Document:

ex10_49pilotagree

EXHIBIT 10.49
PILOT AGREEMENT
THIS PILOT AGREEMENT (this “Agreement”), dated as of October 1, 2014, but effective on the date the Bond referred to below is issued (the “Effective Date”), by and between the DEVELOPMENT AUTHORITY OF MURRAY COUNTY (the “Issuer”), a development authority and public body corporate and politic duly created by the Development Authorities Law, O.G.C.A. §36-62-1, et seq. (the “Act”), TDG OPERATIONS, LLC, a Georgia limited liability company (the “Company”), and MURRAY COUNTY, GEORGIA (the “County”), a county of the State of Georgia (the Issuer, the Company and the County, each a “Party,” or collectively, the “Parties”). The BOARD OF TAX ASSESSORS OF MURRAY COUNTY (the “Board of Assessors”) and the TAX COMMISSIONER OF MURRAY COUNTY (the “Tax Commissioner”) are each executing an Acknowledgment hereof attached to this Agreement in order to acknowledge their respective agreements to the provisions hereof which are applicable to them, but they are not considered to be Parties.
W I T N E S S E T H:
Section 1.The Lease. On the Effective Date, the Issuer is issuing its Taxable Industrial Development Revenue Bond (TDG Operations, LLC Project), Series 2014  in the maximum principal amount of $12,500,000 (the “Bond”) to acquire new and used trade fixtures, machinery and equipment (the “Project”) located or to be located at the Company’s existing facility at 3620 Highway 411N, Eton, Georgia (the “Facility”) located in the County. The Project does not include any trade fixtures, machinery or equipment already located at the Facility on or before January 1, 2014, or any real property. The Project is being leased by the Issuer to the Company under a Lease Agreement, dated as of October 1, 2014 (the “Lease”), for use by the Company in its carpet manufacturing business. Legal title to the Project is to be vested in the Issuer while the Lease in effect. The Lease is to expire on October 1, 2023. All capitalized terms used herein that are defined in the Lease, but are not defined herein, shall have the same meaning as in the Lease. In consideration of the execution of the Lease by the Issuer and the Company and in further consideration of the Issuer’s issuance of the Bonds, the Parties have entered into this Agreement.

Section 2.Taxes and Payments in Lieu of Taxes.

(a)Taxes on Non-Project Property. Property titled to the Company on January 1 of each year is subject to ad valorem property taxes in such year. The Company shall file returns and pay ad valorem property taxes in accordance with law, with respect to taxable property in the County to which the Company holds title (and, hence, which is not a part of the Project on such January 1).

(b)No Actual Taxes on Project While Owned by Issuer. Under the Act, the Issuer’s ownership in the Project is exempt from ad valorem property taxes. Under the terms of the Lease, the Company’s interest in the Project is treated as a bailment for hire which is intended to be nontaxable for purposes of ad valorem property taxes.  Thus, the Company shall not be required to pay actual ad valorem property taxes on the Project while the same is owned by the Issuer and leased to the Company under the Lease. If, on account of the expiration or termination of the Lease, the exercise by the Company of its option to purchase the Project or otherwise, the Project is no longer owned by the Issuer, then actual taxes rather than payments in lieu of taxes shall be paid with respect to the Project.

