mamtek notice 072512

7/31/2019 Mamtek Notice 072512

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WA 3357599.3

NOTICE REGARDING RECENT DEVELOPMENTS

(NOTICE #9)

THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF MOBERLY , MISSOURI ANNUALAPPROPRIATION CAPITAL PROJECT BONDS

(PROJECT SUGAR )SERIES 2010-A, SERIES 2010-B AND SERIES 2010-C (THE BONDS )

*CUSIPS : 607010AB1, 607010AC9, 607010AD760701AE5, 607010AG9, 607010AF2 AND 607010AH8

Please forward this Notice to beneficial holders.

UMB Bank, N.A. serves as Trustee ( Trustee ) for the holders of the above -referenced Bondspursuant to that certain Indenture of Trust dated as of July 1, 2010 (the Indenture ) between TheIndustrial Development Authority of the City of Moberly, Missouri (the Authority ), the City of Moberly, Missouri (the City) and the Trustee. The Bonds are secured by, among otherobligations , that certain Financing Agreement dated July 1, 2010 (the Financing Agreement )

between the Authority and the City, a Security Agreement dated as of July 1, 2010 (the SecurityAgreement ) between the City and the Trustee, a First Deed of Trust dated Jul y 1, 2010 (theDeed of Trust ) between the City, the Mortgage Trustee and the Trustee, and an Assignment of Agreement dated as of July 1, 2010 (the Security Assignment ) between the City and theTrustee. The Indenture, Financing Agreement, Security Agreement, Deed of Trust, Security

Assignment and other documents evidencing the Bonds and/or obligations associated with theBonds are described herein as the Bond Documents . All assets and property of the City,Authority or Mamtek U.S., Inc. ( Mamtek ) in which the Trustee maintains any interest arereferred to as the Mamtek Assets .

A. RECENT DEVELOPMENTS

1. Sale Process.

The Trustee hired Equity Partners CRB, LLC (CRB) in January, 2012, to conduct asale process to attempt to sell the Mamtek Assets as a sucralose or other facility. A substantialmarketing process (at least 120 days) took place to seek a going concern user, which includeddirect mail and e-mail blasts, call campaign, print and internet advertising, including the WallStreet Journal, press releases in numerous newspapers and contact with over 100 groups aboutthe opportunity. While there were a number of groups that signed Confidentiality Agreements,neither CRB nor the Trustee received any offers to purchase the Mamtek Assets as a goingconcern.

The Trustee is now prepared to proceed to a liquidation/auction process that involves thesale of the Mamtek Assets, in parts and whole, for the highest price.


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The Trustee intends to move forward with this process immediately and is currentlyreviewing a proposal from a joint venture composed of Counsel RB Capital LLC and AaronEquipment, Inc., both related to CRB, and well acquainted with the Mamtek Assets.

The Trustee is in the process of analyzing, and will most likely finalize a MarketingServ ices Agreement with CRBs affiliates, on a competitive liquidation/auction process. Thisprocess may also include the Zimmer Companies, Inc., a nationally recognized real estatecompany, to provide assistance regarding the sale of the real property. It is currently anticipatedthe auction sale will occur in the Fall of 2012.

2. Litigation Against Officers, Directors and Agents of Mamtek.

The Trustee has stayed in close contact with the Bankruptcy Trustee, Bruce Strauss, Esq.,(Mr. Strauss) regarding hi s investigations and analyses in Mamteks Chapter 7 bankruptcycase. Mr. Strauss and his office have spent many hours reviewing documents and interviewingvarious parties about Mamtek. The Trustee understands Mr. Strauss is currently analyzingclaims against former Mamtek officers, directors, attorneys and other parties associated withMamtek, which include an analysis regarding a D&O policy in the amount of $3,000,000obtained by Mamtek or its affiliates in the Spring of 2011.

Mr. Strauss has signed an engagement letter with the firm of Rouse Hendricks GermanMay, P.C., to analyze and, if appropriate, institute litigation on a contingent fee basis of 40%calculated on the gross amount of monies recovered by judgment or settlement. An applicationwas filed in the Bankruptcy Court on July 3, 2012 to authorize this employment. The Trusteeintends to support the retention.

As to more traditional preference and fraudulent transfer (avoidance claim) litigation, Mr.Strauss intends to pursue these claims through his firm.

Recovery on all such claims will go to the estate, for pro-rata distribution to creditors(including the Trustee as representative of the bondholders) after payment of Mr. Strausss andhis counsels fees and expenses. At present, it appears the bond debt is the largest claim.Additional claims will not be known until after the claims bar date has passed.

3. Bruce Cole Litigation Status.

Mr. Strauss brought suit against Bruce Cole (the former President of Mamtek) and hiswife for recovery of traditional preference and fraudulent transfer (avoidance) claims and forbreach of fiduciary duty. When Mr. Strauss learned that the Coles were in the process of sellingtheir home, he sought and ultimately obtained a Court Order providing that approximately$868,000 of equity in the house cannot be distributed without further Order of the Court. Whilelitigation is uncertain, and there is no guarantee of the ultimate outcome of the case, based onMr. Strausss analysis to date, it appears that these monies will ultimately be available to thebankruptcy estate for either a judgment or settlement of claims against the Coles. In addition,after the Coles failed to appear for their depositions in California, Mr. Strauss obtained an awardof sanctions, in the amount of about $4,500, which has been paid by the Coles.


