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HomeMy WebLinkAboutEDAAgenda2025June5 ECONOMIC DEVELOPMENT AUTHORITY | THURSDAY, JUNE 5THT | | 8:00 AM | COUNTY ADMINISTRATION BUILDING @ FIRST FLOOR CONFERENCE ROOM 107 KENT STREET WINCHESTER, VA 1. Call to Order 2. Modification of revenue bonds for the benefit of The Village of Orchard Ridge ||PUBLIC HEARING  Public hearing at the request of The Village of Orchard Ridge regarding certain modifications to the Authority's Residential Care Facility Revenue Bonds (The Legacy at North Augusta Project), Series 2011 bonds and Series 2014 bonds and make other related charges. 3. Approval of Minutes – May 1st, 2025|| ACTION  Review and approval of minutes from last meeting, if appropriate 4. Treasurer’s Report || ACTION  Review and approval of latest Treasurer’s Report, if appropriate 5. Incentive Performance Agreements – Clasen Quality Chocolate || ACTION  Review of the agreement for the Local Economic Development Incentive Grant provided to Clasen Quality Chocolate.  Review of the agreement for the Commonwealth Opportunity Fund Grant provided to Clasen Quality Chocolate. 6. Performance Large Project Ready Sites Concept | Next Steps || INFORMATION  Update to the strategy to increase the availability of large project ready sites to facilitate new development and support larger scale projects. 7. EDA Partner Showcase || DISCUSSION  Schedule for continued presentations from key stakeholders to enhance board members understanding on connectivity to the EDA Strategy 8. Such other business as may come before this Authority MINUTES ECONOMIC DEVELOPMENT AUTHORITY | THURSDAY, MAY 1, 2025 | A meeting of the Frederick County Economic Development Authority was held on Thursday, May 1, 2025, at 8:00 a.m. in the County Administration Building, 1st Floor Conference Room, 107 N. Kent Street, Winchester, Virginia. PRESENT: Judy McCann-Slaughter, Diane Kearns, Stan Crockett, Rick Till, Bryan Fairbanks and Tina Murphy. 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. INTRODUCTION OF NEW BOARD MEMBER Mr. Till introduced and welcomed Tina Murphy, new EDA Board member. APPROVAL OF MINUTES The minutes of the March 6, 2025, meeting were presented. On motion duly made by Mr. Crockett and seconded by Ms. McCann-Slaughter, the minutes were approved as presented by the following recorded vote: J. Stanley Crockett Aye Bryan Fairbanks Absent (not arrived yet) Diane Kearns Absent (not arrived yet) Gary Lofton Absent Judy McCann-Slaughter Aye Tina Murphy Aye Rick Till Aye TREASURER'S REPORT Mr. Barker submitted the following report: Checking Account - Bank of Clarke as of March 31, 2025 - $6108.72 Intrafi Account – Bank of Clarke as of March 31, 2025 - $3,168,164.34 Page 2 of 3 Frederick County EDA Meeting Minutes | May 1, 2025 On motion of Ms. McCann-Slaughter, seconded by Mr. Crockett, the Treasurer’s Report was approved by the following recorded vote: J. Stanley Crockett Aye Bryan Fairbanks Absent (not arrived yet) Diane Kearns Aye Gary Lofton Absent Judy McCann-Slaughter Aye Tina Murphy Aye Rick Till Aye LARGE PROJECT READY SITES CONCEPT | NEXT STEPS Mr. Barker reminded Board members that, at the January meeting, they endorsed proceeding with a plan to expand the number of large project ready sites. This approach began with an internal staff assessment to identify and prioritize potential sites. For our purposes, large sites 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 available or could be available within 12-18 months. A critical component of the Large Project Ready Sites Plan involves assigning a priority level to each identified site. This prioritization will be based on a calculated per acre cost, which considers the asking price of the site and costs to bring infrastructure to the site. Mr. Barker presented data he had researched that showed 550,000 gallons of water per 100 acre site and 30-60 megawatts of electricity could be needed depending on the kind of usage for the property. The timeline for acquiring the necessary infrastructure could be 2-4 years for electricity; 18-24 months for natural gas; and 24+ months for wastewater. He reported that staff has contacted all infrastructure providers to acquire input for the Site Evaluation Matrix. Only a few still need to provide the requested information. Once received, staff will provide the completed Matrix and recommended next steps. For review and discussion, he provided Board members with a table detailing the completion level for the 5 sites (all 200 or more acres) under consideration. Ms. Kearns asked when the 5 sites could be identified to Board members. Mr. Barker replied it’s too early in the process and, at this point, doing so would not add any value. FREDCO EATS Ms. May, Marketing Manager, presented a recap of the 2025 Restaurant Week and reviewed survey results. She also reviewed the Cultivate Your Agri-Business Conference held on February 27 and other local food economy happenings. Page 3 of 3 Frederick County EDA Meeting Minutes | May 1, 2025 WIDGET CUP RECAP Ms. Rickard, Business Retention Manager, reviewed the Widget Cup 2025 competition held on April 8. The winning team was from Clarke County. WORLDS OF WORK Ms. Rickard reported that this year’s Worlds of Work event will be held on Thursday, October 2. She also reported that the Employer Expo is scheduled to be held on May 15. AREA DEVELOPMENT CORPORATE AND CONSULTANT SURVEY Mr. Barker stated that many of the EDA’s recent activities center around short-term workforce needs and site readiness. These elements are constantly ranked as some of the top local factors used by corporate decision makers and site consultants, per Area Development magazine’s Annual Survey. The EDA staff routinely shapes its strategy based on this survey. Board members were provided a copy of this year’s survey