not
personal property previously acquired by or conveyed to Issuer, the Lease
Amendment and this Requisition and Certificate relate to those portions of the
Project conveyed to the Issuer by Bill of Sale attached hereto and numbered as
described above.
8. We have no notice of any vendors’, mechanics, or other liens or right to
liens, chattel mortgages or conditional sales contracts, or other contracts or
obligations (other than those being contested in good faith as permitted by
Section 6.1 of the Lease Agreement) which should be satisfied or discharged
before payment of such obligation is made.
9. This requisition contains no item representing payment on account of any
retained percentages which the Issuer or the Lessee is, as of the date of such
requisition, entitled to retain under retained percentage agreements.
All of the foregoing is hereby certified.
By:___________________________
Authorized Lessee Representative
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Insofar as the disbursement requested hereby is to pay obligations incurred for
labor, services, material, supplies or equipment in connection with the
acquisition, construction and installation of the Project, such labor and
services were to the Lessee’s knowledge performed and such material, supplies or
equipment were or are to be used in connection with the acquisition,
construction and installation of the Project or delivered at the site of the
Project for such purpose. This requisition includes by attachment hereto the
bill of sale necessary to convey title in and to the items of leased equipment
comprising the Project for which reimbursement is sought to the Issuer.
This requisition is given without prejudice against any rights of the Issuer or
the Lessee against third parties which exist on the date hereof.
_________________________________
Authorized Lessee Representative
(Attachment to Requisition and Certificate)
Number ______
BILL OF SALE
STATE OF __________  )
        )
COUNTY OF ___________  )
KNOW ALL MEN BY THESE PRESENTS
that Fox Factory, Inc., a Georgia corporation (the “Grantor”), for and in
consideration of the sum of TEN DOLLARS($10.00) and other good and valuable
consideration in hand paid to the Grantor by the Gainesville and Hall County
Development Authority, a public body corporate and politic and an
instrumentality of the City of Gainesville and Hall County, Georgia, duly
organized and existing under the Constitution and laws of the State of Georgia,
(the “Grantee”), the receipt and sufficiency of which is hereby acknowledged,
has transferred, bargained, sold and conveyed and by these presents does hereby
transfer, bargain, sell and convey unto the Grantee and its successors and
assigns, the machinery, equipment and related personal property located in the
Project Facility or on the Project Facility Site in Gainesville, Hall County,
Georgia, which machinery, equipment and related personal property is more
particularly described in Exhibit “A” attached hereto.
TO HAVE AND TO HOLD the said machinery, equipment and related personal property
unto the Grantee, its successors and assigns, to its only proper use, benefit
and behalf forever.
The Grantor warrants that said machinery, equipment and related personal
property is the property of the Grantor and is free from all liens, security
interests and encumbrances other than Permitted Encumbrances” (defined in the
Lease Agreement between the Grantor and the Grantee, dated as of June 1, 2020),
and that the Grantor is authorized to give this Bill of Sale with respect
thereto.
This Bill of Sale is made without general covenants of warranty except as set
forth in the preceding paragraph, and all of said personal property is conveyed
by the Grantor to the Grantee and accepted by the Grantee in the condition in
which it exists and without any representation by the Grantor as to condition
thereof or the suitability thereof for any particular use or purpose.
IN WITNESS WHEREOF, the Grantor has caused this Bill of Sale to be executed in
its name by an authorized officer and its corporate seal to be affixed hereto
and attested by an authorized officer, all as of the ______ day of
______________,_____.
37

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             FOX FACTORY, INC.

By:__________________________________
Title: ___________________________
               (CORPORATE SEAL)
WITNESSES:
______________________________
______________________________

38

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EXHIBIT I
PERMITTED ENCUMBRANCES
Project:

1. Deed to Secure Debt and Security Agreement, dated as of June 1, 2020, between
Gainesville and Hall County Development Authority and Fox Factory, Inc. recorded
in the Hall County, Georgia Deed Records.
2. State and County taxes for 2020 and all subsequent years, which taxes are not
yet due or payable, and any additional taxes, interest and/or penalties which
may be assessed for prior tax years by virtue of adjustment, reappraisal,
reassessment, appeal or other amendment to the tax records of the city or
county in which subject property is located.
3. Unfiled and inchoate mechanics, and materialmen’s liens for construction work
in progress.
4.  Architects’, contractors’, subcontractors’, mechanics’, materialmen’s,
suppliers’, laborers, and vendors’ liens or other similar liens not then payable
or permitted to exist as provided in Section 6.1(c) of the Lease Agreement.
5.  Declaration of Covenants, Restrictions and Easements for Gainesville
Industrial Park West, dated October 23, 2018, recorded in Deed Book 8168, pages
209-222, Hall County, Georgia Deed Records, as amended by Amendment to
Declaration of Covenants, dated December 4, 2018, recorded in Deed Book 8190,
page 663, aforesaid records.
7. Expanded Stream Buffer Conservation Easement, dated April 1, 2008, from Koch
Foods of Gainesville LLC, recorded in Deed Book 6312, pages 595-612, Hall County
Deed Records.
8.  Sanitary Sewer Easement, dated March 25, 2019, from Gainesville and Hall
County Development Authority to City of Gainesville, recorded in Deed Book 8239,
page 310, Hall County Deed Records.
9.  Those matters shown on a plat of survey entitled “ALTA/NSPS Land Title
Survey for FF US Holding LLC and Chicago Title Insurance Company,” dated March
29, 2019, last revised April 25, 2019, prepared by Rochester & Associates, Inc.,
Georgia Registered Land Surveyors, recorded in Plat Book 877, page 58, Hall
County Plat Records.
10. Deed restrictions set forth in that certain limited warranty deed, dated
April 30, 2019, from Gainesville and Hall County Development Authority to FF US
Holding LLC, recorded in Deed Book 8257, page 533, Hall County Deed Records.
11. Construction (Slope) Easement, dated December 10, 2019, from Presco
Properties, Inc. to FF US Holding LLC, recorded in Deed Book 8388, page 597,
Hall County Deed Records.
12. Release/Modification and Grant of Stream Buffer Conservation Easement, dated
October 21, 2019, between FF US Holding LLC and the City of Gainesville,
recorded in Deed Book 8356, page 781, Hall County Deed Records.
13. Construction (Slope) Easement, dated December 10, 2019, from Industrial Park
West Business Center, LLC to FF US Holding LLC, recorded in Deed Book 8388, page
600, Hall County Deed Records.
14. Driveway Easement, dated December 10, 2019, from FF US Holding LLC to Presco
Properties, Inc., recorded in Deed Book 8388, page 603, Hall County Deed
Records.
15. Driveway Easement, dated December 10, 2019, from FF US Holding LLC to
Industrial Park West Business Center, LLC, recorded in Deed Book 8388, page 609,
Hall County Deed Records.

39