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EDAAgenda2025January2 ECONOMIC DEVELOPMENT AUTHORITY | THURSDAY, JANUARY 2ND | | 8:00 AM | COUNTY ADMINISTRATION BUILDING @ FIRST FLOOR CONFERENCE ROOM 107 KENT STREET WINCHESTER, VA 1. Call to Order 2. Annual Meeting || ACTION  Election of Chair, Vice Chair, Secretary, and Treasurer and establish day, time, and location for its regular meetings (First Thursdays of each month at 8:00 am, 107 North Kent Street) 3. Industrial Bond Issuance of Economic Development Authorities  Presentation by McGuire Woods on the industrial bond issuances capacities 4. Approval of Minutes – December 5th || ACTION  Review and approval of minutes from last meeting, if appropriate 5. Treasurer’s Report || ACTION  Review and approval of latest Treasurer’s Report, if appropriate 6. Performance Agreement – HP Hood || ACTION  Review of the agreement for the Local Economic Development Incentive Grant provided to HP Hood. 7. Performance Agreement – Desi Foods || ACTION  Review of the agreement for the Local Economic Development Incentive Grant provided to Desi Foods.  Review of the agreement for the Commonwealth Opportunity Fund Grant provided to Desi Foods. 8. Remote Meeting Policy || ACTION  Annual review and update of the remote meeting policy 9. Large Project Ready Sites Strategy || DISCUSSION  Discussion on strategy to increase the availability of large project ready sites to facilitate new development and support larger scale projects. 10. FredCo Eats: Restaurant Week || INFORMATION  Update on the initiative that will celebrate Frederick County’s local restaurants and promote this sector. 11. Target Industry Study Update || ACTION  Annual update to the identification of target industry sectors 12. Such other business as may come before this Authority DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Annual Meeting The EDA Bylaws call for an annual meeting prior to March 1 of each year. Officers are elected at this time. Officers of the Authority currently include a Chair (Rick Till), a Vice--Chair (Stan Crockett) and Secretary/Treasurer (Jay Tibbs). Chair and Vice- Chair are selected from the membership, whereas, the Secretary and Treasurer, or a Secretary-Treasurer, can be from the membership or not, as the EDA Board desires. Article 3 of the bylaws provides a description of the positions.  The Chair shall preside at all meetings of the Authority; shall be responsible for notice of meetings to the Directors and officers of the Authority; shall be responsible for all correspondence; shall make committee appointments; may appoint members of the Authority as liaison to any other governmental agencies; authorities and commissions; shall act as signatory on behalf of the Authority when authorized; and shall perform such other duties as are incident to his office or may properly be required of him by the Board of Directors.  The Vice-Chair shall, in the absence of the Chair, exercise all of the Chair's powers and duties. In the event the office of Chair shall become vacant, the Vice-Chair shall immediately become the Chair.  The Secretary shall transcribe detailed minutes of every meeting or proceeding of the Authority; shall issue notices for all meetings; shall keep the seal of the Authority and all books and records of the Authority; and shall perform such other duties as may be directed by the Board of Directors.  The Treasurer shall have the custody of all funds and securities of the Authority and shall deposit the same in the name of the Authority in such bank or banks as the Directors may from time to time determine; shall sign all checks, drafts, notes and orders for the payment of moneys and shall pay out and dispose of the same under the direction of the Chair. DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Economic Development Authorities and Bonds Economic Development Authorities (EDAs) in Virginia are empowered to issue bonds to support projects that stimulate economic growth and job creation. These bonds, typically tax-exempt, provide low-cost financing for businesses and nonprofits to develop infrastructure, construct facilities, or expand operations. While the bonds are issued in the EDA’s name, they do not constitute debt for the locality, as repayment is the responsibility of the borrowing entity. This mechanism allows EDAs to attract and retain businesses while safeguarding public finances. At a recent meeting, the EDA Board expressed interest in understanding its bonding capacities, abilities, and the associated processes. To address this, EDA Counsel and a representative from McGuireWoods will provide an overview and answer any questions during the upcoming session. Current as of 2/9/2017 Industrial Development Bond Programs Creditworthy companies seeking to finance industrial and commercial facilities can obtain long-term financing at favorable interest rates and terms through the Virginia Small Business Financing Authority’s (VSBFA) Industrial Development Bond Programs. Tax-Exempt Industrial Development Bonds (IDBs): Available for the acquisition, construction or expansion of manufacturing facilities statewide. Also available for “exempt” projects, such as solid waste disposal facilities. Taxable Industrial Development Bonds: Available for non-manufacturing projects and other projects ineligible for tax-exempt financing. Eligible Borrowers: Tax-Exempt Bonds: Restricted to manufacturing facilities and qualifying “exempt” facilities only and must meet federal code requirements for eligibility. Taxable Bonds: Not restricted by federal regulations. Projects financed should be owner occupied and create new employment opportunities. Fees: Application fee of $1,000 Annual fee of one-tenth of one-percent of the outstanding principal amount of the bond. Amount: Tax-Exempt Bonds: Maximum bond amount is $10 million and the availability of bonds is subject to state bond volume caps. The capital expenditures for the project, when added to the company's capital expenditures in the same jurisdiction as the project for the three years immediately preceding and three years following the closing of the financing of the project, cannot exceed $20,000,000. Taxable Bonds: Minimum project size is $750,000 and there is no maximum project size. BENEFITS OF THE BOND PROGRAMS: Tax-Exempt Industrial Development Bond Program Sub-prime pricing: Since interest earned on the bonds is exempt from federal and state income taxes, interest rates are lower than those available through conventional financing. Long-term financing: Average maturity of up to 120% of the economic life of the assets being financed. Up to 100% project financing: Able to finance many of the ancillary costs of the project, including site preparation, capitalized interest during construction and some issuance costs. Taxable Industrial Development Bond Program Favorable interest rates since interest earned is exempt from state income taxes. Long-term financing with maturities based on the economic life of the assets financed. Fixed and floating rate options are available through the placement agent of the borrower’s choice. For additional information and application materials, visit our website, HTTPS://www.sbsd.virginia.gov/virginia-small-business-financing- authority/ or call (804) 371-8254. Virginia Small Business Financing Authority 101 N. 14th Street, 11th Floor Richmond, VA 23219 MINUTES ECONOMIC DEVELOPMENT AUTHORITY | THURSDAY, DECEMBER 5, 2024 | A meeting of the Frederick County Economic Development Authority was held on Thursday, December 5, 2024, at 8:00 a.m. in the County Administration Building, First Floor Conference Room, 107 North Kent Street, Winchester, Virginia. PRESENT: Judy McCann-Slaughter, Diane Kearns, Karen Swecker, Rick Till and Gary Lofton. STAFF: Patrick Barker, Shayla Rickard, Wendy May, and Donna McIlwee, Frederick County Economic Development Authority; and Michael Bryan, EDA Attorney. MEETING CALLED TO ORDER: Chairman Till called the meeting to order at 8:00 a.m. PARTNER SHOWCASE – FREDERICK WATER Mr. Barker introduced Eric Lawrence, Executive Director, Frederick Water, who then gave an overview of that entity’s operations and activities and how they interact with the EDA. MICROLOAN PROGRAM Mr. Barker introduced Ryan Hall, Executive Director, and Chrissy Weiss, Director of Capital, Shenandoah Community Capital Fund (SCCF), who presented an overview of their operations. The SCCF is a regional nonprofit serving the Shenandoah Valley and has disbursed over $1.7 million in microloans and collaborates closely with localities, like Augusta County, allowing direct input on interest rates and application reviews. During the last joint meeting with the BOS, the need to explore financial support options for county businesses that do not meet the EDA’s Incentive Policy minimum qualifications was identified. Microloans present a promising solution and replicating the SCCF’s model could provide critical support to Frederick County’s small businesses. Mr. Barker stated the EDA Board’s feedback on this proposed microloan initiative is welcome. Mr. Lofton questioned what the SCCF’s default rate was and if they receive more applications from start-ups or those who need help along the way. Ms. Kearns asked what was the SCCF’s success rate for those they have helped. She also stated she is interested in learning more about the program, especially for the agriculture sector. Page 2 of 4 Frederick County EDA Meeting Minutes | November 7, 2024 Ms. McCann-Slaughter inquired as to what was the difference between what the SCCF does compared to services provided by the Small Business Development Center (SBDC). Mr. Hall explained that the SBDC can assist with loan applications but cannot process funding. Ms. Swecker asked what the demand was for this program. She stated more details were needed, as well as research on what is now available to help businesses. In summary, Mr. Barker asked Board members what further information is needed. Needs included a report on the burden a program such as this would place on the EDA’s administrative staff, a program flow chart and a comparison of SBDC services with SCCF’s services. APPROVAL OF MINUTES The minutes from the November 7, 2024, meeting were presented. On motion duly made by Ms. McCann-Slaughter and seconded by Ms. Kearns, the minutes were approved as presented by the following recorded vote: J. Stanley Crockett Absent Bryan Fairbanks Absent Diane Kearns Aye Gary Lofton Aye Judy McCann-Slaughter Aye Karen Swecker Aye Rick Till Aye TREASURER'S REPORT Mr. Barker reported that the bank statements for November have not yet been received. EDA STRATEGY FY26 Mr. Barker presented a final draft of the EDA Strategy FY26, which includes updated economic data, a section on agriculture in the Business Retention section, and staff suggestions. Staff is seeking the Board’s review, feedback, and, if appropriate, adoption of the document. After a brief discussion, Ms. McCann-Slaughter made a motion to approve the Strategy as presented. Motion was seconded by Mr. Lofton and approved by the following recorded vote: J. Stanley Crockett Absent Bryan Fairbanks Absent Diane Kearns Aye Gary Lofton Aye Page 3 of 4 Frederick County EDA Meeting Minutes | November 7, 2024 Judy McCann-Slaughter Aye Karen Swecker Aye Rick Till Aye EDA BUDGET FY26 Mr. Barker reported a draft copy of the proposed FY26 budget had been distributed prior to this meeting. The proposed budget reflects a 2.6% decrease from last year due to the relocation of our office to the County Administration Building which will eliminate our building lease and other associated expenses. Ms. McCann-Slaughter made a motion to approve the proposed budget as presented. Motion was seconded by Mr. Lofton and approved by the following recorded vote: J. Stanley Crockett Absent Bryan Fairbanks Absent Diane Kearns Aye Gary Lofton Aye Judy McCann-Slaughter Aye Karen Swecker Aye Rick Till Aye TARGET INDUSTRY STUDY UPDATE Mr. Barker reported that Board members had been provided a target industry sector update, which was identical to the previously approved sectors. If any Board member believes there is a sector not included which should be, contact Mr. Barker. SUCH OTHER BUSINESS AS MAY COME BEFORE THIS AUTHORITY Mr. Lofton asked Mr. Barker to let Board members know what types of problems a potential buyer of sites within the town limits of Stephens City might encounter due to the ongoing problem between Frederick Water and the town of Stephens City discussed by Mr. Lawrence in his earlier presentation. He also suggested the EDA either send a letter to the Town or set up a meeting with the Town Manager to discuss this topic. Mr. Barker will make arrangements for a meeting between Mr. Till, Mr. Lofton and himself with the Town Manager. ADJOURN There being no further business to come before this Authority, the meeting was adjourned at 9:18 a.m. ________________________________ ____________________________ Richard Till Jay Tibbs Page 4 of 4 Frederick County EDA Meeting Minutes | November 7, 2024 Chairman Secretary TREASURER'S REPORT SYNOPSIS ECONOMIC DEVELOPMENT AUTHORITY November 30, 2024 BANK OF CLARKE COUNTY Beginning Bank Statement Balance - as of October 31, 2024 $18,875.72 Total Deposits $0.00 Total Disbursements $0.00 BANK STATEMENT BALANCE AS OF November 30, 2024 $18,875.72 BANK OF CLARKE - INTRAFI ACCOUNT Beginning Bank Statement Balance - as of October 31, 2024 $3,078,259.35 Total Deposits $9,324.25 Total Disbursements $0.00 BANK STATEMENT BALANCE AS OF November 30, 2024 $3,087,583.60 TREASURER'S REPORT ECONOMIC DEVELOPMENT AUTHORITY November 30, 2024 BANK OF CLARKE COUNTY Beginning Bank Statement Balance - as of October 31, 2024 $18,875.72 Deposits TOTAL DEPOSITS $0.00 Disbursements TOTAL DISBURSEMENTS $0.00 BANK STATEMENT BALANCE AS OF November 