(c)Payments in Lieu of Taxes. In order to prevent the local taxing authorities from being totally deprived of revenues relating to the Project during the period in which title thereto is in the Issuer which would be occasioned by total tax abatement on account of the Issuer’s interest and the Company’s leasehold interests therein being exempt from ad valorem property taxes, the Issuer and the Company agree, that as additional consideration for the Issuer’s leasing the Project to the Company, the Company shall, so long as the Lease is in effect, make payments in lieu of taxes to the Tax Commissioner as provided in this subsection (c).
(i)Valuation and Calculation of Normal Taxes and Procedural Matters.  Not later than April 1 of each year commencing in the year 2015, the Company shall file with the Board of Assessors, a return (the “Annual Return”) in which the Project shall be valued as of January 1 of such year at “Full Value,” as follows: trade fixtures, machinery, equipment and other tangible personal property shall be valued at cost less depreciation (as per guidelines set forth in Georgia Department of Revenue Rule 560-11-10-.08). The Full Value of the Project is subject to confirmation by the Board of Assessors, which shall also multiply such Full Value by forty percent (40%) to determine the “Assessed Value” of the Project, and provide written notice of its valuation to the Issuer and the Company.  The Company shall have forty-five (45) days after receipt of such notice to challenge each such valuation in accordance with the normal procedures of the Board of Assessors.  In each year, not later than thirty (30) days before the date on which ad valorem taxes are due in the County, the Tax Commissioner shall calculate the “Normal Taxes” on the Project that would be payable to the State of Georgia, the County and each other applicable taxing authority by multiplying the Assessed Value by each taxing authority’s millage rate and shall bill the Company for the payments that are due as contemplated in this Agreement. 

(ii)Payments in Lieu of Taxes on the Project. Following receipt of the tax bills referenced in clause (i) above, the Company shall pay to the Tax Commissioner at the time normal ad valorem taxes are due (or if the above-mentioned tax bill(s) has not then been received, then upon receipt), as payments in lieu of taxes, an amount equal to the applicable percentage for such year (stated below) of Normal Taxes that the Company would pay on the Project if the Company were the owner of the Project on January 1 of such year. Such amount paid to the County shall be paid over by the Tax Commissioner to the applicable taxing authorities in proportion to their respective millage rates. The applicable percentage for the assets comprising the Project shall be as follows in the following years. For any such asset, “Year 1” shall be determined as provided in (iii), below.

Payment Schedule
	
		
	Year
	Payment Percentage

	1
	0%

	2
	25%

	3
	50%

	4
	75%

	5 and thereafter
	100%

(iii)Year 1. For purposes of the Payment Schedule in (ii), above, “Year 1” shall be 2015 with respect to the investments in the Project made in 2014; provided, however, that with respect to the investments in the Project made in 2015, 2016, 2017 and 2018 financed through additional draws on the Bond, the calendar year following the calendar year in which such investment is made is deemed to be Year 1 for those assets. That is to say, every new bond-financed investment in Project assets at the Facility during 2015, 2016, 2017 and 2018 will receive a separate five-year Payment Schedule beginning with its respective Year 1. Investments in the Project made after 2018 will not 

benefit from the Payment Schedule, but shall be considered part of the Project for purposes of counting jobs and investment at the Project. 
(d)Recovery Provisions.

(i)Job and Investment Goals.  The payments in lieu of taxes provided for in the Payment Schedule are based on the assumption that (A)(i) on or by January 1, 2015, the capital  investment in the Project will amount to at least $2,500,000, (ii) on or by January 1, 2016, the cumulative capital investment in the Project will amount to at least $5,000,000, (iii) on or by January 1, 2017, the cumulative capital investment in the Project will amount to at least $7,500,000, (iv) on or by January 1, 2018, the cumulative capital investment in the Project will amount to at least $10,000,000, and (v) on or by January 1, 2019, the cumulative capital investment in the Project will amount to at least $12,500,000, in each case, inclusive of property paid for with proceeds of the Bond (the “Investment Goal”), and (B)(i) at least 41 new full-time jobs will be created at the Facility by January 1, 2015 and maintained during calendar year 2015, (ii) at least an additional 24 new full-time jobs (i.e., for a total of 65 new full-time jobs) will be created at the Facility by January 1, 2016 and maintained during calendar year 2016, (iii) at least an additional 8 new full-time jobs (i.e., for a total of 73 new full-time jobs) will be created at the Facility by January 1, 2017 and maintained during calendar year 2017, (iv) at least an additional 8 new full-time jobs (i.e., for a total of 81 new full-time jobs) will be created at the Facility by January 1, 2018 and maintained during calendar year 2018, and (v) at least an additional 8 new full-time jobs (i.e., for a total of 89 new full-time jobs) will be created at the Facility by January 1, 2019 and maintained during the remainder of the term of the Lease (the “Jobs Goal”). There shall be deemed to be no new full-time jobs increase unless the number of new full-time jobs is in excess of 114 (the “Base Amount”), such being the agreed number of full-time jobs at the Facility as of January 1, 2014. Schedule 2 attached hereto determines how the number of full-time jobs shall be calculated and provides rules that shall apply to satisfying the Investment Goal.
(A)Investment Shortfall.  If, on or by January 1, 2016, or any January 1 of any year thereafter while the Lease is in effect (each a tax-year), the aggregate investment at the Project has not reached the Investment Goal, the amount of actual investment as of such January 1 shall be subtracted from the Investment Goal to determine the “Investment Shortfall” for such tax-year. The Investment Shortfall for such tax-year shall be divided by the Investment Goal and the result shall be the “Investment Shortfall Percentage” for such tax-year. 