results. Notable findings show some continuing trends and some new entries to the top local factors. Availability of skilled labor remains a top factor (#5 for corporate and #3 for consultants) and reinforces our focus on short-term workforce strategies. Same can be said for available land (#14 for corporate and #3 for consultants). Quality of life is very strong for corporate (#2). This highlights a need to continue to push implementation of the Talent Strategy. If any Board member wants more details, please contact Mr. Barker. ADJOURN There being no further business to come before this Authority, the meeting was adjourned at 8:45 a.m. ________________________________ ____________________________ Richard Till Jay Tibbs Chairman Secretary DATE: May 30, 2025 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 Clasen Quality Chocolate Attached please find a resolution and performance agreements (State and County) for the location of Clasen Quality Chocolate. As you might recall, Clasen Quality Chocolate will locate its operation in Frederick County. They will make a capital expenditure by or on behalf of the Company of approximately $230,000,000, of which approximately $160,000,000 will be invested in machinery and tools, approximately $70,000,000 will be invested in the expansion, improvement, and up-fit of an existing building. All parties’ legal counsels (Virginia Economic Development Partnership, County, Economic Development Authority and Clasen Quality Chocolate) have reviewed and approved the performance agreement. The Frederick County Board of Supervisors approved this performance agreement at their May 14th 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 - adoption of the resolution. Attachment: • Performance Agreement 1 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 COMMONWEALTH’S DEVELOPMENT OPPORTUNITY FUND PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT (the “Agreement”) made and entered this ____ day of __________, 2025, by and among the COUNTY OF FREDERICK, VIRGINIA (the “Locality”), a political subdivision of the Commonwealth of Virginia (the “Commonwealth”), CLASEN QUALITY CHOCOLATE, a Wisconsin corporation 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 FREDERICK COUNTY, VIRGINIA (the “Authority”), a political subdivision of the Commonwealth. WITNESSETH: WHEREAS, the Locality has been awarded a grant of and expects to receive $3,000,000 (the “COF Grant”) from the Commonwealth’s Development Opportunity Fund (the “Fund”) through VEDP for the purpose of inducing the Company to construct, expand, equip, and operate a 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, expansion, equipping, and operation of the Facility will entail a capital expenditure by or on behalf of the Company of approximately $230,000,000, of which approximately $160,000,000 will be invested in machinery and tools, and approximately $70,000,000 will be invested in the construction, expansion and up-fit of the buildings for the Facility; WHEREAS, the construction, expansion, equipping, and operation of the Facility will further entail the creation and Maintenance of 250 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: 2 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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: “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, expansion, and up-fit by or on behalf of the Company will qualify as Capital Investment. “Capital Investment Target” means that the Company has made or caused to be made and retained Capital Investments of at least $230,000,000. “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 $75,420. 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 250 New Jobs. “Performance Date” means September 30, 2030. 3 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 “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, expand, 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 $75,420 is more than the prevailing average annual wage in the Locality of $58,687. The Locality is not a high-unemployment locality, with an unemployment rate for 2023, which is the last year for which such data is available, of 2.5% as compared to the 2023 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. (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 4 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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 30% ($900,000) for the Company’s Capital Investment Target, and 70% ($2,100,000) 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: (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. 5 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 (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 $3,000,000 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 $207,000,000 of the Capital Investment has been retained (reflecting achievement of 90% of the Capital Investment Target), only 188 New Jobs have been created and Maintained (reflecting achievement of 75% of the New Jobs Target), the Company will receive $810,000 (reflecting 90% of the $900,000 of the COF Grant allocated to the Capital Investment Target), plus $1,575,000 (reflecting 75% of the $2,100,000 of the COF Grant allocated to the New Jobs Target), for a total of $2,385,000. 