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4. State Court Litigation.

Septagon, the general contractor on the Mamtek project, has instituted a mechanics lienforeclosure case in Missouri state court. A number of subcontractors have also assertedmechanics lien claims. Among the issues which need to be resolved in the state court litigationare whether the contractors have valid mechanics liens and, if so, to which property those liens attach. Priority issues may also need to be resol ved. In lieu of pursuing a mechanics lien claim,one of the subcontractors has filed a claim against the City of Moberly alleging that the Cityfailed to follow a Missouri law requiring that a bond be put in place to make sure that contractorsare paid.

5. Claims Bar Date.

September 28, 2012, was recently established as a claims bar date for creditors to fileclaims. The Trustee will file a claim on or before that date on behalf of bondholders. After allthe claims have been filed, The Trustee will also have a better understanding of additional claimsin this case beyond the claims of the bondholders.

6. Mamtek International Litigation.

As previously reported in Notice #6, the Trustee filed a lawsuit in the Eastern District of Missouri federal court against Mamtek International and Mamtek. The Trustee has a default

judgment entry against Mamtek International but is still awaiting that Courts final default judgment in the case. After the default judgment has been entered, the Trustee may be in aposition to use that judgment to execute on any Mamtek International intellectual property,which includes one patent in Mamtek Internationals name and several patent applications, andan ability to pursue officers and directors of Mamtek International with respect to potentialbreach of fiduciary duty and other claims. These claims are in some respect duplicative of the

claims which may be pursued on behalf of Mamtek by Mr. Strauss. At this time, with theexception of the potential execution on the Mamtek International intellectual property (which theTrustee does not believe has substantial value anyway and may not pursue), the Trustee is notintending to pursue any other claims, but will reserve the right to do so should he determine thatit would be advantageous to the bondholders.

B. PAYMENT TO SERIES B BONDHOLDERS OF 2010-B PROJECT FUND .

The Trustee is currently holding $1,965,087.87 in the Series B Project Fund. Pursuant to theIndenture, the Series B Project Funds are to be applied to payment of interest and principal onthe Series B Bonds. The Trustee has determined that it is appropriate to pay this amount to theSeries B Bondholders at this time. The Trustee hereby notifies the Series B Bondholders that theabove payment will be made on August 6, 2012 to Series B Bondholders of record on August 3,2012.


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The details of the Series B distribution, calculated in accordance with the terms of the Indenture,are as follows:

Maturity CUSIP No.Total Amount of Distribution

Amount of The

Distribution/$1,000in Par PrincipalAmount of theBonds (Factor)

9/1/2025 607010AE5 1,965,087.87$ 649.61582

The Trustee calculates that of this distribution amount, $599.59846 is allocable to principal and$50.01736 is allocable to interest per $1,000 par value on the outstanding maturity.

As of the date of this notice, the outstanding principal balance on the Series B Bonds is

$3,025,000, representing approximately 8.2% of the outstanding bond debt. Following thedistribution, the outstanding principal balance on the Series B Bonds will be $1,211,214.65,representing approximately 3.5% of the outstanding bond debt.

C. ACCOUNT BALANCES .

The Trustee is hereby providing the balances of the Debt Service Reserve Project Accounts as of the date of this notice as follows:

2010-A Debt Service Reserve Fund $ 39,888.932010-B Debt Service Reserve Fund $ 148,891.242010-C Debt Service Reserve Fund $1,382,702.702010-A Project Fund $ 45,743.022010-B Project Fund 1 $ -0-2010-C Project Fund $ 19.09

The above balances do not reflect current outstanding expenses for legal fees, consultant fees,and Trustees fees

D. RETENTION OF COUNSEL

The Trustee has retained the law firm of Spencer Fane Britt & Browne LLP and specificallyNorman Fretwell, Scott Goldstein, Doug Weems, Lisa Epps Dade and Adam LaBoda of that firm

to assist it in matters relevant to the Bonds.

1 This is the total amount which will remain in the Fund after the payment described above,


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E. UNOFFICIAL BONDHOLDERS COMMITTEE

Certain institutional Bondholders have joined an unofficial committee which may receiveconfidential information and participate in strategy discussions and negotiations along with theTrustee and its counsel. Bondholders participating in such group could be restricted in theirability to trade their Bonds for at least some period of time. The Trustee invites additionalholders to join this committee. Any Bondholders interested in joining this committee are askedto contact the Trustee.

F. ADDITIONAL INFORMATION

The Trustee intends to issue periodic notices to holders regarding certain matters relevant to theBonds. Bondholders who wish to receive future notices directly may do so by contacting theTrustee. Holders should not rely on the Trustee as their sole source of information.

Holders with questions regarding this notice should direct them in writing to Mark Flannagan,Senior Vice President, UMB Bank, N.A., 1010 Grand Blvd, 4 th Floor, Kansas City, Missouri64106, or by email at [email protected]. The Trustee may conclude that a specificresponse to particular inquiries from individual holders is not consistent with equal and fulldissemination of information to all holders. The Trustee makes no recommendations and givesno investment or tax advice.

UMB Bank, N.A., July 25, 2012As Trustee

*The Trustee is not responsible for the selection or use of these CUSIPs. They are includedsolely for holder convenience.