30, 2024 $18,875.72 TREASURER'S REPORT ECONOMIC DEVELOPMENT AUTHORITY October 31, 2024 BANK OF CLARKE - INTRAFI ACCOUNT Beginning Bank Statement Balance - as of October 31, 2024 $3,078,259.35 Deposits 11/30/2024 Interest $9,324.25 TOTAL DEPOSITS $9,324.25 Disbursements TOTAL DISBURSEMENTS $0.00 BANK STATEMENT BALANCE AS OF November 30, 2024 $3,087,583.60 ** $1,907,000 represents proceeds from the sale of the Robinson School properties. Contact Us Account Economic Development Authority of the Co Date 11/30/2024 Page 1 of 2 IntraFi Cash ServiceSM, or ICS®, Monthly Statement The following information is a summary of activity in your account(s) for the month of November 2024 and the list of FDIC-insured institution(s) that hold your deposits as of the date indicated. These deposits have been placed by us, as your agent and custodian, in deposit accounts through IntraFi Cash Service. Funds in your deposit accounts at the FDIC-insured institutions at which your funds have been placed will be "deposits," as defined by federal law. Summary of Accounts Account ID Deposit Option Interest Rate Opening Balance Ending Balance Demand 3.58%$3,078,259.35 $3,087,583.60 TOTAL $3,078,259.35 $3,087,583.60 CONTAINS CONFIDENTIAL INFORMATION IntraFi and ICS are registered service marks, and IntraFi Cash Service is a service mark, of IntraFi Network LLC. Bank of Clarke PO Box 391 Berryville, VA 22611 Economic Development Authority of the Co AAAAAAAAAAAAAAAAAAAAAA 00000 RETURN SERVICE REQUESTED DETAILED ACCOUNT OVERVIEW Account ID: Account Title: Economic Development Authority of the Co Account Summary - Demand Statement Period 11/1-11/30/2024 Average Daily Balance $3,078,731.81 Previous Period Ending Balance $3,078,259.35 Interest Rate at End of Statement Period 3.58% Total Program Deposits 0.00 Annual Percentage Yield Earned 3.75% Total Program Withdrawals (0.00) YTD Interest Paid 114,201.03 Interest Capitalized 9,324.25 Current Period Ending Balance $3,087,583.60 Account Transaction Detail Date Activity Type Amount Balance 11/13/2024 Interest Capitalization $285.27 $3,078,544.62 11/29/2024 Interest Capitalization 9,038.98 3,087,583.60 Summary of Balances as of November 30, 2024 FDIC-Insured Institution City/State FDIC Cert No.Balance BOKF, National Association Tulsa, OK $247,748.18 Banc of California Los Angeles, CA 247,748.18 Citizens Bank, National Association Providence, RI 247,748.18 Comerica Bank Dallas, TX 114,891.22 First-Citizens Bank & Trust Company Raleigh, NC 247,462.40 Flagstar Bank, N.A.Hicksville, NY 247,748.18 Pinnacle Bank Nashville, TN 247,748.18 Raymond James Bank St. Petersburg, FL 247,748.18 The Huntington National Bank Columbus, OH 247,748.18 Truist Bank Charlotte, NC 247,748.18 Valley National Bank Morristown, NJ 247,748.18 Western Alliance Bank Phoenix, AZ 247,748.18 Zions Bancorporation, N. A.Salt Lake City, UT 247,748.18 Date 11/30/2024 Page 2 of 2 CONTAINS CONFIDENTIAL INFORMATION IntraFi and ICS are registered service marks, and IntraFi Cash Service is a service mark, of IntraFi Network LLC. AAAAAAAAAAAAAAAAAAAAAA 00000 DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Michael Bollhoefer County Administrator RE: Performance Agreement for HP HOOD LLC Attached please find the performance agreement for the most recent expansion of HP HOOD LLC. As you might recall, HP HOOD LLC will be expanding its operation in Frederick County. They will make a capital expenditure of approximately $86,268,634, of which approximately $52,557,599 will be invested in machinery and tools, and approximately $34,711,035 will be invested in real estate improvements. The company will be adding some new high efficiency lines and additional automated storage capacity. All parties’ legal counsels (County, EDA and HP HOOD LLC) have reviewed and approved the performance agreement. The Frederick County Board of Supervisors approved this performance agreement at their December 11th meeting. Under the Virginia State Constitution, localities are prohibited from providing direct funding to private entities. To comply with this provision, EDAs serve as the designated parties in performance agreements that include financial assistance to businesses. The EDA’s responsibilities in these agreements include: 1. Auditing Performance: Ensuring the business meets the agreed-upon milestones, such as job creation, capital investment, or other specified metrics. 2. Administering Funding: Disbursing financial assistance according to the timing and conditions outlined in the performance agreement. This structure not only ensures legal compliance but also provides a framework for accountability and oversight, ensuring that public funds are used effectively to achieve economic development goals. Staff seeks the Authority's review, feedback, and, if appropriate, adoption of the document. Attachment: • Performance Agreement HP Hood Inc LEDIG Performance Agreement Final 1 LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT made and entered this 11th day of December 2024 by and among the COUNTY OF FREDERICK, VIRGINIA (the “Locality”), HP Hood LLC (the “Company”), and the ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA (the “Authority”), a political subdivision of the Commonwealth. WITNESSETH: WHEREAS, the Locality wishes to make a Local Economic Development Incentive Grant in the amount of $800,000 (the “LEDIG”) through the Authority to the Company for the purpose of inducing the Company to expand, equip, improve, and operate its production operations located in the Locality (the “Facility”), thereby making a significant Capital Investment, as such capitalized terms are hereinafter defined; WHEREAS, the Locality is willing to provide the funds to the Authority with the expectation that the Authority will provide the funds to or for the use of the Company, provided that the Company promises to meet certain criteria relating to Capital Investment; WHEREAS, the Locality, the Authority and the Company desire to set forth their understanding and agreement as to the payout of the LEDIG, the use of the proceeds of the LEDIG, the obligations of the Company regarding Capital Investment and the repayment by the Company of all or part of the LEDIG under certain circumstances; WHEREAS, the expansion, equipping, improvement, and operation of the Facility will entail a capital expenditure by or on behalf of the Company of approximately $86,268,634, of which approximately $52,557,599 will be invested in machinery and tools, and approximately $34,711,035 will be invested in construction to expand the Facility; WHEREAS, the stimulation of the additional tax revenue and economic activity to be generated by the Capital Investment constitutes a valid public purpose for the expenditure of public funds and is the animating purpose for payment of LEDIG to the Company: NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows. Section 1. Definitions. For the purposes of this Agreement, the following terms shall have the following definitions: HP Hood Inc LEDIG Performance Agreement Final 2 “Capital Investment” means a capital expenditure by or on behalf of the Company in taxable real property, taxable tangible personal property, or both, at the Facility, excluding existing real property improvements and existing personal property. The purchase or lease of furniture, fixtures, machinery and equipment, including under an operating lease, by or on behalf of the Company will qualify as Capital Investment. The Capital Investment will be calculated based upon taxable capital expenditures reported after December 31, 2023. The total expected capital expenditure of $86,268,634 is referred to in this Agreement as the “Capital Investment.” “Performance Date” means June 30, 2026. The Performance Date shall not be subject to extension. “Target” means the Company’s obligations to make Capital Investments at the Facility of at least $86,268,634 as of the Performance Date. “Virginia Code” means the Code of Virginia (1950, as amended). Section 2. Target; Statutory Criteria. (a) Target: The Company will expand, equip, improve, and operate the Facility in the Locality, and make Capital Investments at the Facility of at least $86,268,634 as of the Performance Date. Section 3. Disbursement of the LEDIG; Use of Proceeds (a) Disbursement of the LEDIG: As an inducement to the Company to achieve the Target at the Facility and provided that the Company is not in default under the terms of this Agreement, the Locality will disburse $800,000 of LEDIG proceeds through the Authority to the Company in two installments as follows: (i) An installment of $300,000 will be paid by the Locality to the Authority and by the Authority to the Company after April 1, 2025, but no later than June 30, 2025. (ii) An installment of $500,000 will be paid by the Locality to the Authority and by the Authority to the Company within sixty (60) days after the Performance Date provided that the final Progress Reports are timely filed and deemed acceptable to the Authority, in the Authority’s sole and absolute discretion. The Progress Reports shall provide evidence of the achievement of the Target by the Company. Section 4. Repayment Obligation. (a) If the Company has met at least 90% of the Target as of the Performance Date, then and thereafter the Company is no longer obligated to repay any portion of the LEDIG. If the Company has not met at least 90% of its Target as of the Performance Date, the Company shall repay to the Authority that part of the LEDIG that is proportional to the Target for which there is a shortfall. For example, if at the Performance Date, the Capital Investment is only $64,701,475 HP Hood Inc LEDIG Performance Agreement Final 3 (reflecting achievement of 75% of the Target), the Company shall repay to the Authority 25% of the moneys allocated to the Target ($200,000 of the LEDIG). Among other things, in the event that the Company should at any time file any amended tax return indicating, among other things, that the Company did not meet the Capital Investment, the Company shall be obligated to repay all or a portion of LEDIG, according to the formula set forth herein. The Company’s repayment obligation hereunder shall survive the Performance Date to the extent that the Locality subsequently receives information to the effect that the Company did not meet the Target. (b) Determination of Inability to Comply: If at any time prior to the Performance Date (a “Determination Date”) a material change in circumstances has occurred that causes the Company to be unable or unwilling to meet and maintain its Target by and through the Performance Date, and if the Locality or the Authority shall have promptly notified the Company of such determination and the Company has not provided reasonable reassurance that it is making commercially reasonable progress toward reaching the Target as of the Performance Date, the Company must repay to the Authority all of the proceeds of the LEDIG previously disbursed to the Company and the Authority shall be under no obligation to disburse any portion of the LEDIG that it has not already disbursed. Such material change will be based on such circumstances as a filing by, on behalf of or against the Company under the U.S. Bankruptcy Code, the liquidation of the Company, an abandonment of the Facility by the Company, appointment of a receiver, or other similar significant event that demonstrates that the Company will be unable or is unwilling to satisfy the Target for LEDIG. Upon such determination, then and in that event, the LEDIG proceeds previously disbursed to the Company will be required to be repaid as set forth in subsection 4(c). (c) Repayment: In the event that the Company is obligated to repay the LEDIG, or any portion thereof, as called for under the terms of this Agreement, the Company shall pay such sums within 30 days after notification of the amount of the sums to be repaid by the Company. Any LEDIG repayment shall be made as follows: (i) LEDIG: Any LEDIG moneys repaid by the Company to the Authority hereunder shall be repaid by the Authority to the Locality within 30 days after the repayment by the Company to the Authority. In the event that the Company fails or refuses to repay any of the LEDIG moneys as called for in this Section 4, such sums shall be assessed interest at the rate of 8.00% per annum until repaid in full by the Company. The Locality and the Authority shall use their best efforts to recover any proceeds of the LEDIG due, including judicial proceedings for any breach of this Agreement by the Company. (d) Attorney’s Fees with Respect to Repayment: In the event that the Company fails to comply with the repayment obligations set forth in this Section 4, the Locality and the Authority shall be entitled to recover their reasonable attorney’s fees and costs incurred in connection with such default by the Company, whether or not judicial proceedings are instituted to collect such funds. HP Hood Inc LEDIG Performance Agreement Final 4 Section 5. The Company Reporting. Commencing on April 1, 2025, and on April 1, 2026, the Company shall provide, at the Company’s expense, reports on the progress of achievement of the Target (“Progress Reports”). Such Progress Reports shall set forth the amount of Capital Investment made as of the date of each report. Such Progress Reports also shall include an affirmative statement signed by an authorized Company Officer or Director that the information provided in the report is true and correct and certifies the status of its efforts to achieve the Target. The Company shall provide such other reports on the progress of achievement of the Target at such other times as the Locality or the Authority may reasonably require. The Company hereby authorizes the Locality, including the Locality’s Commissioner of the Revenue and Treasurer, to provide