Document:

Document

Exhibit 10.1

PILOT AGREEMENT

THIS PILOT AGREEMENT, dated as of the 1st day of June, 2020 (the “Dated Date”), but effective on the date the Bonds referred to below are issued (the “Effective Date”), by and between the Gainesville and Hall County Development Authority (the “Issuer”), a public body corporate and politic created pursuant to a local amendment to the constitution of the State of Georgia and Fox Factory, Inc., a California corporation, authorized to transact business in Georgia (the “Company”).
Section 1. The Lease Agreement. The Issuer is issuing its Gainesville and Hall County Development Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020 (the “Bonds”), in the principal amount of $75,000,000, for the purpose of financing the acquisition, construction and installation of certain real and personal property comprising a facility for the manufacture of shock absorbers for automobiles, trucks and motorcycles in Gainesville Industrial Park West, Gainesville, Hall County, Georgia (the “Project”). The Project is divided into three phases, the 2020 Project, the 2021 Project and the 2022 Project as defined in the Lease Agreement. The Issuer, as lessor, and the Company, as lessee, are entering into that certain Lease Agreement, dated as of the Dated Date (the “Lease Agreement”), under which the Issuer is to lease the Project to the Company for operation. All capitalized terms used herein that are defined in the Lease Agreement, but are not defined herein, shall have the same meaning herein as in the Lease Agreement. In consideration of the execution of the Lease Agreement by the Issuer and Company, and in further consideration of the Issuer’s issuance of the Bonds, the parties have entered into this PILOT Agreement. The parties agree that the principal amount of the Bonds will not act as a limitation or a cap on the amount of property subject to valuation in accordance with Section 4 below.
Section 2. Recitals. The parties hereto recognize that the Issuer’s interest in the Project is exempt from ad valorem taxes. The parties hereto recognize that under the laws of the State of Georgia, a leasehold interest that is a mere usufruct is not treated as a separate estate in property and is not subject to ad valorem taxes.
Section 3. Findings and Agreement as to the Issuer’s and the Company’s Interests.
(a) The intention of the parties controls whether the Lease Agreement creates a usufruct or an estate for years. The Issuer and the Company have expressly stated in the Lease Agreement and hereby agree with each other, and hereby represent unto each other and to the  County, other taxing authorities having powers of taxation over the location of the Project and to the Board of Tax Assessors (the “BOTA”) of the County that they intend the leasehold interest of the Company under the Lease Agreement to be a usufruct, and they have demonstrated this intention by expressly so stating in the Lease Agreement and this intention is further reflected in various provisions of the Lease Agreement which restrict and limit the Company’s rights, to wit: 
(i) Limitation on Nature of Company’s Use. In order that Issuer, as lessor, may control the use of the Project to assure that such use is at all times for purposes permitted by the Act (so as to further the public purposes of the Issuer), the Issuer and the Company have provided in the Lease Agreement that the Company may use the Project only for the limited purposes stated in the Lease Agreement (which are purposes permitted by the Act). Thus, the Company does not have the right to use the Project in as absolute a manner as it would have if it were the owner of the Project.
(ii) Company’s Interest Is Not Subject to Assignment or Sublease.  In order that the Issuer, as lessor, may control the use of the Project and assure that such use is at all times by persons satisfactory to the Issuer, who will use the Project for purposes permitted by the Act (so as to further the public purposes of the Issuer), the Issuer and the Company have provided in the Lease Agreement that the Company’s rights to occupy, use and enjoy the Project (a) may be subleased so long as the sublease is to the parent, subsidiary or affiliate of the Company and the Lessee remains obligated on the Lease and (b) may be assigned if the assignment is to any parent, subsidiary or affiliate of the Company and the assignee assumes all the obligations under the Lease, all as more specifically set forth in the Lease Agreement. Any other assignment or sublease will be subject to the prior consent of the Issuer, which consent shall not be unreasonably withheld or delayed. The Issuer and the Company have the right to grant liens as provided in Section 3.5 of the Lease Agreement.
(iii) Issuer’s Right to Enforce Compliance With Applicable Laws.  In order that the Issuer, as lessor, may control the use of the Project in order to assure that such use is at all times lawful, the parties have provided in the Lease Agreement, that the Company’s use of the Project shall be conducted at all times in accordance with all applicable laws, ordinances, rules and regulations and that the Issuer, as lessor (in addition to any other federal, state or local government body or agency which may be entitled to enforce such laws, ordinances, rules and regulations) shall be entitled to enforce such provision of the Lease Agreement by an action at law or in equity.
1

(iv) Issuer’s Rights of Inspection. In order that the Issuer may monitor compliance by the Company with the restrictions and covenants therein contained, the Issuer and the Company have provided in Section 8.2 of the Lease Agreement that the Issuer shall be entitled to inspect the Project and the Company’s books and records relating thereto, subject to the provisions of Section 8.2 of the Lease Agreement.
(v) Repair and Maintenance Covenants.  Under current law, the granting of a usufruct to the Company would not impose on the Company the obligation to make major repairs to the Project; because the Issuer is without funds to pay costs of repairs and maintenance, the Issuer and the Company have agreed in Section 6.1 of the Lease Agreement that the Company, by operation of express covenant and not by operation of law, shall be responsible for the repair and maintenance of the Project, including major repairs.
(vi) Insurance Covenants.  Under current law, the granting of a usufruct does not impose upon the Company any obligation to insure the property that is the subject of such grant; because the Issuer is without funds to pay costs of insurance, the Issuer and the Company have agreed in Section 6.4 of the Lease Agreement that the Company, by operation of express covenant and not by operation of law, shall be responsible for insuring the Project.
(vii) Covenants Relating to Utilities.  Under current law, the granting of a usufruct does not impose upon the Company an obligation to pay for utility charges resulting from its use of the Project; because the Issuer is without funds to pay costs of utilities, the Issuer and Company have agreed in Section 6.3 of the Lease Agreement that the Company, by operation of express covenant and not by operation of law, shall be responsible for paying the costs of utilities used at the Project.
(viii) Taxes and Payments in Lieu of Taxes. Under current law, the interest of the Issuer, as lessor, is exempt from ad valorem taxes and under current law, the granting of a usufruct does not impose upon the Company any obligation to pay ad valorem taxes, either on its leasehold interest or the Issuer’s ownership interest in the Project. Because the Constitution or laws of the State may be amended in a manner that might subject the Issuer’s ownership interest in the Project or the Company’s leasehold interest in the Project under the Lease Agreement to ad valorem taxes, and because the Issuer is without funds to pay such taxes or the cost of contesting the imposition of taxes, the Issuer and the Company have agreed, in Section 6.3 of the Lease Agreement, that the Company shall bear the risk of taxation as to its leasehold interest and as to the Issuer’s ownership interest in the Project and shall be entitled to contest any ad valorem taxes sought to be imposed thereon, in its own name or in the name of the Issuer. Thus, by operation of express covenant and not by operation of law, the Lessee shall be responsible for paying any ad valorem taxes that may become payable on the Project. The Company will pay ad valorem taxes on the property that is owned by the Company and located at the site of the Project.
Section 4. Special Covenants Related to Ad Valorem Tax Assessment.  
(a) The parties hereto acknowledge that the judicial decisions attempting to distinguish between leases creating an estate for years and leases creating a usufruct have relied heavily on the facts of each case and have created uncertainty. Due to the interest of the Issuer in the Project and the uncertainty under Georgia law as to whether the Company’s leasehold interest created by the Lease Agreement is a usufruct or an estate for years, the parties hereto have agreed that the leasehold interest of the Company in the Project shall be subject to ad valorem taxation as though it were an estate for years and shall be valued for such ad valorem tax purposes in accordance with the provisions of this Section 4 beginning with the tax year commencing on January 1 of the year immediately following the year in which title to the Project is first transferred to the Issuer (the “First Tax Year”), and continuing during the period the Project is owned by the Issuer.
(b) The fair market value of the Project shall be determined using the procedures ordinarily applicable to ad valorem property taxation. The Project includes property purchased with (or the cost of which was reimbursed out of) proceeds of the Bonds, including equipment transferred from another of the Company’s locations, any repairs thereto, renewals and replacements thereof, additions thereto and substitutions therefor (the cost of which need not be paid with proceeds of the Bonds so long as the property repaired, renewed, replaced, added to or with respect to which such substitutions are made was paid for with proceeds of the Bonds and so long as title to such repairs, renewals, replacements, additions and substitutions is vested in the Issuer and leased to Company pursuant to the Lease Agreement). Such repairs, renewals, replacements, additions and substitutions shall be taken into account in the determination of the taxable value of the Project and taken into account in the determination of capital investment under Section 5 hereof.
2