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 is 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 construction or build-out of publicly or privately owned buildings for the Facility, 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 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: 6 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 Category of Incentive: Total Amount COF Grant $3,000,000 Virginia Talent Accelerator Program (“Virginia Talent Accelerator”) (Approximate Value) $798,000 Agriculture and Forestry Industries Incentive Grant (“AFIG”) $500,000 Port Economic and Infrastructure Development Grant (“EID”) $75,000 The proceeds of the COF Grant shall be used for the purposes described in Section 3(c). The AFIG Grant and the EID Grant may be used by the Company for any lawful purpose. The Virginia Talent Accelerator 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 by the Performance Date: Category of Incentive: Total Amount Local Economic Development Incentive Grant $5,000,000 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 $3,000,000 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. The qualification for, and payment of all State-Level Incentives and Local-Level Incentives, except for the COF Grant, will be governed by separate arrangements between the Company and the entities offering the other incentives. 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 January 1, commencing January 1, 2026, reflecting the Company’s progress toward the Targets as of the prior September 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 7 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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. 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 8 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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 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: Clasen Quality Chocolate, Inc., or its assigns Attn: Jack Jensen 5126 West Terrace Drive Madison, Wisconsin 53718 Telephone: 608/467-1130 Facsimile: 608/249-4573 E-mail: jack.jensen@cqc.com Reinhart Boerner Van Deuren s.c. Attn: John K. Tokarz, Esq. 1000 North Water Street, Suite 1700 Milwaukee, Wisconsin 53202 Telephone: 414/298-8453 Facsimile: 414/298-8097 E-mail: jtokarz@reinhartlaw.com if to the Locality, to: with a copy to: County of Frederick, Virginia 107 N. Kent St. Winchester, Virginia 22601 Email: rmichael.bollhoefer@fcva.us Attention: County Administrator County of Frederick, Virginia 107 N. Kent St. Winchester, Virginia 22601 Attention: County Attorney 9 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 if to the Authority, to: with a copy to: Economic Development Authority of Frederick County, Virginia 45 E. Boscawen St. Winchester, Virginia 22601 Email: pbarker@yesfrederickva.com Attention: Executive Director County of Frederick, Virginia 107 N. Kent St. Winchester, Virginia 22601 Email: mbryan@michaelbryanlaw.com 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. 10 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 (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. (f) 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 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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: _________________________ CLASEN QUALITY CHOCOLATE, INC. By Name: Title: Date: _________________________ VIRGINIA ECONOMIC DEVELOPMENT PARTNERSHIP AUTHORITY By Name: Jason El Koubi Title: President and CEO Date: _________________________ 12 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 Exhibit A: Performance Report Form Exhibit B: Final Performance Report Form 13 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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)1 Confidence level target will be reached by Performance Date shown above (check one) High ☐ Moderate ☐ Low ☐ Capital Investment (provide breakdown below) 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 1Data will be verified using Virginia Employment Commission records. Attach the company’s four most recent Quarterly Tax Reports (Form FC-20) filed with the Virginia Employment Commission. 14 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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 Clasen Quality Chocolate, Inc. COF Performance Agreement Final 4.4.25 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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 LOCAL ECONOMIC DEVELOPMENT INCENTIVE GRANT PERFORMANCE AGREEMENT This PERFORMANCE AGREEMENT (the “Agreement”) made and entered this 11th day of _____________, 2025, by and among the COUNTY OF FREDERICK, VIRGINIA (the “Locality”), a political subdivision of the Commonwealth, CLASEN QUALITY CHOCOLATE, a Wisconsin corporation 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 $5,000,000 (the “LEDIG”) for the purpose of inducing the Company to construct, expand, equip, and operate a 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 $230,000,000, of which approximately $160,000,000 will be invested in machinery and tools, approximately $70,000,000 will be invested in the construction, expansion, and up-fit of buildings for the Facility; which results in a net increase in the assessed taxable value of the Facility. WHEREAS, the construction, expansion, equipping and operation of the Facility will further entail the creation and Maintenance of 250 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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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, expansion, 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, 2025. “Capital Investment Target” means that the Company has made or caused to be made and retained Capital Investments of at least $230,000,000. “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 $75,420. 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 250 New Jobs. “Performance Date” means September 30, 2030. 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 3 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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 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, expand, 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 $75,420 is more than the prevailing average annual wage in the Locality of $61,815. 