for review by the Locality or the Authority of the Company’s real estate tax, business personal property tax and machinery and tools tax information. Such information shall be marked and considered confidential and proprietary and shall be used solely for verifying satisfaction of the Capital Investment Target. If the Locality or the Authority, the Office of the Commissioner of the Revenue, or the Office of the Treasurer should require additional documentation or consents from the Company to access such information, the Company shall promptly provide, at the Company’s expense, such additional documentation or consents as the Locality or the Authority may reasonably request. In addition to the verification data described above, the Locality and the Authority may request such other documentation or audits as may reasonably be required to properly verify expenditure of the Capital Investment. Section 6. Notices. Formal notices and communications between the Parties shall be given either by (i) personal service, (ii) delivery by a reputable document delivery service that provides a receipt showing date and time of delivery, (iii) mailing utilizing a certified or first class mail postage prepaid service of the United States Postal Service that provides a receipt showing date and time of delivery, or (iv) delivery by facsimile or electronic mail (email) with transmittal confirmation and confirmation of delivery, addressed as noted below; provided, notices delivered by email to the Company must also be delivered by confirmed facsimile or one of the other methods specified in this Section to the copy address below. Notices and communications personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices and communications mailed shall be deemed effective on the second business day following deposit in the United States mail. Notices and communications delivered by facsimile or email shall be deemed effective the next business day, not less than 24 hours, following the date of transmittal and confirmation of delivery to the intended recipient. Such written notices and communications shall be addressed to: HP Hood Inc LEDIG Performance Agreement Final 5 if to The Company, to: with a copy to: HP Hood LLC Six Kimball Lane Lynnfield, MA 01940 Facsimile: (617) 456-3590 Email: kirsten.dotson@hphood.com Attention: Sr. Director of Treasury HP Hood LLC Six Kimball Lane Lynnfield, MA 01940 Facsimile: (617) 241-2199 Attention: General Counsel if to the Locality, to: with a copy to: County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: rmichael.bollhoefer@fcva.us Attention: County Administrator County of Frederick, Virginia 107 North Kent Street, 3rd Floor Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: austin.cano@fcva.us Attention: Interim County Attorney if to the Authority, to: with a copy to: Economic Development Authority of the County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Facsimile: 540-722-0604 Email: mbryan@michaelbryanlaw.com Attention: Authority Counsel Economic Development Authority of the County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Facsimile: 540-722-0604 Email: pbarker@yesfrederickva.com Attention: Executive Director Section 7. Miscellaneous. (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement among the parties hereto as to the LEDIG and may not be amended or modified, except in writing, signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights and obligations under this Agreement without the prior written consent of the Locality and the Authority. (b) Governing Law; Venue: This Agreement is made, and is intended to be performed, in the Commonwealth of Virginia and shall be construed and enforced by the laws of the Commonwealth of Virginia. Jurisdiction and venue for any litigation regarding this Agreement shall lie in the Circuit Court of the County of Frederick, Virginia, and such litigation shall be brought exclusively in such court. HP Hood Inc LEDIG Performance Agreement Final 6 (c) Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. (d) Severability: If any provision of this Agreement is determined to be unenforceable, invalid or illegal, then the enforceability, validity and legality of the remaining provisions will not in any way be affected or impaired, and such provision will be deemed to be restated to reflect the original intentions of the parties as nearly as possible in accordance with applicable law. (e) Time: Time is of the essence as to all matters set forth in this Performance Agreement. (f) Attorney Fees: Except as noted in Section 4(d) above, attorney’s fees shall be paid by the party incurring such fees. (g) Interpretation: Should any provision of this Agreement require judicial interpretation, it is agreed that the Court interpreting the same shall not apply the presumption that the terms of any such provision shall be more strictly construed against one party or the other by reason of the rule of construction that a document is to be construed most strictly against the party who itself or through its counsel prepared the same, it being agreed that counsel for the Locality, the Company and the Authority have participated in the preparation and review of this Agreement. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] HP Hood Inc LEDIG Performance Agreement Final 7 IN WITNESS WHEREOF, the parties hereto have executed this Performance Agreement as of the date first written above. COUNTY OF FREDERICK, VIRGINIA By Name: Josh Ludwig Title: Chair, Board of Supervisors of the County of Frederick, Virginia Date: _______________________________ ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA By Name: Richard Till Title: Chair, Economic Development Authority of the County of Frederick, Virginia Date: _______________________________ HP HOOD LLC By Name: Title: Date: _________________________ DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Performance Agreement for DESI FRESH FOODS, LLC Attached please find a performance agreements (State and County) for the location of DESI FRESH FOODS, LLC. As you might recall, DESI FRESH FOODS, LLC will locate its operation in Frederick County. They will make a capital expenditure by or on behalf of the Company of approximately $13,000,000, of which approximately $3,000,000 will be invested in machinery and tools, approximately $10,000,000 will be invested in the expansion, improvement, and up- fit of an existing building. All parties’ legal counsels (VEDP, County, EDA and DESI FRESH FOODS, LLC) have reviewed and approved the performance agreement. The Frederick County Board of Supervisors approved this performance agreement at their December 11th meeting. Under the Virginia State Constitution, localities are prohibited from providing direct funding to private entities. To comply with this provision, EDAs serve as the designated parties in performance agreements that include financial assistance to businesses. The EDA’s responsibilities in these agreements include: 1. Auditing Performance: Ensuring the business meets the agreed-upon milestones, such as job creation, capital investment, or other specified metrics. 2. Administering Funding: Disbursing financial assistance according to the timing and conditions outlined in the performance agreement. This structure not only ensures legal compliance but also provides a framework for accountability and oversight, ensuring that public funds are used effectively to achieve economic development goals. Staff seeks the Authority's review, feedback, and, if appropriate, adoption of the document. Attachment: • Performance Agreemen 1 Desi Fresh Foods COF Performance Agreement FINAL COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT (the “Agreement”) made and entered this 23rd day of October, 2024, by and among the COUNTY OF FREDERICK, VIRGINIA (the “Locality”), a political subdivision of the Commonwealth of Virginia (the “Commonwealth”), DESI FRESH FOODS, LLC, a Delaware limited liability company authorized to transact business in the Commonwealth (the “Company”), the VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP AUTHORITY (“VEDP”), a political subdivision of the Commonwealth, and the ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA (the “Authority”), a political subdivision of the Commonwealth. WITNESSETH: WHEREAS, the Locality has been awarded a grant of and expects to receive $150,000 (the “COF Grant”) from the Commonwealth’s Development Opportunity Fund (the “Fund”) through VEDP for the purpose of inducing the Company to acquire an existing facility and to equip, improve, and operate a new manufacturing facility in the Locality (the “Facility”), thereby making a significant Capital Investment, and creating and Maintaining a significant number of New Jobs, as such capitalized terms are hereinafter defined; WHEREAS, the Locality is willing to provide the funds to the Authority with the expectation that the Authority will provide the funds to or for the use of the Company, provided that the Company meets certain criteria relating to Capital Investment and New Jobs; WHEREAS, the Locality, the Authority, the Company, and VEDP desire to set forth their understanding and agreement as to the payout of the COF Grant, the use of the COF Grant proceeds, and the obligations of the Company regarding Capital Investment and New Jobs; WHEREAS, the construction, equipping and operation of the Facility will entail a capital expenditure by or on behalf of the Company of approximately $13,000,000, of which approximately $3,000,000 will be invested in machinery and tools, approximately $10,000,000 will be invested in the expansion, improvement, and up-fit of an existing building at the Facility; WHEREAS, the construction, equipping and operation of the Facility will further entail the creation and Maintenance of 56 New Jobs at the Facility; and WHEREAS, the stimulation of the additional tax revenue and economic activity to be generated by the Capital Investment and New Jobs constitutes a valid public purpose for the expenditure of public funds and is the animating purpose for the COF Grant: NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the 2 Desi Fresh Foods COF Performance Agreement FINAL receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows. Section 1. Definitions. For the purposes of this Agreement, the following terms shall have the following definitions: “Capital Investment” means a capital expenditure by or on behalf of the Company in taxable real property, taxable tangible personal property, or both, at the Facility. The purchase or lease of machinery and tools or furniture, fixtures, and business personal property, including under an operating lease, and expected building construction and up-fit by or on behalf of the Company will qualify as Capital Investment. The Capital Investment must be in addition to the capital improvements at the Facility as of January 1, 2024. “Capital Investment Target” means that the Company has made or caused to be made and retained Capital Investments of at least $13,000,000. “Fund” means the Commonwealth’s Development Opportunity Fund. “Maintain” means that the New Jobs will continue without interruption from the date of creation through the date that the level of achievement of the New Jobs Target is being tested, including the Performance Date. Positions for the New Jobs will be treated as Maintained during periods in which such positions are not filled due to (i) temporary reductions in the Company’s employment levels (so long as there is active recruitment for open positions), (ii) strikes, and (iii) other temporary work stoppages. “New Job” means new permanent full-time employment of an indefinite duration at the Facility for which the standard fringe benefits are provided by the Company for the employee, and for which the Company pays an average annual wage of at least $61,815. Average annual wage means the average annual salary of full-time positions at the Facility determined by dividing total payroll (of a type included in W-2 compensation) provided to full-time positions at the Facility by the number of full-time positions at the Facility. Each New Job must require a minimum of either (i) 35 hours of an employee’s time per week for the entire normal year of the Company’s operations, which “normal year” must consist of at least 48 weeks, or (ii) 1,680 hours per year. Seasonal or temporary positions, positions created when a job function is shifted from an existing location in the Commonwealth, and positions with construction contractors, vendors, suppliers and similar multiplier or spin-off jobs shall not qualify as New Jobs. “New Jobs Target” means that the Company has created and Maintained at least 56 New Jobs. “Performance Date” means June 30, 2027. If the Locality, in consultation with VEDP, deems that good faith and reasonable efforts have been made and are being made by the Company to achieve the Targets, on or before the Performance Date the Locality may request an extension of the Performance Date by up to 15 months. Any extension of the Performance Date shall require 3 Desi Fresh Foods COF Performance Agreement FINAL the prior approval of the Company and the Board of Directors of VEDP (the “Board”). If the Performance Date is extended, the Locality shall send written notice of the extension to the Authority, the Company and VEDP and the date to which the Performance Date has been extended shall be the “Performance Date” for the purposes of this Agreement. “Performance Report” means a report to be filed by the Company in accordance with Section 5. The “Final Performance Report” is to be filed within 90 days after the Performance Date. As noted in Section 5, the Locality, the Authority and VEDP may each request a Performance Report at other dates prior to the Performance Date. “Targets” means