(c) Commencing with the First Tax Year and continuing during the period the Project is owned by the Issuer, the Issuer shall take such actions as shall be necessary to cause the Project to be reflected on the tax rolls of the City of Gainesville, Georgia (the “City”), the Gainesville School District (the “School District), and Hall County (the “County”) as exempt property and to cause the Company’s leasehold interest therein to be valued for property tax purposes in the manner set forth in this Agreement and taking into account the Leasehold Valuation Factors set forth below. Prior to March 1 of each year the Company shall file with the BOTA a separate property tax return with respect to the Project, showing the Project to be exempt from tax and the Company’s leasehold to be valued as set forth in this Section. Such return shall refer to this PILOT Agreement and show the fair market value of the Project and of said leasehold, calculated in accordance with the BOTA’s procedures and as set forth in this Section.
        (d) The fair market value of the 2020 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 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 below, the pro forma assessed values of the 2020 Project 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 Year	Leasehold Valuation Factor
	2021	0%
	2022	0%
	2023	50%
	2024	50%
	2025	50%
	2026 and thereafter	100%

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 below, the pro forma assessed values of the 2021 Project 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 Year	Leasehold Valuation Factor
	2022	0%
	2023	0%
	2024	50%
	2025	50%
	2026	50%
	2027 and thereafter	100%

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 below, the pro forma assessed values of the 2022 Project 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.
3

						
	Tax Year	Leasehold Valuation Factor
	2023	0%
	2024	0%
	2025	50%
	2026	50%
	2027	50%
	2028 and thereafter	100%

        (e) The Issuer and the Company agree that the Company may, in its own name or in the name and on behalf of the Issuer, in good faith contest through any administrative, judicial or other proceedings, the (i) determination by the BOTA of the fair market value of the Project to which the Leasehold Valuation Factor is applied; and (ii) assessment, levying or imposition of any taxes, assessments and other similar charges with respect to the Project that are assessed, levied or imposed in a manner different from that described in this Section 4, and at the request and expense of the Company, the Issuer agrees to cooperate fully with and assist the Company in any such contest.
(f) The foregoing shall not preclude the Company from taking advantage of any policy or procedure of the BOTA that would allow the Company to exempt or exclude certain portions of the Project from property taxation or otherwise reduce the valuation of said Project or the property taxes payable with respect thereto.
Section 5. Payments in Lieu of Taxes. 
(a) In the event that the Company fails to make an aggregate capital investment in land, building and equipment regarding the Project in the amount of $60,000,000 on or before December 31, 2022, and to retain said capital investment (without regard to depreciation) as of December 31, 2025, and fails to create 791 full-time permanent jobs or equivalents (the “headcount”), all in connection with the Project, and to include jobs located at the Tech Center adjacent to Road Atlanta in Hall County, to be measured based on the greater of the actual headcount on March 31, 2025 or the month end average headcount for each month in the 24-month period ended March 31, 2025 (collectively referred to as the “Performance Standards”), the Company agrees to make an additional payment to the taxing authorities in the amount to be determined as set forth below. Said payment shall be made as additional consideration for the issuance of the Bonds by the Issuer on behalf of the Company and as a payment in lieu of taxes payable to the taxing authorities.  The amount of the payment shall be equal to the difference between the “Unpaid Tax Amount” and the “Adjusted Unpaid Tax Amount.” The “Unpaid Tax Amount” is that sum determined by subtracting the amount of ad valorem tax which the Company paid on its interest in the Project for tax years 2021 through 2026 (with any payments under Section 5(b) being treated as taxes paid) from the amount of ad valorem tax the Company would have been required to pay on the Project if the Company had owned the fee simple interest in the Project during tax years 2021 through 2026.  The Company will be deemed to have complied with the Performance Standards if the results of the threshold calculation conducted in accordance with the formula on Exhibit A (“Average Actual Performance”) are equal to or greater than seventy percent (70%) (“Compliance Threshold”).  The threshold calculation formula is the percentage of jobs created or retained to committed jobs and the percentage of actual capital investment to committed investment.  Should the Company’s Average Actual Performance be less than seventy percent (70%) of the Performance Standards the Company’s Unpaid Tax Amount will be adjusted proportionately by multiplying the Unpaid Tax Amount by the Average Actual Performance.  The resulting number will then be subtracted from the Unpaid Tax Amount to determine the Unpaid Tax Amount as adjusted (the “Adjusted Unpaid Tax Amount”).  The Company shall repay to the taxing authorities the difference between the Unpaid Tax Amount and the Adjusted Unpaid Tax Amount (the “Repayment Amount”).  See illustrations in Exhibit B - Repayment Calculation.  The Repayment Amount shall be paid by the Company only in the event Company does not meet the Compliance Threshold.  On or before March 31, 2027, the Company shall provide the Issuer an accurate report regarding the amount of capital investment and the number of jobs created and retained, and the Issuer may use such report to determine if the Company has met the Performance Standards.  Within a reasonable time after receipt of the report from the Company, the Issuer will notify the Company of the Company’s compliance or noncompliance with the Performance Standards.  In the event the Company has failed to meet the Compliance Threshold, the Issuer will notify the Company of the Repayment Amount and provide Company with details of the calculation thereof, including amounts due to each taxing authority.  Absent manifest error in the calculation of the Additional Payment, the Company shall pay the Repayment Amount to the taxing authorities no later than forty-five (45) days after the date of the notification letter from the Issuer indicating that the Company has failed to meet the Compliance Threshold.  Should the Company fail to pay the Repayment Amount to the taxing authorities in a timely manner, the taxing authorities shall have the right, in their sole discretion, to impose any and all remedies available to them at law or equity.
4

