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040-00 BOARD OF SUPERVISORS RESOLUTION SOUTHEASTERN CONTAINER, INC. WHEREAS, Southeastern Container, Inc. has made known its intent to exp<lnd; and WHEREAS, the company meets the policy guidelines of the Frederick County Economic Development Incentives Fund as established by the Winchester-Frederick County Economic Development Commission in 1995; NOW, THEREFORE, BE IT FURTHER RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia does hereby approve the payment of $100,000 to be designated to the Frederick County Industrial Development Authority from the Frederick County Economic Development Incentive Fund to assist Southeastern Container, Inc. to implement an equipment expansion. BE IT FURTHER RESOLVED, that said funds are subject to an executed Memorandum of Understanding outlining a performance criteria of the county. BE IT FURTHER RESOLVED, that the Board of Supervisors for the County of Frederick, Virginia, does hereby authorize the county administrator to execute this document on its behalf. ADOPTED, this 26'h day of April, 2000. Upon motion duly made by Harrington Smith and seconded by Robert Sager the above resolution was approved by the following recorded vote: Richard C. Shickle Aye Sidney Reyes Aye Charles W. Orndoff, Sr. Aye Margaret B. Douglas Aye W. Harrington Smith, Jr. Aye Robert M. Sager Aye A COpy TESTE: ~-ttv( - John R. Riley, Jr. Clerk, Board of Supervisors RESOLUTION NO.: 040-00 cc: Cheryl B. Shiffler, Finance Director C. William Orndoff, Jr., Treasurer MEMORANDUM OF UNDERSTANDING THIS MEMORANDUM OF UNDERSTANDING, dated April 26, 2000, evidences the agreement among FREDERICK COUNTY, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "County"), the INDUSTRIAL DEVELOPMENT AUTHORITY OF THE FREDERICK COUNTY, VIRGINIA, a political subdivision of the Commonwealth of Virginia (the "IDA"), the WINCHESTER - FREDERICK COUNTY ECONOMIC DEVELOPMENT COMMISSION, a joint commission of the City of Winchester and Frederick County, Virginia (the "Commission") , and Southeastern Container, Inc., a North Carolina Corporation, regarding an equipment expansion in their Fort Collier Industrial Park facility. Inducement To Expand. To induce Southeastern Container to implement this equipment expansion and, thereby provide $2,796,000 in machinery and tool values in Frederick County, Virginia by January 31, 2001, (the "Project"), the County agrees to make a cash grant to the IDA in the amount of One Hundred Thousand Dollars ($100,000.00) and that the IDA, in turn, shall make a cash grant to Southeastern Container in an identical amount for new fully automated packaging equipment expansion purposes within the facility as an incentive to implement this expansion in Frederick County (and the IDA hereby agrees to do so) within ninety (90) days of the project start. This grant shall be used by Southeastern Container for the purposes of payment for or reimbursement of such equipment purchase costs. Conditions: (a) Southeastern Container shall diligently pursue such application and procure such approvals from various commercial lending interests to pursue adequate funds to equip the Facility with the new equipment; (b) All incentives described herein shall be provided as and by when indicated; Cooperation. The County and the Commission agree to cooperate with Southeastern Container, its equipment suppliers and its equipment contractor in connection with helping Southeastern Container meet its equipment implementation deadline so that the Facility is equipped by no later than January 31, 2001. Time is of the essence of this Agreement. Nothing in this paragraph shall be interpreted to require the County to issue any permits unless and until all conditions for such permits have been met. BindinQ. This Memorandum of Understanding shall be binding upon and inure to the benefit of the parties and their respective successors upon the date of the acceptance of this Memorandum of Understanding. In the event Southeastern Container fails for any reason to 1.) have operational $2,796,000.00 in new fully automated packaging machine and tool values by January 31, 2001, and 2.) remain located in Frederick County for a full four year period, beginning January 31,2001, and 3.) reduce its number of production job requirements by 20 people during the year 2001, upon written demand of the IDA, Southeastern Container shall refund to the IDA such portion of the $100,000.00 grant as is proportionate these stipulations. For example, if Southeastern Container left the county at the two-year point, before January 31, 2005, Southeastern Container would be obligated upon demand by the IDA, to refund 50% of the $100,000.00, or $50,000.00. Also, if Southeastern Container fails to meet the following targeted objective of an average annual new fully automated packaging machine and tool value of $2,796,000.00 , they shall refund a proportionate amount of the grant funds for the respective time period of their failure: For example, if Southeastern Container were to only implement and maintain an average annual new fully automated packaging machine and tool value of $559,200.00, which is 20% of the committed level up to January 31, 2001, they would repay 80% of the grant, or $80,000.00. In addition, if Southeastern Container fails to reduce its production job requirements by 20 people during 2001, they shall refund a proportionate amount of grant funds. For example, if Southeaster Container were to only implement a job reduction of 10 jobs, they would repay 50% of the grant or $50,000.00. These potential repayment amounts represent the percentage of the agreed to thresholds stated above in this memorandum. Southeastern Container agrees to repay whichever amount is larger should they default on remaining in Frederick County or on the machinery and tool value commitment or on the reduction of its production job requirements. This Agreement shall not be assigned by any party. If Southeastern Container has not executed this Memorandum of Understanding by June 1, 2000, or has not begun the implementation process for this project by April 30, 2000, this Memorandum of Understanding shall be null and void. THE INDUSTRIAL DEVELOPMENT AUTHORITY OF FREDERICK COUNTY, VIRGINIA BY: TITLE: DATE: FREDERICK COUNTY, VIRGINIA BY: John R. Riley, Jr. ~(- TITLE: County Administrator DATE: 4 - 2 C. -0 () WINCHESTER/FREDERICK COUNTY ECONOMIC DEVELOPMENT COMMISSION BY: TITLE: DATE: SOUTHEASTERN CONTAINER, INC. BY: TITLE: DATE: