Item 1.01 Entry into a Material Definitive Agreement.
Gainesville and Hall County Development Authority Taxable Industrial Development
Revenue Bonds
On June 1, 2020, Fox Factory, Inc., a California corporation ("Fox"), and wholly
owned subsidiary of Fox Factory Holding Corp., a Delaware corporation (the
"Company"), entered into each of the agreements as set forth below (the
"Agreements"), which such Agreements became effective as of June 12, 2020 upon
the issuance of the Bonds (as defined below).
FF US Holding LLC, a Georgia limited liability company of which Fox is the sole
member ("Holding") owns property in Gainesville, Georgia on which Fox has
undertaken the acquisition, construction and installation of certain real and
personal property, including a facility for the manufacture of shock absorbers
for certain of its powered vehicles products (the "Project Facility"). The
Gainesville and Hall County Development Authority (the "Issuer") was empowered
by the State of Georgia to issue its revenue bonds for the purpose of providing
economic development incentives.
On June 1, 2020, Fox finalized a PILOT Agreement (the "PILOT Agreement") between
the Issuer and Fox, for certain ad valorem tax benefits provided by the Issuer
to Fox on the Project Facility. The benefits are subject to partial or full
reduction based on the Company's performance against certain criteria, including
capital investment of $60 million in the Project Facility by December 31, 2022,
creation and retention of a specified number of jobs at the Project Facility by
March 31, 2025, and the establishment of Fox's international headquarters at the
Project Facility or another certain real estate site in Gainesville, GA by
December 31, 2026.
To facilitate the incentives, the Issuer will issue its Taxable Industrial
Development Revenue Bonds (Fox Factory, Inc. Project), Series 2020, in an
aggregate principal amount not to exceed $75,000,000 (the "Bonds"). The Bonds
will be issued in multiple installments through 2022, pursuant to the terms of a
Financing Agreement, dated as of June 1, 2020 (the "Financing Agreement"),
between the Issuer and Fox, as bondholder. On June 1, 2020, Fox entered into a
Bond Purchase Agreement (the "Bond Purchase Agreement") between the Issuer and
Fox, providing for the purchase by Fox of the initial Bond installment. On June
12, 2020, Fox purchased, and the Issuer delivered, one fully registered Bond,
dated June 12, 2020, numbered R-1, in the amount of $34,554,100, bearing
interest at the rate of 5.0% per annum, first interest payable on September 1,
2020, and semiannually thereafter on March 1 and September 1 of each year until
maturity or earlier date of prepayment, and maturing on September 1, 2027. Fox
and the Issuer have agreed that in return for the Bond, Holding will convey the
Project Facility to the Issuer and that Fox will lease the Project Facility from
the Issuer under the terms of a Lease (as defined below). Fox will not pay any
cash for the Bond nor receive any cash for the conveyance of the Project
Facility.
On June 1, 2020, Fox entered into a Lease Agreement (the "Lease") between the
Issuer, as lessor, and Fox, as lessee, for the lease of the Project Facility, as
more fully described in the Lease. Rental payments under the Lease are set at
the amount required to pay principal of and interest on the Bonds. The Lease
contains customary obligations related to maintenance, taxes, utilities,
inspections, and insurance requirements. Fox is required to indemnify the Issuer
for construction and operations of the Project Facility, lease defaults by Fox,
and negligence of Fox and certain affiliates. Fox may not assign or sublease the
Project Facility without the Issuer's consent, subject to customary exceptions.
The Lease contains customary default events and remedies, however, the Issuer
may not exercise many of its remedy rights under the Lease without the consent
of Fox as the bondholder. The term of the Lease ends on September 1, 2027 or
upon early termination by Fox. At the termination of the Lease, including early
termination, the Project Facility will be reconveyed to Fox for the sum of ten
dollars ($10) plus de minimus administrative fees in addition to the potential
refund or forfeiture of ad valorem tax benefits.
The Bonds are secured by the Lease, by the Financing Agreement, and by a Deed to
Secure Debt and Security Agreement, dated as of June 1, 2020, executed by the
Issuer in favor of Fox and by an Assignment of Rents, dated as of June 1, 2020,
executed by the Issuer in favor of Fox (under which substantially all the rights
of the Issuer in the Lease are assigned to Fox, as bondholder). Lease and Bond
payments are settled by Fox as both bondholder and lessee on a cashless basis
pursuant to a Direct Payment Agreement, dated June 1, 2020, between the Issuer
and Fox.
Except for the reduction in ad valorem taxes, the transactions described in this
Current Report on Form 8-K will have no impact on the Company's statements of
financial position, operations or cash flow. The Company will continue to report
the Project Facility within property, plant and equipment. Other than the
contingent return of the incentives, the transactions taken as a whole create no
third party financing obligations.
The foregoing summary of the material terms and conditions of the PILOT
Agreement, Bond Purchase Agreement, Financing Agreement, Lease Agreement, Deed
to Secure Debt and Security Agreement, Assignment of Lease Agreement, and Direct
Payment Agreement does not purport to be complete and is subject to, and
qualified in its entirety by, reference to the complete text of the PILOT
Agreement, Bond Purchase Agreement, Financing Agreement, Lease Agreement, Deed
to Secure Debt and Security Agreement, Assignment of Lease Agreement, and Direct
Payment Agreement, which are attached to this Current Report on Form 8-K as
Exhibits 10.1 through 10.7 and are incorporated herein by reference.

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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information included or incorporated by reference in Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this Item 2.03 of
this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished herewith:
    Exhibit Number     Description
                       PILOT Agreement, between Fox Factory, Inc. and the Gainesville and Hall
         10.1          County Development Authority, effective June 12, 2020.
                       Bond Purchase Agreement, between Fox Factory, Inc. and the Gainesville and
         10.2          Hall County Development Authority, effective June 12, 2020.
                       Financing Agreement, between Fox Factory, Inc. and the Gainesville and Hall
         10.3          County Development Authority, effective June 12, 2020.
                       Lease Agreement, between Fox Factory, Inc. and the Gainesville and Hall
         10.4          County Development Authority, effective June 12, 2020.
                       Deed to Secure Debt and Security Agreement, between Fox Factory, Inc. and
                       the Gainesville and Hall County Development Authority, effective June 12,
         10.5          2020.
                       Assignment of Lease Agreement, between Fox Factory, Inc. and the Gainesville
         10.6          and Hall County Development Authority, effective June 12, 2020.
                       Direct Payment Agreement, between Fox Factory, Inc. and the Gainesville and
         10.7          Hall County Development Authority, effective June 12, 2020.
         104           Cover Page Interactive Data File (embedded with Inline XBRL document)

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