(B)Jobs Shortfall.  If, on or by January 1, 2016, or any January 1 of any year thereafter while the Lease is in effect (each a tax-year), the aggregate number of new full-time jobs at the Facility (i.e., full-time jobs in excess of the Base Amount) during the prior calendar year has not reached the Jobs Goal, the amount of actual new full-time jobs during such prior calendar year shall be subtracted from the Jobs Goal to determine the “Jobs Shortfall” for such tax-year. The Jobs Shortfall for such tax-year shall be divided by the Jobs Goal and the result shall be the “Jobs Shortfall Percentage” for such tax-year.

(ii)Force Majeure.  Notwithstanding the foregoing, the Jobs Goal in any year is subject to the effect of force majeure as provided below, if the Company certifies to the Issuer in writing the dates of the commencement and, if the event of force majeure has abated, the date of the abatement, of such event of force majeure. For purposes hereof, “force majeure” means any unexpected event (including, without limitation, any event or act of god, war, civil commotion, flood, fire, explosion, earthquake or other natural disaster, any strikes, walkouts or other labor unrest and 

terrorist acts) which prevents the Company from attaining the Jobs Goal in such year, which act or event is (i) beyond the reasonable control and not arising out of the fault of the Company, (ii) the Company has been unable to overcome such act or event by the exercise of due diligence and reasonable efforts, skill and care, exclusive of the expenditure of unbudgeted sums of money, and (iii) has a material adverse effect on the employment at the Facility; provided, however, notwithstanding anything contained herein, the Company shall not be obligated to negotiate, settle or otherwise take any actions to end any strike, walkout or other labor unrest if it deems such to be in the best interest of the Company. The effect of force majeure shall be that, for any year in which the Company claims the benefit of such provision, the Jobs Goal for such year shall be reduced by the number of full-time jobs that the Company shall demonstrate were not filled as a result of such force majeure.

(iii)Annual Certification.  Not later than March 1, 2016, and not later than March 1 of each year thereafter (to and including the March 1 of the year following the last year in which the Company realizes any tax savings hereunder), the Company shall provide to the Issuer and the Tax Commissioner a certificate of an authorized officer of the Company (the “Annual Certification”) stating (1) the cumulative investment in the Project as of January 1 of such calendar year, and (2) the average number of full-time jobs at the Facility during the immediately preceding calendar year. The Company shall provide such other supporting documentation as the Issuer or the Tax Commissioner may from time to time reasonably request. The Issuer and the Tax Commissioner shall have the right to inspect the investment and payroll records (consistent with the privacy rights of its employees) of the Company relating to the Project to verify the correctness of the Annual Certification and may make adjustments in the jobs information if an error is found. 