(b) In the event that the Company fails to establish its international headquarters at the 2020 Project or on the 23-acre site it owns in Gainesville Industrial Park West and to establish a research and development facility at the 2020 Project or adjacent to Road Atlanta within Hall County, all on or before December 31, 2026 (hereinafter referred to as the “Headquarters Requirement”), then the Company agrees to make an additional payment (the “Additional Payment”) to the taxing authorities in the amount determined below.  The amount of the Additional Payment shall be equal to the difference between the “Reduced Schedule Amount” and the “Unpaid Tax Amount” as defined above.  The “Reduced Schedule Amount” is that sum determined by subtracting (1) the amount of ad valorem tax which the Company would have paid on its interest in the Project for the years 2021 through 2026 if the Leasehold Valuation Factors for the 2020 Project had been:  (i) 2021 - 25%, (ii) 2022 - 25%, (iii) 2023 - 50%, (iv) 2024 - 50%, and (v) 2025 - 50%; for the 2021 Project had been:  (i) 2022 - 25%, (ii) 2023 - 25%, (iii) 2024 - 50%, (iv) 2025 - 50%, and (v) 2026 - 50%; and for the 2022 Project had been:  (i) 2023 - 25%, (ii) 2024 - 25%, (iii) 2025 - 50%, (iv) 2026 - 50%, and (v) 2027 - 50%, from (2) the amount of ad valorem tax the Company would have been required to pay on the Project if the Company had owned the fee simple interest in the Project during tax years 2021 through 2027. In the event the Company has failed to meet the Headquarters Requirement, the Issuer will notify the Company of the Additional Payment and provide Company with details of the calculation thereof, including amounts due to each taxing authority. Absent manifest error in the calculation of the Additional Payment, the Company shall pay the Additional Payment to the taxing authorities no later than forty-five (45) days after the date of the notification letter from the Issuer indicating that the Company has failed to meet the Headquarters Requirement.  Should the Company fail to pay the Additional Payment to the taxing authorities in a timely manner, the taxing authorities shall have the right, in their sole discretion, to impose any and all remedies available to them at law or equity.
(c) If the BOTA, any tax collector or any other official empowered to assess, levy or collect ad valorem taxes should ever seek to assess, levy or collect ad valorem taxes on the Project or at a percentage valuation of the Company’s leasehold different from that set forth in Section 4 during the term of the Lease Agreement, then the Company’s obligation to make payments under Section 5(a) and (b), above shall forthwith terminate. Thus, if in any tax year such taxes are lawfully imposed or the valuation percentage of Section 4 is not respected by the BOTA, then Company shall pay such lawful taxes in accordance with its covenants in the Lease Agreement, but shall not be obligated to make any payments pursuant to Section 5(a) Section 5(b) above in any such tax year.
(d) The Issuer agrees to assist the Company in any administrative or judicial proceeding relating to ad valorem taxes on the Project or the percentage valuation of the Company’s leasehold, or the amount of any payment provided for in Section 5(a) or (b), above, so long as all costs relating thereto are paid by the Company.
Section 6. Termination. This PILOT Agreement shall terminate upon termination of the Lease Agreement, and shall remain in effect through any periods the Lease Agreement is in effect. Termination shall not affect the accrued rights and obligations of any party hereunder.
Section 7. Successors and Assigns.  This PILOT 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. In the event the Company’s rights under the Lease Agreement are assigned in accordance with the Lease Agreement, the rights and obligations of  the Company hereunder shall become the rights and obligations of the successor Lessee, as provided in the Lease Agreement.
Section 8. Third Party Beneficiaries.  The holders of the Bonds, the Escrow Agent,  the County, the other taxing authorities having taxing jurisdiction over the situs of the Project and the BOTA are hereby declared to be third party beneficiaries of this PILOT Agreement.
Section 9. Severability.  In the event any clause, sentence, paragraph or provision of this PILOT 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.
Section 10. Governing Law, Jurisdiction and Venue. This PILOT Agreement shall be governed by the law of the State of Georgia and shall be subject to enforcement only in the Superior Court of the County. The Company, for itself, and its successors and assigns under the Lease Agreement, hereby consents to the personal jurisdiction of said court over the Company and any successor Company under the Lease Agreement.

5

IN WITNESS WHEREOF, the parties hereto have executed this PILOT Agreement as of the day and year first above written.

GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY

By:  /s/ Philip A. Wilheit 
Chairman

Attest: /s/ T. Treadwell Syfan
Secretary

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

6

PILOT AGREEMENT JOINDER
BY
HALL COUNTY BOARD OF TAX ASSESSORS

        The undersigned hereby joins in the PILOT Agreement for the sole purpose of confirming that the Issuer’s interest in the Project is exempt from ad valorem taxation and that ad valorem taxes with respect to the leasehold interest of the Company in the Project will be assessed, levied, imposed and adjusted (if necessary) in accordance with the provisions set forth in Section 4 of the PILOT Agreement.

HALL COUNTY BOARD OF TAX ASSESSORS

By: /s/ Randy Smith
Name: Randy Smith
Title:  Chairman

EXHIBIT A
The Average Actual Performance shall be determine by the following formula:

STEP 1
Actual Jobs Created or Retained     =  Percentage of Committed Jobs Created
Committed Number of Jobs  or Retained
        
Actual Capital Investment          =   Percentage of Committed New Investment
Committed New Investment 

STEP 2
        Percentage of Committed Jobs Created or Retained
  +   Percentage of Committed New Investment               
  = Percentage of Commitments Met

STEP 3
Percentage of Commitment Met  =  Average Actual Performance 
                    2
7

EXHIBIT B
Repayment Amount Calculation 
(Required only if Average Actual Performance is less than 70%)

STEP 1
        Unpaid Tax Amount
    X  Average Actual Performance
      Adjusted Unpaid Tax Amount
STEP 2
        Unpaid Tax Amount
    - Adjusted Unpaid Tax Amount
        Repayment Amount 
Example A – Repayment Required
A $250,000 Unpaid Tax Amount to assist with Company A’s manufacturing facility was part of Company A’s consideration to locate in Hall County rather than an out-of-state location. As part of the deal, Company A committed to create 150 jobs and make a $10,000,000 new investment to construct and operate a new production facility in Georgia.  Twenty four months following the opening of the facility, Company A has actually created 90 jobs and invested $6,500,000 into a smaller facility. 
•Unpaid Tax Amount $250,000
•Commitment – 150 jobs and $10,000,000 new investment
•Actual jobs delivered – 90 (60% of Commitment)
•Actual investment delivered -- $6,500,000 (65% of Commitment)
•60%+65% = 125/2 = 62.5% [Average Actual Performance]
•$156,250 (62.5%) Adjusted Unpaid Tax Amount
•$93,750 (37.5%) Repayment Amount
Example B – No Repayment Necessary
A $100,000 Unpaid Tax Amount to assist with the purchase of production equipment was part of Company B’s consideration to locate in Hall County rather than an out-of-state location. As part of the deal, Company B committed to create 150 jobs and make a $10,000,000 capital investment to expand a manufacturing facility in Hall County. 36 months following the opening of the facility, Company B has actually created 150 jobs and invested $8,500,000 into the facility. 
•Unpaid Tax Amount $100,000
•Commitment – 150 jobs & $10,000,000 investment
•Actual jobs delivered – 150 (100%)
•Actual investment delivered -- $8,500,000 (85%)
•100%+85% = 185/2 = 92.5% [Average Actual Performance]
•No Payment Required
8Document

Exhibit 10.2
BOND PURCHASE AGREEMENT
GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY
Taxable Industrial Development Revenue Bonds
(Fox Factory, Inc. Project), Series 2020