the Capital Investment Target and the New Jobs Target, all to be achieved as of the Performance Date. “Virginia Code” means the Code of Virginia of 1950, as amended. Section 2. Targets; Statutory Criteria. (a) Targets: The Company will construct, equip and operate the Facility, and achieve the Targets. (b) Encouragement to Offer New Jobs to Residents of the Commonwealth: The Locality, the Authority, and VEDP hereby strongly encourage the Company to ensure that at least 30% of the New Jobs are offered to “Residents” of the Commonwealth, as defined in Virginia Code Section 58.1-302. In pertinent part, that definition includes natural persons domiciled in Virginia or natural persons who, for an aggregate of more than 183 days of the year, maintained a place of abode within the Commonwealth, whether domiciled in the Commonwealth or not. (c) Prevailing Wage; Unemployment and Poverty Rates: The average annual wage of the New Jobs of at least $61,815 is more than the prevailing average annual wage in the Locality of $57,956. The Locality is not a high-unemployment locality, with an unemployment rate for 2022, which is the last year for which such data is available, of 2.4% as compared to the 2022 statewide unemployment rate of 2.9%. The Locality is not a high-poverty locality, with a poverty rate for 2022, which is the last year for which such data is available, of 7.2% as compared to the 2022 statewide poverty rate of 10.6%. (d) Disclosure of Political Contributions: The Company acknowledges that the name of the Company will be shared by VEDP with the Governor of Virginia, and any campaign committee or political action committee associated with the Governor. The Company acknowledges that within 18 months of the date of this Agreement, the Governor, his campaign committee, and his political action committee will submit to the Virginia Conflict of Interest and Ethics Advisory Council a report listing any contribution, gift, or other item with a value greater than $100 provided by the Company to the Governor, his campaign committee, or his political action committee, respectively, during the period from the date of the Company’s application for the COF Grant through the one-year period immediately after the date of this Agreement. 4 Desi Fresh Foods COF Performance Agreement FINAL (e) Support for Virginia’s and Locality’s Economic Development Efforts: Recognizing that it is in the best interest of all parties for the Commonwealth and the Locality to achieve sustained economic growth, the parties will periodically engage with one another to advise on economic development strategies and initiatives for the Commonwealth and the Locality, such as promoting the attributes of the Commonwealth and the Locality as places to do business, or highlighting important industry trends and/or business development opportunities that the Commonwealth or the Locality may wish to pursue. Such engagement would include the Company’s participation in occasional business retention and expansion visits from VEDP personnel, as deemed appropriate based on the project parameters and nature of the incentives provided to the Company. (f) Compliance with Environmental Laws: The Company covenants to (i) comply in all material respects with any and all applicable federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws") with respect to its operations at the Facility, (ii) receive all material permits, licenses or other approvals required of the Company under applicable Environmental Laws to conduct its business at the Facility, and (iii) remain in compliance with all material terms and conditions of any such permit, license or approval. If the Company fails to comply with this covenant, and fails to rectify the noncompliance within 30 days of notice from VEDP, VEDP shall have the option to terminate this Agreement in accordance with Section 7. Section 3. Disbursement of COF Grant. (a) General Provisions: The disbursement of the COF Grant proceeds to the Company will serve as an inducement to the Company to achieve the Targets. The COF Grant is to be allocated as 40% ($60,000) for the Company’s Capital Investment Target, and 60% ($90,000) for the Company’s New Jobs Target. The statutory minimum requirements for a COF Grant in the Locality require that the Company (1) make or cause to be made and retained a Capital Investment of at least $5,000,000 and (2) create and Maintain at least 50 New Jobs (the “Statutory Minimum Requirements”). The COF Grant proceeds shall be retained in the Fund until needed for disbursement or the COF Grant is withdrawn in accordance with the terms of this Agreement. (b) Disbursement of the COF Grant: Within 90 days after the Performance Date, the Company will deliver the Final Performance Report. Through this report, the Company will provide notice and evidence satisfactory to the Locality, the Authority and VEDP of the amount of Capital Investments made or caused to be made and retained, and the number of New Jobs created and Maintained, by the Company as of the Performance Date. The Final Performance Report will be subject to verification by the Locality and VEDP. Upon such verification, the amount of the COF Grant proceeds to be disbursed to the Company, if any, shall be determined as follows: 5 Desi Fresh Foods COF Performance Agreement FINAL (i) If Statutory Minimum Requirements Not Met: If, as of the Performance Date, the Company has not achieved both of the Statutory Minimum Requirements, the Company will not receive any of the proceeds of the COF Grant. (ii) If Targets Met: If, as of the Performance Date, the Company has achieved the Capital Investment Target and the New Jobs Target, the Company will receive all $150,000 of the proceeds of the COF Grant. (iii) If Statutory Minimum Requirements Met, but Targets Not Met: If, as of the Performance Date, the Company has achieved both of the Statutory Minimum Requirements, but has not achieved the full Capital Investment Target and the full New Jobs Target, the Company will qualify for a reduced disbursement of the COF Grant, reflecting a proportional amount of the Target or Targets for which there is a shortfall. For example, if as of the Performance Date, only $11,700,000 of the Capital Investment has been retained (reflecting achievement of 90% of the Capital Investment Target), and only 50 New Jobs have been created and Maintained (reflecting achievement of 89% of the New Jobs Target), the Company will receive $54,000 (reflecting 90% of the $60,000 of the COF Grant allocated to the Capital Investment Target), plus $ 80,100 (reflecting 89% of the $90,000 of the COF Grant allocated to the New Jobs Target), for a total of $ 134,100. These amounts reflect the percentages of the shortfall from the Capital Investment Target and the New Jobs Target, each such shortfall multiplied by the portion of the COF Grant proceeds available to the Company allocated to that Target. Within 30 days after verification of the Final Performance Report, if any amount of COF Grant proceeds are available for disbursement to the Company, as determined in accordance with the foregoing calculations, VEDP will disburse that amount to the Locality. Within 30 days after receipt of such amount, the Locality will disburse such COF Grant proceeds to the Authority. Within 30 days after receipt of such amount, the Authority will disburse such COF Grant proceeds to the Company. If any amount of COF Grant proceeds has not been earned by the Company, the amount not disbursed will be retained in the Fund and will be available for other economic development projects. (c) Use of the COF Grant Proceeds: The Company will use the COF Grant proceeds to pay or reimburse the cost of building upfits as permitted by Section 2.2-115(D) of the Virginia Code. Section 4. Break-Even Point; State and Local Incentives. (a) State-Level Incentives: VEDP has estimated that the Commonwealth will reach its “break-even point” by the Performance Date. The break-even point compares new revenues realized as a result of the Capital Investment and New Jobs at the Facility with the 6 Desi Fresh Foods COF Performance Agreement FINAL Commonwealth’s expenditures on discretionary incentives, including but not limited to the COF Grant. With regard to the Facility, the Commonwealth expects to provide discretionary incentives in the following amounts: Category of Incentive: Total Amount COF Grant $150,000 VEDP Talent Accelerator Program (“VTAP”) (Approximate Value) $218,000 Agriculture and Forestry Industries Incentive Grant (“AFIG”) $150,000 The proceeds of the COF Grant shall be used for the purposes described in Section 3(c). The VTAP represents the value to the Company of workforce development services expected to be provided by VEDP to the Company for recruitment and training. (b) Local-Level Incentives: The Locality and the Authority expect to provide the following incentives, as matching grants or otherwise, for the Facility: Category of Incentive: Total Amount Local Economic Development Incentive Grant $150,000 If, by the Performance Date, the total value of all Local-Level Incentives disbursed or provided, or committed to be disbursed or provided, by the Locality to the Company is less than the $150,000 COF Grant local match requirement, the Locality, subject to appropriation, will make an additional grant to the Company of the difference promptly after Performance Date, so long as the Company has met its Targets. c) Other Incentives: This Agreement relates solely to the COF Grant. Section 5. Company Reporting. (a) Performance Reporting: The Company shall provide, at the Company’s expense, in the form attached hereto as Exhibit A, detailed Performance Reports satisfactory to the Locality, the Authority and VEDP of the Company’s progress on the Targets. The Performance Reports are due by each December 1, commencing December 1, 2024, reflecting the Company’s progress toward the Targets as of the prior June 30. Further, the Company shall provide such Performance Reports at such other times as the Locality, the Authority or VEDP may require. (b) Final Performance Report: The Company shall provide, at the Company’s expense, in the form attached hereto as Exhibit B, a detailed Final Performance Report satisfactory to the Locality, the Authority and VEDP of the Company’s achievement of the Targets as of the Performance Date. This Final Performance Report shall be filed within 90 days after the Performance Date. 7 Desi Fresh Foods COF Performance Agreement FINAL Should the Company be unable to file the Final Performance Report within the 90-day timeframe, the Company may request a 60-day delay in filing the Final Performance Report. VEDP will require a $3,000 fee, payable to VEDP, to process the request for the filing delay. Should the Company not file the Final Performance Report within the 90-day window nor request a filing delay (including payment of the required fee), or if the Company requests a filing delay but does not file the Final Performance Report prior to the new filing deadline, VEDP will withhold any COF Grant payment that might otherwise be due and all rights of the Company under this Agreement will automatically terminate. Section 6. Verification of Targets. (a) Verification of Capital Investment: The Company hereby authorizes the Locality, including the Locality’s Commissioner of the Revenue and Treasurer, to release to VEDP the Company’s real estate tax, business personal property tax and machinery and tools tax information. Such information shall be marked and considered confidential and proprietary and shall be used by VEDP solely for verifying satisfaction of the Capital Investment Target. If the Locality, the Office of the Commissioner of the Revenue or the Office of the Treasurer should require additional documentation or consents from the Company to access such information, the Company shall promptly provide, at the Company’s expense, such additional documentation or consents as the Locality or VEDP may request. In accordance with Virginia Code Section 58.1- 3122.3, VEDP is entitled to receive the Company’s real estate tax, business personal property tax and machinery and tools tax information from the Locality’s Commissioner of the Revenue. (b) Verification of New Jobs and Wages: The Company must submit a copy of its four most recent Employer’s Quarterly Tax Reports (Form FC-20) with the Virginia Employment Commission with the Final Performance Report. The forms shall be marked and considered confidential and proprietary and shall be used by VEDP solely for verifying satisfaction of the New Jobs Target. In accordance with Virginia Code Section 60.2-114, VEDP is entitled to receive the Company’s employment level and wage information from the Virginia Employment Commission. The Company agrees that it will report to the Virginia Employment Commission with respect to its employees at a facility-level, rather than at the company-level. (c) Additional Documentation: In addition to the verification data described above, in the sole discretion of the Locality, the Authority or VEDP, the Locality, the Authority or VEDP, may each require such other documentation or audits as may be required to properly verify the Capital Investment or New Jobs. Section 7. Possible Termination of this Agreement and Redeployment of COF Grant Proceeds. If the Locality, the Authority or VEDP shall determine at any time prior to the Performance Date that the Company is unable or unwilling to meet and Maintain its Targets by and through the Performance Date, and if the Locality, the Authority or VEDP shall have promptly notified the Company of such determination, this Agreement will be terminated, no 8 Desi Fresh Foods COF Performance Agreement FINAL further disbursements of the COF Grant proceeds will be made to the Company, and the amount not disbursed will