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Septembell~~WW~rleed

Street u Moberly, Missouri 65270-1551 Phone: (660) 263-4420

By electronic mail:

bcole@i-i&fiIfdcif£s¥el:A?lts

Mr. Bl1lceCole American Sucralose Manufacturing, Inc.

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Re: Memorandum of Understanding in Connection with Proposal dated September 19,

Facilities .Located in

the City of Mobel"ly and the Cure of Defaults under The Industlial Development Authority of the City of Moberly, MissoUll Annual Appropliation Capital Project Bonds

2011 for the Completion and Operation of Certain Manufacturing

(project Sugar) Series 201O-A(Taxable), Selles 2010-B (Tax-Exempt) and Series 2010-C (Tax-Exempt) (collectively, the "Bonds")

Dear Mr. Cole:

You have requested on behalf of Amelican Sucralose Manufacturing, Inc., a Delaware general business corporation (the "Company"), the consideration of the City of Moberly, Missouri (the "City") of a Proposal dated September 19, 2011 to und(~rtakeand complete the installation and the operation of certain sucralose manufacturing facilities located in the City (the "Project") pegun by Mamtek, U.S., Inc. ("Mmntek"). As you know, the Project is currently in abeyance as a result of certain Events of Default by Mamtek which exist and are on-going under various financing documents in c01Ulectionwith the Bonds.

We understand your request at this time to be for a statement of the current intent of the City respecting a willingness aUhe City to treat the Company as a "substitute or successor user for the Project" as contemplated by Section 12.1(c) of that celtain Management, Operating and. Purchase Agreement dated as of July 1, 2010 by and between the City and Mamtek· (the "Management Agreement"). The City is willing to consider an arrangement, subject to a mutually acceptable form and structure, which would transfer to the Company certain lights· to complete the Project as a "substitute or successor user" (as that term is contemplated in Section l2.1(c) of the Management Agreement), subject to fun satisfaction by the Company of the following conditions precedent:

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1.

Not later than October 3, 2011, the Company shall deposit with the City, the non· refundable sum of $250,000, which shall be used by the City at its sole discretion including to offset costs associated with the foregoing Events of Default;

2.

Not later than October 12, 2011, the Company shall provide for the City's review and approval completion plans and estimates of additional costs for the Project in a form and level of detail satisfactory to the City which describe, at minimuin~ the . following two (2) altematives: (i) completion of the Moberly facilities as specified in that certain Development Agreement dated July 1, 2010 (the "Development Agreement") by and among the City, The Indush-ial Development AuthOllty of the

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3.

City of Moberly, and Mamtek (e.g. a maximum initial five lines of sucralose

production) and which minimizes additional expenditure and capital investment and utilizes processes and "know-bow" ill existence as of the date of the Development Agreement and (ii) completion of the Moberly facilities optimized as to yield, efficieilcy, and product consiskncy, applying advances in such processes and "know- how" delived from the Moberly facilities and any contemplated redesigns or re-fits

thereto. Both altematives

current market conditions during the first five years of production to generate annual

net revenues of not less than the average annual debt service on the Bonds during such period ($4,348,464.00).

shall result in a minimum production yield sufficient under

Not later than October 26, 2011, the Company shall deposit

refundable sum of $3,215,885.63 represellting the amounts required to retum the Series 2010 A, B, and C Debt Service Reserve Funds to the original Series 20 lOA, B and C Debt Service Reserve Requirements which amounts shall be transfelTed to

UMB Bank;N.A., as tmstee for the holders of the Bonds (the "Tmstee") for deposit in the applicable Debt Service Reserve Funds for the Bonds.