BOND PURCHASE AGREEMENT dated as of June 1, 2020, between Gainesville and Hall County Development Authority (the “Issuer”) and Fox Factory, Inc. (“Fox Factory”), a California corporation, authorized to transact business in Georgia.
1. Background
(a) The Issuer proposes to issue and sell not to exceed $75,000,000 in aggregate principal amount of its Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020 (the “Bonds”), the proceeds of which shall be used to finance the acquisition, construction and installation of certain real and personal property comprising a facility for the manufacture of shock absorbers for automobiles, trucks and motorcycles in Gainesville Industrial Park West, Gainesville, Hall County, Georgia (the “Project”). The Project will be leased by the Issuer to Fox Factory (hereinafter, in its capacity as lessee of the Project, referred to as the “Lessee”) under the terms of a Lease Agreement, dated as of June 1, 2020 (the “Lease”), requiring Fox Factory to pay to the Issuer rental payments in such amounts and at such times as shall be required to pay the principal of and interest on the Bonds as and when the same become due.  The Bonds shall be issued under and secured by a Financing Agreement, dated as of June 1, 2020 (the “Financing Agreement”) between the Issuer and Fox Factory (hereinafter, in its capacity as purchaser of the Bonds, referred to as the “Bondholder”), under the terms of which and an Assignment of Lease, dated as of June 1, 2020 (the “Assignment”), by the Issuer in favor of the Bondholder, the Issuer’s interest in the Lease and the rents, revenues and receipts to be derived by the Issuer under the Lease will be assigned and pledged to the Bondholder as security for the payment of the Bonds.  As additional security for the payment of the Bonds, the Issuer will execute and deliver to the Bondholder a deed to secure debt and security agreement, dated as of June 1, 2020 (the “Security Deed”), pursuant to which the Issuer will convey a security interest in the Project to the Bondholder.  
(b) The Issuer proposes to sell the Bonds to the Bondholder and the Bondholder proposes to purchase the Bonds for its own investment purposes and not with a view towards any resale or public distribution thereof.
(c) The proceeds of the Bonds are to be applied to pay costs incurred in connection with the acquisition, construction  and installation of the Project as contemplated by the Lease and the Financing Agreement.
(d) The parties hereto contemplate that the interest paid on the Bonds will be includable in gross income of the recipient or recipients thereof for Federal income tax purposes because of the application of certain provisions of the Internal Revenue Code of 1986, as amended, and that, as such, the Bonds may not be offered for sale to the public without registration under the Securities Act of 1933, as amended, unless the Bondholder has received an opinion of counsel satisfactory to it to the effect that failure to register the Bonds will not violate the Securities Act of 1933.  The Issuer will cooperate fully at the request of the Bondholder in effecting such registration and in taking such other steps as may be deemed necessary or appropriate with respect to the Bonds, the Lease, the Financing Agreement or this Agreement to effect such registration in the event of any future public sale or disposition of the Bonds.
(e) In connection with the issuance of the Bonds, the Issuer is executing and delivering the Direct Payment Agreement, dated as of June 1, 2020 (the “Direct {Payment Agreement”), among the Issuer, the Lessee and the Purchaser and a PILOT Agreement, dated as of June 1, 2020 (the PILOT Agreement”), among the Issuer, the Lessee and the Hall County Board of Tax Assessors .
1

2. Purchase, Sale and Closing.  Subject to the terms and conditions and in reliance on the representations, warranties and covenants herein set forth, the Bondholder agrees to purchase from the Issuer all of the Bonds that are to be issued at any time and from time to time under the Financing Agreement and the Issuer hereby agrees to sell to the Bondholder all of the Bonds that are to be issued at any time and from time to time under the Financing Agreement at a price of 100% of the principal amount of the Bonds. The sale and purchase of the Bonds will be accomplished in one or more installments as described hereinafter and in Section 304 of the Financing Agreement. The parties agree that (i) the aggregate principal amount of Bonds to be sold and purchased hereunder shall not exceed the principal amount specified in Paragraph l(a) hereof, and (ii) the Bonds will be delivered to the Bondholder in one or more installments as the acquisition, construction and installation of the Project progresses.  The Bond representing the initial installment shall be in a denomination mutually agreed upon by the parties hereto and shall be delivered simultaneously with the execution and delivery of this Bond Purchase Agreement.  It shall be the sole prerogative of the Bondholder to designate (upon at least ten (10) business days’ advance notice to the Issuer and the Bondholder), the principal amount of each fully-registered Bond to be delivered at any subsequent installment and the date, time and place of the delivery of and payment for such Bond (hereinafter referred to as a “Closing”).  The aforesaid designation to be made by the Bondholder in the case of a fully-registered Bond specified for delivery (after the first such installment shall have been delivered simultaneously with the execution and delivery of this Bond Purchase Agreement) shall be substantially in the form of that which is attached hereto as Exhibit “A” and shall be executed on behalf of the Lessee by its duly authorized officer.  As is set forth in Section 304 of the Financing Agreement, any such designation which the Issuer receives from the Lessee shall be treated as an order to the Issuer to deliver the fully-registered Bond so specified therein.  At any such Closing, subject to the terms and conditions of the Financing Agreement, the Issuer shall deliver to the Bondholder the designated fully-registered Bond in definitive form, duly executed, in the authorized denomination requested by the Lessee; and the Bondholder shall accept delivery and pay the purchase price of such Bond in any manner agreed to be the Lessee and the Bondholder.
Notwithstanding anything to the contrary contained herein, in connection with the initial Bond to be issued at closing of the Bond issue and the delivery of the Lease, the Lessee shall convey the Project Facility Site and the improvements to the Project Facility Site, as such improvements then exist, to the Issuer by Warranty Deed in return for the initial Bond in the amount of $34,554,100.  Also, the Lessee may convey additional portions of the Project to the Issuer in return for additional Bonds.
Payment for Bonds can be made in cash or by the transfer to the Issuer by the Bondholder of property to be included in the Project at its “value,” being the Bondholder’s cost (or at its election, its federal income tax basis).  Such transfer of property shall be at its “value” treated as if (i) an amount equal to the value of such property was advanced by the Bondholder to the Issuer hereunder with respect to the Bonds, (ii) the cash was deposited by the Issuer in the Project Fund under the Financing Agreement, and (iii) the cash was immediately disbursed from the Project Fund to reimburse the Lessee for such value.  Any amounts advanced by the Bondholder in cash, if any,  with respect to the Bonds shall be deposited in the Project Fund and used to pay or to reimburse the Issuer and the Lessee for Costs of the Project and transaction costs of issuing the Bonds.  
If at any such Closing the Issuer fails to deliver the designated fully-registered Bond to the Bondholder as provided herein, the Bondholder may elect to be relieved of any further obligations under this Bond Purchase Agreement without thereby waiving any other rights the Bondholder may have against the Issuer by reason of such failure.  The obligation of the Issuer to sell Bonds and to cause Bonds to be delivered to the Bondholder under the provisions of this Bond Purchase Agreement shall terminate on the earlier of (i) that date which follows the Completion Date (as defined in the Lease) of the Project by one year or (ii) December 31, 2022, and after said termination date the Issuer shall have no obligation to deliver or to cause to be delivered any new or additional Bonds hereunder or under the Financing Agreement.
All Bonds issued by the Issuer are to be sold to the Bondholder under and pursuant to this Bond Purchase Agreement and shall not be sold to any other purchaser or pursuant to any other agreement without an agreement in writing signed by the Issuer and the Lessee.
3. Private Sale. The Bondholder agrees that it is purchasing the Bonds for its own investment account and not with a view towards any resale or public distribution thereof.
4. Issuer’s Representations and Warranties.  The Issuer makes the following representations and warranties to the Lessee and Bondholder:
(a) The Issuer is a body corporate and politic, an instrumentality of Hall County and the City of Gainesville, Georgia, and a public corporation created and existing under the laws of the State of Georgia.
2