be retained in the Fund and made available for other economic development projects. Such a determination will be based on such circumstances as a filing by or on behalf of the Company under the U.S. Bankruptcy Code, the liquidation of the Company, an abandonment of the Facility by the Company, a failure to comply with the covenant provided in Section 2(f), or other similar significant event that demonstrates that the Company will be unable or is unwilling to satisfy the Targets for the COF Grant, as determined by the Locality, the Authority, or VEDP in their sole discretion. Section 8. Notices. Formal notices and communications between the parties shall be given either by (i) personal service, (ii) delivery by a reputable document delivery service that provides a receipt showing date and time of delivery, (iii) mailing utilizing a certified or first class mail postage prepaid service of the United States Postal Service that provides a receipt showing date and time of delivery, or (iv) delivery by electronic mail (email) with transmittal confirmation and confirmation of delivery, addressed as noted below. Notices and communications personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices and communications mailed shall be deemed effective on the second business day following deposit in the United States mail. Notices and communications delivered by email shall be deemed effective the next business day, not less than 24 hours, following the date of transmittal and confirmation of delivery to the intended recipient. Such written notices and communications shall be addressed to: if to the Company, to: with a copy to: Desi Fresh Foods LLC 205 McGhee Road Winchester, Virginia 22603 Email: llaporta@desifreshfoods.com Attention: Larry LaPorta Desi Fresh Foods LLC 205 McGhee Road Winchester, Virginia 22603 Email: fmuys@desifreshfoods.com Attention: Frank Muys if to the Locality, to: with a copy to: The County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: rmichael.bollhoefer@fcva.us Attention: County Administrator The County of Frederick, Virginia 107 North Kent Street, 3rd Floor Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: austin.cano@fcva.us Attention: Interim County Attorney if to the Authority, to: with a copy to: Economic Development Authority of the County of Frederick, Virginia 45 East Boscawen Street, Suite 2 Winchester, Virginia 22601 Facsimile: 540-722-0604 Economic Development Authority of the County of Frederick, Virginia 118 S. Braddock Street Winchester, Virginia 22601 Email: mbryan@michaelbryanlaw.com 9 Desi Fresh Foods COF Performance Agreement FINAL Email: pbarker@yesfrederickva.com Attention: Executive Director Attention: Counsel if to VEDP, to: with a copy to: Virginia Economic Development Partnership One James Center, Suite 900 901 East Cary Street Richmond, Virginia 23219 Email: ceo@vedp.org Attention: President and CEO Virginia Economic Development Partnership One James Center, Suite 900 901 East Cary Street Richmond, Virginia 23219 Email: generalcounsel@vedp.org Attention: General Counsel Each party may change the address for service of notice upon it by a notice in writing to the other parties hereto. Section 9. Miscellaneous. (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement among the parties hereto as to the COF Grant and may not be amended or modified, except in writing, signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights and obligations under this Agreement without the prior written consent of the Locality, the Authority, and VEDP, which consent may be withheld at the sole discretion of the Locality, the Authority, or VEDP. (b) Governing Law; Venue: This Agreement is made, and is intended to be performed, in the Commonwealth and shall be construed and enforced by the laws of the Commonwealth. Jurisdiction and venue for any litigation arising out of or involving this Agreement shall lie in the Circuit Court of the City of Richmond, and such litigation shall be brought only in such court. (c) Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. (d) Severability: If any provision of this Agreement is determined to be unenforceable, invalid or illegal, then the enforceability, validity and legality of the remaining provisions will not in any way be affected or impaired, and such provision will be deemed to be restated to reflect the original intentions of the parties as nearly as possible in accordance with applicable law. (e) Attorney’s Fees: Attorney’s fees shall be paid by the party incurring such fees. (f) Time: Time is of the essence as to all matters set forth in this Performance Agreement. 10 Desi Fresh Foods COF Performance Agreement FINAL (g) Force Majeure: Notwithstanding the foregoing provisions of this Agreement, if the Company does not achieve a Target or take any action required under this Agreement because of an “Event of Force Majeure” (as defined below), the time for achieving the applicable Target or taking such action will be extended day-for-day by the delay in meeting the applicable Target or taking such action caused by the Event of Force Majeure. “Event of Force Majeure” means without limitation, any of the following: acts of God; strikes, lockouts or other industrial disturbances; act of public enemies; orders of any kind of the government of the United States of America or of the Commonwealth or any of their respective departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; riots; epidemics; pandemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals not caused by the Company; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Company. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 11 Desi Fresh Foods COF Performance Agreement FINAL IN WITNESS WHEREOF, the parties hereto have executed this Performance Agreement as of the date first written above. COUNTY OF FREDERICK, VIRGINIA By: ______________________________ Name: Josh Ludwig Title: Chair, Board of Supervisors of the County of Frederick, Virginia Date: _____________________________ ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA By: ______________________________ Name: Richard J. Till Title: Chair, Economic Development Authority of the County of Frederick, Virginia Date: _____________________________ DESI FRESH FOODS, LLC By: ______________________________ Name: Larry LaPorta Title: CEO Date: _____________________________ VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP AUTHORITY By: ______________________________ Name: __________________________ Title: __________________________ Date: _____________________________ 12 Desi Fresh Foods COF Performance Agreement FINAL Exhibit A: Performance Report Form Exhibit B: Final Performance Report Form 13 Desi Fresh Foods COF Performance Agreement FINAL Exhibit A PERFORMANCE REPORT COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND PROJECT SUMMARY: Project Location Amount of Grant Performance Reporting Period Performance Date PROJECT PERFORMANCE: Performance Measurement Target As of _______ % Complete New Jobs (over ___ baseline) Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Capital Investment (provide breakdown below)1 Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Average Annual Wage N/A Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Standard Fringe Benefits (check one) Yes ☐ No ☐ N/A 1 Data will be verified with locality records. 14 Desi Fresh Foods COF Performance Agreement FINAL Capital Investment Breakdown Amount Land $ Land Improvements New Construction or Expansion Renovation or Building Up-fit Production Machinery and Tools Furniture, Fixtures and Equipment Other Total $ COMMENTS: Discuss project status, including the current level of new jobs and capital investment, progress on targets, changes or likely changes in project’s nature that may impact achievement of targets, and other information relevant to project performance. If the project is not on track to meet targets, please provide an explanation. TO BE CERTIFIED BY AN OFFICER OF THE COMPANY: I certify that I have examined this report and to the best of my knowledge and belief, it is true, correct, and complete. Company: __________________________________________ Submitted By: __________________________________________ Signature of Official Name: __________________________________________ Print Name Title: ______________________________________________ Date: _________________________ Please return to: Kim Ellett, Director of Compliance, Virginia Economic Development Partnership, 804.545.5618, kellett@vedp.org 15 Desi Fresh Foods COF Performance Agreement FINAL Exhibit B FINAL PERFORMANCE REPORT COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND PROJECT SUMMARY: Project Location Amount of Grant Performance Date PROJECT PERFORMANCE:1 Performance Measurement Target As of ________, 20__ % Complete New Jobs (over baseline)2 Capital Investment (provide breakdown below)3 Average Annual Wage N/A Standard Fringe Benefits 1Final, actual performance will be reported on VEDP’s public reporting website. 2 Attach the company’s four most recent Quarterly Tax Reports (Form FC-20) filed with the Virginia Employment Commission. 3 Data will be verified using records from the Commissioner of the Revenue and invoices. Capital Investment Breakdown Amount Land $ Land Improvements New Construction or Expansion Renovation or Building Up-fit Production Machinery and Tools Furniture, Fixtures and Equipment Other Total $ 16 Desi Fresh Foods COF Performance Agreement FINAL LOCAL MATCH: Goal Actual COMMENTS: Discuss Project status or the importance of the Project to the locality and region. TO BE CERTIFIED BY AN OFFICER OF THE COMPANY: I certify that I have examined this report and to the best of my knowledge and belief, it is true, correct, and complete. Company: __________________________________________ Submitted By: __________________________________________ Signature of Official Name: __________________________________________ Print Name Title: ______________________________________________ Date: _________________________ Please return to: Kim Ellett, Director of Compliance, Virginia Economic Development Partnership, 804.545.5618, kellett@vedp.org 1 Desi Fresh Foods LEDIG Performance Agreement FINAL LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT (the “Agreement”) made and entered this 11th day of December, 2024, by and among the COUNTY OF FREDERICK, VIRGINIA (the “Locality”), a political subdivision of the Commonwealth, DESI FRESH FOODS, LLC, a Delaware limited liability company authorized to transact business in the Commonwealth (the “Company”) and the ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA (the “Authority”), a political subdivision of the Commonwealth. WITNESSETH: WHEREAS, the Locality wishes to make a Local Economic Development Incentive Grant in the amount of $150,000 (the “LEDIG”) for the purpose of inducing the Company to acquire an existing facility and to equip, improve, and operate a new manufacturing facility in the Locality (the “Facility”), thereby making a significant Capital Investment, and creating and Maintaining a significant number of New Jobs, as such capitalized terms are hereinafter defined; WHEREAS, the Locality is willing to provide the funds to the Authority with the expectation that the Authority will provide the funds to or for the use of the Company, provided that the Company meets certain criteria relating to Capital Investment and New Jobs; WHEREAS, the Locality, the Authority and the Company, desire to set forth their understanding and agreement as to the payout of the LEDIG Grant, the use of the LEDIG Grant proceeds, and the obligations of the Company regarding Capital Investment and New Jobs; WHEREAS, the construction, equipping and operation of the Facility will entail a capital expenditure by or on behalf of the Company of approximately $13,000,000, of which approximately $3,000,000 will be invested in machinery and tools, approximately $10,000,000 will be invested in the expansion, improvement, and up-fit of an existing building for the Facility; which results in a net increase in the assessed taxable value of the facility. WHEREAS, the construction, equipping and operation of the Facility will further entail the creation and Maintenance of 56 New Jobs at the Facility; and WHEREAS, the stimulation of the additional tax revenue and economic activity to be generated by the Capital Investment and New Jobs constitutes a valid public purpose for the expenditure of public funds and is the animating purpose for the LEDIG Grant: NOW, THEREFORE, in consideration of the foregoing, the mutual benefits, promises and undertakings of the parties to this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties covenant and agree as follows. 