with the City the non-

Subject to and following the full satisfaction of the foregoing conditions, the City intends to take appropriate steps under the Management Agreement (and, as applicable, other financing documents in connection with the Bonds) to transfer to the Company, subject to a mutually acceptable form and stl11cture and further subject to any limitations imposed by any financing document for the Bonds, the rights to occupy, complete, operate and purchase the Project as a "substitute or successor user;" provided that continuation of the Company's lights in respect of the Project shall be further conditioned upon and subject to satisfaction of each of the following supplemental conditions:

a) The Company shall pay on demand the costs of the Tlustee previously incUlTed and to be incuned in connection with the foregoing Events of Default and in connection with the transfer of lights contemplated herel1l1der; and shall additionally provide the sum of $100,000.00 to the City as pre-funding of the City's costs in connection with the preparation of transfer documentation and monitoring of the ·perfol1nance of the supplemental conditions;

b) The Company shall provide for the City's review and approval within seven (7) days of the date of the foregoing transfer, a construction and operations schedule which

shall include interim milestone progress dates for completion of the Moberly facility

2,

above;

certain which shall be not later than 300 days from the date of the foregoing transfer. Upon approval of the schedule by the City, failure of the Company for any reason, other than force majeure, to meet any of the ihtelim milestone dates therein shall

a date

in full accordance

with

shall

the

completion

provide

plans

approved

by the City under

production

by

item

the schedule

for initiation

of sucralose

tenninate the Company's rights with respect to the Project;

c) The Company

shall assume Mamtek's

liabilities/obligations

(jointly

and severally

and

not

in

substitution)

under

the

Management

Agreement

and

the

Development

Agreement, including,

without

limitation,

the

obligation

to

timely

make

Basic

2

Payments

Agreement, and shall additionally satisfy or cause to be removed any liens or other

and

Additional

Payments

as

and

when

due

under

the

Management

encumbrances

against

the

Project

as

a

result

of

Mamtek's

prior

activities;

the

Company

shall

also

obtain

the right

to purchase

the Project

upon

the same

terms

applicable

to Mamtek

under the Management

Agreement;

 

d) During the peliod of transfer and completion of the Moberly facilities, the Company shall provide bi-weekly written reports to the City and to the Trustee for the Bonds regarding: (a) status of capital/equity raising effOlis; (b) construction and Moberly facility completion/progress, and (c) any c1aimslliens etc. filed against the Company or against the Moberly facility or any pOliion thereof; failure of the Company to timely obtain new capital/equity sufficient in the City's reasonable judgment to timely implement completion of the Moberly facility and the initiation of sucralose production in accordance with item b), above shall tenninate the Company's rights with respect to the Project;

e) Approval of the Trustee, if such approval is subsequently determined by the Trustee

or by the City to be required the Bonds; and

under any of the financing

documents

in connection

with.

f) Any transfer arrangement or stl11cture may be submitted to the Securities Exchange Commission or other applicable govemmental agency for prior comment; in the event the such agency objects or provides to the City material infonnation adverse to the transfer, the City shall have the right to tenninate the Company's rights with respect to the Project.

Recognizing

that time is of the essence, we request that you provide

not

later than 3:OOPM CST

on Monday,

September

26, 2011

a copy of this response,

executed

and dated by the applicable

officer of the Company which shall serve as the Company's agreement to satisfy the conditions

precedent numbered 1 through 3, above

detailed

documentation.

applicable

appropriate

Upon receipt of the foregoing, the City will initiate

tr.ansfer

stlucture

and

preparation

of

discussions

of

the

This communication contains a statement of certain initial basic terms and conditions which are provided for consideration only. No rights or liabilities shall arise as a result of the provisions of this communication and 110 binding agreement shall exist unless and until a formal transfer agreement is reached and executed by the parties.

The City looks forward by electronic mail to:

Thomas

A. Cunningham,

to receiving

Esq.

tinlely

your response,

CUlmingham, Vogel & Rost, P.C. 333 South Kirkwood Road, Suite 300 St. Louis, MissoUli 63122

.tom@municipalfirm.com

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a copy of which

should he provided

J\.CJ{NOWLEDGED

AND ACCEPTED:

AMERICAN SUCRALOSE MANUFACl'URIN~

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INC.

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Bob Riley, Ma~ r

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