(iv)Tax Savings Recovery Payments.  If the Annual Certification (or an adjustment thereto) shows that the average number of full-time jobs at the Facility in the immediately preceding year was less than the Jobs Goal, then the Job Shortfall Percentage shall be calculated and if there is no Jobs Shortfall, the Jobs Shortfall Percentage shall be zero percent. If the Annual Certification (or an adjustment thereto) shows that there was an Investment Shortfall, then the Investment Shortfall Percentage shall be calculated and if there is no Investment Shortfall, the Investment Shortfall Percentage shall be zero percent. The Investment Shortfall Percentage and the Jobs Shortfall Percentage shall be totaled and divided by two (2); the result shall be the “Project Shortfall Percentage”. If there is a Project Shortfall Percentage of greater than twenty percent (20%), the tax savings recovery payments (“Tax Savings Recovery Payments”) shall be calculated as follows: the Project Shortfall Percentage shall be multiplied by the ad valorem tax savings received by the Company during the immediately preceding calendar year as a result of the tax savings provided hereby (such savings being the difference between normal taxes and the payment in lieu of taxes paid in the prior year (excluding any additional payment in lieu of taxes made in the immediately preceding year on account of any Tax Savings Recovery Payments made in the preceding year)). Tax Savings Recovery Payments shall constitute additional payments in lieu of taxes which shall be paid by the Company to the Tax Commissioner within thirty (30) days following the date of the Annual Certification. If the Project Shortfall Percentage is twenty percent (20%) or less, there shall be no Tax Savings Recovery Payment due.

(e)Company to Pay Other Amounts. The Company shall be responsible for all costs paid by the Issuer or the Tax Commissioner for the collection of the payments required herein, including but not limited to reasonable attorneys’ fees, administrative costs or other collection expenses.

Section 3.Safeguard. If the Project is judicially determined to be lawfully subject to ad valorem taxation for any tax year, or if the Company agrees that the Project is subject to such taxes in such tax year, then it shall pay, or cause to be paid, such lawful taxes in accordance with its covenants in the Lease, but it shall not be obligated to pay payments in lieu of taxes, pursuant to Section 2, above, for any tax year for which actual ad valorem taxes are due with respect to that Project.

Section 4.Termination. This Agreement shall terminate at such time as there are no further payments which may thereafter be required to be made hereunder.

Section 5.Successors and Assigns. This Agreement shall inure to the benefit of, and the obligations of the respective parties hereunder shall be binding upon, the successors and assigns of the respective parties hereto.

Section 6.Severability. In the event any clause, sentence, paragraph or provision of this Agreement shall be determined to be voidable, void or unenforceable, the voidableness, voidness, or unenforceability of such clause, sentence, paragraph shall not affect the validity or enforceability of any other clause, sentence, paragraph or provision hereof. Without in any way limiting the generality of the foregoing, if the agreements of the Issuer set forth herein should be determined to be voidable, void or unenforceable, the obligations of the Company shall not be deemed to be unenforceable for lack of consideration or lack of mutuality; the Company hereby agrees that the agreement of the Issuer to issue the Bond and to lease the Project to the Company under the Lease are sufficient and adequate consideration to support the Company’s agreements and obligations hereunder.

Section 7.Validation. The parties hereto understand that this Agreement is to be one of the documents to be presented to the Superior Court of Murray County in proceedings to validate the Bond and related documents.

Section 8.Governing Law, Jurisdiction and Venue. This Agreement shall be governed by the law of the State of Georgia and shall be subject to enforcement in the appropriate court in Murray County, Georgia.
[signatures begin on following page]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, to be effective as of the Effective Date.
The “Issuer”:
DEVELOPMENT AUTHORITY
 OF MURRAY COUNTY

By: /s/ Craig Brock                       
Chairman
Attest:

/s/ John Kenemer                
Secretary

[seal]
[signatures continue on following page]

The “Company”:

TDG OPERATIONS, LLC, 
a Georgia limited liability company

By:    /s/ Jon A. Faulkner          (seal)
Jon A. Faulkner,     President
[signatures continue on following page]

The “County”:

MURRAY COUNTY, GEORGIA

By:     /s/ Brittany Pittman                 
Brittany Pittman, Sole Commissioner

[county seal]
[signatures continue on following page]

ACKNOWLEDGED
The Board of Tax Assessors of Murray County acknowledges this Agreement and agrees to the provisions hereof that are applicable to it.