2 Desi Fresh Foods LEDIG Performance Agreement FINAL Section 1. Definitions. For the purposes of this Agreement, the following terms shall have the following definitions: “Capital Investment” means a capital expenditure by or on behalf of the Company in taxable real property, taxable tangible personal property, or both, at the Facility. The purchase or lease of machinery and tools or furniture, fixtures, and business personal property, including under an operating lease, and expected building construction and up-fit by or on behalf of the Company will qualify as Capital Investment. The Capital Investment must be in addition to the capital improvements at the Facility as of January 1, 2024. “Capital Investment Target” means that the Company has made or caused to be made and retained Capital Investments of at least $13,000,000. “Maintain” means that the New Jobs will continue without interruption from the date of creation through the date that the level of achievement of the New Jobs Target is being tested, including the Performance Date. Positions for the New Jobs will be treated as Maintained during periods in which such positions are not filled due to (i) temporary reductions in the Company’s employment levels (so long as there is active recruitment for open positions), (ii) strikes, and (iii) other temporary work stoppages. “New Job” means new permanent full-time employment of an indefinite duration at the Facility for which the standard fringe benefits are provided by the Company for the employee, and for which the Company pays an average annual wage of at least $61,815. Average annual wage means the average annual salary of full-time positions at the Facility determined by dividing total payroll (of a type included in W-2 compensation) provided to full-time positions at the Facility by the number of full-time positions at the Facility. Each New Job must require a minimum of either (i) 35 hours of an employee’s time per week for the entire normal year of the Company’s operations, which “normal year” must consist of at least 48 weeks, or (ii) 1,680 hours per year. “New Jobs Target” means that the Company has created and Maintained at least 56 New Jobs. “Performance Date” means June 30, 2027. If the Locality deems that good faith and reasonable efforts have been made and are being made by the Company to achieve the Targets, on or before the Performance Date the Locality may request an extension of the Performance Date by up to 15 months. Any extension of the Performance Date shall require the prior approval of the Company and the Locality. If the Performance Date is extended, the Locality shall send written notice of the extension to the Authority and the Company and the date to which the Performance Date has been extended shall be the “Performance Date” for the purposes of this Agreement. “Performance Report” means a report to be filed by the Company in accordance with Section 5. The “Final Performance Report” is to be filed within 15 days after the Performance 3 Desi Fresh Foods LEDIG Performance Agreement FINAL Date. As noted in Section 5, the Locality and the Authority may each request a Performance Report at other dates prior to the Performance Date. “Targets” means the Capital Investment Target and the New Jobs Target, all to be achieved as of the Performance Date. “Virginia Code” means the Code of Virginia of 1950, as amended. Section 2. Targets; Statutory Criteria. (a) Targets: The Company will construct, equip and operate the Facility, and achieve the Targets. (b) Encouragement to Offer New Jobs to Residents of the Commonwealth: The Locality and the Authority hereby strongly encourage the Company to ensure that at least 30% of the New Jobs are offered to “Residents” of the Commonwealth, as defined in Virginia Code Section 58.1-302. In pertinent part, that definition includes natural persons domiciled in Virginia or natural persons who, for an aggregate of more than 183 days of the year, maintained a place of abode within the Commonwealth, whether domiciled in the Commonwealth or not. (c) Prevailing Wage; Unemployment and Poverty Rates: The average annual wage of the New Jobs of at least $61,815 is more than the prevailing average annual wage in the Locality of $57,956. The Locality is not a high-unemployment locality, with an unemployment rate for 2022, which is the last year for which such data is available, of 2.4% as compared to the 2022 statewide unemployment rate of 2.9%. The Locality is not a high-poverty locality, with a poverty rate for 2022, which is the last year for which such data is available, of 7.2% as compared to the 2022 statewide poverty rate of 10.6%. (d) Support Locality’s Economic Development Efforts: Recognizing that it is in the best interest of all parties for the Locality to achieve sustained economic growth, the parties will periodically engage with one another to advise on economic development strategies and initiatives for the Locality, such as promoting the attributes of the Locality as place to do business, or highlighting important industry trends and/or business development opportunities that the the Locality may wish to pursue. Such engagement would include the Company’s participation in occasional business retention and expansion visits from the Authority’s personnel, as deemed appropriate based on the project parameters and nature of the incentives provided to the Company. (e) Compliance with Environmental Laws: The Company covenants to (i) comply in all material respects with any and all applicable federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws") with respect to its operations at the Facility, (ii) receive all material permits, licenses or other approvals required of the Company under applicable Environmental Laws to conduct its business at the Facility, and (iii) remain in compliance with all material terms and conditions of any such permit, license or approval. If the Company fails to comply with this covenant, and fails to rectify the noncompliance within 30 days of notice from the Authority, Authority shall have the option to terminate this Agreement in accordance with Section 7. 4 Desi Fresh Foods LEDIG Performance Agreement FINAL Section 3. Disbursement of LEDIG Grant. (a) General Provisions: The disbursement of the LEDIG Grant proceeds to the Company will serve as an inducement to the Company to achieve the Targets. The LEDIG Grant is to be allocated as 50% ($75,000) for the Company’s Capital Investment Target, and 50% ($75,000) for the Company’s New Jobs Target. The statutory minimum requirements for a LEDIG Grant in the Locality require that the Company (1) make or cause to be made and retained a Capital Investment of at least $5,000,000 and (2) create and Maintain at least 50 New Jobs (the “Statutory Minimum Requirements”). (b) Disbursement of the LEDIG Grant: As an inducement to Company to achieve the Targets at the Facility and provided that Company is not in default under the terms of this Agreement, the Locality will disburse $150,000 of LEDIG proceeds through the Authority to Company in two installments as follows: (i) An installment of $75,000 will be paid by the Locality to the Authority and by the Authority to Company on or before June 30, 2026. (i) An installment of $75,000 will be paid by the Locality to the Authority and by the Authority to Company within sixty (60) days after the Performance Date, provided that the Final Performance Report is timely filed and is deemed acceptable to the Authority and the Locality, in the sole and absolute discretion of the Authority and the Locality (ii) The Final Performance Report shall provide evidence of the achievement of the Targets by the Company. (iii) Within 15 days after the Performance Date, the Company will deliver the Final Performance Report. Through this report, the Company will provide notice and evidence satisfactory to the Locality and the Authority of the amount of the Capital Investment made or caused to be made and retrain, and the number of New Jobs created and Maintained, by the Company as of the Performance Date. The Final Performance Report will be subject to verification by the Locality and the Authority.. (c) Upon such verification, the amount of LEDIG Grant proceeds to be disbursed to the Company, if any, shall be determined as follows: (i) If Statutory Minimum Requirements Not Met: If, as of the Performance Date, the Company has not achieved both of the Statutory Minimum Requirements, the Company will not receive any of the proceeds of the LEDIG Grant. (ii) If Targets Met: If, as of the Performance Date, the Company has achieved the Capital Investment Target and the New Jobs Target, the Company will receive all $150,000 of the proceeds of the LEDIG Grant. 5 Desi Fresh Foods LEDIG Performance Agreement FINAL (iii) If Statutory Minimum Requirements Met, but Targets Not Met: If, as of the Performance Date, the Company has achieved both of the Statutory Minimum Requirements, but has not achieved the full Capital Investment Target and the full New Jobs Target, the Company will qualify for a reduced disbursement of the LEDIG Grant, reflecting a proportional amount of the Target or Targets for which there is a shortfall. For example, if as of the Performance Date, only $11,700,000 of the Capital Investment has been retained (reflecting achievement of 90% of the Capital Investment Target), and only 50 New Jobs have been created and Maintained (reflecting achievement of 89% of the New Jobs Target), the Company will receive $54,000 (reflecting 90% of the $60,000 of the LEDIG Grant allocated to the Capital Investment Target), plus $80,100 (reflecting 89% of the $90,000 of the LEDIG Grant allocated to the New Jobs Target), for a total of $134,100. These amounts reflect the percentages of the shortfall from the Capital Investment Target and the New Jobs Target, each such shortfall multiplied by the portion of the LEDIG Grant proceeds available to the Company allocated to that Target. (iv) Within 30 days after verification and approval of the Final Performance Report but the Authority and the Locality, if any amount of the LEDIG Grant proceeds are available for disbursement to the Company, as determined in accordance with the foregoing calculations, the Locality will disburse that amount to the Authority. Within 30 days after receipt of such amount, the Authority will disburse such LEDIG Grant proceeds to the Company. (d) Use of the LEDIG Grant Proceeds: The Company will use the LEDIG Grant proceeds to pay or reimburse the cost of building upfits as permitted by Section 2.2-115(D) of the Virginia Code. Section 4. Break-Even Point; State and Local Incentives. (a) Local-Level Incentives: The Locality and the Authority expect to provide the following incentives, as matching grants or otherwise, for the Facility by the Performance Date: Category of Incentive: Total Amount Local Economic Development Incentive Grant $150,000 If, by the Performance Date, the total value of all Local-Level Incentives disbursed or provided, or committed to be disbursed or provided, by the Locality to the Company is less than the $150,000 LEDIG Grant local match requirement, the Locality, subject to appropriation, will make an additional grant to the Authority. The Authority shall disburse said funds to the Company, so long as the Company has met its Targets. 6 Desi Fresh Foods LEDIG Performance Agreement FINAL Section 5. Company Reporting. (a) Performance Reporting: Commencing on June 30, 2025 and continuing on June 30, 2026 and June 30, 2027, the Company shall provide, at the Company’s expense, in the form attached hereto as Exhibit A, detailed Performance Reports satisfactory to the Locality and the Authority of the Company’s progress on the Targets. Such Performance Reports shall set forth the amount of the Capital Investment made as of the date of each report. Such Performance Reports shall also include an affirmative statement signed by an authorized Company officer or director that the information provided in the report is true and correct, and certifies that status of its efforts to achieve the Targets. The Company shall provide such other reports on the progress of achievement of the Targets at such other times as the Locality or the Authority may reasonably require. (b) Final Performance Report: The Company shall provide, at the Company’s expense, in the form attached hereto as Exhibit B, a detailed Final Performance Report satisfactory to the Locality and the Authority of the Company’s achievement of the Targets as of the Performance Date. This Final Performance Report shall be filed within 90 days after the Performance Date. Should the Company be unable to file the Final Performance Report within the 15-days after the Performance Date as called for in Section 3(b), above, the Company may request a 60- day delay in filing the Final Performance Report. Should the Company not file the Final Performance Report within the 60-day delay extension nor request a filing delay including payment of the required fee in the sum $3,000.00 to the Authority, or if the Company requests a filing delay but does not file the Final Performance Report prior to the new filing deadline, the Authority will withhold any LEDIG Grant payment that might otherwise be due and all rights of the Company under this Agreement will automatically terminate. Section 6. Verification of Targets. (a) Verification of Capital Investment: The Company hereby authorizes the Locality, including the Locality’s Commissioner of the Revenue and Treasurer, to release to the Authority the Company’s real estate tax, business personal property tax and machinery and tools tax information. Such information shall be marked and considered confidential and proprietary and shall be used by the Authority solely for verifying satisfaction of the Capital Investment Target. If the Locality, the Office of the Commissioner of the Revenue or the Office of the Treasurer should require additional documentation or consents from the Company to access such information, the Company shall promptly provide, at the Company’s expense, such additional documentation or consents as the Locality may request. In accordance with Virginia Code Section 58.1-3122.3, The Authority is entitled to receive the Company’s real estate tax, business personal property tax and machinery and tools tax information from the Locality’s Commissioner of the Revenue. (b) Verification of New Jobs and Wages: The Company must submit a copy of its four most recent Employer’s Quarterly Tax Reports (Form FC-20) with the Virginia Employment 7 Desi Fresh Foods LEDIG Performance Agreement FINAL Commission with the Final Performance Report. The forms shall be marked and considered confidential and proprietary and shall be used by the Authority solely for verifying satisfaction of the New Jobs Target. The Company agrees that it will report to the Virginia Employment Commission with