(b) The Issuer has full power and authority under the Constitution and laws of the State of Georgia (i) to acquire, construct and install the Project, (ii) to finance the acquisition, construction and installation of the Project by issuing and selling the Bonds, (iii) to lease the Project to the Lessee as provided in the Lease, (iv) to pledge the rents, revenues and receipts derived pursuant to the Lease to the Bondholder as provided in the Financing Agreement and the Assignment, (v) to issue, execute, deliver and perform its obligations under the Bonds and to execute, deliver and perform its obligations under  this Bond Purchase Agreement, the Lease, the Financing Agreement, the Direct Payment Agreement, the Assignment, the PILOT Agreement and the Security Deed in accordance with their respective terms, and (vi) to carry out and consummate all other transactions contemplated by each of the aforesaid documents.
(c) The Issuer has duly authorized all action and complied with all provisions of law with respect to the issuance, execution, delivery and performance of its obligations under the Bonds, the execution, delivery and performance of its obligations under this Bond Purchase Agreement, the Lease, the Financing Agreement, the Direct Payment Agreement, the Assignment, the PILOT Agreement and the Security Deed, and has taken all actions necessary or appropriate to insure that such documents constitute valid and legally binding obligations of the Issuer in accordance with their respective terms.
(d) When delivered to and paid for by the Bondholder in accordance with the terms of this Bond Purchase Agreement, the Bonds will have been duly authorized, executed and issued and will constitute legal, valid and binding limited obligations of the Issuer enforceable in accordance with their terms.
(e) The Issuer has not and will not issue or sell any other bonds or obligations, the principal of and/or interest on which shall be payable from the rents, revenues and receipts derived from the Project or pledged or assigned pursuant to the Financing Agreement or which shall be secured by any lien upon any of the properties constituting the Project.
(f) The execution and delivery of this Bond Purchase Agreement, the Bonds, the Lease, the Financing Agreement, the Direct Payment Agreement, the Assignment, the PILOT Agreement and the Security Deed  and the compliance with the provisions thereof, do not and will not conflict with or constitute on the part of the Issuer a violation of, breach of or default (with or without notice or lapse of time or both) under any constitutional provision, statute, indenture, mortgage, deed of trust, resolution, note agreement or other agreement or instrument to which the Issuer is a party or by which the Issuer or any of its assets is presently bound, or, to the knowledge of the Issuer, any existing order, rule or regulation of any court or governmental agency or body having jurisdiction over the Issuer or any of its activities and property; and all consents, approvals, authorizations and orders of governmental or regulatory authorities, if any, which are required to be obtained by the Issuer for the issuance, execution, delivery and performance of its obligations under the Bonds and the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and this Bond Purchase Agreements and the carrying out and consummation of all of the transactions contemplated thereby have been obtained and are in full force and effect.
(g) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, known to be pending or threatened against or affecting the Issuer, nor to the best of the knowledge of the Issuer is there any basis therefor, wherein an unfavorable decision, ruling or finding (a) would materially adversely affect the transactions contemplated by this Bond Purchase Agreement or (b) which in any way would adversely affect the security for the Bonds or the validity or enforceability of the Bonds, the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement, this Bond Purchase Agreement or any agreement or instrument to which the Issuer is a party and which is used or contemplated for use in the consummation of the transactions contemplated by this Bond Purchase Agreement.
(h) Neither the Issuer nor anyone acting on its behalf (including the Bondholder) has directly or indirectly offered for sale or sold any of the Bonds or any similar security of the Issuer to, or solicited any offer to buy any of the same from, anyone other than the Bondholder. Neither the Bondholder nor anyone else acting on its behalf will after the date hereof directly or indirectly offer any of the Bonds or any other securities under circumstances which would subject this issue and sale of the Bonds to the provisions of Section 5 of the Securities Act of 1933, as amended.
5. Representations and Warranties of Lessee. The Lessee makes the following representations and warranties to the Issuer:
(a) Lessee is a corporation duly organized, existing and in current status under the laws of the State of California, authorized to transact business in the State of Georgia, and is in good standing under the laws of the State of Georgia.  Lessee has full power, authority and legal right to engage in the business and activities conducted or proposed to be conducted by it with respect to the Project, to execute, deliver and perform the Lease and this Bond Purchase Agreement and to perform its obligations thereunder and hereunder, including the making of payments as provided in the Lease.
3

(b) Lessee has duly authorized the execution, delivery and performance of the Lease and this Bond Purchase Agreement, and such documents, when executed and delivered by Lessee, will constitute valid and legally binding obligations of Lessee, enforceable in accordance with their respective terms, except to the extent that their enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights, and subject to the application of principles of equity, if equitable remedies are sought.
(c) The execution and delivery of this Bond Purchase Agreement and the Lease and the compliance with the provisions hereof and thereof by Lessee, do not conflict with or constitute on the part of Lessee a material violation of, breach of or default under (i) the Articles of Incorporation or By-Laws of Lessee, (ii) any material portion of any indenture, mortgage, deed of trust, lease, note agreement or other agreement or instrument to which Lessee is a party or by which Lessee is presently bound, or (iii) any constitutional provision or statute or any existing order, rule or regulation of any court or governmental or regulatory authorities, having jurisdiction over Lessee’s activities or its properties, or Lessee has obtained, where applicable, an express, written waiver thereof.
(d) There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending, or, to Lessee’s knowledge, threatened against Lessee which could reasonably be expected to result in a decision which would materially adversely affect the transactions contemplated by this Bond Purchase Agreement or the Lease or the validity or enforceability of the Lease, this Bond Purchase Agreement, or any agreement or instrument to which Lessee is a party, used or contemplated for use in the consummation of the transactions contemplated by this Bond Purchase Agreement or the Lease.
6. Lessee’s Covenants.  Lessee covenants and agrees that it will:
(a) Indemnify and hold harmless to the extent permitted by applicable law, the Issuer and its officers, directors, agents, servants and employees against any and all losses, claims, damages, expenses or liabilities, joint or several, to which they or any of them may become subject under the Securities Act of 1933, the Securities Exchange Act of 1934, or the Trust Indenture Act of 1939, the rules or regulations under said Acts, or any amendments of said Acts, insofar as such losses, claims, damages, expenses, liabilities or actions arise out of or are based upon the failure to register the Bonds under the Securities Act of 1933 or to qualify the Financing Agreement under the Trust Indenture Act of 1939. Promptly after receipt of notice of the commencement of any action in respect of which indemnity may be sought against the Lessee under this Paragraph 6, the indemnifiable party will notify the Lessee in writing of the commencement thereof, and, subject to the provisions hereinafter stated, the Lessee shall assume the defense of such action (including the employment of counsel, who shall be counsel reasonably satisfactory to the Issuer or such indemnifiable person, as the case may be, and the payment of expenses) insofar as such action shall relate to any alleged liability in respect of which indemnity may be sought against the Lessee. The Issuer or such indemnifiable person shall have the right to employ separate counsel in any such action and to participate in the defense thereof, but the fees and expenses of such counsel shall not be at the expense of the Lessee unless the employment of such counsel has been specifically authorized by the Lessee, or in the event that the Issuer is required to employ separate counsel as a result of the Issuer’s reasonable determination, expressed in writing to the Lessee, that a conflict of interest exists among the indemnified parties hereunder. Lessee shall not be liable to indemnify any person for any settlement of any such action effected without its consent.
(b) Refrain from taking or omitting to take any action which action or omission would in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided for in the Lease or the Financing Agreement, as in effect from time to time.
(c) Pay or cause to be paid, all reasonable expenses and costs incident to the authorization, issuance, printing, sale and delivery, as the case may be, of the Bonds, the Lease, the Financing Agreement, the Security Deed, and this Bond Purchase Agreement, including without limitation (i) all filing, registration and recording fees and expenses; and (ii) reasonable fees and expenses of Bond Counsel and Counsel to the Issuer.
7. Conditions of Bondholder's Obligation as Purchaser. The Bondholder's obligation to purchase and pay for the Bond which is to be delivered as the initial installment hereunder is subject to the fulfillment of the following conditions at or before such delivery:
(a) The Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and this Bond Purchase Agreement shall have been duly authorized, executed and delivered by the respective parties thereto, in substantially the forms heretofore approved by the Bondholder, with only such changes therein as the Issuer and the Bondholder shall mutually agree upon;
(b) The Bond to be initially delivered shall have been duly authorized and executed in accordance with the provisions of the Financing Agreement;
(c) The Bondholder shall have received the following documents:
4