BOARD OF TAX ASSESSORS
 OF MURRAY COUNTY

By:    /s/ Mickey McNeill              
Chairman

[signatures continue on following page]

ACKNOWLEDGED
The Tax Commissioner of Murray County acknowledges this Agreement and agrees to the provisions hereof that are applicable to him/her.

TAX COMMISSIONER OF MURRAY COUNTY

By:    /s/ Charlotte Keener                
Charlotte Keenerex10_50bondpurchaseloanagree

EXHIBIT 10.50
BOND PURCHASE LOAN AGREEMENT
This BOND PURCHASE LOAN AGREEMENT, dated as of October 1, 2014 (this “Agreement”), is by and between the DEVELOPMENT AUTHORITY OF MURRAY COUNTY (the “Issuer”), a development authority and public body corporate and politic, created and existing under the laws of the State of Georgia (the “State”), and TDG OPERATIONS, LLC, a Georgia limited liability company, in its capacity as the lessee (the “Company”) of the Project, referred to herein, and its successors and assigns as such lessee, and in its capacity as the purchaser (the “Purchaser”) of the hereinafter-described revenue bond of the Issuer.
W I T N E S S E T H:
WHEREAS, the Issuer is a public body corporate and politic and a development authority duly created pursuant to the Development Authorities Law of the State of Georgia, O.C.G.A. § 36‐62‐1, et seq. (the “Act”) and activated by resolution of the governing body of Murray County, Georgia (the “County”); and
WHEREAS, the Act provides that the Issuer is created to develop and promote trade, commerce, industry and employment opportunities for the public good and the general welfare within the County and is authorized by the Act to issue its revenue bonds to acquire “projects” (as defined in the Act) to be located in the County which shall be operated and used by private sector persons, firms or corporations in their trades and businesses; the Issuer’s revenue bonds are to be issued and validated under and in accordance with the applicable provisions of the Revenue Bond Law of the State of Georgia (O.C.G.A. § 36-82-60, et seq.), as heretofore and hereafter amended, and other applicable provisions of law; and
WHEREAS, the Act further authorizes and empowers the Issuer: (i) to lease any such project at a rental which, together with other revenues which may be pledged for such purpose, shall be sufficient to pay debt service on such revenue bonds and to pay all other expenses which the Issuer may incur in connection with the undertaking, (ii) to pledge, mortgage, convey, assign, hypothecate or otherwise encumber such projects and the revenues therefrom as security for the Issuer’s revenue bonds; and (iii) to do any and all acts and things necessary or convenient to accomplish the purpose and powers of the Issuer; and
WHEREAS, the Issuer proposes to issue its revenue bond (the “Bond”) in a maximum principal amount of $12,500,000 (the “Maximum Principal Amount”), to be issued as a single Bond in the form of a draw-down instrument to be designated “Development Authority of Murray County Taxable Industrial Development Revenue Bond (TDG Operations, LLC Project), Series 2014,” which shall mature on October 1, 2023 (the “Maturity Date”) and shall bear interest at a rate per annum of six percent (6.00%), which interest shall be payable on October 1 of each year, commencing on October 1, 2015, with the final interest payment being due on the Maturity Date. The Bond is secured by that certain Assignment of Rents and Leases and Security Agreement dated as of October 1, 2014 (the “Security Document”), granted by the Issuer to the Purchaser. The Bond shall be in substantially the form set forth in Exhibit A to the Bond Resolution (hereinafter defined), with such variations, omissions, substitutions, legends and insertions as may be approved by the official of the Issuer who executes such Bond and by the Purchaser; and
WHEREAS, the Bond is to be issued to acquire trade fixtures, machinery and equipment (the “Project”) to be installed and used at the Company’s existing facility in the County at 3620 Highway 411N, Eton, Georgia (the “Facility”), which Project is to be owned by the Issuer and leased to the Company for use in its carpet manufacturing business; and