respect to its employees at a facility-level, rather than at the company-level. (c) Additional Documentation: In addition to the verification data described above, in the sole discretion of the Locality and the Authority, the Locality and the Authority may each require such other documentation or audits as may be required to properly verify the Capital Investment or New Jobs. Section 7. Possible Termination of this Agreement and Redeployment of LEDIG Grant Proceeds. If the Locality and the Authority shall determine at any time prior to the Performance Date that the Company is unable or unwilling to meet and Maintain its Targets by and through the Performance Date, and if the Locality and the Authority shall have promptly notified the Company of such determination, this Agreement will be terminated, no further disbursements of the LEDIG Grant proceeds will be made to the Company, and the amount not disbursed will be returned to the Locality. Such a determination will be based on such circumstances as a filing by or on behalf of the Company under the U.S. Bankruptcy Code, the liquidation of the Company, an abandonment of the Facility by the Company, a failure to comply with the covenant provided in Section 2(d), or other similar significant event that demonstrates that the Company will be unable or is unwilling to satisfy the Targets for the LEDIG Grant as determined by the Locality or the Authority in their sole discretion. . Section 8. Notices. Formal notices and communications between the parties shall be given either by (i) personal service, (ii) delivery by a reputable document delivery service that provides a receipt showing date and time of delivery, (iii) mailing utilizing a certified or first class mail postage prepaid service of the United States Postal Service that provides a receipt showing date and time of delivery, or (iv) delivery by electronic mail (email) with transmittal confirmation and confirmation of delivery, addressed as noted below. Notices and communications personally delivered or delivered by document delivery service shall be deemed effective upon receipt. Notices and communications mailed shall be deemed effective on the second business day following deposit in the United States mail. Notices and communications delivered by email shall be deemed effective the next business day, not less than 24 hours, following the date of transmittal and confirmation of delivery to the intended recipient. Such written notices and communications shall be addressed to: [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 8 Desi Fresh Foods LEDIG Performance Agreement FINAL if to the Company, to: with a copy to: Desi Fresh Foods LLC 205 McGhee Road Winchester, Virginia 22603 Email: llaporta@desifreshfoods.com Attention: Larry LaPorta Desi Fresh Foods LLC 205 McGhee Road Winchester, Virginia 22603 Email: fmuys@desifreshfoods.com Attention: Frank Muys if to the Locality, to: with a copy to: County of Frederick, Virginia 107 North Kent Street Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: rmichael.bollhoefer@fcva.us Attention: County Administrator County of Frederick, Virginia 107 North Kent Street, 3rd Floor Winchester, Virginia 22601 Facsimile: 540-667-0370 Email: austin.cano@fcva.us Attention: Interim County Attorney if to the Authority, to: with a copy to: Economic Development Authority of the County of Frederick, Virginia 45 East Boscawen Street, Suite 2 Winchester, Virginia 22601 Facsimile: 540-722-0604 Email: pbarker@yesfrederickva.com Attention: Executive Director Economic Development Authority of the County of Frederick, Virginia 118 S Braddock Street Winchester, Virginia 22601 Facsimile: Email: mbryan@michaelbryanlaw.com Attention: Counsel Each party may change the address for service of notice upon it by a notice in writing to the other parties hereto. Section 9. Miscellaneous. (a) Entire Agreement; Amendments: This Agreement constitutes the entire agreement among the parties hereto as to the LEDIG Grant and may not be amended or modified, except in writing, signed by each of the parties hereto. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The Company may not assign its rights and obligations under this Agreement without the prior written consent of the Locality and the Authority, which consent may be withheld at the sole discretion of the Locality or the Authority. (b) Governing Law; Venue: This Agreement is made, and is intended to be performed, in the Commonwealth and shall be construed and enforced by the laws of the Commonwealth. Jurisdiction and venue for any litigation arising out of or involving this Agreement shall lie in the Circuit Court of the County of Frederick, and such litigation shall be brought only in such court. 9 Desi Fresh Foods LEDIG Performance Agreement FINAL (c) Counterparts: This Agreement may be executed in one or more counterparts, each of which shall be an original, and all of which together shall be one and the same instrument. (d) Severability: If any provision of this Agreement is determined to be unenforceable, invalid or illegal, then the enforceability, validity and legality of the remaining provisions will not in any way be affected or impaired, and such provision will be deemed to be restated to reflect the original intentions of the parties as nearly as possible in accordance with applicable law. (e) Attorney’s Fees: Attorney’s fees shall be paid by the party incurring such fees. (f) Time: Time is of the essence as to all matters set forth in this Performance Agreement. (g) Force Majeure: Notwithstanding the foregoing provisions of this Agreement, if the Company does not achieve a Target or take any action required under this Agreement because of an “Event of Force Majeure” (as defined below), the time for achieving the applicable Target or taking such action will be extended day-for-day by the delay in meeting the applicable Target or taking such action caused by the Event of Force Majeure. “Event of Force Majeure” means without limitation, any of the following: acts of God; strikes, lockouts or other industrial disturbances; act of public enemies; orders of any kind of the government of the United States of America or of the Commonwealth or any of their respective departments, agencies, political subdivisions or officials, or any civil or military authority; insurrections; riots; epidemics; pandemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraint of government and people; civil disturbances; explosions; breakage or accident to machinery, transmission pipes or canals not caused by the Company; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Company. [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 10 Desi Fresh Foods LEDIG Performance Agreement FINAL IN WITNESS WHEREOF, the parties hereto have executed this Performance Agreement as of the date first written above. COUNTY OF FREDERICK, VIRGINIA By: ______________________________ Name: Josh Ludwig Title: Chair, Board of Supervisors of the County of Frederick, Virginia Date: _____________________________ ECONOMIC DEVELOPMENT AUTHORITY OF THE COUNTY OF FREDERICK, VIRGINIA By: ______________________________ Name: Richard J. Till Title: Chair, Economic Development Authority of the County of Frederick, Virginia Date: _____________________________ DESI FRESH FOODS, LLC By: ______________________________ Name: __________________________ Title: __________________________ Date: _____________________________ 11 Desi Fresh Foods LEDIG Performance Agreement FINAL Exhibit A: Performance Report Form Exhibit B: Final Performance Report Form 12 Desi Fresh Foods LEDIG Performance Agreement FINAL Exhibit A PERFORMANCE REPORT LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT FUND PROJECT SUMMARY: Project Location Amount of Grant Performance Reporting Period Performance Date PROJECT PERFORMANCE: Performance Measurement Target As of _______ % Complete New Jobs (over ___ baseline) Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Capital Investment (provide breakdown below)1 Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Average Annual Wage N/A Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Standard Fringe Benefits (check one) Yes ☐ No ☐ N/A 1 Data will be verified with locality records. 13 Desi Fresh Foods LEDIG Performance Agreement FINAL Capital Investment Breakdown Amount Land $ Land Improvements New Construction or Expansion Renovation or Building Up-fit Production Machinery and Tools Furniture, Fixtures and Equipment Other Total $ COMMENTS: Discuss project status, including the current level of new jobs and capital investment, progress on targets, changes or likely changes in project’s nature that may impact achievement of targets, and other information relevant to project performance. If the project is not on track to meet targets, please provide an explanation. TO BE CERTIFIED BY AN OFFICER OF THE COMPANY: I certify that I have examined this report and to the best of my knowledge and belief, it is true, correct, and complete. Company: __________________________________________ Submitted By: __________________________________________ Signature of Official Name: __________________________________________ Print Name Title: ______________________________________________ Date: _________________________ Please return to: Patrick Barker, Executive Director, Frederick County Economic Development Authority, 540.665.0973, pbarker@yesfrederickva.com 14 Desi Fresh Foods LEDIG Performance Agreement FINAL Exhibit B FINAL PERFORMANCE REPORT LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT FUND PROJECT SUMMARY: Project Location Amount of Grant Performance Date PROJECT PERFORMANCE Performance Measurement Target As of ________, 20__ % Complete New Jobs (over baseline)2 Capital Investment (provide breakdown below)3 Average Annual Wage N/A Standard Fringe Benefits 2 Attach the company’s four most recent Quarterly Tax Reports (Form FC-20) filed with the Virginia Employment Commission. 3 Data will be verified using records from the Commissioner of the Revenue and invoices. Capital Investment Breakdown Amount Land $ Land Improvements New Construction or Expansion Renovation or Building Up-fit Production Machinery and Tools Furniture, Fixtures and Equipment Other Total $ 15 Desi Fresh Foods LEDIG Performance Agreement FINAL COMMENTS: Discuss Project status or the importance of the Project to the locality and region. TO BE CERTIFIED BY AN OFFICER OF THE COMPANY: I certify that I have examined this report and to the best of my knowledge and belief, it is true, correct, and complete. Company: __________________________________________ Submitted By: __________________________________________ Signature of Official Name: __________________________________________ Print Name Title: ______________________________________________ Date: _________________________ Please return to: Patrick Barker, Executive Director, Frederick County Economic Development Authority, 540.665.0973, pbarker@yesfrederickva.com DATE: December 27, 2025 TO: Board of Directors Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Remote Meeting Policy Update As required by State Code, the EDA must adopt its Remote Participation Policy on an annual basis. While no changes are currently suggested to the policy, it is crucial that the EDA formally adopts it to ensure compliance. Key Points:  Policy Adoption Requirement: The EDA cannot allow any Board member to participate remotely in a meeting unless the policy has been adopted for that year.  Quorum Rules: For meetings where remote participation occurs, at least four Board members must be physically present to satisfy the State Code's quorum requirement. This annual adoption underscores the importance of transparency and accountability in the EDA’s operations. DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Large Project Ready Sites Concept Large Project-Ready sites provide significant advantages in terms of speed, cost, and risk reduction when competing for businesses in the EDA’s Target Industry Sectors. These factors are crucial for companies making major investment decisions, and localities offering these sites to position themselves competitively to win deals. For our purposes, Large will be defined as 100 acres or more of contiguous property. Project Ready will be defined as having the necessary entitlements (industrially zoned) and infrastructure (roads, water, wastewater, electric and natural gas) currently or could be within 12-18 months. Frederick County has only one site closely matching the above in Valley Innovation Park, which is 106 acres. Many other competing areas boast at least 5. See the following table for details. Frederick County Richmond Harrisonburg Roanoke Martinsburg Sites above 100 acres 1 17 5 4 11 As directed by the Frederick County Board of Supervisors during the Joint Meeting, the EDA is tasked with creating an innovative and aggressive plan to expand the number of Large Project- Ready sites. This initiative aims to:  Enhance Frederick County’s attractiveness to EDA Target Industry Sectors.  