moberly american sucralose agreement

8/4/2019 Moberly American Sucralose Agreement

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Septembell~~WW~rleed Street u Moberly, Missouri 65270-1551Phone: (660) 263-4420By electronic mail: bcole@i-i&fiIfdcifsel:A?lts

Mr. Bl1lceColeAmerican SucraloseManufacturing, Inc.Re: Memorandum of Understanding in Connection with Proposal dated September 19,2011 for the Completion and Operation of Certain Manufacturing Facilities .Located inthe City of Mobel"ly and the Cure of Defaults under The Industlial DevelopmentAuthority of the City of Moberly, MissoUllAnnual Appropliation Capital Project Bonds(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 generalbusiness 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 installationandthe operation of certain sucralose manufacturing facilities located in the City (the "Project")pegun byMamtek, U.S., Inc. ("Mmntek"). As you know, the Project is currently in abeyance asa result of certain Events of Default by Mamtek which exist and are on-going under variousfinancing documents in c01Ulectionwith the Bonds.We understand your request at this time to be for a statement of the current intent of the Cityrespecting a willingness aUhe City to treat the Company as a "substitute or successor user forthe 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 amutually acceptable form and structure, which would transfer to the Company certain lights tocomplete the Project as a "substitute or successor user" (as that term is contemplated in Sectionl2.1(c) of the Management Agreement), subject to fun satisfaction by the Company of thefollowing conditions precedent:

1. Not later than October 3, 2011, the Company shall deposit with the City, the nonrefundable sum of $250,000, which shall be used by the City at its sole discretionincluding to offset costs associatedwith the foregoing Events of Default;2. Not later than October 12, 2011, the Company shall provide for the City's reviewand approval completion plans and estimates of additional costs for the Project in aform 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 inthat certain Development Agreement dated July 1, 2010 (the "DevelopmentAgreement") by and among the City, The Indush-ialDevelopment AuthOllty of the

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City of Moberly, and Mamtek (e.g. a maximum initial five lines of sucraloseproduction) and which minimizes additional expenditure and capital investment andutilizes processes and "know-bow" ill existence as of the date of the DevelopmentAgreement and (ii) completion of the Moberly facilities optimized as to yield,efficieilcy, and product consiskncy, applying advances in such processes and "knowhow" delived from the Moberly facilities and any contemplated redesigns or re-fitsthereto. Both altematives shall result in a minimum production yield sufficient undercurrent market conditions during the first five years of production to generate annualnet revenues of not less than the average annual debt service on the Bonds duringsuch period ($4,348,464.00).

3. Not later than October 26, 2011, the Company shall deposit with the City the nonrefundable sum of $3,215,885.63 represellting the amounts required to retum theSeries 2010 A, B, and C Debt Service Reserve Funds to the original Series 20 lOA, Band C Debt Service Reserve Requirements which amounts shall be transfelTed toUMB Bank;N.A., as tmstee for the holders of the Bonds (the "Tmstee") for depositin the applicable Debt Service Reserve Funds for the Bonds.

Subject to and following the full satisfaction of the foregoing conditions, the City intends to takeappropriate steps under the Management Agreement (and, as applicable, other financingdocuments in connection with the Bonds) to transfer to the Company, subject to a mutuallyacceptable form and stl11cture and further subject to any limitations imposed by any financingdocument 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 ofthe Project shall be further conditioned upon and subject to satisfaction of each of the followingsupplemental conditions:

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

b) The Company shall provide for the City's review and approval within seven (7) daysof the date of the foregoing transfer, a construction and operations schedule whichshall include interim milestone progress dates for completion of the Moberly facilityin full accordance with the completion plans approved by the City under item 2,above; the schedule shall provide for initiation of sucralose production by a datecertain 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 shalltenninate the Company's rights with respect to the Project;

c) The Company shall assume Mamtek's liabilities/obligations (jointly and severally andnot in substitution) under the Management Agreement and the DevelopmentAgreement, including, without limitation, the obligation to timely make Basic

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Payments and Additional Payments as and when due under the ManagementAgreement, and shall additionally satisfy or cause to be removed any liens or otherencumbrances against the Project as a result of Mamtek's prior activities; theCompany shall also obtain the right to purchase the Project upon the same termsapplicable to Mamtek under the Management Agreement;

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

e) Approval of the Trustee, if such approval is subsequently determined by the Trusteeor by the City to be required under any of the financing documents in connection with.the Bonds; andf) Any transfer arrangement or stl11cture may be submitted to the Securities Exchange

Commission or other applicable govemmental agency for prior comment; in the eventthe such agency objects or provides to the City material infonnation adverse to thetransfer, the City shall have the right to tenninate the Company's rights with respectto the Project.

Recognizing that time is of the essence, we request that you provide not later than 3 :OOPMCSTon Monday, September 26, 2011 a copy of this response, executed and dated by the applicableofficer of the Company which shall serve as the Company's agreement to satisfy the conditionsprecedent numbered 1 through 3, above .. Upon receipt of the foregoing, the City will initiatedetailed discussions of the applicable tr.ansfer stlucture and preparation of appropriatedocumentation.This communication contains a statement of certain initial basic terms and conditions which areprovided for consideration only. No rights or liabilities shall arise as a result of the provisions ofthis communication and 110 binding agreement shall exist unless and until a formal transferagreement is reached and executed by the parties.The City looks forward to receiving tinlely your response, a copy of which should he providedby electronic mail to:Thomas A. Cunningham, Esq.CUlmingham, Vogel & Rost, P.C.333 South Kirkwood Road, Suite 300St. Louis, MissoUli [email protected]

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....--;.:/ ~.~\~:(f.Bob Riley, Ma~ rJ\.CJ{NOWLEDGED AND ACCEPTED:

AMERICAN SUCRALOSE MANUFACl'URIN~ INC.

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moberly american sucralose agreement

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