WHEREAS, the property comprising the Project shall be conveyed to the Issuer by one or more bills of sale; and
WHEREAS, the Project shall be leased to the Company under a Lease Agreement dated as of October 1, 2014 (the “Lease”), under the terms of which the Company will pay Basic Rent payments and other payments at such times and in such amounts as will be required to pay debt service on the Bond as and when the same becomes due, subject to the terms and conditions of the Lease and the Bond Resolution permitting constructive payment of same; the Lease shall become effective upon the delivery thereof and its term is to end upon the final maturity of the Bond or, if sooner redeemed pursuant to the Bond Resolution or the Bond, the date of redemption; and
WHEREAS, pursuant to the resolution adopted by the Issuer (the “Bond Resolution”) authorizing the issuance of the Bond and the execution of this Agreement and the other Issuer Documents (as defined in the Bond Resolution) relating to the Bond, including without limitation, the Security Document, the Issuer is pledging, as security for the payment of the Bond, the Pledged Security therefor, including, but not limited to, the Project acquired by the proceeds of the Bond, all of the Basic Rent payments and any termination payments to be received by the Issuer under the Lease, the Issuer’s interest in the Lease (except for certain Unassigned Rights), and the Net Proceeds of certain casualty insurance and eminent domain awards and other amounts to be held in the Project Fund and Sinking Fund created by the Bond Resolution for such Bond, and investment income and proceeds of the foregoing; and
WHEREAS, all capitalized terms used herein and which are not defined herein shall be defined as set forth in the Bond Resolution and in the Exhibits thereto; and
WHEREAS, the Purchaser desires to purchase the Bond and to advance funds or transfer items of property or other legal consideration to the Issuer hereunder, initially on the date of issuance of the Bond and thereafter from time to time until the Expiration Date (defined below).
NOW, THEREFORE, in consideration of the premises, the parties hereto agree as follows:
1.THE CREDIT FACILITY AND THE COMMITMENT AMOUNT: The Purchaser agrees to purchase the Bond and in connection therewith to provide to the Issuer a credit facility (the “Credit Facility”) of up to the Maximum Principal Amount of the Bond on the following terms and conditions.

2.ADVANCES: Advances under the Credit Facility may be made only with respect to costs of the Project and costs of issuance of the Bond. Such advances shall be made in cash or in property or both. An initial advance shall be made with respect to the Bond on the date the Bond is issued; all or some portion of such advance shall be made in cash to pay or to reimburse issuance costs relating to the Bond. Thereafter, from time to time to, and including, the Expiration Date (as hereinafter defined), the Issuer may make one or more requests for advances with respect to the Bond which shall, when aggregated with prior advances, not exceed the Maximum Principal Amount of the Bond. Costs incurred by the Purchaser for costs of the Project shall be deemed to have been advanced by the Purchaser to the Issuer hereunder with respect to the Bond and immediately disbursed by the Issuer to reimburse the Purchaser for such costs. Any amounts advanced in cash under the Credit Facility with respect to the Bond shall be used to pay or to reimburse the Issuer or the Company, as applicable, for Costs of the Project and transaction costs of issuing the Bond. For purposes of the foregoing and all other purposes related to the Bond, “Costs of the Project,” “Purchaser’s cost of such items,” and “cost to the Company,” as mentioned in the attached form of Certificate and Requisition for Payment, shall have the meaning set forth in the Bond Resolution with respect to 

“Costs of the Project” and shall be determined based on the Purchaser’s or the Company’s actual cost.
Advances under the Credit Facility shall be made upon the written Request for Advance in the form attached hereto as Exhibit A, executed by an authorized representative of the Company, as agent of the Issuer, which shall be delivered to the Purchaser at its notice address by mail, courier, hand delivery or fax; such Request for Advance shall be accompanied by a copy of one or more requisitions (in the form provided at the end of Exhibit A hereto), submitted by the Company, as agent of the Issuer, which are in an aggregate amount equal to the amount of the advance being requested.  It shall not be necessary for the Company to attach to said Request for Advance or requisitions evidence of Costs of the Project with respect to which the requested advance is made, but the Purchaser, at the written request of the Issuer, shall make such information available to the Issuer.