(i) Executed counterparts of the Lease, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and the Financing Agreement;
(ii) Opinions dated as of the date of delivery of the Bond to be initially delivered of (A) Counsel for the Issuer in substantially the form of that which is attached hereto as Exhibit B; (B) Bond Counsel in substantially the form of that which is attached hereto as Exhibit C; and (C) Counsel for Lessee in substantially the form of that which is attached hereto as Exhibit D;
(iii) A certificate dated as of the date of delivery of the Bond to be initially delivered, signed by the Chairman or Vice Chairman and the Secretary of the Issuer and in form and substance satisfactory to the Bondholder, stating that (a)  each of the representations and warranties set forth in the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and this Bond Purchase Agreement is true, accurate and complete in all material respects as of the date of delivery of the Bond to be initially delivered and that the Issuer has complied with each of its covenants and agreements required in the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and this Bond Purchase Agreement to be complied with at or prior to the date of delivery of the Bond to be initially delivered and (b) no default or event with the lapse of time or notice or both would become an event of default has occurred under the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement, the Assignment, the PILOT Agreement and this Bond Purchase Agreement;
(iv) an order validating the Bonds and the security therefor shall have been received by the Superior Court of Hall County and there shall be no pending appeals with respect to such order; and
(v) Such additional opinions, certificates, instruments and other documents as the Bondholder or its counsel may reasonably request to evidence compliance with applicable law, as of the date of delivery of the Bond to be initially delivered.
The Bondholder's obligation to purchase and pay for any of the Bonds at any time or from time to time after the delivery of the Bond to be initially delivered, as herein provided, is subject to the due execution, authentication and deliver to the Bondholder of such pertinent Bond.
8. Direct Payment Agreement.   The Issuer agrees that all amounts payable to the Bondholder with respect to the Bonds held by the Bondholder or its nominee may be made directly to the Bondholder in accordance with the Direct Payment Agreement.
9. Notices and Other Actions. All notices, demands and formal actions hereunder will be in writing mailed, telegraphed, sent by next day air or delivered to:
						
	The Issuer	Gainesville and Hall County Development Authority

		P.O. Box 3280
		Gainesville, GA 30503
		Attention: Chairman
		
	The Bondholder	Fox Factory, Inc.
		6634 Highway 53
		Braselton, GA 30517
		Attention: David Haugen
		
	The Lessee	Fox Factory, Inc.
		6634 Highway 53
		Braselton, GA 30517
		Attention: David Haugen

The Issuer, the Lessee and the Bondholder may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certifications or other communications shall be sent.  Notices shall be effective upon receipt.
10. Survival of Representations and Agreements. Except for paragraphs 4(g) and 5(d), all representations, warranties and agreements of the Issuer and Lessee contained herein shall remain operative and in full force and shall survive (a) the execution and delivery of this Bond Purchase Agreement, and (b) the purchase of any or all of the Bonds hereunder.
5

11. Counterparts. This Bond Purchase Agreement may be executed in any number of counterparts with each executed counterpart constituting an original but all of which together shall constitute one and the same instrument.
12. Successors; Governing Law. This Bond Purchase Agreement will inure to the benefit of and be binding upon the parties hereto and their successors, but will not be assignable or confer any rights upon any other person, except as expressly provided herein. This Bond Purchase Agreement shall be governed by and construed in accordance with the laws of the State of Georgia.

GAINESVILLE AND HALL COUNTY DEVELOPMENT AUTHORITY
By:  /s/ Philip A. Wilheit 
Chairman

Attest: /s/T. Treadwell Syfan
Secretary

FOX FACTORY, INC., 
as Lessee under the Lease Agreement 
and as Bondholder of the Bonds referred
to in this Bond Purchase Agreement

By: /s/ John E. Blocher
John E. Blocher
Chief Financial Officer

6

EXHIBIT A
DESIGNATION OF BOND TO BE
DELIVERED TO UNDERSIGNED
BONDHOLDER AND RELATED CERTIFICATES

Gainesville and Hall County
Development Authority
P. O. Box 3280
Gainesville, GA  30503
Attention: Chairman

Re: Gainesville and Hall County Development Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020

Gentlemen:
Pursuant to that certain Bond Purchase Agreement, dated as of June 1, 2020 (the “Bond Purchase Agreement”), between the Gainesville and Hall County Development Authority (the “Issuer”) and Fox Factory, Inc. (“Fox Factory”), a California corporation, Fox Factory, in its capacity as purchaser of the captioned Bonds (in such capacity, the “Bondholder”), hereby notifies you that it desires to take delivery of a fully registered Bond in the principal amount of $_____________ upon payment by it of the purchase price specified in Paragraph 2 of the Bond Purchase Agreement.  The Bondholder designates the following particulars with respect to the Closing of such purchase and sale:
Closing Date - _______________, 2020
Closing Time - _______________
Fox Factory, as lessee under that certain Lease Agreement, dated as of June 1, 2020 (the “Lease Agreement”), with the Issuer relating to the captioned Bonds, dated as of _________, 2020 (in such capacity, the “Lessee”), hereby certifies that there exists no event of default under the aforesaid Lease Agreement as of the date hereof and that the Lessee will give immediate notice to each of the addressees shown above if to its knowledge any such event of default should occur prior to the delivery to the Bondholder of the Bond designated for delivery hereinabove.
The Bondholder hereby further certifies that the principal amount of the Bond designated for delivery hereinabove when added to the principal amount of the Bond or Bonds heretofore delivered to the Bondholder will not exceed the anticipated total cost to acquire, construct and install the Project (as more fully described in the aforesaid Lease Agreement).

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed by its duly authorized officers, this _____ day of __________________, 20____.
FOX FACTORY, INC. 

By:______________________________
Title:________________________

EXHIBIT B
(Letterhead of Counsel for the Issuer)
_______________, 2020

Fox Factory, Inc.
Braselton, Georgia
Gainesville and Hall County Development Authority
Gainesville, Georgia

Re: Gainesville and Hall County Development Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020, in an authorized aggregate principal amount not to exceed $75,000,000 to be issued under and secured by a Financing Agreement, dated as of June 1, 2020

Ladies and Gentlemen:
As counsel for the Gainesville and Hall Development Authority (the “Issuer”), we have considered the validity of the above captioned bonds (the “Bonds”), and in this connection we have examined
(i) the resolution of the Issuer adopted on May ____, 2020 (the “Resolution”);
(ii) the Lease Agreement, dated as of June 1, 2020 (the “Lease”), between the Issuer and Fox Factory, Inc. (in such capacity, the “Lessee”);
(iii) the Financing Agreement, dated as of June 1, 2020 (the “Financing Agreement”), between the Issuer and Fox Factory, as purchaser of the Bonds (in such capacity, the “Bondholder”);
(iv) the Deed to Secure Debt and Security Agreement, dated as of June 1, 2020 (the “Security Deed”), from the Issuer to the Bondholder;
(v) the Bond Purchase Agreement, dated as of June 1, 2020 (the “Bond Purchase Agreement”) between the Issuer and Fox Factory, in its roles as Lessee and Bondholder;
(vi) the Direct Payment Agreement, dated as of June 1, 2020 (the “Direct Payment Agreement”), among the Issuer, the Lessee and the Bondholder;
(vii) the PILOT Agreement, dated as of June 1, 2020 (the “PILOT Agreement”), among the Issuer, the Lessee and the Board of Tax Assessors of Hall County; 
(viii) a certified copy of the validation proceedings concluded in the Superior Court of Hall County with respect to the Bonds;
(ix) 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 (the “Act”);
(x) financing statements designating the Issuer as debtor, and the Bondholder as secured party, covering the granting of a security interest in certain of the Issuer’s interests in the Lease and the payments to be received pursuant thereto and the security interests in the Project (as defined in the Lease) conveyed to the Bondholder pursuant to the Security Deed (collectively, the “Financing Statements”); and
(xi) such other documents, instruments and laws as we have deemed relevant.
From such examinations, we are of the opinion that as of this date:
1. The Issuer is a body corporate and politic, an instrumentality of Hall County and the City of Gainesville, Georgia, and a public corporation created and existing under the laws of the State of Georgia, particularly the Act.