Align with the EDA’s mission to attract businesses that create high-quality jobs and drive new capital investment. Page 2 of 3 Large Project Ready Sites Concept Given the competitive nature of site development, a creative and proactive approach will likely be necessary to achieve these goals. The plan should also be tailored to leverage the $200+ million available through the Virginia Business Ready Sites Program Grant Program. The pre- application window for this grant program typically opens in early October, making timely planning and preparation critical to securing funding. By acting decisively, Frederick County can position itself as a leader in securing and developing Large Project-Ready sites to meet future economic development needs. Many options exist for increasing the number of Large Project-Ready sites. Any strategy to accomplish this goal should 1) identify sites, 2) evaluate their feasibility, 3) secure the necessary entitlement, and 4) secure at least a Tier 3 status of the Virginia Business Ready Site Program. Below are three high-level strategies, each designed to meet these objectives. Some aspects of these conceptual designs were derived from best practices of other successful efforts. Detailed plans will be developed based on the EDA Board’s direction regarding the preferred approach. Plan #1 This approach begins with a public solicitation to owners of desired sites, followed by a review and ranking process to identify the most promising opportunities. Once sites are selected, the EDA would secure a Memorandum of Understanding (MOU) with the property owner(s) and proceed concurrently with an EDA-funded rezoning and an application to the Virginia Business Ready Site Program (VBRSP). The MOU could include the following provisions:  Agreement on the asking price.  A specified timeframe post-rezoning approval during which property transactions are focused on EDA Industry Targets or require EDA approval for other uses.  A clause requiring the repayment of all rezoning fees and/or due diligence costs to the EDA upon the first land transaction if rezoning is successful. This method ensures a structured approach to site development while minimizing financial risks to the EDA and property owner and aligns property use with the EDA’s strategic goals. Page 3 of 3 Large Project Ready Sites Concept Plan #2 This approach follows a similar strategy to Plan #1 but begins with an internal staff assessment to identify and prioritize potential sites. Key steps include:  Staff-led evaluation of sites to determine suitability.  Engagement with landowner(s) to gauge interest and participation.  Development of MOU.  Concurrent EDA-funded rezoning and submission of a VBRSP application. This plan streamlines the identification process by leveraging staff expertise, allowing for efficient prioritization and targeted landowner outreach. Plan #3 This approach involves hiring a third-party consultant to conduct a thorough assessment of potential sites. Following the assessment, the process mirrors that of Plan #2. Key steps include:  The third-party consultant will evaluate and identify sites based on development potential.  Identified sites will be ranked according to feasibility and alignment with EDA goals.  Property owner(s) will be approached to determine their interest in participating  Development of MOU  The EDA will fund rezoning efforts and submit a concurrent VBRSP application for selected sites. This plan benefits from an objective, third-party assessment with same criteria applied to all sites to increase the number of Large Project-Ready sites. Staff is seeking the Authority's input and discussion of the proposed options in order to advance this strategic direction. NOTESProcess Description Date Pre-Launch Overview and Webinars Overview of guidelines, application process and selection process, plus examples of strong applications and the importance of site development Oct 10, 29 2024 Application launch A brief pre-application will be made available on the website. Qualified applicants will be sent the full application packet Oct 11, 2024 Pre-Application Due Pre-Applications will be available on VEDP's website. Pre - applications will be screened for eligibility prior to sharing a full application with the applicant Nov 14, 2024 Applications Issued Pre-Applications that qualified will be issued a full application Nov 26, 2024 Application Office Hours Individual time for applicants to discuss specific questions with RES staff regarding the application Dec 6, 11 2024 & Jan 3, 2025 Application due date Applications must be submitted via the VBRSP FileShare site by January 8, 2025, to be considered for funding. No late submissions will be accepted Jan 8, 2025 PROGRAM TIMELINE (PAGE 1 OF 2) 0 The timeline has been developed to ensure expeditious award announcements and is subject to approval by the Site Investment Committee. NOTESProcess Description Date Application review Each application will be reviewed for completeness. The applicant will have time to respond to comments. Applications will be reviewed by the Project Review Committee and competitively ranked against all projects considered for the Round. Top applications will be selected for a virtual site tour January & February 2025 Virtual Site Tours A virtual site tour will be used for the Project Review Committee to learn more about the proposed project, business case, return on investment, and ask any questions about the project. The call will be 15-20 minutes in length and will require a prepared slide deck March 3 – March 28, 2025 Virtual Site Tour Review After the virtual site tours, the Project Review Committee will select projects that will move onto the in-person site tour round March 2025 Site Tours The site tour expectation is that the tour will be treated as a real site selection project. This tour will aid in determining funding recommendations April 14 – May 2, 2025 Award Offers When an award is accepted, the recipient is required to enter into a performance agreement June 2025 PROGRAM TIMELINE (PAGE 2 OF 2) 1 CERTIFIED SITES IN VIRGINIA OVER 100 ACRES source: VEDP Dec 2024 DATE: December 27, 2024 TO: Board of Directors Frederick County Economic Development Authority FROM: Wendy May Marketing Manager CC: Jay Tibbs Deputy County Administrator RE: FredCo Eats Update FredCo Eats is a brand created and managed by the Frederick County EDA. It aims to elevate the full scope of Frederick County’s food economy, including agriculture, food manufacturing, and eateries. The following are updates on events supported through the FredCo Eats brand (FredCoEats.com). Upcoming: 4th Annual FredCo Eats Restaurant Week - Restaurant Week is managed by the EDA and seeks to expand awareness of Frederick County’s restaurant industry and provide a midwinter boost for restaurants, a time when sales traditionally decline. Frederick County’s restaurant scene is diverse, including stand-alone restaurants, food trucks, and farms with cafes and markets. Participation criteria are purposely broad to include as many local eateries as possible. Participants will offer a mix of multi-course menus, meal deals, and promotional discounts, from January 27 - February 2, 2025. The EDA measures the success of Restaurant Week through a post-event survey of participants where they indicate their overall satisfaction with the event, if they felt the event created awareness about their business, and if Restaurant Week generated new customers. Upcoming: 2nd Annual Cultivate Your Agribusiness Conference - The EDA collaborated with the Laurel Ridge Small Business Development Center to launch the region’s first Cultivate Your Agribusiness Conference in 2024. The event will be held again on February 20, 2025, at Laurel Ridge Community College. Local agribusinesses will connect with resource providers at the local, state, and federal levels through workshops and panel discussions. The event agenda is guided by feedback from the 2024 conference as well as needs identified through the EDA’s 2023 survey of Frederick County agribusinesses. FredCoEats.com is the central hub for information related to the FredCo Eats brand. # F r e d C o E a t s R W JANUARY 27 - FEBRUARY 2, 2025 Enjoy multi-course menus, promotional discounts, and meal deals at participating Frederick County restaurants! Content features at FredCoEats.com will showcase local cuisines, our favorite neighborhood hangouts, creative chefs, and restaurant families. Join us this winter as we taste our way through Frederick County’s eateries! Get all the details  FredCoEats.com A SHOWCASE OF FREDERICK COUNTY RESTAURANTS Dine-inTake-out& Special restaurant week menus and pricing! FredCo Eats Passport Promotion: Collect stamps on your Restaurant Week Passport for a chance to win prizes! FredCoEats.com DATE: December 27, 2024 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: Target Industry Sectors Update The EDA regularly evaluates its target industries to ensure they align with Frederick County’s unique strengths and growth opportunities. This process pinpoints traded-sector industries that can best leverage local assets, offering promising opportunities for expansion or relocation. These industries drive economic vitality through investments, job creation, competitive payrolls, and increased local procurement, enhancing the county's overall economic landscape. The current Target Industry Sectors are as follows: To conduct this essential review, we applied the same analytical filter process used in prior updates. The first step involved analyzing current and future industry trends using two key data sources: JobsEQ and Conway Analytics. JobsEQ, developed by Chmura Economics, provides comprehensive data on demographics, industries, occupations, and employment. Meanwhile, Conway Analytics offers a global database of corporate expansion projects, delivering critical business insights and tracking signals for companies planning to expand or relocate. This approach ensures data-driven decisions for strategic industry targeting. Page 2 of 4 Target Industry Update First, traded industry sectors with a positive 10-year employment growth trend were identified within the Frederick County MSA, a 45-mile radius, and statewide. Sectors with an average occupational wage above Frederick County’s were shortlisted. Next, Conway Analytics data on new projects from the past 18 months assessed each sector's current relevance. Finally, sectors were compared to national performance. Those meeting all criteria form the final list, ensuring focus on high-growth, high-value opportunities for the county’s economic development strategy. NAICS Industry Occupational Wage 3111 Animal Food Manufacturing $57,700 3256 Soap, Cleaning Compound, and Toilet Preparation Manufacturing $61,850 3334 Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment Manufacturing $62,370 3344 Semiconductor and Other Electronic Component Manufacturing $75,410 3345 Navigational, Measuring, Electromedical, and Control Instruments Manufacturing $84,380 3359 Other Electrical Equipment and Component Manufacturing $63,070 4881 Support Activities for Air Transportation $66,610 4885 Freight Transportation Arrangement $63,430 5162 Media Streaming Distribution Services, Social Networks, and Other Media Networks and Content Providers $93,630 5182 Computing Infrastructure Providers, Data Processing, Web Hosting, and Related Services $98,500 5192 Web Search Portals, Libraries, Archives, and Other Information Services $99,520 5221 Depository Credit Intermediation $78,210 5222 Nondepository Credit Intermediation $78,300 5251 Insurance and Employee Benefit Funds $79,250 5414 Specialized Design Services $77,290 5415 Computer Systems Design and Related Services $106,750 5417 Scientific Research and Development Services $105,730 5419 Other Professional, Scientific, and Technical Services $78,180 5511 Management of Companies and Enterprises $91,340 5611 Office Administrative Services $85,570 Page 3 of 4 Target Industry Update In addition to the above, staff recommends including existing manufacturing sectors with strong competitive advantages, indicated by high location quotients (LQ). These industries show significant concentration and specialization in Frederick County compared to national averages. Relevant economic data, such as current employment levels and job forecasts, support their continued growth and strategic importance. Prioritizing these sectors aligns with the county's strengths and enhances future economic development opportunities. NAICS Industry LQ 3211 Sawmills and Wood Preservation 7.34 3212 Veneer, Plywood, and Engineered Wood Product Manufacturing 5.18 3219 Other Wood Product Manufacturing 1.96 3222 Converted Paper Product Manufacturing 2.31 3231 Printing and Related Support Activities 2.05 3241 Petroleum and Coal Products Manufacturing 4.08 3252 Resin, Synthetic Rubber, and Artificial and Synthetic Fibers and Filaments Manufacturing 1.50 3254 Pharmaceutical and Medicine Manufacturing 4.02 3261 Plastics Product Manufacturing 13.20 3262 Rubber Product Manufacturing 2.46 3271 Clay Product and Refractory Manufacturing 3.98 3273 Cement and Concrete Product Manufacturing 6.68 3274 Lime and Gypsum Product Manufacturing 12.96 3279 Other Nonmetallic Mineral Product Manufacturing 2.46 3323 Architectural and Structural Metals Manufacturing 3.71 3324 Boiler, Tank, and Shipping Container Manufacturing 6.58 3325 Hardware Manufacturing 2.31 3327 Machine Shops; Turned Product; and Screw, Nut, and Bolt Manufacturing 1.19 Page 4 of 4 Target Industry Update In summary, staff recommends the following sectors and subsectors as Targeted Industry Sectors. Note, these are identical to the previously approved Sectors. We seek the Authority's input, discussion, and endorsement, if deemed appropriate, to advance this strategic direction. Corporate Services Finance & Insurance • Management of Companies and Enterprises • Depository Credit Intermediation • Administrative Services • Nondepository Credit Intermediation • Professional, Scientific, and Technical Services Information Technology Advanced Manufacturing • Data Processing, Hosting, and Related Services • Boiler, Tank, and Shipping Containers • Computer Systems Design and Related Services • Cement/Concrete • Control Instruments BioScience • Electric components • Pharmaceutical and Medicine Manufacturing • Lime/Gypsum • Medical and Diagnostic Laboratories • Metals • Scientific Research and Development Services • Petroleum/Coal • Plastics Food & Beverage • Printing • Animal • Wood • Dairy • Fruit and vegetable • Grain • Specialty