Requests for Advances with respect to the Bond shall be promptly honored, provided that (i) the conditions precedent set forth in Section 7 below shall have been satisfied at the time of each advance, (ii) the gross amount requested in such Request for Advance, plus the aggregate gross amounts of all prior advances with respect to the Bond shall not exceed the Maximum Principal Amount of the Bond, and (iii) the Request for Advance is received on or before the Expiration Date. The Purchaser shall be entitled to rely upon any Request for Advance which the Purchaser reasonably believes in good faith to have been signed by the proper person. In addition, the Purchaser shall have no obligation to, but may if it so elects, fund any advance under the Credit Facility if an “Event of Default” (being an “Event of Default” as defined in the Bond Resolution or in any of the Issuer Documents or Company Documents) has occurred and is continuing on and as of such date.
3.COMMENCEMENT DATE: The commencement date of the Credit Facility shall be the date of issuance of the Bond (the date set forth above being merely for purposes of reference).

4.EXPIRATION DATE: The “Expiration Date” shall be the earliest of (i) the date the Maximum Principal Amount of the Bond has been advanced, (ii) the date the Bond is retired, (iii) the date the Company delivers a written notice to the Issuer and the Purchaser that it will make no further request for advances hereunder or (iv) December 31, 2018. The Purchaser shall not make any further advances to the Issuer under the Credit Facility with respect to Requests for Advances received after the Expiration Date.

5.UTILIZATION; THE BOND: All advances in cash or in other legal consideration under the Credit Facility shall be evidenced by the Bond, which shall be issued in the form of a draw-down instrument in substantially the form reviewed by the Purchaser and approved by the Bond Resolution, with such modifications, if any, as are acceptable to the Issuer and the Purchaser, the Issuer’s approval of such modifications, if any, to be conclusively presumed by the execution and delivery thereof, and the Purchaser’s acceptance of such modifications, if any, to be conclusively presumed by the Purchaser’s acceptance of the Bond. The Bond shall be registered in the name of the Purchaser.

6.ISSUANCE FEE: Upon issuance of the Bond, a one-time issuance fee of one-eighth (1/8) of one percent (1%) of the Maximum Principal Amount of the Bond is to be paid to the Issuer by the Company.

7.CONDITIONS PRECEDENT: The Purchaser’s obligation to fund the initial advance hereunder with respect to the Bond shall be subject to its receipt from the Issuer of the duly executed Bond, together with an approving Bond Counsel opinion of Seyfarth Shaw LLP, which shall be in form and substance reasonably acceptable to the Purchaser.

8.INVESTMENT: By acceptance hereof, the Purchaser understands, represents and agrees that: (i) the obligations of the Issuer under the Bond and under the related Issuer Documents, are special and limited obligations payable solely from the Pledged Security for the Bond; (ii) the obligations of the Issuer under the Bond and under the Issuer Documents, and the obligations of the Company under the Company Documents and any other obligations that would constitute “separate securities” relating to the Bond (collectively, herein called the “securities”) have not been registered under the Federal Securities Act of 1933, the Securities and Exchange Act of 1934, the Georgia Uniform Securities Act of 2008, or the securities laws, if applicable, of any other state, and applicable rules and regulations thereunder (collectively, the “Securities Acts”) and are unrated; (iii) no official statement or other offering document has been prepared in connection with the issuance of the Bond; (iv) the Purchaser shall have performed its own “due diligence” investigation as to the Issuer, the Project, the Company, and as to any of the sources of payment of debt service on the Bond and has not relied on any representations of the Issuer, its members, directors, officials, employees, agents or legal counsel as to any matters relating to the adequacy of the Pledged Security to provide for the payment of debt service on the Bond; (v) the Bond is being purchased by the Purchaser in a private placement for its own account and not with a view to resale or other distribution or transfer, except in a transaction in which the Purchaser also assigns its leasehold interest in the Project; (vi) the Bond may not be sold, transferred, pledged or hypothecated by the Purchaser or any subsequent holders except in accordance with the provisions of the Bond Resolution governing transfers of the Bond; and (vii) if any transfer of the Bond would subject the Issuer or the Company to any disclosure requirements under any of the Securities Acts, the Company shall, at its own expense and without cost to the Issuer, make such disclosure as to the Issuer, the Company, the Project, the Pledged Security and the Bond, as is required by the Securities Acts. The representations and agreements contained in this Section shall prevail over any inconsistent term or condition that may be contained in the Lease relating to the Project, in the Bond Resolution or in the Bond.