2. The Issuer has full power and authority and has taken all action legally required to authorize the issuance, sale and delivery of the Bonds and when each Bond has been delivered in the manner set forth in the Financing Agreement, such action will constitute all of the action necessary to duly authorize the issuance, sale and delivery of each Bond by the Issuer and each of said Bonds will rank on a parity regardless of the fact that such Bonds will have actually been issued and delivered at different times.  The Issuer has the power to finance the Project and lease the Project to the Lessee, to pledge and assign its interest in the Pledged Estate (as defined in the Financing Agreement) and to carry out and consummate all the transactions contemplated on its part by the Lease, the Financing Agreement, the Security Deed, the Bond Purchase Agreement, the PILOT Agreement and the Direct Payment Agreement. The Issuer has duly adopted the Resolution and has duly authorized the execution, delivery and performance of the Lease, the Financing Agreement, the Security Deed, the Bond Purchase Agreement, the PILOT Agreement, the Direct Payment Agreement and the Bonds.  The Bonds, the Lease, the Financing Agreement, the Security Deed, the PILOT Agreement and the Direct Payment Agreement and the Bond Purchase Agreement have been duly executed and delivered by the Issuer.
3. Each Bond after delivery in the manner set forth in the Financing Agreement will constitute a valid and binding limited obligation of the Issuer, enforceable in accordance with its terms except that (a) enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and (b) enforceability may be limited to exclude the availability of the remedy of specific performance or any other equitable remedy to the extent there is available an adequate remedy at law, and will be entitled to the security of the Lease, the Financing Agreement, and the Security Deed.
4. The Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement and the Bond Purchase Agreement are each in full force and effect and each such agreement, assuming the due authorization, execution and delivery thereof by the other parties thereto, constitutes the valid, binding and enforceable obligation of the Issuer in accordance with its respective terms except that (a) enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and (b) enforceability may be limited to exclude the availability of the remedy of specific performance or any other equitable remedy to the extent there is available an adequate remedy at law, and the Issuer is entitled to the benefits of the same.
5. The execution and delivery of the Financing Agreement, the Lease, the Security Deed, the PILOT Agreement, the Direct Payment Agreement and the Bond Purchase Agreement and the compliance by the Issuer with the terms thereof will not be a violation of, conflict with, or result in any breach of any of the provisions of, or constitute a default under the Act or By-laws of the Issuer or any law applicable to it or under any indenture, mortgage, deed of trust, resolution, note agreement or other agreement to which the Issuer is a party or by which the Issuer or any of its activities or properties is bound, or result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon the property of the Issuer (other than as contemplated by the Financing Agreement, the Security Deed, and the Lease), pursuant to any agreement or other instrument to which the Issuer is a party or by which it may be bound, or be a violation, conflict with, or result in any breach of the provisions of any license, judgment, constitutional provision, decree, order, law, statute, ordinance or governmental rule or regulation applicable to the Issuer.
6. To the best of our knowledge, the Issuer is not in default in any material respect under any agreement or other instrument to which it is a party or by which it may be bound, which default would materially and adversely affect the transactions contemplated by the Financing Agreement, the Lease, and the Security Deed.
7. No additional or further approval, consent or authorization of any governmental or public agency or authority not already obtained is required by the Issuer in connection with (a) the issuance, sale and delivery of the Bonds, (b) the entering into and performing of its obligations under the Bonds, the Lease, the Financing Agreement, the Security Deed, or (c) the adoption of the Resolution. No opinion is expressed with respect to any “Blue Sky” laws or the securities laws of any jurisdiction.
8. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, public board or body, pending or, to the best of our knowledge, threatened against or affecting the Issuer, wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Resolution, the Bonds, the Lease, the Financing Agreement, the Security Deed, PILOT Agreement, Direct Financing Agreement or the Bond Purchase Agreement, and the execution, delivery and receipt by the Issuer of the Lease, the Financing Agreement, the Security Deed, PILOT Agreement, Direct Payment Agreement and the Bond Purchase Agreement and the performance of the obligations of the Issuer thereunder do not and will not violate or constitute a default under any provision of law or any agreement, indenture, note or other instrument binding upon the Issuer.
9. The Financing Agreement creates a valid first lien on and pledge of the revenues conveyed and pledged thereunder, and all filings and/or recordings of any document required in order to perfect and preserve such first lien and pledge have been duly accomplished.

10. Pursuant to the Financing Agreement and the Security Deed, the Issuer has granted to the Bondholder, as security for the Bonds, a valid and perfected security interest in certain of its rights in the Lease, the payments made pursuant thereto and the Project Equipment as defined in the Lease (said security interest being hereinafter referred to as the “Security Interest”).
11. The Lease Agreement and the Security Deed have been properly recorded in the proper place or places where such recordation is required for the giving of notice thereof, such recordation is complete and no other filing, recording, publishing or re-recording is required.
12. All action taken by the Issuer in connection with the Resolution, the Bonds, the Lease, the Financing Agreement, the Security Deed, the Direct Payment Agreement and the Bond Purchase Agreement is legal in all respects, and none of the proceedings held or actions taken by the Issuer with respect to any of the foregoing has been repealed, rescinded or revoked. All instruments furnished to the Bondholder in connection with the order of the Issuer to deliver the Bonds conform to the requirements of the Financing Agreement and such instruments constitute sufficient authority under the Financing Agreement for the Issuer to deliver the Bonds as directed in such order.

Very truly yours,
STEWART, MELVIN & FROST, LLP

By:____________________________
A Partner

EXHIBIT C
(Letterhead of Bond Counsel)
_____________, 2020
Fox Factory, Inc.
Braselton, Georgia
Gainesville and Hall County Development Authority
Gainesville, Georgia

Re: Gainesville and Hall County Development Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020, in an authorized aggregate principal amount not to exceed $75,000,000 to be issued under and secured by a Financing Agreement, dated as of June 1, 2020

Ladies and Gentlemen:
We have examined (i) 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 (the “Act”); (ii) the resolution of the Gainesville and Hall County Development Authority (the “Issuer”) adopted January 28, 2020 (the “Resolution”); (iii) the Financing Agreement, dated as of June 1, 2020 (the “Financing Agreement”), between the Issuer and Fox Factory, Inc. (“Fox Factory”), as purchaser of the Bonds (in such capacity, the “Bondholder”); (iv) the Lease Agreement, dated as of June 1, 2020 (the “Lease”), between the Issuer, as lessor, and Fox Factory , as lessee; (in such capacity, the “Lessee”); (v) the Deed to Secure Debt and Security Agreement, dated as of June 1, 2020 (the “Security Deed”), from the Issuer to the Bondholder; (vi) the Bond Purchase Agreement, dated as of June 1, 2020 (the “Bond Purchase Agreement”) between the Issuer and Fox Factory; and  (vii) other documents and laws relating to the issuance of the bonds described in caption (the “Bonds”).  The Bonds shall be in fully registered form, shall bear interest from their respective dates of issuance at the rate of 5.0% per annum (calculated on the basis of a 30-day month, 360-day year), such interest shall be payable on the 1st day of March or September next succeeding their respective dates of issuance (whichever shall come first) and semiannually thereafter on the 1st day of March and September in each year, until paid, and shall mature on September 1, 2027.