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 2.5% as compared to the 2023 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 4 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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. 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 70% ($3,500,000) for the Company’s Capital Investment Target, and 30% ($1,500,000) 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”). The LEDIG Grant proceeds shall be retained in the Fund until needed for disbursement or the LEDIG Grant is withdrawn in accordance with the terms of this Agreement. (b) Disbursement of the LEDIG 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 and the Authority 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 the Authority, in the sole and absolute discretion of the Authority and the Locality. Upon such verification, the amount of the 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 $3,000,000 of the proceeds of the LEDIG Grant by June 30, 2031 and four annual LEDIG Grants of $500,000 starting between April 1 and June 30, 2032. (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 5 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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 $207,000,000.00 of the Capital Investment has been retained (reflecting achievement of 90% of the Capital Investment Target), and only 225 New Jobs have been created and Maintained (reflecting achievement of 90% of the New Jobs Target), the Company will receive $3,315,000.00 (reflecting 90% of the $3,500,000.00 of the LEDIG Grant allocated to the Capital Investment Target), plus $1,350,000 (reflecting 90% of the $1,500,000 of the LEDIG Grant allocated to the New Jobs Target), for a total of $4,500,000. 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. Within 30 days after verification and approval of the Final Performance Report by 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. (c) 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 $5,000,000 If, by June 30, 2035, 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 $5,000,000 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. Section 5. Company Reporting. 6 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 (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 January 1, commencing January 1, 2026, reflecting the Company’s progress toward the Targets as of the prior September 30. 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 the 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 90-day timeframe, the Company may request a 60-day delay in filing the Final Performance Report. The Authority will require a $3,000 fee, payable to the Authority, 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, 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 Commission with the Final Performance Report. The forms shall be marked and considered 7 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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(e), 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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 if to the Company, to: with a copy to: Clasen Quality Chocolate, Inc., or its assigns Attn: Jack Jensen 5126 West Terrace Drive Madison, Wisconsin 53718 Telephone: 608/467-1130 Facsimile: 608/249-4573 E-mail: jack.jensen@cqc.com Reinhart Boerner Van Deuren s.c. Attn: John K. Tokarz, Esq. 1000 North Water Street, Suite 1700 Milwaukee, Wisconsin 53202 Telephone: 414/298-8453 Facsimile: 414/298-8097 E-mail: jtokarz@reinhartlaw.com 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 Attention: 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. 9 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 (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. (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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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: _____________________________ CLASEN QUALITY CHOCOLATE, INC. By: ______________________________ Name: __________________________ Title: __________________________ Date: _____________________________ 11 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 Exhibit A: Performance Report Form Exhibit B: Final Performance Report Form 12 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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: 14 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 Patrick Barker, Executive Director, Frederick County Economic Development Authority, 540.665.0973, pbarker@yesfrederickva.com 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 Clasen Quality Chocolate, Inc. LEDIG Performance Agreement Final 4.4.2025 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: May 30, 2025 TO: Board of Directors, Frederick County Economic Development Authority FROM: Patrick Barker, CEcD Executive Director CC: Jay Tibbs Deputy County Administrator RE: EDA Partner Showcase Over the past 18 months, the EDA has received presentations from various EDA partners. The presentations included an overview of their operations and activities and how they interact with the EDA. These 10–15-minute presentations would give EDA Board members a better understanding of the partner’s role in implementing the EDA Strategy. If the EDA Board would like to continue to receive these presentations, staff suggests scheduling the following partners over the next 12 - 18 months.  Tourism (August)  EDA Bonding Ability  Virginia Economic Development Partnership  Small Business Development Center  Virginia Department of Transportation  Electric Cooperatives  Winchester Regional Airport  Frederick County Public Schools  Workforce Solutions at Laurel Ridge Community College  HIVE at Shenandoah University  Top of Virginia Regional Chamber  Virginia Ports Staff is seeking EDA Board direction regarding this concept and recommended schedule.