9.GOVERNING LAW: This Agreement shall be governed by and construed under and in accordance with the internal laws of the State of Georgia (without giving effect to its conflicts of law principles).

10.ASSIGNMENT: The Purchaser shall be entitled to assign the Bond and its rights under this Agreement in accordance with the terms and conditions of section 8 above, the Bond and Section 2.7 of the Bond Resolution. 

11.AMENDMENT: No amendment or modification of this Agreement shall be effective unless it is in writing and executed by the Issuer, the Company and the Purchaser. 

12.HEADINGS: All paragraphs or other headings used in this Agreement are for convenience of reference only and do not constitute a substantive part of this Agreement.

13.REQUESTS FOR ADVANCES AND NOTICES: All Requests for Advances shall be delivered to the Purchaser at its address set forth below. All other requests, notices, demands, and other communications under this Agreement shall be given in writing and are to be deemed to have been duly given and to be effective upon delivery to the party to whom they are directed, to such party at its notice address set forth below, provided that any party may by written notice to the other parties designate a different address for receiving notices under this Agreement; provided, however, that no such change of address will be effective unless and until written notice thereof is actually received by the party to whom such change of address notice is sent.

	
		
	To the Issuer:
	Development Authority of Murray County 
121 N. Fourth Avenue
Chatsworth, Georgia 31539
Attention: Chairman 

	with copies to:
	Gregory H. Kinnamon, P.C. 
512 South Thornton Avenue 
Dalton, Georgia 30720
Attention: Gregory H. Kinnamon, Esq.

	 
	Murray County
121 N. Fourth Avenue
Chatsworth, Georgia 31539
Attention: Brittany Pittman, Sole Commissioner

and

	 
	Seyfarth Shaw LLP
1075 Peachtree Street, N.E.
Suite 2500
Atlanta, Georgia 30309
Attention: Daniel M. McRae, Esq.

	To the Company and Purchaser:
	TDG Operations, LLC
c/o The Dixie Group, Inc.
2208 South Hamilton Street Extension
Dalton, Georgia 30721
Attn: Jon A. Faulkner, President

	with a copy to:
	Miller & Martin PLLC
Suite 1000 Volunteer Building
832 Georgia Avenue
Chattanooga, Tennessee 37402
Attention: Robert L. Dann, Esq.

Any person designated in this Section 13 may, by notice given to the others, designate any additional or different addresses to which subsequent notices, certificates, or other communications shall be sent to it. 
14.EFFECTIVE DATE: This Agreement may be executed prior to the delivery of the Bond to the Purchaser, but shall not become effective until a counterpart hereof executed by all parties hereto is delivered simultaneously with the issuance of the Bond. Upon execution and delivery hereof, as aforesaid, this Agreement and the terms and provisions of the Bond, the Bond Resolution and other documents approved by the Bond Resolution shall supersede the provisions of any commitment letter(s) heretofore issued by the Purchaser to the Issuer and the Company with respect to the Bond, the Credit Facility and the Maximum Principal Amount.

15.COUNTERPARTS: This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument.
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IN WITNESS WHEREOF, each of the parties have caused this Agreement to be duly executed and delivered, under seal, by its respective duly authorized officers.
DEVELOPMENT AUTHORITY 
  OF MURRAY COUNTY

By:    /s/ Craig Brock                   
Chairman
Attest:

/s/ John Kenemer               
Secretary 

[seal]
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TDG OPERATIONS, LLC, 
a Georgia limited liability company 

By:   /s/ Jon A. Faulkner                   (seal)
Jon A. Faulkner, President

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