The Bonds are being issued for the purpose of financing he acquisition, construction and installation of certain real and personal property comprising a facility for the manufacture of shock absorbers for automobiles, trucks and motorcycles in Gainesville Industrial Park West, Gainesville, Hall County, Georgia (the “Project”), for lease to the Lessee under the Lease in furtherance of the public purpose for which the Issuer was created.  Fox Factory has agreed in the Lease to make rental payments sufficient to pay the principal, prepayment premium (if any) and interest on the Bonds as the same become due and payable. The Issuer’s interest in the Lease and all payments thereunder have been pledged under the terms of the Financing Agreement to the payment of the Bonds.
With respect to the creation and existence of Fox Factory, the power of Fox Factory to authorize, execute and deliver the Lease and the Bond Purchase Agreement and to assume the obligations represented thereby, and the execution and delivery by Fox Factory of the Lease and the Bond Purchase Agreement, we have examined and rely solely upon the opinion as to such matters rendered by __________________________________, Counsel to Fox Factory.
We have examined the Bond numbered R-1 (the “Initial Bond”) as executed by the Issuer and based upon such examination and the examinations, opinions and premises above referred to, we are of the opinion that:
(1) the Issuer is a public corporation duly organized and existing under the Constitution and laws of the State of Georgia and is in good standing under the laws of the State of Georgia;
(2) under the Constitution and laws of the State of Georgia, the Lease, the Financing Agreement, the Bond Purchase Agreement, and the Security Deed have been duly authorized, executed and delivered and constitute valid and binding obligations of the parties thereto and are legally enforceable in accordance with their terms subject to bankruptcy, insolvency and other laws of general application affecting creditors’ rights. All the right, title and interest of the Issuer in and to the Lease have been duly assigned to the Bondholder and pledged under the Financing Agreement;
(3) the lien created under the Financing Agreement on the Pledged Estate (as defined in the Financing Agreement) constitutes a first and prior pledge of and lien on the Pledged Estate superior to any pledge heretofore created or that may hereafter be created;
(4) the  Bonds have been duly authorized. (a) the Initial Bond has been duly executed and delivered and is, and (b) the remaining Bonds (excluding the Initial Bond), when executed and delivered in accordance with Section 304 of the Financing Agreement will be, the legally issued and valid limited obligations of the Issuer enforceable in accordance with their terms, secured by the Financing Agreement and the Security Deed and payable solely from Pledged Estate; said Pledged Estate has been irrevocably pledged to the payment of the principal of and interest on the Bonds under the Financing Agreement; and
(5) the Bonds when delivered in the manner set forth in Section 304 of the Financing Agreement will constitute only limited obligations of the Issuer as therein and in the Financing,  Agreement provided and will not constitute indebtedness by or on behalf of the State of Georgia, the City of Gainesville, or the County of Hall, or a pledge of the faith and credit of said State, City or County. The Bonds will be payable from the special fund provided therefor and will not directly, indirectly or contingently obligate said State, City or County to levy or to pledge any form of taxation whatever or to make any appropriation for the payment thereof, and no owner of any of the Bonds will ever have the right to compel the exercise of the taxing power of said State, City or County to pay the same or the interest thereon.

Very truly yours,
STEWART, MELVIN & FROST, LLP
By:_____________________________
A Partner

EXHIBIT D
(Letterhead of Counsel for Fox Factory, Inc.)
_______________, 2020

Gainesville and Hall County Development Authority
Gainesville, Georgia
Stewart, Melvin & Frost, LLP
Gainesville, Georgia

Re: Gainesville and Hall County Development Authority Taxable Industrial Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020, in an authorized aggregate principal amount not to exceed $75,000,000 to be issued under and secured by a Financing Agreement, dated as of June 1, 2020

Gentlemen:
We have acted as counsel for Fox Factory, Inc., a Georgia corporation (the “Fox Factory”), in connection with the issuance and sale by the Gainesville and Hall County Development Authority (the “Issuer”) of the Bonds in caption (the “Bonds”).  We have examined originals, or photostatic or certified copies, of:
(a) the Lease Agreement, dated as of June 1, 2020 (the “Lease”), between Fox Factory as lessee (in such capacity, the “Lessee”), and the Issuer, as lessor, providing for the lease by the Issuer to the Lessee of the Project (as defined in the Lease);
(b) the Financing Agreement, dated as of June 1, 2020 (the “Financing Agreement”), between the Issuer and Fox Factory, as purchaser of the Bonds (in such capacity, the “Bondholder”), pursuant to which the Bonds are to be issued;
(c) the Bond Resolution adopted by the Issuer on May ___, 2020, relating to the authorization, execution and delivery of the Lease, the Financing Agreement, the Bond Purchase Agreement, and the Security Deed and certain other agreements, and the issuance and sale of the Bonds;
(e) the Bond Purchase Agreement, dated as of June 1, 2020 (the “Bond Purchase Agreement”), between the Issuer and Fox Factory, as Lessee and as Bondholder;
(f) the Deed to Secure Debt and Security Agreement, dated as of June 1, 2020 (the “Security Deed”), from the Issuer to the Bondholder; and
(g) the Certificate of Incorporation and By-laws and other charter documents of Fox Factory and such other documents, records and certificates of public officials, of Fox Factory and of officers of Fox Factory as we have deemed necessary and relevant for the opinions set forth herein.
In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies, and the authenticity of the originals of such latter documents.
Based upon our examination mentioned above and relying on statements of fact contained in the documents that we have examined, it is our opinion that:
(1) Fox Factory is a corporation validly existing and in good standing under the laws of the State of California qualified to do business in the State of Georgia.
(2) Fox Factory has full power and authority to execute, deliver and perform its obligations under the Lease and the Bond Purchase Agreement (collectively, the “Fox Factory Documents”), which have been duly authorized, executed and delivered by Fox Factory and said documents constitute the valid and binding agreements of Fox Factory enforceable in accordance with their respective terms, except that (a) enforceability may be limited by any applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally, (b) enforceability may be limited to exclude the availability of the remedy of specific performance or any other equitable remedy to the extent there is available an adequate remedy at law and (c) no opinion is given with respect to the indemnification provisions of the Fox Factory Documents.
(3) The execution and delivery of the Fox Factory Documents and the performance of its obligations thereunder by Fox Factory have not resulted and will not result in a violation of the Certificate of Incorporation or By-Laws of Fox Factory and, to the best of our knowledge, do not constitute a material default under any indenture, mortgage, deed, trust agreement or other instrument relating to borrowed money to which Fox Factory is a party or by which it is bound.

(4) Fox Factory has duly authorized the taking of any and all action necessary to carry out and give effect to the transactions contemplated to be performed on its part by the Fox Factory Documents.
(5) No consent, approval, authorization or other action by any governmental authority within the State of Georgia is required in connection with the execution, delivery or performance by Fox Factory of the Fox Factory Documents.
(6) To the best of our knowledge, there is no action, suit, proceeding or investigation at law or in equity before any court or public board or body pending or threatened against or affecting Fox Factory, nor any basis therefor, wherein an unfavorable decision, ruling or finding would have a material adverse effect on the validity or enforceability as against Fox Factory of the Fox Factory Documents.

Very truly yours,
____________________________________

By:  ________________________________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00310-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00310-of-00352.parquet"}]]